False Economy - Alan Beattie [74]
These rules prevented Islamic partnerships building up expertise and economies of scale over time. No one was likely to commit money and time to a business that could collapse at any moment because of the death of one of its many owners. As a result, enterprises tended to be small and short-lived, comprising usually just a handful of partners and covering only one trade mission at a time. As economies became more complex and the reach of trading areas expanded, this put Muslims at a disadvantage to European merchants. As we will see in later chapters, European countries started creating joint-stock companies where many partners could have transferable shares, from which evolved the idea of the business corporation, a body recognized as being legally separate from its owners. No equivalent existed in Islamic law.
Many parts of medieval Christian Europe also had restrictive rules of inheritance that required business enterprises to be split between multiple inheritors. But, crucially, these were modified as time went on, with relatively little resistance from the religious authorities. By the seventeenth century, primogeniture—inheritance preference given to the oldest son—was the dominant practice in Britain and the Low Countries, which were then leading the continent in commercial sophistication. Primogeniture allowed business enterprises to grow with each generation and be passed on intact.
The crucial difference between Islamic societies in the Middle East and Christian societies in Europe was not in the theology of the respective religions, nor did it depend on where the commercial law based on those religions had started. The difference was that European merchants were powerful enough to have inconvenient laws disposed of, even when that required changing the religious justification of those laws. Their counterparts in Islamic countries, for reasons largely unrelated to the nature of the religion itself, were not.
For a long while, the underlying weakness of this ossification of Islamic regimes was masked by a highly successful series of campaigns of imperial conquest. Like ancient Rome, the Islamic empires extended themselves enormously through excellent bureaucratic organization and military prowess.
The Ottoman empire reached the height of its power under Suleiman (known in Europe as Suleiman the Magnificent) in the sixteenth century, when it extended control across North Africa and became the most powerful political entity in the world. But it failed to extend itself farther into Europe, having been turned back at the gates of Vienna in 1529. The empire did not cut itself off from external influences with non-Muslims. But it did institute religious Islamic sharia law as the legal code for all Muslims, and the Islamic educational system became narrower and more doctrinaire.
It also remained a static society. Like the Roman empire before it, the Ottoman empire discovered there was a natural limit to the benefits to be gained merely from organizing the same technologies in a better way. First the lack of innovation began to constrain expansion, and then it weakened the regime against pressure from outside. Having failed to seize Vienna on the second attempt, in 1683, the Ottoman empire softened. Military discipline weakened, and the battle over the tax revenue from the empire bred corruption and infighting at its center, as it usually tends to do. Rebels tried and sometimes succeeded in setting up breakaway regimes on the peripheries of the empire.
It became increasingly clear that Islamic empires could not compete with economic and military competition from Europe. Napoleons Egyptian expedition at the end of