A few weeks ago, when the interim Iraqi government started buying back weapons in the Baghdad neighborhood of Sadr City, the Financial Times and other papers reported that weapons began flowing into that district from elsewhere in the country.
Community leaders were concerned because the total number of arms rose as weapons flowed in to meet the demand created by the buy-back initiative.
Once again, predictable human economic behavior was trumping a well-intentioned but naive program. The incident highlighted a more important issue, however. With so much entrepreneurial energy at a micro level, why are Arab countries without oil so poor?
Over the past three centuries, Arab countries have been among the world’s poorest. Five to 10 centuries ago, they were comparatively much wealthier. Their science and technology outshone that of Europe.
Moreover, emigrant Arab communities, such as the Lebanese in South America, have a well-deserved reputation for entrepreneurship and business acumen. With a history of learning and a culture of commerce, why do even many of the oil-rich ones have inefficient and unproductive economies outside of their petroleum sectors?
Note that I said Arab and not Islamic. While still poorer than Europe or North America, Turkey and Malaysia are non-Arab Islamic-majority countries that are capable of strong economic growth.
The issues are too involved to cover in a short column. But two recent articles provide useful insights.
Princeton professor Bernard Lewis is well known for arguing that Islamic societies in general — and the Arab ones in particular — lost their economic way a few centuries ago. For historical, cultural and theological reasons, their scholarship declined as did their interaction with Western Europe just as that region prospered in the Enlightenment and in the Industrial Revolution.
Lewis has become a bit of a media star because of his influence with neoconservatives who pressed for invading Iraq. His arguments are concisely expressed in his book, “What Went Wrong? The Clash Between Islam and Modernity in the Middle East.”
Not all scholars agree with his conclusions. The Nov. 4 New York Review of Books has an excellent article by William Dalrymple, who reviews five books, including Lewis’ most recent, and gives an excellent overview of Lewis’ arguments and the controversy they generated. (The article is available at www.nybooks.com/articles/17516.)
The summer 2004 issue of the Journal of Economic Perspectives, which is edited at Macalester College in St. Paul, has an excellent article by Timur Kuran of UCLA. Kuran argues that Islamic law and institutions were economically efficient centuries ago but “turned into handicaps by perpetuating themselves during the long period when the West developed the institutions of the modern economy.” To read the article, click on the link on my Web page at www.twincities.com.
© 2004 Edward Lotterman
Chanarambie Consulting, Inc.