Money is not a commodity like a truck or a house. We cannot treat it as such.
How do you figure? Money's sole purpose is to be a commodity: it is an instrument of value used for exchange and trade. There is no other reason for it to exist.
And in the case of a residential tenancy or a truck lease, the commodity isn't the truck or house itself, it's the
use of the thing. When you rent a truck, the thing you're buying isn't the truck itself - you're buying time, distance or some other measure of usage... in any case, you aren't buying any concrete, physical "thing".
When you rent a house you pay a rent. The value of the house depreciates or appreciates accordingly. So when the house is returned to the owner he gets the value attached to the house which might be more or less than before. Paying the rent makes sense because we are giving a commodity.
What commodity, exactly?
The same with a truck. There is a degree of depreciation that is accounted for by the rent.
Rent is not just based on the depreciation of the truck. It's based on the value of usage of the truck according to market forces.
The lessor certainly hopes that the market rate will be enough to cover the cost of depreciation, but also overhead costs (leasing of trucks has to pay for the company's office, staff and expenses) and profit.
And profit is important. Without profit, there's no incentive to start the business in the first place. The business owner has to have some reason to choose to start a business (with all the risks that this entails) rather than keeping his money tucked away safe under his bed where he won't lose any but won't gain any either... otherwise, the business doesn't come into existence in the first place.
However, money, itself is not a commodity. Money is invested and upon invested you get more or less of it. But if money is assumed to automatically increase in value all the time ... that just makes no sense whatsoever.
Yes, it does make sense... or at least as much as it does to lease out an apartment for a year at a fixed monthly rate without knowing with certainty what your expenses associated with the rental will be.
There's risk, certainly. And the person shouldering the risk usually gets paid a premium to do so. That's why you have a range of investment choices from guaranteed, government-backed accounts with low interest to speculative, high-interest accounts that are not guaranteed at all.
When lenders deposit money in banks they ALWAYS get a profit in return. The whole economy might be suffering a recession and the whole economy might be making an overall loss but the lenders, somehow, still get more money back. Unless the borrower goes bankrupt and simply can not repay anything. It just makes no sense.
Personally, I think it makes sense: the lender and borrower both figure out terms that they think will work to their advantage, and come to an agreement. There's risk involved for both, but they both try to minimize this risk and maximize their anticipated gains.
I see this a fundamentally no different than other activities that Islam apparently has no problem with (AFAIK).
Here's an example from my own past: I used to work as an estimator for an industrial air conditioning company. For repairs, some of our clients would pay us on a time and material basis (i.e. if the repair technician works 3 hours, the client pays for 3 hours, plus the cost of parts at a set markup), others preferred to have a set price arranged in advance.
The problem (at least from the estimator's point of view) with a set price, though, is that often, the time to do a repair can vary wildly. Finding a bad electical connection, for example, can mean checking every connection one-by-one until the bad one is found. The technician could be lucky and find the bad one right away, or it could take a whole day of searching.
If you know that a job could take anywhere from 2 to 10 hours, how do you price it? What you end up having to do is make your best guess for time (e.g. between 2 and 10, maybe assume the midpoint of 6), and then add on a premium to compensate for the additional risk you're taking on (say 2 hours). This means you end up charging the client a fixed price of 8 hours. 75% of the time, this is fine and 8 hours is more than enough time to do the job. 25% of the time, though, the technician takes longer and you lose money on the job. The client pays the same either way.
Effectively, the client has two choices:
- pay on a time and material basis, take on the risk of the project, but generally pay less (assuming your contractor is honest)
- pay at a set price, have certainty of what the cost will be, and generally pay extra for the privilege.
Risk exists either way; the difference is just either shouldering it yourself or paying someone else to take it on for you.
It's exactly the same for interest-bearing investments. The banks engage in business and investments that they believe can make them money but have some measure of risk associated with them. The banks need money to make these investments, and are willing to pay money (i.e. interest) to account holders to use it. How much they will pay you depends on how much of their risk you're willing to take on; you provide a service to them and are compensated for it.
Just as the person who leases out a truck gets paid by the lessee, the person who lends out money gets paid by the borrower. I see no moral distinction between them at all. Both money lending and truck leasing can be done in honourable and dishonourable ways.
