Usury in the Quran
In the Middle Ages, usury in Europe was not only a crime, it was unnatural, and Dante placed usurers in the same circle of Hell as the inhabitants of Sodom and other practitioners of what he and everyone else at the time considered an unnatural vice.
Whatever modern morals would make of Dante’s broader perspective, the fact is that fiat currencies collapse. The median life of a fiat currency is 37 years.
The US dollar has been fully fiat since 1971, which is when it lost any relationship with gold. This is now 44 years ago. But before we claim US exceptionalism over the physics of money, we should consider Voltaire who left no room for doubt: "Paper money eventually returns to its intrinsic value – zero."
The system we have at present combines fiat and usury, both historically regarded as evil. And it is the acceptance of such a system of economics that, in my opinion, is the primary root of most evil in the world.
I can count the prominent pubic representatives in English-speaking countries who robustly acknowledge this core problem on the fingers of one hand – and still have enough fingers left to hold my tea.
Andrew Jackson famously said, "If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."
The US was fully conquered by the banking establishment by means of the Federal Reserve Act of 1913.
Jackson would have turned in his grave.
The post-1913 US economic model is replicated almost everywhere today. Those few countries which held out have either recently been destroyed by NATO, are in the process of being destroyed by NATO, or will – one must assume – shortly be destroyed by NATO.
Not having a central bank seems to be the primary qualification for identification as a member of the ludicrously named Axis of Evil.
We – the Axis of Fluffy Goodness – have got things right. We create debt and spend it into existence and hand over our real goods and assets and labour – and pay interest for the privilege.
This is the system those we elect operate within. They take on huge debt while they are in government – which is exactly what the international banking establishment wants them to do – and put us on the hook for it, rather than solve the problem by issuing debt-free money and linking it to something real.
Thus, the consumer materialism you and I experience in our daily lives is not just something crass and tasteless that has come out of nowhere. It is implicit in the economic system in which we live and have our being because the junky needs his fix.
The problem is not that capitalism is broken. The problem is that we are trying to operate a system in which the money itself is both fiat and usurious.
It is the debt-based and usurious nature of our economics that tends towards the creation of the One Percent.
And it is the reason why rain forests are felled and cash crops sold rather than used to feed the people who need them.
The Qur’an is clear on usury: it is an unmitigated evil:
- Those who take usury suffer a form of demonic possession (2:176-281)
- Those who are warned to cease taking usury but do not desist are destined for Hell (2:176-281)
- Those who believe but continue in usury are warned of war from God and his messenger (2:176-281)
- Those who believe in God are to have nothing to do with usury (3:130-132)
- The Jews have been forbidden good things in part because of their use of usury (4:160-161)4:160161 4:160161
- Usury has no increase with God (30:39)
"Islamic Banking" Exposed
Let us imagine five cases in which a person borrows $10,000 over 10 years.
Case #1: A person borrows $10,000 over 10 years at a compound interest rate of 2.5%.
Case #2: A person borrows $10,000 over 10 years, and pays $7000 to have the right to borrow that sum, which he or she has to pay back over 10 years.
Case #3: A person borrows $10,000 over 10 years at a compound interest rate of 7.5%.
Case #4: A person borrows $10,000 over 10 years, and pays $11,000 to have the right to borrow that sum, which he or she has to pay back over 10 years.
Case #5: A person borrows $10,000 over 10 years at a compound interest rate of 25%.
Islamists claim that it is forbidden to borrow money paying an interest rate, no matter what the situation is, and claim that borrowing money in exchange of a fixed amount is authorized. One of the goals of the above examples is to prove that such a belief does not make any sense when you borrow money over a fixed period of time, because borrowing money in exchange of a fixed sum is always exactly the same as paying an interest rate, which can obviously be abusive in some cases. This is not a debate, this is a very simple mathematical fact, and the table above proves it in a simple way:
- In Case #2, a person borrowed $10,000 over 10 years, in exchange of a promise to repay the sum, plus a $7000 premium, which is exactly the same as paying a 5.5% interest rate.
- In Case #4, a person borrowed $10,000 over 10 years, in exchange of a promise to repay the sum, plus a $11,000 premium, which is about the same as paying a 7.7% interest rate.
Are you going to tell me that borrowing $10,000 over 10 years at a 2.5% interest rate like in case number one is forbidden (where the customer only pays $2,800.35 to borrow the sum = 2.5%), when borrowing the same sum paying $7,000 as a premium is authorized? (Case #2, which is equivalent as paying 5.5%)
For information, Case #2 is the same figure that was provided as an example in a CNN article in 2015 that was explaining how Sunnis are starting to implement real estate loans in the United States. In other words, such a loan was approved by the Sunni "religious authorities". The point being made here is that it is absolutely hypocritical to claim that borrowing a sum at a low interest rate over a fixed period of time is forbidden (Case #1), while paying more money for the same loan in exchange for a fixed sum can be acceptable.
Would you choose to repay a loan that is costing you $7,000 to borrow the money over 10 years (Case #2, which is equivalent as paying 5.5%) because you have been told that it is religiously acceptable, and turn down the same loan at a 2.5% interest rate (which will only cost you $2,800.35) because you blindly think that borrowing money at an interest rate is forbidden?
Anyone who would choose paying more money (Case #2) simply because he or she does not want to hear the word interest rate is either stupid or brainwashed, and should stop reading the rest of the article, because such a person will refuse to use reason, a blessing that God has endowed us with. If someone asked you if you prefer to jump off a wall that is 9 feet high or 32 feet high, what will you answer? That same type of question is being asked here.
A note should be made that the Quran, which spells out religious laws for believers, removes the shackles and burdens imposed on us by the ignorant scholars and religious leaders. Most of the "Muslim" countries have various laws against interest and have sham "interest-free banking" reflecting their ignorance of this simple Quranic truth. Unfortunately, quite a few of those who call themselves Muslims fall victims to the falsehood spread by these religious leaders.
There is no mention or prohibition with regards to giving usury. The prohibition is firmly with receiving usury. Those that give usury, are seen as victims in the Quran. The responsibility solely lies with the creditor to make sure his terms are within the Quranic directive and do not involve usury.
However, this does not mean that there are no responsibilities for the borrower. It is tacitly recognized that a debtor may be constrained by circumstances and be unable to acquire the best deal for a number of reasons and hence be forced to give usury. In such cases, the debtors may simply be at the mercy of the creditors and their own circumstances. Hence the responsibility lies primarily with the creditor. However, this should not mean that one should not avoid contracting debts which are deemed unnecessary. All debts which involve usury should be curtailed to the best of one's ability and circumstances.
For example, a loan on a brand new car is rather different from acquiring a loan to purchase a primary property to provide necessary shelter for one's family. This with the sole intention to pay the funds back as soon as possible where the cost of borrowing is far less than the cost of renting.
Much in the same way, purchasing properties for business gains (and not for personal use) by giving high interests (riba) with a view to make quick lucrative gains seems to be in violation of the spirit of the Quranic narratives.