Is Usury a part of Capitalism ? Both Islam and Capitalism allow private property but private property has existed before Capitalism existed my question is how are they not the same ? Does Capitalism allow full 100% freedom in what people do with private property or farms or the banks or places of business ? When a person or persons want a loan to start a business a new business loan usury can cause the new business to get out of the business a loss of new jobs and the business owner can not pay the loan back correct ? The United States of America and other Western Nations are Capitalist Nations but they have a mixed economy a mix of capitalism and socialism and many regulations. True Pure Laissez Faire Capitalism has no welfare or national healthcare or laws to stop usury or fair wages or regulations. Many Capitalist nations have regulations which makes the nation a mixed economy. Im trying to know how Islam is different from Capitalism in economics. Both Islam and Capitalism allow private property
and personal property ? Also Karl Marx seemed to define Capitalism as
was he wrong ?
Freedom from Usury
Silver Stock Report
by Jason Hommel, Jan 23, 2004
It is said that those who loan money need the interest due to inflation and due to the time value of money. But this is like saying criminals need to commit crimes in order to make money, so it's ok! No, it's not ok. No, inflation is not a given. And no, money tomorrow certainly can be worth more than money today if society is using honest money.
So, what about banking? Banking, as practiced today, is a criminal monstrosity of the ugliest proportions. The reality is that the Bankers have been bankrupt ever since they thought they needed a central bank to bail them out. Depositors (the lenders) are told lies, that they can withdraw their money at any time, but the reality is their money is loaned out. If people want to invest their money in an enterprise, they should be free to do so on their own. There is no need to resort to trickery and fraud to take their money away from them through this banking scheme that has developed.
Why should depositors be paid 2% and the bankers loan the money out at 4% and let the bankers pocket the difference? If the bankers are the middle men, let the bankers be paid as middle men, and let the bankers collect a small commission as they introduce the depositor (capitalist) to the borrower (business), and let the depositors invest like everyone else if they want to invest. At least this would be an honest transaction, and an honest way to do business to "put the money to productive use".
Appeals to greed, envy, and lust, (along with lies and misinformation) are the primary means to attempt to justify banking. People greedily and falsely assert that capital goes to waste if it is not loaned out and put "to productive use". As if a loan is the only way to put money to use! And as if investing and saving are not valid alternatives!
But capital (gold and silver) that is hoarded is being put to productive use. First, it makes all the rest of the capital that exists that much more rare, and thus increases the value of the rest of the gold and silver in circulation. Second, the side effect of hoarding gold, which makes gold more valuable, is to stimulate the production of more gold through mining and industry, which provides jobs, and creates more wealth. Yes, even hoarding gold provides jobs and creates more wealth!
Yet mining is disparaged as a waste of time when money can be produced so efficiently with a printing press. So, what use is it to spend so much time and energy to mine precious metals in the fist place? What societal benefit is there to creating a gold boom through lack of gold and hoarding? Gold keeps men honest. Gold and silver force honesty in economic transactions, whereas paper money is economic fraud, an abomination, an unjust weight and measure, oppressive, unjust, counterfeit, and criminal. Any industry that forces the rest of men in society to behave honestly (and without the use of force or threat of force) is the most valuable industry that a productive society can have.
Therefore, hoarding gold boosts the value of gold, stimulates mining, and increases the honesty of society. None of that can be bad except in the eyes of the man who has set his eyes to envy the hoarded (and so-called unproductive) gold of the honest man.
Unrestricted economic freedom and non-interference of the state in such freedom is another feature of capitalist economy. Every individual is at liberty to initiate, organise and establish any enterprise, business, trade, profession, etc. He has full freedom to earn as much income as he can and spend his wealth in whatever manner he likes. This unrestricted economic freedom generally leads to earning of wealth through foul means such as gambling and prostitution. It also encourages business malpractices such as smuggling, black marketing, profiteering, hoarding, speculation, forward transactions, fraud, exploitation, adulteration, etc. Thus a mad-race for earning wealth becomes order of the day and high social and moral values such as fraternity, brotherhood, mutual help, love, benevolence, truthfulness give place to selfishness, callousness, hatred, falsehood and mistrust. Capitalism, in fact, has come to signify a religion of money or dollar dictatorship.
Islam also allows economic freedom to an individual who is at liberty to earn wealth, own it and spend his wealth at his discretion. But the freedom given by Islam in economic sphere is not unlimited. Islam makes distinction between halal (permitted being lawful) and haram (forbidden being unlawful) in every economic activity embracing vast fields of production, exchange and consumption. Certain means of earning wealth such as interest, bribery, embezzlement, gambling, games of chance, speculation, monopoly, usurpation of wealth of orphans and other weaker persons, prostitution, singing and dancing, sale of wine and narcotics, short weighing and short measuring, trade in haram things, immoral and exploitive methods, etc. are prohibited to a Muslim. Similarly consumption of wealth on luxurious living, haram things and extravagant spending is also forbidden. A Muslim is required to pay Zakat and spend whatever he can for the cause of the poor and the destitute. All these regulations promote moral values in Islamic society and eliminate mad-race for wealth and material gains.
4.Institutions of Interest:
The Institution of banking and interest is the life-blood of capitalistic form of economy. For business, trade and industry especially for big projects and economic ventures, huge funds are required which no individual or firm can arrange. This leads to establishment of banks who borrow capital from depositors and investors on lower rate of interest and lend it to business enterprises on higher rate of interest. Thus the institution of interest has become part and parcel of capitalism.
Islam considers interest as the most exploitive institution for humanity and has abolished it root and branch in its every form and manifestation. According to al-Qur’an taking of interest tantamounts to war against God and His Apostle, while according to Prophet Muhammad (PBUH) interest is worse than adultery. Islam builds its economy on interest free basis and promotes profit and partnership as incentive for saving and investment.
6. Distribution of Wealth:
Capitalism does not believe in fair and just distribution of wealth. Since it believers in full economic freedom and private ownership of means of production, wide economic disparities exist in capitalistic economy. Concentration of wealth in few hands takes place while huge majority of the populace is deprived of the very basic necessities of life. The privileged few live in luxury while poverty, ignorance, disease and unemployment is the lot of the multitude. This disturbed balance of distribution of economic resources and unbridgeable gulf between the haves and have-nots ultimately leads to class struggle and ultimate overthrow of the very system.
Islam, on the one hand guarantees provision of basic human needs such as food, clothing and shelter to everyone and, on the other hand, ensures fair and equitable distribution of wealth and economic resources among all. It does not tolerate existence of wide disparities among the rich and the poor and tries to eliminate concentration of wealth in few hands. For bridging the gulf between the rich and the poor and for ensuring equitable distribution of wealth, Islam has taken many steps such as Zakat and Sadaqat, laws of inheritance and bequest, voluntary charities and compulsory contributions in the form of taxes and duties. To prevent concentration of wealth in few hands Islamic economic code has taken measures like abolition of interest, prohibition of earning of wealth through haram means, prohibition of hoarding of wealth, etc.
Is private ownership
ISLAM AND PRIVATE OWNERSHIP
a natural propensity?
Communists and their likes insist that it is not. They claim that there was no private property in the earliest societies where the "first communism" prevailed. All things, they say, were public property shared by all people who were guided by a spirit of affection, co-operation and brotherhood. They sadly regret that such “an angelic era" did not last because the discovery of agriculture involved disputes over the cultivated land and the means of production. This inevitably led to war. The Communists allege that humanity can put an end to this dreadful evil only by returning more to “the first Communism" where no one had a property or one's own and all production was equally shared by all people. They believe that this is the only way to restore peace, affection and harmony to the world.On the other hand, psychologists and sociologists do not agree upon a clear distinction between natural and acquired human emotions, concepts and manners. Likewise they differ regarding private ownership. Some psychologists and sociologists maintain that private ownership is a natural propensity born with man regardless of the conditions of his environment. Others believe that it is acquired through man's environment. A child, they say, refuses to part with any of his toys either because they are too few or because he fears that another child may take them. When there is just one toy for ten children, quarrel is sure to break out, but, they say, where there are ten toys for ten children everyone will have a toy of his own and there will be no conflict.Our answer to the arguments put forward by communists and other psychologists and sociologists is as follows:-1. No scientist has been able to prove beyond all doubt that private ownership is not the outcome of a natural instinct. All that the leftists could say in this regard is that there is no conclusive evidence available that it is the outcome of a natural instinct. But that is another question.2. The example-about children and their toys-which the communists give in support of their stand cannot lead to the conclusions they aim at. That quarrels do not break out when ten children are given ten toys does not rule out the existence of a natural desire for ownership. It means that the desire for ownership may, in healthy cases, be satisfied by absolute equality. The aforesaid example does not rule out the existence of such desire but it may help to define its nature. Besides, no one can deny that many children would not hesitate to usurp the toys of their friends unless they are prevented from doing so for reasons beyond their control.3. As to "the angelic era" which the communists suppose to have accompanied the earliest societies, it may be said that there is no real evidence that such an era did really exist. Even if there had been such an era, there could have been no means of production at the time. How could disputes arise over something that did not exist? At that time people got their foodeasily and directly from trees. When they went hunting they had to go in groups for fear of wild animals. It was impossible to store slain animals for they would soon go bad. So they had to be eaten up as soon as possible. The absence of conflict in that case does not rule out the existence of a natural desire for ownership. As a matter of fact, absence of conflict is due to absence of anything worth the strife. This is why the discovery of agriculture brought about conflict. The said discovery stimulated a hitherto dormant tendency which till then lacked the incentive for action.4. No one could firmly deny that at such an early era a conflict could have existed among a number of men for the possession of a particular woman. In spite of the existence of sexual communism in that era no one can say for sure that it was prevalent throughout society or that its existence prevented men from fighting each other for possessing a woman whom they considered very attractive.This leads to an important conclusion: where all things are equal and similar the possibility of a conflict may be ruled out. But as long as things are different, conflict and struggle are bound to break out even in the imaginary "angelic society" upon which communists build their future prospects.
Finally, no one could rule out the fact that some men who lived in that early era desired to achieve personal distinction either by showing their bravery and physical strength or by any other means. Some primitive tribes-examples of the so-called "first communist society"-do still refuse to give their daughters in marriage except to those men who would endure a hundred lashes without showing any signs of weariness or pain. There is no doubt that the only reason that invites young men to set out for such a painful ordeal is their desire to achieve personal distinction.
Posted By: tenavision
Date: Friday, 13-Sep-2002 01:28:08
This exactly describes the world right now. Read it and weep. Subject: Curse of Ignorance There is a widespread misconception with regards to the true nature of capitalism, which has largely been bought about by an uncritical acceptance of Marxist-Socialist terminology, itself not only untrue, but intended to be misleading. The essential characterstic of capitalism is not that it permits private ownership of means of production, distribution and exchange, be it land, building, machinery, etc. The personal ownership of all these factors have been since the beginning of mankind a part of natural law. Even the earliest barbarians who owned a stone axe and a bow, and arrows, or the primitive plough and other tools, were not capitalists. Neither were men of feudal times capitalists even if they were great lords. And not even a miser who had accumulated a hoard of gold a capitalist. They all were, and in similar circumtances still are, owners of property.
Capitalism did not originate in the Islamic world as it came into being only after the invention of the machine which took place by chance in Europe.Capitalism was imported into the Islamic world at a time when it was under European domination. Together with the wave of development, it spread into the Islamic world which suffered from poverty, ignorance, illness and backwardness. This made some people think that Islam approves of capitalism, with both its evils and merits. They also claim that there are no provisions in the Islamic law or regulations such as might be in conflict with capitalism. They argue that as Islam permitted individual ownership it must likewise permit capitalism.In answer to this accusation it might suffice to point out that capitalism cannot prosper or grow without usury and monopoly both of which were prohibited by Islam about one thousand years before the existence of capitalism.