December 03, 2009
Charming Bigotry around Islamic finance
The level of paranoia from this American Likoudnik over 'Islamic' finance is ... amusing if also rather sad. As regular Aqoul readers know, I am not great fan of Islamic finance, considering it at best to be an awkward fiction (at worst, a grave error financially speaking). At the same time the writing here is absurd: The Threat of Shariah-Compliant Finance - David Yerushalmi - The Corner on National Review Online
Now it is The National Review, which as far as I can tell is a cesspool of far right lunacy in the US, but this mixture of financial illiteracy and grotesque abuse of language for what is in the end blind religious bigotry:
The Threat of Shariah-Compliant Finance [David Yerushalmi]
What makes this story more than simply one of a massive real-estate-investment company gone bad is the double-edged sword so prevalent in the chase for oil-based Middle East wealth: sovereign wealth funds and Shariah-compliant finance.
Another phenomenon that followed the great Oil Rush of the post-9/11 era was the promotion and aggressive exportation of a Muslim Brotherhood doctrine called Shariah-compliant finance (SCF). SCF or “Islamic finance” was first articulated in the mid-20th century by men like Sayyid Qutb of Egypt and Abul Ala Maududi of Pakistan, both of whom argued for a jihad against Westernization and for the creation of Islamic polities that would ultimately join in a hegemonic global Caliphate, with the goal of establishing Shariah not merely as the supreme law of the land, but as the supreme law of the world.
One would think that a Jewish commentator might be somewhat sensitive to broad based religious libels, as the above fear mongering regarding establishing Shariah as "the supreme law of the world" - uh yeah, so people like Qutb have engaged in fantasy about a global Caliphate. Insofar as no Salafi oriented group has even been capable of instituting "hegemony" in a core Islamic Arabic state (ex perhaps Saudi Arabia I suppose), waving this around, implying some shadowy conspiracy is grotesque. Calling Islamic Finance a "Muslim Brotherhood doctrine" is an amazing bit of bigotry and prejudicial framing, rather like saying modern bank lending is a "Jewish doctrine" based on the implication of Jewish bankers in early modern banking development. Of course that is a position oft used by anti Jewish bigots....
Of course Islamic finance has more progenitors than just Sayyid Qutb - although certainly it came out of the reaction to Westernisation that also characterised the Salafi movement. There is no particular reason to be paranoid about the reaction in general.
In the post-9/11 era, Western imams and their infidel advisors in business suits speaking the Queen’s English have understood that, given the global jihad’s reliance on the dictates of Shariah to murder apostates and terrorize the infidels into submission, SCF must be attired in a kind of progressive Western garb to attract the attention of the financial centers in London, Hong Kong, and New York. So it was that SCF became known as “Ethical Investing” and Western and Muslim financiers began lecturing the world that fraud and abuse in the financial markets were driven by the desire for forbidden gain through interest and gambling. They told us that SCF was based not on forbidden interest and speculative paper assets, but on profits acquired through equity participation and sound investing in real assets.
How many Red Meat bigot flags can we count here? Constant reference to 11 September (here and previously) with the indirect implicatioin of a general Muslim blood debt, use of "infidel" (queerly, in the actual world of Islamic finance, or generally finance in MENA I have never heard any Arabic speaker use the term - odd it is the bigots that bring it out as an excuse). Global Jihad? What does this cretin think, there is some Islamic Hive Mind behind Islamic Finance?
Now taking a poke at the irritating and premature self-congratulatory preening of end-2008 to mid-2009 among the Islamic Finance crowd, well that is understandable. However, in my experience Western promoters looking for new angles on business were rather as prominent as actual Muslims.
The level of childish paranoia exhibited in this paragraph really is extraordinary.
Dubai World, a company wholly owned by the Dubai sovereign, has funded itself through debt to the tune of $60 billion in the form of Shariah-compliant bonds (or “sukuk”). These bonds pay interest just like their forbidden cousins in the Western markets, but the interest is put into the black box of Shariah-created fictions and “special purpose vehicles” to keep the forbidden interest off the books. What we now see as a real-estate-bubble collapse in Dubai is no different and no more or less ethical than any other financial failure. But what makes this collapse so problematic is precisely what makes SCF and sovereign wealth funds so dangerous.
Well, I suppose I can agree in part with the first part of this (although "Shariah-created fictions" is a queer and useless phrase, the legal structures used are almost all civil code or English common law), but the idiotic fear-mongering about Islamic finance and sov wealth funds is just childish.
What is he going to get from Islamic bonds, cooties? Is he secretly afraid that it actually works better or has some magic ability to convert people to Islam, a religion he clearly fears and hates as such?
To understand the rather opaque world of Islamic finance, one must understand the players. Since its founding, the modern SCF world has been driven by essentially two groups. The first we can label the Shariah fundamentalists. They come in the form of the fundamentalists in Saudi Arabia and Iran and the Muslim Brotherhood “political Islamists” operating principally in Egypt, Jordan, Pakistan, Indonesia, and Malaysia. These Shariah-inspired financiers understand SCF as “financial jihad” — indeed, as part of a larger stealth campaign to institutionalize Shariah in the West.Rather opaque?
Well, this tenditious characterisation of the history and drivers is absurd, as is the scare mongering around the impact of
Financial jihad is a meaningless scare-term, and lord knows what the hell "institutionalise Shariah" in the West means in the context of structures done generally under common-law and merely constructed to meet perceived religious restrictions. No different than Jewish groups lending under common law, but with contracts constructed to meet their perceived religious constraints. How that "institutionalises" religious law escapes, as the contracts are enforced by secular courts on common law principal.
What makes this institutionalization a bit tricky is that the financial jihadists must convince the Western financiers and their governmental counterparts that Shariah-inspired finance is somehow distinct from Shariah-inspired global jihad against the infidel West. In other words, how do you export a financial model among infidels when that model is built upon a doctrine that manifestly calls for the death and destruction of the infidels and their political and social systems? The answer to this quandary is found in the second group of SCF advocates: the Western facilitators.Well it is distinct.
This Manchurian candidate paranoia and religious bigotry again is astounding given Jewish history, Jews should know better.
The remainder essentially repeats the argument by illogical insinuation and scare-phrases without real analytical value.
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He forgot to point out how Muslims are required each Ramadan to bake the blood of an infidel child into their LIBORs.
Posted by: matthew hogan at December 4, 2009 12:03 AM