On 12/11/2018 11:07 PM, Hamidreza Jafari wrote:
I didn't follow Michael D Novack. Though I can clarify on some issues that
were mentioned.
Hamid
Sorry about that. I was not expecting many on this list to understand,
but there can be MORE differences between Western Civ "interest" loans
and no interest loans of various traditional societies.
Interest loans are (almost always) fully defined as to the amount to be
paid back.
No interest loans are not necessarily so defined, may resemble
"partnership investments". An "iron sheep" contract was a very unfair
arrangement (unfair to the borrower) which was definite on the downside
but profit shared on the up side. Forbidden by Jewish law and the
"sheep" because originally poor shepherds needing to borrow to get sheep
to manage.
Please understand, the no interest loans of traditional societies do NOT
necessarily mean that the lender could not make a profit on the loan.
Just that this could not be from INTEREST, had to be conditional on
outcome, and the borrower not assuming all of the risk << "iron sheep" >>
Accounting for CONDITIONAL items can be non-trivial. Let me give an
example from my days. I went to college partially with NDF loans. These
were CONDITIONAL loans. They had an interest rate but interest was not
charged if in school or if teaching school (after graduation) and each
year teaching forgave a percentage of the loan.
Michael D Novack
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