Jamal Badawi – Economic System of Islam 12 – Prohibition Of Riba Interest 1
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The name of the benevolent the Merciful, the creator and Sustainer of the universe, peace and blessings upon coming forever. I mean, he was a greeting, comment in the summer, usual breeding on the Islamic Baptist program assalamu Aleikum, which means peace biagio I'm your host Tamar Rashid. Today we have our program in our series dealing with the economic system of Islam. We'll be continuing our discussion of production and productivity. And our topic for today we'll deal with the prohibition of rubber or interest. I have joining me on the program as usual, Dr. Jamal battery of St. Mary's University, that was Jamal sama Lake on income cinema.
In the last few programs in our series, we've been addressing mainly the question of motivation,
to productivity from the point of view of
the conceptual and historical perspectives.
Before addressing the question of interest, which is our topic for today, are there specific measures that you can suggest to help maintain and improve on productivity beyond the broad guidance has been? Yes, indeed. In fact, you can say, for example, that Islam's attitude towards the respect of the rights of private ownership, that you have discussed in one of the earlier programs in this series, is also part of inducing production and productivity because it responds to people instinctive need to possess something and try to invest it and make it grow.
In one of the MBA program, also maybe can make a cross reference here, the investment that Islam provides to work, it's teaching against laziness.
Respect of all types of unraveled, labor's manual or otherwise, is also an aspect of inducing productivity.
We have seen, of course, as you indicated in the previous problems, how the ideological religious orientation also of a true Muslim would be of being productive in fulfillment of his responsibility before God above all,
in addition, of course, to responsibility for humanity in general workers of mankind.
But in addition to this, we find that Islam has taken also more specific measures in the areas production productivity to make sure that resources are properly utilized. That includes teaching pertaining to land use, things pertaining to the prohibition of interest, or usually
also the system of Zakah in Islam, one of the pillars of Islam or charity,
institutionalized charity, if you will, our own factors, which seemed to work also in harmony with the previous measures that we discussed before.
We have a quick look at the question of land use, how does Islam induce its use? Okay, of course, needless to emphasize the importance of the land being one of the measure of productive resources in almost any, any country, or any location. But perhaps, let's say three or four basic regulations pertaining to land use, which provides. One is to give the government the right to dispose of what you might call, current land, land, which is owned by the government, and to give it to individuals who are going to make better use of it or make it productive individuals or bodies, you know, corporations, whatever, who can make use of this land, so that again, encourage, use proper use.
A second interesting teaching in Islam, that comes on the basis of the authority of the teaching of Prophet Muhammad peace be upon him as narrated in Abu Dhabi, udon and other services, is to induce people to reform land which is not tenable or land which is barren
to reform it and do some work on it. In fact, the prophet said that if a person get to a piece of land like that, which is not used, and make it usable, it is his he can use it becomes his property. And that's a strong investment.
Of course, the conditions is that this land should not be owned already by someone else. And number two, that in doing so, the principle of equal opportunity for everybody should be open so you don't say I've taken the entire land of the country for example and reform it, you have to give a chance to others
Also, who may wish to use the same privilege. And of course, an interesting third condition, which relates to your question directly,
is that if a person in Islamic law,
reform this land, but does not use it for three years, he may lose that right? I will talk about, again, land reform by the person. So he's got up to three years, if he doesn't use it or make it productive, then it can be given to someone else, and that, again, prevent resources from being idle. And others are teaching that even in land, which is not from just the regular situation, a price of 100 peace be upon him said that if one of you have any piece of land, he should either
cultivated, or if he's not able to, he should give it to someone who is able to cultivate it. So again, that's not just a matter of charity, but also overall benefit in society. And Firstly, even if the person doesn't wish to do just on a purely charitable basis, because he can't use it.
There is also something in Islamic law called mazara, which is a sort of partnership, whereby, if you're not able to use the land yourself, or you lack the skill, you can agree with someone else to work on that land, and you could contribute something to the cost of
cultivation, and agree on some kind of crop sharing. After the, you know, the the crop is harvested. So these are all examples of measures to keep the land in proper use. Some of us might think of this as really, very advanced or very modern type of measures. But in fact, 1400 years ago, these were enshrined in the stomach teaching.
We're now coming to the question of interest. I think you've indicated in some of our earlier programs, that the
prohibition of interest in Islam is not
contrary to productivity is. The common notion, however, is that it's impossible, particularly in the West common notion is it's impossible to conduct any kind of meaningful economic life without resorting to, to interest. How would you respond to somebody who, who have that particular point when it was it was common to hear that statement. But in my humble understanding, it is a common myth also,
to say that it is impossible to have an advanced economy, not based on interest and interest dealing around we have seen in previous programs,
unequivocal evidence how Islamic civilization and progress has flourished in different parts of the world under different cultural circumstances, for hundreds of years, and we have seen again, the great advancement not only in science, but in agricultural industry, trade and commerce. And these activities were all based on one interest situation is not only on an interest base type of structure, how did they
progress and flourish without interest? It is interesting to notice that during the caliphate of American abdulazeez, that nearly the about 90 years after Prophet Muhammad peace be upon him, that when they collected the charity from North Africa, they did not find enough tours who are in need of that charity. And you might recall in one previous program, sometimes back we said that the command or the instruction of the clinic was to use this money to buy slaves and set them free because there was no poor really in need. When do we find that in the 20th century, and even advanced, technologically advanced country in the world will very prosperous and affluent economy, that cannot
be enough for the people who are asking for charity or need. In fact, the contrary is true. We find problems with the funds available for Social Security and not being able to meet the needs of those who are in need. I think this is an irrefutable evidence that you could have a very, very flourishing economy without necessarily having to resort to, to interest.
Well, if
there's any reason
why you should not have a partnership, and participation in profit and loss on equal grounds without interest, there's no reason why can't we have that this is the question really, that it's not always Why not?
Why not have interest? The question, why do we have to have interest is actually an absolute necessity. But in any case, from the Islamic standpoint, in Islamic law, its interest is not an acceptable alternative to establish
flourishing economy.
It's not only
Islam has prohibited interest is that is not right. There have been other religious communities as well going against the river or interest. Oh yes, that's true. In fact, for example, for most viewers will be familiar with the Bible. And if you refer, for example, to the book of Deuteronomy in chapters 23, particular verses 20 and 21, we find that the instructions verse is quite clear that the Israelite or the Jew is not supposed to lend money, or get interest on loans from another Jew.
The principle is there, even though of course, the difficulty that a Muslim would have with a text like that is that it seems to imply that you can take interest from a Gentile, that in the case of Islam, the prohibition applies to both, you know, a Jew and Gentile Muslim or non Muslim both can be under the same regulation. In the book of Matthew, for example, in chapter 21, and especially verses 12, and 13, we are told about the Prophet Jesus peace be upon him when he entered into Jerusalem went to the temple, and that is through our years. First, the tables of the money changes. And in fact, according to the book of Matthew, He was accusing them of turning the temple of God into what
he called den of thieves, as has been translated.
In the Reformation movement, we find that Moses
has called upon Christians during this reformation period to go back to the original teaching of the Bible. by prohibiting interest. In fact, he wrote a little booklet on the subject. And he considered it
contrary to the role of God and contrary to reason, even today, in
an interest,
even in some philosophers not to find that people like Aristotle, for example,
made an interesting remark that unlike animals, animals can be good animals. But he says money cannot be good money. In other words, money should be regarded as a measure of value. But money is not a commodity itself.
You know, that you can get interest on
some of these views preceded Islam. Some even came after Islam like luthers.
Calm under permission, you know, no, was after Islam came. So the the idea of prohibition of interest is not
is not unique to Islam. It's it seems to be a basic moral or ethical law, really, throughout history.
paths will give us some indication of the authority for the formation of interest in Islam. Is it to based on the Quran? Or is it based on on opinion? Well, it is based on the Quran on the prophetic tradition and the consensus of learned jurist throughout Islamic history.
The first thing to notice here before I go further, is to reiterate what I mentioned earlier, that the prohibition here is not just between Muslims, it's prohibition that applies to everybody because whatever is regarded as an equitable and unjust is applicable to Muslims and non Muslims as well, at least from an Islamic standpoint. But the Quran for example, in chapter four and verse 161, indicates that one of the inequities of the Israelites is that they took usury abroad, they were forbidden from taking it. So that threat or a kind of warning to Muslims not to follow the same kind of, of learning or violation in chapter 30, in the Quran, verse 39,
which by the way, is a matki chapters that is received in Makkah, before even understanding state was established in Medina, will find again, for prohibition of usury, and that this is something that would not be acceptable, by,
by God eroded by him in chapter three in the Quran, in verses 130 and 131. It makes an analogy between avoiding usury and avoiding temperance, which is quite a serious kind of analogy.
But perhaps one of the more dramatic verses in the Quran about about the user is the verse that says, Yeah, you have Medina mm
hmm algebra in quantum meaning.
The translation of the meaning is that, ergo who believe
a field God and give up what remains of your demand for usury, if you are indeed believers, if you do not, notice us take notice of a word from God and His apostle and hope
can stand a word,
who is adversary and that word is God and His Messenger, it's it makes it really clear that usually is great even that one should really keep away. Of course, unfortunately, in our day and age, it seemed that the widespread
use of usury or interest,
have made it so easy for us to look at it very lightly as something which is acceptable simply because it's so widespread. But the same kind of principles has also been echoed in the prophetic traditions, perhaps one of the more dramatic ones as narrated in Muslim, a Buddha route and the timidity in which the Prophet said that the curse of God would be on Usually, the people who take it the people who give it the people who aren't even usually contract or witness this kind of contract, which shows that any participation even in promoting interest, dealings is forbidden for the Muslim. The same kind of pictures were mentioned by the prophet as some of the scenes he saw in the night of
ascension, where he saw again, people who deal and usually in kind of terrible punishment.
But perhaps one of the things that relate to our being so accustomed to usually is a prophetic traditional narrative in which he says that there will come a time when people will deal in usery. So the companions asked what the Prophet he said.
He said, Well, even those who are not directly dealing with usury, will still get the best of it or still get some touchwood.
That's where we are today. So widespread, is not really neither necessary, or right from the point of view of Islamic law.
There are some Muslims who try to justify an interest on a number of grounds that might be helpful for us to spend a few minutes examining some of the grounds that they put forward as well. First is some claim that Islam only forbade the usury. And that usually is different from interest.
Perhaps it shows that they don't understand the the use of the Arabic term, but could you comment a bit on people who hold that view? You see some of the confusion about this? This particular question is that somebody would go to the translation of the meaning of the Quran in English, go to the dictionary, and find the meaning of the word as if this is the original word. As we know, the Quran is revealed in Arabic. Now, it is true that if you check the English dictionary, you find that the term usury means excessive, or illegal, kind of interest.
That means modest interest is different. Yes, but that's in the English term. But the crown is not always in English. That's the problem. See, the original word that appears in the Quran is roba. If you transliterate that it reads like our Ba, Riba and ribbon era, but doesn't mean excessive use of urban Arabic simply means anything in excess,
which means anything in excess of the principle capital, whether it's a small or
unfair or unlawful. Still, it is, it is it is whether it is a study from the Arabic standpoint from the language in which the Quran was revealed. This kind of distinction is not really valid. From the practical point of view, again, it doesn't make much difference, because based on the Arabic definition, whether that increment is small or big, it is regarded as robots it's either big interests, small interests, but what is forbidden in Islam is interest period, regardless of the magnitude. And in fact, the Prophet Muhammad peace be upon him did warn Muslims, that towards the end of the days or later in later days, people would do the things which are unlawful, but give a
different names. And we found that in usually as we find this in other fields, we find for example, indecency and lack of proper
cover and * and all this is sometimes called asked, yes, we'll find intoxicants that destroys the person's mind and health is sometimes called spirits as if it's something you know, spiritual to drink, or to take drugs. By the same token, this is usually which is regarded as wrong islamically from the ethical point of view, as well as practical point of view. Is Guardian giving a different name? No, that's not usually its interest. Well, what's the difference? Really, it's basically
one of the same different names really that accurate, at least
On the basis of the terminology used in
profiles, fellow something that
that
one verse in the Quran speaks only of excessive interest, implying that, once again, that reasonable interest is satisfactory. How would you? How would you respond to that? Okay, first of all, one has to refer to that claimed evidence and see whether it really stands scrutiny.
The worst that's usually cited to support this kind of view is chapter three, and that's first 130, which says, Yeah, you have levena amanu letter coolibah of Asada, which means all you have to believe, do not devour usually doubled and multiplied by fear God, that you may prosper. And they say, well, it says, of alpha madatha, multiplied, you know, twice, thrice and more. So we say, right, well, if the interest is 200%, or 300%, it's under four. But if it's reasonably modest, it is not, it's not unlawful.
But what I'm forgetting is that if you refer to the terminology used in the Quran, it says do not devour usury. It doesn't say devour the principal.
And usury, can easily be multiplied twice, thrice and 10 times. If you're paying an interest rate of, let's say, even 7% a year, something which is red, you can find that now, but supposedly 70%. Well, if you have a loan for five years,
and assuming that you're not making any payment until the end of the five year, the first year,
the interest is multiplied almost five times, because you have to pay 7% a year, so by the end of the five years is specified. So if you look only at the additional amount that you have to pay the interest, it is multiplied so many times. Furthermore, if you look at it, let's say as a monthly interest, the same problem is there, it may sound like a modest three quarter percent per month, but the next month, it will be one and a half, by the end of the year, it will be 12 times as much as a quarter percent. And that meets the quality criteria mentioned in this verse that it is multiplied, it is true that interest is multiplied so many times it's not unusual, even if it appears modest, a
few percentage points here in verse. But even then, if you look at it in terms of the long term investments, like people buying homes, if you buy a home, at even a 10% interest rate over 25 years, you can go and get the tables and find out how much total you'd be paying by the end of the 25th year before you own the house, it would be at least two to three times the original value or the original cost of the house. So even the principle here has been multiplied not even the addition.
So what we're saying here basically is that when the Quran speaks, or uses the term, doubled, and multiplied, it is as a qualified jurist say, it is not a condition for being forbidden. But a description in a bad state of affairs. We have to explain that legalistic room, just like if somebody says brutal murder is wrong,
when it doesn't mean that murder, which is not brutal, is okay. It's simply that you're making the murder look very, very bad really look terrible in the eyes of people. But it doesn't mean that other types of measure, which is not to pretend,
you know, is is a key. So, in addition to this, of course, why pick that particular verse, even though it doesn't mean what some may wanted to meet them, and look all the conclusive texts in the Quran and prophetic tradition which did not make a distinction between small or big interest in government.
Those who claim that interest dealings are just the business like any other kind of commercial dealing, and as such should not be subject to any prohibition, but not a new question. In fact, some might be surprised that the very same question that was raised also by the unbelievers during the days of Prophet Muhammad peace weapon, and it's a very, very frequent question. I'm glad that you wrote it was, in fact about the Andes. In chapter two verse 275, on vegetable garden in the Middle East, Mr. algebra, Bella, it says that those people who devour Usually, I will say that usually is just like trade or commerce. But the worst surprise that God has made trade loans and interests are
usually a novel. So the same kind of analogy was was made in the past. But in addition to the response in terms of the text of the Quran, it can be
Speaking, they seem to be sometimes a mix between money and capital. And some people use the term money and capital
interchangeably, which is not necessarily true. money could be used to buy 70 things, you can use money to buy services, you can buy consumer goods, calves, TV sets, whatever, buy this money, or you can buy equipment, which would be regarded as an asset, or capital. So to say that money and capital are synonymous, is wrong in itself. And as we indicated earlier, money is not a commodity in itself, it is a measure of value.
So that if you convert that money that you want to invest in a form of machinery, assets or other equipment, then you deserve slamet. And there's nothing wrong with that islamically you deserve some income or some kind of reward. But that word would not be just, you know, six times type of interest, that's something that would vary with the kind of profit or contribution that your assets or your equipment adds to the profitability of any particular enterprise. So the two are not necessarily synonymous, but it is different from interest.
Some of the other rounds that some people use to try to justify interest and some have suggested that what Islam prohibits is the charging of interest on consumption loans, especially loans to needy persons.
Is there any basis to that claim? There is no basis for that either. But I remember of reasons for that statement. First of all, it has been already indicated that etymologically speaking the meaning of the word ribba means increment, whether that increment applies to consumption loans, or soccer production type of loans.
And those who say that, they claim that the Arabs before Islam, that's where the Quran was revealed first, even though it was not intended only for them, but they say the context of it was that people should not really
charge interest to people who borrow, because they are needy, because they were to eat, for example. And what they seem to forget, is that the life of the herbs before Islam was really very simple life. And Arab, at that time did not borrow in order to buy a late model car, or a color TV or a video cassette recorder or anything of that sort, as we did today. And that's what causes so many people to keep borrowing and having charge cards and all that.
There used to live in a very simple way they eat mainly dates, and bread, you know, bread even was available as a kind of a luxury item. They drink milk from the gods. When it's very difficult really to say that the herbs before Islam used to borrow a lot to buy this
goat milk doesn't seem to be logical at all. Rep seems to be more magical, perhaps is that Mecca and Medina Mecca where the Quran was revealed first, and a tie for example, a nearby city were commercial cities. Yes, that's one thing. Secondly, in the farewell pilgrimage, Prophet Muhammad peace be upon him in his speech, made it very clear that all kinds of of usury or interest is forbidden. And he said one of them is the usury that was charged by my uncle Alabama. Now Historically, the uncle of the Prophet was not someone who was going to borrow to buy debts or milk or milk. He has a reasonably rich person he used to provide food free food for pilgrims. He was a
merchant. So the knows that the Prophet is talking about, he has worked production loans, that loans to use in commerce and trade, and then simply, you know, people will be charging him some
extra for this. So we're talking about commercial or production loans that the Prophet was was dealing with. The fact that some of the verses in the Quran speaks about prevention of interest, and then talks about charity does not necessarily mean that it's only in the case of law because charity in Islam means also to avoid things that are forbidden. After all, the Prophet says to smile in the face of your brother is a charity.
While our time for this episode of Islam focuses has gone we want to invite you back next week we will continue our discussion. Thank you for watching. Peace