Customer Reviews

Mutual Life, Limited: Islamic Banking, Alternative Currencies, Lateral Reason

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"Mutual Life, Limited" by Bill Maurer (2005). The author uses anthropology to look at Islamic banking finance (IBF) and alternative currencies. He reviews why the Islamic religion is opposed to "riba" or interest-making (usury) on the loan of money. He quotes five ayats of the 20 in the Quran that admonishes usury (p. 27). He also reviews the Ithaca, NY "HOURS" alternative money culture. He inquires: do they make a "promise of a perfect market?", something "better" than the `free market" economy? He quotes various anthropologists, and both Islamist and free-market economists in analyzing IBF. He notes that IBF can have a blend of neo-classical economics, Keynesianism, and even some Marxism - and notes the inconsistencies of this mixture (p.30). Besides the Quran, he also reviews IBF in light of the `teachings' of the sunnah, the hadith, and sharia law - but briefly. The author is aware of the "time value of money" theory as offered by the Nobel Prize winner and Free Market economist Friedrich Hayek (with whom I had some correspondence with in the late 1960s), but little analysis of it in conjunction in with riba. The author wrote: "...I believe...IBF is frequently, if not almost exclusively, always so preoccupied with discussions of technique, apparatus, engineering, instrument, and rationality. The instruments of Islamic finance - contractural forms like murabaha, musharaka, ijara, and mudarabah - occupy center stage in all accounts of IBF" (p. 40). The author also discusses other issues pertaining to IBF: gharar, hiyal, taqlid,qiyas, istislah, and ijara. The author offers the opinions of various Muslim thinkers who argue that the Quran (the word of the Muslim god Allah) really doesn't prohibit riba (p. 80). The author briefly discusses the Dow Jones Islamic Market Index that was created in 1999 to provide "a definitive standard for measuring stock market performance for Islamic investors on a global basis" (p. 105). In discussing `what is money' the author brings in Marx, Freud and Shakespeare for their insights (p. 112). The author presents information regarding the Koin Emas ONK gold-tokens, or "Gold Coin for Pilgrimage Expenses" that are used by Indonesians in saving up and paying for their hajj to the Holy Kabba in Mecca (p. 126). Having lived in Indonesia for awhile, the author provides informative insights into Indonesian economics, banking, bullionism, and how `jiwa' (life-forces) influence insurance policies. Overall, this book is a little too strong on the anthropological look at IBF, and too short on basic free-market economic insights; nonetheless, very informative and well worth reading.