Beyond Debt

Beyond Debt: Islamic Experiments in Global Finance, by Daromir Rudnyckyj (Chicago: The University of Chicago Press, 2019).

Reviewed by Johan Fischer, Roskilde University

For someone such as myself, who has worked on the global halal market (literally, “permissible” or “lawful” in Arabic) and Islamic economies more broadly for almost two decades, this book is a most welcome contribution to a growing body of literature on alternative/spiritual/human economies. Beyond Debt breaks new ground as the most ethnographically rich book on Islamic finance in existence.

Islamic banking and finance (IBF) constitute a worldwide phenomenon and the question of riba (interest) is essential. A broad definition of IBF would include all activities understood to be financial or economic that seek to avoid riba: profit-and-loss sharing, leasing, or other forms of equity- or asset-based financing are central. In general, a few basic principles are often seen to define IBF: to engage in legitimate and lawful businesses and to fulfil all obligations and responsibilities, business must be based on concepts of honesty, justice and equity; overspending and wastage are prohibited; wealth must be used in a proper and orderly manner; to help and assist the needy; and transactions must be properly executed. These ideals are contested and this is even more prominent when trying to define proper IBF practices.

Arguably, Malaysia is the best place to look when exploring how these issues work out in practice: the state, central bank and shifting governments have over the last three decades aimed at making the country and its capital Kuala Lumpur the New York of the Muslim world. Focusing on what IBF is or should be in the eyes of four groups of Islamic finance experts in Malaysia, Rudnyckyj situates his ethnography in the context of recent economic crises, and more specifically examines the centrality of debt in financial crises more generally. In doing so, he opens up a much broader discussion of IBF as an alternative not only to conventional banking, but also to the inherent instability of global capitalism: a vision of a world free of debt. I have explored this as Muslim Piety as Economy (Routledge 2019), in a Southeast Asian perspective comparing the Muslim majority countries of Brunei, Indonesia and Malaysia,. Similarly, Rudnyckyj situates the ambitious experiments that he describes—to create more stable economies and stronger social solidarities by facilitating risk- and profit-sharing, enhanced entrepreneurial skills, and more collaborative economic “geoeconomics”— as a global Islamic alternative to conventional financial networks.

The book argues that the global 2008 financial crisis has given new impetus to this topic; efforts to reform Islamic finance offer a diagnosis of and potential solution to debt as a theoretical and practical problem, while the effort to make Kuala Lumpur an Islamic global city by transforming it into an international hub for Islamic finance reveals an alternative configuration of globalization. Rudnyckyj’s key questions are well-suited to guide readers through the extremely richly textured ethnography: What exactly is Islamic finance? What makes it Islamic? What kind of alternatives do Islam’s restrictions on interest and debt offer, as compared to conventional finance? Is debt a necessary feature of capitalism? Rudnyckyj found that there was no single answer to these questions among Islamic finance experts.

This finding is at least as relevant among “ordinary” Muslims in their everyday lives – especially because these groups most of all are called upon to use/comply with Islamic finance and arguably they felt the consequences of the financial crisis more than so-called experts. The question is how these ideals filter down to shape the practices of consumers in everyday life. In my own research, carried out in 2001 in Kuala Lumpur, three types of relation to IBF were evident: the principle of exclusively using Islamic banking as a moral responsibility; those who use conventional as well as Islamic banking because of loyalty to their conventional bank, habit or sheer convenience while being somewhat sympathetic to IBF; and a third group of informants, who consisted exclusively of Muslims who strictly used conventional banking. In the view of the last group, Islamic banking was a means to legitimize the politicization of the banking system and another twist to deepen what I called Muslim piety as economy. Moreover, these Muslims often quite simply found that conventional banking was a more profitable product compared to Islamic banking. In spite of this, Islamic banking has by now become the dominant banking system in Malaysia.

Beyond Debt is highly recommended, in particular as a superb work of economic anthropology, even if I have a few reservations. First, a lot has happened since my research in 2001, but more detail on ordinary attitudes to IBF would have had relevance to Rudnyckyj’s main discussion of Islamic finance experts. Secondly, it would have been fascinating to explore the extent to which IBF could in any way address the Qur’anic prohibition on corruption—that is, corruption seen as an attitude of unbelief. The relationship between IBF and corruption would make for a fascinating topic in contemporary Malaysia.

Still, Rudnyckyj’s conclusion underscores the main contribution of this book as it ties the book’s findings together and reflects on the role Islamic finance can play globally. Beyond Debt is a seminal work that is appropriate both for academics and for students in courses related to history, anthropology, religion, economics, globalization, state, markets, and trade and regulation, among other subjects. I can imagine it being assigned in a variety of upper-level undergraduate courses and graduate seminars. The book will also be of interest outside academia, to state as well as non-state bodies, and to NGOs, anti-globalization groups, and policy makers.