It's crazy to think that I was raised going to church every Sunday, and I had never even heard the word "usury", or even the idea that lending money at interest might be morally wrong, until I started reading gnostic christian texts. It's there, the ancient church used to talk about it, but we don't anymore.

It's weird to think that this entire piece of morality, which was taken seriously in the past, has just been erased from western culture.

Exactly. They change the names to something more palatable. "Usury" became "interest", so it's all good now. In reality, it's all the same parasitic morally bankrupt garbage.

I really love the way they do home buying. Basically no-interest, but also no opportunity for mortages. The bank owns the house until you've completely paid it off.

I looked a little but couldn't find a longer article explaining it in more detail, but it should be easy enough to search out for interested parties.

To be fair, those transactions are also usurious, because they increase the price of the asset in exchange for postponing payments. There are several Hadiths (narrations) that prohibit that transaction.

Nice. I guess I only love it in theory.

Humans gunna human.

It's very tempting to deal with interest that's for sure, but we have to sacrifice for the greater good. We already see around us what's happening due to parasitic economic practices.

I am under the impression that Islam technically bans loans. So one would have to do an investment instead of a loan with interest. Do you know if I have this right?

So I grew up in a traditional muslim household, here's my understanding of things as they've been taught to me.

generally there are 2 types of loans,

1. Kharz Hasan (Loan of goodwill) given out to people/institutions without any collateral, sometimes even without a term limit. Its up to lender to decide if they want their money back or forgive the loan which then turns this loan into a "Sadqah" (charity).

2. Loan with a collateral: this is the standard loan where the two parties agree on a collateral and lend money based on that.

Neither of these above loans involve any kind of interest.

(My) Islamic Understanding of Mortgages: The risk profile is different compared to normal. Normally what happens is that institutions loan the amount of money and you buy the property and pay interest on the money. In the Muslim Model, the institutions BUY the property and you pay money. The money you pay goes partly towards buying the property and the partly towards paying "fees" to use the property that you don't completely own.

You can see why people would say things like, "oh, they are skirting the rules by changing the name from interest to fees". However, a "proper" implementation would put more burden on the banks in case of a crash.

Hope that clears up few things.

> In the Muslim Model, the institutions BUY the property and you pay money. The money you pay goes partly towards buying the property and the partly towards paying "fees" to use the property that you don't completely own.

Check out what the Companions Ibn Abbas and Ibn Mas'oud said about such a transaction. It's still Riba (usurious) because the price of the house or asset is raised in exchange for postponing payment. It's only relatively recently with the heavy influence of Western banks that this "model" has gained some traction, but it remains a usurious transaction and many scholars have spoken against it.

My understanding is that it isn't the loan that is banned but charging interest. A fairly simple workaround would then be to charge a monthly fee instead, and you would then end up with something that in practice is more or less the same.

> A fairly simple workaround would then be to charge a monthly fee instead, and you would then end up with something that in practice is more or less the same.

No. Islam bans all these workarounds. What you describe is still a money for money exchange. Interestingly enough, Islam does not just ban interest, it has a concept of Riba, which includes interest/usury, but encompasses other transactions as well. What you describe falls squarely under Riba.

This is my takeaway with religious practice. If something is desired, but banned, people will find something that is practically similar enough, and technically allowed by the religion.

In practice, religions tend to have institutions that parse and interpret the text, and make a clear, unambiguous interpretation for a given situation.

So people might tell themselves they are doing a workaround, but it is not really valid from the point of view of the organized religious body.

Except with Islam, since its texts are clear enough to warn about and prohibit what you're describing. Don't lump all religions together.

In Islam, loans are purely an act of charity. A person lends another person a certain amount of money, and they are not owed anything in return (tangible or intangible) other than that same amount of money.

In general, you're correct. People invest their money, with the possibility of profit or loss. One reason interest is prohibited is that the lender is contractually obligated to a profit regardless of the outcome.

Ah, because countries with Islamic finance are renowned for the strength of their economies.

The Catholic Church prohibited usury across Europe until the invention of the contractum trinius, allowing the economic revolution that powered the Renaissance and the transition to modernity.

Correlation vs causation.

If you look at Iraq during the Ummayad dynasty (Umar II), there was a period of time when there were no poor people left to take charity (Zakat). Would be nice to see that again in "modern" financial economies.

> Ah, because countries with Islamic finance are renowned for the strength of their economies.

As opposed to the Western world and its traditional decennial world-threatening financial crisis?

And the ever-widening gap between rich and poor?

The fact that the West's economic crises - which, viewed in the long term, are bumps in a continual upward trend - can threaten the economy of the world as a whole is testament to the strength of its economic model.

And the gap between rich and poor is ever-shrinking, not widening, as poor countries develop by adopting modern technologies and institutions.

It doesn't change the fact that the modern financial and economic system are morally bankrupt. We don't learn from our mistakes, and it becomes normal to have these cycles of collapse then build back. These cycles are caused by interest/usury being at the core that drives the system (why did the government move away from the gold standard? because they want to be able to print their way out of their usurious debts, it's all related).

Look up Iraq during Umar II's rule, how there were no people left to take Zakat because there was a proper economic system.

We do learn from our mistakes, which allows us to make new mistakes. We learned how to free our currencies from their chains of gold and allowed the money supply to respond to the demands of the economy. We learned how inflation is a monetary phenomenon and tamed it with interest rates. We learned how the business cycle propagates itself and introduced countercyclical policies to damp it down. We found that the Great Moderation promoted speculation in real estate, causing the GFC, and responded to that with stress tests and capital buffers in our financial institutions. We have come through a pandemic with our economy running, jobs preserved and society intact. I can't wait to see what the next crisis will be, because the solution will make us even smarter and wealthier.

> We learned how inflation is a monetary phenomenon and tamed it with interest rates

Fix one mistake with another mistake? Plus, it's the other way around, interest rates cause more inflation (how else is the government going to pay its debts?). It's a cyclic phenomenon. Without interest, inflation would be a much less problem.

Secondly, freeing currencies from gold is another mistake because it allows the government to devalue its currency at will, we've see the chaos that comes out of it. Hopefully bitcoin and gang will fix that mistake, but we're already seeing the big banks not liking it because it will take away their power to control the people.

> We found that the Great Moderation promoted speculation in real estate, causing the GFC,

Which would have never happened if we were following proper economic laws which we've literally known about for over 1400 years. Mortages and selling debt for debt are both prohibited Islamically. We already know it's wrong, yet people keep engaging it it because a few rich and powerful will benefit at the expense of everyone else.

The solution is to go back to a sound economic system, not to anticipate the next crash because it's built in to how the modern system works.

Oh, dear. Money isn't created by governments; it's created by banks (and, given demand, shadow banks). Raising interest rates reduces the stock of viable projects thereby reducing lending and money creation, which halts inflation. This is trivial stuff.

The laws of millennia ago were appropriate for their time but would be hilariously ill matched to today's world. Look at Turkey to see where that takes you.

> it's created by banks

They work in tandem with the government obviously.

> Raising interest rates reduces the stock of viable projects thereby reducing lending and money creation, which halts inflation. This is trivial stuff.

Setting interest rates to 0 also heavily reduces lending because no one would be incentivized anymore to lend as they're not getting any benefit. This is why in Islam, lending is purely an act of charity since the lender can in no way shape or form be contractually owed any sort of benefit, monetary or otherwise.

This is proven to work up to even recent times before everyone was forced by the West to succumb to their dangerous economic practices. Claiming that these ideas are only suitable for millenia ago is outright false.