The Effect of the Corruption of Western Economics on Humanity
[Part 2]

In the previous article we discussed how the Western systems were founded upon a corrupt economic foundation. This foundation bore a likewise corrupt economic structure. In turn, this structure, which is the focus of this article, is no less corrupt than its foundation, but rather it is an extension of it.

From this article we should take a lesson from the saying of Allah (swt), where He shows the connection between the foundation and the structure in respect to society's well being and its actions: ‘Is it then He, who laid the foundation of his building on piety to Allah and His Good Pleasure, better - or he who laid the foundation of his building on an undermined brink of a precipice ready to crumble down, so that it crumbled to pieces with him into the Fire of Hell. Allah guides not the people who are the Zaalimoon (unjust).’ [9:109] And He (swt) said: ‘Those before them indeed plotted, but Allah struck at the foundation of their building, and then the roof fell down upon them, from above them, and the torment overtook them from directions they did not perceive.’ [16:26]
Three main pillars represent the western economic structure, they are;

1- the financial system and banks,
2- the Capitalist companies and
3- the system of paper currency.

In this topic we will not discuss the rules of these pillars for this requires much in-depth study and this discussion would become prolonged. However, we shall discuss, in brief, the economic destruction that is brought upon western societies specifically and on humanity in general, by these pillars.

First: The financial system and banks:

Financial institutions and banks in the western systems are established on a corrupt economic foundation, which is the acquisition of material benefit to satisfy a need, regardless of the damage this may cause to the individual or society at large.

According to our Muslim viewpoint it is based on the foundation of usury, about which Allah (swt) said: ‘Those who eat Riba (usury) will not stand (on the day of Resurrection) except like the standing of a person beaten by Shaytan leading him to insanity.’ [2:275]

It is also based on the foundation of hoarding wealth, about which He (swt) said: ‘And those who hoard up gold and silver, and spend not in the Way of Allah, - announce unto them a painful torment.' [9:34]

Banks and financial institutions in western societies are established upon these bases. These massive institutions, in most cases, are formed via private establishments, which are owned by wealthy individuals or a group of wealthy people, or they may be formed by Joint-Stock companies using the money deposited by people into these institutions.

The nature of their work is mostly based on the use of the funds gained from 'usury', where this money is gathered from different people at a low interest rate, then loaned to others at a higher interest rate. Or these small institutions may alternatively deposit money in larger institutions to achieve a higher interest rate in the same country or a different one.

The banks may also initiate their own projects which will be funded by closing the deposit accounts of a group of clients for long periods of time. The benefit given to such clients is that their money will have an increased rate of interest for them.

As for the danger and destructive effects of these institutions on society, they are reflected in the following:

Firstly: Money is tailored to be in circulation amongst a specific sector in society, depriving the rest of the people from benefiting from the circulation of this money. Thus, through interest, money is drawn from the hands of people, and through interest as well, the major Capitalists who are capable of investing and paying off debts are able to take large amounts of this money from these banks. Consequently, this increases the poverty of the poor and the affluence of the rich. The rich then initiate massive projects which dominate the country's economy and the poor live under the mercy of this class in terms of their offering goods and services and fixing the price. Thus the deposits of the working-class into the banks becomes an avenue by which evil is brought to them, contrary to their belief that it will bring them good, and the interest taken from usurious banks becomes a new artery feeding into the oceans of the rich.

Second: The policy of monopolies over production and consumption. This comes about when the major Capitalists, the owners of companies, are the ones who impose the prices on goods. They are able to do this because of their monopoly over projects and the inability of smaller companies to have any influence. The banks usually assist this policy directly or indirectly. They may set up projects for certain goods and stipulate that other investors will not compete over this, or they may assist certain capitalists to gain control by preventing others from competing with them. This is achieved either by convincing other investors that these projects are not economically viable and that they will not be able to pay of the debts, or by directly stipulating that they are not to set up such projects and this is achieved through agreement of other agents.

Third: The banks affect the high prices in society. This is because companies which have a monopoly over goods are able to impose any price they deem appropriate. Thus they raise the prices or withdraw goods or discard them as they please. Furthermore, the interest owed to the bank by those who own the companies pushes these companies to pay their interest in the shortest time possible by raising the prices of goods upon the consumers.

This matter, i.e. the issue of the capitalists control over prices, occasionally pushes the state to intervene with a patchwork system by imposing specific prices on specific goods or subsidising certain goods to enable the citizen to buy them, or it may import specific goods and release them in the market in order to lower the price.

Fourth: The bank aids in the crises which occur in the money markets. This is either by granting massive loans to those dealing in the stock markets, enabling them to purchase a great number of shares for specific projects and consequently raise the value of these shares in the stock market and thereby keeping the people imagining that the value of these shares has truly increased. So the people start buying these shares in a mad frenzy, causing the price to rise again. But once the public have purchased a large number of these shares, the price drops suddenly when those dealing in the stock markets decide to sell; this is after the target for which the prices were initially raised has now been met, which is to fool the people into buying.
What adds to the chaos is the confusion that develops amongst the people. They buy the shares in an insane manner, intensifying the process of the drop in value, resulting in the destruction of many individuals and in certain circumstances leading to economic disasters or even to the collapse of governments.

The banks also attempt to cover up the losses of those dealing in the stock markets from those who have incurred the losses. This is by loaning them money to enable them to continue the process of speculation and consequently leading to economic catastrophes for those people, due to their being in debt with the banks and their inability to pay off the 'loans' or the interest upon these loans.

Fifth: The laundering of capital from the developing nations, better known as the poor nations - or the Third World. This is done by setting up foreign banks in these countries and consequently withdrawing the money directly from the hands of people for the benefit of the foreign states. Money is also laundered via local banks which undertake the role of withdrawing the money from the hands of different groups of people at low rates of interest, which is about 7 or 8 per cent, and depositing them in the western banks at a higher interest rate, which accumulates to millions of dollars.

This is of great danger to those countries, in terms of depriving the country from the capital that would have enabled it to set up different projects, instead placing it in the hands of other nations for them to exploit in their own projects. There are a number of countries who impose special monitoring of the export of capital and there are others who open their gates on all fronts to the investments and establishments of banks etc., as has recently happened in Kuwait.

Sixth: The Colonialist aims. This is represented by the actions of certain countries that have a financial cover for other currencies or other industrial nations, whom have a strong international currency.

The United States, for example, raises the interest rates in her banks to attract money to them and consequently increase the volume of money entering the country. This then enables her to undertake different projects. She also resorts to this method to support her domestic currency when it has been subject to turbulence and subsequent lowering of value, because of large economic or military undertakings.

At other times she may resort to the central bank by issuing great amounts of American Dollars, the financial cover for other currencies. Consequently causing the value of this currency to depreciate due to the release of extra currency into the markets. This forces those countries tied to the dollar to purchase extra amounts from the market in order to protect the value of their supplies and to also protect the value if their own currency.

Countries like America may lower the value of their currency via the central bank for commercial reasons. This encourages the traders to buy goods from their country due to the lower prices in comparison to other countries. This in turn is because the price of goods in the other country has gone down because the price of the dollar has depreciated.

These are just some of the destructive effects caused by banks in societies in the West and elsewhere. There are many other terrible effects, but unfortunately there is insufficient space to mention them all. Such a subject requires a complete volume to explain all the effects resulting from the actions of these banks and from their corrupt systems.

Second: The Capitalist companies and their evil effects upon society:

The Capitalist companies do not differ greatly from banks; rather they are of the same species. Thus the way they are set up, they way in which they obtain money and the nature of their work does not much from that of banks. They resemble banks to a great extent. As we have previously stated, these banks could very well be Capitalist companies themselves.

The Capitalist companies assist in making money circulate only amongst a specific section of society. They encourage the concept of hoarding wealth and they develop economic monopolies of different types by monopolising goods and markets and raw materials creating a class of slaves in society. This is a class whose will and prerogative is taken away by seductive economic deceptions offered by the capitalists in order to keep them deprived. In effect making the dominant class in society the major capitalist class, who own the powerful companies and dispossessing the rest of the people from this distinction; where this class is able to buy up all the votes to the exclusion of everyone else. In this manner it promotes the concept of classes in society. For the Capitalist society nurtures two classes; the big capitalist class - 'the masters', and the poor working class -'the slaves'. And these capitalist companies cause the high prices due to the policy of monopolies and market closures.

There is another simultaneous dangerous issue caused by the Capitalist companies and banks; the idea of investing outside the country. This is in order to obtain money from the hands of people and to obtain raw materials at the most petty prices creating markets for their goods and products in order to achieve the highest possible profit. It should not come as a surprise when we say that the first idea of the first investment was purely economic, due to the ambitions and greed of those who own capitalist companies. Such is the example of oil, iron and steel companies.

Muttasim