Speech of Rodney Shakespeare - Christian Council for Monetary Justice, United Kingdom, & London Global Table - www.globaljusticemovement.net. Private address: 11, Charman House, Hemans Estate, London, SW8 4SP, UK.
Tel: +44(0)20-7771-1107. Email: rodney.shakespeare1@btopenworld.com

Bismillah ar-Rahman ar-Raheem (in the name of God the most merciful)

Meaning of the resurgence of the ummah and achieving the best for any society.

Sir, It is a marvellous thing that this Conference has been arranged. I thank you, and your Organising Committee; Trisakti University; and, in particular, Professor Masudul Choudhury who, as a Muslim, unceasingly devotes himself to the key question:– How is it possible to achieve the resurgence of the ummah?
Now I am not a Muslim but I devote myself to a similar question:–
How is it possible to achieve the best for any society, be it Muslim or non-Muslim?

So what is meant by trying to achieve the resurgence of the ummah? What is meant by trying to achieve the best for any society? Well, it means:–
Firstly, that a society should have a sense of morality and a sense of the worth of the individuals who are part of the society. And it’s no use talking about morality. Morality must be given a specific, practical meaning, or it is nothing.
Secondly, it means that the Islamic way forward must be different from the present system. Islam should not attempt to imitate the West. To achieve its best, Islam must find its own way forward, its own, new distinctive way.
Thirdly, trying to achieve the best for any society means that a society should be independent – free from control by others – and that means, above all, that the society controls its own money supply.
For if the money supply is completely controlled by foreign bankers, then a society does not have independence.
And – even more importantly – if the money supply is substantially controlled by the banking system then, also, the society does not have independence.
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Meaning of “exogenous” and “endogenous” money supply.

Perhaps I can say something here about the difference between an exogenous and endogenous money supply.
“Exogenous” and “endogenous” are difficult words but they are an important part of our discussion and if you want to blame somebody for making difficult words part of our discussion, then blame Professor Choudhury………
“Exogenous” means “coming from without, from abroad, from a foreign country” but when I talk of the exogenous money supply, I mean not only money coming from abroad, but also money coming from the international banking system operating inside a country.

And the other word – “endogenous” – means “coming from within” and when I refer to an endogenous money supply I mean a money supply which comes from within the society, and, in the case, of Islamic societies, that would mean money coming from the bayt al mar – from the Islamic Treasury, or central bank.
And, very broadly, I am proposing an increase in the endogenous money coming from the Islamic central bank – the bayt al mar – and a decrease in the exogenous money coming from the banking system or from abroad. In other words, it is proposed to substitute genuinely endogenous money for exogenous money.

This new endogenous money supply, moreover, will be of absolutely crucial importance because the control and use of the money supply decides, for example: –
• whether there is economic and social justice
• whether there is riba
• whether there is, or is not, a widespread ownership of productive capital
• and whether it is possible to increase political freedoms.
And, above all, the control and use of the money supply decides whether there is an efficient wealth creation and – remember – how to relate the money supply to the real economy, to real production, is the theme of this conference.
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The present so-called “free market” is unfree, inefficient and unjust.

Now in order to achieve real production and an efficient creation of wealth, you must have a market economy with private ownership. In particular, you must have a market which is free, efficient and just.
BUT the present so-called “free market” economy in all countries of the world is not a free market. It is unfree because most people are excluded from ownership of what really creates the wealth – productive capital.
It is not efficient because 55% of the world’s population has to exist on under $3 per day.
And as for the claim that the present system is just, well, anybody who believes that, will believe anything.
Indeed, despite its arrogant boasting, the present so-called “free market” system: –
• does not address poverty
• does not address rich-poor division;
• has an abysmal treatment of carers, particularly women;
• has no concept of some form of small secure income for everybody
• does not focus financial activity onto the real productive economy
• does not allow everyone to own productive capital
• does not enable societies to control their own resources and destiny.
• does not end, or at least mitigate, the practice of riba.

And, in particular, the present so-called “free market” most certainly has no intention of ending a world monetary system which is putting everybody into huge, ever-increasing debt – individual debt; company debt; town debt, city debt; country debt. The way debt is rising in the world today is a disgrace. And it happens as a direct consequence of the structure of the present international banking system which is based upon debt and it will soon enslave every individual in the world unless something is done.
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Is it possible to do things differently?

So is it possible to do things differently? Is it possible:?
• to have a moral economy
• to introduce economic and social justice
• to have efficient wealth creation
• to spread the ownership of productive capital
• and to have some form of basic income for everybody, including women?
Is it possible to mitigate, even end riba and to ensure that money keeps its value, indeed, gains in value?
Indeed, is it possible to do all these things and, at the same time, have a genuine market economy with private ownership and, yes, with an increase of political freedoms?
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Gold is NOT the way forward.

Yes, it is possible……………..But not by using gold.

With gold, you certainly have money which keeps its value but that is not the same thing as saying there is wealth in the society. Gold alone does not create wealth. The use of gold certainly serves the interests of those who possess gold but that is not the same thing as saying that the use of gold serves society. With gold alone, the money supply will literally be in the hands of those who possess gold. That is to say, in the hands of the rich who have a tendency to further their own interests and not worry about anybody else.

Now the supporters of gold can certainly claim that gold keeps its value and that it does not have, like modern fiat money, a fraudulent origin, being created out of nothing. They can also claim that the use of gold would be different. But gold by itself cannot claim to be capable of unleashing the massive productive potential of a modern economy. Obsessed with only one aspect of the situation – a desire to see that money maintains its value – the supporters of gold have no means of directly solving large-scale problems, for example, poverty.

Just because the proposal for gold is a monetary reform, it does not mean that it is an adequate reform. Any proposal for monetary change, any proposal, must also bear in mind the need, among other things, for:–
• material prosperity
• economic justice
• social justice
With gold, the money supply could result in such a tight supply of money/credit that it would seem to be impossible for large sums to become quickly available for feasible investment projects. Such projects are essential if poverty is to be removed.
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Zakah
Ah! The gold supporters may say, there is Zakah, the Islamic wealth tax to be used for the poor.
Yet zakah is really a form of charity. Giving charity is not addressing social and economic justice. It is not making a determined effort to address huge rich-poor division. It is not ensuring that everybody has some sort of secure, regular income. It is not ensuring that everybody has some ownership of productive capital. If Islamic societies are to give a lead to the world, they must come up with something much better than a mere charity.

The fact is that gold and Zakah cannot be enough because they fail to address many of the big issues.

Thus the use of gold (and silver) alone, while undoubtedly having an emotional and historical appeal to Muslims, is unlikely to be the means by which the ummah can become a new association of proud, self-reliant societies.
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The way forward.

What, then, is the way forward?

Well, using the Islamic central bank or bayt al mar, it is a way based on a fiat money but a fiat money which keeps its value, (indeed, gains in value) and a fiat money whose creation is not fraudulent. It is not fraudulent because, all the time, it is being directly linked to productive capacity, the productive capacity which provides the wealth on which so much depends.

And here I express my gratitude to Mohammed Iqbal Anjum who opened this conference and explained that a pan-Islamic currency could be a gold-backed currency or an Islamic fiat currency.

Professor Mohammed Umer Chapra, moreover, also sees an Islamic fiat currency as a possible solution. Crucially, he recognises the need for wealth creation, optimum growth, equitable distribution and economic stability and he advocates the existence of an independent Islamic central bank.
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Interest-free loans from the central bank (or bayt al mar).

So what is the proposed use of the bayt al mar or Islamic central bank?
The use has three main aspects:–
• The new endogenous supply of money would not have interest attached to it. It will be without riba because interest is not necessary. There would, however, be a very small administrative cost attached to the money.
• The new endogenous money would be issued and made repayable and, when repaid, it can then be cancelled out of existence.
• All of the new endogenous money is to be directly connected with productive capacity.

The uses of repayable and cancellable interest-free loans issued through the bayt al mar.
The main uses of the new endogenous money supply can now be seen.
There are four:–
Firstly, for public capital investment thereby allowing hospitals, roads, bridges, schools etc. to be constructed for one half, one third or even less of the present cost. One half or one third of the present cost – because there is no interest to pay.
Secondly, for private capital investment if such investment creates new owners of capital and if such use is patently for the benefit of all and is non-inflationary. This is binary economics. By using interest-free loans, administered by the banking system, a company would get cheap money as long as new shareholders are created, new shareholders who are not the existing rich.
Thirdly, for green investment, particularly for clean, renewable energy. At present, using interest-bearing money, a lot of green technology is not financially viable. With interest-free money, however, it would become viable.
Thus we could have clean electricity through tidal barrages, dams, windmills, wave machines, solar electricity, and geothermal power stations.
Fourthly, for small and start-up businesses thereby freeing them from the crushing pressure of interest-bearing debt. In the case of small businesses, there would be no requirement for wide ownership.

Very importantly, these four uses – for public capital projects, private capital projects if wide ownership is involved, green capital investment and small business –
• would back the currency with assets,
• break the grip of usury,
• and because they are directly related to productive capacity, would be counter-inflationary. The counter-inflation would happen because, once the capital project is built, and the money is repaid, the money is cancelled, leaving the productive capital asset behind.
The four uses, moreover,
• would implement a genuine free, fair and efficient market;
• would throw off foreign and financial elite control,
• and would address social and economic justice through the spreading of wide capital ownership and its associated capital income.

The combination of no interest, enhanced productive capacity, and social and economic justice will form a sound basis for the resurgence of the ummah
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Some detail
A few points of detail.
a) Public capital projects. The use of interest-free loans would cut the cost to one half, even one third of what it is at present. But the capital projects can still be built by the private sector, managed by the private sector, even owned by the private sector. Nor is there any need to have more public capital investment than at present ? you can have the same amount. The key point is that the cost is, at the very least, being halved.
b) Private capital projects, using cheap interest-free loans, if wide ownership is involved. The techniques for doing this are the techniques of binary economics.
‘Binary’ means ‘composed of two’ and there are two factors in production – labor and capital.
Thus there are also two ways of genuinely earning – either though owning your own labor and/or through owning capital. The main object of binary economics is to ensure that all individuals in the population have access to both ways of earning. All really does mean all – carers, retired, sick, unemployed, women, children and men. Everybody, over time, on market principles, comes to own an increasing amount of productive capital paying out its full earnings.

When everybody owns capital, moreover, a balanced growth becomes possible. Binary economics states that the more broadly productive capital is acquired over time on market principles, and its income fully distributed to its new owners, the larger the economy will grow. Binary economics gives a capital acquisition right, to every individual. Operating on market principles, this right enables any individual to acquire efficient, income-generating capital assets. The assets pay for themselves out of their earnings.

Have a look at this diagram. (show the GENERAL THEORY DIAGRAM)
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Benefits of binary economics

The benefits of binary economics include:–
• A basic income for all.
• The balancing of supply and demand.
• A change in attitudes towards consumption
• A green growth.
• Clean green energy investment.
Other obvious benefits include the provision of old age pensions; a huge reduction in the need for welfare benefit; an income for children (sufficient to pay for their basic needs); and the ability to stop people getting their income in ways harmful to the environment by giving them another means of being productive.

Crucially, binary economics ensures that all individuals can become, and remain, economically productive. It will establish economic justice and, eventually, eliminate material poverty.
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The rise of the ummah

With splendid achievement in the past, a massive intellectual and cultural heritage in the present, and bundles of obvious talent and resource, the ummah can build a magnificent future. But, if it is to be a successful future, giving a lead to the world, the ummah must have a central concern for social and economic justice. Without that concern, all proposals for reform of the monetary system are worthless.

Sir, through the Shuratic process Islam must work out its own, new, distinctive way forward. In doing so, it can take its ideas from anywhere and I hope that some of the things mentioned today will make a contribution.

Assalamualaikum,
Salam Alaykum (coom) (Peace be with you)
Assalamualaikum (Peace be with you)

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