usury

Why People Dislike Middleman Minorities: A Fix for Thomas Sowell’s Blind Spot

On most days of Ramadan, fasting makes it impossible for me to do my usual programming and writing work. For this reason I spent most of the daytime hours of this Ramadan reading books, finishing over 20 books (mainly audiobooks).

For years I have been aware of Thomas Sowell as perhaps the greatest living African American intellectual, and this Ramadan I finally got around to reading many of his books.

Thomas Sowell

Thomas Sowell is a very unique intellectual, a type that is very rare both among whites and blacks, and among blacks others like him are almost non-existent. He rejects the popular liberal ideology that presently rules in Western academia and media, and his status as a black person has enabled him to say things about racial and ethnic issues that most whites would likely not be able to get away with without being charged with racism. Sowell is, or at least tries to be, an empiricist, making him a man after my own heart. He rejects nice-sounding, feel-good political ideas for ideas that actually have merit and have been tested in the real world for their efficacy. Thus, for example, he rejects affirmative action (the practice among universities to allow blacks with lower qualifications to enter in preference to better-qualified whites), considering it harmful to blacks by making them think they should live up to lower standards than whites (among various other reasons). He also rejects the common narrative that many common problems of blacks today (such as father absenteeism and low economic status) are directly traceable to slavery, mentioning the fact that blacks in the early 20th century had much better social characteristics (such as male dedication to their families) than blacks in the second half of the 20th century.

Thomas Sowell is not, however, entirely free from bias. He sometimes strongly reflects the neoconservative bias of the Hoover Institution that he works for, for example considering free trade a highly positive thing and ignoring the technological servitude that results from it. He is also strongly invested in the Frankfurt School ideology that there are no interesting genetic-behavioral differences between different populations despite the existence of the vast literature of behavioral genetics. He also has a very strong pro-Israel stance (neoconservatism’s foreign policy views mirror Israel’s interests so exactly that they might as well have been written directly in Tel Aviv), naively thinking that the Muslim hostility toward Israel is merely anti-Semitism. He also entirely ignores the possibility that historical anti-Semitism may have had anything to do with Jewish behavior, again perfectly reflecting the Frankfurt School / neoconservative ideology.

However, Sowell has worked tirelessly to fight the pathologization of Western civilization that has been a major focus of the works of the members of the Frankfurt School and the New York Intellectuals who later emerged as the neoconservatives. Sowell has always maintained a certain independence and empiricism in spite of the influence of his milieu and his powerful intellect has enabled him to break out of important aspects of his intellectual conditioning.

I started by reading his autobiography A Personal Odyssey, one of the most enjoyable and enlightening autobiographies I have read. I went on to read his economics books Basic Economics, Applied Economics and Economic Facts and Fallacies. I then read his 1981 book Ethnic America: A History, a historical and economic analysis of the various ethnicities that make up America (the British, the Germans, the Italians, Jews, etc.). Next I read his trilogy on race and culture: Race and Culture: A World View (1995), Migrations and Cultures: A World View (1996), and Conquests and Cultures: An International History (1998).

I recently finished Black Rednecks and White Liberals (2005), a collection of essays on various issues. The most interesting aspect of this work is his study of “redneck” culture. According to Sowell, redneck culture originated in Britain and was characterized by high criminality and violence, a lack of interest in education, pride, grandiosity and sexual promiscuity. Redneck migrants from England brought their culture with them and established themselves in the American South, repeating the same behaviors that they were famous for in Britain.

Since nine tenth of black slaves lived in the South, they had the unfortunate fate of being acculturated to this redneck culture. Therefore according to Sowell, things that we consider to be “black” culture today (such as gangster rap and a low opinion of education) are actually the redneck culture of Britain that blacks took in. Blacks that were freed in the 19th century and lived in the North abandoned this redneck culture and took in New England’s extremely different (and far more productive) culture, so that these blacks were far more prosperous and educated and suffered far less from the problems that plagued both the whites and blacks of the South. He mentions that once “redneck” Southern blacks started to migrate en masse to the North, the New England blacks looked down on them and would do their best to move out of neighborhoods that these newly arrived blacks lived in, just as the whites did.

Another interesting topic that he covers in his highly unique way is slavery. Rejecting the common Western narrative that the West was somehow uniquely evil in its practice of slavery, Sowell says that slavery was a global phenomenon, and that Western civilization was actually the one that was almost entirely responsible for abolishing it. In the 18th and 19th century the British developed the idea that slavery was morally wrong and unacceptable, and they started to spend vast resources fighting it. The British started to patrol the seas with their ships, fighting slave traders around the world. This British crusade against slavery has been largely forgotten.

Islam and slavery

It was the British who forced the Ottoman Empire to ban slavery. Despite Islam’s humane attitude toward slaves and its strong encouragement for freeing them, it is a fact of history that slavery in the Islamic world represents one of the greatest moral failings of our civilization. We now realize, thanks mainly to Western civilization, that the most Islamic attitude toward slavery is tolerating it with the explicit goal of working to eradicate it. But throughout the centuries, Muslims failed to put this program into practice, instead representing one of the greatest forces supporting slavery throughout the world by creating a strong demand for it. Muslims happily purchased slaves without worrying about how these slaves were created in the first place: the extremely inhuman process by which African, Arab and European slave-raiders acquired slaves to be sold in the Islamic world.

It is not much to be proud of that Islam had very important protections for slave rights when it had nothing to say about how these slaves were acquired in the first place. By creating a vast market for slaves, the Muslims encouraged mass slaughter of Africans and Europeans by cruel slave-raiders. It is amazing to think that all of these Muslims, despite the high morality that the Quran and hadith taught them, did almost nothing about this incredibly unjust and oppressive system until the British came along to civilize them.

Islam and interest

As an economist, Thomas Sowell considers the charging of interest an essential part of the functioning of any well-developed economic system. To him, therefore, the fact that Islam forbids interest is just an ignorant and foolish prejudice that misunderstands the function of interest. Interest makes it possible to mobilize the wealth of society by encouraging the wealthy to use their money to fund economic growth. If people place their savings in the bank, and the bank lends this money to corporations that can invest the money in various economic projects, this makes it possible to mobilize a vast amount of society’s wealth in the service of economic projects.

What Sowell does not realize is that it is perfectly possible to do this without interest. It is, however, true that the ban on interest was a great limiting factor on economic growth in the Islamic world until Muslims learned in the 20th century that it is possible to create the Western pattern of wealth mobilization without interest by creating Islamic banks.

But now that the system is in place, the ban of interest is no longer a limiting factor on economic growth. Islamic finance makes it possible to mobilize society’s wealth without the use of interest through the ṣukūk system, enabling the creation of a financial world that is far more humane and borrower-friendly than the current, usurious Western financial system. For example, in an Islamic home mortgage, no loan is involved, and in the case of default, the home buyer always gets money back. Compare this to the Western system where default means not only losing the home, but sometimes owing hundreds of thousands of dollars to the bank. This incredibly unjust usurious system of the West makes it practically certain that the wealth of the bankers will continuously grow at a faster rate than the wealth of society, making the bankers the richest and most powerful people in the country, as has happened in the West. See my essay: Why the Banks are So Powerful and Why the Bible and the Quran Forbid Usury: Charting How Interest Creates Obscene Wealth Inequality.

Middleman minorities

A big focus of Thomas Sowell’s work is on so-called “middleman minorities”. These are ethnicities such as the Jews in the West, the Chinese in Malaysia, Indonesia and other Southeast Asian countries, and the Lebanese and Indians in Africa. Middleman minorities all share certain attributes:

  • They are generally wealthier than the native population.
  • They are clannish and keep to themselves, maintaining a separate culture from the native population.
  • They keep ties with their home countries and build international trade and financial networks with their co-ethnics.
  • They are often involved in money-lending.
  • They often monopolize entire sectors of the economy.

Middleman minorities have invariably been resented by the native population, who envy the wealth, success and power of the middleman minorities and dislike their separate, clannish existence.

According to Sowell, it is only prejudice and envy that makes native populations dislike middleman minorities since these minorities serve essential functions in their economies. For example, the Chinese in Malaysia are responsible for developing various sectors of the Malaysian economy, sectors that would have been far less developed, and perhaps even non-existent, if the Chinese had not been there. According to Sowell the middleman minorities create the wealth they enjoy. They do not exploit the native population and do not steal their wealth.

So why do natives dislike middlemen? Why were Jews so universally hated in Europe when they served such “essential” economic functions? Why did the Ugandans expel the Indian and Pakistanis who had helped build up so much of their economies? Why do Malaysians and Indonesians so dislike the Chinese among them?

Genetic-cultural altruism

Thomas Sowell’s unsatisfactory answers to the above questions are a very good illustration of the way specialization limits the intellectual horizons of specialists. Being an economist, he thinks of middleman minorities largely in economic terms and sees their positive contributions as more than justifying whatever else the presence of these middleman minorities may entail.

But an evolutionist is going to have a very different view of the clash between natives and middlemen. From an evolutionary perspective, ideally everyone you do business with will be your father. Genetic relatedness makes people more kind toward their own kin than towards strangers. And this behavior comes out on a daily basis in the interactions between the natives and the genetically separate middlemen.

When you need a loan from a bank, rather than going to someone from a strange land and culture who probably dislikes you and has no love for you, you would much rather go to the bank that is run by your father. You know you will be treated with much more sympathy, love and respect.

When you are desperate for employment, you know that your father will be much more likely to employ you than a random stranger who only thinks of you in economic terms.

Middleman minorities are a jarring element in the social fabric of the natives’ society. The natives want to be treated as kin, as humans, by their fellow humans. But middleman minorities only think of the natives in economic terms, dehumanizing them into mere tools of economics. This is an incredibly disorienting, degrading and alienating experience for a native. By being an impermeable, non-kin group, we know that middlemen deal with us only according to the harsh, cold laws of economics, rather than dealing with us as family.

The clannishness of middleman minorities only exacerbates the problem. By creating an impermeable group that deals with its own members charitably while dealing with natives as excluded aliens, they make the population feel as aliens in their own hometowns and countries. This is highly disconcerting. To go from the loving atmosphere of your own kin and ethnicity to the cold atmosphere of the alien middleman is never a pleasant experience.

The solution, the only solution, is for the middleman minority to go native by making their group permeable. Middleman populations such as historical Jews that are stringent about preventing intermarriage and cultural exchange are guaranteed to provoke extreme hostility by making the native population feel like aliens in their own lands. On the other hand, middleman groups that intermarry and become part of the native population both genetically and culturally will end all possible hostilities within a few generations, as happened with the Arab settlers in Southeast Asia (compare with the hostility that the Chinese provoke there nowadays). The Arabs intermarried and became part of the population. Despite their great economic success and their maintenance of familial and economic ties with the Yemeni coastal areas that they came from, they provoked no hostility that I can discover.

While middleman minorities may make the economy more efficient by their activities, they also make it less human by remaining alien, impermeable and clannish and having an us vs. them mentality toward the native population. The various expulsions of middleman minorities throughout history show that people would much rather enjoy a less efficient but more humane economy run by natives than a more efficient but less humane economy run by middleman minorities.

An economist like Thomas Sowell thinks that the natives should simply swallow their pride and their desire to be treated with the dignity that kin treat them for the sake of having clannish middleman minorities make their economies more efficient. This may make sense economically, but it makes no sense from a wider, human perspective.

The indignity of separatism

Middleman minorities, by the very fact of refusing to intermarry and assimilate with the natives, tell the natives on a daily basis that they consider themselves superior: the natives are simply not worth marrying. This is incredibly degrading to the natives. By considering themselves a superior genetic-cultural stock, the middleman minorities constantly stress the inferiority of the natives upon their psyches. It is highly naive to expect the natives to be content with this state of things. To the natives this is an itch that cannot be scratched. And the increasing success and prominence of the middlemen only serve to remind the natives of their own inferiority.

The main problem with middleman minorities is not that they are genetically different from the natives, but that they work to maintain this genetic difference. A native does not need to be an intellectual to realize that this maintenance of genetic separatism is a judgment on his or her ethnicity. They know that they are treated as not being good enough. And that, in turn, leads to their developing a group identity of superiority over the middlemen: if you treat me as inferior, I will treat you as inferior. This leads to the stressing and exaggeration of the negative qualities of the middlemen among the natives. They are avaricious, uncharitable, selfish, lacking common decency, inhuman. The natives develop an ideology of ethnic pride that justifies to themselves their right to fight back against being treated as inferior, and this in turn leads to the natives calling for laws discriminating against the middlemen, boycotts, and even violence.

So the question is this: do middleman minorities have a moral right to practice business in an alien nation while maintaining genetic and cultural separatism? I believe this is a question that only the natives can decide for themselves. If the value that the middlemen offer is so great as to be worth the indignity of tolerating them, then the natives can choose to do so. And if the value they offer is not that great, they can choose to expel them. While economically the second choice may not make “sense”, from a psychological and evolutionary perspective, it makes perfect sense.

While we can feel sorry for the many innocent people who have been harmed in riots and expulsions, we cannot ignore the reality that their separatism is directly responsible for this treatment.

To put it another way, the natives have a moral right to demand to be treated as equally worthy by the middleman minority, and that, above all, means that the middleman minority must cease its clannishness and separatism and must start to intermarry with the natives. Middleman minorities that have gone this route, such as the Japanese in the United States, have completely ceased to be an issue, while middleman minorities such as the Jews in the United States, who have continued to work hard to fight intermarriage, continue to provoke some hostility. The Koreans working in black ghettos in the United States also provoke hostility due to their maintenance of genetic separatism from the blacks they serve.

Sowell may say that the middleman minority has a good reason to remain separate: the natives have an inferior culture. The Chinese, for example, say that the Malays are lazy and less reliable. But the Chinese could marry the Malays and attempt to fuse their supposedly superior culture with that of the Malays. Even if this involves sacrificing aspects of their superior culture, it may be the only reasonable way forward to end the conflict

The solution for the ethnic conflicts that have plagued Southeast Asia is for the governments of these countries to strongly promote intermarriage. In Thailand, due to the fact that the Chinese and the Thais share the same religion, intermarriage has been more common and with it the hostility toward the Chinese has been less pronounced. But in Indonesia and Malaysia, where the Buddhist-Muslim difference is a significant barrier to intermarriage, hostility has been much more pronounced. These countries can greatly reduce the conflict by passing laws that treat the Chinese as natives if they are married to a native.

A significant new middleman minority population are the Chinese in Africa. It is essential for African countries to instate policies requiring intermarriage in order to prevent the same sordid story of riots, pogroms and expulsions that have plagued the history of middleman minorities throughout the world. Unfortunately African nationalist ideas in some countries make the officials of these governments (such as in Uganda) hostile to the idea of intermarriage, a very unconstructive attitude that will only set up the stage for ethnic conflict.

Are Muslims permitted to work in Sharia-compliant banks?

Are Muslims allowed to work in a bank, even if it's labeled as sharia bank?

As discussed in this previous answer, working at usurious banks (banks that profit through interest) is forbidden.

As for Sharia-compliant banks, working for them is permitted if they are truly Sharia-compliant. Some banks are only Sharia-compliant in name, or they offer Sharia-compliant services alongside usurious services. So before working at such a place a person should do their own research and find out if the bank is truly Sharia-compliant. Even if the bank claims to have a fatwa from a scholar that rules their services to be Sharia-compliant, a person should look at the bank critically. If you are unable to decide whether a particular bank is really Sharia-compliant or not, ask a knowledgeable person to do some research on the bank.

Are virtual credit cards halal?

Salaam. I was planning to create a PayPal account, but I'm unemployed, have no credit card, and thought of creating a VCC or Virtual Credit Card to get a full access to PayPal and to make overseas online payment or transfer. Unfortunately, the VCC service asks their users to take up 1,9% to 4,5% from users' account balance. Does this count as usury? If so, I will undo this.

Since it is called a credit card and since a percentage is mentioned, it seems likely that it involves usury. Try to find services that offer debit cards rather than credit cards. Debit cards do not involve usury. You can go to a bank that offers VISA or MasterCard payment cards and open a checking (rather than savings, which involves usury) bank account with them, and first make sure their cards will work online.

Another way to pay with PayPal without having a bank account is to use prepaid gift cards (here is the PayPal page about it). You can buy a prepaid gift card at most Western supermarkets. Make sure they have a MasterCard, VISA, American Express or Discover logo on them. You can them use the prepaid gift card during checkout in PayPal. But I do not know if you can use them to transfer money to others.

If you ever have an urgent need for money in your PayPal account, let me know and I will try to help you.

How lenders contribute to decreasing native populations in industrialized nations: Housing prices, wages, interest and low fertility rates

The following chart from a BBC article (archived link) shows how home prices in the UK increased much faster than wages between 1975 and 2005.

If you ask “Why are wages not increasing fast as home prices?” you are asking the wrong question. What we are seeing above is a literal land grab enabled by what our ancestors called usury. Due to the way that the profits of finance always outrun the profits of the ordinary economy, the wealth of financiers (lenders) grows faster than the wealth of the rest of the economy. In order to reinvest their fast-accumulating wealth, they buy houses and rent them out. They become a major player in the house-buying market, and their fast-increasing wealth, which always outpaces wage growth, enables them to bid up home prices. What we see above is simply a reflection of how usury causes wealth to accumulate in the hands of the lenders. Below is a chart from an essay of mine that illustrates the way wealth accumulates in the hands of lenders over a 100-year period:

I can now state Hawramani’s law of home prices in usurious economies:

In an economy largely controlled by lenders, house prices do not reflect supply and demand, they reflect the increased accumulation of wealth in the hands of the lenders as they bid up home prices in their efforts to reinvest their ever-increasing wealth.

To put it another way, house prices track wealth inequality (wealth accumulation in the hands of the lenders) more than they track supply and demand.

The collapse in fertility rates in industrialized nations has a number of reasons and economics is an important part of it. In countries that have experienced heavy immigration the effects of low fertility rates have been masked since the population continues to be replenished by foreigners. But in countries like Portugal and Japan where immigration has been negligible, the effects are everywhere. Portugal’s population decreased by over 300,000 between 2009 and 2015, which is an important decrease for a small country. Japan’s population is expected to decrease by a third by 2065. Japan’s population peaked in 2010 at 128 million. Today it has a population of about 126.7 million, meaning that it lost 1.3 million during this period. The most visible effect of population decrease is the collapse of the countryside. Villages and small towns are abandoned as the shrinking population makes it economically unfeasible for businesses to provide basic services to them.

When fertility rates go below-replacement, it usually takes 30 years for the population to start falling. This delayed effect is one of the reasons why no industrialized society has come up with an intelligent way of addressing the problem.

People’s interest in marriage and reproduction is going to be rather low when housing is unaffordable. But lenders consider housing an important playground for their wealth, therefore they bid up house prices without concern for the way it reduces fertility. However, lenders also want big populations because bigger populations means more people to burden with debt and extract interest from, and because these people will have to buy the good and services they need from the corporations that are owned largely by these same lenders.

Lenders therefore seek two mutually exclusive things: They want to control the housing (and stock) markets, and they want large populations. They cause fertility rates to collapse by subjecting the population to economic conditions they dictate, in which things continually become more expensive, but they also demand continuous population increase since a growing population is essential for growing corporate profits and growing rents.

The solution, of course, is that they lobby for immigration. Immigrants may be less productive than the native population, but they will still need to pay rent, buy groceries and get into debt through credit cards, mortgages and student loans. Regardless of what an immigrant does, at the end of the day they will be putting money into the pockets of the lenders one way or another.

Today there are hundreds of millions of people who would jump at the chance of living in a Western country. But that number is going to fall dramatically as standards of living in their own countries improve, and as their population growth slows down due to the dramatic fall in fertility rates that is happening all over the place. But for the next few decades, there will likely be ample numbers of third-world people willing to replenish the collapsing populations of industrialized nations, but the pool is going to start to shrink at some point.

In summary:

  1. Finance (interest/usury) continually concentrates wealth in the hands of lenders.
  2. Lenders compete for assets, driving up home prices and making them unaffordable.
  3. Fertility rates drop as people avoid family formation to avoid the high costs of housing and other necessities.
  4. Population growth slows down and eventually comes to a stop.
  5. Lenders lobby for immigration to replenish the native population.

A Short Introduction to Usury: How to Make the Rich Richer, the Poor Poorer and Destroy the Middle Class

Download links: PDFePubMobi (Kindle)

In this short ebook I discuss the history of usury, how it works, its effects on society and how the system can be reformed. An important part of the discussion is how today automation leads to wealth inequality and wage slavery, and how through using a usury-free system and a wealth and speculation tax automation can be turned into an investment that all of society benefits from.

I discuss how through avoiding usury and following a wealth tax inspired by Islam’s zakat basic income system communities can bypass the banks and corporations and revitalize their local economies. This is something that can be done by anyone right now, without reference to the government.

The 1599 Geneva Bible Notes or Study Bible (Downloadable eBook Versions)

Page from a Geneva Bible dated 1599, but apparently (re?)printed a few decades later

Download links: PDF – Word – ePub – Mobi (kindle)

The text was sourced from Sacred Texts. It uses modern spelling and the quoted verses are apparently from the KJV (only the notes come from a Geneva commentary).

Michael Hoffman, in his Usury in Christendom: A Mortal Sin that Was and Now is Notmade a reference to the 1599 Geneva Bible Notes as a bible commentary that forbad usury. As someone who has been studying the problem of usury on and off for years, I was interested to find and download this bible commentary for my own reading. But I soon found out that the matter is not so simple and I was led on a wild goose chase to find the version Hoffman was referring to among the dozens of versions available online. The result of my research is in the introduction of the files.

Get it on Amazon.com

At any rate, as I mention in the introduction, it seems reasonably certain that notes are really by John Calvin and/or some of his followers. Whether the edition is more rightly to be called The 1599 Geneva Bible Notes, The 1599 Geneva Bible Translation Notes, or The 1599 Geneva Study Bible I am not sure, but I discuss them at length in the introduction. However, whether the anti-usury note on Luke 19:23 is really by the early Puritans or was added later I cannot say. The note says:

To the bankers and money changers. Usury or loaning money at interest is strictly forbidden by the Bible, (Exo_22:25-27; Deu_23:19-20). Even a rate as low as one per cent interest was disallowed, (Neh_5:11). This servant had already told two lies. First he said the master was an austere or harsh man. This is a lie for the Lord is merciful and gracious. Next he called his master a thief because he reaped where he did not sow. Finally the master said to him that why did you not add insult to injury and loan the money out at interest so you could call your master a «usurer» too! If the servant had done this, his master would have been responsible for his servant's actions and guilty of usury. (Ed.)

I cannot find any information on who this “Ed.”/editor is. A website that presents the 1587 Geneva Bible also has this note on Luke 19:23, complete with “Ed.” This might refer to the editors who came after John Calvin and updated his 1560 translation with their own improvements. It could also refer to a much later editor, but the presence of this note both in a purported 1587 edition and a 1599 edition supports the hypothesis that this note was added in the late 16th century and not later.

Hoffman’s citation actually goes to a secondary source, a book called The Eighth Commandment: Thou shalt not steal by Ted Weiland (available for free online here). It appears that Weiland may have simply copied the note on Luke 19:23 from one of the many Christian websites that present it, rather than from a manuscript or print edition.

Avoiding the West’s culture of usury as a Muslim

I figured you'd be the best person to ask about this. I'm a young Muslim adult who's been wondering how to navigate through a usury based society. Unless you end up earning ample amounts of money, it feels like getting mortgages and credit cards are pre-requisites to living a comfortable (or decently comfortable) life here. What can I do to avoid partaking in the usury system while allowing me to live a decent life quality? Any advice or readings on this would be a great help.

We should try to avoid interest (and for-profit insurance) as much as we are able. This is a challenge that each person has to face for themselves; one should do as much as they can, but I wouldn’t say that one should absolutely avoid it all, since that can be too difficult for some people’s faith.

Speaking for myself, for mortgages, I would use an Islamic provider like Guidance Residential if it all possible. For insurance, I would only get insurance that I am legally required to get (such as car insurance). I would avoid using credit cards unless absolutely necessary (for example if I can’t pay rent and can’t get help in other ways).

In my new book A Skeptic’s Quick Guide to Modern Economics I explain how today’s usurious system works. You can also check out Usury in Christendom: The Mortal Sin that Was and Now is Not.

And if you ever have money to invest, you should avoid bonds, including “Islamic” ones that give a fixed rate. One should also ideally avoid all companies that borrow money on interest, which basically means all US public corporations. What remains is to invest in private businesses that do not deal in usury and that give their employees living wages. As far as I know there is no easy way to do this other than finding a business and reaching a private deal with them (giving them $10,000, for example, for a certain share of their profits). There are “Islamic” mutual funds like Azzad and AMANA, but both of these either invest in usurious corporations or in fixed-rate “Islamic” bonds that are not so Islamic after all. What is needed is a mutual fund that invests solely in non-usurious businesses or truly Islamic bonds (backed by real assets and with fluctuating returns). Perhaps as the number of Muslims in the US and Europe increases, such funds will be created. At the moment, if I were wealthy, I would have nothing to do with the utterly corrupt and usurious corporate culture of the West and would do everything possible to create new companies that act more ethically.

The point of the Islamic acts of worship

A question received on tumblr:

What are the importances of acts of worship Prayer, zakat and fasting etc

At the most basic level these acts reaffirm God’s important in our lives. We Muslims cannot ignore God, saying “we have faith” and then go for days without thinking about God. The prayers interrupt our lives five times a day. Fasting interrupts a whole month of the year.

As for zakat, it provides basic income to the poor. If the people of the United States paid zakat, it could amount to $100 to $500 billion dollars a year, meaning that within a few years there wouldn’t be a single homeless or poor person in the country, and every poor person (belonging to the bottom 50% of society) would get a monthly income of $1000 or more from zakat.

As far as I know no Muslim country properly applies the zakat system, which is why there is so much widespread poverty in countries like Egypt. Zakat has to be taken, it is not a voluntary act. Most rich people are not generous and would rather not pay 2.5% of their uninvested wealth to the poor every year, they would rather do as the Jews and Christians of America do, lending their wealth to the poor and charging them 5% or more interest.

In the zakat system, the poor charge interest on rich people’s uninvested wealth, the money they hoard in their bank accounts. In America’s usurious system, the rich charge interest on the poor, to the tune of more than a trillion dollars per year. American taxpayers paid upwards of $200 billion on money borrowed from usurers to pay for government expenditures, which is why the rich and powerful of America constantly want to increase the size of the military and to instigate new wars, such as with Iran and Russia. War requires spending, and the money for it has to be borrowed from the rich, and the interest on that money has to be paid by the average taxpayer.

For the rich, war always means money. Islam breaks this cycle of evil and destruction by prohibiting usury (all charging of interest) and enforcing zakat.

As for other acts of worship, they all have some wisdom if you look into them.

Why the Banks are So Powerful and Why the Bible and the Quran Forbid Usury: Charting How Interest Creates Obscene Wealth Inequality

Imagine if in 1913 the real economy of the US had $100 billion in capital, while the banks and money-lenders had only $1 billion. Given everyday economic circumstances, by 2017, the wealth of the real economy would have grown to $2163 billion (with a 3% economic growth rate). Meanwhile, the wealth of the banks and money-lenders during the same period would have grown from $1 billion to $3806 billion. Starting at only 1% of the wealth of the real economy, within just over 100 years, the financial sector grows to 175% the size of the real economy.

This is the heart and soul of usury; the reason why banks are so powerful, and the reason why usurers have been hated with visceral hatred throughout history. The usury sector uses the law to enforce an alternate reality where their profits grow faster than the real economy. If they were honest investors, their money would be directly invested into the economy, so that their wealth would grow (and shrink) with the real economy. But through the hateful invention of usury, they create an alternate reality where their wealth always grows faster than the real economy.

The chart assumes a relatively low business loan interest rate of 5%, and a high delinquency rate of 6.75% (the highest recorded by the St. Louis Fed between 1987 and 2016), and a high (usurer-unfriendly) reserve ratio of 33% (the lower the reserve ratio, the faster the wealth of money-lenders grows, as they earn more interest on their capital).

Usury is evil because, on a macro scale, it passes off most risks to the borrower, and most profits to the lender. In the world of business, businesses sometimes make a profit, sometimes make a loss. But in the world of usury, usurers always make a profit. They lend money at 5% to a business and demand 5% profit after the year with complete disregard for whether the business profited or made a loss.

In this way, usury turns the whole economy into a casino where the usurers win most of the time. They happily lend money to everyone they can burden with debt then demand profits (interest) at a fixed rate without regard for the fact that in the real world people sometimes profit, sometimes make losses. The usurers live in a parallel reality where they always profit.

In this way, the wealth of usurers grows faster than the wealth of the rest of society, enabling them to slowly but surely take control of the whole economy by buying up its lands and businesses. Below is a chart of this process over 20 years in a small town, assuming both the money-lender and the townsfolk have $10 million at the beginning.

A wealthy usurer looks at a fellow human and thinks, “How can I turn this person into a profit-making tool for myself?” They want to give him $10,000 to take risks with, but they want to charge him 5% annual profit regardless of whether he profits or loses. In this way they drive a wedge through reality; most profits to the usurer, all losses to the borrower. They do not want to honestly invest their wealth (such as by starting businesses), because they may lose. Instead, they give their money to you so that you will lose if things go badly, while enjoying the power of the law in extracting their profits from you year after year regardless of your loss.

The usurers at the Federal Reserve, Wall Street and the Chicago School of Economics would have you believe that the above situation is unavoidable, that it is just a fact of life, and that if you dislike money-lenders for their profiteering and rent-seeking, you are just hating them for their wealth.

What is not mentioned is that there is a way for the wealthy to invest their wealth without creating wealth inequality and giving themselves such an obscene advantage over the population, and that method is simply honest investment, what I call Socratic Finance, as Socrates mentions it in Plato’s Republic. It is to make the lender and the borrower share in their fair portion of risk and gain.

How is this magic performed? By prohibiting the charging of interest. When the charging of interest is prohibited, money-lenders are made to invest in the real economy, and to share in its profits and losses. If the town’s money-lender cannot practice usury, and has $10 million in wealth compared to the town’s $10 million, he would be forced to spend his money investing in the real economy by buying businesses or starting new businesses, creating jobs in the process, and raising wages, as he has to compete with other business for available talent. In this way he shares in the town’s profits and losses, instead of enjoying a 5% guaranteed annual profit rate that has nothing to do with reality, that is just a legal fiction designed to enrich him at the expense of his borrowers.

If he wants to invest his money to finance housing, instead of using the corrupt practice of mortgaging, he would offer up houses on a rent-to-own basis. In a normal mortgage, a person is made to carry the burden of a $300,000 loan while the money-lender continues to own the house. In the case of default, the money-lender gets the house back, sells it, and if it sells for less than the outstanding loan amount, he goes after the borrower for the rest of the principal. Most mortgage defaults happen during times of financial crises, when people lose jobs, and when houses lose value. If the home was mortgaged at $300,000, during a crisis it would sell for only $200,000. If the buyer had paid $20,000 of the principal off, they would lose the house, and still owe $80,000 to the usurer.

But Socratic home financing is a world apart from this. If a person gets a Socratically-financed home, and then is unable to make payments, the investor gets the house back and sells it, and the home-buyer gets his principal share of the house back. If he had paid off 20% of the principal, he would get 20% of the house’s sale price. In a Socratically-financed home, the buyer always gets some money back in the case of default, as there is no loan involved, it is real ownership transfer of the house. In the previously mentioned case of the $300,000 house, the buyer would get $40,000 back after foreclosure, instead owing $80,000.

Over the past 400 years, most Christians have continued the tradition of being utter disgraces to the name of Christ, so that today even the Vatican funds its operations through usurious lending. Even the Amish practice usury.

If but a probable suspicion arose
of a man to occupy that filthy trade
He was taken for a devil in the likeness of a man.
But good Lord, how is the world changed?

That which infidels cannot abide, Gospellers allow,
That which Jews take only of strangers
and will not take of their countrymen for shame,
That do Christians take of their dear friends
and think for so doing they deserve great thanks.

Thomas Rogers (Anglican theologian, ca. 1555-1616)

Today’s usurers try to absolve themselves from their sins, and whitewash their actions, through the practice of philanthropy. Almost every wealthy usurer is described as a “philanthropist” on Wikipedia. They gain billions of dollars by squeezing the life out of the economies that play host to them, using usury to drive a wedge into the economy and extract rent from it, then spend a few hundred million dollars funding hospitals, museums and universities, and lo and behold! They are philanthropists. It is to this usurer trick of philanthropy that Rabbi Hermann Adler, Chief Rabbi of the British Empire from 1891 to 1911, refers when he says:

No amount of money given in charity, nothing but the abandonment of this hateful trade, can atone for this great sin against God, Israel and Humanity.

The Risk-Profit Differential

The evils of usury, and the immense urge that usurers feel to practice it, can all be summed up into one phrase: the risk-profit differential.

Whatever reasons usurers bring up to defend usury can be defeated by mentioning this phrase. The risk-profit differential is the core of usury, the reason why usurers prefer usury over productive investment, as was recognized by Jesus in his Parable of the Talents.

The risk-profit differential refers to the fact that, at its core, every usurious contract is about passing off more risk to the borrower than to the lender, and passing off more profit to the lender than to the borrower. This differential, this unbalanced arrangement that constantly pushes risk away from the usurer while also constantly pushing profit toward him, is where the attraction of usury lies.

It is the desire of every human to want to increase profits while also wanting to decrease risks. A usurer is simply someone selfish enough to create an arrangement that puts this unchecked, selfish animal desire into law through a contract that ensures him more profit and less risk, while also ensuring less profit and more risk to the borrower.

Usury is about enforcing a contract that enslaves the borrower to the usurer’s interests. The usurer class ensures itself a constant rate of profit (the class as a whole always profits, never loses), while the borrower class profits and loses randomly as economic conditions demand. The usurer class gets guaranteed profits. The borrower class is forced to share its profits with the usurers, while also being made to keep its losses to itself.

Through this unbalanced arrangement, the wealth of the usurer class balloons. They build skyscrapers to house their banks and insurance companies. The rest of society’s prosperity grows fast at first, then stagnates, and then starts to decline as the debt load grows, until a situation is reached, like that in the US, where bankers and their friends are the richest and most powerful people in the country, almost living in alternate reality, with lavish lifestyles and massive mansions subsidized by the interest payments of the millions of peasants.

Casinos make profits by having machines that win very slightly more often than they lose. Perhaps winning 52% of the time and losing 48% of the time. Usury, through the risk-profit differential, turns the entire economy into a casino where the usurers win 80% of the time, and lose 20% of the time (through defaults and bankruptcies). While a large casino makes a few billion dollars a year for its owners through its rigged nature, the economy, due to the rigged usury, makes trillions every year for the usurer class.

Usury is an unbalanced arrangement, otherwise it wouldn’t be usury. There is no way to make usury fair, to make it harmless, to make it add positive value to society. The only solution to usury is to ban it, as the English Kings Edward I and Edward VI did.

No matter how many clever arguments the usurers and their economists come up with in defense of their usury, they can never make this fact go away, as this is the only reason a usurer practices usury: he wants nearly all profits to come to himself, and nearly all losses to go to his borrowers. He wants to give his money to a peasant who is legally forced to share his profits with the usurer while bearing the full burden of any losses.

Debt slavery

The problem with usury is that the profits of lenders always grows faster than the profits of borrowers. When you borrow $10,000 at 5% interest, within this transaction is the embedded assumption that your prosperity will grow by at least 5% in the next year. This is why Aristotle and many other philosophers and intellectuals call usury “unnatural.” The profits of usury are separate from the profits of the actual economy in which it exists. When usurers lend at 5%, they are maintaining a parallel alternate reality in which the economy profits at 5% in the next year, regardless of whether the actual economy profits at 5% or not.

While some borrowers make good use of the money they have borrowed and make more than 5%, so that they can pay off the usurers and still make a profit, others, because of the millions of chances that operate in the reality of an economy, make a loss on the money they have borrowed. They may have borrowed $10,000, and a year later they only have $8,000 left, because their business dealing didn’t work out as they expected. But the usurer, in his alternate reality, continues to pretend not only that the $10,000 still exists, but that the $10,000 made a 5% profit. He collects $500 from the borrower at the end of the year, leaving the borrower with $7500 in cash, and a $10,000 debt to pay off. If the borrower continues to be unlucky the next year, he loses another $2,000 of his cash, but he still has to pay about $500 to the usurer, so now he has $5,000 left in cash, and a $10,000 debt to pay off.

Meanwhile, during these two years, the usurer has earned $1,000 in profit, without losing any of the $10,000 he gave to the borrower, since the borrower is required to pay it back regardless of his or her profits or losses.

Usury is a way of earning money by the virtue of having money, while making others carry the burden of any risk that comes out of using the money. It is an amazing deal—for the usurer. For the borrower, sometimes it is a good deal, sometimes it breaks even, and sometimes it is pure slavery.

A modern, poignant form of debt slavery today is student debt. A usurer lends a student $100,000 at, let’s say, 5% interest. Within this debt is the assumption that not only will the student be able to use their $100,000 degree to earn that much back over their career, but that they will also make a 5% profit, every year, over and above the cost of the degree.

As it happens, some students graduate and succeed in the business world, so that they pay off the loan in 10 or 15 years while enjoying a good, or at least an acceptable, standard of living.

But for many students, this is only something that they can dream of. They borrow tens of thousands of dollars, only to spend the rest of their lives barely being able to make the monthly payments on their loans. And ten years after graduation, due to changing economic, political or technological conditions, their degrees may be completely worthless, meaning that they racked up $100,000 or more in debt for something completely useless. This $100,000 will hover over them like a dark cloud for the rest of their lives.

Meanwhile, the usurer in his or her high tower, continues to extract a 5% interest, or $10,000 a year, from the student, with the law enabling them to maintain an alternate reality in which that completely useless degree is actually worth $100,000, and also that that useless degree is enabling the student to earn a 5% yearly profit over the value of the degree.

In 2015, there were 2.8 million Americans over the age of 60 who were still living with student debt. US law, authored by usurers and their lobbyists, prohibits these people from declaring bankruptcy so that they can get rid of this cloud that has been giving them constant stress since their early adulthood. The law forces them to pay it off, and empowers usurers to seize these people’s wages and properties to get not only the original $100,000, but an additional $10,000 yearly profit over and above that for every year these people have had their debt, which, for a person of 60, means for their entire adult lives. Student debt has turned these people into money-making machines for the usurers.

Usury is about creating an alternate reality in which the economy profits at 5%, or 20%, or whatever the usurers are currently lending their money at, and using the law to force this reality on the population, regardless of the actual economy.

In the real economy, each year and each month’s profits are different from the previous ones’. One year the economy may make a 5% profit, another a 2.5% profit. A war may break out, or natural disaster may strike, causing the economy to make a loss. Political conditions can change. Trade wars, currency speculation and terrorism can severely damage an economy’s profits.

But in the blissful alternate reality of the usurer, none of this happens. Each year is full of sunshine and great harvests, and the population will have to subsidize this alternate reality for them.