Islamic Solutions to the Global Financial Crisis

Sara Swetzoff ’09, on behalf of the Muslim Student Association, sends in some information about an event in the “Islam in Conversation 2009” series:

Taha Abdul-Basser, Chaplain of the Harvard Islamic Society, will lecture on Islamic solutions to the global financial crisis, on Monday February 16 at 7:00 in PAC002. Abdul-Basser has been teaching Islam in the Boston area since graduating from Harvard in 1996 with a degree in comparative religion. He is currently finishing his doctoral dissertation in post-formative Islamic ethics and traditional Arabic literary theory, in the Department of Near Eastern Languages and Civilizations at Harvard University.

Islamic banking is often described as “ethical banking” and proponents claim that the current financial crisis would not have occurred under the Islamic model. The two most basic principles of Islamic banking are the prohibition of usury (means: no charging interest!) and sharing of profit. In compliance with Islamic law (shariah), Islamic banking must also discourage investment in companies that provide products or services prohibited by Islamic law (such as alcohol and gambling). But the moral compass extends beyond simple prohibitions: in Islamic banking, profit and risk are always shared by the borrower and the lender. A recent article on Islamic banking explains the mortgage system under Islamic law: “A Sharia-compliant mortgage is like rent-to-own: There is no note, or mortgage, but typically part of each month’s payment is held toward the ultimate purchase. The property is titled to an individual trust, or limited liability corporation.” (Michigan bank operates by Islamic law, San Francisco Chronicle, Wednesday, January 21, 2009)

Islamic banking is becoming more mainstream worldwide. Five Islamic banks operate successfully in the UK and their popularity is not without controversy. Some people have voiced their wariness of Islamic banking and its motives. But “Western” banking and Islamic banking are not so dissenting: they even have shared ancestry! The earliest forms of capital and capital accumulation, checks and promissory notes, loaning and trusts were innovated by medieval Islamic banking and spread to Europe by the thirteenth century. Come to Monday’s lecture and learn more on Islamic banking and the future of the global economy.

When: Monday, February 16 at 7:00pm
Where: PAC 002