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Islam and Mammon

Islam and Mammon: The Economic Predicaments of Islamism

Timur Kuran
Copyright Date: 2004
Pages: 224
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  • Book Info
    Islam and Mammon
    Book Description:

    The doctrine of "Islamic economics" entered debates over the social role of Islam in the mid-twentieth century. Since then it has pursued the goal of restructuring economies according to perceived Islamic teachings. Beyond its most visible practical achievement--the establishment of Islamic banks meant to avoid interest--it has promoted Islamic norms of economic behavior and founded redistribution systems modeled after early Islamic fiscal practices.

    In this bold and timely critique, Timur Kuran argues that the doctrine of Islamic economics is simplistic, incoherent, and largely irrelevant to present economic challenges. Observing that few Muslims take it seriously, he also finds that its practical applications have had no discernible effects on efficiency, growth, or poverty reduction. Why, then, has Islamic economics enjoyed any appeal at all? Kuran's answer is that the real purpose of Islamic economics has not been economic improvement but cultivation of a distinct Islamic identity to resist cultural globalization.

    The Islamic subeconomies that have sprung up across the Islamic world are commonly viewed as manifestations of Islamic economics. In reality, Kuran demonstrates, they emerged to meet the economic aspirations of socially marginalized groups. The Islamic enterprises that form these subeconomies provide advancement opportunities to the disadvantaged. By enhancing interpersonal trust, they also facilitate intragroup transactions.

    These findings raise the question of whether there exist links between Islam and economic performance. Exploring these links in relation to the long-unsettled question of why the Islamic world became underdeveloped, Kuran identifies several pertinent social mechanisms, some beneficial to economic development, others harmful.

    eISBN: 978-1-4008-3735-9
    Subjects: Economics, Sociology

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. Preface
    (pp. ix-xx)
  4. CHAPTER ONE The Economic Impact of Islamism
    (pp. 1-37)

    In 1979 pakistan took some major steps to give its economy an Islamic character. To satisfy the presumed Qur’anic ban on interest, banks were ordered to offer an interest-free alternative to the conventional savings account and to purge interest from all their operations within five years. Although the wider objective has not yet been met, the interest-bearing savings account is no longer an option for new depositors. Another highlight of the 1979 program was zakat, Islam’s tax on wealth and income. Voluntary until then, zakat was made a legal obligation. The Pakistani government now collects zakat from several sources, notably...

  5. CHAPTER TWO Islamic Economics and the Islamic Subeconomy
    (pp. 38-54)

    The mid-twentieth century saw the emergence of a literature characterized as Islamic economics. The declared goal of this literature has been to identify and promote an economic order that conforms to Islamic scripture and traditions. Now featuring thousands of books, articles, and pamphlets in dozens of languages, it asserts that an Islamic economy would unite the strengths of capitalism with those of socialism, while overcoming their weaknesses.¹

    For several decades, Islamic economics remained almost exclusively an intellectual exercise. Since the 1970s, however, steps have been taken to put its ideals into practice. Dozens of countries now have Islamic banks—financial...

  6. CHAPTER THREE Islamism and Economics: Policy Prescriptions for a Free Society
    (pp. 55-81)

    One of the most visible triumphs of the ongoing global movement known as Islamic fundamentalism, Islamic revivalism, or Islamism¹ has been the spread of Islamic banks. Throughout the Islamic world the successes of Islamic banking have alarmed many supporters of secularization, modernization, and economic development. One outspoken worrier was Uğur Mumcu, a widely read Turkish columnist who was assassinated in January 1993, probably on orders from the Islamic Republic of Iran.² Mumcu saw the advent of Islamic banking as part of a sinister ploy to advance Islamism, isolate Muslims from global civilization, and force Muslim nations into a despotic political...

  7. CHAPTER FOUR The Genesis of Islamic Economics: A Chapter in the Politics of Muslim Identity
    (pp. 82-102)

    The twentieth century has witnessed the emergence of an economic doctrine that calls itself “Islamic economics.” Of all economists of the Muslim faith, only a small minority, known as “Islamic economists,” identify with some variant of this new doctrine. Yet it is socially significant, if only because it advances the sprawling and headline-grabbing movement known as “political Islam,” “Islamic fundamentalism,” or simply, “Islamism.”

    The declared purpose of Islamic economics is to identify and establish an economic order that conforms to Islamic scripture and traditions.¹ Its core positions took shape in the 1940s, and three decades later efforts to implement them...

  8. CHAPTER FIVE The Notion of Economic Justice in Contemporary Islamic Thought
    (pp. 103-120)

    In the massive contemporary literature that has come to be known as “Islamic economics,”¹ a frequent claim is that an Islamic economic system would serve economic justice better than existing capitalist and socialist systems. An Islamic system, it is said, would be free, on one hand, of the exploitation and severe inequalities that characterize capitalism and, on the other, of the class struggles and intolerable restrictions that are the hallmarks of socialism.²

    The challenge at hand is to describe and evaluate the notion of economic justice that appears in this body of literature. I begin by defining the main principles...

  9. CHAPTER SIX Islam and Underdevelopment: An Old Puzzle Revisited
    (pp. 121-148)

    On october 29, 1923, the day Turkey was proclaimed a republic, the new regime’s founder, who would eventually assume the name Atatürk, spoke to a reporter on culture and religion. The Turkish nation should remain religious, he said, explaining that religion is not necessarily inimical to progress. He added, however, that his fellow Turks were being held back by a “confused and artificial religion riddled with superstitions.”¹ Under his leadership, Turkey would abolish the Islamic caliphate and declare secularism one of its guiding principles.

    Atatürk was not alone in viewing Islam, or at least popular Islam, as irrational and retrogressive....

  10. Notes
    (pp. 149-168)
  11. References
    (pp. 169-188)
  12. Index
    (pp. 189-194)