The Quran about usury
In the name of God, the Gracious, the Merciful
Being faced with the devastating consequences of the economic crisis, the topic of interest has become very relevant and controversial for humanity. In order to solve this problem, some experts drew attention to interest-free economic activity. In this regard, world-class experts began to study Islamic banking. In order to fully understand the essence of the Islamic economic model, it is necessary to turn to the word “ribaa” used in the Quran, which, traditionally, is understood as interest.
The word “ribaa” is formed from the root “raba”: to grow, rise, increase, exceed, cultivate. The word was used by Arabs for crops and livestock. These two activities reflected the property status of a person, so the “ribaa”, over time, became applicable to property in general.
The essence of the meaning of “ribaa” is reduced to the fact that the object of human use must increase. For example, from the seed of any plant must grow a culture that gives an increased amount: either the seeds themselves or the fruits. The same example applies to cattle. Livestock was grown to increase the number of livestock and their subsequent consumption without any final loss.
Both these actions are united by one feature, which is homogeneity. From a certain kind of culture, the same culture grows (from wheat seeds grows wheat, from rice grows rice, etc.). The same formula also applies to cattle (from sheep to sheep, from cow to calf, etc.).
Since ancient times, people have exchanged products or services that are grown or produced, which were designated as commodity. Over time, the most universal standard of exchange has become a certain monetary form, which is also considered as commodity.
Applying the formula of homogeneity to all products, including money, and services, it turns out that in commodity-money relations there is a ban to cultivate any of them for increase.
O you who have believed! Beware of God and give up what remains of usury, if you should be believers! (2:278)
O you who have believed! Do not consume usury, doubled and multiplied, but beware of God that you may be successful! (3:130)
For wrongdoing on the part of the Jews, We made unlawful for them pleasant things which had been lawful to them, and for their averting from the way of God many, for their taking of usury while they had been forbidden from it, and their consuming of the people’s wealth in vainness. And we have prepared for the closed among them a painful punishment. (4:161)
Such a ban, naturally, raises the basic question, how can one do economic activity? The answer is contained in the following passage.
Those who feed at the expense of usury will not exist, except as the one whom disobedient struck by insanity. That is because they say, “Indeed, trade is like usury.” But God has permitted trade and has forbidden usury.
So whoever has received an admonition from his Lord and desists may have what is past, and his affair rests with God. But whoever returns – those are the companions of the fire, they will abide therein. (2:275)
The text indicates that only on the basis of trade economic activity is legitimate before God. There is one more question, and what is trade according to the Quran?
To denote a transaction in the Quran, the word “ba,a,” is used, which means: deal, bargain, sale, trade.
[Are] men whom neither trade nor sale distracts from the remembrance of God and performance of prayer and giving of purifying expenditure… (24:37)
O you who have believed! When you are called for the prayer on the day of gathering, then proceed to the remembrance of God and leave trade. That is better for you, if you only knew! (62:9)
This form of relationship is inherent not only between people, but also between a man and the Lord.
Indeed, God has purchased from the believers their lives and their wealth! For that they will have the garden! They fight in the way of God, they kill and are killed by the true promise from Him in the Torah and the Gospel and the Quran. And who is truer to his obligation than God? So rejoice in your deal which you have concluded with Him! This is a great attainment! (9:111)
The population of any country is familiar with such a phenomenon as corruption. At the core of corruption is the benefit. In some countries this is not so developed, and in some places it has taken a large scale and citizens of such a country are simply accustomed to bribes and trade in power structures. However, the Creator warns that there will be no such thing on the Day of Debt.
O you who have believed! Spend from that which We have provided for you before there comes a day in which there is no exchange and no friendship and no intercession. And those who closed themselves – they are the obscurantists! (2:254)
Tell My servants who have believed to establish prayer and spend from what We have provided them, secretly and publicly, before a day comes in which there will be no trade, nor any friendships! (14:31)
At the heart of the trade is exchange. Exchange can be between goods, services, goods and services. The only condition for a correct exchange is its equivalence. If someone changes one thing or service to another thing or service and they are equal in value, then such a trade is correct. And this is logical. After all, everything is interconnected. The total value of the goods exchanged is limited. If someone offers more of the necessary product or service, then the excess will not be claimed, because it simply will not be necessary. In the case of the exchange, because of necessity, there will be no overproduction, and accordingly there will be no predatory use both of the earth’s interior and biosphere, and exploitation of people for a pittance. But if you demand for your product or service more than its actual value and make this obligation fulfilled, then the other person will not receive the full amount of necessary goods, and in the end such a vicious practice can lead to the concentration of all values in the hands of the one.
Having carefully examined the mechanism of the action of usury, we will clearly see its destructive effect. Usury implies an obligation to return beyond a given homogeneous product or service, which ultimately leads to a “washing out” of material goods to a limited circle of people.
Why the trade should not be equivalent to usury? The right deal involves a fair exchange of different goods and services, valued mutually. The usury is the provision of a product or service for a certain period of time and the return of the same product or service in an increased amount. Required in excess of the cost of goods or services, does not exist in the circulation of goods and services produced, which means that it will have to be filled at the expense of someone or something. This practice leads to an imbalance in economic life and to an unjust distribution of material wealth, which we see today.
The Prescription considers the provision of something for a while as a debt and prescribes the repayment of only the debt itself, and in some cases calls for the postponement of the debt repayment period or to forgiving it. But there can be no question of reward over the debt.
And if someone is in hardship, then wait for ease. But if you give charity, then it is better for you, if you only knew! (2:280)
For the one who believe in the future life of mankind, the main stimulus is God’s call to give alms.
God destroys usury and gives increase for charities. And God does not like every closed sinner! (2:276)
The Creator encourages people not just to help those who need help on a one-off basis, but this practice should be held on a permanent basis in the form of providing a purification expenditure.
And whatever you give for usury to increase within the wealth of people will not increase with God. But what you give for purifying expenditure, desiring the countenance of God – those are the multipliers! (30:39)
You can argue as much as you like about the nature of usury, but historical practice has shown the inconsistency of a percent-speculative economy, which is clearly demonstrated by crises and inflation, bankruptcies and defaults, and as the result is poverty of the majority of the world’s population.