Why modern economy was born in Europe, not Middle East

Jared Rubin explains historic reversal of fortunes at ThinkFest 2021
Feb 16, 2021
Photo: Trinette Lucas/SAMAA Digital
Photo: Trinette Lucas/SAMAA Digital

Why was the modern economy born in Europe and not in the Middle East, which had been far richer and more developed for centuries?

Professor Jared Rubin, an economic historian, presented his findings from Rulers, Religion, and Riches: Why the West Got Rich and the Middle East Did Not during the third day [Saturday] of ThinkFest 2021. The session was hosted by economist Savail Hussain.

Rulers, Religion and Riches is Rubin’s attempt to seek explanations from history to events that have profoundly affected the major world economies—particularly the Middle East and Europe.

The government-religion dynamic

Why Europe progressed and emerged as the world’s biggest economy and the Middle East lagged behind is what fascinated Rubin to write this book as an economist. He calls this reversal of fortunes an “inherently historical” question.

The book traverses both the contrast and parallels between the two most important religions of the world: Islam and Christianity. These religions had more authority and influence in politics of the regions they dominated, precluding any other interests or institutions from gaining equal power or share at the political bargaining table.

Jared has examined the role of religion in politics through an "economic lens". His findings inferred that the Middle East was far ahead of Europe 700 years ago, but its economic vigour gradually diminished, because religious dominance at the political podium comes at a high price.

Religious legitimacy

It is important to understand how legitimacy was influenced by religion in the Middle East and Europe. “Legitimacy is cultivating a belief that the ruler is a rightful ruler,” Rubin explained. “Religions in the past played a fundamental role in legitimising [rulers].”

Legitimation was one of the many techniques for rulers to establish a strong hold on power, another being coercion.

Christianity, however, was not as good at legitimation as Islam, which became one of the most powerful religions, expanding from South Asia to Spain within a short period. “The [Islamic] empire became a great place for merchant activity.” However, its dramatic expansion was not just a result of legitimacy, but other social and economic reforms, including protection of property, currency, etc.

“But if you just rely on religious legitimacy,” continued Rubin, “you’re not going to stay in power for long.”

The Reformation

From the 13th century onwards, religion began to lose its hold at the political bargaining table in Europe, because the government slowly grew out of its influence for legitimacy. But in the Middle East, rulers still relied on religious legitimation. This reliance on conservative bodies debarred economic interests from politics.

“Reformation led to the rise of parliaments in Europe,” said Rubin. These parliaments didn't, however, necessarily represent the people, but interests of the “economic elites”.

Invention of the printing press brought about a revolution across Europe in the 15th century, but it couldn’t secure as impactful a change in the Middle East for nearly 300 years, because printing in the Arabic letters was banned.

“Printing threatened the religious establishment because they had the intellectual monopoly,” explained Rubin. “They were the sole interpreters of the religious works.”

Prohibiting Johannes Gutenberg’s revolutionary invention was the strangulation of great economic opportunities that could have helped the Middle East towards unprecedented advancements in history.

Rubin believes that societies with a strong religious hold require “massive” reforms. “Reforms against those in power are difficult in religious countries.” Over-abundance of religious influence hinders economic advancements in politics.

In the Middle East, the religion-politics dynamic is the key factor governing economic policies. “The oil states in the Middle East are a very mixed bag,” said Rubin in his closing remarks. In his opinion, Malaysia has given economic interests a better seat at the bargain table.

“Malaysia is a good example that shows history is not destiny.”

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