Choice Review

This well-written book by a Muslim teaching finance and accounting in England focuses on the bases and performance of Islamic business enterprises. A concise definition of Islam, and particularly its law, is followed by a summary of Islamic economic structures including taxation. The author accepts as authoritative that lending and borrowing with interest (riba) is prohibited in Islam. Recent American academic discussions have disagreed with this view as a historical phenomenon. The author correctly describes Islamic resurgence not as a product of the last decades, but as having had predecessors as early as the 18th century. Because of the social concerns of international Islamic banks, their administrative role in financing enterprises is greater than in the Western banking system; this raises costs as well as risks, and thus profit participation must be higher than earned interest would be. In the Islamic system profit is not illegal and profit sharing is acceptable. The author covers the funding sources for such enterprises. Material for the case studies, all Egyptian, was obtained from questionnaires, interviews, and published records. These studies include three banks which have the usual directors as well as a religious supervisory board. The author reports that Islamic banks are competitive with Western banks both with respect to deposits and credits. Five commercial and industrial enterprises are also examined, including their profit calculations and inflation accounting. Overall, the author concludes that the decision-making process in Islamic enterprises lies somewhere between capitalist and socialist models and is able to succeed under present world conditions. University collections.-A. Melamid, New York University