Analyzing the Economic
Role of Islam
For Middle Eastern intellectuals the mid-nineteenth century was a time of humiliation and anxiety. Once considered backward, Europeans were now living more prosperously and subjugating Muslims. Although none developed a coherent explanation for this shift in fortunes, many sensed that it had something to do with religion.1 There are several reasons to think that their intuition had a basis in fact.
One has already been given: certain key economic institutions of the Islamic Middle East were intertwined with Islam’s holy law. These institutions emerged in the early centuries of Islam, when temporal and spiritual matters were not sharply divided. The laws of the time did not distinguish, as they now effectively do, between the secular and religious realms of life. Rules and regulations could gain identification with Islam even if their origins lay in the pursuit of power and wealth. Thereafter, to attempt institutional reform would be to risk a confrontation with religion. The risk could vary across contexts. The Islamic inheritance system was based on the Quran, and it differed palpably from some of its alternatives. By contrast, the rights and duties of shoemakers, even where rationalized through scripture, carried little spiritual significance. The rules of footwear production did not differentiate Muslims from Christians in any meaningful way. Nevertheless, certain institutions of great significance for investment, productivity, and exchange were grounded in Islamic teachings.
A second reason to investigate Islam’s economic role is that from the seventh century onward, religion constituted an overarching