Hi Vickie,
Perhaps you missed this in my previous post, so I'll repeat it here:

Vikkie, in your article you quote Italian economist Lorretta Napoleoni as follows

"It should not be surprising that Italian economist Loretta Napoleoni states 'Islamic Banks…are the life-line of Wahhabi insurgency, they are the feeder of Islamist armed groups, without them terror-donations could not reach the end users scattered around the world'."

What should not be surprising? Have you read Napoleoni's other book 'Rogue Economics'? Are you aware of her views regarding Sharia finance?

Happy googling :-)

salaams

Yes I was aware of her views Grateful and despite them she still said Islamic banks are the lifeline of Wahhabi insurgency...I quoted her because she says this despite her support of the concept of sharia finance...

I am not going to be able to comment for more than a week now as will be away but seems the conversation has come to an end anyway. Many thanks for your respectful communication Grateful. Kind regards Vickie

But we come back to the point of misrepresentation. Consider the transcript of Napoleoni's interview with ABC's The World Today.

Let's begin with her analysis of the financial system that you are defending as ethical:

"ELEANOR HALL: The subprime crisis then is a direct consequence of rogue economics?

LORETTA NAPOLEONI: Yes it is. If you look at how the crisis came about, it came about through the transformation of a growing debt into an asset and that was made possible by the usage of derivatives. Basically applying this derivatives to mortgages was possible to transform this debt into an asset and sell the debt as an asset across the world.

There was no regulation in place to prevent something like this to happen.

ELEANOR HALL: I want to mention now one of the startling links that you draw. You say that there is a link between democracy and slavery. What is this link?

LORETTA NAPOLEONI: Well, basically we see that as democratic countries multiply, why this process happen, slavery start rising. By the end of the 1990s we had 27 million people who were actually slaves in those countries which had undergone the process of democratisation.

ELEANOR HALL: And you are not talking about wage slavery. You are talking about slavery like the sort of slavery trade we saw a couple of centuries ago, aren't you?

LORETTA NAPOLEONI: Yeah, I'm talking about real slavery people who are deprived of their freedom. People who are trading as merchandise. Now the first sign of this resurgence came actually right after the fall of the Berlin Wall when women from the former Soviet bloc were started to be traded as sex slaves and prostitutes in the west.

ELEANOR HALL: Who was doing the trading?

LORETTA NAPOLEONI: Well predominantly it was the Mafia. Initially, but then other organisations got involved so to a certain extent it is poor people enslaving other poor people and with the food crisis now hitting really hard, we will, for sure see another surge in the number of slaves."

cont...

cont...
Now let's see what she has to say about Sharia-compliant finance and the future of the global financial system:

"ELEANOR HALL: Now Islamic finance. Interestingly you say that it is the sole global economic force that can challenge rogue economics. Why?
LORETTA NAPOLEONI: Because it has a built-in code of ethics which we do not have anymore in western finance and this code of ethics comes from the Sharia law. Now when we say Sharia law people tend to associate it with something negative now we've got to explain that the Sharia law is nothing to do with the manipulation which has been done of this law by people like Osama bin Laden and the fundamentalists of Islamic.

Sharia law code of ethics which is very similar to the code of ethics of the classic British economist Adam Smith, David Ricardo. For example, money should not produce money. Money should be invested in the real economy and through the growth of the real economy, produce money.

So that is a fundamentally important concept which we have lost to a certain extent. The subprime crisis, it is created by an instrument which is based upon lending money that creates money.

ELEANOR HALL: So instead of a clash of civilisations, we essentially have a clash between rogue economics and Sharia economics?

LORETTA NAPOLEONI: Yes, that is a very good point. We do have a clash between rogue economics and Sharia economics whereby Sharia economics is the only force today that will be able to control rogue economics and bringing back within the rules providing, of course, Islamic finance does not fall into the hands of radical groups as you know al-Qaeda and Osama bin Laden."
http://www.abc.net.au/worldtoday/content/2008/s2250284.htm

Not only is she saying sharia finance has an ethical foundation that is absent from the Western system, but that it is the only hope for what she describes in her book as a "New Social Contract"

cont..

cont..
In the last chapter of her book, Napoleoni predicts

"The gold dinar will become the benchmark of monetary stability and receive a global endorsement....The fiduciary nature of money will require the involvement of the state to guarantee that paper money maintains its value in gold. People will willingly delelgate such responsibility to the politicians, and in return, they will have stable exchange rates.
Politicians will refrain from intervening directly in commerce and economics. Islamic finance, with its encoded value system, will reduce and eventually crush the power of outlaws. The rogue nature of the economy will be trimmed by sharia economics. The outlaws will be shuuned through a code of ethics that prohibits such businesses as gambling, prostitution, pornography, and trade in illegal drugs. Hedge funds and private equities will be regulated by a financial system that rejects the concept that money can create money." p266, Rogue Economics

In her terms, you are a supporter of a rogue economics which has "created victims of millions of ordinary people whose lives have become trapped inside a fantasy world of consumerism", where "unscrupulous entrepreneurs trade without restriction".

Vickie, Napoleoni's of Sharia financial could not be any more different from your view, and yet you have used her in support of your argument or, as you like put it, your "teachings" on Sharia finance.

Clearly, we need to explore this divergence...the conversation is far from being at an end.

Until next week then,

Salaams
Glenn

Perhaps you need to share that with the sharia scholars in Pakistan who still endorse capital punishment for 'blasphemy' and Afghanistan who even discuss in contemporary government reintroducing capital punishment for apostasy - or Saudi that beheads people for witchcraft and forbids non-Muslims entry to Mecca and the authority on sharia, the Grand Mufti who recommends ridding the peninsula of churches. All these are sharia judgments too. Which sharia Grateful - that is the problem. These are all legitimate sharia norms too. That's the problem. As one visiting Sheik replied when asked in Melbourne if suicide bombing was lawful... he said 'well there are two schools of thought and both are valid'...that is the issue we have. There are different schools of sharia thought and both are valid. Why not just be ethical and use conventional finance ethically - sharia offers other options that have theological legitimacy but are not ethical at all. This is not to demonise Muslims but to recognise the inherent problems with sharia.