Kustin 1

Economic Anthropology after 1989: Rationality, Risk and the

Example of Islamic Finance

Bridget Kustin, Anthropology, Johns Hopkins University

Abstract

Scholars working from the 1950s to the 1970s—what Hart (2007) terms the “golden age” of

economic anthropology—could presume a relative stability around their primary systems and

objects of study: from exchange in formal and informal economies, to Marxist questions of

capitalism and production, to consumption and value. Earlier, economist Knight’s (1921)

distinction between risk (measurable uncertainty) and uncertainty (unmeasurable uncertainty) had

laid the groundwork for economics as the science of risk and return, anchored by the utility

maximization of “rational economic man.” Within this framework, what political scientist

Connolly (2011) describes as true emergence, creativity, and randomness became subject to

capture and neutralization into the scientific, stable category of “risk” through stochastic models.

After 1989, the rise of post-Cold War globalization, neoliberalism, and structural adjustment

policies enabled the technologies and processes of “financialization” initiated in the 1970s to

rapidly mature, heralding massive spatial and temporal reorganizations of financial and economic

activity, including exponentially increasing risk and novel strategies for risk management (Martin

2002, MacKenzie 2006, Amato and Fantacci 2011, Appadurai 2013).

Post-1989 revolutions in the writing of ethnography (Clifford and Marcus 1986, Gupta and

Ferguson 1997, Riles 2006) opened up new hermeneutic horizons for understanding the

dialectical constitution of the writing subject and the object of study. The reorientation of

fieldwork and ethnography as intersubjective knowledge production collapsed presumed

distinctions in time and space between “data gathering” versus “writing and analysis.” However,

economics has persisted in evading challenges to its presumed rationality. The uneasy

relationship between the burgeoning field of behavioral economics and contemporary economic

anthropology underscores the post-1989 challenge to economic anthropology: how might the

radical technical shifts in global economic/financial activity and the theoretical shifts in

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anthropology/ethnography allow for new avenues of inquiry into the nature, limits, and emerging

possibilities of capitalism?

I explore how the prohibition of excessive uncertainty (“gharar”) and speculation/gambling

(“maisir”) in contemporary Islamic finance are sites through which the calculative rationality of

economics—and thus capitalism—can be refracted and understood anew. Islamic finance rejects

the notion of wholly rational calculations of uncertainty and risk. Islamic eschatological

orientations toward the present and future are mobilized in the structure of new products and

services (I focus on the nascent, still-evolving Islamic bond market) in ways that make particular

assumptions about the temporality and knowability of uncertainty and risk.

Conceptualizing the Islamic future as an ‘open,’ ‘imaginative horizon’ is inherently as odds with

how economic rationality renders the future contained, measurable, and subject to capture

through mathematical models. The notion that the future is truly unknowable, and thus truly

creative, is a testament to the existence and divinity of God in Islam, whose planning cannot be

foretold, anticipated, or otherwise mapped. In other words, Islamic finance does not necessarily

introduce religion to s “secular” conception of finance. Rather, I argue that it introduces

conceptualizations about uncertainty and risk that render the future (understood economically and

anthropologically) as an open space of possibility, and a worthy object of study for post 1989

economic anthropology.