On 10/15/01 6:46 AM, "Robert J. Bradbury" <firstname.lastname@example.org> wrote:
> If accurate, this is significant! If Islam really prohibits banks
> (or individuals) from charging interest then I have a big question
> whether a successful capitalist economy could ever develop. Even
> if you had "title" to your home, banks could not loan you money
> to develop a business because they do not make anything on the loan.
I once got into an argument with some religious people about the very same
thing. I didn't realize it was a common idea. It wasn't a very fruitful
argument, as they didn't believe the Myth of the Zero Cost Transaction was
relevant in a religious context. When pushed, it essentially boiled down to
a "god will provide" argument. They've resigned themselves to never being
wealthy and they don't even realize it.
> One would have to develop a totally different model of development
> where one avoided the concept of "interest". The only things that
> I can think of would be something like a credit union or a co-op
> where everyone participating would pay in a certain monthly amount
> and have access to a certain amount of capital.
IIRC, when similar religious laws were tried in parts of Europe at various
points in time, I believe the business community created fee structures for
the various services associated with the interest free loan so that profit
could be made. No loan was given that didnšt include a (highly over-priced)
service contract of some type. At least in Europe, as I understand it, they
were able to work around the religious laws by contriving services that
required fees, which was considered acceptable by the church. The islamic
world may have a stricter implementation that does not look favorably on
cost recovery through contrived contracts, making violations of the law in
spirit more difficult.
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