I HAVE been following the debate on Riba and interest. The ordinary citizen is not concerned with the various definitions of Riba, interest, profit, capital, labour and produce, etc., and the intellectual dialogues and scripture quoted from highly influential economists. What is the underlying problem? The crux of the matter is that money is transferred from someone (may be a poor person, any industrialist or any government, etc.) to another person or group without undergoing any hardship on its part. The major discussion falls on four sets of proposition: (1) Riba, (2) Riba plus profit, (3) interest and (4) interest plus profit. Several more could also be added like late fee charges, processing charges, credit cover and insurance. The result is that in all these situations money has passed on from someone to another without any hardship. Our concern is this injustice which has permeated in society the world over under the banner of capitalism. Some have pointed out that interest is a share out of profit. This is not incorrect. Industry is installed or operated on some loan and profit, if earned, is taken on the produce where loan plus interest is considered a part of the produce. This is an eyewash. Remove the interest and much of the profit will crumble down.
Loan is not always taken for industrial purposes where labour is involved. Think of a person or even governments that take loan to pay back interest only. A person may take a loan to pay for his child’s fee at the university, or go for surgery in an emergency. There are numerous cases where a loan is taken, knowing that further loan will be needed to clear this account.
Defenders of interest (or profit) may also consider such cases. Most of the writers have defended profit as Islam also allows it. But what level of profit it allows has never been debated, declaring it open. The spirit of Sharia does not allow sweeping profits and its distribution as huge bonuses, honoraria or even exuberant salaries exceeding several million rupees. I will request all economists to make detailed analyses on a case-to-case basis. This is a very serious issue as capitalism is losing its glamour to most of the world.
IFTIKHAR A. MALIK Lahore