Usury laws

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Inflation is not at the root of all evil. Let's say there's 10% annual inflation, a rate that of course would horrify people today. My widgets go at $10 apiece and I want to build a widget factory. If I know that they will cost $13.33 in three years then it's easier to sink $10 million of today's dollars in a new widget factory. The deflationary environment of today unfortunately makes it more profitable to have the money sit around.

Usury laws are probably the stupidest thing on the planet. I know Islam bans usury entirely, but several banks make money following Sharia law. Does anyone know how Islamic finance works?

I will explain it once more. Suppose A wants to borrow money from B for to open a business. A and B form a business partnership with B supplying the capital. If the business succeeds then B sells his half of the partnership for the amount he invested plus any extra out of business profits. This increment derived from business profit takes the place of interest.

Got it?

ruveyn