ECONOMIC CONDITIONS: Islamic Finance, Law, Economics and Practice

By Tuma, Elias H. | The Middle East Journal, Winter 2007 | Go to article overview

ECONOMIC CONDITIONS: Islamic Finance, Law, Economics and Practice


Tuma, Elias H., The Middle East Journal


ECONOMIC CONDITIONS Islamic Finance, Law, Economics and Practice, by Mohammad A. El-Gamal. Cambridge, UK and New York: Cambridge University Press, 2006. xiii + 191 pages. Notes to p. 212. Bibl. to p. 218. Index to p. 221. $60.

Reviewed by Elias H. Tuma

It is heroic to try to present an Islamic model of finance, but there is no such model in this book or in reality. At best here is a survey of the various approaches to finance by the different schools that consider themselves Islamic. These schools try to base their models of finance on the Shari'a (Islamic Law), or on fatwas (edicts by religious leaders). They all take liberty in interpreting the Shari'a by way of ijtihad (deep analysis and interpretation), eventually to lend legitimacy to coveted financial and economic operations and transactions. The author argues that virtually all the "Islamic" schools of thought seem to be interested in reviving classical economic methods of finance because of their similarity to conventional or modern methods of banking and finance. They avoid payment and receipt of riba (usury) by devising ways to hide an equivalent amount to the price, or earn it in the form of rent. Murabaha (cost plus sale), ijara (lease or hire), and mudaraba (silent partnership) are the most common approaches, but all these were common in medieval Europe to avoid the payment of usury, which was prohibited by the Catholic Church. Current Islamic banks have managed to create a viable industry by devising similar methods.

These various ways to comply with the Shari'a and the use of Shari'a arbitrage deal mostly with form, rather than with substance. If so, why not abandon the emphasis on form and become involved with substance. For example, Islamic banks and financial institutions may become involved in social issues and in extending credit to poor people. It would also be more efficient to screen in industries and institutions that comply with the Shari'a than to screen out those that violate it. According to the author, "most of the shortcomings and inherent dangers of Shari'a arbitrage behavior...can be minimized by redefining the brand name of Islamic finance in terms of religious social and economic development goals" (p. 190), for the industry will be viewed more favorably, and "once Islamic finance outgrows its formulaic and ethical religious tenets, it will no longer need to hide behind the 'Islamic' brand name. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

ECONOMIC CONDITIONS: Islamic Finance, Law, Economics and Practice
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.