Historical Overview Of Usury

As we know, Allah Almighty has forbidden the taking of usury (riba) and in fact transactions involving usury in any way. The ayats in the Qur'an and the various hadiths on the subject make it clear that it is not only forbidden, but forbidden in the strongest terms. It is referred to as 'war against Allah and the Messenger' and as being '30 times worse than adultery.' Strong stuff! Now if Allah makes something forbidden it is not, God forbid, just for the sake of forbidding something. It is because there is harm in that thing for human beings and the prohibition is in order that people should not cause themselves or others harm and upset the balance of human society.

As we have seen, usury has now penetrated every sphere of the society we live in. It is the nature of usury to corrupt and poison everything it touches and there is no doubt that usury is a root cause of all the sicknesses with which our society is riddled. Wherever there is a problem, if you trace it back, you find that usury is either directly or indirectly at its root. So all we have to do to understand why usury is forbidden to us is to look around us and see what its unlimited practice has brought about.

Now all Muslims know that usury is forbidden in Islam. What most people do not know is that it was also completely forbidden to Jews and Christians as well. The question must then be asked that if this is the case, how has the present situation been able to come about? As Muslims living in this time, it is essential for us to know this because until we understand the nature of the system we live in and which governs ever part of the world, we will not be able to replace it, and restore the limits of Allah which it is our responsibility to do to the utmost extent that we are able.

When we do look, an interesting picture emerges which as Muslims we would in fact expect to see, and that is that the introduction of usury has gone hand in hand with the destruction of belief and religious values in society.

As I said, usury, being against the law of Allah, was as forbidden to the Jews and Christians as it is for the Muslims. There are specific texts forbidding it in the Torah from the time of Moses and it was among the things that the Christians accepted when they chopped and changed the teaching of Jesus, peace be upon him. However, the Jews found or invented a loophole and came up with a text permitting them to practise usury as a weapon against their enemies, because as can be seen from the situation today, usury is the way that a very few people can get power over a great many. Anyway, throughout the centuries Jews used it as a way of getting their own back against the Christians, who persecuted them. However, in spite of the fact that they did get very rich, they were hated and despised for it. In the 12th century, the handful of English Jews were so rich that they paid ) of the tax collected in the whole century, but shortly afterwards it came back at them and those who were not killed by the people were expelled from the country, not to return as we shall later see for 350 years.

So that was the situation as far as usury was concerned. There were a few money lenders because people in difficult circumstances will always need to borrow money, but it was on a very limited scale and those who did it were hated and reviled because it was known that what they did was cursed and against Divine Law. The worst possible insult you could give anyone in that society was to call them a usurer. Whereas now people might call one a terrorist or even an Islamic fundamentalist, then they would call them a 'usurer'!

This remained the situation until the 16th century when something took place which completely changed the way usury was regarded and allowed what has happened to happen. What occurred in known as the 'Reformation'.

In Germany, Martin Luther decided, with some justification, that the Roman Catholic Church had become totally corrupt. He felt that the Church, rather than acting as a bridge between human beings and God, prevented them having access to God, Accordingly he separated himself from Rome and created the Protestant Church. However, by doing this he threw out the baby with the bath water because by doing it, he rejected canon law which was the way that what was left of the Shari'ah in Christianity could take effect in society. It is a bit like someone saying we must return to the pure sources of the Kitab wa Sunnah and at the same time throwing out all the fiqh which goes with them.

The actual results of what he did was (1) that religion stopped being something which involved every aspect of people's lives in a tangible way and became a private matter between the individual and his Lord and (2) that it was now possible for anyone to decide whether something was right or wrong.

Following on from what Luther had done, Calvin founded a theocratic state in Geneva and this brings us right back to usury. He, in the name of religion, passed an edict which for the first time permitted the practice of usury, arguing that the commercial situation was so changed that it had become necessary. The fact that he hedged it round with strict conditions made no difference. Unscrupulous businessmen pounced on it with glee. Usury was now permissible and would soon even be respectable. The issue now became not whether usury was permitted or not, but how much? In one stroke, the whole economic edifice was changed.

There was, of course, considerable resistance and a valiant rearguard action was fought which lasted for nearly a century, One Frenchman called Brodin put the case very succinctly. He said, 'Those who maintain under the cover of religion that moderate usury of 4 or 5% is just because the borrower gains as much as the lender go against the law of God which forbids usury absolutely and cannot be revoked.' However, he and those like him were unable to stem the flood which has continued unchecked to the present day.

As we have seen, it was a religious split which allowed usury to come in and since religion as the guardian of Divine Law was the enemy of usury, religion had to go or at least be made totally impotent before the usurers would have their way completely.

England was the arena where this process took place. Following the precedent of of Luther and Calvin, although in his case it was purely out of self-interest, and English King, Henry VIII, split with Rome and founded the Church of England. Until this time religion had constituted the final authority in all matters and everything else was subordinate to it. Henry joined together religion and the state in his own person amd by doing so put them on an equal footing.

Charles I wanted to restore religion to the place of supremacy but when he tried to do so, Oliver Cromwell fought him and the Civil War took place. It was a war between the traditional order and the new economic order represented by the middle classes. Cromwell defeated the King, had him executed and established the Commonwealth which was in fact the first secular state. In it religion was subservient to the state, a department in it. Cromwell had financed himself by loans from Dutch banks and one of the conditions was that the Jews were to be allowed back after 350 years to live in England again. Christianity and Judaism became for the first time equally acceptable religions under the state.

The monarchy was restored, but on a constitutional basis, and when was resented by James II, the final blow was struck. The bankers put in their own man and William of Orange was sent from Holland to be king of England. The usurers were now in control of the state which was in control of religion.

From this time on religion became increasingly irrelevant. It no longer wielded any real power at all. The usurers had won the day.

The Muslims escaped this process as long as the border between Dar al-Islam and Dar al-Kufr remained clear-cut and strongly defended.

However, when Napoleon entered Egypt, an open wound was created in the heart of Islam and through it flowed the poison of usury into the bloodstream of Islam. Students were sent to Europe, the Suez Canal was built, and lo and behold a fatwah was issued making usury halal and the first banks were opened. Now, of course, the situation is such that the Muslims are as much in the power of the usurers as the Europeans or even more so.

The importance of this issue can be seen from the fact that the last ayats to be revealed in the Qur'an were about usury and the Messenger of Allah made a point of stressing it in the Final Khutbah on the Farewell Hajj and ordered us to cut off from it.

We have to see that just as Quraysh were the enemies of the first Muslims, our enemies are the usurers and the economic system by which the whole world is enslaved. We think we are responsible, freely deciding people, but this is self delusion.

We are in fact passive slaves to a destructive and corrupting system set up in direct contravention to the law of Allah. No effort is made to confront this and change it. It is as if we are praying in a sewer. Our job is to establish Islam.

We are responsible to Allah for upholding the limits of Allah and to do this we have to confront the economic system and indeed many of the other systems under which we live.