Islamic Charitable Giving in the UK: A ‘Radical’ Economic Alternative?

ABSTRACT

Muslim financial actions have faced increased scrutiny as financial links to ‘terrorism’ have risen in political rhetoric with anything labelled as ‘Islamic’ being perceived to be in requirement of study in terms of its relation to ‘fundamental British values’ (Kundnani, A., 2014. The Muslims Are Coming! Islamaphobia, Extremism, and the Domestic War on Terror. London: Verso.). Exploring Muslim charitable giving in the UK, it will be posited that much of Islamic charitable practices sustains a relationship with neoliberalism without being entirely reduced to it. The post-9/11 environment ‘has led to renewed scholarly interest in the relationship between the economy and Islam and more specifically the incorporation of Islamic value in daily economic life’ (Rethel, L., 2019. Corporate Islam, Global Capitalism and the Performance of Economic Moralities. New Political Economy, 24 (3), 350–364, 2). Islamic charitable practices potentially offer a resistance to the inegalitarian effects of neoliberalism whilst simultaneously being both a part, and a consequence of, neoliberal dominance. Moreover, Islamic charity in the UK acts as an expression of the Muslim community against a backdrop of security and surveillance. Thus, while potentially offering a ‘radical’ alternative to neoliberalism it is a non-violent and non-conflictual alternative.     

Dual market competition and deposit rate setting in Islamic and conventional banks

This paper addresses the issue of competition in dual banking markets by analyzing the determinants of deposit rates in Islamic and conventional banks. Using a sample of 20 countries with dual banking systems over the 2000–2014 period, our results show significant differences in the drivers of Islamic and conventional banks' pricing behavior. Conventional banks with stronger market power set lower deposit rates but market power is not significant for Islamic banks. In predominantly Muslim environments, conventional banks set higher deposit rates and further higher when their market power is lower. Whereas conventional banks are influenced by the competitiveness of Islamic banks, Islamic banks are only affected by their peers in predominantly Muslim countries. Our findings have important implications regarding competition and bank stability in dual banking markets.     

Why the Arab Spring turned Islamic: the political economy of Islam

This paper argues that the fundamental reason for the ascendancy of political Islam in the wake of the Arab revolutions lies in the uncompetitive nature of the religion and its implications for political economy: the fact that Islam is one and long since unchanged, which makes the Islamists’ call very costly to resist and very attractive to follow. The argument is developed through an examination of sectarian and legal history in Islam and a comparison of the nexus between church, state and individual in Christian and Muslim religious traditions. Special attention is devoted to Islamic Law and the law schools that define it.     

Corporate Islam,Global Capitalism and the Performance of Economic Moralities

Recent years have witnessed the rapid expansion of the Islamic economy, which by some estimates has reached a size of US$4 trillion. The growth of the Islamic economy presents an intriguing test case for the compatibility of global capitalism and moral – in this case specifically Islamic – principles. This article adopts a performative lens to draw attention to the role of the World Islamic Economic Forum and the Global Islamic Economy Summit as legitimation mechanisms celebrating economic diversity and the success of Muslim- entrepreneurs with the aim of increasing the visibility of the Islamic economy. Here, a polyphony of Muslim voices is sought to be consolidated into the voice of ‘business Islam’, with important implications for how the Islamic economy is conceived, defined and delineated.     

Gold dinar for the Islamic countries?

The Malaysian state of Kelantan has made a historical launch of Gold Dinar and Silver Dirham on 12th August 2010. For the first time in almost 100 years since the fall of the Ottoman Caliphate, a Muslim government introduces Shariah currency. In the eyes of many Muslim scholars, the present interest-based fiat monetary system is flawed as it is incompatible with the objectives of the Islamic law or the Shariah. There have been calls for the resurgence of Islamic Gold Dinar (together with the silver dirham) as it is deemed to be the most appropriate medium of exchange to be used in the Islamic economies. Using data from 1970 to 2007, this paper assesses the empirical desirability of the Organization of Islamic Conferences (OIC) countries to an alternative monetary system (Islamic Gold Dinar) that can potentially enhance the exchange rate stability and credibility. The Structural Vector Autoregression (VAR) method is employed to assess the nature of macroeconomic disturbances among the OIC countries. Specifically, the symmetry in macroeconomic disturbances of the OIC economies is examined as satisfying one of the preconditions for forming an Optimum Currency Area (OCA). In addition, this paper also investigates the output and price responses of OIC countries of the underlying structural shocks used to shed light on the suitability of these countries to form a monetary union. The preliminary findings of this study suggest the lack of broad linkages within the entire OIC, although there exists scope among some smaller clusters for potential monetary integration based on the symmetry of their business cycles.     

The Impact of the London Bombings on the Well-Being of Adolescent Muslims*

We exploit the timing of the London bombings of July 2005, coinciding with a large-scale national survey of adolescents, to identify the impact of extremist Islamic terror attacks on the well-being of adolescent Muslims. Our analysis reveals interesting gender differences. We find evidence of a decline in the happiness of Muslim teenage girls after the bombings, which is also accompanied by a rise in expectations of facing discrimination in the labour market. These findings are robust to several falsification tests. However, we fail to uncover compelling evidence of any impact of the bombings on Muslim teenage boys.     

Consumer Protection in Islam: The Case of Pakistan

Consumers whether in an Islamic State or otherwise face similar problems that need to be taken care of by the government and the individuals themselves. Islam as a religion gives a comprehensive framework for conducting business and protecting the consumers' rights. Apparently, this framework seems similar to the commercial laws but glaring differences between the two exist: commercial laws are a relatively new phenomena and are made by humans for the sake of convenience only. Islamic law on the other hand, provided such guidelines 1500 years ago which are based on divine principles set by Allah. Moreover, there is no reward in complying with the commercial laws but Allah promised the believers rewards both in this world and the Hereafter for complying with Islamic principles.
Pakistan is an Islamic State but the area of consumer protection has remained neglected so far. This paper explores how an environment can be created in Pakistan whereby the interests of consumers are best protected under the teachings of Islam. The Qur'anic principles are delineated with reference to: guidelines for Muslim businessmen and consumers; the role of state and institutions.     

Political Economy and Islamic Politics: Insights from the Indonesian Case

It is argued in this study that the trajectory of Islamic politics in Indonesia has been shaped within larger processes of state formation and socio-economic and political changes associated with the advance of the market economy and the pressures of globalisation. It incorporates the Indonesian case into a vast and well-developed debate that has hitherto focused on North Africa and the Middle East. As such it offers a distinct interpretation that goes beyond the prevailing understanding of Islamic politics in Indonesia as the product of conflicts over ideas, doctrine or culture or the institutional requisites of authoritarianism or democracy. Specifically, it is proposed that Islamic politics has been underpinned variously by the conservatism of small propertied interests, the populism of marginalised urban and small town middle classes and the ambitions of the upper middle classes and business. While these dynamics are found across much of the Muslim world, the political outcomes have been diverse. We show that the Indonesian trajectory has been greatly influenced by the failure of Islamic politics to establish effective cross-class alliances behind the banners of Islam and the ability of the secular state to effectively establish its own apparatus of populist politics.     

Behavioral norms in the Islamic doctrine of economics: A critique

At the heart of the contemporary Islamic doctrine of economics lies a set of behavioral norms derived from the first Islamic society in seventh century Arabia. This paper demonstrates that these norms cannot be expected to serve as the spearhead of a drive for modern economic development. For one thing, the proposed norms are unlikely to enjoy widespread adherence in large societies where it is difficult to achieve a common perception of reality, elicit generalized altruism and overcome the free rider problem. Secondly, many Islamic norms are ambiguous, and some interfere with institutions designed to improve the workings of markets.     

Law, state power, and taxation in Islamic history

The ruler's power varied greatly in Islamic history over time and space. We explain these variations through a political economy approach to public finance, identifying factors affecting economic power and its constraints. An influential interest group capable of affecting the ruler's power was the legal community (‘ulamā’). This community could increase the ruler's ability to extract a surplus from the citizenry by conferring legitimacy, thereby lowering the cost of collecting taxes. It could also limit power through legal constraints on taxation. We show how changes in legitimacy and legal constraints affected the economic power of rulers in representative episodes of Islamic history and identify general trends and dynamic processes underlying the relationship between the state and the legal community.