Although capitalism has created some of the richest people in the world it has also created a vast disparity been the rich and poor and this remains its major failure. Many of the problems today in terms of the distribution of wealth, poverty and development are a result of the philosophical underpinnings of capitalism and only once these causes are assessed can the status quo change for the developing world. Capitalism is geared towards wealth creation and looks upon the distribution of wealth as secondary.
Policies such as the re-distribution of wealth, third world aid and the Make poverty history campaign alongside the numerous charities do not address the underlying problems hence they have failed to even halt the problems the third world faces. Only by addressing the ideological underpinnings of the global economic framework can the situation of the world’s impoverished change. Hence reform, globalization, economic openness, more free trade etc are just mere cosmetics which in no way deal with the underlying issues.
For these reasons we need to look at an alternative model of wealth distribution which puts people before the production of goods and does not benefit a strata of society only
The Islamic system has a history of economic success where all citizens contribute to the economy and the state spends out of its budget to ensure no-one lives in poverty. For this Islam laid a number of rules.
Firstly Islam makes a distinction between the production of goods and there distribution. The production of goods follows no particular viewpoint in life. Questions as to how processes can be made more technological, how mechanisms and robots can improve productivity and how inventions can improve the process of manufacturing do not follow any specific viewpoint in life. Islam in origin has permitted the use of any technology which improves production and leaves it to the people to develop this. The manner of distribution of resources, how goods and services should be allocated to the public, whether they should go to the rich or the orphans, aristocracy or the landlords etc. is not a discussion upon the reality. That which defines how to distribute the wealth, how to possess it, and how to spend or dispose of it can never be a taken from the reality as the reality does not explain this. Hence a large chunk of Islamic economics is dedicated to ensuring wealth distribution.
Secondly Islam recognizes the differences in the ability and strength of people and does not leave things completely to the forces of supply and demand. Islam allows government intervention in the economy to bring equilibrium into the market. This is understood from the ayah “That it (i.e. the nation’s wealth) does not become a commodity between the rich among you.” [Surah Al-Hashr (59): Ayah 7]. This verse addressed the Caliph (leader of the Islamic State) to ensure that wealth is not distributed in a manner where it remains amongst the rich alone.
Thirdly Islam funds the basic needs of its entire population by designated any utility regarded as indispensable for the community, such that its absence would require people to search far and wide for it, as a public property. This means the utilities would be publicly owned and the revenue generated would be administered for the benefit of all citizens. This is derived from the hadith of the Prophet (saws) “Muslims are partners in three things: in water, pastures and fire”. Although the hadith mentioned just three things we can utilize qiyas (analogy) and extend the evidence to cover all instances of indispensable community utilities. Thus water sources, forests of firewood, pastures for livestock and the like are all public utilities as well as the mosques, state schools, hospitals, oil fields, electricity plants, motorways, rivers, seas, lakes, public canals, gulfs, straits, dams etc. By taking control of these essential items poverty can actually never occur as key industries are not in the hands of private sector corporations only interested in profiteering.
Fourthly Besides the public properties Islam laid down a number of rules to ensure wealth continually circulates and penalized and in some cases taxed those who hoard their wealth. This is important because hoarding money and leaving wealth in an account to accumulate interest would in fact take money out of circulation. Islam has a whole host of rules which restrict the hoarding of wealth and promotes spending ensuring wealth distribution. Islam has land taxation where Kharaj which is a tax estimated on the quality of the land and Ushri – which is a tax on the produce from the land. Islam allows the confiscation of land if it’s unused for 3 years. This rule would effectively end the monopoly some families have in the third world who inherited huge lands from the departing colonialists, unless it’s used productively which would aid wealth distribution. Interest is forbidden in Islam and the results of this are enormous if we compare this with an interest based system such as the UK. The basic problem everyone faces is the risk of the rate of return on an investment offset by the rate of interest. If this is the case then the incentive would be to save the money rather then to use (invest) it. Although interest is money sitting in an account which banks use for their investment, this money is still not circulating in the economy as banks invest a large chunk of their money in paper i.e. bonds, shares, IOU’s etc. This means that money is held for a promised a rate of return rather then going on actual production of goods, or the building of a plant etc. The next problem is if you do spend you are further hampered by a tax on spending, as VAT is due on most goods.
Fifthly In Islam incentives to not spend are non existent, interest is forbidden and hoarding is taxed. Having no interest means there is no incentive to leave money in a bank account as it will not accumulate interest, but instead be taxed if it’s held for a year. By not having taxation on income or spending a larger proportion of disposable income is free to be invested in physical goods, assets and items, which in turn will create jobs and fulfill any demand in the economy. Paper such as shares, bonds and debt as a form of commodity are non existent in Islam, the only types of investment are in real goods which ensures the economy continually generates wealth.
In summery the vast differences in wealth around the world is due to the view capitalism has which concentrates on wealth generation rather then wealth distribution. By leaving distribution to Freedom of ownership and to the forces of supply and demand people with influence and corporations are able to manipulate prices and the supply of goods and then hoard the generated wealth. Islam by no means condemns using the market for allocating resources however it recognizes the shortcomings of the market and hence defines important utilities as public property. Islam is also not Keynesian in its approach intervening is all strata’s of the economy, Islam recognized the need for a private sector and for this allows the market to set prices and ensure distribution for good and items which fall outside the scope of public utilities.
[Extracted from the article ‘Capitalism in Crises’, Global Issues Website]
About this blog
In recent times a plethora of misconceptions, misrepresentation and myths have been forged about Islam
and Muslims. Many western influentials from politicians, policymakers to judges have taken it upon
themselves to undermine the Islamic beliefs, values and rules so to make it palatable to their
egotistic minds and the secular liberal thoughts.
This blog is dedicated:-
1. To argue the point for Islam in its belief and systems and to refute the misconceptions.
2. To expose the weakness and contradictions of all forms of secularism.
and Muslims. Many western influentials from politicians, policymakers to judges have taken it upon
themselves to undermine the Islamic beliefs, values and rules so to make it palatable to their
egotistic minds and the secular liberal thoughts.
This blog is dedicated:-
1. To argue the point for Islam in its belief and systems and to refute the misconceptions.
2. To expose the weakness and contradictions of all forms of secularism.
23 Aug 2008
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What they said...
“Islam represented the greatest military power on earth…It was the foremost economic power in the world…It had achieved the highest level so far in human history, in the arts and sciences of civilization...Islam in contrast created a world civilization, poly-ethnic, multiracial, international, one might even say intercontinental.”
[Bernard Lewis, Professor of Near Eastern Studies, Orientalist and Historian, 2001]
"There was once a civilization that was the greatest in the world. It was able to create a continental super-state that stretched from ocean to ocean, and from northern climes to tropics and deserts…the civilization I'm talking about was the Islamic world from the year 800 to 1600… Although we are often unaware of our indebtedness to this other civilization, its gifts are very much a part of our heritage"
[Carly Fiorina, ex-CEO of Hewlett-Packard, 2001]
"For the first three centuries of its existence (circ. A.D 650-1000) the realm of Islam was the most civilized and progressive portion of the world. Studded with splendid cities, gracious mosques and quiet universities where the wisdom of the ancient world was preserved and appreciated, the Moslem world offered a striking contrast to the Christian West, then sunk in the night of the Dark Ages."
[Lothrop Stoddard, Ph.D (Harvard), American political theorist and historian, 1932]
"Medieval Islam was technologically advanced and open to innovation. It achieved far higher literacy rates than in contemporary Europe;it assimilated the legacy of classical Greek civilization to such a degree that many classical books are now known to us only through Arabic copies. It invented windmills ,trigonometry, lateen sails and made major advances in metallurgy, mechanical and chemical engineering and irrigation methods. In the middle-ages the flow of technology was overwhelmingly from Islam to Europe rather from Europe to Islam. Only after the 1500's did the net direction of flow begin to reverse."
[Jared Diamond, UCLA sociologist and Author, 1997]
"No other society has such a record of success in uniting in an equality of status, of opportunity and endeavour so many and so varied races of mankind. The great Muslim communities of Africa, India and Indonesia, perhaps also the small community in Japan, show that Islam has still the power to reconcile apparently irreconcilable elements of race and tradition. If ever the opposition of the great societies of the East and west is to be replaced by cooperation, the mediation of Islam is an indispensable condition."
[Hamilton Alexander Rosskeen Gibb, Professor at Harvard University, 1932]
“The Muhammadan Law which is binding on all -- from the crowned head to the meanest subject is a law interwoven with a system of the wisest, the most learned and the most enlightened jurisprudence that ever existed in the world.”
[Edmund Burke, British Statesman and Philosopher, 1789]
"The Exile here is not like in our homeland. The Turks hold respectable Jews in esteem. Here and in Alexandria, Egypt, Jews are the chief officers and administrators of the customs, and the king’s revenues. No injuries are perpetuated against them in all the empire. Only this year, in consequence of the extraordinary expenditure caused by the war against Shah Tahmsap al-Sufi, were the Jews required to make advances of loans to the princes."
[David dei Rossi, Jewish Traveller 17CE, quoted by Norman A. Stillman, The Jews of Arab Lands]
"The notable religious tolerance towards Christians and Jew under Muslim rule had given way to the uncompromising zealotry of Spanish Inquisition. Jews and Muslims thus fled Spain with large numbers of Jews immigrating to the Ottoman Empire which was known for its tolerance to the Jews."
[Graham Fuller, Author and former CIA, 1995]
“If there is much misunderstanding in the West about the nature of Islam, there is also much ignorance about the debt our own culture and civilization owe to the Islamic world. It is a failure, which stems, I think, from the straightjacket of history, which we have inherited. The medieval Islamic world, from central Asia to the shores of the Atlantic, was a world where scholars and men of learning flourished. But because we have tended to see Islam as the enemy of the West, as an alien culture, society, and systems of beliefs, we have tended to ignore or erase its great relevance to our own history”
[Charles Philip Arthur George, HRH The Prince of Wales, 1993]
"...Not being subject to the Sharia, Jews and Christians were free to go to their own religious authorities for adjudication of disputes; but in many cases they went instead to the [Muslim] Qadi"
[Richard W. Bulliet, Professor of History and Author, 2004]
"Here in the land of the Turks we have nothing to complain of. We possess great fortunes; much gold and silver are in our hands. We are not oppressed by heavy taxes and our commerce is free and unhindered. Rich are the fruits of the earth. Everything is cheap and each one of us lives in freedom. Here a Jew is not compelled to wear a yellow star as a badge of shame as is the case in Germany where even wealth and great fortune is a curse for a Jew because he therewith arouses jealousy among the Christians and they devise all kinds of slander against him to rob him of his gold. Arise my brethren, gird up your loins, collect up your forces and come to us."
[In his book 'Constantinople', Philip Mansel quotes a rabbi in Turkey writing to his brethren in Europe where they were facing increasing persecution after 1453]
"Praise be to the beneficent God for his mercy towards me! Kings of the earth, to whom his [the Caliph’s] magnificence and power are known, bring gifts to him, conciliating his favour by costly presents, such as the king of the Germans, the king of the Gebalim, the king of Constantinople, and others. All their gifts pass through my hands, and I am charged with making gifts in return. (Let my lips express praise to the God in heaven who so far extends his loving kindness towards me without any merit of my own, but in the fullness of his mercies.) I always ask the ambassadors of these monarchs about our brethren the Jews, the remnant of the captivity, whether they have heard anything concerning the deliverance of those who have pined in bondage and had found no rest."
[Hasdai Ibn Shaprut (915-990 CE) Jewish physician, chief minister of Islamic Caliphate in Cordova, 'The Jewish Caravan']
"In Baghdad there are about forty thousand Jews, and they dwell in security, prosperity, and honour under the great Caliph [al-Mustanjid, 1160-70 CE], and amongst them are great sages, the Heads of the Academies engaged in the study of the Law…’"
[Benjamin of Tudela, Rabbi in Baghdad in the year 1168 CE, 'The Jew in the Medieval World']
"Those Eastern thinkers of the ninth century laid down, on the basis of their theology, the principle of the Rights of Man, in those very terms, comprehending the rights of individual liberty, and of inviolability of person and property; described the supreme power in Islam, or Califate, as based on a contract, implying conditions of capacity and performance, and subject to cancellation if the conditions under the contract were not fulfilled; elaborated a Law of War of which the humane, chivalrous prescriptions would have put to the blush certain belligerents in the Great War; expounded a doctrine of toleration of non-Moslem creeds so liberal that our West had to wait a thousand years before seeing equivalent principles adopted.
[Leon Ostorog, French Jurist]
"The debt of our science to that of the Arabs does not consist in startling discoveries or revolutionary theories; science owes a great deal more to Arab culture, it owes its existence"
[Robert Briffault, Novelist and Historian, 1928]
"The only effective link between the old and the new science is afforded by the Arabs. The dark ages come as an utter gap in the scientific history of Europe, and for more than a thousand years there was not a scientific man of note except in Arabia"
[Oliver Joseph Lodge, Writer and Professor of Physics, 1893]
“Thus, when Muslims crossed the straits of Gibraltar from North Africa in 711 and invaded the Iberian Peninsula, Jews welcomed them as liberators from Christian Persecution.”
[Zion Zohar, Jewish scholar at Florida International University, 2005]
[Bernard Lewis, Professor of Near Eastern Studies, Orientalist and Historian, 2001]
"There was once a civilization that was the greatest in the world. It was able to create a continental super-state that stretched from ocean to ocean, and from northern climes to tropics and deserts…the civilization I'm talking about was the Islamic world from the year 800 to 1600… Although we are often unaware of our indebtedness to this other civilization, its gifts are very much a part of our heritage"
[Carly Fiorina, ex-CEO of Hewlett-Packard, 2001]
"For the first three centuries of its existence (circ. A.D 650-1000) the realm of Islam was the most civilized and progressive portion of the world. Studded with splendid cities, gracious mosques and quiet universities where the wisdom of the ancient world was preserved and appreciated, the Moslem world offered a striking contrast to the Christian West, then sunk in the night of the Dark Ages."
[Lothrop Stoddard, Ph.D (Harvard), American political theorist and historian, 1932]
"Medieval Islam was technologically advanced and open to innovation. It achieved far higher literacy rates than in contemporary Europe;it assimilated the legacy of classical Greek civilization to such a degree that many classical books are now known to us only through Arabic copies. It invented windmills ,trigonometry, lateen sails and made major advances in metallurgy, mechanical and chemical engineering and irrigation methods. In the middle-ages the flow of technology was overwhelmingly from Islam to Europe rather from Europe to Islam. Only after the 1500's did the net direction of flow begin to reverse."
[Jared Diamond, UCLA sociologist and Author, 1997]
"No other society has such a record of success in uniting in an equality of status, of opportunity and endeavour so many and so varied races of mankind. The great Muslim communities of Africa, India and Indonesia, perhaps also the small community in Japan, show that Islam has still the power to reconcile apparently irreconcilable elements of race and tradition. If ever the opposition of the great societies of the East and west is to be replaced by cooperation, the mediation of Islam is an indispensable condition."
[Hamilton Alexander Rosskeen Gibb, Professor at Harvard University, 1932]
“The Muhammadan Law which is binding on all -- from the crowned head to the meanest subject is a law interwoven with a system of the wisest, the most learned and the most enlightened jurisprudence that ever existed in the world.”
[Edmund Burke, British Statesman and Philosopher, 1789]
"The Exile here is not like in our homeland. The Turks hold respectable Jews in esteem. Here and in Alexandria, Egypt, Jews are the chief officers and administrators of the customs, and the king’s revenues. No injuries are perpetuated against them in all the empire. Only this year, in consequence of the extraordinary expenditure caused by the war against Shah Tahmsap al-Sufi, were the Jews required to make advances of loans to the princes."
[David dei Rossi, Jewish Traveller 17CE, quoted by Norman A. Stillman, The Jews of Arab Lands]
"The notable religious tolerance towards Christians and Jew under Muslim rule had given way to the uncompromising zealotry of Spanish Inquisition. Jews and Muslims thus fled Spain with large numbers of Jews immigrating to the Ottoman Empire which was known for its tolerance to the Jews."
[Graham Fuller, Author and former CIA, 1995]
“If there is much misunderstanding in the West about the nature of Islam, there is also much ignorance about the debt our own culture and civilization owe to the Islamic world. It is a failure, which stems, I think, from the straightjacket of history, which we have inherited. The medieval Islamic world, from central Asia to the shores of the Atlantic, was a world where scholars and men of learning flourished. But because we have tended to see Islam as the enemy of the West, as an alien culture, society, and systems of beliefs, we have tended to ignore or erase its great relevance to our own history”
[Charles Philip Arthur George, HRH The Prince of Wales, 1993]
"...Not being subject to the Sharia, Jews and Christians were free to go to their own religious authorities for adjudication of disputes; but in many cases they went instead to the [Muslim] Qadi"
[Richard W. Bulliet, Professor of History and Author, 2004]
"Here in the land of the Turks we have nothing to complain of. We possess great fortunes; much gold and silver are in our hands. We are not oppressed by heavy taxes and our commerce is free and unhindered. Rich are the fruits of the earth. Everything is cheap and each one of us lives in freedom. Here a Jew is not compelled to wear a yellow star as a badge of shame as is the case in Germany where even wealth and great fortune is a curse for a Jew because he therewith arouses jealousy among the Christians and they devise all kinds of slander against him to rob him of his gold. Arise my brethren, gird up your loins, collect up your forces and come to us."
[In his book 'Constantinople', Philip Mansel quotes a rabbi in Turkey writing to his brethren in Europe where they were facing increasing persecution after 1453]
"Praise be to the beneficent God for his mercy towards me! Kings of the earth, to whom his [the Caliph’s] magnificence and power are known, bring gifts to him, conciliating his favour by costly presents, such as the king of the Germans, the king of the Gebalim, the king of Constantinople, and others. All their gifts pass through my hands, and I am charged with making gifts in return. (Let my lips express praise to the God in heaven who so far extends his loving kindness towards me without any merit of my own, but in the fullness of his mercies.) I always ask the ambassadors of these monarchs about our brethren the Jews, the remnant of the captivity, whether they have heard anything concerning the deliverance of those who have pined in bondage and had found no rest."
[Hasdai Ibn Shaprut (915-990 CE) Jewish physician, chief minister of Islamic Caliphate in Cordova, 'The Jewish Caravan']
"In Baghdad there are about forty thousand Jews, and they dwell in security, prosperity, and honour under the great Caliph [al-Mustanjid, 1160-70 CE], and amongst them are great sages, the Heads of the Academies engaged in the study of the Law…’"
[Benjamin of Tudela, Rabbi in Baghdad in the year 1168 CE, 'The Jew in the Medieval World']
"Those Eastern thinkers of the ninth century laid down, on the basis of their theology, the principle of the Rights of Man, in those very terms, comprehending the rights of individual liberty, and of inviolability of person and property; described the supreme power in Islam, or Califate, as based on a contract, implying conditions of capacity and performance, and subject to cancellation if the conditions under the contract were not fulfilled; elaborated a Law of War of which the humane, chivalrous prescriptions would have put to the blush certain belligerents in the Great War; expounded a doctrine of toleration of non-Moslem creeds so liberal that our West had to wait a thousand years before seeing equivalent principles adopted.
[Leon Ostorog, French Jurist]
"The debt of our science to that of the Arabs does not consist in startling discoveries or revolutionary theories; science owes a great deal more to Arab culture, it owes its existence"
[Robert Briffault, Novelist and Historian, 1928]
"The only effective link between the old and the new science is afforded by the Arabs. The dark ages come as an utter gap in the scientific history of Europe, and for more than a thousand years there was not a scientific man of note except in Arabia"
[Oliver Joseph Lodge, Writer and Professor of Physics, 1893]
“Thus, when Muslims crossed the straits of Gibraltar from North Africa in 711 and invaded the Iberian Peninsula, Jews welcomed them as liberators from Christian Persecution.”
[Zion Zohar, Jewish scholar at Florida International University, 2005]
“Throughout much of the period in question, Arabic served as the global language of scholarship, and learned men of all stripes could travel widely and hold serious and nuanced discussions in this lingua franca. Medieval Western scholars who wanted access to the latest findings also needed to master the Arabic Tongue or work from translations by those who had done so.”
[Jonathan Lyons, Author, Writer and Lecturer, 2009]
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