Drat! There's Another Illusion, Shattered
Proponents of all religions like to dwell on the moral superiority of their beliefs. They point to the sacred word sent down from above. To which adherents must respond to lead an exemplary life, reflecting all that is potentially good in humankind. The loftier impulses, the humanistic emotions brought into active play and acted upon for the good of society. Above all, to reflect well on the religion whose precepts bring these specific and particular qualities into play.Islam has taken great comfort in being able to point out to any that are interested that their code of ethics implanted in their religion through Sharia law, prevents them from taxing funds loaned out to borrowers. They exact no interest on monies borrowed, they glow with pride. Good trick if you can do it. But business and banking institutions must have some incentive to provide services to those who rely upon them for temporary support.
And so it is that interest payments precede the repayment of loans, (in the case of mortgages, where interest represents by far the greater initial proportion of repayment) or at the very least healthily augments repayment in regular, agreed-upon and discrete amounts. It's the way of the world, the manner in which the economy operates to everyone's advantage.
Needless to say, it is to the consumer's advantage when lending institutions see fit to exact modest interest rates, (reflecting the health of a local economy) rather than whopping ones reflective of shady operatives which prey on the desperate, unable to procure the loans they need by traditional, more reasonable means. They have collateral, reputation and a perceived ability to repay.
Islamic economic institutions, was the boast, help end social and economic injustice by ensuring the well-being of all those in need. By uniformly offering required funds, but practising economic restraint to the extent that interest is never anticipated, only repayment of the original sum. Now that's truly amazing, and wonderful as well.
Trouble is, it's an Islamic urban myth, and does not at all appear to reflect Islamic tradition.
It is, according to Timur Kuran, Professor of Islamic Thought and Culture, an "invented tradition" appearing in the 1940s, in India. It was the idea and ideal of a South Asian Islamist intellectual, Abul-Ala Mawdudi who envisioned such an economic system specific to Islam as a way in which to minimize relations with non-Muslims, strengthen the collective Muslim identity while bringing Islam into another area of human activity; modernizing without submitting to Westernization.
It was evidently during the oil boom of the 1970s when Muslim oil interests and exporters came into substantial capital and at that time bought into the ideal of an Islamic economic discipline "that is distinctly and self-consciously Islamic" that the system was adopted. Those that celebrated the Islamic economic way claimed that the capitalist system was a failure and that the Islamic way was one of ethical success.
In his research toward the publication of Islam and Mammon, Mr. Kuran examined the functionality of Islamic economics, primarily its three claims that it abolished interest on money, brought into focus economic equality, and exemplified in its practise a superior business ethic. None of which contentions held up under close scrutiny, evidently.
"Nowhere has interest been purged from economic transactions, and nowhere does economic Islamization enjoy mass support", he wrote. Furthermore, banks claiming to be Islamic "look more like other modern financial institutions than like anything in Islam's heritage." Oh. Oh dear. Oh dear me. Reality does have a way of extinguishing pride in unreliable witness.
As one study had it "by the end of 2005, more than 300 institutions in over 65 jurisdictions were managing assets worth around US$700-billion to US$1-trillion in a Shariah-compatible manner. Ah, the moral superiority of hosts of believers and the utility of smoke and mirrors. Alas, the truth appears to be far distant from the proud illusion.
It has also been pointed out that should Muslims have strictly practised what they preached - the forbidding of exacting of interest; either paying or charging it - their opportunities for economic success would have been severely minimized, shunting them to the back pages of the international economy.
- Another Daniel Pipes revelation. Thank you, sir.
Labels: Political Realities, Religion
posted by Pieface @ Friday, September 28, 2007
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