Reading Timur Kuran

Posted in books, development, economic history, economics, history, institutions, Muslim world, people by jrahman on April 18, 2012

“Big books” are tricky things in social sciences.  Everyone wants to write one, about some major issue of history, society, polity or the economy.  Few try.  And fewer yet actually succeed.  Those who do succeed end up not only changing the research programmes of major universities, but also shaping how the educated layperson thinks about the subject.

Jared Diamond’s Guns, Germs, and Steel: The Fates of Human Societies was perhapsthe big book of the 1990s, at least in the liberal humanities disciplines I was shuffling in and out of as an undergrad.  That explained why geography played a huge role in determining the course of history.

Now, no social scientist anywhere ever would claim that any single book explains everything — that’s the stuff of religion.  Diamond’s thesis didn’t seem particularly convincing about the relative performance of Western Europe and other regions of Eurasia (West Asia, India, China) over the past 500 years.

In the past decade, there has been a number of attempts at explaining this West vs the Rest puzzle.  Within that literature, Timur Kuran of Duke University has explored the difference between Europe and the Middle East.  His The Long Divergence: How Islamic Law Held Back the Middle East is the big book on the subject. 

What’s his thesis?  Hear from him:

Here is the first chapter of the book.  The Economist summarises the thesis as thus:

Europeans inherited the idea of the corporation from Roman law. Using it as a base, they also experimented with ever more complicated partnerships. By 1470 the house of the Medicis had a permanent staff of 57 spread across eight European cities. The Islamic world failed to produce similar innovations. Under the prevailing “law of partnerships”, businesses could be dissolved at the whim of a single partner. The combination of generous inheritance laws and the practice of polygamy meant that wealth was dispersed among numerous claimants.

None of this mattered when business was simple. But the West’s advantage grew as it became more complicated. Whereas business institutions in the Islamic world remained atomised, the West developed ever more resilient corporations—limited liability became widely available in the mid-19th century—as well as a penumbra of technologies such as double-entry book-keeping and stockmarkets.

This is fascinating stuff.  And I plan to blog more about it someday.

But even without this ‘big book’, Kuran’s earlier work — published in 2004 in Islam and Mammon: The Economic Predicaments of Islamism — should be taken seriously in the Muslim world (including Bangladesh).  As ‘Islamist’ parties gain power in newly democratising Arab world, and as Bangladesh slouches towards a future without the two major leaders, Islamic economics should be taken seriously.  And Kuran is a major contributor to that discipline.  Here is an article summarising his take on how the discipline orignated.  Here is the first chapter.  I’ll also blog about his (and other) take on ‘Islamic finance’ someday.

More recently, Kuran has worked on the Hindu-Muslim differences in economic modernisation during the Raj — the relevance to anyone from South Asia is self-evident.


4 Responses

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  1. Diganta said, on April 21, 2012 at 1:38 am

    I read his co-authored paper on subcontinent. I understood his point but I am not sure whether he’s point is one of many. He never tried to point at Indian wealth distribution at regional level and argue how that is being affect by his theory of “capital fragmentation”. In my personal view, regional disparities account for the most of Hindu-Muslim economic divide.

    • jrahman said, on April 22, 2012 at 11:40 am

      Will post about that paper separately, but you do raise an important point.

  2. DhakaShohor said, on April 22, 2012 at 11:51 pm

    What’s his definition of the Middle East in that paper? I think he does have a point but was a bit wary for a number of reasons, not least a (ahem) Tyler Cowen recommendation. Heheh. I will try to read him as soon as I have time to read again.

    • jrahman said, on April 25, 2012 at 12:42 pm

      The standard North Africa and West Asia.

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