Abdassamad Clarke’s objection to Islamic Banking

Posted: December 23, 2014 in Debt, Islamic Finance
Tags: , , , , , ,

Perhaps there is a level of futility to some of these exchanges, however I favour such dialogue if only to expose the falsehoods raised by those who promote Islamic Finance and to allow readers to decide for themselves.

Read the following exchanges between Abdassamad Clarke (a UK Scholar) and Mohammad Amin (a prominent tax practitioner, and member of the MCB);

Are Islamic Banks Islamic Enough?

Clarke’s response is linked in the above but here is the link to his original letter

Suffice to say, Mohammed Amin’s argument that many scholars have endorsed this practice does not hold water for me. If it quacks like a duck and it moves like a duck, I’m not going to believe a vet that tells me it’s not a duck.

Please also read this excellent article from Clarke, with some pertinent highlighted sections shown below;

The Falsity of the Concept of the Islamic State

They mistakenly assume that Muslims can regain some power by taking those elements from the West which they think led to the apparent demise of Islam politically. Thus we have ‘Islamic’ economics, ‘Islamic’ constitutions, ‘Islamic’ science, and ‘Islamic’ banks, etc., etc….. The flaw in this is because there is a total misunderstanding of the nature of Western society and the modern state.

The very essence of the modern state is that it is a body which borrows enormous sums of money from banking institutions. This is needed desperately by the banks because they are in great need of large borrowers who will create grand projects and return the interest they owe their shareholders and depositors. There is tremendous pressure on bankers to put their funds to profitable use. Today those large borrowers are the different nation-states and the great multinational corporations. Then the state taxes its citizens to maintain the interest payments on the loans – the national debt [which must never be repaid].

The most fundamental mistake we make is when we think that the state taxes in order to pay for all its services. Rather the state taxes to keep paying the interest on its debts. Many of the huge state-services: for example, infrastructure, are paid for from loans.

It should be noted that a great number of matters: health services, education and social security were traditionally paid for by Islamic awqaf. The awqaf were genuine ‘sadaqah jariyah‘ – permanent sadaqahs. The awqaf were properties which had been returned to the ownership of Allah by private individuals and were administered by other private individuals for the benefit of whatever purpose they were dedicated. Thus in nineteenth century Turkey, over sixty percent of land was waqf property. Of course, Attaturk nationalised all of it, i.e. stole it for the purposes of the state. The rest of the muslim world has followed his lead

.. I object seriously to the use of the term ‘Islamic State’, just as I object, if possibly even more strenuously, to terms such as ‘Islamic economics’ and ‘Islamic banks’. All of these concepts are based on the idea that we can Islamicise things which are fundamentally alien to Islam, and Allah knows best.

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