4 Comparing Real Islamic Logic and Islamic Finance
Before working out a specific proposal for Real Islamic Logic in some detail, that notion which is transpiring in an abstract or distant formalready, will be compared to Islamic Finance which has been used since around the year 1930 onwards. This comparison is supposed to be helpful for developing an understanding of what RIL can be given a perspective on Islamic Finance.
After that comparison the companion notions Crescent-star Finance and Crescent-star Logic will be briefly compared.
4.1 Comparing IF and RIL in some detail
It has been argued that whether or not the label Roman catholic can be assigned to some concept is a difficult matter and that difficulty is similar for the adjective Islamic.
Nevertheless some convention has been formulated and that convention underlies the understanding of the adjective Islamic in the sequel of this paper. I will now make an attempt to highlight in detail some important merits and demerits of the phrase Islamic Finance while contrasting it with Real Islamic Logic.
1. As I have noticed already above Islamic Finance seems not to be used in existing literature with the historic bias which is dominantly assumed for Islamic Logic.
2. I briefly consider Islamic Astronomy. That has a historic connotation by default.
One might seek for a modern version of it “Modern Islamic Astronomy” or even aJihadic form“ Real Islamic Astronomy” (or a movement with similar objectives).
None of these exist because Modern Islamic Astronomy is simply Astronomy.
3. There is no contemporary Islamic Astronomy for the simple reason that conventional astronomy is entirely acceptable from an Islamic perspective. Real Islamic Logic may be considered meaningless in the same way as contemporary Islamic Astronomy is. Likewise some hold Islamic Finance to be a self-contradictory notion. However, these arguments are flawed because although Islam suggests no alternative ways for pursuing astronomy, Islamic Finance definitely involves a rather specific set of financial conventions and the logic for Islamic Finance may be designed quite specifically as a customized toolbox for applications in an Islamic context. A similar argument can be put forward concerning RIL.
4. The logic involved in Real Islamic Logic can be pursued both in a philosophical style and in a more formalist style. At least for philosophical logic the potential to work in anIslamization oriented mode cannot be ruled out as easily as for instance for physics and mathematics.
5. Islamic Finance is a successful intellectual construction that could have originated outside Islam in theory (not what actually happened, it was a mainstream Islamic development). Pursuing Islamic Finance is by definition a matter formuslims only.
6. A significant result of Islamic Finance is the appearance of Arabic terms and concepts in the financial world. A similar development is not to be expected from the pursuit ofReal Islamic Logic.23 About this phenomenon the following can be said:
• The appearance of Arabic jargon in the financial world cannot simply be understood as a consequence ofIslamization , in the same way as the appearance of English in many areas of activity is not a symptom of Christianization. It merely indicates the importance of Arab speaking authors and financial workers in the pursuit of Islamic Finance.24
• Islam has Arabic language as a major carrier of its cultural sources in very much the same way (though significantly more pronounced) as Christianity has (medieval) Latin as a source. I am assuming that conceptually Islam can and must be separated from Arabic.25
• Not only language and religion must be separated but to some extent history and language need separation as well. For instanceShari’ah may be replaced by “Islamic Legal Process” and that replacement immediately removes potential misunderstandings. For instance one may think that extremely harsh punishments are characteristic forShari’ah ignoring the fact that the local history of some well-known traditions of the Islamic Legal Process have developed in nomadic societies where imprisonment was not considered a practical option and punishment of an instantaneous form was more easily applicable. In different conditions, however, the Islamic Legal Process leads to different ways of dealing with undesirable behavior.
• It is quite difficult to translate classical Arabic terms into English. For instancegharrar (accepting an excessive downside risk) is forbidden in Islamic Finance but explanations of this limitation invariably involve digressions into the meaning of the termgharrar . The concept of Islamic Finance should not be allowed the degree of freedom to proclaim thatgharrar is forbidden whatever it means so to say, thus leaving those who don’t master Arabic uninformed about which behavioral limitation is imposed by means of this proclamation.26
7. Currently Real Islamic Logic may be considered to be about as plausible or implausible as Islamic Economics with the difference that the phrase Islamic Economics is widely used. In spite of being often mentioned Islamic Economics has not really come off the ground except for its specialized financial branch.
8. Islamic Finance acquires significant visibility and profile from a single assumption namely the prohibition of interests. Opinions about the foundations of this prohibition vary from a fully religious grounding (promising no economic advantages compliant with Islamic social objectives) to a fully economic grounding (expecting that this prohibition will contribute significantly to the reduction of phenomena of individual hardship27 and of structural crisis). At a closer inspection Islamic Finance is based on a combination of restrictions amongst which interest prohibition is only the most well-known ingredient. These other restrictions are:
• Avoidance of excessive downside risks.
• Non-reliance on excessive upside chances (gamble).
• Sold items must exist at the time of transaction (but payment may be deferred).
• All parties involved in a sales transaction must have comparable and complete information about what is being sold.
• Parties involved in a financial transaction may not be forced into participation.
9. Real Islamic Logic has no counterpart to the dogma of interest prohibition. That is no single element carries significantly more visibility than other elements. If any counterpart to the above concise specification of Islamic Finance must be found it consists of a cluster of elements for which the following listing may be a candidate:
• Inconsistencies abound, andparaconsistency is the best one may aim for. In particular:
– Revealed sources are a fundamental source of the body universally quantified assertions from which reasoning must take place.
– The totality of revealed sources is not claimed to be consistent. (Many inconsistent subsets may exist.) Informed scholars must resolve contradictions when needed.
– Original eye-witness accounts produce evidence, and so do indirect testimonies.
These may have higher priority than the original source facts these accounts are commenting upon. This also holds if the source facts are understood in a metaphoric fashion.Proximity in time to the causes of creation of the original sources (for instance measured by means of counting number of intermediate witnesses) increases confidence.
– Science (including logic and mathematics) may produce valid assertions which may be inconsistent with revealed sources. Scientific fact wins out against revealed fact, moving the latter into a metaphoric status, which is then in need of explanation by interpreting scholars.
– A improved level of knowledge of science may lead to modified assertions to which a higher degree of confidence is assigned.Ordinary resolution of inconsistencies amongst scientific results.
• Distributed and autonomous humanjudgement performed by groups of informedscholars plays and will play a major role in legal decision making which may overrule at any time all formalized deduction from acquired database of accepted legal assertions. As a consequence:
– Islamic legal reasoning cannot become outdated, it is essentially a contemporary phenomenon, and, – the Islamic Legal Process proceeds concurrently at different locations and different courts may judge quite differently about similar cases at the same time,28 and, – logic is supposed to be supportive of this mechanism and must not in any way be construed as an “objective” replacement of conscious group decision making by informed scholars.
• Resolution of contradictions makes use of geographically based priorities, with local Islamic courts having more impact than distant ones,29 recent courtjudgements have more relevance than older ones of the same court.30
• Altogether Real Islamic Logic deals with (at least) eight priority mechanisms at the same time:
– priority of science over revelation, – priority of improved science over previous scientific findings, – priority of confirmed interpretation (if sources are understood metaphorically) over revelation, – priority of direct witness reports over indirect ones, – priority of propositions put forward by highly regarded scholars over propositions produced by less highly regarded ones, – priority of propositions put forward by directly involved (concerning the issue at hand) individual scholars overjudgements made by individual scholars from a more distant position, – priority of recent courtjudgements over olderjudgements of the same court, – priority of nearby (physically or community wise) courtjudgements over more distant ones.
As it stands human decision making is essential to balance the relative weights that must be assigned to these different priorities.31
The simultaneous presence of a number of priority mechanisms renders Real Islamic Logic astonishingly complex but it constitutes no reason not to analyze its working in detail, on the contrary, it suggest that much work can be done.
4.2 Comparing Crescent-star Finance and Crescent-star Logic
Crescent-star Logic stands for Real Islamic Finance stripped from its political and religious objectives. Similarly Crescent-star Finance is Islamic Finance stripped from its religious, political and ideological objectives. Both themes can be contemplated and advanced by non-muslims . There is a difference, however, because for a non-muslim Islamic Finance represents a reasonable comprehensible deviation from conventional finance and the effect of adherence to that deviation can be investigated in an impartial way both in theory by way of making use of thought experiments and in practice by means of observation of real or of artificial (that is experimental) economic processes.
Work on Crescent-star Finance may, at least in principle, reveal weak points concerning Islamic Finance that need to be taken into account bymuslims pursuing Islamic Finance in its full meaning. It may also lead to the discovery of new financial products which Islamic scholars are likely to consider morally adequate (halal ).
At this early stage Crescent-star Logic is a hypothetical matter altogether because the inclusion and exclusion of formal techniques as well as philosophical methods for Real Islamic Logic needs to be worked out from an application perspective. Nevertheless a stage can be imagined where Crescent-star Logic can be abstracted from real Islamic Logic in way comparable to the way logic programming has been obtained from programming in PROLOG.