The Economic System of Islam — Page 54
54 were unable to borrow money on interest, they would be left with one of the two choices. They could expand their business by includ- ing more people in their partnership, which would of necessity in- volve spreading the earnings over a wider group of people. Or, al- ternatively, they would not be able to grow their business and be- come a hindrance to other small businesses. Either way, there would be a more equitable distribution of wealth. It would also prevent the accumulation of wealth into the hands of a few people, which is extremely dangerous and detrimental for overall economic progress. Unfortunately despite the clearly visible harmful effects of in- terest, people remain entangled in the deadly web of interest, and do not ponder over the destructive impact that this financial system has at national and international levels. Ironically, even the sup- porters of Communism do not escape from this trap, for they do not find anything wrong with interest even though it is the root of capitalism. There are communists around the world who do not see anything wrong with interest, and as such end up inadvertently lending support to the very foundation of capitalism. Islam adopts a rather broader definition of interest. According to the Islamic definition, certain transactions, which are generally not considered to fall within its purview, nevertheless fall within its domain and are therefore prohibited. Islam defines interest as any transaction where the profit is guaranteed. Therefore all trusts, [lo- cal monopolistic arrangements] which are set up to guarantee profit by destroying competition, are to be considered un-Islamic. For ex- ample, suppose fifteen or twenty large businesses in a country got together and formed a monopoly that fixed prices and restricted competition. Then a commodity that sells for (say) two rupees in a competitive market could sell at an artificial monopolistic price of