HoardingI was reading Al-Hadith, the sayings of Muhammad, and was surprised by the strong condemnations of usury and hoarding. Hoarding is defined as storing food for more than 40 days and that gave me pause as we would be in serious straits if no one stored food for more than 40 days. Of course Muhammad was mostly experienced with the lives of nomads and traders in Arabia and I can see how hoarding wouldn't be as necessary in those cultures, but in most agricultural environments someone has to store the food. In the Northern hemishpere it is quite predictable that the cheapest price of most any dried, canned, or frozen food is around November and most expensive around April. However, the price difference is not all that great (else we would all want to store food ourselves) and can easily be predicted by the cost of storage and the current interest rates. There are massive grainaries and warehouses which store enough food so that no one really has to worry about going hungry until the crops from the Southern hemisphere come in (or until the next harvest if it is cheaper to store the food rather than transport it) and I can buy reasonably priced corn flakes whenever I like. Now all this seems like a good thing, but it raises the question of what Muhammad was concerned about. In those days of war and harsh times, the fledging Moslem state must have suffered from profiteers who used their personal wealth to take advantage of those with less means by buying up food when it was available and keeping it back in anticipation of further shortages and the huge profits they could make later. This is not responsible planning for the needs of the group, but rather trying to further increase their wealth by leveraging their advantages over others. This puts the hoarder in the unfortunate position of hoping for further calamities as that increases their wealth. In essense they are praying for the hardships of others. This is a clear path to misery and suffering by increasing their outward focus, imagining that further wealth could fulfil their need for love and acceptance which is really resolved by being the sort of person we want to be. The case against usury is similar, but less extreme. In those days all loans would have been between individuals (there were no corporations, bond markets, or even banks). In such cases, the rate of interest would widely vary (there was no market to keep them reasonable) and there would be the stress of loans between individuals. I myself avoid loaning money to my friends as I value the friendship more than the money and loans can put a lot of stress on a friendship. The only time I loan money to a friend or family is if I am willing to give them the money (i.e. it is for a good cause and I don't really need the money) and then I only call it a loan to allow my friend to save face (taking the money without any loss of pride). I don't worry about whether they pay me back as it was a gift. If they do repay the loan then I think of it as a gift from my friend and am ever so happy about it, what a nice surprise. As to loans to acquaintenances, I leave that to the professionals (like banks) who know what appropriate rates are can take the appropriate precautions. Of course this is in line with my thinking that all legal professions can be performed in accordance with dharma and a life of service. Banks perform the service of investing our excess cash to useful purposes and managing the investments professionally. A banker following dharma seeks to make loans at good rates (choosing good recipients) benefitting the savers (paying good rates), borrowers (keeping loan rates down) and investors (minimizing losses). The job of running the businesses to store food can also be thoroughly in line with dharma. Most busniess people are quite risk adverse and like to insure a good return on investment for their investors (people like me saving for my retirement) by storing the food efficiently and running their business well. They insure against unpredictable events through insurance (for catastrophic events) and options and future contracts. These business men and women are hardly in the position of praying for disaster as their profits are insured by the predictable agricultural activity. Of course there are also the options traders who trade on future contracts. While such traders could be in the position benefitting from catastrophies, realistically those traders are all in the profession of predicting what shortages will develop based on their best estimates of the current trends. When they see events which lead them to believe that there will be a shortage in some commodity like corn. They then buy the appropriate contracts and drive up the future price of that commodity. That in turn encourages farmers and feed manufacturers to resolve the potential shortage through increased plantings and the use of cheaper alternatives. As the people in the market respond to the higher future price, the traders will recognize the larger supply and will sell future contracts. They are in the business of insuring that our production resources are well utilized running efficiently. This can be a very dharmic role and as traders are as likely to be on the selling side as the buying side overall, there is hardly any need for them to pray for anything other than a smooth and efficient process. Indeed, bankers, storers of food, and options traders all have the very useful role of depersonalizing what could be a very destructive and exploitive process. By dispassionately and professionally determining interest rates and future prices, we all benefit without unnecessary conflict and exploitation. For me, the key is not to avoid any form of usury or hoarding, but rather to avoid thinking of the people around me as different from myself and targets for exploitation. It is better for me to focus on my connections to them (making them more like family) and look for ways that we can all benefit and grow together. While usury and hoarding can certainly have negative consequences, it does not need to. Click here to see the next rambling tale.
This page was last updated on April 28, 2010