Is Islam Bad for Business?

In this week’s New Yorker, John Cassidy asks whether Islam may be to blame for slow economic growth in the Arab world. It’s a commonly held theory, popularized by academics like David Landes and Bernard Lewis. “No one can understand the economic performance of the Muslim nations without attending to the experience of Islam as faith and culture,” wrote?Landes, the Harvard economic historian. Ultimately, though, Cassidy disagrees: “[D]ay-to-day worship of the sort practiced by hundreds of millions of Muslims is no more what is holding back the Middle East than Hinduism was what held back India or Roman Catholicism was what held back Ireland. Despite the arguments of new Weberians, people have always found a way to serve their gods and Mammon, too.” [%comments]

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  1. Harrison Brookie says:

    It’s more likely that Islam is just not good for business. If the Protestant work ethic is so great, maybe by comparison Islam is bad.

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  2. Bheesham Kumar says:

    I don’t think it is the religion itself, it maybe a question of how much time people spend to practice their religion (any) and for business.
    Further, does only time spent for business play a key role in economic growth??

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  3. Ian Kemmish says:

    Indonesia had a monopoly on parts of the global spice trade while Europeans were still trying to figure out how to charge interest without endangering their immortal souls. Sounds like pretty good business to me.

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  4. DaveyNC says:

    How does a business owner prepare for what seems to be the inevitable riot?

    I believe there are injunctions in Islam against either charging interest or paying interest, or both. That would hamstring any one trying to build a business beyond a mom and pop sized business.

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  5. Rosemary C. Buja says:

    This observation has perhaps more to do with culture than religion, but if half a society’s workforce is forbidden to work, won’t prosperity take twice as long to arrive?

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  6. Jacob AG says:

    It’s worth remembering that economics is about utility, not money. If prayer derives utility, then business does well by prayer, no matter its effect on GDP.

    It’s also worth remembering the Islamic prohibition on charging or receiving interest. Historically it has been a major drag on economies in Muslim-majority countries, but in the last half-century or so there has been a sea-change in Islamic economics. Where an Islamic mortgage was an oxymoron just 40 years ago, for example, today it’s quite common.

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  7. dude says:

    Apples and oranges.

    If there are rules for commerce in protestant Christianity, they should be compared to the rules for commerce in Islam. You can’t compare people’s work ethic and say it has anything to do with their belief system.

    Compare the religious law only OR compare cultural attitudes on work ethic but don’t combine them and attribute it to a single religion. Muslims in Malaysia are not the same as those in Yemen and the work ethic culturally is not the same.

    The religious rules don’t change but the culture is so vastly different that it is truly apples and grapes. It’s ridiculous to make that comparison. It’s like saying the work ethic of Christians in America is the same as those in Laos.

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  8. MangoPunch says:

    Some disjointed thoughts:

    Turkey (or India) seems like an obvious counterpoint to “Islam is bad for economic growth”.

    I would also gander that a study of Muslims in Western economies would probably show more wealth creation versus non-islamic peers.

    Since over-regulation / control is generally a main culprit in slow or stagnant growth in developing nations, it’s concievable that Sharia law could suppress growth. But suppresive regimes have many faces and bad policy stems from the government, not the religion of the governed.

    Luckily we have a real life test case: I’ve seen estimates that up to 2/3rds of the Egyptian economy was blackmarket/extra legal under Mubarack. Post revolution, more business friendly policies should spur growth – regardless of the fact that the nation will remain Islamic.

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