Muhammad claimed that interest would one day become so dominant that
even those who try to avoid it will not be able to avoid being impacted by it:
The Messenger of God said, "A time will come upon mankind when
they will consume interest." They said to him, "Is that all of the
people?" The Prophet said, "Whoever does not take from it will be
afflicted by its dust." [146]
This clearly describes the state of the world economy today.
As Muhammad predicted, in the modern world it is virtually impossible to avoid
dealing with, or at the very least being impacted by, interest. Just think
about how many people have interest-bearing bank accounts, buy things
using credit cards, and are only able to afford to purchase a home through
an interest-based mortgage. Even if one somehow manages to avoid
dealing in interest directly, almost every aspect of our lives is impacted
by it. Virtually every country in the world, even those considered to be
wealthy, is drowning in interest-based debt. The United States, for example,
is currently wrestling with a debt of trillions of dollars. Central banks
influence the purchasing power of our money, and the financial system
even suffered a global collapse in 2008 because of the widespread practice
of buying and selling interest-based financial debt. This was a disaster
which has plunged the world into economic turmoil, the consequences
of which will be felt for generations to come.
What makes Muhammad's prediction amazing is that the financial state
of the world over the last century is unique in history. At the time of
Muhammad, finance was based on commodities with intrinsic value,
such as gold and silver coins. Gold and silver have been used as the most
common form of currency throughout history. In many languages, such
as Spanish and French, the word for silver is still directly related to the
word for money. Even with the advent of paper money, there was still
a dependence on gold and silver. Initially, paper money was backed
by gold and silver. Every paper note that people possessed could be
redeemed for gold at the bank on demand.
In 1933, the United States
abandoned the world Gold Exchange Standard system, bringing to an
end the existing world monetary system. The paper money that people
held in their hands was no longer backed by physical gold. Under this
new global monetary system, money only has value because governments
say it does. Unlike gold and silver, modern paper money is intrinsically
valueless. Consequently, we now have a system where banks can print
as much money as they wish as they no longer have the restriction of
being tied to physical reserves of gold. Under the current system money
is literally conjured out of thin air. Since banks can now print money on
demand, it means that they can lend more money which in turn results
in the creation of more interest-based debt.
We are living in a time that can only be considered monetary chaos,
as our entire monetary system, as it now stands, is based on nothing
but debt. Every physical coin and paper note has to be borrowed into
existence. With the old system of gold and silver there is a natural order
to money, as its value increases and decreases in accordance with the
supply and demand of the precious metals. Under the current system,
banks can produce as much paper money as they like, and so the supply
of this form of money is entirely elastic, it is entirely flexible. In summary, modern finance is a debt and interest based system that is unique
in history.
The use of paper money with no intrinsic value, along with
the massive debt and interest that it has resulted in, is a phenomenon of
modern finance and not something that could have been easily guessed
by Muhammad over 1,400 years ago.
Now this is not to say that the
concept of interest did not exist at all in seventh century Arabia, we
know that it did because the Qur'an strictly prohibits believers from
practising it: "…they say, 'Trade is [just] like interest.' But God has permitted trade and has forbidden interest. So whoever has received an
admonition from his Lord and desists may have what is past, and his
affair rests with God. But whoever returns to [dealing in interest] - those
are the companions of the Fire..." [2:275].
Moreover, the practice of interest was also prohibited in the Christian world. The Roman Catholic
Church had by the fourth century prohibited the taking of interest by
the clergy; a rule which they extended in the fifth century to the laity.
In the eighth century it was even declared a criminal offence [147]. So
Muhammad's prediction that it would come to dominate the world was
in no way a forgone conclusion. In fact, it must have seemed strange to
his companions, since Muhammad had also predicted that Islam, which
strictly forbids interest, would dominate over all religions and reach
as far as the East and West. The fact that this prophecy was preserved
by his companions shows the complete faith and trust that they had in
what he said, and that it would come to pass, however unlikely it may
have seemed to them.