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Stability of Interest Based Economies
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Posted on: Monday, May 31, 2010 - Hits: 1512
Being a Muslim it is our faith that whatever Islam presents is the most correct thing and of course has some benefits for humanity. My question is that interest is prohibited in Islam; naturally there must be some curse in it. But if we look at the western developed countries, interest is fully present but still their economies are stable and booming day by day. How would you reject this argument?
According to Islam, a contract between a lender and borrower should be an equitable one. It should ensure justice to both parties and safeguard their rights on equal footings. If one party’s rights are protected more than the other even minutely, injustice creeps in. In a Ribā (interest) contract, justice to both parties is not ensured. While the lender is ensured a safe return, the borrower is not – and the lender is least bothered with it. This is unethical. Various measures have been suggested by economists that reduce risk for the lender. All said and done, these measures may be efficient, but the fact remains that they do not ensure equal justice to both parties. Injustice, you’ll agree, is something very objectionable and cannot be tolerated at any level.
The fact that a certain unjust act might cause an economic boom is not reason enough that it should be legalized. There are many practices which may be ethically incorrect but which may boost the economy of a country. Drug trafficking and smuggling, for example, can sometimes be very beneficial for a country. Similarly, in the far eastern countries, child pornography is a very lucrative way of earning. In some African countries, slave trading is very profitable. So you see that if a thing is economically profitable, it does not necessarily mean that it is morally correct. Interest is prohibited because of the fact that it is an unethical contract. You would perhaps agree that economic boom is only commendable if it is based on ethical contracts.
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