Investor’s Business Daily and Congressman Allen West have teamed up overnight to publish an extremely important op ed penned by Congressman West on the subject of Shariah-Compliant Finance.
In his column, Congressman West points out virtually all of the major concerns surrounding Shariah-Compliant Finance and laments that it has received no critical scrutiny from US policymakers.
Allen West is a genuine American hero and a national treasure. Not surprisingly, his article is a must-read:
http://news.investors.com/article/615505/201206201802/shariah-finance-helps-fund-jihadists.htm
Three cheers for Rep. West!
I would go even further than him in some respects: let’s suppose for a moment that there was adequate disclosure in the sharia finance sector, that sharia advisers were transparent in their activities and compensation packages, that the advisers are not jihadists or funding jihad, and that sharia is just a peaceful religious movement.
The issue we are left with is that sharia finance is a monumentally ineffective economic system for the prosperity of mankind. In other words, even if you assume the best about the people involved with sharia finance, you’re not going to have an economically efficient system that outlaws interest, futures contracts, the stock market, the commodities market, that requires the possession of any good or product before that product can be sold, and that seeks the replacement of currency based systems with a return to the days of gold and silver coin economies.
Islam proposes an economically backwards system that allows for some basic business principles among cloth merchants, farmers, and camel breeders, but allows very little opportunity for undertakings that require significant capital. The proof can be seen by looking at the history of economic retardation of the Middle East.
Despite the vast oil reserves of the Persian Gulf, some of the highest rates of poverty, income inequality, slavery, and misery can be found in the Arab world. Or look at the squalor of Pakistan, which has a fairly developed sharia finance sector and government-imposed zakat system. Or look at the collapse of the Iranian currency.
We’re surrounded by examples of the ruin that Islamic principles can cause to financial systems. We ignore them at our own peril.