Thursday, November 17, 2005

Mis-reading (and not reading) Islamic literature

Mohammad_Fadel said...

Must we blame past generations for our own failures? I think modern Muslim religiosity is far removed from classical and medieval teachings. How many people read (or even have the capability if they so desired) medieval works of theology and akhlaq? In short, we cannot blame the **content** of medieval theology for our modern condition.

On the other hand, the medieval tradition should be criticized for its elitism and its assumption that the masses of Muslims are incapable of reflective thought, and accordingly, should be instructed by appealing exclusively to their imaginiations (khayal) instead of to demonstration (burhan). With the spread of literacy, the dichotomy between the learned and the masses is no longer viable, and into the gap charged a superficial textualism, a/k/a "Salafism" or "Wahhabism" that dispensed with the entire critical tradition of the Islamic sciences, as well as poisoning Muslims against Sufism. Leaving aside this movement's simple-minded literalism in jurisprudence and theology, its critical flaw is its lack of any empathy with Muslims with differing views (much less non-Muslims), a feature that characterized the pre-Modern tradition as manifested itself in works of khilaf, not only in furu', but also in usul and dogma (see, e.g., the genre of al-Milal wa-l-nihal, in which Muslim authors discussed not only the beliefs of other Muslim sects, but also the religions of non-Muslims).

As I have said before, there is a lot modern Muslims can learn from the medieval tradition, if they get over their bias against it. We also, however, have to overcome the elitist bias in the medieval tradition that essentially viewed the Muslim masses as lacking in critical faculties and needing detailed guidance from the literate classes. Contemporary Muslim education needs to focus on "fundamentals", not only fundamental Islamic values (ma yu'lam min al-din bi-l-darura), since these are the keys to salvation, but also the fundamentals of Islamic knowledge, so that people are not terrorized by isolated hadiths or opinions of jurists.

Wa-allahu a'lam.

I agree with all that Mohammad said, but I'd like to elaborate on his characterization of the so-called "salafist" (the Salaf were actually quite sophisticated, and it is a shame that those who use that term aren't) "simple-minded literalism in jurisprudence and theology". The most freightening thing for me is that the Muslim masses do exhibit this desire to be told what to do and what to believe, despite their higher rates of literacy and education. In the last few weeks, I had the opportunity to listen to two khutbas by a father and son, who both derided those who wish to interpret Islamic teachings for our time. Both father and son used a classical scare-tactic: "Do you feel sufficiently confident to argue before Allah that you didn't do as He ordered you because times were different?", they asked, and the people nodded... Has it never occurred to those Muslims that understanding the will of God is a highly consuming activity (the true lifetime quest of people of faith)? Has it occurred to them that righteous acts of the past may be insufficient, or even unacceptable today? Has it occurred to them that one can turn the tables and ask how the pseudo-Salafist preachers feel so certain that they know what is asked of them.

The biggest sign of incoherence of the new-religious or pseudo-Salafist Muslim movement is not only the naive and literalist understanding of earlier literature, but the fact that their own heroes (Ibn Taymiyya and Ibn Qayyim) forbade taqlid, which is the acceptance of ealier opinions without subjecting them to rigorous analysis. Yet, both in theology and in jurisprudence, they continue to imitate those who forbade imitation. Moreover, they denounce literate forms of learning and discourse, saying that you have to acquire knowledge only from "people of knowledge" or "scholars". What is most shocking to me is that -- at least here in the Houston area -- those anti-literate pseudo-Salafists have attracted the greatest following among Muslim college students and recent college graduates. I have not yet figured out how those intelligent young people -- who are used to questioning the scientific approaches of Nobel laureates in the classroom -- can accept the anachronistic and anti-literate messages of their gurus...

Saturday, November 12, 2005

Hedging my home equity risk

I have just posted the following on IBFnet in response to David Loundy's remarks therein:

David Loundy had written:

Mahmoud El-Gamal issued a challenge-- anyone who can prove that his conventional mortgage is riba, and that they have a better product that is not riba, will earn his refinance. I believe (and he can correct me if I am wrong), that I have convinced him that according to his stated measures his mortgage may not be riba at this very moment, but that it could be ribawi in the future-- just at the moment he would most wish it not to be. He also told me, off of this list, what it would take for me to produce a product that he would deem sufficiently better to earn his refinance. I hope to be able to provide him with such a product within the next year.

My clarification was this:

The point is quite straight forward. I have roughly 50% of my financial net worth in home equity, and 50% in my retirement plan. I feel that the 50% in home equity is too risky, and insufficiently diversified. A good product to hedge this risk would be a housing price hedgelet such as the ones I could get on Unfortunately, my area in the Houston suburbs does not have an available hedgelet. I can try to synthesize my own through other house prices, inflation and interest rates, but I would be exposed to multiple
basis risks that make the job of putting the hedge in place too difficult.

If a financial intermediary solves this market failure for my home equity hedge, I would buy it. I'll be watching with interest to see how David tackles the problem. It would be nice if others in the US "Islamic" mortgage market were also working on similar products, rather than merely capitalizing on religious insecurities of Muslims and misinformation by those who claim -- falsely, as proven by their own "Islamic" products -- that Islam forbids all forms of interest.

Friday, November 11, 2005

Temptation and Shari`a arbitrage

Almost everyone who would read this blog must have seen the famous Newsweek article about "how the west came to dominate Islamic Finance". The article got me to think about the lucrative business of Shari`a arbitrage, temptation, and post hoc justification in which those Muslims who support the industry must be engaged. Man is so fragile that he easily yields to financial temptation, and justifies it by arguing that if he didn't do it, then someone else with even less qualifications and an even duller conscience would. Perhaps the best thing that can happen to one, then, is to be ostracized from industry events, as I have been. Then, again, that may be post hoc justification on my part ("the reason I am not making that kind of money is that I have a conscience").

During my reflections in Ramadan, I found one thing to be certain: the way most Muslims think about divine commands, revelation, rewards and punishment, etc., are very far removed from the views expressed by the Prophet (p) and held by his companions. Many centuries of Islam as an "organized religion" have corrupted the common-Muslim's mind with Greek/Catholic theology, Zaroastrian and Manichean view of the world as a struggle between good and evil (wherein the devil almost plays the dominant role in many Muslims' imaginations, rather than God), and so on. The result is a religious attitude built upon fear of sin, fear of hell, fear of torment of the grave, etc., rather than love of God, love of knowledge, etc.

This fear-based attitude has translated into the prohibition-driven approach to finance, whether classical or contemporary. Love of God and humanity is taken out of the equation. All that remains is love of wealth and fear of sin. Thus, we end up with stock screens, ostensibly making the selected universe of equities "Shari`a compliant" (it isn't). We also end up with formulaic avoidance of riba and gharar, without being able to illustrate why what is called "Islamic" or "Shari`a compliant" is in any way "good". In fact, we seem to have lost any sense of "good", since we only see God through the lense of fear, punishment, prohibitions, etc.

Where do we begin to fix our contemporary Muslim mind, which is buried under so many centuries of filth and ignorance?