Heidegger for Muslims

Essentialism as Economics

Perhaps the human science that has the more profound effect in our life is Economics. We want to briefly outline why this way of thinking is fundamentally erroneous and why therefore its claim of certainty needs to be rejected.

We want to undertake this task by examining the meaning of two words. Two words that are fundamental to understand the commercial transaction: ownership and value.

Ownership

We start with the saying "an act only IS in its execution". With this sentence we establish that the truth of being entitled as owner means to be able to execute ownership. If a person is entitled as owner but he cannot execute his ownership implies that there is an error.

Let us look at the concept of "minority ownership" in Economics. According to this theory, on which the concept of shareholding is based, -and therefore the whole idea of Stock Exchange is based- ownership can be exercise by vote. Thus the person or persons who "own" 49% (or less) of the votes are minority owners. In contrast the person or persons who "own" 51% (or more) of the votes are majority owners. Both categories hold the title of ownership. Yet only the majority owner can exercise ownership. The minority owner has the title but not the capacity to exercise ownership.

From an existential point of view, the minority owner is not owner. Only the majority owner is owner. The minority owner only holds the concept of ownership in the form of a piece of paper that says so.

In Economics this is not an issue because this way of enquiry is not regarded as important. What matters is the willingness of individual to subscribe the contract. The contract itself is only valid in as much as it is subscribed in good will by the parties. For Economics that is the "truth" of it. The problem is that under this approach (with which usury is also justified), the existential reality of ownership is forgotten. What matters is the paper that says you are owner, not whether you can exercise ownership or not.

This is of course the door to fraud. As it is well known in the Stock Exchange majority ownership is only a "technique" of control. The issue of control is simply masked by this conceptual idea of ownership. Let us take an example:

Mr Maxwell buys 50% plus one share of company A. For simplification we will say that he owns � of company A. This entitles him to control (existentially own) company A. Now he uses capital of company A to buy 50% plus one share of company B. This will also entitle Mr Maxwell to control company B. Yet, he only owns � of the shares of company B. Now he uses capital of company B to buy another 50% plus one share of company C. Mr Maxwell has control of the company C although he only owns 1/8 of the shares. The process can continue n times, at the end Mr Maxwell ends up with company X in which he only owns � of � of � ...(n times). In this company Mr Maxwell is a "tiny owner", yet he has control of the company.

This fraudulent use of the concept of majority ownership is everywhere in our Stock Exchange. It is based on a "concept" of ownership that denies existential ownership. The result is the exploitation of all the minority owners who have been persuaded to sign the false contract of ownership. In this contract they are not only deprived of their ownership right, but they are also deprived of the rights as lenders, since in fact all they are is lenders.

In Islam, to be entitled to be owner means you can execute your ownership. In a co-ownership all the co-owners are owners. They have identical status as owners independent of the amount of shares. Only the results of the company are shared according to the proportional ownership. In this sense, Islamic Law preserves the existential ownership, because it cannot be otherwise.

Value

In the same way that ownership is fraudulently misrepresented as a concept, also value is misrepresented as a psychological concept.

In Islam, the value is interpreted existentially as exchange-value or price. Qadi Abu Bakr, in defining usury (riba) says: "Riba is any unjustified increase between the value of the goods given and the countervalue [of the goods received] ". Here it is clear that in the commercial transaction the values are the same.

Ferdinando Galiani in his "Della moneta" (1750) was the first economist to point out that the value in the exchange is a "subjective" matter: subjective value. He argued that the balance between the value of one thing and that of another is an idea in the mind of the individual. In other words, the value of the goods is established by the psychological evaluation of the two parties. Each one has placed a higher psychological value on the goods that he is receiving, than in the value of the goods he gives. Otherwise neither of them will be motivated to do the exchange. This psychological value overrides the exchange-value. The essentialist concept of value overrides the existential value.

Jeremy Bentham using the same subjectivist approach can easily argue in favour of usury in his book "Defence of Usury" (1780), because for him any commercial transaction is unequal anyway. What he calls value is subjective and therefore different for the two parties -just like in usury. By removing the existential aspect, the value is no longer seen as a human act but rather as a concept in the mind of the individual. Consequently, Bentham can affirm that "trade is like riba". Just like Allah says in the Qur'an when he warns us against the people who say "trade is like riba".

Of course, this change in meaning opens the doors to fraud. This fraud is the total domination of usury over trade which results in the human misery and exploitation that we can see across the planet. The root cause of this problem is the saying "trade is like usury" which can only be formulated (justified) if value is no longer a human act but a psychological concept.

Now we can appreciate what Heidegger means when he says "the priority of 'existentia' over 'essentia'". The opposite means the reification of man and ultimately its imprisonment in a world of self-induced fantasies.

This case against Economics deserves a lot more commentary but we are only here to outline the problems. It is up to us to enquire about them and to go further into understanding our world and our deen. What we can say in conclusion is that the concept of man as seen by Human Sciences is false, because man cannot be reduced to a concept. The fact that the economists will refute this allegation only proves that they cannot see any other way. If this is way of thinking is allowed to rule the world mankind will remain a slave within his own thoughts. This is where we are today. Islam is the only solution to this problem.

It follows that the idea of Islamic Economics, that results in Islamic banking, Islamic Stock Exchange, Islamic Insurance, Islamic inflation, etc., is simply a complete misunderstanding of both Islam and Economics.

May Allah give us the right guidance to recognise His Commands and the will to execute them here and now. Amin.

References

• BT, "Being and Time", Basil Blackwell, Oxford, 1962.
• IT, "Introduction to Metaphysics", Yale University Press, 1959