Islam and Economic Growth

by Kieran Healy on December 9, 2003

Tyler Cowen thinks that Islam might be bad for economic growth. The relationship between religious beliefs and practices, on the one, hand and economic prosperity, on the other, is a very tricky question. It’s kept comparative sociologists busy for more than a century. Here’s one of the reasons why it’s tricky, pithily expressed.

It comes courtesy of Ernest Gellner’s brilliant essay, “Flux and Reflux in the Faith of Men,” which can be found in his book Muslim Society:

I like to imagine what would have happened had the Arabs won at Potiers and gone on to conquer and Islamise Europe. No doubt we should all be admiring Ibn Weber’s The Kharejite Ethic and the Spirit of Capitalism which would conclusively demonstrate how the modern rational spirit and its expression in business and bureaucratic organization could only have arisen in consequence of the sixteenth-century neo-Kharejite puritanism in northern Europe. In particular, the work would demonstrate how modern economic and organizational rationality could never have arisen had Europe stayed Christian, given the inveterate proclivity of that faith to a baroque, manipulative, patronage-ridden, quasi-animistic and disorderly vision of the world. A faith so given to seeing the cosmic order as bribable by pious works and donations could never have taught its adherents to rely on faith alone and to produce and accumulate in an orderly, systematic and unwavering manner. Would they not always have blown their profits on purchasing tickets to eternal bliss, rather than going on to accumulate profits and more? … Altogether, from the viewpoint of an elegant philosophy of history, which sees the story of mankind as a sustained build-up to our condition, it would have been far more satisfactory if the Arabs had won. By various obvious criteria—universalism, scripturalism, spiritual egalitarianism, the extension of full participation in the sacred community not to one, or some, but to all, and the rational systematisation of social life—Islam is, of the three great Western Monotheisms, the one closest to modernity.

{ 15 comments }

1

zaoem 12.09.03 at 1:58 pm

This is interesting, but I am not entirely sure of his point. For example, the jibes at Christianity are many of the same made by the Reformation against Catholicism. Also, is he suggesting that a happenstance military victory was the decisive factor for a culture shift? I much agree that modernization in Western Europe entailed a departure from former religious practises and may have had little to do with Christianity, but am not sure about the mechanisms. Muslims conquered enough of the world to do their dominating.

2

Brad DeLong 12.09.03 at 2:59 pm

I have never been sure whether Gellner is making an argument or just writing well here…

If he is making an argument, it is roughly as follows: all religions (monotheist religions?) have enormous doctrinal flexibility, and can be made consistent with a great variety of styles of life. A mercantile-manufacturing population will find and develop those elements of doctrine that rationalize how they live, and those elements of doctrine that do rationalize how they live and encourage the growth and spread of their style of life will be favored.

This seems to me to be largely true: if you can take the message of Jesus Christ and use it to support the Knights Templar, then there are literally no limits to how doctrine can be transformed (mutilated?) in the interest of providing support for whatever bizarre style of life you can think of.

And, of course, the way to bet is that Gellner is completely wrong on the big question. Had the Muslim conquest extended to the forests of northern Europe, the best bet is that Manchester in 1850 would have looked a lot like Edirne in 1850: no industrial revolution.

3

Brad DeLong 12.09.03 at 3:00 pm

I have never been sure whether Gellner is making an argument or just writing well here…

If he is making an argument, it is roughly as follows: all religions (monotheist religions?) have enormous doctrinal flexibility, and can be made consistent with a great variety of styles of life. A mercantile-manufacturing population will find and develop those elements of doctrine that rationalize how they live, and those elements of doctrine that do rationalize how they live and encourage the growth and spread of their style of life will be favored.

This seems to me to be largely true: if you can take the message of Jesus Christ and use it to support the Knights Templar, then there are literally no limits to how doctrine can be transformed (mutilated?) in the interest of providing support for whatever bizarre style of life you can think of.

And, of course, the way to bet is that Gellner is completely wrong on the big question. Had the Muslim conquest extended to the forests of northern Europe, the best bet is that Manchester in 1850 would have looked a lot like Edirne in 1850: no industrial revolution.

4

des 12.09.03 at 3:37 pm

The relationship between contingency and necessity in history is highly problematical: the unrepeatability of history makes it very hard to use notions of causality with any rigour (“rigor”).

It might be wise to refrain from any assertions about the inevitability of certain consequences given certain ideological constraints (which may or may not correlate with official doctrine in any case), but it’s not very likely to catch on.

(In fact, I personally blame the church for a millenium’s worth of lack of progress between the decline of the Roman empire and the rise of the scientific world-view, but at least I recognise that I am engaging in polemic when doing so.)

5

Andrew Edwards 12.09.03 at 3:52 pm

If he is making an argument, it is roughly as follows: all religions (monotheist religions?) have enormous doctrinal flexibility, and can be made consistent with a great variety of styles of life.

I learned Gellner in the context of his theories of nationalism, where he’s fairly strictly materialist. In his vision, nationalism is very directly a product of the systems of industrialisation.

For instance that industrialisation mandates a broad population with high levels of general education, which means that we need state-administered school systems, which means that identity-forming things like history study start overlapping directly with state borders. He has other stuff. He’s a compelling theorist of the modern nation-state, even if I don’t believe he’s entirely correct.

Anyways, based on that experience with Gellner, I’d be ionclined to think that he was definitely making an argument here, and that the argument is that the material conditions tend to produce the theoretical explanations.

6

David Weman 12.09.03 at 4:27 pm

Cowen didn’t tell us *why* he thinks Islam might be bad for democracy, rule of law, etc.

I think he’s wrong, but then I think historical materialism is even more wrongheaded.

Anyway, here’s an contrary view:
http://www.livejournal.com/users/collounsbury/96315.html

7

st 12.09.03 at 6:24 pm

Historically speaking, Christianity has always been an enemy of modernity. Islam promoted modernity during early years (8-10th centuries) but by 16th century Islam was as decadent as Christianity. Around this time, Europeans started modernizing themselves by rediscovering pagan philosophers. So Brad Delong is right and wrong. Islamic conquest of Europe would have been a setback because Europe had already started abandoning Christian philosophy in favor of Aristotle et. al. Industrial revolution owes it to pagan philosphers and not Christian philosophy.

8

ahem 12.09.03 at 6:47 pm

Had the Muslim conquest extended to the forests of northern Europe, the best bet is that Manchester in 1850 would have looked a lot like Edirne in 1850: no industrial revolution.

Hmm. But you could also lay a similar bet that had the Muslim conquest not extended so far, Manchester in 1850 would have looked like… Manchester in 1450. At least, it took a certain degree of wealth and stablity in the medieval Muslim world to create the climate for learning that was then absorbed back into the west, usually thanks to Jesuits, in the late renaissance. Ibn al-Haytham, for instance, whose work influenced Kepler among others, was a religious sceptic but survived in an 11th-century Arab society that could basically tolerate scepticism.

Cowen didn’t tell us why he thinks Islam might be bad for democracy, rule of law, etc.

Exactly: he could use the same argument, citing China, to suggest that Communism has a positive effect on economic growth.

9

Paul 12.09.03 at 9:29 pm

I am currently reading Steven Barnes’ “LION’S BLOOD”, which has a point of divergence back in the 4th century BCE. In 1850 AD (although the calendar used is the AH), Muslim Africans dominate the world, having colonized America, and Europe is a backwater whose hinterlands (eg Eire) are raided for slaves…

I’ve only started it, I am not sure I buy the premise, but it seems to cut to the chase. These Muslim Africans seem about as technologically advanced as Europeans were in our timeline–guns, transatlantic sailing, balloons.

10

Conrad Barwa 12.09.03 at 11:43 pm

Islamic countries have a difficult time establishing democracy and rule of law and good economic policy.

Hmmm, democracy + rule of Law = good economic policy. So, RIP for Asian values and the good old East Asian economic miracle then?

Muslims in India and Ghana are not poorer that non-Muslims in those countries, adjusting for the relevant variables

Sloppy very sloppy; given the social background of many Muslims in India this can be explained by many other factors such as local state policy, regional political dynamics and so on. There is a very good case for saying that Muslims actually along with other minorities are much worse off than the general population. Official policy and the nature of the polity have an important part to play as well; minorities also differ within themselves as well; as the rather different historical expereince of many ‘Oriental’ Jews compared with their Ashkenazi cousins demonstrates (something replicated in many ways in the internal social stratification within Israel itself).

I might add that in the case of India Hinduism might be bad for growth too, not to mention the animism that is common in Ghana, so this is a comparative result against some not so impressive contenders.

Wow, with one fell swoop both Hinduism and animism (a stupid category if there ever was one) is condemned out of hand. Looks like the rest of us heathens need either to adopt some variant of Confucian values or accept Christian ones as the key to success.

11

praktike 12.10.03 at 6:41 am

actually, the mere fact that charging interest is haram makes Islam largely incompatible with capitalism. no need for all this fancy argument.

12

marcf 12.10.03 at 4:59 pm

There are two different questions here. Is Islam bad for economic growth? We can cite evidence pro or con. Could Islam have nurtured the onset of “modern economic and organizational rationality”? Impossible to answer. This onset happened only one place and time in world history, and it didn’t happen in China or India or etc., as well as Islam. So first we must ask how it actually happened in Europe, and we won’t agree on this.

My opinion is that the origins of moderninity, the Renaissance and the scientific revolution, required the lack of centralized control. A centralized power is inevitably threatened by new ideas. In Europe, some locales were conducive to new ideas, some weren’t. Capitalism is economic decentralization. The hotbeds of originality tended to be smaller places (including England, which had a population of only a few million, similar to Holland).

13

Conrad Barwa 12.10.03 at 5:10 pm

actually, the mere fact that charging interest is haram makes Islam largely incompatible with capitalism. no need for all this fancy argument.

Actually so did Catholicism and Christianity for a long time as well; I don’t see why this is such a problem as it merely displaces the loci of explanation. There are ways around this and changes that can be made; no fundamental incompatibility exists otherwise all Islamic societies today would be non-capitalist; which is not the case.

14

Antoni Jaume 12.10.03 at 10:46 pm

IIRC The Economist had some articles a few years ago about islamic banking. If I undertood it well you can lend money to some one and get a retribution for it. However that had to be fixed at the start, and would not change with time, and I think there was a ceiling, maybe a 10% of the principal. So a Muslim can lend 100 dinars to someone according that in one year he will get 110 dinars. But if the client cannot repay in that time the lender won’t get more than 110 dinars, and if the client can return in less than one year, he still has to return the full 110 dinars.

DSW

15

veena 02.04.04 at 8:36 am

can u pls explain to me these 2 question?

1. Explain the relationship between Islam and Economics. What do you think can an Islamic economic system exists in a secular state. Define a secular state.

2. Explain 4 of the 7 basic concepts in Islamic economics.

Comments on this entry are closed.