MURABAHA (TO SELL AT A PROFIT)
Islamic banks around the
world are attempting to by-pass riba through a process of
devilish financial engineering. Most of the alternatives to riba
which they offer the gullible Muslim public are nothing more than scarcely
disguised forms of riba. For example, they utilize 4 financial
mechanism which they erroneously define as murabaha. The bank would
purchase an article for cash and then sell it for credit at a higher price than
that for which it was bought. The bank argues that since there is agreement on the
new price between buyer and seller the transaction is halal.
If the bank were to purchase
a car for $15.000 cash, and then proceed to sell that very ear for $25,000 cash
in the same market in which it was purchased, the transaction would be of
doubtful validity since the market price would be manifestly violated. Indeed, why
would anyone pay $25,000 cash for a car when the market price is $15,000? If
the buyer was unaware that the market price was $15,000, and the seller
exploited the buyer's ignorance, the transaction would constitute riba
since it would be a form of deception.
Anas ibn
Malik said that the Messenger of Allah said: Deceiving a mustarsal (someone who
is unaware of market prices) is riba.
(Bayhaqi)
If the buyer purchased the
car for $25,000 despite the fact that he was aware of the market price, it
would indicate the presence of some improper hidden element to the transaction.
He could, for example, be mentally unbalanced. That would invalidate the
transaction!
If on the other hand, the
bank were to buy the car for $15,000 cash in one market, and then proceed to
sell it, in the same market, for $25,000 on credit, there would be no other
justification for the increase in price other than the factor of time (i.e.
credit). Such a transaction would be one in which money would increase in
consideration of time, - or money breeds money over time! It would be no
different front riba al-nasi'ah in the time of the Prophet
(s). In fact, it would be pure riba!
Those misguided Muslims who
obstinately cling to this false murabaha should fear Allah the Most High,
and stop misguiding Muslims. They should fear the double punishment which
awaits those who misguide others:
These,
Lord, are the men who led us astray. Let their punishment be doubled in the
Fire.
(Qur’an. -7:38)
The argument that such a
transaction does not constitute riba because there is an element
of risk in it is entirely spurious and without any substance whatsoever. The
party which is selling on the basis of credit usually endeavors to eliminate
risk as much as is possible. And so such a transaction usually requires a
mortgage through which the seller would recover the money owed to him in the
event that the buyer defaults in fulfilling his obligations under the credit
contract.
When the Islamic Movement
assumes power in Pakistan, for example, it will not only immediately prohibit the
lending of money on interest, but will block all avenues through which money is
invested in risk-free investments and in investments in which the increase in
capital is derived without any effort on the part of the owner of the capital.
3 - Having someone
artificially bid up the price in an auction, thus corrupting the free and fair
market; this is a form of riba known as gharar;
From
Abdullah ibn Abi Awfa: The Prophet said: A najish (one who serves as an agent
to bid up the price in an auction) is a cursed taker of riba.
(Bukhari)
4 - Employing deception (gharar)
as a marketing technique, thus compromising the free market;
Abdullah
bin Abu Aufa said: A man displayed some goods in the market and look a false
oath that he had been offered so much for them though he was not offered that
amount. Then the following divine verse was revealed: Verily! Those who
purchase a little gain at the cost of Allah’s covenant and their oaths... will
get painful punishment. (3:77) Ibn Abu Aufa added: Such a person (as described
above) is a treacherous consumer of riba.
(Bukhari)
Anas
ibn Malik said that the Messenger of Allah said: Deceiving a mustarsal (someone
who is unaware of market prices) is riba.
(Bayhaqi)
Abu
Hurairah reported that the Messenger of Allah once came upon a heap of grain,
and when he put his hand into it his fingers felt some dampness, so he asked
the owner of the grain how that came about. On being told that rain had fallen
on it he said: Why did you not put the damp part on the top of the grain so
that people might see it? He who deceives has nothing to do with me.
(Muslim)
Wathila
b. al-Asqa said that he heard Allah's Messenger say: If anyone sells a
defective article without drying attention to it, he will remain under Allah’s
anger or, the angels would continue to curse him.
(Ibn Majah)
The reader would easily
recognize deception and theft in the replacement of real money by artificial
money all over the world today. In real money the value of the money is
intrinsic in the money itself. Such would be the case of gold coins, for
example, when real money is replaced by artificial paper money then the value
of the paper money (even when it is the US dollar) keeps on being diminished.
And so people are deprived of their wealth by deception. That is riba!
(See Qur'an:- 7:85 11:85 26:183)
The cancer of deception in
trade did not exist in Dar al-Islam. The markets of the Ottoman Islamic Empire,
for example, were policed by specially appointed market police officers said
magistrates who were constantly on hand to adjudicate cases of deception or
fraud in business transactions arid to deliver appropriate on-the-spot
punishment. That free and fair market will be restored to the world of Islam
Insha Allah, if and when the Islamic movement succeeds in the revolutionary
struggle to restore dar al-Islam.
5 - Hoarding in order to
capitalize on the resultant artificially created scarcity in the market and
thus compromising the free market;
Ma’mar
reported Allah's Messenger as saying: If anyone keeps goods till the price
rises, he is a sinner.
(Muslim)
Umar
reported the Prophet as spying: He who brings goods for sale is blessed with
good fortune, but he who keeps them till the prices rise is accursed.
(ibn Majah, Darimi)
Ibn
Umar reported Allah's Messenger as saying: If anyone withholds grain for forty
days thereby desiring a higher price, he has renounced Allah and Allah has
renounced him.
(Razin)
Hoarding results in profit
which is unjust. That is riba.
6 - A monopoly is usually
understood as control over the market in such ways as would result in freedom
to fix prices. Such a situation would result in prices being fixed in accordance
with the plan of the monopolists rather than the free market. As such. it is
similar so hoarding. Wealth is sucked from the masses by deception. That is riba.
If the plan of the arch-enemy was simply to rip us off of our wealth that would
have been bad enough. His plan is worse than that. The plan of the enemy is to
derive power from monopoly of the market. That power is then used to
institutionalize such oppression as amounts to the enslavement of all mankind
and in particular, the ummah of the Prophet Muhammad (s).
7 - A sale on the condition
of deferred payment but with an increase in price. The debt is then sold to a
third party for cash at a price which allows both parties to share in the
increase realized through deferred payment;
8 - Speculative
transactions. These are transactions in which one buys goods or stocks etc.,
anticipating that the price would rise. When it does, one then sells and makes
a killing. Alternatively one may sell goods, stocks etc., anticipating that the
price would fall.
When it does, one then buys
back and makes a killing! Such profit is unjust. There is no effort or labor
involved. It is, in effect, gambling.
But the predatory elite of
financial crooks, who become masters of the market of speculative transactions,
effect their transactions on the basis of insider information. i.e. one gets
secret information that there will soon be a rise or a fall in price and one
then takes advantage of that information to buy or sell and reap a wind-fall
profit. This would now be more than a speculative transaction. It would also be
such a deception in trade as would be easily recognized to be fraudulent.
Speculative transactions are haram because they are just a sophisticated form
of gambling. There is no productive effort involved in a speculative
transaction. It is amazing that today’s capitalist world economy is currently witnessing
a phenomenon in which some sixty percent of all financial transfers are for
speculative transactions. In other words the majority of the capital in the
world economy is being gambled in a mad frenzy in search of profits. Even
Muslims are also in the gambling disease.
to be continued . . . .
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