Classical Legal Scholarship and
the Development of Modern
Islamic Finance
The Sixth Annual Harvard Forum
Yusuf Talal DeLorenzo
Said the Prophet of Allah, upon him be peace and blessings: “The lawful is
self-evident, and the unlawful is self-evident; while between the two are
dubious matters not well understood by very many people…
…Those who avoid the dubious will protect their honor and their
religion. But those who engage in the dubious will eventually commit
something unlawful; in the same way that a shepherd who grazes his
herd on the edge of a preserve will eventually trespass on it."[i]
[i] Bukhari (1910, 50), Muslim (2996), Nasa’i (5303), Tirmidhi (1126), Ibn Majah (3974), A^mad
(17649, 17645), DaramÏ (169, 2419)
Mushtabihat and Mushabbahat
Things, or affairs that are confused by reason of their
resembling one another or from any other cause.
E. W. Lane, Arabic Lexicon
Why “Dubious”?
Mushtabihat and Mushabbahat
Things, or affairs that are confused by reason of their
resembling one another or from any other cause.
E. W. Lane, Arabic Lexicon
• matters not well understood by most people are …
• undecided and fraught with uncertainty
dubious
Abu Hamid al-Ghazali in The Revival
These three [categories] continue to apply regardless of how situations
change. However, since the negative consequences of negligence have
spread throughout the religion, and since its sparks have drifted
throughout creation, it has become necessary to expose the face of its
corruption by explaining the differences between the lawful, the
unlawful, and the dubious in a manner that verifies and clarifies.
Moreover, while there may be constraints, the task is not impossible.
The Lawful and the Unlawful, Chapter Two
The “Development” of Modern
Islamic Finance
• Research and
Development must be
practical and goaloriented
• Research and
Development must be
informed by expertise:
– Shari`ah
– Legal
– Business
Shari`ah Methodology (1)
• Four sources of Islamic Law
• The inner dynamic of Shari`ah
– Ijtihad
– Vitality through Ijtihad
– The need for a subject
• Law without a subject is law that has lost its vitality
Shari`ah Methodology (2)
• Fiqh as jurists’ law
– SSB standards
• No stare decisis
– consensus
• No Uniform Code
– AAOIFI and IFSB
industry standards
• Fiqh is a shared
endeavor
– Between God, the
Lawgiver and man, the
interpreter
– Between jurists of the
same and different
times and places
– Between theory and
practice… subject
The Value of the Classics
• Explain the revelational sources
• Elucidate the thought of the legal masters
• Illustrate successful legal methodologies
from the past
• Guide interpretation
• Serve as points of departure
The Variety of the Classics (1)
• Handbooks of Practical
Jurisprudence which
explain the “rules”
according to the classical
schools of legal thought
• Exhaustive works, standard
works, summaries and
compendiums
• Commentaries and glosses
• In English, for example,
– The Hedaya
– Reliance of the Traveler
– The Distinguished Jurist’s
Primer
– Majallah al-Ahkam alAdaliyah
The Variety of the Classics (2)
• Handbooks of theoretical
jurisprudence which
explain the methodology
for deriving “rules” of law
• Digests of case law or
collected fatawa
• The Search for God’s Law
• Moohummudan Law of Sale
According to the Huneefeea
Code
The Variety of the Classics (3)
• Legal literature:
– Legal maxims
– Legal dictionairies
– Legal commentaries of
the Qur’an and the
hadith literature
• In English… nothing
The Search for More Material (1)
• Unpublished manuscripts of the sorts of
fiqh literature mentioned above
– Published works represent less than 10% of the total
– Fatwa literature archived in Cairo, Damascus, Istanbul,
Tonk, Patna, Hyderabad…every Muslim country
– Historical records, archives of trade documents, even
Italian archives and other Mediterranean countries
The Search for More Material (2)
• Beyond Fiqh
– Tasawwuf
• Stress on moral rectitude and purification, even in mundane
matters
• Zuhd literature
• Comprehensive Manuals
– In English
• The Revival of the Religious Sciences
We have done no more than to point out the main features here in order
that the aspirant may know that, if his daily bread comes from different
sources, rather than a single known source, then he cannot do without
knowledge of these matters. Thus, before he consumes anything, from
whatever source, he should question those in possession of knowledge
about these matters, rather than undertake anything in ignorance.
For, as it may be asked of a scholar, `Why are your actions
inconsistent with your knowledge?' it may be asked of an ignorant person,
`Why are your actions consistent with your ignorance?'