Dr. Asad Zaman

Early life and background

Zaman was born in Karachi and grew up mainly there. As a child, his family spent a year in Hawaii after an offer from the East-West Center. Before high school he attended local Pakistani schools. His father sent him to Karachi American School, and he graduated from it in 1971. [2]

Education

Zaman was at MIT at age 16. He graduated from MIT in three years with a degree in mathematics, in 1974. He then went to Stanford for his PhD, which he finished in three years. He completed the PhD in 1977, at age 22, and his research area there was econometrics, which he described as statistics combined with economics. [2]

Career

After his PhD, Zaman did a one-year postdoctoral position in Belgium. He then returned to the economics department at the University of Pennsylvania, where he taught for six years. He then moved to Columbia University in New York and also taught at Johns Hopkins and Caltech. He worked at the IMF for a short period. [1][2]

Zaman was a professor at Caltech and at Columbia University, and also at Bilkent University in Turkey. His professorships included LUMS in Pakistan and the Islamic University. He taught in the United States for about 15 years and left the USA in 1993. He says students liked him because he was good at explaining complicated things, and that his former students are now all over the world in very good positions. [1][2]

Zaman served on the Economic Advisors Council. He was Vice Chancellor of PIDE, the Pakistan Institute of Development Economics, which he calls the government's official think tank. [1][2]

Leaving the United States

Zaman says he felt like a glorified governess, teaching the children of an alien civilization in the US. He says one reason he left the US was to keep his children from being culturally assimilated. He thinks 80 to 90 percent of children growing up in the US assimilate culturally. He says he chose not to sacrifice the Akhirat of his children, calling it a very bad trade-off. [2]

Zaman says pursuing pleasure as his goal left him intensely unhappy. He says he read the Quran in California to see whether it offered guidance. He also says the goal of life is success on the Day of Judgment, not money or fame. [2]

Turkey, LUMS and the Islamic University

Zaman lived in Turkey from 1993 to 1999. He says he and his wife were accepted by both secular and religious circles there. After Turkey he taught economics at LUMS for three years, and he describes LUMS as very strongly capitalist. He accepted an offer from the Islamic University, where he felt at home. [2]

Akhuwat University and Al-Nafi

Zaman is also the Director of Uloom ul Umran, Al-Nafi Online Educational Platform. He says he plans to teach the Islamic business model at his university. He cites Akhuwat University and Edhi as examples of Islam in practice. [1][2]

Writing

Zaman has titled one of his books Islamic Economics: The Polar Opposite of Capitalist Economics. He has also written a recent paper on reconceiving microeconomics and macroeconomics. [1]

Views on Islamic economics and capitalism

Zaman argues that most Islamic economists treat Islamic economics as a branch of capitalism. He argues that Islamic economics is very different from capitalism in all respects. He says the Islamic economic system is right now just a dream and does not exist anywhere in the world. He says capitalism, communism and socialism are all one in terms of assessing material prosperity. [1][2]

Zaman argues that the capitalist system is built on greed, individualism, hedonism and the pursuit of power and profit, while Islamic society is built on generosity and cooperation, not competition. He argues that capitalism treats people as human resources, not human beings, and that the labour market needs interchangeable parts that can be swapped in and out. He says capitalism depends on an exploitable labor force, so poverty is essential to it. He also says there is no real scarcity, because there is enough food to feed everyone on the planet. [1][2]

Zaman says that in capitalism people sell their time and their life for money, and he argues that in Islam people are too precious to be bought and sold on the market. He says that in the West a person's value is measured by the money they can earn. He says the Islamic conception of society is a brotherhood, one body whose every part feels the pain of the others, and the capitalist conception is a jungle of survival of the fittest. [1][2]

Views on society, the state and history

Zaman argues that the basic unit of Islamic economics is the community organized around the masjid. He argues that Islamic macroeconomics would operate at the level of the ummah, not the nation, and that nation states were created deliberately to divide the ummah. He argues that large corporations now dominate nations and dictate their policies. [1]

Zaman cites a book called The Impossible State, and a book called The Great Transformation on the historical and political origins of the current system. He argues that after religious wars, Europe built a secular society that excluded God, and that without God, natural law becomes the law of the jungle and survival of the fittest. He says Islam holds strength is given to protect the poor, not to exploit them. He says the shift from traditional to capitalist society came through a battle that tradition lost. [1]

Zaman says a prayer is not acceptable if a person has money while a neighbour sleeps hungry. He says neighbours in the masjid can pray side by side for years without knowing each other's names, and that in urban areas most people do not know their neighbours' names. He says the masjid was meant to be a social centre where neighbourhood problems were solved. He says farz-e-kifaya does not mean that the government will look after a neighbourhood, but that whoever is on the spot is responsible. [1]

Zaman says if everyone looks after the ten houses on either side, that will make a difference. He says change should start neighbourhood by neighbourhood, community by community. He says an Islamic economy cannot start at government level because government is too embedded in the global capitalist system. He says Islam tells people to work at the level where they can be effective. [1]

Views on the Islamic firm and Islamic finance

Zaman says an Islamic firm earns profit in order to provide service, while a capitalist firm provides service in order to earn profit. He says an Islamic firm would try to maximise the number of people it can feed. He describes an Islamic business model in which workers are equal partners in producing the service and sharing its reward. He says that in his model workers are paid according to their needs as part of their effort, and that the first step toward an Islamic firm is dignity of labour. [1]

Zaman says Islamic finance has three financial rules. He says there should be no interest, no gharar, and no trading of debt. He argues that any one of the three rules would have prevented the 2007 global financial crisis. He says Islamic finance is often treated as charity. [1]

Zaman cites Indus Hospital as an example of Islamic economics, and says it runs with no treasury or cashier and treats everyone. He cites zero-interest microfinance as an example of Islam in practice. He says Islam is built on trust and human relationships. [1]

Views on generations of Islamic economists

Zaman says the first generation of Islamic economists were revolutionaries fighting capitalism, communism and socialism. He says governments proved too strongly entrenched, and none of these revolutions succeeded. He says about 90% of the world was colonised, including the Islamic world. [1]

Zaman says second-generation Islamic economists took PhDs in economics and came to see capitalism as the only system. He says there was a conference on Islamic economics in Mecca around the mid-1970s. He says the second generation chose to Islamize capitalism because governments could not be captured, and that it achieved nothing in the roughly 50 years from the mid-1970s. [1]

Zaman says a third generation of Islamic economists is emerging and working within current conditions. He says the third generation is building self-sufficient local communities. [1]

Views on money, currency and technology

Zaman says an Islamic currency could be designed along the lines of BRICS. He argues there is no natural trading system, so financial systems must be designed. He cites the book The Battle of Bretton Woods, and says Keynes had an alternative design that did not put the dollar at the centre. He argues that the key factor for a currency is how self-sufficient the country is. [1]

Zaman says simple lifestyles are essential for self-sufficiency. He says a self-sufficient system would not starve if the exchange rate jumps. He says modern money came into existence in 1971, when Nixon delinked the dollar from gold, and that modern monetary theory describes the correct nature of modern money. He says gold was not very widely used as a currency, contrary to common belief, and that a fixed money supply cannot keep up with the needs of a growing economy. [1][2]

Zaman says the one requirement for government money creation is that it funds productive jobs. He says central banks should increase the money stock at exactly the same pace as economic growth. He says Keynesian economics was dominant from about 1930 to 1980, before the Reagan-Thatcher revolution. He says inflation is due to class conflict and calls it a concealed weapon, and that producers raise prices to make bigger profits. [2]

Zaman says he told people before the crypto bust that crypto was a Ponzi scheme and a pump and dump scheme. He says the fundamentals of crypto are a secure, democratized and finite form of currency, and that the main defect of crypto is that it has no anchor tying its value to a fixed amount. He says the skills to create crypto are concentrated in Russia and some other places, not widespread in the Islamic world. He says crypto that substitutes for human trust would be harmful to the cause, and that technology that substitutes for character is harmful. He says technology can play a useful supplementary role if used carefully. [1][2]

Views on education and knowledge

Zaman says Western education teaches that all knowledge has been produced by the West. He says the West defined knowledge as coming only from observation and logic. He says madrasas teach traditional Islamic sciences but not how they apply to the modern world. He says some people are too Islamic and reject science, while scientists reject philosophy. [2]

Zaman says his aim is to show that the Quran's knowledge can solve modern problems, though for now this is a claim without evidence. He says a school that teaches people to become better human beings would struggle to attract students. He says economic theory taught in universities is a propaganda instrument for capitalism. He says he has spent a lifetime as a teacher trying to get students to aim to change the world. [2]

Views on Pakistan

Zaman says Pakistan's elites have a different economy from the masses, and do not care whether the masses starve, as long as they get luxury goods. He says Pakistan has a colonial economy that extracts money from the masses instead of developing them. He says the current system is neo-colonialist, and that the party that comes to power has a pump for extracting money. He says the biggest problem in Pakistan is that everyone is in the game for only two or three years. [1][2]

Zaman says China has one party, the Communist Party, which will stay in control for the foreseeable future, so it can plan long term. He says Malaysia was fully reformed under one president who ruled for 27 years. He says democracy devolves power so that change needs the buy-in of everyone. He says he does not see an easy end to Pakistan's political turbulence, and that he sees no end to the political machinations in Pakistan. He says Pakistan's situation is nothing like Bangladesh's, so nothing similar can be expected. [1][2]

Zaman says Pakistan bought 60 billion dollars of imports and sold 30 billion dollars of exports. He says the solution to Pakistan's economic crisis is to reduce imports, and that the two biggest parts of Pakistan's import bill are energy and agriculture products. He says Pakistan could be self-sufficient in agriculture if the problems in its agriculture sector were fixed. He says Iran is ready to sell Pakistan cheap energy, but big powers will not let Pakistan buy it, and that OGDC has schemes to make Pakistan energy self-sufficient in three to five years. [2]

Zaman argues that the focus on exports and FDI is inherently against development. He says Pakistan's economy is built on selling its population's wheat and rice to foreigners for dollars, so the elite can buy luxury goods. He says a plan for agricultural self-sufficiency would never sell to the upper class, because it would cut their lifestyle. He says the future of Pakistan depends on what its people do, and that the one Islamic principle that would solve the crisis is that all children in Pakistan are his children. [2]

Views on Islam and the modern world

Zaman says Islam cannot be reduced to a few characteristics. He says the level of charity given by Muslims in proportion to their income is the biggest in the world. He says the leadership and system of Islamic countries have nothing to do with Islam, and that non-Muslim countries may uphold some Islamic financial ideals better than Muslim countries. [1]

Zaman says the question for individuals is what they can do, not what the world will become. He says the priority now is to prepare for the climate crisis, and that people should live in rural communities close to the earth, with simple lifestyles. He advises people not to try to change the system, but to change their neighbourhood and lifestyle. He advises a simpler lifestyle with less consumption, production and labour, so people have time for relationships. [1]

Zaman says many people work from day to night and have no time for friends and family. He argues the need for personal surplus is vastly reduced in an Islamic society built on social relationships. He advises individuals to look inward to get through the turbulence. [1]

Personal life and reflections

Zaman says he learned about Zen Buddhism and joined some encounter groups. He says there was no social life and he devoted himself to his studies. He says he was very interested in becoming American and did not care much for Pakistanis. He says MIT encouraged him to become more of an introvert, and that he later realised he was unable to relate to people and saw this as a big deficiency. [2]

Zaman says his perception has changed a lot since he was young. He says students did not come to him for personal advice. He has given a talk about his experiences at MIT. [2]

Timeline

1971

Graduated from Karachi American School.[2]

1974

Graduated from MIT with a degree in mathematics.[2]

1977

Completed his PhD at Stanford.[2]

1993

Left the United States.[2]

1993 to 1999

Lived in Turkey.[2]

Appearances

Frequently asked questions

References

1. Islamic economics is the polar opposite of capitalism . Thought Behind Things , 2024-08-23.
2. Why Islamic economics is neither capitalism nor communism . Thought Behind Things , 2023-05-08.