The Islamic Economic System a Panacea to Capitalist Economic Catastrophes
Allah (swt) said: (وَمَآ أَرۡسَلۡنَـٰكَ إِلَّا رَحۡمَةً۬ لِّلۡعَـٰلَمِينَ) “And We have not sent you, [O Muhammad], except as a mercy to the worlds. [21. Al-Anbiya: 107] Islam is an ideology i.e. a complete way of life emanating from the Creator of the universe, man and life, Allah (swt). Hence, Allah (swt) challenged mankind to recognize His presence by using his mind. It is via thinking that judgements and decisions can be made. Subsequently, actions are done as a result of the concepts emanating from the said thoughts. In additions, mankind’s inherent organic needs and instincts require him to satisfy them based on what he adopts in terms of thought. Therefore, man’s mentality (akliyya) and disposition (nafsiyya) together form his personality (shaksiyya). That means he can either have an Islamic personality or otherwise.
An Islamic personality is that which the thinking and the satisfaction is limited within the confines of the Islamic Shari’ah (Quran, Sunnah, Ijma’ Sahaba and Qiyas). A Muslim with an Islamic personality is a slave to Allah (swt) i.e. he submits to His commandments and prohibitions. On the other hand, whoever does not have an Islamic personality will always be slave to his desires and possess a secular capitalist personality. That is the essence of the current reality today where people with no Islamic personality either Muslims or not have abrogated the supreme role of the Creator in legislation to themselves. They are now ruling and managing people’s affairs based on their yearnings! In the process causing immeasurable catastrophes in all spheres of life by their adoption of the secular capitalist ideology and implementing its poisonous systems including but not limited to the capitalist economic system. A destructive system that continues to tighten economic nooses on people’s lives and causing miseries and desperation across the world!
Every secular capitalist economist, politician and scholar is engaged in a rat-race of giving hope in tomorrow whose coming is not guaranteed! In other words, the economic system is irreparable broken and cannot be fixed. Since the root cause of its failure is the basis upon which it was founded. The capitalist economic system is premised on the fallacy of scarcity of resources unable to satisfy the unlimited needs of mankind! Anchored on such an incorrect principle it embarked on production of goods and services as a solution to its alleged problem! Hence, we are witnessing the exponential wealth accumulation by a few individuals and their respective entities while the masses are plunged in perpetual and inconceivable poverty. For instance, America that alleges to be the land of milk and honey, its citizens are homeless, hungry and unhealthy! What about the rest of the world?
To make matters worse the capitalist economic system emboldens democratic regimes to perpetuate daylight robbery of citizens hard earned property. It achieves its evil aims via drafting and executing of draconian and oppressive taxation policies and laws that further burden the languishing citizens. In addition, the governments embark on white elephant projects funded by loans that incur punitive and exorbitant interests’ payment plans. That is why the GDP of all secular capitalist nations is based on the productivity, profits and losses made by conglomerates and not the ability of the individual citizens in satisfying their basic needs and providing incentives for meeting luxurious needs!
Economies of secular capitalist nations across the world are just speculative! Yes, since their value is shackled to the dollar! In essence, their nominal value keeps depreciating as long as the confidence in the American hegemony keeps fading! No, wonder every blunder made by American companies is felt across the world via the ripples effect dichotomy! When America prints more papers (fiat money) and its economy and that of the rest of world shrinks and inflation peeks! All as a result of Bretton Woods Institutions, World Bank and International Monetary Fund policies! Two institutions that were setup in at a meeting of 43 countries in Bretton Woods, New Hampshire, USA in July 1994. Their main aim was to rebuild the shattered postwar global economy after the Second World War. They came about as a results of ideas of three key experts – US Treasury Secretary Henry Morganthau, his chief economic advisor Harry Dexter White and British economist John Maynard Keynes. An entire global economy pegged on three people whose minds are limited! Alas! Catastrophes continue unabated to-date! Bretton Woods Project
In contrary the Islamic economic system that emanates from Allah (swt). It is part of the perfection of the Islamic system that is implemented by the Islamic state of Khilafah. The Islamic system was implemented under the guardianship of Prophet Muhammad ibn Abdullah (saw) in Madinah as the President of the Islamic State. Then later followed by the Khulafaa (Caliphs) who numbered 101. For almost 13 centuries the Islamic state implemented the Islamic economic system. A system that is clearly explained by the above verse, stated at the beginning of this piece. It is a system of mercy not oppressive, ruthless or exploitative to the people implemented upon like what is being witnessed today across the world.
The Islamic economic system of Islam is founded upon the basis that the problem is in distribution of wealth and not scarcity of resources as alleged by the capitalist economic system. Allah (swt) said, (كَيْ لَا يَكُونَ دُولَةً بَيْنَ الْأَغْنِيَاءِ مِنْكُمْ) “So that it will not be a perpetual distribution among the rich from among you.” [Al-Hashr: 7]. In addition, the Islamic economic system recognize that the needs of mankind are limited and not unlimited as claimed by the capitalist economic system. So, the Islamic economic system strives to solve the distribution of the resources to individuals and enable them to meet their basic needs i.e. clothing, food and shelter; societal needs i.e. education, security and health and provide them with incentives to realize their luxurious needs. The following are some of the empirical evidences of the economic prosperity under the Khilafah when it was present before its destruction on 28 Rajab 1342 AH I 3 March 1924 CE:
First: It was during the era of the second Khalifah (Caliph), Umar ibn Khattab, the conquest of Persia was realized and huge amounts of treasure were seized as war booty and distributed to the Muslims and others used in the sustenance of the Khilafah crucial apparatus such as the army. The Khalifah himself used to ensure that citizens were fed from the Baitul-Mal. In other times, withdrawing policies that seem to be oppressing the citizens such as cutting of hands of thieves during the time or famine until it past. Furthermore, he ordered that old non-Muslim men unable to pay the Jizya to be waived from them and instead to be provided for from the Baitul-Mal. That is contrary to exploitative taxation mechanisms imposed by secular democratic regimes across the world, they do not care for the old or youth, men or women; what they see is just a human being is a factor of production!
Second: It was during the era of the Khalifah, Umar ibn Abdul Aziz, within a span of 2 years and 5 months, the Khilafah was able to see record numbers of non-Muslims converting to Islam due to the administration of Islam in all spheres of life and especially on the economic front. The Khalifah himself strived to lead by example by being steadfast in avoiding committing economic injustices to his citizens. In turn it led to a situation where there were no poor people to be given Zakat. However, the Zakat funds kept increasing with decreasing number of those deserving allocation.
Third: The era of the Abbasid Khilafah that begun on the mid-7th century to the mid-13th century. This is also known as the Islamic Golden Age. It is in this duration that Islam and Muslims flourish. The major contributor of this flourishment was expanding of knowledge as a result of the defeat of the Chinese Tang Dynasty by the Muslims in the Battle of Talas in 751 CE. The Muslims captured knowledgeable paper makers who taught the Muslims the craft of making paper. In turn it led to expansion of knowledge since paper mills became numerous and people could write and pass knowledge. At the same, the paper industry revolutionized the economy as the shcolars engaged in further astounding and breakthrough researches were conducted in the fields of medicine, mathematics etc. that led to furthering the economy of the Islamic state, the Khilafah.
The above three are just some of the highlights of the outcome of the Islamic economic system implemented under the Khilafah. The Khilafah will not rob its citizens their hard-earned money in the name of sustaining or running the State affairs. Since the Shari’ah has clearly laid out its sources of income and expenditure. Hence, doing away with the perennial annually budget making processes that is extremely cumbersome and most times keeps shifting in terms of gluttonous prioritizes by those in power. White elephant projects will not be entertained since every coin will be used and accounted by the Khilafah’s citizens, but also a monumental task awaits the Khalifah on the Day of Judgement to expound the same before Allah (swt).
The three above are just a snapshot compared to the current reality where the Muslims are about 2 billion scattered around the world. If they were to be united under one leader, one banner and one state with Islam as the only unifying bond and factor. It will not only be long the Muslim Ummah will be an unrivaled force not to be messed with politically, socio-economically and militarily. However, since the destruction of the Khilafah, the Muslim Ummah is disorganized and poisoned with nationalism concepts and turn a blind eye to the continuous proliferation of their lands and looting of their immense resources such as oil, arable land, human resources etc.
The absence of the Khilafah keeps choking peoples’ life irrespective of their age, gender, race, religious, socio-economic or political background to-date 101 Hijri years. The only tested and viable solution is the reestablishment of the Islamic state, the Khilafah on the method of Prophethood. In this Rajab of 1443 AH is a decisive moment to seize the moment and opportunity of the global of the global pandemonium being witnessed across the world to replace the world order with a New Islamic order that is mercy to humanity.
This is a moment to do away with complacent mindset that nothing can be done. Alas! We must rise above and respond to the call of Allah (swt) to the believers. Now is the moment to proclaim that enough is enough with this trial and error system of governance. A failed system that is just waiting for the reemergence of the Khilafah on the method of Prophethood to be declared dead and to be buried instantly.
Ali Nassoro Ali
Member of the Central Media Office of Hizb ut Tahrir