Part 4 - Covering the 5th and 6th principles: Distribution of wealth and ownership of public, state and private property. Together with Islam's view of trading in the Stock market.
Fifth: Distribution of Wealth and Ownership in Islam
The rules of wealth distribution in Islam comprise a unique aspect referred to as the public property. The wealth under the Khilafah state is owned under three headings: Private property, Public property and State property. It is the state that maintains and protects these in accordance with the laws of Shar’ia.
Public Property: This category does not merely comprise the highways and roads etc. but also includes what was explained by the Prophet (saw) in two noble and authentic narrations:
First Narration: The Prophet (saw) said:
The Muslims are partners in three (resources): Water, Pastures and Fire.
The term ‘fire’ here includes all forms of energy used as fuel in industry, machines and plants as well as the gas plants which use gas as fuel and coal etc. All of these are under the public ownership category.
Second Narration: The saying of the Prophet (saw) to Abyadh ibn Hammal who was refused ownership of a salt-laden land on the ground that this land contained an uncountable quantity of water as has been reported in the hadeeth. Here the uncountable means a source that replenishes in time. This category includes all minerals whether they are solids like copper, iron or gold etc. Or liquid like petrol or gaseous like the natural gas. It also comprises such categories which are obvious and hence easily discovered antimony, sapphire and so on or is found in the depths of earth and not easily discovered like underground mines, they are all under the category of public property and the Khilafah state alone manages and supervises their extraction, sale and distribution. Also it is the state that ensures that every Muslim gets his rightful share in the public properties. So the petroleum crude oilfields and the mineral mines in the Khilafah state are not owned by the state as was the case in the communist system where the state exercised its will over such resources as it wished, nor is it owned by individuals or corporations, as is the case in the prevalent capitalist system which makes it rightful for the big capitalists to own the enormous resources and who boast of such personal wealth which exceeds that of certain countries!
Public property is not similar to statoe property which the ruler dispenses for the interests of the state, it is for the Ummah (nation) and the revenues generated by public property are to be disbursed among them after the incurred costs are adjusted. These revenues are to be distributed to the citizens and they have rights over it from their birth. It also has to be spent on their protection and making them a force to be reckoned with. This can be done by spending on military capabilities and ammunition. One can also imagine the huge amounts generated from crude oil and minerals in the Islamic lands and how they would be spent on alleviation and elimination of poverty when the Khilafah state disburses these revenues and services to its citizens.
This shar’i understanding along with other concepts goes well to consolidate the economic lives of the Muslims and prevent their rulers from falling for the deception and intrigue of the non-Muslim colonialists who have managed to transfer the petroleum revenues from the Islamic lands through the so-called sovereign funds of the Gulf states for the development of Europe and America, and denied the same funds to this Ummah. These revenues now count in the trillions of gold dinars and they are enjoying them to the cost of this Ummah while the Ummah is condemned to suffer further from the financial crises of their making!
As for the state property which is different from public and private property. State property can be spent by the Khaleefah as per his discretion and ijtihad and it includes the Fai, Kharaj and the inheritance of those who leave behind no successor. This is on the condition that Sharee’ah does not specify where such revenues may be spent, in cases where the Sharee’ah does lay down such conditions, then it has to be spent for that which it was specified, this is similar to zakat which can only be spent on the 8 specified categories given in the Quran.
The state property may be spent by the Khaleefah per his discretion and ijtihad in matters of state and citizenship, for instance he may spend to create balance in the society so that the money transactions are not confined to the rich alone, Allah (swt) says:
“in order that it may not become a fortune used by the rich among you.” [TMQ 59: 07]
Therefore the Khaleefah may grant these to the poor and destitute as the Prophet (saw) did with Fai from the Banu Nadheer tribe which he (saw) distributed only amongst the immigrants from Makkah and not among the Ansar (supporters) of Madeenah except for two of the poor Ansar who were as destitute as the immigrants, they were: Abu Dujanah and Sahl ibn Hunaif. This was in compliance with the Ayah so that the money circulation does not remain confined among the rich.
As for the private property, it is dispensed by the individual and is different from public property and the state prevents any violation of it. It is not allowed for a person to usurp this forcibly, not even by the state. Consequently, the so-called nationalisation actually amounts to exploitation of individual property by the state and this is a grave crime.
Certainly, categorising these into just one category under the state’s management will invariably result in crisis leading to failure and breakdown. This is how the concept of communism failed in economics because all properties were owned by the state. Even under communism, certain sectors were immensely successful like the heavy industry and petroleum sectors. While those that must be managed by individuals, like agriculture and medium sized industries, failed miserably under communism and under the weight of these failures, communism came to be extinct. Similarly, the capitalist system failed and is now nearly on the threshold of collapse. This is because on the grounds of free market economy, privatisation and globalisation it allowed individuals, enterprises and companies to own what should be public property, like petrol, gas, energy forms and so on. The result of this has been the recurring upheavals and rapid crashes in the financial markets and companies one after another. This is how socialist communism collapsed and this is why the capitalist system is on the verge of collapse.
Sixth: The Stock Exchanges and the Islamic Perspective
In the capitalist system, the stock exchanges play the same role as the interest system which confines and concentrates wealth within a small circle of people. The stock exchanges are even more severe because they turn the economy from trading in real goods and services to mere numbers and papers from which people profit and incur losses. In this system, wealth is inflated multifold without any real production of good or services. When the markets reach a high, the people get the illusion that economic growth is high and similarly, when the markets plunge, people are shocked because their wealth which they possessed or thought they possessed, is blown away, while the financial speculators take away the real wealth. An ordinary investor makes a profit by buying shares and selling them off when the prices increase, while a speculator earns his profits through the so called “short selling” wherein he sells shares (which are borrowed) at high volume in order to bring down the prices.
Indeed, the stock exchanges and financial markets are the cradles of capitalist crises which leave behind scores of people poorer having exposed them and their wealth to severe losses.
However, under Islam the buying and selling markets are regulated by the laws of Sharee’ah which are a guarantee against conflicts and ensure that no one usurps the wealth of others by invalid and wrongful means, some of these regulations are:
A: Any goods not owned and possessed by the seller is not allowed to be sold. Therefore any good that has been bought but not taken possession of, is prohibited to be sold. The practice of the stock exchanges is that shares and goods are bought and sold many times over while they remain in their place, neither in the possession of the seller nor of the buyer.
B: These rules forbid speculation whereby the prices surge, not because of an actual demand or selling of the goods, but because speculation in high volume and often without possession causes an increase in price. This is the practice in the stock markets currently. The increase in the prices of crude oil in the last year bears proof of this.
C: These rules also prohibit the purchase and sale of the six commodities unless it is with immediate effect, hand to hand transfer, while if it is for the same commodity, the sale will be invalid without the quantities being equal and without immediate transfer of possession. These commodities are: Gold, Silver, Wheat, Barley, Dates and Salt.
Therefore the selling of these commodities against each other is not valid unless it is done with immediate transfer of possession, and selling of these commodities (the same commodity) is not valid if done without taking possession and with equivalent quantities. For instance in selling of gold for gold or wheat for wheat. Differences in quantity and deferred delivery is not allowed.
But the practice in the commodities exchanges is in contravention to this and hence invalid. Any delay is taking possession in these commodities especially during exchange leads to problems. The crises emerge as a result of high volatility, price differentials and deferred possession, driven falsely as possession is not required for initiating the trade. Consequently it becomes similar to gambling and its adverse affects like losses and crises are obvious.
D: The Sharee’ah rules prohibit transactions of shares because the public limited companies and as a result, their shares are invalid. These shares are certificates which comprise mixed amounts of permitted (Halal) capital and prohibited (Haram) profits in the invalid contract and transaction where the principal amount and profit are mixed. Each share certificate represents an equity share in the assets of the invalid company and such assets have been amassed as a result of invalid transactions prohibited by Sharee’ah. This becomes prohibited (Haram) money and the shares of the company would include Haram assets. This renders the shares Haram whose sale, purchase and transaction is prohibited. This applies both to the ordinary shares as well as to preferential shares which accrue profits under all circumstances and which have access to priority payments in case of the winding up of the company and disbursement of profits.
Similarly, it is also not allowed to purchase shares on interest based loans offered by the share broker or others to the buyer against mortgage of the shares itself. This is because it is akin to interest and shares are mortgaged. These actions are prohibited by text on the one who eats interest, the one who pays interest, the one who records the transaction and the one who bears witness to the transaction.
It is also not permitted to sell shares that are not owned by the seller and are ‘acquired’ by way of the promise of the broker that a loan would be given at the time of delivery of shares. This amounts to selling what is not in possession of the seller (the broker in this case). This prohibition becomes all the more severe when a condition is stipulated that the price is to be paid to the broker so that he gains profits from it through deposit with usury interest so he gains money for his lending of the shares.
It is also not permitted to sell or transact shares because the shares are a debt to the company which invests this money for interest and also because it is prohibited to sell debt with debt.
Thus the sale & purchase markets in Islam achieve Halal and secure trade free from the threats of crises, disputes, speculation, gambling and cheating. They are clean markets with clean hands which comply with the rules of Sharee’ah in all transactions.
Wednesday, 25 February 2009
Monday, 23 February 2009
The Plight of Africa
Slight departure today from the key conference address. I'm linking to an interesting article about the future of Africa, which is questioning whether we will see an improvement away from the current impoverishment of the African continent.
Whilst it is highly unlikely that the African roots of Obama will override the overwhelming capitalist interests of his nation in Africa, the key point I think that needs to be addressed is the issue of ownership of the wealth, a matter that we have been highlighting in the recent conference. Until there is a clear delineation of public, state and private property as clearly set out in Islam we will continue to witness the clear and consistent rape of public resources worldwide. That Africa is so public resource rich = oil, gas, minerals, water, and so on = is both a wonderful advantage and a terrible magnet for the most undesirable of looters, shysters and crooks that is called the international multinational corporate world. Long term debt forgiveness programmes which in effect are tiny in relation to the scale of debt slavery, too will have minimal effect (yet will garner much column inches and false publicity).
We need to get the basics right first. And only Islam forbids the sale and lease of public property into private and corporate hands.
More tomorrow.
http://www.finalcall.com/artman/publish/article_5661.shtml
Whilst it is highly unlikely that the African roots of Obama will override the overwhelming capitalist interests of his nation in Africa, the key point I think that needs to be addressed is the issue of ownership of the wealth, a matter that we have been highlighting in the recent conference. Until there is a clear delineation of public, state and private property as clearly set out in Islam we will continue to witness the clear and consistent rape of public resources worldwide. That Africa is so public resource rich = oil, gas, minerals, water, and so on = is both a wonderful advantage and a terrible magnet for the most undesirable of looters, shysters and crooks that is called the international multinational corporate world. Long term debt forgiveness programmes which in effect are tiny in relation to the scale of debt slavery, too will have minimal effect (yet will garner much column inches and false publicity).
We need to get the basics right first. And only Islam forbids the sale and lease of public property into private and corporate hands.
More tomorrow.
http://www.finalcall.com/artman/publish/article_5661.shtml
Sunday, 22 February 2009
Crisis free economic justice - economy in the Khilafah - Part 3
Our third instalment of the keynote speech from the Khartoum, Sudan conference organised by Hizb ut-Tahrir…….. Principles 3 and 4 (Islam’s monetary basis and the prohibition of interest (usury).
Third: Islam’s Monetary view
The Prophet (saw) specified gold and silver as the monetary medium of exchange and made these as the only standard benchmark to measure goods and wages of work. All transactions were based on this standard, the units of which were the ounce, dirham, daniq (1/8 of dirham), carat, mithqaal, and dinar. All of these were well known during the era of the Prophet (saw), the people used them and it is established conclusively that the Prophet (saw) approved the usage of these units. All trade and dower were measured in gold and silver as the monetary standard and this is proved by the authentic ahadeeth. The weight of these was laid down on a specific system of the people of Makkah, the Prophet (saw) said: “the standard of weight is the standard of the people of Makkah.” In comparison to the units of cash under Islam, the units of this period are: 1 dinar=4.25 grams of gold and 1 dirham=2.975 of silver.
Thus the Shar’i rules have linked the monetary system to gold and silver and under this monetary system; there was never a fiscal crisis as opposed to the current practice where the currency of one country is tied to a currency of another country. Ever since gold was removed as the sole monetary standard and was taken jointly with the dollar as the standard under the Bretton Woods system at the end of the World War II, and finally replaced with the dollar as the sole monetary standard in the 1970’s, the US dollar became the overwhelming defacto currency of the world and as a result of this, any tremor in the US economy caused a fatal blow to the economies of all other countries. This is because most if not all the cash reserves of these countries is covered by the paper dollar whose intrinsic value does not exceed the value of the paper it is printed on! So much so, that even after the European Union’s Euro entered the arena and nations began to buy currency other than the dollar, the US currency generally retained its position of the overwhelmingly dominant currency.
Therefore so long as gold is absent as the sole monetary standard, economic upheavals will repeatedly occur. Not only this, any crisis related to the dollar would adversely reflect on the economies of other countries, and even any action that America takes to create a political upheaval will reflect on the dollar and therefore the entire world. This can happen with any other paper currency of any influential country.
Fourth: Strong Prohibition of Interest
The Shar’i texts have prohibited usury in the strongest of terms and this prohibition is conclusive both in its implication and narration with no scope at all for any other interpretation or ijtihad. In fact dealing in interest is equivalent to waging war against Allah (swt) and His Prophet (saw), He (swt) says:
“O you who believe! Be afraid of Allâh and give up what remains (due to you) from Ribâ (from now onward), if you are (really) believers. And if you do not do it, then take notice of war from Allâh and His Messenger [sal-Allâhu 'alayhi wa sallam]” [TMQ 02:279]
The intensity of this prohibition comes in such strong terms that the Prophet (saw) cursed usury and those who indulge in it, it has been reported in an authentic hadeeth:
The Prophet (saw) cursed the person who takes interest and its payer, the one who records it, and the two witnesses. [Sahih Muslim]
This curse implies that the cursed person is denied Allah (swt)’s mercy. A proper understanding of the realities of the interest based capitalist economy, reveals that it leads to exploitation and subjugation because of the interest based loans and the consequences are misery, hardship and distress. Therefore the denial of Allah’s (swt) mercy to those who indulge in usury is easily comprehensible. Even the capitalist West has now come to realise that profit through interest was a culprit behind the recent economic crisis and this is the reason that they are now advocating a reduction in the interest rates on loans so that the reduced interest rates will stimulate economic activity, if only they had realised the truth and altogether done away with it!
For these reasons, the economic system in the Khilafah State will be free of banks and interest based financing funds which are the prominent symbols of capitalism. Ensuring a secure economic life for Muslims has three aspects:
The First Aspect: This will focus Muslims’ attention to the production economy or the real economy, which will result in an abundance of goods in the Islamic state in terms of production, imports and exports and thereby will result in real competition. This, over a period of time will develop the markets which have suffered from the communist/socialist system and make the markets of the Khilafah state greatly prosperous.
The Second Aspect: This system will protect the Muslims and non Muslims in the Khilafah state from the loss of their wealth by way of interest. The Islamic system will eliminate the strong protectionism and inflation, which encourages people to mortgage their wealth and cash in banks in the hope of being rewarded with a small margin of interest as witnessed in the capitalist economy. The banks thereby accrue huge profits by impoverishing others through interest based loans and reap huge deposits from the local as well as international markets including from the poorest of the people who suffer endlessly under the clutches of interest, suffering toil and hardship over a great part of their lives trying to repay the accumulated interest. As a result of this we see misery in the capitalist countries which spring from the control of the banking sector over all other sectors since all sectors are intricately entangled with the banking sectors and the interest regime which cause economic threats. All these perils will be unheard of and non-existent in the Islamic context under the Khilafah state. Also the richest of the rich who have amassed enormous wealth mainly through fleecing other people’s wealth will be an unheard of phenomenon in the Islamic economic system. The wealth of the Muslims and non-Muslims will be protected under the system sent down by Allah (swt) which forbids usury and the temptations of the banks which will soon be exposed as a mere mirage which impoverished people and robbed them of their wealth by treacherously invalid means.
The Third Aspect: The long and endless queues that you come across in front of the capitalist banks are of people whose wealth has been evaporated and they have been hopelessly impoverished. This is far from the reality under the system of Islam which forbids and eliminates all banks. Thus it does away with interest based lenders and protects the wealth of the people from being fiddled away by the usury eaters. There are no laws in the Khilafah state to protect interest based banks and invalid companies which declare bankruptcy and continue to indulge in corruption & corrupting.
Thus by forbidding interest and prohibiting it conclusively, Islam has completely blocked any chances of these economic upheavals and crises from leaking into those lands which comply with the Islamic system; thereby the economic life of Muslims is made safe, secure and impervious from such crises.
However, Islam has encouraged Muslims to lend to their brethren and urged them to do so, the Prophet (saw) said: “No Muslim lends to another Muslim twice except that one of these would be like a sadaqah.” This is not only at the level of the individual alone; in fact there is a separate economic department within the Khilafah state which will disburse loans to farmers and entrepreneurs within the framework of the state’s economic policy and this will be to eliminate poverty by finding gainful employment and providing goods. But off course, these loans will have no interest attached and its purpose will not be to make profits because the Khilafah state is a welfare state and not a revenue collecting state.
Part 4 tomorrow (Distribution of wealth, ownership and the Islamic perspective on Stock Markets)
Third: Islam’s Monetary view
The Prophet (saw) specified gold and silver as the monetary medium of exchange and made these as the only standard benchmark to measure goods and wages of work. All transactions were based on this standard, the units of which were the ounce, dirham, daniq (1/8 of dirham), carat, mithqaal, and dinar. All of these were well known during the era of the Prophet (saw), the people used them and it is established conclusively that the Prophet (saw) approved the usage of these units. All trade and dower were measured in gold and silver as the monetary standard and this is proved by the authentic ahadeeth. The weight of these was laid down on a specific system of the people of Makkah, the Prophet (saw) said: “the standard of weight is the standard of the people of Makkah.” In comparison to the units of cash under Islam, the units of this period are: 1 dinar=4.25 grams of gold and 1 dirham=2.975 of silver.
Thus the Shar’i rules have linked the monetary system to gold and silver and under this monetary system; there was never a fiscal crisis as opposed to the current practice where the currency of one country is tied to a currency of another country. Ever since gold was removed as the sole monetary standard and was taken jointly with the dollar as the standard under the Bretton Woods system at the end of the World War II, and finally replaced with the dollar as the sole monetary standard in the 1970’s, the US dollar became the overwhelming defacto currency of the world and as a result of this, any tremor in the US economy caused a fatal blow to the economies of all other countries. This is because most if not all the cash reserves of these countries is covered by the paper dollar whose intrinsic value does not exceed the value of the paper it is printed on! So much so, that even after the European Union’s Euro entered the arena and nations began to buy currency other than the dollar, the US currency generally retained its position of the overwhelmingly dominant currency.
Therefore so long as gold is absent as the sole monetary standard, economic upheavals will repeatedly occur. Not only this, any crisis related to the dollar would adversely reflect on the economies of other countries, and even any action that America takes to create a political upheaval will reflect on the dollar and therefore the entire world. This can happen with any other paper currency of any influential country.
Fourth: Strong Prohibition of Interest
The Shar’i texts have prohibited usury in the strongest of terms and this prohibition is conclusive both in its implication and narration with no scope at all for any other interpretation or ijtihad. In fact dealing in interest is equivalent to waging war against Allah (swt) and His Prophet (saw), He (swt) says:
“O you who believe! Be afraid of Allâh and give up what remains (due to you) from Ribâ (from now onward), if you are (really) believers. And if you do not do it, then take notice of war from Allâh and His Messenger [sal-Allâhu 'alayhi wa sallam]” [TMQ 02:279]
The intensity of this prohibition comes in such strong terms that the Prophet (saw) cursed usury and those who indulge in it, it has been reported in an authentic hadeeth:
The Prophet (saw) cursed the person who takes interest and its payer, the one who records it, and the two witnesses. [Sahih Muslim]
This curse implies that the cursed person is denied Allah (swt)’s mercy. A proper understanding of the realities of the interest based capitalist economy, reveals that it leads to exploitation and subjugation because of the interest based loans and the consequences are misery, hardship and distress. Therefore the denial of Allah’s (swt) mercy to those who indulge in usury is easily comprehensible. Even the capitalist West has now come to realise that profit through interest was a culprit behind the recent economic crisis and this is the reason that they are now advocating a reduction in the interest rates on loans so that the reduced interest rates will stimulate economic activity, if only they had realised the truth and altogether done away with it!
For these reasons, the economic system in the Khilafah State will be free of banks and interest based financing funds which are the prominent symbols of capitalism. Ensuring a secure economic life for Muslims has three aspects:
The First Aspect: This will focus Muslims’ attention to the production economy or the real economy, which will result in an abundance of goods in the Islamic state in terms of production, imports and exports and thereby will result in real competition. This, over a period of time will develop the markets which have suffered from the communist/socialist system and make the markets of the Khilafah state greatly prosperous.
The Second Aspect: This system will protect the Muslims and non Muslims in the Khilafah state from the loss of their wealth by way of interest. The Islamic system will eliminate the strong protectionism and inflation, which encourages people to mortgage their wealth and cash in banks in the hope of being rewarded with a small margin of interest as witnessed in the capitalist economy. The banks thereby accrue huge profits by impoverishing others through interest based loans and reap huge deposits from the local as well as international markets including from the poorest of the people who suffer endlessly under the clutches of interest, suffering toil and hardship over a great part of their lives trying to repay the accumulated interest. As a result of this we see misery in the capitalist countries which spring from the control of the banking sector over all other sectors since all sectors are intricately entangled with the banking sectors and the interest regime which cause economic threats. All these perils will be unheard of and non-existent in the Islamic context under the Khilafah state. Also the richest of the rich who have amassed enormous wealth mainly through fleecing other people’s wealth will be an unheard of phenomenon in the Islamic economic system. The wealth of the Muslims and non-Muslims will be protected under the system sent down by Allah (swt) which forbids usury and the temptations of the banks which will soon be exposed as a mere mirage which impoverished people and robbed them of their wealth by treacherously invalid means.
The Third Aspect: The long and endless queues that you come across in front of the capitalist banks are of people whose wealth has been evaporated and they have been hopelessly impoverished. This is far from the reality under the system of Islam which forbids and eliminates all banks. Thus it does away with interest based lenders and protects the wealth of the people from being fiddled away by the usury eaters. There are no laws in the Khilafah state to protect interest based banks and invalid companies which declare bankruptcy and continue to indulge in corruption & corrupting.
Thus by forbidding interest and prohibiting it conclusively, Islam has completely blocked any chances of these economic upheavals and crises from leaking into those lands which comply with the Islamic system; thereby the economic life of Muslims is made safe, secure and impervious from such crises.
However, Islam has encouraged Muslims to lend to their brethren and urged them to do so, the Prophet (saw) said: “No Muslim lends to another Muslim twice except that one of these would be like a sadaqah.” This is not only at the level of the individual alone; in fact there is a separate economic department within the Khilafah state which will disburse loans to farmers and entrepreneurs within the framework of the state’s economic policy and this will be to eliminate poverty by finding gainful employment and providing goods. But off course, these loans will have no interest attached and its purpose will not be to make profits because the Khilafah state is a welfare state and not a revenue collecting state.
Part 4 tomorrow (Distribution of wealth, ownership and the Islamic perspective on Stock Markets)
Saturday, 21 February 2009
Crisis free economic justice - economy in the Khilafah Pt2
Today in our second instalment of the keynote speech presented by Ibraheem Othman (spokesman of Hizb ut-Tahrir Sudan) on the 3rd of January, he outlines the first 2 of 9 key Islamic economic principles: the Economic Policy and Islam's Viewpoint regarding wealth, its ownership and utilisation.
First: The Economic Policy in Islam
Administering of the economy is the focus of the rules that address the management of human issues, and the economic policy in Islam ensures complete satisfaction of all basic human needs and then to enable man, as a member of a particular society and a given way of life, to satisfy his luxurious needs which he can earn. The economic policy in Islam does not merely aim at raising the living standard or GDP of the country as a whole, irrespective of whether every single individual has actual access to this raised living standard. Nor does the economic policy of Islam remain content with raising the living standard of the country as a whole and leaving members of society free to partake from this to the extent they can, without ensuring that every single individual has his share in it. Rather, the economic policy of Islam addresses the basic problems of every individual in his capacity as a man/woman who lives under particular relations and empowering him to raise the standard of life and achieve prosperity for himself in his particular way of life. This unique aspect distinguishes the economic system of Islam from any other system.
While laying down economic rules for mankind, Islam focuses it towards the individual, and Islam, while ensuring his share in life and empowering him to prosper, ensures that he achieves this in his specific society with a particular way of life. Thus one finds that the Shar’i rules guarantee that every single individual citizen of the Islamic State (muslim and non-muslim) is able to fully satisfy all of their basic needs of food, clothing and shelter. This, it achieves by:
Mandating that every single, able man engages in work to earn the basic needs for himself and for those who are dependent on him:
“So walk in the paths thereof and eat of His provision.” [TMQ 67: 15]
And as has been reported in a hadeeth that the Prophet (sal-Allâhu 'alayhi wa sallam) shook hands with Sa’ad ibn Ma’adh (ra) and found them to be rough. When the Prophet (saw) asked about it, Sa’ad said: “I dig with the shovel to maintain my family.” The Prophet (saw) kissed Sa’ad’s hands and said: “They are two hands which Allah (swt) loves.”
It is also reported that ‘Omar bin Khattab (ra) passed by some people who were known as readers of the Qur’an. They were sitting with their heads bent; he asked about them and was told that they were dependents (al-Mutawakkiloon) upon Allah (swt). ‘Omar replied: “No, they are the eaters who eat people’s properties. Do you want me to describe those who are the Mutawakkiloon? People said: “Yes.” ‘Omar said: “He is the person who throws the seed in the earth and then depends on his Lord, The Almighty, The Exalted.”
Similarly, work has been mandated for the father and his successor if he is able to work, Allah (swt) said:
“But the father of the child shall bear the cost of the mother's food and clothing on a reasonable basis. No person shall have a burden laid on him greater than he can bear. No mother shall be treated unfairly on account of her child, nor father on account of his child. And on the (father's) heir is incumbent the like of that (which was incumbent on the father).” [TMQ 02: 233]
Further, it has been mandated that the treasury (bait ul maal) will take care of those that have no one who are legally enjoined to provide the necessities, the Prophet (saw) said:
“The Imam is in charge (ra’i) and he is responsible for his citizens.”
Also, the Prophet (saw) said:
“If somebody dies (among the Muslims) leaving some property, the property will go to his heirs; and if he leaves a debt or dependants, we will take care of them.”
In another version, the Prophet (saw) said:
“If anyone leaves property, it goes to his heirs, and if anyone leaves debt and dependants, let the matter come to me and I shall be responsible.”
Thus Islam has ensured that every single individual in his capacity as a man/woman is able to fully satisfy his/her essential needs of food, clothing and shelter. Islam then urged this individual to enjoy the bounties and take his share of the luxuries of this world’s life which he can afford, Allah (swt) said:
“Say (O Muhammad [sal-Allâhu 'alayhi wa sallam]): “Who has forbidden the adornment with clothes given by Allâh, which He has produced for His slaves, and At-Tayyibât [all kinds of Halâl (lawful) things] of food?” [TMQ 07: 32]
And He (swt) said:
“And eat of the things which Allâh has provided for you, lawful and good,” [TMQ 05: 88]
These and other similar verses of the Qur’an clearly indicate that the economic rules and commands of the Shari’a are focused on earning of wealth and enjoying the bounties within its rules. Islam has urged individuals to work and earn and ordered them to benefit from the wealth they earn. This is aimed at achieving economic prosperity in the land, to satisfy the essential needs of every individual and to empower him to pursue his luxuries.
In order to allow a Muslim to earn wealth, we find that while Islam has legislated rules pertaining to how he may possess wealth, it has not complicated such rules but has kept them very simple indeed. Thus Islam has laid down means of ownership and it has specified the types of contracts one may enter into to transfer such ownership. Islam does not intervene in creation of wealth, and has liberated man to be creative in adopting means and methods in this regard. Thus it provides every individual sufficiently to fully satisfy his basic needs. Islam has not been content at merely urging the individual or restricting this satisfaction within the individual’s earnings, it has further mandated that the Bait ul Maal (State treasury) spends on them from its means and has also mandated that the state takes responsibility for those who are unable to earn for themselves. The state has been tasked with the responsibility of providing the essential needs of the people because they have a right to it. Bukhari reported on the authority of ibn ‘Omar (ra) that the Prophet (saw) said:
“The Imam who has been put in charge of the people is the shepherd and responsible for his herd.”
And he (saw) said:
“Whoever is placed in charge of the affairs of Muslims and he abandons them without delivering their needs, and leaves them & their poverty, Allah (swt) will also abandon him without fulfilling his needs or alleviating his poverty.”
In this regard, the instructions of Syeddina ‘Ali (ra) to Malik bin Harith al-Ashtar, the governor of Egypt are regarded as a model for the role of state. He asked the governor to levy taxes and fight its enemy; train & culture its people and build the land, he said: “Your sight should remain focused on building the land, more than concentrating on collecting revenues; he who wants to extract taxes from people without building their land, destroys the land and impoverishes its people. His rule lasts only a while.”
Apart from this, Islam has laid great stress on cooperating in matter of piety and fear of Allah (swt), He said:
“And in their properties there was the right of the Sâ'il (the beggar who asked) and the Mahrûm (the poor who does not ask others).” [TMQ 51: 07]
Further, the Prophet (saw) also emphasised this and said:
"Any community who wakes up while they have a hungry one amongst them, then Allah and his messenger will curse them"
And he (saw) said:
“He is not a believer who has his fill and his neighbour on his side goes hungry.”
Moreover, the Prophet (saw) praised those Muslims who share their belongings in times of scarcity & famine and said:
“When the people of the Ash'ari tribe ran short of food during the holy battles, or the food of their families in Medina ran short, they would collect all their remaining food in one sheet and then distribute it among themselves equally by measuring it with a bowl. So, these people are from me, and I am from them.”
Secondly: Islam’s view of Wealth
Wealth is generally used for 3 purposes: To accumulate or save, to invest or spend, and to transact business. Islam has legislated rules governing each of these aspects in such a way that wealth is used for the service of mankind so that he himself benefits from it and benefits others with it too, and not in such a way that man is reduced to being its slave whereby he harms himself and others with it.
For instance, man accumulates wealth in order to build his house or to make purchases or accumulates money to pay for his hajj journey or for any other matter that requires him to accumulate money. There is no harm in this so long as the person continues to pay the mandatory zakat at the end of each year passed if the amount exceeds the nisab amount. However if a person were to hoard wealth for the sake of hoarding, then it is forbidden in the Qur’an, Allah (swt) said:
“And those who hoard up gold and silver (Al-Kanz: the money, the Zakât (obligatory charity) of which has not been paid) and spend them not in the way of Allâh, announce to them a painful torment.” [TMQ 09: 34]
Similarly, Islam has specified rules for investing or spending the wealth, it has permitted spending of wealth as sadaqah and kinship relations etc… While it has made it obligatory to extract from it zakat, spending on the blood relatives or to prepare for jihad in the path of Allah (swt). Islam has prohibited spending it on wine, gambling and drugs.
As for using money to transact business, Islam has organised this from two different aspects:
Firstly: Laid down fixed standards for wages and prices, which is the ‘cash money’ or currency, and which has been confined to gold and silver alone.
Secondly: Clarified the correct and valid shar’ii transactions like the rules of companies in Islam which can be: al-‘Anan, al-Abadan, al-Mudharibah, al-Wujooh and al-Mufawidhah. Furthermore, rules related to leasing, business, agriculture, share-cropping, sale, forward buying, issuance of money, agency or representation, and so on are illustrated. Manufacturing plants for forbidden products are prohibited because plants are discussed in terms of what they produce, thus if their produce is forbidden, the production will also be consequently prohibited. Hence wine manufacturing plants are prohibited since wine is forbidden. Under the public ownership sector, it is prohibited to have plants that extract petrol and refine it for different usages, or plants that extract minerals and produce raw material from it. These and similar plants are based on materials which are owned by the people (public property) and it is prohibited for the private sector industry to own them, they can only be owned by all the people under the state’s management which distributes the accrued revenue to the people in kind. Similar is the case of services provided.
Islam has prohibited such transactions as invalid company structures which do not comply with conditions of establishment and validity like the public limited companies, risk and insurance companies. And also prohibited their shares, products etc. Moreover it has also prohibited interest based mortgages and mortgage companies, and credit cards issued by banks to its customers for payment via the cards for purchases they make which pay interest to the issuing bank. Islam has also prohibited hoarding and monopolies which stash away goods for sale later at a higher price.
Furthermore, Islam has prohibited transactions for the sale of goods which are not in possession at the time of sale, or selling those goods whose possession is not yet effected - as is the practice in commodities exchanges - where goods are bought and sold many times over without taking possession of the goods and transferring them to the purchaser.
Islam has also prohibited the sale of gold and silver and cash with deferred payment, it can only be a hand to hand (spot) cash transaction. Additionally speculative trading where goods are stashed away with the aim of creating scarcity and a rise in their prices in the market and not for the purpose of genuine trade are also forbidden.
Thus Islam has forbidden the malpractices of the multinational companies, the financial markets, and stock exchanges through decisive rules elaborated upon in the chapters of fiqh, three of these rules are of vital importance:
The prohibition of selling goods not owned by the seller, prohibition of selling goods not in possession of the seller and prohibiting the purchase and selling of six key commodities on a non-immediate (spot market) basis. Islam obliges an immediate hand to hand transfer for purchases and sales of these commodities, while if there is a trade of the same commodity (of these 6), the sale will be invalid unless the quantities are equal and without immediate transfer of possession. These commodities are: Gold, Silver, Wheat, Barley, Dates and Salt.
Interest in all its forms is forbidden in Islam, and consequently banks (as currently constituted) do not exist in the Islamic state; not even the banks that are nowadays known as the Islamic banks, which sell products that are not owned by them at all, and they invest in public limited enterprises and real estate mortgaging companies. Instead there will be a department within the Bait ul Maal which will dispense loans for trading, industry and agriculture without interest.
Part 3 of the speech tomorrow.
First: The Economic Policy in Islam
Administering of the economy is the focus of the rules that address the management of human issues, and the economic policy in Islam ensures complete satisfaction of all basic human needs and then to enable man, as a member of a particular society and a given way of life, to satisfy his luxurious needs which he can earn. The economic policy in Islam does not merely aim at raising the living standard or GDP of the country as a whole, irrespective of whether every single individual has actual access to this raised living standard. Nor does the economic policy of Islam remain content with raising the living standard of the country as a whole and leaving members of society free to partake from this to the extent they can, without ensuring that every single individual has his share in it. Rather, the economic policy of Islam addresses the basic problems of every individual in his capacity as a man/woman who lives under particular relations and empowering him to raise the standard of life and achieve prosperity for himself in his particular way of life. This unique aspect distinguishes the economic system of Islam from any other system.
While laying down economic rules for mankind, Islam focuses it towards the individual, and Islam, while ensuring his share in life and empowering him to prosper, ensures that he achieves this in his specific society with a particular way of life. Thus one finds that the Shar’i rules guarantee that every single individual citizen of the Islamic State (muslim and non-muslim) is able to fully satisfy all of their basic needs of food, clothing and shelter. This, it achieves by:
Mandating that every single, able man engages in work to earn the basic needs for himself and for those who are dependent on him:
“So walk in the paths thereof and eat of His provision.” [TMQ 67: 15]
And as has been reported in a hadeeth that the Prophet (sal-Allâhu 'alayhi wa sallam) shook hands with Sa’ad ibn Ma’adh (ra) and found them to be rough. When the Prophet (saw) asked about it, Sa’ad said: “I dig with the shovel to maintain my family.” The Prophet (saw) kissed Sa’ad’s hands and said: “They are two hands which Allah (swt) loves.”
It is also reported that ‘Omar bin Khattab (ra) passed by some people who were known as readers of the Qur’an. They were sitting with their heads bent; he asked about them and was told that they were dependents (al-Mutawakkiloon) upon Allah (swt). ‘Omar replied: “No, they are the eaters who eat people’s properties. Do you want me to describe those who are the Mutawakkiloon? People said: “Yes.” ‘Omar said: “He is the person who throws the seed in the earth and then depends on his Lord, The Almighty, The Exalted.”
Similarly, work has been mandated for the father and his successor if he is able to work, Allah (swt) said:
“But the father of the child shall bear the cost of the mother's food and clothing on a reasonable basis. No person shall have a burden laid on him greater than he can bear. No mother shall be treated unfairly on account of her child, nor father on account of his child. And on the (father's) heir is incumbent the like of that (which was incumbent on the father).” [TMQ 02: 233]
Further, it has been mandated that the treasury (bait ul maal) will take care of those that have no one who are legally enjoined to provide the necessities, the Prophet (saw) said:
“The Imam is in charge (ra’i) and he is responsible for his citizens.”
Also, the Prophet (saw) said:
“If somebody dies (among the Muslims) leaving some property, the property will go to his heirs; and if he leaves a debt or dependants, we will take care of them.”
In another version, the Prophet (saw) said:
“If anyone leaves property, it goes to his heirs, and if anyone leaves debt and dependants, let the matter come to me and I shall be responsible.”
Thus Islam has ensured that every single individual in his capacity as a man/woman is able to fully satisfy his/her essential needs of food, clothing and shelter. Islam then urged this individual to enjoy the bounties and take his share of the luxuries of this world’s life which he can afford, Allah (swt) said:
“Say (O Muhammad [sal-Allâhu 'alayhi wa sallam]): “Who has forbidden the adornment with clothes given by Allâh, which He has produced for His slaves, and At-Tayyibât [all kinds of Halâl (lawful) things] of food?” [TMQ 07: 32]
And He (swt) said:
“And eat of the things which Allâh has provided for you, lawful and good,” [TMQ 05: 88]
These and other similar verses of the Qur’an clearly indicate that the economic rules and commands of the Shari’a are focused on earning of wealth and enjoying the bounties within its rules. Islam has urged individuals to work and earn and ordered them to benefit from the wealth they earn. This is aimed at achieving economic prosperity in the land, to satisfy the essential needs of every individual and to empower him to pursue his luxuries.
In order to allow a Muslim to earn wealth, we find that while Islam has legislated rules pertaining to how he may possess wealth, it has not complicated such rules but has kept them very simple indeed. Thus Islam has laid down means of ownership and it has specified the types of contracts one may enter into to transfer such ownership. Islam does not intervene in creation of wealth, and has liberated man to be creative in adopting means and methods in this regard. Thus it provides every individual sufficiently to fully satisfy his basic needs. Islam has not been content at merely urging the individual or restricting this satisfaction within the individual’s earnings, it has further mandated that the Bait ul Maal (State treasury) spends on them from its means and has also mandated that the state takes responsibility for those who are unable to earn for themselves. The state has been tasked with the responsibility of providing the essential needs of the people because they have a right to it. Bukhari reported on the authority of ibn ‘Omar (ra) that the Prophet (saw) said:
“The Imam who has been put in charge of the people is the shepherd and responsible for his herd.”
And he (saw) said:
“Whoever is placed in charge of the affairs of Muslims and he abandons them without delivering their needs, and leaves them & their poverty, Allah (swt) will also abandon him without fulfilling his needs or alleviating his poverty.”
In this regard, the instructions of Syeddina ‘Ali (ra) to Malik bin Harith al-Ashtar, the governor of Egypt are regarded as a model for the role of state. He asked the governor to levy taxes and fight its enemy; train & culture its people and build the land, he said: “Your sight should remain focused on building the land, more than concentrating on collecting revenues; he who wants to extract taxes from people without building their land, destroys the land and impoverishes its people. His rule lasts only a while.”
Apart from this, Islam has laid great stress on cooperating in matter of piety and fear of Allah (swt), He said:
“And in their properties there was the right of the Sâ'il (the beggar who asked) and the Mahrûm (the poor who does not ask others).” [TMQ 51: 07]
Further, the Prophet (saw) also emphasised this and said:
"Any community who wakes up while they have a hungry one amongst them, then Allah and his messenger will curse them"
And he (saw) said:
“He is not a believer who has his fill and his neighbour on his side goes hungry.”
Moreover, the Prophet (saw) praised those Muslims who share their belongings in times of scarcity & famine and said:
“When the people of the Ash'ari tribe ran short of food during the holy battles, or the food of their families in Medina ran short, they would collect all their remaining food in one sheet and then distribute it among themselves equally by measuring it with a bowl. So, these people are from me, and I am from them.”
Secondly: Islam’s view of Wealth
Wealth is generally used for 3 purposes: To accumulate or save, to invest or spend, and to transact business. Islam has legislated rules governing each of these aspects in such a way that wealth is used for the service of mankind so that he himself benefits from it and benefits others with it too, and not in such a way that man is reduced to being its slave whereby he harms himself and others with it.
For instance, man accumulates wealth in order to build his house or to make purchases or accumulates money to pay for his hajj journey or for any other matter that requires him to accumulate money. There is no harm in this so long as the person continues to pay the mandatory zakat at the end of each year passed if the amount exceeds the nisab amount. However if a person were to hoard wealth for the sake of hoarding, then it is forbidden in the Qur’an, Allah (swt) said:
“And those who hoard up gold and silver (Al-Kanz: the money, the Zakât (obligatory charity) of which has not been paid) and spend them not in the way of Allâh, announce to them a painful torment.” [TMQ 09: 34]
Similarly, Islam has specified rules for investing or spending the wealth, it has permitted spending of wealth as sadaqah and kinship relations etc… While it has made it obligatory to extract from it zakat, spending on the blood relatives or to prepare for jihad in the path of Allah (swt). Islam has prohibited spending it on wine, gambling and drugs.
As for using money to transact business, Islam has organised this from two different aspects:
Firstly: Laid down fixed standards for wages and prices, which is the ‘cash money’ or currency, and which has been confined to gold and silver alone.
Secondly: Clarified the correct and valid shar’ii transactions like the rules of companies in Islam which can be: al-‘Anan, al-Abadan, al-Mudharibah, al-Wujooh and al-Mufawidhah. Furthermore, rules related to leasing, business, agriculture, share-cropping, sale, forward buying, issuance of money, agency or representation, and so on are illustrated. Manufacturing plants for forbidden products are prohibited because plants are discussed in terms of what they produce, thus if their produce is forbidden, the production will also be consequently prohibited. Hence wine manufacturing plants are prohibited since wine is forbidden. Under the public ownership sector, it is prohibited to have plants that extract petrol and refine it for different usages, or plants that extract minerals and produce raw material from it. These and similar plants are based on materials which are owned by the people (public property) and it is prohibited for the private sector industry to own them, they can only be owned by all the people under the state’s management which distributes the accrued revenue to the people in kind. Similar is the case of services provided.
Islam has prohibited such transactions as invalid company structures which do not comply with conditions of establishment and validity like the public limited companies, risk and insurance companies. And also prohibited their shares, products etc. Moreover it has also prohibited interest based mortgages and mortgage companies, and credit cards issued by banks to its customers for payment via the cards for purchases they make which pay interest to the issuing bank. Islam has also prohibited hoarding and monopolies which stash away goods for sale later at a higher price.
Furthermore, Islam has prohibited transactions for the sale of goods which are not in possession at the time of sale, or selling those goods whose possession is not yet effected - as is the practice in commodities exchanges - where goods are bought and sold many times over without taking possession of the goods and transferring them to the purchaser.
Islam has also prohibited the sale of gold and silver and cash with deferred payment, it can only be a hand to hand (spot) cash transaction. Additionally speculative trading where goods are stashed away with the aim of creating scarcity and a rise in their prices in the market and not for the purpose of genuine trade are also forbidden.
Thus Islam has forbidden the malpractices of the multinational companies, the financial markets, and stock exchanges through decisive rules elaborated upon in the chapters of fiqh, three of these rules are of vital importance:
The prohibition of selling goods not owned by the seller, prohibition of selling goods not in possession of the seller and prohibiting the purchase and selling of six key commodities on a non-immediate (spot market) basis. Islam obliges an immediate hand to hand transfer for purchases and sales of these commodities, while if there is a trade of the same commodity (of these 6), the sale will be invalid unless the quantities are equal and without immediate transfer of possession. These commodities are: Gold, Silver, Wheat, Barley, Dates and Salt.
Interest in all its forms is forbidden in Islam, and consequently banks (as currently constituted) do not exist in the Islamic state; not even the banks that are nowadays known as the Islamic banks, which sell products that are not owned by them at all, and they invest in public limited enterprises and real estate mortgaging companies. Instead there will be a department within the Bait ul Maal which will dispense loans for trading, industry and agriculture without interest.
Part 3 of the speech tomorrow.
Friday, 20 February 2009
Crisis free economic justice - economy in the Khilafah
It is our privilege to be able to produce here for the first time the key note speech from the International Economic Conference held in Khartoum, Sudan on the 3rd of January organised by Hizb ut-Tahrir. This address was made by Abu Khaleel the official spokesman of Hizb ut-Tahrir, Sudan. Due to the length of the address, we will present it in parts. The introduction (today) followed by the balance over the next 3 days. The speech has been translated from Arabic.
The Islamic Economic System under the Khilafah State (providing crisis-free economic justice)
The importance of the economic aspect in man’s life is becoming more and more acute in the present times, so much so that nations consider economic might as a parameter of their strength, which can influence resolutions on global issues. Some even regard the economic weakness of the erstwhile Soviet Union as the reason for its breakdown and fall from its position of being the second most powerful nation in the world. Economics is so strongly linked to global politics that the colonial powers aspire to plunder the resources of the weaker nations and this is amply manifest in the General Agreement on Trade & Tariffs (GATT).
The most prominent of these examples is the United States of America whose political domination is a direct result of its economic stranglehold through American control of capital in industry, utilities and services, over the weaker nations’ production, and through manipulating them to suit its own economic agenda.
Crises like the global financial crisis, globalisation - in all its forms - including economic globalisation, financial globalisation, monetary globalisation, privatisation, alliances and economic unions, have emerged in the present times. The European Union (EU), the annual summit of the industrialised nations or the Group of 8 (G8), the North-South conferences, the meetings of the nations of the Mediterranean Sea, several other economic conferences and GATT are all examples of this trend. Then there are the multi-national and trans-continental companies and so on…
Yet, despite the several disasters caused by the Capitalist system, the West is convinced of its achievements, living conditions and committed to its systems. They are overwhelmed by its glimmer and gloss more than is deserved, and are smitten by its civilisation and institutions and follow it blindly. They believe that this system has no competition and cannot be replaced by anything else. This has resulted in them losing clear perspective and their own sense of identity.
A keen observer of the capitalist system would notice that the people who are beholden to it are the ones described by Allah (swt) in the Quran:
“They have hearts wherewith they understand not, and they have eyes wherewith they see not, and they have ears wherewith they hear not (the truth).” [TMQ 07: 179]
If one were to observe its reality, one would see all its past failures since its inception and not merely after the emergence of the current international financial crisis alone. One can clearly see that the foundations of the capitalist system are rotten and decayed from its very beginning like Solomon’s staff which remained erect only because no one ever touched it with his hands!
Distinguished audience:
You have listened to the reality of the Capitalist system and how the seeds of its failures are intrinsic to it, especially when confronted with a crisis which causes its very foundations to tremble. You have also seen that nations actually tinker with its very basis and that this contradicts their own principles which rule out national interference. The Capitalist system is founded on the freedom of the market or liberal economy and the classical view is opposed to state interference. This view talks of the ‘invisible hand’ and self-balance of the economy. The Capitalist system carries the famous slogan given to it by Adam Smith, the concept of laissez faire which requires that states do not interfere in the markets or tinker with it. When the crisis of 1929 hit, John Maynard Keynes, the noted economist argued in favour of the need for modifying this classic slogan of the system and advocated that states can, and should intervene. And surely they did… then came the 80’s and the capitalist states refrained from market intervention, yet now again they have returned to intervention. This state intervention has not been resisted or decried by the Western thinkers, rather they have welcomed it as in their opinion state intervention will salvage their economy from the present dangerous mess. The Western scholars, instead of noting that the Capitalist system has failed miserably in solving the economic crisis, are arguing it remains the best system, and furthermore they say that if not this, what else?! The reason for their stand is that they are either ignorant of the Islamic Economic System or are pretending to be ignorant. They compare their reigning capitalist system with the collapsed system of communism and argue that their system which is still alive and surviving (barely) is the best. This may be all right as long as the competing system is the collapsed communism. If they were to consider the issue on its merits, even without being a believer in Islam, they would certainly come to the conclusion that the economic system of Islam alone can provide a secure economy free from disasters. Indeed the great Islamic economic system has been designed by Allah (swt) who is the Creator, the Sustainer, who is all Knowing and Aware of the needs of His creations and what is good for them. They could see that this system would achieve for them a secure and prosperous life:
“Should not He Who has created know? And He is the Most Kind and Courteous (to His slaves), the Well-Acquainted (with everything).” [TMQ 67:14]
Since the ruling class who control the affairs of the world today and dictate its policies, and the politicians have chosen to ignore the economic system of Islam and have confined their sights to just the two systems; the collapsed communist system and the capitalist system which is on the verge of collapse; their ignorance will only harm them and will certainly not harm Islam’s economic system which continues to state the truth in anticipation of the re-establishment of a Khilafah State (very soon) with the grace of Allah (swt) which will apply and implement it just as it had done so for over thirteen centuries. The people will be blessed with it and will again live an economically secure & prosperous life.
Distinguished audience:
The short duration of this conference does not permit an elaborate description of the economic policies of Islam, however, I would sketch the broad outlines, which Allah (swt) willing will be sufficient to drive home the point that the economic system of Islam alone is capable of ensuring a crisis-free and secure economic life for the people.
(tomorrow the first 3 of 9 key Islamic Economic policies)
The Islamic Economic System under the Khilafah State (providing crisis-free economic justice)
The importance of the economic aspect in man’s life is becoming more and more acute in the present times, so much so that nations consider economic might as a parameter of their strength, which can influence resolutions on global issues. Some even regard the economic weakness of the erstwhile Soviet Union as the reason for its breakdown and fall from its position of being the second most powerful nation in the world. Economics is so strongly linked to global politics that the colonial powers aspire to plunder the resources of the weaker nations and this is amply manifest in the General Agreement on Trade & Tariffs (GATT).
The most prominent of these examples is the United States of America whose political domination is a direct result of its economic stranglehold through American control of capital in industry, utilities and services, over the weaker nations’ production, and through manipulating them to suit its own economic agenda.
Crises like the global financial crisis, globalisation - in all its forms - including economic globalisation, financial globalisation, monetary globalisation, privatisation, alliances and economic unions, have emerged in the present times. The European Union (EU), the annual summit of the industrialised nations or the Group of 8 (G8), the North-South conferences, the meetings of the nations of the Mediterranean Sea, several other economic conferences and GATT are all examples of this trend. Then there are the multi-national and trans-continental companies and so on…
Yet, despite the several disasters caused by the Capitalist system, the West is convinced of its achievements, living conditions and committed to its systems. They are overwhelmed by its glimmer and gloss more than is deserved, and are smitten by its civilisation and institutions and follow it blindly. They believe that this system has no competition and cannot be replaced by anything else. This has resulted in them losing clear perspective and their own sense of identity.
A keen observer of the capitalist system would notice that the people who are beholden to it are the ones described by Allah (swt) in the Quran:
“They have hearts wherewith they understand not, and they have eyes wherewith they see not, and they have ears wherewith they hear not (the truth).” [TMQ 07: 179]
If one were to observe its reality, one would see all its past failures since its inception and not merely after the emergence of the current international financial crisis alone. One can clearly see that the foundations of the capitalist system are rotten and decayed from its very beginning like Solomon’s staff which remained erect only because no one ever touched it with his hands!
Distinguished audience:
You have listened to the reality of the Capitalist system and how the seeds of its failures are intrinsic to it, especially when confronted with a crisis which causes its very foundations to tremble. You have also seen that nations actually tinker with its very basis and that this contradicts their own principles which rule out national interference. The Capitalist system is founded on the freedom of the market or liberal economy and the classical view is opposed to state interference. This view talks of the ‘invisible hand’ and self-balance of the economy. The Capitalist system carries the famous slogan given to it by Adam Smith, the concept of laissez faire which requires that states do not interfere in the markets or tinker with it. When the crisis of 1929 hit, John Maynard Keynes, the noted economist argued in favour of the need for modifying this classic slogan of the system and advocated that states can, and should intervene. And surely they did… then came the 80’s and the capitalist states refrained from market intervention, yet now again they have returned to intervention. This state intervention has not been resisted or decried by the Western thinkers, rather they have welcomed it as in their opinion state intervention will salvage their economy from the present dangerous mess. The Western scholars, instead of noting that the Capitalist system has failed miserably in solving the economic crisis, are arguing it remains the best system, and furthermore they say that if not this, what else?! The reason for their stand is that they are either ignorant of the Islamic Economic System or are pretending to be ignorant. They compare their reigning capitalist system with the collapsed system of communism and argue that their system which is still alive and surviving (barely) is the best. This may be all right as long as the competing system is the collapsed communism. If they were to consider the issue on its merits, even without being a believer in Islam, they would certainly come to the conclusion that the economic system of Islam alone can provide a secure economy free from disasters. Indeed the great Islamic economic system has been designed by Allah (swt) who is the Creator, the Sustainer, who is all Knowing and Aware of the needs of His creations and what is good for them. They could see that this system would achieve for them a secure and prosperous life:
“Should not He Who has created know? And He is the Most Kind and Courteous (to His slaves), the Well-Acquainted (with everything).” [TMQ 67:14]
Since the ruling class who control the affairs of the world today and dictate its policies, and the politicians have chosen to ignore the economic system of Islam and have confined their sights to just the two systems; the collapsed communist system and the capitalist system which is on the verge of collapse; their ignorance will only harm them and will certainly not harm Islam’s economic system which continues to state the truth in anticipation of the re-establishment of a Khilafah State (very soon) with the grace of Allah (swt) which will apply and implement it just as it had done so for over thirteen centuries. The people will be blessed with it and will again live an economically secure & prosperous life.
Distinguished audience:
The short duration of this conference does not permit an elaborate description of the economic policies of Islam, however, I would sketch the broad outlines, which Allah (swt) willing will be sufficient to drive home the point that the economic system of Islam alone is capable of ensuring a crisis-free and secure economic life for the people.
(tomorrow the first 3 of 9 key Islamic Economic policies)
Thursday, 19 February 2009
Legislation by Kite Flying
UK 'extremism' ideas floated to test the waters
http://www.thenational.ae/article/20090219/FOREIGN/932941981/1002/rss
UK to isolate hardline preachers
David Sapsted, Foreign Correspondent
"Muslim preachers who do not accept the British way of life are to be targeted by a new strategy to be unveiled by the government next month.
Current proposals, which are being hotly debated by ministers, include branding as extremists those conservative Muslims who, while eschewing violence, maintain that Islam is incompatible with British democracy.
Details of the proposals, known as “Contest 2”, appear to have been selectively leaked to the BBC and Guardian newspaper this week. A well-placed source in Whitehall said in an interview yesterday that this represented “a classic, kite-flying exercise” by a government uncertain over which of the proposals to go along with.
Under the current proposals, British Muslims would be considered “extremist” if they advocated non-participation in UK elections, called for the creation of a caliphate, promoted Shariah and argued in favour of an Islamic ban on homosexuality…."
COMMENT
I have a different take on this, and can only welcome such an approach. The lifeblood of the politician is dialogue and debate, in fact this is all we do – seek to win the arguments. We live or die based on the strength of our ideas. We (HT) do not take or seek public funding, never have, never will. So that clearly doesn’t affect us. If they (UK government) define the views and values you can have – sidelining all outside this narrow remit – I’m sorry but they’ve lost the debate.
The moment you tell the public that they cannot even countenance the notion of opposition to homosexuality, or arbitrarily remove the right of nations that are occupied or attacked to defend themselves – the impact will be the opposite to that sought to be imposed. If they think they can remove condemnation of homosexuality from the Quran, I can only remind them that for 14 centuries people have tried and failed to change the Quran. It just won’t happen. As for this Orwellian thought police – I think the public is a bit more independently minded than to fall for that.
If the British way of life is so good, why do we have hundreds of politicians changing the laws every week in this democracy? I’m sure you will admit that this is appallingly inefficient, no? What if there is something better than democracy? No one should, or even can be allowed to debate that! Isn’t that totalitarianism?
Now anyone daring to suggest that the Muslim world should go back to its Caliphate must be sidelined, ostracized, a McCarthyan outcast. Just what are they afraid of? Is it possible that Shariah law and the Caliphate system of governance actually works.
So whilst I want to win the debate fairly, this type of own goal can only drive people to examine in more detail that which must be so emphatically (and illiberally) banned. I rest my case.
Jamal
http://www.thenational.ae/article/20090219/FOREIGN/932941981/1002/rss
UK to isolate hardline preachers
David Sapsted, Foreign Correspondent
"Muslim preachers who do not accept the British way of life are to be targeted by a new strategy to be unveiled by the government next month.
Current proposals, which are being hotly debated by ministers, include branding as extremists those conservative Muslims who, while eschewing violence, maintain that Islam is incompatible with British democracy.
Details of the proposals, known as “Contest 2”, appear to have been selectively leaked to the BBC and Guardian newspaper this week. A well-placed source in Whitehall said in an interview yesterday that this represented “a classic, kite-flying exercise” by a government uncertain over which of the proposals to go along with.
Under the current proposals, British Muslims would be considered “extremist” if they advocated non-participation in UK elections, called for the creation of a caliphate, promoted Shariah and argued in favour of an Islamic ban on homosexuality…."
COMMENT
I have a different take on this, and can only welcome such an approach. The lifeblood of the politician is dialogue and debate, in fact this is all we do – seek to win the arguments. We live or die based on the strength of our ideas. We (HT) do not take or seek public funding, never have, never will. So that clearly doesn’t affect us. If they (UK government) define the views and values you can have – sidelining all outside this narrow remit – I’m sorry but they’ve lost the debate.
The moment you tell the public that they cannot even countenance the notion of opposition to homosexuality, or arbitrarily remove the right of nations that are occupied or attacked to defend themselves – the impact will be the opposite to that sought to be imposed. If they think they can remove condemnation of homosexuality from the Quran, I can only remind them that for 14 centuries people have tried and failed to change the Quran. It just won’t happen. As for this Orwellian thought police – I think the public is a bit more independently minded than to fall for that.
If the British way of life is so good, why do we have hundreds of politicians changing the laws every week in this democracy? I’m sure you will admit that this is appallingly inefficient, no? What if there is something better than democracy? No one should, or even can be allowed to debate that! Isn’t that totalitarianism?
Now anyone daring to suggest that the Muslim world should go back to its Caliphate must be sidelined, ostracized, a McCarthyan outcast. Just what are they afraid of? Is it possible that Shariah law and the Caliphate system of governance actually works.
So whilst I want to win the debate fairly, this type of own goal can only drive people to examine in more detail that which must be so emphatically (and illiberally) banned. I rest my case.
Jamal
Wednesday, 18 February 2009
Bankers in the Dock or just another show trial
The functioning of a select committee questioning is one of the great anachronisms of the UK parliamentary system. A committee of assorted politicians, usually unqualified for the committee to which they are members, sits in mock court session to intererrogate those they want to bring before the public gaze. The sketch writers for the daily newspapers have a field day - the politicians express moral outrage at what went on, and ask what went wrong and whether the bankers are "sorry", as if that is the most searching and searing of questions. The bankers feign remorse for the mess they've put us all in, and everyone goes home none the wiser as to what's been going on, or who is really going to pay for hundreds of billions in bank bailouts and assorted political largesse.
"We are profoundly, and I think I would say unreservedly, sorry..." said Lord Stevenson, former Chairman of the disgraced HBOS, last week. So that's ok then! They are all sorry for what happened, so lets move on then.
Richard Fuld, the now unemployed former head of Lehman Brothers sitting in front of the US equivalent of the UK Select committee, to Congress last October 6th, set out the defacto approach to such proceedings. Fuld said he "took full responsibility" for the bankruptcy of Lehman's and felt "horrible" about what happened. He defended his $484 million in salary fully aware that he was walking away from the disaster he and his colleagues oversaw at the bank. Without any personal liability for the 20 or 30 times leveraging of their balance sheet assets, the enormously risky bets they were taking nor the hundreds of thousands of derivative contracts which remain outstanding, Fuld could happily brush aside most questions. Yet, being sorry for the Bank collapse (its failure to gain a Treasury bailout) didn't stop their executives from endorsing $20 million in ‘special payments’ for departing senior executives only days before the final nails were hit into the Lehman coffin.
Of course these executives (in the UK and US) really have no responsibility for their gross failings. They have gambled and won for several years in a bull market and lined their pockets accordingly. Now in a massive depression, that they have played no little part in driving (via the enormous run up in credit over the past 10 years), they can merrily walk away from their failure and enjoy their retirements with the many millions they have taken in the past few years. Simon Carr writing in the Independent took a different view, suggesting that these executives should pay for their failings with their "houses, their Bentleys and their childrens exclusive school places". However, via the ridiculous provisions of "limited liability" this will never happen, as these executives - no matter how senior - really have no responsibility for their actions. Unless they break the (admittedly weak financial laws) they will not be held to account for any contracts and commitments. Their failed companies are liable only to the extent of their relatively small initial capital positions.
This is unlike the Islamic injunctions where the owners/partners of any company remain liable for losses even after a company has failed. The establishment of real accountability for actions, rather than merely a potential curtailment of bonuses, or worse the mere demand for a public apology, provides a level of sobriety to the trading and business practices of company executives.
“O you who believe!, fulfill your undertakings” [Al Maidah 5:1]
These show trials are only put on to deceive the public away from the failings of the system (capitalism) itself. Someone has to be seen as the “fall guy” and the deposed bank chiefs are useful candidates for that purpose. It is not an individual failure that they represent, but a wholesale failure of capitalism. The ideology that they are the leading advocates for, and which they gratefully led and implemented.
Jamal
"We are profoundly, and I think I would say unreservedly, sorry..." said Lord Stevenson, former Chairman of the disgraced HBOS, last week. So that's ok then! They are all sorry for what happened, so lets move on then.
Richard Fuld, the now unemployed former head of Lehman Brothers sitting in front of the US equivalent of the UK Select committee, to Congress last October 6th, set out the defacto approach to such proceedings. Fuld said he "took full responsibility" for the bankruptcy of Lehman's and felt "horrible" about what happened. He defended his $484 million in salary fully aware that he was walking away from the disaster he and his colleagues oversaw at the bank. Without any personal liability for the 20 or 30 times leveraging of their balance sheet assets, the enormously risky bets they were taking nor the hundreds of thousands of derivative contracts which remain outstanding, Fuld could happily brush aside most questions. Yet, being sorry for the Bank collapse (its failure to gain a Treasury bailout) didn't stop their executives from endorsing $20 million in ‘special payments’ for departing senior executives only days before the final nails were hit into the Lehman coffin.
Of course these executives (in the UK and US) really have no responsibility for their gross failings. They have gambled and won for several years in a bull market and lined their pockets accordingly. Now in a massive depression, that they have played no little part in driving (via the enormous run up in credit over the past 10 years), they can merrily walk away from their failure and enjoy their retirements with the many millions they have taken in the past few years. Simon Carr writing in the Independent took a different view, suggesting that these executives should pay for their failings with their "houses, their Bentleys and their childrens exclusive school places". However, via the ridiculous provisions of "limited liability" this will never happen, as these executives - no matter how senior - really have no responsibility for their actions. Unless they break the (admittedly weak financial laws) they will not be held to account for any contracts and commitments. Their failed companies are liable only to the extent of their relatively small initial capital positions.
This is unlike the Islamic injunctions where the owners/partners of any company remain liable for losses even after a company has failed. The establishment of real accountability for actions, rather than merely a potential curtailment of bonuses, or worse the mere demand for a public apology, provides a level of sobriety to the trading and business practices of company executives.
“O you who believe!, fulfill your undertakings” [Al Maidah 5:1]
These show trials are only put on to deceive the public away from the failings of the system (capitalism) itself. Someone has to be seen as the “fall guy” and the deposed bank chiefs are useful candidates for that purpose. It is not an individual failure that they represent, but a wholesale failure of capitalism. The ideology that they are the leading advocates for, and which they gratefully led and implemented.
Jamal
Tuesday, 17 February 2009
The Opening Address
Where better to start than with the words of Sheikh Ata ibn Khaleel Abu Rashta (the Amir of Hizb ut-Tahrir) – with his opening address to the Economic Crisis conference held in Khartoum, Sudan on the 3rd of January, 2009. Here published for the first time, in full and in English.
Opening Words
Distinguished Audience
You have been witnessing the global financial crisis the flames of which started in the United States of America and engulfed other countries via the instruments of capitalism and helped by the burning splinters of globalization, such that no country was immune from the scorching effects of the flames - however small or far-away it may be.
Similarly you have been witnessing the various ‘solutions’ and packages to overcome the crisis being prepared around the world. These packages are being drawn up by individual countries as well as alliances and unions in their conferences and summits like the European Union, the G20 in Washington, the Lima Summit and the Qatar Summit etc… But these packages have not resolved the crisis. Even the best of these solutions have at best only provided a short-term and momentary respite for days or even a few hours before the crisis returns to haunt them once again.
Distinguished Audience
A keen observer who examines the solutions of the rulers and the economists of countries will find that they have followed two approaches in attempting to solve the crisis:
The first category is the one which has shut its eyes to the very principles of the corrupt capitalist system which has caused this crisis in the first place. This category has ‘worked out solutions’ based on outward symptoms and not examined the real inner causes behind these symptoms. They have concluded that the problem is that the financial institutions have lost liquidity; therefore they decided to pump in billions and billions to provide these financial institutions with liquidity. They felt that the investment and financial markets were stagnant and frozen; therefore they decided to reduce interest rates in order to encourage lending and thereby stimulate the markets. They saw that shares, bonds and financial instruments have lost most of their value and crossed the red-lines; so they decided that the State should intervene and buy the devaluing shares and instruments…
Thus in their attempt to treat the problem, they focused on the outward and apparent symptoms and closed their eyes to the real basis of the corrupt and failed capitalist system, which was left as it was. They forgot or ignored that the system itself was responsible for the crisis and therefore all their solutions were merely a consolation and provided an anaesthetising shot to overcome the effects of the crisis for some moments before the crisis reemerged even stronger and more destructive than before.
Their example is that of the man who observes a deep crack in the walls of this house and rushes to fetch some cement mixture and paint to fill and cover the crack and presumes that he has solved the problem and retires to bed for some rest! Moments later the crack reemerges. This should not come as a surprise because the man only treated the crack and not the actual deeper cause that caused the crack in the first place, which was weakness in the foundation.
Thus, this category merely covered over the cracks and did not address its real causes….
As for the other category, they did not shut their eyes to the basic principles of the corrupt and failed capitalist system and look for solutions to the crisis, rather, they restricted their thoughts and searched for solutions within the two systems and did not look beyond to the third option. They looked at the communist/socialist system which had already failed and disintegrated, and capitalism which is reeling but not yet dead. They view capitalism with all its shortcomings as better than communism. Hence for a solution, they faced the critics of capitalism with the question: “What is the alternative then?” While fully knowing that there is no option and that they will not suggest communism as the solution so long as they and their economists do not look beyond these two systems: The failed and disintegrated communism and rapidly disintegrating capitalism, on the verge of collapse, whose head is tottering but not yet on the canvass!
Strangely, this group either neglected or is unaware of an economic system which has stood the test of time for centuries and lasted longer than any other system can boast of; providing safety and security, where people enjoyed economically prosperous and secure lives free from the worries and uncertainties of crises for thirteen centuries, where one had to look for a destitute person to feed from the bait ul maal (state treasury) of the Muslims! And yet, one could not find the destitute. As opposed to this, there are millions of poor and needy people even in the wealthiest of nations. This is the direct result of the economic systems of either capitalism or communism which have resulted in such human hardships and misery.
Indeed it is strange that this group ignores the fair and equitable economic system of Islam which for centuries provided safe & secure economic prosperity to people without misery and exploitation.
This group presumes that there are only two alternative economic systems, capitalism or communism and all their efforts and study are restricted to these two systems only: Either the state owns everything or the individuals and the private sector own everything, there is no third option for them. Either the state owns agriculture, industry and trade, whereby it becomes the communist model; or the companies and individuals own agriculture, industry and trade, whereby it becomes private ownership and free markets and the state would not interfere in the financial markets!
If only this group would look at these economic sectors it would find that the two are very different to each other. Owning a deep mine of minerals or oil is not the same as owning a house or a piece of land; neither is the owning of petro-chemical plants or various energy generating units or a weapons manufacturing facility, the same as owning a cotton weaving factory or a sweet meat confectionary; and neither is owning a railway network similar to owning a car.
If this group objectively examines the economic system of Islam, it would find that wealth and properties are grouped according to the manner in which it is owned and so Islam differentiates them into three distinct categories:
First: These are public properties whose revenues are disbursed among the Ummah (nation) after deduction of incurred costs, these include mines-whether of minerals, oil or gas etc… all of these are public properties and neither individuals, nor companies and not even the state are allowed to own them. They come under the ownership of the public who are citizens of the state and the proceeds from these properties are distributed amongst them after incurred costs are deducted.
Second: These are state properties which are at the discretion of the state, which spends the revenues generated from these for its own expenses and invests in agriculture, industry and trade. These are different to public property, but the state also spends from these properties to create balance between people in terms of wealth as has been detailed in book the “Economic System of Islam” (Hizb ut-Tahrir).
http://www.scribd.com/doc/3943477/The-Economic-System-of-Islam-Taqiuddin-anNabhani-Hizb-utTahrir
Third: These are the properties which are owned by individuals in the agricultural, industrial and trade sectors excluding the public & state properties and are also detailed in the Economic system of Islam.
Islam has identified these properties with mind with amazing precision:
First Example: Transportation:
Islam has distinguished between various means of transportation like railways, or the electric-operated trains and trolley buses; and those that use roads, like cars and buses.
The first group invariably uses the public utilities i.e. railway tracks, and since these are public properties, these must always be reserved for the public sector and it is not allowed for the state, companies or individuals to own them. They are always in the ownership of the public sector. Thus, the trains, tramways and trolley buses which use them must always be owned by the public sector under state supervision and their revenues must be disbursed to the people after deducting incurred costs.
As for the buses and cars, they use roads ie a public utility but the roads are also used by others and are not reserved for them. Hence these cars and buses can also be used by the state as well as individuals, which imply that it is permitted for state, individuals and companies to own them.
Second Example: Electricity:
Electricity is used to drive industrial plants i.e. it is used as fuel for engines, for lighting etc…
As for its use in the industrial plants, it is described as ‘fire’ in the hadeeth:
“People are partners in three; Water, Pastures and Fire”
‘Fire’ includes all that is implied by it in terms of energy, whether derived from burning of trees, coal or electricity. All of these would be categorised under the public wealth and the state, individuals or companies are not allowed to own these sources of electricity which is used as fuel to drive industrial plants. These resources are public properties supervised by the state and revenues generated from these are to be disbursed to the state’s citizens after the deduction of costs.
As for the use of electricity for the purpose of lighting, it is not a part of the public properties and is not implied by the term ‘fire’. It is therefore allowed for the state, individuals and companies to own electricity for the purpose of lighting and similar, on the condition that its usage does not extend to the public domain, whereby it would be considered in the public wealth category.
I have only cited these two examples to illustrate the preciseness with which Islam has categorized wealth into three domains.
Despite the fact that this exhaustive and comprehensive system is not merely a philosophical ideology lost in the pages of books, but this is the economic system implemented continuously for the longest period of recorded history; yet this current group of capitalists have chosen to shut their eyes and ignore it without searching it for solutions to their problems.
Thus this group of capitalists have also failed to find real solutions for their problems and have confined their search to the two man-made systems, ignoring the truth of the rightful economic system. Their example is that of one who has eyesight but cannot see, if he opens his eyes for what he has been searching for, he would find it staring out to his eyes loud and clear!
Distinguished Audience!
Indeed the economic system of Islam under the Khilafah state is the only system that provides a secure and prosperous economic life for the people, free from calamities and crises.
This is the system revealed and mandated by Allah (swt), who is the Creator and knows what is best for His creations, He (swt) says:
“Should not He Who has created know? And He is the Most Kind and Courteous (to His slaves), the Well-Acquainted (with everything).” [TMQ al-Mulk 67:014]
I pray to Allah (swt), for success for your conference and that during the course of it, you are able to appreciate that the economic system of Islam is truly and rightfully the one that provides a secure and prosperous economic life, free from calamities and crises.
Ata ibn Khaleel Abu Rashta
7th Muharram, 1430 A.H
3rd January, 2009
Opening Words
Distinguished Audience
You have been witnessing the global financial crisis the flames of which started in the United States of America and engulfed other countries via the instruments of capitalism and helped by the burning splinters of globalization, such that no country was immune from the scorching effects of the flames - however small or far-away it may be.
Similarly you have been witnessing the various ‘solutions’ and packages to overcome the crisis being prepared around the world. These packages are being drawn up by individual countries as well as alliances and unions in their conferences and summits like the European Union, the G20 in Washington, the Lima Summit and the Qatar Summit etc… But these packages have not resolved the crisis. Even the best of these solutions have at best only provided a short-term and momentary respite for days or even a few hours before the crisis returns to haunt them once again.
Distinguished Audience
A keen observer who examines the solutions of the rulers and the economists of countries will find that they have followed two approaches in attempting to solve the crisis:
The first category is the one which has shut its eyes to the very principles of the corrupt capitalist system which has caused this crisis in the first place. This category has ‘worked out solutions’ based on outward symptoms and not examined the real inner causes behind these symptoms. They have concluded that the problem is that the financial institutions have lost liquidity; therefore they decided to pump in billions and billions to provide these financial institutions with liquidity. They felt that the investment and financial markets were stagnant and frozen; therefore they decided to reduce interest rates in order to encourage lending and thereby stimulate the markets. They saw that shares, bonds and financial instruments have lost most of their value and crossed the red-lines; so they decided that the State should intervene and buy the devaluing shares and instruments…
Thus in their attempt to treat the problem, they focused on the outward and apparent symptoms and closed their eyes to the real basis of the corrupt and failed capitalist system, which was left as it was. They forgot or ignored that the system itself was responsible for the crisis and therefore all their solutions were merely a consolation and provided an anaesthetising shot to overcome the effects of the crisis for some moments before the crisis reemerged even stronger and more destructive than before.
Their example is that of the man who observes a deep crack in the walls of this house and rushes to fetch some cement mixture and paint to fill and cover the crack and presumes that he has solved the problem and retires to bed for some rest! Moments later the crack reemerges. This should not come as a surprise because the man only treated the crack and not the actual deeper cause that caused the crack in the first place, which was weakness in the foundation.
Thus, this category merely covered over the cracks and did not address its real causes….
As for the other category, they did not shut their eyes to the basic principles of the corrupt and failed capitalist system and look for solutions to the crisis, rather, they restricted their thoughts and searched for solutions within the two systems and did not look beyond to the third option. They looked at the communist/socialist system which had already failed and disintegrated, and capitalism which is reeling but not yet dead. They view capitalism with all its shortcomings as better than communism. Hence for a solution, they faced the critics of capitalism with the question: “What is the alternative then?” While fully knowing that there is no option and that they will not suggest communism as the solution so long as they and their economists do not look beyond these two systems: The failed and disintegrated communism and rapidly disintegrating capitalism, on the verge of collapse, whose head is tottering but not yet on the canvass!
Strangely, this group either neglected or is unaware of an economic system which has stood the test of time for centuries and lasted longer than any other system can boast of; providing safety and security, where people enjoyed economically prosperous and secure lives free from the worries and uncertainties of crises for thirteen centuries, where one had to look for a destitute person to feed from the bait ul maal (state treasury) of the Muslims! And yet, one could not find the destitute. As opposed to this, there are millions of poor and needy people even in the wealthiest of nations. This is the direct result of the economic systems of either capitalism or communism which have resulted in such human hardships and misery.
Indeed it is strange that this group ignores the fair and equitable economic system of Islam which for centuries provided safe & secure economic prosperity to people without misery and exploitation.
This group presumes that there are only two alternative economic systems, capitalism or communism and all their efforts and study are restricted to these two systems only: Either the state owns everything or the individuals and the private sector own everything, there is no third option for them. Either the state owns agriculture, industry and trade, whereby it becomes the communist model; or the companies and individuals own agriculture, industry and trade, whereby it becomes private ownership and free markets and the state would not interfere in the financial markets!
If only this group would look at these economic sectors it would find that the two are very different to each other. Owning a deep mine of minerals or oil is not the same as owning a house or a piece of land; neither is the owning of petro-chemical plants or various energy generating units or a weapons manufacturing facility, the same as owning a cotton weaving factory or a sweet meat confectionary; and neither is owning a railway network similar to owning a car.
If this group objectively examines the economic system of Islam, it would find that wealth and properties are grouped according to the manner in which it is owned and so Islam differentiates them into three distinct categories:
First: These are public properties whose revenues are disbursed among the Ummah (nation) after deduction of incurred costs, these include mines-whether of minerals, oil or gas etc… all of these are public properties and neither individuals, nor companies and not even the state are allowed to own them. They come under the ownership of the public who are citizens of the state and the proceeds from these properties are distributed amongst them after incurred costs are deducted.
Second: These are state properties which are at the discretion of the state, which spends the revenues generated from these for its own expenses and invests in agriculture, industry and trade. These are different to public property, but the state also spends from these properties to create balance between people in terms of wealth as has been detailed in book the “Economic System of Islam” (Hizb ut-Tahrir).
http://www.scribd.com/doc/3943477/The-Economic-System-of-Islam-Taqiuddin-anNabhani-Hizb-utTahrir
Third: These are the properties which are owned by individuals in the agricultural, industrial and trade sectors excluding the public & state properties and are also detailed in the Economic system of Islam.
Islam has identified these properties with mind with amazing precision:
First Example: Transportation:
Islam has distinguished between various means of transportation like railways, or the electric-operated trains and trolley buses; and those that use roads, like cars and buses.
The first group invariably uses the public utilities i.e. railway tracks, and since these are public properties, these must always be reserved for the public sector and it is not allowed for the state, companies or individuals to own them. They are always in the ownership of the public sector. Thus, the trains, tramways and trolley buses which use them must always be owned by the public sector under state supervision and their revenues must be disbursed to the people after deducting incurred costs.
As for the buses and cars, they use roads ie a public utility but the roads are also used by others and are not reserved for them. Hence these cars and buses can also be used by the state as well as individuals, which imply that it is permitted for state, individuals and companies to own them.
Second Example: Electricity:
Electricity is used to drive industrial plants i.e. it is used as fuel for engines, for lighting etc…
As for its use in the industrial plants, it is described as ‘fire’ in the hadeeth:
“People are partners in three; Water, Pastures and Fire”
‘Fire’ includes all that is implied by it in terms of energy, whether derived from burning of trees, coal or electricity. All of these would be categorised under the public wealth and the state, individuals or companies are not allowed to own these sources of electricity which is used as fuel to drive industrial plants. These resources are public properties supervised by the state and revenues generated from these are to be disbursed to the state’s citizens after the deduction of costs.
As for the use of electricity for the purpose of lighting, it is not a part of the public properties and is not implied by the term ‘fire’. It is therefore allowed for the state, individuals and companies to own electricity for the purpose of lighting and similar, on the condition that its usage does not extend to the public domain, whereby it would be considered in the public wealth category.
I have only cited these two examples to illustrate the preciseness with which Islam has categorized wealth into three domains.
Despite the fact that this exhaustive and comprehensive system is not merely a philosophical ideology lost in the pages of books, but this is the economic system implemented continuously for the longest period of recorded history; yet this current group of capitalists have chosen to shut their eyes and ignore it without searching it for solutions to their problems.
Thus this group of capitalists have also failed to find real solutions for their problems and have confined their search to the two man-made systems, ignoring the truth of the rightful economic system. Their example is that of one who has eyesight but cannot see, if he opens his eyes for what he has been searching for, he would find it staring out to his eyes loud and clear!
Distinguished Audience!
Indeed the economic system of Islam under the Khilafah state is the only system that provides a secure and prosperous economic life for the people, free from calamities and crises.
This is the system revealed and mandated by Allah (swt), who is the Creator and knows what is best for His creations, He (swt) says:
“Should not He Who has created know? And He is the Most Kind and Courteous (to His slaves), the Well-Acquainted (with everything).” [TMQ al-Mulk 67:014]
I pray to Allah (swt), for success for your conference and that during the course of it, you are able to appreciate that the economic system of Islam is truly and rightfully the one that provides a secure and prosperous economic life, free from calamities and crises.
Ata ibn Khaleel Abu Rashta
7th Muharram, 1430 A.H
3rd January, 2009
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