Unit 2 Paper

OK, so Capitalism in not sustainable.

Now what?!

Hisham El Sherbini

AMSR7

Team 2

December 2016

Table of Contents

1. Introduction .................................................................................................................................. 1

2. Money ........................................................................................................................................... 1

3. The options ................................................................................................................................... 3

4. Gift ................................................................................................................................................ 4

5. The role of Islamic Social Business in Alleviating Poverty and Social Inequality ............................ 6

6. Action/Experiment ........................................................................................................................ 7

7. Conclusion..................................................................................................................................... 7

8. References .................................................................................................................................... 8

Hisham El Sherbini Unit 2 Paper

Page | 1

1. INTRODUCTION

In my first paper, I was keen on exploring different views on whether Capitalism is a

sustainable system. My conclusion was that, in a best-case scenario, it cannot continue in its

current form – in terms of relentlessly pursuing growth, accumulating capital and exploiting

human and natural resources. The other scenario, which I am more inclined towards, is that

“Alternative Systems” need to be explored and developed in order to gradually weaken and

eventually replace Capitalism altogether.

2. MONEY

I could not have agreed more with the Eisenstein’s (2011) use of the word “profane” in

terms of money associations. Typically, the use of the words “corrupt, “filthy” and dirty” is

associated with money. When we ask Why questions such as Why is there a biodiversity

crisis? Or why are we drilling for more oil knowing that it causes pollution of the

atmosphere? And down a couple of levels of Why if we use a Root-Cause Analysis method

such as the 5 Why’s (Jones & Womack, 1996), we always get to money (Eisenstein, 2011).

Growing up in Egypt, money, whether we had it or not, was not important. In my young

years after graduating from college, I was paid pennies and I spent most of it on transport.

There was no way to save but it did not matter, not at all. And friends of mine were even

less well-off but it did not matter. And it did not matter because we valued other things; we

valued each other, we valued each other’s company and, if anyone needed anything,

instead of going and “buying” that service or product, we found ways of delivering it

without involving money. For example, if it was a skill then we source a friend of a friend to

do it, without money. If it was a product, we find someone who had it but does not need it.

That “system” is what we “sacred”. Basic human interactions were not “commoditized”. We

were living a life of gratitude and we were “Gifting” back all the gifts we receive.

It was not until I came to the UK and Europe that I realized that “money” was given way

more value than people. For example, as part of my involvement with CouchSurfing, a

travellers’ community that is supposed to bring people together, I remember, when I invite

people to join our social gatherings, some invitees would say “I cannot afford it”. And I get

Hisham El Sherbini Unit 2 Paper

Page | 2

so puzzled, what can you not afford? Going and talking to human beings?! If you join us at a

café, you don’t have to buy anything. You can ask for free tap water.

And it’s not just that but also how everything is turning into a commodity, that has a price.

Who would have thought that asking my neighbour to pick up my kids from school is going

to have a price tag on it? Or if my neighbour can help me with some simple DIY work at my

place that I would have to pay them?

And this is where Capitalism comes in. That relentless need to “grow” requires the creation

of new goods and services and target new markets hence the need to commoditize anything

and everything that could be commoditized. It had to find something that people used to

get for free or did for themselves or each other and take it away and then sell it back to

them. This is how we get cut off from nature the same like we get cut off from community

(Eisenstein, 2011).

It is interesting to see how Money transitioned from simply being a “facilitator of

exchanges” to the opposite, the “agent of scarcity”. But perhaps it is ‘is not something that

has to be ‘invented’ in order to facilitate exchange between strangers holding pre-existing

specialised goods. It is the very thing that creates the potential for there to be strangers

trading specialised goods in the first place’ (Scott, 2016).

Anyhow, the question is “how”, “why”, “what caused that”? It’s been generally assumed

that “Greed”, a human nature, has to do with it. I admit that it always crossed my mind and

that we have to implement controls to restrain our greed. After all, there is no such thing as

a free market (Chang, 2010).

At the same time, “greed” seems to be no more than a perception when we see how that

rich people, sometimes, tend to be less generous than poor people. So, perhaps besides

greed, it is that perception of “scarcity”? Which is quite interesting, in a world with

abundant resources. So, this “illusion” of scarcity had to be created, once again by the

financial system of Capitalism, in order to create the need for the system to work. Hence,

money, in its current form, has turned abundance into scarcity which engendered greed

(Eisenstein, 2011).

Hisham El Sherbini Unit 2 Paper

Page | 3

3. THE OPTIONS

Being a newbie, I wanted to start by, at least, understanding the options. There are many

ways to “change money” as Table 1 below illustrates.

Table 1 - Ways to Change Money

Method Key Features Example

Change how we interact with

the ledgers

One big public ledger rather than a series of

privately-controlled bank ledgers

A decentralised network of ‘techno-clerks’ that

process the transactions, rather than a closed

cartel of banks

Fintech &

Mobile

Payments

Change the power dynamics

of who controls the ledgers

The key feature of this system is that rather

than X owing units to Y in particular, X owes

them to anyone who is on the system and Y can

claim from anyone in the system. These units

are essentially ‘money’… socially constructed

claims upon value

Cryptocurrency

Change who gets to issue it An interest-free credit system based on

reciprocity where someone claim goods or

services from you. It is noted down in a central

ledger and they return them in exchange over

time.

Mutual credit

Change what it is

redeemable for

The Brixton Pounds are essentially vouchers

issued by the Brixton Pound organisation that

are completed backed by normal pounds. This

makes the system easy to understand and safe

but it means that it is essentially a localised

version of the British Pound. There is no credit

system.

Brixton Pound

Hisham El Sherbini Unit 2 Paper

Page | 4

Change the internal

properties of the money

Reversing the interest, becoming negative

interest

Demurrage

Find ways to bypass it

entirely

Sharing systems and not keeping score Gift Economy

Alter the financial

institutions that dominate

the standard money system

Approach 1: Change the mission of the bank –

social banking

Approach 2: Change the ownership structure of

the bank – cooperative banking

Approach 3: Change the geographic scale &

focus of the bank – local banking

Social banks +

financial reform

initiatives

(Adapted from Scott, 2013; 2016)

4. GIFT

It is becoming more and more obvious to me that one of the solutions, rather than the

solution, is to go back to our roots, to our nature, to go back to Gift Relationships. I am also

intrigued and convinced that one of the most effective ways to intervene in a system is by

challenging the ‘mindset or paradigm out of which the system — its goals, power structure,

rules, its culture — arises’ (Meadows, 1999).

The fundamental principles of a Gift Economy roughly correspond to those of a Monetary

system as Table 2 suggests.

Table 2 – Gift Economy vs Monetary System

Gift Economy Monetary System

Connecting the provider of a gift with the person who

needs that gift

Medium of Exchange

Acknowledging and honouring those who give

generously of their gifts

Unit of account

Hisham El Sherbini Unit 2 Paper

Page | 5

Coordinating the gifts of many people across space

and time in order to create things transcending the

needs or gifts of any individual.

Store of value

(Adapted from Eisenstein, 2011)

I now recall and realize that I have been part of many Gift paradigms, without specifically

knowing that that’s what it is. I always loved to be part of them and I always kept looking for

them. To me, it seemed common sense to live in similar communities like the ones I used to

experience back in Egypt. Some of them are shown in Table 3 below:

Table 3 - Some Gift Paradigms

Gift Paradigm What it’s about

StreetBank

(www.streetbank.com)

1. Give things away

2. Share things

3. Share skills

CouchSurfing

(www.couchsurfing.com)

1. Travel the world – you can stay with locals in every country on

earth.

2. Rediscover your city – There's a community of Couchsurfers

near you. Make new friends.

3. Become a host – Give back and open your home to travellers.

Streetlife

(www.streetlife.com)

To help people make the most of where they live by connecting

with their neighbours and sharing practical information, advice

and resources.

Freecycle

(www.freecycle.org)

A grassroots and entirely non-profit movement of people who are

giving (and getting) stuff for free. It's all about reuse.

But it now seems to me that every one of them had issues:

Hisham El Sherbini Unit 2 Paper

Page | 6

StreetBank has relatively little penetration even though it’s been there for a while

and even though it acquired another community (JustForTheLoveOfIt).

CouchSurfing has changed from being a non-for-profit organisation into a “Certified

B Corporation”. Since then, there has been a revolt in the community with a lot of

members expressing their frustration at that change and some leaving it all together.

Streetlife has a “business” side of it. Some people used it to advertise their local

businesses which would conflict with those providing free services or skill-swap.

5. THE ROLE OF ISLAMIC SOCIAL BUSINESS IN ALLEVIATING POVERTY AND SOCIAL INEQUALITY

One of the main issues of Capitalism that angers me is Social Injustice. Social business and

enterprise are some of the contemporary innovations that suggest the world should be

diverted from “selfish” capitalism to “selfless” social capitalism.

Interestingly, many of these are embedded and compulsory responsibilities for Muslims that

I have experienced myself. One of the teachings of Prophet Mohammad (PBUH) is that ‘the

rich cannot sleep contentedly while his neighbour sleeps hungry’. Islam does not only

require the payment of Zakat, which is considered as a right of the poor people to the

wealth of rich Muslims, but also highly encouraged the practice of Qard Al-Hasan (interest-

free loan), and the spending of Sadaqah (charity) and Waqf (donation) to alleviate poverty.

It is not surprising then that Muslims are Britain’s top charity givers (Gledhil, 2013).

Due to the religious commitments, IFIs (Islamic Financial Institutes), compared to the

traditional financial ones, should play a greater role in ensuring social and economic welfare

through the equitable distribution of income and wealth, social justice, environmental

balance and promoting economic development. In the last three decades, the Islamic

finance industry has been experiencing continuous development and growth all over the

world, which proves its effectiveness. But since the objective of this industry should not only

be about making profit but also to serve humankind, it is perhaps the right time for them to

take responsibility for the poor in the society and to attempt to solve the social problems.

In addition, many Islamic charity organizations such as Islamic Relief, Islamic Aid, Muslim Aid

and more are allocating Qard Al-Hasan, Zakat and Sadaqah and mobilizing these funds to

contribute to mitigating social problems and reducing poverty (Aziz & Mohamad, 2016).

Hisham El Sherbini Unit 2 Paper

Page | 7

6. ACTION/EXPERIMENT

I reached out to a friend of mine who always posts about Sustainability. His name is Chris

Agnos. I did not realise how much what he writes about and talks about resonate with me

until I interviewed him for an hour long (and I recorded the interview). He totally agrees that

Capitalism has to go and the best way to do that is to weaken it by attracting people to

other systems hence moving naturally away from it causing it to seize to exist.

His Transition Consultancy, Sustainable Human (http://sustainablehuman.com/) is exactly

about Gift Economy and he’s championing a system called “COPIOSIS”

(https://copiosis.com/). It uses a different kind of “money” called net benefit reward (NBR)

which is the reward that society gives people for creating a net benefit. A net benefit is

created when the positive aspects of a certain activity outweigh the negative ones.

7. CONCLUSION

A lot of people are really doing something about all the damage that Capitalism has brought

to our planet and our lives. They are putting a lot of time, energy and passion. Many

systems of Gift economies are emerging and many other alternatives of traditional money

systems as well. This is becoming way more real to me than any other time and I’m very

optimistic that the transition will occur.

Hisham El Sherbini Unit 2 Paper

Page | 8

8. REFERENCES

Aziz, M. N., & Mohamad, O. B. (2016). Islamic social business to alleviate poverty and social

inequality. International Journal of Social Economics,43(6).

Chang, H. J. (2012). 23 things they don't tell you about capitalism. Bloomsbury Publishing

USA.

Eisenstein, C. (2011). Sacred economics: Money, gift, and society in the age of transition.

North Atlantic Books.

Gledhill, R. (2013). Muslims ‘are Britain’s top charity givers’ Retrieved 11 December, 2015

from http://www.thetimes.co.uk/tto/faith/article3820522.ece

Jones, D. and Womack, J. (1996) Lean Thinking: Banish Waste and Create Wealth in Your

Corporation, New York: Simon & Schuster.

Meadows, D. H. (1999). Leverage points: Places to intervene in a system (pp. 1-19). Hartland,

VT: Sustainability Institute.

Scott, B. (2013). The heretic's guide to global finance: hacking the future of money. Pluto

Press.

Scott, B. (2016). Brett Scott - Finance Innovation Lab presentation.