Reforming Finance and Economics in Light of the Abrahamic Principles

By Camille Paldi

Abstract:

Riba (interest) was prohibited in both Judaism and Christianity long before Islam and the Qu’ran is just re-stating what the two previous Holy Books have already mentioned. However, the modern day economic system is built upon and operates around interest-based lending, which allows one class of people to grow rich at the expense of the majority of the population. Interest has been prohibited in all Abrahamic religions for essentially the same reasons, which includes the well-being of humanity, the avoidance of segregating society into the oppressor and oppressed, and encouraging productive trade, economic growth, and the egalitarian distribution and flow of money throughout all segments of society. When the economic structure is engineered in a manner, which allows people to make money from money in unproductive activities, this enables some people to exploit the majority for profit without doing any work. This paper explores what then will economics and finance look like if reformed in the light of Abrahamic principles? What if we molded an economic structure with Shariáh, Christian, and Jewish law, values, and principles and removed interest from the financial structures thereby transforming the entire economy from one based on a creditor/lender relationship and interest-based loans to one based on partnership and profit and loss sharing utilizing gold and silver currency issued by the government and people geared around productive trade? It is argued that the Abrahamic economic structure may create a stable economy based on real assets and productive interactions between finance houses and people in a partnership format where profit and loss are shared between the parties in a business venture. This structure allows the economy to grow and expand, stabilizes the value of currency and prices, and encourages the distribution of wealth across a broader cross- section of society.