Disinterested Money: Islamic Banking, Monti di Pietà, and the Possibility of Moral Finance

The current economic crisis arose in large part from financial activities in which capital was practically and logically alienated from real economy. This essay examines the exploitative logic of modern finance while considering two alternative models—microfinance and Islamic banking. These models will be considered against the backdrop of medieval arguments over usury, notably the debates between Franciscans and Dominicans surrounding the lending institutions known as monti di pietà. While noting that either model is decidedly preferable to current normative banking practices, this essay argues for the interest-free logic of Islamic finance against the logic of usury insofar as usury lends itself to a double alienation—of lender from borrower and of profit from value.