The Second Poison: Secular Knowledge

[bit.do/azspsk] Even though Islam created a revolution in the lives of ignorant and backwards Arabs fourteen centuries ago, and even though to the teachings of Islam created a civilization that enlightened the world for a thousand years, TODAY these same teachings SEEM to have lost their power. The Muslims today are backwards and ignorant, and the conditions of the world are strikingly similar to those of the Jahilliyyah — the pre Islamic era of darkness and ignorance. Why cannot we launch the same revolution today using the teachings of Islam that was launched 1440 years ago by our ancestors?

As I have explained in the previous two posts, the answer is that our minds have been poisoned by Western knowledge. Before we remove the deep misconceptions created by a Western education, we cannot understand, appreciate and apply the teachings of Islam to solve our modern problems. The first poison is “Eurocentric History” which teaches us that all great accomplishments of mankind have been achieved by people of European origin. See the “Rise and Fall of Civilizations” for an alternative view. A lot more work is required to develop a genuine Islamic alternative to Eurocentric History; the best beginning has been made by Syed Abul Hassan Ali Nadwi in his classic book “What the World Lost Due to the Decline of the Islamic Civilization”.

In this post, I want to discuss the second poison: the concept of secular knowledge; in “Diagnosis: Absorption of Secular Thought” I have argued that acceptance of this idea by Muslim scholars is at the heart of our difficulties in applying Islamic teachings to solve modern problems. The idea that there are domains of human knowledge which are outside the reach of religion was first introduced in Europe, and was vehemently rejected by most of the people. It was obvious that religious knowledge was the trunk and the root, and all categories of human knowledge were branches of the same tree. As discussed in “European Transition to Secular Thought”, Europeans gradually lost faith in Christianity for many reasons, one of which was violent and barbaric quarrels between Protestants and Catholics. This resulted in the demand for “knowledge” which would be acceptable to all, without being grounded in religion. As I have explained in “Origins of Western Social Sciences” , Social Sciences arose in the West due to their attempt to find alternatives to religion on which to build a society.

The main difference between secular and religious thought occurs with respect to the purpose of life. Islam teaches us that we were all created by God, and that this life has been given to us as a test. Those who succeed in this test will earn the greatest rewards, while those who fail will receive severe punishment. Knowledge which help us to achieve the purpose, to succeed in our test, is classified as useful knowledge. Knowledge which distracts us from the goal, or creates obstacles in our path to success, is either harmful or useless knowledge. The Prophet Mohammad SAW prayed for getting useful knowledge, and also prayed for avoiding useless knowledge. It follows that if we should acquire knowledge ONLY if it is useful, to help us achieve our purpose. We should avoid knowledge which is useless or harmful.

In contrast to this, according to secular Western thinking, life is completely meaningless. This is because the universe came into existence by an accident, and life itself starting by an accident when a random collection of molecules came together by chance. Because life has no purpose, we are free to do anything we want. We can learn anything which amuses us, without having any justification or use for that knowledge.

Everything we study during our Western education is built on the concept of secular knowledge — their is no need to mention God, or the Akhirah — hereafter — or the purpose of life — when we are studying these subjects. In fact, a subject of study is useful ONLY if it can be of service to human beings. Islam teaches us a radically different approach to education. When we apply this approach, then all subjects must be taught in a very different way from how they are taught in the West. To understand this in detail, you can watch the lecture linked below, which is the first lecture of my course entitled: Introduction to Statistics: An Islamic Approach. This first lecture explains why an Islamic approach is necessary, even to an apparently technical subject like statistics. It also explains how an Islamic approach makes a dramatic difference in terms of HOW we study the subject, and also WHAT kind of subject matter we study.

For more discussion about the concept of “secular knowledge” and how Islam is opposed to this concept, you might look at my related posts listed below:

  1. Does Islam Encompass All Knowledge? — Obviously, Islam does not teach us calculus, or physics — how can we say that Islamic knowledge covers all things and provides us with complete and perfect guidance for today? The answer is that Islam provides general guidance about goals, while specific details about how to get to the goal in current time and place and circumstances are left for us to discover.
  2. Islam and Econometrics — This is an Urdu talk which explains how Islam can provide us with guidance about an abstract and technical subject like econometrics. For more work along these lines, see (English talks)  “Choosing the Right Regressors” and “A Realist Approach to Econometrics”. Both of these posts show that because we are in shock and awe of the West, we accept without question deeply flawed methods and ideas, just because they come from the West.
  3. Contrasts Between Western and Islamic Views on Education: This Urdu video lecture explains to teachers of Statistics why an Islamic Approach to education makes a big difference in terms of how we teach statistics.
  4. Islamic Knowledge: Still Revolutionary after 1440 Years! — The real power of knowledge lies in its ability to transform our  lives, and this is what Islamic Knowledge provides: “Transforming Knowledge”.  This post explains my own educational experiences in the West, and how I learned that Western knowledge is an illusion, while real knowledge comes from the Islamic traditions. This post provides excerpts from the Forward to Imam Al-Nawawi’s book on The Etiquettes Of The Scholar And The Learner, And The Muftī And The Questioner — This forward discusses the deep value of an Islamic Education.
  5. Exploding the Myths Which Block Our Minds: This post shows how a Western education blocks our mind and prevents us from getting the real education that we need, in order to realize the amazing potential for excellence which Allah T’aala has put inside every human beings.

 

 

 

 

Islamic Concept of Knowledge

In my previous post on “The Principles of an Islamic Education”, I explained that even though Islamic Knowledge is Still Revolutionary after 1440 years, Muslims no longer believe in the power of Islamic knowledge to change our internal personal lives, which will create a revolution in our external lives. Muslims have stopped believing in the power of Islamic teachings because our minds and hearts have been poisoned by Western education. To solve the problem, we must learn to recognize the poison and to cleanse and purify ourselves by removing these false Western ideas from our hearts and minds.

The first obstacle on the path to “Tazkiya” is our “Deep-Seated Inferiority Complex”. This complex has been created by centuries of being ruled by the British, and being given an education designed by Macaulay to create love and admiration for Whites, and hatred and contempt for our own civilization. To counter-act this, we need to re-learn history. Today, we have been brought up on a Eurocentric History, according to which all great accomplishments of mankind have been achieved by people of European origin. This myth needs to be corrected in many different ways. One way to fix the problem is to look at “Subaltern Studies” — this field of study was born from the realization that History, as told by losers of battles, looks very different from the History told by the winners. Since winners get to write history, we only find tales of heroism, and do not learn the tales of the barbarism, savagery, inhumanity, and violence, that was involved in the conquest — see for example “Colonial Atrocities”. A second fix is to read Syed Abul Hassan Ali Nadwi: “What the World Lost Due to the Decline of the Islamic Civilization”, which explains the great benefits that Islam brought to the world, and the darkness which has been created by its decline.

But curing an inferiority complex is not just a matter of learning the truth about history — although this is also very important. Psychological damage which was inflicted upon us by a deliberate policy requires healing of the heart, which requires time, and social re-reinforcement – that is, being in the company of people who have overcome this inferiority complex. The British knew that they would be few in number, and therefore sought to create shock-and-awe in the minds of the population, to ensure their mental enslavement, so that they would not think of revolting. They cultivated an image of honesty and integrity, and they had a policy of ensuring that only young people served the British India, so that the population would not see old and infirm British. They put the dress of our beloved hero and king Tipu Sultan on their orderlies who stood outside the doors of the British bureaucrats. Imagine the damage done to the heart when you see your king as a servant of the British! They used the names of high posts in the Mughal Army like Khan-e-Saman (Quartermaster General) for their cooks and other menial servants. This psychological warfare was VERY EFFECTIVE. Some of our leaders stated that we are like animals compared to the British, and even if they slaughter us like animals, we have no right to complain. We have achieved physical freedom from the British, but our minds are still very much colonized. Liberating our minds from colonial chains is very much needed. Healing our hearts of the damage caused by these deep wounds is not at all easy — it will take time, effort, struggle, and learning. Both the head and the heart must be engaged in this work. But this is a NECESSARY first step, before we can take an Islamic approach to education, which is required to study Islamic Economics.

The following 85m Video Lecture on “Breaking the Chains of Colonial Thought” explains some of the knowledge we need to have, to liberate our minds

Lecture at IMS Peshawar, Nov 2017 — The Mu’tazila were so impressed by Greek Philosophy that they elevated to the status of Wahy (Quran). Today’s Muslims are equally impressed by Western knowledge, considering it equal to Wahy — see :The Modern Mu’tazila”. In fact, Western knowledge is based on very weak foundations. If we can remove shock and awe of Western Institutions, we can revive Islamic traditions and create a revolution

RELATED & IMPORTANT: The Search for Knowledge — this explains how Islamic concept of knowledge is radically different from the Western concept. Therefore, Research Methodology — that is, the method by which we search for knowledge, must also be radically different.

Principles of An Islamic Education

[bit.do/azpie] Previous post was about a course on Islamic Economics which concluded recently (see bit.do/ie2019 for course materials). This course was based on an Islamic approach to education This is radically different from a Western education. Unfortunately, Muslims generally do not appreciate this difference, because they have been brainwashed by a Western education, which teaches them completely wrong lessons about what is knowledge, and how we should seek knowledge. Obviously, if we want to teach “Islamic Economics”, we must do so in an Islamic style. This post explains the basic principles of an Islamic Education, which we must learn in order to study “Islamic Economics”. Addendum: I have now created a free online course on this topic; to register for this course, fill in the form: Registration PIE.

Truth: 1440 Years Ago, the coming of Islam created a revolution in world history. It took ignorant and backwards Arabs, who were at the bottom rung of civilization, and transformed them into the leaders of the world. It launched a civilization which enlightened the whole world. 

Evidence: Read Syed Abul Hassan Ali Nadwi: What the World Lost Due to the Decline of Islam Read: Marshall Hodson: The Venture of Islam. Many other books document the contribution of Islam to the shaping of the World Civilizations in general, and Europe in particular. The dark ages of Europe ended due to the light of Islamic Spain Al-Andalus. TASK for Students: LEARN this history.
Burning Questions: How did Islam achieve this transformation 1450 years ago? Do the teachings of Islam have the same power today, that they did fourteen centuries ago?
 
CLAIM: Muslims no longer believe that teachings of Islam are “perfect and complete” and would be sufficient to solve our modern problems.
Proof: Vast majority of Muslims believe that today we need to learn economics from the West, in order to be able to make economic progress, and remove poverty. We try to implement poverty alleviation programs designed in the West, by the World Bank and other international agencies, to solve our problems. We DO NOT try to solve problems of poverty by implementing the Islamic instrument of Zakat, meant for the alleviation of poverty.
 
QUESTION: Why do Muslims no longer believe in power of the teachings of Islam?
Answer: Because Muslims have been brainwashed by a Western education, which teaches many concepts that are the OPPOSITE of ideas which are at the heart of Islamic teachings. Once we have swallowed these poisons, then it becomes impossible to understand what Islam is, and to appreciate the power and beauty of the teachings of Islam. So the prophecy has come true that: Islam came as a stranger, and will become a stranger.
 
QUESTION: So what is the solution to this problem? How can we apply the teachings of Islam to understand the solutions to our modern problems in economics, and in all other dimensions of our daily lives — both on a personal level, and on the social level of the community of the Muslims?
 
Answer: First we must learn to RECOGNIZE the poison that we have swallowed, which has penetrated our minds and hearts. Then we must cleanse our hearts — do Tazkiya — and UNLEARN the false teachings of economics. Only then would it be possible to UNDERSTAND the Islamic teachings. 
 
QUESTION: What are the FIRST STEPS we can take to understand the teachings of Islam in general, and teachings of Islam related to economics in particular?
 
Answer: The first step is to understand the nature of KNOWLEDGE itself. What is Knowledge? How do we acquire knowledge? A Western education teaches us the WRONG answers to these fundamental questions. By deceiving us about the nature of knowledge itself, it makes it impossible for us to even become seekers of knowledge. But you cannot find something if you are not even looking for it. As Iqbal has said in Jawab-e-Shikwa — speaking on behalf of God: We are inclined towards Mercy, but there are no seekers. To Whom should We show the way, when there are no travellers on the path?
 
Islam differentiates between USEFUL knowledge and USELESS knowledge. The Prophet Mohammad SAW made dua for the acquisition of useful knowledge, and he also made dua for protection from useless knowledge. 
 

The Prophet sal Allahu alayhi wa sallam narrated this duaa in a hadeeth in Sunan ibn Maajah (authenticated  by Shaykh Albaani rahimahullah):

اللَّهُمَّ انْفَعْنِي بِمَا عَلَّمْتَنِي وَ عَلِّمْنِي مَا يَنْفَعُنِي وَ زِدْنِي عِلْمًا

Allahumma-infa’nī bimā ‘alamtanī wa ‘allimnī mā yanfa’unī wa zidnī ‘ilmā

O Allah, benefit me from that which You taught me, and teach me that which will benefit me, and increase me in knowledge.

 
 

Also the Prophet used to supplicate:

اللَّهُمَّ إِنِّي أَعُوذُ بِكَ مِنْ عِلْمٍ لَا يَنْفَعُ وَمِنْ قَلْبٍ لَا يَخْشَعُ وَمِنْ نَفْسٍ ‏لَا تَشْبَعُ ‏ ‏وَمِنْ دَعْوَةٍ لَا يُسْتَجَابُ لَهَا‏

Allahumma inni a’udhu bika min ‘ilmin la yanfa’u wa min qalbin la yakhsha’u wa min nafsin la tashba’u wa min da’watin la yustajabu laha

“O Allah, I seek refuge in You from knowledge which does not benefit, from a heart that does not entertain the fear (of Allah), from a soul that is not satisfied and the supplication that is not answered.”

 
So the very first question that we must learn is HOW do we know what type of knowledge is USEFUL and what type of knowledge is USELESS — because one type must be avoided and the other type must be sought. 
 
Question to both teachers and students: Do you KNOW the difference between useful and useless knowledge? 
Answer — Our Western education has taught us the WRONG answer to this question. It teaches us the following IDEAS, all which are wrong and HARMFUL knowledge. These are SOME of the poisons which are planted in our minds by a Western education:
1. The West acquired power and glory and dominates the world because of the knowledge that they have. Therefore Western knowledge is the most useful type of knowledge. 
2. Western knowledge allows us to get jobs, money, recognition, publications, prestige, so obviously it is the most useful type of knowledge. 
 
However, this is an illusion. Allah T’aala warns us about this illusion:
Quran (3:196) Do not be deceived by the prosperity of the disbelievers throughout the land.
 

57:20. Know that the life of this world is only play, and idle talk, and pageantry, and boasting among you, and rivalry in respect of wealth and children; …. the life of the world is but matter of illusion.

Real knowledge is that which allows us to get the success of the hereafter, and that is the only real success. The apparent successes of this world which Western knowledge can buy is only an illusion. So How can we seek knowledge which leads to the real success? How do we RECOGNIZE this knowledge? The Prophet SAW told us how to recognize useful knowledge — useful knowledge enters the heart!
It is narrated by Jabir R.A. that the Prophet S.A.W. stated that Knowledge is of two kinds. One which enters the hearts, and that is the useful knowledge. The other is only on the tongue (without action or sincerety) and that is argument of Allah against the son of Adam A.S. Hadeeth 6 in Muntakhib Ahadeeth Ilmo-Zikr
 
Now reflect on your western education to find if there is ANY part of it which has entered your heart — chemistry, physics, math, economics, biology — is there ANYTHING which enters the hearts? If not, then can it be classified as USEFUL knowledge? 
 
To START this new course on Islamic Economics, we must make DUA to Allah to bless us with useful knowledge. This is one of the greatest GIFTS of Allah, one of the most valuable TREASURES that we can get. Allah Subhanuhu wa T’aala has ALL the knowledge, and HE gives portions and fragments of it to whomsoever HE is pleased with. Seekers of knowledge have been promised great rewards
 
One who proceeds on a path in the pursuit of knowledge, God makes him proceed therewith on a path to the Garden (Paradise). And, verily, the angels spread their wings for the seekers of knowledge out of delight. Verily, every creature of the heaven and the earth asks forgiveness for the seeker of knowledge, even the fish in the sea. The merit of the ‘alim (the learned) over the ‘abid (the devout) is like the merit of the moon over the stars on a full-moon night. The learned are the heirs of the prophets, for the prophets did not leave behind a legacy of wealth but that of knowledge. So whoever partakes of it derives a plenteous benefit
So let us start this course by making two rik’ats of salat-ul-hajat to ask Allah T’aala to count us as being among the seekers of knowledge and to teach us Adab — the Etiquette — which is necessary in order for us to follow the path of those who were accepted as seekers of knowledge before us. Some of the basic principles of an Islamic Education, which we must learn if we want to learn anything “Islamic” are listed in the essay below. Note that these principles of an Islamic education have NOTHING in common with principles of Western education.
The essay linked below explains the fundamental principles of an Islamic Education. A loose translation of the essay into urdu, based on similar ideas, but for a different context, is also provided below 
This essay is called Islami Tijarat kay Bunyadi Usool, but it is not at all about Tijarat — rather, it is about the principles of an Islamic Education, much like the previous essay and this post

Announcement: Course on Islamic Economics

Insha-Allah, in the coming semester, I will be teaching a course on “Islamic Economics” at IIIE, IIUI.  As those who have read my articles know, my approach to this topic is unique — very different from any other textbook or course. In this preliminary post, I will explain the central ideas behind the course. I will try to post the lectures and all relevant materials on this website, so that interested students who cannot attend in person, should be able to get a VIRTUAL course.

The outline for the last time I taught the course, and its contents, can be obtained from this link: Course on Islamic Economics . Material for the NEW course, starting in February 2019, will be organized on a new website: Islamic Economics 2019.  The first class will be held at IIIE, IIUI on Friday 15th Feb at 2:00pm insha Allah. I will try to record lectures and provide outlines. I have taught similar courses in the past — A 90m Yout-Tube Video of a previous first lecture, in urdu, is linked below. Summary and outline of the lecture is also provided later on in this post.

A 1hr You-Tube Video which provides an introduction in URDU to the subject follows. For an English lecture, see my lecture on Islamic Economics at Imam Sadiq University in Tehran.

 

An English Summary and outline of key points in the lecture will be uploaded and linked later on. I will also post later on the unique concepts and organization of this new course later,

Footnote & Postscript: Goals of an Islamic Education are radically different from those of a Western education. A Western education is meant for mass production of labor for use in Capitalist systems of production of wealth. All students are meant to be interchangeable parts. In contrast. an Islamic education seeks to develop the unique hidden talents and capacities in the heart of each student — Teacher must discover the capabilities of each student and provide them with training suitable to their talents and interests, This is indicated in the Ottoman Madrassa inscription below

 

Privatization of SOEs: Islamic Views

[bit.do/azpsi] As a result of our  Deep-Seated Inferiority Complex , we have come to regard Western knowledge as superior to the deep wisdom of our inherited intellectual traditions. This is why we no longer look to our tradition for insights about modern problems, and generally think that the teachings of our religion have nothing to say about it. The talk given below looks at the problem of privatization of State-Owned Enterprises in the light of the teachings of Islam, and comes to conclusions very different from what is generally being said about this matter in the literature.

Brief Summary of article & video talk by Dr. Asad Zaman at Round Table Conference on REFORMING THE STATE-OWNED ENTERPRISES OF PAKISTAN: LEARNING FROM CHINA & BRI COUNTRIES held on Nov 12, 2018 at the Center of Excellence for CPEC, PIDE.

Brief Summary:

To establish efficient SOEs, we need to work on re-aligning the motives of the workers in the SOEs. Privatization is based on the idea idea that the selfish profit motive is superior to the motive of social service. This idea is anti-thetical to Islam, which teaches us to develop our motivation to serve humanity – the creation of God — for the sake of the love of God.  In fact, the idea of the “invisible hand” that the selfish private profit motive works best to produce social benefits has been proven wrong by many different examples. The Global Financial Crisis was caused by the search for profits, without regards to social responsibility. In contrast, Chairman Mao-Tse-Tung changed the destiny of the Chinese by inspiring them with a powerful vision based on their past. Similarly, campaign based on inspirational poetry aligned with our heritage based on Islamic ideals can launch the internal changes required to create great managers in both public and private sectors.

The 22-minute video talk is linked below — Detailed outline of talk is also given below

A 2200 word summary of the talk was published in The Nation on 10th Jan 2019

Privatization of State Owned Enterprises

Should we privatize our State Owned Enterprises (SOEs)? Would privatization solve the management issues and make them successful?  SOEs are, or should be, motivated by social service, while private sector works on the profit motive. Paradoxically, it seems that the profit motive creates more public benefits than social service. Is this really true? This is a hot topic of debate among economists, policy makers, and legislators, which has very serious consequences and implications. But some very important aspects are often overlooked in the discussion. There is no serious discussion among scholars on key variables such as Integrity, honesty and morality, and motivation for work effort. Ignoring these central issues has led us to solutions that don’t work. The question of why issues central to the public versus private debate are neglected has to do with the fact that this question emerged in European societies within the historical context of modern secular states.  Because the relationships between private and public sectors have been very different in Islamic societies, and were dramatically disrupted by the process of colonization, there is a need of finding different solutions which are more relevant to our cultural, historical and religious context.

The Problem is formulated in the Wrong Way

When we talk about regulating enterprises from an Islamic perspective there are three main parameters. The institutional structure, the rules and regulations and the spiritual aspect. All three aspects are of central importance in terms of the comparisons between private and public sectors. Eurocentric conceptions exclude these considerations, focusing purely on institutional structures and law. Scholars like Weber and Tawney have shown the central importance of Christian ethics in the emergence of Capitalism, as well as the shaping of institutional structures in Europe. Similarly, Institutional structures which are compatible with our local historical context and ideological frameworks cannot be imported from Europe. Rather, it is essential to design our institutions in conformity with our social values and collective goals as a society. Given the right social values, both public and private enterprises would work with similar levels of efficiency, while a general failure of moral education in a society would be equally reflected in poor performance in both public and private sector. Thus the focus on public versus private misses the essential elements that we need to consider.

Origin of the Problem

To understand the misconception that private and public sector represent polar opposites in terms of efficiency of operation, we need to go back to Europe where this idea originated.  Centuries of violent religious warfare led to general dis-enchantment with religion. The secular state was conceived as a collection of communities living under common rule of law, but with different religions and no common purpose. The scope of collective action was restricted to the government, since the people were divided into communities with no collective identity. Thus, there was either public ownership or private ownership and there was no intermediary.  Since there was no agreement on purpose, collective consensus could only be achieved on the mediating agencies of wealth and freedom, which would allow each community to strive for their separate goals. Wealth and freedom are intermediate goods, valuable only because they allow people to achieve their final purpose. Through a long and slow process, these intermediaries came to be regarded as the final goods – the ends for which we strive. It was the gradual decline of religion that took out meaning from the lives of the people. They were left with no clue as to what do with the freedom, liberties and wealth that they had acquired.

Religion and the Rise of Capitalism

Secular European society has erased its religious roots, so that the standard Eurocentric narrative ignores and neglects the strong contributions of Protestant religion to the emergence of Capitalism. This story has been developed in great detail by Tawney in Religion and the Rise of Capitalism and Weber in The Protestant Ethic and the Spirit of Capitalism. One of the central elements in the transformation of traditional society based on religion to a secular society was the change in attitudes towards wealth. The Christian maxim that “love of wealth is the root of all evil” was replaced by the Shavian maxim that “Lack of wealth is the root of all evil”.  In particular, Calvinism introduced the concept that working is a sacred duty and that worldly wealth is a sign of the favor of the Lord. Parenthetically, Islam emphatically rejects this, and explicitly asserts that wealth is not a sign of the favor of the Lord.  Nonetheless, this view became widely accepted, so that working hard and earning wealth, without indulging in luxury, came to be regarded as a sacred duty, required of good Christians. Originally, this conception was meant as a cloak for use by the religious people to enable them to enter the dirty and impure world of work and wealth without getting contaminated. However, even though religion lost its grip on minds and hearts, the habits of working for wealth became embedded within the cultural frameworks, excluding serious re-conceptualization of lifestyles required by the loss of faith. In the elegant metaphor of Weber, what was meant as a cloak to be lightly put on for dealing with the world, became an iron cage.

Divorcing religion and redefining Knowledge

Loss of faith in the certainties of religion and afterlife had profound consequences on European society. Europeans learned to distrust the heart, which had led to collective consensus on the illusion that Christianity had proven to be. Enlightenment philosophers argued that all traditional knowledge must be put to the critical test of reason. Rejecting the heart, and relying solely on the rational faculty led to a highly imbalanced theory of knowledge, which could not provide answers to critical questions that we all face in our human lives. Based solely on rational calculations, all moral considerations can be set aside in pursuit of wealth and power, as recommended by Machiavelli. All of the modern social sciences were founded on the basis that men are rational robots without hearts and soul. Take the example of discipline of Economics. One of the core assumptions of Economics is that we live solely for the sake of the pleasure derived from consumption. Rational human decisions are guided by profit and loss consideration, so that honesty, commitments, trust, and sympathy are excluded from economic theories of human behavior. The larger questions like a vision of the good life and the good society are lost from view, leading to a deep sense of meaninglessness. Today the world is governed by social science theories which are based on a deeply defective understanding of what it means to be human. The results of this are evident in the multitude of catastrophes which confront the planet as corporations pursue short-sighted profits, at the expense of laborers, environment, and humanity.

Colonial Era, Governance and present day Governance problems of Pakistan

Private sector versus public sector is a red herring – if we have honest people who have the desire to serve the public, they can run organizations equally well, whether they are in the public or the private sector. As proof, consider China where around 70% of the production takes place within State Owned Enterprises, and yet it has had the highest growth rate for over a decade. Importantly, many of these SOEs are tasked with social responsibilities, in addition to the financial goals private sector firms have. Chinese SOEs have been engines of growth, so we must consider the special features of Pakistan which make our SOEs a liability and a burden.

To understand governance structures in Pakistan, it is essential to consider our colonial history. The British destroyed efficient and functional educational systems which provided training to the masses without charging any fees. These were replaced by educational institutions that aimed at producing bureaucrats who had contempt for their own heritage and traditions, and were loyal to the British. The goal of all institutional structures was to maximize the extraction of revenues from the colony. This colonial legacy continues to haunt us in terms of poor performance of the public sector because bureaucrats represent the lords and rulers of the country and are not answerable to the public. The central problem of governance is to change the attitude of the bureaucrats to be the “public servants” that they are in name.

To improve the performance of SOEs, we will have to try to change these mindsets and this will take place in steps. The first step is to create a community and common goals, to bridge the divide between the rulers and the public. We need to get a buy-in by the stakeholders in the society. We need to find the points where the interests of all the people of the society converge. This was the strategy used by Mahathir Mohammad to create the East Asian Miracle in Malaysia. The community leaders of the Indians, the Chinese and the native Malays came together and agreed on certain principles and goals. The progress that Malaysia has made is an excellent example explaining the miracles of the consensus built upon the basis of community based collective action.

Does the Profit Motive Work?

The mistake committed by all of us is the unverified and invalid argument that systems based on community, social responsible, and common goals cannot work because the profit motive is the only reliable driver for enterprise. Counterexamples to this assertion surround us in Pakistan. Abdus-Sattar Edhi built a world class charity, while the Indus Hospital is a world class hospital run on the basis of social responsibility. Akhtar Hameed Khan showed how communities can self-organize and solve their own problems with very little help. The essence of the debate on SOEs is that the social service motive of the SOE’s can be replaced by the profit motive of the private sector and this will bring the desired positive change. In the world, we see many examples where private sector greed has led to massive losses. The biggest example is the Global Financial Crisis where the greed of the financial sector led to trillion dollar losses worldwide. But thousands of other examples of the same phenomena, where corporate greed has led to massive losses to public welfare, can easily be found.

The Solution

Instead the mirage of the profit motive, real solutions lie in inspiring people to act with social responsibility. This requires aligning work incentives with our religious and cultural background. For instance earning Halal rizq is an act of worship. Serving the public for the sake of the love of Allah is an act of worship. According Islamic teachings, the leader is the servant of the people. This spirit still exists, but only in very weak form. Real change is created when the people are inspired to work together for larger goals. Today, in Pakistan, we need to use education and media to nurture and strengthen this spirit. Once the motivations are re-engineered and the right motivations are presented then it won’t matter that whether the Enterprise is state owned or privatized it will bring positive changes in the society. China is a good example for this. Mao-Tse-Tung’s dynamic leadership inspired the nation to work together for change. Chinese SOE’s place great emphasis on the social responsibility and contribution to the society. The profit motive is replaced by the service motive and it has worked in China. The biggest obstacle on our path is the defeated mindset created by a century of colonization. In fact, the subcontinent has produced many great world class leaders. Mahbubul Haq changed the direction of the development discourse from accumulation of wealth to Human Development. The Grameen Bank pioneered the concept of microfinance. Akhtar Hameed Khan and his followers introduced the concepts of community driven development to the World. Word class social work and successful programs for graduation out of poverty have been pioneered in the subcontinent.

Conclusion

In conclusion, I would say that the question of SOE’s versus privatization is a red herring. The real question is how to improve management. This requires finding honest, efficient, and competent managers inspired with the desire to serve the people. If we can educate and train people to work with the right spirit, they will create productive enterprises whether in the public sector or in the private sector. We could ask if this is merely a pipe-dream, or whether there are some realistic examples of success of such models? We gave a few examples of successful world class public service organizations earlier. The truth is that at the grass roots level there are thousands of domestic organizations working to serve the public. We need to come out of colonial mindset and look at our Islamic traditions of service and excellence. Since our common factor is our heritage, we can inspire people to unite for high common goals only on this basis. If we can succeed in creating the spirit of service, , for the sake of the love of Allah, the internal revolution will create an external revolution. Then the public sector and private sector will work together harmoniously for a common cause, creating development on a scale which we cannot currently imagine.

 

 

Quest for Prosperity: Culture & Economy

The dominant definition of prosperity today differs radically from Islamic concepts. Consequently, how we strive for prosperity must also be radically different. The Quaid-e-Azam lecture at the 33rd Annual General Meetings of Pakisan Society of Development Economics held in 2017 was devoted to this topic.

This lecture explained that the West has defined prosperity by material wealth and comforts. In contrast, the Islamic tradition has always defined prosperity as human development — our progress towards the goals of becoming better human beings. This Islamic insight was encapsulated in the human development paradigm, formulated by Mahbubul Haq, and this launched a revolution in the thinking about development, by focusing, for the first time, on our internal world, instead of the external. This reflects the Hadeeth that “true richness is the contentment of the heart”. A ten minute summary of lecture is given in the video below.  A longer written summary of 1000 words, and a video of the complete lecture, is also linked below.

1000 word summary of the Quaid-e-Azam Lecture entitled “The Quest for Prosperity: Culture and Economy” on 14th Dec 2017 at 33rd PSDE AGM & Annual Conference, by Dr Asad Zaman, VC PIDE. Link to full 42m lecture is also given at bottom of this post. Also, a classroom discussion of key concepts in this lecture is linked belwo.

The main thesis of our lecture is that our quest for prosperity has failed to deliver the sought-after goals because we have misunderstood the meaning of prosperity, and looked for it where it cannot be found. We base our economic policies on modern economic theory, which is based on the amazing assumption that human being act to maximize lifetime consumption, since this is the sole source of human welfare.  Recent Nobel Winner Richard Thaler has spent several decades shows the dramatic differences between actual human behavior and the assumptions of economic theory. Human beings are far more generous and cooperative than the assumptions of economic theory allow for. Even more important is Richard Easterlin’s discovery that enormously increased levels of consumption do not bring about corresponding increases in happiness. Consumption only bring short-run happiness; long-run happiness has no correlation with consumption, and is far better correlated with character traits like generosity and gratitude. Mindless pursuit of wealth, implemented by policies to maximize growth, has led to increasing misery, instead of prosperity. Growth-oriented policies have destroyed family lives, engaging all members in production of wealth, and they have damaged our environment, destroying the future of our species for short run gains.

Can this damage can be reversed? Can we improve human lives and welfare, and also stave off the impending environmental crisis? At the core of the crisis we face is the prioritization of wealth over human beings. A market economy cheapens human beings because it is based on the idea that human lives are commodities for sale in the labor market. Reversing these priorities requires the recognition that all human lives are infinitely precious, with amazing potentials and capabilities for growth in dimensions unknown. Taking this principle seriously would require re-writing all economics textbooks, and radically re-organizing our economic, political and social institutions. Taking collective responsibility to ensure that all members of a society get the chance to develop their capabilities would be a new definition of prosperity, very different from GNP per capita, which is the current focus of policy makers across the globe.

Modern economic theory makes accumulation of wealth the goal of economic activity, and values human lives only to the extent that they contribute to production. How can we reverse these priorities, putting the enrichment and empowerment of human lives at the center, and valuing wealth only to the extent that it is helpful in achieving this goal? The first requirement is to win the battle of ideas, creating consensus on the prioritization of human beings over material wealth. To do this, we need to recognize modern economic theory for what it is, instead of what it claims to be. To accomplish this goal, it is useful to label modern economic theory as Economic Theory of the Top 1% — or ET1% — and explain how all aspects of this theory are designed to portray increasing wealth of the top 1% as the goal of society, and also to show that this serves to benefit the entire society. For example, use of GNP per capita as a yardstick of social welfare exactly fits this description, since gains to the top 1% are first divided over the entire population and then measured, thus appearing to be generally beneficial, when in fact they are not. Overcoming this deception will involve replacing ET1% by ET90% — a new economic theory for the bottom 90%.

Karl Marx clearly recognized the deceptive nature of economic theory, and stated that functioning of capitalism requires convincing the laborers of the necessity and fairness of their own exploitation. ET1% does this by arguing the growth is the best policy to pursue for all, since benefits which obviously accrue to the rich will eventually trickle down to the poor. In contrast, Marx offered ET90% by asking for a shift from each according to his abilities to “each according to his needs”, thereby prioritizing the needs of the poor over growth to provide more wealth to the already wealthy.

As a prescription for change, Marx urged the laborers of the bottom 90% to unite, and throw off their chains.  Experience shows that we can successfully unite laborers to revolt against the capitalists, but after the revolution, control necessarily remains in the hand of a small minority. The nature of power is such that this small minority will be corrupted by it, and will use it for personal gains, and to oppress the majority. Just like democracy has failed to give ‘power to the people’, so alternative systems of government also fail.

The Islamic solution works along different dimensions. It seeks to co-opt the rich and powerful, instead of killing them off, and replacing them by another set of rich and powerful. This is done by creating social norms of generosity and social responsibility. Fourteen centuries ago, the revolutionary teachings of Islam led backwards and ignorant Arabs to world leadership. These teachings include the ideas that the best leader is the servant of the people, that power is given to us in order to protect the weak, and wealth is meant to be given to the needy. Widespread acceptance of these ideas created a society which provided basic needs, health care, and education to all members using the institutions of Waqf, and the norms of collective social responsibility and brotherhood. Because these ideas have been forgotten, they continue to have the same revolutionary potential today, as they did 1400 years ago. The most important first step in this revolution is sensitizing our hearts to feel compassion for sufferings of all mankind. The feeling that all of the creation is the family of God, and service to humanity, and all living creatures, is the highest form of worship, is essential motivation for the Herculean efforts required to create revolutionary changes required to reverse the increasing concentration of wealth at the top and misery at the bottom.

Short Link for above YouTube Video: bit.do/azqal (Asad Zaman Quaide Azam Lecture)

This lecture was also used for an inverted class in Advanced Micro; 55min discussion on the lecture can be accessed from: Adv Micro Lec 27 (AM27) Human Development