A wise visitor from outer space who dropped in on Earth a millennium ago might have assumed that the Americas would eventually be colonized not by primitive Europeans but by the more advanced Arab civilization — and that as a result we Americans would all be speaking Arabic today.
Yet after about 1200, the Middle East took a long break: it stagnated economically, and today it is marked by high levels of illiteracy and autocracy. So as the region erupts in protests seeking democracy, a basic question arises: What took so long? And, a politically incorrect question: Could the reason for the Middle East’s backwardness be Islam?
The sociologist Max Weber and other scholars have argued that Islam is inherently a poor foundation for capitalism, and some have pointed in particular to Islamic qualms about paying interest on loans.
But that doesn’t seem right. Other experts note that Islam in some ways is more pro-business than other major religions. The Prophet Muhammad was a successful merchant and much more sympathetic to the wealthy than Jesus was. And the Middle East was a global center of culture and commerce in, say, the 12th century: if Islam stifles business now, why didn’t it then?
As for hostility toward interest on loans, similar teachings are found in Jewish and Christian texts, and what the Koran bans isn’t interest as such but “riba,” an extreme form of usury that could lead to enslavement for failing to pay debts. Until the late 18th century, Muslims were as likely to be money-lenders in the Middle East as Christians or Jews. And today paying interest is routine even in the most conservative Muslim countries.
Many Arabs have an alternative theory about the reason for the region’s backwardness: Western colonialism. But that seems equally specious and has the sequencing wrong. “For all its discontents, the Middle East’s colonial period brought fundamental transformation, not stagnation; rising literacy and education, not spreading ignorance; and enrichment at unprecedented rates, not immiserization,” writes Timur Kuran, a Duke University economic historian, in a meticulously researched new book, “The Long Divergence: How Islamic Law Held Back the Middle East.”
Professor Kuran’s book offers the best explanation yet for why the Middle East has lagged. After poring over ancient business records, Professor Kuran persuasively argues that what held the Middle East back wasn’t Islam as such, or colonialism, but rather various secondary Islamic legal practices that are no longer relevant today.
It’s a sophisticated argument that a column can’t do justice to, but for example, one impediment was inheritance law. Western systems most commonly passed all property intact to the eldest son, thus preserving large estates. In contrast, Islamic law stipulated a much fairer division of assets (including some to daughters), but this meant that large estates fragmented. One upshot was that private capital accumulation faltered and couldn’t support major investments to usher in an industrial revolution.
Professor Kuran also focuses on the Islamic partnership, which tended to be the vehicle for businesses. Islamic partnerships dissolved whenever any member died, and so they tended to include only a few partners — making it difficult to compete with European industrial and financial corporations backed by hundreds of shareholders.
The emergence of banks in Europe led long-term British interest rates to drop by two-thirds leading up to the Industrial Revolution. No such drop occurred in the Arab world until the colonial period.
These traditional impediments are no longer a problem in the 21st century. Muslim countries now have banks, corporations, and stock and bond markets, and inheritance law now isn’t an obstacle to capital accumulation. So if Professor Kuran’s diagnosis is correct, that should bode well for the region — and Turkey’s boom in recent years underscores the potential for a renaissance.
Yet one challenge is psychological. Many Arabs blame outsiders for their backwardness, and cope by rejecting modernity and the outside world. It’s a disgrace that an area that once produced outstanding science and culture (giving us words like algebra) now is an educational underachiever, especially for girls.
The crisis in the Arab world provides a chance for a new start. I hope we’ll have some tough, honest conversations on all sides about what went wrong — as a starting point for a new and more hopeful trajectory.
The Muslim Brotherhood has often used the slogan, “Islam is the solution.” And to the West, the unstated feeling upon looking across the bleak Middle East landscape has often been: “Islam is the problem.” Professor Kuran’s research suggests that, at least looking forward, the more correct view is: Islam isn’t the problem and it isn’t the solution, it’s simply a religion — meaning that the break is over, there are no excuses, and it’s time to move forward again.
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March 05, 2011, NY Times