Masudul Alam Choudhury

A paradigm of Islamic money and banking

Purpose – Theological perspectives in ethics, values and their functional application in the real world are vividly covered by the theory and practice of Islamic banking in recent times. This paper seeks to formalize the theological paradigm of the unity of God (Tawhid) and to make the groundwork of unity of knowledge in the context of the money, finance and real economy linkages. Design/methodology/approach – The paper combines narrative with argument and analysis. Findings – On the basis of this the structure of the balance sheet of Islamic banks with no interest rate as an ethical condition of Islamic financing is delineated. This topic is followed by a discussion on the experience of Islamic banks in recent times in the area of mobilizing resources and gaining profitability, popularity and stability by the Islamic financing methods and the direct mobilizing of financial resources into the real economy. In this way, the Islamic banks are shown to attain the much-needed complementary relations between social well-being for clients and financial efficiency for the banks. Originality/value – Adds insights to the theory and practice of Islamic banking.

Distribution of Income

Distribution of income involves payments to factors of production in accordance with their marginal productivity and social productivity requirements. Such payments depend upon the particular types of demand and supply configurations for factors of production. In a perfectly competitive market for factors of production it is the marginal productivity theory of factor payments that is applicable in determining factor payments. In the case of market imperfections, particularly of the type of externalities and in monopsonistic competition, the marginal productivity theory of factor payments is not totally acceptable. Here methods on the social determination of wages and remuneration must be applied.

Islamic venture capital ‐ A critical examination

The well‐known modes of raising and mobilizing venture capital in Islam known as mudarabah and musharakah (m&m) in Islamic economics are critically examined. In the form as m&m presently exist, they are pointed out to be pre‐Islamic financing instruments that came into usage in the Islamic economic literature. The inability to realise the extensively relational perspectives of Islamic socio‐economic co‐operation with extensive participation across agents, firms and sectors by means of these instruments, which are essential requirements for the Islamic political economy, is shown to make the instruments fraught with many technical and ethical problems of development financing. The alternative to transform m&m into a more integrated financing instrument of Islamic venture capital is formalised. Empirical evidences are given. Institutional issues are examined in the light of Islamic joint venture financing.

The Islamic world-system : a study in polity-market interaction

Part I: Theoretical Perspectives 1. A Theory of the Islamic World-System 2. A Formal Model of the Islamic World-System 3. An Evaluation of the Occidental World-System Part II: Applied Perspectives 4. A General Systems Theory of Knowledge: Application to Family and Ecology 5. The World-System According IBN Khalduns Prolegomena comparatively viewed 6. The Islamic Political Economy of Property and Property Rights: Concepts and Application 7. Micro-Money: Islamic Perspective 8. An Overlapping Generation Valuation Model with Debt-Equity Swaps 9. A Knowledge Model of Layers of Techniques 10. Conclusion

Markets as a system of social contracts

Examines critically traditional economic paradigms as well as those given by Hayek and Buchanan on markets with constitutional contracts in order to contrast them with yet another view of market ‐ that endogeneity of various political and economic processes creates a global system of interlinkages among and between policy variables and socio‐economic variables. By invoking the methodology and epistemology of such a system develops a theory of globally interactive market processes. In such a globally interactive system, markets are seen to be induced by and to regenerate circularly endogenous preferences. Knowledge induction becomes epistemologically critical in such an evolutionary and interactive order. Hence, these globally knowledge‐induced interlinkages generated by policy‐market interactions are made to establish and explain what is termed here as a system of social contracts.

Corporate governance in Islamic perspective

Purpose - The purpose of this paper is to delineate the substantially different theory and application of corporate governance idea in Islamic financial theory contrary to the perceived one in the literature. Thus, a comparative and contrasting examination of the topic is provided. Design/methodology/approach - A theoretical and extensively comparative study of the literature to bring out the objective of presenting the systemic theory of Islamic corporate governance underlying its specific epistemological foundations. Findings - The hetrodox theory of Islamic finance in regards to the theme of corporate governance is shown to be a viable alternative way of understanding this topic in the light of the particular Islamic epistemological premise. Thus, Islamic financial perspective, exemplified here in terms of corporate governance, is expounded. Research limitations/implications - Empirical extension can be made but such epistemological responses are presently not available from the Islamic financial institutions because of their imperfect premise on the epistemology of unity of knowledge and organization on which the theory of Islamic corporate governance rests. Social implications - A vast social implication of corporate govarnance is opened by its epistemological inquiry comprehending integrated decision-making and systemic complemenatrities expending across society at large. Thereby, a socio-financial theory of corporate governance in the epistemological context is elaborated upon. Originality/value - This is a pathbreaking paper premised on its epistemological approach of unity of knowledge and learning systems as a distinct contribution in the theory of corporate governance in the field of ethical socio-financial perspective.

The Epistemic‐Ontic Circular Causation and Continuity Model of Socio‐scientific Reality The Knowledge Premiss

Undertakes an epistemological formulation of ethico‐economics. This formulation challenges the neo‐classical and macroeconomic foundations of mainstream economics and then presents the rigorously analytical depths of ethico‐economics. Traces the developments, the praxis of the rational precept of economic science from its Hellenic roots as this found inroads into the thinking of the classical, Austrian institutionalists and political economists. Shows to be logically flawed several areas of general equilibrium and market equilibrium relations that we face without question in a pedagogical presentation of economic theory. Even the microeconomic and macroeconomic dichotomy is a kind of duality in economic reasoning that has the traces of Kantian dualism in it. Hence, in none of the received economic doctrines the circular cause and effect of the epistemic and the ontic roots of human reasoning are unified together to give a truly interactive view of economic activities embedded within the larger ecological ...

Interrelationship between Zakat, Islamic bank and the economy: A theoretical exploration

Purpose - The purpose of this paper is to formalize a general equilibrium circular causation relationship model in the Islamic economic framework between wealth tax (Zakat), Islamic bank and the real economy. Design/methodology/approach - Mathematical modeling along with explanation. Findings - The integrative interrelationships can be formalized only under the assumption of unity of knowledge as derived from the foundation of oneness of the divine law (shari’ah) according to the Qur’an, Prophetic traditions (Sunnah) and social discourse. Research limitations/implications - A future work would be to empirically estimate the general equilibrium model. Practical implications - A guidance to Islamic banks on the constructive utilization of Zakat fund for productive transformation in the real economy. Originality/value - A general equilibrium model guided by the episteme of oneness of the divine law at work, hence unity of knowledge at work in real problems of ethics and economics according to the Islamic worldview.

Learning sets and topologies

Purpose – This is an exploratory analytical paper. It aims to show how systemic learning is explained formally by evolutionary sets and topologies of ordinal values of knowledge‐flows, the knowledge‐induced socio‐scientific variables and the relational mappings in terms of knowledge‐flows and their induced socio‐scientific variables.Design/methodology/approach – Mathematical theory of sets and topology is used to study the evolutionary impact of learning on social problems, whereby the impact can be transmitted into sets and topology for measurement.Findings – The properties are of interaction, integration and creative evolution of the knowledge‐flows and their knowledge‐induced socio‐scientific variables and relations that are realized by circular causation interrelations. Such systemic learning emanating by circular causation relations is defined by measurable mappings over sets and topologies.Research limitations/implications – The cybernetic nature of the paper points toward potential machine interfac...

Microenterprise development using Islamic financing and organizational instruments

A microenterprise is modeled on Islamic epistemological premises to bring out its extensively applied perspectives using community‐based participatory instruments of Islamic law (Shari’ah). The case study is for Bangladesh, but the model developed has universal implications. Various organizational features of such a microenterprise model with a strong human resource development focus at the grass roots are explained in detail, keeping in view the process‐based systems perspectives in the knowledge‐induced learning process that is embedded in the model of the Islamic microenterprise.