About this blog

In recent times a plethora of misconceptions, misrepresentation and myths have been forged about Islam
and Muslims. Many western influentials from politicians, policymakers to judges have taken it upon
themselves to undermine the Islamic beliefs, values and rules so to make it palatable to their
egotistic minds and the secular liberal thoughts.

This blog is dedicated:-

1. To argue the point for Islam in its belief and systems and to refute the misconceptions.
2. To expose the weakness and contradictions of all forms of secularism.

28 Oct 2008

Underlying Causes of the Current Financial Crisis



Any observer of the state of the Capitalist economic system can see that the system is on the verge of collapse – if it has not collapsed already. Whatever efforts the Capitalists have planned to salvage the system can only at best provide temporary relief. This is because the causes of the problem lie within the foundations of Capitalism, and cannot be solved by mere patch work on the surface. There are four factors at the heart of Capitalism's foundation that needs to be addressed:

1. Lack of the gold standard:

After World War II, the world adopted the US dollar as the reserve currency under the Bretton Woods' agreement (i.e. which ensures that nations could redeem US dollars for gold). However, the US broke this agreement in 1971 and did not allow countries to redeem their dollars for gold. This rendered the global economy susceptible to any economic shock in the United States, as most countries were tied to the dollar – a worthless piece of paper printed in the US – instead of gold. Even after the advent of the Euro in the economic arena, the dollar generally retained its position, as most currencies were tied to it.

It is for this reason that, unless gold returns as the monetary standard, such economic crises will certainly be repeated. The global system is effectively held hostage by the US dollar. Any dollar shock or US policy affecting the dollar will have effects outside of America.

2. Interest based loans:

Riba (interest) based loans result in great economic difficulties. Inevitably, companies, individuals, and states face a situation where they are unable to pay the loans due to the nature of compound interest. This results in a loan repayment crisis. Economic activity and production slows down due to the inability to repay such loans.

3. Legality of stocks, derivatives, futures, and alowing the purchase of goods without taking possession of them:

The system and practices in the financial markets and stock exchanges of buying and selling shares, financial instruments and commodities cause a separation between the physical economy and the financial (paper) economy. In the Capitalist system, it is allowed to exchange commodities, derivatives, and other financial instruments without taking physical possession of goods. Rather, pieces of paper representing the asset are bought and sold many times over, without actual goods being transferred between the seller and buyer. This practice causes wild swings in the prices of goods. All this triggers shocks in the markets, but speculators continue to engage in such activity with the expectation of making large profits. These practices are only exposed when the economy is in a financial crisis – such as the one unfolding across the world today.

4. Free market dogma:

Although most people recognize that the state-owned approach of Communism was a failure, there is a lack of awareness of how the economy needs to have a mixed approach to ownership, as prescribed by the shariah. The US government intervention into the system – back tracking on a US Senate law prohibiting any restriction upon the financial system – is a testament to the failure of the laissez-faire approach to economy.

[Extracted from the article ‘Islamic Economics & the Current Crisis’, The PAM Website]
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What they said...

“Islam represented the greatest military power on earth…It was the foremost economic power in the world…It had achieved the highest level so far in human history, in the arts and sciences of civilization...Islam in contrast created a world civilization, poly-ethnic, multiracial, international, one might even say intercontinental.”





[Bernard Lewis, Professor of Near Eastern Studies, Orientalist and Historian, 2001]





"There was once a civilization that was the greatest in the world. It was able to create a continental super-state that stretched from ocean to ocean, and from northern climes to tropics and deserts…the civilization I'm talking about was the Islamic world from the year 800 to 1600… Although we are often unaware of our indebtedness to this other civilization, its gifts are very much a part of our heritage"





[Carly Fiorina, ex-CEO of Hewlett-Packard, 2001]





"For the first three centuries of its existence (circ. A.D 650-1000) the realm of Islam was the most civilized and progressive portion of the world. Studded with splendid cities, gracious mosques and quiet universities where the wisdom of the ancient world was preserved and appreciated, the Moslem world offered a striking contrast to the Christian West, then sunk in the night of the Dark Ages."





[Lothrop Stoddard, Ph.D (Harvard), American political theorist and historian, 1932]





"Medieval Islam was technologically advanced and open to innovation. It achieved far higher literacy rates than in contemporary Europe;it assimilated the legacy of classical Greek civilization to such a degree that many classical books are now known to us only through Arabic copies. It invented windmills ,trigonometry, lateen sails and made major advances in metallurgy, mechanical and chemical engineering and irrigation methods. In the middle-ages the flow of technology was overwhelmingly from Islam to Europe rather from Europe to Islam. Only after the 1500's did the net direction of flow begin to reverse."





[Jared Diamond, UCLA sociologist and Author, 1997]



"No other society has such a record of success in uniting in an equality of status, of opportunity and endeavour so many and so varied races of mankind. The great Muslim communities of Africa, India and Indonesia, perhaps also the small community in Japan, show that Islam has still the power to reconcile apparently irreconcilable elements of race and tradition. If ever the opposition of the great societies of the East and west is to be replaced by cooperation, the mediation of Islam is an indispensable condition."





[Hamilton Alexander Rosskeen Gibb, Professor at Harvard University, 1932]





“The Muhammadan Law which is binding on all -- from the crowned head to the meanest subject is a law interwoven with a system of the wisest, the most learned and the most enlightened jurisprudence that ever existed in the world.”





[Edmund Burke, British Statesman and Philosopher, 1789]





"The Exile here is not like in our homeland. The Turks hold respectable Jews in esteem. Here and in Alexandria, Egypt, Jews are the chief officers and administrators of the customs, and the king’s revenues. No injuries are perpetuated against them in all the empire. Only this year, in consequence of the extraordinary expenditure caused by the war against Shah Tahmsap al-Sufi, were the Jews required to make advances of loans to the princes."





[David dei Rossi, Jewish Traveller 17CE, quoted by Norman A. Stillman, The Jews of Arab Lands]





"The notable religious tolerance towards Christians and Jew under Muslim rule had given way to the uncompromising zealotry of Spanish Inquisition. Jews and Muslims thus fled Spain with large numbers of Jews immigrating to the Ottoman Empire which was known for its tolerance to the Jews."





[Graham Fuller, Author and former CIA, 1995]





“If there is much misunderstanding in the West about the nature of Islam, there is also much ignorance about the debt our own culture and civilization owe to the Islamic world. It is a failure, which stems, I think, from the straightjacket of history, which we have inherited. The medieval Islamic world, from central Asia to the shores of the Atlantic, was a world where scholars and men of learning flourished. But because we have tended to see Islam as the enemy of the West, as an alien culture, society, and systems of beliefs, we have tended to ignore or erase its great relevance to our own history”





[Charles Philip Arthur George, HRH The Prince of Wales, 1993]





"...Not being subject to the Sharia, Jews and Christians were free to go to their own religious authorities for adjudication of disputes; but in many cases they went instead to the [Muslim] Qadi"





[Richard W. Bulliet, Professor of History and Author, 2004]





"Here in the land of the Turks we have nothing to complain of. We possess great fortunes; much gold and silver are in our hands. We are not oppressed by heavy taxes and our commerce is free and unhindered. Rich are the fruits of the earth. Everything is cheap and each one of us lives in freedom. Here a Jew is not compelled to wear a yellow star as a badge of shame as is the case in Germany where even wealth and great fortune is a curse for a Jew because he therewith arouses jealousy among the Christians and they devise all kinds of slander against him to rob him of his gold. Arise my brethren, gird up your loins, collect up your forces and come to us."





[In his book 'Constantinople', Philip Mansel quotes a rabbi in Turkey writing to his brethren in Europe where they were facing increasing persecution after 1453]





"Praise be to the beneficent God for his mercy towards me! Kings of the earth, to whom his [the Caliph’s] magnificence and power are known, bring gifts to him, conciliating his favour by costly presents, such as the king of the Germans, the king of the Gebalim, the king of Constantinople, and others. All their gifts pass through my hands, and I am charged with making gifts in return. (Let my lips express praise to the God in heaven who so far extends his loving kindness towards me without any merit of my own, but in the fullness of his mercies.) I always ask the ambassadors of these monarchs about our brethren the Jews, the remnant of the captivity, whether they have heard anything concerning the deliverance of those who have pined in bondage and had found no rest."





[Hasdai Ibn Shaprut (915-990 CE) Jewish physician, chief minister of Islamic Caliphate in Cordova, 'The Jewish Caravan']





"In Baghdad there are about forty thousand Jews, and they dwell in security, prosperity, and honour under the great Caliph [al-Mustanjid, 1160-70 CE], and amongst them are great sages, the Heads of the Academies engaged in the study of the Law…’"





[Benjamin of Tudela, Rabbi in Baghdad in the year 1168 CE, 'The Jew in the Medieval World']





"Those Eastern thinkers of the ninth century laid down, on the basis of their theology, the principle of the Rights of Man, in those very terms, comprehending the rights of individual liberty, and of inviolability of person and property; described the supreme power in Islam, or Califate, as based on a contract, implying conditions of capacity and performance, and subject to cancellation if the conditions under the contract were not fulfilled; elaborated a Law of War of which the humane, chivalrous prescriptions would have put to the blush certain belligerents in the Great War; expounded a doctrine of toleration of non-Moslem creeds so liberal that our West had to wait a thousand years before seeing equivalent principles adopted.





[Leon Ostorog, French Jurist]





"The debt of our science to that of the Arabs does not consist in startling discoveries or revolutionary theories; science owes a great deal more to Arab culture, it owes its existence"





[Robert Briffault, Novelist and Historian, 1928]





"The only effective link between the old and the new science is afforded by the Arabs. The dark ages come as an utter gap in the scientific history of Europe, and for more than a thousand years there was not a scientific man of note except in Arabia"





[Oliver Joseph Lodge, Writer and Professor of Physics, 1893]





“Thus, when Muslims crossed the straits of Gibraltar from North Africa in 711 and invaded the Iberian Peninsula, Jews welcomed them as liberators from Christian Persecution.”





[Zion Zohar, Jewish scholar at Florida International University, 2005]







“Throughout much of the period in question, Arabic served as the global language of scholarship, and learned men of all stripes could travel widely and hold serious and nuanced discussions in this lingua franca. Medieval Western scholars who wanted access to the latest findings also needed to master the Arabic Tongue or work from translations by those who had done so.”





[Jonathan Lyons, Author, Writer and Lecturer, 2009]