Bills of Exchange, Interest Bans, and Impersonal Exchange in Islam and Christianity

Posted: 31 Jul 2009 Last revised: 4 Jun 2010

See all articles by Jared Rubin

Jared Rubin

Chapman University - The George L. Argyros School of Business & Economics

Date Written: April 2010

Abstract

A vast economic history literature suggests that medieval institutions supporting contract enforcement were necessary for impersonal exchange to emerge. Yet this literature cannot account for the bill of exchange, an important financial instrument that had positive legal standing in both the medieval Islamic and Christian worlds but remained relegated to personal networks only in the former. This paper suggests that a seemingly innocuous difference - the involvement of currency exchange in European but not Middle Eastern bills, a difference resulting from the secular legalization of interest in Europe - encouraged divergent endogenous processes resulting in these distinct institutional arrangements.

Keywords: bills of exchange, impersonal exchange, interest, usury, suftaja, Islam, Christianity, exchange, credit, financial institutions

JEL Classification: E40, F10, F31, K42, N20, N40, Z10

Suggested Citation

Rubin, Jared, Bills of Exchange, Interest Bans, and Impersonal Exchange in Islam and Christianity (April 2010). Explorations in Economic History, Vol. 47, No. 2, pp. 213-227, 2010. Available at SSRN: https://ssrn.com/abstract=1441332

Jared Rubin (Contact Author)

Chapman University - The George L. Argyros School of Business & Economics ( email )

One University Drive
Orange, CA 92866
United States

HOME PAGE: http://www.jaredcrubin.com

Register to save articles to
your library

Register

Paper statistics

Abstract Views
616
PlumX Metrics