Studying Islamic Finance

السلام والازدهار العدالة المجتمعي
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Monday, May 13, 2013

Christian Vs Islamic Economic Results

Here is a summary of historical research with another slant, touching on Christianity vs. Islam:

Lopez contrasts the European evolution with that of a neighboring civilization, Islam, where political pressures smothered the potential for an economic upsurge:
The early centuries of Islamic expansion opened large vistas to merchants and tradesmen. But they failed to bring to towns the freedom and power that was indispensable for their progress. Under the tightening grip of military and landed aristocracies the revolution that in the tenth century had been just around the corner lost momentum and failed. (Ibid., 57)

One might want to consider who Islam had to work with, and how the peoples that islam conquered with such alacrity were apostate Christians, not the best the West had to offer to Islam.  If this is true, would it matter?  Might Islam, as it evolved given the exigencies of ruling an apostate people, to some extent be condign punishment for apostasy?

In Europe, as trade and industry expanded, people discovered that "commerce thrives on freedom and runs away from constriction; normally the most prosperous cities were those that adopted the most liberal policies" (Ibid., 90). The "demonstration effect" that has been a constant element in European progress – and which could exist precisely because Europe was a decentralized system of competing jurisdictions –   helped spread the liberal policies that brought prosperity to the towns that first ventured to experiment with them.

Just so, and this is well known by that very system of liberal laws, the Lex Mercatoria.  Where thsi private law was adopted by states, peace and prosperity flowers.  Where it is constrained, such as in USA, we see devolution of that comity.

Also, one of the most important international trade systems, the letter of credit, is under private law internationally as well. (See the UCP of the ICC).

That Mohammed was a merchant is well known, and his teachings are replete with sage advice to any merchant.  Jesus too had cogent advice to business in his teaching.  To what extent does the predisposition of the listeners indicate results?

Berman, moreover, focuses attention on a critical development that began in the eleventh century: the creation by Pope Gregory VII and his successors of a powerful "corporate, hierarchical church … independent of emperors, kings, and feudal lords," and thus capable of foiling the power-seeking of temporal authority (Ibid., 56).[10]  In this way, Berman bolsters Lord Acton's analysis of the central role of the Catholic church in generating Western liberty by forestalling any concentration of power such as marked the other great cultures, and thus creating the Europe of divided and conflicting jurisdictions.[11] 

Indeed, was not Islam’s golden age an example of just this kind of balance of powers?

The conflict of cultures is between the emerging fascist state as representated by the USA, and the newly emerging free-Islam which is necessarily in conflict.

The state conflict with the Catholic Church in USA is a domestic echo of this international conflict.  Although the Bishops have done all they can do make the Church subservient to the state, state actors, amazed at each new level of obeisance, are ever surprised at the compliance of the Bishops. With the hospitals, schools and Catholic charities now comprommised beyond recovery, abusing Bishops is now just a matter of amusement.

Islam bristles at what the state has done to the Church, how Christianity has decimated Christians in Moslems lands, and are only too aware of what “Christian” George Bush and company would visit on Islam.  No wonder they want no part of “democracy.”

Berman's work is in the tradition of the great English scholar, A.J. Carlyle, who, at the conclusion of his monumental study of political thought in the Middle Ages, summarized the basic principles of medieval politics: that all – including the king – are bound by law; that a lawless ruler is not a legitimate king, but a tyrant; that where there is no justice there is no commonwealth; that a contract exists between the ruler and his subjects (Carlyle and Carlyle 1950, 503–26).

My guess is we’d find such a tradition every bit as robust in Islam.

Other recent scholarship has supported these conclusions. In his last, posthumous work, the distinguished historian of economic thought, Jacob Viner, noted that the references to taxation by St. Thomas Aquinas "treat it as a more or less extraordinary act of a ruler which is as likely as not to be morally illicit" (Viner 1978, 68–69). Viner pointed to the medieval papal bull, In Coena Domini – evidently republished each year into the late eighteenth century – which threatened to excommunicate any ruler "who levied new taxes or increased old ones, except for cases supported by law, or by an express permission from the pope" (Ibid., 69). Throughout the Western world, the Middle Ages gave rise to parliaments, diets, estates-generals, Cortes, etc., which served to limit the powers of the monarch. [13] A.R. Myers notes:

Almost everywhere in Latin Christendom the principle was, at one time or another, accepted by the rulers that, apart from the normal revenues of the prince, no taxes could be imposed without the consent of parliament … By using their power of the purse [the parliaments] often influenced the rulers policies, especially restraining him from military adventures. (Myers 1975 29–30)

The Church does not recognise the legitimacy of the state. Kingdoms, yes; the state no (such as democracies).    Perhaps its forbearance to the point of subjection is a result of an inability to work with such a regime.

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