Launching An Islamic Revolution in Economics

[bit.do/azai4] Final Part 4 of talk on “How Islam applies to Economics” By Dr. Asad Zaman, Ex-VC PIDE  English Re-Recording of Original 1hr talk in URDU at Econ Dept. Karachi University Monday 16th Sept 2019 — 14m Video of Part 4:

So we started this talk with the question: “(How) Does Islam apply to modern economics?”. Conventional textbooks seem to be completely unrelated to Islam. As we have seen, this is because conventional economics is about a market society based on humans lives for sale in a labor market, competition, greed, individualism, and hedonism. These values are opposed to Islamic values. Islam does NOT apply to modern economics – it tells us to reject the whole thing, and build a new economic system on entirely different foundations. Islam works on TRANSFORMING human behavior towards Cooperation, Generosity, Social Responsibility. Of course, we may object that this is too idealistic – we can never create a perfect society, where everyone acts like an angel. The answer to this objection is that Islam is concerned with PROCESS, not with OUTCOMES. That is, we are required to WORK for change, to struggle for a good society. We are not responsible to achieve success. The Prophet SAW was tasked with the responsibility of taking the Deen of Islam to all of mankind, but he was told that Guidance was solely in the hands of Allah. Similarly, we are asked to struggle to spread the ways of Islam, but the outcomes of our efforts are solely in the hands of Allah.

How can we work to create change? One effective technique is to replace conventional economics courses with radical replacements, which provide a critique of standard theories, and provide Islamic alternatives. I have developed many courses which provide alternatives to conventional courses on the basis of these principles. Before I discuss the courses, I want to provide some general advice to Muslim students and teachers of economics.

Advice to students: Students frequently become frustrated and unhappy when they learn that they have been taught false theories. It is important that you don’t give up, drop out, abandon study because all economics is based on wrong ideas. Even though economics is all wrong, these ideas are running the world today. We cannot understand what is happening in the world without learning these ideas. To have any chance of creating a viable alternative, we must understand these ideas. So we must study harder, to learn the weapons being used by the enemies.

Advice to teachers: We must teach economics in a DIFFERENT way. Don’t teach it as the TRUTH. Teach it as a theory which is used to make policy decision. Don’t focus on micro-details; how to do the calculations. Instead, understand and teach the CONCEPTS beneath the theories. See through math and technicalities, as discussed earlier. Learn how these theories are used to make policies. Teach students how to DRIVE the car, not how the ENGINE is constructed. Since the Western educational model does not teach these things, you will have to learn them on your own. My courses, described below, will provide a lot of help with them. Become a student, and learn along with your students. Use Fellow Traveller model: we are all learning together, but I am a senior learner, a little bit more experienced than the students. See my lectures on How to Become A Great Teacher for more details.

SOME NEW COURSES: As explained, I have developed alternatives to conventional courses. One of these courses is Advanced Microeconomics I [shortlink: bit.do/az4micro] This starts out by covering the Hill & Myatt: Anti-Textbook on Microeconomics. The purpose is to create a link with conventional micro. The student will learn all of the basic concepts taught in conventional micro, but in a critical fashion. The textbook goes through standard theories of micro – in context of how they are USED in the real world. Explains why the theories are wrong, and why they lead to wrong policies. There is a serious question which emerges – why do wrong theories continue to be taught, even though there is huge amount of evidence against them? The answer has to with how Power shapes Knowledge. Theories which are taught serve the interests of power. Theories like Marxism are rejected and ridiculed, not because they are wrong, but because they are harmful to the rich and the powerful. As I have explained in detail, modern economic theory is really Economic Theory of the Top 1% (ET1%) – it protects the interests of the rich and the powerful, while pretending to be objective and neutral.

This is why Islam help us launch a revolution in Economics. We need to construct a theory of the bottom 90% – ET90% – which protects the interests of the weak and powerless masses, against the rich and wealthy. As a first step, we must learn to see through the deception of conventional economics. We must study conventional theories, not as an apprentice learning the truth, but as an external observer watching a magician to learn the secrets by which he deceives the public – see Thousand Snakes: Image and Reality of Western Economics.

One of the key deceptions is the WRONG model of human behavior: homo economicus. The idea that we are all selfish and greedy, and that this is rational behavior, serves to justify and allow the rich an powerful to do whatever they want. Actually, this concept is contradicted by actual human behavior. This theory is used to justify laissez-faire economics – just let everyone do whatever they want. By the ridiculous theory of the invisible hand, if everyone behaves selfishly, the society will automatically reach the best results. See Game Theory for Humans with Hearts.

The Islamic Perspective on this is that economists have the wrong model of human behavior, and also the wrong model of what makes us happy. We can create a new basis for Micro if we start by differentiating between NEED and WANT (as discussed earlier, and in greater detail in “Scarcity: East and West”). There is enough for everyone’s need, but not enough for everyone’s greed. If we make the objective the fulfillment of NEEDS, discouraging fulfilment of Wants, and encouraging people with excess to give to those who are in need, this is enough to launch a  Revolution in Economics.

I have developed new courses in Microeconomics, which are a compromise between the full ideal Islamic course, and the current neoclassical economics courses. Advanced Microeconomics I is based on using existing alternative approaches. One of these is Behavioral Economics, which studies actual behavior of human beings, instead of the axiomatic behavior which is mathematically predictable. As we have discussed, many development in Islamic Economics can be brought into the picture, to provide genuine alternatives – see Islam’s Gift: An Economy of Spiritual Development. Closely related is Experimental Economics, which engages students in real world experiments, which allows them to see that actual human behavior is very different from what economic theories say. In particular, human beings do not optimize; they use heuristics for decision making. This makes it impossible to calculate outcomes using simple mathematical formula. A solution is provided by the techniques of Agent Based Modelling. This allows us to deal with Heterogeneity (many different types of agents). Instead of mathematically calculating outcomes, we can simulate results on a computer.  This allows us to go beyond the “equilibrium” theories of economics, which belong to nineteenth century physics. Another new development discussed in our new approach to micro is Evolutionary Game Theory. This allows to model change over time, without having any equilibrium in mind.

Advanced Microeconomics II (2018): This course is based on Holt & Davis text on Experimental Economics, it examines conventional micro theories within an experimental framework. By being subjects in experiments and by running experiments themselves students learn the vast differences and contradictions between economic theories and real-world markets. Course provides students with deep intuition about real world economics which is not available by studying formulas as in conventional courses.

Similarly, I have developed pedagogical materials and videotaped lectures on more than TEN courses. These educational materials have a Radical Design, based on Islamic Pedagogical Principles. Testing them on students, we find Radically improved educational outcomes. The principles involve teaching students how to DRIVE, and not technicalities of the Engine manufacture. That is, our courses equip students with real life skills of value in solving real world problems. This is based on the Islamic principle of providing BENEFICIAL knowledge, and of avoiding useless knowledge. In addition, teachers and students should make the intention to use knowledge to serve mankind, out of love of God. For more details about these courses, Lookup ONLINE COURSES on asadzaman.net  In particular, for  Advanced Macroeconomics, see: bit.do/az4macro  This course is based on integrating history with macro – the goal of the course is to study the real world events which led to the development of macro. Students will learn about the Great Depression, the Gold Standard, and its replacement by the Dollar in the Bretton Woods Agreement. Many aspects of the changing and evolving global economic and financial systems are discussed and studies in the new advanced macro course. The point is to enable the student to understand real world macroeconomics issues, rather than mathematical theories based on bizarre assumptions made just to make it possible to do the calculations with pencil and paper.

End of Part 4 of 4. For the earlier parts, see Part 1: How Islam relates to modern economics?, Part 2: Conflicts between Islam and Economics, Part 3: The Shock and Awe Factor. This concludes the four part lecture. May Allah T’aala make it beneficial for the Ummah of Muslimeen, and for humanity as a whole. Ameen.

Shock and Awe: Barrier to Islamic Approach

[bit.do/azai3] Part 3 of talk on “How Islam applies to Modern Economics”, re-recorded in English. Original one hour Urdu talk on Monday 16th Sept at Econ Dept, Karachi University by Dr. Asad Zaman, Ex-VC PIDE. For previous parts, see Part 1 and Part 2. 18m English Video:

1800 Word Summary of Part 3

The challenge we face today is to Re-think economics from GROUND UP. The greatest obstacle in our path is shock-and-awe of the West, and the Western intellectual apparatus. WE must not be scared of conventional economics – its is DESIGNED to shock-and-awe, and prevent us from thinking. We must not be discouraged from this study; Economics is the new religion of mankind, and the driver of policy, thought and action, all over the world. This religion idealizes a society based on individualism and competition, driven by greed and hedonism. As opposed to this, Islamic teachings aim to create a society based on cooperation, generosity, and social responsibility.

Mathematics is used a weapon, to prevent outsiders from criticizing economics. Many top economists have criticized the over-use and abuse of mathematics. For example, Krugman said that “Economists went astray because they mistook beauty of mathematics for truth.” For a detailed discussion, with many quotes and references, see “The Overuse of Mathematics in Economics: Nobel Resistance”. One simple example of absurd mathematical models is the theory of utility maximization, which all economists learn. If I were to say to you the following: “See that old lady purchasing tomatoes? Do you know what she is doing? She has a multivariate utility function. She is now computing the first order partial derivatives with respect to the goods she is planning to purchase. Now, she just put in the budget constraint, and is solving the system of n nonlinear equation. Great! She just learned that she must purchase 3 pounds of tomatoes to maximize her utility!”. Every economics students laughs – but they all took it seriously when it was taught to them in their textbooks. This is how shock-and-awe operates. Completely absurd theories, contradicted by our personal experiences, observations, and thoughts, are accepted on the authority of the West.

In fact, Nobel Laureate economists, who have spent their lives in the profession, also recognize the absurdity of the theories currently dominating economics. For example, Robert Solow remarked that theories of Lucas and Prescott are based on crazy assumptions, and to discuss mathematical details of these theories means that you have accepted these assumptions. Instead, you should just laugh at these theories. See “Quotes Critical of Economics” for a large set of quotations deeply critical of current economic theories. A large amount of recent work shows that complex systems cannot be described via mathematics – the formal symbols are not built to handle real-world complexity. Instead, we must use computer simulations, which can deal with the level of complexity which exists in the real world.

Instead of being deeply impressed by fancy mathematics, we must learn to see through the fancy assumptions and complex Mathematics. The way to do this is to note that all analysis must start with some real world problem, which we can all understand. This problem is then translated into symbols and fancy mathematics, on the basis of simplifying assumptions which are actually quite crazy, if you can understand them. The trick is that no one understands the mathematics, so you can get away with murder. After translation into mathematics, a mathematical solution is produced, and then explained in real world terms. If we realize that all the fancy mathematics is useless, misleading and wrong, then we can see through the deception. Just Look at the Question (understandable) and look at the Answer (also understandable). IGNORE the math which is useless. Instead of the wrong mathematics, look at the MOTIVATIONS which lead to these answers. We illustrate this process by a few examples below.

Economic theory tells us that Price = Marginal Cost in competitive markets. If someone was pricing above marginal cost, than a competitor could sell the product cheaper and make a profit. Instead of the mathematics, look at the world around you. We find that Insulin prices are $300 in USA, and $10 in LDCs Similarly, a vial of life-saving Epinephrine is around $600 in USA, and $1 in Pakistan. The same drugs which sell for $30 in Canada, sell for $300 in USA. Is it possible for price to be marginal cost in such situations. Instead of mathematics, think about WHY this argument is being made. Actually, it is being made to justify the extortionary prices being charged by greedy corporations, which bankrupted millions of households to make profits in the Global Financial crisis. Economic Theory teaches us that firms are Price Takers, but a Survey by Alan Blinder shows that more than 80% of firms SET prices. They are Price Makers. Lots of empirical evidence exists to show that price equals marginal cost theory does not work in the real world. Why do textbooks keep on teaching these theories, which are easily proven false? Because these theories support the rich and the powerful corporations which are actually running the world, behind the cover of democracies.

Consider another basic principle of economic theory. Does Wage = Marginal Product of Labor? Consider all people in Govt Grade BPS 19 – They all receive roughly the same pay – are they all equally productive? Similar categorization occurs in all industries.  CEO pay is now 300 times median worker. This has increased from 30 times since financial deregulation in the 1980s. Productivity of CEOs has not gone up, but their pay has become ten times greater. Similarly, Labor productivity has increased greatly, but real wages have remained stagnant. Why do economists insist that wages equal marginal productivity in face of all this evidence to the contrary? This is because it allows billionaires to say, like Qaroon, that the money I have earned is due to my cleverness – it is justified reward from my productivity, instead of use of power for exploitation of the weak and powerless. Looking at the power structures of a society gives us a deeper understanding of the Marginal Productivity theory compared to the understanding of the mathematics behind the theory.

As a final illustration, let us look at the most fundamental of all economic theories. Is price determined by Supply-Demand? Card & Krueger: Myth & Measurement: Data on Minimum Wage shows that increasing minimum wage leads to increased employment, contradicting the Supply and Demand models. A huge amount of empirical evidence exists to show that supply and demand theory does not work in the labor market. The central argument of Keynes in his General Theory of Employment, Interest, and Money was that real wages were NOT determined by Supply and Demand. A simple evidence and proof of this was that high unemployment persisted for more than ten years – the real wage did not adjust downwards to eliminate excess supply of labor. For more details, see “Understanding Macro: The Great Depression

So, we come back to the core question addressed in this talk: How can Islam help us launch a revolution in Economics? FIRST: We must master conventional economics – not as a body of KNOWLEDGE – but as a (wrong) conceptual framework which is currently used by vast numbers of people to understand the world around us, and to make policies which affect the lives of millions. A key problem with this framework is that it uses completely wrong models of human behavior. Islam provides us with alternatives based on REALISTIC theories of human behavior, from Islamic sources. As we will discuss in part 4 of this talk, correcting fundamental methodological mis-understandings at the heart of Western Social Sciences allows us to launch a complete revolution in Micro-economics, Macro-Economics, Statistics, Mathematics, Econometrics. From being third rate followers, copiers and imitators of the West, we can become world leaders in these fields. More details will be given in the final Part 4 of this talk. Here we provide a brief description of the process by which economic models currently in use are constructed, to debunk their mystery.

APPENDIX (not covered in video/talk): The NATURE of mathematical models in Economics and Econometrics. “To a man with a hammer, everything looks like a nail”.

Everyone, economists included, realizes that the real world is too complex to be described mathematically. A MODEL is built by simplifying the world to make it possible to apply mathematics. What most people do not realize is that the simplification is NOT done on the basis of what describes reality best. Rather the simplification is done on the basis of what mathematics we have available to us – the world is re-shaped to fit calculus, rather than expanding mathematical tools to fit the world. Human behavior is too complex to model, so human beings are replaced by the robots – homo economicus – who behave according to mathematical laws. If we put more than one human being in our model, the formulae become too complex, so DSGE models contain only ONE human being! Completely absurd assumptions are made, because the mathematical calculations can ONLY be done if the world fits these absurd assumptions. Recently, Agent Based Models are becoming more popular. These allow for more complex and diverse forms of human behavior and allow for hundreds of agents within a model. The outcomes cannot be calculated mathematically by hand, but it can be fed into a computer to get simulation results. When we do this, we find that the real economy is drastically different from simplified mathematical models used by economists. There is no surprise that economists and econometrician completely missed the Global Financial Crisis. Their models were too simple to capture the elements which created the crisis. Robert Solow remarked that with only one person in the model, it is not possible for one agent to deceive another, which was the cause of the GFC. What is surprising is that after the crisis, there has been no change in the economics profession. Despite solid evidence that these theories are wrong, they continue to be taught. The established economists have too much to lose by allowing a revolution, so that are preventing all attempts at change. This makes an Islamic approach all the more promising.

RSIA-01 Islamic Approach to Knowledge

This is the 1st & 2nd section of a DRAFT of Chapter 1 of a proposed new textbook on Real Statistics: An Islamic Approach — This Chapter introduces an Islamic Approach to knowledge, and how this differs from the Western approach. I would like to get feedback and comments from readers in order to create a final version of this for textbook. Readers can add comments directly on the SHARED Google Document: ISM01main. Or they can add comments below this post. Note that Hyperlinks connect to additional material which is NOT part of this lecture — if some material from those references should be included here, readers can add remarks to this effect. Also, you can add comments on the 90m You-Tube Video Lecture which corresponds to this chapter:

Sections 1&2 are given below. Sections 3&4 are given in the next post – RSIA01b Value of Knowledge – which also provides links to a shorter Alternative Introductory Video lecture of 42m

Section 1: Introduction

I seek refuge in Allah from the outcast Shaitan, and begin with His Name Allah, who is also Rahman and Rahim:

7:172 When thy Lord drew forth from the Children of Adam – from their loins – their descendants, and made them testify concerning themselves, (saying): “Am I not your Lord (who cherishes and sustains you)?”- They said: “Yea! We do testify!” (This), lest ye should say on the Day of Judgment: “Of this we were never mindful”:

Allah T’aala created all of us, and made us recognize Him as our Lord, prior to sending us to this world. The object of our life on this Earth is to live with full awareness and recognition of our Creator. All useful knowledge is a means to this end. The prophet Mohammad SAW delivered to us the message of Allah, which is both complete and perfect.

5:3 This day have I perfected your religion for you, completed My favour upon you, and have chosen for you Islam as your religion.

According to a prophecy of our Prophet Mohammad s.a.w., the Deen of Islam came as a stranger, and it will become a stranger. Over the past few centuries, Muslims as a whole have moved far from the Deen in their individual and collective lives. The rise to global power of the West has led to spread of many types of ideas and philosophies very much in conflict with the central message of Islam. Central to Western secular thought is the idea that certain realms of knowledge fall outside the scope of religion. Because the West has taken the lead in many realms of knowledge, Muslims have been forced to study, adopt and accept these western ideas. The project of Islamization of knowledge is an attempt to acquire the useful aspects of western advances in knowledge, while removing the harmful secular and atheistic components. This has been difficult to do because many ideas conflicting with Islamic views are buried within foundational assumptions of Western knowledge and not openly stated or discussed. Nonetheless, it is an issue of high priority because how Muslim youth are trained will have a big impact on our future. Current methods of training borrowed from the West are highly unsuitable, for many reasons discussed in “An Islamic Worldview: An Essential Component of an Islamic Education”. At the same time, we cannot afford to bypass or ignore Western contributions to the stock of human knowledge. Finding a suitable way to accomplish both objectives is our goal.

This textbook is part of the project of Islamization of Knowledge. We will study statistics in a way that is in accordance with Islamic teachings. Islamic views on knowledge, as well as the methodology for teaching and learning, differ radically from Western views.  One of the central ideas of Western secular thinking is that knowledge can be compartmentalized – some areas of knowledge (like science, mathematics, etc.) have no relation to religion. We will show that Islam sheds light on all areas of knowledge.  We will show how radically our perspectives on the subject change when the contents are assimilated into a meaningful framework defined by Islam.  These differences will be illustrated concretely in the course of these lectures on introductory statistics for Muslims.

We will start by studying the process of teaching and learning. The prophet Mohammad s.a.w. was sent as a teacher, and Islam has a vast collection of important principles about how to teach and learn. The widely imitated Western approach to education carries no hints of these principles, which are characteristics of an Islamic education. We will only be able to review a few essential elements of these principles in this first lecture.

In this lecture, we will establish that Islam has its own unique approach to knowledge, both for teachers and for students. This approach is radically different from the approach currently being followed in the West, and being blindly imitated in the East. Unfortunately, because Muslims have been content to imitate, this has created an impression that Muslims do not have their own approach. It is essential to counteract this. This is the primary goal of this first lecture.

The Prophet Mohammad S.A.W. was sent as a teacher. He was the best of teachers. Learning the principles of teaching and studying from him leads to the best approaches to teaching and learning. We will distill some principles from these Islamic modes of education and exposit them here.

Section 2:  Knowledge is Among the Greatest Gifts of God.

2:269 He granteth wisdom to whom He pleaseth; and he to whom wisdom is granted receiveth indeed a benefit overflowing; but none will grasp the Message but men of understanding.

The first words of the revelation are powerfully infused with the message of the importance of knowledge:

Q96:1- 5 READ in the name of thy Sustainer, who has- created man out of a germ-cell. Read – for thy Sustainer is the Most Bountiful One who has taught [man] the use of the pen – taught man what he did not know!

Reading & writing are mention thrice in this short passage. Reference is made to the mysteries of creation of man, about which the discoverer of DNA, Francis Crick said:”An honest man, armed with all the knowledge available to us now, could only state that in some sense, the origin of life appears at the moment to be almost a miracle.” – Francis Crick, Nobel Prize winner, “Life Itself: Its Origin and Nature”, 1981 (p. 88)

The bounty of the Lord is mentioned as being teaching man to read and write and giving him knowledge of that which he did not know. This first message is reinforced by many other verses of the Quran and Hadeeth giving central importance to knowledge.

Aboo al-Dardaa said: `Listen. I have heard rasoolullaah sallal-laahu `alayhi wa sallam saying, “Allah ta`aalaa makes the way to jannah easy for one who traverses some distance to seek knowledge. Angels spread their wings under his feet, and all things in the skies and earth (even the fish in the water) ask Allah for his forgiveness. The superiority of a person possessing knowledge over a person doing worship is as the superiority of the moon over the stars. The `ulamaa are the inheritors of rasoolullaah sallal-laahu `alayhi wa sallam. The legacy of the anbiyaa `alayhis-salaam is neither gold nor silver. Their legacy is knowledge. A person who acquires knowledge acquires a great wealth.“‘”

In particular, we must approach knowledge as a means of spiritual advancement, inner transformation, and a means for changing the world around us. It is not a way to earn a living, nor is it “human capital,” a way to increase our value as a means of producing material goods. {see PP1: The First Principle of Pedagogy }

End of Sections 1&2 (with Full Video lecture of 90m); Next Post has Sections 3&4  – RSIA01b Value of Knowledge – which also provides links to a shorter Alternative Introductory Video lecture of 42m

Q & A: Islamic Approach to Statistics

Questions which arose in discussion below are typical of those which arise because of ideas we have absorbed from our Western education. A western education trains us to believe in a theory of knowledge which must be UNLEARNED first, before the ideas that I am presenting start to make sense. I will try to provide some answers to questions which were presented to my by some of the group discussions of “Real Statistics: An Islamic Approach to Knowledge”. This topic was presented and discussed in depth on 9/22/19 at ISOSS: Real Statistics, Islamic Approach — See link for 1hr Urdu Talk and 1hr Q&A session after the talk.

1.       When a teacher will firstly announce that he is going to teach stats for Muslims, the first obstacle he gets in his way is the business of stats with Islam. Why are you mixing a pure scientific approach with a religion?

The way statistics is done currently, it is designed to deceive. The most popular book, which has sold more copies than all other statistics textbooks, is Darrell Huff’s “How to Lie with Statistics”. The so-called pure “scientific” approach pretends to be objective, but actually HIDES many subjective judgments underneath a cover of objectivity. The goal of Islam is to lead us to the TRUTH. This requires UNCOVERING what statistics really does, which is very different from what is taught in textbooks of statistics.  See “The Illusion of Objective Knowledge“, and “Statistics as Rhetoric” for a counter-argument.

2.       Why are we mixing religion with a pure objective scientific knowledge?? Due to this mixture, we have to deny the western knowledge, upon which in reality the whole world is running.

The idea that there is such a thing as “pure objective scientific knowledge” is an illusion. This was first made clear by Thomas Kuhn in “The Structure of Scientific Revolutions“. He showed that scientific progress occurs in a sequence of revolutions. For example, everyone believe in Ptolemy’s theory, and does scientific astronomy under the assumption that Earth is the center of the universe. But then this whole picture of the universe is changed. Similarly, Newtonian Physics is replaced by Einsteinian Physics. It is not that these are one-time exceptional events. Every month, new journals of physics come out which reject previous theories and advance new ones in their place. The laws of physics are based on Intuition and on Social Consensus, not on objective reality. This is because we have to GUESS at the laws, they are not visible in the objective external reality. So, most philosophers of science no longer make the claim that science is purely objective knowledge.

Is it true that the whole world is running on scientific knowledge? The amount of devastation done to the planet by science and technology far exceeds the benefits. If you calculate the costs of the destruction of species, plants, and environments, which took millions of years to produce, destroyed for a measly few million bucks.  The looming environmental catastrophe threatens to make the planet un-inhabitable for human beings. It was science and technology which provided the capability to kill 50 million human beings in the two world wars, wreaking havoc on a scale never before seen in human history. Science and technology distract us from the realities of human existence, which depend on character — honesty, integrity, courage, love – qualities which are not taught in the textbooks. Read my post on “Higher Goals of Education” to see how these lessons have been removed from a Western education.  It is actually corporate greed which led to massive deception in the Global Financial Crisis, wiping out lifetime savings of millions, and leading to the highest level of homelessness and hunger in the USA since World War 2. How could advanced science and technology prevent this from happening.

3.    What is the problem with arithmetic mean? Is it western or is it Islamic? If it is western, and it is wrong? Then why and what is the Islamic replacement? Similar is the case of Islamic unit root and Islamic cointegration??

It all depends on HOW YOU USE the arithmetic mean. This is not taught in statistics textbooks. It is GUARANTEED that if you use ONE NUMBER to represent 1000 numbers (by taking their average) there will be loss of information. One number cannot take the place of one thousand numbers. This is exactly what the arithmetic mean does. So one must look at HOW it is used, to see whether this involves deception or not. This is not typically taught, with the result that it is easy to use the mean to deceive people. The issue is not whether to use mean or median, these are tools. The Islamic approach involves teaching the USE of these concepts in ways that AVOID deceiving people. This requires teaching people HOW to use them correctly. To see how arithmetic means are used to deceive people and to make policies favorable to the rich and powerful, see my post on GNP as Statistical Rhetoric

Unit Roots and Cointegrations are hallucinations imposed upon the data by a set of assumptions which are not satisfied by any data set in the real world. These can ONLY be defined for stationary time series, which means that the series must be generated in the same way FOREVER. No real time series goes on forever, and over long periods of time conditions keep changing so stationarity does not hold. For any real world finite series, you can fit both unit root and non unit root models equally well to them; this is a mathematical theorem. So that it is possible to “Get Any Result You Want From a Unit Root Test” – this was the title of an M.Phil. Thesis written by my student Abdul Ghaffar Shah. This is the kind of deception created by standard theoretical statistical method, which pay no attention to how they can be used. For a deeper understanding of why conventional econometrics is a fraud, because it makes assumptions which never hold true in real world applications, see my post and lecture on “A Realist Approach to Econometrics“.

4.       If  arithmetic mean is wrong, then their replacement are median and mode, which are again the fruits of western knowledge.

It is question of learning how to USE statistics for solution of real world problems in way that is truthful and honest, and beneficial for mankind. Cigarette companies used statistical consultants to manipulate data to show that cigarettes did not cause cancer, causing deaths of millions. Similarly, drug companies today use fabricated statistics to sell huge numbers of fake, useless, and harmful drugs today in the West. The idea the we can do OBJECTIVE statistical analysis looking only at the numbers, while somebody else uses our analysis to solve real world problems is wrong. We cannot separate the theory from the practice. This is the MAIN problem with statistics as it is currently taught. You are taught how to calculate mean, median, and mode of a series of numbers. You are never taught how this is ACTUALLY used in solving real world problems. When we start studying real world problems, we discover that most of the things we learned in statistics do not apply.See “My Journey from Theory to Reality” which explains how statistical theories are based on assumptions which are almost always wrong when applied to real world data sets. As a result, they create misleading results. For a deeper discussion of how an Islamic approach leads to a methodology for doing statistics which is very different from the current conventional methodology, see my post on “Real Statistics (4/4) The Illusion of Objectivity“.

5.       I just want to understand that by rejecting knowledge of science and technology as to how we can live life in this modern era because even I am writing this text using western knowledge as they developed computer science and softwares like WhatsApp etc.

The problem is that shock-and-awe of West is so great that questioning any part of Western knowledge appears shocking. Surely we should be able to use our OWN judgment about what is good and what is bad, and how to use Western technologies. All of the useful things that have been developed have their costs and benefits. We should learn to examine them, instead of uncritically accepting everything, just because it is from the advanced and developed West, while we are backwards and under-developed — this too is an illusion created by Western education. See “Deep Seated Inferiority Complex.” What I have said is the we need to change our approach to education. I did not call for abandoning the use of computers.

6.       How an Islamic approach to education differs radically from the Western approach? Is the difference in purpose? Is the difference in material?

Do the lessons in the first module: Principles of an Islamic Education to find out. There is a difference in purpose — we want to use education to learn how to become human beings, whereas a western education is designed to turn us into human resources. See my talk at Iqra University on “How to become a Human Being, instead of a human resource“. Because the purpose is different, the material also becomes different. In particular, we have to start by defining our GOAL in life. Then we have to evaluate knowledge to see if it will help us to achieve that goal — in which case it is useful knowledge. If the knowledge we acquire will turn us into machines for making money, without having emotions about all the destruction that we are causing in the lives of people (see the movie TIGERS about how Nestle sells baby milk powder while knowing it will kill millions of babies), then this knowledge is harmful knowledge. To understand this better, see my post on “Learn Who You Are!“. 

FINALLY – for an in depth study of how an Islamic approach creates a revolution in the entire approach to education, register for a free online learning module on Principles of Islamic Education, by filling out Google form “Registration: PIE“. If you go through the lessons given there, you will achieve much better understanding of these issues. The answers given above only scratch the surface.

Real Statistics (4/4) Illusion of Objectivity

[bit.do/azrs4] 4th of a 4-Part Lecture about an online course: Real Statistics: An Islamic Approach.  The course is free, open enrollment, and allows student to go through a sequence of lessons at their own pace. To register for the first module of this course, on general principles of an Islamic education, fill in the form: Registration: PIE. Previous three parts of this lecture were: Part I – Fundamental of an Islamic Approach {bit.do/azrs1} Part II: Teaching Statistics as an Act of Worship {bit.do/azrs2} Part III: Statistics as Rhetoric {bit.do/azrs3}. This is the final Part IV: How Subjective Comparisons are made to Appear Objective {bit.do/azrs4}. The original talk at Univ of Baluchistan was in urdu. The four parts of the urdu talk are available on YouTube via the following links: RSIA (1/4) Islamic Fundamentals, RSIA (2/4) Teaching as Worship, RSIA (3/4) Statistics as Rhetoric, RSIA (4/4) Illusion of Objectivity.   The 18min English Video Lecture is linked below:

Comparing Two Numbers – (3000 Word Summary) Continue reading

Real Statistics (2/4) Teaching Statistics as an Act of Worship

[bit.do/azrs2] This is the second part of my talk at University of Baluchistan on Mon, 22 July 2019 (Link to Part 2 of Original Urdu Talk at UoB). The talk is about my online course, scheduled to start on Sat 27th July 2109, on Real Statistics: An Islamic Approach (RSIA). To register for the free online course, follow link in the first paragraph of “Connecting Statistics to Reality“.  The first part of the talk laid out The Fundamentals for An Islamic Approach [bit.do/azrs1]. This second part deals with the question of “How to teach statistics as an act of worship?”. The 15m video (re-recorded in English) is followed by a brief summary of main points in 1700 words.

Teaching Statistics as Worship: (1700 Word Summary) Continue reading

Connecting Statistics to Reality

[bit.do/azcsr] An online course entitled Real Statistics: An Islamic Approach (RSIA)- was launched on Saturday 27th July 2019. 200+ students registered for the course, which has now started. To accommodate the excess demand, I have converted the course to a self paced open enrollment course. Students can start at any time, and work through the lessons at their own pace. To register for the first module of the course (on Principles of an Islamic Education), signup on form: Registration: PIE. The 26m Video lecture below provides the motivational ideas which went into the construction of the online course. Additional relevant materials are listed in the Postscript.

Real Statistics: An Islamic Approach – (1300 Word Summary). Continue reading