coe163_dar.mp3

Speaker1: [00:00:24] Hey, welcome back, everyone to the Cultures of Energy podcast, it is our special Green New Deal Afternoon Edition Stuff's happening. Woo-hoo. New deals Green ones are being put forward by up and coming, and partially not so up and coming Congress people in the United

Speaker2: [00:00:42] States, fresh women in the a fresh woman in particular.

Speaker1: [00:00:46] And some dude, I guess, is another Massachusetts guy. Yeah, the cosigner. I don't know him as well. Fine. Alexandria Ocasio-Cortez.

Speaker2: [00:00:53] Not as cool as Alexandria. That's right. She's the one. And you know what? I think she was wearing a green coat when she was doing it, thereby making a semiotic message as well.

Speaker1: [00:01:02] In case you didn't get the text, you just look at the fashion and

Speaker2: [00:01:06] You're like, Oh yeah, the color of the blazer. No, it's a really it's a very impressive document. And I have to say it's it's sort of surreal to read these claims, which are brilliant and beautiful and comprehensive claims, not just for energy transition and environmental protection, but really social justice. Like in some ways, the document is kind of like three quarters social justice issues. Yeah, that pivot around the call for a Green New Deal and rebuilding infrastructures and creating new infrastructures like super high speed rail that they say could make plane flights pretty much obsolete within the United States. Wouldn't that be cool? I would love that, actually. If you could just rail

Speaker1: [00:01:49] Around, there's a lot. There's a lot to praise in it. But that point about the expansiveness of the vision has not been lost on its critics.

Speaker2: [00:01:58] Oh yeah. Oh, you think there? You think the Republicans don't like it?

Speaker1: [00:02:01] Oh, I don't think they like it very much, and they don't like it because they see it as a pretext to, you know, reintroduce and strengthen union rights.

Speaker2: [00:02:09] And what's what's in there? It says that,

Speaker1: [00:02:11] You know, and oh my God, helping the poor. That's not something the government should do.

Speaker2: [00:02:14] I mean, they actually mentioned that the ability of labor to organize has been diminished like that. It's very explicitly stated in there. It's also explicitly stated that in the original New Deal, that there that a lot of people were left out of that, including communities of color, et cetera, underprivileged people. And so that this is an opportunity to kind of do the new deal newly and

Speaker1: [00:02:39] Really starting to

Speaker2: [00:02:40] Get to do

Speaker1: [00:02:41] It right. So do you want to just go over the five key points really quickly? You've got them in front of you, I see.

Speaker2: [00:02:46] Yeah, I mean, a lot of the preamble, the kind of background. The argument stuff is really interesting, too. Like they talk about these crises and they talk about how the United States has been responsible for 20 percent of global greenhouse emissions. You know, up through twenty fourteen and also has a high technological capacity and therefore should take a leading role talks about the decline in life expectancy in the United States, the lack of basic needs and transport and education. A four decade trend of wage stagnation, deindustrialization and anti-labor policies that has led to this wage stagnation. The third worst level of socioeconomic mobility in the developed world before the Great Recession. Erosion of earning the greatest income inequality since the 1920s, with the top one percent of earners accruing ninety one percent of gains in the first few years of economic recovery after the Great Recession, a large racial wealth divide. I mean, gender earnings gap with women earning 80 percent. I mean, it's really super explicit about the kinds of conditions that mandate that we undertake these new the new program. So the House of Representatives recognize a new national, social, industrial and economic mobilization on a scale not seen since World War Two is a historic opportunity one to create millions of good high wage jobs to provide unprecedented levels of prosperity and to counteract systemic injustices. So here's the

Speaker1: [00:04:18] Other five points now.

Speaker2: [00:04:19] It is the duty of the federal government to create a Green New Deal, one way to achieve net zero greenhouse gas emissions through a fair and just transition for all communities and workers.

Speaker1: [00:04:29] So that's first, first point there, emphasis.

Speaker2: [00:04:31] Yeah, that's first point to create millions of good high wage jobs and ensure prosperity and economic security for all peoples of the United States to invest in the infrastructure and industry of the United States to sustainably meet the challenges of the 21st century. Number three, to secure for all people in the United States for generations to come ready. Clean air and water, climate and community resiliency. Healthy food. I love this one. Access to nature. And finally, the a sustainable environment. And then finally, this is the fifth point to promote justice and equity by stopping current, preventing future and repairing historic oppression of indigenous peoples. Communities of color. Migrant communities de industrialized communities. Depopulated. Rural communities, the poor, low income workers, women, the elderly, the unhoused people with disabilities and youth referred to in this resolution as front line and vulnerable communities. It's really a powerful message about those the UN included, right? The marginalised, right? Well, predictably, nine percent of the population.

Speaker1: [00:05:44] So it is very inspirational and generally I think it's been very well received by people. The climate woke, especially in the progressive left. There have been a couple points of criticism I've seen come up already that there's not been enough emphasis on urban density and creating kind of like, you know, walkable, livable cities as being one of the key methods forward. There's been some concern about it's agnostic position on carbon taxes. In other words, it doesn't want to go there. It doesn't want to get into that fight.

Speaker2: [00:06:12] Yeah, but the media is talking about they're talking about carbon markets again. So they've got that. There was the economist who weighed in on the 1.5 degree report who had this strong argument about creating the carbon tax.

Speaker1: [00:06:26] Yeah, there are going to be people who argue the carbon tax is the best mechanism for doing this, and there'll be other people who will say, you know, it's not. It's still a kind of neoliberal market policy at its core and thus thus won't be as good as putting emphasis on big infrastructural projects or on income redistribution. You know, but I think the idea was to leave open the doors towards a debate and to try to work these things out, rather than preordained the right policy and specific measures to be taken. So I think that's good. And what else? Yeah. Obviously, the right is hysterical about this to the extent they're paying attention to it. And I have to say I just checked CNN before we started recording. And it's kind of sad that not only is this not the top news, the top news is, you know, Trump versus Adam Schiff over, you know, the House investigation of Trump's finances.

Speaker2: [00:07:15] But the top the top news is the Virginia racist stuff going on.

Speaker1: [00:07:19] No, that's been out of the news cycle.

Speaker2: [00:07:20] A couple not on the New York Times. It's not. That's top billing right now.

Speaker1: [00:07:24] Ok, well, good for the New York Times. Yeah, I

Speaker2: [00:07:26] Guess. No, because there's new stuff. There's new stuff that's coming out. All right.

Speaker1: [00:07:29] Well, maybe new stuff. Maybe I've missed that. But but what I was seeing was the top coverage of the Green New Deal focused on what's interpreted to be Nancy Pelosi's diss of this. It's like Pelosi versus Ocasio-Cortez, and it's just it's irritating when the news covers this as like internal struggle within the Democratic Party rather than isn't it great that finally somebody is coherently put forward a really bold, visionary plan to address not only looming and looming existing environmental crises, but also all sorts of other social problems? A lot along the way. So really? So wrapping it all together, there is really something for everyone in the Green New Deal, you know, depending on how it's

Speaker2: [00:08:14] About a job creation. I mean, that seems to be one of the key spokes of the wheel here.

Speaker1: [00:08:20] Yeah. Well, you build a lot of infrastructure. You're going to have a lot of jobs, right? You read, you retool, adapt, retrofit a lot of infrastructure. You're going to have a lot of jobs there, too. So yeah, it is an opportunity. But yeah, I can see that. Well, it'll be interesting to see what happens. I'm not really that.

Speaker2: [00:08:36] Well, that said, I guess she's I don't know if she actually stated this or if I just read this, that she's not going to bring it up for a vote. No, I don't think she because it's too utopian for her imaginary or something,

Speaker1: [00:08:48] And she fancies herself a climate forward activist, which I guess she has been in the past and I don't think she likes being trumped by. Sorry for the choice of word by Ocasio-Cortez, but nonetheless, it's good that this is out here, and I hope that this does not devolve into kind of posturing between the center and the left wings of the Democratic Party.

Speaker2: [00:09:09] Well, it's just an even, you know, as we'll see, you know, how it kind of moves along. Maybe people will take some of these ideas or most of them and put them into different bills and forms so that it could get passed in different ways maybe doesn't happen in this one. A comprehensive document, but it is nice to be able to point to this one comprehensive document and so that we don't have to hang our head in shame everywhere else on the planet, which we mostly do most of the time, but can say, like, look, at least we have a few good people in Congress who are trying to do something radically

Speaker1: [00:09:40] Better, right? And even though, yes, there are probably flaws and allusions and omissions from this short text, but I think there's a lot in here to like and to stand for, and I personally be very happy to rally behind it. And, you know, street walk and, yeah, knock on doors and, you know, try to get people out in support of it. So I'm looking forward to the next opportunity to do that.

Speaker2: [00:10:01] It's going to be some mechanism to do that. Or you oh, it's called an election.

Speaker1: [00:10:04] You're going to happen from time to time.

Speaker2: [00:10:06] Well, yeah. But is this going to be part of the election discussion? I don't know. I guess it could be depending

Speaker1: [00:10:12] On where it's I guess we'll see. I mean, it depends who runs as president and whether that president, you know, agrees to push forward the Green New Deal. Right. And I guess

Speaker2: [00:10:20] We'll find out. Well, see, that's the thing.

Speaker1: [00:10:22] Become a litmus test, I'm betting you that there's going to be a lot of pressure on whoever the Democratic candidate is to endorse some version of

Speaker2: [00:10:29] This, maybe some version of,

Speaker1: [00:10:30] Yeah, yeah, maybe not all lock stock and barrel, but any also kind of a good day from that point of view, like bright, little bright tiny rays of hope shining through the cloudiness of U.S. politics. What else has been going on? Say now you sound sick? How do you get sick?

Speaker2: [00:10:46] I don't know. I just have a sickness. I just realize you're a little snarky today. You look at the election.

Speaker1: [00:10:51] Is the sickness like a little

Speaker2: [00:10:53] Like it's

Speaker1: [00:10:55] Snarky snake. Miss the

Speaker2: [00:10:57] Like in a kind of 11 year old sarcasm

Speaker1: [00:10:59] Is the sickness that you try too hard. You work too hard, like you give too

Speaker2: [00:11:03] Much a little. It's like junior high school.

Speaker1: [00:11:07] I guess I go outside. Yeah, I go outside to the remains of what used to be in my office and barely like a plumber can.

Speaker2: [00:11:15] Yeah, you're lucky that the plumber didn't like, cut up the entire let me. That's what he wanted to do. Let me explain this is going to go in there like get a jigsaw in there, cut up the whole fucking wall. So you're lucky that it only did as much damage.

Speaker1: [00:11:28] Let me explain this to folks at home. Now you might think that a plumber came to work the bathroom and destroyed my office than my office. You know, with ergo, be in the bathroom, but it's not actually on in the bathroom at all the wall, it's on the other side of the wall. And yet I come home. The bathroom doesn't seem to have been touched, and yet everything in my little office area is on the ground upheaval stacks knocked to the wall.

Speaker2: [00:11:51] Who knew that the wall on your office wall actually connects to the backside of the shower where there is a you know why he didn't have to cut up the entire wall is because there was a little portal there. You unscrew the thing and there's like a little, I don't know. It's like a gate or something.

Speaker1: [00:12:06] It's like a little secret door to a magical garden.

Speaker2: [00:12:08] I didn't know that secret door was there, but we had to move that bookcase and then it collapsed. Like as soon as we moved it, it collapsed. There's so much dust on it. That's probably what made me sick.

Speaker1: [00:12:18] Actually, that's my dust collection. I am. I have

Speaker2: [00:12:22] Like a

Speaker1: [00:12:23] The collection of

Speaker2: [00:12:24] Dust. The stuff on the top of that shelf has like a centimeter of dust on.

Speaker1: [00:12:27] I have got dust going back 10 years now and every you know, I'd like to, I like to keep it. I've got little cases that I put it in and they

Speaker2: [00:12:35] Put it on both. I think the bookcase collapsed under the weight of the dust. Actually, it wasn't even the books. So anyway, so that fell apart. But I see it as a good opportunity for you to dust off all that stuff, throw away about half of it, reorganize it, put it back together, and then you can put the book.

Speaker1: [00:12:50] So that's if you're wondering why it might be a little snarky. It might be because I came home to that task. Oh yeah, you know, you have to totally redo your office. I was like, Why? Because the plumber came and the plumber came to install something in the back. Believe me, we got off.

Speaker2: [00:13:02] We got off easy. Like, if we hadn't found that magical portal to the back end of the shower, we would have. He would have cut open the wall and had to repaint the whole fucking thing. He would have had to repaint. That whole thing would have been expensive and stinky and messy.

Speaker1: [00:13:15] I wish I could find the magical portal to the plumber's back end.

Speaker2: [00:13:19] Sorry, off-color. I don't know. Jason's doing the best he can as long as that thing is fixed.

Speaker1: [00:13:25] I'm not on a first name basis with anyone who destroys my office. Collateral damage in the attempt to install something in the bathroom anyhow, that's happening on the home front. Green New Deal is happening on the bigger front. Who are we talking to today, though? It's been a while. All right, I'll answer that question.

Speaker2: [00:13:39] You answer that question because

Speaker1: [00:13:41] Jeremy Rudnitsky

Speaker2: [00:13:42] Oh, Darren, yes.

Speaker1: [00:13:43] We are talking to Darren here about his brand new book Beyond Debt and apropos of Big Picture Economic Stuff. This is a book that is a really wonderful introduction to Islamic finance. It's something you've heard about. It's something I have to admit I didn't fully understand until I read his book, and now I'm really intrigued about it as a possible partial contribution to a solution to neoliberal economic overdrive.

Speaker2: [00:14:07] Right. And it's also it also has potentially some ethical slash environmental potential as well if you sort of extend out some of the ethics or the moral underpinnings of it. So it's a fascinating object beyond the kind of economics of it. I think it does have a kind of eco potential as well. And if you listen to the podcast, you'll get a very good understanding of what it is.

Speaker1: [00:14:28] Right?

Speaker2: [00:14:28] But because I don't think it's totally common

Speaker1: [00:14:30] Knowledge in some just to get the gist of it, our current financial system is based on producing debt.

Speaker2: [00:14:36] No, don't tell the whole story now. In the past,

Speaker1: [00:14:39] I know what the Islamic finance is built around. Spoiler is around equity and collaborative risk. Mm hmm. So I'm just going to leave that as a teaser. You're going to want to listen to it, though, because it is actually a really interesting story.

Speaker2: [00:14:53] Collective risk collaborative. It was a collaborative.

Speaker1: [00:14:55] That's what DA calls it. Ok, so it's

Speaker2: [00:14:58] A nice try. It's more a general, I guess.

Speaker1: [00:15:00] So we took this, you know, from the angle of how might a shift towards Islamic finance, which seems to be happening in some parts of the world, how might that contribute to remaking the global economy and also maybe helping to upend the growth obsession of contemporary capitalism? So that was kind of how we took it. I think it's interesting discussion. I. That's standing,

Speaker2: [00:15:23] But that's in part, that's the environmental angle. Yeah, that's kind of where we is that it has a kind of a flat line growth or even a D growth potential, potential, potential potential.

Speaker1: [00:15:33] So it'll be interesting to think about that, especially in line now with this Green New Deal. And, you know, and Darren Meyer, you know, he he will wear a green suit. I think he was wearing a green suit when we talked to him. Was he? Yeah, he probably was. He said another possible term for Islamic finance is green finance. That was one thing we talked about.

Speaker2: [00:15:51] And then the other thing is is that at the heart of Islamic finance is a kind of moral mandate or an ethical reckoning. Right. And I think that's important, too. If we think kind of the things that we're looking at in this Green New Deal all have a moral underpinning to equality, not just bottom line shareholder enrichment.

Speaker1: [00:16:12] Are you seeing the massive accumulation of individual wealth isn't enough morality for you so many? How like since when hasn't that been enough for you?

Speaker2: [00:16:19] I don't know.

Speaker1: [00:16:20] Just unfettered.

Speaker2: [00:16:21] I don't know. However, ever since old Adam Adam Smith in his hand died, both his hands died. Since that time, it really hasn't been enough for me. You know what I learned? Did you know this about Adam Smith that he lived with his mommy his whole life?

Speaker1: [00:16:35] That explains a lot.

Speaker2: [00:16:36] Did you know that? No. That was fascinating. I forget where I read that. I read it a couple of days ago. Maybe it's in Jason Moore's book, but was he? No, he never married and he never had children and he

Speaker1: [00:16:48] Lived when I make an invisible hand joke. No kidding.

Speaker2: [00:16:50] Oh God. Gross.

Speaker1: [00:16:53] I didn't even have to tell the joke. I just set up the premise. Some jokes tell themselves,

Speaker2: [00:16:58] I don't know. You know, it's interesting. Now I'm kind of curious about like the erotica of Adam Smith and his like sexual imaginary. Like, what? What was his story? Was he going to prostitutes? Was he asexual? Was was the invisible hand an important part of his love life? I don't know.

Speaker1: [00:17:13] Maybe that's the tin factory. Like if you pulled back like one of the fake walls, it was a brothel.

Speaker2: [00:17:18] Yeah, right?

Speaker1: [00:17:19] How many? Or, you know, maybe quote unquote pin factory workers. Does it take to get? Or maybe.

Speaker2: [00:17:25] Oh, right, exactly. You know, maybe he was a closeted gay man. It just was never able to able to live his life openly or we never heard about it.

Speaker1: [00:17:34] I really actually, I have to say, having read and taught Adam Smith a bunch, I have a lot of fondness for Adam Smith. He's not nearly the the creature of the neoliberals make him out to be. He's a much more interesting thinker. And he wrote a whole book on moral sentiments that, I mean, you could say he's a utopian, and that's probably true, but he's not. He never preached avarice, and he was really critical of the kind of commercial class of his own era.

Speaker2: [00:17:56] And why was that? Because he had a good mother. Yeah, the

Speaker1: [00:17:58] Good mom mom was telling him right. But also, he said, he has got this great quote that I always read, which says, you know, that basically society should never allow the commercial class to write its laws because they will only write laws in their own interests and not have the interest of the whole in mind. And so he got it. I mean, and that's what we've had, you know, pretty

Speaker2: [00:18:17] Much because from

Speaker1: [00:18:18] Time immemorial in this country, yes, just the commercial class

Speaker2: [00:18:22] Immemorial,

Speaker1: [00:18:23] Immoral. Exactly. Anyway, so we should probably wrap it up with that, folks. Thanks for listening. Read that Green New Deal. Get behind it if you're interested. Write to us. Meanwhile, go

Speaker2: [00:18:34] Dharma.

Speaker3: [00:18:52] Welcome back, everyone, to the Cultures of Energy podcast we have on the line with us from a secure, soundproof studio in bomb shelters somewhere on the west coast of Canada. Dami Rudnitsky, good to have you on the podcast.

Speaker4: [00:19:05] Thank you very much. It's great to be with you guys. I'm a long time listener and I'm really thrilled to be here. It's a real honor. Cool.

Speaker5: [00:19:12] We're really glad to have you here to. So you've just come out with this fantastic book that's called Beyond Debt Deadbeat Islamic Experiments in global finance. And in the book, we learn a lot about what's called Islamic finance, and we have all kinds of questions to ask you about that and its impact upon capitalist logics of growth and development and impact upon socio eco environmental systems. But we thought that we would begin by asking you to tell our listeners what Islamic finance is, maybe some of the genealogy out of which it was born and to give us a kind of kind of an encyclopedia entry, I guess, of what it is for those listeners who might not be familiar with it.

Speaker4: [00:19:54] Ok, well, that is a question I could probably talk for about four hours on.

Speaker2: [00:19:59] Yeah, no doubt.

Speaker4: [00:20:00] So it's it's a big question, but I guess for the sake of brevity, the easiest way to define Islamic finance is it's a system of finance, the management of money that operates in accordance with Islamic norms. And traditionally those have been really defined along three central prohibitions a prohibition against interest which is most well known and is mentioned at least five times in the Qur'an. A prohibition against ambiguity or what's called GA in Arabic, and a prohibition against gambling or overt speculation or what's called Myesha. So if you go to any textbook for Islamic finance in a Class A university class, it's teaching the subject that will be the standard definition that one would encounter. However, while I was doing the ethnographic fieldwork for this project, I found that the debate over what Islamic finance is and how it should operate is much more complex indeed. And so while some people are content to hold to those three central prohibitions, there are a number of discussions that get into much deeper levels about, for example, what the meaning of those prohibitions are, what the implications of those prohibitions are for capitalism and what the social and well, really, what the social implications of Islamic finance are for questions of equality, fairness, justice. I mean, one of the

Speaker5: [00:21:40] Things that we learn in the book is that it, at its core Islamic finance is meant to to facilitate the acquisition of capital in the provision of capital through investment, a kind of collective investment rather than than debt creation. Can you explain a little bit more about how that operates in? Maybe give us an example sort of scenario about how that operates?

Speaker4: [00:22:06] Sure. Yeah. So this was actually one of the, I think, central, centrally important ethnographic findings that I found by doing the fieldwork. So, you know, I had read that textbook definition that I gave you earlier and I went to the field to Malaysia. I started this fieldwork in 2010, and I had assumed I had a good understanding of what Islamic finance was. And all of a sudden I got into the field and I encountered that. Actually, there was this raging debate going on among Islamic finance professionals because there basically had over the past, I don't know, 30 years a form of of what was called Islamic finance had emerged that essentially used a kind of workaround in order to comply with the Islamic prohibition on interest bearing debt. And so the way that would work would be primarily through using two sales, a markup and a deferred payment to reverse engineer and interest bearing debt contract. And it sounds quite technical, but it's basically very simple. You know, if I'm an investor and I'm in need of capital, say, a million dollars and you're a bank and I have say a factory, I can sell you my or I could sell you a building part of my factory for a million dollars and on a payment deferred basis. Or I would sell it to you for, say, one point one million on a payment deferred basis. So the point one would be a markup. And then we agree on some time horizon on which I would have to pay you that money and then you would turn. Around pretty much on the spot, a few few seconds or minutes or half hour or so later and sell me back the factory because you're in the business of financing, not in the business of making widgets for, say, a million dollars and I would walk away none the wiser with a million dollars of capital that I could use to basically do whatever I wanted with.

Speaker4: [00:24:13] And you would have this contract in which I would owe you one point one million dollars over three years or five years. So effectively what that did and what many of the experts with whom I was conducting field work realized, what that effectively did was create a kind of interest bearing debt. It kind of reverse engineered a debt based contract through these two sales. The markup and the deferred payment. Now, when I got into the field, I started going to all these conferences and workshops and interviewing people and hanging out at this university where I conducted a bunch of the field work and I found that there was a considerable degree of skepticism, basically among all the various groups of experts with whom I engaged. There are four primary categories of experts, and they were all kind of conscious in the back of their minds that this was really little more than a kind of shell game or subterfuge. You know that it was it was a workaround, and on paper, it all worked out. Some people, particularly people that had come from regular banking and finance, really liked it because they're like, Hey, this is just like what we do. We're already know how to do this.

Speaker4: [00:25:26] But most people, when you actually push them on it, were aware of the fact that this was kind of a workaround and that there were some questions over the whether this was actually meeting the spirit of these prohibitions and restrictions that Islamic texts had placed on economic practices. And so what I then found was that there was this considerable effort being dedicated in Malaysia toward actually creating something that was a more more met the spirit of Islamic law and not just a letter. So it wasn't just about conforming to the prohibitions and ensuring that everything worked out on paper, but really sought to create a fundamentally different model for facilitating the provision of capital. And the way in which that would essentially work was through what they would call investment based, or they would often use the term equity based contracts. And whereas that first contract I described to you, they would refer to as debt based, it wasn't there wasn't actual. I mean, on paper, it wasn't an interest bearing debt, but in spirit, it really was. And so they would call that the debt based version of Islamic finance. Instead, they were seeking to propose this equity based or investment based version. And this is actually will sound actually quite familiar to anyone who's read anything about contemporary capitalism. The way these contracts would primarily work would be around profit and risk sharing. So in to take back to return to the example that I offered previously, if I was in need of capital and a million dollars and you had a bank or a financial institution, we would meet up and get together and I would show you, Well, I need a million dollars.

Speaker4: [00:27:19] I'd want to expand this line of my widget making process and I can boost productivity. And here's my business plan. And here's here's where I see the growing area of the market. And I would present to you all the details around around the expansion that I was planning and we would go in as partners. We would go in under a contract. The most commonly one is something called a Mujtaba and an investment based contract. And you would basically invest that million dollars in my concern and I would pay you a percentage of the profits that I made in the future. But of course, these contracts are risky because, you know, there might be a recession, there might be a depression, the economy might tank the market for widgets, might dry up, God forbid, and or Allah forbid, and things could could go south, in which case you, as the investor, would be on the hook for the investment that you made. I would be on the hook for my portion of the business, but for whatever you had invested, you would be on the hook for and you could lose the investment that you made as well. And the experts with whom I was conducting the field work would say things like, Well, these are actually really much more in the spirit of what Islam is requesting people to do as as far as creating profit sharing, creating risk sharing and creating a kind of ultimately more collaborative form of capitalism.

Speaker5: [00:28:49] And then I think one of the things that's very. Interesting about Islamic finance at its core is its particular kind of moral roots, right, and it's a very different kind of ethical starting point or or site than we imagine in liberal economics or the morality of the market that we might see in someone like Adam Smith, right? So there's a morality here to finance that's rooted in Islamic texts. And I'm wondering, too, if that kind of extends to the use of profits or the gains or the wealth that's made, you know, through the management of capital. So one of the things that you point out in the book is that there's been an incredible growth in numerically right in terms of the amount of capital that's been raised by these financial institutions. You say that at the end of twenty seventeen, it was over two trillion and it's expected to pass three trillion in just two years. So I'm wondering, you know, as as this capital is grown, is there a kind of commensurate morality or set of ethical principles about how profits are spent or how wealth then gets extended into other other social spaces that are outside of the kind of fiduciary world of the finance experts themselves?

Speaker4: [00:30:11] Yeah, I mean, I think I mean, I think again, one of the things that a lot of these experts that were seeking to reform Islamic finance for advocating was this profit sharing model in the sense that profits then would be distributed among all investors. And so part of the logic then extended to, well, you know, what about making investment easier, not just for the elite that have huge portfolios, but also expanding it so that, you know, creating vehicles so that common people could invest in state projects? So one, while I was in Malaysia, one big project that was being proposed was an Islamic financial contract to build a major expressway. And the idea was that shares in the expressway would be sold at relatively low values to everyday investors. You know, the share prices would be on the order of I don't know, you could buy a share for ten dollars or something like that. And then the expressway would open and there would be tolls. It would be a toll tollway. And the profits that the expressway made, the tolls that would be collected would then be distributed to all the shareholders. And you could have, you know, just everyday mom and pop shareholders who might have large institutional shareholders. But it would make it was. This investment and profit sharing model was really committed to ensuring that everyone who had some investment capital, whether they had a lot of capital or some spare dollars from ringgit from their paychecks, could invest money and enjoy the profits of economic growth, not just to kind of select few who would have access to these things. So I think there was a kind of democratizing impulse in this idea of of profit and risk sharing as well. But I mean, the converse of that is that that it is that you are sharing in the risk so you might invest in an expressway and, you know, maybe no one drives on it and it doesn't make as much money as it's forecast to, in which case you would have invested in this venture that wasn't terribly successful.

Speaker4: [00:32:32] So one of the things that everyone encouraged all of my interlocutors kind of consistent refrain was, you know, people are really going to have to do their research. They can't go into this blindfolded. We're all going to have to become active, attentive economics subjects in a sense, if if, if Islamic finance is to achieve these kind of risk and profit sharing objectives. So I think there's a there's another question about there about the privatization of risk that is interesting and important or the individualization of risk that is that is important to consider when doing this. I mean, this is not this is not a socialization of risk by any stretch of the imagination. Now that's there's some good things to that too, right? Because part of what happened after the last financial crisis was this massive socialization of risk in which the taxpayers ended up bailing out many of these massive corporations under the dictum of too big to fail. So I think, you know, I think this is a complex and multifaceted problem, but I think there is a certain morality here and it really, in some sense takes up the call that Arjuna Pottery makes in banking on words recently where he says, you know, part of the problem with contemporary Western financial. Capitalism is that it enables only really the the big players to benefit from the upside of risk and then socializes all the losses.

Speaker3: [00:33:59] Mm hmm. Yeah, it's a great point if I can just jump in. You know, I wanted to just point out for people who still may be a little cloudy on the debt model of finance versus the equity model of finance, I just wanted to say that in the very opening of your book, you have this really, really vivid way of putting it in terms of student loans where you say in the conventional kind of debt based model of student loan finance, which I'm sure people are familiar with listening to this podcast, you know, a bank will loan you the money to pay for your tuition and then expect you to pay that debt back off with interest over the rest of your life, essentially, it seems. Whereas in the equity model of finance, your tuition is paid for up front, but then the bank would expect a certain percentage or tithe of your income going forward. So it's like you would pay. And if you were a doctor, that could work out really well for everyone. If you end up being a poet, maybe not so well for the bank, but the idea is that somehow, you know, there's this idea of of the kind of shared risk instead of putting all of the risk on the person who's taking out the loan. I really like that that analogy.

Speaker4: [00:35:01] Yeah, exactly, exactly.

Speaker3: [00:35:02] So I just want just to continue real quick to my question. So, you know, I think you do a really good job of showing how that debt model of finance has its deep roots in the kind of European colonial legacies that were set up to basically extract rents from the rest of the world even after empires began to collapse. You have a kind of financial imperialism that exists after kind of direct military control, although let's be honest, the direct military control is there in many places, too. You know, given that you know, one of the things we talk about on this podcast a lot are the challenges of trying to imagine sustainability within a world in which the economic dominant economic model preaches growth. Growth growth, right? I'm curious to hear your thoughts about whether this demonstrable shift in importance towards equity, finance or Islamic finance. Do you think that that has the potential to rein in growth? Or is the is the profit expectation still very much as much money as we can possibly make? Thus, you're going to be incentivizing companies to do everything they can to grow?

Speaker4: [00:36:05] Yeah, that's a great question, and I'm really glad that you asked it. Actually, I broached this topic briefly. I'm not sure if you saw it in a recent essay I published on public books, but one of the things that's interesting, particularly about this equity based model, is that people would actually, when you push them on it, they would say, Yeah, at the end of the day, this probably is a more moderate, slower growth form of capitalism. And the reason for that is that what this equity based model does is you can't it's very it becomes much more difficult to essentially create money out of thin air, which is basically what a lot of banks and financial institutions can do today through fractional reserve lending. And basically, I mean, as is, I think, pretty well-known, you know, when a bank creates well, banks essentially create most of the money that exists in an economy. So over 90 percent of the money in any financialized capitalist economy is essentially created through bank debt. Whenever a bank issues a loan, say, they loan you a million dollars. They don't have a million dollars in the vault, they have $100000 or maybe even less, and they essentially create the other nine hundred thousand or more out of the borrower's promise to pay.

Speaker4: [00:37:24] And that then creates this this kind of like capitalism on speed, right? It's like this inflated, you know, capital that the banks are suddenly going and they're trying to get this money out on the street and they're inflating. These get these massive asset bubbles. Essentially, a lot of what drove, you know, economists are coming out saying this is essentially what a lot of what drove in part, the 2008 financial crisis and other financial crises that have emerged right is the fact that all this capital gets created and this even gets injected into the system. And you know, you get these asset bubbles and speculative bubbles and so forth. And the reason for that is that you have these private banks that essentially have this tremendous power to create the fuel of capitalism capital with very, very few restrictions, right? I mean, the fractional resending lending fractional reserve rate is something like nine or 10 to one, and it can be higher depending on how you structure, structure the contracts. And so what this equity based system does, and this actually was, was kind of a light bulb moment when I was doing the field work, when I was listening to this regulator from the central Bank of Malaysia.

Speaker4: [00:38:42] At this workshop, I was at something called the Islamic Financial Services Board, which is a global regulatory institution. For Islamic finance that's based in Kuala Lumpur. So I was listening to this regulator and he said, you know, well, the real advantage, the real alternative of Islamic finance is the limits that it places on something called leverage. And what leverage is is essentially an investment strategy in which one uses borrowed money to increase the returns on an investment that you borrow money and invest it with the expectation that the investment is always going to do well. This is essentially what happened in the housing crisis in the United States in 2008, where people were buying houses with the expectation that those houses would increase in value. And then as the value of the houses increased, they would borrow more money on those houses and keep this kind of chain creating this massive asset bubble in which real estate became vastly overpriced. And this regulator basically said, Well, you know, and long as finance, you can't do that because it puts these limits on on leverage. It puts limits on borrowing. It puts real limits on this, this capitalist speed that is accelerating the economy.

Speaker3: [00:40:03] And hey, dharma, can I just interrupt quickly just before we lose that point? Do you want to explain a little bit what it is in Islamic moral philosophy that limits the leveraging? You know, what particular injunction does that respond to?

Speaker4: [00:40:18] You know, there's no there's no Koranic passage that says, you know, coverage. Yeah, exactly. That's an interpretive feature of this equity based system. Got it. So it's basically leverage and debt are very closely linked. And when you have this equity, the reason that that leverage becomes difficult or impossible even in an equity based system is that you can't borrow money to invest the capital used for investment already. You already have to own that in order to to invest it. You can't go out and borrow money with the interest bearing loan in order to obtain the capital that you would like to use for investment. And so that then because this equity based system says, well, you can only really invest what you already have, you can't do this overly speculative form of investment, right? Then that puts a kind of natural limit on this, this massive inflation of the money supply. That is a fundamental feature of debt based capitalism. So I guess in some sense, it complies with the the this prohibition we talked about earlier, the prohibition against gambling or or overt speculation, the the mice here prohibition. But I think it's kind of an interpretation of that and it's basically deductive. It's a kind of deductive logic that these experts would be engaged in to say, OK, this is these are the advantages that Islamic finance offers over the conventional system.

Speaker3: [00:41:56] And in fact, you know, you can immediately see how just this idea of what you call collaborative risk or, you know, the sharing of risk in this model of investment and finance, how it would prohibit certain types of investment vehicles that became rather notorious during the 2008 crash because they allowed you in kind of commonplace terms to buy fire insurance on your neighbor's house? Right?

Speaker4: [00:42:22] Yeah, exactly.

Speaker3: [00:42:23] Creating weird incentives for it to burn down, right? And thus, you know. Yeah. And so I think I could see immediately how this Islamic model would be an improvement upon that. Do you want to talk a little bit about not to change the topic entirely? But you know, there has been a call by David Graber, among others, to to for these debt forgiveness Jubilee's and I think the Occupy Debt Movement and other movements like that have been doing a lot of activist work on trying to kind of get debt forgiven. But you make it you make some interesting points in the book about how in some ways, you know, those models kind of remain within the logic of debt, whereas this equity model could be something different. Do you want to say a little bit about that?

Speaker4: [00:43:08] Sure. Yeah, I mean, I think, you know, part of what I'm trying to do here is create a kind of anthropology that speaks to really these big picture questions. And I think in some sense, anthropology has kind of moved away from them in the past 10 years. Things like the ontological turn or the anthropology of suffering, I mean, those have made some really good interventions. But I think what they have tended to do is really get focus more on on on marginalized and smaller scale issues rather than really critically contemporary problems. And so part of what I was trying to do. Putting this book together was really to develop a kind of anthropological methodology and sensibility that could speak to questions of critical contemporary relevance. And one of the important interventions it's taking place in the last 10 years in this regard is, of course, David Gruber's work and his book on debt. But what was, I think, interesting and where I was trying to depart from that is really whereas he takes debt as a more historical problem. I was trying to think about what debt would look like as really an ethnographic problem. And so the way that I then chose to do that was to really focus on how these experts who are trying to come up with an alternative to debt based finance would create a form of capitalism that enabled the mobilisation of capital without recourse to interest bearing debt. So debt in some sense in the sense is is an ethnographic problem problem with which the interlocutors with whom I was working were struggling, grappling with thinking about and not something that was in the past. Now the second dimension, I think that I found when actually went and did this fieldwork was that there are ways of thinking about capitalism beyond debt.

Speaker4: [00:45:18] And so my objection, I think to the Jubilee model, I mean, I think it's really important. I think we should always have the opportunity for bankruptcy and forgiveness and those kinds of techniques to enable people to to restart or reset after after they become indebted. But the problem with the Jubilee is that it really simply adds forgiveness to the cycle of consumption indebtedness default that characterizes contemporary capitalism. And so what I argue in the book is that what Islamic finance offers and what I found through doing the field work is that it really creates this radical challenge to capitalism by trying to to to say, well, what kind of alternatives actually exist to a capitalism based on debt. And it proposes this this really radical intervention, in some ways, very radical intervention. Well, let's just organize the whole economy around equity and investment rather than debt. And you know, that itself becomes a really interesting problem because so much of finance is is is debt oriented. You know, you can imagine, well, how you know. And so the guys that I was working with were trying to think through all these problems, you know, how would a savings account work if you didn't have interest? How would a checking account work? How would you know, how would a student loan work? You know, how would all these kind of basic a home mortgage? How does that work if you don't have debt? You know, these are all kind of empirical problems that these experts were seeking to address that. I then came in and said, Wow, you know, it's really interesting how debt then is becoming this, this this actual empirical problem rather than just the kind of theoretical or abstract idea.

Speaker3: [00:47:11] And as you point out, it's really the subtitle of the book is Islamic Experiments, so it's not as though this is settled. This is an experimental complex assemblage that's unfolding now, and that seems to be gaining in strength and relevance. I do have to ask, though, because I'm sure I'm sure some people are wondering this when we think about the qualifier of this type of finances Islamic instead of, say, equity oriented. You mention at least once in the book that there are some similar ideas that have been put forward by figures as well known and well claimed in the neoliberal universe. As you know, wait for it, Milton Friedman, that there were some moments of freed mania and proposals that that that had some similarities here. And given that, you know, one of the things that the insane kind of right wing of the U.S. likes to do is look for Sharia law everywhere. I'm just wondering how we could get how we could get this model of Islam, how we could rebrand Islamic finance to take over the global north without immediately invoking those Islamophobic sectors of society? Is that something you've thought about?

Speaker4: [00:48:19] Oh, yeah, no. That's a great question and a great point. I mean, yeah, I mean, this is a constant struggle that I have when I when I mentioned to someone just last week, you know, smart scholar who's visiting here from University of Chicago on our campus, and he immediately said, Oh, you mean Islamic finance, you mean terrorist financing. You're working on terrorist finance. No, no, no, no. This is this is about, you know, this is his as there isn't committed to capitalism as they come, right? But I I mean, I think as. As far as this kind of branding issue that you bring up, this is actually something that many of the people with whom I was doing the fieldwork were thinking about themselves. They were conscious and sensitive to the fact that in many places, the simple appellation Islam was going to create the kind of hysteria to which you allude. And so there were various ideas. I mean, some people have suggested rebranding green finance because of this moderate growth impulse. It suggests a more environmentally friendly, sustainable form of finance, not as addicted to fast growth as as quickly as possible big large scale growth as quickly as possible. So that was one idea that some people suggested that one guy that I was working with was particularly and she said, Well, we're going to call this green finance and then you got us kind of smiley face. And he says, Well, you know, green is also a really important color in Islam. Right? Right, exactly.

Speaker4: [00:49:53] So he said, you know, it could work that way. Other people suggested social finance because of this emphasis on collaboration, risk sharing, profit sharing. So I think, you know, there are a number of options. You know, people in Malaysia, not all of whom are Malaysians. I mean, Malaysia's Kuala Lumpur is now one of the central nodes for Islamic finance expertise. So you'd have people there from the Gulf, from South Asia, from Turkey, North Africa and so forth. But they were pretty, I think, realistic about the fact that this wasn't going to catch on terribly quickly in places like the United States. But one of the things that was hot and I think it's still somewhat on the back burner is the idea that, well, Canada and I have the advantage of being based at a Canadian university. They always thought of Canada as being more friendly to Islam, more more more tolerant of Muslims. And, you know, Toronto has a major financial services center. And so the idea then is that and actually people at the Toronto Financial Services Authority have have broached this idea as well of Toronto becoming a kind of sub hub for Islamic finance in North America. But again, I think you're absolutely right. I mean, I think the problem. Problematic nature of politics today and the Orientalist legacy that we still those of us who work on Islam still operate under is is a real hindrance to developing this in the U.S. and probably elsewhere in the North Atlantic as well.

Speaker3: [00:51:33] You know, it's been always our problem, our meeting the global north and and not theirs, right? It's our phobia is it's our anxieties, absolute rationality that's at stake here. So, you know, when you were talking about social finance, green finance, it reminded me of that really interesting moment in Chapter six, when one of your interlocutors describes Islamic finance as like the organic food movement, so you could talk about halal finance, too. I wanted to throw that into the mix, but for me, that also brings up some interesting, you know, when you think about the organic food movement, you also think about farm to table, you think about local foods. And again, one of the aspects of global finance that I think people have found so frightening and toxic is it's very global city, right? The fact that a day trader in Houston can help destroy the currency of an Asian nation and not really give a shit because he has no stake in that right. He has no stake in markets being shuttered or families going hungry. So this idea of halal finance, you know, do you see a possibility of a kind of a re localization of finance? I mean, is that something that we should be thinking about here, too? It's not just about kind of trying to replace one global financial order with another, but it's somehow about scale and about the relationship between investment and like place and time.

Speaker4: [00:52:52] Yeah, that's a great point. I mean, I think you know that that's really an important intervention. It actually speaks to newer work that I'm starting at the moment rather than this project, per say. As I mentioned previously, this project was really dedicated toward trying to answer a critical question of contemporary relevance and really focus on what kind of large scale initiatives are out there that aren't well known in the global north that may hold some, at least make us critically reflect on the systems in which we're embedded the global systems in which we're embedded. And that said, I think, you know, there are people in the Islamic finance space that are working on precisely these questions of locality and global city. That wasn't a particular. Well, locality, I mean, that wasn't a particular focus of this project, but actually, I mean, I've got this new work that I'm starting now that takes up this question specifically around alternative currencies. And it really stems in many respects from this book that's we're discussing right now because money becomes a very interesting problem in Islamic finance, because so much of the money that we use is debt. You know, the borrowers promise to pay, as we discussed earlier. If one creates an equity based system, it becomes a real intellectual challenge. How money would work, you know, where would the money to lubricate an economy come from if 90 percent of it isn't being created by commercial banks? And so I got interested in that as a kind of conceptual problem and began poking around alternative currency movements.

Speaker4: [00:54:47] And I'm actually starting a new lab here that I'm calling the counter currency lab. Wow. And one dimension of that is looking at the history present and future of local alternative currencies. It turns out that one type of alternative currency that is become a prototype for local currencies around the world was actually first pioneered on Vancouver Island, about three hours north of Victoria, where I'm based, and we've recently. This was back in the eighties in the context of a global and local recession that really created a severe, localized economic depression on central Vancouver Island. And a group of people came together at that moment and basically created their own currency. They called it the green dollar in order to facilitate the exchange of local goods and services. And that became a prototype for all it's called a lette system lets that stands for local exchange trading system. It's basically a network with its own unit of account, virtual unit of account that circulates and is exchangeable with state issued fiat money. And what we've recently done is acquired the archive to that. Let's so I've got about a hundred cubic feet of of files and diskettes and videotapes and audiotapes that were the infrastructure for this local currency experiment. So I think that's a great question. I think it's actually really important to keep that the question of local finance and localizing finance on the table.

Speaker3: [00:56:25] Well, that's really fascinating. I actually want to pursue that a little bit. But first, let me just remind everyone who's the book is called Beyond Debt Islamic Experiments in Global Finance Dami Rudnitsky. And I just want to say, you know, this book I've heard a lot about Islamic finance. This was the first book. After having read it, I really feel like I understood Islamic Finance, so I want to say thank you taught me a lot about this, and I do think that it makes a compelling case that, you know, somewhere between the business as usual acceleration, asset finance and economic model that we live in now and the aspirations of de-growth and exploding and destroying the system. I mean, there are these other kind of middle way path. Some of them are quite interesting and actually in all likelihood, they're probably more likely what's going to happen is rather than business as usual or a complete reversal of business as usual, we'll probably see something like this become more of a norm that would make sense to me. It kind of based on historical precedent. So I think we should take it really seriously and look at what it can do and what it can't do and how to optimize it in terms of the kinds of political and social concerns we have in the Anthropocene.

Speaker3: [00:57:30] So let me just ask you this then on this subject of the new currencies, the alternative currencies you're working on because it's fascinating. I hadn't really thought about that. Yes. Given that money is principally in the conventional system based on debt, you take away debt. What is money based on? It reminds me I used to live in Ithaca, New York, as you know, and there we had Ithaca hours, which was the basically the idea of being based on labor, right? That, you know, a certain amount of labor could be translatable. And this is like, you know, basic labor theory of value. You know, it's nice, but kind of unspecific also. And it wasn't quite clear how you commensurate one hour of of massages with one hour of tax accounting help or something like that. So, you know, as you're looking at these alternative currencies, are you interested in the kind of regimes of value that they discuss? Tell me a little bit more about what the in terms of the broader scope of this, like what really interests you intellectually in this project?

Speaker4: [00:58:25] Well, I think the main thing is, and I think this is actually has some overlap with the book we're discussing as well. The main thing that interests me about these alternative currencies is the way in which they offer some kind of critical, reflexive perspective on this naturalized, naturalized social system in which. We all participate. So, you know, almost nobody ever thinks about what a dollar is or what a what a twenty dollar bill is, what it actually is. And I think, you know, once you do this anthropological move of saying, OK, here's this thing that we take for granted that we've naturalized in much the same way language gets naturalized or gender gets naturalized. Money also gets naturalized as, OK, it's just it's just the an order in which we live and we take it for granted and we never stop to think about it. And one of the things that working on these alternative currencies has really done for me is to get a kind of critical perspective on money and to begin thinking very critically about, you know, well, what actually is money and what does actually money? Do you know, as as an object? And how does it shape social relations and how does it shape such activities? And how does it shape the kinds of collaborations and kinds of communities that human beings can build? And so my interest in money in some sense and in these alternative currencies is really an attempt to do this. I think fundamentally anthropological move of making the familiar strange or to, as Paul Robinson put it, I think quoting Paul Ridker, obtain better comprehension of the self through the detour of the comprehension of the other. And so I think you know, what alternative currency does is is that know, allows us just kind of critical reflexivity on money. And then it opens up a whole new set of ways of thinking about sociality, about human interactions with one another, about ultimately how we're all going to live together in a increasingly bleak present.

Speaker3: [01:00:52] Well, we can't leave it on that note. So. So Darren Meyer plug something articles coming out. Anything else you're working on that you want people to know about?

Speaker4: [01:01:00] Yeah. Well, the book is just come out. So I'm doing a lot of work around getting the stuff out in the book. As I mentioned previously, this public book's essay came up, which is basically, I don't know, 800 word or something synopsis of some of the central arguments, right? It's great. So if people want the CliffsNotes version of the book, they can go check that out at public books I've got. I've got a, you know, there's a few pieces that I've got commissioned working a lot on trying to kind of think through. I actually got a piece I'm working on now that where I'm trying to think think about capitalism and how to study capitalism through the work that I've done in Southeast Asia. So the earlier book that, you know very well and we're very supportive of spiritual economies and now the second

Speaker3: [01:01:50] Award winning book, by the

Speaker4: [01:01:51] Way. Yeah. Thank you. Thank you. You know, these two projects, I think in some sense, address capitalism in Southeast Asia. And so I'm trying to think through, you know, well, what? How do these actually what kind of what have I actually done in these books that help us understand capitalism, both as it's manifest in Southeast Asia, but also capitalism? More generally, you know what kind of forms it's taking, what kind of subjects it's creating, what kind of norms it's standardizing and so forth. And so I'm trying to think really, I think critically about trying to make make the point that that places like Southeast Asia, which is really, I think, off the map at this point in the academic conversation in many respects how that can allow us to understand our capitalism in a fundamentally more profound way.

Speaker3: [01:02:50] Yeah. And I think you do a great job of that. You've done it in your past work. This book certainly is making a very strong case that, you know, we should all be looking at what's happening in Malaysia right now for, you know, insights into the future of finance. And I think it's, you know, it's a huge success. So. So Dharma, thank you so much for being with us. Simone had to duck out a bit early as we had alerted you previously. She sends her best wishes and hugs and thanks though, to all listeners and of course to you too. We are really psyched that you're bringing this work on Islamic finance into these conversations about the future of capitalism. It's so

Speaker4: [01:03:25] Important. Well, thank you very much. I really appreciated the opportunity to discuss it with you, and your questions were great. They really made me think a lot and gave me some new ideas, so I found this extremely generative. And thank you for taking the time to engage with the work and to discuss it with me.

Speaker3: [01:03:43] All right. Well, you know, you're dealing with semi professionals here. We're going to we're going to give you those high quality questions every time.

Speaker4: [01:03:51] Yeah, of course.