British Academy: The UK's National Academy for the Humanities and Social Sciences

Distinguishing 'Religious' from 'Economic'
Workshop at the
British Academy, Carlton House Terrace, London SW1

9.45 am – 5.15 pm
Thursday 26 November, 2009
Academic convenor: Trevor Stack

Abstracts

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• The Religious-Secular Paradigm: Towards A Narrative Of Religion And Ethics In The Jurisprudence Of Islamic Finance (Jonathan Ercanbrack, SOAS)
• The Emergence of the Civil Corporation From 13th Century Poverty: The case of the ‘peculiar exception’ (Michael Black, Blackfriars, Oxford)
• Notes on Religion and Economics (William Dixon, London Metropolitan Business School)
• Understanding Glastonbury as a Site of Consumption (Marion Bowman, Religious Studies, Open University)

The Religious-Secular Paradigm: Towards A Narrative Of Religion And Ethics In The Jurisprudence Of Islamic Finance (Jonathan Ercanbrack, SOAS)

The modern phenomenon of Islamic finance invokes many age-old contracts for investment in today’s global markets, and thereby relies on classical Islamic law to structure the form and content of these products. Yet the homogenising effects of the international regulatory environment and fierce competitive pressures unknown to earlier centuries have shaped these contracts in ways that many scholars have derided as un-Islamic, based on a 'schizophrenic jurisprudence', which creates complex contractual jumbles to mask otherwise secular economic outcomes.  While an increasing tendency to harmonise the contractual diversity underpinning Islamic financial products and services may inadvertently propel the industry towards a conventional and thus secular market strategy, a devoutly conservative jurisprudence seems determined to project an ethical and religious essence onto many contracts that are otherwise bereft of a consistently observable ethical component. 

Islamic finance thus presents us with an opportunity to examine the changing nature of Islamic law in the modern world.  The religio-ethical essence of the Islamic nominate contracts and the pragmatic, secular nature of commercial exchange maintained a tenuous relationship in classical jurisprudence and medieval economic transactions.  Islamic finance has shifted this jurisprudential paradigm markedly towards a profit-driven commercial objective which obfuscates the lack of a coherent modern ethical foundation despite a flourishing Islamic narrative of ethics and religiosity.  For example, Islamic financial institutions now employ so-called Shari’a supervisory boards to review the Shari’a-compatibility of Islamic financial products and services.  Shari’a boards not only constitute a historically unprecedented rationalisation of Islamic commercial transactions, they also serve to legitimate and infuse modern transactions with ethical/religious spirit.  Moreover, numerous laws and financial regulations in the United Kingdom and elsewhere contribute to this development as the conventional legal framework often impedes the development and transaction of contractual structures which could otherwise be housed in the ethical and religious tradition of the Islamic nominate contracts.   As a result, the Islamic financial industry has created a hybrid jurisprudence which seems to symbolise devout Muslims’ desire to adhere to the sacred traditions of Islam while attempting to establish a unique, commercially-competitive voice in international economic affairs.

The Emergence of the Civil Corporation From 13th Century Poverty: The case of the ‘peculiar exception’ (Michael Black, Blackfriars, Oxford)

The modern corporation is the product of a secular distinction in Roman law, used in a political battle between Church and Empire during the 13th century to create a legal entity which could own but could not be owned, that is, the corporation. The distinction is that of the peculium, a commonplace but archaic legal institution which was an exception to the fundamental principle of Roman property law – the inseparability of dominium (possession) and usufructus (benefit). This distinction had been used by St. Paul to portray his revolutionary concept of the Kingdom of God in 1st century Corinth. But not until the 13th century was it used by the Franciscan Order, with the help of the papal curia, to establish the existence of a legal entity with an identity that was independent of its members and their interests in order to ensure, paradoxically, institutional impoverishment. It also provided the means to legally argue for the independence of the Church from state control by establishing the origin of the Church in Private rather than Public law. The peculium thus passed from a legal backwater to the mainstream of post-Roman law.  The distinction was rediscovered by Berle and Means in the 1930’s in their foundational study of the modern corporation. Without an appreciation of the significance of the peculium, therefore, the corporation, its management and its regulation, are unintelligible.

Notes on Religion and Economics (William Dixon, London Metropolitan Business School)

The separation of religious and economics supposes the possibility of self-interested behaviour that can be studied apart from whatever we might take to be virtues. The nature of this separation then supposes a study that is not considering whether the behaviour is good or bad but rather what follows from it. This would be economics in which the ethical consideration is removed as a condition of study. In the history of the discipline this approach appears to go back to its origins where we find Das Adam Smith Problem (DASP). It is supposed that Adam Smith in writing both The Theory of Moral Sentiments and the Wealth of Nations had written two incompatible works supposing in the one what we might summarize as benevolence while in the other supposing self-interest. This is not just a problem of some historical interest but also represents the current configuration of modern economic thought. In this sense DASP continues as a modern problem. It poses what seem two sides, perhaps oppositional, or two poles of human behaviour: selfishness v. altruism, the individual v. social, natural v. conventional, appetitive v. rule bound, urge v consideration, secular v. religion. This oppositional configuration of DASP refuses to go quietly, rather it represents a point of historical and theoretical disquiet from which a number of innovations and proposals arise as people seek plausible reconciliation or fruitful restatement of the issues. There are a number of contexts in which disquiet may become active, - is there altruism? Can there be charity? Philanthropy? Do we ignore suffering? Is suffering just the consequence of individual decisions or does it have wider causes beyond the individual? Can people happily collaborate (i.e without cheating)? Do we allow self-interest to be unchecked,- as in finance today, greed is good-?

If we focus on the history of the discipline we can trace DASP further back to what is now called the Hobbes problem, that is to say how can we account for or even produce some social arrangement, peace, from the interaction of selves that constitutes the 'state of nature' and that produces a 'warre of all against all'. So the underlying problem then is not whether we can construct a study of self-interest but rather whether we can construct from such meagre material social arrangements that can stand. Hobbes's solution was the Leviathan. While this solution may not be accepted his approach based on the selfish maximiser has become standard in economics.

This configuration of ideas has implications for religion. In one view this strengthens the position of religion since it plays its part in a division of labour in which economics deals with self-interest while religion deals with virtues or morals. Of course this implies that religion does not have sway over all aspects of life, such is the division of labour. We can see religion making proposals about the limitation of markets or the modification of behaviour and also making arguments regarding the deeper needs of humans beyond the material etc. However, such an approach leaves the constitution of self-interest as essentially unchallenged, even if its operation requires some external modification. This modification does not question how self-interest operates as an ethics free realm of maximisation.

An alternative approach may be found in the history of economic thought. Firstly, it is not true that religion was so easily removed from economic life. Indeed, especially as we consider issues such as the poor we find strong involvement of religious figures in matters of economy, involvement that was indeed influential in its day and formative of subsequent policy. We can mention here, amongst others, Joseph Butler, William Wilberforce, Thomas Malthus, John Bird Sumner, Thomas Chalmers.  Here a variation of views can be found around a common theme, even if differently interpreted, that is that life is a trial (i.e living in the economy), a discipline through which people go and in which they make decisions formative of their moral condition. In this consideration we can also find expression of a view developed in opposition to Hobbes's narrow self-interest that in some way people were endowed with a conscience, some capacity to determine right from wrong. In this view the stark separation of self-interest (economy) from other related behaviour (ethics, religion) was not accepted.

In fact subsequent to Hobbes theoretical development endeavoured to counter his argument. This development through the British Moralists included Shaftesbury and the above mentioned Joseph Butler (i.e. in his Sermons). This culminated in Adam Smith's Theory of Moral Sentiments. If this was the culmination then it posed a problem in regard to DASP. How could Smith have been a culmination of the search for an alternative to Hobbes as well as the originator of Hobbes in economic thought. The suggested reconciliation of this depends on an understanding of how Smith believed people came by moral conduct. Here the key was sympathy, the capacity to put oneself in another place, a capacity that enables the person to act with some conception in mind of how the other will respond. In this view then interaction, and so moral conduct, is fundamental to understanding action, rather than as with the Hobbes (modern economics) view the other way round. We can see this view worked out by Thomas Chalmers (1833) in his On The Adaptation of External Nature to The Moral and Intellectual Constitution of Man,  [Bridgewater Treatise 1]   However it is arguable that Chalmers was one of the last (if not the last) to be influenced by Smith in this way. Indeed he was reacting himself to what he called utilitarian economics. While for him religion was central to the economy because of his view of god-given human capacity this marked something of a side turning in economic thought, one that certainly had influence in social policy but that had little subsequent purchase in economics itself. The subsequent story developed on the suppositions that sustained DASP and would culminate in the explicit rejection of ethical considerations from economic thought in such as Samuelson and finding expression in the economics taught today.

Understanding Glastonbury as a Site of Consumption (Marion Bowman, Religious Studies, Open University)

Pilgrimage centres always generate distinctive economies, a mixture of specialist goods and services and the regular sector which serves both locals and pilgrims. Glastonbury, dubbed ’epicentre of New Age in England’, is an example par excellence of a contemporary pilgrimage centre, with traditional and new forms of religion/ spirituality, traditional and new goods and services, producing a distinctive ’spiritual economy.’ Almost 50% of the town’s retail outlets are what might be broadly termed ’alternative’, there is a huge variety of healing on offer, annual events bring in people from Britain, Europe, America and elsewhere, there are specialist bed and breakfast options, and complex  patterns of ’portfolio working’ within which people combine, for example, clairvoyance and part-time shop work.

To understand both the ’shopscape’ and the more hidden aspects of Glastonbury’s economy, however, it is important to see beyond simply the ’selling’ aspect to the internal interactions and ’relativised’ ethos of Glastonbury, the self-narration of many ’spiritual entrepreneurs’, and the importance of ’staking a claim’ in Glastonbury.