Rethinking money : the formative years of Islamic finance, 1900-1975

Though Islamic economics, often used synonymously with Islamic finance, possesses an extensive general bibliography, very little has been written about its historical development as an idea in the Arab world. Still less has addressed the relationship of Islamic economics to decolonization. Through a series of snapshots of specific historical junctures and special focus on the representative writings of Shiite cleric Muhammad Baqir al-Sadr, this dissertation traces the formative years of Islamic economics in the Arab world. Two primary questions drive the analysis in this project: First, why and how was Islamic economics conceived as a form of spiritual and material decolonization? Second, why did Islamic economics eventually come to be defined narrowly as a form of banking primarily derived from Western conventional models? An examination of Western conventional banking’s nineteenth century eclipse of previous Ottoman economic structures, followed by an analysis of the religious political economy driving the rise of Islamic finance as an idea in the early twentieth century, serve to introduce the origins of Islamic economics as an idea with enduring resonance, explaining its salience, urgency, and popular appeal. Then, the dissertation introduces the major relevant works of al-Sadr, Falsafatunā (Our Philosophy, 1959), Iqtiṣādunā (Our Economics, 1961) and its important second edition preface (1968), and Al-Bank al-lā-Ribawī (The Usury-Free Bank, 1969), analyzing them as canonical texts in the theorization and development of Islamic economics in practice, with specific reference to the surrounding moment of Arab decolonization in which they were written. Islamic economics, as idea and as phenomenon, is ultimately a form of identity assertion and religious reclamation as much as economic practice. As a form of banking, it served a further decolonizing goal: as a means to compete successfully in the global arena with its Western conventional counterpart. As such, Islamic economics is an example of decolonization in both the spiritual and material realms.