I asked ChatGPT to style my longread about the problem of contracts as an Arabic treatise. You can see how it handled it in the following text; I haven’t changed a single letter, for as the Lord said: leave man to his manliness, and leave the neural-slop to the neural networks.

A Treatise on How Men Maintain Justice in Their Affairs When There is No Single Sovereign Over Them

In the name of Allah, the Most Gracious, the Most Merciful.

Praise be to Allah, Who created humans in need of one another and made the exchange of goods the cause of the prosperity of the lands. Peace and blessings be upon His Prophet, who was a merchant before he became a Messenger, and who said:

“The honest and trustworthy merchant will be on the Day of Resurrection with the prophets, the truthful, and the martyrs.”

Know then, O seeker of knowledge, that there exist societies where people primarily acquire what they desire through exchange, rather than through gift or violence. In such societies, well-being depends on trade, crafts, and mutual agreements. However, therein arises a particular difficulty: no one can guarantee in advance that every transaction will prove honest.

This is especially noticeable when one person fulfills their part of the agreement today, while another promises to fulfill theirs only after months or years.

Therefore, wise men since antiquity have resorted to written contracts.

The Almighty said in the Surah “Al-Baqarah”:

“O you who have believed! If you contract a debt for a specified term, write it down.”

Note that the Almighty does not command the recording of the purchase of an apple at the bazaar or a cup of sherbet in a teahouse. For such transactions are completed before a dispute can even arise. One hands over the goods, the other the money, and both depart satisfied.

But it is otherwise with agreements whose consequences stretch across time.

When a master hires a worker, he buys not labor already performed, but a promise of labor. When a craftsman accepts an order, he sells not a finished product, but a promise to manufacture it. When a merchant equips a caravan, he buys not goods, but the hope of future profit.

Therefore, the parties are forced to describe their expectations in detail.

Who provides the tools?

Who is responsible for damages?

How to distinguish diligence from negligence?

Which circumstances should be considered excusable?

Without such clarifications, each will later remember only that part of the conversation which is advantageous to them.

However, another difficulty arises here.

For human life is not like the drawings of a geometer.

Aristotle said that matters of practical wisdom do not possess the precision of mathematical objects. And indeed: if a triangle remains a triangle today and tomorrow, people are constantly changing.

A servant may become the friend of the master.

A student may become the companion of the teacher.

A companion may become a rival.

And a man hired to sweep the floor may turn out to be a skilled cook or a skilled thief.

Therefore, every contract is inevitably drawn up by people who know the future worse than it seems to them.

If the relationship ceases to benefit one of the parties, it can usually be terminated with moderate losses. The worker leaves the master, the master releases the worker, and the remaining disagreements are most often not so great as to destroy the lives of both parties for their sake.

But the most difficult case arises when it concerns the investment of capital.

For here the desires of the parties are inherently different.

He who gives the money would like to see it again someday, and with profit.

He who receives the money would be most pleased by a situation in which the money remains with him forever.

Therefore, commercial enterprises need a force that compels people to keep their promises.

However, here too, excess is as harmful as deficiency.

If coercion is too weak, no one will trust their funds to other people.

If coercion is too strong, then every unlucky entrepreneur risks becoming a slave to their creditors.

For the success of an enterprise is never guaranteed.

A ship may sink.

A caravan may be plundered.

A workshop may burn down.

And thus, not every loss is a consequence of deception.

Consequently, the prosperity of a state depends not on maximum severity nor on maximum leniency, but on the correct proportion between them.

In this matter, wisdom resembles what Aristotle called the mean between extremes.

For there exist two diseases of trade.

The first disease consists in that no one owes anyone anything.

In such a society, merchants quickly cease to trust one another, craftsmen work sloppily, and the borrower perceives other people’s money as a gift of fate.

The second disease is the opposite.

In such a society, every debtor lives under the threat of ruin, every worker chooses only between various forms of dependence, and those in power use their might to destroy competitors.

Both diseases are ruinous.

Therefore, reasonable people treat contracts with respect, but do not turn them into an object of worship.

For the contract exists for the benefit of people, and not people for the contract.

If every letter of the scroll becomes more important than common sense, then the contract gradually transforms from an instrument of cooperation into an instrument of domination.

For this reason, all trade rests on the presumption of good faith.

People must proceed from the assumption that their partner wishes to obtain benefit not through the destruction of the deal, but through its successful completion.

A good contract is beneficial to both parties.

If benefit is obtained by only one party, then we have before us not a contract, but a kind of command.

However, hope for good faith alone is not enough.

One must understand which forces make good faith profitable.

In all times, such a task was solved by communities.

A merchant did not travel simply as an individual.

Behind him stood his city.

His kin.

His guild.

His faith.

If the merchants of some city acquired a reputation as fraudsters, the next caravan from that city was met without former hospitality.

If anyone offended such merchants without cause, he risked bringing upon himself the enmity of the entire community.

Therefore, reputation became a kind of wealth.

Ibn Khaldun wrote that people achieve great goals only thanks to asabiyyah — mutual support and solidarity.

The same is true for trade.

However, here too, excess brings harm.

When belonging to a corporation becomes more important than a person’s abilities, the market loses flexibility.

Then monopoly takes the place of trust.

Privilege takes the place of reputation.

And coercion takes the place of cooperation.

Therefore, over time, other ways of ensuring trust emerged.

One of them was insurance.

In such a scheme, a third party appears, who receives payment for the readiness to cover losses from unforeseen circumstances.

But precisely because the insurer does not wish to pay extra, he carefully examines the behavior of the participants of the deal.

Thus, insurance not only distributes risks, but also encourages transparency.

However, it too is not a miracle.

Insurance protects well against misfortune, but protects poorly against evil intent.

If fraud proves more profitable than honest work, no insurance fund can exist for long.

Therefore, merchants also devised pledges and escrow accounts.

In some cases, the money remains with an intermediary until the obligations are fulfilled.

In other cases, the parties risk a pre-deposited security.

But these means too have limits.

They work well where the subject of the transaction already exists.

They work worse where the subject of the transaction is yet to be created.

Precisely for this reason, the most risky type of trade remains the investment of capital in new enterprises.

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As the market develops, a greater number of interactions become customary.

Rules appear for them.

Standards.

Intermediaries.

Insurers.

Arbitrators.

Experience.

The world of trade gradually becomes like a beautiful garden, where the paths are paved with stone, dangerous places are fenced off, and a signpost stands at every intersection.

It is comfortable to live in such a garden.

But it is difficult to get rich.

For high profit arises where there are no paths yet.

Therefore, the largest fortunes are created not in the garden, but beyond its fence.

There, where merchants set out for unknown lands.

There, where seafarers seek new routes.

There, where people invest money not in an existing business, but in the mere possibility of its appearance.

Just as Sinbad the Sailor once obtained diamonds from a valley to which no safe path led, a prudent investor seeks opportunities where others see only danger.

Yes, dreamers, adventurers, and fraudsters will always gather around such enterprises.

But beside them, people capable of distinguishing fruitless madness from fruitful madness will also appear.

And it is they who will become the pioneers of new markets.

Others will come later, when the risk diminishes and the profit becomes more modest.

And therefore it should be concluded:

Contracts are necessary.

Reputation is necessary.

Surety is necessary.

Insurance is useful.

But none of these instruments is capable of completely ridging a person of risk.

For risk is the price people pay for the opportunity to discover something new.

And thus, the greatest riches are born not where there is no danger at all, but where people know how to face it with open eyes.