A Review of Ryan Calder, The Paradox of Islamic Finance: How Shariah Scholars Reconcile Religion and Capitalism. Princeton, NJ; Oxford: Princeton University Press, 2024, 347 p.

Abstract

Ryan Calder’s book explores the “paradox” of Islamic finance, where the principles of Islamic law impose restrictions on financial contracts and transactions, while at the same time having to adapt to the reality of capitalist competition and market demands. Drawing on extensive interviews with experts in the field of Islamic finance, the author examines the historical development and institutional structure of Islamic finance. Calder focuses on the role of Shariah boards in the functioning of Islamic banks in Saudi Arabia and Pakistan — bodies in which religious experts assess the conformity of financial products with Islamic norms. The study highlights the strategies employed by Islamic financiers to avoid usury (riba) through complex transaction structures that mimic conventional debt contracts. Additionally, the book delves into the scholarly debates surrounding different models of Islamic banking, offering insights into the divergent approaches advocated by Shariah scholars. The author shows that Shariah boards play a key role in determining what constitutes Islamic finance, since Islamic norms are formulated through interpretation and reasoning within these boards. As a result, Shariah in the context of Islamic finance emerges as a dynamic system of norms shaped by expert work at the intersection of Islamic law and financial auditing.