Daromir Rudnyckyj's Beyond Debt is a timely, highly readable, and informative anthropological study of Malaysia's efforts to transform Kuala Lumpur into a global center of Islamic finance. Capitalizing on global fears that followed the 2008 financial crisis and responding to increased scrutiny of financial instruments by shariah committees, Malaysia-based Islamic finance experts have been devoting significant effort towards perfecting new financial instruments that can deliver returns to investors without debt or interest. Developing interest-free financial instruments is central to Islamic finance, as pious investors seek to abide by Qur'anic prohibitions against incurring unjust financial gains through the usurious collection of interest gained from debt (riba). To tell this story, Rudnyckyj builds on multi-sited fieldwork among Islamic financial experts conducted during eight trips to Malaysia between 2010 and 2015, and at numerous global conferences in places ranging from Dubai to Cambridge, Massachusetts. The book traces the negotiations global Islamic finance professionals have with investors, shariah scholars, university-based economists, conventional bankers, entrepreneurs, financial regulators, and state leaders, as they try to answer a basic question: “What exactly is Islamic finance?” (p. 2).
The book clearly shows how this central question is increasingly animated by an even more specific goal—to create financial instruments that are not just shariah-compliant but that can be truly considered shariah-based. One solution, captured in the title of the book, is to develop financial instruments that move beyond debt. Islamic financial entrepreneurs are no longer content making conventional finance acceptable to Muslims but increasingly wish to rethink basic premises underlying finance itself. In this way, Islamic finance proves itself to be more transformative than even the most anti-capitalist proposals from the Euro-American left, who despite their radicalism still struggle to think outside the debt-encrusted box of conventional finance.
The clarity with which the book describes these issues will make it useful to anthropologists of finance, scholars seeking to understand the lived realities of contemporary Malaysian Islam, and anyone interested in alternatives to debt. Along the way, it helps readers understand how Islamic injunctions against accruing interest impact the work of financial thinkers not only in Malaysia but across the Muslim world. For Southeast Asianists, the book adds an important component to the oft-told tale of Malaysia's rapid economic development.
State-centered developmentalism has been buttressed by state-backed efforts to make Kuala Lumpur a global center of Islamic finance since at least the 1960s, when newly independent Malaysian Muslims were increasingly seeking ways to save up funds in order to undertake the hajj. Aspiring pilgrims faced a moral quandary: “Depositing savings in an interest-based bank would entail incurring interest and, consequently, one would paradoxically commit a grave sin while preparing to participate in one of the holiest rituals in Islam” (p. 29). In response to this quandary, the Muslim Pilgrims Savings Corporation was established in 1963, and from that basis a long history of Islamic financial instruments have been created ever since, intensifying after the rise of Mahathir Mohammed in the 1980s and now again in the second decade of the new millennium.
Rudnyckyj has a talent for explaining concepts. Readers will quickly come to understand the central distinction between “shariah-compliant” and “shariah-based” financial instruments. As the book progresses, some of the ethnographic examples may occasionally seem repetitive—they tend to stress some of the same dilemmas—but the sum effect is to clearly support the book's core arguments and provide ample illustration and evidence.
For classroom use, instructors might teach just the introduction and chapter 1, but specialist readers will find it worth reading cover to cover because each chapter provides nuanced explanations of different financial experiments. For example, careful reading will illuminate why shariah committees and financial professionals consider bai al inah contracts shariah-compliant (because they accrue profit through a deferred process of buying and selling assets but are pegged to interest rates) while mudaraba contracts are considered sharia-based (because capital-rich investors form a risk-sharing operation with an entrepreneur, analogous to a joint venture).
My only quibble with the book comes early on, when Rudnyckyj insists that the book offers a dramatic theoretical departure from what he calls the “tropes” of economic anthropology—for example, “that economic action is embedded in society and culture” or that “capitalism breaks down existing social relations” (p. 9). As an anthropologist, I had the opposite reaction—I found myself thinking that most of the informants encountered in the book seemed to share the core concerns animating classic themes in economic anthropology. Take this passage, for example: “Islamic economics is a critique of much conventional economics in that it questions the assumption that human action is solely motivated by rational self-interest and an imperative toward maximization” (p. 61). That sounds like every introduction to economic anthropology I have ever read! In the end, Beyond Debt does not move beyond anthropology but remains anthropological to the core. For this reader, that is not a critique but a note of praise.
