This is a key
(Reverend Canon) Peter Challen
4 of “Science and Epistemology in the Qur'an”
Masudul Alam Choudhury
All the great faiths seek surrender to God - and that is
the literal meaning of "Islam". If people of other
faiths and humanist traditions could graciously concede
that the use of the word 'Islam' is a moral response to
that surrender which is available to all persons of free
will, then the way will be opened for a serious examination
of the model that some Muslim scholars are seeking to apply
to contemporary complexities in the social and economic
The key to that model lies in understanding the nature
of surrender. In the past, surrender was often viewed rather
narrowly as a personal concept, of submission of the individual
will, while the obligation towards others was only one of
charity. The more comprehensive view, however, is that surrender
is a social concept - a surrender of individual selfishness
in favour of serving others - and the obligation towards
others is the far more extensive one of a duty to work for
the overall, beneficial, restructuring of society. Indeed,
we nowadays believe that, unless an active societal concern
for others is the main part of our relationship with God,
all else is at naught.
The change in understanding the nature of surrender is
closely connected with change in the nature of physical
reality. In times gone by, implementing a substantial and
enduring help for others was difficult - the fate of most
people was a grim unjust poverty for which charity was often
the only, and usually totally inadequate, remedy.
Today, however, the situation has changed. The poverty
remains but with the vast difference that we now have the
technological capacity to eliminate it. Thus any failure
to eliminate poverty is a failure to serve God; and the
essence of morality, incumbent on us all, is a duty to work
for inclusive structural justice. In the present world of
conflict, furthermore, such justice is the only concept
capable of uniting people of faith, and of good faith (1),
in an impelling cause — transcending cultural and
political boundaries — for the betterment of humankind.
Leading the cause with a remarkable range of extensive
and profound books is Masudul Alam Choudhury. Choudhury's
starting point is the Islamic concept of Tawhid —
the Law of Divine Unity — which upholds the unity
of knowledge in the analytical and observed world-system.
Tawhid goes wider than knowledge, however, to embrace all
aspects of life — social and economic systems, morality,
finance, environment — so that there is an overall
sense of relatedness and comprehensiveness. That sense also
exists in the other great faiths which have concepts such
as the reign of God, Shalom and Dharma etc to depict the
totality and Unicity of the presence of God in everything.
The sense, however, does not mean we can assume that, one
day, we shall be able to understand everything and see the
connecting detail between all aspects of the universe. Indeed,
in matters of human knowledge we are, in practice, forced
to recognise that, at our present imperfect level of intellectual
development, the everyday reality is often of observations,
facts and interpretations which appear to be inconsistent
with each other, even which tell against Unicity. In such
circumstances, we have little alternative but to be patient
and hope for better resolution and consistency when our
knowledge improves. This has been recognised by Stephen
Hawking who for many years has upheld the possibility of
discovering a Grand Unified Theory (2). The goal of the
GUT is a theory that unifies the four fundamental forces
of nature — gravity, the strong nuclear force, the
weak nuclear force and the electromagnetic force. Such a
theory, Hawking opined in 1988, would enable us to "see
into the mind of God".
Recently, however (2004), Hawking has expressed the view
that the GUT is no longer possible (3). The main apparent
problem in producing a GUT is that quantum mechanics and
general relativity have radically different descriptions
of the universe. Moreover, in 1931 Kurt Godel demonstrated
that there are mathematical statements that can never be
proved, the implication being that a theory of everything
is certain to be either incomplete or inconsistent.
A similar point has been made by Anne Primavesi who doubts
that any form of mere language — be it theological
or scientific — can ever fully express the reality
of "all there is". With recognition of the limits
of language comes awareness that a God who eludes verbal
categories has broken other bounds as well.—
|(Thus) the usual confines within which we place
and then describe God are seen to be all on our side
of the horizon. Paradox shows them up for what they
are, and dismantles them sufficiently to give God
room; room to be God of the whole earth system; enchanting
and terrible, giver of life and death, not separate
from and not confused with the world and its sacred
gift events. (4)
In sum, therefore, we can sense that the universe has Unicity
but, in matters of scientific, even theological, knowledge,
until as such time as Unicity is revealed to us in more
extensive detail, we have to do our best with the information
and understandings at our present disposal. In one huge
respect, however, there is an undoubted Unicity and that
is the duty, incumbent on us all, to work for structural
Which raises the question — What is meant by "structural
justice"? Generally, structural justice includes the
— all individuals to be continually and sufficiently
productive so that they have income sufficient for
their reasonable needs
— a basic income for all
— societies to rule themselves and not be
ruled by outsiders
— reasonableness and fairness within societies
— a lessening of rich-poor division
— good health and education systems
— a focussing of financial activity on the
real, productive economy
— an end to a financial system bent on putting
the whole world into debt
To which can be added two matters of, at
first sight, only Islamic - but, in fact, universal -
concern. They are the need for:-
— a revival of the ummah (or comity of
Islamic nations) - this is essentially the need of all
societies to achieve the best flowering of which they
— an end to the imposition of riba (interest).
Riba is not only wrong in the eyes of Islam but wrong
in the sense that the continually debilitating imposition
of interest, in any society, is not necessary.
Generally stating a concept and its several aspects, however,
is far from enough. Ideas are ten for a penny but, unless
their important aspects are highlighted and embodied in
practical mechanisms, they might as well not have been stated
in the first place.
Of first importance is the creation of wealth for, without
wealth, we have little hope of improving the lot of our
fellows. As for the practical mechanism to create wealth,
experience indicates the virtue of a genuinely free and
open market. But - and it is a very big
"but" - the present so-called "free market"
of neo-classical economics is not a genuinely free and open
market. Nor is it, as the neo-classicists claim, an efficient
market. Nor are its outcomes just and fair. Since 1989,
of course, there has been much arrogant boasting about the
alleged merits of the "free market". Those alleged
merits, however, stem only from the fact that, compared
with the miserable material performance of communism and
socialism, the present "free market" is undoubtedly
the more efficient (5). However, as compared to what is
possible, the "free market" is massively unfree
(working well only for the few), massively inefficient,
massively unjust, and massively unfair (6).
Now consider the existence of private property. Because
private property is intimately related with the workings
of the market, "free market" rhetoric robustly
upholds its worth. But - and it is another big "but"
- private property at present (in particular, the ownership
of productive capital) is not owned by all and, in practice,
is owned only by the few.
And there is a third major matter. Neo-classical economics
upholds Say's Theorem (Law). The Theorem says that, in a
market economy, the total market value of the wealth produced
is equal to the total purchasing power created by the process
of production and therefore that supply creates its own
demand. The Theorem also requires that producers and consumers
must be the same people. But, at present,
there is undoubtedly a huge potential supply which does
not create its own demand. Moreover, producers and consumers
are not the same people. That is to say, at present, Say's
Theorem (Law) most certainly does not work in practice.
In other words, things at present are not half as perfect
as they are claimed to be and the prowess of the so-called
"free market" is in considerable doubt.
All of which raises some fascinating questions: -
Suppose the "free market" did
work efficiently for everyone (as opposed to the few), and
was patently fair and just? Suppose private property, in
particular, the ownership of productive capital, was spread,
on market principles, to all individuals
throughout the population? Suppose supply did
create its own demand because producers and consumers are
the same people?
Indeed, if "free market" rhetoric were to be
a genuine reflection of actual reality, then would there
not be a situation of huge inherent possibility?
At which point attention is drawn to a fourth, and very
extraordinary, matter. Just as the lack of freedom in the
"free market", the narrow ownership of productive
capital, and the inoperativeness of Say's Theorem are rarely
commented upon (at least by neo-classical economists) so,
even rarer, is comment made on the crucial fact that, today,
the supply of new money for our economy is created
out of nothing by private bankers. Yes, the money which
is central to our economy and an extensive part of our daily
lives, is not created by the State but by the banking system
which does it at the touch of a computer button. The
banking system then adds interest (which is distinct
from administrative charges) and demands repayment.
In the UK, an amazing 97% of the new money supply is interest-bearing
loans created in this way.
Which might not matter too much if the new money
were to be directed at productive capacity, a capacity having
new owners coming from those who were formerly without capital.
But, alas, today's money supply goes into ripping off consumers,
inflating existing assets, building up upside-down pyramids
of derivatives which could bring down the whole global financial
system and, in particular, into putting country after country
into a huge debt which can never be repaid. Society's money
supply — society's money supply — is
now in the hands of the few who care only for their own
interest and not that of the society. The situation is shocking
yet the neo-classicists economists ignore it.
Fortunately, a new thinking is arising and Masudul Choudhury
is giving the lead. In essence, distinction is made between
exogenous and endogenous money. Exogenous money
is either money coming from abroad or money created by the
international banking system operating within a country.
It takes the form of interest-bearing loans which are not
directed at productive capacity and furthering the needs
of society; and which hand control of society either to
a narrow elite or to outsiders.
In happy contrast, endogenous money, although
repayable, bears no interest and is always
directed at productive capacity. "Endogenous"
means coming or growing from within. Thus an endogenous
money supply means a money supply arising from within the
society. In the case of Islamic societies, that means money
issued by the bayt al mar — the Islamic Treasury
— and in the case of other societies, money issued
by the central bank.
An endogenous money supply is of immense importance because
it is capable of ensuring, among other things:—
i) economic and social justice
ii) an end to riba
iii) a direct linking of new money to productive capacity
iv) a widespread ownership of productive capital
v) an increase in political freedoms
vi) an efficient wealth creation
vii) a basic income for all inhabitants
viii) policy to unite inhabitants who have different linguistic,
religious, geographical and ethnic backgrounds
ix) an ability of a society to control its own destiny as
opposed to being ruled by outsiders and others
x) a new economic system (7) which, by a proper use of interest-free
loans, spreads productive capacity to all individuals
in the population so that they produce (and thus earn) independently
of whether or not they also have a conventional job. The
result is a combination of efficiency with social and
economic justice (8).
The new endogenous money ensures that a
society's currency is always backed by productive
assets. Taking the form of state-issued, interest-free
loans (administered by the private banking system) it
is directly related to the real economy, made repayable
and, when repaid, is cancelled or cancellable. It has
four main uses (9) :—
Public capital investment thereby allowing
hospitals, roads, bridges, sewage works, fire stations,
schools etc. to be constructed for one half, or one third
of the present cost. Over time, the National Debt would
reduce. However, the capital projects can still, if wished,
be built by the private sector, managed by the private sector,
even owned by the private sector. The key point is that
the cost, at the very least, is being halved.
Private capital investment if such investment
creates new owners of capital and is part of policy to enable
all individuals, over time, on market principles, to
become owners of substantial amounts of productive capital.
By using state-issued interest-free loans, administered
by the banking system on market principles, a company/corporation
would get cheap money as long as new shareholders
are created (11).
Green capital investment, particularly
for clean, renewable energy. At present, using interest-bearing
loans, a lot of green technology is not financially viable.
With interest-free loans, however, it would become viable.
Thus we could have, for example, clean electricity through
tidal barrages, dams, windmills, wave machines, solar electricity,
and geothermal power stations.
Small and start-up businesses thereby
freeing them from the crushing pressure of interest-bearing
debt. (In the case of small and start-up businesses, there
would be no requirement for wide ownership.)
These uses would combine with a genuinely Islamic Banking
(which, unlike conventional banking, does not create money
out of nothing, nor use riba - interest). They have huge
practical implications not least that the cost of all productive
capital investment is reduced to a half or less of what
it costs at present (12). Moreover, there would be a money
supply whose origin is not fraudulent because it is directly
and continuously related to the real economy with counter-inflationary
Perhaps best of all, the widespread ownership of productive
capital would give all owners a stake in the economic success,
and social cohesion, of their society. By profoundly involving
all individuals in the economy through individual
capital ownership, political unity can be built. Countries
with different ethnic, religious, linguistic or other groupings
will be able to give all their people a strong sense of
common cause and purpose.
Please note that Complementary Currencies
are endogenous money already in widespread use as a medium
of exchange in many local trading systems. Complementary
a) created within the society
b) directly related to provision of a good or service
c) cannot be inflationary
d) have no interest attached
e) have no debt to the banking system
f) are not created out of nothing
It is not suggested that this form of endogenous money is
a complete substitute for a national currency, but it enables
goods and services to be produced (and in effect directly
monetised, but without using ordinary money) to facilitate
If there ever was a time when fertility, positive attitude
and momentum are required to achieve extensive change, it
is now. In the case of Islamic societies, the implementation
of the new thinking will see the rise of the ummah as a
new comity of proud, self-reliant societies
giving a lead to a world sorely in need of such a lead.
Non-Islamic and secular societies will be able to achieve
their best potential (as opposed to being prevented from
achieving their best potential which is the situation at
Any society - Islamic, or non-Islamic - which embraces
the new thinking will not only have a huge material success
but, just as importantly, will be in a position to give
a moral and material leadership to the rest of the world.
These, then, are the underlying aims of the great and ongoing
work of Masudul Choudhury. We shall diminish ourselves if
we fail to follow his lead.
1. The phrase "of good faith" covers those having
religious faith and honesty of intention as well as those
who may lack the religious faith but still have the honesty
2. Stephen Hawking holds the Lucasian Chair of Mathematics
at Cambridge University, UK, the most famous academic Chair
in the world. A previous holder was Isaac Newton.
4. The underlying problem is that if there are mathematical
results which cannot be proved, there are physical problems
that cannot be predicted. Thus we are not angels or gods
viewing the universe from the outside. Rather, humans and
any mathematical models they make are on the inside
- they are part of the universe they are attempting
to describe. So, far from there ever being a GUT, there
will always be something new to discover.
5. Anne Primavesi, Sacred Gaia - holistic theology
and earth system science. The great Italian scientist
Galileo expressed a similar view. The way, he observed,
is paradoxical. '"The (Christian) Bible shows us the
way to go to Heaven, but it does not show us the ways the
heavens go." This pithy statement encourages us to
sense the paradoxical nature of a loving, creative God who
is affected by earthly contingencies.
6. Since the fall of communism in 1989, the apologists
for neo-classical economics (which now prevails throughout
the world) boast that so-called "free market"
capitalism has won; that it cannot be bettered; and that
history (in the sense of the possibility of any substantial
change to economic and political systems) has come to an
end. See Francis Fukyama, The End of History and
The Last Man, 1992.
7. The reader may wish to consider the following questions:-
Why is it that when there is undoubtedly sufficient
productive capacity in the world, there still exist widespread
unmet needs and wants? Why are 20% of the world's population
existing on under $1 per day; 40% existing on under $2 per
day; and 55% existing on under $3 per day - with the situation
likely to get worse in the coming decades? Why are there
huge strata of misery and poverty within
the purported "free market" societies, the USA,
for example? Just the asking of these questions - at a time
when everybody knows that the worldâs factories and
farms are physically capable of solving material problems
- points to large-scale failure thus putting into considerable
doubt the claim of neo-classical economics that it promotes
a system which cannot be substantially bettered.
8. The monetary system needed to express Islam must be
different from that at present existing in the West - Masudul
Alam Choudhury, Money in Islam (Routledge, 1997).
See also, Masudul Alam Choudhury, The Islamic World-system
9. Rodney Shakespeare & Peter Challen, Seven Steps
to Justice (New European Publications, 2002). See also
10. Very significantly, these four uses — for public
capital projects; private capital projects if wide ownership
is involved; green capital investment; and small business
— would back the currency with assets, break the grip
of usury and, because they are directly related to productive
capacity, would be counter-inflationary. The counter-inflation
would happen because, once the capital project is built,
and the money is repaid, the money is cancelled,
leaving the productive capital asset behind. The four uses,
moreover, would implement a genuine free, fair and efficient
market; throw off foreign and financial elite control, and
address social and economic justice through the spreading
of wide capital ownership and its associated capital income.
11. The techniques for doing this are those of binary economics.
"Binary" means "composed of two" and
there are two factors in production — labour and capital.
Thus there are also two ways of genuinely earning —
either though owning your own labour and/or
through owning capital. The main object of binary economics
is to ensure that all individuals in the population have
access to both ways of earning. All really
does mean all — carers, retired, sick, unemployed,
women, children and men. Everybody, over time, on market
principles, comes to own an increasing amount of productive
capital paying out its full earnings. Binary economics gives
a capital acquisition right, to every individual. Operating
on market principles, this right enables any individual
to acquire efficient, income-generating capital assets.
The assets pay for themselves out of their earnings and,
thereafter, with full payout of earnings, provide capital
income to the owners. See Binary Economics - the new
paradigm, by Robert Ashford & Rodney Shakespeare,
(University Press of America, 1999).
12. Governments borrow interest-bearing money from the
banking system in order to finance public capital projects.
As a result, the UK National Debt costs every person £8/9
per week - which sum is paid out of taxes.
Since people resent too much taxation, the solution is interest-free
loans for public capital investment.
13. In The Islamic World-system, Masudul Alam
Choudhury proposes that the issuance of money should be
linked to gold with a 100% reserve requirement i.e., if
a sum of money is issued, there must be gold of equivalent
value held in reserve.
Peter Challen, London, 2004