I was reading Socialism’s Ignored Success: Iranian Islamic Socialism by Ramin Mazaheri, and they mentioned something that has become a common sight here too: Islamic finance.
Iran is leading in Islamic financing, with Saudi Arabia, Malaysia, the UAE and Qatar filling the rest of the Top 5 according to this report.
For those who don’t know, it’s basically finance but with Islamic principles as accorded to the Quran and various Madhhabs (schools of jurisprudence).
Some of it’s principles are (quoting Wikipedia), among others:
- Paying or charging interest. “All forms of interest are riba and hence prohibited”. Islamic rules on transactions (known as Fiqh al-Muamalat) have been created to prevent use of interest.
- Investing in businesses involved in activities that are forbidden (haraam). These include things such as selling alcohol or pork, or producing media such as gossip columns or pornography.
- Charging extra for late payment. This applies to murâbaḥah or other fixed payment financing transactions, although some authors believe late fees may be charged if they are donated to charity,or if the buyer has “deliberately refused” to make a payment.
Has any comrades read much on this?
How viable do you think is such a financial system, especially now, with renewed interest in de-dollarisation? (see what I did there?)
Can it fully live up to it’s socialistic principles in a world capitalist system?
Honestly most banks nowadays don’t even really offer interest on savings any more, or if they do it’s so low to be basically useless. The days when you could put your savings in a bank and have them accrue interest for you are over. The only way you get that today is by investing it into the stock market in some way or another. At least that’s the case where i live. If you’re poor you actually come out with a net loss when putting your money in the bank because they charge an “administrative fee” which is many times higher than the few meager cents of interest you’d get.
The banks are able to have their cake and eat it too. Not only do they get to rip people off with absurd interest rates on loans and on top of that get to gamble with your money and make even more profits doing that (and if they lose they get bailed out by the taxpayer), they also have stopped even pretending like you get something out of giving them your money to do all this with, because they know you have no choice. You have to use the banking system or you literally can’t function in western society, can’t even get your wages paid otherwise and you can’t pay your bills any other way.
I haven’t used these guys, but this bank in the USA has 4% annual interest for savings accounts.
https://www.liveoakbank.com/
And yes, in the USA, the glass stegal act repeal has been disasterous in how it works in tandem with the FDIC.
You need to compare the nominal interest rates with the rate of inflation. Because if inflation exceeds the interest rate on your deposit you are effectively losing money. It’s like having a negative interest rate. And that is still very much the case in Europe. If anything it has just gotten worse in recent times.
The US still has two advantages: one being that they have vassalized Europe and can cannibalize those economies to keep their own afloat, and the other being that they still control the dollar as the world reserve currency which allows them to keep their own inflation low at the expense of the rest of the world.
https://www.usinflationcalculator.com/inflation/current-inflation-rates/
4.9 percent in year 2023. and most banks in the USA are less than 1 percent.
I don’t know what to do with my inflated dollars. I find it hard to believe that these stock market shenanigans will continue for 40 years.
Do any of you know of a place where we can buy currency that is likely to not inflats as much as the dollars to hedge against inflation caused by de-dollarization? Because alot of dollars will be chasing alot less goods very soon.