From Light to Darkness

Darkness & Light: More than twenty five years ago, after I spent four months in Tableegh, I was struck by what appeared to me to be a stark contradiction between the Quran and the empirical reality – The Quran says that the believers will be led out of darkness towards the light, while the reverse will be true of those who deny the faith. My Western education showed me a world in which exactly the opposite was true; where the light of knowledge illuminated the universities of the unbelievers, while ignorance and darkness reigned supreme in the religious seminaries of the believers. One of the key elements of the work of Tableegh is to create faith in the unseen, against the visible evidence of our experience. The Quran starts with a description of believers as those who believe in the unseen; exactly the opposite of what my Western education had trained me to do: believe only in observable, empirical evidence. Faith requires us to believe that even though we see that fire burns, the reality is that all power belongs to Allah, and it is only by the will of Allah that fire burns. Allah T’aala can withdraw this power, and turn fire cool, if He so desires. The work of Tableegh had strengthened my faith sufficiently, so that I believed that the Quran was correct, and my experience and education had led me to the wrong conclusions. But, for the life of me, I could not understand how this could be true. I had learned that we must subordinate our reason to the Quran, rather than subordinating the Quran to reason (see: The Quran: Faith and Reason). I started to regularly make dua to Allah to resolve this problem by showing me the light of knowledge promised to the believers, and to make clear to me how the unbelievers were led out of the light into the darkness.

First Steps Towards the Light: There was no blinding flash of lightning in response to my prayers. Rather, step-by-step, day-by-day, I was gradually led along pathways which I could not have imagined. The first steps in my journey towards the light are described in “My Journey from Theory to Reality”.  In order to turn my teaching into an act of worship, as all acts of a Muslim should be, I resolved that I should teach “Beneficial Knowledge” only, which the Prophet has sought in his duas. Since the prophet had asked for protection from “Useless” knowledge, I made the intention to avoid teaching useless knowledge. However, I did not know what useful knowledge was, and how I could separate it from useless knowledge. Initially, I started with the assumption that useful knowledge allows us to solve real world problems, while useless knowledge does not. Much to my surprise, as I struggled to use my academic knowledge to solve real world problems, I learned that most of it was useless. The micro theory that we had been taught actually was a barrier to understanding real human behavior. Similarly, the macro theories of the labor market show (even now) that involuntary unemployment cannot persist in the long run.  But this is also contrary to observed empirical realities. My personal struggles to resolve conflicts between the economic theories that I had learnt in graduate school, and empirical evidence produced by observations of the real world, are described in “The Education of An Economist”.

Macroeconomics: When you study the history of thought, it is easy to see that neoclassical economic theory is designed to prove the superiority of free markets, and inferiority of government, regardless of empirical evidence – see “Ideological Macroeconomics and Increasing Inequality.” So eventually I realized that massively sophisticated mathematical theories I had learned in graduate school concealed complete ignorance about the real world. This became obvious to the whole world when the Global Financial Crisis of 2007 took the entire profession by surprise. Furthermore, vigorous application of dominant theories failed to prevent the Great Recession which followed. On this occasion, many leading economists publicly stated their extreme dissatisfaction with reigning macroeonomic theories – see “Quotes Critical of Economics”.

Microeconomics: The entire field of behavioral economics emerged when psychologists tested economic theories of consumer behavior and found actual human behavior routinely and systematically violates these theories. In my paper on “Empirical Evidence Against Neoclassical Utility Theory: A Survey of the Literature”, I collected evidence over a vast range of categories, which conclusively established the failure of neoclassical microeconomics. Again, what appears to be a sophisticated and complex structure of knowledge turns out to be a deception and an illusion. This becomes clear upon application of the very simple Islamic principle of pursuing “beneficial knowledge”. Can we understand human behavior and welfare using microeconomics? The field of “Happiness Studies” emerged when empirical studies uncovered the Easterlin Paradox: Contrary to economic theory, massive increases in levels of consumption do not lead to corresponding increases in happiness and welfare.

Mathematics and Statistics: I did my BS in Math and MS in Statistics. I was taught that this was the apex of human learning – the closest we could get to truth and beauty, in the cold hard world of objective facts and logically exquisite proofs. For a long time, I was enchanted by this spell. But when I applied the yardstick of “usefulness”, I searched long and hard, but could not find any real world application of the skill of proving theorems that was central to these subjects. Reading “A Mathematicians Apology” by Hardy confirmed that study of mathematics was a purely aesthetic pursuit, like art. Hardy thought that  the most beautiful mathematics was that which had no practical applications in the outside world (pure mathematics) . Similarly, Statistics turned out to be a way of deceiving people by the use of numbers (see Real Statistics: An Islamic Approach, for more details).

Initial Conclusions: Towards the end of this journey, which took more than a decade, it became clear to me that all that I had thought was advanced and superior knowledge, was actually an illusion of knowledge. This seems like a mind-boggling conclusion, especially when proof of the value of Western technical knowledge surrounds us on all sides. To arrive at it, one needs to break it down into small digestible pieces, and then attempt to absorb, assimilate, and understand the small pieces separately. For example, it is not difficult to see deep and fundamental problems with conventional macro and micro. Also, a large portion of mathematics is explicitly and proudly, purely a theoretical enterprise, with no possible real-world applications. In both statistics and econometrics, many have realized that conventional techniques make assumptions (like normal distributions) which do not hold in real world data sets. As a result, one can get extremely bad results from standard techniques. In my paper on “Origins of Western Social Sciences”, I have explained how social sciences emerged in the West as a direct result of rejection of Christianity. Because rejection of faith led to rejection of heart and soul as sources of knowledge, the social sciences are based on a fundamentally flawed conception of the nature of human beings. As a result, the path is open for us to launch “An Islamic Revolution in Social Sciences”. But what about the technological progress that we see all around us? To evaluate it, we need to do a cost-benefit analysis in terms of millions killed by advanced technology, and the destruction and pollution of air, land, and sea, impending environmental catastrophe, and mass extinction of countless species, possibly including humans, in the near future. Perhaps we would have been better off living simpler lives, in peace and harmony with our neighbors and our environment, instead of the continuous warfare with all that currently prevails.

My Western education had taught me to believe that advanced mathematics and science would provide us with the solution to human problems. In fact, central questions of our existence, like learning to recognize our hidden potentials, and our true identities, are outside the scope of a secular modern education. Developing an Islamic approach to education taught me how we can study secular subjects in way that helps us to solve human problems, and to live better lives. How can we learn to be human beings, and to realize the potential for excellence which we are all born with? This remains the exclusive province of Islamic teachings, which are just as revolutionary today as they were fourteen centuries ago.

Underground Railroad: Path to Freedom

[bit.do/azurp] In early 19th century, slaves in South USA would escape to the North and Canada using the “Underground Railroad”, a network of meeting places, secret routes, passageways and safe houses, created to enable such escapes. In a previous talk on “Learn Who You Are!“, we discussed how a capitalist economy turns us into human resources for the production of wealth, by deceiving us about our true identities. This talk is about how we can build our own underground railroad, in order to free ourselves from the chains of thought which bind us. Just like a fish is unaware of the water in which it swims, so we are unaware of the tides of history which have shaped our lives and our ways of thinking. One effective strategy for liberation is to rise above it all, and to examine human history from a broader perspective. In this 20m English Video talk, we will look at three major historical events which have changed the lives and thoughts of everyone on the planet:

  1. The conquest of 85% of the globe by Europeans, completed by the early 20th Century.
  2. The transformation of European societies from traditional to secular, modern, market societies.
  3. The spread of Eurocentric History, and Market Ideologies throughout the globe by the means of Western education.

A brief English summary of the talk is given below. This talk, and the previous one, are English versions of the first two segments of a 1hr 30m Urdu talk at Iqra University on “Learning How to Become a Human Being, Instead of a Human Resource“.

European Colonization of the Globe: The need to justify ruthless and barbaric conquest, accompanied by uncountable massacres and genocides, required the creation of honorable cover story. To understand this, it is useful to look at the Iraq invasion. This was justified on the grounds of protecting the world from Weapons of Mass Destruction, liberating the Iraqi people from an evil dictator, and bring benefits of democracy to the people of Iraq. The reality was a complete destruction of nearly all infrastructure, killing of more than a million innocent civilians, and giving the Oil Cartel control of the vast oil reserves of Iraq. Exactly like this, the justification given for global conquest was that the Europeans had an extremely advanced civilization, and they wanted to share the benefits of their progress, science, technology, and democracy with the backwards and ignorant people living outside Europe. The reality was that massive amounts of wealth of Africans, Asians, and Americans was transferred to Europe, making them tremendously wealthy, while the rest of world became extremely poor, ignorant, and backwards, as a result of this looting and destruction. See Central Myths of Eurocentric History for more details.

The Great Transformation: The industrial revolution in England led to creation of mass overproduction. The necessity to produce excessive goods, and to market them, led to the transformation of traditional European society into a market society. A traditional society is built on social norms of cooperation, generosity, and social responsibility. However, in order to create a market society it is necessary to change these norms, so that no one is willing to help others in distress. It is only creation of need and dependency on a massive scale that permits the creation of a labor market, where major chunks of human lives are sold for money in the marketplace. When all our needs for survival must be purchased, this has a deep effect on our ways of thinking. Money becomes god, for it can buy everything – unlike traditional societies, where markets are not dominant, and the most precious things are not for sale. For more details, see “The Great Transformation“.

Western Education: In a market society, the purpose of education is to create workers for the labor market. Students are indoctrinated into thinking of themselves as human resources, commodities for sale in the labor market. the society learns to value human beings according to how much they can earn. Pursuit of Wealth becomes the purpose of life.  Student are taught to compete with other, to think of education as a means to earn money, to value grades and degrees, instead of an education which teaches us how to live our unique and precious lives to the fullest. Theories that we learn teach us to be selfish, care about money over social relationships, and to accept no moral obstacles in the path of pursuit of pleasure — “All is fair in love and war”. As even Western observers have noted, these philosophies are poisonous; see for example, Julie Nelson “Poisoning the Well: How Economic Theory Damages Moral Imagination“.

The Underground Railroad: Three major historical events have shaped our thoughts. When we become aware of these trends, then it becomes possible to see where these ideas came from, and it becomes possible to imagine alternative ways of thinking and acting. In this process, Islam provides us with substantial guidance regarding revolutionary alternatives which can transform our personalities, and change the world. The pathway to liberation is the same as it was 1400 years ago; see “Islamic Knowledge: Still Revolutionary after 1440 Years

The Forest and Tree Principle

In a previous post, “My Journey from Theory to Reality“, I explained how converting my ‘worldly’ profession of teaching economics to an act of worship required working on intentions: (both mine and the students). I made the intention to study “useful” knowledge, in order to provide service to the creation of God, for the sake of the love of God. I also asked my students to make the same intention.

Our Prophet Mohammad SAW made dua for beneficial knowledge, and also made dua for protection from useless knowledge. This distinction does not exist in Western epistemology. In fact, there is an explicit argument made that there is no such distinction. Apparently useless knowledge we acquire today (for example about how bats navigate without eyes) may become useful tomorrow (as in the discovery of the sonar). It is clear that Islam does make a distinction, and so  it became necessary for me to make the effort to find out the nature of “useful” knowledge. At the outset, I defined the term solely in terms of the ability to use this knowledge in order to solve some real world problem. Later, I learned much more about ‘useful’ knowledge. In this post, I will describe some basic and elementary facts that became clear to me in my search for useful knowledge to teach my students.

My first introduction to the huge gap between theory and practice came when I wrote my first book: “Statistical Foundations for Econometric Techniques“. When I submitted the first draft to Academic Press in 1990, one of the reviewers wrote that the author is an expert on theory, but has no grasp of real world problems. The theory of knowledge that we had absorbed in Graduate School taught us that applications were trivial. We took our theoretical models, and plugged in real data sets to get the results. So I was irritated by this criticism; I decided to add one real world application to each chapter of my book. To my great surprise, this process took six years, delaying the publication of the book to 1996! I ran into great difficulties when I tried to find serious and realistic applications of the theory I was describing in the book. It was not a matter of just plugging in data and producing results. Most data did not fit the assumptions made in our theoretical models.  Eventually, I did manage to add a lot of realistic examples, almost one per chapter as I had decided. But in the process I learned a lot about the gap between theory and practice in Econometrics. I could find real examples only by choosing the very few realistic problems which provided a rough match to the theoretical assumptions. I learned that the vast majority of complex real world problems did not fit the simplified assumptions we used to set up our theoretical models.

As one example, Chapter 5 of my textbook was an introduction to robust regression techniques. When I surveyed the literature, I found more than 25 different techniques had been suggested in the theoretical literature. This was too many to cover in one chapter.  While trying to decide what to cover, I decided to look at techniques which had actually been applied to the analysis of real world data sets. That immediately reduced the number under consideration to only 5 or so, which was possible to cover. This was just one among many examples which showed me the great divide between theory and practice. Theoreticians would happily work out solutions to problems which never occur in practice, making assumptions which lead to nice mathematical solutions. In contrast, real world problems would have structures which were too complex to express in elegant mathematical forms, and hence were never dealt with by the theoreticians.

The simple idea of converting the theoretical knowledge that I had been taught, into practical ideas which were relevant to solution of real world problems, made my life an exciting process of continuous discovery — every abstract theoretical idea acquired new life when it was translated into the context of a real world application. Many theories and skills that I had been taught died a natural death — I learned that they could not be applied. For example, I discovered that the mathematical theorems and proofs that I had spent years learning had no practical real world applications. The few theories that could be applied acquired new meanings, depth, and complexity, when viewed in the light of real world applications. This led me to what I have called the ‘forest and tree’ principle. The forest is a theory about how a collection of trees can be grouped together — this collectivity exists in minds, and is subjective. At the same time, the trees are out there, and an objective part of external reality. Understanding the world requires simultaneous work on the theories which organized the complex external reality into simple patterns (the forest) , and on the objects (trees) which have been collected into a pattern by ignoring a huge amount of details regarding the particulars (like size, type, distances from other trees, age, etc.). The forest and tree principle involves looking together at the forest and trees: the general and abstract theories, and the particular and special trees. I found this principle of great importance in developing “useful knowledge”.

The Forest and Tree principle: Any abstract theory, philosophy, or concept, can only be understood in context of its application to a particular, specialized, concrete, and unique real world problem. The converse is also true: we cannot understand particular, special, and unique real world problems without the help of abstract theories.

We all learn Western epistemology (theory of knowledge), not because we take courses in philosophy, but by on-the-job training that an apprentice receives. The courses we take in chemistry, biology, physics, mathematics, history, economics, etc. etc. etc. define for us the nature of knowledge — knowledge is what we learn in our courses. Because it is never mentioned, we are taught that learning how to live, discovering the purpose of life, learning codes of conduct for our personal, family, and social lives — these are NOT part of knowledge. As I understood much later, real knowledge is about learning how to realize the potential for excellence that all human beings are born with. Knowledge of our internal world, which is required for this, is not part of the Western syllabus, but plays a central role in the teachings of Islam. The Forest and Tree principle applies to the knowledge of the external world, which is the sole focus of Western knowledge.  But even when it comes to the study of the external world, Western theories of knowledge are seriously mistaken. This is especially surprising in view of the tremendous success these theories have achieved in terms of technological and scientific progress. The errors arise from the effort to prove that scientific theories are objective facts about external realities, when in fact they are subjective ways of organizing collections of facts into meaningful patterns. To understand this, it is useful to think more deeply about the forest and the trees.

Even though there is an external reality which is objective, out-there, and same for all, our only access to this reality is through our subjective senses. When we call an object in the external reality a “tree” – we have already added a lot of subjective information to the external reality. We have ignored a huge amount of information — how many branches, leaves, colors, wood density, age, molecular composition, roots, etc. etc. — in arriving at this classification. Philosophers of science have realized that observations are theory-laden. The tree is not an external reality out there; it is a product of our classification system which says that many details about the external Tree-object can be ignored, while certain special aspects must be taken into account. If we really took all details into account, then every tree would be a particular unique type of object which would have no other similar objects elsewhere. A fact of the type: there is an object O, at time T, which has characteristics C1, C2, …  is not very useful because we cannot use it to say anything about the world in general. In order to learn from observations, it is NECESSARY to introduce THEORIES – These theories tell us what facts should be considered as important, and which ones can be ignored. It is after ignoring particular details of the tree, that we can create a collection of trees which share similarities, and are located in the same place. Thus the FOREST is a subjective meta-theory – it is theory which is built on top of our theories regarding what a tree is.

In general, whenever we collect an objective set of observations about the external reality, it is necessary to find some patterns in them, in order to learn something more about the real world. If we have a collection of facts F1, F2, F3, … these facts tell us nothing more than what they are themselves, UNLESS we construct a theory based on these facts. The theory is what allows us to LEARN from the facts, but the theory is ALWAYS subjective — it is based on our own judgments about how to organize the trees into a forest.

One very important implication of this way of understanding the world is that we DO NOT LEARN from EXPERIENCE. Experience is just a collection of facts that we observe in the process of engaging with the world. Learning comes from applying a THEORY to organize this experience. To give a very simple example, consider someone who struggles to achieve some goal, and fails 100 times. What can he learn from this experience? He may apply the theory that the goal is too difficult, that his capabilities are too limited, or some other similar lesson, which says that he should give up. Alternatively, he could apply the theory that his failure represents incomplete effort and insufficient experience, and therefore he should try harder, and learn more, in order to succeed. It is interesting that both theories can prove themselves by further experience. The one who gives up will say that yes, my theory is correct, and a 100 examples prove it. I have no need of further experimentation to prove my theory. The one who keeps trying may experience success on the 150th trial, can also conclude that his theory was correct. Identical people with identical experiences may apply different theories and learn different things from the same experience.

Let me summarize the key lessons of the forest and trees. Theories about the external world are based on collections of facts, but always involve subjective elements — theories are patterns in our mind which have some reflections in external realities as well. All facts are also theory-laden, which means that arriving at a “fact” always involves discarding large amounts of information as being irrelevant, and focusing on some small set of observables as being relevant — this classification is based on our theories about what matters and what does not matter. It is our higher level theories — like the forest — which determine how we define a tree (so as to fit into a collection of trees). So what we observe in the real world is based on the theories we use to look at the world. This is how our theories like “forest” can only be understood by looking at external realities represented by the “tree”. But also, the external reality can only be understood by applying theories which allow us to abstract from the particular and unique features, and put our experience in terms which can be shared across individuals because of the commonalities.

My Journey from Theory to Reality

I have now created a new website to use for the “final” version of a course on “Real Statistics: An Islamic Approach.” I have been working on this course for more than ten years. The journey started when, inspired by Tableegh, I started thinking about how to turn all of my life into worship, as required by the Quran (51:56) “And I did not create the jinn and mankind except to worship Me.” As a professor, a large part of my life consisted of teaching. At the time, I also believed in the myth of “secular knowledge” — statistics is just objective facts about numbers, and as such, it would be same subject whether approached from Islamic perspective or from Western. The laws of gravity are the same in the East and the West. As I progressed in the journey, I learned that this was not so — the subject matter itself changed, when approached from an Islamic angle. However, this was not clear to me at the start.

But it was clear that an Islamic approach did make a difference. An act of worship must be done with the intention to serve Allah. If I teach statistics in order to earn money to feed my family, this may be permissible, but it is a secondary level, a worship after other worships. Furthermore, for people who are sufficiently well off, this may not be permissible. Furthermore, there are some restrictions on buying and selling education. It seemed better to target for a higher intention, where these doubts would not arise. I made the intention to provide USEFUL knowledge to my students, and also to ask my students to USE this knowledge to provide SERVICE to the Creation of Allah, for the sake of the LOVE of Allah. This involves two changes from the standard approach to teaching, one for the student and one for the teacher:

  1. As a Teacher, I am committed to providing USEFUL knowledge, instead of covering whatever is written in the textbook. I wanted to go from the theory to the application, to show how the material covered is used to solve real world problems. I found that typical textbooks were useless for this purpose. They covered concepts in a purely theoretical way. Real data was often used, but it was always for SHOW – it created an IMPRESSION that these techniques can be used on real data sets, but there was no actual problem which occurs in the real world, which could be solved by these techniques. The UNIQUE textbook that I found which did actually cover real world problems was “Statistics” by David Freedman. This books starts with a discussion of real world problems, and every technique discussed is illustrated in context of real world use of statistics. I immediately adopted this textbook for use in my teaching of statistics, as being clearly useful knowledge. Even though I had Ph.D. level training in statistics, I found this book very hard to read — even though it covers very basic concepts. The reason is that the theoretical training we receive in statistics does not prepare us to solve real world problems.
  2. For Students, I asked them to change the intentions with which they were sitting in my course. Typically, the students assume that the subject being taught is of zero relevance to the real world (as in fact most social science subjects taught in universities are). They are sitting with the intention to acquire enough knowledge to pass the exams for the course. When you try to teach them something difficult, they immediately ask if it will come on the exam, so that it would be worth making the effort to try to understand. Passing the exam is required for the degree, and the degree is required for the job, and the job is required for money. Making money is the goal of life. I asked the students to change their intentions. I told them that statistics is routinely used to deceive people (see “How to Lie With Statistics”), and Economic Hit-Men use statistics to deceive nations into following wrong policies. I committed myself to working hard to ensure that they received knowledge which would be more than just bookish and theoretical, and would actually have application to real world problems. In turn, they should commit to making a real effort to understand and learn what I teach, and to use it to create a better world, to serve mankind, for the sake of the love of God.

With this change in intention on part of the teacher and the student, both can be considered to be performing an act of worship in the process of studying statistics. Of course, it can be argued that earning money is also an act of worship (under suitable restrictions) so that the standard methods of teaching and studying would also qualify as acts of worship. Without going into controversial discussion, note that Quran (67:2)”[He] who created death and life to test you [as to] which of you is best in deed – and He is the Exalted in Might, the Forgiving“. We are not here to do what may or may not be permissible — this is a competition to see who can do the BEST deed. It should be clear that an intention to use knowledge to serve humanity, for the love of Allah, makes studying much closer to a best deed, compared to the intention to get a degree and earn money for personal benefits, regardless of whether or not this is permissible.

At the start of my journey to convert my teaching to a form of worship, I did not expect that there would be changes in the subject itself. I expected to make myself and student ‘responsible’ users of knowledge. They should not learn how to build atom bombs, and then claim that they have no responsibility for how it is used. A statistical consultant who studies how to raise taxes should have awareness of whether or not this is in the public interest. However, much to my surprise, I found that the subject matter itself changed, as I struggled to make it useful to students. In the two commitments to convert study and teaching into worship, I was trying to live up to my commitment to ensure that the topics I were teaching were actually useful. Working on making the subject useful led to a lot of surprises for me. The standard approach to education which had been given to me was ‘analytical’ — acquire small pieces of knowledge A,B,C, …. and then put them all together to arrive at the big picture. I discovered, to my bitter experience, that all the small pieces I had been taught did NOT add to a bigger picture — they just remained small pieces. See “Recovering from a Western Education“.

Instead of teaching techniques T, R, S, separately and asking the student to put them all together to solve real world problems, I wanted to combine theory and application by showing students how techniques are used in the real world. Of course, the standard objection to this approach is that each technique is not applicable by itself — rather, it is a whole package of techniques which are used together to solve a problem. To resolve this problem, I decided to do ‘reverse engineering’. Start with a real world problem, and introduce whatever techniques are required for its solution in the process of finding the solution. This will have the advantage of keeping students motivated, because we will work together on solving real world problems which actually matter. This methodology will also show how techniques are used in real world contexts, ensuring that these techniques are indeed “useful” knowledge. I decided to follow this INVERSION principle in teaching. Instead of teaching techniques T,R,S, … and hoping that in some later course, someone else would put them together in order to solve real world problems, I would devote the course to the solution of problems P1, P2, P3. I would pick the simplest possible real world problems. I would ONLY teach techniques which were ACTUALLY useful in solving these real world problems. At the end of the course, the students would actually have knowledge of how to solve at least a few real world problems.

This INVERSION methodology goes against the separation of theory and practice which is often done in Western education. By studying how to solve real world problems, we guarantee that knowledge being given is useful. We also study theory ONLY in the context of how the theory is used to solve real world problems. We DO NOT study theory in isolation, separated from how the theory is used in the the real world. Doing this created a dramatic change in the topics that I started to teach. My original training was heavily mathematical. A Bachelors in Math and more advanced training created within me an extreme admiration for the beautiful, elegant, and complex proofs, that we learned for deep and difficult theorems of mathematics. To my mind, this was the highest form of learning. As I started studying about how I could use my knowledge about how to prove theorems to solve real world problems, I was extremely disappointed. I could not find a SINGLE real world problem where my abilities to prove mathematical theorems would be helpful in finding a solution. Very gradually, hesitantly, and reluctantly, I reversed my position about the value of learning proofs of mathematical theorems. I started expressing this insight in terms of the metaphor of the car engine and the driver. An excellent car driver need not know anything about the car engine. Conversely, an excellent mechanic who knows everything about radiators, spark plugs, and cylinders, may be very poor as a car driver. What mattered for practical purposes, for most people, was learning how to drive. Our education — in terms of proofs of mathematics, was training us to open up the engine and analyze all the parts — but DID NOT TEACH us about driving the car. Learning how to drive the car — that is learning how to solve real world problems — was VERY DIFFERENT from the process of learning how to put the engine together, and learning about how the different parts of the engine function.

I started teaching students how to solve real world problems, and teach them ONLY those parts of theory which they needed to solve them. In this process, I learned (much to my surprise) that HUGE portions of the theory that I had learnt were completely useless. The blinders fell from my eyes when I realized that the beautiful Gauss-Markoff Theorem, which is at the center of every basic econometrics course, is completely useless. This theorem shows that OLS, the most important regression estimator used, is BLUE – Best Linear Unbiased Estimator. However, this property has no relevance to whether or not we should use it in practice. The student who knows this theorem is no different from the one who does not know it, when it comes to practical applications. Instead of teaching students the theory of regression models, I did ‘reverse engineering’. I would start by taking data and running a regression, and my goal in the Econometrics course was to ensure that the students would understand all the numbers that are written on the regression printout. During the process of teaching in this way, I came to realize the UNDERSTANDING concepts was VERY DIFFERENT from actually learning how to carry out computations, or doing theorems and proofs. I started explaining in an intuitive way the MEANING of the concepts being studied, rather than explaining the technical details. For example, the calculation of the OLS estimates involves forming the matrix X’X, inverting this matrix, and multiplying by X’y. However, students can understand the meaning of the OLS estimates without knowing any linear algebra, or even anything about matrices.

This insight — heavy mathematical training is not needed to learn how to drive — allowed me to launch the first Ph.D. program in Econometrics in Pakistan. I was encouraged to do this by the HEC Launch of the Indigenous Ph.D. Fellowships, which allowed me to take students for this program without worrying about financing them. I realized that it was possible to teach students to DO econometrics, without learning years of heavy mathematical theory, in the way that I had been taught. This program proved to be very successful. It produced students who were able to write research papers at world-class levels, contrary to my initial expectations. I was also able to create a radically different course in research methodology, which focused on having students define a real world research problem, and then doing whatever research was required to find solutions to this problem. This methodology created a stream of M. Phil. and Ph. D. students at IIIE, IIUI, whereas previously research had been at a standstill.

Sometime during this process of switching from teaching theory to teaching how to solve real world problems, I came across the “Statistics” textbook of David Freedman. This textbook actually implemented exactly this idea that I had come to believe in — do statistics in context of solving real world problems. One amazing characteristic of this textbook is that it has no mathematical formulae – ZERO. Freedman explained that students use formulae as crutches to prevent them from thinking. So he explains all concepts in words only, exactly the same insight that I had learnt on my own. Formulas teach you techniques for calculation. We don’t need these techniques — leave them to the computer. We need to UNDERSTAND what these calculations mean. That is a VERY DIFFERENT process. I got involved in an email correspondence with David Freedman, who had very similar experience to mine. He had started out as a very heavily mathematically oriented researchers. His early papers are all very heavy mathematically. Later, when he got involved in doing some testimony in real world court cases, he realized that all of the theory he had learnt was useless in the real world. This is because the assumptions we make in theory are almost always false in the real world. Then he had to learn how to do real world statistics, exactly as I have had to do. Since most fancy assumptions we make in statistics and econometrics are wrong, we need to learn how to do simple and basic inferences, which actually makes life much easier for students of the subject — we need to teach them basic and intuitive things, not complex models and math.

David Freedman died in 2008. Around this time, some of my students in Turkey were trying to launch a new International Journal in Econometric. I had asked David for an article for our first issue. He had written a draft, and it had been circulated for comments to other leading econometricians. The first issue of the journal, International Econometric Review, Vol 1, No 1, April 2009 contains my short memorial note for David Freedman, which describes his intellectual journey. It contains his article on “The Limits of Econometrics”, which explains how the assumptions we make for running regression models are almost always wrong in real world applications. Then it contains comments by famous authors Arnold Zellner and Richard Berk, on the problems created by Freedman’s approach, and how we could do realistic econometrics.

The proposed course on Real Statistics: An Islamic Approach is a continuation of efforts to teach students USEFUL knowledge, as required by Islam. In the process of trying to do so, I have made very unexpected discoveries. I have learned that the problems created by splitting Theory and Practice are not a small and isolated set of problems which do not affect most of Western knowledge. In fact, three divisions which are made in Western education are extremely harmful for students, because they prevent understanding. One division, between theory and practice, has already been discussed. Because of this division, a HUGE amount of useless theory, which has NO POSSIBLE application to real world problems, is developed. One example is the entire theory of Unit Roots, which is completely useless from the perspective of solving real problems we face in the real world. Another division is of the Head and the Heart – see my personal experiences with this in “The Great Divide: Head and Heart“. A Western education places enormous emphasis on ‘reasoning’ and very little on intuition. But our learning proceeds from the heart, which can feel and sense truths, rather than our head, which has limited abilities to reason. So explaining concepts, as I learned to do, requires appealing to the hearts of the students. The third major divide has been recognized as a serious problem by many academics, and has been named “the Fragmentation of Knowledge.” Everyone knows a in great detail about very small piece of the picture — which is his own speciality. No one has any idea of the big picture. The theoretician does not know about the practice, and the practitioner does not know the theory. When I got my Ph.D. in Economics, I had deep knowledge of a very specialized area of econometrics (Bayesian and Decision Theory), but only superficial knowledge of many other areas of econometrics (for example Time Series, Simultaneous Equations, and other areas). What is much more important, I did not know what role econometrics plays in the area of economics as a whole — how does it contribute to the advancement of human knowledge? Even more, I did not know the significance of the study of economics, within the entirety of human knowledge. 

Over the twenty years that I have been pursuing an Islamic approach — focusing on the production of USEFUL knowledge, I have managed to heal all three of these divides. This happens naturally, when you focus on solution of real world problems. You automatically need to combine information coming from many different specialization areas. You need to use reasoning and also intuition. You also need to use both theory and its applications to the real world experiences. This leads to substantial changes in the subject matter itself. I have applied this approach with great success to Econometrics, Statistics, Microeconomics, Macroeconomics, Experimental Economics, and even Mathematics itself. I am in process of creating textbooks and teaching materials in all of these areas. Because my work is most advanced in the area of Statistics, I am working on putting it all together in a new course on Real Statistics: An Islamic Approach. There is a large amount of pre-existing material – lectures, texts, exercises, references – that I have created over the past decade on working on this course. However, as I progress, I keep learning new things, and this time I want to put together a polished new version of this course for public use. My primary target audience is teachers of statistics — I  would like to persuade them to use this new approach to teach statistics. Those who would like to follow my progress as I construct a new website on a lecture by lecture basis gradually are encourged to fill in the following Registration form. I will use emails to notify them when I complete a new lecture, and also invite feedback on what is there, so that we can build it up with clarity and consensus. 

Registration: Real Statistics: An Islamic Approach (RSIA) 

 

 

IE 2019 Final Exam

My course on Islamic Economics last semester at IIIE, IIUI synthesized a lot of work I have been doing in this area for more than a decade, to create an entirely new approach to the subject. We start from the point of view that all actions of a Muslim should be acts of worship. So how can we study Economics in a way so that it becomes an act of worship? Since the worth of actions depends on the intentions, the first step must be to examine our intentions for this study. Accordingly, the course starts with a discussion of purpose of our lives. The website for the course on Islamic Economics 2019 has shortlink bit.do/ie2019. I am in process of creating a new website which would organize this set of lectures into a new textbook and supporting materials. This post provides the Final Examination of the course, which will give an idea of the materials covered during the course. The first five questions have been answered in detail in earlier posts, and I will provide answers to the remaining questions in later posts. Links to earlier discussions of these questions are also provided below:

  1. What does modern Economic theory teach us about the purpose of life? How does this contrast with the purpose of life as per Islamic teachings? What should the purpose of life be for someone who does not know whether or not God exists, and if so, which religion is correct? ANSWER: See IE 2019 Q1 Economic Theory: Purpose of Life.
  2. Distinguish between Useful Versus Useless knowledge according to Western teachings and the same two concepts according to Islamic teachings. ANSWER: See IE 2019 Q2: Useful Knowledge
  3. According to Eurocentric History, (A) history starts with the Enlightenment of Europe starting around the sixteenth century. Since then, (B) Europe has made fantastic progress on all fronts, leaving the rest of humanity behind. (C) Europe conquered the globe as part of their civilizing mission, to spread their knowledge and advanced civlization to the whole world, which was in darkness. What is the COUNTER-NARRATIVE? That is, explain why A,B,C, are false, and explain what Islam says about these three items. ANSWER: See IE 2019 Q3: Eurocentric HistoryIE 2019 Q3: Eurocentric History
  4. Explain what is logical positivism, and why this philosophy emerged and became dominant in the West. Explain why this philosophy is wrong. ANSWER: See IE 2019 Q4: Logical Positivism
  5. Explain the concept of “Secular” knowledge – domains of knowledge which are outside the reach of religion. Explain how religious wars in Europe led to the inventions of this concept. Explain why this concept is wrong, and how Islamic teachings apply to all domains of knowledge. How does Islam apply to apparently neutral subjects like statistics and mathematics and physics? ANSWER: See IE 2019 Q5: Secular Knowledge
  6. Explain how the concept of homo economicus emerged in the West, even though it is a completely ridiculous model of human behavior. Show examples of why homo economicus does not describe actual human behavior. Show example of how what economics calls rational behavior is actually irrational in real life. Explain what the Islamic model of human behavior is. ANSWER — will be discussed later. For now see The Fourth Poison: Homo Economicus
  7. Explain why economists think scarcity is the central concept of economics. Explain why this is opposed to Islamic Views. Show how differentiating between wants and needs solves the problem of scarcity. ANSWER — will be discussed later. For now see The Illusion of Scarcity.
  8. Different groups of Muslims have different ideas about the problems facing Islamic Societies today, and how they can be solved. List three major different schools of thought about what the problem is and according what the solution is. Differentiate between evolutionary and revolutionary strategies for change. Discuss how we should work today to rebuild an Islamic Society. ANSWER — will be discussed later. For now see Rebuilding An Islamic Society.
  9. Explain how Islamic Financial Institutions today are Islamic in form but not in spirit. Explain how genuine Islamic financial institutions could be built which would reflect the spirit of Islam as well as the form. ANSWER — will be discussed later. For now see Building Genuine Islamic Financial Institutions
  10. The first portion of the article “Islam’s Gift” solves two mysteries – explain. Mystery 1 – why do economists teach absurd theories of human behavior? And Mystery 2: Why do Muslims economists accept these absurd theories, even though they conflict with Islamic teachings? ANSWER — will be discussed later. For now see Islam’s Gift: An Economy of Spiritual Development.
  11. The second portion of “Islam’s Gift” describes the Islamic approach as being based on Three Pillars: Normative, Positive, and Transformative. Describe both Islamic and Western position on each of the three pillars and contrast them with each other. ANSWER: will be discussed later. For now see:  Transforming Human Behavior.
  12. Explain why most Muslims today think that we must learn Science and Technology to progress, but this is an illusion. The Quran is still complete and perfect guidance for today, even though most Muslims act as if they no longer believe this, by spending all their time and energy in pursuing Western solutions to our problems, instead of the Quranic solutions. ANSWER – to be dicussed later. For now, see Quran: Complete and Perfect Guidance.
  13. Explain the three generations of Islamic Economics, and how each of these originated in its own historical context, due to the problems facing the Muslims at that time. ANSWER – to be discussed later. For new see> Three Generations of Islamic Economics .

These questions discuss some preliminary grounds that must be cleared before a study of Islamic Economics proper can be initiated. In the new website created for this purpose, I hope to be able to do the job of clearing grounds together with re-construction of foundations of IE on ancient Islamic principles, together.

IE 2019 Final Q5: Secular Knowledge

[bit.do/azq5sk] In previous posts, we have discussed the first four questions on the Final Exam of Islamic Economics 2019 –  Q1: Purpose of LifeQ2: Useful Knowledge, and Q3: Eurocentric History, and  Q4: Logical Positivism. This post is about the fifth question.

Q5: Explain the concept of “Secular” knowledge – domains of knowledge which are outside the reach of religion. Explain how religious wars in Europe led to the inventions of this concept. Explain why this concept is wrong, and how Islamic teachings apply to all domains of knowledge. How does Islam apply to apparently neutral subjects like statistics and mathematics and physics?

In “European Transition to Secular Thought”, I have explained how continuous warfare between Protestants and Catholics led to the necessity of creating a political theory based on grounds which would be acceptable to all religious factions. RH Tawney in Religion and the Rise of Capitalism calls ‘the secularization of political theory as the most momentous of the intellectual changes which ushered in the modern world’. There were very severe problems with the idea of creating a secular body of knowledge, but historical necessity of creating agreement across warring factions forced European intellectuals to ignore these difficulties. The main difficulty can be explained as follows:

Sterility of Reason: Reason applying to observable facts does not get us anywhere – reason is sterile, and unable to produce new knowledge. Given a collection of facts, F1, F2, … applying pure reason cannot get us to any conclusion which is not already contained in the collection of facts we are starting from. Any production of knowledge involves going beyond the observables. For instance, a scientific hypothesis is a guess about how these facts have been generated by a hidden mechanism. An induction is based on a guess about a pattern; but patterns exist in the mind of the beholder, as the subjective interacts with the objective.

Arriving at conclusions from observations involves both intuition and experience. However, both of these elements are subjective, and were controversial and disputed among different religious factions in Europe. Therefore, European intellectuals denied experience and intuitions as sources of objective knowledge. But objective reason was not capable of producing the knowledge of human beings and ways of organizing societies, which the Europeans sought.  As a result, subjective elements were used, but concealed and suppressed within an apparently objective and neutral framework. Many ethical principles upon which there was widespread consensus among European intellectuals were accepted as part of “rationality”, even though these elements were actually part shared historical experiences, and background Christian beliefs. As many post-modern thinkers realized, the social sciences were presented as universal laws, even though they were derived from European historical experiences. Because of European global domination, and the spread of Western education, these false claims of social sciences to the status of being objective and factual universal laws have become widely accepted throughout the world.

In order to understand how Islamic teachings apply to all domains of knowledge, we have to go back to the fundamental first question: What is the purpose of our human lives? All human activity must be directed towards this purpose. Suppose we follow atheists and agnostics, and believe that the universe was constructed accidentally and our life is meaningless. In this case, one possible purpose is to enjoy life to the fullest extent possible – eat, drink, and be merry, for tomorrow you shall die. No rules can applied to the production of knowledge. To understand this, consider the proverb: “When ignorance is bliss, tis folly to be wise.” If acquiring an education is a painful struggle, and one can be happy if one maintains foolish beliefs which would be punctured by learning the truth, then why learn the truth? If life itself is meaningless, than all types of knowledge, and all types of ignorance, are equally meaningless, and choosing something over another is merely a matter of personal preference.

From the Islamic point of view, life is extremely precious. In the few moments that we have on this Earth, we must strive to do the best possible deeds, which carry the greatest value in the eyes of Allah, and will carry the greatest weight on the scales in the day of judgement. Islamic teachings have also defined clearly the nature of useful and useless knowledge.  Allah T’aala has made the seeking of useful knowledge one of the highest forms of worship. At the same time, we are required to avoid useless or harmful knowledge. Obviously, learning the difference between the two forms is of extreme importance for us. The crucial difference in terms of Islamic and Western approach to any body of knowledge lies in the theory/practice distinction. Western secular knowledge separates the physics theory required to build an atom bomb from the practical application of this theory in real world contexts. Islam requires us to consider the theory and practice together. All parties to a forbidden interest transaction – the witnesses, the ink-bearers, the parchment sellers, partake in the sin. So the theoretician who provides the plans for the bomb cannot absolve himself from the responsibility of the deaths caused by the bomb. Similarly, the statistical consultant who analyzes the data cannot keep himself apart from how this analysis will be used. But considering theory and practice together changes the nature of the subjects drastically. I have demonstrated this by constructing courses in Statistics, Econometrics, Microeconomics, Macroeconomics, and Experimental Economics; see “Replacing Western Courses with Islamic Ones”. When we consider how the theories we learn are applied in the real world, we immediately run into moral issues – our actions must be considered for their benefits and harms to humanity as a whole. It is this failure to integrate moral considerations into the structure of secular knowledge that has been a source of severe harm to humanity. What is worse is that these moral considerations are hidden under an apparently objective and neutral framework – secular knowledge pretends to a neutrality and objectivity which it does not have.

The revival of the Ummah depends upon our learning how to apply Islamic teachings to the solution of modern problems. One of the central obstacles in the path of our understanding how this can be done is the concept of secular knowledge, which says that Islamic teachings CANNOT be applied to modern secular types of knowledge which form the basis of current Western educational curricula. The Ghazali Project of Ihya Uloom ud Deen requires rejection of this secular idea, and demonstration of how Islamic teachings apply to all modern subjects. An example of this is a course I am in process of constructing: Real Statistics: An Islamic Approach. Because of the central importance of rejecting the concept of secular knowledge, I have devoted several posts to this topic in the past. Some of them are listed below.

Diagnosis: Absorption of Secular Thought: Today, Muslims are looking towards Western knowledge, instead of teachings of Islam, as the solution to our current problems of ignorance and backwardness. Why, when 1440 years ago, Islamic teachings rapidly transformed the Jahiliyya period, and made  Muslims leaders of the world? The reason that Muslims are no longer looking to Islam for solutions is because they have absorbed the idea that secular knowledge is the solution to our modern problems, and Islamic teachings bear no relationship to secular knowledge.

Islamic Approaches to Knowledge: This post continues the discussion in the previous one, and explains why it is of central importance to Muslims, to consider the question of secular knowledge. Our Prophet Mohammad SAW distinguished strongly between useful and useless knowledge, and prayed for acquiring the first kind and asked for protection from the second kind. So we MUST analyze knowledge in order to understand which kind it is — whether it is worth praying for, or is it the type we must avoid. We conclude that the standard secular format is harmful knowledge, but we can convert it into useful knowledge by using a proper Islamic approach, which involves considering the theory together with its applications. In this situation, Islam provides us with moral guidance about the applications.

The Second Poison: Secular Knowledge: Why are Muslims ignorant and backwards today, when we have been equipped with complete and perfect guidance in the form of the Quran. This is because of the Conquest of Knowledge which occured as part of European colonization of the globe. Control over our minds created by this conquest is maintained by the dominance of Western educational systems. The way out of this trap is to re-write the secular courses which fill our minds with poisons, and replace them by Islamic versions. This post provide a link to the first lecture on a course entitled: “Statistics: An Islamic Approach”. This first lecture is solely devoted to the question of why “An Islamic Approach” is needed for an apparently purely technical subject like Statistics. Surely, Islamic approach is not relevant for 2+2=4? We explain that appearances are deceiving, and even purely technical subjects can change a lot when treated in an Islamic manner.

Knowledge to Change the World: Once we reject the idea of secular knowledge, we are faced with the task of constructing a genuine alternative. Islam defines knowledge in a way that is radically different from the West. This post provides a discussion of some of the essential differences, and explains how Islamic knowledge teaches us how to change our own internal lives, causing a transformation which can then change the world around us. The Quran talks about how God changes the external conditions of a people when they change their own internal conditions. Another lecture on this topic is the “The Search for Knowledge” – research methodology as it should be done by Muslims.

 

 

 

 

Top 10 Posts of 2018

By the Grace of God, this blog has attracted a lot of attention, and I have received a lot of positive feedback from readers. May Allah T’aala make it a source of good for the Ummah, and protect all of us from the evil coming from my Nafs, and my errors and mistakes of thoughts, feelings, and actions. In this post, I list the top 10 posts of the past year:

  1. Remembering My Father: Memories of my father on the occasion of his passing away.
  2. The Mission of the Ummah & Asiya Bibi: Some reflection on this case.
  3. Guidance for Research for M.Phil/Ph.D.  How to prepare a proposal, and links to more information.
  4. The Search for Knowledge: What the West calls knowledge is about the external world, whereas Islamic knowledge is about learning how to live. Accordingly “research methodology” must be very different in the two traditions.
  5. A Deep-Seated Inferiority Complex: The reason we cannot benefit from our precious heritage is the shock-and-awe of West leads us to over-value Western knowledge, and to fail to appreciate the power and beauty of Islam.
  6. Recovering from a Western Education: Personal experiences of education at MIT, where we were taught all about calculus, but nothing about the bigger questions of life.
  7. Economics for the 21st Century: If we can overcome the shock-and-awe of the West, we can create a revolution in economics, by rejecting existing Western economics, and rebuilding the discipline on solid foundations created by Islamic teachings. This would involve replace greed, competition, and individualism, by generosity, cooperation, and social responsibility.
  8. Islam and Econometrics?: The idea that Islam cannot be applied to modern subjects is a great delusion – in fact Islam provides deep insights into all forms of human knowledge. I have arrived at deep understandings of the fundamental flaws in foundations of econometrics and economics by approaching the subjects from an Islamic point of view.
  9. The Ways of the Eagles: This post encourages students to overcome the illusion that they are low-flying, carrion eating crows, and learn to soar like the Eagles, which is their birthright.
  10. Reaching Beyond the Stars: We can only achieve what we aspire to, so we must set our goals very high, if we want to achieve great things.