Is Islam Compatible With Capitalism

8/10/2019 Is Islam Compatible With Capitalism

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values, %y contrast, meant underta$in# nothin# outside the !amil) and tribe, whichlimite commercial epeitions resources an hence their reach. *he %ons o# %loocoulnt compete with #air, relia%le institutions Jsee ?!conomics Foes =ot Hie,@ ummer2009K.Irei#s theory suggests that cultural i5erences eplain economic evelopment %etterthan religious %elie#s o. nee, #rom a strictly religious perspective, one coul view6uslims as having an avantage at creating wealth. $#ter all, slam is the only religion#oune %y a traer"one who also, %y the way, marrie a wealthy merchant. *he Goran

has only goo wors #or success#ul %usinessmen. !ntrepreneurs must pay a 2.+ percentta, the zakat , to the community to support the general wel#are, %ut otherwise can maemoney guilt-#ree. Lrivate property is sacre, accoring to the Goran. $ll this, neeless tosay, contrasts with the traitional Christian attitue towar wealth, which puts the pooron the #ast trac to heaven an loos own in particular on merchants Jrecall 4esussriving them #rom the *empleK.Aut Fues Guran %elieves that slam i play a role in the Hong Fivergence. t wasnt theGoran, which the 6uslim #aith#ul see as written %y Io an unaltera%le, that impee6uslims economically, he argues, %ut instea sharia, the religious law evelope %yscholars a#ter 6ohammes time. =ot that sharia was overtly hostile to economicprogress) it esta%lishe commerce-#rienly legal rules that, #or instance, allowe #or

%a&aars an #or the ar%itration o# economic isputes. 7ather, Guran maintains, sharia%ecame economically counterprouctive %ecause it was less e(cient than the Desternlegal #ramewor.

*he most signi<cant o# the sharia-roote economic lia%ilities was the slamic partnership,which prove no match #or the Destern worls joint-stoc company. Lartnerships wereshort-live, issolving with the eath o# any o# the partners, an they tene to %e small,o#ten #orme among #amily mem%ers. 4oint-stoc companies, which sharia prohi%ite, hamuch greater reach an ris-heging power. haria inheritance rules were a secon ragon economic evelopment, Guran eplains. ince the Goran sanctions polygamy, shariareuire a hus%ans wealth, upon his eath, to go in eual portions to his wiows anchilren, which wore against capital accumulation. n the 7oman law that hel sway in

!urope until the nineteenth century, %y contrast, the elest son inherite his ecease#athers wealth, creating vast #ortunes that coul %e put to economic wor. omeeconomists point to sharias prohi%ition o# interest as another hamper on evelopment,%ut this is much less signi<cant than it appears. 8rom at least the twel#th century on,sharia lawyers authori&e ?#ees@ that coul accompany money-lening, getting arounthe %an.6uslim wel#are #ounations to ai the poor, calle waqf , also unermine economiccompetitiveness over time, says Guran. $ccoring to sharia, all money given to thesecharities was eempt #rom taation. Aut 6uslim merchants %egan to esta%lish waqf as#ronts #or commercial enterprises, epriving the government o# su(cient #uns to #unctionproperly. *his ta evasion contri%ute to the #ailure o# the $ra% ingoms an the

ttoman !mpire to %uil a competent minimal state, which is essential to the e5ectiverule o# law.8or evience that sharia ha negative economic e5ects, consier the !gyptian city o#$leanria. Aeginning in the <#teenth century, non-6uslim merchants in the city coul optout o# sharias %usiness rules. *hose who i an em%race Destern capitalist normsuicly grew richer than those who continue to #ollow sharia, historians have shown.ver time, however, sharia aapte to capitalism. n the nineteenth century, it <nallyallowe 6uslims to #orm joint-stoc companies an to %orrow other ey capitalistinstitutions #rom the Dest. *oay, slamic %ans #ollow the same practices that non-slamic%ans o Jincluing the use o# erivativesK %ut escri%e them i5erently, so that theycon#orm with sharia. 'et espite this trans#ormation in slamic law, 6uslim economies still

lag %ehin Destern ones. Irei# an Guran may help eplain the Hong Fivergence, %ut

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what accounts #or the #act that there is no ?$ra% *iger@ compara%le with $siasremara%le success storiesB

*art o# the answer may, in #act, %e religious: slams apostasy law. haria hols that a6uslim who %reas with slam %ecomes an apostate, an o5ense punisha%le %y eath. $nsince, at least #or unni 6uslims, there is no central theological authority"the theocraticregime in ran esta%lishes such authority #or hiite 6uslims"any unni imam can e<newhat constitutes %reaing with slam. *his power may eter potential innovators,

incluing the entrepreneurial in, #rom oing anything that coul conceiva%ly get theminto trou%le.Aut a %igger reason #or the $ra% worls stagnation is political. n nearly every $ra%6uslim country, the prime enemy o# entrepreneurship an the #ree maret is an a%usivegovernment"an the strong, unaccounta%le, an usually espotic regimes that haveominate $ra% 6uslim populations #or ecaes owe neither their origins nor theirlegitimacy, such as it is, to slam. $ll emerge #rom the ecoloni&ation struggles o# the1+0s an 1M0s, which, since the primary coloni&ers were !uropeans, provoe angryanti-Destern an anticapitalist attitues in 6uslim societies. *he ecoloni&ation o# the$ra%s i not go well. Niolent con#rontations were the norm, even when #ull-%lown warint %rea out, as happene in $lgeria. *he upheavals %rought military regimes to

power in most o# the ecoloni&e $ra% states) even when the military wasnt o(cially incharge, it controlle puppet governments, as in 6orocco. $ll these regimes espousenationalism an resiste any rule o# law that might limit state power"or giveentrepreneurs a #reer han.Dorse, inepenence too place at a time when the oviet nion was inEuential anmany %elieve that centrally planne socialism was a shortcut to power an prosperity.$ra% governments thus #oun it tempting to con<scate private property, eraicate theeisting %ourgeoisie, an create massive state monopolies in resources lie copper, oil,an phosphate. n the name o# national inepenence an economic moerni&ation, allthe wealth coul %e concentrate in the hans o# the ruling militaries an %ureaucracies.$#ter the #all o# the oviet nion showe socialism to %e #ar less e(cient than the #ree

maret, $ra% 6uslim governments %egan to #ree up marets somewhat, %ut withoutsurrenering their tyrannical authority. *his resulte in an $ra% crony capitalism, which isnow the ominant economic arrangement in the 6uslim 6ile !ast. n toays pseuo-maret $ra% economies, it maes little sense to %e an inepenent entrepreneur. # youwant to open a %usiness, youll nee a license, an the only sure<re way to o%tain it is to%elong to Jor %e close toK someone in the ruling elite) even then, youll share your pro<tswith the %ureaucrats. ts #ar easier to see a rent"a %ene<t %ase on your position insociety. 7ent-seeing is particularly prevalent in countries overEowing with naturalresources lie oil an gas, which %ring in massive revenues that reuce the incentive toiversi#y the economy.!gypt eempli<es the crony-capitalist moel. Furing the 10s, corrupt privati&ationstrans#erre state monopolies in energy, steel, cement, an other inustries to private?entrepreneurs,@ most o# whom were mem%ers o# Lresient ;osni 6u%aras #amily, topmilitary o(cers, an other well-connecte people. 6eanwhile, economist ;ernano eoto has calculate, opening a moest %aery in Cairo reuire two years o# sloggingthrough the %ureaucracy, at each stage o# which the woul-%e owner woul nee togrease o(cial palms"an i# his %aery <nally opene, he woul then have to pay ongoingprotection money to the local police. mall woner !gypt su5ers #rom slow growth,massive unemployment, an a large %lac maret.

*he authoritarian nature o# toays 6uslim governments also generates social norms thatharm entrepreneurship. 8or eample, a survey conucte %y the Casa%lanca-%ase%usiness maga&ine L’Economistecompare the organi&ational structures o# 6oroccan <rmswith those o# Destern companies operating in 6orocco. t #oun that the %oss o# a6oroccan <rm tens to have a larger o(ce an more assistants, secretaries, anchau5eurs than his Destern counterpart oes an that his %ehavior is more autocratic.

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*he liely reason is that the 6oroccan %oss, mimicing the ing an his entourage, <nspower"an the ehi%ition o# power"more compelling than pro<ts.

The prosperity-crushing inEuence o# government on 6uslim entrepreneurship hasnowhere %een more evient than in *urey. n the early nineteenth century, the *urishsultan, lie the !gyptian pasha, trie to import Destern science an military methoswithout introucing Destern rule o# law. ?*he ttoman !mpire #ell into poverty %ecausethe ominant concern o# the sultans was always to avoi the emergence o# a competing

power,@ eplains *urish economist !vet Lamu. $n the possi%ility that they #eare themost was the %irth o# a Desterni&e *urish %ourgeoisie, its power %ase on privateownership.Dhen the empire %ecame the *urish 7epu%lic in 121, little change. *he repu%lics#ouner, 6usta#a Gemal Jlater calle $tatOr, a name he chose that means ?8ather o# the

*urs@K, was #ascinate %y the #ashiona%le talian #ascist ieal. *he *urs laceentrepreneurial spirit, he %elieve, so it was up to the government to act as a collectiveentrepreneur an pic those who eserve to start new %usinesses. ner his regime,which %ecame a military ictatorship a#ter his 139 eath, the *urish economy maelittle progress, though a small group o# well-connecte %usinessmen grew etremelywealthy.

slam wasnt to %lame #or *ureys poor economy. nee, the new repu%lic was <ercelysecular) #or ecaes, no openly evout 6uslim coul hol any signi<cant position in pu%licservice, in the military, or even in %usiness. 6oern *urey starte to grow economicallyonly a#ter it %egan to #ree up the maret uner #ormer Dorl Aan economist *urgut P&al,a evout 6uslim whom the military ha installe as prime minister in 193 to %ringinEation uner control. P&als re#orms opene the way #or the openly slamic, pro-maret

4ustice an Fevelopment Larty, or $GL, which has rule *urey since 2002. Dhatevercriticisms one might mae o# the $GL"it has on occasion sought to impose religiousnorms on a secular society, among other trou%ling signs"it has %rought a%out anastouning trans#ormation o# *ureys economy. *he states %uget is %alance, prices aresta%le, #ree trae is enthusiastically em%race, an crony capitalism has %een

constraine. $s a conseuence, the *urish growth rate has %een one o# the worlshighest: 9 percent annually #or several years now. *ureys per-capita income is nowhigher than aui $ra%ias"an *urey has no oil.8ueling this economic epansion is a new generation o# entrepreneurs #rom $natolia, ineastern *urey. *hese %usinesspeople are conservative 6uslims, %ut they arentetremists. *he $natolians are astonishing) no one can say #or sure how they arrive onthe scene as the ynamic engine o# *urish moernity. $s an $natolian entrepreneura%out this success an he may creit a strong wor ethic, com%ine with #amily valuesingraine in the 6uslim #aith. r he may mention the %usiness traitions o# $natolia, acrossroas %etween $sia an !urope uner the ttoman !mpire. Lamu, a secular *ur,points to munane #actors lie the $natolians low la%or costs an *ureys proimity tothe vast !uropean maret: *urey now eports 2+ percent o# its national prouction, up#rom 3 percent in 190. Dhatever the reason #or the $natolian %reathrough, slam hasnot impee it.

+ill the *urish moel sprea to near%y $ra% countriesB *his years revolutions in *unisiaan !gypt may answer that uestion. 7emem%er the man who inspire the revolutions:6ohamme Aoua&i&i, a young *unisian who earne a university egree %ut coul <n noecent #ormal employment, a situation all too common #or eucate young $ra%s.Aoua&i&i sought to mae a living #rom a tiny #ruit-an-vegeta%le stan, %ut last Fecem%er,%ecause he hant registere it with the authorities, police con<scate it. Aoua&i&i thenset himsel# on <re.Aoua&i&is suicie %rought millions o# $ra%s to the streets %ecause they coul ienti#y with

him. ;uman rights leaers int start the revolutions) neither i long-%anne slamicmovements lie the 6uslim Arotherhoo. *he upheavals werent characteri&e %y slamic

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%anners or %y sraeli Eags going up in Eames Jthough there were istur%ing reports o#6uslims attacing Christian churches in !gypt a#ter the police ha vanishe #rom thestreetsK. =o, the ominant message o# the $ra% pring was that the $ra%s int want toremain separate #rom the rest o# the worl. *he !gyptian stuents in *ahrir uarecoulnt have put it more clearly: they wante emocracy, glo%ali&ation, an maretprosperity, not slamici&ation. ?De want a normal country, which means #ree enterprisean emocracy,@ sai one o# their leaers, $mr alah o# the Cairo nstitute #or ;uman7ights, in Laris this $pril. !ven the notorious 6uslim Arotherhoo is on %oar with

capitalism: ?ur economic program is a #ree-maret society in orer to pursue social justice,@ says ameh al-Aarui, an $merican-eucate economics epert with theArotherhoo.

*he transition #rom the $ra% worls authoritarian regimes to emocracy, marets, anthe rule o# law is #ar #rom guarantee, o# course. 8or a reminer o# the i(culty o#installing success#ul Destern-style capitalism, consier 7i#aa, who returne to !gypt a#terseven years in 8rance an %ecame the pashas main avisor"overseeing the translationo# 8rench scienti<c %oos into $ra%ic, #ouning the <rst $ra%ic newspapers, an openingschools #or girls. *hough 7i#aa #ace the hostility o# 6uslim conservatives, his re#orms,accompanying the eras shi#ts in sharia, inaugurate an era o# moerni&ation in !gypt. Aythe late nineteenth century, Cairo was starting to loo lie a !uropean city, with

electricity, sanitation, universities, an an inepenent press. Aut the renaissance intlast long, %ecause 7i#aa repeately #aile to persuae the pasha to accept a Destern-styleconstitution, which woul have limite the rulers ar%itrary power. Dhat ept !gypt %acwas its #ailure to esta%lish the rule-governe institutions #amiliar in the Dest.t shoul %e so%ering, there#ore, that the military isnt liely to surrener its politicalprivileges easily in any $ra% country. till, most o# the political parties emerging in the#erment are supporters o# #ree marets. Jome socialist parties remain in 6orocco an

*unisia, where the 8rench inEuence le#t its mar, %ut they are socialist in name only.K *heyoung men an women %ehin the $ra% pring will continue to push #or more openmarets where millions o# Aoua&i&is will %e a%le to %ecome entrepreneurs"where it wonttae two years an countless %ri%es to open a %aery. $n there appears to %e no cultural

or religious reason that someay, in the not-so-istant #uture, we wont <n ca#>s in Cairothat run as e(ciently an reasona%ly as those in 6arseille.Guy orman! a City 4ournal contri"utin# editor! is the author of Chilren o# 7i#aa: n earcho# a 6oerate slam and many other "ooks.

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Is Islam Compatible With Capitalism