Table of Contents

Handbook on Islam and Economic Life

Handbook on Islam and Economic Life

Edited by M. Kabir Hassan and Mervyn K. Lewis

Handbook on Islam and Economic Life is a unique study, one of the first of its kind to consider Islam within a broader economic sphere. Covering a wide breadth of topics and research, it explores how Islam impinges upon and seeks to shape major aspects of economic life including economic organisation, business and management, finance and investment, charity, mutuality and self-help, and government. It concludes by analysing the link between religion and development, the present economic situation in Arab countries and the causes of underdevelopment in Muslim countries.

Chapter 29: Islamic institutions and underdevelopment

Jared Rubin

Subjects: asian studies, asian economics, economics and finance, asian economics, islamic economics and finance

Extract

One thousand years ago, Western Europe was a relatively poor area – the rule of law existed only in small, settled regions, little inter-regional commerce existed, populations were small and scattered, and science and technology were far behind those of other regions. Meanwhile, the Middle East was nearing the end of a ‘Golden Age’. By almost any measure, Middle Eastern science and technology were more advanced than in Europe, trade flowed in higher volumes and over longer distances, and Middle Easterners employed more complicated financial instruments to facilitate trade. Yet, by as early as the seventeenth century, a clear reversal of fortunes was in the making, with Western Europe on a path to dominate much of the rest of the world economically, technologically, and militarily. Why didn’t economic growth occur in the Middle East as it did in Western Europe? Many scholars in the first half of the twentieth century viewed this question as irrelevant. Kuran (1997) notes that ‘cultural relativism’ dominated academia in this period, a position which treated cultures as incomparable. For those scholars who were willing to engage in comparative analyses, Eurocentric explanations for the reversal of economic fortunes dominated academic thought. The most important of these was the explanation propounded by Max Weber and followers, who suggested that the conservative or mystical nature of Islam discouraged curiosity (to learn non-Muslim languages or European cartography, take foreign expeditions, adopt foreign methods and techniques, and so forth) and prevented risk-taking, innovation, and mechanization.

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