Abstract
Consumers pursue fulfilling their needs rather than satisfying their wants. There are, however, influences (either external or internal) that put the consumers off the track of fulfilling needs and instead seeking satisfaction of wants, which are not needs. This results in problems of increasing Isrāf (waste of resources) and hence worsening well-being at micro-level and creating problems like poverty, unemployment and slowing down of growth at macro-level. If such economic diseases occur in a society because of distorted consumption behaviour, then how to correct the situation and how to put the consumers back on their natural and rational track. This chapter explains the role of public policy and consumption planning. It has been argued that state can play a role in this respect not by directly telling the consumer what is their need and what is not but by adopting an appropriate policy framework and institutional arrangements that will promote in the economy a consumption pattern conforming to the objectives of Sharīʿah.
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Notes
- 1.
The word “rational” is avoided here because “rationality” in this paper is being defined differently than it is conventionally defined in economics. This will be explained in detail shortly in this paper.
- 2.
For Muslims, we will go beyond the concept of “Sound mindedness”. For Muslims, we will refer to Rushd or right-mindedness recognizing the influence of values of Islamic system of life on his consumption choices. This will be discussed in detail in this paper.
- 3.
In some sense this is relevant to the concept of bounded rationality because social environment and social values cover the information deficiency at individual level that led Simon to define bounded rationality. Herbert Simon’s concept of ‘bounded rationality’ is somewhat closer to the ‘sound-mindedness’ referred above.
- 4.
The Quran has used the terms of Itrāf (wasteful consumption) and Mutrifeen (affluent members of society).
- 5.
Following verses in Quran identify these two types of behaviour:
Verse
Verse Verily thy Lord doth provide Sustenance in abundance For whom he pleaseth, and He Straiten it For He doth know And regard all His servants. (17:30)
Verse
Verse Those who, when they spend, Are not extravagant and not Niggardly, but hold a just (balance) Between those (extremes); (25:67)
- 6.
The author does not claim to be competent to write on this subject. This is only an economists understanding objectives of Sharīʿah relating to consumer behaviour.
- 7.
The Quran quotes the prophet Lut, saying to his people, “is there not among you a single right- minded man (rasheed)”? (11:78). Also refer to (11:87). The people of Lūt may be acting according to sound judgment in their own sense, but they were definitely not acting with right sense of judgment.
- 8.
“… And be not excessive. Indeed, He likes not those who commit excess” (7:31), (6:141).
- 9.
“Indeed, the wasteful are brothers of the devils” (17:28).
- 10.
And they ask you what they should spend (as infāq). Say, “The excess [beyond needs]” (2:219).
- 11.
Al-Shatibi, “al-Muafiqaat”.
- 12.
Al-Shatibi has termed the needs at these three levels as ‘ḍarooryyat’, ‘ḥajyyaatt’ and ‘tahseenyyat’.
- 13.
Some Islamic scholars have argued that it is the duty of state to guarantee of minimum needs of the population living in an Islamic state (Siddiqi 1988).
- 14.
Methodologies, however, are available to make such calculations. The most difficult requirement in this category perhaps is to calculate benchmark for water requirement. International Water Association, for example, has carried elaborate exercises to define water requirements and to explain how to calculate minimum requirements.
- 15.
MDG target aimed to halve the proportion of people whose income is less than $1 a day during the period between 1990 and 2015. According to UN, roughly 920 million people would still be living under the international poverty line in 2015, even if the target is achieved.
- 16.
For example, the statement in the Quran (Say: “If ye had control of the Treasures of the Mercy of my Lord, Behold, ye would keep them back, for fear of spending them: for man is (ever) niggardly!” [17:100]) highlights an aspect of human nature, which is obviously outside the assumptions and methodology of conventional economics that fails even to explain why people hold money despite substantial opportunity costs of doing so.
References
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Annexure: UNDP Index of Human Development (HDI)
Annexure: UNDP Index of Human Development (HDI)
The Human Development Index was developed as numerical measure made up of what most of the Development Economists believe are the very basic ingredients of human well-being: health, education and income. The first Human Development Index was presented in 1990. It has been an annual feature of every Human Development Report since, ranking virtually every country in the world from number one (currently Iceland) to number 177 (currently Sierra Leone).
This composite index has become one of the most widely used indices of well-being around the world and has succeeded in broadening the measurement and discussion of well-being. The following table summarizes the position of Muslim countries according to the UNDP-HDI ranking for 2012.
Table 1 reveals the following:
Low-ranked countries include more OIC countries than non-OIC countries (25:21).
The countries which have not been ranked as low, the ratio OIC and non-OIC countries is 14:33.
There are 92 Countries above the world average of which only 18 countries (19%) are OIC countries.
This does not give as bad a picture as seen with respect to population. Out of the total population living in low-ranked countries, two-thirds (66%) live in OIC countries. Out of the total population of OIC countries, 50% live in the low-ranked countries as defined in the above table. On the other hand, the total population living in non-OIC world, only 7% live in low-ranked countries.
According to Table 1, a total population of 1111 million of the world lives in the high-ranking countries. The total population of OIC countries that lives in the high-ranking world is only 0.1%.
A total population of 1236 million lives in low-ranking countries. The total population of OIC countries that lives in low-ranking countries is 70%.
Is the picture really so bad for Muslim world, or there are some serious problems in the concept and/or measurement?
Speaking globally, how does the information in above table help the world in improving global well-being? If Israel and Norway (where less than two per cent of world population lives) would move up in the above table, how much global well-being would improve?
But if India and China (where 37% of world population lives) move down in rank, it is a disaster for global well-being.
How does the so-called HDI ranking under UN definition help institutions concerned with world development a global well-being?
The same question arises for OIC and IDB. The UN-sponsored HDI does not help these institutions how to improve well-being at Ummah level.
Human development is objective of Sharīʿah with the ultimate goal of comprehensive human well-being. Though the Mahbub ul Haq terminology of human development and human well-being is the terminology that Islamic scholars have also been using since long, the meaning and substance of human development in the work of Mahbub ul Haq (adopted later on universally by United Nations Development Programme) is not what Islamic scholars refer to when discussing the objectives of Sharīʿah.
Their concept of well-being is vague if not doubtful. The three criteria income, education and life expectancy will indicate well-being even if the prostitution, same-sex marriages, gambling and drugs like Marijuana are being legalized and protected through developing necessary institutions for that purpose. The HDI on these three variables will not be concerned with increasing organized crime, gang rapes, increasing pedophiles, etc. The HDI also has no room for the consideration of adherence of moral and ethical values.
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Khan, F.M. (2019). Consumer Behaviour, Consumption Planning and Objectives of Sharīʿah. In: Ali, S. (eds) Towards a Maqāṣid al-Sharīʿah Index of Socio-Economic Development. Palgrave Studies in Islamic Banking, Finance, and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-12793-0_4
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