if islam forbids interest, how do muslim countries make money? how do their banks work?
if islam forbids interest, how do muslim countries make money? how do their banks work?
if islam forbids interest, how do muslim countries make money? how do their banks work?
they ignore it
Most central banks and commercial banks don't care and just put interest anyway. There are some "Islamic Banks" in my country that allegedly work on "Islamic Principles" but I have zero idea how they work.
don't most islamic banks just use usuary with extra steps aka you agree to lend money for a certain time and pay a certain cost for it, same if you had borrowed it a certain time with a certain interest
They don’t.
>if islam forbids interest, how do muslim countries make money? how do their banks work?
That only applies if you are a Muslim lending money to another Muslim.
Such a rule doesn't apply when lending to non-Muslims.
On a similar topic, why is ursury no longer seen as bad in christian countrie? Modern capitalism?
what "christian countries"? all western nations are secular.
There was a series of debates in the 1500s on that very topic
Usury is like a game breaking glitch. Anyone who doesn't do it is willingly handicapping themselves.
That's why it has to be prohibited. Money lending harms everyone, but more those who do not participate.
Because the loan doesn't change how many tractors get produced, the farmer only was given a tractor that he couldn't afford. When you keep giving loans for tractors, you only drive the prices high, you won't produce more tractors. Even if it makes company more tractors, something else will be made less of.
Yes, that's how banks call it when they go broke.
>Because the loan doesn't change how many tractors get produced, the farmer only was given a tractor that he couldn't afford. When you keep giving loans for tractors, you only drive the prices high, you won't produce more tractors. Even if it makes company more tractors, something else will be made less of.
Indeed economic growth is just a lie made up by neoliberals
It appears so.
Then the people, the factory, and the steel and so on would be used to make something else that somebody would buy. Loans never create anytjing of value, it's a sort of reverse whack a mole. What you add in one place gets lost somewhere else.
>Then the people, the factory, and the steel and so on would be used to make something else that somebody would buy. Loans never create anytjing of value, it's a sort of reverse whack a mole. What you add in one place gets lost somewhere else.
Let's discuss this last point a bit further, "gets lost somewhere else". It's true that only so much capital and labour exists. What is not true is that the investment of these resources is equal, as seems to be implied. Let's look at a scenario:
100% of resources are invested in the horse industry
Someone has an idea for something called a "car" and is loaned 5% to develop their idea
The horse industry now only has 95%, but obviously that 5% loan is going to increase general wealth. It has not been lost, it has been reallocated.
This is not a zero sum game.
And how do you know someone with the money else would actually buy the tractor? is it better if someone in need of a tractor rents it from whoever has money to lease it out?
They just change the definition of what usury is. Usury used to be any interest at all, but now people say it means excessive interest, which is of course just a cop-out.
they took the money to fund other economical project like opening shops funding factories etc.
it's not like your regular bank use usury as the only source of income anyway.
In practice they just charge service fees or accept religious "donations" from the lender. This might seem like just a semantic difference but the theory is different. A fee is charged for a service, a tangible action. Interest is money created from money, there's no human interaction involved which is why it's controversial.
>I will charge you $500 a month on this loan as interest
This is terrible, ban interest
>I will charge you $500 a month on this loan as a service fee, but provide identical service
Much better
The way Muslims describe it is the most "pilpul" shit I've ever seen, but it's basically just interest - usually fixed rate - with a few extra steps: https://ir.lawnet.fordham.edu/cgi/viewcontent.cgi?referer=&httpsredir=1&article=1915&context=ilj
These guys are right on the money:
This guy
is lying through his teeth. Islamic loans and financing are all about profit, unless those "fake Islamic banks" are 99.9% of Islamic banks.
The problem woth usury isn't religious, nor the interest. The problem with usury is that loans don't create what is bought for the money, you arbitrarily increase one person's resources at the expense of somebody else. It buys something that somebody else won't be able to afford, even if they could afford it if the loan wasn't given. As the result, the effect of money lending on the overal wealth is negative, as the resources get misallocated.
>As the result, the effect of money lending on the overal wealth is negative, as the resources get misallocated
A farmer wants to buy a tractor to harvest more crops, but he can't afford one
A bank gives him the money to buy a tractor
The farmer produces more crops and the bank gets a return for helping him
Overall wealth is increased
Yes, but you need to look at the economy at the biggest scale. The loan didn't produce the tractor. Somebody else would buy the tractor, who now can't afford it. Or some other machinery would get produced, which is now missing.
On the macroeconomic scale, loans produce nothing. They only disrupt the economy.
>Somebody else would buy the tractor, who now can't afford it. Or some other machinery would get produced, which is now missing.
I'm not sure I understand this part, why is another party prevented from buying comparable goods?
>On the macroeconomic scale, loans produce nothing. They only disrupt the economy
Well, think of it this way. A parent buys food, education, and shelter for their child. The child would not be able to afford these things on their own, but funds from the parent enables their development. In this case we will say the parent didn't "produce" any of those products or services. Why does that disrupt the economy? Should we only be allowed to use products we directly produce?
Do you have any idea what a liquidity crisis is?
They do use interest, they just redefine it (like israelites do) and pretend it doesn't count.
Islam created Interest in USD for its Banks.
In most countries, you buy the house with the money the bank loans you and then pay off the loan with the house as collateral. Halal lending is functionally no different, but the bank is considered to own the house, and you’re seen as partaking in a ‘rent-to-own’ sort of thing. So it’s technically not usury but functionally there’s no real difference, Muslims will never admit it but on some level they realized that advanced societies can’t function without some amount of usury.
Ironically the only possobpe way to do away with interest is socialism so it's the atheist socialist coies who are closer to getting rid of it than anyone
They charge a fee that by pure coincidence is exactly what the total interest would be. But because they call it a fee its not interest and therefore not usury. Banks in medieval Europe operated exactly the same way.
bump
Jerry, thats not interest that is stock market
They have interests in their central banks, lol, it is ok because al lreligious people are hypocrites when their religion do not conform them.
Remember when it is only legal to have 4 wives but ISIS niggas had like tens of sex slaves? Remember when it is haram to trade with mushriqin and munafiqun but ISIS actively traded oil with Assad Regime?
I can't understand this question. It makes no sense. Do you think usury is the only way to make money or something? I've made plenty of money and I've never even given a loan to anyone.
The system you made money in, its' currency, uses interest.
Therefore by using the currency, you have participated in interest rates without acknowledging so. As long as your money stays in a bank and is not in gold/silver form of course.
Or, unless you are in some country with no central banking system such as North Korea or Syria.
I honestly think cryptocurrency is the future of Islamic currency. We should have never accepted western fiat
they give you an indirect fee and say its totally different
>What is meant is that Islamic loans are based on trust and kinship instead of the possibility of profit
if I get a loan from a bank, they will limit me to an amount I can reasonably pay back
the bank itself will also have a range of useful options and services
if I'm unable to pay back the loan, at worst I declare bankruptcy and I don't harm my friends and family
regulated and impersonal
the idea of getting a loan from a friend or relative instead of a business sounds very dangerous financially and emotionally, a veritable well of potential misery
I know how atomized you people are, but imagine trusting the israelite and central bank before your cousin or family. This can only be conceived as stockholm syndrome
There's a difference between "I trust my cousin is a good person" and "I trust we have the necessary knowledge and calculations to determine suitable loan sizes, terms, and repayments"
We have a saying over here, and we arent westerners.
"Never loan from friends or family".
It tends to turn into a clusterfuck, in the case of large sums.
>very dangerous financially and emotionally
What is the function of family if not the help each other out, without regard for profit? Is this why the West kill babies in the womb? Because they get no profit off of it? We Muslims are closer, in custom, to your ancestors
if the goal is to help the family then why not expose others to risk instead of your own family?
The real reason its shit is that islamic countries with strong clan systems like Somalia are shitholes whose educated individuals massmigrate then sit here and post about how great their native religion and culture are
How many does actually practice this?
>How many does actually practice this?
On the level of government, only the Islamic Emirate of Afghanistan. On the level of family, millions including my own. If the government isn't doing their Islamic duty, then the individual and their families will do their part
They call interest "equity" and steal half of your company instead.
i don't know about today, but iirc historically people would take out loans from rich merchants in exchange for paying higher prices for their goods in the future, which is effectively the same thing as interest, but technically legal
>Islam
>Humanity-centric
Lmao, Islam is just legalism and oppression, they literally call themselves slaves of Allah.
Not to actually answer the question but the bank buys the item for you and then you agree to pay them back plus int- SORRY, plus a service fee. So if a house is $300k, they buy it for $300k and then sell it to you for $400k, and you pay them back over a 30 year period.