able to forge large scale commercial enterprises that flourished over time.
Thus, an Italian business enterprise could continue to grow and amass for-
tunes long after the death of a founder(s). Indeed many of the successful mer-
chants of Italy were large family enterprises such as the Medicis, Borhgeses,
Peruzzis, or the Bardis. Islamic legal codes kept business small, limited and
ephemeral. No great merchant families emerged, let alone the vast trading
companies typical of Europe.^21 The subsequent growth of Portuguese and
Spanish trade, and later the Netherlands and England, all depended on these
large-scale enterprises.^22 Secondly, Islamic inheritance laws meant that when
one of the associates died, a partnership was terminated and inheritance was
divided in egalitarian ways, as opposed to European laws that allowed lim-
ited inheritance, e.g., a single person could inherit a share of an enterprise
that nevertheless survived the loss of an owner-partner. Finally, the prohibi-
tions on “excessive” interest, rabìand the lack of rational accounting meant
that business enterprises could not borrow money for investment purposes.^23
Quranic-based laws thus thwarted the growth of a secular, commercial, sphere.
As a result, while vast Islamic trade networks would create great wealth, that
wealth was not centralized by large, powerful economic actors. It would never
have the large, rationally regulated, large scale, international economic enter-
prises that led to the affluence of the West.
The Decline of the Crescent
A number of internal and external factors led to the decline of the [Abbasid]
Caliphate and the waning of Islam’s Golden Age. Thus, for example, Islam
survived and rebounded from the Mongol sackings of Baghdad and the
destructions of the libraries of the foremost cultural center of Islam. Following
the first Mongol invasion by Hulagu Khan in 1258, the Abbasid Caliphate
was destroyed. The city rebounded, but was again attacked in 1401 by
From the Caliphate to the Shaheedim• 305(^21) Timur Kuran, The Islamic Commercial Crisis: Institutional Roots of the Delay in the
Middle East’s Economic Modernization. (Los Angeles, California, 2001): USC Center for
Law, Economics and Organization, Research paper, CO01–12, http://papers.srn.com/
abstract 22 _id+276377
Thus for example, the Dutch East India Company, or the British East India
Company became important motors for economic growth and imperialism. See http://
en.wikipedia.org/wiki/Dutch_East_India_Company http://59.1911encyclopedia.org/
E/EA/EAST_INDIA_COMPANY.htm 23
Rodinson (1966) argues that the prohibition was not absolute, what was dis-
dained was excessive interest.