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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.

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Hisham El Sherbini Unit2 Paper v2.0 (For Pub)

  • 1. Unit 2 Paper OK, so Capitalism in not sustainable. Now what?! Hisham El Sherbini AMSR7 Team 2 December 2016
  • 2. 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
  • 3. 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
  • 4. 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).
  • 5. 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
  • 6. 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
  • 7. 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:
  • 8. 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).
  • 9. 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.
  • 10. 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.