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In Session: Shifting Sentiments and Credit: Reworked Moral Economies in Late Nineteenth Century Asia
2: The Indian Muslim Salariat, Usury Laws, and the Moral Economy of Moneylending, 1857-1914
Friday, March 26, 2021
8:30am – 10:00am EDT
Harvard University, United States
This paper examines how Indian Muslim gentry and urban professionals (salariat) grappled with the question of usury and its economic and moral dimensions from the colonial state’s abrogation of usury laws in 1855 to the First World War. For these figures, the spread of usury in India in these decades was inseparable from colonial agricultural policy, which they argued had led to the outbreak of severe famines, the progressive impoverishment of peasants and landowners alike, and the rise of a predatory class of moneylenders. In the midst of attempting to delineate a means to break the cycle, the Indian Muslim salariat put forward several competing theories of rent, land tenure, Islamic law, and interest-bearing capital. These ideas vied with one another in both Urdu and English-language publications and organizations, and drew from the latest works in European political economy as well as Islamic legal texts and Mughal precedents.
The Indian Muslim salariat were in agreement that expanding the provision of agricultural credit was a must, and many became enthusiastic proponents of cooperative societies and agricultural banks. But they crucially disagreed on how to best combat usury and whether interest lending might ever be morally defensible. A small group even lambasted Islamic rulings pertaining to interest and elaborated novel arguments for their permissibility. Such a view, however, became progressively rejected by the salariat from 1914 onwards. A moral economy approach preserves the particularity of these debates, which interacted with colonial political economy, but were never reducible to them.