by tahanson43206 » Tue Aug 18, 2015 3:50 pm
The prohibition against earning interest from loans which is part of the Islamic tradition was something of which I was aware but did not consider important enough to investigate until now. However, a recent post by germanforestgump, showing the many challenges that must be faced by developers of a sea based habitat for humans led me to investigate.
I was surprised to discover that the prohibition led to a practice that looks (to me) almost identical to modern American Venture Capitalism.
Begin Quotation from Wikipedia:
20th century[edit] -Further information: Islamic economic jurisprudence
Publications available relating to Islamic Finance
Year Number: prior to 1979 238, 1999 2722, 2006 6484
SOURCE: Islamic Finance
Project Databank[21]
Building housing the Islamic Banking & Finance Institute Malaysia (IBFIM) in downtown Kuala Lumpur.
In the 20th and 21st century there has been “a gradual evolution of the institutions of interest-free financial enterprises across the world”[22]
In the 20th century, Islamic scholars such as Naeem Siddiqi, Maulana Maududi, Muhammad Hamidullah, all recognised the need for commercial banks and their perceived "necessary evil," and proposed a banking system based on the concept of Mudarabha, defined as a relationship in which one party contributes capital and other expertise to earn profit which is shared at an agreed upon ratio, such as 50:50. The Investor is called Rab ul Maal and the other party is termed as Mudarib.[citation needed] Further works specifically devoted to the subject of interest-free banking were authored by Muhammad Uzair (1955), Abdullah al-Araby (1967), Nejatullah Siddiqi (1961, 1969), al-Najjar (1971) and Baqir al-Sadr (1961, 1974).[citation needed]
End Quotation.
I like what I see here, because (as I interpret the passage) the investor becomes a part of the project. The 50-50 split idea itself is appealing (to me), because it implies an understanding that lending of resources is just half of a project. The other (equal) half is the physical labor and more importantly, the vision, judgement and management skill that leads to a successful outcome.
Thus, if the enterprise is to build and operate a PERMANENT economically self-sustaining habitat on (and in) the ocean, then those who would provide the physical resources would share equally in the profits to be obtained with those who provide the vision, the labor, and the skills to direct the labor of those who have specific skills needed.
There is (was and probably still is) a proposal to build floating habitats for skilled persons to live just off shore of the United States, to solve the problem of insufficient green card opportunities provided by the congress of the United States.
Such habitats would be economically self-sustaining due to the value of the intellectual capabilities of the residents, who could solve difficult problems for US companies without having green cards, due to the modern communications systems available.
As I envision future development of self-sustaining sea based habits, not only would the intellectual service via telecommunications provide economic gain for the enterprise, but traditional agriculture could flourish due to the invention of modern hydroponics, as shown in the PBS program "Humanity from Space". The surface of the ocean has room for more than one living space structure, surrounded by hydroponics barges with solar panels sharing space with plants.
Both the Western venture capital system and the Islamic financing system appear (to me) to provide a basis for funding sea based economic enterprise on the bases of shared profits.
(th)
May every member of The Knowledge forum grow financially, intellectually, socially and beyond.