http://www.todayszaman.com/tz-web/yazarDetay.do?haberno=159917
The crisis of capitalism:
toward the end of a materialist age
Today
we are paying the cost of the last, but not the least, crisis caused by
the "capitalist ideology." To remind you, a serious crisis came at the
beginning of the 20th century that resulted in World War I.
The second big crisis came with the Great
Depression and lasted throughout the 1930s, with a major collapse of
the international payment system, resulting in World War II. Now the
world is passing through yet another one at the beginning of the 21st
century and will presumably end with an even bigger global catastrophe.In
my understanding, the fundamental weaknesses of the American
political/economic system, such as an ever-rising debt, current account
and budget deficit, savings-investment gap, excessive
consumption-oriented citizens and many other mutually reinforcing
negative elements, have reached a poisonous stage. This process
seriously threatens the hegemonic, or superpower, status of the US. As
the US becomes a risky market, the world has begun to escape from the
dollar-dominated economy.Having
considered all these developments, it seems the US has entered into
quite a dangerous gamble throughout the world, but particularly in the
Middle East and the Caucasus. The name of this gamble is called "The
Great Middle East Project." It seems to me that the Yankees are
incapable of returning to their mainland, irrespective of who is
elected. The result of this process might result in a situation
symbolized by the term "sink or swim."After
establishing final control over Gulf energy resources, as a next step,
the US wants to diffuse into the heart of the Central Asian and
Caucasian energy resources by eliminating the "Iran factor." Therefore,
the Sept. 11 attacks were abused by the US in order to invade
Afghanistan and then Iraq so that Iran would be more easily contained.
By establishing control over Eurasian energy resources, the US will be
able to isolate China and Russia by separating two superpowers --
Russia as one of the major energy and raw material suppliers; China as
the major importer of energy and almost any kind of primary products.However,
by coordinating their efforts, members of the Shanghai Cooperation
Organization (SCO) have come together in order to prevent US
infiltration in the region. As the situation is quite unclear, the
process dynamic and the result uncertain, it is not possible to predict
the outcome of the current big chess game in the world.What
I would like to suggest is that we need to change the basic ideology
behind the current global materialist order in order to establish a
peaceful world. Capitalism and communism are twin sisters in the sense
that they are the product of a materialist-positivist philosophy, as
interpreted and explained by Auguste Comte around the 1820s. This
philosophy is secularist, short-term oriented and utilitarian.Unlike
capitalism, as communist ideology denied basic human propensities and
therefore isolated itself from market dynamics, it was short lived. On
the other hand, even if capitalism accepts basic human nature, it
relies heavily on some "poisonous" propensities or devilish aspects of
the human being such as short-term maximization of satisfaction by
conspicuous consumption and through excessive use of limited natural
resources.Destructive
characteristics of this capitalist ideology can be observed even in the
definition of economics. Capitalism tries to interpret economics by
using methodology similar to that used in the natural sciences such as
physics and chemistry. Put simply, in capitalist terminology, economics
has already become an applied sub-discipline of mathematical
optimization. According to this calculus of a simple maximization of
efforts, economics is explained as "a science of scarcity." Resources
are limited but our desires are unlimited. We therefore face a fatal
economic problem of ordering and choice.In
our view, this is one of the fatal errors caused by the materialist
illusion in approaching the human being and the universe; the link
created between them by God is missing. From a spiritual perspective,
resources are quite satisfactory, rather than being limited, provided
that they are fairly distributed. On the other hand, we should not take
our desires as "a given," as something that cannot be domesticated,
controlled and guided. Yes, our desires might be unlimited, but it is
unlikely that such limitless desires will be satisfied solely through
the means of materialistic means in such a limited and temporary life
span. Moreover, human beings are not a simple function of their
desires. Human beings are also equipped by other ethical propensities.
What we need is to balance both dimensions of human beings.Therefore,
rather than taking our wants and desires as guiding principles, we
should take our limited needs into consideration. Provided that we take
resources as "sufficient," relying on their equitable distribution and
take our needs as limited, the fatal or poisonous error in the
definition of economics would disappear.Having
done so, we would start preserving limited resources, the environment
and climate by limiting our consumption by establishing control on
private property and by limiting our dedication to a one-dimensional
emphasis on an accumulation regiment. The fight in controlling limited
resources will then be replaced by a more peaceful and
cooperation-oriented world system.In
my view, Islam, as a world religion, has the potential as well as the
historical experience to provide the basis of such a global peace.
Rather than blaming Islam as a "religion of war," by using mass media
as a means of propagating such a view, it should be seen as the
philosophy of last resort in this age of global dissatisfaction and
devastating wars. This fact needs further elaboration, which requires
more words than this column allows for.
http://www.todayszaman.com/tz-web/yazarDetay.do?haberno=156567
Global financial crisis highlights benefits of Islamic finance
Islamic
finance has entered a bright new stage of development, emerging after
the global financial crisis as a more equitable and efficient
alternative to the Western approach. Let's see how. Interest in Islamic finance
(IF) began in
the 1970s, mainly due to the accumulated petro-dollars in Arab
countries. In a rather pragmatic approach, it was thought in the West
that respecting Islamic principles regarding finance would attract
wealthy Arab investors. The
second major turning point in IF took place after the Sept. 11 attack
on the US. It was declared at that time that Muslims were guilty unless
they proved themselves innocent, and as a reaction to this uncertainty
and discrimination, IF escaped from the West. The amount of capital
which fled the West was over $200 billion. Moreover, as the epicenter
of global economic growth shifted to Asia, IF concentrated its focus on
these emerging and dynamic markets.The
last, but most critical, stage has already started due to the collapse
of the conventional finance system based on interest. Regardless of the
religious values associated with IF, some people sought IF as merely a
more efficient, equitable and even sustainable form of finance. Because
interest-based transactions are prohibited, Islam encourages business
and trade activities that generate fair and legitimate profit. In IF,
there is therefore always a close link between financial flow and
productivity. This intrinsic property of IF contributes towards
insulating it from the potential risks resulting from excess leverage
and speculative financial activities. Another
fundamental principle of IF is the risk and profit-sharing feature of
IF transactions (such as Mudarabah or Musyarakah contracts). It is this
profit and risk-sharing feature of IF transactions that requires a high
level of disclosure and transparency in the IF system. These
disclosures allow the market to assign the appropriate risk premiums to
companies, thereby enhancing the potential for market discipline to
take effect. These features, which are required by Shariah (Islamic
law) injunctions, provide built-in checks and balances which serve to
ensure the financial stability of the IF system. Because
of these features, IF has experienced major transformations and growth
especially since 2000, and its volume has reached almost $1.5 trillion.
It has been one of the fastest growing financial markets over the last
five years and is expected to continue expanding at an even faster
rate. Its rapid evolution is
particularly evident in four dimensions of its development. Firstly,
today IF is viewed as a competitive form of financial intermediation,
drawing significant participation by non-Muslims. The total assets of
the Islamic financial system have surpassed $1 trillion, a fivefold
increase over their magnitude just five years ago. IF is now among the
fastest growing financial segments in the world, with an estimated
annual growth of 20 percent. Secondly,
with the emergence of more diverse IF institutions and the development
of IF markets, the scope of IF business has been expanded to include
private equity, project finance, the origination and issuance of sukuk
(bonds), and fund, asset and wealth management activities. The
third dimension in which there has been significant evolution is in the
regulatory and legal framework of IF, which is shaped by the distinct
features of IF transactions. This has ensured that the growth and
development of IF is accompanied by the corresponding development of
this framework.Fourthly, the
international dimension of IF has rapidly gained significance as it
evolves to become an increasingly important part of the international
financial system and as it becomes poised to contribute to greater
global financial integration. The expansion of the network of links
among intermediaries and markets in various regions will contribute
towards a more efficient allocation of financial resources across
borders and thus contribute to enhancing global growth prospects.
