At the heart of any legal debate over an alternative Islamic banking system lies the definition of the word riba. The word is mentioned several times in the Qur'an. In a concise form, the rule can be stated thus: ‘God has forbidden riba’ (Q :II, 275). Depending on the domain subsumed under the word, a number of financial, commercial and legal transactions will be included in, or excluded from, the Qur'anic prohibition. The issue is complicated by the distinction, which appears in the hadith, between riba annasi'a and riba al-fadl.

Riba an-nasi'a is the classical form of riba, which entails – as in a loan – a fixed increase (riba comes from the root verb raba, yarbu, to increase) in the amount of money over a time period. Riba al-fadl, which occurs in a contract of sales when there is an increase in the terms of exchange themselves, is also prohibited following the Prophet's injunction. A hadith mentions six commodities which constitute the object of riba al-fadl (the exchange riba): ‘Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates, salt for salt, each kind for each kind, in hand: he who increases or asks for an increase commits riba (arba), alike whether he gives or takes.’

In the modern banking world, it is the first riba, riba an-nasi'a, which is the main source of contention. If riba is defined as usury, then there is little problem in charging interest on transactions in the way of conventional banking.

In the preceding chapters, the relevance of the Shi'i schools of law for the modern constitutional debate, as well as the most direct sources at the origin of the present Iranian Constitution, primarily Muhammad Baqer as-Sadr's 1979 studies, have been presented. With these contributions in mind, this chapter will analyse some of the constitutional issues which have recently unfolded in the system. Occasionally, a comparative perspective will be introduced to shed more light on the problems that the Iranian institutions face.

In the widest acceptation of government, the quintessential constitutional question is about who ultimately holds the power to say what the law is. In view of the centrality of the shari'a in the definition of an Islamic state, this issue represents the essential problem of contemporary Islamic law.

A guiding perspective to the analysis of this chapter is offered by the celebrated exchange between Humpty Dumpty and Alice: ‘“When I use a word,” Humpty Dumpty said, in rather a scornful tone, “it means just what I choose it to mean – neither more nor less”. “The question is,” said Alice, “whether you can make words mean so many different things.” “The question is,” said Humpty Dumpty, “which is to be master – that's all”’; or, as in a sermon preached two centuries ago: ‘Whoever hath an absolute authority to interpret any written or spoken laws, it is he who is truly the lawgiver, to all intents and purposes, and not the person who first spoke or wrote them.’

At the outset of this work was posed the question of the advances of thought in the Islamic Renaissance. Was there anything * new’ in the theses elaborated in the Shi'i colleges, in comparison with the Middle Eastern intellectual scene, and beyond, in the longue duree course of the history of ideas? We have discovered in the works of Muhammad Baqer as-Sadr a system.

As in all systems, its strength comes from the avenues it opens, rather than from the specific answers it is able to provide. Sadr was confronted with several challenges, which he tried to address with the tools of the tradition available to him. In economics and banking, he was operating from difficult uncharted territory, and whilst he sometimes erred, the way he proceeded and the seriousness of his work remain unmatched in Islamic literature. As argued in this research, the detour through the shari'a allowed Sadr to elaborate on economic and banking issues with far more depth than his immediate contemporaries. Even in the works of the great reformists of the twentieth century, contributions in the field have been rare and unalluring.

One can find a large body of literature on ‘Islamic economics’, in Arabic as well as in English. But many of the works tend to dabble in generalities and to err in a lack of rigour which prevents the emergence of a serious and systematic literature. The recent ‘fad’ of ‘Islamic economics’ has impressed the production with an urgency that has kept the literature produced so far to a superficial and repetitive standard.

More serious undertakings have exploited the formidable legacy of Ibn Khaldun. Thus an Egyptian scholar writing an Encyclopaedia of Islamic Economics would dwell heavily on the Muqaddima. His effort is not unique, nor is it new. The legal tradition had early in the century exploited the famous historian in no less important a scholar than Subhi al-Mahmasani, who wrote his thesis in the 1920s on The Economic Ideas of Ibn Khaldun.

The reliance on Ibn Khaldun is the sign of the apparent dearth of material from which to draw an Islamic theory of economics. In contrast to the riches of constitutional law, economics appears as a non-subject in the faqih tradition: there is simply no general theory of economics, let alone a basis for such theory in a specialised subject like banking.

This is why the works of Muhammad Baqer as-Sadr in economics and banking are significant. Against a classical background where the discipline of economics did not exist, and an Islamic world which by 1960 had produced no consistent reflection in the field, Sadr wrote two serious and lengthy works on the subject, Iqtisaduna and al-Bank al-la Ribawi fil-Islam.

The relevance of the Usuli/Akhbari controversy

A received notion of contemporary Shi'i law is the major division in the history of Ja'farism between two schools of law, the Usuli and the Akhbari madhhabs (schools), and the dominance of each alternatively since the emergence of Shi'i fiqh. Since the end of the eighteenth century however, it is generally acknowledged that Shi'i law came under complete control of the Usuli school.

Recently, there has been a renewed interest in the two schools, and some good research carried out on the earlier periods of Akhbari dominance, at the beginning of the Safavid period, as well as the critical period in the eighteenth century that saw the triumph of the eponym of the present Usuli school, Al-Wahid al-Behbehani, about whom very little is known.

The present analysis is less concerned by the establishment, rise and wane of Akhbarism and Usulism than with the present perception of the debate by modern Shi'i jurists. The emphasis on the contemporary perception is partly related to the difficulty in accessing early documents. But it is also premised on the necessity to emphasise methodologically the relevance of the controversy on the present structure of Shi'i law. Whatever the earlier dissensions and their historical dimension, the differences have to some extent become mooted, since the Akhbari school has been discarded for over two centuries. Usulism rules unchallenged. The extremely limited geographical sway of Akhbarism confines its role, by contrast, to that of a revelator of Usuli characteristics: the distinguishing features of contemporary Usuli Shi'i law can be more clearly perceived in the light of their contrast with Akhbarism.

No intellectual theme has been more prominent in the Middle East of the twentieth century than the idea of the state. In one way or another, most ideas debated have been closely connected to the ideal form of the state, and nearly all the directions that such a debate could have taken have been probed. The gamut of political theories concerning the state was so wide that it allowed for any ideology, no matter how remote from the society where it was proposed and how thinly connected to its cultural milieu, to find an association with or to curry favour as the ideology of some Middle Eastern group.

It is true that most other countries of the world have witnessed to some extent a similarly wide range of state theories. But a characteristic of the Middle East lay in the difficulty of accepting the classical nation-state which, by the late 1950s, was established in most countries of the world. To date, the reluctance of the debate to deal with nation-states in their present form has been a major indication of the resilience of radically different projections and their claim to order societies in the Middle East according to alternative schemes.

Parallels can of course be found with other areas. South East Asia and Africa have had similar problems of state identity, and the Vietnam and Korean crises, as well as the South-African situation, have seen divisions and controversies which foreshadow and echo the Middle Eastern situation.

Law as Lingua Franca

In recent years, a renewed interest in Islam as a worldwide active social phenomenon has appeared. This has resulted in a flurry of works of sundry types on the theme of resurgence, revivalism, re-emergence of political Islam, also dubbed revolutionary Islam, radical Islam, militant Islam, Islamic fundamentalism, or more simply Islamism.

The issue of Islam as a socially turbulent phenomenon was approached by countries and disciplines: history, sociology, anthropology, politics. Questions were being posed in the worried and intrigued West, but they were also being asked in the East, where answers had an immediate political relevance. Naturally, the concerns were different according to the groups' varied interests. The common underlying concern, however, was for stability, or its converse, foiled or successful revolution. Depending on the position of a group in a particular state, fear, concern, or hope alternated.

This research tries to look into the thought of the resurgent Islams behind the first layer of enthusiasm or despair, to determine how the new vindicated outlook was shaped, and to examine whether there were any new ideas in the alternative system at all. In this longer perspective of the history of ideas, ideas could be ‘new’ only in comparison with earlier outlooks.

Iqtisaduna, an exposé

Iqtisaduna consists of three parts: the two first parts are critiques of the capitalist and socialist systems and operate negatively by presenting, essentially, counterarguments to classical socialist and capitalist theories (‘With Socialism’, I 17–212; ‘With Capitalism’, I 213–54). The most interesting part is the third one which deals with the conception of the Islamic economy in Sadr's mind, and is the object of our presentation (I 255–700).

The exposition of ‘Islamic economics’ is constituted, in Sadr's outline, by several sections which appear loosely connected. After an introduction which includes various methodological remarks (‘Our economic system in its general features’, I 255–356), Sadr divides the bulk of the investigation into a ‘theory of distribution before production’ (I 385–469) and a ‘theory of distribution after production’ (I 515–80). This is followed by a fourth section on the ‘theory of production’ (I 582–628), a section on ‘the responsibility of the state in the Islamic economic system’ (I 628–58) and various appendices on points of detail on some legal-economic aspects discussed in the book (I 659–700).

As appears in the outline, there is no underlying concept which emerges in the book, although the central unifying element seems to be a general notion of the distribution process, which is introduced by an analysis of the ‘preproduction phase’ and is followed by further remarks on the role of the state in the system.

Iqtisaduna is re-arranged in this presentation under three headings: Principles and method; Distribution and the factors of production; and Distribution and justice.

Introduction: on wilayat al-faqih

There is little doubt that the theory of wilayat al-faqih, as developed in Khumaini's lectures of Najaf, was most influential in the creation of the constitution passed in Iran in the wake of the Revolution. In these Najaf lectures, delivered in 1970, Khumaini developed the idea of the ‘ulama's responsibility in the state, in the form of an institutionalised structure which should be entrusted with the country's leadership.

The general thrust of the theory is not completely original. One can find the idea of the mujtahids' responsibility in the state developed much earlier in the century, for example when a dispute over Parliament and the new State of Iraq broke out in 1922–3. After the great revolt of Najaf against the British, which was led by the 'ulama, the continuation of this leadership through some representation in the state could not fail to be advocated in circles close to the Shi'i jurists:

THE CODE CIVIL OF 1804: AN END AND A NEW BEGINNING

1 This book does not aim to sketch out a ‘universal’ history of law but to give a historical introduction to the development of the private law currently in force in Belgium and the Netherlands. That law is made up of very old as well as very modern elements, and during its development it went through periods of stagnation and periods of rapid change. The most important of these periods was that of the great Napoleonic codifications, in particular the Code civil des Français promulgated in 1804. The Code civil is the culmination of several centuries of French legal evolution: much of it is old law, some of which goes back directly or even literally to the customary and Roman law of the Middle Ages and early modern times. None the less the Code civil of 1804 marked a decisive break in the gradual evolution of the law. It replaced the variety of the old law with a single and uniform code for the whole of France; it abolished the law which had previously been in force, in particular custom and Roman law (art. 7 of the law of 31 March 1804); it incorporated several ideological measures inspired by the Revolution of 1789; and it attempted to make the traditional role of legal scholarship superfluous, by forbidding doctrinal commentary on the codes, in the belief that the new legislation was clear and selfsufficient.

The French Code civil immediately came into force in Belgium, whose territory had been annexed to France and divided into départements.