It could be !
An Academic Question on Riba. Need help. Please tag your friends. Any help would be appreciated
- Thread starter AsifAmeer
- Start date
RIBAA and BAYEE are opposing terms used in the quran to define economic basis by the quran for a society that is based upon the quran.
The foundation for which the quran claims to be revealed is peace=islam. The quran claims that peace between mankind is impossible unless people accept terms and conditions laid down in the quran.
Since quran wants people to live in peace and that peace is not possible till individuals are free from inflicting harm and destruction upon each other and that is not possible unless people have proper rights and responsibilities regarding each other and so treat each other fairly and compassionately. This means any economic system must be based upon brotherhood of mankind if it has to be qualified islamic because without cooperation between people for progress and prosperity mankind cannot have peace.
So all arguments are useless about economics that do not have this foundation to begin with. This is the main reason business for profit is unislamic because it is anti humanity. It is precisely the reason people undercut each other and go down the negative spiral of competition to make money. This is why it is law of jungle ie evolutionary economics based upon idea of winner takes all or survival of the fittest.
So long as we approach economics from this angle the problems we have remain.
So anyone who wants to come up with an economic system that could be called islamic must take this as base and then build upon it a system that ensures its success on basis of well being of humanity.
So the real question is, can capitalism be controlled and used in the way the quran wants us to use it for good of mankind? Can communism be controlled and used the same way or can mixed economic system be used to achieve the set out goal? So long as the goal of peace is achievable through an economic system it is islamic and so long as it is not achievable through an economic system it is not islamic. That is the definition of terms ribaa and bayee in quranic context. The end goal is peace through removing oppression and suppression from society, injustice, unfairness, cruelty, animosity, regression and stagnation and poverty of all sorts eg of education and livelihood etc.
Unless people look at full picture in context of the quran tinkering around the edges is not going to solve the facing problems. Mullahs have no idea what they are talking about and it is the mullahs who have destroyed the original islamic set up on behalf of rulers at the time. We do have structure of islamic economic system in the quran but people need to reinterpret the quran in its proper context before they can get that information from the quran. This is going to take some time. All mullah based interpretations of the quran so far have proven useless and impractical that is why we have failed to even offer alternative never mind convince people about islamic system being the best and 100% effective.
Since muslims are now realising that they do not have anything on the table they are forced to start looking for the causes and problems caused by mullahs. As I said before unless we leave islamic concepts of mullaism alone we will not be able to get out of this mess. We do need to go back to original quranic context or we have nothing to stand upon to face the onslaught by capitalism. This is why people must read what I wrote and help find answers from the quranic text. These days simple declarations of faith do not work rather we need to prove what we claim. Moreover we cannot blame others for things in which we have failed ourselves and rest of humanity.
I see mullah followers posting a lot of useless posts because they do not even realise yet how deeply we are in trouble as a nation. Instead of nonsense posts it will be very useful to post and discuss issues that face us and try and bring forth answers from the quranic text directly. Today our issues are all about politics so we need to know what is islam in political sense or what is islam in economic sense. If we do not have clear islamic stance based upon the quranic text then how are we going convince ourselves and others islam is something we must even consider? No doubt we are going through a tough time but unless we come forward with answers worth listening to things are going to get yet worse for us as a people.
The foundation for which the quran claims to be revealed is peace=islam. The quran claims that peace between mankind is impossible unless people accept terms and conditions laid down in the quran.
Since quran wants people to live in peace and that peace is not possible till individuals are free from inflicting harm and destruction upon each other and that is not possible unless people have proper rights and responsibilities regarding each other and so treat each other fairly and compassionately. This means any economic system must be based upon brotherhood of mankind if it has to be qualified islamic because without cooperation between people for progress and prosperity mankind cannot have peace.
So all arguments are useless about economics that do not have this foundation to begin with. This is the main reason business for profit is unislamic because it is anti humanity. It is precisely the reason people undercut each other and go down the negative spiral of competition to make money. This is why it is law of jungle ie evolutionary economics based upon idea of winner takes all or survival of the fittest.
So long as we approach economics from this angle the problems we have remain.
So anyone who wants to come up with an economic system that could be called islamic must take this as base and then build upon it a system that ensures its success on basis of well being of humanity.
So the real question is, can capitalism be controlled and used in the way the quran wants us to use it for good of mankind? Can communism be controlled and used the same way or can mixed economic system be used to achieve the set out goal? So long as the goal of peace is achievable through an economic system it is islamic and so long as it is not achievable through an economic system it is not islamic. That is the definition of terms ribaa and bayee in quranic context. The end goal is peace through removing oppression and suppression from society, injustice, unfairness, cruelty, animosity, regression and stagnation and poverty of all sorts eg of education and livelihood etc.
Unless people look at full picture in context of the quran tinkering around the edges is not going to solve the facing problems. Mullahs have no idea what they are talking about and it is the mullahs who have destroyed the original islamic set up on behalf of rulers at the time. We do have structure of islamic economic system in the quran but people need to reinterpret the quran in its proper context before they can get that information from the quran. This is going to take some time. All mullah based interpretations of the quran so far have proven useless and impractical that is why we have failed to even offer alternative never mind convince people about islamic system being the best and 100% effective.
Since muslims are now realising that they do not have anything on the table they are forced to start looking for the causes and problems caused by mullahs. As I said before unless we leave islamic concepts of mullaism alone we will not be able to get out of this mess. We do need to go back to original quranic context or we have nothing to stand upon to face the onslaught by capitalism. This is why people must read what I wrote and help find answers from the quranic text. These days simple declarations of faith do not work rather we need to prove what we claim. Moreover we cannot blame others for things in which we have failed ourselves and rest of humanity.
I see mullah followers posting a lot of useless posts because they do not even realise yet how deeply we are in trouble as a nation. Instead of nonsense posts it will be very useful to post and discuss issues that face us and try and bring forth answers from the quranic text directly. Today our issues are all about politics so we need to know what is islam in political sense or what is islam in economic sense. If we do not have clear islamic stance based upon the quranic text then how are we going convince ourselves and others islam is something we must even consider? No doubt we are going through a tough time but unless we come forward with answers worth listening to things are going to get yet worse for us as a people.
Last edited:
yes we always mix interest with profit...........:)
Read the comment by [MENTION=13412]Mughal1[/MENTION] who thinks
Theres a whole lot of confusion in the general public.
profit is unislamic because it is anti humanity
Theres a whole lot of confusion in the general public.
My Conversation with an Islamic Professor
on Per Sheikh, I cannot charge 7 gm of silver if the payment is made in the future. (3 days max)
After explaining him what a forward contract is, (setting a price of a sale for a future date), he said there are different school of thoughts.
Lekin my initial idea of borrowing 1gm of Gold and returning 60gm of silver - this is not valid and considered riba. So chalk it off.
However, I was still not given a clear on the follow:
- If RIBA is "RENTING of Money" and money can be Dollar, Rupee, Gold, Silver, Wheat grain, Rice, Land, Water, etc. This definition leads up to a false conclusion that renting land is Riba as well.
- The other issue was Inflation. I shared my view that in an Inflationary enviroment, it is actually the BORROWER who is getting RIBA if the lent loan doesnt not have an interest rate less than the Inflation rate because the VALUE BORROWED was not RETURNED at the end of the loan. (i.e. the returned money is worth less than the money borrowed). The Sheikh said "The borrower is poor and how could be be making interest on borrowed money.?" Once I cleared his views that today its the most powerful who are the borrowers (Nations, corporations and wealthy individuals) who have to most amount of outstanding loans and they are making money off from the borrowed money. It was at that point I felt the Sheikh openned up to me and said never in the History of Mankind has a system this twisted imposed on the humans.
Conclusion
Folks, make up your own mind. What I suggested here is not right. It is Riba. But I am still unclear as to what the criteria is for RIBA. There is alot of work Muslims need to do. It would be completely unfair to my kids if I were to leave this world without answering this question for my kids. I have gotten you in this loop too. So you too are responsible now. All the best!
The Messenger of Allāh (Gods peace and blessings beupon him) said, Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates,salt for salt,like for like, equal for equal (that is, in equal weight or measure), and from hand to hand. If these species differ, then, sell as you like, as long as it is from hand to hand.
...............................................................
The transaction will be valid if it's on Spot , 7 gm or 70 gm no difference. If delay is introduced than it will be invalid on account of delay i.e Riba Nasi'ah
and why would profit/loss bother you , you are just taking Qarz & not a business activity?
say I borrow $10000@ 0% for 1 year, do you see any element of Riba in this transaction?
iceburg
Banned
[MENTION=24375]AsifAmeer[/MENTION]
I started a thesis on this topic but it remained incomplete ... due to many reasons. Below I am copying Section-II of that incomplete work as I think it is relevant to your first post.
We have mentioned in Section-I that some confusions in the meanings of term ‘interest’ has been created by the theory of Economics. The confusion is that Economics defines "Interest" in two different manners i.e. there are two types of definitions of interest available in Economics literature. Both types of definitions actually describe entirely different phenomenon but are still claimed to be the definitions of single term “interest”. This section is devoted to differentiate between the two different concepts which are currently considered to be one single concept, at least, by the Economics literature. Following are the examples of those two types of definitions:
First Type of Definition:
“Interest is the return to capital”.
Second Type of Definition:
“Interest is the amount of money, you pay in addition to the amount of borrowed money if you have got a loan from some body.” Another same example is: “Interest is price paid for the use of money for a period of time.”
A sight comparison between above mentioned two types of definitions reveals the following differences:
a) First type of definition describes interest as return to “capital” and second type defines interest as additional return to borrowed “money”. But “capital” and “money” themselves are not considered the same thing according to the same Economics’ literature. “Capital” according to Economics’ literature includes any such thing as building, machinery, tool etc. which take active part in the production process along with other factors of production. Thus “Capital” means all those “goods” which are used for the production of other goods and services in the economy. “Money” on the other hand, is not considered, in Economics, as any kind of “goods”. Money is considered just a mean of exchange and is used merely to buy and sell other goods and services. Besides this, money also performs some auxiliary functions such as store of value; unit of account etc. but the emphasizing or focusing point here is to show that nature of “money”, unlike “capital”, is not that of economic good. Money, being the mean of exchange only, does not participate directly in the production process. Money, therefore, is not considered as a factor of production. Now if we analyze the two types of definitions of “interest” in the light of above mentioned fact that money and capital are two different things, then “return to capital” and “return to money” are two entirely different things and we should conclude that these two different things or concepts not be given the same name. But practically, Economics literature, mistakenly, not only gives these two concepts a single name but also consider them to be a single concept.
b) Interest is a factor income according to first type of definition because “capital” is a factor of production. On the other hand interest is not a factor income according to second type of definition because “money” is not a factor of production. This clear contradiction suggests that the two types of definitions do not represent a single concept.
c) First type of definitions which describes interest to be return to capital implies that it is factor income because capital actively participates in the production process. It means that interest income arises due to the production of goods and services in the economy and the share of capital in the production i.e. the interest income is to be calculated on the basis of production data and not on the basis of any such formula as Amount x Rate x Time because interest in this case has relationship only with the production quantity and it has nothing to do with time period in any way. Also note that if there is no production in economy, there would arise no interest income. We already have seen in Section-I that this ‘interest’ of Economics actually corresponds to the concept of ‘leasing’ in Accounting in case capital assets have been hired by the business enterprise. If capital assets such as machinery and building are the property of business firm, then this Economics’ ‘interest’ would correspond to the concept of ‘depreciation’ in Accounting. Whereas according to the second type of definition which considers interest to be the “price paid for the use of money for a period of time”, implies that interest has nothing to do with the production and the interest income shall arise even if there is no production in the economy. Interest in this case has relationship with the principal amount, the rate of interest and the time period involved and the amount of interest, in this case, is calculated on the basis of the formula i.e. Amount x Rate x Time. With reference to our discussion in Section-I, we have seen there that this ‘interest’ of Economics corresponds to that ‘interest’ of Accounting which is the reward of outsiders liabilities.
Do Both Types of Definitions Describe a Single Thing …Interest…?
No! Only one type of definitions define the term “interest” and the other type of definitions define some other thing … for which Economics is yet to choose the appropriate name.
Which Type Defines “Interest” And Which Type Defines “Some Other Thing” ….?
Due to the limited information available in Economics, it is not possible to decide which type of definitions actually defines the term “interest”. The only way is to arbitrarily choose any one for this purpose. But fortunately we already have the second type of definition available in ancient Islamic literature with its appropriate name i.e. “Riba”. Yes! The second type of definition which is in fact the definition of Riba has been defined in Islamic literature in the following way:
The Prophet (PBUH) said, "The selling of wheat for wheat is Riba (usury) except if it is handed from hand to hand and equal in amount. Similarly the selling of barley for barley, is Riba except if it is from hand to hand and equal in amount, and dates for dates is usury except if it is from hand to hand and equal in amount. (Sahi-Al-Bukhari 3.379)
On the basis of this available definition of Riba, it can be safely concluded that exchange of one commodity with the same commodity in unequal quantity includes Riba. It also means that if Rs.12 are exchanged for Rs.10, the extra Rs.2 are Riba according to this definition. The same conclusion we can get from the second type of definitions of interest. It means that second type of definitions are not the definitions of “interest” but are the definitions of “Riba.” Therefore Economics needs to be corrected on this issue.
It must be noted that Riba has been prohibited in Islam so according to Islamic teachings, Riba is not a legitimate form of income. In the next section of this thesis, we shall logically prove that riba which is prohibited in Islam is an illegitimate form of income and then in subsequent sections we shall mention the negative implications of a riba based Economy. To formulate a riba free accounting outline for the firms is also one of the main tasks of this thesis and this we shall do in various appropriate sections of this thesis.
References:
Narrated Az Zuhri from Malik bin AusNarrated 'Umar bin Al-Khattab: Allah's Apostle said, "The bartering of gold for silver is Riba, (usury), except if it is from hand to hand and equal in amount, and wheat grain for wheat grain is usury except if it is form hand to hand and equal in amount, and dates for dates is usury except if it is from hand to hand and equal in amount, and barley for barley is usury except if it is from hand to hand and equal in amount."
(Sahi Bukhari - 3.344)
Narrated Ibn Umar
The Prophet said, "The selling of wheat for wheat is Riba (usury) except if it is handed from hand to hand and equal in amount. Similarly the selling of barley for barley, is Riba except if it is from hand to hand and equal in amount, and dates for dates is usury except if it is from hand to hand and equal in amount. (See Riba-Fadl in the glossary).
(Sahi Bukhari - 3.379)
Narrated Ibn Shihab
that Malik bin Aus said, "I was in need of change for one-hundred Dinars. Talha bin 'Ubaidullah called me and we discussed the matter, and he agreed to change (my Dinars). He took the gold pieces in his hands and fidgeted with them, and then said, "Wait till my storekeeper comes from the forest." 'Umar was listening to that and said, "By Allah! You should not separate from Talha till you get the money from him, for Allah's Apostle said, 'The selling of gold for gold is Riba (usury) except if the exchange is from hand to hand and equal in amount, and similarly, the selling of wheat for wheat is Riba (usury) unless it is from hand to hand and equal in amount, and the selling of barley for barley is usury unless it is from hand to hand and equal in
amount, and dates for dates, is usury unless it is from hand to hand and equal in amount.' "
(Sahi Bukhari - 3.382)
Narrated Abu Salih Az Zaiyat
I heard Abu Said Al-Khudri saying, "The selling of a Dinar for a Dinar, and a for a Dirham (is permissible)." I said to him, "Ibn 'Abbas does not say the same." Abu Said replied, "I asked Ibn 'Abbas whether he had heard it from the Prophet or seen it in the Holy Book. Ibn 'Abbas replied, "I do not claim that, and you know Allah's Apostle better than I, but Usama informed me that the Prophet had said, 'There is no Riba (in money exchange) except when it is not done from hand to
hand (i.e. when there is delay in payment).' "
(Sahi Bukhari - 3.386)
Narrated Abu Said Al Khudri and Abu Huraira
Allah's Apostle employed someone as a governor at Khaibar. When the man came to Medina, he brought with him dates called Janib. The Prophet asked him, "Are all the dates of Khaibar of this kind?" The man replied, "(No), we exchange two Sa's of bad dates for one Sa of this kind of dates (i.e. Janib), or exchange three Sa's for two." On that, the Prophet said, "Don't do so, as it is a kind of usury (Riba) but sell the dates of inferior quality for money, and then buy Janib with the money". The Prophet said the same thing about dates sold by weight. (See Hadith No. 506).
(Sahi Bukhari - 3.499)
Narrated Abu Said al Khudri
Once Bilal brought Barni (i.e. a kind of dates) to the Prophet and the Prophet asked him, "From where have you brought these?" Bilal replied, "I had some inferior type of dates and exchanged two Sas of it for one Sa of Barni dates in order to give it to the Prophet to eat." Thereupon the Prophet said, "Beware! Beware! This is definitely Riba (usury)! This is definitely Riba (Usury)! Don't do so, but if you want to buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money."
(Sahi Bukhari - 3.506)
Narrated Abdullah bin Abu Aufa
A man displayed some goods in the market and took a false oath that he had been offered so much for them though he was not offered that amount. Then the following Divine verse was revealed: "Verily! Those who purchase a little gain at the cost of Allah's covenant and their oaths . . . Will get painful punishment." (3.77) Ibn Abu Aufa added, "Such person as described above is a treacherous Riba-eater (i.e. eater of usury)."
(Sahi Bukhari - 3.841)
Narrated Abu Burda
When I came to Medina, I met Abdullah bin Salam. He said, "Will you come to me so that I may serve you with Sawiq (i.e. powdered barley) and dates, and let you enter a (blessed) house that in which the Prophet entered?" Then he added, "You are in a country where the practice of Riba (i.e. usury) is prevalent; so if somebody owes you something and he sends you a present of a load of chopped straw or a load of barley or a load of provender then do not take it, as it is Riba."
(Sahi Bukhari - 5.159)
Narrated Sahl ibn AbuHathmah
Bushayr ibn Yasar reported on the authority of some of the Companions of Allah's Messenger (peace be upon him) among the members of his family among whom one was Sahl ibn AbuHathmah that Allah's Messenger (peace be upon him) forbade buying of fresh dates against dry dates and that it is Riba and this is Muzabanah, but he made an exemption of Ariyyah (donations) of a tree or two in which case the members of a family sell dry dates and buy fresh dates for eating them.
(Sahi Muslim - 730)
I started a thesis on this topic but it remained incomplete ... due to many reasons. Below I am copying Section-II of that incomplete work as I think it is relevant to your first post.
We have mentioned in Section-I that some confusions in the meanings of term ‘interest’ has been created by the theory of Economics. The confusion is that Economics defines "Interest" in two different manners i.e. there are two types of definitions of interest available in Economics literature. Both types of definitions actually describe entirely different phenomenon but are still claimed to be the definitions of single term “interest”. This section is devoted to differentiate between the two different concepts which are currently considered to be one single concept, at least, by the Economics literature. Following are the examples of those two types of definitions:
First Type of Definition:
“Interest is the return to capital”.
Second Type of Definition:
“Interest is the amount of money, you pay in addition to the amount of borrowed money if you have got a loan from some body.” Another same example is: “Interest is price paid for the use of money for a period of time.”
A sight comparison between above mentioned two types of definitions reveals the following differences:
a) First type of definition describes interest as return to “capital” and second type defines interest as additional return to borrowed “money”. But “capital” and “money” themselves are not considered the same thing according to the same Economics’ literature. “Capital” according to Economics’ literature includes any such thing as building, machinery, tool etc. which take active part in the production process along with other factors of production. Thus “Capital” means all those “goods” which are used for the production of other goods and services in the economy. “Money” on the other hand, is not considered, in Economics, as any kind of “goods”. Money is considered just a mean of exchange and is used merely to buy and sell other goods and services. Besides this, money also performs some auxiliary functions such as store of value; unit of account etc. but the emphasizing or focusing point here is to show that nature of “money”, unlike “capital”, is not that of economic good. Money, being the mean of exchange only, does not participate directly in the production process. Money, therefore, is not considered as a factor of production. Now if we analyze the two types of definitions of “interest” in the light of above mentioned fact that money and capital are two different things, then “return to capital” and “return to money” are two entirely different things and we should conclude that these two different things or concepts not be given the same name. But practically, Economics literature, mistakenly, not only gives these two concepts a single name but also consider them to be a single concept.
b) Interest is a factor income according to first type of definition because “capital” is a factor of production. On the other hand interest is not a factor income according to second type of definition because “money” is not a factor of production. This clear contradiction suggests that the two types of definitions do not represent a single concept.
c) First type of definitions which describes interest to be return to capital implies that it is factor income because capital actively participates in the production process. It means that interest income arises due to the production of goods and services in the economy and the share of capital in the production i.e. the interest income is to be calculated on the basis of production data and not on the basis of any such formula as Amount x Rate x Time because interest in this case has relationship only with the production quantity and it has nothing to do with time period in any way. Also note that if there is no production in economy, there would arise no interest income. We already have seen in Section-I that this ‘interest’ of Economics actually corresponds to the concept of ‘leasing’ in Accounting in case capital assets have been hired by the business enterprise. If capital assets such as machinery and building are the property of business firm, then this Economics’ ‘interest’ would correspond to the concept of ‘depreciation’ in Accounting. Whereas according to the second type of definition which considers interest to be the “price paid for the use of money for a period of time”, implies that interest has nothing to do with the production and the interest income shall arise even if there is no production in the economy. Interest in this case has relationship with the principal amount, the rate of interest and the time period involved and the amount of interest, in this case, is calculated on the basis of the formula i.e. Amount x Rate x Time. With reference to our discussion in Section-I, we have seen there that this ‘interest’ of Economics corresponds to that ‘interest’ of Accounting which is the reward of outsiders liabilities.
Do Both Types of Definitions Describe a Single Thing …Interest…?
No! Only one type of definitions define the term “interest” and the other type of definitions define some other thing … for which Economics is yet to choose the appropriate name.
Which Type Defines “Interest” And Which Type Defines “Some Other Thing” ….?
Due to the limited information available in Economics, it is not possible to decide which type of definitions actually defines the term “interest”. The only way is to arbitrarily choose any one for this purpose. But fortunately we already have the second type of definition available in ancient Islamic literature with its appropriate name i.e. “Riba”. Yes! The second type of definition which is in fact the definition of Riba has been defined in Islamic literature in the following way:
The Prophet (PBUH) said, "The selling of wheat for wheat is Riba (usury) except if it is handed from hand to hand and equal in amount. Similarly the selling of barley for barley, is Riba except if it is from hand to hand and equal in amount, and dates for dates is usury except if it is from hand to hand and equal in amount. (Sahi-Al-Bukhari 3.379)
On the basis of this available definition of Riba, it can be safely concluded that exchange of one commodity with the same commodity in unequal quantity includes Riba. It also means that if Rs.12 are exchanged for Rs.10, the extra Rs.2 are Riba according to this definition. The same conclusion we can get from the second type of definitions of interest. It means that second type of definitions are not the definitions of “interest” but are the definitions of “Riba.” Therefore Economics needs to be corrected on this issue.
It must be noted that Riba has been prohibited in Islam so according to Islamic teachings, Riba is not a legitimate form of income. In the next section of this thesis, we shall logically prove that riba which is prohibited in Islam is an illegitimate form of income and then in subsequent sections we shall mention the negative implications of a riba based Economy. To formulate a riba free accounting outline for the firms is also one of the main tasks of this thesis and this we shall do in various appropriate sections of this thesis.
References:
Narrated Az Zuhri from Malik bin AusNarrated 'Umar bin Al-Khattab: Allah's Apostle said, "The bartering of gold for silver is Riba, (usury), except if it is from hand to hand and equal in amount, and wheat grain for wheat grain is usury except if it is form hand to hand and equal in amount, and dates for dates is usury except if it is from hand to hand and equal in amount, and barley for barley is usury except if it is from hand to hand and equal in amount."
(Sahi Bukhari - 3.344)
Narrated Ibn Umar
The Prophet said, "The selling of wheat for wheat is Riba (usury) except if it is handed from hand to hand and equal in amount. Similarly the selling of barley for barley, is Riba except if it is from hand to hand and equal in amount, and dates for dates is usury except if it is from hand to hand and equal in amount. (See Riba-Fadl in the glossary).
(Sahi Bukhari - 3.379)
Narrated Ibn Shihab
that Malik bin Aus said, "I was in need of change for one-hundred Dinars. Talha bin 'Ubaidullah called me and we discussed the matter, and he agreed to change (my Dinars). He took the gold pieces in his hands and fidgeted with them, and then said, "Wait till my storekeeper comes from the forest." 'Umar was listening to that and said, "By Allah! You should not separate from Talha till you get the money from him, for Allah's Apostle said, 'The selling of gold for gold is Riba (usury) except if the exchange is from hand to hand and equal in amount, and similarly, the selling of wheat for wheat is Riba (usury) unless it is from hand to hand and equal in amount, and the selling of barley for barley is usury unless it is from hand to hand and equal in
amount, and dates for dates, is usury unless it is from hand to hand and equal in amount.' "
(Sahi Bukhari - 3.382)
Narrated Abu Salih Az Zaiyat
I heard Abu Said Al-Khudri saying, "The selling of a Dinar for a Dinar, and a for a Dirham (is permissible)." I said to him, "Ibn 'Abbas does not say the same." Abu Said replied, "I asked Ibn 'Abbas whether he had heard it from the Prophet or seen it in the Holy Book. Ibn 'Abbas replied, "I do not claim that, and you know Allah's Apostle better than I, but Usama informed me that the Prophet had said, 'There is no Riba (in money exchange) except when it is not done from hand to
hand (i.e. when there is delay in payment).' "
(Sahi Bukhari - 3.386)
Narrated Abu Said Al Khudri and Abu Huraira
Allah's Apostle employed someone as a governor at Khaibar. When the man came to Medina, he brought with him dates called Janib. The Prophet asked him, "Are all the dates of Khaibar of this kind?" The man replied, "(No), we exchange two Sa's of bad dates for one Sa of this kind of dates (i.e. Janib), or exchange three Sa's for two." On that, the Prophet said, "Don't do so, as it is a kind of usury (Riba) but sell the dates of inferior quality for money, and then buy Janib with the money". The Prophet said the same thing about dates sold by weight. (See Hadith No. 506).
(Sahi Bukhari - 3.499)
Narrated Abu Said al Khudri
Once Bilal brought Barni (i.e. a kind of dates) to the Prophet and the Prophet asked him, "From where have you brought these?" Bilal replied, "I had some inferior type of dates and exchanged two Sas of it for one Sa of Barni dates in order to give it to the Prophet to eat." Thereupon the Prophet said, "Beware! Beware! This is definitely Riba (usury)! This is definitely Riba (Usury)! Don't do so, but if you want to buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money."
(Sahi Bukhari - 3.506)
Narrated Abdullah bin Abu Aufa
A man displayed some goods in the market and took a false oath that he had been offered so much for them though he was not offered that amount. Then the following Divine verse was revealed: "Verily! Those who purchase a little gain at the cost of Allah's covenant and their oaths . . . Will get painful punishment." (3.77) Ibn Abu Aufa added, "Such person as described above is a treacherous Riba-eater (i.e. eater of usury)."
(Sahi Bukhari - 3.841)
Narrated Abu Burda
When I came to Medina, I met Abdullah bin Salam. He said, "Will you come to me so that I may serve you with Sawiq (i.e. powdered barley) and dates, and let you enter a (blessed) house that in which the Prophet entered?" Then he added, "You are in a country where the practice of Riba (i.e. usury) is prevalent; so if somebody owes you something and he sends you a present of a load of chopped straw or a load of barley or a load of provender then do not take it, as it is Riba."
(Sahi Bukhari - 5.159)
Narrated Sahl ibn AbuHathmah
Bushayr ibn Yasar reported on the authority of some of the Companions of Allah's Messenger (peace be upon him) among the members of his family among whom one was Sahl ibn AbuHathmah that Allah's Messenger (peace be upon him) forbade buying of fresh dates against dry dates and that it is Riba and this is Muzabanah, but he made an exemption of Ariyyah (donations) of a tree or two in which case the members of a family sell dry dates and buy fresh dates for eating them.
(Sahi Muslim - 730)
iceburg
Banned
In Section-II of this thesis, first I presented summery of theory of logic then constructed a logical proof of illegitimacy of Riba Income. Here I am copying only the last portion of Section-II (i.e. excluding summery of theory of logic) This is also incomplete in the end because due to many reasons I lost interest to complete it. But I shall welcome any attempt to complete it:
Construction of Logical Proof about the Illegitimacy of Riba Income:
After having presented the summery of underlying concepts and rules of both traditional formal logic and modern symbolic logic, now we shall construct the logical proof about the illegitimacy of riba income using the above presented concepts and rules of formal as well as modern symbolic logic.
Logical Proof about the Illegitimacy of Riba Income using Traditional Formal Logic:
In order to logically prove that riba is an illegitimate form of income, using the formal logic, we shall have to construct such a standard form categorical syllogistic argument which shall have the following characteristics:
According to Production Theory of Economics:
Production in Economy is the result of combined efforts of four factors of production which are (i) land, (ii) labour, (iii) capital and (iv) organization;
According to the theory of National Income (suppose a closed economy):
Production in Economy = National Income
According to Income Distribution Theory of Economics:
National Income is to be divided among only four factors of production because ‘income’ is the result of ‘production’; and ‘production’ is the result of the combined efforts of only four factors of production.
The following proposition can be easily derived out of above mentioned description of the Income Distribution Theory of Economics:
‘Interest’ according to 2[SUP]nd[/SUP] type of definition is Non-Factor Income. We also concluded in section-II that 2[SUP]nd[/SUP] type of definition is not in fact the definition of ‘interest’ but is the definition of ‘riba’.
So on the basis of above mentioned points of the section-II of this thesis, the following proposition can be easily derived:
In our argument:
Major Term = P = illegitimate income
Minor Term = S = Riba
Middle Term = M = Non-Factor Income
Major Premise = All Non-Factor Income is illegitimate income. = ‘A’ proposition.
Minor Premise = All Riba is Non-Factor Income. = ‘A’ proposition.
Conclusion = Therefore all Riba is illegitimate income. = ‘A’ proposition.
The formal logical structure of our argument is as follows:
In order to decide about the figure of our argument, we need to compare the pattern of the occurrence of the middle term in the premises with the four possible figures which we already discussed but we again mention them below for ready reference purpose:
Now if we compare the pattern of the occurrence of middle term ‘M’ in the premises of our argument, we can easily find that it is same to that of 1[SUP]st[/SUP] figure. It means that the figure of our argument is 1[SUP]st[/SUP].
We know that form of an argument is stated in terms of both its mood and figure. Since the mood of our argument is AAA and the figure is 1[SUP]st[/SUP], so the form of our argument is AAA-1. And since any argument having standard form of AAA-1 has to be a valid argument so it is objectively proved that our argument whose conclusion assets that riba is illegitimate income; is valid argument. It is so because the standard form AAA-1 is included in the list of 15 valid standard syllogistic forms. The special name which has been assigned to this valid standard form syllogistic argument i.e. AAA-1 is ‘Barbara’. The list of 15 valid standard syllogistic forms has already been given in this section.
Our argument has been proved to be a valid argument. The meaning of its validity however is not more than that whatever the truth value of its conclusion is, it has solid logical footing. So if the truth value of our conclusion is true then it is proved that the true assertion that riba is illegitimate income has solid logical footing. But we still are not confirmed that the truth value of our conclusion is essentially true. If our argument is based on one or both such premises whose truth value is false then we cannot get objective surety about the truth of our conclusion even if our argument is valid. After having proved that our argument is valid, now we are in need to objectively prove that the truth value of our conclusion is true. We can get objective surety that truth value of our conclusion is true if we provide objective evidence that truth value of our both the premises is true.
We have constructed the structure of our premises on the basis of following three basic propositions:
First Proposition:
Production in Economy is the result of combined efforts of four factors of production which are (i) land, (ii) labour, (iii) capital and (iv) organization;
Objective Evidence:
Second Proposition:
Production in Economy = National Income
Objective Evidence:
“What is National Income? It is the loose name we give for the money measure of the over-all annual flow of goods and services in an economy.”
“The net national product, or “national income evaluated at market prices” as it is technically named, is definable as the total money value of the flow of final products of the community.”
(Economics – An Introductory Analysis, by Paul A. Samuelson, fifth edition, pages 212 & 214)
Note: The above definitions of National income talk of ‘annual flow of goods and services in the economy’, instead of annual production of economy. the ‘annual flow of goods and services’ may include, in addition to domestic annual production of the economy, the value of difference of imported and exported goods. But under the assumption of closed economy, the annual flow of goods and services shall be equal to the value of annual production of goods and services in the economy.
Construction of Logical Proof about the Illegitimacy of Riba Income:
After having presented the summery of underlying concepts and rules of both traditional formal logic and modern symbolic logic, now we shall construct the logical proof about the illegitimacy of riba income using the above presented concepts and rules of formal as well as modern symbolic logic.
Logical Proof about the Illegitimacy of Riba Income using Traditional Formal Logic:
In order to logically prove that riba is an illegitimate form of income, using the formal logic, we shall have to construct such a standard form categorical syllogistic argument which shall have the following characteristics:
- The argument’s standard form must be one of the 15 valid forms. If our argument’s standard form will be one of the 15 valid forms, it would be objectively proved that our argument is valid.
- We have to use such two true premises for the construction of our argument whose necessary conclusion should assert that riba is an illegitimate form of income. Our premises’ truth value must be true. It is necessary because only the validity of the argument does not prove the truth of its conclusion. But if in a valid argument, the truth value of both the premises is true; then it shall be objectively proved that the truth value of the conclusion is also true. Here we are interested not only in the validity of our argument; we are also interested in the truth value of our conclusion. The validity of the argument is important because if we construct an invalid argument whose conclusion asserts that riba is an illegitimate form of income, here our conclusion, even if its truth value is true, shall be having no valid basis. We are interested in arriving at this same conclusion but on sound and solid footings. We are also interested in the true truth value of our conclusion because it is exactly what we want to prove. At this point, we need to clarify our position also. Yes! We openly admit that we want to arrive at a particular true conclusion. One may think that we shall maliciously manipulate the structure of our logic just for to arrive at a pre-determined conclusion. We have honestly admitted that yes we want to arrive at a pre-determined conclusion and for this purpose obviously we shall have to design the structure of our premises in such a way that their necessary outcome should be such a conclusion which should assert that riba is an illegitimate form of income. So it is true that we shall design the structure of our premises as per our own pre-determined intention but the point to be clarified is that we shall do it in an objective manner. It means that the structure of our premises shall be in accordance with the rules of the theory of logic and the contents of our premises shall come from the currently accepted theories of Economics. Our intention is pre-determined not just because we are sure about the true truth value of our intended conclusion in a subjective manner. Actually there are certain theories of Economics which are currently accepted to be true and which are in our notice in such a manner that we know that their obvious logical outcome would be such a ‘true’ conclusion which shall assert that riba income is an illegitimate form of income. So actually the ground for our intended logical structure is already available in the existing theories of Economics. The ground for such a logical structure is available but a tangible such logical structure is yet to be formed. This is exactly what we want to do in this section of this thesis. It is true that we are also sure about the true truth value of our intended conclusion in a subjective manner. But we are also aware of the existence of such a ground in the already existing theories of Economics which can be used as a solid logical base as an objective support to our subjective belief. A question arises is that if the ground for such a logical basis is available then why it has not yet been converted into a tangible structure which openly declares the ‘return to money’ as an illegitimate form of income, by the western Economists. In our opinion, the presence of a sufficient logical basis that go against the ‘return to money’ as a legitimate form of income is so much obvious that we cannot assume that western Economists are just un-aware about it. In our opinion, it is likely that western Economists are very much aware about it but they deliberately avoid projecting such a truth which goes against their favored capitalist economic system. So the fact seems to be is that ‘return to money’ i.e. ‘riba’ can be easily logically proved to be an illegitimate form of income. Western Economists are not interested in doing it but we are. And we are not going to prove this by just maliciously manipulating the structure of logic in a desired way by directing it towards a pre-determined end. We are aware of such already existing solid logical ground which is helpful for the achievement of our desired objective. We are just converting that already existing logical ground into a tangible logical structure so as to construct such a solid logical base which can be used as an objective support to our already existing subjective belief.
According to Production Theory of Economics:
Production in Economy is the result of combined efforts of four factors of production which are (i) land, (ii) labour, (iii) capital and (iv) organization;
According to the theory of National Income (suppose a closed economy):
Production in Economy = National Income
According to Income Distribution Theory of Economics:
National Income is to be divided among only four factors of production because ‘income’ is the result of ‘production’; and ‘production’ is the result of the combined efforts of only four factors of production.
The following proposition can be easily derived out of above mentioned description of the Income Distribution Theory of Economics:
- Only Factor Income is the legitimate income.
- Non-Factor Income is illegitimate income. …(i)
‘Interest’ according to 2[SUP]nd[/SUP] type of definition is Non-Factor Income. We also concluded in section-II that 2[SUP]nd[/SUP] type of definition is not in fact the definition of ‘interest’ but is the definition of ‘riba’.
So on the basis of above mentioned points of the section-II of this thesis, the following proposition can be easily derived:
- Riba is Non-Factor Income. …(ii)
- All Non-Factor Income is illegitimate income.
- All Riba is Non-Factor Income.
- Therefore all Riba is illegitimate income.
In our argument:
Major Term = P = illegitimate income
Minor Term = S = Riba
Middle Term = M = Non-Factor Income
Major Premise = All Non-Factor Income is illegitimate income. = ‘A’ proposition.
Minor Premise = All Riba is Non-Factor Income. = ‘A’ proposition.
Conclusion = Therefore all Riba is illegitimate income. = ‘A’ proposition.
The formal logical structure of our argument is as follows:
- All M is P
- All S is M
- .. All S is P
In order to decide about the figure of our argument, we need to compare the pattern of the occurrence of the middle term in the premises with the four possible figures which we already discussed but we again mention them below for ready reference purpose:
|
|
|
|
| 1[SUP]st[/SUP] Figure | 2[SUP]nd[/SUP] Figure | 3[SUP]rd[/SUP] Figure | 4[SUP]th[/SUP] Figure |
We know that form of an argument is stated in terms of both its mood and figure. Since the mood of our argument is AAA and the figure is 1[SUP]st[/SUP], so the form of our argument is AAA-1. And since any argument having standard form of AAA-1 has to be a valid argument so it is objectively proved that our argument whose conclusion assets that riba is illegitimate income; is valid argument. It is so because the standard form AAA-1 is included in the list of 15 valid standard syllogistic forms. The special name which has been assigned to this valid standard form syllogistic argument i.e. AAA-1 is ‘Barbara’. The list of 15 valid standard syllogistic forms has already been given in this section.
Our argument has been proved to be a valid argument. The meaning of its validity however is not more than that whatever the truth value of its conclusion is, it has solid logical footing. So if the truth value of our conclusion is true then it is proved that the true assertion that riba is illegitimate income has solid logical footing. But we still are not confirmed that the truth value of our conclusion is essentially true. If our argument is based on one or both such premises whose truth value is false then we cannot get objective surety about the truth of our conclusion even if our argument is valid. After having proved that our argument is valid, now we are in need to objectively prove that the truth value of our conclusion is true. We can get objective surety that truth value of our conclusion is true if we provide objective evidence that truth value of our both the premises is true.
We have constructed the structure of our premises on the basis of following three basic propositions:
- Production in Economy is the result of combined efforts of four factors of production which are (i) land, (ii) labour, (iii) capital and (iv) organization;
- Production in Economy = National Income and;
- National Income is to be divided among only four factors of production.
First Proposition:
Production in Economy is the result of combined efforts of four factors of production which are (i) land, (ii) labour, (iii) capital and (iv) organization;
Objective Evidence:
Second Proposition:
Production in Economy = National Income
Objective Evidence:
“What is National Income? It is the loose name we give for the money measure of the over-all annual flow of goods and services in an economy.”
“The net national product, or “national income evaluated at market prices” as it is technically named, is definable as the total money value of the flow of final products of the community.”
(Economics – An Introductory Analysis, by Paul A. Samuelson, fifth edition, pages 212 & 214)
Note: The above definitions of National income talk of ‘annual flow of goods and services in the economy’, instead of annual production of economy. the ‘annual flow of goods and services’ may include, in addition to domestic annual production of the economy, the value of difference of imported and exported goods. But under the assumption of closed economy, the annual flow of goods and services shall be equal to the value of annual production of goods and services in the economy.
How land can be money, does it perform the function of money?
Land is a commodity and the owner has the right to receive income from it's use. Whereas money in the form gold,silver, dollar are medium of exchanges and not commodities. the rule regarding the medium of exchange is given in the Hadith :
"Gold for gold, silver for silver, wheat for wheat, barley for barley, date for date, salt for salt, must be equal on both sides and hand to hand. Whoever pays more or demands more (on either side) indulges in Riba."
Last edited:
This is a beautiful hadith. Very precise and very simple.
Then we bump into the "future contract" or forward contract issue.
Suppose I run a big cookie company. I buy wheat,sugar,eggs from my farmer according to the FUTURE orders from the market. I have to secure orders for the future to get an idea now much raw material i should buy. Same issue goes with the farmer. Futures market gives farmers the idea how much land they should allocate for wheat, poultry, rice..etc..
Sure the goods are exchanged hand in hand lekin the prices are set months prior to the delivery.
I do not understand the Islamic prespective on the future/forward contract. If I get to speak to some Scholar, I will share it here.
Then we bump into the "future contract" or forward contract issue.
Suppose I run a big cookie company. I buy wheat,sugar,eggs from my farmer according to the FUTURE orders from the market. I have to secure orders for the future to get an idea now much raw material i should buy. Same issue goes with the farmer. Futures market gives farmers the idea how much land they should allocate for wheat, poultry, rice..etc..
Sure the goods are exchanged hand in hand lekin the prices are set months prior to the delivery.
I do not understand the Islamic prespective on the future/forward contract. If I get to speak to some Scholar, I will share it here.
From a technical perspective, you owe the lender whatever the rate of inflation would during that year, because you returned a lesser valued currency at the end of the loan. So its actually the BORROWER who got paid the interest.
But whats the rule in regards to money? I have heard Aalim say Money cannot be a commodity even when GOLD is a commodity. Anything that is standardized is commodity. Gold, Wheat, Salt, Fuel, water. There's in interesting book, called "WHEN MONEY DIES". Speaks about the hyperinflation of Wiemar Republic, how ppl started using Cigarettes, bullets, stamps, liquor as money. When the US attacked IRAQ, Iraq's currency lost value and people started using "Mobile phone airtime credits" as money. Money can be ANYTHING.
Problem is we have only seen money as dollar, rupee or gold silver as money. And we think that Money can only be these things. But history teaches us otherwise.
I say land too can be money. Infact land IS money. I can sell supposed 400 sqft of land for a house built on a 250ft of land.
Now check this Hadith out
Problem is we have only seen money as dollar, rupee or gold silver as money. And we think that Money can only be these things. But history teaches us otherwise.
I say land too can be money. Infact land IS money. I can sell supposed 400 sqft of land for a house built on a 250ft of land.
Now check this Hadith out
Here's the hadith
Narrated Abu Said al-Khudri
Once Bilal brought Barni (i.e. a kind of dates) to the Prophet and theProphet asked him, "From where have you brought these?" Bilal replied,"I had some inferior type of dates and exchanged two Sas of it for oneSa of Barni dates in order to give it to the Prophet; to eat." Thereupon the Prophet said, "Beware! Beware! This is definitely riba(usury)! This is definitely riba (Usury)! Don't do so, but if you wantto buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money."
How do you see my transaction of 400sqft of land for 250sqft of land with a house on it?
Narrated Abu Said al-Khudri
Once Bilal brought Barni (i.e. a kind of dates) to the Prophet and theProphet asked him, "From where have you brought these?" Bilal replied,"I had some inferior type of dates and exchanged two Sas of it for oneSa of Barni dates in order to give it to the Prophet; to eat." Thereupon the Prophet said, "Beware! Beware! This is definitely riba(usury)! This is definitely riba (Usury)! Don't do so, but if you wantto buy (a superior kind of dates) sell the inferior dates for money and then buy the superior kind of dates with that money."
How do you see my transaction of 400sqft of land for 250sqft of land with a house on it?
@iceberg
You took it head on... turning the very argument of income and production against Interest! beautiful! Lekin it was a tough read. Felt I was going thru the "Treatise on Human Action" by Von Mises.
Now I feel more confident on this definition of Riba as "Guaranteed Profit", hence a rent-seeking economic model, which is truly what todays financial sector is. A blood-sucking parasitical economic sector.
If there was anything I dont totally agree upon was the definition of money. If you consider Gold as money, well its a commodity too. Whereas there's a subtle difference b/w currencies and commodity because currency's supply pool can be increased/decreased a million fold in seconds! Using Fiat currency controlled by an entity is truly a sick sick religion.
Acha there was this Hadith which I didnt understand very well
You took it head on... turning the very argument of income and production against Interest! beautiful! Lekin it was a tough read. Felt I was going thru the "Treatise on Human Action" by Von Mises.
Now I feel more confident on this definition of Riba as "Guaranteed Profit", hence a rent-seeking economic model, which is truly what todays financial sector is. A blood-sucking parasitical economic sector.
If there was anything I dont totally agree upon was the definition of money. If you consider Gold as money, well its a commodity too. Whereas there's a subtle difference b/w currencies and commodity because currency's supply pool can be increased/decreased a million fold in seconds! Using Fiat currency controlled by an entity is truly a sick sick religion.
Acha there was this Hadith which I didnt understand very well
I heard Abu Said Al-Khudri saying, "The selling of a Dinar for a Dinar, and a for a Dirham (is permissible)." I said to him, "Ibn 'Abbas does not say the same." Abu Said replied, "I asked Ibn 'Abbas whether he had heard it from the Prophet or seen it in the Holy Book. Ibn 'Abbas replied, "I do not claim that, and you know Allah's Apostle better than I, but Usama informed me that the Prophet had said, 'There is no Riba (in money exchange) except when it is not done from hand to
hand (i.e. when there is delay in payment).' "
hand (i.e. when there is delay in payment).' "
So its a weak hadith?lets add one more condition,
I borrow:
$10000@ 0% for 1 year (inflation rate 0%) , now do you see any element of Riba in this transaction?
Islam doesn't recognize the loss in the purchasing power of the paper currency , the loss which is the result of the capitalistic system.
Islam differentiates between Medium of exchange i.e Money and Commodity - The reason is, if Islam doesn't differentiate and allows money to be treated like a commodity than people will say (like they say) that they have the right to earn profit on their commodity (money) like as in every commodity. Money is just a medium to facilitate business transactions and not the business itself.
Regarding the Hadith of dates, people in those times used to treat dates,wheat,salt etc., as a medium of exchange and the reason that rules governing medium of exchange applied here i.e hand to hand, equal for equal -- The Hadith exactly points out that the rule "equal for equal" was violated and the reason Prophet Muhammad sallallahu alaihi wasallam cautioned about Riba'.
for land to serve as a medium of exchange, it should perform the functions of money. Now can land work as a money, can i purchase 1 kilo of meat in exchange for land, if yes how? Also does it perform the function of Unit of account, how do we measure the market value of goods & services in sqft of land??
Regarding your transaction, i just see this as a transaction where commodities are exchanged and even in this transaction you are dependent on money (medium of exchange) dollar,gold etc., to determine the market value of both commodities.
This would fall under Bai Salam, the conditions for such contract is that seller undertakes to supply specific goods to the buyer at some future date in exchange of advance payment (full) on spot. Only Imam Maalik is of the view that a concession of 2-3 days can be given for payment and that also should not be the part of the agreement.
This kind of sale is to facilitate the farmers.
Unicorn
Banned
Renting money is Riba for sure if the rent paid does not reduces the principle by the whole amount of the payment. So is renting a hose. Both of these have a common evil " exploitation " If their are more renters than and less houses there can be exploitation. I see exploitation everywhere the best way is do not exploit anyone and don't let anyone exploit you.
Why worry about your kids?......they may choose not to follow your religion...........
btw why this discussion when you know that even if you get a clear cut answer either way you will still deal in riba, will you not?............
