False Economy - Alan Beattie [75]
Islamic nations reacted in the same way as they had to the Mongol invasions—maintaining a strong centralized state to defend themselves against economic and political domination from abroad. Many have continued to respond in a similar way ever since. In modern times this has manifested itself as a suspicion of foreign capital—and foreign capitalism. The desire to retain power in the hands of a central authority has strengthened the hand of the state and those who control it.
In this context, Islam has sometimes provided a useful cover to governments wanting to maintain control over their economies and their people. It wraps the familiar economic nationalism of many developing nations in a cloak of religion. Frequently, as in modern-day Iran, the bureaucracy of the state itself, with its ownership and control of industry, has become an interest group struggling against the rise of alternative sources of wealth and power, such as a strong private sector.
But such a role is not inevitable from the nature of Islam. The same defensiveness, interestingly, is also evident among those countries with Muslim populations that have deliberately distanced themselves from their Islamic identity. The secular modernizers of twentieth-century Turkey and Egypt, Mustafa Kemal Atatiirk and Gamal Abdel Nasser, also adopted a defiant economic statism as part of their defining political ideology. Nor is the present Iranian government's control over its economy unique to Islamic theocracies: there is a similar stifling stranglehold in secular Arab republics like Syria and (prewar) Iraq.
And in otherwise fairly similar countries, the dominance of Islam (rather than another religion) rarely seems to predict why one government works and another does not. Malaysia, for example, despite retaining a strong Muslim identity, has been one of the most successful of the second wave of East Asian countries. In recent decades it has embraced industrialization and used the state to encourage private enterprise and attract foreign direct investment. Indeed, it has been more successful than, say, the Christian Philippines or predominantly Buddhist Thailand.
So the effect of religion on economic development probably owes more to a religion's political role than its theology. Perhaps, rather than its values becoming embedded in the psychology of its followers, religion influences growth mainly through its exploitation by the institutions of power. This should explain why Spain and Portugal underperformed in the first few decades after the Second World War. It wasn't that they were Catholic; it was that until the mid-1970s they were ruled by dictators who helped to keep them relatively poor and backward, and who aligned themselves closely with the Catholic Church to enhance further their own authority.
For an elegant exposition of how this might happen, we can turn to—well, intriguingly enough, we can turn to Max Weber, whose lesser-known works are, for my money, more interesting and convincing than his Protestant-ethic blockbuster. Weber also compared Indian, Chinese, and Islamic societies, all of which made it some way down the path of economic development and then seemed to stop. Weber's writings here relied less on amateur psychology and the power of internalized ideas and more on the operation of material interests. He awarded an important role to "carriers"—particular groups in society who could find an affinity between certain important religious doctrines and their own interests. In China, Weber said, such doctrines were propagated by bureaucrats; in India they were transmitted by scholars and priests of the high Brahmin caste. And neither group had an interest in disruptive