Benjamin Friedman: recommendation

Transcript context

…If we look at Muslim countries, it seems that Muslim immigrants to non-Muslim countries, on average, both do very well and are quite likely to be involved in commerce. The history of Islam seems quite positive for commerce. Muhammad was himself a merchant. There are limitations on usury and the like, but overall, the doctrine of the religion is arguably more pro-commerce than is Christianity. So why is it that so few Islamic nations have embraced liberal democratic capitalism? And very few are democracies, right? Malaysia, to some extent, Indonesia, but overall, the record is not that democratic. There are two points of view that I think are probably both right. One is that somewhere along the way, Islam took a very interesting turn that moved those societies from being at the very forefront — which they were — of scientific advance and cultural height, to a more stagnant, backward-looking orientation. Timur Kuran’s book, I think, is the key one on that, but many other people — my colleague, Noah Feldman at Harvard — have views of all of this as well. The second view is that the Islamic view of lending is particularly inimical to economic development. Now, this is a view in which one doesn’t lend at interest, which originates in the Hebrew Bible and was taken up by the early Christian thinkers as well. Many historians of the economic development point to the movement away from the ban on lending at interest under Luther, and then especially under Calvin, as the key step that freed Western society to move toward a more financially based, and therefore expansive, economic posture. That’s been blocked in the Islamic world by the strictures on banking and lending. I think there’s something to both of these views, but they’re very different. Why are Mormons so capitalistic?…

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