False Economy - Alan Beattie [70]
There are other commercial restrictions in the Koran, but most refer to excesses of speculation and what might be regarded as profiteering rather than to business itself. Apart from the obvious proscriptions on trading in food and drink banned from consumption by Muslims, in particular wine and pork, the remaining rules on commerce read more like a guidebook on business ethics or a regulatory manual for the futures market than an injunction to practice monastic poverty. Speculation in essential goods like water is forbidden, for example. Also disallowed is entering into a contract for future delivery without knowing specific times and prices. But there is nothing in principle prohibiting such "forward" or "futures" markets, the use of which reduces risk for both producers and buyers and has become an essential part of modern trade.
The general tone of the Koran and the hadith—the associated teachings and deeds of the Prophet Mohammed—is one of conducting business fairly and using the proceeds to support Islam, not of hedging commercial life with prohibitions and treating it with distrust. One tradition reports Mohammed saying: "If thou profit by doing what is permitted, thy deed is a jihad [holy act], and if thou usest it for thy family and kindred it will be a sadaqa [charitable deed], and truly a dirham lawfully gained from trade is worth more than ten dirhams gained in any other way" This rather recalls the dictum of John Wesley, the founder of Methodist Christianity (and a favorite of that apostle of low-church capitalism, Margaret Thatcher): "Gain all you can; save all you can; give all you can." Mohammed is also cited thus: "The merchant who is sincere and trustworthy will [on Judgment Day] be among the prophets, the just and the martyrs." The Prophet Mohammed was, after all, a trader before he became a preacher. And Islam is the only major religion to be founded by a trader.
An Arabic manual of commerce attributed to the eleventh century describes several types of perfectly legal merchants, including one who buys goods when they are cheap and sells them when prices have gone up. Another type arbitrages between two markets by knowing the difference in prices and customs duties between them.
The Koran is open to judicial interpretation in many different ways, not least because there were several schools within Islam, the main two being Sunni and Shia. But in the widely followed Hanafite tradition of Sunni law—which later provided the legal basis for the Islamic Ottoman empire—jurists provided many methods for getting around the theoretical prohibition on usury. Nothing induces theological malleability like a bit of self-interest, and according to one estimate, three-quarters of Islamic religious scholars in the ninth and tenth centuries were themselves active in business.
One familiar ruse was a sale-and-buy-back scheme: I sell my book to you for 120 dirhams, the money to be paid in a year's time. I buy it back for 100 immediately. I keep my book: you have, in effect, borrowed 100 dirhams from me for a year at 20 percent interest. This trick was called a mohatra contract, and was so common that it became a standard commercial term used for centuries. Issuing a decree in 1679, the Holy Office of the Vatican condemned the idea that "contractus mohatra licitus est," decreeing that such contracts violated the biblical prohibitions on usury. It doesn't say much for the thesis that Islam was an intrinsically anticommercial religion that its standard lending