In light of the YouTube trailer for ‘Innocence of Muslims’, the “clash of civilisations” theory has been dredged up once again. Both sides fail to appreciate the values of the other but there is a way of harmonising the relationship, and there is a role that Islamic finance can play. To argue this point, Rizwan Rahman uses the works of John Maynard Keynes to show that Islamic finance has the tools to shift opinions but it all depends on efficiency, profitability and maintaining the bonds of brotherhood.
For many in the west, Muslim reaction to the pitiful YouTube trailer, ‘The Innocence of Muslims’ was shocking. The wanton violence occurring in Egypt, Libya, Sudan and Pakistan conveyed primitive behaviour, unrestrained by rationality and fuelled by zealotry. Their opinion was that the video did not justify the casual destruction of mostly American institutions and the protests showed backwardness in thinking. On the other side, many Muslims felt that while the protests occasionally overstepped the boundaries of dignity and decency, it nevertheless reflected the esteem by which the global Muslim population held the Prophet (pbuh). It also conveyed their irritation to the West’s approbation of unrestrained freedom of speech. For the Muslims, it was shocking that the mockery of such a holy figure could be allowed in Western society, and served to show the moral degeneracy the West had succumbed to.
In consequence, as with ‘The Satanic Verses’ and the Danish cartoon incidents, the debate revolved around a clash of values. Unfortunately both sides failed to understand the other’s point of view. The film was a cause of this clash, but it was not the underlying basis for the tensions between the two opposing parties. The Muslims shake their heads in amazement that so little in the West is not substance for mockery and satire, and the Prophet (pbuh) is considered no different to King Henry VIII or David Cameron as a target for insult. While the film was roundly condemned and criticised for its obvious intent to provoke camps by west would have argued that the producers should not have the right to create the film. Freedom of speech is an embedded principle in any Western democracy. What is more, this same freedom resulted from throwing off the shackles of the Church’s power. To criticise and condemn the Church was a right that was fought for; no religious normative should gag this right, especially a foreign religion.
Those who were surprised by the Muslim reaction fail to understand the importance of the Prophet to the lives of the Muslim. He is the one that gives the Muslim their identity in this world and a connection to the hereafter. To mock him is to mock personally and dehumanize the individual Muslim. Their honour and self-respect is violated. It also denudes the sacredness of Islam, and sacredness remains a cornerstone of this religion. Sacredness elevates a symbol over and above the banality of life. Derision lowers it. If sacred symbols are consistently caricatured then religion loses its importance and value in the lives of men – the current state of Christianity is a case in point. Failing to understand the importance of sacred symbols in a Muslim’s life creates this clash of values. For Muslims across the globe, to take to the streets to protest is a reflection of the powerful spirit that is embedded in believers. All differences were set aside, and for a week, Muslims were unified in spirit.
Spirit, in this context, is a tribal-like commitment to an ideal, the ideal of Islam. The importance of the ideal gains strength in situations where there is overt antagonism to the ideal. The ideal can be of many forms and is by no means limited to religion. As people in Greece, Spain and Portugal protest against the government’s austerity measures, their reaction is similar to the reaction of Muslims across the world. But they are protesting for another ideal, the ideal of financial security. In many respects, money making (be it for profit or for survival) and religious identity can motivate the best and the worst in people. Both can fuel ambition or instigate violence; both can unite or cause separation; both have the power of creating unique economic and political systems.
The great economist John Maynard Keynes recognised the domineering influence that religion and money-making can have on the individual. In two articles, “A short view of Russia’ and ‘ The end of laissez faire’ published in his compendium ‘ Essays in Persuasion’ Keynes explores the objectives of man, the challenges for capitalism and how it can be improved. He begins the former essay opining that Europe had managed to separate religion and spirituality into two compartments of the soul. By this he means that they were mutually exclusive and religion had lost its power in influencing the broad material desires of man. However, the growth of communism reflected a convergence of religion and money-making in the soul. Keynes saw communism reflect religious traits. This worried Keynes. He feared
“For modern capitalism is absolutely irreligious, without internal union, without much public spirit, often, though not always, mere congeries of possessors and pursuers. Such a system has to be immense, not merely moderately, successful to survive.”
that the religious fervour of communism would overpower capitalism as the dominant material ideology. To counter the onslaught of communism, capitalism had to be greatly more efficient than communism to convince people of its worth. As a utilitarian, Keynes believed that an economic system that produces the greatest good for the greatest amount of people should intuitively be the system people follow. For Keynes, this was capitalism though it had its flaws. He writes:
“Capitalism, wisely managed, can probably be more efficient for attaining economic ends than any alternative system…Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life”
The reason why capitalism is considered the best system is because it aligns with the central tendency of human begins. Human beings are predisposed towards money-making. Keynes writes “…the moral problem of our age is concerned with the love of money, with the habitual appeal of the money motive in nine-tenths of the activities of life, with the universal striving after individual economic security as the prime objective of the endeavour, with the social approbation of money as the measure of constructive success,and with the social appeal to the hoarding instinct as the foundation of the necessary provision for the family and for the future”.
Thus, humans are predisposed to (a) ensuring economic security for themselves and their families; and (b) rising up the social hierarchy which is measured by how much money one has, or rather how much they spend, with goods procured acting as symbols of their wealth. If the masses are naturally inclined towards making money then capitalism is the system that will suit their very aims.
Keynes viewed the love of money as being a spiritual need, and capitalism serving it beneficially. In these essays, the pragmatist Keynes reveals a more esoteric disposition. He describes the essential characteristic of capitalism as the following:
“…dependence upon an intense appeal to the money-making and money-loving instinct of individuals as the main motive force of the economic machine.”
Therefore capitalism appealed to the basic tendency of the human being. Religion appealed to men’s souls but it was playing less of a role in their lives. It was failing to meet the material wants of human beings. He
writes:
“Most religions and most philosophers deprecate…a way of life mainly influenced by considerations of personal money profit. On the other hand, most men today reject ascetic notions and do not doubt the real advantages of wealth”
However, the rise of communism appeared to combine money-making and religion in the souls of man but in a quite nuanced way. As a religion, communism’s strength was that it “exalts the common man and makes him everything” with charismatic leaders fervently preaching to the masses of its potential to unite the people for the betterment of their welfare. Here the leaders of communism appeal to the money-making aspect of the soul arguing that a focus on individualistic money-making – which capitalism encourages- is bad. As with all new religions, the socialist bedrock appeals more to the multitudes and rallies against what Keynes calls ‘egotistic atomism of the irreligious’. This makes religion particularly potent, even if its economic ideas are flawed The strength of religion is its aggrandizement of the social bond; the weakness of capitalism is the failure to do so. In an intriguing passage, Keynes writes:
“For modern capitalism is absolutely irreligious, without internal union, without much public spirit, often, though not always, mere congeries of possessors and pursuers. Such a system has to be immensely, not merely moderately, successful to survive.”
Keynes, therefore, was looking for ways of improving the value of capitalism fearing people would otherwise be attracted to alternative ideologies. He appeared to view capitalism as the most efficient but devoid of public spirit. Religious movements, on the other hand, were characterised for their ability to bring together like-minded individuals for a common cause. To improve capitalism, Keynes argued for autonomous bodies and central institutions with consideration for the public good, to enter into the market where the individual or business fails to fulfil societal needs. To put it another way, he wished capitalistic societies to extract the public spirit imbued in religious movements.
Islamic finance: combining money making and religion
The global Muslim outcry following the release of the YouTube trailer revealed the community spirit of Muslims. There was no real leader but a belief in something out-worldly and transcendent. Objectively, if there was anything positive that could be taken from the Muslim reaction, it was this cohesion. The video united and galvanised a global community. To harness this community spirit for the improved welfare of people around the world, Keynes felt would be potent. The question was whether a system which purported to do so would also be efficient.
Keynes would have seen Islamic finance as uniting money-making and religion in the same compartment of the soul. Proponents of Islamic finance would agree. Religious sensibilities were appealed to in creating the foundations of the Islamic finance industry. From the Organisation of Islamic Conference, conceived as an organisation that would bring together Muslim countries, came the Islamic Development Bank. When Islamic finance institutions sprung up, it had a limited product portfolio with many products being more expensive than its conventional counterpart. Yet, customers demanded as the products were vetted by Shari’a-trained scholars so seen as being acceptable under the religion. Since the early days of Islamic finance, prices of products have decreased but issues relating to the authenticity of the products and accusations of replication of conventional products follow the industry. Nevertheless, its growing popularity is more to do with the religious overtones that comfort the Shari’a-sensitive consumer than with the value proposition it has to offer. This, of course, may change over time.
A fundamental criticism of Islamic finance, however, is that it is financially inefficient; that costs are higher for Islamic banks to create financial products that produce the same outcome as a conventional product. The industry is evolving and creating facilities and institutions to solve efficiency problems. Rome was not built in a day and neither can we expect the Islamic finance industry to be perfected over the course of 20 years. The industry itself recognises that its success thus far has relied on the ‘Islamic’ element but with growing criticism of its failure to truly differentiate itself, the industry is attempting to improve. If in the long run, the industry fails to be more efficient than the conventional financial industry, then relying on the religious sensibilities of Muslims will be misplaced. In this regard, Keynes was quite prescient.
Communism in the 1920s was a new and untested ideology but Keynes, possibly in disapproval of Marxist thought, regarded communism as being inefficient. Without the revolutionary zeal, it would have dissolved quickly. The zeal and the institutions that were created ensured that communism lasted 70 years but in the end capitalism, being a more efficient system, triumphed. Today, China is one of the few communist states remaining, but its continuing growth owes itself to its capitalistic approach. Capitalism has therefore been far more resilient than its detractors would care to give it credit for precisely because it appeals to a basic tendency of the human soul. To compete more effectively, Islamic finance has to be more efficient, even if it currently unites money-making and religion in the soul.
Conclusion
If nothing less, the Muslim protests conveyed a strong religious bond between the global Muslim population. Harnessed in the right way, this bond can be quite potent in improving the lives of many in society. Keynes understood public spirit as being a key ingredient to sustaining and making capitalism more efficient. However, he believed that capitalism was irreligious and individualistic and therefore individual money-making behaviour could not be relied upon to sustain its existence. There needed to be the kind of public spirit internal to the system that one sees in religious movements. In the absence of religious influence, public institutions have to be created to incentivise and encourage public spirit. Islamic finance is a religious-based economic system that unites two tendencies Keynes saw in the human soul: a penchant to make money and an adherence to a transcendent cause. A system which combines the two can be beneficial to society provided that it is also efficient i.e. it meets demand but at a low cost. The success of Islamic finance rests upon improving its efficiency as there is the potential that the religious spirit that created it and has thus far sustained it will gradually wither away. By doing so, a potential ancillary effect could be that the angry Muslim imagery portrayed in the media will be replaced by the conceptualisation of Islam that there are principles and techniques that can lead to a better society.
