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Why are people continually surprised to discover that money is "just" meaning? Mutual Life, Limited spends time among those who, in acknowledging the fictions of finance, are making money anew. It documents ongoing efforts to remake money and finance by Islamic bankers who seek to avoid interest and local currency proponents who would stand outside of national economies. It asks how alternative moneys both escape and reenact dominant forms of money and finance, and reflects critically on their broader implications for scholarship.
Based on fieldwork among participants in a local currency system in Ithaca, New York, and among Islamic banking practitioners in the United States, Indonesia, and elsewhere, this book exploits the convergence between the reflexivity of monetary alternatives and social inquiry by questioning the equivalence between money and ethnography. Can money ever be adequate to the value backing it? Can social description ever be adequate to messy and contingent realities?
Bill Maurer's ethnographic discovery is that ethnography as such--the holistic description of a way of life--cannot be sustained when faced with a set of practices that anticipates and incorporates it in advance. His fluently written book represents an unprecedented critique of social scientific approaches to money through an ethnographic description of specific monetary alternatives, while also speaking broadly to the very problem of anthropological knowledge in the twenty-first century.
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Mutual Life, LimitedIslamic Banking, Alternative Currencies, Lateral Reason
Chapter OneIN THE MATTER OF ISLAMIC BANKING AND LOCAL CURRENCIES
ONE OF THE MOST DIFFICULT aspects of this book's project is specifying its subject of study. First, the material is hopelessly intertwined with "other" material; the work of delineation and separation is confounded by the material's own work of networking, hybridization, and interconnection. Second, the very idea of the materiality of data, of those notes in bottles of which Geertz wrote, is undercut by the analytical work of the material itself: currency forms that put into question the relationship of adequation between word and thing presupposed by modern moneys and philosophies. People's creation, discussion and use of these currency forms are continually interrupted by their querying of the forms' veracity, reality, and sometimes very existence. Thus it was that I was repeatedly told that Ithaca HOURS are a "game," that they are "novelty items or souvenirs," and that Islamic banking is "just word-play." The activity of Islamic banking or local currencies is backed by "nothing," people said, or, is really just state money or conventional banking in disguise, and, so, "nothing" out of the ordinary. In making thesestatements, participants preempted analysts. "This is all very interesting but really rather banal," a sociologist told me.
My response: "Yes, indeed." The sociologist's statement, after all, was directly related to my third quandary in speciefying this material-that is, rendering my data into specie, legal tender for the currency of contemporary social theory. Participants in these alternative money projects often resolved the first two problems, for the time being, by focusing on the technical aspects of their effort. They would reduce Islamic banking to a set of contractual forms and the capacities and efficacies they enlisted and enabled. They would reduce Ithaca HOURS to the mathematical operations of currency, time, and labor conversions. Time and again people familiar with my research have asked me questions like "But what is Islamic banking, really? What are local currencies? How do they work? What do they do?" and my answers repeated the technical specifications of participants themselves. My doing so affirmed their banality; the technical details are fun to get caught up in, to a point, but once you see how the apparatus works it ceases to be interesting because the problem with which you began is solved. As in a mystery novel, once the murderer is known, the mystery dissolves into the banalities of jealousy, betrayal, or greed. Focusing on the technical also left aside the real import of these questions and the explicit ontologies-the genera and species of money or finance-that they sought as answers.
The problem of specifying the material is interwoven with the analytical problem of how to represent these alternatives, both "within" and "outside" their worlds. Local currency proponents, at least since the 1980s, have debated the use of the terms "local," "alternative," "community," or "complementary" to describe their moneys, the adjectives often marking subtle ideological differences, regional variations, and the political-economic intention of the currency. Those who prefer "alternative," for example, tend to view their activities in terms of creating a wholly new "economy" that is separate from national economies. Those who prefer "complementary" imagine the money they are creating as supplementing the use of the national currency, especially for those people who rely on their activities in an informal economy to meet their needs. Those who prefer "local" sometimes imagine a world of localities, each circulating wealth internally while occasionally reaching beyond them to form loose, interconnected networks. These preferences do not name hard and fast rules, of course, and often the same person will tack back and forth between them or use different names to describe them.
For Islamic banking, names are a central preoccupation. Although most in the business use Arabic terms for the various contractual forms they employ, some see these terms as obfuscation, or worry that they provide an Islamic veneer over practices whose status in shari'a, or Islamic law, is uncertain. At worst, some maintain, the use of such terms is merely a marketing ploy. For the most part, the lingua franca of Islamic finance is English; Arabic terms supplement it, and most if not all of those supplementary terms are nouns naming contracts or concepts. The field has settled on the terms, "Islamic banking" or "Islamic finance" or most often "Islamic banking and finance," sometimes abbreviated IBF, to name itself. But there are vocal and influential individuals within the field who insist that the term lariba better captures what it is that makes its activities unique-the avoidance of riba-and better exposes the field to the widest possible potential audience. "Islamic" may have negative connotations, for one thing, and furthermore one does not have to be Muslim to appreciate or participate in lariba banking. Along similar lines, especially after September 11, 2001, some began using the expression "faith-based" to describe their activities, a term popularized by President George W. Bush's "faith-based initiatives" to direct federal funds to religious social service institutions.
Naming becomes vexed as well when issues of permissibility seem to hinge on very finely tuned definitions. It sometimes marks the boundaries between different factions within the field. Said one Islamic banking professional:
There's two faces [or] aspects of Islamic banking, one which was doing it for the rich and affluent, the people from the Gulf countries that came to invest in big real estate projects and so on ... They spent all this money trying to change the word "interest" to the word "profit" or whatever I called it Mickey Mouse Islamic banking. And then [there is] the work that we are doing, which is the grassroots work, which calls things by their names.
The invocation of correct names tracks Qur'anic verses that relate how God taught the angels and Adam the names of all things and then made each perform before the others so that they might each know the truth of each other, as well as of God's infinite knowledge. Upon seeing Adam's demonstration of his knowledge of the names of things, all the angels except Satan then bowed down before him as God's vice-regent on earth (2:30-34). The paradox of calling things by their names is that we can never with our names capture all the qualities of the essence of the thing. The "Islamic" in the Islamic banking that is not Mickey Mouse Islamic banking, as the product of human activity, must be translated anew each time. On the other hand, Islamic bankers and their clients sometimes use the term "I-banking," capturing the newness and the nicheness of the field, rendering Islam a sort of placeholder for the practical activity bundled under the name. Here, the "I" could never bring under itself all the qualities of the object, and is thus always already hopelessly inadequate-or both adequate and inadequate, oscillating back and forth in the time of the discussion and the exchange.
The issue of naming also preoccupies those who take the time to "study" alternative currencies or Islamic banking as if from a position outside. This includes people like me, who believe they have no link with such phenomena apart from their research interest, an interest even the language of lariba does not escape, and the vast numbers of people who believe they are generally "inside" these phenomena and who author books and articles about them. There is a tendency to want to specify these phenomena in terms of other projects or movements, an impulse to categorize or classify. This extends, of course, to the incorporation of Ithaca HOURS and Islamic banking under the rubric of "alternative currencies" or "alternative economies," found not just in the book before you but in texts written "within" these socialities, such as Richard Douthwaite's (1996) Short Circuit: Strengthening Local Economies for Security in an Unstable World and Margrit Kennedy's (1995) Interest and Inflation Free Money-both of which were recommended to me on separate occasions by one of the founders of the Ithaca HOURS system as well as one of the founders of an American Islamic investment company. It is these entanglements between the inside and the outside of these alternatives, entanglements that obviate the very notion of the alternative, that trouble the matter of Islamic banking, local currencies, and their analysis. This chapter takes up Islamic banking and Ithaca HOURS in turn, sketching out the symmetries and divergencies between these two alternatives as well as providing a basic road map of the territories each attempts to traverse. The concluding section takes up the question of the alternative itself, and asks whether the analytical impulse to name "alternative" economies, and alternative "economies," can be sustained in light of the networks the chapter replicates.2
ENTANGLED ORIGINS OF ISLAMIC BANKING Question: Are we allowed to claim tax deductions on our Zakat contributions?
Answer: Surely, you must report all your Zakat contributions as your charitable contributions and take all legal exemptions and deductions. Any money that may come back to you from the federal or state taxes, you should apply that to your next year's income and pay the Zakat on it next year. There is great reward in giving money for Zakat, but there is no blessing in giving extra money to IRS.
The Qur'an invokes riba, literally "increase," often translated as usury or interest, twenty times. Five verses in particular stand out: Those that live on usury [riba] shall rise up before God like men whom Satan has demented by his touch; for they claim that trading is no different from usury. But God has permitted trading and made usury unlawful. He that has received an admonition from his Lord and minded his ways may keep his previous gains; God will be his judge. Those that turn back shall be the inmates of the Fire, wherein they shall abide for ever. (2:275)
God has laid His curse on usury and blessed almsgiving with increase. God bears no love for the impious and the sinful. (2:276)
Believers, have fear of God and waive what is still due to you from usury, if your faith be true, or war shall be declared against you by God and his apostle. (2:278)
Believers, do not live on usury, doubling your wealth many times over. Have fear of God, that you may prosper. (3:130)
That which you seek to increase by usury will not be blessed by God; but the alms you give for His sake shall be repaid to you many times over. (30:39)
The last is particularly intriguing, for it brings together riba and alms, zakat(also, literally, "increase") like two sides of a ledger that cancel each other out. It was also one of the earliest verses to have been revealed to Muhammad (Saeed 1999:20).
As I am using it here, and as those in the field use the phrase, Islamic banking and finance (IBF) refers to a worldwide phenomenon taking place in Malaysia, Indonesia, the United States, the United Kingdom, the Arabian peninsula, the Indian subcontinent, and, to a lesser extent, west and east Africa, and not simply the financial systems of those nation-states that have officially at one time or another "Islamized" their economies, such as the Sudan, Brunei, Iran, and Pakistan. The broadest definition of IBF would include all those activities understood to be financial or economic that seek to avoid riba-itself a term of considerable definitional anxiety-generally through profit-and-loss sharing, leasing, or other forms of equity- or asset-based financing. Global Islamic banking today owes much to the immigration of Middle Eastern and South Asian students and professionals to the United States and United Kingdom during the 1970s and 1980s, and the consolidation of large U.S. Muslim organizations such as the Islamic Society of North America and the Islamic Circle of North America. The oil boom in the Middle East during the 1970s, which sparked renewed interest in Islamic banking in many Muslim-majority countries (see, e.g., Warde 2000:92-93; Wilson 1990), also encouraged the development of a loosely knit interconnected international network of Muslim members of the business community, who, working for oil and chemical companies as well as financial firms, gained experience in Western regulatory and business environments. The main nodes of this network, however, were the financial and industrial centers of Europe and the United States, and not the Middle East or South Asia. Thus, although at present Saudi royals and entrepreneurs bankroll many Islamic finance conferences, journals, and academic institutions around the world, the main sites for intellectual production in Islamic economics are places like the Islamic Foundation in Leicester, England; the Institute of Islamic Banking and Insurance in London; and the Harvard Islamic Finance Information Program in Cambridge, Massachusetts.
Much like anthropologists debating their disciplinary projects and identities, people involved in Islamic banking and finance are continually engaged in an effort to define precisely what their field is. The foregoing description is a just-so story, and variations of it can be found in most of the books, articles, and encyclopedias of Islamic banking that have been published since the 1980s. Indeed, a publishing boom has been taking place at least since the mid-1980s, following on the heels of a number of international conferences that took place from the mid-1970s to early 1980s. With the establishment in the late 1990s of two important Web sites (that of the Institute of Islamic Banking and Insurance in London, and the IBF Net site started by Mohammed Obaidullah in Bhubaneswar, India, in 1998) information proliferated about Islamic banking on the Internet, and many more people and companies posted many more Web sites. With so much text out there, from so many different kinds of people, it is easy to understand why debates within Islamic banking so frequently go back to first principles, from the very possibility of human interpretation of the Qur'an, to the prohibition of riba, different styles of reasoning in jurisprudence, and so forth. The constant tacking back and forth between heady philosophical and theological issues can be disorienting at times, both for participants and the participant-observer ("What is the efficient cause or 'illa of gold?" "How should one weigh shari'a derived from the hadith versus the Qur'an?"), practical ones ("Where do you enter returns from mudarabah on a ledger?" "What is the best instrument for short-term project financing?"). Indeed, the very distinction between participant and participant-observer breaks down here, since everyone involved in Islamic banking at one time or another is compelled to take a step back and reflexively examine what it is he or she has been doing, and why.
Nonetheless, despite the avalanche of prose in the past twenty years, some distinct patterns do emerge, especially when one looks at the transnational dissemination of ideas about Islamic banking to places like Indonesia. Most writers, within and outside Islamic banking, cite a handful of key texts responsible for the early formation of the field, namely, the writings of Sayyid Abul al-A'la Maulana Maududi (1903-79) and Sayyid Qutb (1906-66), founders of the Jama'at-i Islami in India and the Muslim Brotherhood in Egypt, respectively. Interestingly, however, it is Maududi who gets more play, primarily because of the citation practices of other South Asian writers who tend to rely more heavily on his English and Urdu texts rather than the Arabic works of Qutb or his disciples.
Another pattern traceable to citation practices is the divergence between those texts that seek to outline an entire "Islamic economic system" and those that focus on techniques and contractual forms. The latter are dominant in the field today in citational terms, although the two sets of texts often converge, and sometimes appear side by side in anthologies (or, in the bodies of their authors, at conferences). The former often begin with an understanding of riba as contrasted to zakat. The latter begin with an understanding of riba in contrast to legitimate forms of profit making, hanging much of their argument on the verse "God has permitted trading and made usury unlawful" (2.275), which seems to imply that the prohibition of riba was meant to direct people toward lawful profit making through trade. This is the interpretation of Muhammad Nejatullah Siddiqi (1931-), born in Gorakhpur, India, and currently professor emeritus of economics at King Abdulaziz University, Jeddah, Saudi Arabia, where he helped establish the International Center for Research in Islamic Economics. It is also the interpretation of Muhammad Abdul Mannan (1938-), born in Bangladesh, educated at Michigan State University, and professor at the Center for Research in Islamic Economics in Jeddah. Of "first generation" scholars in the field, that is, those who took up the mantle of Maududi and were instrumental in the field's initial formation as a scholarly endeavor, Siddiqi and Mannan are perhaps the most widely cited Islamic economics scholars in the world-Siddiqi more so because of his sheer output. Both have published almost exclusively in English.
Excerpted from Mutual Life, Limited by Bill Maurer Copyright © 2005 by Princeton University Press. Excerpted by permission.
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Table of ContentsList of Illustrations and Tables xi
A Note on Transliteration xxi
INTRODUCTION: Lateral Reasons for a Post-reflexive Anthropology 1
CHAPTER 1: In the Matter of Islamic Banking and Local Currencies 24
CHAPTER 2: Of Law and Belief 55
CHAPTER 3: Of Monetary Alternatives and the Limits of Values Past 77
CHAPTER 4: Innumerate Equivalencies: Making Change with Alternative Currencies 100
CHAPTER 5: Wiseman's and Fool's Gold 122
CHAPTER 6: Mutual Life, Limited: Insurance, Moral Value, and Bureaucratic Form 136
CONCLUSION: Restaging Abstraction and Adequation 154
References Cited 185
What People are Saying About This
I enjoyed this book mightily. Not only is its topicmoney in various manifestationsinherently interesting but the book is both theoretically innovative and empirically rich, as well as being well written.
Nigel Thrift, University of Oxford, author of "Money/Space: Geographies of Monetary Transformation"
This book represents an ethnography of a far more interesting kind than the standard sort. Its genius lies in the way its author has drawn in diverse social practices to comment upon (lie alongside) one another. Islamic banking is revealed to have much in common with local currency schemes, both being alternatives to capitalist finance based on interest. Because the subject is discourses of money, one would expect the text to be abstract; in fact the text summons myriad points that are splendidly concrete.
Marilyn Strathern, University of Cambridge, author of "Property, Substance and Effect: Anthropological Essays on Persons and Things"