BaKhabar, Vol 5, Issue 4, April 2012
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Capitalistic world order has incentive to ignore the backward sections of society

... by Shakeel Ahmad <shakeeluae@gmail.com>

Adam works in his two acre farm the whole day, from dawn to dusk literally, without caring much for his leisure, food, or health. His wife takes good care of the household and the two children, sends both to school ready with their lunch-boxes, water bottle, and the increasingly-getting-heavier school-bags. The next thing she would do is to cook the breakfast for Adam, and deliver it to him in his farms. From dawn to dusk, she is also engaged in the daily chores without much of a change, except when she goes to her parental village for a few days when the children have their school closed for some vacation. Her effort is not even valued for adding to the GDP numbers or the national income. She may ask why? That may be left for the country’s economists to answer. But, Adam and his wife’s efforts can most likely help them survive, unless some natural calamity destroys the crops; and this is not as uncommon as we believe – hailstorms, floods, and drought – the calamities strike in many ways. All of Adam’s thinking faculties have to be concentrated on earning, none on spending. Spending comes as naturally as the calamities, and he has to use his earnings to meet the demands of these notices of spending, like the EMI (Equated Monthly Installment of bank-loan), school fees, shopping for daily needs, for the medicines, ever-rising electricity bills, and so on … While festivals are supposed to bring joy to us, Adam gets frightened at the thought of an impending festival when he has to manage more cash to make his wife, children, and parents happy.

Farm Worker

Kamal does not need to work at all. His efforts are focused on enjoying his time as much as possible in as many different ways as conceivable. He needs to apply his thinking faculties to find out innovative means to spend his money for quenching his thirst for more and more amusements. He has to continuously think of something different every week because the same avenues of enjoyment do not bring delight for long, and he gets bored. He does not need to use his intellectual abilities to think about how to earn, because his income is guaranteed almost forever, at least he feels that way. His ancestral wealth lying idle in his bank account in the form of paper money earns for him interest which is more than enough for his needs, and it goes on accumulating more and more because the interest money he is not able to use gets him more interest every consecutive month. No tax needs to be effectively paid by him because of the tax-saving mechanisms cleverly built in by his wealth management consultant gifted to him by his late father.
The equation gets perfectly balanced with some people like Adam who must continue to work and others like Kamal who must continue to spend. Is this balance perfect?
Money makes more money; and only money can make more money – if we could understand capitalism in as simple terms as this; we may be accused of being too simplistic; but are we really far from the truth? Although humans have also been proposed as an important component of the “capital”, have you ever seen human capital included in the balance sheets of companies? While Return of Investment (ROI) carries the maximum value as parameter of success, as if investments alone bring “returns” and the humans play no role, even a later variant - ROA (return on assets) – which considers all assets as the source of success does not consider humans as a component of “Assets” in the balance sheets. Is it due to ignorance, 
that is, lack of knowledge in the field of valuing the human assets? It is not, because many models of valuing the human assets are available. Is it harmful to the balance sheet in any way? Hardly! On the contrary, it is beneficial; it raises the networth of the company. Further, no depreciation occurs to this asset; instead, it appreciates every year with added knowledge, skills, and expertise. If “goodwill” can be considered as an important component on the asset-side, why not human capital? We do hear that humans are the greatest assets to any ongoing business, but why are they ignored as a measure of success? The answer to this question validates the simplistic definition of capitalism beyond any doubt.
Ignoring the humans has great many incentives for the capitalists; and capitalism cannot succeed without incentives. If you pay the employees less, they cannot accumulate wealth, so cannot enter into business to compete with you. If they have enough money, why should they work for you? Why should they work at all when in the interest-based economy, their money brings them easy money without doing any work? So, if you want employees in sufficient numbers, you should do everything to keep the people in penury. A working class must exist forever, and in sufficient numbers, to serve those who must enjoy being the masters of masses.

Masses
Occupy Wall Street

The popular banking and finance industry established by the capitalist world-order promotes the interests of capitalism by making “interest” as the backbone of the system, an indispensable tool so strongly embedded in the psyche of everyone as equivalent of the blood circulating in the human body that imagining a financial world-order without it is considered beyond sanity.
My new book* - Islamic Banking and Finance: The Future of Financial World Order - has made efforts to prove that an alternative mechanism is indeed available which can be used to internalize ethics into business, remove the gamble of greed, and gift the inhabitants of this earth a financial world-order established on the foundation of real assets and rock-solid values of fairness and justice. Islamic Financial system, being that alternative system, promises to be the future of the new financial world order which delivers public good, not greed, and keeps financial institutions far away from bankruptcy.
The future is definitely bright for the Islamic banking and finance industry. They have already established a niche by roping in the Muslim community. And their appeal is expanding, particularly with the number of proponents of Ethical Banking and Finance on the rise in other communities. In order to give the conventional system any semblance of competition, it has to grow out of the niche, and convince everybody not just about the ethical aspects but also the economic benefits that it carries – in fact it will have to prove that it is more profitable than its conventional counterpart.
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* The book “Islamic Banking and Finance: The Future of Financial World Order” can be ordered online from www.morebooks.de using 978-3-8484-0829-0 as the search phrase – it is the ISBN of the book, published on 5th March 2012.

Riba and related commercial transactions in Quran (the divine book):
"For increase through the property of (other) people, will have no increase with Allah: But that which ye lay out for charity, seeking the countenance of Allah, (will increase): It is these who will get a recompense multiplied."(30: 39).
That they took usury, though they were forbidden; and that they devoured Men's substances wrongfully. (4: 161).
Devour not usury, doubled and multiplied; But fear Allah; that ye may (really) prosper. (3: 130).
Those who devour usury will not stand except as stand one whom the Evil one by his touch Hath driven to madness. That is because they say: "Trade is like usury," but Allah hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (The offence) are companions of the Fire: They will abide therein (for ever). (2:275)
Allah will deprive usury of all blessing, but will give increase for deeds of charity: For He loveth not creatures ungrateful and wicked. (2:276)
O ye who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers. If ye do it not, Take notice of war from Allah and His Messenger. But if ye turn back, ye shall have your capital sums: Deal not unjustly, and ye shall not be dealt with unjustly (2:278-279)
Quran recommends writing off even the principal as charity!
If the debtor is in a difficulty, grant him time Till it is easy for him to repay. But if ye remit it by way of charity, that is best for you if ye only knew. (2:280)
Quran recommends all transactions to be documented in the presence of witnesses.
O ye who believe! When ye deal with each other, in transactions involving future obligations in a fixed period of time, reduce them to writing Let a scribe write down faithfully as between the parties: let not the scribe refuse to write: as Allah Has taught him, so let him write. Let him who incurs the liability dictate, but let him fear His Lord Allah, and not diminish aught of what he owes. If they party liable is mentally deficient, or weak, or unable Himself to dictate, Let his guardian dictate faithfully, and get two witnesses, out of your own men, and if there are not two men, then a man and two women, such as ye choose, for witnesses, so that if one of them errs, the other can remind her. The witnesses should not refuse when they are called on (For evidence). Disdain not to reduce to writing (your contract) for a future period, whether it be small or big: it is juster in the sight of Allah, More suitable as evidence, and more convenient to prevent doubts among yourselves but if it be a transaction which ye carry out on the spot among yourselves, there is no blame on you if ye reduce it not to writing. But take witness whenever ye make a commercial contract; and let neither scribe nor witness suffer harm. If ye do (such harm), it would be wickedness in you. So fear Allah. For it is Good that teaches you. And Allah is well acquainted with all things. If ye are on a journey, and cannot find a scribe, a pledge with possession (may serve the purpose). And if one of you deposits a thing on trust with another, Let the trustee (Faithfully) discharge His trust, and let him fear his Lord. Conceal not evidence; for whoever conceals it,- His heart is tainted with sin. And Allah Knoweth all that ye do. (Quran, 2:282-283)

 … Excerpted from chapter-3 of the book “Islamic Banking and Finance: The Future of Financial World Order” which can be ordered online from www.morebooks.de using 978-3-8484-0829-0 as the search phrase – it is the ISBN of the book, published on 5th March 2012.
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