Seyed Abbas Mousavian: Difference between revisions

Islam-centered method uses all Islamic sources instead of being content with Fiqh alone; the Islamic sources includ moral judgments, jurisprudence, divine traditions, and the objectives and principles of Islam. Ghafouri and Mirmoezzi, researchers in Islamic jurisprudence, state that a study of Mousavian’s works shows that he considered ethical principles or divine traditions in constructing an economic system. They cited the article “Religion and Economics” and the article “Introduction the Islamic Economic System” for this calim.<ref>Mirmoezzi and Ghafouri, “The Development of Professor Mousavian’s Scientific Method from the Jurisprudence-Centered Method to the Islam-Centered Method,” p. 58.</ref>

According to these researchers, in this method Mousavian, as in the jurisprudence-centered method, proceeded through two stages in economics: Islamization and Islamic establishment. Islamization means examining and reconstructing the conventional economic model on the basis of all Islamic data, including ethical rulings, jurisprudence, divine traditions, and the objectives and principles of Islam. The Islamic establishment method likewise means presenting a new economic model based on these criteria.<ref>Mirmoezzi and Ghafouri, “The Development of Professor Mousavian’s Scientific Method from the Jurisprudence-Centered Method to the Islam-Centered Method,” p. 59.</ref>

The superiority of the Islam-centered method over the jurisprudence-centered method lies in the fact that jurisprudence does not encompass all Islamic teachings in every respect, because jurisprudential knowledge does not necessarily correspond to the Preserved Tablet and is a conjectural and ijtihadi process. Accordingly, a model concerning financial institutions and instruments may not conflict with jurisprudence but may nevertheless contradict the principal foundations of the Sharia, such as justice, security, and freedom.<ref>Mirmoezzi and Ghafouri, “The Development of Professor Mousavian’s Scientific Method from the Jurisprudence-Centered Method to the Islam-Centered Method,” p. 63.</ref>

=== '''No Distinction between Bank Interest and Usury''' ===

By equating [[bank interest]] with usury, Mousavian regarded views distinguishing between the two as incorrect and invalid.<ref>Mousavian and Meysami, “A Critique and Examination of New Views concerning Usury and Bank Interest,” p. 7.</ref> Mousavian refers to several such views:

# Usury as an economic necessity of the present age: According to this theory, bank interest or usury is necessary for economic development in the present age and plays an effective role; pursuant to the maxim “necessities permit prohibitions” (al-darurat tubih al-mahzurat), rulings are relaxed in circumstances of harm.<ref>Mousavian, Financial Instruments, pp. 162-163.</ref>

# Restricting usury to interest charged by private banks: On this basis, bank interest constitutes usury and is prohibited only when it relates to private banks, not state-owned banks, because state-owned banks are not exploitative institutions and have not been established to generate profits. Abbas Mousavian attributes this theory to [[Mohammad Hadi Marefat]].<ref>Mousavian, Financial Instruments, p. 160.</ref>

# Restricting usury to an increase charged for extending the term: According to this view, prohibited usury is money paid to a lender in return for extending the repayment period of a loan. Mohammad Rashid Rida expressed this view in “Tafsir al-Manar” under Verse 130 of Sura Al Imran and in the “book al-Riba wa-l-Mu‘amalat fi al-Islam.” Interest charged in modern banking does not possess this characteristic.<ref>Mousavian, Financial Instruments, pp. 150-164.</ref>

In rejecting these theories, Mousavian maintains that engagement in genuine transactions must be regarded as the principal means of earning profit and that new transactions arising from the expansion of the banking system must be carefully examined to ensure that they are free of every form of loan-based and transactional usury.<ref>Mousavian, Financial Instruments, pp. 150-164.</ref>

=== '''Distinguishing Permissible and Impermissible Stratagems for Circumventing Usury''' ===

Mousavian divided stratagems for circumventing usury into permissible and impermissible stratagems. According to him, the criterion for impermissible stratagems is the absence of a genuine intention to undertake the alternative transaction or the applicability of usury to the stratagem despite the existence of a genuine intention. He maintained that this distinction depends largely on the parties’ intentions. In contrast, he classified spot and deferred sales, as well as the leasing of fixed assets, among permissible stratagems. He maintained that, in many transactions, because of the prohibition of usury, the parties genuinely intend to enter into permissible transactions.<ref>Mousavian, Financial Instruments, pp. 164-187.</ref>

Abbas Mousavian accepted several financial instruments, such as [[qard al-hasan securities]],<ref>Mousavian, Islamic Financial Instruments, pp. 347-354.</ref> [[murabaha securities]] (in some of their forms),<ref>Mousavian, Islamic Financial Instruments, pp. 359-361.</ref> and lease securities<ref>Mousavian, Islamic Financial Instruments, pp. 372-374.</ref> as Islamic financial instruments. He regarded these securities as appropriate alternatives to [[bonds]] and [[preferred shares]]—which are generally based on interest.<ref>Mousavian, Islamic Financial Instruments, p. 345.</ref>

Abbas Mousavian divides bonds into four categories (interest-bearing bonds, income bonds, prize bonds, and discount bonds). For each category, he reports and critiques the jurisprudential opinions of jurists and marjas, with most of the discussion concerning loans, usury, and the foundations of their prohibition.<ref>Mousavian, Islamic Capital Market, pp. 364-370.</ref> According to Mousavian, none of the justifications for considering various types of bonds permissible possesses a jurisprudential foundation; according to the definition of usury, every loan in which an increase is stipulated and the borrower undertakes to pay that increase constitutes usury and is prohibited.<ref>Mousavian, Islamic Capital Market, pp. 366-370.</ref>

According to Mousavian, murabaha is a type of sale (purchase and sale) that, when structured as securities, represents the owner’s debt to the holder of the security.<ref>Mousavian, Islamic Financial Instruments (Sukuk), p. 355.</ref> Mousavian regards murabaha as legitimate in Imami jurisprudence and based on a narration from the sixth Imam of the Shia.<ref>Mousavian, “The Application of Murabaha in Interest-Free Banking,” p. 38; Kulayni, al-Kafi, 1407 AH, vol. 5, p. 201.</ref> According to Mousavian, trading murabaha securities includes transactions other than the murabaha sale; after examination, it appears that Shia jurists have regarded the purchase and sale of these securities as valid under certain assumptions.<ref>Mousavian, Islamic Financial Instruments (Sukuk), pp. 359-360.</ref>

According to Mousavian, shares are a new phenomenon with no precedent in jurisprudential texts and constitute one of the newly arising issues.<ref>Mousavian, Islamic Capital Market, pp. 387-399.</ref> Mousavian maintains that, provided the activities of public joint-stock companies concern legitimate subjects and are conducted in accordance with religious standards, the establishment of such companies and their operation within the framework of specific laws and regulations present no jurisprudential problem.<ref>Mousavian, Islamic Capital Market, p. 399.</ref>

Seyed Abbas Mousavian maintains that certain preferred shares present no jurisprudential problem, while others are prohibited. He regards “non-cumulative fixed-dividend preferred shares” and “non-cumulative participating preferred shares” as permissible, while considering “cumulative fixed-dividend preferred shares,” “cumulative participating preferred shares,” and “floating-rate preferred shares” to be instances of impermissible stratagems and usury.<ref>Mousavian, Islamic Capital Market, p. 415.</ref>

Summaries of several books by Seyed Abbas Mousavian have been written in the [[Encyclopedia of Contemporary Jurisprudence]]: