Economic Activity Without Exploitation (August 29, 2007)
DR MOHAMMAD MANZOOR ALAM explains how the quest for "economic growth with a humane face" is just the contemporary articulation of an old ideal that seeks to balance the creation and accumulation of wealth with fair-play and concern for the underprivileged. The desire for attaining such a balance goes back a couple of millennia.
At least since the onset of European Renaissance we see two parallel concerns gaining ground over the decades and centuries almost worldwide. These are increased economic, business and industrial activity for ever larger profits, multiplication of wealth and over all prosperity on one hand and the constant quest for economic justice, fair-play and the wellbeing of underprivileged masses.
These concerns go a couple of millennia beyond the European Renaissance. The fear that wealth creation and accumulation had a certain morally undesirable dimension to it led the great soul, Shri Mahavira, the founder of Jainism, to conclude that "property" could be a hindrance in spiritual attainment. Giving away one’s material possessions is still the Jain ideal.
Jesus Christ (peace be upon him) looked down at moneychangers of his time with disapproval, largely on the moral ground that such activity was ruthless, unfair and exploitative. Hence, irreligious and un-Christian like.
Islam, too, has been deeply concerned about the human propensity for greed, exploitation and selfishness. However, since day one it has vouchsafed for the legitimacy of business, industry, individual and group right to property, the sanctity and inviolability of such property and the legitimacy of generation and accumulation of wealth in morally acceptable ways.
It is the desire for protecting the economically weak and vulnerable classes during Europe’s Industrial Revolution that the transparently wrong-headed Luddites rose to attack and destroy the huge mills and factories that looked like Satan to them. And again it was the same desire that was behind the rise of a dozen varieties of socialism worldwide. In the middle of the 19th century came the Communist Manifesto that prescribed a stronger medicine for the malaise. The Marxist doctrine saw a conspiracy among the business, industrial and landed aristocracy and organised religion to marginalise the poor. Marxism duly went on to dismiss all of them, together. Even the Romantic movement in European art, literature (and political thought, too) was fuelled by fears about the industrial society one way or the other.
Through the ages, since day one (as said earlier) Islam has refused to delegitimise entrepreneurship, wealth generation and accumulation, but has stubbornly stuck to its stance of purging economic activity of all exploitative practices. It shares Jesus Christ’s and Shri Mhavira’s worries about human greed and selfishness. It is wary of usury (riba), and Islamic scholars are constantly trying to evaluate all transactions (from bank interests to speculation and forward trading) whether they have features that can be construed as usurious or unfair transactions.
We have been trying to make things participatory and non-exploitative. From the Islamic perspective investments have to meet some additional criteria: we can’t invest in the production and sale of intoxicants, pork, casinos, pornography and other morally outrageous activities or things regarded as taboo in our faith.
Admittedly, to the uninitiated it might look a little utopian and, even cranky. We have to keep it in mind that today’s peripheral is tomorrow’s mainstream. We remember how in our college days electronic equipment were fitted only in costly spacecraft, in weapon systems the super powers had. Today virtually the entire population possesses something or the other that has a microchip in it. Buy a 100-rupee toy and you find that it has a chip inside.
Participatory banking is not mainstream, but it is no longer peripheral either. Also, it looks more like an investment fund management service rather than a regular bank as we know it, that is, an institution that accepts deposits and pays interest on them or extends a loan against a standard rate of interest. That this is not peripheral is evident from the fact that it is already operational in 23 countries.
The business intelligence and rating agency Standard and Poor’s has said that the size of global Shariah-compliant assets is about $400 billion and the potential market for Islamic financial services is close to $4 trillion. That is a staggering figure from any reckoning.
So far the focus has been on the Western markets only, but now there is a concerted expansion towards Malaysia, China, India and Japan. Being Indians we have our stakes in India’s growth, prosperity and prominence. Being Indian Muslims we would be happy to have an economic climate a part of which is sensitive to our beliefs and conscience and which does not force us to make a choice between our conscience and opportunities of economic benefit.
The system, in fact, has nothing that deters any Indian professing any faith. It makes good economic logic and comes with all the standard regulatory safeguards that are part of the contemporary banking and investment melieu. We hope to have some of the top minds in the business and financial sector to see how we as a growing economic power can take our share of the pie.
Our two-day (August 31-September 1) conference is a crucial step towards staking claim to our share of the pie as a country.