Surah al-Baqarah (The Cow) 2 : 275

Overview (Verses 275 - 276)
 
The preceding passage discussed the ethics of charity and its role in society; the present passage deals with the opposite, dark side of the circulation of money, namely, usury, or to use the Islamic term, ribā. While charity denotes giving, generosity, purification, growth, cooperation and mutual social welfare, usury signifies stinginess, greed and self-aggrandizement.
 
Charity is giving of one’s wealth without any expectation of recompense or repayment, while usury is the exaction of a charge over and above money owed, which is usually paid for out of the sweat and blood of the borrower, regardless of whether he profits as a result of the loan or not.
 
It is perhaps significant that the sūrah should discuss usury immediately after dealing with a pleasant subject such as charity, in order to highlight the sharp contrast between the two, and their effects on people and society.
 
No other issue has been condemned and denounced so strongly in the Qur’ān as has usury; nor has any practice come in for stronger warnings, spelling out fearful doom. Infinite is God in His wisdom. For, although it was one of the most pervasive evils during the pre- Islamic Dark Ages, most of its destructive aspects have only become better known in our modern society. Only today, in the light of widespread human suffering, can we appreciate the reasons behind the Qur’ān’s determined onslaught on this evil practice. Today, we are better placed than even the people of pre-Islamic Arabia to understand God’s wisdom underlying these principles, and the suitability of Islam for the organization of human society. In today’s world, we have all the signs and evidence we need to explain and confirm the words of the Qur’ān. We can see what havoc and what misery a usury-based financial system has brought upon the world, as well as the insidious destruction it has caused to the morals, religion, health and economic strength of modern society. As the Qur’ān says, we are witnessing a divinely-inspired war against all individuals, groups, nations and states that persist in defying God’s commands concerning the practice of usury in its various disguises.
 
The passage discussed in Chapter 18 laid down the basic principles for giving to charity, for the sake of God, as an important part of the Islamic social and economic system God has chosen for the Muslim community. It serves as a model for the rest of mankind to emulate and enjoy. It is presented as an alternative to a wicked and inhumane system based on usury.
 
We, thus, have two contrasting socio-economic systems: the Islamic system and the usury-based un-Islamic system. They are based on totally different value systems and views of the world. They can never be reconciled, as each leads in a completely opposite direction to the other and aims to achieve different ends.
 
The economic system Islam advocates, like its overall view of life, is based on the fundamental concept that God is the Creator and the undisputed master of all that exists. God has struck a deal with mankind and delegated to man certain duties and responsibilities on earth. He provided him with the tools, the materials and the means by which he can exercise his authority and freewill. The main proviso of God’s covenant with man is that man should live and behave according to God’s laws. Only actions, morals, dealings or religious activities conducted according to God’s law will be sanctioned and valid. The imposition of such activities by duress is rejected and condemned as injustice. God is the ultimate ruler and arbiter, and temporal human authority is derived from adherence to His law and code of living, to which human beings are bound by their covenant with Him.
 
Another provision of God’s covenant with man stipulates that believers must look after one another’s welfare and share the benefits of what God has provided for all of them. This does not mean common ownership in the Marxist sense, but responsible and regulated private ownership. Those who have should share with those who have not and all are equally required to seek work and earn their living according to their ability. No capable member of society should live off someone else or become a burden on the community. To support this system of social welfare, Islam has set up zakāt as a fixed obligation on the well- off and encouraged voluntary charity without limits.
 
God has also advised man to seek moderation and avoid lavish spending and extravagant living. This would ensure sensible employment of wealth and a surplus of funds for the payment of zakāt and a contribution to charitable causes.
 
Muslims are required to invest their money and seek the growth and development of their wealth, by scrupulous and legitimate means, without exploiting others or encroaching on their rights. Besides, it is not allowed to try to pervert, in any way, the fair and healthy circulation of capital and wealth in society. The Qur’ān stresses that wealth “should not be left to circulate only among the rich of you.” (59:7)
 
God has also enjoined honesty of intention and action and the integrity of ends and means. He has laid down rules and ethics that should be observed in the investment and development of wealth so as not to compromise the conscience or morals of the individual, or undermine the life and welfare of the community. These principles are laid down in accordance with Islam’s overall philosophy of life and worldview, and in line with the terms and conditions of God’s covenant with man that governs the whole range of human actions and activities in this world.
 
Thus we can see that usury as an economic instrument conflicts directly with the very basic concepts of Islam, because it is based on the total rejection of God’s role and the dismissal of all the principles and aims on which the divine code of living is founded.
 
A usurious or interest-based system assumes a total divorce between the divine will and human life, leading to the conclusion that man is the absolute master of this world, not bound by any responsibility towards God or any obligation to respect His teachings or commands. It also implies that man is free as to how he accumulates, enjoys and uses wealth, and that in this regard he has no obligation whatsoever towards God or, indeed, any liability to others; it would not matter if thousands or millions of people were to suffer in the process.
 
Of course man-made laws may occasionally intervene to curb this freedom by setting the rates of usury or banning certain fraudulent and illegal practices, but this is usually dictated by expediency and popular convention rather than by considerations of the principle laid down by a higher divine authority.
 
A usury-based system is founded on the erroneous concept that the accumulation and enjoyment of wealth, regardless of the means, is the ultimate objective of human life, which explains the resulting reckless and vicious rush for money-making and prodigality.
 
Such a system brings nothing but misery and suffering upon individuals, communities, and nations, while it benefits only a few moneylenders. It undermines the moral and psychological fabric of society and creates a detrimental imbalance in the distribution of wealth and economic development, leading, as it is doing at present, to the concentration of power and influence in the hands of a few greedy, unscrupulous, and malevolent individuals and institutions, at national and international level, that reap the highest benefits but have no respect or regard for human values and human effort.
 
These powerful individuals and institutions not only control the world economy and international wealth, but they also wield enormous influence in several other walks of life with the aim of enhancing their role and position in the world. Since they are unscrupulous and unprincipled and look with disdain on religion and morality, it is to their advantage to undermine religious belief and encourage moral degradation, promiscuity and excessive spending. They manipulate the world economy for their own benefit, manufacturing and fuelling regular economic crises in various parts of the world and diverting economic and industrial production away from the common world interest to areas that will give them the greatest advantage and control of international wealth.
 
This catastrophic situation has been further exacerbated by the success of these powerful finance centres and groups, through their strong influence in the political, economic, media and entertainment worlds, to create the universal popular myth that usury is a good and natural aspect of the economy, without which there would be no economic prosperity or growth. It has been alleged that an interest- based economy is the one responsible for the tremendous achievements and progress of modern Western civilization, and that those calling for the abolition of usury are unrealistic dreamers and idealists motivated by moralistic and religious considerations that are capable, if given the chance, of corrupting the whole modern economic system. What is more is that those who criticize the interest- based economic system on these grounds are ridiculed by people who are in reality victims of this very system. Another victim of the system of usury is world economy which is forcibly set on the wrong course by international usurers. Thus, it suffers periodic, stage-managed crises to ensure that all its benefits are reaped by such usurers, rather than by humanity as a whole.
 
Some Western economists have recognized the fact that a usurious system is a threat, from the purely economic point of view. One leading critic of the system, Dr. Schacht, a former Governor of the German Central Bank, in a speech given in 1953 in Damascus, said that with an infinite mathematical operation it would be possible to show that the total sum of all liquid money in the world ends up in the hands of a few usurers, because a usurer-lender gains in every deal while the borrower is equally liable to gain or lose. Logically, therefore, money will ultimately end up with the one who always gains. The majority of capital today is under the real control of a few thousand people; while landlords, industrialists, farmers and traders who borrow from the banks, as well as workers and ordinary consumers, are no more than labourers working for the benefit of those in possession and control of capital.
 
That is not all that is wrong with a usury-based economy. The relationship between capitalists on the one hand, and those working in commerce and industry on the other, is based on mistrust, strife and resentment. Moneylenders try to make maximum gains by lending their money, and therefore favour a squeeze on the money supply to cause a rise in the cost of borrowing. This eventually leads td a slowdown in the economy, a rise in unemployment, and a fall in /the purchasing power of the individual. This creates a fall in industrial loans which, in turn, forces the moneylenders to reduce the cost of borrowing, and a new cycle of growth and prosperity begins, only to lead to another recession and more misery for borrowers and consumers. It is this vicious circle of boom and bust that brings about the regular international economic crises.
 
In such an economy, every consumer pays part of the price of goods to the moneylenders albeit indirectly. Industrialists and traders take the extra cost of borrowing out of consumers’ pockets by raising the prices of goods and services, thus spreading the burden over the widest possible area. Government borrowing to finance public projects is also met by ever-rising taxes imposed on the earning sections of the population, spreading the cost again over large numbers of people. This led to the rise of colonialism, and remains the root cause of war and conflict in the world today.
 
When considering the Islamic attitude to usury, we must bear in mind a number of essential facts.
 
The teachings and ethics of Islam, as we have seen, are in total conflict with a usurious economy. All the rulings, issued by the official ‘clergy’ in Muslim countries, and the arguments advanced to show that usury may be accommodated into the Islamic system, are pure humbug aimed at deceiving the public.
 
The usury system is a curse on all humanity, not only ethically and religiously, but also economically and practically. It is a system that creates unhappiness and restricts the growth of harmony and stability in society, despite its deceptive promise of prosperity.
 
Moral and practical considerations are inextricably linked. In all his actions, man is governed by the terms of God’s covenant; he is here with a mission and a responsibility and will have to account for his actions in the hereafter. An Islamic economic system must be built on moral and ethical principles. Such principles are not a merely desirable addition that can be done without in people’s life.
 
A usury-based economic system is bound to undermine the moral and ethical character of individuals, their feelings and their desire to help each other. It encourages greed, selfishness, lechery and speculation. In the modern world, it has opened the gates for the most sinister and corrupting forms of investment ever known, such as the drug trade, pornography, prostitution, all in pursuit of guaranteed astronomical profits. Borrowed money is not used in the service of humanity but for maximizing profit, regardless of the nature of the trade or the methods by which that profit is realized.
 
Islam is a comprehensive way of life. Its economic system completely discounts the need for usury and organizes the social life of the community in such a way as to eliminate usury altogether. At the same time it maintains the balance and progress of economic, social and human development in society.
 
Under Islam, there is no need for the abolition or removal of existing economic and financial institutions, such as banks and commercial companies, which play a vital role in modern economic development. Islam can reform these institutions and enable them to function along the sound and constructive rules and regulations it lays down.
 
Most importantly, Muslims must realize that it is a conceptual impossibility that God Almighty should prohibit something that is vital for the perpetuation and preservation of human life. By the same token, no practice that is inherently corrupt could ever be essential for the organization and progress of human life. A Muslim who truly believes in God as the creator, preserver and controller of life and the world cannot conceive that God would forbid anything that is vital, or prescribe anything that is vile or obscene. The reasons for widespread belief in usury-based economic and financial systems can be traced to ignorance and the obnoxious propaganda systematically waged by capitalist and money lending lobbies and institutions. These continue to exert their pervasive influence on governments, international political organizations, and private and public media and information establishments.
 
The claim that the international economic and financial systems cannot exist or function without usury is simply a myth and a monstrous lie sustained by big business and international vested interests. Usury-free economies have existed and performed very successfully. To revive them today requires determination and a concerted, well-considered international effort by at least the Muslim countries of the world, in order to revive some hope of future stability, prosperity, happiness and real peace and justice in our world.
 
It is beyond the scope of this commentary to discuss in detail the practical methods of implementing the Islamic system. We will only look more closely at how
 
Islam succeeded in the eradication of that abominable practice of usury.
 
The Horrific Image of Usury
 
Those who gorge themselves on usury cannot rise up except as he may rise up whom Satan has confounded with his touch. That is because they say, ‘Trade is just the same as usury;’ whereas God has made trade lawful and usury forbidden. He who receives an admonition from his Lord, and thereupon desists [from usury] may retain his past gains, and it will be for God to judge him. Those who revert to the practice [of usury] are indeed the inmates of the fire, wherein they shall abide. God blots out usury and causes charitable offerings to grow and increase. God does not love confirmed unbelievers who persist in wrongdoing. (Verses 275-276)
 
It is a frightening image, far more effective than any threat or admonition. The image of a person possessed by the devil is an evocative and terrifying one, most effective in deterring usurers and in conveying the message to others. It shakes the human conscience and brings home the horrible reality of the effects of usury on individuals as well as society as a whole.
 
Most commentators have suggested that the sūrah refers to rising before God on the Day of Judgement, but I am of the view that this is a metaphor for what actually happens in life on this earth. This interpretation is supported by a later passage warning usurers of an impending war against them by God and His Messenger which, in my view, we can see going on in the world today. The whole world is currently reeling under the dire consequences of a pervasive international usury- based financial system.
 
However, before we study the Qur’ānic text in detail, let us review the different types of usury, or ribā, known at the time of revelation and how the Arabs of the pre- Islamic jāhiliyyah, or Dark Ages, viewed the whole practice of usury. There were two main types, known in Arabic as ribā al-nasī’āh, increase related to deferment, and ribā al- fađl, increase based on difference in quality.
 
Ribā al-nasī’ah, according to Qatādah, applies to selling goods on credit for an agreed term. When the term expires, and the buyer finds himself unable to settle, the seller raises the price in lieu of extending the settlement term. According to Mujāhid, if a borrower fails to settle a debt, he agrees to make an additional payment, over the original loan, to the lender in return for an extension of the settlement period. According to Abū Bakr al-Jaşşāş, ribā al-nasī’ah was no more than a deferred loan conditional on an implied premium, the deferment being granted in return for the additional payment over the original amount.
 
In his commentary, Imām al-Rāzī says that ribā al-nasī’ah was the more widely known in the pre-Islamic days. People would advance money for a fixed term in return for an agreed monthly fee, keeping the original amount unchanged. At the end of the fixed term, the borrower would either pay back the original loan in full or be granted an extension with higher monthly payments.
 
Usāmah ibn Zayd quotes the Prophet as saying: “Ribā al-nasī’ah [i.e. increase related to deferment] is the only real form of usury.” [Related by al-Bukhārī and Muslim]
 
Ribā al fađl [i.e. increase based on difference in quality] applies to premiums on spot transactions involving the exchange of quantities of the same commodity, with something extra: gold for gold, silver for silver, wheat for wheat, and so on. Such transactions are considered usurious because they bring exploitation, a feature common to all types of usury. This fact will be of great importance in our discussion of the contemporary situation.
 
Abū Sa`īd al-Khudrī quotes the Prophet as saying: “Gold for gold, silver for silver, wheat for wheat, barley for barley, dates for dates and salt for salt; may be exchanged, measure for measure, from hand to hand [on the spot] . If either party gives or seeks an increase, both parties are equally guilty of usury.” [Related by al- Bukhārī and Muslim]
 
Abū Sa`īd al-Khudrī also reports that when Bilāl, the Abyssinian Companion of the Prophet, once brought the Prophet some dates of excellent quality, the Prophet immediately asked where he had obtained them. Bilāl said he had received them in exchange for some dates of lower quality that were in his possession, two measures for one. The Prophet was extremely displeased and said: “This is stark usury! It is the very thing! Do not ever do it. If you wish to buy good dates, sell your dates in some other way and then buy the good ones with what you receive.” [Related by al- Bukhārī and Muslim]
 
That ribā al-nasī’ah is usurious is self-explanatory: it involves an increased payment and time extension, the two essential elements of usurious transactions. In ribā al-fađl there have to be real differences in quality of the same commodity which give rise to an increase in the quantity of one over the other. This is clear in Bilāl’s transaction, condemned by the Prophet as usurious, since it assigned different values to the two types of dates. Hence the Prophet ordered that one type of dates should be sold for cash, which is then used by the seller to buy the other type, thus removing all suspicion of usury.
 
The requirement to exchange traded goods simultaneously, “hand to hand”, is important in order to avoid any difference in the two quantities due to a lapse in time which could affect their respective values. It also indicates how sensitive the Prophet was to any suspicion of usury, and how sagacious was his approach in uprooting it.
 
There are those today, overwhelmed by the triumph of Western capitalism, who wish to limit the definition of usury to ribā al-nasī’ah only, basing their reasoning on the report by Usāmah and definitions of usury in pre-Islamic Arabia given by some early scholars. Later and new forms of usury that do not precisely fit those definitions are, according to these pundits, allowed by Islam.
 
This is a symptom of spiritual and intellectual defeatism, because Islamic rules are not decided merely on technicalities but on sound and firm concepts and principles. Islam did not condemn one particular form of usury, but stood against it entirely in theory and practice. It went so far as to forbid ribā al fađl in order to eliminate all semblance of usury from Islamic monetary and economic systems.
 
This could only mean that all usurious dealings are forbidden, whether similar to those known in pre-Islamic Arabia or it has a new shape. Wherever the essential elements of usury are present in a transaction, it becomes forbidden. Similarly, any transaction tainted by extortion, greed or an element of gambling, or otherwise driven by the evil desire to make a profit by any means, is strictly outlawed.
 
Divine Admonition Remains Unheeded
 
“Those who gorge themselves on usury cannot rise up except as he may rise up whom Satan has confounded with his touch.” (Verse 275) This is a reference not only to those who take interest or charge a usurious gain, but also to society as a whole.
 
Jābir ibn `Abdullāh reports that the Prophet has cursed the person who charges usury, the one who pays it, the two witnesses and the one who writes the contract, saying: “They bear the same responsibility. [Related by Muslim, Aĥmad, Abū Dāwūd and al-Tirmidhī]
 
These rules apply to private, one-to-one transactions, while the whole community is condemned to the onslaught of God’s wrath in societies where usury forms the basis for financial transactions. Such a society lives in turmoil and constant insecurity; and if there were doubts about this fact during the early days of the capitalist system, some four centuries ago, its record since then totally vindicates it.
 
The world we live in today is full of anxiety, instability and fear. Western leaders, intellectuals and scientists themselves admit to the frightening spread of nervous and psychological diseases in the West, despite its spectacular industrial, scientific and economic success. The other frightening aspect of today’s Western-dominated world is the spread of conflict and strife, and the imminent threat of global war and mass destruction.
 
As a result, a dark cloud of depression and despair hangs over this world of ours which Western civilization, with all its achievements and capabilities and wealth cannot remove. What, then, is the point of material progress if it does not bring happiness, peace and security to individuals and societies?
 
It is a fact that no fair-minded person could ever deny: the majority of people in the most affluent and materially advanced countries, such as the United States of America or Sweden, lead the most miserable lives. Anxiety, depression and boredom are eating into people’s lives who, despite their affluence and energy, are driven to a culture of fads and mental and sexual perversions, and all kinds of anti-social escapist behaviour that allows them no peace or security
 
The fundamental cause of this pervasive unhappiness is the spiritual wilderness in which Western societies are living today. For, in spite of the prosperity and material well-being they enjoy, these societies lack the spiritual reassurance and faith that can only come with belief in God and placing our full trust in Him. They no longer have any universal goals or aims to aspire to. They have lost faith in human life and man’s mission and role in the world as defined in God’s covenant with mankind.
 
From that fundamental cause springs the curse of usury which undermines the whole economic edifice of society in such a way that the economy inflates but never seems to grow in a healthy and equitable manner or benefit all sections of the community. A usury-based economy is a lopsided one, in which the faceless privileged few prosper to the most obscene extent at the expense of the industrial and commercial resources of the community. Financiers and moneylenders control the flow of money into the market and thereby impose their wishes and interests rather than seek to meet the needs of the people or serve the public interest. Their aim is not to provide regular employment or long-term security of income, leading to happiness and social stability, but to maximize their own profits, even if that means the suffering and deprivation of millions, or the destruction of the security and welfare of the rest of mankind.
 
Those with vested interests objected to the condemnation and abolition of usury, claiming that “‘Trade is just the same as usury;’ whereas God has made trade lawful and usury forbidden.” (Verse 275) Their argument rested on the false assumption that the objective of both trading and usury was to secure gains, but trading is open to the risk of loss as well as to making profit. It also requires real tangible input from the trader. Usury transactions, on the other hand, are aimed at bringing guaranteed gains for the lender in any case. That is the crucial difference between the two. Any transactions involving a guaranteed return for the lender, under all circumstances, are usurious and, hence, forbidden. There can be no argument on this point. God has permitted trading for many reasons that make it beneficial for human life, and the absence of guaranteed returns is first among them.
 
However, Islam faced the situation existing at the time with realism, averting any kind of economic or social upheaval. It declared its new rules effective immediately and turned a new page with respect to what had been going on previously: “He who receives an admonition from his Lord, and thereupon desists [from usury] may retain his past gains, and it will be for God to judge him.” (Verse 275)
 
It seems to suggest that exoneration for previous usurious activities would be left to God’s grace, thereby providing individuals with a stronger incentive to desist and seek to conduct their trade without usury. Nevertheless, it goes on to warn those who go back to such practices that they “are indeed the inmates of the fire, wherein they shall abide.” (Verse 275) It affirms with power and authority for the benefit of those who might delude themselves that the hereafter was a long way away, that: “God blots out usury and causes charitable offerings to grow and increase. God does not love confirmed unbelievers who persist in wrongdoing.” (Verse 276)
 
God’s words have come true. There is evidence that no society has built its economy on usury and seen real prosperity, peace, security or happiness. A society may indeed be outwardly wealthy, productive and affluent, but these are not necessarily the signs of a blessed and fortunate society. Social welfare, integrity and cohesion are only found in societies constructed on altruism, charity, tolerance, compassion and open-handedness, and in which people vie only for the pleasure and grace of God Almighty.
 
There are, of course, those who refuse to see these facts, because they are either consumed by greed and self-interest or blinded by the falsehood and the propaganda perpetrated by those who have a real vested interest in the promotion and spread of the odious practice of usury and the whole system based on it.
 
“God does not love confirmed unbelievers who persist in wrongdoing.” (Verse 276) This statement clearly indicates that those who persist with usury, after all that has been said about it, are guilty of grave wrongdoing and condemned by God. Evidently, those who legalize what God has forbidden are guilty and damned, even if they assert their belief in Islam with all the power at their disposal.
 
Islam is not mere words one utters, but a comprehensive way and system of life. To reject a part of it is to reject it all. In this case, there is riot the slightest doubt that usury is totally forbidden. Hence, to legalize it and build the life of society on it is tantamount to unbelief.