It's a legal history book, devoted to answering a single puzzling economic question: why did the econonomy of the Arab world succeed so stunningly in the first half of the second millenium, and why did it then decline in the second half? There are lots of theories about this, but most of them seem to operate at a very vague level of overgeneralization (for example, there's a theory which says that Muslim societies were too traditionalist to discover/develop new ways of doing business, which isn't very specific and is in any case so vague that it's more likely the result of prejudice than analysis).
His theory, which is pretty well laid out, is basically the following:
(a) islamic partnership law, by requiring the dissolution of partnerships upon the death of a partner and by allowing partners to withdraw at any time, discouraged the development of large, wealthy partnerships like the banking partnerships which arose in the fourteenth and fifteenth centuries in Europe;
(b) this was exacerbated by the lack of legal personhood attached to corporate bodies in the Islamic world. The Romans and Byzantines had both had corporate personhood to some degree, and most municipal governments in the west were organized as corporate persons, but the Islamic world deliberately abandoned this in order to prevent tribes from having legal recognition;
(c) it was also exacerbated by islamic inheritance law, which required division of property in a way that impeded the development of large fortunes. this was self-reinforcing; it weakened partnerships in such a way that the partnerships were unable to develop the wealth and power to push for changes in the partnership law.
the vastly oversimplified version of his thesis is that islamic partnership law represented an improvement over the pre-existing partnership law, because it allowed limited liability which promoted the development of medium-size merchant operations, which accounted for the success of the arab world by comparison to its premodern competitors; but the inability to change the partnership law, reinforced by the corporate law and the inheritance law, meant that when europe started developing semi-permanent partnerships with large accumulations of cash, the arab world couldn't compete.
it's an interesting theory, and the book does a very good job of presenting it. it also has an extended bit about how the concessions to foreigners - allowing them to operate under their own law, essentially - morphed out of control in large part because they allowed the Ottoman state to profit off of the activities of foreign merchants without a reformation of law at home, and how it only really broke down when the foreign states started enrolling large numbers of local christians as foreign agents.
all told, it's one of the better, more interesting historical analyses i've read in some time. :)
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