Homo economicus, the Economic Man, represents a rational human being formalized in certain social science models, especially in economics, who acts in self-interest to achieve in a goal-oriented manner. As John Kay puts it, "He is self interested, materialistic, and obsessed with calculating his worth." In the world of economics textbooks, "... he is the mainstay of economic life." The edifice of modern economics is built on the foundation of Homo economicus, where the behavior of this creature is assumed to be ascertained in the positivist tradition of social science. Islamic economics, and its offshoot Islamic finance, are built on the foundation of Homo islamicus, the Islamic Man, which is claimed to be distinctive from Homo economicus. However, the Islamic financial institutions emerged as part of the Islamic banking movement, where interest (traditionally equated with riba) is regarded as prohibited and the underlying behavior of the constituent members, Homo islamicus, is assumed as part of an idealized society, imbued with Islamic values and commitment. Indeed, the accumulating experience of Islamic financial institutions is pointing to the reality that the idealized Homo islamicus seems to be behaving more like Homo economicus. The distinction between the two constructs is important because often it is used to make the case that Islamic economics is fundamentally different from conventional economics. This claim of distinctiveness is made without considering (a) whether the positive economics (reflecting “what is”) is essentially different from Islamic economics; and (b) whether Islamic economics also acknowledges understanding economics at two levels: positive (what is) and normative (what should be). This essay briefly explores why the assumed distinction between the two constructs of human behavior is narrowing, or the real gap between the two is much narrower than commonly claimed or understood. The particular focus of this essay is the notion of self-interest from the Islamic viewpoint.
II. Homo economicus vs. Homo islamicus
Homo economicus is "the human species in its capability to rationally decide, that is, essentially that people will act in their own best interest when making decisions." In constrast, The most important difference between Homo islamicus and Homo economicus is the assumption of altruism. As with other pre-capitalist systems, Islam is preoccupied with the welfare of a community where every individual behaves altruistically and according to religious norms. Islamic economists are not comfortable or satisfied with Homo economicus as the behavioral model to capture or describe the essence of Homo islamicus. Monzer Kahf, a prominent Islamic economist, for example, offers the following explanation of consumer behavior in modern economics. It should be noted that Islamic economists are not monolithic in approaching these issues, theoretical or otherwise: From this dual origin [i.e. economic rationalism and utilitarianism] emerged the theory of consumer behavior. This theory considers the maximization of utility as a postulated objective of the consumer. The utility to be maximized is that of a 'Homo economicus' whose sole goal is to achieve the highest level of economic satisfaction and whose only stimulus is the 'sense of money'. The author then offers the following Islamic perspective about consumer behavior. Even though these are postulated in the context of consumer behavior, these are generally applicable to Homo islamicus. Muslim writers have viewed the foregoing development of rationalization and consumer theory with suspicion and have accused it of being a limited and one-dimensional aspect of human behavior. They claim that it is based on 'rigorous calculations directed with foresight and caution toward economic success,' as Max Weber stated it. But they do not agree with Max Weber that the alternative to 'economic rationalism' is 'the hand-to-mouth existence...
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