Friday, July 29, 2005

Al-Sanhuri Biographical sketch

As requested, here is a brief sketch of `Abd Al-Razzaq Al-Sanhuri's life, based on the entry in Encyclopedia of Islam. I will only include basic information in bullet form, to avoid infringing on Brill's copyrights. However, I will include some short quotations from their text:

`Abd Al-Razzaq Al-Sanhuri

  • Born 11 August 1895 in Alexandria, Egypt, died 1971 in Cairo.
  • "The Arab world's most distinguished scholar of modern jurisprudence, with the regeneration of Islamic law figuring prominently in his work".
  • Drafted civil codes for Egypt, Iraq, Syria and Libya.
  • Obained License en droit in 1917 from the Khedival School of Law (top of his class).
  • Started carrer in Mansura:

    • Wakil niyaba (assistant attorney general) in mixed courts.
    • Teacher in the school for Shari`a judges.

  • Went to France in 1921, to study at U. Lyon with E. Lambert.

    • Wrote thesis on English law, which won first prize.
    • Wrote a second thesis on the Caliphate (1926), calling for re-establishing the Caliphate and reforming Arab legal systems.

  • Returned to Cairo in 1926, appointed at National (Cairo) University Faculty of Law.
  • Wrote many treatises merging Egyptian and Islamic Law, including:

    • `Aqd al-Ijar (lease contract).
    • Nazariyyat al-`Aqd (Contract theory).

  • In 1935, went to Baghdad as Professor and Dean of the newly established Law School.
  • In 1936, published Majallat al-Qada', comparing Islamic codifications in Majallat al-Ahkam and Murshid al-Hayran on the one hand, and European codes on the other.
  • Returned to Egypt in 1936 as Dean of Faculty of Law, started revising Egyptian civil law, making it fully compliant (in his opinion) with Islamic Law.
  • Deputy Minister of Justice in 1944.
  • Minister of Education 1945-6, 1947.
  • Defended the new civil code in 1948 before parliament. His critics "wanted a completely Islamic code", and he argued that his proposed code "included all the Islamic law it was then possible to adopt" taking into consideration "sound principles of modern legislation".
  • Chief justice of Majlis al-Dawlah in 1949.
  • Supported the revolution early on, but was attacked physically by demagogues and demonstrators in 1954.
  • Best publications came after retiring from public life, including his magnum opus:

    • Masadir al-Haqq fi al-Fiqh al-Islami (Sources of Justice in Islamic Jurisprudence), 1954-9 (6 parts in 2 volumes).

"Islamic mortgage", suspension of reason, and audacity

An article labeled RELIGION: BRITISH TRY TO BANK THE ISLAMIC WAY, posted today on, contained the following:

"You as a customer come to me saying I would like to buy a house," says Lewis. "The bank then buys the house in its own name. You then make a monthly payment to the bank. That payment will not include any interest. But what it will basically cover is rental for the bank as if you were living in a property in their name, and then further payment, gradually buying back the title of the property. By the end of the term, the property is yours. But the payment itself doesn't include an interest element."

But could this be conventional banking in a roundabout way, with the interest paid and received, but disguised?

"These products launched on the market have been approved by a board of internationally respected Sharia experts who have issued a fatwa for each of our products that it is fully in accordance with Sharia law," Lewis said.

The products have been supported by some Islamic leaders who have become key consultants to banks for these products.

The quote speaks for itself: no rationale is given besides the presumed sacred authority of "respected Sharia experts who have issued a fatwa...". Indeed, Mr. Lewis did not even bother to deny (can he?) that this was disguised interest. I guess the attitude is that if they want to buy holy water, or an indulgence, along with their mortgage, the banker's only constraint is to cover his costs, and possibly make an extra profit margin in the process of Shari`a-arbitrage.

All of that is fine: reasonable people can disagree about such issues. What is disturbing is having the audacity to claim that "... is fully in accordance with Sharia law"! A juristic opinion expressed in a fatwa is by definition probabilistic knowledge (علم ظني). So, the most a Shari`a board (even if all of its members were in fact internationally respected scholars) can announce is that some dealing is "probably in accordance with Shari`a". As Imam Al-Shafi`i was famous for saying: "I hold my opinion to be correct, recognizing that it may be incorrect; and hold other opinions to be incorrect, recognizing that they may be correct" (رأيي صواب يحتمل الخطأ؛ و رأي غيري خطأ يحتمل الصواب).

Thursday, July 28, 2005

On mortgage, riba, usury and interest

Commenting on a previous posting, "heraish" wrote:

In the case of a conventional mortgage loan. In case of default. Late payment charges (interest) is added and then the totals are compounded until the foreclosure process is finished which could take up to 6 months. The "Sharia" contract in vogue today places a fixed late payment fee for every month missed without compunding as the situation drags. This is a small value added to the traditional mortgage loan.

So even if we consider the mortgage loan to be permissable in concept without the need for "sharia" equivalents, there are still certain details that are against the spirit of sharia. Which is the taking advantage of a person in distress.

wallahu alem

I have seen similar arguments regarding the impermissibility of conventional credit cards: Even if you pay the entire balance monthly, the argument goes, your contract says that if you are late making a payment you would have to pay interest (and penalties if you do not make the minimum payment). I am of the opinion that credit cards, if abused, indeed become usurious. Like usurers, they entice people to consume beyond their means (or exploit their need to make certain purchases), and only pile-up the heavy interest after you're too deep to get out. The biggest profits are made off of those who can never repay their balances, while those who pay their balances regularly are relatively dispensable.

That being said, I think the argument about the nature of the contract, and the specification of late payment charges (which could be legitimate interest in the classical sense) cannot directly lead to charges of riba or usury. After all, an apartment rent agreement also specifies late payment charges, as does the contract with the utility company. Without looking at the actual dollar amounts, it is difficult to determine whether the charges are usurious riba al-jahiliyyah (increase justified by the mere extension of credit) vs. legitimate interest (to compensate the creditor for actual costs, lost opportunities, etc.).

That distinction between legitimate interest and usury (even if parading under the name of interest, as Luther denounced much usurious behavior of his time) is fundamental; c.f. Eric Kerridge, Usury, Interest and the Reformation, Ashgate, 2002. I have not yet found classical Muslim jurists making that distinction (except, of course, when "interest" takes the form of variable profit share). They obviously recognized the time value, since scholars of all schools "allowed a share for time in the price", thus allowing the credit price in a sale to exceed the cash price. However, I have not been able to find classical jurists who tried to tie the increase in price due to deferment to its fair market value (legitimate interest).

In "Islamic banking", the objective is clearly neither to buy nor to sell the financed commodity, but only to extend credit. In that regard, one can decompose the mark-up -- designated as "profit" -- into three components: (1) transactions costs associated with spurious buying and selling, etc. + (2) legitimate interest reflecting the time value of money + (3) usurious profit collected in the name of Islam. Item (3) constitutes super-normal profits or rents that can be charged to pious Muslims for the mere extension of credit in a manner approved by a "Sharia board". In other words, (3) should be classified as usury.

[Painful thought: depending on how you designate fees paid to the Sharia board, they would either be classified under (1), or under (3). So, while bankers may have few scruples about devouring usury, I wonder how Shari`a-board scholars can sleep at night. In fact, since their fees are only necessary for the extension of credit to a captive market, it is much more reasonable to argue that they simply share in the Shari`a-arbitrage rent-component (3) -- which, according to this taxonomy, is usury.]

The closest to this argument that I have seen has been by Dr. Rafik Yunus Al-Misri, who suggested that one problem with calling the mark-up profit, rather than interest, is that the former is unbounded, whereas the latter is constrained by usury laws that specify interest rate ceilings. I would appreciate any references to classical Islamic jurists going through the decomposition I proposed above.

Wednesday, July 27, 2005

Exchange on (anti-)rationalism in jurisprudence with Mohammad Fadel

Saif I. Shah Mohammed suggested that this exchange (and perhaps other exchanges) in the comments section following an earlier posting is getting too long, and should be reposted independently. I am including an interesting "comments" exchange with Mohammad Fadel in this reposting:

This exchange deals with my earlier posting: "Islam awaiting a reformation? Anti-rationalism and Anti-Humanism ..."

Mohammad Fadel said...

I have no quarrels with your diagnosis of the general intellectual malaise within the Muslim world that has made it a fertile ground for terrorism and nihilistic political movements, with the caveat, however, that the experience of Muslim peoples under the post-war system of international relations has left them a lot of legitimate complaints.

I must object, however, to your further argument that there has been a "battle within Islam between rationalism and humanism on the one hand, and their antitheses on the other, . . . from the earliest days of Muslim empires." (Please excuse the rambling nature of this post)

I want to make the bold claim that all Muslim sects were rationalists in the following sense: they all believed that reason, in theory, can provide certainty, and in those circumstances where it does provide a certain answer, one is obliged to accept it. Accordingly, theologians developed the concept of "al-mu'arid al-'aqli" (the countervailing rational argument) as a necessary tool in the interpretation of revelation. Muslim sects disagreed, however, on the scope of questions that reason could conclusively answer, and of course, they often disagreed substantively on what reason required.

In understanding Muslim scholastics' view of reason, however, it is critical to understand the distinction between pure reason and practical reason: one can affirm the latter as a tool of legal reasoning (which all jurists do, otherwise fiqh could not exist) while at the same time reject pure reason as a source of moral truth, which is the position of the Ash'aris, with the Mu'tazilis taking the position that pure reason is a source of moral truth. The distinction between pure and practical reason is also critical in understanding the differences between the Muslim theologians and the Muslim philosophers. The Muslim philosophers believed that pure reason could give an account of the physical world because it was the subject of "necessary" laws which could be understood through logic. For them, natural science was simply a branch of metaphysics, and one could understand the physical world simply through the logical application of the laws of metaphysics to the empirical world of human experience.

Muslim theologians rejected this view of nature, largely for the reason that it denied any creative power to God, in favor of a theory of constant creation whose stability is not a result of mechanical rules, but rather the "custom" of God. Nevertheless, divine custom is regular enough that, based on empirical observation, one can make predictions about natural phenomenon. Accordingly, the metaphysics of the theologians is consistnt with an empirical investigation of the natural and social worlds, even if it is not a postivistic account of the natural and social world. It is interesting that Muslim scientists (or scientists in the Muslim world (not all were Muslim)) were committed to empirical investigation of the natural world. While I would never claim that the metaphsyics of Islamic theology required them to adopt this methodological innovation (see the work of George Saliba and Ahmad Dallal), I point out that Muslim theology gave empirical knowledge an important place in human learning distinct from metaphysics, and in that sense is certainly superior to what the Muslim philosophers were offering.

In general, Islamic epistemology recognized three orders of knowing: that of pure reason ('aql), that of experience ('ada) and that of revelation (shar'). Pure reason was ultimately superior to the other two in that neither experience nor revelation could contradict something that must be true as a matter of pure reason, i.e., one cannot experience something that cannot be true as a matter of pure reason, e.g., being in point A and B simultaneously, and revelation cannot contradict rational truths, e.g., that God has no body, and therefore, any expression in revelation implying corporeality cannot be taken literally.

Ghazali's discussion of maslaha cannot be understood without understanding the broader epistemological framework within which he worked. Note that it is a topic raised within the rubric of understanding revealed knowledge, specifically, divine commands, and whether maslaha in itself, is a source of divine commands. His answer is no, it is not a source of divine commands, but, divine commands are consistent with maslaha.

For his more general views on the relationship of pure reason to moral knowledge, one must consult his discussion on the nature of good "al-husn wa-l-qubh", wherein he rejects the notion that good and evil are rational concepts. Instead, he stakes out the position that good and evil are relative to individuals, and therefore, something is "hasan" (good) if it is consistent with one's desire and something is "qabih" (bad) if it is not. He does not deny that practical reason is incapable of discovering, instrumentally, the way (or even the best way) to satisfy one's desires; his objection is to the claim that pure reason can know that certain ends are good or bad and instead asserts that it is desire that establishes our ends. Accordingly, for al-Ghazali and others, maslaha cannot be an independent source of moral value, because it is inherently instrumental. Once the good is known (and that can be known only be revelation), however, practical reason can use maslaha as a mode of understanding revelation's applicability to solving particular problems.

I believe this is fairly consistent with the views of contemporary economists that welfare, i.e., salah, is objectively indeterminate, and is ultimately incommensurable across individuals (although you can do empirical studies of individuals' utility curves).

Now, what we should not do is confuse rationalism with positivism. No Muslims, whether theologians or philosophers, were positivists. Abduh and Afghani clearly attempted to move Islamic theology toward a more positivistic stance, but I don't believe this is logically necessary: I believe the metaphysics of traditional Muslim theology gives enough respect to empirical reality that practical reason can legitimately flourish.

I would add that, with respect to al-Ghazali's political thought, he is the only pre-modern Muslim theologian whom I know to have given any attention to distributive concerns (beyond mere recitation of the rules of zakat). In his argument for the necessity of the Imama (the state) in al-Iqtisad fi-l-i'tiqad, he points out certain public goods that are essential for religious life to flourish (and therefore logically prior to religion) and which cannot be secured in the absence of the state. Among these are the minimum necessities of life, e.g., food, security, housing and companionship, implying that persons must have certain minimal entitlements to collective resources before they become capable of benefitting from religion.

Mahmoud El-Gamal said...
Let me say at the outset that I consider theology (`ilm al-kalam) to be a terrible waste of time and intellect. As Qaradawi once said: "we need the creed of Qur'an, rather than re-hashed Greek philosophy" (نريد شريعة القرآن لا كلام اليونان). I am more interested in what Ghazali and others said from a juristic point of view, and I am fully cognizant of the fact that someone can be a brilliant jurist but a mediocre theologian (like ibn Taymiyyah) or vice versa.

The practical effect of Ghazali's (and Shatibi's) restriction and subordination of Maslaha or benefit analysis to scholastic interpretations of revealed texts severely limits what you call practical reason as well as pure reason. It does so by subordinating contemporary benefit analyses to outdated scholarly interpretations of the revealed Texts, rather than allowing those contemporary analyses to yield their own superior interpretations of the Texts.

Mohammad Fadel said...

It's a shame that you dismiss kalam . . . In any case, you can hardly make the claim that someone like al-Ghazali was against rationality without attempting to understand his epistemological theory. To do that, you must read kalam, which, as Ghazali points out in his introduction to al-Mustasfa, is the mother of all religious sciences, being logically precedent to all other inquiries.

In any case, it seems your real complaint is not against kalam, but rather, in your words the " restriction and subordination of Maslaha or benefit analysis to scholastic interpretations . . . by subordinating contemporary benefit analyses to outdated scholarly interpretations of the revealed Texts, rather than allowing those contemporary analyses to yield their own superior interpretations of the Texts."

My response is that your complaint is with juristic hubris, not scholastic epistemology. Qarafi makes the point, and cites numerous examples, that jurists have no expertise in empirical matters, and accordingly, it is not permissible to defer to a jurist in his empirical assessments of reality. In other words, a scholar's analysis of benefits is entitled to zero deference, because that is an empirical matter, not a matter of scripturual interpretation.

I will admit, however, that fiqh books are chock full of rules that are no more than codifications of empirical observations of presigious jurists. Legal systems often do this for their own reasons, e.g., stability and predictability, but Qarafi's point makes clear that when deference is given to a jurist's factual assesment, the basis for that deference, whatever it is, cannot be because he has some type of special talent for observing the world -- he does not.

In short, if Muslims defer to scholastic interpretations that are based in benefit analysis, that is no fault of medieval jurisprudence or theology, but our own unwillingness to be honest about the nature of Islamic law.

Mahmoud El-Gamal said...
I agree. The problem, however, is that we have many people (jurists and lay people) with pre-formed opinions about Halal and Haram (say of "mortgage loans", without fully investigating if they are in fact "loans" in the sense of "qard", or totally new contracts that require a new juristic analysis). It is also the nature of argumentation that one always tries to move the discussion to one's own turf, where one is more comfortable (which explains my discomfort with kalam, and your moving the debate from a Shafi`i Usuli -- Ghazali -- to your Maliki territory under Qarafi ... just injecting some humor in the discussion :-).

Many jurists do not understand the empirical issues, as you and Qarafi suggested (one may say that the juristic characterization of the problem is faulty, rendering their application of Texts to that characterization irrelevant). However, they have their biases, and they can easily find "experts" (including ideologically-driven economists) who will corroborate their faulty juristic characterizations of problems. Moreover, jurists exercise a selectivity bias by choosing "experts" who confirm their own views, rather than challenge them (and there is no shortage of those). Then if one criticizes the resulting opinion as incoherent or irrelevant, one is criticized for "attacking our eminent scholars", or "spreading confusion" (not to mention more serious charges, و العياذ بالله).

I am not sure how to avoid this problem, which has plagued Muslims in many areas of life. My personal leaning is to dismiss the institution of fatwa altogether, since the mustafti and the mufti both manipulate its procedures to issue pre-conceived opinions, rather than engaging in an objective analysis of the problem in light of the Islamic Texts.

Tuesday, July 26, 2005

Rashid Rida on Riba -- III: Rationale for the Hayderabad fatwa + preliminary thoughts on credit risk

In this posting, I shall summarize the arguments used by the Hanafi Indian jurists in Hayderabad to justify their four fatwas, culminating in the conclusion that interest on loans is not definitively the forbidden riba. The arguments are provided on pp.19-72 of the publication I cited on earlier posts. Obviously, given the length of this presentation, I shall try to concentrate on the high points of the jurists' argument.

The first part of the argument stipulated that the term riba was mentioned in the Qur'an generally and in the abstract, with Sunnah providing the explanation. They relied on arguments by Al-Jassas Al-Razi (in Ahkam al-Qur'an), which indicated that the term was definitely not mentioned in the Qur'an to forbid all riba in the linguistic sense (since riba simply means growth or addition). Thus, he reasoned that the term was used in its juristic sense, which is thus abstract, and requiring explanation from the Sunnah. In particular, in disagreeing with the Shafi`i restriction of riba to monetary goods (gold and silver) and foostuffs (as their generalization of wheat, barley, salt and dates), he (Al-Jassas) said:

There are a number of reasons we do not accept their proof. One of them is based on our previous assertion that the term riba in Shar` [meaning revealed Cannonical Texts] was mentioned abstractly and generally. Thus, the very generality of the term cannot be used as juristic proof. Rather, other proofs must be used to establish that a transaction is characterized as riba, and thus the verse may be brought to bear on that transaction. [pp.22-23]

They further explained what they mean by the term being general and abstract (مجمل) by quoting Nizam al-Din al-Shashi:

A term's usage is characterized as general and abstract if it allows for different interpretations, thus its understanding requires further explanation by the one who used the term (المجمل هو ما احتمل وجوها فصار بحال لا يوقف على المراد إلا ببيان من قبل المتكلم). The example of this in legal areas is the verse "and forbade riba".

They also cited jurists of other schools indicating that the term was mentioned generally and in the abstract, including the Shafi`i al-Suyuti [p.21], and the Maliki ibn Rushd:

There has been disagreement regarding the verses: "Allah has permitted trade and forbidden usury", "Establish salah and pay zakah", "Allah has established an obligation on people to perform Hajj to The House", "Siyam has been established as an obligation upon you", are the terms [riba, salah, zakah, Hajj, siyam] being used generally and abstractly? (أهي من الألفاظ العامة المجملة؟). Some scholars have concluded that the terms were mentioned abstractly, and their understanding require other sources.
[Those who concluded that riba was mentioned abstractly] reasoned that seeking an increase through legitimate trade is not forbidden. Rather, what is forbidden is a particular type of increase, which can only be inferred from the Legislator's own words.

The text that they found to be explaining the general abstract term in the Qur'an is that of the six commodities (which stipulates two conditions in trading them: hand to hand, and in equal quantities). Thus, they did not distinguish between riba al-fadl and riba al-nasi'ah, since the Hadith equally characterizes increase in spot sales and deferment as "riba".

[ME-G Side remark: This is interesting to me, since my argument about the economic nature of riba relies on this Hadith, together with the Hadith of Bilal, on trading dates for dates on the spot in different quantities, and the Prophet's (p) order to sell his dates and use the proceeds to buy the other. Based on those two Hadiths, I reasoned that the objective is "marking to market" to ensure fairness in trading, and cited ibn Rushd and others who reasoned similarly. However, Dr. Anas Al-Zarqa and Dr. Monzer Qahf both told me that I should not confuse people by tying riba al-fadl to riba al-nasi'ah... Perhaps I should come back to that issue in a later posting].

The next step taken by the Indian jurists is to restrict riba only to commutative financial contracts (المعاوضات):

Muhammad [al-Shaybani] said: "Riba is only effected in sales (البيع), but not in voluntary contributions (التبرع)", after having argued that loans should be more readily permitted (لأن القرض أسرع جوازا من البيع), since their legal form is one of voluntary [charitable] contribution.

Shaykh ul-Islam al-Mirghiyani said: Riba is only effected in commutative contracts, and not in voluntary contributions (Kitab ul-Hibah).

ibn `Abidin reported the statement of Al-Zayla`i: "It (i.e. riba) is restricted to commutative financial contracts, to the exclusion of other commutative and voluntary contribution dealings".

Similar quotations were also provided from al-Shaykh Zahah, Al-Kasani, and other Hanafi jurists. The conclusion to which the Indian jurists were building up then follows on p.32:

Thus it has become clear that a defined benefit stipulated as a condition in loans (النفع المعين المشروط في القرض) is not a form of the riba mentioned in Canonical texts, since the verse mentioned the term only generally and abstractly - so that the desired meaning cannot be understood from the verse itself - and the Hadiths that explain the term are all restricted to sales and no other contracts. Thus, our jurists explicitly stated that riba is only effected in sales and not in voluntary contributions. Perhaps what they meant to say is that it is not the riba that is mentioned in Canonical Texts.
[Long footnote here from ibn Rushd's Al-Muqaddimat, wherein he explains `Abdullah ibn `Umar's prohibition of a stipulated increase on the lent amount as not being a direct application of the Textual prohibition of riba, but rather one that is inferred by analogy. They also cite Al-Baghawi making the same argument: that prohibition of interest on loans is inferred by analogy, not by direct application of the Cannonical Texts of Qur'an and Hadith].
Proof for this assertion is also probided by the king of schoalrs [that would be Al-Kasani] in Al-Bada'i`, wherein he forbade a stipulated increase in loans by saying: "because the stipulated increase is similar to riba" (ولأن الزيادة تشبه الربا). In this regard, that which is similar to riba cannot itself be characterized as riba.
As for the Hadith reported in Bulugh al-Maram on the authority of Ali, which everyone among the commoners and the elect have been narrating: "every loan which brings a benefit is riba" (), this Hadith cannot be used to explain the Qur'an, since it is not well established, and has no foundation. In this regard, ibn Hajar said: "[its chain of narration] includes Al-Harith ibn Usamah, whose narrations are not considered"...
[More references to Hadith scholars -- including Al-Zayla`i, Abi al-Jahm, Al-Bukhari, Al-Nasa'i, ibn Al-Humam -- who rejected the Hadith due to other weak links in its chain of narrators. In particular, ibn al-Humam said that the best one can say about this doctrine is that it is based on the views of the Prophet's companions, and they only agreed that it was reprehensible -- which implies that it is not riba, otherwise they should have concluded that it was forbidden].
As for Al-Ghazali and his teacher [that would be Al-Juwaini] concluding that this Hadith is valid, Al-Shawkani said in Nayl [Al-Awtar] that they are not experts in this art [of Hadith scholarship].

Thus, the authors of the Hayderabad fatwa concluded that interest on loans was not included in the Textual prohibitions of riba in Qur'an and Hadith, and reasnoed that `Abdullah ibn `Umar's characterization of such interest on loans as riba is based on analogy to the pre-Islamic riba (of increase in debt amount at maturity to allow further deferment) [p.37]. Moreover, [p.39] they cited the majority of jurists allowing repayment of more than the lent sum, if that increase was not stipulated as a condition at the inception of the loan. Such a voluntary increase at repayment is considered a part of good character, e.g. based on the Hadith narrated by al-Bukhari and Muslim on the authority of Jabir that the Prophet (p) ordered Bilal to repay his debt with an increase. Many other narrations to the same effect were also included [pp.39-41]. More detailed discussion of those who had different opinions were also included.

The next step is to exclude loans from sales in particular and commutative financial contracts more generally. Thus, they cite Al-Kasani in Bada'i` al-Sana'i` saying: "a loan for a period of time is a voluntary contribution contract, since there is no compensation for the time factor (لأن القرض للحال تبرع ألا ترى أنه لا يقابله عوض للحال و أنه لا يملكه من لا يملك التبرع؟), and one who cannot afford to make a contribution can't afford to make a loan?". They gave more arguments from classical sources to establish that loans are not commutative financial contracts. Most of those references highlight the fact that loans are similar to gifts or charity at their inception, because the lender doesn't know whether or not he will be repaid. To them (as it is for the jurists they cited, including ibn al-Qayyim), that establishes that the contract is different from commutative ones.

[ME-G Side-remark: I believe that those arguments can serve as a foundation for developing an authentic Islamic understanding of the notion of credit risk, and avoiding the naiive assertion by classical and contemporary jurists and Islamic economists alike that the reasons for prohibtion of interest on loans is that the lender does not carry any risk... To any banker, Muslim or otherwise, dismissing credit risk in that manner only shows that the speaker doesn't understand the basics of finance.]

The final step of the analysis is to argue that due to this fundamental difference between commutative financial contracts (wherein riba is forbidden) on the one hand, and loans on the other, forbidding interest on loans based on analogy to sales and other commutative contracts is invalid. Citing authorites from `Ata' to Ab Hanifa having ruled benefits stipulated at the inception of loans (i.e. interest on loans) as reprehensible (makruh; Muhammad [Al-Shaybani] reported in his book on currency exchange -- Sarf: أن أبا حنيفة رحمه الله كان يكره كل قرض جر منفعة).

This conclues my summary of the arguments used by the issuers of the Hayderabad fatwa. Their proofs definitely merit reflection and analysis, even if contemporary jurists maintain the generally accepted ruling that all interest on loans is riba. There are two issues I would bring up towards developing a meaningful Islamic finance:

1. Is every contract that is labeled "loan" (e.g. mortgage loan, auto loan, etc.) necessarily a loan in the classical juristic sense of qard (قرض)?

2. How would we develop a coherent theory of credit risk within the general Islamic theory of guaranty (ضمان), to distinguish between loans that do and others that should be treated as classical loans? (I have been pushing Walid Hegazy, who is writing his dissertation under Frank Vogel's supervision on the theory of Daman in Islamic jurisprudence, within a comparative context with modern theories of guaranty in western legal systems. I hope that he can bring some much needed legal scholarship to those issues).

Thursday, July 21, 2005

Rashid Rida (and Muhammad Abduh) on Riba -- II: Response to the Hayderabad fatwa + using rational analysis in proper adherence to Qur'an and Sunnah

See the first posting in this series for citation of the publication, and translated text of the Hayderabad fatwa. In this posting, I include Rashid Rida's response. I am translating his response in full, due primarily to his implicit criticism of "looking at the Qur'an and Sunnah through the lens of jurisprudence" -- something that (and those are not Rida's words, but clearly his import) distorts our readings of revealted texts by the misconceptions of previous jurists. Also, if you find the posting too long, make sure not to miss the quotation from Muhammad Abduh at the end.

Muhammad Rashid Rida said: I testify that this fatwa message on the topic of riba is a valuable one, and that its author, at once issuing a fatwa and soliciting one, has done a very good job researching the topic within the Hanafi school. Indeed, based on this research, he is qualified to be considered a Mujtahid (مجتهد, jurist researcher) or selector of opinions within his [Hanafi] school (مرجح في المذهب), though not sufficiently advanced to issue opinions directly from Qur'an and Sunnah, despite his clear scholarship in exegesis and Prophetic tradition scholarship.

In what follows, I shall explain my opinion on the four main questions addressed in the fatwa that he has sent to scholars in other countries seeking their opinions. Then, I shall turn to our own research, based on what Allah has taught us in Islamic jurisprudence, without restriction ot any school following any of the great scholars.

We shall do so since this issue [of riba] is one on which jurists of the various schools have differed in opinion, and Allah (SWT) ordered [Al-Nisaa': 59] "If you differ in opinion over any subject, refer to Allah and his messenger if you have faith in Allah and the final day; that is best for you, and best in the final analysis".

In this regard, our brother the Indian Hanafi jurist has attempted to do the same thing. However, he looked at the proofs in Qur'an and Sunnah through the lens of jurisprudence, which has been hardwired in his character and dominated his talents. So, I pray in earnest to Allah (SWT) that he will guide me to the correct answer, and endow me with wisdom and decisive language.

The first fatwa

He [the Hayderabad jurist] said: The Riba mentioned (in the verse of Al-Baqara) is deemed by Hanafis and other major scholars to be mentioned abstractly, to the point where one may say that a consensus has emerged on this topic, and its detailed meaning is deemed by the majority of jurists to be explained in the Traditions narrated by `Ubadah and others.

I [Rashid Rida] say: He is correct in stating that the Hanafis consider the riba mentioned in the Qur'an to be an abstract concept. However, he is incorrect to claim that there is a consensus on that view. Moreover, his statement that the Hadith of `Ubadah and others "wheat for wheat..." is the explanation of the verse is not necessarily accepted by all. In this regard, the first thing that comes to mind is that the use of the letters Alif and Lam in "Al-Riba" implies reference to what is familiar; and what was familiar to those addressed by the Qur'an at its time of revelation was two things:

First: Riba al-Jahiliyyah (pre-Islamic riba), which was dropped and invalidated by the Prophet (pbuh), as he dropped and invalidated remaining blood-revenge claims of pre-Islamic times. This was labeled the external custom.

Second: The verse [3:130] "Oh people of faith, do not devour riba doubled and multiplied" is unanimously accepted to have been revealed prior to the verses of riba in Al-Baqara, and the verse [2:281] "and be wary of a day on which you are returned to Allah" were the last revealed verses of teh Qur'an, and that `Umar (mAbpwh) said that the Prophet (pbuh) died without having explained those verses [of riba]. In this regard, `Umar -- who is a narrator of Hadith, and one who acted upon Hadith, as established in books of Sunnah -- would not have said that [the Prophet (pbuh) didn't explain those verses] had the Hadith of `Ubadah and others been an explanation. Rather, `Umar (mAbpwh) meant that the Prophet (pbuh) didn't sa anything more about riba than what was discussed in Al-`Imran, regarding the pre-Islamic riba, which was thus invalidated with the verse [2:279] "if you repent, then you shall have your principals, without increase or diminution". In this regard, it is well established that a definite noun [Al-Riba] if used repeately, would mean the same thing in the second instance as it meant in the first.

The Second fatwa

He [the Indian jurist] said: "Riba is an un-compensated increase in sales", and mentioned [in a footnote] that jurists added the restriction that the increase is stipulated as a contract condition, but that this specification by jurists is not required. He based this view on the Hadith of `Ubadah and the verse as explained by that Hadith.

I [Rida] say: This view is not necessarily accepted, since his proof is not necessarily accepted -- as mentioned above. In this regard, he has himself listed --as others have-- other more general restrictions, including within the Hanafi school, whereby riba was not restricted only to sales.

The third fatwa

He [the Indian jurist] said: "A benefit stipulated as a condition in loans is not the riba explicitly mentioned in Canonical Texts, since such explicit mention has not been proven in Qur'an or valid Hadith".

I [Rida] say: If he means that it is not explicitly mentioned in the Qur'an, we accept the statement, since the riba mentioned in Qur'an is restricted to riba al-nasi'a (increase accompanying deferment) applied to deferment of existing debts, rather than at the inception of the first contract (where increase in the latter would be compensation for benefiting from use of the loan, rather than for deferment of repayment). However, he seems to seek a more general conclusion...
[Rida includes here a correction of the Indian jurist's grammar, and side-remarks about non-Arab learned scholars lacking proper independent learning of the language].
Further, he claimed that there is no explicit prohibition in valid Hadith of benefit stipulated as a condition in loans is based on his maintained assuption that loans are different from debts, and are excluded from sales within which he restricted the scope of the forbidden riba. This claim is in agreement with the Hanafi juristic terminology (موافق لاصطلاح الفقه عندهم).

However, in the Arabic language, a loan is a form of debt (القرض في اللغة العربية دين). In this regard, riba fundamentally applies to all debts, whether it was established as a [deferred] price in sale, or an identified object as we shall show. It is important to note that the biggest problem in understanding the Qur'an and Sunnah independently is subjecting those Texts to later juristic terminology, rather than understanding them in the Arabic language that the recipients of those Texts would have understood.

Finally, the Hadith forbidding trading gold and silver and foodstuffs unless they are hand-to-hand and in equal amounts is not an explanation of the riba mentioned in Qur'an, nor is it a restriction of riba to sales. Rather, it is a ruling to prevent ways of effecting the riba mentioned in Qur'an (لسد الذريعة لارتكاب ربا القرآن). Otherwise, such trading by itself does not lead to such major harm as to require this extreme warning in the verses of Al-Baqarah (و إلا فهو لذاته ليس فيه من المفسدة ما يقتضي هذا الوعيد الشديد في آيات البقرة).

The fourth fatwa

He [the Indian jurist] said: A benefit stipulated as a condition at the inception of a loan [i.e. interest on loans], as it was not proven from direct Texts of the Qur'an and Hadith as riba, was inferred to be a form of riba sometimes based on analogy, and others based on the Hadith "every loan which brings a benefit is riba" (كل قرض جر منفعة فهو ربا), both of which are doubtful.

The first proof is doubtful since the analogy is invalid based on differences in instigating factor (قياس مع الفارق فلا يصح) see p.71.

The second proof is doubtful since the Hadith has a weak chain of narration, and thus is not valid, and cannot be used as proof.

Moreover, if we deem [the first proof based on] analogy to be valid, the ruling would still be doubtful [today], since rulings based on analogy change with time [reference to Majallat al-Ahkam in footnote]. In this regard, anyone who understands current times and people's dealings would alow [interest in loans], as they have allowed paying compensation for teaching Qur'an, calling for prayers, leading prayers, etc. [footnote stating that earlier rulings had forbidden such compensation]. In this regard, declaring [benefit or interest on loans] to be forbidden based on earlier rulings, we claim that those earlier rulings were only built on reasoning by analogy, without other proof. Anyone claiming otherwise must provide alternative proof, and God knows the truth best.

I [Rida] say: It appeas that this fatwa was the one for which the entire treatise was composed. Its import is that a benefit stipulated as a condition at the inception of loans is not the type of riba that was mentioned explicitly in the Qur'an or established based on a valid Hadith or valid reasoning by analogy. [The jurists argued further] that if the analogy was valid at an earlier time, its ruling may be reversed based on necessities of needs in curent times, as would be the case for any ruling based for analogy. The author of the treatise has relied on various jurists views in this regard in his footnotes. This is a juristic inference on a topic wherein jurists have differed in opinion, based on evident juristic grounds (و هو اجتهاد في مسألة اختلف فيها الفقهاء له وجه فقهي ظاهر). This is sufficient explanation of our views on this fatwa ( وحسبنا هذا بيانا لرأينا في الفتوى). As for our view on the foundational concept of riba, we shall explain it in later chaptes, and success comes from God.

I repeat that my purpose is not to appeal to authority (of Rashid Rida, the Hayderabad jurist, or anyone else). What is most interesting is the level of discourse, and the rationalism with which Rashid Rida approached the problem. In particular, the last sentence in Rashid Rida's answer to the Indian juist's third fatwa is fascinating: He concludes that the types of riba mentioned in the Hadith of the six commodities (gold, silver, wheat, barley, salt and dates; which he characterized as two monies and foodstuffs, whereas Hanafi jurists would generalize to anything measured by weight or volume) must be forbidden based on the rule of sadd al-dhara'i` (prevention of means of affecting the type of riba mentioned in the Qur'an). He reached this conclusion by noting that the harm in allowing those types of trades is not very severe, and hence would not merit such a severe warning, as is provided in Al-Baqarah ("if you do not [desist], then be warned of a war from God and his Messenger"). This is reminiscent of statements by Muhammad Abduh in Al-Manar, quoted in Sh. Dr. Tantawi's book on banking, which say that even if simple interest is a form of riba, it is not the form that ruins households, and merits a warning of war from God and his Messenger.

The full quotation, on p.95 of M. Sayid Tantawi "Bank Operations and their Islamic Legal Status" (Mu`amalat al-Bunuk wa Ahkamuha al-Shar`iyyah), Cairo, Nahdat Misr, 2001 edition. He quotes Rashid Rida in Al-Manar, p.332, vol.9, 1906 saying that Imam Muhammad `Abduh said:

و لا يدخل في الربا الذي لا يشك فيه من يعطي آخر مالا يستغله و يجعل له من كسبه حظا معينا، لأن مخالفة قواعد الفقهاء في جعل الحظ معينا، قل الربح أو كثر، لا يدخل ذلك في الربا الجلي المركب المخرب للبيوت؛ لأن هذه المعاملة نافعة للعامل و لصاحب المال معا؛ و ذلك الربا ضار بواحد بلا ذنب غير الاضطرار، ونافع لواحد بلا عمل سوى القسوة و الطمع، فلا يمكن أن يكون حكمهما في عدل الله واحدا

My translation of that passage is as follows:

The undoubtful forms of forbidden riba do not include the case of one giving another his money to use it and pay him a fixed percentage. This follows since violating the jurists' rules against fixing the rate of return (high be it or low) does not constitute the type of obvious compounded riba which ruins households. The first type of transaction benefits the worker and the investor, both; whereas the forbidden riba harms one for no reason other than need, and benefits the other for no reason but greed and hardness of heart. Consequently, it is inconceivable that the two types of dealings would have the same ruling in God's justice!

I have already hinted in earlier postings (on anti-humanism and anti-rationalism) to the fact that the early 20th Century witnessed an attempted reformation of contemporary jurisprudence based on rational (dare I say economic) analysis, whereas the later discourse starting from mid-Century is heavy on rhetoric and light on substance. I repeat for the third time that the issue is not who made which ruling, but how rulings were justified by jurists a century ago and by today's jurists (of course not everyone who parades as a jurist or "scholar" in Islamic finance circles would qualify for that characterization at any rate).

Monday, July 18, 2005

Rashid Rida on Riba -- I: The Hayderabad fatwa

This series of postings present arguments and views expressed in the publication Al-Riba w al-Mu`amalat fi al-Islam (Riba and Transactions in Islam), by Rashid Rida, published by Dar ibn Zaydun (Beirut) and Maktabat Al-Kulliyat al-Azhariyyah (Cairo), 1986.

No dates were given in Rida's forward, the actual Indian fatwa, or Rashid Rida's analysis. The forward to the whole volume was written by Muhammad Bahgah al-Bitar, and dated 1959, but the actual fatwa and Rashid Rida's analysis must be earlier.

Rashid Rida provided in Al-Manar an introduction in which he stated:

The readers of Al-Manar know that the issue of Riba is among the greatest Muslim civil problems that have occupied rulers, leaders and schoalrs in this age. We have many questions regarding the dealings of banks, corporations, and contracts that jurists may consider to contain riba... We have been postponing our answer to those issues until an oppotunity arises to solve this problem through detailed analysis upon which solutions to the contemporary problems may be built.
The Islamic Indian government of Hayderabad has given us such an opportunity a few months ago, when it published a manuscript on the issue, containing a fatwa by some of their scholars, printed by the Asafi government, and sent by its supreme Shari`a court to famous scholars in various Islamic countries, requesting their opinion regarding its Islamic legal proofs...
The actual text of the fatwa contains background research, published in pp. 19-72 of the book cited in the beginning of this posting. The research (from which I shall quote selectively below and in later postings) culminates in a fatwa in the form of questions and proposed answers:

What say you, respected scholars, regarding the
following answers to the listed questions?

Are those answers correct or incorrect?

Illustrate or illuminate your answers with legal proofs (بالدليل)

(1) The term riba in <و> (God has permitted trade and forbidden riba), is it or is it not abstract (مجمل), especially within the Hanafi school? If we accept that the Qur'anic term is abstract, how is it explained by the Legislator (based on Qur'an and valid Prophetic Tradition - Hadith)?

(2) Explain to us what riba means based on Qur'an and valid Hadith.

(3) Is of isn't a pre-specified benefit (increase) stipulated as a condition at the inception of loans
(النفع المعين المشروط في القرض ربا منصوص أم لا؟) a form of riba addressed by Canonical Texts?

(4) If it is said that a pre-specified benefit stipulated in loans is riba, what is the legal proof accepted by the respected jurists?

(1) Hanafis and other major scholars agree that the riba mentioned in the Qur'an is abstract, the level of agreement may be characterized as a consensus. The Hadiths of 'Ubadah and others are considered by the majority of jurists to be explanations of the abstract concept (see pp.19-25).

(2) Riba is an increase without compensation in sales (الربا هو الفضل الخالي عن العوض في البيع) [references to Al-Mabsut and Sahrh al-Hidayah], and the proof for this explanation are the narrations by `Ubadah and others (wheat for wheat, etc.), see pp.25-6.

This explanation is also supported by the verse (God has permitted trade and forbidden riba), based on the view that the Qur'anic verse forbade riba as an abstract concept, which is explained by Hadith. Thus, the riba of Qur'an cannot be different from the riba of Prophetic Tradition (Sunnah). In other words, the riba mentioned in the Qur'an is precisely the riba defined by Hadith (see pp.30-1).

(3) A benefit stipulated as condition in a loan is not a riba explicitly mentioned in the Canonical Texts, (النفع المشروط في القرض ليس هو ربا منصوصا لعدم ثبوته من القرآن و من حديث صحيح) since there is no proof thereof in Qur'an and valid Hadith (see pp. 31-44).

(4) Since a benefit stipulated as a condition in loans is not established as riba by Qur'an or Hadith, it was variously proven to be riba based on analogical reasoning (see p.71), or based on the Hadith (كل قرض جر منفعة , every loan which brings a benefit [is riba]), and both proofs are doubtful.

The first proof is doubtful since the analogy is invalid based on differences in instigating factor (قياس مع الفارق فلا يصح) see p.71.

The second proof is doubtful since the Hadith has a weak chain of narration, and thus is not valid, and cannot be used as proof.

Moreover, if we deem [the first proof based on] analogy to be valid, the ruling would still be doubtful [today], since rulings based on analogy change with time [reference to Majallat al-Ahkam in footnote]. In this regard, anyone who understands current times and people's dealings would alow [interest in loans], as they have allowed paying compensation for teaching Qur'an, calling for prayers, leading prayers, etc. [footnote stating that earlier rulings had forbidden such compensation]. In this regard, declaring [benefit or interest on loans] to be forbidden based on earlier rulings, we claim that those earlier rulings were only built on reasoning by analogy, without other proof. Anyone claiming otherwise must provide alternative proof, and God knows the truth best.
That is the text of the fatwa itself, with proofs for its assertions in various parts of the earlier published texts, to which I shall return in later postings. Rashid Rida's reply to the four fatwas was published in pp. 79-84, and followed by a long treatise on "The Nature of the Riba that is Definitively Forbidden in Itself, the nature of Suspected Riba Forbidden to prevent routes to circumvent the prohibition, and the nature of sales and trading" on pp.85-169.

In the next posting, I shall translate Rashid Rida's response to the four fatwas, followed by the proofs of the Hayderabad jurists in the third posting, and Rashid Rida's definition of definitively forbidden riba in the fourth.

I could not resist, however, posting here Rashid Rida's response to the fourth fatwa:

I say [regarding the fourth fatwa]: It appeas that this fatwa was the one for which the entire treatise was composed. Its import is that a benefit stipulated as a condition at the inception of loans is not the type of riba that was mentioned explicitly in the Qur'an or established based on a valid Hadith or valid reasoning by analogy. [The jurists argued further] that if the analogy was valid at an earlier time, its ruling may be reversed based on necessities of needs in curent times, as would be the case for any ruling based for analogy. The author of the treatise has relied on various jurists views in this regard in his footnotes. This is a juristic inference on a topic wherein jurists have differed in opinion, based on evident juristic grounds (و هو اجتهاد في مسألة اختلف فيها الفقهاء له وجه فقهي ظاهر). This is sufficient explanation of our views on this fatwa ( وحسبنا هذا بيانا لرأينا في الفتوى). As for our view on the foundational concept of riba, we shall explain it in later chaptes, and success comes from God.
Before ending this posting, I should link it to my discussion of attempted Islamic reformation a century ago (led by Al-Afghani, Abduh, and to a lesser extent Rida). Not much would be different in Islamist circles today had Rida, Abduh and their contemporaries been more explicit in his acceptance of conventional banking practice as not necessarily the forbidden riba (Abduh was quoted by Tantawi as having said in Al-Manar that it may be riba, but not "the riba" that is so terribly forbidden in the Qur'an, the one which destroys households, etc.). Many of the other rulings of Abduh and his students have been rejected since mid-Century as western, or even heretical (e.g. Abduh was not opposed to statues and portraits, provided that they were clearly not in a place of worship, where idolatry would be feared). Indeed, all contemporary jurists, including the most liberal, say that interest on loans is the forbidden riba -- Dr. Tantawi and others get around that problem by arguing that deposits at banks are not really loans, see my presentation on the Azhar fatwa on bank interest here.

What I hope to accomplish with this series of postings is to get people to think again about the usefulness of blindly accepting certain jurists views, which may not be based on proper legal proof.

Sunday, July 17, 2005

An old khutba (sermon) against Nationalist/ separatist interpretations of Islamic Ummah

This is an old khutba that I gave at the ISGH main center in Houston, TX on February 27, 2004. I was "heckled" after this khutba, when a member of the congregation said that he was shaking with anger, looked at me and said "I reject your khutba", and claimed that it questioned "our `aqidah (creed)". I was told afterwards that there was a lot of argument outside the prayer area, with people agreeing with the views I had expressed, and others disagreeing.

I obviously still adhere to my views expressed in this khutba.
The main point about Mawdudi and company defining the "Ummah" in a nationalist sense, and the emphasis on doing things differently (whether it's in the way we dress or the way we do finance) is very much at the heart of the problem with Muslims today. We need to understand the basic message of Islam, and to work with all people who agree with our moral and social views -- not to convert them, or to separate from them, but to reach good social outcomes that are beneficial to everyone.

At any rate, here is the text of that khutba:

(traditional introduction) then

I would like to congratulate the community for the new Hijri year, and to congratulate our brothers and sisters who returned from performing the Hajj. I pray that we can all have the opportunity to perform Hajj next year, IA.

It is customary at this time to give a khutbah that discusses the lessons of the Hijra. Instead, however, I would like to discuss some difficult issues related to misconceptions regarding the nature of those lessons. I would also like to link those misconceptions and resulting attitudes of the Muslim American community, of which I am a member, to some of the current issues that have dominated our news sources and emails over the past few weeks.

One of the current issues that have mobilized Muslim American communities recently is the recent French law banning girls from wearing Hijab/headscarf at school. The surprising thing is that this recent development in France prompted numerous marches around the world, including here in the U.S., while majority-Muslim countries, including Turkey, Tunisia and others, have similar laws on their books. In fact, when a Muslim Turkish woman who wears a headscarf won a seat in the Turkish parliament, but was prevented from entering the building of parliament because of her garb, that was a mere footnote for most Muslim communities, and it certainly did not mobilize Muslim groups to start marching around the globe in her support.

What matters to us most is the fact that different parties to the debate on the new French law continue to talk at cross-purposes: Muslims continue to inform that head-covering is a religious obligation on Muslim women, while French officials continue to talk about the issue as one of “religious symbols”. Mr. Pasqua, who was one of the architects of the new law, argued that they have seen Muslim women elsewhere who did not wear head covering, and stated that “it is not sufficient to have Muslims in France, we need a French Islam” (See Ch.9 “The Beleaguered Muslims of France”, in Milton Viorst’s In the Shadow of the Prophet, New York: Westview Press, 2001). Prof. Kepel, one of the authors of the law, echoed the sentiment: “We will have a sort of apartheid. Everyone will be proud to defend his own identity — I am a Muslim, I am a Christian, I am a Jew first. And then a Frenchman, second. This is not acceptable” (See this and more quotes in the article: In other words, the issue of the headscarf representing a religious symbol was threatening their national identity.

Indeed, we can go back to history before the recent developments and the 1989 case of the three Muslim girls at the Creil school in France. In 1984, we had a discrimination case right here in America, of the substitute school teacher Alima Dolores Reardon, who was fired from her job in Philadelphia due to wearing the Hijab to work. She won an initial court ruling, but subsequently lost at an appeals court, based on the “religious garb” statute enacted in 1895, and representing anti-Catholic sentiments of that time (See Moore, Kathleen “The Hijab and Religious Liberty: Anti-Discrimination Law and Muslim Women in the United States”, Ch. 5 of Y. Haddad and J. Esposito, Muslims on the Americanization Path? Oxford: Oxford University Press, 2000).

Indeed, both in the French and U.S. cases, fear of religious garb acting as a religious symbol was closely tied to issues of allegiance or non-allegiance to one’s country. Well into the 20th Century, Catholics in this country were suspected of having more allegiance to the Vatican (Church) than to their home country. It would have been unthinkable in 1895, or 1940 for that matter, that someone like John F. Kennedy could have been elected President of the United States.

Brothers and sisters, this is the problem we face in America today. The headscarf by itself is not threatening to a society, unless they think that it represents allegiance to different – foreign – entities. Indeed, this is closely related to the recent barrage of indictments of Muslim Americans as “an enemy within” by pseudo academics such as Daniel Pipes, Congressmen such as Rep. Peter King (of NY), and many in between. While we do, and should continue to dispel those misconceptions, we also need to reconsider some of our own thoughts and words that may have helped to create this fear of American Muslims (notice the difference between Muslim Americans vs. American Muslims, which one is the primary characterization?).

We do and should care about Muslims around the world. Muslim narrated that the Prophet (pbuh) said (Arabic Hadith, and translation: “the example of Muslims in their mutual sympathy and love is like a single body: if one part aches, the rest of the body responds with fever and sleeplessness”). However, that does not mean that we should not be equally concerned about our local communities. The Prophet (pbuh) also said, as narrated in Bukhari on the authority of Aisha (mAbpwh): (Arabic Hadith, translation: “Gabriel kept reminding me of the importance of kindness to one’s neighbors, to the point that I thought he would give neighbors a share in inheritance”). Commentary on this Hadith in Fath al-Bari Sharh Sahih al-Bukhari stated that it applies to all neighbors, including non-Muslims, infidels, idolators and even enemies! We should ask ourselves: do we care and work for our local communities as much as we care and work for far-away Muslims? If not, how can we be surprised if others think of us as “enemies within” with a foreign agenda?

In September 1992, a report issued by the House Republican Research Committee’s Task Force on Terrorism and Unconventional Warfare stated the following, based mainly on the study of Muslim communities in France, where they represent the majority practiced religion (although Catholicism remains officially the majority religion):
“Islam is a communal way of life, and the vast majority of emigrants and their European born children live together isolated from, and hostile to, the society around them. The Muslim communities demand to be allowed to retain all aspects of Islam including laws unacceptable in the West… and argue for making Islamic law superior to the civil law of the land…”

In our discourse, I hear my fellow Muslims speaking of our non-Muslim neighbors at worst as “kuffar” (infidels) and at best as “potential Muslims”, which cannot be a comforting thought to other religious communities. Moreover, the insistence on building Islamic schools “to shelter our children” from American society, and our obsession in da`wa work on converting others to Islam, suggests an agenda that others – unsurprisingly – see as threatening.

Yvonne Haddad is a long-time student of Muslim American communities, and a sympathetic one. In one of her studies (Haddad, Y. “The Dynamics of Islamic Identity in North America”, Ch.1 of Y. Haddad and J. Esposito, Op.Cit.), she found that American Muslim communities did indeed live in isolation and hostility to the surrounding predominantly non-Muslim society. She found that they justified their life in this land (wrongly, I would argue) according to one of two models based on the Prophet’s (pbuh) example in Madina. Some maintain a conviction that they will eventually return to their countries of birth (they would say “home country”), and therefore consider the Hijra as an example of the Prophet (pbuh) leaving Makkah to get stronger, and eventually return to reform it. Of course, this is a myth for most American Muslims: the vast majority will stay here, as will their descendants. Another group take the lesson of Hijra to be that the Prophet (pbuh) went to Madinah and turned it into a Muslim city/state. Therefore, they think that through da`wa, they can convert sufficient numbers of Americans to Islam, eventually to turn this land into an Islamic state (as Daniel Pipes so famously stated). Of course, this is not the true purpose of da`wa: the latter means calling for righteousness and preventing bad behavior in our society. Instead of being fixated on numbers of Muslims, we should work with the other tens of millions of Americans who share our views on what is good and what is bad. We should be fully committed American citizens, who call for change out of our love for America, and our deep wish that America would always stand for what is right and oppose what is wrong. We can only contribute to this American goal if we are fully part of the civil society, with no compromise in our allegiance.

The problem, however, is that the roots of our Muslim organizations date back to the builders of ISNA and before it various Muslim Student Associations, who were predominantly ex- or continuing members of the Muslim brotherhood (for Arab students) or Jamat-i-Islami (for Pakistani and Indian students). Some continue to read the basic texts that inspired those groups (mostly by Mawdudi and Sayid Qutb), and others who do not read that literature have its contents deeply engrained in their subconscious through oral indoctrination. That literature came about in the mid 20th Century as part of the Islamist revival movement resulting from the failure of the nationalist movements of the first half of the century, and it essentially compromised Muslims’ allegiance to their countries.

We must remember that the nation state is a reasonably new notion that was invented in America, and spread in Europe and later the Islamic world (post Ottoman period) following the French revolution. While the Islamic world rejected almost all western social advances as “Christian”, the secular nationalist ideals of France were clearly anti-Church, and thus did not pose a Crusading danger. Thus, various parts of the Ottoman empire adopted nationalist agendas, re-discovering their ancient civilizations (Egyptian, Phoenician, Babylonian, etc.). When the new nation states failed to deliver prosperity and true independence, Islamist movements (inspired by the thought of Mawdudi and Qutb) called for a return to pan-Islamist identity, but ironically did so in a nationalist way.

This nationalist re-interpretation of Islamic civilizations is anachronistic, since clearly the nation state only developed centuries later. Nevertheless, in our common parlance, we use the term “Ummah”, which is a central notion in the Qur’an, to mean “Nation”. We would say that the Qur’an proclaimed: “You are the best Nation sent unto mankind…”. However, the term Ummah does not mean nation in that modern sense.

For instance, Abdullah ibn Mas`ud was once heard saying: “May Allah have mercy on Mu`adh, he was Ummatan Qanitan”. It was said to him: “But Allah said this about Ibrahim (pbuh)”, he said “Ummah is the man who teaches righteousness, and Qanit means obedient to Allah”. Also, the Prophet (pbuh) said if Zayd ibn Amr ibn Nufayl that he will be resurrected on the day of judgment “Ummatan wahdah”, or an “Ummah” by himself. Reflecting on this Hadith, the author of the most comprehensive Arabic dictionary Lisan al-Arab noted that Ummah means a man who does not share his religion with others. That dictionary also lists numerous other meanings of the term (followers of prophets, a good man, a righteous teacher, etc.), none of which agrees with the contemporary notion of the nation state.

Therefore, we need to abandon this outdated Islamic-nationalist thought, and recognize that allegiance to the Muslim Ummah in no way compromises our allegiance to America. Once that is reflected in our words and actions, through integration in the American society and cooperative work with other faith communities, the fear of Muslims as an “enemy within” will be proved decisively as unjustified paranoia: We can be fully Muslim and fully American, and we do not need to announce which comes first and which comes second.

For now, however, we should not blame others for applying double standards when we ourselves apply double standards by ridiculing other communities’ faiths while being outraged if they criticize ours. Once we are integrated into society, we can engage in a fruitful dialogue with people of all faiths in the manner dictated by the Qur’an “using wisdom and kind admonition”, for the betterment of our society.

Islam awaiting a reformation? Anti-rationalism and Anti-Humanism in contemporary Muslim cirlces

I had promised to post the Haydarabad fatwa that interest at the inception of loans is not the forbidden riba, and Rashid Rida's response, and still plan to do so. I have been held back in part by laziness (too much to translate), and in part due to depression over the behavior of Muslims in Iraq, London, and other parts of the world. I think Prime Minister Blair is absolutely right talking about militant Muslims as an evil cult, but that cult did not emerge out of nothing. It emerged out of decades of irrational and anti-humanist thought in Muslim circles. The current crop of young men who have committed acts of mass murder around the world are only doing what they heard their parents praising for so long, and unfortunately, that earlier generation still has numerous bitter people who justify murder in the name of revenge and defense of religion...

The problem goes deeper, and is not entirely unrelated to the anti-rationalism and anti-humanism that gave rise to political Islam, Islamic economics, Islamic finance, etc. Those issues are really very closely related.

The battle within Islam between rationalism and humanism on the one hand, and their antitheses on the other, has been raging on from the earliest days of Muslim empires. The history of rationalism and anti-rationalism looked like a roller-coaster:

  • The first wave of rationalism started in the Eighth Century CE, epitomized by the thought of ibn al-Muqaffa` (720-756) and Abu Yusuf (731-798), who argued for political economic thought underlying codified laws, rather than relying on jurist literalism and excessive reliance on juristic analogies rather than logical analogies and cost-benefit analyses.
  • This first wave was destroyed in the Ninth Century CE with the rise of formal jurisprudence under Al-Shafi`i (d. 820) and ibn Hanbal (d. 855), the first restricting all juristic inference to formalistic juristic analogy, and the latter subordinating even such analogies to literalist adherence to relatively weak canonical texts.
  • All was not lost, as a second rationalist wave arose in the Tenth Century CE, with the likes of Al-Farabi (870-950) and ibn Sina (980-1037), both of whom argued for the superiority of knowledge attained through reason, the limited usefulness of literalist jurists and anti-rational jurisprudence, and emphasizing analysis of the social function of religion, vieweing Muhammad (p) as the consummate Philosopher-Prophet.
  • This set the stage for the greatest intellectual battle of Islam, between two of the greatest minds in its history: Al-Ghazali (1058-1111) and ibn Rushd (1126-1198).
    • Al-Ghazali launched a terrible attack on the rationalism of Al-Farabi and ibn Sina, esp. in his Tahafut Al-Falasifah (incoherence of the philsophers). He adopted a neo-Platonic approach that rejected excessive reliance on the rational faculty, arguing that knowledge attained through revelation (or illumination, after the last messenger had passed away) was superior to that attained through reason. This reflected in his legal-theoretic masterpiece Al-Mustasfa, by arguing that benefits (maslaha) cannot be understood rationally independently of revelation, hence giving literalists and jurists the upper hand.
    • ibn Rushd tried to salvage Aristotelian rationalism from Al-Ghazali's attack. His response Tahafut al-Tahafut (incoherence of [al-Ghazali's] incoherence) defeated Al-Ghazali's attacks, and his own mastery of jurisprudence allowed him to speak with great authority on the importance rational analogy in proper juristic reasoning (his masterpiece in this regard is Fasl al-Maqal fima bayna al-Hikmati wa al-Shari`ati min al-ittisal: The final word on the connection between [Rational/Philosophical] wisdom and Religious Law). Echoes of his thought can be found in the jurisprudence of ibn Taymiyyah and his student ibn Qayyim al-Jawziyyah, who rejected legal ruses (Hiyal), and argued that what matters in contracts is substance rather than form and name... Surprisingly, while jurists, especially in the GCC are fond of quoting the latter two jurists, they seem not to follow their method of innovative thinking based on rational analysis of contracts.
As much as I admire Al-Ghazali, I think that his anti-rationalist attack dealt the fatal blow to Islamic civilization, causing it to fall into a deadly sprial through the 13th to 19th Centuries. At the turn of the 20th Century, Jamal al-Din al-Afghani, and his student Muhammad Abduh (and later Rashid Rida) started what one can define as an attempt at Islamic reformation. They tried to resurrect proper Islamic thought through rationalism, and borrowing from more advanced cultures (in their case Europe) elements that did not stand in contradiction with Islamic thought. Muhammad Abduh said famously: "I went to Paris, and found there Islam without Muslims, then I returned to Cairo, and found there Muslims without Islam". The early writings of Rashid Rida (including those I plan to post here in translation) reflected that early attempt to understand the substance of Islam and Islamic law, and to strive for betterment of Muslim societies through hard work and borrowing from others innovations that are useful and not in contradiction with Islam (that -- of course -- is the paradigm of Sanhuri on which I wrote the last posting).

Unfortunately, in mid-Century, the movement (originally carrying the "salafi" label to imply rejecting bad jurisprudence of intervening centuries, and reinterpreting the Canonical texts of Islam in light of modern social science and experience) was subverted (when later "salafis" chose to imitate the opinions of ibn Taymiyya and his students, even though the latter forbade imitation -- taqlid!!). Under the misguidance of the likes of Mawdudi, Qutb, etc., the few gains of contemporary Muslim societies were rejected as western innovations, and dreams of an ideal Muslim society led to poisonous denounciation of contemporary ones as infidel. It was only a matter of time until the children of the generation growing with this poisonous thought in mid-Twentieth century would debase the name of Islam: In the economic sphere through the mockery that is Islamic finance, and in the political sphere by glorifying "martyr attackers" (even when the targets were innocent civilians -- in direct contradiction to Islamic Canonical texts forbidding such attacks on civilians), first in the occupied West Bank and Gaza, then in Israel, then elsewhere...

Strange as it may seem at first, I think that those developments are not independent. In fact, they are facets of the same phenomenon of anti-rationalism and anti-humanism in the Mawdudi/Qutb poisoned minds of contemporary Muslims that think of jurisprudence as a set of rules with no apparent rational explanation, and think of Islam in a nationalist sense that allows them to commit abhorable criminal acts ostensibly in the name of Islam.

This is difficult for me to say, but I remembered a statement made to me a few years ago by an ex-US ambassador to the Kingdom of Saudi Arabia. "The problem with Islam is that it has not yet had its reformation", he said. I argued with him that Islam didn't need a reformation, since we did not have a Church with political and financial ambitions, let alone one that relied for its financing on selling indulgences (صكوك الغفران). The more I think about it now, the more I see Islamic finance (stamps of approval by bought jurists) as sellers of indulgences (even though the notion of purgatory is not as well developed in Islamic thought), and various politically minded Muslims using religious insecurity to justify criminal activities, just as Catholic rulers could justify ethnic cleansing in Spain and murderous Crusades to the east in the name of religion.

Perhaps Islam does need another reformation. A good place to start might be to re-read the thoughtful writings of the last attempted reformation a century ago, in the writings of Muhammad Abduh and his students. Others must be thinking the same: last year, there was a TV series on Qasim Amin (one of Abudh's disciples, and most famously author of Tahrir Al-Mar'ah -- Women's liberation). Now, there is news about a TV series about the life of Muhammad Abduh himself:

Sunday, July 03, 2005

Al-Sanhuri on reviving Islamic Jurisprudence, and prelude on Rashid Rida's analysis of Riba in contemporary transactions

I picked up a copy of Al-Sanhuri's memoires (published by his daughter and son-in-law) in Cairo last week. Apparently, an earlier version of those memoires were published in 1988, but not widely circulated. I picked up my copy at Madbuli's, and it was published by Dar Al-Shuruq, Madinat Nasr, Cairo, 2005 (

Journal entry #160, pages 150-1, marked: Paris - 24 February, 1924 is entitled 'Ihya' Al-Fiqh Al-'Islami. The point made by Sanhuri is the exact antithesis of the current form-based approach in Islamic finance, and indeed in all aspects of adherence to classical jurisitic opinions on various subjects. The following is a translation of Al-Sanhuri's recipe for a viable and contemporary Islamic jurisprudence:

I think that the foundation upon which revival of Islamic Shari`a may be built has to proceed as follows:

(1) Distinguishing pure religious doctrinal belief (تمييز الاعتقاد الديني المحض) from Shari`a as a law organizing and regulating (لتنظيم) relations among human beings (Fiqh, or the science of detailed rules, الفقه أو علم الفروع or branches of knowledge).

(2) Within the domain of fiqh, the part dealing with law (separated from the part dealing with creed and acts of ritual worship) should be considered, and from it inferred general principles of Islamic Shari`a (القواعد العامة للشريعة الإسلامية), which principles -- by virtue of their generality -- can be validly applied in every time and place. Those principles are considered (أصولا للشريعة الإسلامية) foundations of Islamic Shari`a .

(3) Those foundations are immutable (by virtue of being principles and foundations), but the applications differ (first) across time, and (second) across nations and communities. Thus, there must be foundations of Islamic Shari`a that are unchanging, and details of Islamic Shari`a that change with time and place. It is thus meangingful to assert that the foundations are the same, but the details are decided in particular centuries and particular lands/countries. That is the meaning that should be given to the different Juristic Schools/Guilds (مذاهب) in Islamic Shari`a, such as the School of Imam Abu Hanifa. Thus, this school/madhhab must be understood as an application ot the foundations of Islamic Shari`a for the time and region in which it was applied, and that it is a manifestation of Islamic Shari`a only within those [spacio-temporal] constraints. Thus, it should [only] be said that the details that were accepted in this specific time and that specific region were such and such. This does not imply tha tthose details must be accepted in all times and all regions. Rather, every region in every time must infer their own detailed jurisprudence based on the specific circumstances thereof. This does not mean that we ignore or drop the detailed rulings developed with admirable rigor in other times and regions. Instead, the past must be connected to the present in a manner that does not prevent contemporary progress, while maintaining a connection to the past, to avoid negating the universal unity of Islamic Shari`a.

This is the principal foundation upon which I beliee a valid revival of Islamic Shari`a can be effected, and every one of hte three points listed above requires further careful investigation.

I add here that we should not limit revival of Islamic Jurisprudence as a law governing contemporary Muslims, but as one for non-Muslims as well. This does not mean forcing non-Muslims to accept principles that are not accepted by their beliefs and various religions -- which should be fully respected. Rather, it means that the movement to revive Islamic Shari`a must be built on foundational principles that do not contradict those other religious beliefs. This, in turn, requires accepting two principles:

1- There should be collaboration in this reform movement between Muslims and other oriental (شرقيين) non-Muslims, including legal scholars and social scientists.

2- A foundational principle -- that has not been sufficiently considered heretofore -- must be established clearly: That Islamic Shari`a is complementary to other legal systems (الشرائع الأخرى) wherever they are not in contradiction, and Islamic Shari`a abrogates the parts of other legal systems that lead to contradiction. Excluding those contradictory parts, those other legal systems must be deemed an established part of Islamic Shari`a. Based on this foundation, it is possible to accept many of the principles of other legal systems that are appropriate for contemporary application.

Of course, that was the foundational thought that drove Sanhuri later to codify civil laws for various Arab countries (starting with Egypt) based on the French civil code, and abrogating clauses that were in contradiction with the principles of Islamic Shari`a. Unfortunately, the poisonous takfiri thought of Mawdudi, Qutb, and others in the mid-Twentieth Century led to claims that the legal systems in Muslim countries are not Islamic, and demanding the establishment of an Islamic state that would apply Islamic Shari`a, etc. It is out of this latter development that the mockery of Islamic thought that is "Islamic Economics", and the usuristic activities in the name of Islam that is "Islamic banking" arose: driven by individuals who failed to understand the principles of Islamic Shari`a.

To return to the manifestation in the areas of "Islamic economics" and "Islamic finance", I plan to write my next blog entry on another book that I picked up last week in Cairo: Al-Riba wa al-Mu`amalat fi Al-Islam, (Riba and Transactions in Islam) by M. Rashid Rida, published by Dar ibn-Zaydun, Beirut, in collaboration with Dar Al-Kulliyat Al-Azhariyyah, Cairo, 1986. The book contains an interesting long prologue followed by a solicited fatwa by an unnamed Indian jurist, aiming primarily to conclude that interest stipulated as a condition at inception of loans (as opposed to being added on for further deferment of an existing debt) is not the riba that is mentioned in the Qur'an, but one based on a weak Hadith (every loan that brings a benefit to the lender is riba; كل قرض جر نفعا فهو ربا), or an invalid analogy to the riba that is forbidden in the Qur'an. Rashid Rida debates the different forms of riba, and distinguishes between the definitively forbidden riba in Qur'an (for which extremely strong condemnation was given), and other forms that were forbidden to prevent the worse type of riba, or via analogies that can change with time and place (which links it back to the Sanhuri methodology explained in this blog entry). On the main point of the fatwa on which he was asked, Rida simply said that the Indian jurist (who argued that stipulated interest in a loan is not the forbidden riba based on Qur'an and Hadith, and the ruling based on analogy can be changed or overruled based on benefit) is entitled to his analysis and conclusion (اجتهاد) on this matter wherein earlier jurists had differed (p.84). Moreover, Rida seemed to agree that at the very least, the simpler forms of riba cannot be equated to the kind considered a great sin (من الكبائر) and condemend so severely in the Qur'an.

But that's enough of a teaser on Rashid Rida's at the end of this long blog entry. In the next blog entry, I plan to offer summary/selected translations from the original fatwa and Rida's comments thereupon, and in the following blog entry I would like to discuss how current "Islamic banking" (based on murabaha, tawarruq, or what have you) is no protection from the worst type of riba -- since the person can always be charged compounded interest for further deferment through artificial commodity sales as is commonly done by those "Islamic banks".