You Might Also Like: The Story of Money

**Benedikt Koehler** (0:00)
He had started out in life. He came out of very good family, but he had absolutely nothing. By the time he was in his midlife, he was a successful businessman and could have continued coasting that way.
He had this calling, and becoming a prophet was a terrible challenge for him.

**Gillian Tett** (0:25)
Today, on The Story of Money, did you know that one of the world's great religions was founded not by a saint per se, but a businessman?

**Robin Wigglesworth** (0:35)
Yeah, he was an international trader, he set up a commodities market, and he became quite wealthy along the way. And if you're wondering who we're talking about, well, the answer is the Prophet Muhammad.

**Gillian Tett** (0:49)
So to tell this very counterintuitive story, we are joined by Benedikt Koehler. Benedikt, welcome to the show.

**Benedikt Koehler** (0:56)
Well, thank you for inviting me.

**Gillian Tett** (0:58)
One reason we wanted to talk to you is because you bring a really unusual perspective to this subject. You know, you're a fellow at the Institute of Economic Affairs, which is the famously free market think tank in London.
So presumably you describe yourself not just as a capitalist, but a libertarian too.

**Benedikt Koehler** (1:15)
Well, and a reader of the work of Friedrich von Hayek. And Hayek said governments aren't all that necessary for economies to prosper. And having read Hayek in looking at early Islamic history, I just felt the story of early Islam is the story of Hayek in Arabia.

**Robin Wigglesworth** (1:33)
Yeah, Hayek of Arabia. That sounds like a great film. I'd watch that. In any case, today we're going to be talking about the story of Muhammad, the capitalist, Muhammad, the merchant here on The Story of Money with me, Robin Wigglesworth and me, Gillian Tett.
Benedikt, you have a fascinating back story as well, right? You wrote a book called Early Islam and the Birth of Capitalism that argues that we in the West have actually learned and imported a lot of sort of early capitalist financial ideas from the Muslim world. But you started out as a financier in the city of London. So can you tell us a little bit how a German banker ended up writing about Islam and finance?

**Benedikt Koehler** (2:25)
Well, I was interested in the history of banking, and I discovered that one of the founders of Deutsche Bank was also a founder of the German Liberal Party. And I thought that's an interesting story and wrote his biography. And after that, somebody tipped me off. By the way, if you're looking for a topic, did you know, Mohammed, before he was a prophet, he was a merchant. Maybe there's something in it. And so for the last 15 years, I've been looking at economics of religion.

**Gillian Tett** (2:49)
Well, that's fascinating. But it's also quite surprising because there's a big school of study around the idea that Protestant Christianity influence ideas of capitalism. But people don't normally talk about the Islamic world in association with capitalism, partly because the religion is famous for banning interest payments, isn't it?

**Benedikt Koehler** (3:09)
It is famous for banning interest payments, just like Judaism and Christianity. But what's different about Islam is that it's a religion that is centered on the personality of its founder, on Mohammed. And in my view, he was really a supply side economist of world historical importance. And that's my theme.

**Robin Wigglesworth** (3:29)
Well, I have to say, Benedikt, that I am a little bit personally skeptical of the thesis that Western capitalism was influenced directly by Islamic capitalism.
But I do love Islamic finance. It was my first job in financial journalism, in fact. And it's just a fantastic topic. So I'm really looking forward to seeing if you can win me over by the end of today.

**Benedikt Koehler** (3:52)
Well, I'll make my best effort. Thanks.

**Robin Wigglesworth** (3:54)
So we're going to start our story with a wedding. The year is 595 CE, common error. So the venue is the Arabian market town of Mecca. And it's bringing together two figures in that town's business community.
So we're going to start with the groom, the hero of our story, who is of course Mohammed himself. So Benedikt, can you tell us a little bit about the young Mohammed who's about to get married at the time?

**Benedikt Koehler** (4:23)
Well, Mohammed came from a family that was high level, high prestige, was an elite family. But his own life was very, very hard and he knew from very early on, he'd have to pay his way in life. And the reason was that his father was a caravan merchant. But unfortunately, his father died on a caravan mission, didn't come home in time for his own birth. So he was an orphan and he was raised first by his grandfather and then when the grandfather died by his uncle Abu Talib. And Abu Talib took in hand to give the young boy professional background and he wanted to train him up to be a caravan merchant, which is what everybody in the family did.