The Lure of Easy Money: Islamic Finance in the Age of Capitalism

Money. Money makes the world go round, or, yes, any direction you want if you own it. So when it comes to easy money, boy, does it make the world reap! Easy Money – Earned without sweat and wear, usually required to earn a living. Who at least wouldn’t be tempted by that?

Society and its priorities change with the seconds of change in time. While morality and integrity were extremely important at a time in an unclear past, society’s priority today is gathering plenty of wealth. One might ask, why not? If, by multiple zeros for a figure in your bank statement, you certainly mean to have a greater influence and a faster dominance of the world, then why are you playing that conscience card on us?

Well, but, I say, was it not for us in the first place to form a direct relationship between wealth and influence in the world? You seriously can’t tell me that’s how it’s been since time immemorial! About the time we embarked on an insightful journey, wouldn’t you say?

If money was really directly proportional to influence, then the exemplary case with the other caliph of Islam, Umar ibn al-Khattab r. A. For example, it would be a scientific deviation!

It was in 637 AD, after a protracted siege of Jerusalem, the Muslims finally occupied the city. While Heraclius, the Byzantine emperor, had fled, Sophronius, the Greek Orthodox patriarch, abandoned the city on condition that no one should be harmed. Conditions were met and the patriarch gave the key to the city to Umar ibn al-Khattab r.a.

Umar R. a. Went into Jerusalem to sign the peace treaty with humility and went on foot with his servant, comfortably conveyed by a camel. Umar R. a. And the servant had traveled on foot and on the camel in turn (Muir: 135).

When Sophronius met Ameer-ul-Mo’mineen, Umar Ra, one of the most influential men in the history of Islam and the rest of the world, he was dressed in his travel-colored combat tunic while Sophronius was dressed in lavish robes. Sophronius was very surprised to find the commander of the Muslim world dressed in anything but royal clothing and even interrogated Umar r.a. about the simplicity of his clothing to which I replied that Allah SWT does not “require extravagance”.

The patriarch then explained that he did not wear all regalia to adorn himself, but to “control the confusion and anarchy of the world” and that he was “the office of God.” In other words, he apparently had to show in his attire that he was a representative of God. In fact, it is the concept of appearances that has confused us as to what impact is in reality. This confusion has consequently led to forgetting the reason behind the creation of high appearances in the past, even though it was the result of a lack of thinking.

Sam Polk, a former hedge fund trader and founder of a non-profit organization, Groceryships, has ingeniously researched the reality of the addictive rat race to raise money in a New York Times article in which he says that the cash-strapped Wall Street is, in fact, “a toxic culture that encourages the power of grandeur of people who are desperate try to feel powerful. “

Therefore, the focus of our society today is reduced to the goal of generating easy money. Money that can be easily earned does not care about the path or the means chosen to harvest it. Every professional field has ample evidence in this regard, in fact every professional field Have become an example of this problem.

Whether it is a doctor prescribing extra medication or recommending unnecessary laboratory examinations to earn extra commission; or a judge “directs” a case with a politically influential defendant in return for a nomination being elected to the district court; or even a teacher passing a failing student who goes to his / her house for private tuition; or the role of the media in selectively producing puzzles of a scenario that falsely represents the whole truth, to please governments and ruling powers in the world; the evil of light money tempts and envelops us with its shining traps in every sphere and every corner and corner of our lives.

Deep down, everyone knows between right and wrong. Each of us feels a sense of guilt as we board the bus, leading to bribery, dishonesty, greed, etc. The effects of friction between our conscience and our choices are initially diminished. But with time and continuity, friction is leveled, choosing a wrong but easier path to our goals does not seem to confuse us.

In fact, calculated steps are being taken by large corporations and governments to erase the distinction between what is the right or wrong method and / or means of earning honest living as it ultimately means expansion and prosperity for those in this chain reaction. This is the case with Islamic finance and the concept of Sukuk – Sharee’ah bonds.

A conventional bond is a certificate that, under the stated conditions, once purchased from the issuer, requires the issuer to pay the holder of the bond face value in addition to the agreed interest when it reaches maturity, or to pay other benefits, such as prizes awarded by lottery, payment of a lump sum or discount. It is an asset-based investment where the holder of the bond does not strictly own ownership of tangible assets associated with the investment they made, with the exception of the certificate.

According to Islamic Fiqh Council, having any kind of bond is subject to the above conditions haram (forbidden) no matter who it is issued by and no matter what name it is given as disguise under Sharee’ah (Islamic law) because they are riba-based loans and riba (interest) is haram in Islam.

The reason that Islam strictly prohibits acting in the interest of any agreement is because it is considered an exploitation. In Islam, if a person contributes to capital in a business, they should be entitled to ownership of the associated assets and an equal bearer of profits and losses of the assets they back up.

There have been Muslims who, despite knowing that it is forbidden to take an interest in Islam, have voluntarily traded it because of the lure of easy money. However, there have been a large number of Muslims who have deliberately avoided going down this path and strictly adhering to their religious doctrines. This was obviously a major loss for banks and companies that were interest-oriented. Therefore, to include the large part of the Muslim population that avoided trading with interest-based money, the big fish in the financial world, came up with the idea of ​​”Islamizing” banks and other contemporaries, and as a result, bonds as well.

What started with a façade of a sincere attempt to create Islamic banks, which was a huge success among the Muslim masses, became very clear in the capitalist gap. The only difference left today between joint banks and Islamic banks is the inclusion and / or exclusion of the term Islamic. The products offered in Islamic banks are the same ones offered by a conventional bank that prevents the difference in English and Arabic terminology.

Semantics does not really qualify as a stamp of religious endorsement and frankly stands for nothing. A shovel is a shovel no matter what color it comes in. The fact is that 97% of the world’s money is intangible, not created by governments but by banks when loans are made. This money is only visible in our bank statement. Therefore, if banks create Islamic finance products, it would obviously not be based on concrete cash as they existed only in electronic form.

Similarly, Sukuk (bonds) is also one of the contemporary features of “Islamic” banking and is widely endorsed by many Islamic banks. Sukuk market has rapidly risen in recent years, worth billions of dollars. So much so that CNBC named the year 2014 as the year for Sukuk bonds.

Traditionally, what differentiated Sukuk (bonds) from conventional bonds was that the buyer of Sukuk became its legal owner of part of an asset sold by the issuer. The buyer is then allowed to lease that portion of the asset (s) to the issuer.

Therefore, the assets should be material with a physical substance rather than an intangible asset. This concept is noticeably much safer than the conventional bond that deals with electronic money – a substitute for hard cash.

It was not that the concept of Sukuk was drastically different from conventional bindings that made it such a hit, but predominantly the fact that they were supported by religious scholars who ignited its phenomenal growth. Since Sukuk issuers did not follow this traditional concept, but an adjusted concept with Sukuk bonds where the buyer does not get ownership of the assets he / she buys. The name Sukuks was as intangible as the conventional bonds, which are contrary to Sharee’ah.

According to a Bloomberg report, Sheikh Muhammad Taqi Usmani, president of the Bahrain-based Islamic Financial Institutions Accounting and Auditing Organization (AAOIFI), declared that 80% to 85% of the issued Sukuk did not conform to Sharee’ah.

However, as mentioned earlier, corruption and its infested claws have reached every capillary in the human world, and thus to gain the respect of religion and seduce the uninformed Muslim and, of course, the partially tempted Muslim Islamic approval purchased by dishonest and immoral, shady ‘scholars’. According to a BBC report, revealed a Dubai-based investment bank that the same products offered in conventional banks and businesses are created, but in order to be Sharee’ah compliant, the banks continue to try their luck with Islamic scholars by calling them one after the other until eventually adhering to the easy income in the form of a beautiful bribe and sells his services that include, the glowing fatwa (stamp of Sharee’ah approval).

Even the method of getting approval is not an example of ingenuity, as are the products. Getting approval through bribery in the financial market has been around for a long time. You can draw a parallel to the way investment banks bribe rating agencies to assign their conventional bonds with a triple A rating.

As a result, the same conventional banking products, albeit with a new cloth of Arabic terminology and religious sanction, are sold in support of millions of this fresh, unexplored sector of the Muslim population, with the endorsement of this ‘legal’ deception. access prior to this imitative battle.

Nevertheless, everything is not gloomy. What still remains with us is of great importance, and that is freedom of choice.

Times are tough, we have to go tiptop to protect ourselves from being victims of lure of easy money, yet we have the independence to make our decision, whether to give in to the materialistic world or honor our sense of conscientiousness.

We will be obsessed with fraud and deception every step of the way, whether exploiting ourselves in a disguise of religious holiness or through another agency that appeals to our sense of entitlement and values. But again, in essence, we have been willed with the faculty of thought, analysis and making calculated decisions. What decisions we make will determine who we are as individuals.

The Panama Papers incident should make us question whether today’s ‘influential’ public figures succeeded in earning respect for themselves through their system of making money. It should serve as a reminder, and what we should ask ourselves before giving ourselves ways to generate easy money is: whether it will really make us more influential or not? Whether making money through someone else’s hard work actually accounts for something or not? Whether there is influence without values, without honesty, without honor and integrity? Whether influence is really directly proportional to the accumulation of wealth?