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?


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