The Lure of Easy Money: Islamic Finance within the Age of Capitalism
Money. Money makes the world cross spherical, or, well, any path you need if you own it. So, with regards to easy money, boy, it makes the sector move haywire! Easy money – this is earned without the sweat and toil, commonly required for incomes a livelihood. Who would not, as a minimum, be tempted by it? Society and its priorities exchange with the seconds of the trade-in time. Whereas morality and integrity had been of maximum importance at a time in an obscure past, today’s concern is collecting thousands of wealth. One can also question, why not? If, having more significant zeros after a parent to your financial institution declaration, simply, the method having an extra impact and a vaster dominion over the world, then why are you playing the guilty moral sense card on us?
Well, but, I say, wasn’t it us, inside the first region, to shape an immediate share among wealth and impact the world? You, critically, can’t inform me that that is the way it has been on account that time immemorial! About time we embarked on a few insightful adventures, wouldn’t you assert? If money becomes virtually directly proportional to persuade, then the second caliph of Islam’s exemplary case, Umar ibn al-Khattab r. A., as an instance, would be a systematic anomaly!
It became in 637 AD that once an extended siege of Jerusalem; the Muslims sooner or later took the town. While Heraclius, the Byzantine Emperor, had fled, Sophronius, the Greek Orthodox patriarch, surrendered the city at the circumstance that nobody was to be harmed. The phrases have been observed, and the patriarch gave the town key to Umar ibn al-Khattab r.A. Umar r. A. Entered Jerusalem, to sign the peace treaty, with humbleness, walking in via foot along his servant who was without difficulty being conveyed by way of a camel. Umar r. A. And the servant had been traveling through the foot and at the camel in turns (Muir: 135).
When Sophronius met the Ameer-ul-Mo’mineen, Umar r.A., one of the maximum influential guys in the history of Islam and the world’s relaxation, he turned into dressing in his travel-stained struggle tunic, even as Sophronius changed into attired in sumptuous gowns. Sophronius changed into very amazed to locate the Muslim global Commander wearing something but royal garments or even questioned Umar r.A. Approximately the simplicity of his clothing, to which he replied that Allah SWT does not “demand extravagance.”
The Patriarch then defined that he did no longer put on all the regalia to decorate himself however to ‘test the confusion and anarchy within the world’ and he was “God’s office”. In other words, for the sake of appearances, he had to portray in his dressing that he became a representative of God. Indeed, the concept of impressions that have confused us as to what impacts is in actuality. Consequently, that confusion led to forgetting the reason at the back of the creation of lofty appearances earlier in time, although it turned into a result of incorrect wondering.
Sam Polk, a former hedge-fund dealer and founding father of a non-profit enterprise, Groceryships, brilliantly scrutinized the truth of the addictive rat race of accumulating money in a New York Times article pronouncing that the money-spawning Wall Street, in reality, is “a poisonous way of life that encourages the grandiosity of people who are desperately seeking to experience powerful.”
Thus, these days, the focal point of our society has been reduced merely to the aim of generating easy money. Money that is quickly earned does no longer fear approximately the direction or manner selected for reaping it. Every expert field has enough of evidence in this regard, in reality, every professional discipline has grown to be an instance of this problem.
Whether it is a physician prescribing extra medicines or recommending needless laboratory tests to earn a greater fee; or a judge ‘solving’ a case with a politically influential defendant in return for a nomination to be elected to the District Court; or maybe a trainer passing a failing student, who is going to his/her residence for personal tuitions; or the role of media in selectively portraying jigsaws of a scenario that misrepresents the complete picture of reality to thrill governments and ruling powers of the sector; the evil of easy cash tempts and ensnares us with its shiny traps in every sphere and each nook and corner of our lives. Deep down, anyone knows between right and wrong. All of us feel a pang of guilt while we are approximate to board the bus leading to bribery, dishonesty, greed, et cetera. The effects of friction among our conscience and our desire are terser, to begin with. However, with time and continuity, the conflict smoothens out and selecting a wrong; however, an easier path to our dreams would not seem to disconcert us.
In fact, calculated steps are taken by big companies and governments to erase the divide among what’s the right or wrong approach and/or method of earning an honest livelihood, because of it, in the end, way enlargement and prosperity for them in this chain response. So is the case with Islamic finance and the concept of Sukuk – Sharee’ah bonds. A traditional bond is a certificate which, as consistent with the terms set, while once offered from the provider, requires the provider to pay the holder of the bond the face price in addition to the agreed amount of interest whilst it reaches maturity or to produce different benefits, including prizes given by way of drawing lots, or payment of a hard and fast quantity, or any rebate. It is an asset-primarily based fundin. The holder of the bond, strictly, no longer has ownership of any tangible assets associated with the funding they made, storing the certificate.
According to the Islamic Fiqh Council, having any form of handling bonds of the above-said phrases is haraam (forbidden) regardless of whom it’s far issued using and regardless of what name it’s miles given as a hide, in line with the Shari’ah (Islamic regulation), because they are riba-based loans, and riba (hobby) is haraam in Islam. The purpose why Islam strictly forbids dealing in the pursuit in any association is because it’s far deemed exploitation. In Islam, if someone contributes towards any commercial enterprise’s capital, they have to be entitled to ownership of the related property and an identical bearer of the profits and lack of the stuff they’re backing.
There were Muslims, who, no matter understanding that interest is forbidden in Islam, have voluntarily dealt in it due to the lure of easy cash. However, a fantastic range of Muslims has consciously averted took place in this direction, adhering strictly to their nonsecular doctrines. This, indeed, was a significant loss for banks and businesses that have been interest-orientated. Therefore, to encompass that huge segment of the Muslim population that prevented dealing in interest-primarily based cash, the big fish within the world of finance, came up with the concept of “Islamicizing” banks and other concomitant groups, and as a result, bonds, too.
What started with a façade of an honest try at developing Islamic bankbecamech become a massive achievemy of the Muslim hds, very quickly overtly degenerated into the capitalist pothole. The most compelling difference that remains nowadays betwixt commonplace banks and Islamic banks is the inclusion and/or exclusion of the time period Islamic. The products provide at Islamic banks are the same that are presented through a conventional bank, barring the distinction in English and Arabic terminology.
Semantics does now not clearly qualify as a stamp of nonsecular approval and, frankly, accounts for nothing. A spade is a spade regardless of what shade it comes in. The reality is that 97% of the sector’s money is intangible, created no longer using the governments but using banks whilst loans are made. That cash is only seen in our financial institution statements. Therefore, if banks were developing Islamic finance merchandise, it manifestly became not going to be based on tangible cash because it best existed in digital form.