A lot of shariah compliant finance is just lawyer balling the whole interest thing. For example a shariah compliant mortgage is equivalent to a traditional fixed rate mortgage.
Why is lending a necessity? "Cash on the barrel" is pretty great, in my view; don't spend what you don't have, and that includes other people's money.
The only counter I've thought of is starting a business or factory. Contracts could be negotiated with employees to have their wages be a (small) % of profits instead (or in supplement) of hourly or salary. Harder initial investments like real estate and hardware can be pooled from the funds of cofounders - I'm not convinced that every business must be able to be founded by a single entrepeneur. The difference between this and borrowing money is that the cofounders might actually gain some skin in the game instead of just some rootless cosmopolitan watching numbers in his office. You could try to legislate lenders into becoming cofounders, but it's really not the same because they don't give a shit as long as they get their cut.
The only counter I've thought of is starting a business or factory.
You've fundamentally answered your own question.
You lend money to someone who has the capability of returning on your investment, but does not have the capitol assets to do it themselves. So, you calculate the profits they expect to make, and charge interest on a loan which is your return on your own money. They created wealth by their action, but they would have taken decades to accumulate the capital to even try. So, they give you money for having helped finance them.
It's pretty reasonable.
The difference between this and borrowing money is that the cofounders might actually gain some skin in the game instead of just some rootless cosmopolitan watching numbers in his office.
That's the difference between loaning your money, and loaning other people's money. Our Keynesian system is built to protect the banks from loss and to side against you whenever possible to keep the banks from ever actually suffering consequences. Not only that, they're funding the loans with your money, not theirs. In the end, they never lose anything because the game is intentionally rigged by people who thought that would stimulate economic growth.
Some banks really should go out of business, and really should be forced to gamble their money instead of someone else's.
That's not a problem with lending money & interest. That's a problem with Socialist Economic policies.
That's the difference between loaning your money, and loaning other people's money.
I was overlooking that part of it, for some reason.
I still am not comfortable with charging interest in general, but I'll admit that it can have a beneficial place and so shouldn't be banned altogether. It's just the whole 'making money with no work/risk' thing that bothers me. Perhaps it really would be sufficient to ban the reallocation ("investment") of funds that aren't your own.
A lot of shariah compliant finance is just lawyer balling the whole interest thing. For example a shariah compliant mortgage is equivalent to a traditional fixed rate mortgage.
It would also kill all lending, and not allowing interest is simply retarded.
Why is lending a necessity? "Cash on the barrel" is pretty great, in my view; don't spend what you don't have, and that includes other people's money.
The only counter I've thought of is starting a business or factory. Contracts could be negotiated with employees to have their wages be a (small) % of profits instead (or in supplement) of hourly or salary. Harder initial investments like real estate and hardware can be pooled from the funds of cofounders - I'm not convinced that every business must be able to be founded by a single entrepeneur. The difference between this and borrowing money is that the cofounders might actually gain some skin in the game instead of just some rootless cosmopolitan watching numbers in his office. You could try to legislate lenders into becoming cofounders, but it's really not the same because they don't give a shit as long as they get their cut.
You've fundamentally answered your own question.
You lend money to someone who has the capability of returning on your investment, but does not have the capitol assets to do it themselves. So, you calculate the profits they expect to make, and charge interest on a loan which is your return on your own money. They created wealth by their action, but they would have taken decades to accumulate the capital to even try. So, they give you money for having helped finance them.
It's pretty reasonable.
That's the difference between loaning your money, and loaning other people's money. Our Keynesian system is built to protect the banks from loss and to side against you whenever possible to keep the banks from ever actually suffering consequences. Not only that, they're funding the loans with your money, not theirs. In the end, they never lose anything because the game is intentionally rigged by people who thought that would stimulate economic growth.
Some banks really should go out of business, and really should be forced to gamble their money instead of someone else's.
That's not a problem with lending money & interest. That's a problem with Socialist Economic policies.
I was overlooking that part of it, for some reason.
I still am not comfortable with charging interest in general, but I'll admit that it can have a beneficial place and so shouldn't be banned altogether. It's just the whole 'making money with no work/risk' thing that bothers me. Perhaps it really would be sufficient to ban the reallocation ("investment") of funds that aren't your own.