 In this seminar I would like to say that modern economics is broken. We need to replace it and rebuild it on new foundations. And actually this is a very exciting opportunity for us to take all of this discipline and start rebuilding it from ground zero. This first part of the talk explains that social science is the study of specific societies and lessons learned from the study of the historical experience of European societies cannot be applied to Islamic societies. So first I will give a general background on why this is necessary. Why did it happen that this whole discipline got built on wrong foundations and so why we need to replace it. So there is a paper I have written short which talks about the idea of social science. So social science is study of human society but which society? So if it is the study of European society it would be different social science it would be different Chinese society would be different but social science makes no mention of this. It says that it is science. Science means that something which is true for in all time space the law of physics remains the same. So there is something strange about the word social science. You can say a study of Europe, study of Africa, study of China but there is no science of human beings. So then the question is why when it is easily shown that our society and the rules and regulations and the methodology and the ideas which govern Islamic societies are very different from those of European societies. So there is no one set of laws which covers both. Same is true of economics. Economics in Islamic societies is different from Islamic in European societies and is different from economics in African societies. The question that I am asking is why when this is so easy to understand, so easy to prove why is this word being used at all? Why not use humanities which is what it used to be? So humanities is study of human beings it will be different for different humans. So to understand this we have to look at European history. So there was more than 100 years of war between Protestants and Catholics in Europe and it was very devastating. One third of the population was wiped out in certain areas and all of the European population was affected. In every family there would be some problems. So those who have studied history of economic thought know that there was a scholastic school. The scholastics were building social science, the study of society on the Bible which was natural just like we should build our social science on the basis of the Quran and that is what I am going to tell about how to do. So because the Christian wars caused devastation in Europe everybody realized that you can't build social science on the Bible. So the scholastic school of thought was rejected because it led to continuous wars. So then they said okay we need to have a different kind of a secular science of society which is not connected to religion and which allows all different religions to live together in peace. Now when they rejected Christianity they had to find new answers to all of the fundamental questions which religion answers. And religion tells us that the universe was created by God. The purpose of our lives is to have success on the hereafter and conduct the rules are given. And then of course institutional structure. Well in Islam we have Khilafat and we have Sharia which tells us about the justice and there are educational systems and there is the family which is the most basic unit of society and then there are neighborhoods, the masjid, all of these things are part of the society and in Islamic society. And similarly you had a Christian society and they had their own structures very different from ours but they had their own. But now they said that we are going to reject the Christians so now we have to start from zero. So we have to define how we should behave, what should the political structure be, what should the economic structure be and it has to start from zero. We have no knowledge. So the most basic question which was explored by enlightenment philosophers in Europe is what is knowledge? I mean suppose I say this is how we should run politics so I'm saying this is part of knowledge. So how do we know if this is true or false? So the Christian answer was that everything comes from the Bible so if we can support it from the Bible then it's true. The Islamic answer is that the Quran and the Sunnah are the foundation of our knowledge. But the enlightenment thinkers rejected the Bible and then they said okay the only thing we will believe is something which we can see and touch that's the empirical and then there is reason. So logical positivism, logic refers to logic, logic and positive means something you can see and touch. So all of the enlightenment philosophers were engaged in this struggle, engaged in this philosophy of how to build human knowledge. So you remember the famous formula I think therefore I am what is Descartes doing? Well basically he is trying to build knowledge from zero. So if you have zero knowledge then the first thing you want to know is do I actually exist? So the logic is actually very bad and this is the true of all logic. The reason this logic is bad is because when you say I think you have already assumed that I exist so what you're doing is something which is quite trivial. You have assumed that I exist then you derive that I exist so it's not really very meaningful but the point is not to criticize the logic the point is to show that the philosophers were starting from zero and they were trying to use logic and senses to derive everything and they failed because you cannot derive all knowledge from zero and that's why we need to go back to the Quran and the Sunnah to derive. So the foundations of western sizes were built on certain answers to these questions which are opposite of the Christian answers. So they said that there is no God as opposed to Christianity. So if there is no God then the universe was created by chance because there was no one to create it. So then man is just another kind of animal. There is no Ashraf al-Makhluqat. So life is like a jungle and what is the law of the jungle? Survival of the fittest. You get whoever. And so what is the purpose of our life? It is the purpose of pleasure and of power because power comes with the survival of the fittest. You need power to survive. So these are the ideas. All of this is built in logic. So when we say rational behavior it means all of these things because it's irrational to believe in God because there is no empirical evidence. Where is the data? Where is the time series? Where can you show me that here there is God? So when we say in economics that this is the theory of rational behavior it means what do we say? We say that you should maximize the pleasure that you receive over your lifetime. Now this is not an Islamic answer. We should be maximizing our chances of success in Qiyamah. And for that Allah Ta'ala has said Lantan al-birat tatin faqum ima ta'ibbun that instead of maximizing your utility you take something which you like very much and you give it away for the sake of Allah. So is this going to maximize your utility? No, it's going to minimize your utility because you are going to take something which you like very much and you are not going to get it. So Islam teaches us to minimize our utility. So, but it is not rational because we are believing in something for which there is no empirical evidence. So they say that's not rational, but that's our behavior. So the Enlightenment thinkers thought that they were revolutionaries. They said everything that humankind has learned up to now is nonsense. We are going to rebuild knowledge from zero. We are only going to have the knowledge and they thought that we had a unique civilization. There is nothing, no one like us. It's like in the Quran there is this Qawam which says that is there anybody like us? So they have that feeling and they still have the same feeling. And basically they said that reason is the key defining feature of man. Man is the one who knows how to reason and only white Europeans know how to reason. Everybody else is irrational. So Asians, Chinese, Africans, we are all incapable of rationality. And that is what justified the colonization. These are all animals. We are the only human beings. So we can kill them and enslave them and millions of Africans were killed and enslaved and all over the world they destroyed civilizations and cities and shot and killed at will. So now we can answer the question, why is there a social science? They said we have derived our knowledge on the basis of reason and evidence. So it is true. And we are the most advanced society because we have built our society on the basis of reason. All other societies are primitives. And so when they develop they will become like us. So this is actually obviously false but Europeans believe this in their pride and those people who lived in the colonized world got colonized minds. And we believe whatever the white man says even if it is wrong, so I usually when I give economics lessons I say look, suppose to the students, if you look at this old woman, she is trying to buy some tomatoes. Do you know what she is doing? She has a multivariable function. Now she is taking partial derivatives of the function in respect to each variable. Now she has set up the first order conditions. Now she is solving them and putting in the budget constraint and she realizes that I must buy one and a half kilos of tomatoes. So everybody laughs. So I said that now you are laughing but when your teacher was teaching you, you were taking very serious notes and you were worried that how to understand this. So just like this, this theory utility, it is all nonsense. It is garbage. But because the white man is telling us so we say it must be true, it doesn't correspond to our intelligence but we don't have any intelligence. So we accept it. So Rajab Shantur has this series of lectures on Decoloniality which shows how we can build social science on the basis of Islamic principles and also I have a lot of lectures on the same. So the critical thing that we learned from here is that social... Deen refers to a way of life. Religion in European terminology refers to a belief system. See once Europeans rejected Christianity as a social science, so then the idea that religion was a way of life, that was rejected. This is very important because in Islam we think that Islam is both a belief system. We know about Allah Ta'ala and Akhira and angels and life after death, this is all belief. And then there is Deen which is way of life. So we have how to behave in family, what is the Khilafat, what is the Sharia, how do you enforce laws, many other things. This is the way of life. So in Europe they rejected Christianity as Deen, as way of life. They retained Christianity as belief system that personally you can have whatever belief you like. You can believe in three gods, you can believe in one god, you can believe whatever you like. But it has your personal belief. It should not interfere with the society. The society is going to be organized along social science lines. So they have developed a Deen. So this economics is part of the Deen that is developed to replace the scholastics. It is a religion, it is not a science. This is very important to understand. So there are no morals in this Deen because it is based on survival of the fitters. So utility theory is exactly what we call nafs-e-amara. Do whatever the nafs commands you to do. In game theory we study prisoner's dilemma and we see that, suppose I promise you that I will not betray you but later on I say that if I betray you I will gain more advantage. Then it is rational to betray. This is what they say. So there are no commitments. There is no one because it is animals. We are not humans. So again, this has to be if we want to build an Islamic social science it has to be done on different foundations about human behavior. So this is the end of part one of our talk on rebuilding economics on Islamic foundations. We have seen how western social sciences are built on the rejection of Christianity and on the assumptions of western superiority which are not compatible with Islam. This explains why we need to build rebuild economics on Islamic foundations. And in the next part we will explain how we can do so.