Embracing risk: Islamic finance and practice in the bazaar

Abstract

In this article I demonstrate that Muslim traders in the bazaar inhabit a practical-experiential conception of Islamic economic practice in contrast with the normative conceptualization implicit in modern Islamic finance. I examine the role of non-economic factors like reputation, generosity, mistrust, and an acknowledgment of the workings of the divine in sustaining bazaar transactions. I argue that these attitudes are learned through experience and act as risk-bearing and trust-inducing mechanisms without the framework of normative law and the governance of state institutions. I present practice as a meaningful site of hermeneutical engagement with Islamic teachings, an alternative to the text-bound hermeneutics that Islamic reformers espouse.