Sharia Finance at MIT

"Sharia Finance In The Classroom" -- a course announcement from the MIT Sloan School of Management, posted by Pamela at Atlas Shrugs:

Title Spec Sem in Mgmt: Practice of Finance: Islamic Finance

Islamic financial institutions have in recent years experienced spectacular growth (+25% in 2006, +37% in 2007). Islamic financial assets now exceed 1 trillion dollars and what was once a small niche has gone mainstream. Indeed, most major Western financial institutions are involved in one way or another in Islamic finance. The first part of the course introduces the basic principles underlying the industry (the prohibitions of riba, gharar, etc.) and discusses its recent evolution. The second part focuses on the main Islamic products: murabaha, mudaraba, musharaka, ijara, sukuk, takaful, etc. and explains how Islamic deals are structured. The third part discusses the challenges - competitive, regulatory, political, religious, etc. - faced by Islamic institutions and considers the impact of the current financial meltdown on their future evolution.
Area
Finance
Course Number
15.994
Credits
6.0
Capacity
20
Course Abstract

Room
E51-361
Time
T (H1) 4:00 PM-7:00 PM

David Yerushalmi explained some of the things that should make Westerners approach Sharia Finance with caution in a recent FrontPage article:

[1] The telos or purpose of Shariah is submission. Shariah seeks to establish that Allah is the divine lawgiver and that no other law may properly exist but Allah’s law.

[2] Shariah seeks to achieve this goal through persuasion and other non-violent means. But when necessary and under certain prescribed circumstances the use of force and even full-scale war to achieve the dominance of Shariah worldwide is not only permissible, but obligatory. The use of force or war is termed Jihad.

[3] The goal of Shariah is to achieve submission to Allah’s law by converting or conquering the entire world and the methodology to achieve this end (by persuasion, by force and subjugation, or by murder) is extant doctrine and valid law by virtue of a universal consensus among the authoritative Shariah scholars throughout Islamic history.

[4] The doctrine of Jihad is foundational because it is based upon explicit verses in the Qur’an and the most authentic of canonical Sunna and it is considered a cornerstone of justice: until the infidels and polytheists are converted, subjugated, or murdered, their mischief and domination will continue to harm the Muslim nation. And,

[5] Jihad is conducted primarily through kinetic warfare but it includes other modalities such as propaganda and psychological warfare.

[...]

Because Jihad necessarily advocates violence and the destruction of our representative, constitution-based government, the advocacy of Jihad by a Shariah authority presents a real and present danger. This is sedition when advocated from within our borders; an act of war when directed at us from foreign soil.

[...]

Shariah, as it is described on its own terms, is fundamentally and critically unlike Jewish law and any form of Christian canon or ecclesiastical law. Specifically, because neither Jewish law (halacha) nor Christian canon or ecclesiastical law obligates the Jew or Christian, respectively, to violently impose theo-political tenets in lieu of the Constitution, there is simply no basis to apply the laws of sedition to the application of Jewish law or Christian dogma within private religious or commercial contexts. While Jews and Christians may advocate and petition their government for laws that reflect their moral and theological worldview (as may Muslims or atheists), neither Jewish law nor Christian dogma permits the forceful imposition of a theocracy in lieu of representative government or the replacement of our constitution with theocratic legislation.

I myself see no problem with courses on Sharia Finance, as long as they make all this clear. I doubt that the one at MIT will do so.