Firstly, the financial crisis that has rocked the USA initially and thereafter other parts of the world and
Secondly, the rising costs of basic food commodities that are affecting the poorest of the poor.
• With regards to the first issue, the fallout has been spectacular and the end is not in sight. Some financial institutions have closed shop; some have been bought out by others and the Federal Reserve in the USA is attempting to save others by injecting a whopping $700 billion into the system. The figures are huge, astronomical and really mind boggling, running into trillions of dollars.
• According to one analyst:
“The US debt crisis was not caused by the collapse of the sub-prime market, but was rather part of a consequence of bubbles and crashes induced by inadequately regulated financial markets, of which the sub-prime collapse is but one symptom. …
• What perspectives can Muslims offer which will identify the fault lines that has caused this crisis?
1. The Institution of Interest
These markets are steeped in interest and that too, money related interest. Money should be used to facilitate exchange of commodities and services, but now it serves the function of a commodity for profit. Interest wreaks havoc in the life of people, it leads to the concentration of wealth in the hands of a minority to the exclusion of the majority, it widens social and economic disparities, and it perpetuates the exploitation of the poor. There is no question about the prohibition of interest in Islâm. So much so that Allâh has declared war on the person who is involved in interest in whatever form, be it the borrower or the lender.
2. The Element of Greed
Liquid (money supply) was abundant in supply so more people needed to come into the net. The more money you have, the more interest you make and the more interest you make the more money you have. How do you get more people involved? Relax the regulations. Credit was thus extended to those individuals who did not qualify to access finance ordinarily. Thus the term sub-prime is coined. The risk was great, but greed overwhelms discretion and prudence.
As the famous Arabic proverb reads, ‘Asking is a disgrace, humiliation.’ Overspending and failing to spend according to ones income leads to incurring debt. There is no doubt that to be in debt is a worry by night and humiliation by day. Ask those who are in debt, how many sleepless nights they have endured, and how many times during the day they had to suffer the embarrassment of being told a mouthful of choice words. Perhaps we may endure the humiliation of debt in this world, but we do not know who is keen and enthusiastic to face the music if the disgrace of debt is extended to the Hereafter. If this is the case, should we then not be free from the shackles of debt? Even martyrdom is no absolution of debt. A martyr will be forgiven from all of his sins, except debt.
Americans increased their debt levels enormously and their consumption increased. We are following a similar pattern here in South Africa. This aspect is linked to debt and in more ways relevant to the second global challenge alluded to earlier with regard to spiraling prices of basic food commodities.
• Despite these reasons, which by all accounts are reasonable in their own right, there is a growing voice that is becoming louder that ‘Man must change his lifestyle.’ He is not managing the resources available in a prudent way. Besides being wasteful, he is utilizing resources in a manner that is not necessary. This is where the aspect of consumption comes into the picture.
• Zuhd (abstinence) is a Muslim’s defense against this onslaught of consumerism. It is an attitude, a way of thinking and a way to live. It is to treat this life as a short journey, which is transient and worthless as an end in itself, but critically important as a means to an everlasting life. Zuhd makes us think twice about even permissible routine engagements of our life and makes us ask: is this food, garment or object of my desire necessary for me? Is it going to get me closer to my Allâh? Or, is it a mere distraction, a luxury, a waste of my time, wealth and energy that is better contained?
• Imam Ahmad bin Hambal (ra) has divided Zuhd into three categories:
1. Avoiding the prohibitions - this is the Zuhd of the common folk.
2. Abandoning what is not necessary even among permissible things - this is the Zuhd of the distinguished people (at a higher level of piety).
3. Abandoning what will distract from the remembrance of Allâh - this is the highest level of Zuhd.
• In Islâm, Zuhd is not to abandon this world altogether, but only to subdue ones desire for something. In Islâm, Zuhd is not to abandon luxuries, but rather to reduce luxuries. This attitude/quality of Zuhd in Islâm is very different from the Christian concept of asceticism which emanates from a fundamental aversion of this world, which sees all material existence as inherently evil and this life as a punishment. We are sure in our minds that if we embrace a reasonable level of Zuhd, we will not be victims of consumerism; which will allow for better management of resources, eradicate shortages and which will make things more affordable.
• It is our belief that Islâm provides the values for creating a better world. We need to know these values, know how to apply them to our lives and to the lives of those around us. It is also important to remember that while Islâm may have the solutions to the crisis facing mankind, it is not merely content at tinkering unjust systems. It is concerned to reorient man in a direction that is in keeping with his innate values. When this happens, it is the exploiters, the squanderers and the unjust who need to worry.
Prepared by Jamiatul Ulama South Africa