Date :Tuesday, November 10th, 2020 | Time : 19:58 |ID: 180194 | Print

21st Century Usury: The need for a Moral Economy/Shafaqna’s extended interview with Clive Menzies

SHAFAQNA | by Syed Mohsin Abbas: “Imagine having the power to control time. To manipulate time. To become its master. Instead of feeling like a slave to time, imagine what you might do, if you had the power to make time work for you? Throughout the world, our time is controlled, manipulated and directed, by ‘Masters of the Universe’.  Men who are adept in these ancient secrets, and have the power to make “our” time work for them. They are the bookkeepers.”

“For every debit there must be a credit, and for every credit there must be a debit” – Alas!  How few consider that if this must be the case, the rule to go by, nothing is more easy than to make a set of books wear the appearance of correctness, which at the same time is full of errors, or of false entries, made on purpose to deceive! This clever sophistry of the “Time value of money” has its origin in one of the greatest moral arguments of all time; whether the charging of interest on money (usury) is right, or wrong. Men have always dreamed of possessing this power. In 15th century Italy, the discovery of mysterious ancient documents in Byzantium finally made it possible.” So asserts the Colin McKay who writes at

Bismillaah ar-Rahman ar-Raheem

Wal ‘Asr

Innal insaana lafee khusr

Illal ladhenna aamannu

Wa ‘amilus saalihaati wa tawaasau bilhaqq

Wa tawaasau bis sabr

In the name of Allah, the Beneficent, the Merciful

Time is witness that, surely, mankind suffers loss,

except for those of faith,

Who do good, and become a model of truthful living,

and together practice patience and constancy.

Surah Al-Asr of Holy Quran (Translated by Kabir Helminski)

This emphasis, in the Holy Quran, on mankind being in loss and God’s swearing by time read in conjunction with the preceding introduction about those men seeking to use time as a means of enhancing their immoral material gain and thirst for ever greater economic control raises the question of the contemporary nexus between morality spirituality and economics today.

Clive Menzies*, founding member of Critical Thinking at the Free University- a research and analysis project, highlights the historical roots of modern usury in the West asserting that when the ‘Father of the Renaissance’, a humanist scholar, priest, and astrologer by the name of Marsilio Ficino translated the Corpus Hermeticum from Greek into Latin, he could not have known that his labour would, in time, condemn most of humanity to slave labour for the Lords of Time. Clive Menzies argues that “interest on money is the wrecking machine at the heart of the economy, but its evil purpose is hidden by the comfortable illusion of double entry bookkeeping” and that “interest on money is the means by which bankers rule the world.”

Abhorrence of usury in Islam and Christianity 

Islam and Christianity have much in common especially in terms of love of the Divine respect of Jesus Christ, moral codes and virtue ethics. But practically, the original teachings of both have interesting synchronicity on many practical societal issues, too. One such commonality was there abhorrence of usury. Clive clarifies that “Christianity prohibited interest until the Renaissance and the invention of double entry book keeping”. Islam still prohibits usury even though modern Islamic banking institutions seem to have evolved a sugar-coated form of usury, claiming it is free of the practice of Riba, but there’s a recognition by many Islamic scholars that it is not strictly as halal as its promoters would have us all believe.

The word used for ‘interest’ in the Quran is Ar-Riba, an Arabic word which means ‘excess.’ In Sharia (Islamic Law), it is the measure of excess in one thing when two things are exchanged in some bargain; or in the case of a loan, an increased amount of the loan at the time of its payment. In Islam, dealing with Riba is one of the major sins, which entail severe punishment by Allah Almighty. Allah, the Exalted, says :

“Those who consume interest cannot stand [on the Day of Resurrection] except as one stands who is being beaten by Satan into insanity. That is because they say, ‘Trade is [just] like interest.’ But Allah (SWT) has permitted trade and has forbidden interest. So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with Allah (SWT). But whoever returns [to dealing in interest or usury] – those are the companions of the Fire; they will abide therein. Allah (SWT) destroys interest and gives increase for charities.

And Allah (SWT) does not like every sinning disbeliever. Indeed, those who believe and do righteous deeds and establish prayer and give Zakah will have their reward with their Lord, and there will be no fear concerning them, nor will they grieve. O’ you who have believed, fear Allah (SWT) and give up what remains [due to you] of interest, if you should be believers. And if you do not, then be informed of a war [against you] from Allah (SWT) and God’s Messenger. But if you repent, you may have your principal – [thus] you do no wrong, nor are you wronged.” (Quran 2:275-279)

The reasons, put forward by some scholars for such severity in the matter of interest, is that Islam wants to create a society that is founded on fraternity, sympathy, selflessness and sacrifice. If someone is in need of money, the rich should fulfill his needs for the sake of Allah’s (SWT) Pleasure or give him a loan without interest. As against the Islamic system, this system of interest is based on selfishness, exploitation and suppression.

These religious scholars note that in the interest-ridden societies, the affluent people are not inclined to co-operate with the needy for the sake of Allah (SWT). All they are concerned with is their own interest. Their lust and greed are not reduced in the slightest measure even after draining the last drop of the blood of the poor. This, they say, is the reason why Islam has forbidden interest of every kind and regarded it unlawful, no matter whether the loan is for the personal need or commercial requirements.

Rebirth of usury as a result of “Me”-centred rather than “God”-centred worldview

Colin Mckay argues that “for over 1,000 years the Christian West also officially prohibited the practice of charging interest on money (usury). But in the 15th century, the advocates for usury found themselves equipped with a new box of rhetorical and symbolic tricks with which to convince their audience. The syncretism of Neo-Platonic, Kabbalistic, and Hermetic philosophies in the Renaissance (“rebirth” in French) resulted in the resurrection of ancient Greco-Roman paganism. With it came an individualistic, “Me”-centred rather than “God”-centred worldview, with all-pervading emphasis on rationalism, and numerical calculation. In particular, the calculation of profit that German economist Werner Sombart says that “by enabling a numerical, monetary (and hence, in his view, “rational”) calculation of profit, double-entry bookkeeping provided the basis on which commerce could be seen as a process of acquisition: as an unending, systematic pursuit of profit.”

Colin goes on to assert that the “popularisation of double-entry bookkeeping in the Medici’s (European Renaissance) time offered another profoundly important benefit. It gave the merchant a way to “rationally” justify all of his “costs” — including the “costs” he perceives himself to have suffered, in extending (lending) “credit” to customers. This says Colin “would prove crucial in context of the historical argument on usury. Then, as now, those who argued in favour of usury have claimed that a man who lends his money to another has a moral right to be compensated for a wholly imaginary expense — the “opportunity cost” of his not being able to use the money he loaned out, to earn more money in some other way.” These critics of the current economic order argue that “money” created by bankers is simply the symbolic, written expression of a double perception. Each Dollar, Euro, or Pound created as a new loan magically appears (to the borrower) as both a debt (Liability) that must be repaid plus interest to the bank, and simultaneously, a credit (Asset) that the borrower can spend.

Church’s ban on usury

Clive Menzies points out that in “an essay published in 1985, the historian James Aho linked double-entry bookkeeping to the ancient art of rhetoric, the rules used to make persuasive arguments perfected by the Roman lawyer and orator Cicero (an art, incidentally, which Aristotle says sprang from a property dispute). He says that “according to this argument, medieval merchants used double-entry bookkeeping as a rhetorical tool of capitalist propaganda, to persuade their ‘audience’ that their business was honest, morally sound and its profit-making justified.

Why would bookkeeping need to persuade? Because, says Aho, it was used to defend these businesses against the Church’s ban on usury. The rhetoric of a well-kept ledger argued for the honesty of a business and the legitimacy of its profits, as this advice from 1683 makes clear: ‘If [the merchant] be fortunate and acquire much, [double entry] directs him the way to imply it to the best advantage, if he be unfortunate it satisfies the world of his just dealing, and is the fairest and best apology of his innocence and honesty to the World.’

Psalmistice’s author also reveals that in “Vol 2 of ‘The Economist As Saviour 1920-1937,’ John Maynard Keynes’s biographer Robert Skidelsky informs us that in Keynes’s view capitalism’s driving force is a vice which he called “love of money” in the General Theory “the propensity to hoard” or “liquidity preference” plays a vital part in the mechanics of an economy’s rundown, once something has happened to make investment less attractive. This links up with Keynes’s sense that, at some level too deep to be captured by mathematics, “love of money” as an end, not a means, is at the root of the world’s economic problem and  that “nearly two thousand years earlier, Jesus of Nazareth pointed to the same thing, in debunking the money-lenders’ illusion (delusion) that “‘Time’ (‘God’) is ‘Money’”. The moral inference being” that no one can serve two masters as either he will hate the one and love the other, or else he will be loyal to the one and despise the other. You cannot serve God and mammon [money].”

Bernard Lietaer is a former central banker, fund manager, and co-designer of the European Currency Unit (precursor to the Euro), who was named “the world’s top currency trader” by Business Week in 1992. Until his recent passing, Lietaer was a currency system reformer with almost 40 years active experience in the field who explains that “essentially, to pay back interest on a loan requires using someone else’s principal. In other words, not creating the money to pay interest is the device used to generate the scarcity necessary for a bank-debt monetary system to function. It forces people to compete with each other for money that was never created, and it penalizes them with bankruptcy should they not succeed. “

As Clive Menzies puts it “when a bank checks a customer’s credit-worthiness, it is really verifying his or her ability to compete successfully against the other players – that is to say, assessing the customer’s ability to extract from others the money that is required to reimburse the interest payment. One is obliged in the current monetary system to incur debt and compete with others in order to perform exchanges and pay the resulting interest to the banks and lenders.”

Islamic economics is a science that needs revival

Islamic scholarship unanimously agrees that the Prophet Muhammad (PBUH) banned usury as practised prior to his invitation to lead in the strategic city of Yathrib and he immediately prohibited unjust economic exploitation in the new State of Medina of the 7th Century, a model that offers Muslims and the world the blueprint for ethical economics even today. Market forces were left to operate freely within defined Sharia parameters without complete subjugation to central planners. Barriers to entry which blocked potential entrants from entering the market were abolished. Thus, the Prophet negated the need for regulatory clearances, licences and did not permit favouring existing firms by protecting their revenues. He opened up a level playing field for all market participants by allowing everyone free and open access to launch a business in the market. Removing the barriers to entry symbolised another key economic principle: incentivizing. The Prophet displayed how people respond to potential rewards and taught how an economy needs to incentivize. The free access to the market was a key incentive to entrepreneurs whilst the other markets in Medina had barriers to entry in place making it difficult to start a trade.

Unfair practices were banned and the first signs of a true regulatory approach to consumer protection was enshrined in law. Taxing one another in the market was banned. The other markets in Medina had entry taxes as well as taxes on trades. These were private taxes filling the coffers of the market owners and such taxes were not designated to protect civil institutions or citizens, neither were they being redistributed among the people. Such selfish taxation regimes were banned in the Islamic market and this allowed people to enjoy more disposable income which was ultimately spent, invested or used in trade, increasing GDP and boosting economic growth for the overall benefit of society.

Islamic economics is therefore, arguably, a science that urgently needs revival given the proven failures of hyper-capitalism and a growing awareness and exploration of fairer, more balanced model for global and local economics. The Islamic Banking systems that have been posited as halal are criticised, by many Islamic scholars, as being an example of how not to do things given their failure to prevent back door usury practices whilst claiming otherwise.

Beginning of research in Islamic ethical economics

Are Muslim scholars in seminaries and beyond able to evolve an authentic Prophetic economics for the 21st Century, or is the gulf between Islamic institutions, which traditionally favour a focus on jurisprudence, and the secular worlds economic institutions  too great now to influence global economies in generating a more moral economics? In the past, Islamic scholarship certainly prided itself on its polymaths who mastered the sciences of economics, politics, philosophy and jurisprudence. Perhaps we need polymaths that can straddle both spiritual and secular sciences once more in order to produce solutions for the world just as Prophet Mohammad (PBUH) and others did in the past.

The good news is that there are signs of Muslim seminaries, academic institutions and even some States that are beginning to invest in researching alternative Islamic ethical economics without doubt. People in the West such as Professor Rodney Shakespeare who advocates a usury free ‘binary economics’, which he will be advancing at a forthcoming Islamic Conference on Islamic Economics in Chittagong, as well as Clive Menzies are certainly keen to develop the connection between spirituality and economics. They, along with others in the West, are beginning to explore these areas of traditional wisdom from the Sacred traditions in an effort to offer alternatives to current exploitative usury and greed propelled economic systems, which whilst they are collapsing under the weight of Covid-19 responses, are also beginning to be replaced by a new kind of potentially even more immoral economics by the same usury obsessed actors.

So at this critical global juncture, when all signs indicate the beginning of a great global reset of the international economic flora, there could be no better time to accelerate an Islamic ethical economic vision to the world- one which is based on fairness equity and justice just as the Prophetic dream intended all those centuries ago.

*Clive was a founding member of Critical Thinking at the Free University, a research and analysis project. Clive’s experience encompasses a wide range of management positions within financial services, technology and other sectors, augmented by his extensive research of political economy. Clive’s current preoccupations are the spiritual dimension to our being and how we understand and reconcile the imperative to obey universal law with the global political economy. Recognising that money controls everything, Clive is working with others on self-organising, distributed systems of accounting for human economic activity that will encourage and reward obedience to Divine Wisdom, i.e. to underpin a global political economy that serves everybody, rather than the few.

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *