Please find enclosed a copy of Benedikt Koehler’s text on the application of market based principles extensively throughout out the early and later eras of Islam.

I hope to write more about this enlightening piece in a later post, but meanwhile, please do download a copy and read all about the history you never knew

Early Islam and the Birth of Capitalism – Benedikt Koehler

Also view the following presentation delivered in the City of London at the Legatum Institute, which includes a Q&A


The profound concept of what value is and what value society should try to attain is explored in this worthy documentary.

I would like to highlight a number of the take home messages which I found to be praiseworthy and challenging of conventional wisdom;

  • ‘Not all profits are created equal’ implying certain gains could potentially be more worthy than others, the simple metric that something is profitable should not be an absolutist criterion. Profit should be based on sustainability not success
  • The components of the Value Chain should be continually assessed not for whether they are profitable but for what real value they provide the wider society, what positive aspects do they contribute?
  • Price, a key market signal, does not reflect the true cost to society or the environment, therefore how ‘profitable’ are certain activities
  • Our environment governs our behaviour therefore is there is any such thing as free choice, do we even have the freedom to make a choice?
  • The rewards we have currently have in a market economy incentivise us to make potentially harmful choices, not the beneficial choices
  • Contrast the theory that markets allows us to allocate resources adequately with the knowledge that this allocation may be to detrimental activities
  • Some say society at large has never been more prosperous nor peaceful, but the point of how fractured it is bears contemplating
  • The final scene where the following advice was given had much resonance with me, ‘…it’s time. Serve’ This could also be interpreted as in order to serve (society/the natural world order, and therefore establish justice to ourselves and others) we must SUBMIT…the basis of the concept of Islam

Seeing is believing, in some cases. When the scale of certain matters is so extraordinary it helps to visualise its relative proportionality.

This is the purpose of the following site, please view this page showing what makes up the entire global Money supply and where it is invested….

The following points strike me about these fascinating illustrations;

  • As far as verifiable facts and accepted knowledge are concerned, some of the points given are true. Yet, these two ‘facts’ which I am aware of seem to suggest that not everything is shown on this site subject to the information not being in the public domain.

Consider the largest companies, all US giants, which are all listed/publicly traded  and therefore the value can be determined via reference to an active market. Yet currently global investors are anticipating the listing of the Arab state-owned oil behemoth of Saudi Aramco, which is expected to eclipse all other company valuations, being estimated as a $2 Trillion company, such a corporation is not featured because it is not publically traded – are there other non public entities that are similar, not mentioned, giving a distorted, inaccurate picture of reality? This fact can only be true when looking at public domain based knowledge.

  • On a similar note, the wealth given of the richest individuals does not mention the extraordinary level of wealth known to be in the hands of certain family members of the Rothschild’s, for example. Some have reckoned this to be in the region of trillions of dollars…but again, this is not publicly known information
  • Physical notes and coins are estimated to be 8% of total money stock….slightly higher than other estimates I have read which are closer to 3%
  • The global Gold supply is estimated at approximately over $7 trillion, which compares favourably with the estimated value of global currency held in notes and coins…therefore physical money can almost entirely be backed by Gold, however the issue is more to do with a broader definition is money which is shown later in the graphic as approximately $90 trillion, yet this is dwarfed by the amount of global debt in the world – over $200 trillion
  • Almost 50% of residential asset values are associated with only 16% of the global population, all in Europe and USA.
  • “No one really knows the exact size of the market” in reference to the size of the derivative markets.
  • The quote by Warren Buffet is remarkably telling…someone known to invest in a very traditional way – get to know the company and buy equity in it – pretty much stays away from large investments in derivatives, although as a hedging mechanism, he may well use them perhaps?
  • Finally, it is an interesting link which is referenced by Jeff Greene, that derivatives are in existence due to debt, and presumably the hedging thereof, although this hasn’t stopped them from being highly traded for speculation and profit methinks…something to explore further

Consider this post in reference to the concept of derivatives.

I feel that if anyone wants to attempt any critique of the derivatives market in its entirety, one has to move past any continued emphasis on ‘casino capitalism’, as this is an oft repeated line which, whatever its merits or otherwise, has become an easy reply for those who favour such practices.

I believe one needs to concentrate on debunking the notion of risk management in order to effectively retort.

Many supporters of derivatives would rightly point to their use is not just to speculate with (as in Investment Banking), but as a valid means to manage risk, especially in Insurance, and it is this aspect which deserves further attention in my humble opinion

The above linked post brilliantly draws together the notion of colonising time as an integral commodity, matching any such physical asset, thereby shinning a much needed light on the important and neglected aspects of this discourse of, post colonialism and global racial financialisation.

It has been oft repeated that in our democratic, liberal societies, the few have greater power over the many

Is it the top 1% that owns a greater share of the capital and wealth than the remaining 99%? It is interesting to think of how many of these ‘many verses few’ statistics genuinely exist when analysing our reality

Given the freedom to own property and generate capital, which can indeed be a positive thing, to what extent is this so open to abuse that the rules of the game were never really meant to create fairness and a degree of equality? Is human nature, which is left unchecked, too prone to avarice that such freedoms will always result in a small elite hungry to capture ever more resources than required?

This is not another post looking to promote controlled economies,  however its purpose is to illustrate that, with the best of intensions, will some freedoms, when applied to a population shaped and conformed to behave in a certain manner, always result in a pyramidical structure taking shape where these conditions exist? Is this shape the overriding effect of all the freedoms at our disposal? Consider the following;

Top Asset Management firms by total value of assets under management

Think about what this data is actually telling us; when asset managers acquire equity, or interest in another business enterprise, they take a degree of ownership in that firm. Thereby, over time and because of the funds that flow to these giant institutions, the few in combination, have ended up in a position of ‘owning’ in part or in full, the many corporations that they have a share in – allowing them to ascend to the top of the pyramid; the few owning much greater proportion combined than the many. It also follows that this leads to a common source of control and influence across an economy/region given this limited pool of effective ownership.

Another perspective on this could be that much of this capital originates from the mass population who are the ultimate owners, through their long term savings and pension provisions invested with these providers. Therefore, is this an attempt to invert the structure, allowing the many to benefit? I would argue not, the masses, when considered individually, on average, do not financially benefit as much as the managers who take material cuts from the pool of funds at their disposal. Often their reward incentives are not adequately aligned with the retail investors at large, allowing the elite to become disproportionally better off than the investors who are searching for gains. The small investor is also not the party which excercises the controlling power.

In addition to this asset ownership, consider more generally, how much land the few own in comparison to the larger population, the size of GDP of the few regions compared to the many, the distribution of resources, the access to what is classed as the best quality of education, the trend continues and the structure that we can continually see forming is that of a top down, hierarchical pyramid – it should be clear from such insights what the ultimate power structure of the contemporary world is and what the fruits of everybody’s efforts are really delivering.



For anyone not familiar with the work of Ann Pettifor – one of the few to correctly call the coming of the financial crisis a number of years prior to it arriving, and one of the main proponents of the Jubilee 2000 campaign which cancelled a portion of third world debt – please search for her various articles, lectures and opinions online.

Associated with Keynesian economics and the Labour party, her views may be dismissed by some, however upon closer inspection, I was interested in her view on the creation of money, and what this meant for resolving the debt and economic problems facing the developing world.

She is principally part of the PRIME think tank/research group, which has a number of papers on its site proving an alternative voice on economic issues

The above lecture at the LSE discusses her latest book, ‘The Production of Money: How to Break the Power of Bankers’, and gives an insight into her theories.

What I wish to highlight, are the following;

  • The issue of commodity money, and how scarce resources should not be used as a basis of any monetary system
  • The recognition that a fiat monetary system, can and should be used for the benefit of the population – outside the control of private banks, but in the knowledge that an entirely man-made system should be used to achieve a level of prosperity in all societies
  • There are certainly many socialist aspects to these beliefs, such as exerting capital controls and spending money into existence in terms of health, education and social expenditure thus increasing national debt, however interest ideally should not be necessary when such a system is implemented
  • There are some similarities with what Positive Money are advocating, but it seems there are specific differences, as this discussion points out…



The findings imply that Islamic banks are not different from conventional banks, except for different branding to cater for a different category of clients

(INCEIF 2016)

A 2016 study in Malaysia, one of the most prominent centres for Islamic Finance, compared the two kinds of institution in order to ascertain if the difference between the two are genuine or merely superficial. It lends weight to the latter judgement.

What does this say about the industry from a body set up to proliferate the understanding of it? Learn more about the ICEIF here