CONCEPTUALIZING ILLUSION: THEORETICAL ILLUSTRATION OF TRUTH AND FALSEHOOD IN EPISTEMOLOGICAL METHODOLOGY FOLLOWED IN ISLAMIC FINANCE

Abstract

This paper aims to establish the point that even the field of Islamic economics and Islamic Banking and Finance IBF, are vulnerably deficient and cannot produce valid solutions for post-colonial Muslim economies. This is due to the prevalent homoeconomicus tone in Islamic Banking & Finance IBF in the academic arena as a direct result of the cognition reality of Muslim individuals involved in IBF academic research that contributed towards its adherence to neoclassical economics. This will be approached by displaying the contrast between homoislamicus and homoeconomicus vision of the world, to understand the intrinsic malfunction of IBF and inclination towards homoeconomicus that will persistently occur unless religious homoislamicus policy is adopted while leaving lesser margin for homoeconomicus social policies. This study will pursue discourse analysis methodology with subjective positivist analysis of the Homo’s dichotomy, to apprehend the difference between them. This difference has not been realised and the homoislamicus promise of Islamic economics has not come out as a methodological difference. Then discussion will cover the behavioural norms (psychological and sociological) of researchers in the field and their contributions toward creating epistemological bubbles that cannot serve as a valid foundation for knowledge due to its fragility. This paper suggests that the field of Islamic economics is mainly found on neoclassical homoeconomicus grounds and has no potential in creating ethical Islamic financial system besides its claim of elimination of RibÄ (Interest). This paper recommends that Islamic economics should reunite with Islamic fiqh rather than looking at it as an independent field.