Posted on by Liam Ray

Almezeini, “The Negotiability of Debt in Islamic Finance”

In December, Brill Publishers will release The Negotiability of Debt in Islamic Finance: An Analytical and Critical Study by Abdulaziz A. Almezeini (Georgetown University Law Center). The publisher’s description follows:

Brill_logoThe challenges posed by the non-liquidity and non-diversity of the Islamic debts market make the market an inefficient tool on contributing to Muslim economic growth. Islamic scholars and experts created sukuk as an Islamic debt instrument to avoid riba (usury), but the sukuk market (especially in the Gulf) still struggles with the prohibition of the trade of debt due to the prohibition of the two Fiqh Academies.

Trading and securitizing debts should be permitted in Islamic law, with one condition, that the debt should be considered low risk. This new rule, the permissibility of trading debts, is supported by three Islamic legal bases, istishab, qiyas, and maslaha, which are recognized by all four Islamic schools of legal thought. Furthermore, permitting the trading of debts is more consistent with the principles and theories of Islamic law than is forbidding it. It is consistent with the obligations theory that debt is a personal right. It is consistent with the mal (property) theory that debt may be sold according to the three Islamic schools of legal thought, all of which consider debt as property. It is consistent with other modern Islamic financial transactions that are permitted by the two Fiqh Academies, such as tawarruq and murabaha.

Posted on by

Franken, “Liberal Neutrality and State Support for Religion”

In May, Springer will release “Liberal Neutrality and State Support for Religion” by Leni Franken (University of Antwerp). The publisher’s description follows:

This book focuses on the financing of religions, examining some European church-state models, using a philosophical methodology. The work defends autonomy-based liberalism and elaborates how this liberalism can meet the requirements of liberal neutrality. The chapters also explore religious education and the financing of institutionalized religion. This volume collates the work of top scholars in the field. Starting from the idea that autonomy-based liberalism is an adequate framework for the requirement of liberal neutrality, the author elaborates why a liberal state can support religions and how she should do this, without violating the principle of neutrality. Taking into account the principle of religious freedom and the separation of church and state, this work explores which criteria the state should take into account when she actively supports religions, faith-based schools and religious education. A number of concrete church-state models, including hands-off, religious accommodation and the state church are evaluated, and the book gives some recommendations in order to optimize those church-state models, where needed. Practitioners and scholars of politics, law, philosophy and education, especially religious education, will find this work of particular interest as it has useful guidelines on policies and practices, as well as studies of church-state models.

Posted on by

Lange, “Excommunication for Debt in Late Medieval France”

Next month, Cambridge University Press will release “Excommunication for Debt in Late Medieval France: The Business of Salvation” by Tyler Lange (University of California, Berkeley). The publisher’s description follows:

Late medieval church courts frequently excommunicated debtors at the request of their creditors. Tyler Lange analyzes over 11,000 excommunications between 1380 and 1530 in order to explore the forms, rhythms, and cultural significance of the practice. Three case studies demonstrate how excommunication for debt facilitated minor transactions in an age of scarce small-denomination coinage and how interest-free loans and sales credits could be viewed as encouraging the relations of charitable exchange that were supposed to exist between members of Christ’s body. Lange also demonstrates how from 1500 or so believers gradually turned away from the practice and towards secular courts, at the same time as they retained the moralized, economically irrational conception of indebtedness we have yet to shake. The demand-driven rise and fall of excommunication for debt reveals how believers began to reshape the institutional Church well before Martin Luther posted his theses.

Posted on by

Khan, “Islamic Banking in Pakistan”

In November, Routledge will release “Islamic Banking in Pakistan: Shariah-Compliant Finance and the Quest to make Pakistan more Islamic” by Feisal Khan (Hobart and William Smith Colleges). The publisher’s description follows:

Islamic Banking and Finance (IBF) has become a growing force over the past three decades, with Pakistan being one of the IBF pioneers by converting to an ‘interest-free’ banking system in 1985. However, since independence in 1947, there has been continual tension over Pakistan’s essential character, between Islamic Minimalists, who favour a Modernist interpretation of Islam, and those who favour an Islamic Maximalist interpretation that sees Pakistan as a model Islamic state.

This book analyses the push to Islamize Pakistan and its financial system by Islamic revivalists, following the early 1947 debates in the original Constituent Assembly to the final 2002 ruling on IBF of the Shariat Appellate Bench of the Pakistan Supreme Court. It examines the practice and theory behind contemporary Islamic, “Shariah-compliant”, banking. It offers extensive interviews with Pakistani Islamic bankers on the state of their industry and how they see it developing, and provides analysis on how the Islamic banks’ customers differ from those of conventional ones.

Presenting a critical analysis of Pakistan’s IBF experience and offering a new insight into Pakistan’s banking industry that illustrates broader political and social trends in the country, this book will be of interest to specialists on Islam, South Asia and International Economics.

Posted on by

De Sanctis, “Churches, Temples, and Financial Crimes”

This May, Springer Publishing will release “Churches, Temples, and Financial Crimes: A Judicial Perspective of the Abuse of Faith” by Fausto Martin De Sanctis.  The publisher’s description follows:

This eye-opening volume examines ways in which religious institutions can be misused to mask illegal financial dealings, and steps law enforcement can take to combat these criminal activities. The chapters review legal rights and responsibilities of churches and the types of loopholes that can allow unscrupulous practices to flourish. This book offers local and global proposals for the study and practice of improving financial transparency for religious organizations, and assessing and curbing monetary crimes within their ranks. A sampling of criminal cases of financial wrongdoing by churches and temples spotlights the ingenuity involved in such scams as well as in the ongoing fight against them. Included in the coverage:

  • Religious freedom in the U.S and Brazilian constitutional orders
  • Government regulation of religious organizations
  • Criminal investigations and cases involving financial crimes practiced by and through religious institutions
  • International religious activities and legal cooperation for repatriation of assets
  • Payments through illegal and disguised means, and the misuse of churches, temples, and charitable organizations
  •  Proposals to improve the war against financial crimes within temples and churches

Its unique subject matter and depth of information make Churches, Temples, and Financial Crimes distinctly useful for professionals involved in efforts to curb this form of crime, particularly law enforcement personnel, prosecutors, and judges.

Posted on by Mark Movsesian

More on Religion and the Eurozone Crisis

Last week, I discussed Walter Russell Mead’s interesting post on how the Greek crisis implicates the divide between the Eastern and Western Christian worlds. Here’s another reference to the religious implications of the eurozone crisis, in an essay by Estonian President Toomas Hendrik Ilves. Ilves complains that northern countries have been trying for decades to be fiscally responsible. Now, he says, the EU is asking these countries, even relatively poor countries like Estonia, to fund transfer payments to profligate southern countries like Greece, Italy, Portugal, and Spain. And when political leaders in the northern countries object, their counterparts in the rest of the eurozone accuse them of courting “populism,” which, in the European context, carries the connotation of fascism.

These accusations irritate Ilves, and he says so bluntly. In the course of his essay, he makes a startling religious reference. It’s only a quick reference in a long essay, with a subtle, almost dog-whistle quality. But I think it’s significant. Ilves draws on the image of the Protestant Reformation to explain the current eurozone crisis:

When we still talk about new and old members, we still talk nonsense about “populism” in all the wrong ways. Indeed I believe that the “populism” and the “specter of the 30s” that all kinds of pundits unknowledgeably appeal to has nothing to do with the populism we see in Northern Europe. That is not a populism of the dispossessed, the unemployed. It is a populism more akin to what Calvin and Luther appealed to than what the fascists of the 1930s appealed to. It is, like most populism, based on resentment, and resentment at unfairness. But the unfairness is, as it was in the 16th Century, a resentment of those who flaunt their flouting the rules by which others abide. Resentment on the part of those who take commitments seriously regarding those who do not: Is that the “specter of the 30s”?

It would be silly to ascribe the whole eurozone crisis to the different worldviews of Protestants and Catholics, and Ilves doesn’t do so. Some fiscally responsible countries that Ilves praises, like Austria and Poland, are historically Catholic. And, anyway, politics throughout Europe is quite secular, and there’s plenty of blame to go around. Still, one can’t help noticing that the “frugal” countries happen to be mostly northern and historically Protestant, and the “profligate” countries tend to be southern and historically Catholic (or Orthodox). Paging Max Weber! H/T: Rod Dreher.

Posted on by Mark Movsesian

Langton et al., “Islamic Economics and Finance: A European Perspective”

From Palgrave Macmillian, a new work on applying Islamic finance in the European context, Islamic Economics and Finance: A European Perspective (Jonathan Langton, Cristina Trullols and Abdullah Q. Turkistani eds. 2011). The authors suggest that the global financial crisis has led to an interest in alternative economic models, including the Islamic, with its emphasis on business ethics. The publisher’s description follows:

The global economic crisis has driven many economists around the world to seek alternative solutions to the western capitalist model which has proven to have some shortcomings. One prominent area of that research has been Islamic Economics and Finance. Based on the Muslim teachings of shari’ah, this system differs significantly from conventional economics and finance, notably in the prohibition of interest and strong emphasis on moral ethics.

In June 2010, IE Business School, with King Abdulaziz University, gathered in Madrid some of the world’s foremost scholars, academics and practitioners of Islamic Economics and Finance to discuss how this alternative philosophy can be applied in western financial markets. This collection of highlights from that conference and original articles, specifically addresses the post-crisis application, as well as the Legal and Tax Implications, of this growing and relevant economic philosophy in Europe, including in the area of Project Financing.

Posted on by Marc O. DeGirolami

Usury Revisited

A while back I had some thoughts about usury as existing in a somewhat unique position from a historical point of view.  Professor Bainbridge had a nice response to my post here.  And this is a more recent and also very thoughtful post by John Schwenkler, discussing a piece by Elizabeth Anscombe, Faith in a Hard Ground, in which she comes down very strongly opposed, that I did not know.

Posted on by Mark Movsesian

NYC Bar Program: Shariah Law and Islamic Finance (Nov. 29)

The NYC Bar Association will host a program, “Shariah Law and Islamic Finance — A Threat to America?,” on Tuesday, November 29, at the Association’s headquarters at 42 W. 44th Street in New York. Speakers include Bernard J. Apperson, Abed Awad, Bernard K. Freamon, Robert E. Michael, and Maria M. Patterson.  Details are here.

Posted on by Mark Movsesian · 1 Comment

Religious Law and the Financial Crisis

In this recent interview in L’Express (in French), Gilles Bernheim, the Chief Rabbi of France, makes some points about the relationship between religious law, specifically Talmudic Law, and contemporary economics. Although the Talmud could not imagine today’s financial arrangements, he concedes, it did teach, in the language of its time, that individualism was the worst enemy of communal confidence. According to the Talmudic view, we should place confidence in work, solidarity, and justice, not the “audacity” of rugged individualism “that dares all without concern for others.” The Talmudic worldview, one infers, would help avert crises like the one we’re currently experiencing.

Rabbi Bernheim’s critique of market economics from a religious perspective is quite familiar; it is very similar, for example, to the critique in Catholic Social Thought (another reminder that one should not reflexively link religion with the political right). And the financial crisis we’re living through does reflect reckless behavior by people who should have known better. A sense of responsibility to the community, which a religious worldview might have imparted, might have helped to avert the crisis.

That said, we should avoid being simplistic about things. Of course individualism “that dares all without concern for others” is incompatible with a religious worldview, but egotism like that is inconsistent with sane market economics as well. And in the United States, at least, the housing bubble that led to the Panic of 2008 was caused in part by government programs that encouraged people to purchase homes they could not afford. In other words, the crisis was not caused only by rugged individualism and greed; it was also caused by a misguided egalitarian project that had terrible consequences for everyone, including its supposed beneficiaries. Anyway, the relationship among selfishness, communal solidarity, and financial collapse is a complicated one that the Chief Rabbi more or less slides by. Though perhaps one shouldn’t expect too much from a newspaper interview – or a blog post. – MLM