Business Science and 'islamic Loans and Mortgages'?

Business Science and 'Islamic Loans and mortgages'?

Due to the fact that ‘Muslim mortgages' became interesting in recent time, two British banks (Lloyds TSB and HSBC) started to offer them in all of their branches this summer. Could they have used business science to come up with this product?

At first the topic will be briefly explained and afterwards it will be put in context with Kuhn's idea of paradigms and incommensurability with a conclusion in the end.

Muslim people are strictly seen prohibited by the Koran to charge or pay interest which contradicts to the western banking sector philosophy. As they are in the need of borrowing money like other people, for example for buying a house, the usual interest payments have to be obviated to be consistent with their religion.

By using Kuhn, business science is possible for Lloyds TSB and HSBC. Suppose in his normal science there exists the paradigm that the western banking sector works with the paying of interest. Taking history into account this method is established and has been improved in the past. But this method or paradigm encounters difficulties with the culture of the muslim people, an anomaly which can also be seen to some extent as a pressing social need since more and more muslim families try to buy a house in Great Britain for example. This results in a crisis for the existing paradigm so that a gestalt switch is necessary. The new paradigm includes the new product ‘Islamic loans and mortgages' which gives access to a new market and customers. According to Kuhn both paradigms together cannot approach the truth and are incommensurable (cultural incommensurability one might say too) because in his opinion that is the way paradigms function.

But this actually leads to various problems. It is true that the two paradigms differ, nevertheless they are working in the same field; even the same situation: giving out loans and mortgages to culturally different kind of people. Why should they be incommensurable or incomparable then? The old product has to be modified to fit the demands of the new one, but this does not change the whole composition. Kuhn only allows limited cumulative progress which means a restriction to certain stages of a scientific discipline. Progress in science becomes effective when an entire paradigm is replaced through a revolution. Such a point of view neglects the cumulative progress characteristic where knowledge can be gathered and used to come up with new ideas or options to refine paradigms or even implement new ones. The refining option fits quite good in the underlying problem since not the whole process of giving out a loan changes, but just a part of it. Another problem concerns the ‘relativist" view which was claimed to be apparent in the publication ‘The Structure of Scientific Revolutions'; "The question of whether a paradigm is better or not than one it challenges does not have a definite, neutral answer, but depends on the values of the individual, group or culture that makes the judgement." Kuhn denied that his point of view results in relativism, although he admits that it is better to tackle problems with newer theories. The relativist point of view can be useful for the Islamic loan context since it depends on the individual's attitude which kind of loan is preferred. One could compare both possibilites for oneself and come to a conclusion which can naturally differ to the conclusion of another person with a different background, believes and religion. Therefore it is not possible to suggest a definite better answer for everyone in general.

Furtermore there is a third problem with rationality in science which fails if tried to be implemented in Kuhn's idea of paradigms and incommensurability. The fact that the paradigms are incomparable leaves no space for rational or logical arguments in the case of competing paradigms or scientific progress which would not make sense if there were interrelations or connections between paradigms. Rationality or logic