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Ottoman Cash Waqfs: An Alternative Financial System

The institutions of “waqfs,” that is foundations, stand before us as an intermediate option between collectivist and individualistic societies. These foundations provide for societal and individual needs in many areas including religion, education, finance, health, and infrastructure. One of the most important forms is the cash waqf, which acts as both a charity and financial intermediary and has evolved to become an option to today’s conventional lending mechanism. Waqfs have historically solved the most important financial needs of the period by considering the sensitivities of the society. This study will discuss the potential solutions that the cash waqfs can bring to the problems that modern-day societies are currently experiencing in finance.

Ottoman Cash Waqfs An Alternative Financial System
British Shadow Chancellor McDonnell demonstrating outside the Bank of England on the 10th anniversary of the collapse of Lehman Brothers Bank which caused the global financial crisis in 2008. MATTHEW CHATTLE / Barcroft Images /Barcroft Media via Getty Im
 

Introduction

In our global world, the economic problems caused by the modern economic mind do not only affect the country where the crisis emerges. As the rate of integration in the global financial system increases, the rate of impact from crises also increases. Unfortunately, countries do not have alternatives to being in the global financial world. If they want to trade or take part in international organizations, it is imperative to be integrated into the network. Therefore, if a country wants to exist in the system, it has to bear all the negativities including financial crises.

Financial crises have many causes but perhaps the two most important reasons are the huge gap between the real money circulating on the market and the money that is considered as circulating, and the interest rate ideology which causes wealth to accumulate within certain peoples and groups. These fundamental problems are still obstacles to improving monetary distribution but despite this, institutions and states are not engaged in a “real” effort to tackle the financial problems caused by the system. The result is that capital owners have become the most important policymakers in the world, after the emergence of states with mercantilism in Europe in the 16th century, followed by capitalism which started with the Industrial Revolution. In a system where capital owners are so strong, it is naturally very difficult to combat the problems caused by interest, which is their main source of income.

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