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By Masudul Alam Choudhury

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In such a universe economic decisions and social policies are formulated, not by self-seeking optimisers, but rather by a large number of interacting agents, each co-operating, sharing and conceding to the process of learning-bydoing in the movement towards realisation of the ethico-economic goals. 1. The symbols of the diagram are defined below: E (DE): S (IE): I (D): SP: C (CS): ethical goals/level first endowed and then cyclically evolved in the ethico-economic system (distributive equity as an ethical goal); state preferences (social preferences) based on given ethical goals and norms (international economic programmes of development finance institutions influenced by goals of distributive equity); individual preferences made to conform with social preferences (domestic economy of a nation state); social policy formulation based on ethical goals and norms (appropriate social policy orientated towards attainment of the goal of distributive equity); consumption preferences associated with individual The Humanomic Structure 5 preferences (consumer goods sector, which is part of the domestic economy); production menus influenced by individual consumpP (IS): tion preferences and co-operation between capitalist and worker (investment goods sector, which is part of the domestic economy); D (DT): distribution of incomes and resources influenced by individual and societal preferences on consumption and production (distribution, which is part of the domestic economy); first stage (repeated by subsequent stages) of attained SS: social states (attained social state); social transformation carrying social states to higher T (ST): levels of ethical perfection/goals and recreating the 'ethical man' and the ethico-economic order (social transformation commences in cycles, such as better economic security, lower budget deficit, greater expenditure in the social goods sector); social consensus formation between decision-makers SC: (between development finance institutions and their member countries in respect to appropriate choice of social projects and consequent changes in development planning).

The result of this interaction is the improved influence of the policy instruments on all the Islamic economic principles. The Principle of Ethical Endogeneity is brought out in the above interrelationships among the Islamic economic principles and policy instruments. 2 Interrelationships among principles and policy instruments in an Islamic economy 'Tewheed' and brotherhood In this figure it can be seen that a great many possible combinations can be formed among the Islamic principles and instruments.

It can be shown that the total social benefit function in Islamic economics is based on an income and The Humanomic Structure 9 employment multiplier relationship through which, in the 'Zakat' benefit model the total 'Zakat' benefit increases for one who pays 'Zakat' and for the one who receives it. 17 Additionally, the objective of 'Zakat' expenditure is to generate both ethical purging of incomes through equitable distribution as well as growth. Thus 'Zakat' cannot be considered as a mere transfer income based on the needs test, rather it is qualified on the basis of a productivity test as well.

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