Society for Economic Anthropology
Oral Presentation Session
From the origins of financial markets to the present, there have been discourses that seek to morally distinguish good and bad investment, often by lamenting the untethering of financial activity from the “real” economy. Islamic banking and finance shares a similar concern by distinguishing “tangible assets” from “intangible debt,” and by insisting that the identified assets and use of proceeds are not interpreted as harmful by religious experts. Drawing on ethnographic research in Malaysian Islamic investment banks, this paper investigates the social consequences of this ethical meaning-making for economic action. First, it outlines two limiting cases representing the ease (Sharia-compliant stocks or shares) and difficulty (tawarruq) of tethering financial instruments to productive activity in the real economy. It then explores the complexity of this ethical meaning-making by investigating an intermediate case: sukuk (Islamic sovereign and corporate bonds). Based on these three case studies, the paper concludes that the distinction between “equity” and “debt” is a moral distinction rather than a natural or inherently economic distinction. This line of argumentation has implications for scholars of conventional finance, particularly anthropologists who have reified the concepts of “equity” and “debt” in their work.