Timur Kuran is a Duke professor of economics and political science and Gorter Family Professor of Islamic Studies. His recent book, “The Long Divergence: How Islamic Law Held Back the Middle East,” has garnered acclaim from around the academic world, earning high praise from, among other publications, The New York Times, The Economist and The New Yorker. The Chronicle’s Alex Zempolich spoke with Kuran about his research on the economic trajectories of Europe and the Middle East and what they mean for globalization.
The Chronicle: Could you summarize the findings of your book?
Timur Kuran: The basic message is that Islam mattered to the economic trajectory of the Middle East in that it promoted economic growth, but was an obstacle subsequently. But the mechanism has nothing to do with conservatism or traditionalism, or animosity to commerce. Certain institutions of Islam that are part of the Sharia, the holy law of Islam, unintentionally prevented the transition from a personal economy based on small-scale and short-lived organizations to a predominantly impersonal economy based on large and long-living organizations that could sustain large, long-term investments and accumulation of wealth. The institutions [that were] needed to jump start the stalled Middle Eastern economy came from the West. They were transplanted during the colonial era and modern commercial systems were instituted and all the basic ingredients needed for modern economic growth are now present in the Middle East. Islam is, by and large, not an obstacle to economic growth today as the necessary institutions have now been established. Those countries that started the transition earliest— Turkey, for example—are the most modernized and industrial today.
TC: Although your book pertains to historical barriers to economic growth in the Muslim world, what laws or customs hinder growth in the region today?
TK: Yes, there are still institutions that are problematic. One is the prohibition of apostasy. There is no freedom of religion in many Muslim countries. This discourages innovation and limits freedom of discussion because people are afraid of being perceived as challenging the religion. It basically has a chilling effect on discourse and people who are innovative and creative leave the Middle East. The other problem is the lasting effect of an atomistic private sector. Now you have some corporations, but traditionally the region has had an atomistic private sector—that is, many small-scale companies. Dealing with small-scale companies of short duration means economic exchanges were personal. In the West, exchanges tend to be predominantly impersonal, when we buy things on the Internet or at the department store, we deal with people who don’t know us––we don’t know the salesman personally. We are essentially dealing with a company, which is an impersonal entity. This is starting in the Middle East as well, but people still feel uncomfortable with impersonal exchanges. The transition from personal exchange to mostly impersonal exchanges took millennia in Europe. The Middle East started this transition about a century ago and it will take a few more generations for people to feel comfortable with dealing with corporations. This is one historical reason why I am pessimistic about the immediate future of the region, economically and politically, but I am optimistic in the long run. There will be more bumps in the road as we are seeing now.
TC: Speaking of trusting the institution versus personal exchanges, do you think that, with the current pro-democratic revolutions, people will begin to place more belief in impersonal systems that could aid growth?
TK: I think they will. Democracy is a system that involves trust in institutions versus trust in the individual. An autocratic system involves trust, or if it’s a bad autocratic system, mistrust, in a particular individual. There is a dictator and presumably all good and all bad flows from the person at the top. He takes all the credit if things go well and the blame for everything that does not. In a democracy, it is an entire system. We don’t hold Obama responsible for everything that goes right or wrong; we understand there is a lot he cannot control and there are a lot of checks and balances. Authority is more diffuse. We also have faith in certain institutions. We know if we go the post office, whether Obama or McCain goes to the post office we will be treated the same way.
TC: Just as the West exported capitalism, are there customs or ideas that the Muslim world could ingrain in western culture in the future?
TK: Anyone who lives in the Middle East will find that communal relations are much closer in many domains. On the street that you live on, you are likely to know at least a few families very well. If you need help, it is quite acceptable to ask for help and you are likely to be given it. That is something that is not the case in the United States now, and I think the United States could benefit now that we’ve gone to an extreme where we hardly know our neighbors. There is a part of globalization that dictates that influences go both ways. Just as interactions among the nations of the world have led to many American institutions, like American hotels being established all across the world, Americans have borrowed things from abroad as well. Ethnic cuisines are a good example, certain sports as well. I think we can expect that as the Middle East opens up and more Americans and Europeans visit, we will increasingly see influences going the other way.
TC: Moving from the Muslim world to the United States, we tend to see our growth as derived from cultural ideals—for example, American work ethic. Are there more subtle cultural attributes we have missed? What are contemporary hindrances we may face?
TK: One of the great sources of American prosperity has been its openness to the outside world and its willingness to assimilate immigrants. Many ideas that have been critical to American prosperity have been associated with immigrants or their children. I think one danger looking forward is the anti-immigrant sentiment that is quite widespread in the United States. It threatens to make the United States a less creative, dynamic place. Another potential problem is that the United States is becoming an increasingly old society, which means a larger proportion of the population will be non-productive and in need of being supported by those who are. That is a threat not only to productivity, but also creativity. The larger the retired population, the larger the proportion of the electorate that will be in favor of coasting and protecting the status quo and their privileges, rather than promoting an economic environment conducive to innovation and new ideas. Countries that insulate themselves from future waves of globalization will ultimately lose. Western Europe became very prosperous partly because it was very open to trade. Most of the global trade was within Europe or between Europe and the outside world—there was very little trade between China and India and between China and the Middle East. That was not the case in the middle ages. The Middle East was, at the time, central to the global trading system and did very well. Whatever the exchanges are, it is helpful to be at the center of it. If the United States cedes the position as a global trading power because of protectionism or conservatism generated by senior citizens, it will ultimately lose.
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