Whole Economics

The Whole Economics strand comprises an intention to move:

Away from monetary systems disconnected from real value and embedded in usury;
Towards just economic systems nurturing to life, soul and community.


Introduction: The System that Dysfunctions

The recent and ongoing financial crisis is a manifestation of an economic system that is unsustainable, unjust and disconnected from the real world. We have witnessed a debt crisis leading to billions of pounds raised within a few weeks to bail out banks. Yet, simultaneously, we have witnessed a financial neglect of services such as the NHS and education along with a mindless neglect of ecological justice. Something is very clearly wrong.

Indeed, not only is there an upside down world of priorities, but the capitalist system is a key component responsible for ecological injustice. Rescuing such a system with billions of pounds means more of such injustice – more destablisation of human societies and the wider natural world. What is needed instead is a radical shift to economic systems working in harmony with the natural order. This would mean less to spend on problems otherwise created and exacerbated by the dysfunctional capitalist system. WIN believes that we need to work together to implement a joined-up approach.


A Fictitious Cycle: The Creation of Money

“The process by which banks create money is so simple the mind is repelled.” John Kenneth Galbraith, Economist

“Permit me to issue and control the money of a nation, and I care not who makes its laws.” Mayer Amschel Rothschild, International Banker

As the New Economics Foundation (NEF) point out: “Many people would be surprised to learn that even among bankers, economists, and policymakers, there is no common understanding of how new money is created.”

NEF continue by pointing out that physical cash accounts for less than 3 per cent of the total stock of money in the economy.

So, how do we account for the other 97%. Here’s a good part of the explanation:

  • Commercial banks can literally create money out of nothing to lend (credit) to you and me. It isn’t money they’ve earned. It isn’t money anyone has deposited. It is literally fictitious!
  • Yet, it is lent to people who must pay it back… with interest.
  • Accumulation of interest leads to increasing debts.
  • The pressure to pay off increasing debt means pressure to increase economic activity – i.e. money & profit move to the centre, leading to calculated advertising to engineer human ‘wants’; earth & community move to the margins.
  • In the human world, we experience pressure to do more and more in less time, to serve this fictitious system.
  • It has effects on the material world, putting pressure to manufacture more things to sell, more energy demand (including through fossil fuels), and more waste including greenhouse gases that contribute to climate change; again, to serve the fictitious economic system.
  • As this economic system grows, aspects of the real world shrink and become depleted, such as the depletion of resources, deforestation and shrinking of human rights – so that corporations can expand & local resources can be exploited for profit.
  • At the same time, to enable outstanding debt to be paid off, the commercial banks create more fictitious money to lend with interest.
  • This means more debt!
  • The dysfunctional cycle repeats and repeats…

“Anyone who believes exponential growth can go on forever in a finite world is either a madman or an economist.” Kenneth Boulding, economist

In a system that does not add up, that grows more than it gives, sooner or later it has to collapse – yet when it does what we have seen so far are governments propping the dysfunctional system back on its feet, by bailing out banks and cutting services. There is no surprise that there is public anger across the globe.

We therefore have an economic system in which:

1) Money can be created out of nothing – i.e. is fictitious, often no more than pixels on a screen.
2) The lent fictitious money has interest compounded into it.
3) The above two impact on the real world – on the earth and on communities.


Let There Be No Usury

  • Riba, in Arabic is ‘derived from the verb “raba”, which means “to increase”, or “to grow”. Although there are some divergence in views, the vast majority of jurists have understood it to mean interest rate or usury.
  • Whilst there can be differences of opinion as to whether or not a particular exchange falls into the classification of riba, it is however agreed that the modern interest banking loan, is one kind of transaction that clearly falls into the riba bracket.

The extent to which such a loan is prohibited in Islam is highlighted by the Qur’an in several verses referring to usury. Here are a couple of examples:

“Those who devour usury will not stand except as stand one whom the Evil One by his touch hath driven to madness. That is because they say: “Trade is like usury,” but God hath permitted trade and forbidden usury.” (Qur’an, 2:275).

“O ye who believe! Devour not usury, doubled and multiplied; but fear God; that ye may (really) prosper.” (Qur’an 3:130).

Some impacts of usurious loans have been outlined in the previous section, which highlights reasons as to why spiritual traditions would warn against them.

Thus, if such loans are not an option… what might an alternative look like?

Risk-Sharing Loans

Here’s the basics of one alternative to usurious loans, that is in line with Islamic principles (This draws on the book, ‘The Problem with Interest’: see Further Resources, below):

  • The bank could be an investment advisor for which it could charge a fee.
  • The customer would invest on a profit-sharing basis. Thus, just as profits would be shared, so too would any losses.
  • As repayment of the loan is tied to the success of the project as opposed to a fixed interest rate, a growing level of debt is prevented and loan repayment is more easily achieved.
  • Loans would less likely be granted on the basis of the borrower having a cushion of collateral. This would thus broaden financial opportunities to those beyond the rich.
  • It would appear that such a setup would thus encourage the initiation of small-scale community oriented business projects.


The Medium of Exchange: From Fictitious to Real

Only when the last tree has died
and the last river been poisoned
and the last fish been caught
will we realise we cannot eat money.

Cree Indian Proverb

  • In an Islamic economics, the unit of transaction that takes the form of money would have real value. Thus, paper receipts and pixels on a screen, which correspond to no real wealth, would consequently have no more buying power than their worth as objects in the eyes of the people.
  • Any medium could be used and it would be left to the people who would be free to engage in transactions using whatever medium they choose. The power would thus shift away from banks, and back to the people, thus supporting a real democracy.
  • A fundamental distinction between such a system and the current one, is that in the one proposed, money would remain connected to the real wealth of the finite physical world, for it is only such wealth that would be a candidate for money.

Zakat and the Laws of Nature

In nature, if something is stored, it tends to decay, becoming absorbed into the ecosystem. Contrast this to money in the dominant economics: if money is stored or saved, interest is added, and the money grows. The dominant economic system is working according to certain human-made laws, whereas nature is working according to another set of laws. Our current economic system supports the financially privileged to have more, and those in debt, to owe more. Is there perhaps a lesson in nature? Could it be possible to draw on the wisdom in nature to develop a fairer economy? This is a point at which it would be helpful to reflect on zakat, a core pillar in Islam.

The act of zakat is the giving of a small percentage of one’s wealth – money and crops – (e.g. 2.5% in the case of of money savings) each year to support the less privileged. As in nature, through zakat, surplus resources are absorbed into the wider system; zakat enables a gradual flow away from those who have more, towards those who have less. Zakat is a gentle means of purifying ones wealth (mal) and self (nafs) – indeed nothing is truly ours, as it comes with responsibility – while facilitating a fairer distribution of wealth, which ultimately benefits everyone.

[‘The Book of Essential Islam’ under Further Resources,below, has a fuller introduction to the concept of zakat]


Islamic Economics: A Net Effect

“And the skies has He raised high, and has devised [for all things] a measure,
so that you [too, O men,] might never transgress the measure [of what is right]
weigh, therefore, [your deeds] with equity, and cut not the measure short!” (Qur’ an: 55:7-9)

With the presence of zakat, risk-sharing loans, and absence of usury, an Islamic economics possesses internal constraints that a) help prevent borrowers from running into unpayable debt, whilst b) encouraging wealth to be distributed more evenly.

Simultaneously, using a medium of exchange that has real wealth c) helps prevent the plundering of resources to depletion.

Whether such a radical shift comes under the label of an Islamic, green or a sustainable economics is perhaps of lesser importance than the fact that it appears to offer principles consistent with a whole economics that places life, soul & community above profit.

Case Study: Banks & Corporate Interest

This movement from an economics that is out of balance to one that is whole, is also linked to a move away from corporate domination towards corporate accountability and community initiatives, within the framework of a grassroots deep democracy.

“I live in an area where there are really strong winds that corporations – funded by the World Bank – are converting into energy. In this project there have been a lot of problems right from the start. They did not properly consult us, and instead tried to bribe and force the people into signing away their land. The project has been imposed against the will of the people, through corrupt means, with threats from the state police and threats of imprisonment. The corporations are the ones that caused climate change… For the community it’s dispossession of our lands, they say there’s employment, but where is it? they only recruit people to dispossess their land. For them it’s fine. For them there is money, but for the people working the land, there is no benefit.”

Bettina Czruz Velaquez, Juchitan, Oxaca. (From WDM)


Concluding Comments: The Process of Transition

There is likely to be more than one way and here we have simply outlined basic principles that can take us forward. At the same time, the transition is a process, and we envisage the steps for a transformed economics will emerge through a variety of local and wider people-led initiatives – initiatives that move towards or embody the principles of real wealth, economics without usury, and just transactions, that serve communities, ecosystems and wholeness.


Further Resources


The Book of Essential Islam: The Spiritual Training System of Islam: By Ali Rafea, with Aliaa and Aisha Rafea. Some aspects of the section on zakat on this web page, were informed by this readable book.

Christian Council for Monetary Justice

The Green New Deal: Published by the Green New Deal Group. Gives more background about the causes of the debt cir isis and places it in the context of a climate and energy crisis to formulate a set of solutions intended to be mutually supporting.

Islam & Climate Change: Perspectives and Engagement: By Dr Muzammal Hussain: MA dissertation by WIN Rep whilst at Sussex Uni. One of the most comprehensive papers on the subject. Pages 24-30 provide a good basic intro to Islamic economic principles.

The Problem with Interest: By Tarek El Diwany: An informative book on this crucial subject.