I read these arguments on another website:
"I read the Wikipedia article about Islamic banking, and the claim that they "don't charge interest" just doesn't hold up. Under IB, the bank buys something and then resells it to you for more, but allows you to pay in installments.
Sorry, but that's charging interest."
"Arguments about the evil of interest fundamentally fail. Even if everyone rejected the whole idea of lending or borrowing money at interest, or the government could somehow enforce a complete ban, interest would still enter into most economic calculations. People would still gravitate toward a discount of the present value of future goods. People would still buy things that draw rents and can be resold such that they earn a return. (The German word for interest, Zins, comes from the Latin census, which was the tabulation of someone's wealth which was at the time mostly land. People soon realized that owning land had the same financial effect as loaning money at interest and so the name stuck.)
Futhermore, the idea of interest as a drain on society is ultimately contradictory. If any and all interest income is evil, then the more, the worse. So the longer you loan out the money, the more evil you're committing. The most evil thing you could do then would be to loan the money out *forever* and let the interest accrue. Of course, this means never redeeming it to consume resources. Since you had to produce something at some point to earn the interest, that would imply that the absolute worst thing you could do is to produce, and never consume. In reality, of course, that's the best thing you could do! Hence, a contradiction.
Interest, exponential value growth, is a manifestation of the exponential growth involved in *production*. By producing rather than consuming, you bring into effect a chain of events which enables and exponentially growing level of output. Your satisfaction of someone's desires freed him to satisfy someone else's desires, who was then free to satisfy someone else's desires, and so on. Society is *not* indifferent to when production occurs; all else equal, the sooner production happens, the better. Interest rewards those who produce sooner and consume later, and thereby enable a larger amount of wealth for all.
Finally, it's true that interest allows past injustices to increase in severity because the profits accrue interest. This is an argument for assigning interest penalties to those illicit profits, not to condemning interest."
Is anyone knowledgable on economics to speak on this issue?