2023 FUTURE OBSERVATORY
2023 FUTURE OBSERVATORY
In the context of what may seem like a war between western capitalist culture (especially that of the US) and that of the Islamic nations, it should be recognized that (despite the popular myths) the culture of Islam has much to offer on a wide variety of fronts. Indeed, if positively approached by the West, it might considerably enrich the emerging global culture; and would, not least, defuse the looming confrontations by demonstrating that this culture was the property of all - who might then feel they had the right to enrich it with their own contributions. Indeed, on many fronts - not least its tolerance on most issues, and the relations between government and commerce - it offers useful, and important, lessons which complement those of the West. Thus, the Koran assumes, much the same as the West, an economic system based on individual enterprise and correspondingly individual reward' and Muhammad had nothing against profit.
Islamic economists would also point to the moral superiority of concepts such as 'zakat', the word for charity by which rich men improve themselves by giving to the poor. This is even sometimes imposed as a tax; though, as Brian Beedham points out, a small one - less than 0.5% of GDP for Pakistan. This economic morality also extends to 'riba'; which is generally seen as an alternative to interest and which is banned - in much the same way as Christians approached the problem when usury was prohibited. The result is that Muslim bankers have been forced to develop devices which get round this ban. Some of these are simply paper transactions which redefine the payments. One solution though, known as 'madaraba', is significantly different. It requires the bank to in effect buy shares in the company borrowing money. If it performs well the bank gets an agreed share of profits; but if it fails the bank also loses. This is too often true, literally by default, in the West; as a bankrupt company defaults on its loans. The Islamic approach, though, formalises the shared risk. The most important practical point is that this is a principle which applies to all such loans. Japanese banks have long had cosy relations with their favoured customers, which is often claimed to be one reason for Japan's success, but these are voluntary; where madaraba is, in effect, compulsory. The one problem left, in its more general use, is that governments would no longer be able to use interest rates as a control on their economies; though many of us might argue that would be yet another benefit - forcing governments to live in the real world with the rest of us!
It might be possible to obtain the best of both worlds, Islamic and Western - especially in terms of financial activities, if we do not overreact to the imaginary threats.
On the other hand, this is a subtle argument which most of those in our research were blind to - as are almost all futurologists.
It is certainly one that the US is blind to! There is, indeed, a real danger of a clash of cultures; but this is being fostered by the ignorance of US politicians looking for the new reds under the beds!
As Brian Beedham points out "A good Muslim should be guided by his conscience [something which has been notably missing on Wall Street in recent years] - and by God's written instructions - to do right thing by other people. He should pay a reasonable wage, charge a fair price and be decently restrained in the way he spends his profits (which, the shrewd Islamic economist points out, ought to be good for investment, and healthily counter inflationary). He should also take care of the environment." Almost all of these are things which our research shows western managers would like to emulate.
7 May 2003
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