The Problem With Spirituality And Islamic Banking

I was reading the comments posted in the earlier posts and a small bell went off somewhere inside my head and these thoughts popped up. 

Folks, we have to believe in the power of  The One. And The One is you. The power of one individual person to be able to live a good life. Which is what life should be all about. The purpose of life is to live.  If anyone is confused about this do this simple exercise. Exhale all the air from your lungs now, close your mouth tightly and pinch your nose also tightly with your fingers. Do not allow any air to enter your mouth and lungs. See how long you can last in that condition. Maybe five seconds? The purpose of life is to live well. If you are able to make your own life good and useful then you will also be of greater benefit to those people and animals around you and that surround you. Recall that before the flight takes off (thank you) the air stewardress tells you that in case of  an emergency secure the oxygen mask for yourself first before you wish to help your children or anyone else. Because if you are knocked out then you will not be able to help young children or the elderly. So secure your own position first.

The purpose of life is to live well. Not measured by wealth, piety or fame. But measured in the useful deeds done and that continue to be done by The One to himself and his surroundings which facilitate the living of a good life. Don't forget the One is you. And to be able to win the trust of humans and animals through actions and deeds that are relevant to living a good life.  Being good and being useful are different things altogether. 

Also deeds and not words. Winning the trust of all human beings, including those that dislike you or consider you an enemy (they may be retards). Toyota did not want to be the largest car manufacturer in the world. They wanted to be the best. They did hit best. In the process they also became number one. They delivered trust and they also earned trust - even when some cars had design failures they overcame it by handling it with more trustworthiness.

And it is all up to the individual. Individuals make the difference. Hence in a community where wickedness  is a way of life, suddenly one person stands out in complete contrast to the wicked. He will say "This just cannot be right". In any community, every society, every family, every village, town and city where wickedness and cruelty (zalim or zulm in Arabic) rule some person will come along and say 'This is wrong'. This is the power of The One. That One is you.  

So what is the problem (or similarity of the problem) with Islamic banking and spirituality?

Both of them - spirituality and Islamic banking - cannot prove the core reason for their existence. 

Lets take the easy one first - spirituality. 

After that we will look at the easier one - Islamic banking.

I Googled spirituality and found the following (there is more than one) :

1. "the quality of being concerned with the human spirit or soul as opposed to material or physical things"

2. Another  one liner said :  "spirituality is a worldview and a way of life based on the belief that there is more to life than what meets the senses, more to the universe than just purposeless mechanics".

The first one is too whacky for such a nice morning outside. 

The second line's "based on the belief that there is more to life than what meets the senses" is equally nonsensical and much quicker to dispose with.

You only have the FIVE SENSES - the senses of sight, sound, smell, touch and taste.

There is absolutely no such thing as a sixth sense. 

There is no such thing as a seventh sense !! 

Or nine or 12 senses. 

You only have FIVE SENSES - sight, sound, smell, touch and taste.

The great success of science is that science can only prove that which exists. Even "invisible" things like gravity, fat dissolved in cow's milk, x rays, gamma rays etc are brought into the perception of our FIVE SENSES through detection devices, measuring devices and repeatable experiments. Our FIVE SENSES help us measure gravity, x rays and the fat in cow's milk.  

The microscope is about 300 years old. The consequent discovery of microbes was by chance. Van Leeuwenhoek had no idea what he would see under his microscope. He placed various tiny things under his microscope and then recorded what he saw. It was an eye opener - literally.  Leewenhoek had no SIXTH sense or SEVENTH sense already giving him pre-conceived ideas about what his microscope would be showing him. 

This is Science. Science goes out to see what is around the corner with little or no idea what is around the corner.  Science DOES NOT simply imagine or dream up what is around the corner and then go around the corner trying to prove what it has already dreamed up or pre-imagined. 

So for only 300 years now we have been able to see microbes. Why? Because of the microscope and because microbes exist. A microscope cannot magnify something that does not exist. The microbes have to exist first before the microscope can magnify them.

Imagine modern life today WITHOUT microscopes to see the microbes. There will not be much of modern life. In the same way that microscopes have solved many mysteries of the microscopic, I believe that one day we will solve the mysteries of the creation of the universe. We just do not have the right tools yet. We will develop it one day in the future. I am absolutely confident about this point. The human will solve all the mysteries of the universe through science.

So going back to "spirituality" - still, until today, no one has seen a spirit yet.  

This is the single largest problem of spirituality. 

Why? Because there are no such things as spirits. 

They do not exist. How do we know this with such certainty?

Because your FIVE SENSES - sight, sound, smell, touch and taste - have not been able to detect any spirits.

And they never will. Why? 

Because there are no such things as spirits.

So where do your ideas about spirits and spirituality come from?

Here is your answer : They come from your imagination. 

Let me prove this to you now - instantly.

It is normal for young children to engage in imaginary play acting with imaginary friends. Happens all the time.

Say your five your old son comes and says, "Papa last night I rode on a magic flying horse. We went up in the sky." 

What will be your reaction?  You will say 'Oh my child is so cute. He can imagine the wildest things'.

Fast forward 30 years. Your now 35 year old son says, "Papa last night I rode on a magic flying horse. We went up in the sky."

What will be your reaction? 

You have two options :

Option 1. Your wife might faint. You may get a heart attack. Your immediate reaction will be 'Aiyyo !! Close the windows. Dont let the neighbours hear what he said. Dont tell my family or your family. Lets take our son to see Dr Jega the psychiatrist. He needs serious help. He is delusional.'

Option 2. Or you declare your son a saint - a guru bringing salvation to save mankind. He can start a new religion. You can be the Chief High Priest. People may even start worshipping your son.

So spirituality is pure imagination. 

It is actually a delusion. 

It is a mental condition.

So all those who feel that you are spiritual, you need serious psychiatric help.

So what about Islamic banking? 

What is the connection with spirituality?

It is the same. It is also delusional.

Why is it delusional? 

Because the core of Islamic banking simply does not exist.

What is the core of Islamic banking ?

The Islamic bank must make a profit. 

So how will the bank determine the profit rate?

The conventional banks call it interest rate. 5%, 6%, 8% pa or whatever.

The Islamic banks call it profit rate. Also 5%, 6%, 8% or whatever.

The conventional banks interest rate is determined by market forces. 

No one can exactly predict what will be the interest rate six months or 12 months from now.

It is just not possible.

So how does the Islamic bank determine their so called "profit rate"?

Which they say is determined DIFFERENTLY  from the how the conventional banks determine their interest rate.

The interest rate is also called the cost of funds - to us the borrowing public.

The conventional bank has its own cost of funds which is slightly lower (it has to be lower o'wise how will the bank make a profit?)

Lets take a simple example - the Felda plantations in the Jengka Triangle.

Lets say there are 10,000 square kilometres of oil palm plantations in the Jengka area. 

Only one crop - oil palm. So this is a real world example. 

Ini bukan magic horse flying through the sky tau.

This can be called a palm oil economy.

For an area of 10,000 sq km ALL the oil palm planters have to pay an average RMxx for fertiliser per acre, an average RMyy labour cost per acre, and they harvest an average zz tons of FFB per acre. Some more, some less but there is an average. 

Then they take the selling price, minus all the costs, divide by the numer of tons produced / acres etc and from there they can calculate the Return on Investment. So on average an acre of oil palm plantation in Jengka will yield a certain X % Return on Investment per acre.

This shall be known as the return on the oil palm business in that area. 

Then the conventional banks appear and set up some branches in the area. They start making loans to the oil palm plantations. Can the conventional banks simply wade in and tell the borrowers 'We are going to charge you 15% interest per annum?' The conventional bank will not make a single Ringgit in loans because no oil palm grower will be able to generate enough cash or profits to sustain such high cost borrowing.

So over time the conventional banks will only be able to offer loans at an interest rate that is sustainable by the Return on Investments of the palm oil economy in the Jengka area. And which can also sustain the banks own cost of funds and the banks own cost of operations. This is called the market finding its own level.  That is how interest rates "settle down" for each and every economy in the world.

Then suddenly the Islamic bankers show up. 

They want to determine the 'Islamic profit rate'.

How are they going to do that - different from the average costs per acre of oil palm planting, different from the average ROI per ton of FFB or per hectare of oil palms?

You cannot be any different in determing your profit rate than the conventional bank determing its interest rate WITHIN THE SAME ECONOMIC PARAMETERS. 

Islamic bankers - do not bullshit yourselves. 

The numbers and the calculations are the same. They cannot be different.

You cannot claim to do some sembahyang hajat and magically arrive at your Islamic profit rate' using voodoo economic methods to calculate your numbers. 

So at the end of the day - the core of all banking systems ie determining their cost of funds - cannot be divorced from the realities of the economy around them. 

To say that you have a different, religiously inspired method of determing your cost of funds  is just delusional. 

Just like believing in spirits and spirituality.

Islamic bankers - you too need psychiatric counseling.

I do not expect the people in the kampongs to understand this.

But those of you who have some education should know this better.