Usury and Interest: A Comparative Economic Study (book): Difference between revisions

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 At the conclusion of this chapter, the author presents several common criticisms to all theories. He indicates that in Islam, if capital takes the form of either goods or cash, it is permissible to set a portion of the profit in exchange; however, it is not permissible to assign a benefit to it. Thus, the theories mentioned are closely aligned with Islamic teachings as they establish a return and profit for capital. Moreover, these theories can be employed to challenge collective theories that deny any form of profit from capital (p. 75).
 Following these criticisms in the final section of his article, Al-Masry outlines six points. He notes that in Islam, both work and capital can provide adequate returns, and the reasoning behind the restriction of certain benefits for capital is to promote risk-taking among individuals, ensuring that risk is not solely associated with labor. He urges Muslims to steer clear of being trapped by socialist and capitalist perspectives and to preserve their intellectual freedom. (p. 81)
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+===The critique of the perspective of Rafiq Yunus Al-Masri by Muhammad Riyaz Abrash===
+As an economist, Mohammad Riyaz Al-Abrash offers a detailed critique of Rafiq Yunus Al-Masri's viewpoints, presenting his own arguments in 22 distinct points that refute Al-Masri's theoretical framework (pp. 89 to 148). He believes that:
+Islamic thought has a traditional and broad-scope origin which often results in continuous proponents and opponents. In contrast, Western thought, unlike the monotheistic and dualistic religious ideologies such as Islam, Christianity, Judaism, and Buddhism, is consistently based on empirical experience. It is the latest human culture and civilization from ancient Greece to the present (neoliberalism) and may soon emerge as the dominant global culture. The differences between Islamic and Western thought reflect the same historical contrasts between Arab and Persian (Iranian) cultures. In general, there is a notable divergence and distinction between Islamic and Western civilizations. (pp. 91-93) The core issue is not merely the adaptation of Islam to economics, but rather an analysis of the Western viewpoint and an explanation of the nature and differences between usury and the current concept of interest (p. 96).
+Abrash asserts that, as acknowledged by Al-Masri, the majority of Islamic jurists, if not all jurists opposing usury, base their arguments on the distinction between interest and usury. However, these jurists lack familiarity with modern economic concepts and should not extend Quranic texts and prophetic traditions, such as the prohibition of usury, from their historical context to the present day, which involves a complex market environment unlike the simple markets of seventh-century Medina and Mecca. Furthermore, there exists a divergence among scholars, and their jurisprudential opinions are often speculative and uncertain, particularly in specialized economic matters (p. 98).
+According to Abrash, although economics and Islam are often viewed as distinct areas, there is room for their interaction and the absence of conflict. This is illustrated by the recognition of the difference between usury and interest (p. 110). The prohibition of usury is only applicable in cases where there is explicit textual support, with the general principle being one of permissibility. The ban on usury is relevant only in contexts where a clear and unequivocal analogy can be established, and it is restricted to specific transactions that pertain to the particular period of the verse's revelation (p. 102).
+==The second section of the book: Usury and Interest in Western Thought and Islam==
+The second section of the book, following the style of the "Dialogues for the New Century" series, features an independent article by Muhammad Riyaz Al-Abrash. This article examines the topics of interest and usury within the context of modern Western economics, followed by a critique and analysis of the article by Rafiq Yunus Masri.
+===The transition from usury to interest in Western thought===
+The dichotomy between Western and Islamic thought illustrates two fundamentally different intellectual traditions that seldom interact meaningfully, except by coincidence and without deliberate intent. Western thought, characterized by a long history and evolution, has a realistic and pragmatic approach, relying exclusively on established truths and thereby avoiding doubt and uncertainty. Conversely, Islamic thought is a universal and transcendent framework that transcends temporal and spatial boundaries, rendering theoretical speculation impractical (p. 151). While religion plays a minor and restricted role in Western thought, it occupies a paramount position in Islamic thought, where it is perpetually subject to interpretation and explanation (p. 155).
+By comparing Western and Islamic thought, Mohammad Abrash discusses the historical context of usury in Western philosophy, tracing its origins from ancient Greece (such as Plato), through the Roman Empire, the Middle Ages, and into the Enlightenment. He argues that following the Renaissance and the emergence of new economic ideas, the traditional concept of usury, which was associated with consumer loans, evolved into the modern understanding of interest on money and capital. He posits that capital, much like land, serves as a source of profit and is subject to interest and income; the interest on capital is analogous to land rent (ri' al-ard) (pp. 155-158). He considers the concept of land rent to be broader than that of interest (al-fā'idah) and provides three interpretations of ri' (p. 159).
+===New insights into the interest rates in modern economy===
+Like Rafiq Yunus, Mohammad Abrash addresses modern perspectives on usury and interest, articulating and examining nine different theories:
+.	The theory of time preference: The monetary value over time and the distinction between present and future costs (p. 64).
+.	The theory of consumption deferral or sacrifice and waiting: addressing the depreciation of consumer goods (p. 162).
+.	The capital productivity theory: profit as an inherent result of capital (p. 163).
+.	The Marxist theory: a critique of the capitalist system and the inclusion of interest in cost calculations (p. 164).
+.	The liquidity preference theory: the time value of Liquidity (p. 165).
+.	The theory of available lending balances: considerations of existing loan availability against demand levels and interest rate determination (p. 166).
+.	The theory of accumulated labor: wealth as accumulated work or indirect activity (p. 167).
+.	Risk Theory: Coverage for the risk of defaulting on debt (p. 169).
+.	Theory of Use or Leasing: using or leasing funds (p. 171).
+After introducing these innovative theories, the author of the article begins by discussing the various types of inflation and their relationship with interest. He then revisits the fundamental differences between Islamic and Western thought from a different perspective, thereby providing an additional rationale to the previously stated nine theories, which posit that interest, understood as profit, is crucial for the survival and economic framework of the present age. Abrash notes a distinct difference between the time of Islam's birth and the modern world, which is partly evident in the contrast between the primitive pastoral economy of that period and the liberal economy of today. Consequently, he argues that the solutions offered by that earlier economy do not address the problems of the modern era. The author asserts that profit is an unavoidable element within any economic system (pp. 175-180).
+===The critique of the perspective of Muhammad Riyaz Abrash by Rafiq Yunus Al-Masri===
+The concluding section of the book features a brief critique by Rafiq Yunus (the author of the first article) regarding the perspective of Mohammad Abrash (the author of the second article). Rafiq Yunus challenges Abrash's perspective on the relationship between Western and Islamic thought, asserting that, contrary to Abrash's claims, these two schools of thought have interacted and that the West has benefited from Islamic intellectual traditions. Additionally, the analysis of Islamic and Western economies reveals several advantageous insights, including an understanding of how Western economic practices have been informed by Islamic teachings and scholars, an exploration of the differences and unique characteristics of the two economic philosophies, and a dedicated effort towards the establishment of an Islamic economic framework (pp. 186-187).
+He refutes the distinction between interest and usury from the perspective of Mohammad Abrash, referencing the explanations provided in his article and highlighting the fixed principles and variable rulings in Islam (p. 188). He also stresses that although Islamic scholars are not infallible prophets, they have the responsibility to interpret what is right and just to the best of their scholarly and human capacities, while being mindful of the objectives of Sharia (p. 189). In contrast to the accusations against them, he contends that they know economy, asserting that Islamic economics is not solely focused on charity or the afterlife; rather, it possesses the capability to manage the affairs of the nation and its Muslim citizens in contemporary times, whereas capitalism tends to leave no space for generosity and altruism (p. 190).
+[[fa:الربا و الفائدة: دراسة اقتصادیة مقارنة (کتاب)]]
+[[category: book review]]