While reading a retrospective article today about the recent Madoff scandal, I came across a fascinating financial firm — Dharma Investments.
Whatever that name makes you think is probably right. Dharma Investments is a firm that considers its primary mission to be “the development of Hindu and Buddhist faith-based investing.”
I’ve heard about Islamic finance, but this is the first time I’ve come across finance that’s Dharmic — that is, Hindu and Buddhist. I don’t know much about Islamic finance, but I was under the impression that it deals with circumventing certain religious restrictions in Islam that Wall Street finance disregards — finance in keeping with Shariah law.
With this impression, it’s hard to see exactly what Dharmic investment might be, considering the nebulousness of “dharma.” But Dharma Investments and Dow Jones have an answer, and produced a pamphlet answering the question of “What Is Dharma?” It’s strange, disconcerting even, to look at a definition of dharma, stamped with the industrial blue of Dow Jones across the bottom. It’s not a bad thing, I’m just not used to it — yet.
Given the interest in the financial industry at Harvard — an interest that’s been shaken over the past few months for economic reasons that I don’t understand at all — I’m sure that other people reading this post have more to say, especially about Islamic finance, the above pamphlet on dharma, how Dharmic finance might actually perform in the markets, and the creation of the Dow Jones Dharma Index. Thoughts?
PS: When I came across the company, I thought to myself, this is screaming for Deepak Chopra’s pen — connecting Hinduism with the material interests of the upper-middle-class American. So I searched on Google for deepak chopra dharma investment and found some of his thoughts on the economics of sin and virtue.
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2 Comments
Interesting post, Saketh. I had seen “ethical” mutual funds, including mutual funds targeted at Muslim investors, but I had never seen specifically “Dharmic” funds.
I think there is at least one key difference between Islamic and Dharmic finance. While both Islamic and Dharmic financial products must adhere to certain ethical standards, Islamic finance actually requires a complete redesign of several financial instruments that we might take for granted because of the Koran’s prohbition of riba (interest) and gharar (risk). For example, even conventional mortgages are off-limits. As far as I could tell from Dharma Investments’ website, Dharmic finance has no such prohibitions on interest and risk, so Hindu and Buddhist investors can still buy conventional financial products as long as they adhere to the required ethical guidelines. In other words, I don’t think the structure of the “conventional” financial system, which has interest rates and the trading of risk at its core, contradicts anything in Hinduism. Am I missing something?
I don’t think you’ve missed anything, Vikram — they appear to simply be branding for South Asian markets. I have not come across any consistent injunctions in Dharmic traditions against economic concepts which are forbidden in Islam.
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