Published by EH.NET (August 2004)

Timur Kuran, Islam and Mammon: The Economic Predicaments of Islamism. Princeton, NJ: Princeton University Press, 2004. xviii + 194 pp. $35 (cloth). ISBN: 0-691-11510-9.

Reviewed for EH.NET by Frederic L. Pryor, Economics Department, Swarthmore College.

Timur Kuran’s book of six essays explores various characteristics of Islamic economics, some of which have received considerable attention while others have been practically untouched. His writing is lively, his arguments are cogent, and the scholarship is wide ranging.

The first chapter on “The Economic Impact of Islamism” is the best single survey of Islamic economics that I have read. He focuses particular attention on Islamic doctrines on risk bearing, interest, and banking; redistribution and organized charity (zakat); and Islamic morality, exploring not just their doctrinal and historical origins, but how they are currently practiced. He takes considerable pains to point out the vagueness of the original doctrines and the major ways in which present practices diverge from their original spirit, for instance, how Islamic banks are able to lend at interest, even though the actual interest payments are masked.

His next two chapters focus on how the various Islamic practices are placed within the context of the actual economies in which they are situated and the implication of these doctrines for economic policies. In particular he explores how these policy prescriptions are often counterproductive, and how one should deal with them in the course of political debate. In many respects these two essays are repetitive of the first essay.

The fourth chapter provides an extremely interesting historical analysis of the genesis of Islamic economics and the politics of Muslim identity. I found it surprising that serious attempts to formulate an Islamic economics did not really begin until the 1930s. He argues that a strong impetus for this intellectual exercise was to help bind together the proclaimed community binding all Muslims together (umma), and in their exposition of Islamic economics gave rise to the myth of Islam’s “Golden Age.”

The following chapter is an exploration of economic justice in contemporary Islamic thought. These doctrines are vague and seemingly at odds with each other, and their analysis by those unfamiliar with modern economic discourse leads often to useless and/or naive assertions. As a result, Kuran has no difficulty in showing how the basic principles of equality and fairness have only the vaguest relationship to the injunctions by which these principles are to be implemented and how this literature is littered with contradictions. Of course, the same destructive exercise can be carried out with the doctrines of other contemporary religions as well, such as fundamentalist Christians.

The final chapter examines the relation between Islam and economic under-development. He starts with a statistical analysis of the relatively low per capita GDP in most of the predominantly Islamic nations except those exporting oil, and contrasts this with the situation in the several centuries following the death of Muhammed when the Middle East nations had booming economies and appeared more economically and technologically advanced than the West. The key question, of course, is what happened in the ninth and eleventh century that caused this change. After exploring the analyses of others, he argues that it was not Islam per se which brought about this unfortunate change. Rather, the cause was social/political. In these crucial centuries freedom of innovation ended as authorities declared that independent judgment was no longer permissible (the “gates of ijtihad” were closed), that all answers were available, and that one needed merely to follow and obey. But this was not enough: the crucial change occurred in the subsequent social process whereby this intellectual shift was reinforced by a communalism which discouraged critical public discourse on these alleged final answers; it simply became socially unacceptable to express new ideas and argue for new approaches.

Readers will appreciate his attempt to present the various sides of the doctrinal issues and then to contrast them with Islamic reality. I found little in his analysis to quarrel with and his discussion covers most of the important issues in Islamic economics. Nevertheless, two issues deserve discussion, because both deal with sins of omission, rather than commission.

In these essays Kuran does not focus on the original sources of Islam, but rather on their use by Islamic economists. I believe this to be a wise strategy since, in my reading of the Qur’an I found only few passages that deal with economic matters; and these, it must be added, are extremely vague. Of course, Islamic economists can also draw upon the recorded sayings of Muhammed, which are summarized in the 19 volume Encyclopedia of Hadith. Unfortunately for most of us, this is in Arabic and I have found no translations of the full encyclopedia. One can draw, of course, upon some translated partial summaries (I have found Ali, 1988, particularly useful since it presents both the Qur’anic verses as well as many of the relevant Hadith, all arranged by topic). Nevertheless, for someone writing on Islamic economics this situation leads to certain difficulties. For instance, from his study of the vast literature of Islamic economics Kuran emphasizes that Islamic economists believe that industrialists must charge “just” prices. But I have found evidence from the Hadith (discussed in detail in Pryor, 1985: 216) that Muhammed believed it to be Allah who raises and lowers prices, which suggests that humans cannot by themselves discover a just price. Given the uncertain authenticity of many Hadith and their many ambiguities, I believe Kuran was wise to focus primarily on how these original sources are used by those proclaiming themselves Islamic economists, rather than engage in exegesis..

My only real disappointment in the book was his discussion of economic and technological underdevelopment of Islamic nations. While I found his explanation of a change in the mentality in Middle Eastern nations and the inhibiting role of public opinion a millennium ago to be fascinating and useful, I regret that he did not include as his seventh chapter his own essay (2003), in which he argues that the Middle East fell behind the West because of the influence of three interlocking institutions which made difficult the accumulation of wealth for productive purposes in large enterprises. These were the Islamic law of inheritance, which scattered family wealth among a number of heirs; the absence in Islamic law of the concept of a corporation, which hindered investment by many people pooling their wealth; and the existence of the waqf (a charitable foundation), which has locked vast resources into unproductive organizations and activities.

Although Kuran’s book is rigorously argued and is of great value to specialists, it is also quite accessible to undergraduates and provides a useful and understandable introduction to both the doctrines of Islamic economics and how they are related to economic behavior in predominantly Islamic nations.


Ali, Maulana Muhammad. 1988. A Manual of Hadith. New York: Olive Branch Press.

Kuran, Timur. 2003. “The Islamic Commercial Crisis: Institutional Roots of Economic Underdevelopment in the Middle East.” Journal of Economic History 63, no. 2 (June): 414-46.

Pryor, Frederic L. 1985. “The Islamic Economic System: A Review Article.” Journal of Comparative Economics 9, no. 2 (June): 197 224.

Thesaurus Islamicus Foundation. 2000. Encyclopedia of Hadith. Vaduz, Liechtenstein.

Frederic L. Pryor is the author of a forthcoming book entitled Economic Systems of Foraging, Agricultural, and Industrial Societies (New York: Cambridge University Press, 2005).