# How did Adam Smith and industrialisation change attitudes to greed and lending? *Adam Smith, the pursuit of self-interest and the promise of a better tomorrow* - URL: https://muftiabulayth.org/r/ucdrblygy70/s/9/ - Date: 2017-10-19 · Kind: lesson · Transcript tier: machine · Recording: Are Mortgages & Bank Loans Haram? - Mufti Abu Layth (36:59–41:39) - Status: general teaching - Watch from the start of the segment: https://www.youtube.com/watch?v=ucdrbLyGY70&t=2219s - Recording page: https://muftiabulayth.org/r/ucdrblygy70/ **Topics:** Riba, mortgages and loans; Philosophy and ideas; Islam and modernity **Summary (not a quotation; machine-made, unchecked):** Adam Smith's idea of the pursuit of self-interest and the industrial-era promise of a better tomorrow changed a mindset in which greed was simply evil and nobody would lend. These are ingredients of the modern economy the Quran did not address. **Checked position (checked by two independent reviews, not by the channel):** Mufti Abu Layth says that before Adam Smith's promotion of the pursuit of self-interest greed was seen simply as evil, as it was when the Quran condemned riba, and that industrialisation brought a new promise of a better tomorrow, before which people would not lend money. **Evidence, his words at 37:43:** “So, when the Quran was condemning riba in the time of the Arabs of 7th century Arabia greed was just seen as an evil thing. But everything changes in the 18th century.” (https://www.youtube.com/watch?v=ucdrbLyGY70&t=2263s) ## Longer summary Mufti Abu Layth says that alongside paper money came Adam Smith, who in The Wealth of Nations promoted free trade and free markets and, crucially, the pursuit of self-interest. Before Smith, he says, greed was simply seen as evil, as it was when the Quran condemned riba in seventh-century Arabia; today a shopkeeper will say that by opening a shop he creates jobs, disseminates wealth and gives back to the community, which nobody would have thought five hundred years ago. He greets an imam joining the stream and explains Adam Smith briefly for a viewer who asked. He then adds a further ingredient: the promise that tomorrow will be better than yesterday, which never existed before industrialisation, when people expected raids, war and disease and so would not lend money. ## Sources and names cited - Adam Smith - The Wealth of Nations - riba ## Transcript (machine tier, 36:59–41:39) [36:53] You see now tie this in. Now, hold that hold that peg that thought right there. Hold that and come back to another thought. With this you had the rise of people like Adam Smith and his understanding of economics. His understanding of commerce. Now, in his books amongst them the wealth of nations. [37:17] He speaks about and you see now Adam Smith highly promoted things like obviously free trade free markets. But with there was a very important concept that he started to promote. And that was the pursuit of self-interest. You see prior to Adam Smith people were seeing this as just greed. [37:43] That greed was a bad thing. So, when the Quran was condemning riba in the time of the Arabs of 7th century Arabia greed was just seen as an evil thing. But everything changes in the 18th century. You see all of a sudden you see like let me ask you if you were to open a shop and I asked you or you were to do business why is this just being greedy? [38:16] Is your business just about you and being greedy? You will say and it may be about being greedy. But you will say no. Look, by me opening a shop I'm I'm I'm creating jobs. I'm what is it disseminating wealth within the community. I'm giving back to the community. I'm allowing trade within a community. [38:41] I'm adding to the flourishing nature of a community. Now, believe it or not nobody nobody would have thought like that 500 years ago. Nobody. Now, it seems so common sense today. But it was impossible 500 years ago to even think like that. [39:04] Nobody thought like that. You see Adam Smith starts to write about the pursuit of self-interest. He says that look even if people are doing this for greed but greed in in the case of business is a good thing. Because what it does is you still feed back where you live. [39:26] You create jobs. You are still disseminating wealth in that community. So, what happens in the decades and the centuries that follow is there is a shift in mindset. Imam ahlan wa sahlan, tusharrafna, people. Imam Mark, Manly is in the house. Allah, Allah. [39:49] Right, a legend. Rising star, absolute star from the US. So, people, if you're not in touch, reach out to him and shoot away with your questions to him as well whenever you get a chance. Right, now this we're just discussing the concept of riba. Now I Imam Mark, I know your your views absolutely on the right supporting the right to bear arms. [40:22] Right, so but coming back to this so the mind shift started to change. Another thing started to change. Right, with with this kind of thought of the pursuit of self-interest with economist Adam Smith is a revolutionary kind of a person who wrote on economics and stuff like that for whoever's asking the Another thing that started to change was the promise of tomorrow being better than yesterday. [40:53] Now, in the past that was never the case. Now, this is another important ingredient. It was never the case. People in the past always felt that tomorrow would be worse than today and yesterday. So, they didn't want to give you money. When you came to ask somebody to loan you money, they would not give you money. [41:17] Because they felt why should we? The chances are tomorrow is going to be miserable. It's going to be abysmal. There's going to be There's going to be just raids and war and battles and diseases and the the promise of tomorrow was never optimistic. Now, with industrialization that changed. So, all of a sudden we've got now hold on to these elements that I'm giving you these ingredients. ## Cite Mufti Abu Layth Archive, segment ucdrbLyGY70/s/9. https://muftiabulayth.org/r/ucdrblygy70/s/9/ Not a fatwa: these answers were given to specific people at specific times. Ask a qualified scholar about your own situation.