At the heart of the contemporary Islamic doctrine of economics lies a set of behavioral norms derived from the first Islamic society in seventh century Arabia. This paper demonstrates that these norms cannot be expected to serve as the spearhead of a drive for modern economic development. For one thing, the proposed norms are unlikely to enjoy widespread adherence in large societies where it is difficult to achieve a common perception of reality, elicit generalized altruism and overcome the free rider problem. Secondly, many Islamic norms are ambiguous, and some interfere with institutions designed to improve the workings of markets. © 1983.