Is Islamic Finance Capitalism’s Future?

From Jeremy Harding in the latest The London Review of Books:

What fascinates the markets about Islamic finance, however, is its dramatic growth in recent years and confident predictions that it’s set to expand at 15 to 20 per cent every year. Its allure for moderately prosperous, pious Muslims – and quite a few non-Muslims recoiling from the debt crisis in anger and disgust – is different. They admire what they see as a promise to achieve stability and transparency, and a sense of proportion about money: look it in the eye, tell it you like it, but admit that you have lingering doubts about the transcendent value of paper. That’s an unsophisticated position, but since the credit crunch not many people trust the sophisticated keepers of the modern money culture; in this sense the rise of sharia-compliant products is also a challenge to the unofficial, polytheist faith of offshore Britannia: the worship of markets in general and financial markets in particular.

Key word: Trust. Everyone has been calling for a new architecture of the global financial system, but most of the ideas offered seem to be mere band aid solutions that aim to go back to where things were. This is the only article i have read that points at a real alternative to the status quo. Read the article in its entirety. It makes for a fascinating read.

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