Production and Trade in an Islamic Context:Sharika Contracts in the Transitional Economy of Northern Samaria, 1853–1943 (II)

Abstract

In Part I of this article I noted that the farming out of capital resources to an entrepreneur for a share of the profits, which has always played a very important role in the Middle Eastern economy, never won unqualified approval by the jurists of medieval Islam; for on the one hand farming out on shares was held to be closely allied to thesharika(an institution of broad scope corresponding to the partnership) yet on the other it did not meet all the criteria by which asharikawas accounted valid by thesharî'a. The requirement it did not meet, the jurists felt, was full contractual equality between the parties — in this case the owner of the resources and his working partner or entrepreneur. Owing to the pressure of necessity, farming out on shares was validated, but on the rather shaky grounds of custom and precedent.

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