While the imposition of interest on loans is expressly forbidden by the Quran, over the generations Muslims in fact found it difficult to observe this prohibition and lent to and borrowed from one another. The Muslim big merchants (tujjār), who held large amounts of liquid capital, were prominent among the lenders. The religious prohibition on the one hand, and everyday constraints on the other, caused a certain cognitive dissonance among many ulema, as manifested in the religious (shar'i) courts. The records of these courts in various regions in the Middle East from the sixteenth to the beginning of the twentieth century include cases in which judges (qadis) exempted borrowers from full or partial repayment of interest on the grounds that a demand for payment of interest violates the precepts of Islam. The present article provides examples of such cases and discusses the possible effects of the courts' retroactive annulment or amendment of contracts on the development of capitalist economies in Muslim countries during the nineteenth century when Middle Eastern economies began integrating into the global economic system. Inter alia, the discussion of this question sheds new light on the historians' critiques of Max Weber's observation regarding 'Kadijustiz' (qadi's justice) and its effect on the development of modern capitalism.
Bibliographical noteFunding Information:
*Department of Middle Eastern History, University of Haifa, Haifa 31905, Israel. E-mail: email@example.com A shorter version of this article was presented at the conference ‘The Historical Determinants of Entrepreneurship’, Complutense University, Madrid, October 2008. I am grateful to Youssef Cassis, James Forman-Peck and Uri Kupferschimdt for their insightful remarks and comments. This Research was supported by the Israel Science Foundation, grant no. 865/06.
ASJC Scopus subject areas
- Geography, Planning and Development
- Earth-Surface Processes