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- Our financial misery needs moral solutions
Our financial misery needs moral solutions
13 October, 2008 | 1 Comment
I remember the day Lehman Brothers went belly up; I was hosting a Ramadan Iftar event for the Civil Servant Islamic Society. One of the speakers mocked them for being greedy. I agreed with the speaker about these companies being greedy however I found the mocking difficult to stomach for a simple reason – there were many innocent victims who have unfairly lost their jobs and life savings in this saga. We should never laugh at the misery of others.
I could not believe my ears when I heard that our government is bailing out the banks using tax payers’ money. In my opinion this is rewarding those who made the mess in the first place. I would have liked to have seen a more robust and principled approach taken by the government to reign in those who have been simply shamelessly greedy. The bankers and the executives of these financial institutions have behaved irresponsible, callous and in total disregard to the well being of their customers and us all. In other professions they would have been investigated for criminal activities.
We would all agree this a time of national crisis and during such a time every citizen has a moral duty to lend a helping hand to prevent our economy from sliding further into deep recession.
I would like to propose the following steps that the government and us all could take both individually and collectively to help stabilize our economy -
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Moratorium on bonuses - All the CEO’s, partners, board members and senior executives of these firms should be ordered to pay back 50% of their last years bonuses and forgo any impending bonuses for this year. There should be a freeze on any pay rise or bonus packages for at least the next three years or until we are out of recession.
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Confiscate luxury assets - All the luxury jets, cruise, yachts, holiday homes and extra houses and flats these people have bought with the bonuses should be confiscated and sold, all proceeds should be used to pay back innocent public their pension savings and the hard working individuals their hard earned savings so that they can simply pay their mortgages and live.
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Freeze on essential food and fuel price – There should a three year freeze on basic food and essential fuel price. Government should cut tax on these items immediately. This will ease the burden of the poor public who are making such stark choices such as whether to eat or keep their homes warm. This is simply immoral. The profit margins of big companies are still grotesque. For example Tesco announced a profit of £2.8bn at the beginning of the year while the rest of us have been making difficult cut backs. BP made a profit of 3.4bn between April and June 2008 alone, of course at our misery as we paid nearly £1.50 a litre for petrol. The companies must be forced to reduce the cost of fuel immediately.
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Tax the multi-nationals – Extraordinary times require extraordinary measures. Our country is on the brink of recession, we are all loosing our savings and cost of living is increasing every day. Yet multi-nationals have made enormous amounts of profit, they should be taxed heavily and the money collected should be used to combat poverty amongst our children and elderly.
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End wasting food – We should give up on buying unnecessary food. When we go to the supermarkets we should not fall victims of the marketing ploys – “buy one get another free”, “buy three for the price of two” and list of promotional adverts continues. Most people end up throwing these items in the dustbin. We do not need them so let us not buy them. This would help ease on the demand and thus supply. There is not infinite amount of food available in the world; our greed has a knock effect on the poorer parts of the world. Now that we are all feeling the pinch let us reflect on the plight of the poor people of the world and end wasting food.
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Invest in ethical funds – We should not just be fixated on the profit we get from higher and higher interest rates. It is unethical to demand continuous profit while refusing to share the losses. There is a popular saying “no pain, no gain”. Our greed is ultimately our undoing and if not us, someone somewhere in the world would have to pay for it. I would invest in ethical funds and should be prepared to share the loss and benefit from the profit.
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about
Ajmal Masroor is director of Communities in Action. He provides consultancy and support to media and various government agencies on Muslim issues.
He is a broadcaster and regular contributor on national radio and TV programmes, and presents his own programme on the Islam Channel and Channel S.
Ajmal has studied in Islamic institutions in Bangladesh, UK and Syria, and now leads Friday prayers in rotation in four Mosques across London.
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You make some excellent points. I got interested in ethics as it relates to finance and investing some forty years ago. In Islam, Sharia based financial structures have a strong ethical component. And partly for this reason, and with around $1 trillion under management, Shariah banking and finance is attracting the attention of the western financial industry.
My popular ethical investing website might be of interest to you. Besides covering the latest global ethical investing news, I frequently carry information pertaining to Islamic finance and investment. The site is at http://www.investingforthesoul.com
Best wishes, Ron Robins