Skip to Content, Navigation, or Footer.
The Daily Lobo The Independent Voice of UNM since 1895
Latest Issue
Read our print edition on Issuu
Chris Sherlin takes notes during economist Loretta Napoleoni's lecture on the global financial crisis Monday at the SUB.
Chris Sherlin takes notes during economist Loretta Napoleoni's lecture on the global financial crisis Monday at the SUB.

Economist: US could benefit from Islamist ways

The U.S. may be able to solve its financial troubles by being more like Middle Eastern countries.

At least that's what Loretta Napoleoni, author of Rogue Economics: Capitalism's New Reality, said during a presentation in the SUB on Wednesday.

She said the banking systems in Islamist countries operate according to religious laws and are more successful for it.

Napoleoni delivered the keynote address for the International Studies Institute's lecture series "Global Instability: Causes, Consequences and Cures," which continues today and Thursday.

Napoleoni has written several books, including Terror Incorporated and Insurgent Iraq. She earned a master's in international relations from Johns Hopkins University and a Ph.D. in economics from the University of Rome.

Napoleoni said that in Islamist finance, banks do not charge interest for loans and that this encourages entrepreneurs.

Enjoy what you're reading?
Get content from The Daily Lobo delivered to your inbox
Subscribe

"Money has to be invested," she said. "It has to be invested in the real economy, and through real growth, they can produce more money. This system could help us to get out of the current crisis."

Charles Kalm, a graduate assistant from the International Studies Institute, said Americans need to heed the advice of economists like Napoleoni.

"I think that we can all agree that our economic system is malfunctioning," he said. "There are a number of things that are going to have to happen to help the average guy, all of the working people, the banks and to help with the main problem, which is faith in the economy."

Napoleoni said that in Islamist economic systems, a person buys a bond from a bank to finance a project and that the bond's growth is determined by the success or failure of the project.

This means banks might not regain the funds they loan out.

"The relationship between the bank and the individual is completely different," she said. "The concept is actually risk-sharing: The bank and the customer share the risk."

She said that in the Islamist banking system, all transactions have to be approved by a religious committee, which decides whether an entrepreneur's business plan is in keeping with the Shari'ah, a set of religious laws that can be applied to finance.

"Every single product that an Islamic bank produces has to be Shari'ah-compliant," she said. "You should not invest in prostitution; you should not invest in pornography businesses; you should not gamble; you should not speculate; and so on and so forth."

Napoleoni said these principles fall in line with classical Western economics.

Student Michaela Rode said the U.S. economy does not work the way it should and is in need of a change.

"It's based on a bunch of corporations that don't care about the people who invest in them or are working for them," she said.

Napoleoni said voters are responsible for electing the politicians who made decisions that led to the U.S. credit crisis.

"The issue here is, who is the government?" she said. "The government is us. We elected the government."

Community member Mike Raugh said Napoleoni's speech was thought-provoking but that he did not agree that voters are responsible for the decisions of politicians.

"If we have a democracy, it's a rapidly waning crescent moon," he said.

Napoleoni said there are many things Americans can do to change the U.S. economic situation.

"You can stop buying products of suspicious origin," she said. "You can try to buy more local products. By stopping buying products coming from outside, you can help your local economy. There is a lot we can do, but that requires changing our attitude toward consumption."

Comments
Powered by SNworks Solutions by The State News
All Content © 2024 The Daily Lobo