Islamizing finance: From magical capitalism to a spiritual economy

Abstract

Anthropological analyses of the assemblage of religious practice and economic action have often been viewed as evidence of mystification and have focused on the ‘occult’ dimensions of late capitalism. In contrast, this article approaches the magic of capitalism not in terms of occult or millennial practices, but rather as the tricks and sleight of hand techniques deployed by economic experts. The article describes how the initial iteration of Islamic finance in Malaysia relied on what experts refer to as ‘tricks’ (hiyal) – legal stratagems that transformed impermissible contracts into ones capable of being deemed permissible by Islamic scholars. The article describes how today, experts are seeking to reform Islamic finance in Malaysia by creating a spiritual economy that moves away from a regime based on tricks to one based on eliciting the ethical practices conducive to neoliberalism: entrepreneurship, risk calculation, and cost‐benefit analysis. In so doing, the article argues that the spiritual economy of Islamic finance seeks to create a regime of production and capital circulation grounded in the ethical principles and ascetic pieties of neoliberal Islam.