Read Ann Pettifor’s recent publication on Islamic Finance here
Islamic Finance is a system of banking operating within a liberalized, deregulated economic framework that is entirely hostile to the values and principles of, for example stakeholder engagement and responsibility, upon which Islamic banks have been established. As a result, Islamic financial institutions find themselves unable to compete with western financial institutions that do not operate under similar ethical principles, or the prohibition against usury. Indeed usury is positively encouraged under today’s liberalized and globalized economic framework. 2 Incorporating the Rentier Sectors into a Financial Model, by Michael Hudson, University of Missouri at Kansas City & Levy Institute, USA and Dirk Bezemer, University of Groningen, Netherlands. World Economic Review Vol 1: 1-12, 2012. file:///Users/annpettifor/Dropbox/Hudson-and-Bezemer%20Rentierism2012.pdf 3 In the YouGov Cambridge University Public Trust in Banking Report, published 17 April, 2013 and found here: http://yougov.co.uk/news/2013/04/17/special-report-public-trust-banking/ 8 If Islamic finance or banking is to be made to work, then its practitioners will have to help in the creation or re-creation of an alternative economic framework, within which Islamic finance could operate safely and even profitably – One which honours and safeguards stakeholder finance (with both lender and borrower sharing risk); and low or zero rates of interest as the price of borrowing funds.
