Islam the Religion of Peace: Jews of Rhodes

Jews thrived on the Island of Rhodes from about 200BC, including 400 years under Islamic rule.  That Islamic rule ended in 1912 when the Italians conquered Rhodes.  Within some 30 years, there was not a single Jew on Rhodes, most having been killed.

Moslems tried to save the Jews from the Nazis.    We never hear about Jews thriving under Islam.

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Islam and Forgiveness

The last two days I attended a conference on Forgiveness in Islam at the University of Washington.  Prof. Arzoo Osanloo brought tremendous resources together and better yet introduced scholars who will esteem each others work for the coming decades, each improving the other.

For my part I got a brief chance to discuss my particular interest with Prof. Moumtaz, and that is loans, debt forgiveness and usury in Islam.  I had some general discussions with Profs Turner and Barfield that were enlightening.  The fireworks were saved for last with Profs. Lemons, et al and Nakissa going at it over "conceptualizing the habitus".  Frankly, I am used to professors who get into it like that, and I welcome it.

I did form a question somewhat outside of my amateur study, and it relates to Prof. Osanloo's studies of the Iran experience.  Prof Osanloo related a story of lad to be hanged under a regime more "radical (in the positive sense of "at the roots") in which the family offended decides whether the murderer is to be executed.  Given what I heard from the other professors, let's have a case that is the Shariah version of "open and shut."  Two adults playing chess (nothing disreputable as Prof. Barfield noted) in a cafe, lots of witnesses, Farhad beats Ehsan five games in a row, Ehsan is angry and begins to denigrate Farhad, Farhad is not having that and suggests Ehsan should learn to play chess if he wants to win, it becomes a shoving match, Ehsan loses the shoving match and screams "I'll kill you.." Screams it again on the way to the kitchen, screams it again coming out of the kitchen with the knife (three times) and then Ehsan kills Farhad.  Mid-sized city, relations not too close and not too far, (as prof. Ben Hounet noted), a clear straight murder case.

Judge rules, clear case, Ehsan's life is forfeit.  Ehsan makes an abject apology, blames himself for having pride in his chess-playing, when his skill was a gift from God and so not only did he murder Farhad, he is guilty of blasphemy and deserves to die, etc.

The family is sad at the murder of Farhad, sad at the whole case, moved by Ehsan's repentance, and decides to forgive for the love of God (let's ignore the problem of blood money for the sake of argument).  And under the radical Shariah, Ehsan walks free.  (And following Prof. El Fadl, this forgiveness is sad and beautiful.)

My observation: given all of the talk in the conference to the status of the forgiven in a regime of forgiveness, surely one can appreciate that even a forgiven Ehsan, free to walk, has had a profound sentence imposed upon him: he is a murderer.  The Ehsan before the murder and the Ehsan after the murder are two different people.  From inability to find a chess partner to compromised marriage prospects, a murder conviction is no small thing.

In the recent, western experiment someone who has "served his time" has been rehabilitated and the legal fiction is "justice served."  It seems to me, in our system, this is an extremely expensive process that guarantees we arrive at nonsense.

Now, take the Ehsan case today, as I understood the new laws in Iran in the same case today Ehsan walks free out of the Shariah court, and into the state court where he faces an "Article 12" prison term of 3 to 10 years, under the recent, western european innovation that a murderer has offended the legal fiction of the state (my editorializing).

So my question is, in the "article 12" regime example today, just what does the state bring to the polity by imposing a jail sentence?

My thesis:  mixing polities only makes things worse, but rent-seeking is an eternal human endeavor.  The experience of Ehsan the forgiven ought to carry weight in the considerations of polity change.  Prof. Kanafani-Zahar highlighted stability problems with these hybrid approaches.

Radical systems are proven by the test of time, but are subject to prejudice or woefully misunderstood.  Under the Timurids Afghanistan was the world's California and Herat its San Francisco (my biases, but you take my point).  It seems to me the problem is not a lack of innovation in mix-and-match NGO recommended systems, but a lack of restoring what works.  

Now I am not proposing the world go Timurid, but in a place like Hong Kong where the state is near non-existent, Moslems practice Shariah, the Chinese see the deal broker, the Christians use mediating institutions, the Hindus have their system, and the Jews theirs.  In spite of a reputation for probity, fairness, independence and accessibility, the courts are rather unattended.  At the same time Hong Kong is a beacon of peace and prosperity. 

What little reading I've done on the Prophet I recognize as a merchant his esteem of freedom.  Instead of Weber's 1919 definition of the state as a monopoly on violence, settled in the West, perhaps Islam can organize states as "protectors of freedom", evident in the rationale of the prohibition on usury, a process which enslaves people.  I am sure there are other examples of freedom esteemed.

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Plain Dealing

One aspect of Islamic finance is its emphasis on clarity and plain dealing.  On the other hand, let's look at a rule from a capitalist book:

This Statement provides accounting and reporting standards for transfers and servicing of financial assets and extinguishments of liabilities. Those standards are based on consistent application of afinancial-components approach that focuses on control. Under that approach, after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. This Statement provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings.

Definitions are so convoluted that books have to be written to explicate a "true sale" from one that is not true.  This makes it unlikely that partners to a deal can really appreciate their risk.

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Retirement and If You Don't Work, You Don't Eat

With Usury comes the false promise that one can retire to some luxury, such as a beachfront property in Mexico, living off of the interest on retirement funds.  This whole notion is in direct contradiction to St. Paul's injunction "if you don't work you don't eat."

But people will argue "I saved."  You saved what?  Credit claims built on a system you can easily recognize as wrong, if you were not greedy for the promises of stones turned into bread if you wold just worship Mammon?

To take the Social Security/pension offer is to bet the Capitalism trumps Christianity.

I advise against the bet, the outcome is rigged.

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USA Crony Capitalism

In spite of, or perhaps because of, the relentlessly bad policies of the USGovernment, people are allowed to criticize it accurately.  For example:

This transfer of wealth continues, by the way, in the form of relentlessly low interest rates, and an ongoing war by the Fed on safe and stable investment tools such as savings accounts and low-risk bonds. Indeed, this is a deliberate policy to get people away from these safer investments, and to get them investing in more volatile and higher yield investments. The idea is that the Fed can somehow force bigger returns on these riskier investments, and this will lead to a wealth effect. People will then think they’re richer, and we can then spend ourselves into a recovery. This is a terrible doctrine, but that’s what rules Washington right now. It actively works against middle-class people who want to work and save and invest their money responsibly and conservatively.

What happens is the extremely few people who read Stockman and the even fewer who act on what they learn become a sort of safety valve for the regime.  As we see what is happening, and arrange our affairs so as to not get nailed by the bad policy, we cease to object, since we are exempt.

It's brilliant.

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Shocked, Shocked; There Is A Conspiracy of Bankers!

Comes an earnest lawyer, an ex-World Bank employee, who knows where some bodies are buried, and she tells us:

Hudes, an attorney who spent some two decades working in the World Bank’s legal department, has observed the machinations of the network up close. “I realized we were now dealing with something known as state capture, which is where the institutions of government are co-opted by the group that’s corrupt,” she told The New American in a phone interview. “The pillars of the U.S. government – some of them – are dysfunctional because of state capture; this is a big story, this is a big cover up.”
At the heart of the network, Hudes said, are 147 financial institutions and central banks – especially the Federal Reserve, which was created by Congress but is owned by essentially a cartel of private banks. “This is a story about how the international financial system was secretly gamed, mostly by central banks – they’re the ones we are talking about,” she explained. “The central bankers have been gaming the system. I would say that this is a power grab.”

Honey, we already knew this.  Ms. Hudes, who was relieved of her sinecure and NOW objects to the World Bank, has this to offer now that she has let a cat of sorts out of a bag of sorts:

“We’re going to have a cleaned-up financial system, that’s where it is going, but in the meantime, people who didn’t know how the system was gamed are going to find out,” she said. “We’re going to have a different kind of international financial system.... It’ll be a new kind of world where people know what’s going on — no more backroom deals; that’s not going to keep happening. We’re going to have a different kind of media if people don’t want to be dominated and controlled, which I don’t think they do.” 

Ms. Hudes makes that beginners mistake of believing her own PR (public relations.)  She believes her earnest witness will change minds.  She really ought to have checked with the several million writers over the last few hundred years who have already warned of all of this.

And the most fundamental problem is, in fact, people do want to be dominated and controlled.  Most humans reject the freedom, that ether in which God resides and wherein we exercise free will, and prefer to be dominated.  She really needs to acquaint herself with the Bible, especially 1 Samuel 8, and 1 Samuel 12 which reiterates.

But perhaps she knows this when we are told -

The researchers described the core as an “economic ‘super-entity’” that raises important issues for policymakers and researchers. Of course, the implications are enormous for citizens as well. 

Ah.  For policymakers like Ms. Hudes.  She does not really want a system of freedom, she just wants a top position in the next regime.  There is no free market with policymakers.  So she cannot have what she putatively advocates.

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Luke Twelve: Jesus Gives Business Advice

Jesus gets interrupted during a discourse...

13 And one of the multitude said to him: Master, speak to my brother that he divide the inheritance with me.

Which demonstrates how jurisprudence can be had without the state,  voluntarily, and Jesus replies

14 But he said to him: Man, who hath appointed me judge, or divider, over you?

in which He declines to take on the case, especially since the elder brother made no request.  Jesus does not want religion to be used to force people to do things they don't volunteer to do.  He goes on

15 And he said to them: Take heed and beware of all covetousness; for a man's life doth not consist in the abundance of things which he possesseth.

16 And he spoke a similitude to them, saying: The land of a certain rich man brought forth plenty of fruits.

17 And he thought within himself, saying: What shall I do, because I have no room where to bestow my fruits?

18 And he said: This will I do: I will pull down my barns, and will build greater; and into them will I gather all things that are grown to me, and my goods.

19 And I will say to my soul: Soul, thou hast much goods laid up for many years take thy rest; eat, drink, make good cheer.

20 But God said to him: Thou fool, this night do they require thy soul of thee: and whose shall those things be which thou hast provided?

21 So is he that layeth up treasure for himself, and is not rich towards God.

The main mistake is as the man says - I I I I ...  The bumper crop is for all.  If the man sells the crop into the market, then the price falls and people have more disposable income.  What do they do with more disposable income?  Buy what is next on their needs list: repair a roof, books for the kids, new tools, some furniture, who knows.  But a boon is to be spent into the community.  In this way the fellow with the boon crop benefits indirectly as the entire community is, in whatever measure, wealthier, and provides better in all manner of goods and services, for all, including the farmer who is the beneficiary of the boon crop.  This is the unseen benefit of the boon.

What profits the farmer makes selling more grain at less price now will be benefit enough in terms of cash now for the farmer.  This he can see, and ought to accept.

On the other hand,  if the man does as he imagines, he builds the infrastructure to hold bumper crop, he is asking for trouble for the stored wheat is unlikely to cover the cost of the infrastructure to hold the product for a few seasons.   The community gets nothing but some abandoned warehouses in a few years.

The decision of the Lord is to end the life of such a greedy ingrate.

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Christian Vs Islamic Economic Results

Here is a summary of historical research with another slant, touching on Christianity vs. Islam:

Lopez contrasts the European evolution with that of a neighboring civilization, Islam, where political pressures smothered the potential for an economic upsurge:

The early centuries of Islamic expansion opened large vistas to merchants and tradesmen. But they failed to bring to towns the freedom and power that was indispensable for their progress. Under the tightening grip of military and landed aristocracies the revolution that in the tenth century had been just around the corner lost momentum and failed. (Ibid., 57)

One might want to consider who Islam had to work with, and how the peoples that islam conquered with such alacrity were apostate Christians, not the best the West had to offer to Islam.  If this is true, would it matter?  Might Islam, as it evolved given the exigencies of ruling an apostate people, to some extent be condign punishment for apostasy?

In Europe, as trade and industry expanded, people discovered that "commerce thrives on freedom and runs away from constriction; normally the most prosperous cities were those that adopted the most liberal policies" (Ibid., 90). The "demonstration effect" that has been a constant element in European progress – and which could exist precisely because Europe was a decentralized system of competing jurisdictions –   helped spread the liberal policies that brought prosperity to the towns that first ventured to experiment with them.

Just so, and this is well known by that very system of liberal laws, the Lex Mercatoria.  Where thsi private law was adopted by states, peace and prosperity flowers.  Where it is constrained, such as in USA, we see devolution of that comity.

Also, one of the most important international trade systems, the letter of credit, is under private law internationally as well. (See the UCP of the ICC).

That Mohammed was a merchant is well known, and his teachings are replete with sage advice to any merchant.  Jesus too had cogent advice to business in his teaching.  To what extent does the predisposition of the listeners indicate results?

Berman, moreover, focuses attention on a critical development that began in the eleventh century: the creation by Pope Gregory VII and his successors of a powerful "corporate, hierarchical church … independent of emperors, kings, and feudal lords," and thus capable of foiling the power-seeking of temporal authority (Ibid., 56).[10]  In this way, Berman bolsters Lord Acton's analysis of the central role of the Catholic church in generating Western liberty by forestalling any concentration of power such as marked the other great cultures, and thus creating the Europe of divided and conflicting jurisdictions.[11] 

Indeed, was not Islam’s golden age an example of just this kind of balance of powers?

The conflict of cultures is between the emerging fascist state as representated by the USA, and the newly emerging free-Islam which is necessarily in conflict.

The state conflict with the Catholic Church in USA is a domestic echo of this international conflict.  Although the Bishops have done all they can do make the Church subservient to the state, state actors, amazed at each new level of obeisance, are ever surprised at the compliance of the Bishops. With the hospitals, schools and Catholic charities now comprommised beyond recovery, abusing Bishops is now just a matter of amusement.

Islam bristles at what the state has done to the Church, how Christianity has decimated Christians in Moslems lands, and are only too aware of what “Christian” George Bush and company would visit on Islam.  No wonder they want no part of “democracy.”

Berman's work is in the tradition of the great English scholar, A.J. Carlyle, who, at the conclusion of his monumental study of political thought in the Middle Ages, summarized the basic principles of medieval politics: that all – including the king – are bound by law; that a lawless ruler is not a legitimate king, but a tyrant; that where there is no justice there is no commonwealth; that a contract exists between the ruler and his subjects (Carlyle and Carlyle 1950, 503–26).

My guess is we’d find such a tradition every bit as robust in Islam.

Other recent scholarship has supported these conclusions. In his last, posthumous work, the distinguished historian of economic thought, Jacob Viner, noted that the references to taxation by St. Thomas Aquinas "treat it as a more or less extraordinary act of a ruler which is as likely as not to be morally illicit" (Viner 1978, 68–69). Viner pointed to the medieval papal bull, In Coena Domini – evidently republished each year into the late eighteenth century – which threatened to excommunicate any ruler "who levied new taxes or increased old ones, except for cases supported by law, or by an express permission from the pope" (Ibid., 69). Throughout the Western world, the Middle Ages gave rise to parliaments, diets, estates-generals, Cortes, etc., which served to limit the powers of the monarch. [13] A.R. Myers notes:

Almost everywhere in Latin Christendom the principle was, at one time or another, accepted by the rulers that, apart from the normal revenues of the prince, no taxes could be imposed without the consent of parliament … By using their power of the purse [the parliaments] often influenced the rulers policies, especially restraining him from military adventures. (Myers 1975 29–30)

The Church does not recognise the legitimacy of the state. Kingdoms, yes; the state no (such as democracies).    Perhaps its forbearance to the point of subjection is a result of an inability to work with such a regime.

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The Encyclopedia of the Catholic Church on Usury

On the topic of usury, the English language Encyclopedia of the Catholic Church gives an American understanding of the law on usury.

One finds in the Encyclopedia of the Catholic Church:

Even at the present day, a small number of French catholics (Abbé Morel, "Du prêt à intéret"; Modeste, "Le prêt à intérêt, dernière forme de l'esclavage") see in the attitude of the Church only atolerance justified by the fear of greater evils. This is not so. The change in the attitude of the Church is due entirely to a change in economic matters that require the present system. The Holy See itself puts its funds out at interest, and requires ecclesiastical administrators to do the same.

One would be pardoned for relying on this passage.  The encyclopedia of the Catholic Church is not the catechism of the Catholic Church.  And if the Holy See requires ecclesiastical administrators put funds out at interest, as it does (although this is exceedingly difficult to determine if true), this is an error in administration, not a change in teaching of faith and morals.

The other problem is the definition of interest, which something in Church language aside form usury, and in common language the same thing.  This makes for complicated explication, since usury is clearly forbidden.

There was in older times the simple prohibition on making money on money, like on like.  As clever men resisted this prohibition, two new elements were introduced to the argument: time and space.  What about money loaned out gratis held longer than promised.  If I pay a fine Monday for failure to pay a debt, for money I did not receive back from the loan on time, is not the person who delayed paying me back obliged to pay my fine.  This is a claim on nonperformance, due to an interval of time (interesse).

What if I lend someone money for a journey and they will repay me when they arrive a thousand miles away. but the money has to be transmitted back some why.  Is there not a warrant to pay for the cost of transmitting the money over space?  This is a claim on a loss in making a loan, the cost of the interval of space that must be covered to repay the loan.  So interest means a warrant to cover a loss, not as we think today a warrant to earn a gain.

So if the church is lending out at interest, it is in the sense of a claim on a loss, not a gain on a loan.  Now this is debatable if they have crossed the line administratively, in fact it is debatable if in the real world there are any instances where time or space or both causes a loss that would warrant a "make whole" premium.

With usury and interest synonymous in English, much usury sneaks by as interest.  How much is yet to be exstimated.

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Sash Checks In

Hey Sash, 

I've convinced myself that credit (at usury) is the heart of our economic problems...  so I cancelled all of my cards.  i do have a debit card, sponsored by Visa, and it is linked to Alaska Airlines, which always wins #1 in the ratings for mileage plans.

Also, if you check with consolidators and discounters, you get the same seats at lower prices if you are willing to pay cash...  which can make the "free miles" too expensive if you reckon the costs.

I am sure that did not help, but there it is ...

John

On Feb 25, 2013, at 9:58 AM, Sash wrote:

Hi John,

I'm researching credit cards.  Any suggestions on a card that offers good miles/points, etc.?  Something that's best for the (striving to be)self-employed, international trader?

Thanks!

-s-

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Taxing Questions

Here is a delightful anti-usury blog with a commentary on taxes.  There is a 13 minute video with an interesting argument on taxes, to which I commented:


An excellent little video, if a bit slow to the point...  property is created when labor is mixed with natural resources.  Land as property is worked, land, and limited by the ability to work it.  islam has a rule that land can be taken after being 3 years fallow, and in common law we have adverse possession, the means to take unused law.  If we are to have taxes, then the argument here is ineluctable.

It does not mention who assesses value for the tax basis.  I believe the ancient Greeks had an excellent system for assessment, the owner stated the value.  Conflict of interest?  Not at all, because the stated assessed value was also an offer to sell, the price at which the landlord would give up the parcel.


The blog is a good place to study.

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Finance & Cheating

Here is a TED talk in which a fellow talks about people who cheat, with some interesting experiments relating to financial cheating and money.  What is interesting is his observations regarding cheating in relation to money as opposed to other things.

It may explain the mechanics of why usury became "interest" and became acceptable in Western countries, and what Moslems should watch for as Islam struggles with the question of usury.

If people are made to recall ten commandments, if if they are not believers, they are less likely to cheat.  This certainly supports the idea that the Lawgiver reminded us of what he wrote on our hearts when he made us.

Here is from the transcripts:

Think about the following intuition. How bad would you feel about taking a pencil from work home, compared to how bad would you feel about taking 10 cents from a petty cash box?

and

So, what have we learned from this about cheating? We've learned that a lot of people can cheat. They cheat just by a little bit. When we remind people about their morality, they cheat less. When we get bigger distance from cheating, from the object of money, for example, people cheat more. And when we see cheating around us, particularly if it's a part of our in-group, cheating goes up. Now, if we think about this in terms of the stock market,think about what happens. What happens in a situation when you create something where you pay people a lot of money to see reality in a slightly distorted way? Would they not be able to see it this way? Of course they would. What happens when you do other things, like you remove things from money? You call them stock, or stock options, derivatives,mortgage-backed securities. Could it be that with those more distant things, it's not a token for one second, it's something that is many steps removed from money for a much longer time -- could it be that people will cheat even more? And what happens to the social environment when people see other people behave around them? I think all of those forces worked in a very bad way in the stock market.


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A Bank, In the Biblical/Koranic Sense

On the question of a bank formed compliant with Shariah and Christian obligations, a correspondent, and ex-banker says:

First hurdle would be the Feds closing you down – not tolerating the honest competition.  

I wonder.  The feds charter banks to be a part of a game based on usury, and not even relating to money, but usury on credit (today termed interest on money).

So if one was making loans of money, properly defined, in charity to others, at no point is there any usury or credit.  so why would the feds care from a banking regulation point of view, since no banking is going on in the modern sense (but certainly in the Biblical/Koranic sense.)

So if I put out 1000 gold coins to be lent to someone in need to be paid back over time at 1000 gold coins total, then where does regulation come in?

As to the question of where does one get credit then, so say build a house, well at all times and places in history there was "vendor financing" which here again the feds have no interest in.

Except obliquely, and here is the problem.  All of these loans are presumed to be interest bearing, to the point where the law requires income be imputed, and that income taxed.  So should a bank, or a private entity make a loan in the Biblical/Koranic sense, the IRS would demand the lender pay taxes on the profits, even though in fact there are no profits.

And if not the lender, the borrower, who through the margin of inflation gained by paying no interest, must be taxed on the passive income.

This is ripe for testing.

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How Mass Transit Imprisons People

It is all about the bonds.  Mass transit is sheer madness.  52% of the state transportation budget serves 3% of the population who use mass transit.

It is one thing to build a bridge over a chasm, a bridge that can pay for itself with tolls rather quickly, or as in ancient Greece and Islamic tradition the wealthy simply build it and pay for it, at a very efficient price.

But when the state steps in, the process becomes political, and the price goes up.  Way up.  In Seattle it is $179 million per mile.  And what gets bought is political.  In this case 1880s technology.  And that is just building cost, not operating and maintenance cost.



To pay for it, the state issues bonds, which pay interest (usury).  Lawyers write up the contracts and bankers handle the sales, for fees and commissions.  That is part of the $179 million per mile.  They make their money up front. Now there is a conflict of interest between the state, the project and the lawyers working on it.  the lawyers are officers of the court, one of the three branches making up the checks and balances in our government.  To have members of the judicial branch serving in the legislative or executive branch, or both, is to have the fox guarding the henhouse.

Now there is simply not enough capacity in the trains to ever recover the sunk cost of $179 million per mile, plus operating costs.  So bonds will be rolled over forever, and 100% of taxpayers will perpetually be paying for the 52% of the transportation budget that serves 3% of the population.

By structuring a deal that cannot ever zero out, taxpayers are trapped forever, like being in hell.  And worse than hell, because the system traps the children and grandchildren, forever.  It is pure evil.

The smartest thing to do is to cease all work on light rail, and tear up and out what has been built.  We'd be on the right track.  Then let private individuals set up transit systems.  Just as we say private companies freely trading in telephony give us the internet, completely unexpected, so freeing transportation from state control would give us unimaginable savings.

When the state chartered bankers to charge usury on fractional reserve credit, vast abusive systems needed to be created to sop up all of the putative credit.  And the powers that be needed huge projects to warrant the flow of "interest (usury)" so they can aggregate all the more power unto themselves.

Light rail is created by credit, but the usury to the powers that be is paid by workers in money.  The trick is to involve the state, because any other entity would just go bankrupt.

There must always be a separation of business and state.

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Keeping Halal in China

China has a large Moslem population.  One problem is the confusing logos for halal food.

There are more than 23 million Muslims in China. Combining Islamic dietary guidelines and local culture during the past 1,200 years, they have adopted some culinary traits from the Han Chinese and created their own style of halal food. More than 97 percent of China's cities and counties have halal food manufacturers, according to China Inspection and Quarantine magazine earlier this year.

Perhaps there is business to be done unifying a halal brand.

http://usa.chinadaily.com.cn

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Dreaming of Good Things

We awake from a disturbing dream and look around, feel the warmth of the bed, the calming familiarity of the night lights or the dawn, and we relax with a sigh.  It was only a dream, very disturbing, but only a dream.  We see the familiar furnishings, smell the coffee we brew, feel the hot water of the shower, and know that everything is good.

When the snake tempted Eve, it was with delicious fruit, which is good.  From a beautiful tree, which is good.  The tree of knowledge, and knowledge is good.  Eve was tempted by things that were good.  But they were forbidden by God.  For reasons we do not know.

We understand that we do not know everything, probably cannot know everything.  There are things we just do not know.  Eve looked at the good she could experience.  She did not consider the question farther.

Through usury we can have good things.  We may not know why usury is wrong.  We only look around and see good things.  We can know that usury is forbidden by God.  But we are surrounded by good things, why risk what is good?

Peace is good, if only metaphysical.  We may very well enjoy the things we feel, smell, taste and hear, but our dreams may make us uneasy.  We may lack peace on a metaphysical level, our psyche telling us something is wrong.  Acted out in dreams.  Maybe the dreams are an experience of reality on a metaphysical level, the truth behind the reality.

We do not know what we would see if we were usury-free.  That is unknown. It takes an act of faith to move to usury free and an act of hope there will be good things with it.  We just cannot know in advance. 

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Farrakhan On Islam in USA

Watch this all the way through.  Minister Farrakhan is making a bid to a reform movement in Islam emanating out of the USA.  Quite interesting...



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Defining Free Markets in Islam

From the same book by Ibrahim Warde cited below comes these paragraphs on "liberalization" of Islamic economies.  I have put some comments in parentheses ***  ***:

The changes leading to a New World Order were accompanied by an ideological shift. Traditional views on development had already been under sharp attack. Since 1979, the World Bank had changed its focus from financing individual projects to transforming entire economies. With the Philippines as its first guinea pig, it set out to transform economic (and hence political) ‘structures’ in exchange for aid. And since the debt crisis which spread from Mexico to much of the developing world, the International Monetary Fund (IMF) had become a sort of ‘global bankruptcy judge’, disbursing funds only on condition that countries adopt ‘structural adjustment’ policies. Both in the cases of IMF and World Bank plans, the typical package included addressing macro-economic imbalances and implementing sound fiscal and monetary policies, reforming the public sector, modernizing the supervisory and legal infrastructure, liberalizing financial markets, eliminating subsidies, promoting the free flow of capital and investment, etc. It should therefore come as no surprise that some have called such ‘structural adjustment programs’ the equivalent of ‘a foreign controlled coup in slow motion’.

***Well distilled!***

The new paradigm was strengthened by the collapse of Communism in

Eastern Europe and the implosion of the Soviet Union, which were interpreted as the victory, in the battle of ideas, of capitalism and the market economy over socialism and central planning. 

***Which in retrospect seems to be a bit of an illusion, given the capitalist democracies performance subsequently.***

Old dogmas regarding the respective roles of states and markets were turned on their head: government leaders were now seen as neither able nor willing to promote the public good; state controls could only encourage inefficiency, stifle entrepreneurship and delay reform. What came to be known as the ‘Washington consensus’ was shared by the US and other industrialized countries and by international organizations. The state, once seen as the provider of solutions, was now perceived as the major obstacle to development. 

***Sounds about right...***

 All attempts at central planning, and even milder forms of industrial policy, were doomed. State-led policies, protectionism and import-substitution had to be replaced by privatization, deregulation, and an export orientation. Foreign ‘experts’, some of whom – for example, Harvard’s Jeffrey Sachs – achieved celebrity status, advised governments, often with disastrous results, on the reform process and the transition to free-market economies.

***Correct, Sachs talked the talk, but Sachs is hardly a free-marketer.  WE are getting into trouble referring to "privatization, deregulation, and an export orientation" as the free market, inasmuch a a policy of "privatization, deregulation, and an export orientation" is no more a free market than a policy of protectionism and import-substitution is free market.***

 Most Islamic countries are heavily indebted and increasingly dependent on the outside world for financing, and the political and economic clout of bankers and other financiers is on the rise.

***Extremely important question:  How did they get to this point?  The answer is the fact that states violated Islamic finance principles.***

 In order to raise funds in the international markets, or to obtain aid from the International Monetary Fund or the World Bank, governments must adopt policies that conform to the new international orthodoxy (economic austerity, liberalization of trade and capital flows, privatization, deregulation and dismantling of the public sector). 

*** Now, to go back to the people whose society led one into dire straights in the first place is not likely a god plan.***

Even so-called ‘rogue states’such as Iran or the Sudan, lest they be financially starved, have to deal with the IMF and the World Bank and thus comply with demands related to economic policy. 

***Strikes me as a false dilemma, and given the currency issues in Iran presently, Iran may find another path after they get through this present storm.***

The tidal wave of liberalism was somewhat late in reaching the Islamic world, but it is now clearly there. The ‘alliance’ between Islamists and liberals is justified by the existence of a common target: the all-powerful (and secular) state. Two areas of convergence between the Islamist critique of statism and the Washington consensus should be emphasized. First is the Islamic commitment to private property, free enterprise and to the importance of contracts, as opposed to state-led economic policy and the arbitrary decisions that go along with a strong state bureaucracy. 

***Hang on, the contract seems to have a firmer basis in Islam than in capitalism, so upon this point elaboration is warranted, and with a prophet like Mohammed, capitalism has nothing to add to knowledge of private property and free enterprise. Any lack of liberalism is to the degree Islam has been shunned.  See the next paragraphs from this very section in Prof. Warde's book.***

In many countries, Islam has become the tool of entrepreneurs seeking to get around restrictive regulation, and an instrumental factor in privatization and deregulation – and the best excuse to disengage the state from the economy. 

***True, Islam was born in a free market, so what could be more natural?***

Insofar as financial liberalization is ‘the process of reducing government control over the allocation of credit’, Islamic bankers were bound to make common cause with economic liberals. 

***This should be unpacked: is this a long way of saying "allow usury?"***

Second is the parallel between the ‘privatization of welfare’ (through reliance on zakat and other religiously based redistribution schemes) advocated by Islamists, and the downsizing of the state that is central to the new ideological consensus. Private virtue thus meets efficiency: by helping the poor, the wealthy become better human beings; and the voluntary provision of charity reduces the need for public welfare organizations that are usually costlier to run. This is not a new phenomenon. In medieval Muslim society, the Shariah was often used as a shield for private property against arbitrary confiscation. 

***And private property is crucial to a free market.***

Today the merchant classes are using the Koranic emphasis on private property rights, and Islam’s positive view of commerce and profits, to pursue policies of privatization and deregulation. Even Islamic Republics have on occasion openly embraced neo-liberalism. Thus, in Sudan between 1992 and the end of 1993, Economics Minister Abdul Rahim Hamdi – a disciple of Milton Friedman and incidentally a former Islamic banker in London – did not hesitate to implement the harshest free market remedies dictated by the International Monetary Fund. He said he was committed to transforming the heretofore statist economy ‘according to free-market rules, because, because this is how an Islamic economy should function’.

***And now we are back to the fundamental problem, a proper definition of free market.***

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Wealth and Envy, Passion and Joy

Wealth is not how much power and credit one has, but the extent to which we all have access by our own means to an array of goods and services ever better matched to our changing needs and wants.  Wealth does accumulate to a person at times to an extraordinary degree, which causes others to be envious.  The Koran cautions:

Abu `Abd Allah (al‑Imam al‑Sadiq) (a) said that the Apostle of God (s) said that God Almighty addressed Musa ibn `Imran (a) as follows: 

"O son of `Imran, never be envious of people concerning the favours I have conferred on them by My grace;

And a commentary offers this counsel among many to people experiencing envy of those who are exceptionally blessed:

Fear and Love of authority: Also, the envious man is fearful of some hindrance on the part of the person enjoying an advantage or talent or merit that may frustrate his cherished objectives.

Just so.  That person has the power to frustrate my hopes and dreams and schemes.  Christianity has plenty to say on this topic, but I like this particular note struck by the commentator.

Such a line of thinking is destructive in many ways.  It misunderstands wealth and gifts.  Christians say "to whom much is given, much is expected" and "be happy with the portion God gave you."  Jesus expects us to develop our talents, but that does not mean we will be successful in all of our hopes and dreams.

If God blesses someone with some abundance,  the envy is over the abundance.  In essence, the envious one is saying "I want what already is, what that person has.  Well, objectively, what the blessed has is enough for the world.  What is missing in the mind of the envious is to conceive of "what else is missing?"

We all to some creative degree have a creative mind.  That means we can take various ideas and pull them together into something good.  There is even a scientific process to assist in this creativity: observation, hypothesis, test, theory, test, proof.  That is also basic product development sequence in business.

And so to my point.  He who is envious of another wants a short cut to wealth.  He simply wants what God gave to someone else (without knowing what conditions God required of the one blessed when He bestowed the gift... an unseen aspect of which one should be wary.)  We know when we feel envy. Envy needs to be acknowledged as evil (lacking good) when we feel it, and as an opportunity to reflect.

Clearly God has the power to bless.  Even if you were to somehow "get" what the other has, then the world is no better off for our existence.  We do not need another person wealthy in the way that particular person is wealthy or blessed, we need the envious person to be blessed in a way that is yet unseen.

If you seek take another's wealth for yourself, then the world is no better off, plus the world is denied the good of your creativity and initiative.  "But but but, I am not creative...  I am not talented!"  Is not most of the reason you are envious is because that person God blessed is particularly untalented?

We can look at a Bruce Lee or a Van Cliburn and say "Well, that person is a genius, so they deserve their blessings."  We have no envy there.  But is it not precisely the untalented, the idiotic, the socially backward who God has blessed that so excites envy in us?  "Why him, and not me?"  Well, that question will never be answered satisfactorily, but you will allow that if God can yield good results from an idiot, how much more so will the blessing be from your efforts?

To say you "cannot" is an argument you will always win.   In fact, any one can go through the process of product development outlined above.

But how does one start a process of discovery of what is unseen now but is needed?  We all hear that success in business takes "passion."  What few realize is the word passion means "to suffer."  We all suffer for some lack, something we wish was there, but is not.  A medicine.  A tool.  A food.  A new kind of house, who knows.  If you experiencing the pain of envy of something that is already there, make an act of will to move over to a different pain, the suffering you feel over something NOT being there.  A medicine.  A tool.  A food.  A new kind of house, who knows.

Yet, we all suffer over many things, like no cab available when a rainstorm hits.  So how can we tell when that over which we in particular suffer is what we should be working on?  This is the key that is left out of every discussion of success and passion:  Passion is necessary, but not sufficient.  That project you are working on, that lack over which you suffer, if, when you are working on a solution you find joy, then that is the dead giveaway you are working on the right project for you.  If and when you find passion (suffering) and joy at the same time, then you have been enlightened as to you purpose.  To use your creativity to bring something out of nothing, insh'Allah.  To offer the world something good that was not there before.  As a practical mater the process is simply the observation, hypothesis, test, theory, test, proof mentioned above.

In the West, when one has a good idea for a business, the first concern is often "how will I get finance?" As capitalism has demonstrated, usury-based financial structures are limited to the wealthy in spite of the fact that the poor have as many good ideas and all the talent necessary to succeed. A risk adjusted premium for a start-up is say gross 8%, well, that is exactly the margin necessary and sufficient for the entrepreneur to live on in this particular project.  The poor in capitalism are limited to working for others, where their talents will never be developed.  Capitalism denies the rest of us the good of what the poor might have offered.

Wealth also accumulates to a remarkable degree in terms of the extent to which we all have access by our own means to an array of goods and services ever better matched to our changing needs and wants.  This occurs in what we call the free market.  Free to pursue creating what is missing, free from force or fraud.  That is the free market.

Usury is both force and fraud.  Usury unjustly concentrates power in ever fewer hands.  The results of usury is very clear in the capitalist economies.

So usury-free economies have an advantage.  When the envious behold those blessed by God with material advantages, the envious need to take that feeling, that signal, and turn it into a reflection on what is missing, instead of what is already there.  In non-capitalist economies, the poor are not trapped by usury, so innovation and creativity, product development know no hindrance from usury.

Shariah-based finance has a built in advantage, or is at least free of the hindrance of usury.  Islam once was the envy of the world with countless innovations in every field.  Self-satisfied China sent a fleet to converse with Islam, and returned unrequited.  What need did golden-age Islam have for China?

So the proof is in the results.    Capitalist dominated economies are no indication of the power of avoiding usury.  They prove its destructiveness.

Properly defined, free markets will demonstrate the proof of the good of usury-free economics.  Free from the force and fraud of usury is necessary, but not sufficient.  The point of usury-free is to allow for innovation.  Free to innovate.  Free from force of fraud.

Hong Kong comes to mind as the closest example of this working today.  Although it is a world financial center, most businesses are based on sharing risk, not on earning interest.  All those who sincerely seek a proof of the benefits of usury free have the neutral example of Hong Kong to draw on.

The leaders of Tunisia saw this, and were working towards it, but too late.  This brings up another question: how to transition to an economy that is free?