Last March, Freddie Mac began investing in non-traditional “mortgages”
designed to circumvent the Islamic prohibition on usury, the paying or
receiving of interest. In essence, a broker buys the house and sells it to
the resident a piece at a time, charging rent instead of interest. Since
nothing called “interest” is charged, the contract is judged Islamically
legitimate by Muslim clerics. This arrangement is a pleasant fiction, as
the homeowner pays the same amount or more for the money which buys the
house as he would if he paid interest. However, this fiction is a positive
step for Muslims in America because it represents an accommodation of
Islam to reality, to successful life in this world.
Islam, like most religions, is concerned primarily with the afterlife,
and justifies itself through faith rather than reason. To succeed and
prosper in this life, one must focus on this life and act according to
reason rather than blind faith. Muslims in America, for example, must act
in ways abhorrent to millions of Muslims around the world—accepting the
self-sufficiency of women, accepting the public mixing of the sexes and
accepting that freedom of religion extends to blasphemy, for example. To
succeed in America, Muslims must value success and prosperity in America
over adherence to Islamic custom.
There is a long religious history of the prohibition of usury. Exodus
Chapter 22 bans the taking of interest from the poor people of God. Canon
law of the Middle Ages forbade the practice to Christians, Martin Luther
denounced the practice, while Calvin forbade the taking of interest from
the poor. As Europe entered the Enlightenment, however, people chose
reality over religion, rewriting, reinterpreting, and quietly discarding
the restrictions on usury to the point where they are largely forgotten
today in the Christian world.
Many in the Islamic world have called for an Islamic Enlightenment.
What the Enlightenment meant was a turning away from religion to the
things of this world—to science, commerce, prosperity and happiness. If
Muslims begin to place success in this world above obedience to Islamic
law, either by ignoring Islamic law or by reinterpreting it, that is
excellent news for Muslims and good news for us all.
Freddie Mac press release: