Debt-money and the Environment By Irving Goh When a debt is payed with a debt, there is an unjustified increase in the total purchasing power of the members of an economy. For example, in a clean, normal credit transaction, when A borrows 200 dinars from B. B, temporarily losses purchasing power while A temporarily gains purchasing power. Thus, there is no increase in total purchasing power between them. But if B uses A s debt to him to pay for goods and services which he (B) bought, meaning he (B) assumes that debt is an asset like any other and therefore transferable. The economy now temporarily has an extra 200 dinars worth of purchasing power because both A and B can demand 200 dinars of goods or services from the market. This unjustified increase in purchasing power will last so long as As debt to B remains outstanding. We say unjustified because there are no goods or services to back that purchasing power. If the transfer of debt is not confined between the creditor and the debtor, there will be an unjustified increase in the demand for goods and services in the economy. “Yahya related to me from Malik that he had heard that receipts (sukukun) were given to people in the time of Marwan ibn al-Hakam for the produce of the market of al-Jar. People bought and sold the receipts among themselves before they took delivery of the goods. Zayd ibn Thabit and one of the Companions of the Messenger of Allah, may Allah bless him and grant him peace, went to Marwan ibn Hakam and said, “Marwan! Do you make usury halal?” He said, “I seek refuge with Allah! What is that?” He said, “These receipts which people buy and sell before they take delivery of the goods.” Marwan therefore sent guards to follow them and take them from people’s hands and return them to their owners.” (Iman Maliks Al Muwatta) The situation is further aggravated by the creation of debt out of nothing. Today we live in a world where a huge portion of the purchasing power of the economy consists of debt. In principle, since debt can be created out of nothing ( this is made possible with the banking system, fractional reserve lending, credit cards, ...) there would be an unlimited increase in the economys purchasing power and therefore an increase in their consumption of goods and services and by extension resources. At this rate, our consumption of resources is not sustainable and this will eventually have an adverse effect on the environment. When money equals to debt we are stealing basic resources and biological balance from the future to fuel our excessive and wasteful demand today. Is this the symbol of progress?
Posted on: Sat, 02 Aug 2014 17:48:22 +0000
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