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exluding countless favorable opinions

Reader comment on item: Islamic Economics: What Does It Mean?

Submitted by Daniel Hummel (Indonesia), Sep 26, 2007 at 21:20

... Quoting Timur Kuran, a noted critic of the Islamic economic framework exludes the countless favorable opinions of the system from Western scholars and given the fact that the UK has now centered the Islamic Banking and Financial services ring of Europe in London it only goes to show that this critique is falling far behind the growing tide.

To say there is no Economic system in Islam neglects the references in the Qur'an to riba or usury and the countless references in the Hadith not only about riba but also about business ethics, employment, wages, contracts, etc. Although some of these concepts coincide with Western philosophy, for instance, see Shareholder Theory or see the growing tide of Corporate Social Responsibility, not all of it is included in the Western ethic. It might also be noted that riba was also addressed in the bible and became a chief focus of Christian scholars when it was forbidden in financial transactions through most of the Medieval period with it being of such debate that during the Protestant Reformation, various figures addressed it such as Calvin in England. The base exists in the Quran and Hadith and the methodology is slowly being perfected in the Modern Islamic Economy. The Modern Islamic system is unique to the 20th/21st century, but not because it was an invented concept, but because a lot has changed since the days of Arab traders though the principle remains the same....

Where countries are making larger interest payments than their GDP one has to wonder the justice in it. It is also a noted fact that companies make employment decisions based on the rate of interest. Also the determining of the rate of interest is based on speculation and complex formulas meant to minimalize risk to the bank, but in turn just fattens the pockets of the lenders. Islamic banking is about real time value assessment and links every investment to an actual value in production not money only thus fueling job growth and gradual poverty alleviation, although it would be an inflated claim to say that it alone alleviates poverty.

Zakat itself does not alleviate poverty and if there is any corruption in its management it is not the fault of the system but the fault of the handlers. Poverty will always exist, but how much and how poor is something that Islam seeks to remedy. ...

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