[Spaceships] Islamic Banking and Financing Spaceships Purchases

[jason taylor]

Originally Posted by whswhs

Sure, but it would work exactly the same way in economic terms if there were a large class of sadists who enjoyed seeing images of whip-scarred serfs and gloating over them, and would pay more for that brand of coffee.

That sounds like MESAN brand Coffee in Honor Harrington.

[jason taylor]

Originally Posted by vicky_molokh

Greetings, all!

For cultural (rather than religious) reasons, a setting includes two major approaches to banking. Let's call them, for a lack of a better word, 'Usury-OK' and 'Usury-NO', with the latter resembling the real-world Islamic Banking (but actually has nothing to do with Islam, since the setting has totally different cultures and religions). In some regions, people are heavily inclined towards one approach or the other, and in some there may even be legal reasons why one or the other maintains little or no presence; in others, they coexist to cater to people with different priorities, fears, concerns etc. (Also, a side note: IRL Islamic Banking seems to still be in its infancy, barely a few decades old, while the setting in question is TL9ish and had its usury-no equivalent for a handful of TLs, letting it become more developed / bugs removed / etc.)

Now, of course all financial matters are very complex in real life, and usually simplified in games. Me reading a bunch of articles and discussions (which I did) is not enough to understand the intricacies of Islamic Banking IRL, and real-world understanding is recommended when trying to produce a playable simplification of a real thing.

So my question is to those who are 'at home' with real-world intricacies of banking, economics, accounting, finance etc.: what should be the game effects of choosing the latter approach over the former? What should be the game-mechanical differences in terms of financing and payment as depicted on SS2:27?

Thanks in advance!

One quirk I invented which was that interest loans were legal in the normal economy(other means to pump capital were preferred but that was another story). But licensed gaming halls did not allow wagerers to wager borrowed money and indeed all chips must be bought in cash. The reason for that was to prevent harm coming to a relation whom it is presumed must in honor cover for them. The interesting thing was that gaming halls were allowed to permit customers to leave winnings in the bank and even to give usury-that was their affair. They just were not allowed to charge it. The effect was that gaming halls tended to become faux-banks existing beside normal banks.

This is not quite the same as what you are getting at, but it is interesting enough to notice.

For the financing of spaceships most clans organize their properties like Israeli Moshavrim. Personal properties are owned personally and starships are usually corporate, unless someone is a really humongous Taipan. Despite this banking is a normal part of life and clans that have amassed a given amount in shipping often switch to banking and charter off their tonnage. Clans in this stage often get involved in politics more as well.

[jason taylor]

Originally Posted by whswhs

No one who is lending money for commercial reasons, rather than within a family, to a friend, or as an act of charity, would accept getting the same money back a year later. "I'll pay you now" is not equivalent to "I'll pay you a year from now" in value—nor to "I'll pay you now, but you have to agree not to spend the money till a year from now." The latter gives you fewer options, and the ones you don't get include the most urgent ones.

So if you do prohibit lending X amount of money and getting back X+x, one of three things will happen: Either you get workarounds, or you have desperate borrowers going to black market lenders (who will charge higher interest rates and/or use brutal enforcement methods), or you simply have no ability to borrow money, no matter how desperate your need. In GURPS terms, the first two rely primarily on Law and Streetwise, respectively. (Whereas if interest is legal, you just need to make a Finance roll.)

One of the common workarounds, though, is the understanding that you are lending money to a productive enterprise—in effect, sharecropping. Your funds pay for assets that increase the output, and thus you're entitled to share in the output you've helped produce. That doesn't do anything for consumer loans, including purchase of consumer durables such as cars, houses, or yachts, but it would seem to apply, at least potentially, to spaceships.

I often use that. "Voyage shares" are often used. The financier does not buy the ship-that belongs to a given clan. He does buy a share of the voyage. Of course that would mean these could only be used to soften the installments on the ship while it pays up. Which sounds a bit of a tricky game to play.

[whswhs]

Originally Posted by Anthony

Well, this assumes you think Sharia banking is more than just semantic games. Assuming it is, however, what this amounts to is "loans, as described on SS2:27, do not exist".

Yes. You're free to make "no interest may be charged on loans" a formal rule that has well understood and long established workarounds. And then really you have a system equivalent to ours, but with Law, Administration, and Accounting requiring different familiarities or even different optional specializations. Or you can make it an actual restriction, and deal with the consequences of not being able to access cash for commercial transactions except from personal savings, selling personal assets, or retained earnings from a business.

And both systems may well be described by saying "It's not possible to lend money at interest." The trick is to know what that means in practice.

[jason taylor]

One possibility is that the receiver does some kind of favor(such as burying the lender's assassinated son) that the Mullah can't track.