Challenges (French Economic Magazine)
Edito 11 Septembre 2008

The pope or the Quran
André Comte-Sponville, philosopher, repeated it in satisfaction: Capitalism cannot be moral, nor against morality. It is simply amoral. Economy and morality belong, in the pascalien sense, to two different orders, and trying to conjugate both together comes close to "barbarism", calls remind us the author of the excellent essay: Is capitalism moral? (Published: Albin Michel). But even for those who do not believe in the divine order, they should be tempted, as the pope is visiting France, to look for some references on the economy in the Vatican literature.
Our columnist, Robert Rochefort, who hides behind his position as director of the Crédoc (Research centre for the study and observation of life quality), an attachment to the tradition of the Social Christians, found nothing very recent from Rome (read page 61). Nothing at least very important since 1991, when Jean-Paul II had ventured on the economy in his encyclical Centesimus annus, when he had half-heartedly provided a justification of profit: the corner stone of Capitalism was recognized at the most « as a good indicator of the functioning of the enterprise».
Really, and Benoît XVI will forgive us, as we cross a financial crisis which sweeps all growth indexes, it is rather the Koran which we need to read again than the papal ****s. Because, should our bankers, eager for profitability on stockholders' equity, had respected, for at least a little, the Sharia, we would not be in this situation.
You ought not to see the Islamic finance as an exercise of medieval barter, because the countries of the Gulf showed us how much their entrepreneurship mentality knew how to take on the XXIst Century. Simply, their bankers do not compromise on a sacred principle: Money must not produce money. The translation of this commitment is simple: any credit has to have opposite a well identified asset. Forbidden are the toxic products; the ABS (Asset-Backed Securities) and CDO (collateralized debt obligation) whom nobody is capable of understanding. In other words, money can be used only to finance the real economy. There is, thus, no hazard: if the banks of the Gulf went out unhurt by the Subprime mortgage crisis, it is because they did not enter it. The respect for this principle of the Quran is also very useful in one's relation with money, be they companies or private individuals: so, institutions, have no right to get into debt beyond their market capitalization; as for the physical persons, they cannot de facto suffer from excessive debt. Here are rules which cannot be harmful. And even if they rest on a **** of the VIIth Century, Benoît XVI will have difficulty in making sermons more related to the current events.