The Lahore Ahmadiyya Movement Blog

Usury and Interest? – Rather, Fury and Disinterest of Quran in an Illusory Wealth

In the economic system dominated by money markets and speculative conjectures, banks and insurances, whose business model is solely based upon raking in interest; where the transactions are only of capital, there are always associated inexorable greed and unbridled exploitation. Every new loan creates money out of thin air, which is essentially an entry with a pen on someone's account as there is no corresponding inflow of actual money or assets into the account. Value of currency too is based upon speculations rather than any material standards, such as gold. Currency bill, instead of being an official receipt for an equivalent asset, is now more of a derivative that derives its value from non-tangibles which include war machine of nations, ironically nations whom no one threatens. The have-not segments and nations first become the killing fields, financially if not militarily, and then are protected as grazing grounds for the ever usury hungry cud chewing ‘holy cows’, the banks. The financial institutions that are ‘too big to fail’^[2] are worshipped and protected under the garb of national security interests that factually are no more than selfish commercial policies that find their way into national policies sanctified by parliaments that act as board rooms of these financial megaliths. The laws passed to protect the commercial interests are essentially forethought and the interests of the masses are merely an afterthought. These financial centers act as global vacuum cleaners sucking in the usury by direct or indirect taxes paid by all the peoples of world. These banks take the first bite from each morsel swallowed the world over.

Banks lend money against fractional reserves^[3], naively assuming that there is no such thing as greed in human species. On the contrary, greed is a reality and banks and their usury are mere instruments to cater to that greed. The purported intention of modern banking system is to transform money into wealth via investments in various projects in the community that in their wake expand the economy. If expansion of the economy is the goal, then banks should be at the forefront of owning the assets on the ground, but they do not, instead it is only the liquid assets^[4] which are of interest to them. Why?

The definition of wealth for banks is unique to them only which is to create fictitious money and to expand it with a multiplicative effect. Such an effect only balloons with time into unavoidable pyramidal schemes that are beyond the regulatory controls. Overtime such a facade cannot avoid the run on the bank that culminates in tax payer bail out. If the loans issued are (hypothetically) ten times the actual reserves then an apparent 8% interest (in crude estimation) earned by the first bank is factually more than 80% windfall for all the banks in the chain, besides the ten times of actual money recovered by the series of banks from fictitious money loaned. Paradoxically, banks recover real money with interest from the consumers for fictitious money they loaned. Banks loan money, something they do not have to begin with, against real assets of the debtor as collateral. Why?

The exit from such economic system creates an even more of a paradox that is in direct opposites for the consumer and the bank in which the deck is clearly stacked against the former. For an insolvent bank it is the tax payer, not the bank that pays through bailouts, whereas for a bankrupt debtor his assets are unflinchingly taken over by the bank, a working model of 'mine is mine and thine is mine.' Banks and  laws of the land call it an honest business for their creating fictitious money for a fictitious purchasing power, by permissive rules that are no less than sleight of hand, in the garb of ‘commercial credit’, while the banks themselves remain immune from all risks. Societies under the sway of fictitious wealth complemented with unbridled greed inevitably fall into the trap where they spend without saving, import without exporting and consume without producing^[5].

The exuberant interest by the bank on its loan sets into motion a vicious cycle of a downward spiral where the loanee tags on the interest paid to the bank into the price of its product, which depending upon the market dynamics might not sell enough due to its higher price because of higher ‘production costs’, which in turn creates a backward pressure to cut cost by cutting wages and laying off employees, which then decreases purchasing power in the market, which on the reverse creates shrinking of the economy of a nation. Artificial supports of consumer credit are then erected with incentives for the cash strapped consumers to “buy now, pay later,” but with interest, which is factually an insult to injury. Still, the individual in a ‘free society’ can absorb only so much debt. This is where the military muscle comes in handy to find newer markets, mostly in poorer countries for the surplus goods. Thus, the problem initially localized to one region becomes the world problem. No wonder the cyclical expansion and shrinking of ‘bubble’ economies and their consequent wars and global turpitudes have been the bane of the societies under the sway of interest and usury. The interest on the loans that governments take creates the very basis for income taxes that only go up with time for ordinary people. Banks are not only eager but drool on funding wars, many a times on both sides of the conflict, where loans in trillions are issued on drop of a hat, as such loans are secured to be paid back by the governments. Ironically, the same banks and governments are averse to fund basic societal needs at a fraction of the cost of war such as healthcare and education. Everyone suffers, but the bank. Why?

In such financial models, gains of one are inevitably due to losses of another. Speculative bubbles rise and burst, financial markets ebb and flow as gambler's instincts which in turn are dignified by labels of bear and bull-run in the ‘financial markets’. It is insult to the very name ‘market’ because by their very definition these so called markets have no goods and services but are only a venerated name for gambling tables. The magnitude of gambling in derivatives is mind boggling. According to US Federal reserve – “the derivatives market expanded from $87 trillion in June 1998 to $454 trillion in June 2006.”^[6],^[7],^[8] To add insult to injury, the derivatives are not even regulated; essentially it is free for all. Some might even say that the boom and bust of the stock and bond markets too is staged because following every bust there is a winner, who earlier sold it high and later bought it low. Everyone else perished but certain families in the guise of faceless corporations, the sole survivors of crash after crash. Why?

In this speculative chaos, pundits show up with Op Ed pieces and experts prophesize with the 'insider' instincts to the markets. Even 'propriety' mathematical models are developed which try to 'predict' the future based upon hundreds of variable from around the globe. Leveraged returns are exploited against 'cheap money'^[9] which is unreal to begin with. The only game in town is to salivate at non-labored gains and how to dodge the loss, a loss which could be anybody's guess, and it better be of someone else's. Risk is passed around as a hot potato under various names till it hits the saturation point, before it unravels the common man's life earnings and retirement. Such speculated profits are what every deck holder wishes and yearns for and a loss that he prays against in an otherwise godless Ponzi world of capital markets. Why?

The Quran too outlines a financial system sans greed in which it fully addresses the trade of goods and services, lending and borrowing minus interest, contractual obligations of the parties, preempts the misuse of administrative powers, displaces usury with charity, and replaces income tax with asset tax. Property, bequest and inheritance rights and laws are extensive in which equity of women, children and the survivors are assured, but will not be delved into in this chapter. In summary, Quran advocates equitable distribution of wealth by inheritance, charity, bequeathal and annulling of usury. Once the wealth is equitably distributed, only then the wealth achieves its purpose, the equality of opportunities for mankind, else it is the same wealth that creates ever increasing multitudes of poor in bondage of a few rich that was only highlighted by Oxfam in its recent report:

Almost half of the world’s wealth is now owned by just one percent of the population. The wealth of the one percent richest people in the world amounts to $110 trillion. That’s 65 times the total wealth of the bottom half of the world’s population. The bottom half of the world’s population owns the same as the richest 85 people in the world. Seven out of ten people live in countries where economic inequality has increased in the last 30 years. The richest one percent increased their share of income in 24 out of 26 countries for which we have data between 1980 and 2012. In the US, the wealthiest one percent captured 95 percent of post financial crisis growth since 2009, while the bottom 90 percent became poorer.^[10] [Emphasis added]

In summary, Quran lays down the foundations of its economic order based on a fundamental moral principle in which the humans have to strive for wealth and not the wealth to create itself:

53:39. And that a human being will have (to his account) what he strives for.^[11]

Quran assures the individual the rights not only of the life and liberty, but the equal and assured pursuit of wealth besides happiness:

59:7. … (It has been) so (ordained) that the (wealth) should not circulate (only) among your rich people…^[12]

The exploitation of a common man is run amok in an interest bearing banking system. The depositor is taken for a ride by the banks. Little do the depositors know that it is they, who are the actual capitalists, the capital source for the bank and it is the bank that is the borrower of the money from the depositor. When an average consumer deposits an amount he gets a paltry interest but when the same depositor asks for a loan, he will be slapped with an interest that is many magnitudes higher than what he received from a deposit. Essentially, this gap is what the bank skims off many folds from the depositors. Bank that was factually supposed to be no more than an agent for the depositor actually becomes the controller and the capitalist. For all intents and purposes, bank usurps the rightful power and the rights of the depositor. Why it is so and why is it allowed? This relationship of the bank and the depositor is paradoxically like that of a master who hires a servant on the condition that the servant will use his own money and tools to earn money for the master. Why? Such institutional double standards are put on notice in Quran. Interest bearing banking system fails this simple moral test that Quran outlines:

83:1. Woe be to those who make a default in any of their duties and give short measure.

83:2. When they receive measure from other people they receive in full (not allowing the least shortage and loss),

83:3. But when they give by measure to others or weigh to them they give them less (than what is due).

83:4-15. Do not such people realize that they will be raised (to life again), to face (and hear the Judgment of) that Great Day? The Day when mankind shall stand before the Lord of the worlds? Nay, (not at all as they believe) the record of (the deeds) of the wicked is in Sijjîn (- the register of a prison). What should make you know what that Sijjîn is? (It is) a book written (distinctly and comprehensively). On that Day woe shall befall those who belie (the truth); Those that belie the Day of Requital. No one can treat it as a lie except every sinful transgressor, (Who) when Our Messages are recited to him says, `(These are) mere fables of the ancients.' Nay (not at all so), the truth is that their (evil) deeds have rusted their hearts. Nay (We repeat, not at all so). Verily, they shall be debarred from (the sight and mercy of) their Lord that day. Then they shall surely enter into the flaming Fire, Then it shall be said (to them), `This is that (very punishment) which you used to cry lies to.' ^[13]

Quran also admonishes against speculations on money:

2:219. They ask you concerning intoxicants and games of chance. Say, `In both of them is a great sin and both are harmful too, and they have some uses for people, but the sin inherent in them is even more serious than their usefulness.' They ask you how much they should spend [–in charity, in the cause of Allah]. Say, `The surplus (- what you can spare after spending on your basic requirement).' Thus does Allâh make clear His commandments so that you may reflect –^[14]

For business transactions and loans, Quran gives the following contractual guidelines:

2:282. O you who believe, if you borrow debt for a future period, then you shall record it. And let a scribe of justice record it for you; and let not the scribe refuse to record as God has taught him. Let him record and let the person who is borrowing dictate to him, and let him be aware of God, and let him not reduce from it anything. If the one who is borrowing is immature or weak or he cannot dictate himself, then let his guardian dictate with justice; and bring two witnesses from amongst your men; if they are not two men, then a man and two women from whom you will accept their testimony, so that if one of them becomes occupied [with issues unique to her gender], then the one can recall the other. And let the witnesses not refuse to come if they are called. And do not fail to record it no matter how small or large until its maturity. That is more just with God and better for the testimony, and better that you do not have doubts; except if it is a trade to be done on the spot between you, then there is no sin upon you if you do not record it. And have evidence if you trade. No scribe shall be harmed nor any witness; for if you do so then it is vileness on your part, and be aware of God and [that] God teaches you and God is aware of all things.^[15]

Quran outlines the recompense for labor. If taken literally, the following verse gives a concrete example of the magnitude and manifold reward inherent in nature for a good effort. For example, a seed when sowed and taken care of is rewarded in one crop cycle by many ears of corn:

2:261. The attribute of those who spend their wealth in the cause of Allâh is like the attribute of a grain (of corn) which sprouts seven ears, each ear bearing a hundred grains. And Allâh multiplies further for whomsoever He pleases, for Allâh is Bountiful, All-Knowing.^[17]

It is because of such incentives in nature that a farmer tills the land under the scorching sun, tirelessly takes care of the field and finally harvests the yield. The reward is not limited to the farmer alone. The humanity at large benefits from the toils of the farmer when he sells the produce in the market place, where a baker turns that corn into a loaf that a consumer buys. Such a chain of transactions is gainful each step of the way for both, the seller and the buyer. The former gets a profit for his goods, while latter lives off the nourishment. No wonder Quran encourages trade in which needs of humanity are in congruence with the value of goods and services:

2:275. … Allah has made trade lawful…^[18]

The above example can also be applied to any lawful profession for the services it provides. Both the provider and the client mutually benefit from the transaction as the skills of the former are beneficial for the latter.

However, if we contrast these examples with the money lender, we see that the debtor is at a clear disadvantage, in which the loss of the latter is manifold gain of the former. Unlike a trade where there is one time transaction which covers the cost of goods and services along with the profit, the interest is a repeatedly occurring transaction, month after month, year after year and decade after decade. There is no theoretical end to profit making, while the money given to the debtor was one time only. The very basis of money lending as a profession is tied to usury, in which money generates the money without any toil of the lender or exchange of goods or services. It is to prevent the exploitation of the debtor that Quran states:

3:130. O you who believe! do not practise usury and interest involving multiple additions, and keep your duty to Allâh and take Him as a shield so that you may prosper.^[19]

The above verse can be easily understood by the apparently innocuous example of borrowing a loan of only one dollar at 10% annual interest. The calculations are as follows:

Base amount: $1.00
Interest Rate: 10%
Effective Annual Rate: 10%
Calculation period: 500 years
(interest compounded yearly – added at the end of each year)

In another example, a penny borrowed by Jesus Christ 2012 years ago at an annual interest rate of 5% would have accrued a debt of $4,290,000,000,000,000,000,000,000,000,000,000,000,000,000.00^[20] which exceeds the wildest imagination, but still might not be enough to satisfy the greed of the lender.

The above numbers which are even beyond the capacity of the planet earth to produce speak for themselves and explain the basis of how certain banking families flourished in a few generations in recent centuries by lending to the governments in the West. No loanee or the lender could live beyond a few decades to payoff and collect the loan but governments and lending institution do survive longer periods. Not too surprisingly there is no end to the loan that a government can acquire for a war, but when it comes to provide for its moral obligation to its masses it has to scrap the bottom of the barrel to fund social programs. Government essentially is a function of the people in the country, who are the ultimate debtors, whereas the money lenders are only a few individuals or corporations with the sole purpose to make profit, not loss. If a loan shark needs a bouncer to break legs to recover the debt, the banking institutions control governments and their institutions which include armies, intelligence agencies and media to collect from the nations unable to pay back the bone crushing interest which inevitably swells manifolds than the principal. The scruple-less money lenders shy not of demanding the 'pound of flesh' ^[21]of the debtor:

“All that we had borrowed up to 1985 was around $5 billion, and we have paid about $16 billion; yet we are still being told that we owe about $28 billion. That $28 billion came about because of the injustice in the foreign creditors’ interest rates. If you ask me, what is the worst thing in the world? I will say it is compound interest.” – Former President of Nigeria, Olusegun Obasanjo speaking after the G8 Summit in Okinawa, Japan in the year 2000. ^[22]

It is necessary to remove the veneer of difference between usury and interest. The apologists argue that usury in prohibited because it is excessive interest, whereas interest is permissible. This is a bogus argument which tries to draw justification of moderate drinking over heavy alcohol drinking. For the apologist, simply put, social drinking even by the clergy is okay, but alcoholism is not acceptable. Just like gradations of alcoholism, this distinction between excessive and moderate interest probably has its origins in Christendom. In Quran, there is no distinction between usury and interest and its consequent evils that the society suffers from. Islam does not hinder the rich from their riches, but does not allow richness at the expense of ordinary citizens. Usury robs masses of their dignity, freedom, rights and opportunities, preservation of which is the purpose of Islam. On the other hand, there is no Robin-hood-ness either in Quran as well. Islam does not abolish Capitalism but remedies its evils^[23], for example:

It may he questioned why the prohibition [of interest] assumed a religious form; this law of the country should have been left free-handed to operate on the merit of individual cases instead of entire prohibition. In this connection it may be noted that the universal prohibition, is based on the universal harm of the usury. For instance a business man who borrows money cannot guarantee that the business will fetch profit; yet the money lender will take interest in all circumstances. The other side of commercial interest is the bargain when ready payment is not made by the buyer of goods. It is also equally rather more harmful for the interests of Society. The buyer [seller] of goods who is more properly the borrower of money, must sell the goods at an increasingly high rate [i.e. higher price] to meet the swelling sum of interest as allowed in the transaction. The burden of increased rates would, therefore, fall upon the public.^[24]

The verse 3:130 above unambiguously banned usury and its subsequent verse not only points to turmoil from interest for the debtor that is hidden in the usury practices but also draws attention to the equal in magnitude, the Fire of greed that likewise engulfs the usurer:

3:131. Be on your guard against the Fire which has been prepared for the disbelievers.^[25]

Divine prohibition of usury and interest is not unique to Quran:

Leviticus 25:36-37. Take no usury or interest from him; but fear your God, that your brother may live with you. You shall not lend him your money for usury, nor lend him your food at a profit. [New Kings James Version]

The money lenders of the yore and their modern day equivalents, the banks, project themselves as honorable profession, but by the standards of Quran, they are touched by the devil. They might call themselves a business, but requirements for business are exchange of goods and services which they have nothing to do with:

2:275. Those who practice usury and interest, (their condition is such as) they will not be able to stand [i.e. fall into immorality] except like the standing of one who has lost his reason under the influence of satan. That is so because they say, `Trade is just like usury and interest.' Whereas Allah has made trade lawful and made interest unlawful. Then whosoever has received (this) admonition from his Lord and keeps away (from usury and interest) he may keep whatever (interest) he has taken in the past. His matter rests with Allâh. As for those who revert (to the practice of usury and interest) it is these who are the fellows of the Fire, therein shall they live for long.^[26]

Whereas Allah has made trade lawful and made interest unlawful for the mere fact that – Trade is doubtlessly as prosperous to the country and nation as usury is shocking for the society and the masses.^[27]

Not only that the usury and interest are unlawful, Quran actually annuls them altogether and replaces them with charity:

2:276. Allâh annuls usury and interest and promotes charity. Allâh does not love any persistent and confirmed disbeliever and an arch-sinner.

2:277. Verily, those who believe and do deeds of righteousness and regularly observe the Prayer and go on presenting the Zakât [–charity] shall have their reward from their Lord; they shall have no cause of fear, nor shall they ever grieve.

2:278. O you who believe! take Allâh as a shield and forgo all outstanding gains from usury and interest if you are indeed believers.

2:279. But if you do (it) not, then beware of war from Allâh and His Messenger [because the burden and exploitation of interest is equivalent of an already declared exploitative war on the society]. But if you turn away (from such an unlawful transaction) then you shall have your principal (without interest) back. (Thus) you shall neither deal unjustly nor be dealt with unjustly.^[28]

Jesus Christ in his capacity did no different than verse 2:279 when he stood up against the currency dealers of his time and ‘overturned the tables of the money changers’:

Mark 11:15-18. On reaching Jerusalem, Jesus entered the temple courts and began driving out those who were buying and selling there. He overturned the tables of the money changers and the benches of those selling doves, and would not allow anyone to carry merchandise through the temple courts. And as he taught them, he said, “Is it not written: ‘My house will be called a house of prayer for all nations’? But you have made it ‘a den of robbers.’” The chief priests and the teachers of the law heard this and began looking for a way to kill him, for they feared him, because the whole crowd was amazed at his teaching.

The selective allowance to charge usury by Israelites from non-Israelites, the foreigners, is allowed in the Old Testament:

Deuteronomy 23:20. You may charge a foreigner interest, but not a fellow Israelite…[New International Version]

Quran takes away the vestige of above argument altogether when it makes the mankind a single nation and removes the discrimination of a foreigner altogether:

10:19. And mankind were but a single nation, then they fell into variance…^[30]

The debtor is under the contractual obligation to return the debt, but if for some reason it becomes impossible to repay the loan, then unlike a usurious banking system that takes over the assets of the bankrupt, Quran gives the following relief:

2:280. If any (debtor) be in straitened circumstances there shall be respite (for him) till (his circumstances) ease. But that if you remit (the debt) by way of charity (for the sake of God), it is better for you, if you only knew.^[31]

All the injunctions above would not be worth their value than the piece of paper they are written on, unless the administrative authority carrying out these commandments is just as well:

In terms of finance, if nothing else, the above verse squarely draws attention to 'insider trading' on any forum whose sole intention is to appropriate a portion of (other) people's property by sinful means (and bribery) and that (too) knowingly (that you have no right to do so). Even the recent history bears witness to devastation in the world from usurious borrowing and funding of the wars over past several centuries including the world wars which resulted from usury practices by certain classes from the people of the Book:

4:160. Then (by way of punishing them) on account of the transgression of those who judaised, We made unlawful to them certain of the good and pure things which had been allowed to them before, and that too on account of their causing hindrances to many (people, and their own staying away) from Allâh's way;

4:161. And (also on account of) their taking interest and usury though they were forbidden it, and because of their misappropriating people's belongings. And We have prepared a woeful punishment for those among them who disbelieve.^[34]

5:62. And you will find many of them vying one with another in committing sin and transgression and being too much given to eat things forbidden [– including the usury and interest]. How evil is that which they practise!

5:63. Why do not the teachers of divine knowledge and those learned in the Law prohibit them from their blasphemic talk and deeds and their being too much given to eating things forbidden? Evil indeed is their machination.^[35]

Of note is that one of the foremost things forbidden is the usury and interest. The next corresponding verses separate the righteous people of the Book from usurers of above verses:

4:162. But those among them who are firmly grounded in knowledge and the faithful who believe in that (Divine Message) which has been revealed to you and that which was revealed before you, and (especially) the observers of Prayers, and those who go on presenting the Zakât, and believe in Allâh and the Last Day, it is they We will certainly bestow on them a great reward.^[36]

5:65. And if the people of the Scripture had only believed and guarded against evil, We would surely have absolved them of their sins and We would surely make them enter Gardens of bliss.

It is the usurers that are admonished repeatedly in Quran:

2:168. O people! eat what is lawful and pure (of the produces) of the earth and follow not the footsteps of satan for he is your enemy severing you (from Allâh).

2:169. He (- satan) only bids you to indulge in evil and to (do) things foul and obscene and that you say against Allâh things you do not know.^[38]

The ancestral money-lenders, in the garb of financial institution of our times are addressed in Quran:

2:170. And when it is said to them (- the disbelievers), `Follow what Allâh has revealed.' They say, `We would rather follow such things as we found our forefathers (doing and believing).' (Would they do so) even though their forefathers could not refrain (from evil), nor they could achieve their goal.

2:171. The case of (one that calls) those who refuse (to obey the commandments of God) is like the case of one who shouts to that (animal) who hears nothing, but a mere call and a cry (of a shepherd). (They are) deaf, dumb and blind, moreover they do not use their reason.^[39]

However, those 'believers', living in a financial system beyond their control, might have to partake the interest obligations, the flesh of swine, to survive. They can draw some solace from the next verses and may seek mercy from their Lord:

2:172. O you who believe! eat of the good and pure things We have provided you with, and render thanks to Allâh, if it is He alone whom you really worship.

2:173. He has forbidden you only (to eat carrion) that which dies of itself, the blood, the flesh of swine and that over (the sacrifice of) which the name of someone other than Allâh has been invoked. Yet he who is constrained (to use them) without desiring (them) nor going beyond the limits (of bare necessity), incurs no sin. Surely, Allâh is Great Protector, Ever Merciful.^[40] [Emphasis added]

To those governments, where they have the power to annul usury in their land, but instead hide which Allâh has revealed in this perfect Book about admonitions against interest and usury and take a paltry price (- worldly gains) from usury and interest bearing institutions, Quran forewarns with the following:

2:174. Surely, those who hide (any part of the teaching) which Allâh has revealed in this perfect Book and take a paltry price (- worldly gains) for it, it is these who feed their bellies with nothing but fire [of usurious debt and all its ill consequences for the society], and Allâh will not speak to them (with affection and mercy) on the Day of Resurrection, nor He will treat them as pure, and there awaits them a grievous punishment. [Emphasis added].

2:175. It is these who have preferred error to guidance and punishment to protection. (The onlookers of these sufferers will say,) `How very enduring they are at (the punishment of) the Fire!' [This is a glaring example of the burden of interest borne by citizens of the developing world at the hands of the global banking system, a never ending servitude]

2:176. That (punishment) is because, whereas Allâh caused the perfect Book to be revealed to suit all the requirements of truth and wisdom (they have rejected it outright). Surely, those who dissented from the perfect Book have indeed gone far astray in enmity (of the truth) and in obstinacy.^[41]

The dilemma of a Muslims who live in a usury infested system is summed up as follows in an article written in 1925:

^[42]We are living in an age in which usury is common, and, do and declare what we will, we are nearly all of us tainted with it. It is a sin, but Muslims must trade, and Muslims must not fall back. They are already far too backward. If Turkey has natural resources which she cannot develop out of her revenues, and if she cannot obtain money without paying interest to develop those resources, then her only course is to borrow at interest. This does not mean that the transaction thereby becomes lawful. It only means, as the Holy Qur-an says :—

2:173. …But whoever is driven to necessity, not desiring, nor exceeding the limit, no sin shall be upon him.

Unless Muslims want to become extinct and leave the earth to others, they must trade; and trade nowadays usually means both the taking and paying of interest. Let each man be his own judge. Let no one be a fanatic or a fool. God is Reasonable, and Islam conforms to the dictates of true reason. It is easy for the doctrinaire to condemn all trade and all civilization; and it is equally easy for the greedy person, under the cloak of business, to live on usury. The right course is to desist from the paying or taking of interest, wherever possible; and in other cases to go only so far as necessity compels us to go. "Whoever is driven to necessity," says God, "not desiring, nor exceeding the limit, no sin shall be upon him."What is "necessity"? What is the "excess"? What is the "limit"? These are questions to be decided by each man or institution in each particular case. No general rule or rules can be laid down. But God has given us eyes, ears and hearts. And He has also provided us with the all-important mind. The heart of man acting on the mind of man is responsible for the deeds of each individual, and God alone is the Great Judge. The first tradition quoted by Imam Bukhari from the Prophet is Al-Aamal-o-bin-niyyat-e— "All deeds are judged by their intentions." The man who thinks he can save himself by a show of keeping the letter of the law, but really infringing the whole object of the ordinances of God, cannot really save himself, for God knows all. On the other hand, what shall it profit me if I never take a penny in interest, but when it comes to helping a needy person I thrust my hands into my pockets, and leave the poor man in his need? My piety in not taking interest shall not avail me aught in the sight of God. Socrates used to say that the opposites could only be understood by putting them together—pain with pleasure, and virtue with evil. Charity and usury are the opposite extremes of human conduct. The first is a divine ordinance, and the second is an institution of the devil. In showing the beauties of charity God shows us the ugliness of usury. But everything is relative. The absolute is with God alone. We are human beings and necessarily weak.

53:32. Those who avoid grave sins and open shameful deeds but (who are sometimes guilty) only (of) minor offences (will find) your Lord is Lord of immense protection (and resorts to His mercy in such cases). He knows you full well (since) when He created you from the earth and when you were embryos in the wombs of your mothers. So make no pretensions to the purity of your souls. It is He Who knows best who (truly and fully) guards against evil.^[43][Nooruddin]

Some may scoff at an earlier quoted verse i.e. 2:279. But if you do (it) [i.e. usurious practices] not, then beware of war from Allâh and His. While reading this verse, let’s not forget that Europe since its dark ages and the West as a whole continues to fight wars, which have been funded by usurious loans. Some may even say that West goes to war because of it bowing to usury. It is anybody’s guess about future wars.

In summary, temptation of usury for its abundance and its profits flowing to the usurer are contrasted with apparent misperception of loss from charity and it is against this overwhelming enticement of bad and impure that one has to seek protection from:

It is to this never ending cycle of abundance of the bad and impure interest that might have been in the prophecy about Adam and Children of Adam:

2:35. And We said, `O Adam! dwell you and your wife in this garden and eat freely and plentifully from it as you will [that you can afford]. But you shall not go near this tree (- evil [113:2. `From the evil of that which He has created which includes usury and interest]) lest you should be of the unjust.'

2:36. After sometime the satan caused them both [individually and nations collectively] to slip from this (order of not going near evil) and thus brought them out of (the happy state) which they were in. And We said (to them), `Go forth, some of you are enemies of others and for you there is a sojourn in this land and a provision for a time.'

2:37. After that Adam received from his Lord certain (useful) commandments and He turned to him with mercy. He, indeed is Oft-returning with compassion, the Ever Merciful.

2:38. We said, `Go forth from this state, all of you, and when there comes to you a guidance from Me, then, those who follow My guidance shall have nothing to fear and nothing to grieve at.'^[45]

Quran is fully cognizant of the human tendency to acquire and hoard wealth to which it draws attention:

3:14. It has been made fairseeming to the people the love of the desired things comprising women, sons, stored up heaps of gold and silver, well-bred horses, cattle and tilth. That is the provision of the present life. Whereas with Allâh is the fairest goal (of life).

3:15. Say, `Shall I inform you of something better than these? There are with their Lord Gardens served with running streams for those who become secure against evil. There they shall abide forever, and (there will be the righteous) companions perfectly purified and (above all they will enjoy) the good pleasure of Allâh.' And Allâh is Mindful of (His) servants,

3:16. Who say, `Our Lord! we have certainly believed, therefore protect us against (the consequences of) our sins and save us from the punishment of the Fire.'^[46]

Quran does not abhor the wealth of the individual, but it brings to fore the consequences of hoarding it:

104:1. Disaster is (decreed) for every slanderer, defamer,

104:2. Who amasses wealth (instead of spending it for the good of humanity), counts it over and over and depends upon it as a safeguard (against his future possible hardships).

104:3. He thinks that his wealth will make him immortal.

104:4. No, never! he shall surely be cast into the crushing torment (of Hell).

104:5. And what should make you know what the crushing torment is?

104:6. (It is) the Fire set ablaze by Allâh,

104:7. And which rises over (the feelings of) the hearts (- the origin of a man's hell).

104:8. It (- Fire) will be closed in on them (so as not to let them escape from it and also increase for them the torture of heat).

104:9. (The flames of the Fire will rise) in (the form of) huge outstretched columns.^[47]

3:180. And do not let those, who behave niggardly in (spending) what Allâh has granted them of His bounty, think that it is good for them, nay it is bad for them. They shall certainly have the things they were niggardly about, hung about their necks like halters on the Day of Resurrection. And to Allâh belongs the heritage of the heavens and the earth. Indeed, Allâh is Well-Aware of all that you do.^[48]

The walk away argument of wealth in Islam is the similitude of blood in a body. The more it circulates, the healthier the body is. However, the illness and death sets in when the circulation of blood slows down and it clots. For a clot the treatment is naturally a clot buster. Similarly, when the wealth is taken out of circulation and hoarded in assets, the clot buster in Islam is the Zakat, the asset tax which historically is about 2.5 percent, a rate which is neither too taxing for the asset holder nor is mandated on those without assets. Whereas, the income tax of capitalism does not differentiate between the haves and have-nots, it does not take into account the liabilities of the one taxed. Since the tax laws are heavily influenced by the haves, the loopholes thus created in the laws disproportionately benefit them at the detriment of the have-nots. History is witness to the pervasive bloody struggle between the two, the drooling greed on one side and the shuddering cries of deprivation of the majority.

A great advantage of the elimination of interest will be that dormant capital will not be able to create wealth, which will mean that either it will have to invest itself for protection or surrender itself for State use for the benefit of the society. In either case it will have a beneficent effect on the production and consumption of the country. The attraction of hoarding will be completely gone, as even hoarded money will be subjected to zakat, and there will be no alternative left for capital but to invest, produce and consume. This eternal cycle alone can ensure full employment and not wars and armament drives, on which the Western world has come to depend so pathetically nowadays.^[49]

Charity replaces Usury and Interest in Quran

The temptation of direct money lending with interest or lending it by proxy via financial institutions is based upon a 'guaranteed' return on investment. In contrast, Quran declares the opposite and assures return on charity. Individual experience from time to time tells us of monetary losses from bank failures, but has anyone yet to claim him ending in poverty by being charitable? The answer is no, and to that Quran states:

30:39. And that which you lay out as interest and usuary with a view to increase the wealth of the people does not help increase it in the sight of Allâh. But that which you present as Zakât (purifying dues) with a view to seek (thereby) the pleasure of Allâh, it is they (- the regular payers of Zakât) then who will increase (their wealth) many times over. ^[50]

Usury is both a source and manifestation of greed. There is enough in the world for all to live, but there is not enough for one man's greed^[51]. Those schools of thought that abet interest, almost as a matter of faith are thus identified in Quran, some more than the others:

2:96. And you shall of course find them the greediest of all people for (this base) life and even more (greedy) than those who set up equals (to God). Each one of them would love to be granted a life of a thousand years [because of their intoxication from power that comes with a usurious wealth], yet his being spared for a long life shall, by no means keep him away from the punishment. And Allâh is Watchful of all their doings.^[52]

It is because of this greed out of interest that Quran further states:

4:160. Then (by way of punishing them) on account of the transgression of those who judaised, We made unlawful to them certain of the good and pure things which had been allowed to them before [i.e. the blessings and favors. Note: no prophet after Moses was law bearing to forbid material things to Israelites^[53]], and that too on account of their causing hindrances to many (people, and their own staying away) from Allâh's way;

4:161. And (also on account of) their taking interest and usury though they were forbidden it, and because of their misappropriating people's belongings. And We have prepared a woeful punishment for those among them who disbelieve.^[54]

Usury by its very nature creates miserliness. Quran makes a historical reference to Israelites who after Solomon had been deprived of a kingdom because of usury driving their miserly behaviors:

4:53. They have no share in the kingdom. If they had they would not give the people (even so much as) the little groove in a date-stone.

4:54. Or do they feel jealous of the people for which Allâh has granted them out of His bounty and grace? (Let them remember) We surely gave the Children of Abraham the Scripture and the Wisdom, and We also gave them a grand kingdom.^[55]

As to the morality and rewards shadowing charity, Quran thus speaks quite eloquently which needs no comment but to quote it directly:

2:261. The attribute of those who spend their wealth in the cause of Allâh is like the attribute of a grain (of corn) which sprouts seven ears, each ear bearing a hundred grains. And Allâh multiplies further for whomsoever He pleases, for Allâh is Bountiful, All-Knowing.

2:262. Those who spend their wealth in the cause of Allâh, then follow not up what they have spent with a show of obligation, nor (with) injury, they shall have their reward with their Lord. They shall have no cause of fear, nor shall they ever grieve.

2:263. A fair word and forbearance are better than charity followed by injury. Indeed, Allâh is Self-Sufficient (having no want), Ever Forbearing.

2:264. O you who believe! Do not render void your charities by (a show of) obligation and injury, like him who spends his wealth to be seen by people and does not believe in Allâh and the Last Day. So his case is like the case of a smooth rock with some soil thereon, when heavy rain hits it leaves it bare and hard. They shall not be able to gain anything of what they accomplished. And Allâh does not guide such disbelieving people to the way of success.

2:265. But the case of (charity on the part of) those who spend their wealth seeking the good pleasure of Allâh and for their own consolidation and with firm faith, is like the case of a garden situated on a highly fertile land. It is hit by heavy rain so it yields its fruit manifold; but even if heavy rain does not hit it then a mere drizzle (is sufficient) for it. And Allâh sees well what you do.

2:266. Would anyone of you wish that while he has a garden of date-palm trees and vines served with running streams, he has therein each and every kind of fruit, while he is stricken by old age and has children who are (yet) feeble, a whirlwind carrying fire should smite it (– the garden) so that it is all burnt up? (No, not at all.) Thus does Allâh explain to you His Messages so that you may give thought.

2:267. O you who believe! spend (for the cause of Allâh) a portion of good and pure things, that you have yourselves earned and out of that which We have produced for you from the earth. Do not intend (upon spending) the bad and inferior. You would spend that (bad and inferior for the cause of Allâh) which you would not accept at all (for yourselves) unless you connive at it. And know that Allâh is Self-Sufficient, Ever Praiseworthy.

2:268. Satan threatens you with poverty and incites you to niggardliness. But Allâh promises you forgiveness from Himself and affluence. And Allâh is Bountiful, All-Knowing.

2:269. He grants wisdom to whomsoever He will. Indeed, he who is granted wisdom has been granted an ample good. And none would take heed except those endowed with to you and you shall not be treated unjustly.

2:270. Whatever things worthy to be spent you spend and whatever vow for the performance of a non-obligatory act of goodness you take, Allah knows it well. As for the wrongdoer they shall have no helpers.

2:271. If you give (your) alms openly it is well and good (in itself). But if you keep them secret and give them to the needy it is better for your own selves and He will (thereby) acquit you of some of your evil deeds. Allah is fully aware of what you do.

2:272. You are not responsible for their guidance to the right path but Allah guides (him) who wishes (to be guided). (Believers!) whatever wealth you spend (in doing good) will be fully credited to you and you shall not be treated unjustly.

2:273. (These charities are meant) for those needy who are (so) confined in the way of Allâh that they are unable to move about in the land (for providing their sustenance). The person ignorant (of their condition) thinks them free from want, because of (their) abstaining (from begging). But you shall know them by their appearance (that they are in need). They do not beg of people with importunity. And whatever good thing you spend (for their help) Allâh knows it surely well.

2:274. Those who spend their wealth by night and by day (for the cause of Allâh) privately and publicly have their reward with their Lord, they shall have no cause of fear, nor shall they ever grieve.^[56]

End Note: To get an insight into philosophy of financial system of Islam as contrasted against the Capitalism and Communism, reader is encouraged to read: “The New World Order” by Maulana Muhammad Ali (link).

^[1] The Islamic Economic System and the Process of Change Over By "Ariel", Islamic Review, p. 10, November 1952.
^[2] Link: http://en.wikipedia.org/wiki/Too_big_to_fail
^[3] Video: “Fractional reserve banking”. Link: https://www.khanacademy.org/economics-finance-domain/macroeconomics/monetary-system-topic/fractional-reserve-banking-tut/v/overview-of-fractional-reserve-banking
^[4] An asset that can be converted into cash in a short time, with little or no loss in value. Link: http://www.businessdictionary.com/definition/liquid-asset.html#ixzz3HEmk6QSW
^[5] Der Spiegel. Note: the actual article could not be located. The closest reference is “Playing With Fire: America and the Dollar Illusion”. Link: http://www.spiegel.de/international/playing-with-fire-america-and-the-dollar-illusion-a-440054.html
^[6] Link: http://www.federalreserve.gov/pubs/bulletin/2007/articles/crossbordersecurities/default.htm
^[7] Office of the Comptroller of the Currency – OCC’s Quarterly Report on Bank Trading and Derivatives Activities Fourth Quarter 2013 (pdf) – see Table 12 (on the last page). Link: http://www.occ.treas.gov/topics/capital-markets/financial-markets/trading/derivatives/dq413.pdf
^[8] Link: http://demonocracy.info/infographics/usa/derivatives/bank_exposure.html
^[9] The Real—and Simple—Equation That Killed Wall Street, by Chris Arnade, Scientific American Blogs, January 30, 2013. Link: http://blogs.scientificamerican.com/guest-blog/2013/01/30/leveraged-yield/
^[10] “WORKING FOR THE FEW, Political capture and economic inequality”, 178 OXFAM BRIEFING PAPER, 20 JANUARY 2014.
^[11] Al-Najm – Parts of the Qur'ân: Nooruddin
^[12] Al-Hashr – The Banishment: Nooruddin
^[13] Al-Mutaffifîn – The Defaulters In Duty : Nooruddin
^[14] Al-Baqarah –The Cow: Nooruddin
^[15]Al-Baqarah –The Cow: Free Minds
^[16] Al-Baqarah –The Cow: Nooruddin
^[17] Al-Baqarah –The Cow: Nooruddin
^[18] Al-Baqarah –The Cow: Nooruddin
^[19] Al-Imran – Family of Amran: Nooruddin
^[20] Example of Compound Interest – Wikipedia, http://en.wikipedia.org/wiki/Compound_interest#Example_of_compound_interest
^[21]The pound of flesh, which I demand of him,
Is dearly bought; 'tis mine and I will have it.
If you deny me, fie upon your law!
There is no force in the decrees of Venice.
I stand for judgment: answer; shall I have it?
Shakespeare: Merchant of Venice. Shylock – Act IV, Scene 1, Venice. A court of justice.
^[22] Link: http://www.businessdayonline.com/NG/index.php/law/legal-insight/26439-a-nigerian-approach-to-islamic-banking
^[23] The Living Thoughts of the Prophet Muhammad by Maulana Muhammad Ali, Chapter 9: Wealth
^[24] “Usury or Interest”, The Light, Vol II, No. 16, August 16, 1923, p. 2, Ahmadiyya Anjuman Ishaat Islam, Lahore.
^[25] Al-Imran – Family of Amran: Nooruddin
^[26] Al-Baqarah –The Cow: Nooruddin
^[27] “Usury or Interest”, The Light, Vol II, No. 18, September 16, 1923, p. 3, Ahmadiyya Anjuman Ishaat Islam, Lahore.
^[28] Al-Baqarah –The Cow: Nooruddin
^[29]“The New World Order” by Maulana Muhammad Ali, p. 51-52, Ahmadiyya Anjuman Ishaat Islam Lahore,1944.
^[30] Yunus – Jonah: Nooruddin
^[31] Al-Baqarah –The Cow: Nooruddin
^[32]“The New World Order” by Maulana Muhammad Ali, p. 51, Ahmadiyyah Anjuman Ishaat Islam Lahore, 1944.
^[33] Al-Baqarah –The Cow: Nooruddin
^[34] Al-Nisa – The Women: Nooruddin
^[35] Al-Maidah – The Table Spread with Food: Nooruddin
^[36] Al-Nisa – The Women: Nooruddin
^[37] Al-Maidah – The Table Spread with Food: Nooruddin
^[38] Al-Baqarah –The Cow: Nooruddin
^[39] Al-Baqarah –The Cow: Nooruddin
^[40] Al-Baqarah –The Cow: Nooruddin
^[41] Al-Baqarah –The Cow: Nooruddin
^[42]“Islam, Usury and Interest” by Al-Haj Hafiz Ghulam Sarwar, M.A., p. 27-29, The Islamic Review, January 1925.
^[43] Al-Najm – Parts of the Qur'ân: Nooruddin
^[44] Al-Maidah – The Table Spread with Food: Nooruddin
^[45] Al-Baqarah –The Cow: Nooruddin
^[46] Al-Nisa – The Women: Nooruddin
^[47] Al-Humazah – The Slanderer: Nooruddin
^[48] Al-Nisa – The Women: Nooruddin
^[49] The Islamic Economic System and the Process of Change Over By "Ariel", Islamic Review, p. 10, November 1952.
^[50] Al-Rum – The Byzantines: Nooruddin
^[51] The Islamic Economic System and the Process of Change Over By "Ariel", Islamic Review, p. 10, November 1952.
^[52] Al-Baqarah –The Cow: Nooruddin
^[53] Excerpt from Quran’ Five Volume Commentary – footnote 624, p. 686, by Ahmadiyya Movement.
^[54] Al-Nisa – The Women: Nooruddin
^[55] Al-Nisa – The Women: Nooruddin
^[56] Al-Baqarah –The Cow: Nooruddin