At the end of 2008, Alan Greenspan, the former chairman of Federal Reserve was summoned to the US Congress to testify about the financial crisis. His tenure at the Fed had been long and lauded, and Congress wanted to know what had gone wrong.

Greenspan who once dubbed as ‘The Oracle’ and at one time so revered by financial markets that a single utterance might prompt – to borrow a Greenspan phrase – an outbreak of ‘irrational exuberance’. Despite his high stature in the past, he was brought down to the earth by Congress during the hearing regarding the failure of American financial system which many have identified the causes as rooted during his tenure as the chairperson of the Fed.

During the hearing, there happened to be an interesting exchange between a panel member named Henry Waxman and Greenspan which highlight the ‘real depth’ of the problem:

Waxman: The question I have for you is, you had an ideology, you had a belief that free, competitive – and this is your statement – ‘I do have an ideology. My judgment is that free, competitive markets are by far the unrivalled way to organise economies. We have tried regulation, none meaningfully worked.’ That was your quote.

‘You had the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis. You were advised to do so by many others. And now our whole economy is paying the price. Do you feel that your ideology pushed you to make decisions that you wish you had not made?

‘Greenspan: Well, remember, though, what an ideology is. It’s a conceptual framework with the way people deal with reality. Everyone has one. You have to – to exist, you need an ideology. The question is, whether it is accurate or not. What I am saying to you is, yes, I found the flaw, I don’t know how significant or permanent it is, but I have been very distressed by that fact.

‘Waxman: You found a flaw?

‘Greenspan: I found a flaw in the model that I perceived is the critical functioning structure that defines how the world works, so to speak.

‘Waxman: In other words, you found that your view of the world, your ideology, was not right, it was not working.

‘Greenspan: Precisely. That is precisely the reason I was shocked, because I had been going for 40 years or more with very considerable evidence that it was working exceptionally well.’

The exchange between Waxman and Greenspan was far deeper than an economic issue. It was a question of truth and reality that best fits into a philosophical discussion that could be extended to various facets of human life be it economics, success, happiness, development and other key terms that define our purpose of existence in this life.

The financial fiasco that broke off in Wall Street and seeped through the Main Street while at the same time engulfing the world financial system can no longer be analysed in its mere ‘external’ form. The real problem that has beset Wall Street could be identified much to so-called ‘financial experts’ who embraced certain negative values and turned them into ‘virtues’ in a world where they dream to create heaven on earth with dollars and cents.

Worse, their utopian dream which was being built on a foundation of greed and deceit was created at the expense of others, notably the honest working class people who have worked tremendously hard to earn an honest living.

However, at the end, their savings are sucked into this financial abyss due to the failure of the banking system as succinctly portrayed by the downfall of Lehman Brothers, Merril Lynch and not to forget a country by the name of Iceland.

In the case of Greenspan and many of corporate raiders, their flaw in reasoning churned out, - in the words of Austrian economist Thorstein Veblen - a ‘conspicuous consumption’ that turned to out to be the environment for economic growth which yielded this economic crisis. As testified by Greenspan earlier, it all boiled down to the correctness of the worldview of the people that run the system.

In Islamic knowledge tradition, this has never been the case. According to Syed Muhammad Naquib Al-Attas, a renowned Islamic metaphysician and thinker, a worldview is a metaphysical survey of both the visible and invisible world.

What is meant by ‘worldview’, according to the perspective of Islam, is then the vision of reality and truth that appears before our mind’s eye revealing what existence is all about; for it is the world of existence in its totality that Islam is projecting. Thus by ‘worldview’ we must mean ‘ru’yat al-islam li al-wujud.’

Now, Greenspan himself has admitted the fallacy of his economic worldview that laid a fertile ground for the perpetuation of the current economic crisis which has been dubbed by many economists as worse than infamous Great Depression of the 30s.

Still, there are many lessons to be learnt from this crisis. What is more important is how we can re-construct our worldview to yield a better economic knowledge system that could translate into better policies and governance.

Maybe the upcoming BM seminar organised by the Assembly of Young Intellectuals (Hakim) and the National Union of Malaysian Muslim Students (PKPIM) on the ‘Worldview of Islam’ and a special lecture of the year by renowned Islamic thinker Syed Muhammad Naquib Al-Attas entitled ‘Reviving the Worldview of Islam: Internal and External Challenges’ (in English) could provide some serious answers and solutions to current challenges that we are facing today.

The event will be held on Dec 13 from 9am till 11pm at Malaysian Integrity Institute, Jalan Duta, Kuala Lumpur.