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<ul><li><p>1 </p><p>ABSENCE OF MONASTICISM AS ONE OF THE CAUSES OF THE ECONOMIC UNDERDEVELOPMENT </p><p>OF MOSLEM COUNTRIES </p><p>Dr. Resit Ergener Bogazici University </p><p>Abstract: The historical economic underdevelopment of Islamic countries relative to the west has been explained by the absence of rationalism (Weber 1963), by the negative impact of Western imperialism (Rodinson 1974), by the development of Muslim law, particularly with regard to property rights, (Facchini, 2007), Islamic law of inheritance which had a negative impact on capital accumulation, absence of the concept of corporation which blocked the development organizations and of civil society , locking up of vast resources into waqfs, Islamic form of trusts, which were to become dysfunctional over time (Kuran 2004) and the disposition of institutions of freedom to the West by Christianity and not to the Middle east by Islam (Facchini, 2009). Other authors have argued that there was nothing irrational about Islamic mentality (Rodinson, 1974) and have pointed out the sophistication of medieval Moslem financial and commercial practices. (Udovitch, 1962) All of these arguments have surprisingly overlooked the absence of one important institution in Islam: Monasticism. What Moslem countries failed to achieve, which the Christian West did, was self transforming growth, based on the mobilization of domestic resources. As Randall Collins has argued, monasticism was the key institution which made self perpetuating growth possible in Europe (and also in Japan.) Monasticism also made a significant contribution to the development of corporate law and property rights, and ultimately of capitalism as well as to the advancement of learning and to technological innovation. The absence of monasticism in Islam, which stems from the lack of emphasis on hard work, abstinence and celibacy as paths to salvation, should be added to the list of causes explaining the historical economic underdevelopment of Moslem societies. </p><p>Keywords: Islam, underdevelopment, monasticism </p><p>Why the Moslem Middle East has remained underdeveloped relative to the West has </p><p>been the subject of much scholarly debate. Historically, Muslim countries have not always been </p><p>poorer than those in the West. Early Muslim states were prosperous. A millennium ago, </p><p>around roughly the tenth century, the Middle East was an economically advanced region of </p><p>the world, as measured by standard of living, technology, agricultural productivity, literacy or </p><p>institutional creativity. Only China might have been even more developed.(Kuran 2004, p. </p><p>71) The economic prosperity was fuelled by the commercial and financial regulations </p><p>introduced under Muslim Law (Udovitch 1970) Such regulations would have a favorable </p><p>impact on the economic evolution of Western Europe, where they were adopted (Udovitch </p><p>1962). Partly based on observations about the economic success of early Muslim societies, </p></li><li><p>2 </p><p>Islamic economics proposes that the economic prescriptions of Islam - its financial </p><p>regulations, contracting guidelines, distributional instruments, and behavioral norms - provide </p><p>an ideal framework for economic development. For proof, one needs look only at the </p><p>impressive economic record of the first Islamic society in seventh-century Arabia. (Kuran </p><p>1997, p. 48) </p><p>However, the prosperity of an economy does not mean that the economy will be on the </p><p>path to future growth. As Kuran (1997, p. 48) points out there is no inherent conflict between </p><p>the economic successes of early Islamic civilization and the proposition that Islam itself </p><p>discourages economic development. For one thing, the early successes could have occurred </p><p>in spite of the religion's growth-inhibiting features; the primary source of development might </p><p>have been, for example, the mixing of cultures brought about by conquests, conversions, and </p><p>political reorganization. For another, even if Islam promoted growth for a while, it obviously </p><p>failed to ensure quick adaptations to later opportunities. </p><p>Subsequent performance of Muslim economies shows that early prosperity had failed </p><p>to put these economies on the path for sustained growth. Sustained growth in a nation's per </p><p>capita income can only occur if there is a rise in output per unit of input (Krugman 1994, p. </p><p>67) and if there is a generally accepted practice of deferred gratification, the willingness </p><p>to sacrifice current satisfaction for future gain. (Krugman 1994, p. 78) In other words, </p><p>technological change and savings are the essential preconditions for self transforming </p><p>economic growth. The fundamental reason why the economic performance of Muslim and </p><p>Western (and Japanese) economies fared along such different paths, is because mechanisms </p><p>evolved in Western and Japanese economies, which raised the level of savings and enabled </p><p>technological change in those economies, whereas similar mechanisms failed to evolve in </p><p>Muslim economies. </p><p>The difference between the economic performance of Western and Muslim economies </p><p>became apparent with the industrial revolution which accompanied by the rise of capitalism. </p><p>Savings rose and technological change accelerated in the West with the rise of capitalism. </p><p>Several authors have therefore associated the historical underdevelopment of Islam with the </p><p>failure for capitalism to grow in Muslim countries. </p></li><li><p>3 </p><p>Rodinson (1966/1974) blamed imperialism for the failure of capitalism and </p><p>subsequent economic growth to take place in Muslim countries - as he believed there was </p><p>nothing in Islam that would inhibit such developments. </p><p>Rodinson explored the answers to the questions as to 1) whether the failure of </p><p>capitalism to develop indigenously in Muslim countries could be explained by Muslim </p><p>precepts and 2) whether Islam was opposed to capitalist development. His answers to both </p><p>questions were negative. </p><p>According to Robinson, there is no passage in the Koran which opposes private </p><p>property or inequality. There are no rules against ownership of the means of production. </p><p>Wage labor is acceptable. Koran favors commerce. Sunnah also upholds the right to private </p><p>ownership, the search for profit, trade, and production for the market to the same extent as the </p><p>Koran. Ban on interest and on speculation (sales which involve uncertainty, such as sale by </p><p>auction and contracts based on risk or chance) would inhibit commercial activity. But, such </p><p>restrictions were circumvented by Muslim legalists through methods known as hiyal, </p><p>meaning ruses. Circumventing these restrictions would have costs which would put breaks on </p><p>economic development, but such costs would not have totally blocked economic </p><p>development. (Jones 1988) </p><p>Kuran blames mainly the Moslem legal system for the economic underdevelopment of </p><p>Islamic Middle East. Islam's law of partnerships limited enterprise continuity by requiring </p><p>reorganization at every death or retirement. Its inheritance system (which mandates the division of </p><p>the estate amongst spouses and offspring) compounded the problem by raising the cost of </p><p>reorganization. And the lack of an Islamic concept of corporation blocked alternative paths to </p><p>economic modernization. (Kuran 2003, p. 442) The waqf, Islam's distinct form of trust, </p><p>which locked vast resources into organizations likely to become dysfunctional over time. </p><p>(Kuran 2004, p. 71) </p><p>Facchini blames the absence of individual rights and freedoms and of secure private </p><p>property rights for the lack of economic development in Muslim countries. (Facchini, 2009) </p><p>The main obstacle to the emergence of private property has been the status of land, </p><p>originating out of the domination of the first caliphates. This status protects public </p><p>ownership and even extends it to cover water rights. This encloses the economy in a </p></li><li><p>4 </p><p>philosophy of enrichment where the opportunities for profit are artificially created through </p><p>the rents seized by the ruling class. (Facchini, 2007) </p><p>It is not possible to prove that Moslem countries would have developed economically </p><p>if there was no imperialism. (Jomo, 1977) Legal practices pointed out by Kuran and Facchini </p><p>had their role to play in the economic underdevelopment of Islam. But these practices by </p><p>themselves are not sufficient to explain why savings and technological change, which are the </p><p>preconditions for economic growth, were not realized under Islam. Given the important role </p><p>that religion has always played in the functioning of Muslim societies, it quite possible that that </p><p>religion did indeed play a role in the economic underdevelopment of Muslim Middle East. </p><p>A religious institution, monasticism played an important role in the emergence of </p><p>capitalism and of subsequent self sustained growth in the West and in Buddhist Japan, and </p><p>the absence of this institution in Islam can be one of the causes for the failure of capitalism </p><p>and of self sustained growth to emerge in Muslim countries. </p><p>Monasticism would facilitate savings and technological change in the West and in </p><p>Buddhist Japan. Monasticism would also contribute to relieve the legal bottlenecks which </p><p>inhibited economic growth in Muslim countries, by defending their corporate rights against </p><p>central authorities thereby contributing to the evolution of corporation and of practices </p><p>essential for the evolution of capitalism, such as book keeping. </p><p>Capitalist markets evolve out of agrarian coercive markets which are dominated by </p><p>military aristocrats. (Collins, 1990; 1997) In such societies property rights were absent as </p><p>aristocrats could confiscate and redistribute property. Peasant labor was tied up in various </p><p>tenure arrangements. Aristocrats did not manage their wealth in a prudent manner since status </p><p>was to be gained through consumption. Merchants who are likely to posses economic rationale </p><p>(motivation for hard work and prudence) would be held in contempt and under control and </p><p>would therefore be in no position to spearhead the evolution to a capitalist market economy. </p><p>Collins argues that in the Christian West and in Buddhist Japan, the impetus to change to the </p><p>capitalist market economy would come from the religious sector. </p><p>Why would the religious sector spearhead these changes? Partly because universal </p><p>religions would break down the barriers between social groups and enforce ethical rules which </p><p>applied to all. But more importantly, there were teachings in Christianity and Buddhist religions </p></li><li><p>5 </p><p>which regarded hard work and restraining ones consumption as practices which could be </p><p>employed in attaining salvation. </p><p>It was Weber who pointed out the importance of work ethic and prudence in the </p><p>evolution of capitalism. Weber identified these attitudes with the Protestant ethic. But </p><p>Catholic (as well as Buddhist) monks had Protestant ethic without Protestantism. (Collins </p><p>1986, p. 54) Both in Christianity and in Buddhism, it was the monks, before Protestant </p><p>puritans, who regarded work and abstention (limiting ones consumption) as virtuous. St. </p><p>Benedict had written in his rule in the sixth century: Idleness is the enemy of the soul. </p><p>Therefore the brothers should have specified periods for manual labor as well as prayerful </p><p>reading... When they live by the labor of their hands as our fathers and the apostles did then </p><p>they are real bonds. (Stark 2006, p. 62) As Stark points out, Capitalism was invented not in a </p><p>Venetian counting house or in a Protestant bank in Holland, but it was initiated in the ninth </p><p>century, by Catholic monks who, had put having put aside personal worldly things, but were </p><p>seeking to ensure the economic security of their monastic estates. (Stark 2006, p. 56) </p><p>Let us summarize Randall Collins argument as to how monasticism leads to self </p><p>transforming growth under capitalism: </p><p>Self-transforming economic growth takes place under capitalism because under </p><p>capitalism market niches, new products, and techniques proliferate. (Collins 1997) Giving </p><p>Webers model (in his words) a Schumpeterian twist, Collins argues that three </p><p>organizational conditions are necessary for self-sustaining capitalist growth to exist: 1) </p><p>Markets must exist for factors of production (land, labor, and capital) as well as for </p><p>commodities, 2) All factors of production must be controlled by entrepreneurs, 3) Both </p><p>entrepreneurs and labor should be motivated to work hard and should be willing to give up </p><p>current consumption for the sake of future gains. These organizational conditions were met as </p><p>monasteries, temples, and churches at first formed their own market and property relations, </p><p>accumulated wealth, and pioneered new economic structures. These made up a substantial </p><p>sector in medieval economies where religious organization at times held as much as one third </p><p>of the cultivated land, and perhaps even more of the portable wealth. Within its own sector, </p><p>religious organization broke through the obstacles to economic growth within traditional </p><p>societies. In Schumpeter's terms, monasteries were the first entrepreneurs. (Collins 1997, p. </p><p>848) In other words, religion contributed to capitalism not by inspiring lay peoples beliefs </p></li><li><p>6 </p><p>and motivations (as Protestant ethic did) but through the material expansion of monasteries. </p><p>Weber and others noted the irony that ascetic Protestants, prohibited by religious </p><p>scruples from freely spending the rewards of their disciplined labor, ended up growing rich. </p><p>The mechanism is even more evident in the case of the monasteries, where the fruits of </p><p>religious discipline became material capital for investment: Because celibate monks could not </p><p>siphon this off to family consumption, it was the monastic corporation that grew rich. </p><p>(Collins 1997, p. 848) </p><p>Throughout the medieval era the Catholic Church was the biggest landowner in </p><p>Europe and its wealth surpassed the wealth of all nobility in Europe. (Stark 2006, p.58) </p><p>Monastic corporations also spearheaded innovations in production techniques which raised </p><p>productivity. Immense increases in productivity were realized because of the switch to horses </p><p>from cows when ploughing, the heavy mouldboard plough, three field system. Cistercians </p><p>incorporated previously untilled tracts and cleared forests and drained submerged areas (Stark </p><p>2006, p.59) As a result, monasteries ceased to be longer subsistence economies and they </p><p>specialized in the production of particular commodities, which they sold at a profit. (Stark </p><p>2006, p. 58) </p><p>The spill over to a secular economy takes place first through the spread of </p><p>proselytizing movements that began in the monastic orders. In Europe, China, and Japan </p><p>alike, there were periods during which burgeoning movements founded new monasteries, </p><p>typically by reforming orders which tightened monastic discipline (Cistercians in Europe, </p><p>Ch'an in China, Zen in Japan). These movements had the effects of geographically expanding </p><p>the monastic economy and amassing wealth. Religious organizational growth was </p><p>accompanied or followed by movements led by monastic preachers proselytizing among the </p><p>common people...</p></li></ul>