Daniel Pipes has written a readable explanation that clarifies the meaning, and clears up some of the misconceptions about of the term "Islamic Economics" for the average reader.
For instance, we are lead to believe that Islamic economic policy was developed many centuries ago. In fact, it is "an invented tradition" that emerged in the 1940s in India. The idea of an economics discipline "that is distinctingly and self-conciously Islamic is very new," and was invented in order to "minimize relations with non-Muslims, strengthen the collective sense of Muslim identity, extend Islam into a new area of human activity, and modernize without Westernizing."
We are also fed the notion that Islamic economics forbids the collecting of interest on loans. Apparently this isn' true:
1) "Nowhere has interest been purged from economic transactions, and nowhere does economic Islamization enjoy mass support." Exotic and complex profit-loss sharing techniques such as ijara, mudaraba, murabaha, and musharaka all involve thinly disguised payments of interest. Banks claiming to be Islamic in fact "look more like other modern financial institutions than like anything in Islam's heritage." In brief, there is almost nothing Islamic about Islamic banking – which goes far to explain how Citibank and other Western majors host far larger Islam-compliant deposits than do the specifically Islamic banks.
2) "Nowhere" has the goal of reducing inequality by imposition of the zakat tax succeeded. Indeed, Kuran finds this tax "does not necessarily transfer resources to the poor; it may transfer resources away from them." Worse, in Malaysia, zakat taxation, supposedly intended to help the poor, instead appears to serve as "a convenient pretext for advancing broad Islamic objectives and for lining the pockets of religious officials."
3) "The renewed emphasis on economic morality has had no appreciable effect on economic behavior." That's because, in common with socialism, "certain elements of the Islamic economic agenda conflict with human nature."
Why should we be concerned? Sharia based banks are popping up in North America after becoming the norm in the UK and Europe, and oil-rich Muslims have bought shares in in the NASDAQ, the London Stock Exchange, and in the Scandinavian bourse.
Remember the other golden rule: He who has the gold makes the rules!
Pipes nails it: "In short, Islamic economics has trivial economic import but poses a substantial and malign political danger."