A Comparative Study on Capital Formation in the Usury and Non-usury Economic Systems

10.22059/ier.2003.30889

Abstract

The rule of ideologies which ban interest or usury which is earned through lending money has led to developing economic systems that differ from conventional economic systems in which ,interest has been entered. The presence of systems not relying on interest, in turn, has questioned the necessary motives in capital establishments through savings. In this paper, while defining the concepts of money, capital and attribution of interest to money and profit to capital, a comparative study has been carried out to study the characteristics of capital establishment in the usury and non- usury based economic systems. It has been shown how these two systems differ from each other in terms of production costs, amount of profit, risk acceptance, increased supply of goods and services and general level of prices. At the same time, the important issue of supplying financial provisions for non-investment projects and related indexes have been studied accordingly.