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The Roots of Islamic Backwardness

The war in Iraq is over. But the battle to transform the economies of the Middle East--the only hope of preventing fanaticism from claiming a generation of young unemployed Arabs and Iranians--is only beginning.

That struggle goes beyond development strategies and touches the roots of Islam. "The people of Iran," the late Ayatollah Khomeini is reported to have liked to say, "did not make the Islamic Revolution to lower the price of watermelons." By that logic, capitalism and Islam are incompatible. Are they?