In his lecture, Benedikt Koehler proposed a strikingly original thesis; that capitalism first emerged in Arabia, not in late medieval Italian city states as is commonly assumed.

According to Koehler, the Prophet Muhammad is a seminal but largely unrecognised figure in the history of economic thought. Descending from an elite dynasty of religious, civil and commercial leaders, Muhammad was a successful entrepreneur and businessman before founding Islam. As such, the new religion had much to say on consumer protection, business ethics and property. As Islam rapidly spread across the region so did the economic teachings of its founder, which eventually made their way to Europe.

Koehler demonstrated how Islamic institutions and business practices were adopted and adapted in Venice and Genoa. These financial innovations include the invention of the corporation, business management techniques, commercial arithmetic, and monetary reform. As such it can be rightfully said that these essential aspects of capitalist thought all have Islamic antecedents.

The lecture was introduced by Hywel Williams, Senior Adviser at the Legatum Institute.

Early Islam and the Birth of Capitalism - Download Transcript [PDF]



About the Speaker
Educated at the Universities of Yale and Tübingen, Benedikt Koehler has had a career both in the City of London and is a former government economic adviser in Whitehall. He is the editor of A History of Financial Disasters 1857-1923 and is also the author of biographies of Ludwig Bamberger, one of the founders of Germany's Deutsche Bank, and of Adam Müller, the nineteenth century political economist. His forthcoming book Early Islam and the Origins of Capitalism will be published later this year.

About the History of Capitalism Series
This new series of lectures, which forms part of the Legatum Institute's 'Culture of Prosperity' programme, will investigate the origins and development of a movement of thought and endeavour which has transformed the human condition. Capitalism's characteristic emphasis on freedom of trade and market expansion has encouraged social mobility, global exploration and intellectual curiosity. Wherever and whenever it has appeared across the world's continents capitalism has undermined monopolies, economic protectionism and restrictive practices. Individuals, companies and nations have been enriched materially as a result of the choices and opportunities extended to them by the capitalist dynamo and its liberation of the human spirit has dismantled antiquated ways of thinking as well as outmoded social hierarchies. Capitalism is the single most important force in the making of the modern world and its impact knows no boundaries. Our lecturers will therefore be assessing case studies in business history and the individual biographies of thinkers, writers and inventors as well as describing particular periods in the histories of cities, states and nations. In the wake of the banking collapse of 2008 capitalism has had to surmount a profound economic crisis while also confronting severe attacks on its code of ethics. In studying capitalism's contemporary history this course will therefore investigate the means by which it survived as well as its continuing legitimacy as a moral system.

The History of Capitalism is a three year course and the syllabus, which will combine a thematic approach with a narrative emphasis, is designed to have a broad appeal.  Large and diverse audiences have been drawn to the Institute over the past two years as a result of its 'salon' series of events in the course of which scholars, writers and artists have debated prosperity's cultural aspects. The course will build on that pattern of success while also extending the Institute's area of activity to the world of higher education at both an under-graduate and post-graduate level.