8 April, 2010
This is a piece written for a conference on Islamic finance to be held on 29th April in Edinburgh.
The notion of the moral economy is intrinsic to all the major faiths, each of which has placed ethical boundaries on the behaviour of those active in the market.
The ten commandments of the Jewish Torah or Christian Old Testament laid down an ethical boundary – or regulation – for work:
“for six days you shall labour and do all your work. But the seventh day is a Sabbath to the Lord your God; you shall not do any work – you, your son or your daughter, your male or female slave, your livestock, or the alien resident in your towns.
The Qu’ran lays down clear ethical boundaries for lending and borrowing, and for trade.
These boundaries have been vital in the maintenance of great civilisations. As Karl Polanyi, the great economic historian argued (in his 1944 book “The Great Transformation”) – the regulation of the conduct of human affairs by law is vital to the maintenance of civilised society, and to the market, because
“robbed of the protective covering of cultural institutions, human beings would perish from the effects of social exposure; they would die as the victims of acute social dislocation through vice, perversion, crime and starvation….neighbourhoods and landscapes defiled, rivers polluted, military safety jeopardized, the power to produce food and raw materials destroyed”.
So one of the great contradictions we in the West face today is this: law – or regulation – needs boundaries, in particular ethical boundaries; but also geographical and political boundaries.
However markets, in particular financial markets, abhor boundaries.
How do we reconcile therefore, the ethical boundaries/regulation advocated by the world’s great religions with the resistance of, in particular financial markets, to these boundaries? Continue reading… ›
12th December 2009
