Bellerbys Economics - Mr Stephenson

Tuesday, March 04, 2008

Universal Sustenance

One of the disadvantages of doing the A-level Economics course in the UK is that it is almost entirely about western capitalist economics. Of course, there's a good reason for this in that this form of Economics is now prevalent throughout the world.

However, there are other approaches that can be taken to the universal economic problems of what to produce, how to produce it and who we are producing it for. Within the course, we take a very brief look at the command economics prevalent in the Soviet Union and mid-century China, but one economic train of thought that is almost completely ignored is the Islamic concept of universal sustenance.

Let's look at oil for example. Because of the strong capitalist tradition of property rights, it is assumed that natural resources belong to the country which just happens to sit on top of them - so the Middle East states and Russia own most of the world's oil. They get rich because it is a scarce resource - other countries with huge populations, such as Bangladesh get poor because they have to pay huge prices for this oil.

The Islamic concept of universal sustenance, however, argues that natural resources belong to everyone in the world and should be shared fairly. The concepts of Justice (Al-Adl) and Indemnification (al-Ihsan) in the Koran require a delicate and fair balance with regard to the production, consumption and distribution of resources, goods and services in the economy. In particular, Al-Ihsan requires a genuine concern for the poor and downtrodden in society.

Following the teachings of the Koran, we might suggest that a world commission be formed to marshal our natural resources that benefits all citizens of the world fairly. This would also tie in with the Islamic concept of trusteeship - an alternative to ownership. Under trusteeship, for example, a rich man might not own his house outright, but would be holding it in trust for the next generation. If more of us considered land and property in this way, it might make us less energetic in our desire to use up all the world's natural resources in about three generations time!

So what does this all mean? Well, apart from anything else, I guess it means we can learn a lot of interesting things if we listen to what our fellow students from many different cultures are trying to explain to us - as I did.

As Harvard economist Dani Rodrik says in his new book - "One Economics, Many Recipes".

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