The Goliath we face in Riba The capitalist world-economy takes the form of an iceberg. The most studied part which appears above the surface is supported by a huge underlying structure that is out of sight. Unlike the iceberg, the world-economy is a dynamic system based on flows of value from the underside toward the top. These include drains of expropriated value that take two forms: visible monetarized flows of visible value and hidden undercosted flows that carry the unrecorded value of cheap labor, labor reproduction and ecological externalities which gave us the current socio-economic and environmental meltdown. Commodity chains are central mechanisms for these surplus drains in the world-economy. At each node of the chain, participants attempt to maximize their capture of visible value through wages, rent and profit. They do this by constructing differential degrees of monopoly (control of the markup between cost and sale price) and degrees of monopsony (control of markdowns of production costs), while the poor get poorer and the rich fatter. Not even the “economic crisis” of 2007/8, although it has been the deepest and most enduring economic downturn of the past half-century, created the collapse proposed by many future foretellers and their ilk. (Ian Dallas aka Abdulqadir Sufi and his predictions spring to mind). The immediate trigger for the 2008 onset seems to have been the very practices that mainstream economics endorsed, for years, as mechanisms that would ensure a further rationalization of the market. Derivatives became Integrals (excuse the mathematical pun). The new-fangled instruments like Collateralized Debt Obligations, Mortgage-Backed Securities, and the institutions that generated them, were all extolled by so many neoliberal economists who argued that they would further deepen financial markets and smooth out economic uncertainty. So, when the whole house came crashing down, one might have thought that it would trigger some churning within the economics profession – a criticism of the free-market fundamentalism of the past decades, and the blind faith in models based on fantastic assumptions. What did we see? Other than a momentary wringing of the hands by a few, in a very small number of media outlets, no such self-criticism occurred. Astoundingly, neoliberal economic theory is no less secure today than it was ten years ago. Capitalism, like the Borg, self-adaptive, genetic algorithm neural networked and pumped up to feed relentlessly on the less fortunate, is a life form bent of keeping the shiny part of the iceberg afloat. It finds new ways of adapting rapidly to change, and the reboot is no longer a catastrophe but a refreshing restart with a chance to install some updates! This is the monster that those who wish to take on the awesome task of freeing the world from Riba, and its overt consequences of Pharaoh worship and Wealth worship will have to kill. Business is not just business. Business is part of Muamalaat and thus part of the actions governed by the Merciful Shariah.
Posted on: Thu, 03 Apr 2014 12:32:08 +0000
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