ABSTRACT
Islamic finance is full of paradoxes. Imagination and practicality seem to be competing with each other. The imagination of the scholars, both religious and academic, knows no bounds. The writings of the early architects of Islamic finance abound with lofty ideals. The industry is presented as the ‘alternative’—the answer to humanity’s prayers and problems—capable of ridding the conventions of its ills. Islamic finance also has a champion: Musharakah. This financial arrangement, the birth of which can be traced back to the pre-Islamic era, emerged as the knight in shining armor, capable of slaying the evil beast of interest based debt with its strength and resolve. The ideals of imagination, however, were facing the rationality of profit. With the market as the judge, jury, and executioner, evil triumphed against goodness and debt against Musharakah. It seems that for the good to prevail and Musharakah to emerge, the hearts have to be pure and justice has to prevail. When the dark clouds of competition are replaced with compassion; when people are less fearing and more trusting; when the society and regulators collectively decide to penalize the exploiters with an altruistic punishment—only then could our hero triumph. Till then it would remain a privilege available to the courageous.
