Does Islam Have a Bette Handle on Capitalism?

Have you ever heard of “Riba”?  No, not the red headed country singer.  Riba essentially is interest or usury.  Riba is also one of the most forbidden practices in all of Islam, and is pretty much across the board agreed to be vile by every type of Muslim.  In fact, most Islamic theocracies outlaw interest.  So you might ask, “how can you run an economy without interest” or “what’s the advantage to saving without interest”

Well the way it works essentially is to take what you would normally save and invest it in something that will generate more income (which isn’t interest).  Essentially, it works more like venture capital than investment banking.  A venture capitalist has money, gives it to an up and coming business and in return gets a share of the business.  As the business does better, the venture capitalists investment grows.

On the flip side of that coin, the same start up could go to a bank and get a loan.  The business may experience the same growth, but the whole time the bank is getting paid back and its return on investment is solely based  on interest.  The bank doesn’t care if the business does well or poorly as long as it gets the loan paid back.

So, to return to my original question, does Islam have a better handle on capitalism?  Maybe, maybe not.  But it is really hard to argue that with out interest, investors have a lot more to think about and businesses have a lot more accountability.  Also, without interest payments, more money is circulating amongst the population instead of gathering moths and piddly interest in savings accounts and CDs.

 

Driscoll and Chandler

Two of my favorites

more about "Driscoll and Chandler", posted with vodpod

 

A Heartbeat Away

  This man is a heartbeat away from being the leader of the free world…and people had a problem with Channey, Bush, and Palin.  Seriously?!

 

All I want for Christmas: 2009

I know Christmas was just a few weeks ago, but I had the hardest time trying to figure out what I wanted for Christmas (much to my wife’s chagrin), but I have stumbled upon two things that I think are A-Maz-ING.  The first one is the Powermat.  It charges electronic devices wirelessly.  All you have to do is set them on the mat and they charge.  It also charges laptops with a special adapter.  It is scalable and awesome.

Powermat Wireless Charging from Powermat on Vimeo.

The second thing is Mattel’s Mind Flex which is a mind control game that uses brain waves to move a ball through an obstacle course.  The game comes with a brain scanning headset that manipulates the speed of a fan depending on how hard you concentrate allowing you to control how high the game ball levitates.

So, Santa, all I want for Christmas is a device that transports electricity with out wires and a game that I can control with my mind.  I promise I’ll be a good boy.

 

Reflections on the Semester

Looking back on the semester as Christmas approaches, I would like to take some time to list some areas that have come to the forefront of my mind due to MGT 501.  I have been challenged to think about how my faith effects how I do business.  I always believed that my actions in business presented a good testimony of my faith, but this class has broadened my horizons to areas that I never thought about.  My belief is that all of my actions should be acts of worship to God, and in doing so, I should strive to show the love of Jesus to everyone.  Merely behaving ethically within a narrow view of the world is not the best I can do.  I have been convicted of holding too narrow of a world view.  The areas that I have a new focus on are my stewardship of what God has given me, and how what I do effects others that I don’t come in contact with.  My main goal is now to evaluate how my business practices reflect my commitment to serving God in a manner pleasing to Him.

Secondly, it was nice to be involved in a project that will have a lasting effect on the community.  My part in the bike rack project really utilized my construction knowledge from my past as well as my experience working on strategic planning and building committees.   The best thing about it is that years from now I can show my children the racks all around the city and the county and tell them I had a part in bringing them to the area.  Hopefully they will learn the importance of community involvement.

The best part of the class was having a structured time to evaluate how my business and other businesses are dealing with sustainability and social justice issues.  Sometimes the day to day rigmarole get in the way of being able to take time to do that type of reflection.  I will try to keep that as part of my routine.

 

“Greenwashing” Government?

I just finished reading an article (link here) from the McKinsey Quarterly that summarized a survey of CEOs.  The survey was about CEOs perspective on the social and environmental responsibility of corporations.  The bulk of CEOs surveyed believed that it is important for their companies to be socially and environmentally responsible in order to be successful going forward.  Juxtaposing this against the rhetoric of the recent election, I am having a hard time understanding why the government would want to continue to impose stricter regulation on companies who are trying to clean up their act?  It seems to me that political candidates are trying to exploit the public sentiment that CEOs can easily recognize by examining their bottom line.  What I am trying to say is that I think politicians are trying to take credit for what businesses are already trying to do because people are concerned about the environment and those politicians want to be perceived as the heroes.  Shouldn’t government be encouraging businesses to “go green” instead of punishing them for not?  It is all too reminiscent of the old carrot-and-stick idiom.

 

Just checking in…

I haven’t had much time to write any new posts lately, but I figured I should just get a few thoughts out there.

1. I really like the group project as I wrote in my last post.  I think that it will do a lot of good for the city.
2. I am having a hard time with the second book.  Even though this model is similar in its essence to the model presented in the first book, this model is harder for me to apply to my business.  It is going to take a good amount of work to come up with good ideas.

Just a reminder to everyone: Vote November 4th

 

Biking and the LA Bus system

I just wanted to post a quick blurb about our semester project for MGT 501.  Our group is helping Lackawanna County, COLTS, and Bike Scranton with a project to encourage people to use bicycles as a viable mode of commuting and to make it safer for bike enthusiasts to ride in Lackawanna county. Here is an article from the Scranton Times which makes reference to the project.  This project is a something that I am proud to be a part of.  I remember seeing a TV program about public transportation a few months ago which featured Los Angeles.  They showed a  bus that had a  bike rack on its front and I thought  it was the coolest thing.  I am sure my sister-in-law wished  she had something like this to aid her commute.

 

Grading Obama’s New “Economic Rescue Plan for the Middle Class”

Today Barack Obama announced what he calls a comprehensive economic rescue plan for the middle class.  The major points of his proposal are:

1. Tax credit for employers who hire people to work in the USA
2. Create a pool of funds that could be used by States and municipalities to repair and improve our infrastructure
3. A 1 year moratorium on 401k withdrawal penalties (up to $10k)
4. A 3 month moratorium on home foreclosures

Point 1:  This point is mearly pandering.  Obama’s proposal is a $3k tax credit per employee hired to work in the USA.  Business owners are in business to make money not jobs.  As businesses grow they are more likely to invest in human capital (create jobs).  No business owner is going to take on the cost of any additional employee to get $3k.  Since the dollar amount seems arbitrary, I will have to chalk this one up to pandering.  Grade: D

Point 2:  This is actually not a bad idea.  Maintaining our infrastructure is the government’s responsability, and anyone who has driven on a Pennsylvania road in February and March knows that the government hasn’t been doing their job.  But on a more serious note, this would create jobs and inject capital into our economy in a healthy way.  Also, the benefit to transportation companies would be fantastic.  Grade: A

Point 3:  This is a tremendously horrible idea.  Making it easy to take money out of your 401k after it tanked is a horrible, horrible idea.  As long as that money stays in the 401k, there is no “realized” loss.  The minute it comes out, it’s gone.  People – DO NOT TOUCH YOUR RETIREMENT UNTIL YOU ARE RETIRING.  They are not Christmas Clubs for recessions.  Figure something else out, but do not touch the 401k.  Grade: F (only because there is nothing lower)

Point 4:  I think this is more pandering.  The majority of what I have read about the housing crisis says that it’s bottoming out.  It will get worse if we don’t introduce liquidity (money) into the credit system so that banks can lend.  You can have a foreclosure moratorium for as long as you want, but if when it’s over you still can’t refinance because banks aren’t lending, than what’s the point?  This will have no effect.  Grade: D

Over all, Obama’s plan will have little effect on our economy.  It just doesn’t really do anything besides sound good to Joe Schmoe.  Overall Grade: “I” for ineffective.

 

Christianity and Sustainable Value

The concept of sustainability can be defined as “living today in a manner that does not hamper the way future generations want to live.”  As a Christian, I believe that we were chosen by God to be good stewards of His creation.  I also believe that God created us to worship him.  Man is a being created to worship, and no matter what you believe, you end up worshiping something wether you recognize it or not.  I believe that creation (the world we live in) is not to be worshiped as god, but was created by God so that we would seek to worship Him.  The major tenants of Sustainable Value are environmental and social.  As Christians, we are to take care of the planet because God charged us to be responsible for the Earth.  Also, as Christians we are to be socially responsible.  Mark 12:28-31 says, “28 And one of the scribes came up and heard them disputing with one another, and seeing that he answered them well, asked him, Which commandment is the most important of all? 29 Jesus answered, The most important is, Hear, O Israel: The Lord our God, the Lord is one. 30 And you shall love the Lord your God with all your heart and with all your soul and with all your mind and with all your strength. 31 The second is this: You shall love your neighbor as yourself. There is no other commandment greater than these.”  In this passage, Jesus says the greatest commandment is to love God, and to love one another.  If you are a Christian, the expression of your faith is what you do (See James 2:14-26).  Since we were created to worship God, we can do that by being good stewards of his creation and loving each other as he commanded.  In the end, no matter what your opinion is on global warming, or how to handle the poor, if you are a true Christian, your deeds will result in sustainability.