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Timur Kuran, author of The Long Divergence: How Islamic Law Held Back the Middle East, gave an outstanding presentation at the Mont Pelerin Society Conference. It shed a lot of light–to my way of thinking–upon many of the most vexing aspects of modern Turkey:
Timur Kuran argues that what slowed the economic development of the Middle East was not colonialism or geography, still less Muslim attitudes or some incompatibility between Islam and capitalism. Rather, starting around the tenth century, Islamic legal institutions, which had benefitted the Middle Eastern economy in the early centuries of Islam, began to act as a drag on development by slowing or blocking the emergence of central features of modern economic life–including private capital accumulation, corporations, large-scale production, and impersonal exchange. By the nineteenth century, modern economic institutions began to be transplanted to the Middle East, but its economy has not caught up. And there is no quick fix today. Low trust, rampant corruption, and weak civil societies–all characteristic of the region’s economies today and all legacies of its economic history–will take generations to overcome.
You can read the first chapter here. The great pleasure of hearing him speak or reading his work is the encounter with someone who has a sense that history began well before the second Bush Administration. So many people fail to grasp that.
One of his key questions is this: Why did the Islamic world fail to develop the concept of a corporation, that is to say, an entity designed to encourage investment and profit-sharing and separated from tribal and family loyalty? Why did this notion arise in Great Britain, Holland, Belgium, Switzerland? The answers he proposes are fascinating.
A passing thought: Economic history isn’t over. Wouldn’t it be interesting to know what economic historians will say, a thousand years from now, about the impact of institutions that are only now coming into being? Who knows which ones will really change things? Published in