INTEREST IN ISLAM OR SHARIA LAW

In this article we shall attempt to outline the definition of interest, so called (Riba) under the Sharia or Islamic law, followed by a short survey of the laws of some Arab countries which have prohibited or permitted charging interest. This article is supplementary to a previous article by the authors, entitled: Application of Islamic Law in the Middle East, and would be better understood if read together.

Regulation and prohibition of charging interests are as old as making laws in the human history. Babylon Code of law in 1750 B.C. laid down a number of restrictions and ceilings on the amount of interests.¹

Christianity and Judaism have also restricted or prohibited charging interest. That the practice has been different is another question.

Under Islamic Law, charging interest or Riba is forbidden by verses of the holy Koran, and the "Hadith". But the uncertainty and the difficulty lie in the lack of a precise definition of Riba and the types of Riba. This difficulty is further deepened because of the many different opinions between the various schools of Islam.

Sources of Prohibition of Interest

The prohibition of Riba or interest in the Koran came gradual and in stages, starting with discouragement and condemnation of Riba by the Koran to the final prohibition as laid down in the following verse of the Quran:

"Allah permitted the sale and forbade Riba" (Verse 275, Surah Al Baqarah)

The Hadith of the Prophet went further that: "Every loan which attracts benefit is Riba".

The benefit which renders the transaction prohibited may be a sum of money, or any goods of a value.²

Thus, the prohibition has a far wider meaning and application than prohibition of charging interest on loans. It is a prohibition of usury and any unearned accretion on the capital or the principal, whether it is in the form of interest or any benefit.

Definition of Interest

Riba may be defined as: "monetary advantage without counter value, an advantage which is stipulated in favour of one of the parties in exchange of two monetary values".³ It may also be defined as: "any unjustified increase of capital for which no compensation is given".

The Economic Foundation

The basic concept of Islam is that wealth should not be hoarded or wasted, it should be put to productive use so that the owner, the society and the less privileged may share the benefits. It follows that it is not permissible to leave money idle and charge interest or profit from the mere use of the money by another party without regard to risks, or profits, that may generate. Usurers only seek profit, or interest without risks. This is contrary to the foundation of Islamic economy which is based on equity and equilibrium.

From the aforesaid concept stems the principle of profit and risk sharing between the owner of the capital and the other party, i.e. the borrower. Thus, in contrast to the conventional banking, the capital owner cannot claim both a fixed interest as well as the guarantee of the return of his capital.⁴

Also, Sharia does not consider money as such a commodity, but as a means of payment and as a neutral measure of valuation rather than a commodity by itself

Nevertheless, the owner of the capital may receive compensation on the basis of sharing profits and risks. The prohibition of trading with money plus interest aims at ensuring that money remains a stable value. ⁵

The aforementioned concepts also signify the basis of economic philosophy and Islamic banking. This underlines the difference between Western and Islamic Banking Systems, as we shall see later. In Islamic economy and banking, both profit taking and risks sharing goes together.

Based on the above, Sharia prohibited usury, as well as transactions having unusual uncertainty and unknown perils called "Gharar", such as gambling, because such transactions run contrary to the principle of balanced relationship or equivalence.

Though, Sharia recognises the sanctity of the contract, the prohibition of usury and contracts of "Gharar" together with some other principles of Sharia (such as unjustified enrichment) have created restrictions on the freedom of contracting, which Islamic banking must observe in any banking transaction.

Usury in Debts

There are several types of usury, some of which are no longer in use.⁶

Usury in debts or in loans, also called "Riba al-nasia", is the most relevant type of usury practised today. It is a loan or exchange of goods with a condition that the borrower repays the goods or the loan later in addition to an increase in value. Thus, there are two main elements at least:

• Repayment at a future date

• And an increase on the principal given by the creditor.

Repayment of the principal may be:

• Of the same kind whether they are measured or weighed or not, such as selling one ton of wheat for two tons of wheat delivered later, or such as lending £ 100 for £ 120 to be paid later, or

• of a different kind if measured or weighed, such as selling one ton of wheat for 2 tons of rice later, or selling one ton of wheat of a value of £ 10 for £ 20 paid later.

Prior to Islam, usury in debt was a common practice whereby the creditor provided the borrower money or goods and received from the debtor interest or increase periodically, and the principal or the loan was to be returned in full at a future date, a practice called "Ribal al Jahiliya."⁷

In short, usury in debt, i.e. an exchange of goods whether of the same kinds or not for a delayed repayment with an increase, is prohibited by Sharia according to the verses of Quran and the Hadith. This includes interest charging on loans in today banking transactions. Every loan containing a provision for an increase above the capital is forbidden under Sharia.

It is worthwhile to note that though it is forbidden to agree on an increase in price or value because of delay in repayment, Sharia allows an agreement to sell goods on deferred payment for a price which is higher than the price of the same sale in cash. In this case, and contrary to the ordinary loan agreement, both parties are exposed to certain risks: the seller agrees on a fixed price to be received at a future date, thus accepting the risk if the market price increases at the date of payment. At thesame time, the buyer accepts the immediate transfer of the property of the goods sold, thus assuming all the risks attached to such a transfer of property.

Also, in a contract of sale, deferred delivery of goods or forward purchase, the so called "Sale of Salam", is permitted for a lower price if the goods are specified, as an exception to the prohibition of the rules of Gharar. ⁸

As to the effect of interest provision on the contract, there exist different views. For instance, Hanafi School considers the provision concerning interest null and void, but the remaining contract as valid. Hanbali School considers a loan agreement with interest ipso facto as null and void.

Below is a short survey of the provisions of some of the civil and commercial Arab Codes dealing with interest followed by certain court decisions.

Interest under Arab Civil and Commercial Codes

The question as to whether charging interest is permissible or illegal has been dealt with by the Arab Civil Codes and Commercial Codes in different manners. It has also been subject to many court decisions in most of the Arab countries. But the outcome has been nearly always in favour of allowing the Western system of interest taking to continue. This is in spite of the constitutional provisions in many Arab countries which declare Islamic law or Sharia as the main source (as in Egyptian constitution) or a source of legislation (as in Kuwaiti and UAE Constitutions), which we have dealt with in a previous article on the Application of Islamic Law in Middle East.

In general the Civil and Commercial Codes of the Arab countries may be divided in two categories as to the manner of dealing with the question of interest:

Firstly: Egyptian Civil Code and those Arab Codes which followed closely the Egyptian Civil Code, whereby charging interest is declared as legal by the relevant Civil Code whether in civil or in commercial matters.

Article 226 of the Egyptian Civil Code provides that:

• If the object of an obligation is payment of a sum of money, the amount of which is known at the date of filing a claim, and the debtor delayed the payment, then the debtor shall pay the creditor as compensation for delay 4 % interest in civil matters and 5 % in commercial matters. Such interest shall be calculated as from the date of filing the case.
  
  As we shall see later, this article 226 was subject of the decision of the constitutional Court of Egypt issued in May 1985.

• Article 171 of the Iraqi Civil Code is identical to the Article 226 of the Egyptian Civil Code, except that the Iraqi Civil Code stipulates that the object of the obligation must be known at the date the obligation arose instead of the time of filing the claim as the Egyptian Civil Code requires.

• Article 227 of the Egyptian Civil Code as well as Article 172 of the Iraqi Civil Code lay down the maximum limits for the interest charged, and provide that the parties in a loan agreement or contract may agree on a rate of interest if it is below the maximum rate.

• Also, Article 231 of the Egyptian Civil Code, as well as Article 173 of the Iraqi Civil Code have entitled the creditor to claim supplementary indemnity in addition to the interest if the creditor suffered loss or damages as a result of gross fault or cheating by the debtor. Similar provisions may be found in other Arab Civil or Commercial Codes, as in article 114 of the Kuwaiti Commercial Code and article 91 of the UAE Commercial Code.

• Article 228 of the Egyptian Civil Code, as well as paragraph 2 of Article 173 of the Iraqi Civil Code provide that in order for the interest to fall due, the creditor shall not be required to prove loss or damage.

• The Syrian Civil Code, Articles 227-229, and the Libyan Civil Code, Articles 229-231, have laid down similar provisions as the Egyptian Civil Code, except that each Civil Code adopted a different maximum rate of interest, which the parties to an agreement must not exceed.

• Egyptian Civil Code, Article 232 and other Arab Civil and/or Commercial Codes have prohibited charging compound interests.

The authors of the Arab Civil Codes, which provided for interest appear to justify that on the ground that: in cases of delay of payment, interest amounts to compensation, because the creditor suffers loss due to lending his capital or as a result of the delay of payment by the debtor, especially when the debtor fails intentionally to pay in time. Some writers have argued that interest in certain cases amount to indemnification or compensation for losses suffered by the creditor. To reach to such conclusion, they have relied on the Islamic principle of "There shall be no unfair loss nor the causing of such loss", among other arguments.⁹

Secondly: Kuwaiti and UAE Civil and Commercial Codes distinguishes between civil matters, whereby charging interest is not allowed in the Civil Codes, and commercial matters, whereby interest is permitted under the Commercial Codes.

Kuwait

• Article 547 of the Kuwaiti Civil Code states: "1. Loans shall be without interest. Any condition to the contrary shall be void without prejudice to the loan agreement. 2. Any benefit which the lender stipulates shall be deemed as interest".

• Article 550 of the Kuwaiti Civil Code (similar to article 719 of the UAE Civil Code) goes further and states that no account shall be taken of any change in the value of money, i.e. fluctuation, decrease of increase of money.

Notwithstanding the said provisions, Article 102 of the Commercial Code stipulates that "1. The creditor shall be entitled to an interest in a commercial loan unless otherwise is agreed upon. If the rate of interest is not stipulated in the contract, the rate due shall be the 7 % legal rate. 2. If a rate agreed upon is stipulated in the contract, and the debtor delays settlement, the interest for the delay shall be calculated on the basis of the agreed rate". Here, it is noted that Article 102 provides an assumption in favour of the creditor to receive interest, even when the agreement is silent.

• Article 110 of the Kuwaiti Commercial Code lays down provisions similar to Article 171 of the Iraqi Civil Code, and Article 226 of the Egyptian Civil Code by imposing 7 % legal interest on the debtor who fails to pay in time.

• Article 111 of the Kuwaiti Commercial Code lays down a maximum rate of interest similar to Article 227 of the Egyptian Civil Code and Article 172 of the Iraqi Civil Code.

According to Article 3 of the Kuwaiti Commercial Code, the Code applies to all commercial matters, including loan agreement, and prevails over the provisions of the Civil Code.

Thus, we see here a straight forward prohibition of interest under the Civil Code in compliance with the Sharia, while the Commercial Code – as a special law – allows interest charging contrary to the principles of Sharia.

It is worthwhile to recall that Article 1 of the Kuwaiti Civil Code provides that Sharia applies as a source of law in case of the absence of an express legislative provision, but only in the absence of a rule of custom. Also Article 2 of the Kuwaiti Constitution declares that Sharia is a principal source of legislation, among other sources.

U A E

UAE Civil and Commercial Codes have adopted a similar approach as the Kuwaiti Code in prohibiting interest under the Civil Code and allowing it under the provisions of the Commercial Code.

• Article 714 of the UAE Civil Code of 1985 provides that:
  
  "If the contract of loan provides for a benefit in excess of the essence of the contract, otherwise than a guarantee of the rights of the lender, such provision shall be void but the contract shall be valid."

Contrary to the above mentioned provisions, Article 76 of the UAE Commercial Code of 1993 states that a creditor may stipulate interest in a commercial loan agreement. If he fails to stipulate the rate of the interest, the current market interest rate shall apply not exceeding 12 %. Here again, there is a presumption in favour of the creditor to claim interest, even if he fails to stipulate that in the agreement.

• Article 88 of the Commercial Code has laid down provisions (similar to Article 171 of the Iraqi Civil Code, and Article 226 of the Egyptian Civil Code, imposing legal interest for delay in payment.

In Jordan the Civil Code did not deal with interest, but interest is charged in accordance with the provisions of an old Ottoman law as well as the 1988 Code of Civil Procedures.

Decisions of the Courts

Having reviewed briefly the provisions of the laws in some Arab countries dealing with interest, it is worthwhile to see how the court in some Arab countries have dealt with the matter.

Constitutional Court of Egypt

Decision of 4^th May 1985

During 1980 Article 2 of the Egyptian Constitution was amended to read that:

"Islam is the religion of the State…. And the principles of the Sharia are THE main sources of legislation".

The Rector of the Al Azhar University filed a case against the President and others claiming that the provisions of Article 226 of the Egyptian Civil Code which allow interest for delay in payment is unconstitutional and contrary to the Article 2 of the Constitution referred to before.

The Court held that: Charging interest is prohibited by Sharia, but Article 2 of the Constitution has no retrospective effect, and therefore Article 226 remained in force and was not effected by the amendment. Article 2 of the Constitution has not made Sharia directly the common law of the land and that it does not directly apply. But, it has imposed an obligation on the legislator to observe and apply Sharia principle in any future legislation. ¹⁰

Thus, Article 2 of the Constitution is a limitation on the legislator to apply Sharia in respect of any future enactment, and the laws enacted prior to the date of the amended Article 2 of the Constitution, such as the Civil Code, are not effected. Therefore, Article 226 of the Civil Code remains enforceable, though contrary to Sharia.

This decision of the Constitutional Court is widely criticized as poor and not convincing. It is argued that the provisions of Article 2 of the Constitution and the prohibition of interest have become part of the public order and morals and should be applied at least from the date of the enactment in 1980. And the Constitutional Court has the duty and function to control and ensure that the application of the laws are not in contradiction with the Constitution. It has further been argued that the court might have done better if it had based its decision on the principles of necessities and common interest of the society to justify charging interest under the present economic regime.¹¹

It has also been submitted that imposition of interest under Article 226 of the Egyptian Civil Code and similar provisions is a compensation for loss suffered by the creditor due to the failure of the debtor to pay. The creditor does not stipulate interest under Article 226, but the obligation to pay interest arises after the failure of the debtor to pay. This is in conformity with the Sharia principles of "Theman" that a person causing damage must compensate. In support of this opinion it is also said that: Islam encourages giving loan without interest, but the debtor must act in good faith. The failure to repay the loan in time is intentional fault and amounts to bad faith." Therefore, the reasons "illah" behind the prohibition of interest is not present in such cases. Consequently, it is argued, imposing interest for delayed payment falls outside the prohibition of Riba.¹²

Kuwait Constitutional Court, Decision of 28.11.1992

An appeal was submitted to the Constitutional Court on the basis that Article 2 of the Constitution provided that Sharia is a main source of legislation and Article 110 and 113 of the Commercial Code permit charging interest for delay in violation of the Constitution. Therefore, the Appellant claimed the court must declare Articles 110 and 113 unconstitutional.

The Court held that:

Article 2 of the Constitution is a directive to the legislator to resort to Sharia as a source among other sources for legislation, but it does not prevent it from applying other sources of law when necessities arise. It imposes on the legislator only a trust to adopt the Sharia principles to the extent possible, it is a political directive to the legislator to adopt Sharia, but the legislator remains free to withdraw principles of law from other sources which the legislator finds suitable. The judge may not ignore an express provision of law such those of Article 110 and 113 and apply Sharia, but he may resort to the application of Sharia only when there is no express provision in the law.¹³

Sharia is not THE source and not the only source of law. Based on that the court held that Articles 110 and 113 of the Kuwaiti Commercial Code permitting interest are constitutional.

It is noted that the reasoning of the Kuwaiti court runs parallel to the reasoning of the Egyptian Al Azhar case, in certain aspects, except that the Kuwaiti court did not contend that Article 2 of the Constitution has no retrospective effect. But, in both cases the court appeared to aim at one thing, i.e. legitimising interest by all means.

UAE Supreme Federal Court, Decision dated. 06.09.1983

The Defendant, a company, which borrowed a sum of money from a bank, claimed that Sharia has prohibited interest and specially compound interest. Therefore, the Defendant had no obligation to pay the sums claimed by the bank. The appellant, a bank, appealed to the Federal Court in Abu Dhabi against the decision of the lower court for the remaining sum of a loan and interest allegedly due from a company. The appellant contended that the court may apply the Sharia only in cases of absence of an express provision in the law as stated in Article 5 of the Code of the UAE Civil Procedures no. 3 of 1970. Articles 61 and 62 of the said law permit charging interest expressly, therefore the court can not set aside the express provisions of the law and apply the principles of Sharia prohibiting interest.

The Federal Supreme Court held that Sharia has prohibited interest, but has at the same time made exception to the prohibition by the application of the Sharia principle of: "Necessity permits what would be otherwise forbidden". Also, the court further argued that Islamic jurisprudence allows exceptions to a rule when there is overwhelming interest of the society. Based on the foregoing principles, Sharia has recognised sale of "Salam" and contract of "Istisnah" as exceptions to rules, which render the sale of non-existing object invalid.

Based upon the aforesaid principles, charging simple interest should be considered as exception to the rule of prohibition due to the necessities, requirements, and interest of the people. Consequently, the provisions of Articles 61 and 62 of the Code of the Civil Procedures of 1970 are constitutional, the court held.

The court added to the above mentioned reasoning that the judge must respect the will of the parties, and may not ignore the agreement of the parties except in exceptional circumstances. Thus, the court can not set aside the agreement of the parties to pay interest unless the rate is in excess of the maximum legal rate or in cases of compound interests which the law expressly forbade.¹⁴

Furthermore, the court held that the interest in the case subject of the appeal amounts to compensation. Accordingly, the court rejected the contention of the defendant.

In another case, the UAE Supreme Court held that though article 714 of the Civil Code prohibits interest, but the Civil Code as such does not apply to commercial transactions, and that charging interest by banks is permitted under the Commercial Code.¹⁵

The Civil Procedural Law of 1970 has now been replaced by the new Civil Procedural Law no. 11 of 1992 and Articles 76, 77, 88 and 409 of the UAE Commercial Code of 1993 leave no doubt that charging simple interest in commercial and banking transactions is permitted.

In conclusion, it appears from the foregoing review, that courts and the legislators in the Arab countries have succeeded up to now in paying a lip service to the rules of the Sharia and have survived the conflict created by the application of the Sharia vis a vis the requirements of the modern secular legal and commercial systems.

Islamic Banking

The Islamic financing and banking institutions have grown successfully within the last 20 years in response to popular need in Islamic countries for free interest financing as well as the need of Western and American markets for new capitals. OPEC surplus made it possible for both sides to use the huge surplus money. However, the size of the Islamic Banking transactions remains small as compared to the traditional banking, but it is steadily growing.

It is estimated that there are about US $ 100 billion investment worldwide according to Sharia principles; relatively a small sum but significant considering the short period during which Islamic financial institutions and Islamic funds have existed. The use of Islamic investment funds and banking is not confined to the Middle East but has been adopted by a number of conventional banks in USA and Europe.

We shall attempt here-below to outline the main features of Islamic banking and the differences with conventional banking as well as some of tools used by such institutions as financing instruments.

General Features

Islamic banking refers to a banking and financing system which ensures that the financial transactions conform to Islamic law principles.

The management of such financial institutions includes a board of Islamic scholars and advisors who examine each financial transaction to ensure compliance with Sharia.

In Islamic banking, both risk and profit go together, and depositor is deemed as a shareholder, taking profits or sharing loss. The bank often act as trustee acting on behalf of their clients whether depositors or borrowers in accordance with the principles of Sharia.

The concept of Islamic financing aims not only at making profit, but also at achieving economic development and social justice in comparison with conventional banking system which is based on debts and interests.

The main differences between the conventional and Islamic banking stem from the prohibition of Riba, and "Gharar" or gambling transactions by Sharia, as stated before.¹⁶ Also, the prohibition of "Gharar", gambling and aleatory transactions under Sharia lead to restrictions on the activities of the Islamic banks. These are transactions which are too speculative or based on unknown and uncertain events, with significant high risks. These and other rules of the Sharia have shaped the types of financial transactions adopted by Islamic banks. Accordingly, the Islamic financial institutions have developed certain contracting models based on no-interest concept to satisfy the needs of the market.

The following are the most popular banking instruments or model contracts commonly known by their Arabic names:

Murabaha (Trade Financing)

A customer with traditional banking relationships wishes to purchase raw materials or goods for which it does not have the funds to pay the purchase price. It borrows the amount of the purchase price from the bank, which may take a charge or lien against the goods purchased and require the customer to repay the amount of interest. An Islamic institution cannot extend such a loan but it can help the customer to make the purchase by buying the goods from the supplier and then selling the same to the customer at a profit.¹⁷

The bulk of Islamic bank funds are operated through murabaha contracts (a sale at percentage mark up). In this type of contract the customer orders the bank to buy goods according to his specifications from a supplier. The customer further promises to purchase these goods from the bank for costs plus a mark up. In practice, the bank purchases the goods only when it is satisfied that the customer will purchase them. This second sale between the bank and its customer is usually on credit. By involving the bank as a seller, the customer can purchase the goods on credit and the bank can claim compensation for their services by demanding a higher sales price. Legally the customer is not just borrowing money for interest but buying goods on credit, permissible under Islamic law. In other words the transaction between the bank and its customer is a sale on credit and not a loan.

The critical difference between a Murabaha financing and traditional purchase financing is that the bank in a Murabaha must actually take title to the goods in question and transfer that title to the ultimate purchaser later. This passage of title raises questions of defects in title, claims, risk of loss, and insurance that must be carefully considered in negotiating and drafting any Murabaha contract. It is also important to determine where and under the law of which nation the title passes, for this will affect whether the title passes at all and whether the purchase and subsequent sale by the Islamic institution or the bank are events subject to transfer, ad valorem, or income taxes of any kind.

To reduce the risks of the bank, in practice, the first and the second sale takes place simultaneously when the title of the goods is transferred to the bank.

Also, an important limitation of the Murabaha arrangement is that it requires three unrelated parties – the supplier, the Islamic institution or the bank and the ultimate purchaser or customer. In such transactions all parties carry certain risks and benefits.

Mudaraba (Profit Sharing Finance)

If a company requires financing a project, but not management or administrative assistance for a project or business opportunity, Islamic institutions or banks may use the Mudaraba contract, in which the Islamic institution or the bank provides the necessary financing and the company provides the work, executes and manages a project. Here there are two phases of transactions. In the first phase, the capital owner deposits his capital in the bank and the bank acts as the party investing the capital, i.e. as "mudarib".

In the second phase, the bank acts as provider of the capital, and the company as a second "mudarib" equivalent to a conventional borrower, which requires and uses the money for a project. The profit (if any) made by the company out of the project is divided according to an agreed proportion between the bank and the company.

The Islamic bank later divides again the profit between the bank and the first capital owner. The bank may also charge fees for its normal services, but not interest.

Such transactions are governed by two basic principals, both derived from Islamic law. Instead of taking interest for lending money, capital providers are involved in a profit and risk sharing arrangement.

The first principle is that the return on capital cannot be fixed in advance but is described by a proportion of profits. The capital provider and the mudarib who makes use of the capital, both share the profit according to agreed proportions.¹⁸

The second principle is that the capital owner shares the risks out of the project. Thus, in case of the project looses, the capital owner is liable up to the capital he invested, but not beyond that amount, and the bank does not guarantee the return of the initial capital to the capital owner, and the company or the "mudarib" may lose his labour. Thus, in contrast to conventional banking, the capital provider cannot claim both a fixed interest and the assured return of his capital.

Musharaka, Joint Ventures

A company has a project or business opportunity that requires both financing and management assistance. It may find an Islamic institution willing to enter into a partnership or Musharaka arrangement whereby the company and the Islamic bank are partners in the true sense, sharing equity, management, profit, and losses, according to an agreement made between them. This is Islamic finance in a pure sense, in that it carries out the fundamentals of sharing and putting wealth to productive use.

In entering into a Musharaka arrangement, the considerations are the same as the considerations in any joint venture or partnership. The parties must address the general questions of what the partnership is intended to do, how it will be managed, how the profits and losses will be shared, and how the arrangement can be terminated. Here, the bank may take a lower ratio of profits, but in cases of losses it becomes liable up to its full equity ratio.

A Musharaka arrangement may be related to financing a particular project, whereby the agreement is terminated after completion of the project, or may be linked to a continuing project, in which case the bank receives back its investment progressively according to the project’s ability to repay the initial investment and the agreed profit. The return is based on the revenue out of the project instead of charging interest.

The aforementioned transactions ensure the observance of the riba prohibition and satisfy the rule that when money is lent to another party for a period of time, compensation for the financing may not be a predetermined amount guaranteed by the other party to the contract. Furthermore, such transactions are based on the notion of sharing profit and risks, and on avoiding riskless gains.

There are other instruments and model contracts developed by the Islamic institutions to conform with Islamic principles such as leasing contract (Ijara), whereby a company requests the bank to purchase certain machinery and to lease the machinery to the company for an agreed regular fee.

These and other instruments used by the Islamic banks have proved to be workable, for most of modern transactions are capable to be broken down into sale, purchase, lease and joint venture agreements.¹⁹

Also, it is noted that there are continuous efforts to develop new Islamic banking instruments which are in conformity with Islamic principles, and at the same time realistic and profitable.

Islam prohibits interests, but at the same time commands legitimate and fair commerce and legitimate wealth creation. It does not restrict the freedom of contracting and trading as long as they conform to the general principles of Sharia. Islamic banking is still in making and its future depends on its ability to find new ways of trading and investing

Islam and Modern in the science

Contemporary Islam is not known for its engagement in the modern scientific project. But it is heir to a legendary “Golden Age” of Arabic science frequently invoked by commentators hoping to make Muslims and Westerners more respectful and understanding of each other. President Obama, for instance, in his June 4, 2009 speech in Cairo, praised Muslims for their historical scientific and intellectual contributions to civilization:

It was Islam that carried the light of learning through so many centuries, paving the way for Europe’s Renaissance and Enlightenment. It was innovation in Muslim communities that developed the order of algebra; our magnetic compass and tools of navigation; our mastery of pens and printing; our understanding of how disease spreads and how it can be healed.

Such tributes to the Arab world’s era of scientific achievement are generally made in service of a broader political point, as they usually precede discussion of the region’s contemporary problems. They serve as an implicit exhortation: the great age of Arab science demonstrates that there is no categorical or congenital barrier to tolerance, cosmopolitanism, and advancement in the Islamic Middle East.

To anyone familiar with this Golden Age, roughly spanning the eighth through the thirteenth centuriesa.d., the disparity between the intellectual achievements of the Middle East then and now — particularly relative to the rest of the world — is staggering indeed. In his 2002 book What Went Wrong?, historian Bernard Lewis notes that “for many centuries the world of Islam was in the forefront of human civilization and achievement.” “Nothing in Europe,” notes Jamil Ragep, a professor of the history of science at the University of Oklahoma, “could hold a candle to what was going on in the Islamic world until about 1600.” Algebra, algorithm, alchemy, alcohol, alkali, nadir, zenith, coffee, and lemon: these words all derive from Arabic, reflecting Islam’s contribution to the West.

Today, however, the spirit of science in the Muslim world is as dry as the desert. Pakistani physicist Pervez Amirali Hoodbhoy laid out the grim statistics in a 2007 Physics Today article: Muslim countries have nine scientists, engineers, and technicians per thousand people, compared with a world average of forty-one. In these nations, there are approximately 1,800 universities, but only 312 of those universities have scholars who have published journal articles. Of the fifty most-published of these universities, twenty-six are in Turkey, nine are in Iran, three each are in Malaysia and Egypt, Pakistan has two, and Uganda, the U.A.E., Saudi Arabia, Lebanon, Kuwait, Jordan, and Azerbaijan each have one.

There are roughly 1.6 billion Muslims in the world, but only two scientists from Muslim countries have won Nobel Prizes in science (one for physics in 1979, the other for chemistry in 1999). Forty-six Muslim countries combined contribute just 1 percent of the world’s scientific literature; Spain and India eachcontribute more of the world’s scientific literature than those countries taken together. In fact, although Spain is hardly an intellectual superpower, it translates more books in a single year than the entire Arab world has in the past thousand years. “Though there are talented scientists of Muslim origin working productively in the West,” Nobel laureate physicist Steven Weinberg has observed, “for forty years I have not seen a single paper by a physicist or astronomer working in a Muslim country that was worth reading.”

Comparative metrics on the Arab world tell the same story. Arabs comprise 5 percent of the world’s population, but publish just 1.1 percent of its books, according to the U.N.’s 2003 Arab Human Development Report. Between 1980 and 2000, Korea granted 16,328 patents, while nine Arab countries, including Egypt, Saudi Arabia, and the U.A.E., granted a combined total of only 370, many of them registered by foreigners. A study in 1989 found that in one year, the United States published 10,481 scientific papers that were frequently cited, while the entire Arab world published only four. This may sound like the punch line of a bad joke, but when Nature magazine published a sketch of science in the Arab world in 2002, its reporter identified just three scientific areas in which Islamic countries excel: desalination, falconry, and camel reproduction. The recent push to establish new research and science institutions in the Arab world — described in these pages by Waleed Al-Shobakky (see “Petrodollar Science,” Fall 2008) — clearly still has a long way to go.

Given that Arabic science was the most advanced in the world up until about the thirteenth century, it is tempting to ask what went wrong — why it is that modern science did not arise from Baghdad or Cairo or Córdoba. We will turn to this question later, but it is important to keep in mind that the decline of scientific activity is the rule, not the exception, of civilizations. While it is commonplace to assume that the scientific revolution and the progress of technology were inevitable, in fact the West is the single sustained success story out of many civilizations with periods of scientific flourishing. Like the Muslims, the ancient Chinese and Indian civilizations, both of which were at one time far more advanced than the West, did not produce the scientific revolution.

Nevertheless, while the decline of Arabic civilization is not exceptional, the reasons for it offer insights into the history and nature of Islam and its relationship with modernity. Islam’s decline as an intellectual and political force was gradual but pronounced: while the Golden Age was extraordinarily productive, with the contributions made by Arabic thinkers often original and groundbreaking, the past seven hundred years tell a very different story.

Original Contributions of Arabic Science

A preliminary caution must be noted about both parts of the term “Arabic science.” This is, first, because the scientists discussed here were not all Arab Muslims. Indeed, most of the greatest thinkers of the era were not ethnically Arab. This is not surprising considering that, for several centuries throughout the Middle East, Muslims were a minority (a trend that only began to change at the end of the tenth century). The second caution about “Arabic science” is that it was not science as we are familiar with it today. Pre-modern science, while not blind to utility, sought knowledge primarily in order to understand philosophical questions concerned with meaning, being, the good, and so on. Modern science, by contrast, grew out of a revolution in thought that reoriented politics around individual comfort through the mastery of nature. Modern science dismisses ancient metaphysical questions as (to borrow Francis Bacon’s words) the pursuit of pleasure and vanity. Whatever modern science owes to Arabic science, the intellectual activity of the medieval Islamic world was not of the same kind as the European scientific revolution, which came after a radical break from ancient natural philosophy. Indeed, even though we use the term “science” for convenience, it is important to remember that this word was not coined until the nineteenth century; the closest word in Arabic — ilm— means “knowledge,” and not necessarily that of the natural world.

Still, there are two reasons why it makes sense to refer to scientific activity of the Golden Age as Arabic. The first is that most of the philosophical and scientific work at the time was eventually translated into Arabic, which became the language of most scholars in the region, regardless of ethnicity or religious background. And second, the alternatives — “Middle Eastern science” or “Islamic science” — are even less accurate. This is in part because very little is known about the personal backgrounds of these thinkers. But it is also because of another caution we must keep in mind about this subject, which ought to be footnoted to every broad assertion made about the Golden Age: surprisingly little is known for certain even about the social and historical context of this era. Abdelhamid I. Sabra, a now-retired professor of the history of Arabic science who taught at Harvard,described his field to the New York Times in 2001 as one that “hasn’t even begun yet.”

That said, the field has advanced far enough to convincingly demonstrate that Arabic civilization contributed much more to the development of science than the passive transmission to the West of ancient thought and of inventions originating elsewhere (such as the numeral system from India and papermaking from China). For one thing, the scholarly revival in Abbasid Baghdad (751-1258) that resulted in the translation of almost all the scientific works of the classical Greeks into Arabic is nothing to scoff at. But beyond their translations of (and commentaries upon) the ancients, Arabic thinkers made original contributions, both through writing and methodical experimentation, in such fields as philosophy, astronomy, medicine, chemistry, geography, physics, optics, and mathematics.

Perhaps the most oft-repeated claim about the Golden Age is that Muslims invented algebra. This claim is largely true: initially inspired by Greek and Indian works, the Persian al-Khwarizmi (died 850) wrote a book from whose title we get the term algebra. The book starts out with a mathematical introduction, and proceeds to explain how to solve then-commonplace issues involving trade, inheritance, marriage, and slave emancipations. (Its methods involve no equations or algebraic symbols, instead using geometrical figures to solve problems that today would be solved using algebra.) Despite its grounding in practical affairs, this book is the primary source that contributed to the development of the algebraic system that we know today.

The Golden Age also saw advances in medicine. One of the most famous thinkers in the history of Arabic science, and considered among the greatest of all medieval physicians, was Rhazes (also known as al-Razi). Born in present-day Tehran, Rhazes (died 925) was trained in Baghdad and became the director of two hospitals. He identified smallpox and measles, writing a treatise on them that became influential beyond the Middle East and into nineteenth-century Europe. Rhazes was the first to discover that fever is a defense mechanism. And he was the author of an encyclopedia of medicine that spanned twenty-three volumes. What is most striking about his career, as Ehsan Masood points out in Science and Islam, is that Rhazes was the first to seriously challenge the seeming infallibility of the classical physician Galen. For example, he disputed Galen’s theory of humors, and he conducted a controlled experiment to see if bloodletting, which was the most common medical procedure up until the nineteenth century, actually worked as a medical treatment. (He found that it did.) Rhazes provides a clear instance of a thinker explicitly questioning, and empirically testing, the widely-accepted theories of an ancient giant, while making original contributions to a field.

Breakthroughs in medicine continued with the physician and philosopher Avicenna (also known as Ibn-Sina; died 1037), whom some consider the most important physician since Hippocrates. He authored theCanon of Medicine, a multi-volume medical survey that became the authoritative reference book for doctors in the region, and — once translated into Latin — a staple in the West for six centuries. TheCanon is a compilation of medical knowledge and a manual for drug testing, but it also includes Avicenna’s own discoveries, including the infectiousness of tuberculosis.

Like the later European Renaissance, the Arabic Golden Age also had many polymaths who excelled in and advanced numerous fields. One of the earliest such polymaths was al-Farabi (also known as Alpharabius, died ca. 950), a Baghdadi thinker who, in addition to his prolific writing on many aspects of Platonic and Aristotelian philosophy, also wrote on physics, psychology, alchemy, cosmology, music, and much else. So esteemed was he that he came to be known as the “Second Teacher” — second greatest, that is, after Aristotle. Another great polymath was al-Biruni (died 1048), who wrote 146 treatises totaling 13,000 pages in virtually every scientific field. His major work, The Description of India, was an anthropological work on Hindus. One of al-Biruni’s most notable accomplishments was the near-accurate measurement of the Earth’s circumference using his own trigonometric method; he missed the correct measurement of 24,900 miles by only 200 miles. (However, unlike Rhazes, Avicenna, and al-Farabi, al-Biruni’s works were never translated into Latin and thus did not have much influence beyond the Arabic world.) Another of the most brilliant minds of the Golden Age was the physicist and geometrician Alhazen (also known as Ibn al-Haytham; died 1040). Although his greatest legacy is in optics — he showed the flaws in the theory of extramission, which held that our eyes emit energy that makes it possible for us to see — he also did work in astronomy, mathematics, and engineering. And perhaps the most renowned scholar of the late Golden Age was Averroës (also known as Ibn Rushd; died 1198), a philosopher, theologian, physician, and jurist best known for his commentaries on Aristotle. The 20,000 pages he wrote over his lifetime included works in philosophy, medicine, biology, physics, and astronomy.

Why Arabic Science Thrived

What prompted scientific scholarship to flourish where and when it did? What were the conditions that incubated these important Arabic-speaking scientific thinkers? There is, of course, no single explanation for the development of Arabic science, no single ruler who inaugurated it, no single culture that fueled it. As historian David C. Lindberg puts it in The Beginnings of Western Science (1992), Arabic science thrived for as long as it did thanks to “an incredibly complex concatenation of contingent circumstances.”

Scientific activity was reaching a peak when Islam was the dominant civilization in the world. So one important factor in the rise of the scholarly culture of the Golden Age was its material backdrop, provided by the rise of a powerful and prosperous empire. By the year 750, the Arabs had conquered Arabia, Iraq, Syria, Lebanon, Palestine, Egypt, and much of North Africa, Central Asia, Spain, and the fringes of China and India. Newly opened routes connecting India and the Eastern Mediterranean spurred an explosion of wealth through trade, as well as an agricultural revolution.

For the first time since the reign of Alexander the Great, the vast region was united politically and economically. The result was, first, an Arab kingdom under the Umayyad caliphs (ruling in Damascus from 661 to 750) and then an Islamic empire under the Abbasid caliphs (ruling in Baghdad from 751 to 1258), which saw the most intellectually productive age in Arab history. The rise of the first centralized Islamic state under the Abbasids profoundly shaped life in the Islamic world, transforming it from a tribal culture with little literacy to a dynamic empire. To be sure, the vast empire was theologically and ethnically diverse; but the removal of political barriers that previously divided the region meant that scholars from different religious and ethnic backgrounds could travel and interact with each other. Linguistic barriers, too, were decreasingly an issue as Arabic became the common idiom of all scholars across the vast realm.

The spread of empire brought urbanization, commerce, and wealth that helped spur intellectual collaboration. Maarten Bosker of Utrecht University and his colleagues explain that in the year 800, while the Latin West (with the exception of Italy) was “relatively backward,” the Arab world was highly urbanized, with twice the urban population of the West. Several large metropolises — including Baghdad, Basra, Wasit, and Kufa — were unified under the Abbasids; they shared a single spoken language and brisk trade via a network of caravan roads. Baghdad in particular, the Abbasid capital, was home to palaces, mosques, joint-stock companies, banks, schools, and hospitals; by the tenth century, it was the largest city in the world.

As the Abbasid empire grew, it also expanded eastward, bringing it into contact with the ancient Egyptian, Greek, Indian, Chinese, and Persian civilizations, the fruits of which it readily enjoyed. (In this era, Muslims found little of interest in the West, and for good reason.) One of the most important discoveries by Muslims was paper, which was probably invented in China around a.d. 105 and brought into the Islamic world starting in the mid-eighth century. The effect of paper on the scholarly culture of Arabic society was enormous: it made the reproduction of books cheap and efficient, and it encouraged scholarship, correspondence, poetry, recordkeeping, and banking.

The arrival of paper also helped improve literacy, which had been encouraged since the dawn of Islam due to the religion’s literary foundation, the Koran. Medieval Muslims took religious scholarship very seriously, and some scientists in the region grew up studying it. Avicenna, for example, is said to have known the entire Koran by heart before he arrived at Baghdad. Might it be fair, then, to say that Islam itself encouraged scientific enterprise? This question provokes wildly divergent answers. Some scholars argue that there are many parts of the Koran and the hadith (the sayings of Muhammad) that exhort believers to think about and try to understand Allah’s creations in a scientific spirit. As one hadithurges, “Seek knowledge, even in China.” But there are other scholars who argue that “knowledge” in the Koranic sense is not scientific knowledge but religious knowledge, and that to conflate such knowledge with modern science is inaccurate and even naïve.

The Gift of Baghdad

But the single most significant reason that Arabic science thrived was the absorption and assimilation of the Greek heritage — a development fueled by the translation movement in Abbasid Baghdad. The translation movement, according to Yale historian and classicist Dimitri Gutas, is “equal in significance to, and belongs to the same narrative as ... that of Pericles’ Athens, the Italian Renaissance, or the scientific revolution of the sixteenth and seventeenth centuries.” Whether or not one is willing to grant Gutas the comparison, there is no question that the translation movement in Baghdad — which by the year 1000 saw nearly the entire Greek corpus in medicine, mathematics, and natural philosophy translated into Arabic — provided the foundation for inquiry in the sciences. While most of the great thinkers in the Golden Age were not themselves in Baghdad, the Arabic world’s other cultural centers likely would not have thrived without Baghdad’s translation movement. For this reason, even if it is said that the Golden Age of Arabic science encompasses a large region, as a historical event it especially demands an explanation of the success of Abbasid Baghdad.

The rise to power of the Abbasid caliphate in the year 750 was, as Bernard Lewis put it in The Arabs in History (1950), “a revolution in the history of Islam, as important a turning point as the French and Russian revolutions in the history of the West.” Instead of tribe and ethnicity, the Abbasids made religion and language the defining characteristics of state identity. This allowed for a relatively cosmopolitan society in which all Muslims could participate in cultural and political life. Their empire lasted until 1258, when the Mongols sacked Baghdad and executed the last Abbasid caliph (along with a large part of the Abbasid population). During the years that the Abbasid empire thrived, it deeply influenced politics and society from Tunisia to India.

The Greek-Arabic translation movement in Abbasid Baghdad, like other scholarly efforts elsewhere in the Islamic world, was centered less in educational institutions than in the households of great patrons seeking social prestige. But Baghdad was distinctive: its philosophical and scientific activity enjoyed a high level of cultural support. As Gutas explains in Greek Thought, Arabic Culture (1998), the translation movement, which mostly flourished from the middle of the eighth century to the end of the tenth, was a self-perpetuating enterprise supported by “the entire elite of Abbasid society: caliphs and princes, civil servants and military leaders, merchants and bankers, and scholars and scientists; it was not the pet project of any particular group in the furtherance of their restricted agenda.” This was an anomaly in the Islamic world, where for the most part, as Ehsan Masood argues, science was “supported by individual patrons, and when these patrons changed their priorities, or when they died, any institutions that they might have built often died with them.”

There seem to have been three salient factors inspiring the translation movement. First, the Abbasids found scientific Greek texts immensely useful for a sort of technological progress — solving common problems to make daily life easier. The Abbasids did not bother translating works in subjects such as poetry, history, or drama, which they regarded as useless or inferior. Indeed, science under Islam, although in part an extension of Greek science, was much less theoretical than that of the ancients. Translated works in mathematics, for example, were eventually used for engineering and irrigation, as well as in calculation for intricate inheritance laws. And translating Greek works on medicine had obvious practical use.

Astrology was another Greek subject adapted for use in Baghdad: the Abbasids turned to it for proof that the caliphate was the divinely ordained successor to the ancient Mesopotamian empires — although such claims were sometimes eyed warily, because the idea that celestial information can predict the future clashed with Islamic teaching that only God has such knowledge.

There were also practical religious reasons to study Greek science. Mosque timekeepers found it useful to study astronomy and trigonometry to determine the direction to Mecca (qibla), the times for prayer, and the beginning of Ramadan. For example, the Arabic astronomer Ibn al-Shatir (died 1375) also served as a religious official, a timekeeper (muwaqqit), for the Great Mosque of Damascus. Another religious motivation for translating Greek works was their value for the purposes of rhetoric and what we would today call ideological warfare: Aristotle’s Topics, a treatise on logic, was used to aid in religious disputation with non-Muslims and in the conversion of nonbelievers to Islam (which was state policy under the Abbasids).

The second factor central to the rise of the translation movement was that Greek thought had already been diffused in the region, slowly and over a long period, before the Abbasids and indeed before the advent of Islam. Partly for this reason, the Abbasid Baghdad translation movement was not like the West’s subsequent rediscovery of ancient Athens, in that it was in some respects a continuation of Middle Eastern Hellenism. Greek thought spread as early as Alexander the Great’s conquests of Asia and North Africa in the 300s b.c., and Greek centers, such as in Alexandria and the Greco-Bactrian Kingdom (238-140 b.c., in what is now Afghanistan), were productive centers of learning even amid Roman conquest. By the time of the Arab conquests, the Greek tongue was known throughout the vast region, and it was the administrative language of Syria and Egypt. After the arrival of Christianity, Greek thought was spread further by missionary activity, especially by Nestorian Christians. Centuries later, well into the rule of the Abbasids in Baghdad, many of these Nestorians — some of them Arabs and Arabized Persians who eventually converted to Islam — contributed technical skill for the Greek-Arabic translation movement, and even filled many translation-oriented administrative posts in the Abbasid government.

While practical utility and the influence of Hellenism help explain why science could develop, both were true of most of the Arabic world during the Golden Age and so cannot account for the Abbasid translation movement in particular. As Gutas argues, the distinguishing factor that led to that movement was the attempt by the Abbasid rulers to legitimize their rule by co-opting Persian culture, which at the time deeply revered Greek thought. The Baghdad region in which the Abbasids established themselves included a major Persian population, which played an instrumental role in the revolution that ended the previous dynasty; thus, the Abbasids made many symbolic and political gestures to ingratiate themselves with the Persians. In an effort to enfold this constituency into a reliable ruling base, the Abbasids incorporated Zoroastrianism and the imperial ideology of the defunct Persian Sasanian Empire, more than a century gone, into their political platform. The Abbasid rulers sought to establish the idea that they were the successors not to the defeated Arab Umayyads who had been overthrown in 650 but to the region’s previous imperial dynasty, the Sasanians.

This incorporation of Sasanian ideology led to the translation of Greek texts into Arabic because doing so was seen as recovering not just Greek, but Persian knowledge. The Persians believed that sacred ancient Zoroastrian texts were scattered by Alexander the Great’s destruction of Persepolis in 330 b.c., and were subsequently appropriated by the Greeks. By translating ancient Greek texts into Arabic, Persian wisdom could be recovered.

Initially, Arab Muslims themselves did not seem to care much about the translation movement and the study of science, feeling that they had “no ethnic or historical stake in it,” as Gutas explains. This began to change during the reign of al-Mamun (died 833), the seventh Abbasid caliph. For the purposes of opposing the Byzantine Empire, al-Mamun reoriented the translation movement as a means to recovering Greek, rather than Persian, learning. In the eyes of Abbasid Muslims of this era, the ancient Greeks did not have a pristine reputation — they were not Muslims, after all — but at least they were not tainted with Christianity. The fact that the hated Christian Byzantines did not embrace the ancient Greeks, though, led the Abbasids to warm to them. This philhellenism in the centuries after al-Mamun marked a prideful distinction between the Arabs — who considered themselves “champions of the truth,” as Gutas puts it — and their benighted Christian contemporaries. One Arab philosopher, al-Kindi (died 870), even devised a genealogy that presented Yunan, the ancestor of the ancient Greeks, as the brother of Qahtan, the ancestor of the Arabs.

Until its collapse in the Mongol invasion of 1258, the Abbasid caliphate was the greatest power in the Islamic world and oversaw the most intellectually productive movement in Arab history. The Abbasids read, commented on, translated, and preserved Greek and Persian works that may have been otherwise lost. By making Greek thought accessible, they also formed the foundation of the Arabic Golden Age. Major works of philosophy and science far from Baghdad — in Spain, Egypt, and Central Asia — were influenced by Greek-Arabic translations, both during and after the Abbasids. Indeed, even if it is a matter of conjecture to what extent the rise of science in the West depended on Arabic science, there is no question that the West benefited from both the preservation of Greek works and from original Arabic scholarship that commented on them.

Why the Golden Age Faded

As the Middle Ages progressed, Arabic civilization began to run out of steam. After the twelfth century, Europe had more significant scientific scholars than the Arabic world, as Harvard historian George Sarton noted in his Introduction to the History of Science (1927-48). After the fourteenth century, the Arab world saw very few innovations in fields that it had previously dominated, such as optics and medicine; henceforth, its innovations were for the most part not in the realm of metaphysics or science, but were more narrowly practical inventions like vaccines. “The Renaissance, the Reformation, even the scientific revolution and the Enlightenment, passed unnoticed in the Muslim world,” Bernard Lewis remarks in Islam and the West (1993).

There was a modest rebirth of science in the Arabic world in the nineteenth century due largely to Napoleon’s 1798 expedition to Egypt, but it was soon followed by decline. Lewis notes in What Went Wrong? that “The relationship between Christendom and Islam in the sciences was now reversed. Those who had been disciples now became teachers; those who had been masters became pupils, often reluctant and resentful pupils.” The civilization that had produced cities, libraries, and observatories and opened itself to the world had now regressed and become closed, resentful, violent, and hostile to discourse and innovation.

What happened? To repeat an important point, scientific decline is hardly peculiar to Arabic-Islamic civilization. Such decline is the norm of history; only in the West did something very different happen. Still, it may be possible to discern some specific causes of decline — and attempting to do so can deepen our understanding of Arabic-Islamic civilization and its tensions with modernity. As Sayyid Jamal al-Din al-Afghani, an influential figure in contemporary pan-Islamism, said in the late nineteenth century, “It is permissible ... to ask oneself why Arab civilization, after having thrown such a live light on the world, suddenly became extinguished; why this torch has not been relit since; and why the Arab world still remains buried in profound darkness.”

Just as there is no simple explanation for the success of Arabic science, there is no simple explanation for its gradual — not sudden, as al-Afghani claims — demise. The most significant factor was physical and geopolitical. As early as the tenth or eleventh century, the Abbasid empire began to factionalize and fragment due to increased provincial autonomy and frequent uprisings. By 1258, the little that was left of the Abbasid state was swept away by the Mongol invasion. And in Spain, Christians reconquered Córdoba in 1236 and Seville in 1248. But the Islamic turn away from scholarship actually preceded the civilization’s geopolitical decline — it can be traced back to the rise of the anti-philosophical Ash’arism school among Sunni Muslims, who comprise the vast majority of the Muslim world.

To understand this anti-rationalist movement, we once again turn our gaze back to the time of the Abbasid caliph al-Mamun. Al-Mamun picked up the pro-science torch lit by the second caliph, al-Mansur, and ran with it. He responded to a crisis of legitimacy by attempting to undermine traditionalist religious scholars while actively sponsoring a doctrine called Mu’tazilism that was deeply influenced by Greek rationalism, particularly Aristotelianism. To this end, he imposed an inquisition, under which those who refused to profess their allegiance to Mu’tazilism were punished by flogging, imprisonment, or beheading. But the caliphs who followed al-Mamun upheld the doctrine with less fervor, and within a few decades, adherence to it became a punishable offense. The backlash against Mu’tazilism was tremendously successful: by 885, a half century after al-Mamun’s death, it even became a crime to copy books of philosophy. The beginning of the de-Hellenization of Arabic high culture was underway. By the twelfth or thirteenth century, the influence of Mu’tazilism was nearly completely marginalized.

In its place arose the anti-rationalist Ash’ari school whose increasing dominance is linked to the decline of Arabic science. With the rise of the Ash’arites, the ethos in the Islamic world was increasingly opposed to original scholarship and any scientific inquiry that did not directly aid in religious regulation of private and public life. While the Mu’tazilites had contended that the Koran was created and so God’s purpose for man must be interpreted through reason, the Ash’arites believed the Koran to be coeval with God — and therefore unchallengeable. At the heart of Ash’ari metaphysics is the idea of occasionalism, a doctrine that denies natural causality. Put simply, it suggests natural necessity cannot exist because God’s will is completely free. Ash’arites believed that God is the only cause, so that the world is a series of discrete physical events each willed by God.

As Maimonides described it in The Guide for the Perplexed, this view sees natural things that appear to be permanent as merely following habit. Heat follows fire and hunger follows lack of food as a matter of habit, not necessity, “just as the king generally rides on horseback through the streets of the city, and is never found departing from this habit; but reason does not find it impossible that he should walk on foot through the place.” According to the occasionalist view, tomorrow coldness might follow fire, and satiety might follow lack of food. God wills every single atomic event and God’s will is not bound up with reason. This amounts to a denial of the coherence and comprehensibility of the natural world. In his controversial 2006 University of Regensburg address, Pope Benedict XVI described this idea by quoting the philosopher Ibn Hazm (died 1064) as saying, “Were it God’s will, we would even have to practice idolatry.” It is not difficult to see how this doctrine could lead to dogma and eventually to the end of free inquiry in science and philosophy.

The greatest and most influential voice of the Ash’arites was the medieval theologian Abu Hamid al-Ghazali (also known as Algazel; died 1111). In his book The Incoherence of the Philosophers, al-Ghazali vigorously attacked philosophy and philosophers — both the Greek philosophers themselves and their followers in the Muslim world (such as al-Farabi and Avicenna). Al-Ghazali was worried that when people become favorably influenced by philosophical arguments, they will also come to trust the philosophers on matters of religion, thus making Muslims less pious. Reason, because it teaches us to discover, question, and innovate, was the enemy; al-Ghazali argued that in assuming necessity in nature, philosophy was incompatible with Islamic teaching, which recognizes that nature is entirely subject to God’s will: “Nothing in nature,” he wrote, “can act spontaneously and apart from God.” While al-Ghazali did defend logic, he did so only to the extent that it could be used to ask theological questions and wielded as a tool to undermine philosophy. Sunnis embraced al-Ghazali as the winner of the debate with the Hellenistic rationalists, and opposition to philosophy gradually ossified, even to the extent that independent inquiry became a tainted enterprise, sometimes to the point of criminality. It is an exaggeration to say, as Steven Weinberg claimed in the Times of London, that after al-Ghazali “there was no more science worth mentioning in Islamic countries”; in some places, especially Central Asia, Arabic work in science continued for some time, and philosophy was still studied somewhat under Shi’ite rule. (In the Sunni world, philosophy turned into mysticism.) But the fact is, Arab contributions to science became increasingly sporadic as the anti-rationalism sank in.

The Ash’ari view has endured to this day. Its most extreme form can be seen in some sects of Islamists. For example, Mohammed Yusuf, the late leader of a group called the Nigerian Taliban, explained why “Western education is a sin” by explaining its view on rain: “We believe it is a creation of God rather than an evaporation caused by the sun that condenses and becomes rain.” The Ash’ari view is also evident when Islamic leaders attribute natural disasters to God’s vengeance, as they did when they said that the 2010 eruption of Iceland’s Eyjafjallajökull volcano was the result of God’s anger at immodestly dressed women in Europe. Such inferences sound crazy to Western ears, but given their frequency in the Muslim world, they must sound at least a little less crazy to Muslims. As Robert R. Reilly argues in The Closing of the Muslim Mind (2010), “the fatal disconnect between the creator and the mind of his creature is the source of Sunni Islam’s most profound woes.”

A similar ossification occurred in the realm of law. The first four centuries of Islam saw vigorous discussion and flexibility regarding legal issues; this was the tradition of ijtihad, or independent judgment and critical thinking. But by the end of the eleventh century, discordant ideas were increasingly seen as a problem, and autocratic rulers worried about dissent — so the “gates of ijtihad” were closed for Sunni Muslims: ijtihad was seen as no longer necessary, since all important legal questions were regarded as already answered. New readings of Islamic revelation became a crime. All that was left to do was to submit to the instructions of religious authorities; to understand morality, one needed only to read legal decrees. Thinkers who resisted the closing came to be seen as nefarious dissidents. (Averroës, for example, was banished for heresy and his books were burned.)

Why Inquiry Failed in the Islamic World

But is Ash’arism the deepest root of Arabic science’s demise? That the Ash’arites won and the Mu’tazilites lost suggests that for whatever reason, Muslims already found Ash’ari thought more convincing or more palatable; it suited prevailing sentiments and political ideas. Indeed, Muslim theologians appeared receptive to the occasionalist view as early as the ninth century, before the founder of Ash’arism was even born. Thus the Ash’ari victory raises thorny questions about the theological-political predispositions of Islam.

As a way of articulating questions that lie deeper than the Ash’arism-Mu’tazilism debate, it is helpful to briefly compare Islam with Christianity. Christianity acknowledges a private-public distinction and (theoretically, at least) allows adherents the liberty to decide much about their social and political lives. Islam, on the other hand, denies any private-public distinction and includes laws regulating the most minute details of private life. Put another way, Islam does not acknowledge any difference between religious and political ends: it is a religion that specifies political rules for the community.

Such differences between the two faiths can be traced to the differences between their prophets. While Christ was an outsider of the state who ruled no one, and while Christianity did not become a state religion until centuries after Christ’s birth, Mohammed was not only a prophet but also a chief magistrate, a political leader who conquered and governed a religious community he founded. Because Islam was born outside of the Roman Empire, it was never subordinate to politics. As Bernard Lewis puts it, Mohammed was his own Constantine. This means that, for Islam, religion and politics were interdependent from the beginning; Islam needs a state to enforce its laws, and the state needs a basis in Islam to be legitimate. To what extent, then, do Islam’s political proclivities make free inquiry — which is inherently subversive to established rules and customs — possible at a deep and enduring institutional level?

Some clues can be found by comparing institutions in the medieval period. Far from accepting anything close to the occasionalism and legal positivism of the Sunnis, European scholars argued explicitly that when the Bible contradicts the natural world, the holy book should not be taken literally. Influential philosophers like Augustine held that knowledge and reason precede Christianity; he approached the subject of scientific inquiry with cautious encouragement, exhorting Christians to use the classical sciences as a handmaiden of Christian thought. Galileo’s house arrest notwithstanding, his famous remark that “the intention of the Holy Ghost is to teach us how one goes to heaven, not how heaven goes” underscores the durability of the scientific spirit among pious Western societies. Indeed, as David C. Lindberg argues in an essay collected in Galileo Goes to Jail and Other Myths about Science and Religion (2009), “No institution or cultural force of the patristic period offered more encouragement for the investigation of nature than did the Christian church.” And, as Baylor University sociologist Rodney Stark notes in his book For the Glory of God (2003), many of the greatest scientists of the scientific revolution were also Christian priests or ministers.

The Church’s acceptance and even encouragement of philosophy and science was evident from the High Middle Ages to modern times. As the late Ernest L. Fortin of Boston College noted in an essay collected in Classical Christianity and the Political Order (1996), unlike al-Farabi and his successors, “Aquinas was rarely forced to contend with an anti-philosophic bias on the part of the ecclesiastical authorities. As a Christian, he could simply assume philosophy without becoming publicly involved in any argument for or against it.” And when someone like Galileo got in trouble, his work moved forward and his inquiry was carried on by others; in other words, institutional dedication to scientific inquiry was too entrenched in Europe for any authority to control. After about the middle of the thirteenth century in the Latin West, we know of no instance of persecution of anyone who advocated philosophy as an aid in interpreting revelation. In this period, “attacks on reason would have been regarded as bizarre and unacceptable,” explains historian Edward Grant in Science and Religion, 400 b.c. to a.d. 1550.

The success of the West is a topic that could fill — indeed, has filled — many large books. But some general comparisons are helpful in understanding why Islam was so institutionally different from the West. The most striking difference is articulated by Bassam Tibi in The Challenge of Fundamentalism(1998): “because rational disciplines had not been institutionalized in classical Islam, the adoption of the Greek legacy had no lasting effect on Islamic civilization.” In The Rise of Early Modern Science, Toby E. Huff makes a persuasive argument for why modern science emerged in the West and not in Islamic (or Chinese) civilization:

The rise of modern science is the result of the development of a civilizationally based culture that was uniquely humanistic in the sense that it tolerated, indeed, protected and promoted those heretical and innovative ideas that ran counter to accepted religious and theological teaching. Conversely, one might say that critical elements of the scientific worldview were surreptitiously encoded in the religious and legal presuppositions of the European West.

In other words, Islamic civilization did not have a culture hospitable to the advancement of science, while medieval Europe did.

The contrast is most obvious in the realm of formal education. As Huff argues, the lack of a scientific curriculum in medieval madrassas reflects a deeper absence of a capacity or willingness to build legally autonomous institutions. Madrassas were established under the law of waqf, or pious endowments, which meant they were legally obligated to follow the religious commitments of their founders. Islamic law did not recognize any corporate groups or entities, and so prevented any hope of recognizing institutions such as universities within which scholarly norms could develop. (Medieval China, too, had no independent institutions dedicated to learning; all were dependent on the official bureaucracy and the state.) Legally autonomous institutions were utterly absent in the Islamic world until the late nineteenth century. And madrassas nearly always excluded study of anything besides the subjects that aid in understanding Islam: Arabic grammar, the Koran, the hadith, and the principles of sharia. These were often referred to as the “Islamic sciences,” in contrast to Greek sciences, which were widely referred to as the “foreign” or “alien” sciences (indeed, the term “philosopher” in Arabic — faylasuf — was often used pejoratively). Furthermore, the rigidity of the religious curriculum in madrassas contributed to the educational method of learning by rote; even today, repetition, drill, and imitation — with chastisement for questioning or innovating — are habituated at an early age in many parts of the Arab world.

The exclusion of science and mathematics from the madrassas suggests that these subjects “were institutionally marginal in medieval Islamic life,” writes Huff. Such inquiry was tolerated, and sometimes promoted by individuals, but it was never “officially institutionalized and sanctioned by the intellectual elite of Islam.” This meant that when intellectual discoveries were made, they were not picked up and carried by students, and did not influence later thinkers in Muslim communities. No one paid much attention to the work of Averroës after he was driven out of Spain to Morocco, for instance — that is, until Europeans rediscovered his work. Perhaps the lack of institutional support for science allowed Arabic thinkers (such as al-Farabi) to be bolder than their European counterparts. But it also meant that many Arabic thinkers relied on the patronage of friendly rulers and ephemeral conditions.

By way of contrast, the legal system that developed in twelfth- and thirteenth-century Europe — which saw the absorption of Greek philosophy, Roman law, and Christian theology — was instrumental in forming a philosophically and theologically open culture that respected scientific development. As Huff argues, because European universities were legally autonomous, they could develop their own rules, scholarly norms, and curricula. The norms they incorporated were those of curiosity and skepticism, and the curricula they chose were steeped in ancient Greek philosophy. In the medieval Western world, a spirit of skepticism and inquisitiveness moved theologians and philosophers. It was a spirit of “probing and poking around,” as Edward Grant writes in God and Reason in the Middle Ages (2001).

It was this attitude of inquiry that helped lay the foundation for modern science. Beginning in the early Middle Ages, this attitude was evident in technological innovations among even unlearned artisans and merchants. These obscure people contributed to the development of practical technologies, such as the mechanical clock (circa 1272) and spectacles (circa 1284). Even as early as the sixth century, Europeans strove to invent labor-saving technology, such as the heavy-wheeled plow and, later, the padded horse collar. According to research by the late Charles Issawi of Princeton University, eleventh-century England had more mills per capita than even the Ottoman lands at the height of the empire’s power. And although it was in use since 1460 in the West, the printing press was not introduced in the Islamic world until 1727. The Arabic world appears to have been even slower in finding uses for academic technological devices. For instance, the telescope appeared in the Middle East soon after its invention in 1608, but it failed to attract excitement or interest until centuries later.

As science in the Arabic world declined and retrogressed, Europe hungrily absorbed and translated classical and scientific works, mainly through cultural centers in Spain. By 1200, Oxford and Paris had curricula that included works of Arabic science. Works by Aristotle, Euclid, Ptolemy, and Galen, along with commentaries by Avicenna and Averroës, were all translated into Latin. Not only were these works taught openly, but they were formally incorporated into the program of study of universities. Meanwhile, in the Islamic world, the dissolution of the Golden Age was well underway.

A Gold Standard?

In trying to explain the Islamic world’s intellectual laggardness, it is tempting to point to the obvious factors: authoritarianism, bad education, and underfunding (Muslim states spend significantly less than developed states on research and development as a percentage of GDP). But these reasons are all broad and somewhat crude, and raise more questions than answers. At a deeper level, Islam lags because it failed to offer a way to institutionalize free inquiry. That, in turn, is attributable to its failure to reconcile faith and reason. In this respect, Islamic societies have fared worse not just than the West but also than many societies of Asia. With a couple of exceptions, every country in the Middle Eastern parts of the Muslim world has been ruled by an autocrat, a radical Islamic sect, or a tribal chieftain. Islam has no tradition of separating politics and religion.

The decline of Islam and the rise of Christianity was a development that was and remains deeply humiliating for Muslims. Since Islam tended to ascribe its political power to its theological superiority over other faiths, its fading as a worldly power raised profound questions about where a wrong turn was made. Over at least the past century, Muslim reformers have been debating how best to reacquire the lost honor. In the same period, the Muslim world tried, and failed, to reverse its decline by borrowing Western technology and sociopolitical ideas, including secularization and nationalism. But these tastes of “modernization” turned many Muslims away from modernity. This raises a question: Can and should Islam’s past achievements serve as a standard for Islam’s future? After all, it is quite common to imply, as President Obama did, that knowledge of the Golden Age of Arabic science will somehow exhort the Islamic world to improve itself and to hate the West less.

The story of Arabic science offers a window into the relationship between Islam and modernity; perhaps, too, it holds out the prospect of Islam coming to benefit from principles it badly needs in order to prosper, such as sexual equality, the rule of law, and free civil life. But the predominant posture among many Muslims today is that the good life is best approximated by returning to a pristine and pious past — and this posture has proven poisonous to coping with modernity. Islamism, the cause of violence that the world is now agonizingly familiar with, arises from doctrines characterized by a deep nostalgia for the Islamic classical period. Even today, suggesting that the Koran isn’t coeternal with God can make one an infidel.

And yet intellectual progress and cultural openness were once encouraged among many Arabic societies. So to the extent that appeals to the salutary classical attitude can be found in the Islamic tradition, the fanatical false nostalgia might be tamed. Some reformers already point out that many medieval Muslims embraced reason and other ideas that presaged modernity, and that doing so is not impious and does not mean simply giving up eternal rewards for materialistic ones. On an intellectual level, this effort could be deepened by challenging the Ash’ari orthodoxy that has dominated Sunni Islam for a thousand years — that is, by asking whether al-Ghazali and his Ash’arite followers really understood nature, theology, and philosophy better than the Mu’tazilites.

But there are reasons why exhortation to emulate Muslim ancestors may also be misguided. One is that medieval Islam does not offer a decent political standard. When compared to modern Western standards, the Golden Age of Arabic science was decidedly not a Golden Age of equality. While Islam was comparatively tolerant at the time of members of other religions, the kind of tolerance we think of today was never a virtue for early Muslims (or early Christians, for that matter). As Bernard Lewis puts it in The Jews of Islam (1984), giving equal treatment to followers and rejecters of the true faith would have been seen not only as an absurdity but also an outright “dereliction of duty.” Jews and Christians were subjected to official second-class sociopolitical status beginning in Mohammed’s time, and Abbasid-era oppressions also included religious persecution and the eradication of churches and synagogues. The Golden Age was also an era of widespread slavery of persons deemed to be of even lower class. For all the estimable achievements of the medieval Arabic world, it is quite clear that its political and social history should not be made into a celebrated standard.

There is a more fundamental reason, however, why it may not make much sense to urge the Muslim world to restore those parts of its past that valued rational and open inquiry: namely, a return to the Mu’tazilites may not be enough. Even the most rationalist schools in Islam did not categorically argue for the primacy of reason. As Ali A. Allawi argues in The Crisis of Islamic Civilization (2009), “None of the free-thinking schools in classical Islam — such as the Mu’tazila — could ever entertain the idea of breaking the God-Man relationship and the validity of revelation, in spite of their espousal of a rationalist philosophy.” Indeed, in 1889 the Hungarian scholar Ignaz Goldziher noted in his essay “The Attitude of Orthodox Islam Toward the ‘Ancient Sciences’” that it was not only Ash’arite but Mu’tazilite circles that “produced numerous polemical treatises against Aristotelian philosophy in general and against logic in particular.” Even before al-Ghazali’s attack on the Mu’tazilites, engaging in Greek philosophy was not exactly a safe task outside of auspicious but rather ephemeral conditions.

But more importantly, merely popularizing previous rationalist schools would not go very far in persuading Muslims to reflect on the theological-political problem of Islam. For all the great help that the rediscovery of the influential Arabic philosophers (especially al-Farabi, Averroës, and Maimonides) would provide, no science-friendly Islamic tradition goes nearly far enough, to the point that it offers a theological renovation in the vein of Luther and Calvin — a reinterpretation of Islam that challenges the faith’s comprehensive ruling principles in a way that simultaneously convinces Muslims that they are in fact returning to the fundamentals of their faith.

There is a final reason why it makes little sense to exhort Muslims to their own past: while there are many things that the Islamic world lacks, pride in heritage is not one of them. What is needed in Islam is less self-pride and more self-criticism. Today, self-criticism in Islam is valued only insofar as it is made as an appeal to be more pious and less spiritually corrupt. And yet most criticism in the Muslim world is directed outward, at the West. This prejudice — what Fouad Ajami has called (referring to the Arab world) “a political tradition of belligerent self-pity” — is undoubtedly one of Islam’s biggest obstacles. It makes information that contradicts orthodox belief irrelevant, and it closes off debate about the nature and history of Islam.

In this respect, inquiry into the history of Arabic science, and the recovery and research of manuscripts of the era, may have a beneficial effect — so long as it is pursued in an analytical spirit. That would mean that Muslims would use it as a resource within their own tradition to critically engage with their philosophical, political, and founding flaws. If that occurs, it will not arise from any Western outreach efforts, but will be a consequence of Muslims’ own determination, creativity, and wisdom — in short, those very traits that Westerners rightly ascribe to the Muslims of the Golden Age.