Arguments Against Interest from Economic and Legal Aspects in Islam and Christianity

Abstract

Mainstream economists, and most non-economists, as well, consider the existence of interest as a matter-of-course. Moreover, some economists say that it is an essential regulator of the economy, which creates a balance between savers and investors, regulates the borrowings, and it is an essential tool for the central bank's monetary control. In our study we examine the role of the interest in the Christian and Islamic moral and economy. Comparing arguments for and against interest it became clear that – even if it was not discussed in detail – the pro arguments can be easily challenged, while counterarguments are considered as moral argument by mainstream economics forgetting the fact that the science of economics has emerged from ethics. In a system of interest payment every player of the economy has to pay interest, while in the Islamic monetary system, not only profit and loss are shared between the lender and borrower, but they also have to give to the poor. Within the framework of the moral side, we are curious about the methods by the Islamic economy works without interest, if interest itself is so important that it substantiates the whole economic mechanism.