One of the most absurd declarations from those who use Shariah-Compliant Finance to spread Shariah worldwide is the claim that Shariah Finance somehow is immune to the economic cycle and market forces.
Part of this stems from the fact that Shariah-Compliant Finance is the opposite of free market capitalism; it is a system of centralized control and attempted interference in the economic cycle.
The snake oil salesmen who propagate this theory essentially say,”Make everything Shariah-compliant and your worries will be over.”
There is absolutely no empirical evidence to back this nonsense. No economic system can be immune from the basic laws of economic and the forces of supply and demand. Yet we hear this tale over and over.
The latest example comes from Malaysia…
[Malaysia] must turn to Islam to find the solution to whatever economic woes faced by the country as all other economic ideologies have failed civilisation, PAS President Datuk Seri Abdul Hadi Awang said today.
“We advise the government to remedy the situation by going back to an Islamic economy. Islam is not only about hudud, it is about the economy,” he added.
Hadi said recent history has shown that the two prevailing economic ideologies in the world — capitalism and socialism — have both failed as illustrated by the collapse of the Soviet Union and the trillions of dollars in debt weighing down the US.
He claimed that both ideologies have no “soul” and are bereft of any spiritual guidance on sin and the afterlife, making them unsuitable for any country in the world, including Malaysia.
“If people can accept the economic ideology of Adam Smith, when he is not Chinese or Indian, or that of socialism and Karl Marx and the like, who were also not Chinese or Indian, then I do not see why they cannot accept an Islamic economy,” he said.