I presented "David Hume - History of England" at the Philosophy Club of the Villages on 4 November 2011. THANKS to all who attended and made well-thought out comments.
You may download a copy of my Powerpoint show here: HERE
David Hume was born in Scotland (1711) and lived there and in England for most of his life. He published the first volume of his History of England in 1754. He published additional volumes in the years following. Hume died in 1776.
OUTLINE OF MY TALK
1. David Hume and Adam Smith
- His sanguine life and stoic death
2. Early History of England
- Britons (prior to ~43 BC)
- Roman Rule (~43 BC)
- Saxon Invasion (~450 AD)
- Danish Invasion (~980 AD)
- Norman Conquest (~1050 AD)
Ira Glickstein
5 comments:
One of the things that interested me about your resume of Hume's history was the problems that the Jews incurred because of loans. It's obviously impossible for a society to progress without the use of dormant capital by entrepreneurs. Strictly speaking the Christianity followed at that time did not permit loaning money at interest. The Jews by shouldering all the sin were a useful means for getting around this economic problem. What interests me is that many modern Muslims, especially in the US, have found a way of circumventing the same restriction against lending in their religion. I have tried to reproduce below the essential elements of the technique for home purchases without a mortgage, but it didn't work. so all I can do is point you to a web site. (see http://guidanceresidential.com/how-it-works) Up to recently, Muslim home ownership in the US has lagged behind other groups, because of these restrictions.
Thanks Joel for the link that I have made clickable.
It is amazing to me that the medieval society couldn't figure out how to get around the religious law for prevention of usury.
Instead of interest, the homebuyer pays the "Guidance" (what would be the lender in our mortgage system) a monthly fee for use of the home. That makes sense because Guidance, at lease initially, owns the majority share of the home. The homebuyer also incrementally pays Guidance to increase the portion of the home he or she owns, presumably reducing the monthly fee. At some point, the homebuyer owns the whole house and does not have to pay Guidance any more.
I understand the same scheme works for someone who needs money to buy a business.
However, since the ownership of the home or business is split between the buyer and Guidance, does the former need permission to make changes to the property? Does Guidance share in the increase (or decrease) in the value of the property? In other words, if the property goes up (or down) in value does teh monthly fee for usage of the whole property change?
Ira Glickstein
Hi Ira,
I don't know the answers to your questions, but I'm sure they can be found at http://en.wikipedia.org/wiki/Islamic_banking#cite_ref-18 The article is too complex for me. There may not be a single answer, since these shariah-compliant techniques are human inventions to get around the Koran. One group or another may say that another is usuary.
Joel, I read your link and now I understand there are a variety of different ways Islamic Banking has to get around the prohibited riba of collecting interest based on the time value of money.
You may be familiar with the "Rent to Own" stores in poor neighborhoods that rent things like TV sets, appliances, and furniture to people, and, if the renter pays for the set period of the agreement, they own the item. Of course, if you add all the rental payments together, they are considerably more than it would cost to buy the item at any department store.
I have also heard of "land contracts" where a landowner basically rents a property, such as farmland, to a tenant, with the agreement that, after a certain number of years of paying the rental, the land will change ownership to the renter.
Both of the above are schemes that take advantage of poor (and sometimes desperate and ignorant) buyers. And, both would pass muster with Islamic Banking.
This all reminds me of the well-meaning relative who bought our daughters a game called "Anti-Monopoly" that was basically Monopoly, but with altered terms and rules. After a while, I proudly noticed that our daughters were using capitalistic terms and "buying" properties and so on. They had converted the game to a selfish pursuit of profit, by another name, but still profit!
So, Islamic Finance, at bottom, is lending money at it's time value. They just use different words to describe what they are really doing. I could say the bank is in partnership with me on my home, and that my monthly payments to them are not interest at all, but merely rental for my right to use the portion of the house they own, plus an additional amount that increases my ownership share in the property. Each month, my ownership share increases, the rental portion decreases, and more of my mortgage payment goes to increasing the amount of the property I own.
Ira Glickstein
This sounds similar to the explanation I got from our guide when Claire and I visited Egypt in 2010. In response to my question, " Why do so many houses have rebar sticking out the top?" He replied, that most Egyptians were biased against taking out a mortgage for religious reasons so people just saved up and built as much as they could afford...the rebar was the story they ran out of money on.
However, the ones that wanted to build the whole house at once got around the mortgage question with this ruse: If I need, say 10K, to build my house, I sign a note with the bank that I've borrowed 12K and they give me only 10K but I have to pay back the 12K to the bank! Nobody but me and Allah and the bank knows about the hidden interest charge...
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