Is Islamic law to blame for the Middle East's economic failures?

[High_Gravity]

Is Islamic law to blame for the Middle East's economic failures?

One of the great mysteries of economic history concerns how the Islamic world lost its mojo. A thousand years ago, the Middle East was richer and more influential in the global economy than Europe. According to data compiled by the late economist and statistical wizard Angus Maddison, the Middle East accounted for about 9.5% of global GDP in the year 1000 while Western Europe's share was less than 9%. By 1700, however, the situation had totally reversed, with Western Europe commanding a hefty 22% of global GDP and the Middle East a pathetic 3%. The Arab world had controlled many of the lucrative trade routes between Asia and the West, but that role got usurped first by the Portuguese, then by the British and Dutch. What went wrong?

Economists and historians have struggled over that question for centuries. The answer is not just of academic interest. The revolutions that have swept through the Middle East, toppling dictators in Libya, Egypt and Tunisia, got a good part of their momentum from the widespread public frustration over the persistent lack of economic progress and opportunity omnipresent in the Middle East. Perhaps the biggest challenge facing the new governments that have emerged from the Arab Spring is providing the jobs and higher incomes all of those young people who participated in the rebellions desperately expect. If the new political leaders fail to deliver, the Arab Spring, which has brought such hope to the region, could deteriorate into a cycle of protest and political upheaval that will only set back its economic development.

There have been many theories of how the Middle East lost out economically to the West. But they have generally felt unsatisfactory. One argues that European colonialism suppressed the economic progress of the region. However, the dominance of the West is a symptom of the Middle East's economic decline, not a cause. If the Arab world had maintained its edge over the West in economic clout, it is unlikely that European imperialists could have advanced very far in the region. Another theory claims that Islam itself is biased against economic progress. This argument, too, falls very flat. If Islam was inherently un-economic, how can we explain the vibrancy of the Muslim world's economies in the centuries after the Arab conquests? And in modern times as well, certain Islamic nations, especially Malaysia and Indonesia, have been among the world's best economic performers. Remember, Mohammad himself was a merchant before he became the Prophet, and Mecca, the first city of Islam, had been a major center of the caravan trade.

A much more compelling argument was outlined by economist Timur Kuran in his 2010 book The Long Divergence. He makes the intriguing case that Islamic law was at the root of the problem. Its strictures, he claims inhibited the emergence of the institutions of modern capitalism as they developed in Europe. And the Middle East is suffering for that failure to this day.

How's that? When first developed, Islamic law was actually quite progressive for its time on economic matters, allowing, for example, for the easy formation of partnerships and clear rules to guide commercial behavior in a fair fashion. However, over the centuries, it fell out of touch with the times and failed to adapt to the new world economy being designed by European capitalists. While Europeans were creating innovative types of institutions that allowed them to amass and mobilize resources on a mammoth scale – such as joint stock companies and modern banking systems – Islamic law in the Middle East prevented these same institutions from forming. Partnership practices, which allow any partner to dissolve the arrangement, and inheritance laws, which mandate the deceased's assets go to certain family members, discouraged the emergence of the modern corporation, for example, by restricting the Muslims' ability to form long-standing business organizations. Ordering the death penaly for apostasy made it extremely difficult to do business in non-Muslim legal systems. The new institutions of capitalism gave the West an edge that it has never relinquished. Even after strict Islamic law was eventually liberalized in many parts of the Muslim world, its strictures had already done their damage, leaving the Middle East devoid of the strong private economies it needed to compete. When Arab countries then tried to copy Western economic institutions, like courts with European commercial codes, they proved a poor fit. Having not emerged naturally from society, the imported institutions didn't work as they did back home. In modern times, that left the state to play an overly powerful role in the Middle East's economic development, which didn't produce the same, amazing results of the Asian model based on trade and entrepreneurship.

We can see the consequences by looking at the shape of Middle East economies today. I personally cannot think of one private company from the Arab world that holds a significant international presence. Those corporations that do play on the world stage – like Dubai-based airline Emirates, for example – are owned by the state. And those small parts of the Islamic world that have developed modern, competitive economies have done so through building better institutions. Take, again, Dubai. As I detailed in a recent story for TIME magazine, the secret behind Dubai's success is, to a degree, due to its ability to import Western-style economic institutions and make them work. Yes, Islamic finance is a powerful economic force in the emirate, and will only grow further, but Dubai didn't become a wealthy city by sticking to Islamic law. The forward-looking leadership in Dubai launched a stock market, created special zones for finance and media with Western-style regulatory systems to govern them, and backed it all up with a level of religious and cultural tolerance that is rare in much of the region. And when Dubai has stumbled – most notably with its colossal property bust – the factors behind those failures can be found in the incomplete development of these institutions of capitalism, such as insufficient transparency and weak corporate governance. Dubai is an institution-building experiment in progress.

Read more: Is Islamic law to blame for the Middle East

 

[JStone]

Noooooooooooooooooooooooooooooooooo

Quran 9:29: Fight against those who (1) believe not in Allâh, (2) nor in the Last Day, (3) nor forbid that which has been forbidden by Allâh and His Messenger (4) and those who acknowledge not the religion of truth (i.e. Islâm) among the people of the Scripture (Jews and Christians), until they pay the Jizyah[] with willing submission, and feel themselves subdued.

 

[PoliticalChic]

Is Islamic law to blame for the Middle East's economic failures?

One of the great mysteries of economic history concerns how the Islamic world lost its mojo. A thousand years ago, the Middle East was richer and more influential in the global economy than Europe. According to data compiled by the late economist and statistical wizard Angus Maddison, the Middle East accounted for about 9.5% of global GDP in the year 1000 while Western Europe's share was less than 9%. By 1700, however, the situation had totally reversed, with Western Europe commanding a hefty 22% of global GDP and the Middle East a pathetic 3%. The Arab world had controlled many of the lucrative trade routes between Asia and the West, but that role got usurped first by the Portuguese, then by the British and Dutch. What went wrong?

Economists and historians have struggled over that question for centuries. The answer is not just of academic interest. The revolutions that have swept through the Middle East, toppling dictators in Libya, Egypt and Tunisia, got a good part of their momentum from the widespread public frustration over the persistent lack of economic progress and opportunity omnipresent in the Middle East. Perhaps the biggest challenge facing the new governments that have emerged from the Arab Spring is providing the jobs and higher incomes all of those young people who participated in the rebellions desperately expect. If the new political leaders fail to deliver, the Arab Spring, which has brought such hope to the region, could deteriorate into a cycle of protest and political upheaval that will only set back its economic development.

There have been many theories of how the Middle East lost out economically to the West. But they have generally felt unsatisfactory. One argues that European colonialism suppressed the economic progress of the region. However, the dominance of the West is a symptom of the Middle East's economic decline, not a cause. If the Arab world had maintained its edge over the West in economic clout, it is unlikely that European imperialists could have advanced very far in the region. Another theory claims that Islam itself is biased against economic progress. This argument, too, falls very flat. If Islam was inherently un-economic, how can we explain the vibrancy of the Muslim world's economies in the centuries after the Arab conquests? And in modern times as well, certain Islamic nations, especially Malaysia and Indonesia, have been among the world's best economic performers. Remember, Mohammad himself was a merchant before he became the Prophet, and Mecca, the first city of Islam, had been a major center of the caravan trade.

A much more compelling argument was outlined by economist Timur Kuran in his 2010 book The Long Divergence. He makes the intriguing case that Islamic law was at the root of the problem. Its strictures, he claims inhibited the emergence of the institutions of modern capitalism as they developed in Europe. And the Middle East is suffering for that failure to this day.

How's that? When first developed, Islamic law was actually quite progressive for its time on economic matters, allowing, for example, for the easy formation of partnerships and clear rules to guide commercial behavior in a fair fashion. However, over the centuries, it fell out of touch with the times and failed to adapt to the new world economy being designed by European capitalists. While Europeans were creating innovative types of institutions that allowed them to amass and mobilize resources on a mammoth scale – such as joint stock companies and modern banking systems – Islamic law in the Middle East prevented these same institutions from forming. Partnership practices, which allow any partner to dissolve the arrangement, and inheritance laws, which mandate the deceased's assets go to certain family members, discouraged the emergence of the modern corporation, for example, by restricting the Muslims' ability to form long-standing business organizations. Ordering the death penaly for apostasy made it extremely difficult to do business in non-Muslim legal systems. The new institutions of capitalism gave the West an edge that it has never relinquished. Even after strict Islamic law was eventually liberalized in many parts of the Muslim world, its strictures had already done their damage, leaving the Middle East devoid of the strong private economies it needed to compete. When Arab countries then tried to copy Western economic institutions, like courts with European commercial codes, they proved a poor fit. Having not emerged naturally from society, the imported institutions didn't work as they did back home. In modern times, that left the state to play an overly powerful role in the Middle East's economic development, which didn't produce the same, amazing results of the Asian model based on trade and entrepreneurship.

We can see the consequences by looking at the shape of Middle East economies today. I personally cannot think of one private company from the Arab world that holds a significant international presence. Those corporations that do play on the world stage – like Dubai-based airline Emirates, for example – are owned by the state. And those small parts of the Islamic world that have developed modern, competitive economies have done so through building better institutions. Take, again, Dubai. As I detailed in a recent story for TIME magazine, the secret behind Dubai's success is, to a degree, due to its ability to import Western-style economic institutions and make them work. Yes, Islamic finance is a powerful economic force in the emirate, and will only grow further, but Dubai didn't become a wealthy city by sticking to Islamic law. The forward-looking leadership in Dubai launched a stock market, created special zones for finance and media with Western-style regulatory systems to govern them, and backed it all up with a level of religious and cultural tolerance that is rare in much of the region. And when Dubai has stumbled – most notably with its colossal property bust – the factors behind those failures can be found in the incomplete development of these institutions of capitalism, such as insufficient transparency and weak corporate governance. Dubai is an institution-building experiment in progress.

Read more: Is Islamic law to blame for the Middle East

But, despite that, the report was a bombshell nonetheless, though the only thing that would surprise those who are familiar with the situation in the Arab world is its nondiplomatic language and criticism, and naming of the faults. Arab societies are paralyzed because of the absence of political freedoms, the persecution of women, and isolation from the world and new ideas.

The oil wealth is matched by social backwardness, and the only other region of the world with an income level lower than ours is sub-Saharan Africa. Productivity is decreasing, scientific research is virtually nonexistent, the region is suffering a brain drain, and illiteracy afflicts half of Arab women. The report was only diplo-matic concerning implicit criticisms of extremist Islamist movements as a cause of the culture of backwardness and absence of fertile ground for democ-racy. Interestingly, the report found that the total number of books translated into Arabic yearly is no more than 330, or one-fifth of those translated in a small country like Greece.

Indeed, the total number of books translated into Arabic during the 1,000 years since the age of Caliph Al-Ma’moun [a ninth-century Arab ruler who was a patron of cultural interaction between Arab, Persian, and Greek scholars—WPR] to this day is less than those translated in Spain in one year. The report noted that Arab rulers stay in office all their lives and create dynasties that inherit power, and the peoples are unable to institute change.
Arab Human Development Report - Worldpress.org

 

[Ropey]

^ # 1 reason for the cultural and ideological demarcation line imo...

 

[JStone]

Investor's Business Daily: How Free Israel Prospers As Islam Remains In The Dark
How Free Israel Prospers As Islam Remains In Dark - Investors.com

Israel, a New Jersey-sized nation of 7.5 million people (1.7 million of whom are Arab) filed 7,082 international patents in the five years ending in 2007. By contrast, 28 majority-Muslim nations with almost 1.2 billion people — 155 times the population of Israel — were granted 2,071 patents in the same period. Narrowing the comparison to the 17 Muslim nations of the Middle East from Morocco to Iran and down the Arabian Peninsula, the 409 million people in that region generated 680 patents in five years.
This means that the Arab and Iranian world produced about one patent per year for every 3 million people, compared with Israel's output of one annual patent for every 5,295 people, an Israeli rate some 568 times that of Israel's neighbors and sometime enemies.

The awarding of Nobel Prizes in the quantitative areas of chemistry, economics and physics shows a similar disparity, with five Israeli winners compared with one French Algerian (a Jew who earned the prize for work done in France) and an Egyptian-American (for work done at Caltech in California).

But wealth isn't the sole explanation for this disparity in intellectual innovation. Saudi Arabia enjoyed a per capita income of $24,200 in 2010. Yet the Kingdom averages an anemic 37 patents per year compared with Israel's 1,416 per year — and there are 3 1/2 times more Saudis than Israelis, meaning that Israel's per capita output of intellectual property is 132 times greater than Saudi Arabia's.

The telltale signs of Israel's economic rise can be seen in the Tel Aviv skyline and the new office complexes around Jerusalem. International giant Teva Pharmaceutical Industries Ltd. was founded in 1901 by three pharmacists in Jerusalem. Today it employs 40,000 around the world. Teva has a market cap of $44.2 billion — the most highly valued company based in Israel and the ninth-largest firm traded on the Nasdaq

A few miles from Teva's gleaming office campus west of the Old City sits the former national mint building for the British Mandate. Built in 1937, this renovated building, along with the old Ottoman Empire railway warehouses next to it, houses the JVP Media Quarter and 300 entrepreneurs.

The complex hosts Israel's leading venture capital firm, Jerusalem Venture Partners, as well as 35 startups and a performing arts center for good measure. JVP, which has helped launch 70 companies since 1993, has more than $820 million under management with seven active venture capital funds.

The Media Quarter concept was created in 2002 when JVP founder Erel Margalit wanted to create a media-focused incubator that combined technology, culture, art and business. JVP has shepherded 18 initial public offerings, mergers and acquisitions, including some of the largest Israel-based companies: Qlik Technologies, Netro Corp., Chromatis Networks, Precise Software, Cogent Communications.

Less than 300 miles separate the purposeful creative buzz in the JVP Media Quarter from the restive streets of Cairo, where the Muslim Brotherhood tells Egypt's unemployed that their plight is the fault of corrupt capitalists and Jews. It doesn't take a Nobel Prize-winning economist to figure out where these two economies are going.

 

[Toro]

Partly, yeah.

It's also hindered by corruption, bad education, restrictive business practices and the absence of the rule of law.

 

[High_Gravity]

Is Islamic law to blame for the Middle East's economic failures?

One of the great mysteries of economic history concerns how the Islamic world lost its mojo. A thousand years ago, the Middle East was richer and more influential in the global economy than Europe. According to data compiled by the late economist and statistical wizard Angus Maddison, the Middle East accounted for about 9.5% of global GDP in the year 1000 while Western Europe's share was less than 9%. By 1700, however, the situation had totally reversed, with Western Europe commanding a hefty 22% of global GDP and the Middle East a pathetic 3%. The Arab world had controlled many of the lucrative trade routes between Asia and the West, but that role got usurped first by the Portuguese, then by the British and Dutch. What went wrong?

Economists and historians have struggled over that question for centuries. The answer is not just of academic interest. The revolutions that have swept through the Middle East, toppling dictators in Libya, Egypt and Tunisia, got a good part of their momentum from the widespread public frustration over the persistent lack of economic progress and opportunity omnipresent in the Middle East. Perhaps the biggest challenge facing the new governments that have emerged from the Arab Spring is providing the jobs and higher incomes all of those young people who participated in the rebellions desperately expect. If the new political leaders fail to deliver, the Arab Spring, which has brought such hope to the region, could deteriorate into a cycle of protest and political upheaval that will only set back its economic development.

There have been many theories of how the Middle East lost out economically to the West. But they have generally felt unsatisfactory. One argues that European colonialism suppressed the economic progress of the region. However, the dominance of the West is a symptom of the Middle East's economic decline, not a cause. If the Arab world had maintained its edge over the West in economic clout, it is unlikely that European imperialists could have advanced very far in the region. Another theory claims that Islam itself is biased against economic progress. This argument, too, falls very flat. If Islam was inherently un-economic, how can we explain the vibrancy of the Muslim world's economies in the centuries after the Arab conquests? And in modern times as well, certain Islamic nations, especially Malaysia and Indonesia, have been among the world's best economic performers. Remember, Mohammad himself was a merchant before he became the Prophet, and Mecca, the first city of Islam, had been a major center of the caravan trade.

A much more compelling argument was outlined by economist Timur Kuran in his 2010 book The Long Divergence. He makes the intriguing case that Islamic law was at the root of the problem. Its strictures, he claims inhibited the emergence of the institutions of modern capitalism as they developed in Europe. And the Middle East is suffering for that failure to this day.

How's that? When first developed, Islamic law was actually quite progressive for its time on economic matters, allowing, for example, for the easy formation of partnerships and clear rules to guide commercial behavior in a fair fashion. However, over the centuries, it fell out of touch with the times and failed to adapt to the new world economy being designed by European capitalists. While Europeans were creating innovative types of institutions that allowed them to amass and mobilize resources on a mammoth scale – such as joint stock companies and modern banking systems – Islamic law in the Middle East prevented these same institutions from forming. Partnership practices, which allow any partner to dissolve the arrangement, and inheritance laws, which mandate the deceased's assets go to certain family members, discouraged the emergence of the modern corporation, for example, by restricting the Muslims' ability to form long-standing business organizations. Ordering the death penaly for apostasy made it extremely difficult to do business in non-Muslim legal systems. The new institutions of capitalism gave the West an edge that it has never relinquished. Even after strict Islamic law was eventually liberalized in many parts of the Muslim world, its strictures had already done their damage, leaving the Middle East devoid of the strong private economies it needed to compete. When Arab countries then tried to copy Western economic institutions, like courts with European commercial codes, they proved a poor fit. Having not emerged naturally from society, the imported institutions didn't work as they did back home. In modern times, that left the state to play an overly powerful role in the Middle East's economic development, which didn't produce the same, amazing results of the Asian model based on trade and entrepreneurship.

We can see the consequences by looking at the shape of Middle East economies today. I personally cannot think of one private company from the Arab world that holds a significant international presence. Those corporations that do play on the world stage – like Dubai-based airline Emirates, for example – are owned by the state. And those small parts of the Islamic world that have developed modern, competitive economies have done so through building better institutions. Take, again, Dubai. As I detailed in a recent story for TIME magazine, the secret behind Dubai's success is, to a degree, due to its ability to import Western-style economic institutions and make them work. Yes, Islamic finance is a powerful economic force in the emirate, and will only grow further, but Dubai didn't become a wealthy city by sticking to Islamic law. The forward-looking leadership in Dubai launched a stock market, created special zones for finance and media with Western-style regulatory systems to govern them, and backed it all up with a level of religious and cultural tolerance that is rare in much of the region. And when Dubai has stumbled – most notably with its colossal property bust – the factors behind those failures can be found in the incomplete development of these institutions of capitalism, such as insufficient transparency and weak corporate governance. Dubai is an institution-building experiment in progress.

Read more: Is Islamic law to blame for the Middle East

But, despite that, the report was a bombshell nonetheless, though the only thing that would surprise those who are familiar with the situation in the Arab world is its nondiplomatic language and criticism, and naming of the faults. Arab societies are paralyzed because of the absence of political freedoms, the persecution of women, and isolation from the world and new ideas.

The oil wealth is matched by social backwardness, and the only other region of the world with an income level lower than ours is sub-Saharan Africa. Productivity is decreasing, scientific research is virtually nonexistent, the region is suffering a brain drain, and illiteracy afflicts half of Arab women. The report was only diplo-matic concerning implicit criticisms of extremist Islamist movements as a cause of the culture of backwardness and absence of fertile ground for democ-racy. Interestingly, the report found that the total number of books translated into Arabic yearly is no more than 330, or one-fifth of those translated in a small country like Greece.

Indeed, the total number of books translated into Arabic during the 1,000 years since the age of Caliph Al-Ma’moun [a ninth-century Arab ruler who was a patron of cultural interaction between Arab, Persian, and Greek scholars—WPR] to this day is less than those translated in Spain in one year. The report noted that Arab rulers stay in office all their lives and create dynasties that inherit power, and the peoples are unable to institute change.
Arab Human Development Report - Worldpress.org

You pretty much nailed it PC, brain drain is a big problem on Islamic countries because once an educated Muslim comes to the US or Europe they don't want to go back because they have gotten a taste of something better. Plus from being over there in the Middle East I can tell you that oil money doesn't necessarily mean a high standard of life, the Gulf Countries are filthy rich in oil money but their countries at the end of the day are third world shit holes. Plus, the Islamists see education as a threat because people might be able to see through their bullshit, and they don't like that.

 

[High_Gravity]

Another problem in the region nobody has mentioned is inbreeding, that definently does not help matters at all.

 

[JStone]

Another problem in the region nobody has mentioned is inbreeding, that definently does not help matters at all.

It doesn't help that Muslimes believe that allah wills their fate. Thus, in their distorted minds, they are backward because allah wants it that way. If allah want them to be successful, allah will make that happen, too. They actually believe that self-defeatist nonsense based on the teachings of an illiterate cave-dwelling bum and pedophile

 

[High_Gravity]

Another problem in the region nobody has mentioned is inbreeding, that definently does not help matters at all.

It doesn't help that Muslimes believe that allah wills their fate. Thus, in their distorted minds, they are backward because allah wants it that way. If allah want them to be successful, allah will make that happen, too. They actually believe that self-defeatist nonsense based on the teachings of an illiterate cave-dwelling bum and pedophile

Well is it allahs will that all these Muslim countries are backwards third world shit holes?