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60 Jurist 137 (2000)
The Religious Foundations of Islamic Finance

handle is hein.journals/juristcu60 and id is 139 raw text is: THE JURIST 60 (2000) 137-161

For centuries Muslims all over the world have conducted business en-
terprises, financed ambitious and innovative projects, traded across
deserts, oceans, and continents, and provided for their families in ways
consistent with Islamic law. Throughout the centuries, Muslims have
employed a highly sophisticated understanding of transactions, based on
a prescribed set of Shariah-approved contracts, to further their financial
ends. The principles articulated by the Shariah for transacting business
have long been the subject of study by Muslim legal and financial pro-
I have little doubt that most Muslim readers will never think to ques-
tion why a work such as this one should be necessary. In my experience,
the same assertion may be made in regard to non-Muslim readers. In
today's world there are very few people who will fail to appreciate the
need for Muslims to live in accordance with the teachings of Islam. With
globalization and increasing diversity, there is general appreciation for
the need of any religious or cultural minority to live in accordance with
their particular inclinations or imperatives. Islamic law and its precepts
for living are a part of every Muslim's cultural and spiritual identity.
Thus, regardless of where Muslims may live in the world today, it is a
matter of considerable importance that they be able to live their lives in
accordance with their beliefs. Today, when a large part of modem life is
in fact commercial life, it is clear that Muslims are keenly interested in
this subject.
It is my intention to suggest a sort of theoretical framework for Islam-
ic finance to which the reader may refer from time to time in the course
of his/her study. Historically, for practioners of Islamic finance, there
was little need to articulate such a theory. The milieu in which Muslims
conducted their business was one in which the verities of such a theory
were at once ubiquitous and so obvious as to require no elaboration.
Today, however, an entirely different set of circumstances obtains. Eco-
* Shariah Advisor to financial institutions in the US, UK, Middle East, and Africa, in-
cluding the Dow Jones Islamic Market Index.

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