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Production and Trade in an Islamic Context: Sh arika Contracts in the Transitional Economy of Northern Samaria, 1853–1943 (II)

1975; Cambridge University Press; Volume: 6; Issue: 3 Linguagem: Inglês

10.1017/s0020743800022868

1471-6380

Ya'akov Firestone,

Islamic Finance and Banking Studies

In Part I of this article I noted that the farming out of capital resources to an entrepreneur for a share of the profits, which has always played a very important role in the Middle Eastern economy, never won unqualified approval by the jurists of medieval Islam; for on the one hand farming out on shares was held to be closely allied to the sh arika (an institution of broad scope corresponding to the partnership) yet on the other it did not meet all the criteria by which a sh arika was accounted valid by the sh arî'a. The requirement it did not meet, the jurists felt, was full contractual equality between the parties — in this case the owner of the resources and his working partner or entrepreneur. Owing to the pressure of necessity, farming out on shares was validated, but on the rather shaky grounds of custom and precedent.