Valentino Cattelan
University of Oxford, Oxford Centre for Islamic Studies, Visiting Fellow under the Scholar in Residence Programme in Islamic Finance (2013-2014)
IE BUSINESS SCHOOL, SCIEF - Saudi-Spanish Centre for Islamic Economics and Finance, Associate Researcher
My research activity focuses on the interaction between law, money, society and culture, with special attention to the European Union and the comparison between the Western and the Islamic legal traditions.
To this aim, my expertise comprises comparative law, property law, contract law in European/Muslim societies and the study of Islamic finance law. My approach to these research topics is enriched with an interest in legal history, sociology of money and cultural anthropology. I am passionate about exploring the nature of property rights and contractual transactions, and how concurrent methodologies (law and religion; law and economics; legal pluralism; de-coloniality; dialectical critical realism) can contribute to diversity in financial markets.
A brief extract from the introduction of my book on "Religion and Contract Law in Islam: From Medieval Trade to Global Finance" (Routledge, 2023) can illustrate my approach: "The book employs the contract as a medium of Islamic nomos: a vehicle of legal meaning that not only is particularly apt, as we will see, to shed light on the interface between the secular and the religious in the normative universe of the Muslim world, but also to reveal how the nature of the contract, so familiar to the men of law, has been thought differently in the Western and the Islamic legal traditions, and how its rules, as part of mutable social contexts, where the experience of every man's life subsists, have differently practiced in space and time. In brief, by devoting its contents to the contract in Islam, not only is the aspiration of this book to say something valuable about the Muslim world, but also about contract law as a fundamental aspect of human life in any society, and how the study of the 'aqd [the Arabic term for 'contract'] can contribute to a better understanding of law and religion in the East and the West, as much of the cultural construction of the Orient by the Occident, and eventually to its re-orientation".
To this aim, my expertise comprises comparative law, property law, contract law in European/Muslim societies and the study of Islamic finance law. My approach to these research topics is enriched with an interest in legal history, sociology of money and cultural anthropology. I am passionate about exploring the nature of property rights and contractual transactions, and how concurrent methodologies (law and religion; law and economics; legal pluralism; de-coloniality; dialectical critical realism) can contribute to diversity in financial markets.
A brief extract from the introduction of my book on "Religion and Contract Law in Islam: From Medieval Trade to Global Finance" (Routledge, 2023) can illustrate my approach: "The book employs the contract as a medium of Islamic nomos: a vehicle of legal meaning that not only is particularly apt, as we will see, to shed light on the interface between the secular and the religious in the normative universe of the Muslim world, but also to reveal how the nature of the contract, so familiar to the men of law, has been thought differently in the Western and the Islamic legal traditions, and how its rules, as part of mutable social contexts, where the experience of every man's life subsists, have differently practiced in space and time. In brief, by devoting its contents to the contract in Islam, not only is the aspiration of this book to say something valuable about the Muslim world, but also about contract law as a fundamental aspect of human life in any society, and how the study of the 'aqd [the Arabic term for 'contract'] can contribute to a better understanding of law and religion in the East and the West, as much of the cultural construction of the Orient by the Occident, and eventually to its re-orientation".
less
Related Authors
InterestsView All (31)
Uploads
Books by Valentino Cattelan
life? How much has it changed over the centuries? Undertaking a search that
spans revelation, legal tradition, and the reality of the Muslim world, this book
explores the Islamic contract (‘aqd in Arabic) as a ‘city’ at the crossroads of
convergent paths of translation, comparison, and law in context.
In particular, the book shows that only by re-orienting traditional categories
of Western law-religion toward the East can an alternative path of discovery
for the ‘aqd be advanced. Hence, through a fortuitous encounter with an Arab
Girl, the reader will (re-)visit the Temple of Western modernity and explore a
city ruled by Towers of dialectical forces, carrying a hermeneutical Ring that
combines dialectics, Islamic studies, and media theory. This interdisciplinary
approach will not only enrich our knowledge of the ‘aqd but also make it more
understandable as a cultural and social construction to which both Muslims
and non-Muslims have participated in forging its multiple representations. By
inviting the readers ‘to know who they are’ while looking at her, the Arab Girl
is already waiting for us to listen to the Islamic contract in a new way.
By applying a distinctive law and religion approach to the study of the
contract in Islam, the book provides a comprehensive exploration of a topic
that is of interest to legal and economic comparatists as well as to readers in
anthropology, Islamic and cultural studies, and it is also of topical meaning for
today’s international lawyers and the operators of an increasingly multicultural
and transnational market.
The book is divided into 2 parts. Part I covers scriptural, electronic, and digital money. It analyses the European framework for payment services users, explores limits and challenges of the Banking Union, and looks at the project for a digital euro. Part II investigates the policy and regulatory drivers of the EU's changing identity, from the early modern roots of the European law of money and capital to the regulatory strategy set in the Capital Markets Union and the role conferred on venture capital; from the fintech-based developments of payment systems to the newly-established fiscal and monetary policies in the post-COVID phase.
The book will be of interest to researchers, academics and policy makers in the fields of law and regulation, as well as political economy and political sciences.
The collected essays analyse the social dimension of entrepreneurship from an Islamic perspective, highlighting the extent to which the rationales of "sharing," distribution and cooperation, affect the conceptualization of the market in Islam as a place of "shared prosperity." Moving from the conceptual "roots" of this paradigm to its operative "branches," the contributing authors also connect the most recent trends in the financial market to Shari‘ah-based strategies for community welfare, hence exploring the applications of Islamic social finance from the sharing economy, FinTech and crowdfunding to microcredit, waqf, zakat, sukuk and green investments.
An illuminating reference for researchers, practitioners and policy-makers dealing with the challenges of a global market where not only is diversity being perceived as a value to be fostered, but also as an important opportunity for a more inclusive economy for everybody.
The contributing authors analyse key economic development and social integration issues from an Islamic perspective and outline the European approach to accommodating Islamic finance, with particular regard to the peculiarities of individual nation-states. Set in this context, the book presents financial pluralism as a device to enhance a level playing field in the global marketplace, as well as to foster a plural open society.
Providing a comprehensive and methodological guide to Islamic finance in Europe, this book will prove an illuminating and informative read for academics, students and policymakers with an interest in the impact on financial regulation of an increasingly globalised world.
Reports by Valentino Cattelan
research programmes that have been undertaken in the last few decades under this discipline, the report assesses the
coherence of Islamic economics epistemology.
In particular, on the one side it critically evaluates which rationales
underlie the moral economy of Islam; on the other side it argues that a more consistent methodology can be identified in a paradigm of shared prosperity that replaces the postulates of scarcity, division and competition of conventional capitalism with axioms of abundance, distribution and cooperation, derived from the tawhidi framework of
Islam. Accordingly, suggestions are advanced to overcome persistent weaknesses in Islamic economics studies both with regard to the solutions that its paradigm can offer within the changing nature of the global economy, and their effective implementation in the diverse sociologies that belong to the contemporary practice of Islamic finance.
To conclude, next to the recognition of the Truth that Islamic economics embodies for Muslim believers, the report also highlights the truth-s that it holds for non-Muslims as an alternative to conventional capitalism, and the benefits that it can bring about.
Journal Articles by Valentino Cattelan
To this aim, it compares the local practice of classical fiqh in medieval Islam to the current globalised law of financial transactions, arguing that contemporary lex mercatoria has radically changed the meaning of 'Islamic law' as used in the context of the law of Islamic finance.
The article employs a law and anthropology approach, with particular reference to the notion of 'textual polity' by Brinckley Messick; notably, much of its conclusions are drawn from Wisława Szymborska's poem 'The people on the bridge'.
Using Alice in Wonderland as hermeneutical device to explore the logic of fiqh, this article identifies a divergence between Western and Islamic legal thinking in the application of abduction as key form of inference in the law of Islam.
In particular, looking at the fact/law relation in symbolic terms, the article highlights how, while a dichotomy between fact and law characterizes Western legal thinking, fiqh upholds a connection between the “real” and the “right” (ḥaqq), where the effort (ijtihād) in understanding sharī‘ah postulates the actualization of the “rule” (ḥukm) in God’s creation. Thus, if sharī‘ah pre-scribes the Law, not only is the rule discovered through the sources (uṣūl), but the right has to be justified through a verdict de-scribing the fact, for the law to be validly stated for the given situation.
In this sense, abduction as explanatory “hypothesis” (Peirce) and “inference to the best explanation” (Harman) of sharī‘ah provides an account for the probabilistic nature of fiqh, its ramification (furū‘) through verdicts, as well as for the epistemic and narrative function of the tradition as core aspects of the logic of Islamic law.
At the same time, doubts can be raised about the compatibility between this logic and the deductive logic of modern state law, as a sub-product of Western legal thinking.
The final publication is available at springer.com.
The first section of the paper is theoretical. (1) After clarifying the notion of paradigm in epistemology of science, (2) the study preliminarily reviews the ethical approach to Islamic economics and finance (IEF) for its intrinsic incapability to challenge conventional economics as universal paradigm. In fact, by setting an antithesis between homo-Islamicus and homo-economicus, this approach implicitly re-affirms the validity of the ‘universal’, locating Shari‘ah economics, as a ‘particular’ case of ethical investments, in an ana-logical relationship with it, where Islamic values rectify, but do not substitute, conventional rationales (Shari‘ah-compliant economy). (3) On the contrary, moving from an approach ‘universal/particular’ to a perspective ‘one/many’, the paper argues that the autonomy of Shari‘ah economics can be properly recognized by internalising Islamic values within an Islamic economic rationality as intellectual endeavour (ijtihad) aimed at reconciling divine omnipotence and human agency (Shari‘ah-based economy). Marking this turning point, the rationales of Shari‘ah economics are coherently identified through Shari‘ah (Qur’an and Sunna) in (a) the primacy of real economy over finance; (b) the equilibrium in commercial transactions; (c) asset-backed and risk-sharing investment strategies, as expression of a theory of justice that is not based on the division of economic resources (conventional economics), but on sharing goods through participating in the unique divine justice (Shari‘ah economics), and that can be set in a dia-logical relation with the former.
From this theoretical shift, the paper derives relevant operative outcomes. (4) While in the approach ‘universal/particular’ Shari‘ah economics, as a ‘particular’, necessarily depends on the ‘universal’ for its elaboration, in a perspective ‘one/many’ IEF stands without a necessary comparison with/dependence on conventional economics. In other terms, since IEF products and services enjoy their own rationales, they can be ‘thought’ as Shari‘ah-based and not simply Shari‘ah-compliant. Accordingly, their configuration does not merely rectify conventional economics, but becomes ‘self-conceivable’ according to its own logical paradigm. On the matter, as practical examples, issues related to Islamic banking regulation and to the admissibility of Islamic derivatives are briefly discussed.
(5) Rejecting an ‘ana-logical’ discourse (‘one’ paradigm) in favour of the recognition of ‘many’ autonomous paradigms, the paper concludes by emphasizing the viability of a dia-logical relationship between conventional and Shari‘ah economics, both in the light of the Qur’an and the rejection of a Eurocentric conception of science.
The approach provides a comprehension of the bans which is alternative to their moral understanding, that is based on the religious nature of fiqh and still prevalent in academic literature despite the uncertainty it holds.
In particular, the Paper argues that the doctrines of ribā, gharar and maysir, commonly considered as evidence of the religious/ethical bases of Islamic law, express, more precisely, a requirement of efficiency of the contract (‘aqd) linked to the quantitative and qualitative equilibrium, whose deepest sense may emerge only within the conceptualization of ḥaqq in Islamic justice (‘adl).
Contributions to Edited Volumes by Valentino Cattelan
Full citation: Cattelan, V. (2022), “Back to the Future: envisioning Islamic finance as a trade-oriented phenomenon”, GIFR (Global Islamic Finance Report) 2022 on Futurism in Islamic Finance, pp. 108-119. London: Cambridge Institute of Islamic Finance
Full citation: Cattelan, V. (2020), “Translating sustainability into Islamic social finance”, GIFR 2020-2021 (Global Islamic Finance Report, 11th ed.) on Islamic Social Finance for Socio-Economic Inclusion & Sustainable Development, pp. 76-87. London: Cambridge Institute of Islamic Finance
life? How much has it changed over the centuries? Undertaking a search that
spans revelation, legal tradition, and the reality of the Muslim world, this book
explores the Islamic contract (‘aqd in Arabic) as a ‘city’ at the crossroads of
convergent paths of translation, comparison, and law in context.
In particular, the book shows that only by re-orienting traditional categories
of Western law-religion toward the East can an alternative path of discovery
for the ‘aqd be advanced. Hence, through a fortuitous encounter with an Arab
Girl, the reader will (re-)visit the Temple of Western modernity and explore a
city ruled by Towers of dialectical forces, carrying a hermeneutical Ring that
combines dialectics, Islamic studies, and media theory. This interdisciplinary
approach will not only enrich our knowledge of the ‘aqd but also make it more
understandable as a cultural and social construction to which both Muslims
and non-Muslims have participated in forging its multiple representations. By
inviting the readers ‘to know who they are’ while looking at her, the Arab Girl
is already waiting for us to listen to the Islamic contract in a new way.
By applying a distinctive law and religion approach to the study of the
contract in Islam, the book provides a comprehensive exploration of a topic
that is of interest to legal and economic comparatists as well as to readers in
anthropology, Islamic and cultural studies, and it is also of topical meaning for
today’s international lawyers and the operators of an increasingly multicultural
and transnational market.
The book is divided into 2 parts. Part I covers scriptural, electronic, and digital money. It analyses the European framework for payment services users, explores limits and challenges of the Banking Union, and looks at the project for a digital euro. Part II investigates the policy and regulatory drivers of the EU's changing identity, from the early modern roots of the European law of money and capital to the regulatory strategy set in the Capital Markets Union and the role conferred on venture capital; from the fintech-based developments of payment systems to the newly-established fiscal and monetary policies in the post-COVID phase.
The book will be of interest to researchers, academics and policy makers in the fields of law and regulation, as well as political economy and political sciences.
The collected essays analyse the social dimension of entrepreneurship from an Islamic perspective, highlighting the extent to which the rationales of "sharing," distribution and cooperation, affect the conceptualization of the market in Islam as a place of "shared prosperity." Moving from the conceptual "roots" of this paradigm to its operative "branches," the contributing authors also connect the most recent trends in the financial market to Shari‘ah-based strategies for community welfare, hence exploring the applications of Islamic social finance from the sharing economy, FinTech and crowdfunding to microcredit, waqf, zakat, sukuk and green investments.
An illuminating reference for researchers, practitioners and policy-makers dealing with the challenges of a global market where not only is diversity being perceived as a value to be fostered, but also as an important opportunity for a more inclusive economy for everybody.
The contributing authors analyse key economic development and social integration issues from an Islamic perspective and outline the European approach to accommodating Islamic finance, with particular regard to the peculiarities of individual nation-states. Set in this context, the book presents financial pluralism as a device to enhance a level playing field in the global marketplace, as well as to foster a plural open society.
Providing a comprehensive and methodological guide to Islamic finance in Europe, this book will prove an illuminating and informative read for academics, students and policymakers with an interest in the impact on financial regulation of an increasingly globalised world.
research programmes that have been undertaken in the last few decades under this discipline, the report assesses the
coherence of Islamic economics epistemology.
In particular, on the one side it critically evaluates which rationales
underlie the moral economy of Islam; on the other side it argues that a more consistent methodology can be identified in a paradigm of shared prosperity that replaces the postulates of scarcity, division and competition of conventional capitalism with axioms of abundance, distribution and cooperation, derived from the tawhidi framework of
Islam. Accordingly, suggestions are advanced to overcome persistent weaknesses in Islamic economics studies both with regard to the solutions that its paradigm can offer within the changing nature of the global economy, and their effective implementation in the diverse sociologies that belong to the contemporary practice of Islamic finance.
To conclude, next to the recognition of the Truth that Islamic economics embodies for Muslim believers, the report also highlights the truth-s that it holds for non-Muslims as an alternative to conventional capitalism, and the benefits that it can bring about.
To this aim, it compares the local practice of classical fiqh in medieval Islam to the current globalised law of financial transactions, arguing that contemporary lex mercatoria has radically changed the meaning of 'Islamic law' as used in the context of the law of Islamic finance.
The article employs a law and anthropology approach, with particular reference to the notion of 'textual polity' by Brinckley Messick; notably, much of its conclusions are drawn from Wisława Szymborska's poem 'The people on the bridge'.
Using Alice in Wonderland as hermeneutical device to explore the logic of fiqh, this article identifies a divergence between Western and Islamic legal thinking in the application of abduction as key form of inference in the law of Islam.
In particular, looking at the fact/law relation in symbolic terms, the article highlights how, while a dichotomy between fact and law characterizes Western legal thinking, fiqh upholds a connection between the “real” and the “right” (ḥaqq), where the effort (ijtihād) in understanding sharī‘ah postulates the actualization of the “rule” (ḥukm) in God’s creation. Thus, if sharī‘ah pre-scribes the Law, not only is the rule discovered through the sources (uṣūl), but the right has to be justified through a verdict de-scribing the fact, for the law to be validly stated for the given situation.
In this sense, abduction as explanatory “hypothesis” (Peirce) and “inference to the best explanation” (Harman) of sharī‘ah provides an account for the probabilistic nature of fiqh, its ramification (furū‘) through verdicts, as well as for the epistemic and narrative function of the tradition as core aspects of the logic of Islamic law.
At the same time, doubts can be raised about the compatibility between this logic and the deductive logic of modern state law, as a sub-product of Western legal thinking.
The final publication is available at springer.com.
The first section of the paper is theoretical. (1) After clarifying the notion of paradigm in epistemology of science, (2) the study preliminarily reviews the ethical approach to Islamic economics and finance (IEF) for its intrinsic incapability to challenge conventional economics as universal paradigm. In fact, by setting an antithesis between homo-Islamicus and homo-economicus, this approach implicitly re-affirms the validity of the ‘universal’, locating Shari‘ah economics, as a ‘particular’ case of ethical investments, in an ana-logical relationship with it, where Islamic values rectify, but do not substitute, conventional rationales (Shari‘ah-compliant economy). (3) On the contrary, moving from an approach ‘universal/particular’ to a perspective ‘one/many’, the paper argues that the autonomy of Shari‘ah economics can be properly recognized by internalising Islamic values within an Islamic economic rationality as intellectual endeavour (ijtihad) aimed at reconciling divine omnipotence and human agency (Shari‘ah-based economy). Marking this turning point, the rationales of Shari‘ah economics are coherently identified through Shari‘ah (Qur’an and Sunna) in (a) the primacy of real economy over finance; (b) the equilibrium in commercial transactions; (c) asset-backed and risk-sharing investment strategies, as expression of a theory of justice that is not based on the division of economic resources (conventional economics), but on sharing goods through participating in the unique divine justice (Shari‘ah economics), and that can be set in a dia-logical relation with the former.
From this theoretical shift, the paper derives relevant operative outcomes. (4) While in the approach ‘universal/particular’ Shari‘ah economics, as a ‘particular’, necessarily depends on the ‘universal’ for its elaboration, in a perspective ‘one/many’ IEF stands without a necessary comparison with/dependence on conventional economics. In other terms, since IEF products and services enjoy their own rationales, they can be ‘thought’ as Shari‘ah-based and not simply Shari‘ah-compliant. Accordingly, their configuration does not merely rectify conventional economics, but becomes ‘self-conceivable’ according to its own logical paradigm. On the matter, as practical examples, issues related to Islamic banking regulation and to the admissibility of Islamic derivatives are briefly discussed.
(5) Rejecting an ‘ana-logical’ discourse (‘one’ paradigm) in favour of the recognition of ‘many’ autonomous paradigms, the paper concludes by emphasizing the viability of a dia-logical relationship between conventional and Shari‘ah economics, both in the light of the Qur’an and the rejection of a Eurocentric conception of science.
The approach provides a comprehension of the bans which is alternative to their moral understanding, that is based on the religious nature of fiqh and still prevalent in academic literature despite the uncertainty it holds.
In particular, the Paper argues that the doctrines of ribā, gharar and maysir, commonly considered as evidence of the religious/ethical bases of Islamic law, express, more precisely, a requirement of efficiency of the contract (‘aqd) linked to the quantitative and qualitative equilibrium, whose deepest sense may emerge only within the conceptualization of ḥaqq in Islamic justice (‘adl).
Full citation: Cattelan, V. (2022), “Back to the Future: envisioning Islamic finance as a trade-oriented phenomenon”, GIFR (Global Islamic Finance Report) 2022 on Futurism in Islamic Finance, pp. 108-119. London: Cambridge Institute of Islamic Finance
Full citation: Cattelan, V. (2020), “Translating sustainability into Islamic social finance”, GIFR 2020-2021 (Global Islamic Finance Report, 11th ed.) on Islamic Social Finance for Socio-Economic Inclusion & Sustainable Development, pp. 76-87. London: Cambridge Institute of Islamic Finance
The paper advances an interpretation of the EU political impasse about how to deal with the COVID-19 emergency by shifting Agamben's paradigm of the 'homo sacer' to the 'sacertas' of the Euro. In this frame, after describing the Euro as a currency (nomisma) lacking in an appropriate nomos to give member states (economic) credit backed by EU (political) credit, it looks at the EU Recovery Plan, on which the EU member states have just agreed, as a historic moment for the future of Europe.
The final proofreading of this paper occurred in the precise days (17-19 July 2020) in which the EU summit in charge of negotiating/approving the recovery plan proposed by the EU Commission was taking place. I trust that the reader will find in the text good points to make his/her own evaluation about the summit development and final outcomes.
The Islamic law of money, prohibiting any quantitative inequality as well as uncertainty in commercial transactions, raises fundamental issues for all the components of the contemporary financial system stemming from conventional capitalism, from the banking sector to the insurance segment and payment standards.
Considering this, the chapter aims at investigating the “identity” of “Islamic money”, moving from its legal and socio-economic nature to the challenges related to the accommodation of Islamic finance in the contemporary financial system.
In this direction, open issues related to the plural dimensions of contemporary capitalism will be also taken into consideration, dealing with aspects of credit history, comparative law and socio-economics (with regard to the categories of “community” – Gemeinschaft – and “society” – Gesellschaft –) from an interdisciplinary perspective. Final considerations will also comment on the current dynamics of convergence between Islamic and conventional finance within the sharing economy.
[Cattelan, V. (2016), ““Equal for equal, hand to hand”: comparing Islamic and Western money”, in Gimigliano G. (ed.), Money, Payment Systems and the European Union: The Regulatory Challenges of Governance, Newcastle upon Tyne, UK: Cambridge Scholars Publishing, pp. 77-101]
In the light of the various spiritual and secular factors interlinked in this fabric, it summarizes the Islamic theory of property rights in three fundamental rationales: (1) the centrality of the object in the transaction as something 'real' to be traded; (2) the fundamental need for an equilibrium in the exchange; (3) asset-backed risk and investment risk-sharing as primary risk management strategies.
Fundamental issues of comparative methodology in social sciences are also discussed through the metaphor of the veil of Maya.
It argues that derivative contracts, as a Western law product, cannot be automatically replicated in the Islamic legal tradition, which requires constant reference to tangible assets for the validity of the transaction. In particular, the usual proposal of khiyār ash-sharṭ and al-‘urbūn as analogues to option contracts determines substantial incoherence with the logic of Islamic contract law, and cannot be supported in the light of an authentic performance of the divine Message.
On the contrary, as an alternative, the paper suggests that not the research of an Islamic analogue, but that of an Islamic substitute to (Western) options should be undertaken for hedging purposes.
Accordingly, it shows that the same object of financial options (the future transfer of an asset if the purchase is convenient for the option holder, with a profit for the option writer, which fulfils both hedging and speculative strategies) can be alternatively modelled in Islamic law through an ijāra wa-hiba structure (payment of rent for the usufruct of the underlining assets, instead of the initial option premium; eventual transfer through donation with contextual compensation), with a function limited to risk mitigation. The paper also discusses the establishment of a clearing-house for the market of ijāra wa-hiba options and the related trade and pricing of ṣukūk al-manfa‘a.
In questa prospettiva europea, si segnalano i limiti persistenti di tale offerta, evidenziando come, da un lato, essi siano indice di una scarsa competitività del sistema universitario nazionale rispetto ai partner europei; dall'altro, come essi incidano indirettamente anche sulla competitività economica del mercato italiano rispetto alla capacità attrattiva di capitali Shari'ah-compliant, per la mancanza di figure professionali con un profilo specializzante in materia.
But criticism of this assumption may provide a more comprehensive understanding of Islamic finance.
Indeed, it seems to me that the depiction of Islamic finance as intrinsically ethical stems from two concurrent factors that have hindered any sensible investigation on the matter: first, a misleading conception of “Islamic law” as an ethical code of behaviour; second, the idealization of Islamic finance as part of a superior social system, fostered by an enthusiastic economic scholarship .
Leaving aside these assumptions, this essay aims at proposing a more critical distinction between the categories of “ethical investments” and “Islamic finance”, as bearer of an autonomous ethics. Consequently, I will argue the opportunity to distinguish in academic research the notion of “Islamic finance”, as branch of the international financial market, from the sub-category of “ethical investments” supported by Islamic financial institutions."
This paper aims at providing a reply to these intertwined issues moving from an Islamic understanding of the role of contractual freedom in the market to consequent policy-making inputs in order to promote social justice according to Islamic values.
To this objective, Part I of the paper compares the abstract and general conception of contractual freedom that belongs to the Western “free market” of Adam Smith’s “invisible hand” with the social justice of Islamic economy as result of God’s will (hukm). In particular it underlines how, to the extent to which conventional free market separates an abstract notion of freedom from the real economic conditions of market actors, leading to a division and competition for property rights, Islam, conversely, connects this reality (the haqq of God’s creation) to the social dimension of the market by locating human freedom within the Right Path of shari‘ah (the Guidance of the revealed Word), thus upholding, on the contrary, the sharing of economic resources and the cooperation among market actors.
Moving from a descriptive to a normative approach, Part II draws from this understanding of market freedom relevant inputs for the promotion of social justice in an Islamic economy through a community dimension of wealth production based on mutual aid, profit- and risk-sharing. In this light, beside the employ of zakat as a tool of property alleviation, appropriate instruments of financial inclusion are mentioned, from retail banking and micro-finance to project finance and the re-discovery of waqf as an institute of Muslim economic tradition.
To conclude, the paper raises final considerations on the current practice of Islamic finance at a global level and its distance from the community dimension that the free market, as a place of sharing and cooperation, should have in an Islamic economic system, also through political economy means.
[Paper presented at the "IV Islamic Economics Workshop", April 2-3, 2016 – Istanbul, on "Social Justice from the Perspective of Islamic Economy"]
Commenting on Bernstein’s work while moving from the Western ‘risk’ to the Arabic رزق rizq, ‘(God’s) sustenance’, this paper dares to look at human hazard, زهر zahr, the ‘dice’ of future chances, through a comparative and inter-cultural perspective. More precisely, it aims to show how specific anthropological assumptions result in an alternative theory and practice of risk management in a market whose peculiarity is to operate not ‘against’ but ‘in the Name of God’: namely, the market of Islamic finance.
To this objective, Islamic finance will be depicted within an anthropology of time where not only is the future, but also the present, a divine (rather than human) creation, and where, consequently, risk is deeply re-framed both as a concept and as source of legitimate profit. In fact, to the extent to which the future remains an economic opportunity in Islam (Q. II:275: “Allah has permitted trade”), it is no more conceived as a human product but in the light of man’s responsibility for performing Shari‘ah, as God’s agent in the ‘real’/‘right’ (haqq). Thus, while any legitimate profit follows liability (al-kharaj bil-daman), risk management coherently endorses the primacy of real economy; exchange equilibrium (being any unlawful increase, due to riba, gharar or maysir, prohibited); and profit-loss sharing. In other terms, if risk continues to hold an economic value in Islamic finance, this value exists only as legitimate profit (kharaj) through liability (daman), and linked to asset-based and commercial activities. As a result, the logic underpinning Islamic banking and insurance (takaful), as well as of securities (sukuk) trade, becomes hardly comparable to the conventional one, and rejects financial products, such as derivatives, deemed lacking in any commercial value since nothing ‘real’ is actually traded.
To conclude, the paper will remark how this alternative story of risk in Islam would require further consideration in financial theory and regulation, for the benefit of a level playing field where both conventional and Islamic finance will be able to co-exist and prosper under the same (God’s) sky.""
More precisely, challenging both the universality of (Western) free market and the subsequent conceptualization of Islamic economics as a particular example of moral economy, the paper argues that the recognition of the peculiar identity of Islamic economics requires a preliminary disclosure of the specific legal structure/function of Islamic justice and property rights, contextualizing human agency within a Qur’anic Creator paradigm where God’s Will is realized through the allocation of property rights according to the primacy of real economy, transactional equilibrium and risk and profit-loss sharing principles.
In other words, only by moving from the Western postulates of division/competition (in a free market conceived in individualistic terms) to the Islamic postulates of participation/cooperation (in a free market conceived, on the contrary, in mutualistic terms), Islamic economics can find a self-founding frame, thus indirectly fostering the shift from a monolithic (Western-based) market theory towards a plural market economy theory.
Accordingly, the paper will conclusively remark how issues of identity and pluralism cannot be marginalized in the theoretical discourse of Islamic economics: on the contrary, they are essential for the promotion of a free market economy re-conceptualized in the light of diversity."
After a preliminary introduction (Paragraph 1), Islamic justice (‘adl) is firstly contextualized within the Qur’ānic Creator paradigm of Sunnī Ash‘arī theology, moving from God’s authority to human responsibility for following the Path (Sharī‘ah) (Paragraph 2).
Within this frame, the fundamental interdependence in Islām between the notions of ‘Law’ (ḥukm) and ‘right’ (ḥaqq) is disclosed, highlighting how the ‘right’ (ḥaqq) realizes in the creation what is already established by the ‘decree’ (ḥukm) of the only Truth (Paragraph 3).
Accordingly, IEF rationales (the necessary reference to tangible assets; the prohibitions of ribā, gharar and maysir; asset-backed and risk-sharing investment strategies) are later interpreted as coherent expressions of a theory of justice connecting the ‘monism of the rule’ with the ‘realism of the right’. In other terms, it is the reality of the only Truth that guarantees in Islām equality for all mankind, giving rise to a paradigm of ‘participation’ that is autonomous from the ‘division’ of resources ruling conventional economics (Paragraph 4).
Finally, Paragraph 5 adds two corollaries to the discussion. First, it postulates the possible co-existence of complementary practice(s) of IEF, as manifestations of other theological positions next to orthodox Ash‘arī Sunnism (e.g. doctrine of maqāṣid al-Sharī‘ah, close to Mu‘tazilism; Shī‘ites). Second, it upholds that IEF offers, next to conventional economics, an alternative path towards sustainable development and growth within the frame of a plural market economy.
The reasoning proceeds as follows.
Reviewing the ethical approach to Islamic finance (Section I), the paper firstly broadens the discussion to property rights issues, and identities a hiatus between descriptive and normative theories, being the latter centred on a universality of Western capitalism that is challenged by the former. On the matter, a plural approach to property rights is suggested as a valuable way to fill this gap (Section II).
Within this framework, the paper highlights how, differently from Western capitalism, Islamic property rights postulate a ‘participation’ in justice that is achieved by ‘sharing’ economic resources, and is derived from the conceptualization of legal, commutative and distributive justice in Islam. As a result, Islamic capital theory implies (1) the primacy of real economy over finance, (2) the prevention of unjustified income (riba), uncertainty (gharar) and speculation (maysir); (3) the focus on asset-backed and risk-sharing investment strategies (Section III).
As corollary of the discussion, Section IV proposes a plural paradigm for capitalism.
By gathering major experts on the interaction between law, economics, ethics and religion in a frame of cultural diversity, the School will prove an illuminating opportunity for students, researchers and professionals to investigate the impact on market economy of an increasingly globalised world."
This post refers to Islamic economics as an alternative to conventional property rights.
In this direction, assuming that not only is money a means of exchange but also a social relation, the study describes its (1) “substance”, (2) “form”, (3) the “price” as efficient cause, and highlights (4) how “Islamic money” (either as purchasing or investing power), by relating both to the “life of goods” (hayat al-amwal) and the “life of human beings” (hayat al-nufus), fosters a trade community where the market is conceived as a common venture of partnership, profit- and risk-sharing (Part I).
Accordingly, in the light of the peculiar identity of “Islamic money” in comparison to “Western money”, the paper argues that current regulatory policies should recognize the specific socio-economics of Islamic finance as complementary to that of the conventional financial system, and suggests relevant strategies to nourish the full potential of “Islamic money” in relation to the “community of credit” that it embraces (Part II).
Final considerations also comment on the current dynamics of interaction between Islamic and conventional finance within global capitalism.
Paper presented at the 11th International Conference on Islamic Economics and Finance (11th ICIEF): "Rethinking Islamic Economics and Finance: Paving the Way Forward for Inclusive and Sustainable Development" - 11-13 October 2016, Kuala Lumpur, Malaysia
The paper advances an interpretation of the current EU political impasse about how to deal with the Covid-19 emergency by shifting Agamben's paradigm of the 'homo sacer' to the 'sacertas' of the Euro. In this frame, it describes the Euro as a currency (nomisma) lacking in an appropriate nomos to give Member States (economic) credit backed by EU (political) credit.
To this aim it raises some critical remarks on possible hermeneutical mistakes in asserting an immediate convergence between the former and the latter through sustainability. Accordingly the text warns the readers that the operativity of Islamic social finance does not correspond precisely to those of SDGs: on the contrary, it is grounded on a different paradigm of socio-economic inclusion derived from Islam, of which the interpret must be conscious when pursuing objectives of sustainable development and shared prosperity.
[The manuscript is going to be published in the form of a contribution to the GIFR 11th ed. - "Islamic Social Finance for Socio-Economic Inclusion & Sustainable Development"]