Jamesian Philosophy Refreshed

I'm quite happy with the way my review of this book for The Federal Lawyer  turned out. Reviewing Khan Regular readers of this blog may remember the book, which I discussed with you here, this spring. I'll quote myself, only briefly: " Riba is always a negative.  Whatever exactly riba is, it is bad. Thus, any devout Muslim who believes as an empirical matter that interest is a critical part of a successful financial system will have to have an understanding of riba that allows him to support the charging of interest while still condemning riba."

So with my astonishment noted as yesterday., let me proceed on the subject of Islamic Finance. This is a set of practices (and accompanying theories) that have grown up to allow devout Muslims to make use of their savings, without keeping them in a mattress on the one hand and without committing the offense Muslims call riba on the other. Riba is often understood to mean contracted-for rates of interest on debt in general. How does finance work without interest? There are lots of ways to go about answering that question. I've recently read a book by Muhammad Akram Khan entitled What is Wrong with Islamic Economics?   that holds among much else that rather too much ingenuity has been expended on trying to devise a system of finance without interest. The simple answer he prefers is that riba in the relevant sense is quite a narrow range of conduct, and completely distinct from the practice of charging for a borrower's access to investment capital.  R...