Islamo-Capitalists

Even as the BBC reports on a sad sack gathering of anti-capitalist European Islamists, reader Mark Dranias points us in the direction of The Minaret of Freedom Institute, an Islamic group whose goal "is to educate Muslims on the importance of liberty and free markets to a good society, while educating non-Muslims about the beliefs and contributions of Islam and the political realities of conflict between the two cultures."

Comments

[Anonymous]

do they advocate tax cu...I mean welfare for the rich.

[jacob dreyer]

what? the man at the anticapitalist conference said capitalisms collpase is imminent? what an original message!

LOL @ the notion that capitalism isn't capitalism if you use gold dinars instead of dollars, pounds and euros.

[Madog]

"Mr Vadillo, a Spanish Muslim, called on all followers of Islam to stop using western currencies such as the dollar, the pound and the euro and instead to return to the use of the gold dinar.
...
Shortly afterwards, he said, the capitalist structure would quickly fall and it would make the Wall Street crash of 1929 seem minor by comparison. "

So in his mind returning to the gold standard would would lead to the collapse of capitalism? Interesting theory.

[Anonymous]

you don't earn interest on gold.

[Anonymous]

you do if you loan it

[Ira Weatheral]

Wasn't Mohammad a merchant? What would be his take on this issue?

During the expansion phase of Islam all unbelievers were treated with respect but taxed more heavily than believers. This led to many conversions. Why don't they try this appoarch in Europe?

[Anonymous]

Where can I buy gold diners? Is it time for the stateless bank a la the Cryptonomican. Apparently leftist islamists would support it.

[Russ]

Hey anon@4:21,

You don't earn interest on any currency... You earn interest by lending it. Gold works the same way.

[Alex]

not strictly speaking correct, anon 4:21

Through forward sales, Islamic funds are able to synthetically earn interest on their gold balances - skirting the obtuse Islamic injunctions prohibiting interest.

[Douglas Fletcher]

I'll sell you a rug for $3,000 dollars.

[Alex]

Cash and carry operations employing forward sales earn contango, however, this is not the same as "synthetic interest". The forward price does factor in the opportunity cost of capital (aka. interest) but the expectations of future supply and demand play a bigger role. Hence, in times of shortage, futures markets exhibit backwardation, a condition where spot prices are higher than forward prices. By your argument, this would amount to negative interest rates.

[Alex]

Other Alex:

As you probably know, backwardation in precious metals markets (as opposed to ags or energy) is an extraordinary aberration since storage cost is trivial and there is little effective convenience yield ... in any case, the forward curve in metals is typically governed by the risk-free (which is to say, Treasury interest) rate, less the negligible lease rate. Islamic investors have used the carry trade (holding cash metals, selling forward at a premium) since the 80's in order to synthetically earn this yield -- which itself depends on the open market (non Islamic 3rd parties) acting as lenders on behalf of the gold owner; otherwise a higher futures price (as always exists) could not be economically justified.

Lending of the metal itself (and therefore earning the lease rate) I believe is off limits to devout Muslims.

Here's an interesting PDF on derivatives in 'Islamic finance' if youre interested:

http://islamic-finance.net/journals/journal1/art2.pdf

[Alex]

Do you really believe an system deigned to regulate a medieval barter economy is a "major contender" with free-market capitalism? It's no coincidence that for centuries in the Arab world technological innovation languished while industry thrived in the free markets of the West...

Islam's record re: "social justice, animal rights and environmental care" is far from ideal... why would anyone expect an Islamic financial code, arbitrated by clerics, to be more just than what we've got?? At least CEO's are answerable to their shareholders.

[Anonymous]

http://www.eh.net/lists/archives/hes/mar-2001/0057.php

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Why should members of ACE be interested in a book on Islamic finance? Because the Islamic financial system is at present the only reasonably well-articulated major contender against the current materialist economic system (capitalism), and because Islamic finance is based on tenets curiously parallel to those in the Old Testaments. Examining the case for and against an Islamic financial system may also help us to consider the case for and against developing a genuinely Biblical economics. Further, one might wish to consider that, as the failure of the Church adequately to address its prophetic duty on the issue of social justice in the nineteenth century led to the creation of Marxism, and as the failure of the Church adequately to tackle the desire for peace and a new world after World War II led to the birth of 'flower power' and the New Age in the Sixties, so the failure of the Church adequately to tackle the challenges of capitalism is leading at the moment certainly to individual conversions to religions or philosophies which are perceived as offering some hope regarding the key issues of global capitalism such as social justice, animal rights and environmental care ('sustainability'); if the Church continues to fail in its prophetic duty to address such issues, we may well see the development of another soul-less and therefore ultimately destructive mass alternative to global capitalism.

[jacob dreyer]

ANY alternative to global capitalism is ultimately destructve

[Anonymous]

http://libertaddigital.com/noticias/noticia_1275765938.html