> Oh right, I'm dealing with someone who believes in the "free market"
I don't believe in absolute free market as defined by capitalism. Case in point: I do not deal with interest (usury), as it is prohibited in my faith. There are also some other red lines which I will not get into here, as it is not the subject of discussion. I'm happy to go into them more though if someone is curious. As such, no, it is not your typical capitalistic position.
> Can you give us a good solution to keep the price of bread from rising above the ability for impoverished people to purchase it over government induced inflation?
Yes. In Islam, we have something called Zakat, a form of "wealth tax" if you will. Its proceedings go to impoverished people, among others. It has been documented that in Iraq during the Ummayad period, there were no poor people left to even accept Zakat, after everyone was paying their share.
Of course we still need to handle the root cause: move to a currency that is not bound to interest that keeps growing, and the government can print money at will, devaluing everyone's hard work in an instant.
Interest is not the same as usury whatever definition you use. The fact that your faith equates them does not make them equal. You are perfectly free to use them interchangeably in your mind but most people do not do so, and your use leads to misunderstandings.
Interest, in traditional western societies is just the measure of the present value of future time, which is understood as valuable. Thus, money+time=“more money”.
> Interest is not the same as usury whatever definition you use.
In Islam, there is no difference. If I lend you $10,000 and I ask for $10,000.01 back, that $.01 is usury. They are equal because both operate on the same exploitation principle, that not only pries on the poor, but exacerbates the wealth inequality gap that everyone is complaining about today. Once the door is open to artificially differentiate the two, many other immoral things become acceptable. We've seen it time and time again.
We don't deny the time value of money, we jus say that use money in a moral way to extract value over time, by taking appropriate risk in a manner that is not exploitative.
> use money in a moral way to extract value over time, by taking appropriate risk in a manner that is not exploitative
I've been reading on islamic banking recently, and I have to say that it appears one can arrive at a consistent philosophy and working economics with usury being prohibited. The world won't grind to a halt because capital is no longer entitled to gains by the virtue of purely existing, as opposed to being used productively. (Observe PoS vs PoW parallels, in the theme of this submission.)
You can lend money and earn a profit without interest, and you can pay for getting a credit without it being immoral. The trick is that both parties share both the gains and the risk, not just the lender being responsible for all the risk.
It's great you're reading up on it. I would however, exercise caution as to what falls under "Islamic banking". From spending quite a bit of time reading up on it, many present day "Islamic banking offerings" aren't Islamic. They're simply ways to dance around the issue. What I'm saying isn't something controversial, I've talked to people, including a well known scholar who confirmed that to me. When there is a lot of money involved, things can go bad, and corporations with the most money and potential to profit can end up getting their way. Like seriously, a usurious bank like HSBC can offer a traditional mortgage product and an "Islamic financing" product side by side? Give me a break.
Note however, that this does not affect Islam one bit. True and honest scholars will always call out such actions, and they have been.
That being said, yes, at the core, true Islamic finance is about true and proper risk sharing, and reward sharing. Want to open a business? Get someone, or a group of people to fund you. They put in the money and you put in the risk. If it succeeds, you both share the rewards, if it doesn't, you lost the time and effort, and they lost the money. This is a very straight forward example.
Under Islamic law, lending money is only to be done as a purely charitable act, as the lender cannot benefit from the loan - either monetarily or in a non-tangential manner even. The general ruling is as follows: any loan that brings a benefit to the lender is Riba (can be loosely translated as usury). Riba involves more than the usury or interest that are done today by banks, it also includes things like buying gold on credit (Riba), or exchanging silver for silver of non equal amounts (also Riba).
I don't believe in absolute free market as defined by capitalism. Case in point: I do not deal with interest (usury), as it is prohibited in my faith. There are also some other red lines which I will not get into here, as it is not the subject of discussion. I'm happy to go into them more though if someone is curious. As such, no, it is not your typical capitalistic position.
> Can you give us a good solution to keep the price of bread from rising above the ability for impoverished people to purchase it over government induced inflation?
Yes. In Islam, we have something called Zakat, a form of "wealth tax" if you will. Its proceedings go to impoverished people, among others. It has been documented that in Iraq during the Ummayad period, there were no poor people left to even accept Zakat, after everyone was paying their share.
Of course we still need to handle the root cause: move to a currency that is not bound to interest that keeps growing, and the government can print money at will, devaluing everyone's hard work in an instant.