The politics of usury or the politics of zakāt? Reflections on the future of Islam in Britain

Abstract

In this article, we offer some observations on the possible future of Islam in Britain and, by extension, elsewhere. Basing our critique on the norms established in the Sharīʾa, we first highlight the need for amirate, or personal political leadership, in any Islamic community. We then contrast this with the present global system – illustrated by several examples from the British context in particular – where power can be seen to be exercised by a financial elite that owes little or no allegiance to any national government. This elite owes its power to its control and manipulation of world financial markets, particularly through the usurious technique of fractional reserve banking. We examine fractional reserve banking and demonstrates its overtly ḥarām nature, and thus the ḥarām nature of the global monetary system that it supports. The Islamic alternative to this system, as demonstrated by the sunna, is to use gold and silver currency as opposed to ḥarām paper money. Such a currency, in tandem with strong personal leadership, will enable not only ḥalāl trade, both locally and globally, but also the correct implementation of the critically important Third Pillar of Islam, zakāt, since, firstly, zakāt needs leadership for its collection and distribution, and, secondly, it cannot correctly be collected from paper money but only from gold and silver, crops and livestock.

Keywords:

• leadership
• usury
• zakāt
• dinar

Acknowledgments

This article is an expanded version of a paper originally presented at “The Future of Islam in Britain: New Muslims' Perspective” conference held at the Department of Theology and Religion, University of Birmingham, Birmingham, UK, 3–4 March 2008. I am grateful to the organisers of the conference, and in particular Dr Haifaa Jawad, for inviting me and making it possible for me to attend. I wish also to acknowledge an intellectual debt to Shaykh Abdalqadir as-Sufi and, following him, Umar Ibrahim Vadillo, whose pioneering efforts in restoring the Islamic gold dinar and silver dirham and reviving the fiqh of zakāt underlie the critique contained in the present work; and to thank Drs Raihanah Abdullah, Abdul Karim Ali and Asmak Ab Rahman for their help with an earlier draft of this article.

Notes

¹For example, Ibn Hishām, al-Sīra al-nabawiyya, ed. Ṭāhā ʾAbd al-Raʿūf Saʾd (4 vols 3rd edn Maktabat al-Kulliyyāt al-Azhariyya, Cairo 1398/1978) II. 196; also Alfred Guillaume (tr), The Life of Muhammad: A Translation of Ibn Ishaq's Sirat Rasul Allah (Oxford University Press, Karachi 1955/1978) 300.

²For example, Muslim, Ṣaḥīḥ, ed with marginal notes by Muḥammad Shukrī ibn Ḥasan al-Anqarawī (8 vols Dār al-Fikr, Beirut n.d.; originally al-Maṭbaʾa al-ʾĀmira, Istanbul 1334/1916) VI, 22 [Kitāb al-Imāra: bāb al-amr bi-luzūm al-jamāʾa ʾinda ẓuhūr al-fitan wa-taḥdhīr al-duʾāt ilā l-kufr], and the commentary in the margin thereto.

³For example, al-Ṣāwī, Ḥāshiyat al-Ṣāwī ʾalā l-Jalālayn (4 vols Dār al-Fikr, Beirut n.d.; originally Maktabat al-Tijāriyya al-Kubrā, Cairo 1358/1939) II, 46 [at Q.6:129: “In that way We put some of the wrongdoers in charge of others because of what they have done”].

⁴al-Wansharisi, al-Miʾyār al-muʾrib wa-l-jāmiʾ al-mughrib ʾan fatāwī Ifrīqiyya wa-l-Maghrib, ed Muḥammad Ḥajjī (13 vols Dār al-Gharb al-Islāmī, Rabat/Beirut 1403/1983), II, 138–9; also Muḥammad ʾIllīsh, Fatḥ al-ʾalī al-mālik fī al-fatwā ʾalā madhhab al-Imām Mālik (2 vols: Dār al-Fikr, Beirut n.d.) I, 386.

⁵For example, Nuh Ha-Mim Keller (tr), The Reliance of the Traveller (rev edn Sunna, Evanston, IL 1994) 638.

⁷Lucy Ward, ‘“President Blair” Killed Cabinet, Says Mowlam’, Guardian (17 November 2001) <http://www.guardian.co.uk/politics/2001/nov/17/uk.Whitehall?INTCMP=SRCH>.

⁶For example, BBC On This Day (6 May 1997) <http://news.bbc.co.uk/onthisday/hi/dates/may/6/newsid_3806000/3806313.stm> accessed 12 June 2012, where the decision is presented as that of the then Chancellor of the Exchequer, Gordon Brown, under the rubric “1997: Brown sets Bank of England free”, noting that “The Chancellor, Gordon Brown, has given the Bank of England independence from political control.” Philip Webster clarifies that the idea was as much Blair's as it was Brown's; Philip Webster, ‘Independence for the Bank of England Was My Idea, Says Tony Blair”, TimesOnline (17 November 2007) <http://www.timesonline.co.uk/tol/news/politics/the_blair_years/article2886548.ece> accessed 11 November 2009. As for whether the Bank of England was ever anything other than private, that is a moot point. Wikipedia notes that the Bank of England “was established in 1694 to act as the English Government's banker, and to this day it still acts as the banker for HM Government. The Bank was privately owned and operated from its foundation in 1694. It was subordinated to the Treasury after 1931 in making policy and was nationalised in 1946. In 1998, it became an independent public organisation, wholly-owned by the Treasury Solicitor on behalf of the Government, with independence in setting monetary policy”; Wikipedia, ‘Bank of England’ <http://en.wikipedia.org/wiki/Bank_of_England> accessed 12 June 2012. However, the nature of the “nationalization” in 1946 remains somewhat questionable, with the Bank continuing as a Royal Charter Company enjoying the absolute protection of confidentiality and security afforded by a Royal Charter and The Official Secrets Act; e.g. Robert Owen, ‘Bank of England Nominees’ (5 October 2012 <http://forumnews.wordpress.com/about/bank-of-england-nominees/> accessed 12 June 2012.

⁸BBC 2, Undercurrents of 1994 (television programme broadcast 31 December 1994).

⁹R. Dallas Brett, Usury in Britain (St Botolph, London 1946) 31 (emphasis added).

¹⁰Ibid. 33. For more about the political and financial crisis of 1931 and the events leading up to it, see, for example, Ralph Miliband, Parliamentary Socialism: A Study in the Politics of Labour (George Allen & Unwin, London 1961) 152–92; David Marquand, Ramsay MacDonald (Jonathan Cape, London 1977) 518–670 (esp. for reference to the government being faced with a “bankers' ramp”, 622).

¹¹Brett (n 9) 33.

¹²Jeffrey Mark, The Modern Idolatry (Chatto & Windus, London 1934) 70.

¹³ Wikipedia notes: “Queen Elizabeth II was not the first British monarch to have her face on UK banknotes. George II, George III and George IV appeared on early Royal Bank of Scotland notes and George V appeared on 10 shilling and 1 pound notes issued by the British Treasury between 1914 and 1928. However, prior to the issue of its Series C banknotes in 1960, Bank of England banknotes generally did not depict the monarch. Today, notes issued by Scottish and Irish banks do not depict the monarch./ The monarch is depicted on banknotes issued by the Crown dependencies./ Some British overseas territories have their own Sterling-based currencies, and some of these issue banknotes bearing the monarch; for example the Falkland pound, the Gibraltar pound, and the Saint Helena pound”; Wikipedia, ‘Banknotes of the Pound Sterling. 10. The Monarch on Banknotes’ <http://en.wikipedia.org/wiki/Banknotes_of_the_pound_sterling> accessed 12 June 2012.

¹⁴This maxim was quoted in this form by T. Cushing Daniel, a writer on financial matters, before a US Senate subcommittee on banking and currency convened on 12 March 1914; Rural Credit: Joint Hearings Before the Subcommittees of the Committee on Banking and Currency of the Senate and of the House of Representatives Charged with the Investigation of Rural Credits, Sixty-third Congress, Second Session (Government Printing Office, Washington, DC 1914) 771 <http://www.archive.org/stream/ruralcreditsjoin01unit#page/770/mode/2up> accessed 12 June 2012. In a letter from the same Mr Daniel to President Woodrow Wilson, dated 8 May 1913, which he read out to the aforementioned subcommittee, he refers in a more general way to this being “the maxim of the ‘money lenders’ of the Old World”; ibid. 764 <http://www.archive.org/stream/ruralcreditsjoin01unit#page/764/mode/2up> accessed 12 June 2012. This reference is cited in, for example, Joseph Plummer, ‘Sourced Quotes on Banking’ in Dishonest Money: Financing the Road to Ruin <http://dishonestmoney.com/sourced_quotes_on_banking.html>; and Wikiquote, ‘Conspiracy’ <http://en.wikiquote.org/wiki/Conspiracy> both accessed 12 June 2012. In the latter source (and frequently elsewhere) a variant of this statement is attributed specifically to Mayer Amschel Rothschild (1744–1812) (“Permit me to issue and control the money of a nation, and I care not who makes the laws”), as it is also, for example, in a well-received book on 20th-century economic history: Liaquat Ahamed, Lords of Finance: 1929, the Great Depression, and the Bankers Who Broke the World (Windmill, London 2010) 179 (“Let me issue and control a nation's money and I care not who writes the laws”).

¹⁵E. Victor Morgan, A History of Money (Penguin, Harmondsworth 1965) 18.

¹⁶Ibid. 27. For the events leading up to the abandonment of the gold standard in 1931, see Miliband (n 10) 152–92; and Marquand (n 10) 518–670 (esp. 659–60).

¹⁷Ibn al-ʾArabī, al-ʾAwāṣim min al-qawāṣim (al-Maktaba al-ʾIlmiyya, Beirut 1405/1985; originally al-Maṭbaʾa al-Salafiyya, Cairo 1371/1951–52) 46–7.

¹⁸Ibn al-ʾArabī, Aḥkām al-Qurʿān (4 vols Dār al-Maʾrifa, Beirut n.d.; originally Cairo? 1376/1957) II, 1006.

¹⁹Ibid. II, 1007–08.

²⁰Ibid. II, 1011.

²¹Al-Qurṭubī, Tafsīr [= al-Jāmiʾ li-aḥkām al-Qurʿān] (20 vols Dār al-Kitāb al-ʾArabī, Cairo 1387/1967) VIII, 251.

²²Mālik, in his Muwaṭṭaʿ, after mentioning two reports from the Prophet relating to the minimum amounts that a person needs to own before zakāt becomes obligatory, includes a third report that ʾUmar ibn ʾAbd al-ʾAzīz had written to his representative (ʾāmil) in Damascus about zakāt, telling him that zakāt only applied to crops, gold and silver, and livestock. Mālik then summarises that zakāt is only taken from three categories of wealth: crops, gold and silver, and livestock; Mālik ibn Anas, al-Muwaṭṭaʿ (2 vols Maṭbaʾat al-Ḥalabī wa-Awlādihi, Cairo 1349/1930) I, 188.

²³Mālik, for instance, says: “Some transactions may be allowed if the transaction has gone ahead and is difficult to annul, but usury (ribā) in a transaction automatically annuls it. Neither a little nor a lot of it is allowed, nor is there the same leeway with regard to it as there is for other types of transaction, because Allah, the Blessed and Exalted, says in His Book: ‘And if you repent, you may have your capital back, without either wronging or being wronged’”; ibid. II, 89 (citing Q.2:279).

²⁴Frederick Soddy, Wealth, Virtual Wealth and Debt (George Allen & Unwin, London 1926) 157.

²⁵In this context note the work of Tarek El Diwany on the subject <http://www.islamic-finance.com>; also Tarek El Diwany, The Problem With Interest (2nd edn Kreatoc, London 2003).

²⁶For Calvin accepting usury at 5%, see John Calvin, Sermons on Deuteronomy, tr A. Golding (London 1583) 824; and idem, The Library of Christian Classics XXII. Calvin: Theological Treatises, tr JKS Reid (SCM Press, London 1954) 81. At the same time, Calvin said, echoing a sentiment roundly condemned in the Qur'an, “Many such cases exist in which, as far as equity is concerned, usury is not worse than purchase”; whereas Allah says, “They say that trade is like usury, but Allah has permitted trade and forbidden usury” (Q.2:275); idem, Commentaries on the Last Four Books of Moses, tr CW Bingham (Calvin Transmission Society, Edinburgh 1854) III, 131.

²⁷Cited in Ezra Pound, What Is Money For? (Greater Britain Publ., London 1939) 2; repr. in William Cookson (ed), Ezra Pound: Selected Prose: 1909–1965 (Faber & Faber, London 1973) 260. Cf. Ezra Pound, Impact (Henry Regnery, Chicago, IL 1960) 46–7, 101, 108, 187. For Paterson organising a loan of £1.2 million of this money “created out of nothing” to the English government at 8% plus charges, see Wikipedia, ‘Bank of England. 1. History’ <http://en/wikipedia.org/wiki/Bank_of_England> accessed 12 June 2012.

²⁸John K. Galbraith, Money: Whence It Came, Where It Went (Pelican, London 1976) 29.

²⁹AG Anderton, Economics: A New Approach (new edn Unwin Hyman, London 1990) 18.

³⁰Ibid. 355.

³¹Cited in Mark (n 12) 81.

³²Soddy (n 24) 157 (emphasis added).

³³al-Qurṭubī (n 21) III, 364 (36 times; 99 types); Ibn Mājah, Sunan, ed. Muḥammad Fuʿād ʾAbd al-Bāqī (Dār Iḥyāʿ al-Turāth al-ʾArabī, n.d.) II, 764 [= Kitāb al-Tijārāt: bāb al-taghlīẓ fī l-ribā] (70 types).

³⁴al-Bukhārī, Ṣaḥīḥ, ed. Muḥammad Dhihnī (8 vols Dār al-Fikr, Beirut n.d.; originally al-Maṭbaʾa al-ʾĀmira, Istanbul 1315/1898) IV, 187 [= Bāb suʿāl al-mushrikīn an yuriyahum al-nabī ṣallā llāhu ʾalayhi wa-sallama āya fa-ʿarāhum inshiqāq al-qamar, appearing shortly after Bāb ʾalāmāt al-nubuwwa fī l-islām].

³⁵Roy Jastram, The Golden Constant: The English and American Experience, 1560–1976 (Wiley, New York, NY 1977) 189.

³⁶James Turk, ‘GoldMoney and Its Strengths: Why Are GoldGrams a Unique Currency?’ <http://goldmoney.com/essays-strengths.html> accessed 12 June 2012.

³⁷For silver as well as gold, see James Turk, ‘Silver is Money’, in Free Gold Money Report (28 September 2007) <http://www.fgmr.com/silver-is-money.html (accessed 12 June 2012; for pounds sterling and euros as well as the dollar, see idem, ‘Don't ‘Invest’ in Gold – Save It', in Golden Fortunes: Financial Freedom Thru Education (2009) <http://www.goldenfortunes.com/index.php/articles-a-commentary/44-james-turk-goldmoney/71-dont-invest-in-gold-save-it> accessed 12 June 2012.

³⁸Such was the case with English sterling silver pennies, which in medieval times gained a wide reputation on the Continent for their consistent fineness; e.g. AE Feavearyear, The Pound Sterling: A History of English Money (Humphrey Milford/Oxford University Press, London 1931) 8; also for Edward I's reign, see Michael Prestwich, ‘Edward I's Monetary Policies and Their Consequences’ (1969) 22 Econ Hist Rev 406–16 (esp. 408, 410, 413); Wikipedia, ‘The History of the English Penny (1154–1485)’ <http://en.wikipedia.org/wiki/History_of_the_English_penny_(1154%E2%80%931485> accessed 12 June 2012. It was also true, for example, of the Almoravid gold dinars that circulated as high-quality currency in the Mediterranean world for many years after the demise of the dynasty that minted them; e.g. Ronald A. Messier, ‘The Almoravids: West African Gold and the Gold Currency of the Mediterranean Basin’ (1974) 17(1) J Econ Soc Hist Orient 31–47 (esp. 32–3); Hanna E. Kassis, ‘Observations on the First Three Decades of the Almoravid Dynasty (A.H. 450–480 = A.D. 1058–1088): A Numismatic Study’ (1985) 62 Der Islam 313–14 (esp. nn 8, 9).