Terrorism by American Muslims -- What the American Muslim Community Can Do

This is a draft of my khutba (sermon) for this afternoon.
(After the traditional liturgical opening).

Assessing Our Responsibility

Every act of illegal aggression perpetrated by Muslims is painful to other Muslims. The terrorist attack at the Boston marathon was a particularly painful event for me personally, and I suspect for many others, because the profiles of the two brothers who almost certainly committed these heinous crimes is so familiar. The younger brother's profile, in particular, suggested that even seemingly well integrated and academically successful youth can fall victim to heretical thinking of which Islam is innocent.

It is too facile to focus only on denouncing the act, and denouncing guilt by association -- declaring as we often do, truthfully, that Islam has always condemned such behavior, and that hundreds of millions of Muslims would never approve of, let alone commit, such acts.

The reason that this is too facile can best be seen by contrasting it with the great pride that we take in the great principles of our religion, and the great examples set by the Prophet, his companions, and their successors. If we reject guilt by association, we should obviously also reject credit by association. For, after all, our generation and recent generations of Muslims have done little to deserve much credit in terms of benefit to humankind.

Of course, to the extent that we try to emulate the first generations of Muslims and to apply the principles that they advocated in the modern age, we should deserve some credit for effort. Likewise, to the extent that we may be able to do more to avoid having more Muslims commit acts that are most definitely and extremely un-Islamic, we may not go as far as to say that we deserve blame for these crimes, but we must certainly engage in more soul searching and measurement of our actions and words to minimize the likelihood of repetition of such tragedies.

Islamic Prohibition of Murder, and Emphasized Prohibition of Aggression Toward Civilians with Whom One Has Made a Covenant

Let's begin by reemphasizing, albeit very briefly, the canonical Islamic prohibition against terrorism, focusing especially on such acts being perpetrated on American soil by citizens, legal aliens, or individuals who entered the country lawfully with a proper visa. All such individuals have signed an explicit, not only implicit, contract with society not to engage in any types of crimes -- and murder is recognized by Islam as the worst of crimes, as the Prophet (p) said:

‏ ‏حَدَّثَنَا ‏ ‏عَلِيٌّ ‏ ‏حَدَّثَنَا ‏ ‏إِسْحَاقُ بْنُ سَعِيدِ بْنِ عَمْرِو بْنِ سَعِيدِ بْنِ الْعَاصِ ‏ ‏عَنْ ‏ ‏أَبِيهِ ‏ ‏عَنْ ‏ ‏ابْنِ عُمَرَ ‏ ‏رَضِيَ اللَّهُ عَنْهُمَا ‏ ‏قَالَ ‏ ( ‏قَالَ رَسُولُ اللَّهِ ‏ ‏صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ ‏ ‏لَنْ يَزَالَ الْمُؤْمِنُ فِي فُسْحَةٍ مِنْ دِينِهِ مَا لَمْ يُصِبْ دَمًا حَرَامًا ‏).
(Al-Bukhari narrated On the authority of Ibn Umar (r), the Prophet (p) said: "A believer will always have some leeway - to return to his proper - religion, as long as he does not spill forbidden blood).

This is within the context of the commandment against murder:
وَلَا تَقْتُلُوا النَّفْسَ الَّتِي حَرَّمَ اللَّهُ إِلَّا بِالْحَقِّ
(And do not kill the soul that has been made sacred by Allah outside the context of law enforcement)

Returning to the fact that legal entry into the U.S. constitutes a covenant not to violate laws or take lives, we cite the saying of the Prophet (p):

‏ ‏حَدَّثَنَا ‏ ‏مُحَمَّدُ بْنُ عَبْدِ الْمَلِكِ بْنِ أَبِي الشَّوَارِبِ ‏ ‏حَدَّثَنَا ‏ ‏أَبُو عَوَانَةَ ‏ ‏عَنْ ‏ ‏عَبْدِ الْمَلِكِ بْنِ عُمَيْرٍ ‏ ‏عَنْ ‏ ‏رِفَاعَةَ بْنِ شَدَّادٍ الْقِتْبَانِيِّ ‏ ‏قَالَ ‏ ( ‏لَوْلَا كَلِمَةٌ سَمِعْتُهَا مِنْ ‏ ‏عَمْرِو بْنِ الْحَمِقِ الْخُزَاعِيِّ ‏ ‏لَمَشَيْتُ فِيمَا بَيْنَ رَأْسِ الْمُخْتَارِ وَجَسَدِهِ سَمِعْتُهُ يَقُولُ قَالَ رَسُولُ اللَّهِ ‏ ‏صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ ‏ ‏مَنْ أَمِنَ رَجُلًا عَلَى دَمِهِ فَقَتَلَهُ فَإِنَّهُ يَحْمِلُ لِوَاءَ غَدْرٍ يَوْمَ الْقِيَامَةِ ‏ ).

(Ibn Majah narrated that the Prophet (p) said: "Whoever feels that his life is safe in the presence of another man, and then that man kills him, then the killer will be carrying a sign of 'traitor' on the day of judgement).

Consequently, the Prophet (p) said that such a killer will be extremely remote from paradise:
‏ ‏حَدَّثَنَا ‏ ‏قَيْسُ بْنُ حَفْصٍ ‏ ‏حَدَّثَنَا ‏ ‏عَبْدُ الْوَاحِدِ ‏ ‏حَدَّثَنَا ‏ ‏الْحَسَنُ بْنُ عَمْرٍو ‏ ‏حَدَّثَنَا ‏ ‏مُجَاهِدٌ ‏ ‏عَنْ ‏ ‏عَبْدِ اللَّهِ بْنِ عَمْرٍو ‏ ‏رَضِيَ اللَّهُ عَنْهُمَا ‏ ( ‏عَنْ النَّبِيِّ ‏ ‏صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ ‏ ‏قَالَ ‏ ‏مَنْ قَتَلَ مُعَاهَدًا لَمْ يَرِحْ رَائِحَةَ الْجَنَّةِ وَإِنَّ رِيحَهَا تُوجَدُ مِنْ مَسِيرَةِ أَرْبَعِينَ عَامًا ‏).

(Al-Bukhari narrated on the authority of Ibn Amr (r) that the Prophet (p) said: "Whoever kills a person to whom they had given a covenant will never smell the odor of paradise; and the odor of paradise can be smelled from a distance that can be traveled in forty years).

Such murder is the worst kind of violation of covenants, and Allah (s) mandated fulfilling covenants:
{وَأَوْفُواْ بِالْعَهْدِ إِنَّ الْعَهْدَ كَانَ مَسْؤُولاً} سورة الإسراء:34.
(And fulfill your covenants, for you will be accountable for your covenants)

{وَأَوْفُواْ بِعَهْدِ اللّهِ إِذَا عَاهَدتُّمْ وَلاَ تَنقُضُواْ الأَيْمَانَ بَعْدَ تَوْكِيدِهَا وَقَدْ جَعَلْتُمُ اللّهَ عَلَيْكُمْ كَفِيلاً إِنَّ اللّهَ يَعْلَمُ مَا تَفْعَلُونَ} سورة النحل:91
(And fulfill your covenants, which are in fact with Allah, whenever you make any covenants, and never violate your oaths after affirming them, for you have made Allah your guarantor, and Allah knows all that you do)

There are many other Prophetic traditions (Hadiths) that forbid cheating or otherwise acting unfairly toward those with whom we have made covenants.

Terrorist Profile

The canonical proofs of extreme un-Islamicity of illegal behavior are too many to list in our limited time, and every Muslim knows them to some degree. We remind ourselves during sermons because this is the tradition of the Prophet, but also to try to understand what a terrorist may be thinking. 

It is important in this context to note that decades of social-psychological research on terrorism have shown that terrorists are not deranged people or people suffering from PTSD or other psychological disorders. Indeed, terrorist organizations would never recruit such people, because they would not be effective in carrying out their criminal missions and would endanger their co-conspirators.

Instead, the profile of a terrorist that has emerged from research and numerous interviews has shown three components: (1) a strong identity-political identification, be it religious, national, ethnic, or otherwise; (2) a sense of victimization of the group with whom the potential terrorist has identified himself or herself; and (3) a sense of helplessness in trying to address this perceived or real injustice by lawful means.

These traits are common, and difficult to overcome, but terrorists have one more mental mutation that may be avoidable: To commit the unthinkable crime of killing innocent people, including children, requires dehumanization of the victims. Most interviewed terrorists do not recognize that they did anything wrong, because they feel that the people with whom they have identified have been dehumanized and thus victimized, and therefore make the leap to dehumanize their victims.

(After delivering the sermon this afternoon, a gentleman came to me and he said that he agreed with all that I said, and that having served in Vietnam, he wanted to add one more trait to my list: Young men who engage in terrorist activities get a "power high" from destruction. Apparently, it is like a drug that gives a quick and perverse jolt to the pleasure center of the brain... I'll look to see if there is any neuroscience research on this.)

Islamic Teachings to Counter the Terrorist Drive

But Islam teaches that the reaction of the faithful should always be either thankfulness (shukr) when good happens or perseverance and restraint (sabr) when calamity befalls them.  The Qur'an teaches that one should not respond to hatred and victimization with injustice to others:

يَا أَيُّهَا الَّذِينَ آمَنُوا كُونُوا قَوَّامِينَ لِلَّهِ شُهَدَاءَ بِالْقِسْطِ وَلَا يَجْرِمَنَّكُمْ شَنَآنُ قَوْمٍ عَلَى أَلَّا تَعْدِلُوا اعْدِلُوا هُوَ أَقْرَبُ لِلتَّقْوَى

(O you have faith, stand fast for Allah as witnesses for justice, and let not the hatred of others prompt you to do injustice; always be just, for that makes you closer to piety)

The Prophet (p) taught that one should never feel so helpless as to give up or transgress:

((المؤمن القوي خيرٌ وأحب إلى الله من المؤمن الضعيف، وفي كلٍ خير، احرص على ما ينفعك، واستعن بالله ولا تعجز، وإن أصابك شيءٌ فلا تقل: لو أني فعلت كذا وكذا وكذا ولكن قل: قدر الله وما شاء فعل، فإن (لو) تفتح عمل الشيطان ))

(Muslim narrated: A strong believer is better and more beloved to Allah from a weak believer, and there is good in each. Always pursue what is of benefit to you and do not despair; and if calamity befalls you, then do not say 'had I done such and such, such and such would have been the case', but say 'Allah has chosen, and whatever He choses He does', because saying "if" [i.e. entertaining counterfactuals] opens the door to the devil)

In this regard, it must be important to remember that strength is in continuing to do good even when others do bad, and to restrain oneself even when angry, as the Prophet (p) said:
ليس الشديد بِالصُّرَعَةِ ، إنما الشديد الذي يملك نفسه عند الغضب
(Al-Bukhari narrated: The strong is not one who can outwrestle his opponent; rather the strong is one who can restrain himself when angry)

What We Can Do

But we know that our congregations and societies will always have weak people, who feel despair and resort to criminal activities that they justify to themselves -- most wrongly -- in the name of religion. Knowing that fact, we should emphasize and reiterate the teachings summarized above. But there is more that we can do:

1. Obviously, we cannot deny that we feel the pain of other Muslims around the world, or that there are Muslims who are victimized, but we can make sure not to speak of these issues in excessively desperate ways that make weak people feel despair and helplessness. Focus on political, humanitarian, and other positive measures that can be taken as positive channels for dealing with loss and sadness.
2. We should refrain from disparaging remarks about how politicians or others in our country are not paying attention to Muslim suffering, and repeatedly saying that they pay more attention to (ostensibly) "smaller" calamities at home. First of all, it is natural to focus on what is closer to home, second, all human life is sacred, and not measured in numbers, and third by insinuating that others are dehumanizing Muslims, we help to start those weak people on the road to dehumanizing their neighbors, which allows them to justify criminal un-Islamic behavior as retribution.
3. We should be open to conducting solid research on what types of speech and organization is conducive to perverse interpretations of religion, and not fall back on familiar historical religious speech, some of which was authored for local consumption (in time and space) during the time of Mongol invasions and other dark episodes.

There are probably many other measures that we can take in order to help in prevention of criminal behavior and other misdirection of Muslims' energies in unproductive directions. The first step is to go beyond defensiveness and vicitimhood and to think proactively about possible such measures.

American Muslims, Freedom of Speech, and Cultural Divides

This is a draft of my khutba for this afternoon.

يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَقُولُوا قَوْلًا سَدِيدًا

يُصْلِحْ لَكُمْ أَعْمَالَكُمْ وَيَغْفِرْ لَكُمْ ذُنُوبَكُمْ وَمَن يُطِعِ اللَّهَ وَرَسُولَهُ فَقَدْ فَازَ فَوْزًا عَظِيمًا

[O Community of faith: Be God-Conscious and make your speech truthful and carefully aimed, so that He may make your works felicitous and forgive your sins; and verily whoever obeys God and his Messenger has earned a great reward]

For speech to be carefully aimed, we have first to define our audience. This is not a speech before the United Nations General Assembly or an argument before the Supreme Court of the United States. Neither this speaker nor his audience should lose sight of who we are and what we can do. As the Sufi masters say, ملتفت لا يصل [one who is easily distracted does not reach his destination]. In this context, we should not think too highly of our station or ability to cause positive social change, but we should also understand our surroundings in order to make the positive social change that we can.

So, who are we, and what is our destination? We are American Muslims, who aim to live in harmony both with American and Islamic norms and laws. One of our fundamental convictions is that there is no inconsistency between the two sets of norms and laws, and that is why we live here. (For the small minority who believe that the two are inconsistent, it is a religious obligation on them to follow the orders of their religious scholars and migrate to a majority-Muslim country.)

In recent years, our community has made successful strides both as Americans and as Muslims in almost every arena, professionally, politically, and socially. 

As a relatively new social segment in the U.S., we expected to suffer some of the same social backlash that previous immigrant communities suffered (e.g. Irish and Italian Catholics, European Jews, etc.). 

We were fortunate because the forms of discrimination and persecution in the aftermath of the 1960s civil rights movement had become less vicious and generally more subtle. However, we were also unfortunate because our community was just hitting its stride when the traditional majority and elite demographic in the U.S. (White Anglo-Saxon Protestants) were coming to the realization that they will become a minority in the U.S. within one generation. 

The angst from this realization is the driving force behind vicious political as well as social and religious attacks that have found their easiest target in the Muslim community, attacks against which would be rejected as racism and bigotry were they leveled against other more established components of the U.S. social mosaic.

But we must admit that there are indeed points of disharmony between current American and Islamic norms. We must always study our own faults, as the Sufi masters' advice continued:

  ملتفت لا يصل، ومتسلل لا يفلح، ومن لم يعرف من نفسه النقصان فكل أوقاته نقصان

[one who is easily distracted does not reach his destination, one who sneaks in does not succeed, and whoever does not recognize his own shortcomings forever suffers his shortcomings]

One area that is clearly a point of conflict between current American norms and current Islamic norms pertains to freedom of speech on revered religious figures, and those on both sides who wish to escalate a clash of cultures have been exploiting this point of conflict unrelentlessly. 

We  -- American Muslims and similar minded groups -- reject hateful speech that recycles sick anti-Muslim medieval European literature (composed during an earlier episode of Western anti-Muslim angst). Those who use this hateful speech clearly seek to justify bigotry against today's Muslims, but they cleverly exploit loopholes in contemporary free speech protections. 

Limits on free speech, and indeed all laws and regulations, are codifications of current cultural norms (e.g. what are considered to be "fighting words" or "libelous" accusations are determined in social context). Asking others to "respect" your cultural norms, which are by definition different from theirs, by enshrining them in their own laws, is essentially tantamount to asking them to abandon their norms for yours, which is incoherent in the extreme.

We -- American Muslims and similar minded groups -- also reject not only violent conduct, which cannot be justified by any speech, but also misguided calls to curb freedom of speech in medieval ways that have predictable and terrible consequences. Therefore, we reject "blasphemy laws" in some Muslim countries, which contradict the fundamental Qur'anic principle:

وَقُلِ الْحَقُّ مِن رَّبِّكُمْ فَمَن شَاءَ فَلْيُؤْمِن وَمَن شَاءَ فَلْيَكْفُرْ

[and say Truth emanates from your Lord, so whoever wishes may believe, and whoever wishes may disbelieve].

Laws against "despising religion" are also incoherent, because rejecting the religion of another clearly implies at the very least an accusation of untruthfulness. We expect at least some of those who reject Islam not to think well of it, and expect some of the latter to vocalize their negative views. That is not at all surprising. The Prophet (p) reacted clamly to insults from his tribe of Quraysh, and said:

صحيح البخاري

‏..‏.

‏ ‏‏ ‏عَنْ ‏ ‏أَبِي هُرَيْرَةَ ‏ ‏رَضِيَ اللَّهُ عَنْهُ ‏ ‏قَالَ ‏ ( ‏قَالَ رَسُولُ اللَّهِ ‏ ‏صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ ‏ ‏أَلَا تَعْجَبُونَ كَيْفَ يَصْرِفُ اللَّهُ عَنِّي شَتْمَ ‏ ‏قُرَيْشٍ ‏ ‏وَلَعْنَهُمْ يَشْتِمُونَ ‏ ‏مُذَمَّمًا ‏ ‏وَيَلْعَنُونَ ‏ ‏مُذَمَّمًا ‏ ‏وَأَنَا ‏ ‏مُحَمَّدٌ ‏ ).

["Are you not amazed how God deflects the insults and curses of Quraysh: They insult and curse a blameworthy person, and I am praiseworthy?" (a pun on the meaning of his name: Muhammad)].

Even some of the hypocritical Muslims insulted the Prophet (p) as chronicled in the Qur'an:

وَمِنْهُمُ الَّذِينَ يُؤْذُونَ النَّبِيَّ وَيَقُولُونَ هُوَ أُذُنٌ قُلْ أُذُنُ خَيْرٍ لَّكُمْ يُؤْمِنُ بِاللَّهِ وَيُؤْمِنُ لِلْمُؤْمِنِينَ وَرَحْمَةٌ لِّلَّذِينَ آمَنُوا مِنكُمْ وَالَّذِينَ يُؤْذُونَ رَسُولَ اللَّهِ لَهُمْ عَذَابٌ أَلِيمٌ

[and some of them (hypocritical Muslims) hurt the Prophet and say that he's a gullible listener (literal translation: "he's just an ear"), say he is a good listener for you, who believes in God and believes in the believers, and he is a mercy to those who have faith among you, but those who harm God's Messenger will have a great punishment]

God ordered the Prophet (p) to ignore his ignorant adversaries

خُذِ الْعَفْوَ وَأْمُرْ بِالْعُرْفِ وَأَعْرِضْ عَنِ الْجَاهِلِينَ

["Accept what comes easily to your companions, enjoin righteous common courtesy, and avoid the ignorant"] 

Some traditional scholars went to extremes demanding earthly punishment for Muslims who insult the Prophet (p), but none over the centuries demanded punishment of non-Muslims who insult the Prophet. Those who demand it now are not reacting to religion so much as pent up anger looking for a seemingly honorable outlet. Their anger is not about the Prophet being disrespected so much as it is about them and their sensibilities not being respected. It's about their own self image and ego, formulated in their insular cultural bubble, which is increasingly impossible to maintain in today's globalized world.

So, we believe that free speech is a fundamental Islamic and human principle. However, we feel pain when we hear hurtful speech that aims to hurt psychologically in the short term and justify material injury in the medium to long term. Then, we feel double the pain when our co-religionists exhibit fundamentally un-Islamic reactions and make incoherent legal demands with which we disagree. 

We are caught between unsynchronized cultures at this critical time. 
This is not cause to despair. On the contrary, as Ahmad narrated, that the Prophet (p) said:

مسند احمد ابن حنبل

...

عن عبد الرحمن بن سنة انه سمع النبي صلى الله عليه و سلم يقول: (بدأ الإسلام غريبا ثم يعود غريبا كما بدا فطوبى  

للغرباء). قيل: (يا رسول الله ومن الغرباء). قال: (الذين يصلحون إذا فسد الناس

...

["Islam started as a stranger, and it will again be a stranger, so glad tidings to the strangers." He (p) was asked: "Who are these strangers?" and he replied: "those who act righteously when others don't".]

When the time for speechmaking is over, we must get back to work on reform and calls to righteousness, individually and collectively. 

Pursuit of major and quick cultural changes is folly and distraction from the righteous straight path -- ملتفت لا يصل. The Prophet (p) said: "قل آمنت بالله ثم استقم" [say I have faith in God and then stay on the straight path]. Do not get distracted off that straight path -- ملتفت لا يصل.

(My late father taught me many years ago that one can indeed make a positive difference, but only if one does not demand that the difference is big, and one is willing for someone else to take credit for the change.)

All reform is slow, all politics are local, and all da`wa (calls to righteousness) are personal.

We do our best work in our daily lives, when we are not thinking about making major changes. Our biggest challenges are distractions from that work.

Can Political Islam Reform "Islamic Finance"?

Update: March 30, 2013 -- the definitive answer to my question has been heard loud and clear, and it is a definitive "No." Islamists, at least those in power in my native Egypt, are clearly just as mired in identity politics and financial greed as the Islamists sharing power in GCC countries. There is no hope that they can produce policies and financial instruments with minimal competence, let alone reform the folly of others. 

--------

In recent days, as the IMF and Egypt continue to negotiate a potential $4.8 billion loan at 1.1% interest, first the Salafi Nur Party has issued a statement that this interest is not forbidden riba, and then another Salafi preacher has issued a similar statement.

(Tuesday, August 28, Update: the next day, the debate has been rejoined, with Salafis reasserting the prohibition of all interest bearing loans and bemoaning the expected social effects of typical conditionality of IMF loans... The Office of the President announced that the loan has no conditionality and that its interest rate is the absolute minimum required to cover actual costs of administration. The statement mentioned that the only remaining details to cover are the specific projects to be financed by the loan and then it will be advanced... The argument that this is not really riba because it only covers the Fund's administrative costs was heavily used in the opinions expressed yesterday and linked in the first paragraph).

This reminded me of a question that I asked myself in February 2012 in the piece reproduced below. The story of this piece is interesting: A famous current political affairs magazine solicited an article on Islamic finance from a more severe academic critic, who referred them to me. I wrote the requested piece, but then never heard back from them, and they didn't even reply to my query email a month later.  I guess this is my catch-22: I am not critical enough for some and too critical for others.

At any rate, here is the piece that I wrote and submitted to that magazine on February 12, 2012. There was a 2,500 word limit, so the argument can clearly be fleshed out more. The current developments cited in the first paragraph suggest that the question may be quite relevant. The piece is dated in may respects, but many points are still worth considering.

--- February 12, 2102 --- Will Political Islam Reform "Islamic Finance"?

Throughout the Islamic world, Islamists have gained political power through ballot boxes, alliances with military leaders, or both. Examples of the first include political successes of Islamist parties in Malaysia and Turkey. Examples of the second include Khomeini’s successful incorporation of the armed forces to serve Iran’s Islamic revolution and the earlier success of General Zia-ul-Haq to incorporate Islamism – to many Pakistanis the raison d’etre for their nation state – to legitimize his military rule. Fluid situations in post-revolutionary North Africa, especially in Egypt, exhibit Islamist electoral successes under emerging grand bargains with military elites.

It is safe to assume that Islamist political gains will translate into growth of “Islamic finance,” especially in countries where secular rulers had for decades feared Islamists and sought to limit their economic power. Whether these countries pursue Islamist economic agendas that are substantially different from the dominant paradigm remains to be seen. The toppled governments in Tunisia and Egypt had been following neoliberal agendas while protecting bloated public sectors and directing state bank lending in imitation of “capitalism with Chinese characteristics.” It is unlikely that Islamist governments can deviate substantially from this agenda. Their appeal to the public who voted for them will therefore drive them to seek legitimacy quickly by containing rampant corruption in highly visible ways, and promoting well-understood mechanics of an “Islamic finance” sector that has grown exponentially fast in recent decades.

Islamic finance is the child of a brand of Islamism that became dominant in the second half of the twentieth century and the petrodollars that supported that brand. Its ideological origins date to the mid-twentieth century when Islamist intellectuals in newly independent South-Asian and Arab countries sought to rid their societies of Western banking practices that were introduced during the Ottoman and European colonial periods. The first major wave of petrodollars in the late 1970s transformed the Utopian dreams of these Islamist intellectuals into a practical industry that utilized forms of legal arbitrage to restructure banking practices using primarily credit sale and lease contracts, wherein price markup and pure rent components mimic interest payments in ways that were claimed to be different from interest bearing loans.

During the new millennium, growth in Islamic finance was powered by a second wave of petrodollar flows, as well as the tools of structured finance perfected during the 1990s by Anglo-American lawyers and investment bankers to arbitrage tax laws. For example, a financial lease buyback was used by some Western corporations to exploit financial and tax benefits in paying interest on financial leases off balance sheet. The return on mastering these techniques declined as the structures became easier to implement, and more importantly after the collapse of Enron. Fortunately for the financial engineers who had perfected this craft of legal arbitrage, the Middle East had trillions of petrodollars that potentially aimed to earn yield that is not characterized as interest on loans.

In order to understand the phenomenon of Islamic finance, and to anticipate potential directions for Islamist parties outside of its traditional growth market, we need to review the historical roots of Islamism. Many believe that Islamism arose as a consequence of the Islamic world’s traumatic encounter with modernity – which inspired Bernard Lewis’s book title: What Went Wrong? Because different societies encountered modernity in different ways, Islamism also took different forms in various nascent nation states.

In the interest of brevity, I shall focus only on two forms of Middle-East Islamism, which have paradoxically shared the same name: Salafism – following the path of the earliest Muslims. The first Salafism was born in the heart of eighteenth century Arabia. The cleric Muhammad ibn Abdul-Wahhab returned from today’s Southern Iraq disenchanted with different Islamic and secular practices, and eventually formed an alliance with Muhammad Al-Saud in 1744, which enabled the first Saudi state to make substantial military conquests Northward into Southern Iraq and Westward to the holy cities of Makkah and Madinah. This alliance has continued through multiple Al Saud monarchies.

The official religious doctrine of Saudi Arabia and countries in her immediate domain of influence has therefore been the Salafism of ibn Abdul-Wahhab, which most importantly aimed to fight every innovation in religion, not only in the form of theological rejection of Shiite and Sufi practices, but also rejection of innovations in everyday life. This extended in early years to rejection of the telegraph, the telephone, and the like, which were eventually accepted. Conventional banking was also eventually – albeit uncomfortably – tolerated, and almost all banking in Saudi Arabia and her neighbors followed Western practices until quite recently, although religious-law (Shari`a) courts were prone to overrule civil codes that allowed banking transactions. The compromise was “Islamic finance” which uses traditional contracts such as sales and leases to restructure bank transactions in ways approved by religious scholars – some of whom were retained as consultants for the emerging industry, especially in upstart oil-poor emirates like Bahrain and Dubai that compete to attract petrodollars.

The Salafi parties that won roughly one quarter of the seats in the recent Egyptian parliamentary elections belong to this Saudi sphere of influence. Their ideal economic agenda would be simply to encourage “Islamic finance” institutions and contracts wherever possible, and otherwise follow a model of capitalism that is a hybrid between the Chinese model (to utilize pools of unemployment and underemployment) and the Dubai model (to capitalize on synergies with petrodollar-rich Arab countries). Both models rely on “trickle-down” expectations that may not be sufficient for countries with high levels of unemployment and poverty, especially if Chinese-style rates of per capita GDP growth cannot be sustained. Indeed, one can argue that the failure of this hybrid (Chinese-Dubai) model in Tunisia and Egypt – which was moderately successful in recent years but failed to generate Chinese-like growth rates of per capita income – precipitated the overthrow of their respective regimes, as the authoritarian bargain became untenable. This problem does not exist for oil-rich countries or neighboring low population emirates, which can be sustained by oil rents for decades to come.

This brings us to the other type of Islamism represented in the Muslim Brotherhood, whose party has won nearly half the seats in the Egyptian parliament and whose offshoots have had similar success in Tunisia and elsewhere. The Brotherhood was born in Egypt in 1928, under the influence of a brand of official religious Salafism that embraced modernity – exemplified by Muhammad Abduh, the turn of the century Grand Mufti of Egypt, who fought against British colonialism and advocated for a modern nation state that reflects the historical and cultural roots of his people.

The Brotherhood was born under the influence of this thought, and embarked on social and occasionally political work to pave the road for an Islamic state. Its repression during the 1950s and 1960s by the Nasser regime led to closer ties with oil-rich gulf monarchies, but created an uneasy fraternity with Saudi-style Salafism, which was largely apolitical. Egyptians thus complained that petrodollars were financing an alien brand of Islamism that focused on seemingly superficial issues of dress and grooming, and the like, while ignoring issues of social justice and political reform. Saudi officials likewise resented the fact that they embraced and protected Brotherhood activists only for the latter to politicize segments of their religious public. Political ramifications of this competition among Islamist worldviews have been many and will continue to be important, but we should now refocus the discussion on finance as a case study for this tension.

The strongest driving force for Islamic finance is the Islamic prohibition of riba (the equivalent of the Hebrew ribit, and Islamic scripture explicitly identifies the prohibition as Biblical). Utopian Islamist intellectuals of the mid-twentieth century interpreted this prohibition to encompass all types of interest and envisioned a financial system built entirely on equity finance – which many continue to this day to extoll as the Islamic ideal. The justification for prohibition of interest on debts in classical Islamic jurisprudence and modern Islamic economics is based on equity considerations. Earning interest on one’s capital allows the rich to get richer unjustly, the argument went, reminiscent of the Aristotelian doctrine that capital is sterile (money cannot – or should not – beget money), which was not surprisingly adopted in the Catholic doctrine of usury and later Islamic understanding of the prohibition of riba.

It is important to recall that the roots of the ancient law of usury (in the Hebrew Bible and later in the Qur’an) emerged in nomadic societies, many aspects of which are preserved in religious laws and rituals. For instance, in the Islamic rules for pilgrimage, the Qur’an explicitly forbids the pilgrims in a state of ritual purity from engagement in hunting. At the end of the rites of Hajj, an animal sacrifice is made, and the meat must be distributed in equal shares of one third between the poor, one’s friends and family, and one’s own household. Highly regimented distribution of meat, in particular, as well as redistributive mechanisms such as alms taken from the rich and given to the poor, are the hallmarks of traditions that evolved from hunter-gatherer social structures (e.g., in the Arabian Peninsula) that ethnographers have identified as the most egalitarian. In this regard, economists Edward Glaeser and Jose Scheinkman have argued persuasively that usury laws were forms of social insurance for predominantly poor ancient societies.

This brings us back to Arab revolutions and the rise of Islamists. I recall over the past few years that many economists in international financial institutions and think tanks were perplexed by the pitch of complaints in Arab countries, where the plight of the poor was significantly better than in many Latin American and Asian countries. Of course, the authoritarian bargain that these experts expected to last much longer has proved untenable, and the revolutions were not led by the poor, but rather by the educated middle classes of these countries. Although the latter have been generally secular in their political outlook, they were driven by egalitarian considerations that featured prominently in their slogans. Revolutionary youths may have been dismayed by the public vote for Islamists, but those who voted for Islamists were indeed voting out of the very same cultural demands for egalitarianism and justice, which they conflated with religious piety.

Of course, many now acknowledge the need for greater egalitarianism, surprisingly including the International Monetary Fund, because long-term efficiency cannot be ensured without political stability, which in turns requires a sustainable social contract. Likewise, some regulatory elements of the ancient law, for example, limits on leverage and debt imposed by the size of underlying real economic activity, would enhance long-term stability and efficiency even if they limit short-term growth. The Great Recession that contributed partially to the timing of Arab revolts was a consequence of the financial deregulation wave starting in the 1980s that led to multiple bubbles and crashes and continues to pose a major threat of another Great Depression. “Islamic finance” has been a full culprit in this deregulation trend, providing demand for various assets (including mortgage backed securities) and contributing to the under-pricing of credit risk.

Usurers have always used multiparty asset-based financial structures to rob the ancient law of its substance. Thus, if the law forbade the usurer from lending a needy person with exorbitant interest, he would sell him a piece of cloth with a credit price equal to price plus interest. A neighboring merchant would dutifully buy the cloth back from the debtor at market price, thus circumventing the law (Islamic banks currently use this ancient trick known as tawarruq). Rafik Al-Misri, a Professor at King Abdulaziz University in Saudi Arabia, has beseeched his readers to please call the markup “interest” so that a ceiling may be imposed by secular usury law, otherwise it would be impossible to put a ceiling on ostensible “profit rates” in contrived credit sales.

For higher-level finance, the rules for issuing bonds known as sukuk may seem to limit debt to the value of real underlying assets, for example, through selling an asset to a special purpose vehicle that leases it to the sukuk holders and then sells it back to the original owner at maturity. However, as legal experts try to “perfect” the bond issuance so that only credit risk remains, the real value of the underlying asset becomes immaterial. In the extreme, the industry that generates debt by selling such bonds might fuel the overvaluation of assets with which one can generate more debt through buy-sell-lease-buyback-sell. The capacity to subvert the egalitarian and prudential regulatory content of the ancient law is thus fully realized in “Islamic finance.”

In the meantime, by the admission of its own champions and practitioners, Islamic finance has not focused on helping to alleviate poverty or reduce unemployment. It has mainly served elites by synthesizing modern financial transactions from pre-modern contract forms – often to chase past returns on various asset classes that had not yet been “Islamized.” To the extent that poor and unemployed Muslims may demand financial products that are structured likewise from pre-modern contracts, one may justify efforts by the Islamic Development Bank and the World Bank’s International Finance Corporation to develop such products. Unfortunately, the decades-long track record of these organizations remains very disappointing, as some of their own studies have estimated that half of the world’s Muslims continue to live below the poverty line of $2 per day.

The ideological and religious motivation for Islamic finance emerged from the egalitarian agendas of political Islamists, exemplified by the Muslim Brotherhood and its sister organizations. However, the development of practical Islamic finance was financed by petrodollars and prospered in countries where Islamists generally focused more on the way finance was conducted (pre-modern juristic legal status of contracts) rather than the objectives of finance. As the two types of Islamism cooperate and/or compete for setting economic agendas, the sociopolitical agenda of the political Islamists may redirect Islamic finance, most likely retaining the emphasis on contract forms but also placing greater emphasis on the objectives of finance. The example of Turkey’s Islamist business community, such as members of the industrialist association MUSIAD, who supported and benefited from the political rise of Prime Minister Erdogan in Istanbul and nationally, is quite similar to networks of Brotherhood businesses that were occasionally attacked by secular Arab governments but many of which survived nonetheless.

Political Islamists can follow one of three financial paths. They may simply replicate the pietist “Islamic finance” that serves identity politics and little else. They may also choose to create Islamic subeconomies, as Timur Kuran has argued, but still fail to provide broader economic development for their countries. Hopefully, they may manage to solve the perennial problems of financial disintermediation and succeed finally in growing the small and medium enterprise sector that can help with poverty alleviation, employment creation, and economic development. Trust networks that can facilitate this development would be akin to “relationship banking” in more advanced economies. A recent editorial in the Economist criticized this hope as merely a wish by Egypt’s Islamists. At least, it is the right wish.

Islam and Politics (large and small, near and far)

This is a draft of my khutba for today, after the semi-liturgical opening with a Qur'anic verse and a Hadith.


As Mahatma Gandhi stated correctly:

• "In democracy no fact of life is untouched by politics."

• "Those who say that religion has nothing to do with politics do not know what religion means."

I gave a khutba last month about the futility of our children's approaches to Islam, and its dire ramifications for our future as a community. A reporter recently asked me if this was only a problem for our community or for Islamic societies more generally. It took me a while to see it, but this is a much more general problem, and that is what I hope to discuss today.

In preparation for the khutba, I went back and reread a book that I had read 30 years ago in my undergraduate student years, the late Professor Fazlur-Rahman's Islam and Modernity. I did not appreciate his emphasis on education when I read this book as a 20-year old, but now I have found his analysis very illuminating. I have also found it very disheartening to combine his analysis up to the early 1980s with what has happened in the past 30 years. In what follows, I paraphrase Fazlur Rahman's analysis with some interpretations and elaborations of my own.

The early Muslims shortly after the death of the Prophet (p) had internalized fully the social and spiritual message of the Qur'an and the example of the Prophet (p), whose character was the Qur'an. It was only a generation or two later that "tradition" of the Prophet as well as the application of Qur'an to daily life acquired what Fazlur Rahman called an "atomistic" character, using separate verses and traditions as legal proofs for various rulings. The best scholars only used such proofs when there was preponderance of evidence not only of their authenticity, but also of their understanding and applicability of the entire canon to specific situations. However, they became the exception rather than the rule in Islamic "scholarship."

Gradual decline produced a large medieval literature (which we use as our primary sources of Islamic "learning" to this day) that consists of two strands. The first is a clever but sterile literature of commentary upon summary upon commentary, etc., which took the atomism of the proto-jurists to absurd extremes (some legal and some linguistic) and produced no useful knowledge. The second is an escapist mystical tradition that went absurdly beyond the basic functions of self purification and character development to focus on esoteric formulas of various types. Both traditions shunned logic and industry, contributing in significant part to the decline of Islamic civilization. They constituted what the Prophet (p) derided as sterile or useless knowledge.

At the turn of the previous century, seeking to catch up with civilization, revival movements to combine Islamic authenticity with modernity arose in various parts of the world. Prominent examples included Muhammad `Abduh in Egypt, Muhammad Iqbal in India, and Said Nursi in Turkey, all of whom were anti colonial but not antagonistic to the West. They aimed to combine modern sciences, philosophy, and other areas of knowledge toward a better understanding of what Islam means for the modern era, in the process to facilitate socioeconomic as well as spiritual development. These enlightened thinkers coexisted with another class of modernists who sought to discard all social Islamic teachings as outdated and irrelevant, and at best to let religion be a private affair for rituals that are ends in themselves (or for the hereafter), rather than means to individual and social human improvement.

Unfortunately, the enlightened movements spearheaded by these thinkers were soon replaced by populist movements with significantly less scholarly leaders who nonetheless emerged into legendary figures for their followers. Respectively, these would be Hassan El-Banna in Egypt, Abul-'A`la Al-Mawdudi in India/Pakistan, and Fethullah Gulen in Turkey. These populists were men of action who attracted other men of action. They were themselves not truly scholarly, but most of their followers were even less scholarly, so the Banna, Mawdudi, and Gulen pseudo-scholarly teachings remained sacrosanct and did not help to develop a new Islamic mindset. Their followers were professionals, politicians, etc. who professed that the message of Islam (including for the modern era) is very simple, and therefore sought only to enlarge their network and build institutions. Their focus can be surmised in various forms of identity politics that they encouraged, including today's manifestations in dress codes, "Islamic finance," and the like.

Our Islamic societies in the U.S. were mainly built by young men from these traditions, especially the Muslim Brotherhood and the Jamaat-i-Islami, who formed the core of Muslim Student Associations, and later ISNA, ICNA, ISGH and the like. These institutions rarely were led by intellectual visions other than identity politics with all its positive and negative aspects.

For politics large and small, near and far, the programs developed by MB, JI, and their offshoots have failed miserably. For near politics on a large scale witness the oscillation between Republican support in 2000 and Democratic support today, without any intelligent explanation of why we prefer one platform over another (e.g. does Islam support healthcare reform, progressive taxes, financial regulation, etc.? When have Islamic leaders opined on these?). For near politics on a small scale witness the dysfunctionality of our local organizations like ISGH which are run like small tribal/family clubs, again failing to meet the full religious, and therefore by necessity social and political needs of the community. For far away politics on a large scale, witness the dismal failures of Pakistan, Sudan, Iran, and soon other countries that think that identity politics and good intentions can suffice.

What Fazlur-Rahman never witnessed in his lifetime were the children of the communities led by MB and JI offshoots; our children. They could see that these identity politics programs were not built on solid Islamic world views, and have not been particularly successful. Some of them became like the modernists of the early twentieth century, and at best just pray, fast, etc. and try to be good people, but their Islamic identity is not integral to who they are in any substantive way. Others sought to find authentic Islamic learning, but they went full circle to the sterile medieval scholarship (like Maghreb Institute), recycled Sufi doctrines (numerous tariqas), or combinations thereof (like Zaytuna). It is as if we have come back full circle and hadn't learned that the aborted enlightenment movement of the early 20th century had revolted precisely against these useless forms of pseudo scholarship and pseudo spirituality that contributed to Muslim retardation.

Even Fazlur Rahman's own suggested research program, which was to fully comprehend the Qur'an in its totality and interpret what it means for the modern era -- part of the program popularized by Omar Al-Faruqi and others as "Islamization of knowledge" -- was itself simply a return to what `Abduh, Iqbal, and Nursi had tried to accomplish and to have failed.

I know that you would prefer that the khateeb would not only diagnose a problem, but also offer a solution. Alas, I do not know what is the solution, and no individual should pretend to offer a simple and ready solution. Finding a solution is itself a political process, in which one cannot be merely a spectator. The one thing that I can say with some level of certainty is that we have been going around on the inside rim of a vicious circle, unable to break free and integrate our modern lives with our Islamic teaching and identity. Even those of us who have reconciled the two in semi-separate domains have not really integrated them, and our Islam as well as our modernity will not be complete unless we do so.

Muslim Education and Another Parable of Light

A righteous man built a beautiful and tranquil estate for his family. Then, as he neared death, he gathered his children around him and told them that the secret of his success, and theirs after him, is in his sacred book.

Part of the magic of the sacred book, he told them, was that each of his children, and their offspring to the end of time, will get their own identical copies. The difficulty, he said, is that they need to read this book at night, away from all distractions and temptations.

Within one generation, the righteous man's offspring ran out of the oil that he had used for light.
The following generations followed different paths.

Some concluded that the best way to read in the dark is imply to memorize the words during the day. Generation after generation, the meaning of these memorized words was lost and some decided instead of memorizing just to move their fingers over the words without reading or recitation. They fell into poverty, laying to waste what was left of their portion of the estate.

Others traveled far and near,  importing all types of oil from Greece and Persia and every new civilization that generated new light. But the words seemed no different at night than they were by day, so they concluded that obeying the righteous forefather's commands was paramount, even if his special oil was not to be found. So, they collected every fragment of the story of their forefather, relevant or irrelevant: how he lit the oil, how many words he recited, and in what order, where he put his sandals when he did so, and so on. They kept competing in the collection and perfection of every detail until they forgot the primary command to read the sacred book away from distractions and temptations. They had imported so many lighting materials, spent all night and day pouring over the book and the traditions, and produced so little, that those who sold them the light on credit confiscated their portion of the estate.

A third group reasoned that the forefather's oil emanated from within him. As his descendants, they reasoned, they can generate their own oil. They became so enamored with the idea that all light essentially emanated from within themselves that they thought the book itself was not as important as finding the purest oil within themselves, the one that almost self ignites without being touched by fire. They also concluded that their portion of the estate was a temptation and a distraction so they gave it away.

Offspring of all three groups felt that their forefathers had gone astray, be they "memorizers," "scholars," or "mystics." They reasoned that the sacred book's message was in fact extremely simple, and the righteous man was simply instructing them to clear their mind before each day, so that they can work better and prosper. They concluded that what they needed was action, and formed brotherhoods, parties, and other organizations, which mobilized numerous members with promises of consolidating their estate and regaining their long-lost prosperity. Once they had garnered sufficient support to lead, they -- and their dismayed followers -- discovered that they had no idea how to reconstitute their family or rebuild their estate.

The children of this fourth group reasoned that their parents had been so preoccupied with action, and had such a grossly oversimplified understanding of the message of the sacred book. They embarked on their own quest to succeed where their parents had failed. Sadly, they did so by tracing the footsteps of their forefathers in separate competing groups, so some preoccupied themselves with memorization, others with historical, grammatical and logical dissection of the text, and a third group with contemplating their inner lighting oil.

The righteous man's command was simple: clear your mind from distractions, clear your heart from temptations, and read the sacred book. But the book itself was anything but simple, and reading it for success in each generation is itself hard work, agreeing with others over what work it commands is hard work, and following its commands is hard work. Each of the four groups had done some of the work but in isolation from, and sometimes disparaging, the other groups. They all needed to do at least some of the work of the other groups to appreciate it, and then all must collaborate to rebuild their forefather's estate. The oil that once belonged to one man was scattered across his progeny. Only if they can pool their talents with mutual love for one another can their collective oil self-ignite and only then can the sacred book reveal its mysteries for their generation.

Islam, Economics, and the Egyptian Presidential Elections

Update 5/25: My spacial analysis was wrong in one respect. The two candidates closest to the new political center (moderately anti-secular, moderately leftist) together would have won the election. However, they split the votes of those with typical preference measuring distance of candidates from their ideal points in two-dimensional space. In the meantime, the two extreme candidates (the Muslim Brotherhood candidate and the Mubarak regime candidate) had blocks of voters with lexicographic preferences on the secular-anti-secular dimension. This brings back ultimate polarization and disastrous outcomes whoever wins. On the economic and international relations dimension, the two candidates are equally to the right, and that cannot sit well with a left-leaning populace.

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I gave a talk earlier this week at AUC (my alma mater) about "Polarization and Reemerging Middles." The first part of the talk was on global income distribution dynamics and the role of industrialization. I concluded that first half with the argument that a window of opportunity might exist for countries in the Middle East (focusing on Egypt) to industrialize and leapfrog over some middle income countries over the next decade, but only if the political process can produce a social contract for functional social behavior.

In this regard, I turned to comparisons with Malaysia and Turkey, the models discussed by Islamists and secularists alike as possible role models for Egypt to follow. I show in the slides below that Egyptian society is nothing like Malaysia or Turkish societies, using data from the World Values Survey (2005-2008 wave). The data is very clear: the Egyptian public is much more left leaning and much more anti-secular than either the Turkish or Malaysian (possibly because roughly half the population in Turkey are ultra-secularist Ataturkists and half the population in Malaysia are non-Muslims of Indian and Chinese origin). Indeed, using data from the World Values Survey (2000-2001 wave), I show that the Egyptian public appears even more anti-secular than Pakistan!

I attach the series of slides showing these comparisons below without further commentary.

I then attach a video which shows my argument that one should think of current Egyptian politics in a spacial model of at least two dimensions: one is the religious anti-secular/secular dimension, and the other is the economic left/right dimension. We are used in the U.S. to thinking of both directions as the same (the religious right confounds the two dimensions, to the chagrin of very religious and socially conservative but economically liberal democrats). However, I think that we need to consider both dimensions in Egypt, because the society has moved quite far to the left and to the anti-secular direction. The 1970s clash between Nasserist/socialist/leftists and the Islamists seems to have created a strange hybrid, which is very clear in the partial autobiography of Abdel-Moneim Abul-Fotouh that I read recently, describing his great admiration for Nasser, who gave his father and uncles 5 feddans each, without which his father could not have married his mother whose family's land was confiscated in land reform, but also admitting to his roots in Salafi thought during his Jamaah Isalmiyah years when he confronted Sadat in a famous televised meeting.

In this video, I tried to show where the various candidates may be placed based on their comments. For example, the Muslim Brotherhood (and former candidate Salafi Hazem Salah Abu-Ismail) do not differ much from theoretical centrists like Amr Moussa on economic agendas. Their agenda coincides with the New Washington Consensus of neo-liberalism with safety nets. Therefore, while close to the actual center on anti-secularism, they are far on the economic left-right dimension (Khairat Al-Shatir is not too different from NDP economic tycoons, in terms of economic behavior or thought). The Nasserist Hamdeen Sabbahi matches the actual center on leftism but is too secular to have a chance. Abdel-Moneim Abul-Fotouh seems closest to the actual center. If he wins, he will likely face difficulties dealing with the Washington Consensus gang (including IMF, WB, as well as internal business communities such as the American Chamber of Commerce, etc.). On the other hand, if Amr Moussa wins, he is likely to get the full support of these business communities but run afoul the redistributional and anti-secular sentiments of the public. Finding a middle ground may be difficult, but is not impossible.

Now, I leave you to the slides and then the video (which shows how the center has moved from its theoretical position, and where I think the candidates are placed based on what I've seen and read).