The rise of Islamic capitalism

If you are a proud Muslim, there are chances that you might find the title above a bit disturbing. Because for many people in the world – especially in my part of the world – the word “capitalism” means nothing other than greed, exploitation or injustice.

However, if capitalism merely means an economic system of private property, free enterprise and free markets, then there would be nothing “un-Islamic” about it, as the economic history of the Islamic civilization proves. Being founded by a merchant (Prophet Muhammad), and directed by a scripture (the Quran) whose longest verse is about how to write a proper loan contract, Islam, at its core, is a capitalist religion in the Weberian sense.

But why then, you might ask, is the Islamic Middle East a region not of entrepreneurs and wealth creation, but domineering states and stagnation? And why, in the past century, has the region oscillated between “Arab socialism” and “Islamic socialism?” 

An important book which gives a compelling answer to these questions is “The Rise of Islamic Capitalism,” by Vali Nasr, an Iranian-born professor of international relations at Tufts University. Nasr, I believe, gives the right answer to what really went wrong in the modern Muslim world and also pinpoints the right dynamics for positive change.

One of the book’s most important insights is the way it deals with the common Western question, “Why does the Muslim world not move forward... Why does it not embrace modernity?” The answer is not “blind adherence to a rigid faith,” Nasr explains, but that the extremely problematic version of modernity Muslims have faced so far – an authoritarian, state-imposed program of aggressive secularism and corporatism.

As a Turk, it is quite meaningful to me that Nasr sees this model as initiated and exemplified by none other than Turkey’s Kemalist regime. He grants that Kemalism “began with the best of intentions,” by envisioning a state that would guide a “backward” society to an enlightened future. But he shows how Kemalism’s aggressive modernity has been counter-productive, first by provoking a fundamentalist response and then by suffocating the dynamics of progress. 

Quite notably, Nasr sees Kemalism not only as a Turkish model, but also a regional one, as Atatürk’s “revolution” was copied, with some adjustments, by other modernist dictators in the Middle East, such as Reza Shah in Iran, Gamal Abdel Nasser in Egypt, or General Ayub Khan in Pakistan. All these strong men believed in “a formidable leviathan, backed by a modern army, pressing rapid reforms.” 

However, this state-imposed and often harshly secularist modernity soon created the enemy that it feared most: Islamic fundamentalism. This ideology was not a mere loyalty to tradition, Nasr explains, but the very mirror image of the modernity that Kemalism has introduced. Fundamentalists, in other words, simply wanted to capture the modern leviathan, and use it to impose their own utopia. They wanted, as Nasr puts it, to “beat Kemalism at Kemalism’s own game.”

But fundamentalism, which had its peak in the Iranian Revolution, also failed to bless the Middle East. For the game that it aspired to win – authoritarianism – was destined to fail.

That’s why Nasr foresees a Middle East that is both post-Kemalist and post-fundamentalist and defined by democracy and pluralism. And the surest path that goes there, he explains, is free market capitalism, which, by raising a middle class that is independent from the state, creates the medium in which more liberal attitudes will emerge.

And all this, I believe, not only shows that Turkey’s Kemalists are right to complain about the deconstruction of their beloved regime by “global capitalism.” It also shows that this is good news.