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fschmidt
Allah says in the Quran:
This mean the religion has been completed for all those who believe in Allah and there is nothing which needs to be added or removed from the religion.
Brother @Eric and Brother
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Ahmed
have commented on this as well but let me explain in little more detail by giving an example of Islamic finance system. Interest has been prohibited in OT and in Quran. Muslims don't deal with interest because Quran tells them that who so ever deals with interest has waged a war against Allah and His messenger PBUH. Now a businessman will think that there is no way this law can benefit him after all most of the world works on interest based system.
Our countries and societies are all based on interest based system. Time is money is the basic economic principal.
Economists can attempt to come up with numerous justifications for the payment of interest but the real test is to study the affects that interest has. It is important to note that when something is prohibited by God, this does not mean that there is absolutely nothing beneficial in the prohibited item or practice. Indeed, one may be able to find something beneficial even in prohibited items. For example, God says in the Quran about alcohol:
Thus, the essential point is not whether there is anything beneficial in something but whether the harm of something outweighs its benefit. Thus, economists may be able to find a hint of a justification for paying interest but this definitely would not outweigh the harms that interest can be shown to cause. Even if interest is considered some kind of payment to a factor of production, it has some unique characteristics that set it apart from payments to any other factor of production. Due to its unique nature, it leads to some very disturbing results.
First, interest leads to an inequitable distribution of income. This can be seen by taking an example of three people. Suppose there are three people who consume of all of their income in a given year yet one of them starts with $1,000 in savings, a second with $100 and a third with zero. At 10% interest per annum, by the end of the year, the first person will have $1,100, the second $110 and the third person zero in their accounts. If the same scenario follows in the next year, the first person will have $1,210, the second $121 and the third will have zero. Already, one can see how the distribution between them grows every year, even between the one who has some savings of his own. This scenario will be made even worse if the richest person will also to be able to add savings. Suppose he adds one thousand at the end of each year. He will have 1,100 at the end of the first year, he adds $1,000 and continues with his 10% interest and he will have $2,310 at the end of the second year, and so on.
Now it is one thing if this money paid was actually due to some positive factor of production but in reality one cannot make that argument in this case. The money that the people are making via interest may have been squandered, lost or even stolen by the people who borrowed it, but one still has to be pay the interest. It may have been invested in a completely losing project and therefore it actually did not produce anything. But all of that does not matter, it has to be paid regardless of whether that “factor of production” produces anything or not. This is simply one of the unique aspects of money and payments to money. No one can argue that this is just and therefore its results are an inequitable distribution of money.
Furthermore, the distribution of income becomes more and more skewed over time. One can imagine some individuals dealing in millions while others are dealing in hundreds or thousands. The disparity in their interest incomes will indeed be great and growing every year. In other words, as one hears often, it will lead to a situation where the rich keep getting richer while the poor keep getting relatively poorer. Note that those in debt, paying interest that grows every year, have not been added to the equation. In their case, as interest continues to grow, more and more of their overall income is consumed by interest, further exacerbating the skewed distribution of income.
Someone could ask as to whether an inequitable distribution of income should be considered a major issue. Besides the psychological effects on the poor, especially given mass media advertising that emphasizes the good life and the need to consume, there are very important effects on the market as a whole.
In a market economy, production will be geared towards those who have the money to pay for the output, regardless of how necessary other goods may be for society. If the rich desire, demand and are willing to pay a lot of money for SUVs and gas-guzzling vehicles, those will be produced (regardless of how much conservationists may complain). As the income distribution becomes more and more skewed, more and more resources will be devoted to the demands of the richer classes.
Since resources are somewhat “fixed,” this means that less and less will be devoted to the needs of the poorer classes.
Furthermore, the lesser resources devoted to the goods that the poor consume reduces supply and drives up the prices of those goods, further harming the poor people’s overall economic situation. For example, one can find numerous medical clinics catering to the rich (those who can afford such treatments), even if they are far from necessary, such as numerous places for cosmetic surgery and the like. At the same time, one may find it very difficult to find clinics catering to the poor and meeting their basic needs. If they could pay more for those essential services, in a market driven economy, one would definitely find more of those types of clinics, more resources devoted to those needs and a cheaper price in the long-run for what they need. In addition, this skewed distribution also has strong implications for the health of democracy; however, that discussion is beyond the scope of my post and will only make my reply much more longer.
In addition, the burden of interest upon the poor who fall into debt puts them into a situation where they cannot advance socially or economically, widening the gap between the rich and the poor. Debt itself is a difficult situation for any individual. However, it is interest payments that make one’s debt a moving target, many times one that an individual simply cannot keep up with. Again, it is a bogus factor of production but it works to allow the rich to get richer while putting a great burden upon those who fall into debt.
Perhaps you are familiar with how much of a debtor society the United States, the richest country in the world, has become. This has afflicted not only the lower classes but many of the middle class as well. Some sorry individuals do not realize that if they pay only the minimum on their credit card bills, for example, they will virtually never clear their balance.
But, of course, it is the poorest that are hardest hit. In fact, the system is stacked against them as the poorer an individual is, the worst his credit rating and the higher the interest rate he will be forced to pay. The plight of small-scale farmers forced to borrow due to dropping prices on their output has been well-documented. Many of them have pawned their precious belongings or lost their farms that have been in their families for generations simply due to interest payments that they could not keep up with.
On an international level, the situation is much more devastating and dangerous. There is no question that when looked at from an international perspective, interest kills people.
The debt servicing of lesser developed countries today is so great that they must sacrifice essential health and nutritional needs. It is dumbfounding to think that untold numbers of children are dying daily in lesser-developed countries due to the “tool” of modern capitalism: interest. Some African governments are forced to spend more on debt servicing than they spend on health or education.
In this context, the UNDP (1998) predicted that if the external debt of the 20 poorest countries of the world was written off, it could save the lives of 20 million people before the year 2000. In other words, it means that uncancelled debt was responsible for the deaths of 130,000 children a week up until the year 2000.
Global capitalism kills more people each year then were killed by Adolf Hitler. IMF and World Bank are to be blamed for deaths of millions due to their refusal to ease the debt burden. Every year since 1981 between 15 and 20 million people died unnecessarily due to debt burden because Third World governments have had to cut back on clean water and health programs to meet their repayments.
Debt, with its increasing amount of interest compounded upon it, is dangerous for any nation because it means loss of sovereignty and control. This aspect, incidentally, is no accident. Lesser developed countries especially their elites and corrupt rulers are not free of guilt when it comes to the issue of the debt that they have accumulated. At the same time, if they did not borrow and get in debt, pressure would definitely be put on them to do so.
The current debt situation, with the major role that interest is playing in it, is potentially very devastating for the world as a whole. In Global Trends 2015, the Central Intelligence Agency (CIA) recognized:
In reality, there are yet other ills related to interest that could be discussed but the above should suffice for the purposes here. As you can see that God has prohibited to use interest many thousand years ago because He knows what you and I can't know with our own intelligence. We need to understand that God knows what we don't and we need to accept that without compromising anything with the religion.
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