![](https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEjBUbhb7Xh_Amq-TABRbLk03zYtZbIiX4lMdrOJHX9CFJOtnx_WEHRQaCcp1SRVEp_3rZlF5VWXDZfd8WojpcX-Vqbw13Ulm0Gvn9FvZbTSOHR2EPVmrOF1infO4noUOERaPhO9rMGkfFE/s400/world_economy.jpg)
Without doubt, it is the Islamic economic model alone that cures and prevents the occurrence of such economic crises. For it alone has prohibited the factors that lead to economic crises in the first place.
1. The silver-gold monetary standard:
Islam mandates that only gold and silver can be the monetary standard. Any paper currency issued must be fully convertible to gold or silver on demand. Consequently, paper currency of one country cannot be tied to the currency of any other country. Rather each state's currency must be free of any other currency and have its own fixed, unalterable value.
2. Absolute prohibition on riba (interest):
Islam has prohibited interest in all its forms and mandated loans to the needy to assist them, without any interest or surcharge over their principal amount. Islam mandates that the treasury, the Bait ul-Maal, maintains a separate head to provide interest-free loans in order to assist those in need.
3. Specific regulation over partnership structures and the sale of goods:
Islam prohibits the selling of goods before the buyer takes possession, thus preventing speculation in commodities. It also prohibits transactions in financial instruments, derivatives and shares resulting from batil (invalid) contracts, along with other speculative trading. These practices are specific to the Capitalist economy, which allows them in the name of freedom of ownership.
4. Using the shariah to determine ownership of goods:
Allah (swt) designated three types of ownership:
Public Ownership consisting of solid, liquid and gaseous minerals including petrol, iron, copper, gold, natural gases etc. found in the depths of earth, all forms of energies and the energy-intensive, heavy industrial plants. Consequently, individuals/companies are prohibited from owning such items. Instead, these public properties are to be managed by the state and their benefits distributed amongst its people.
State Ownership includes taxes collected by the state and any revenues earned by the state from agricultural, trade and industrial activity, outside the range of public properties. The state spends these incomes on state expenses.
Private Ownership unlike the above two, is held by individuals and disposed of in accordance with the Shariah rules.
By applying Islam and ensuring the above categories of ownership, the Khilafah will avoid the disastrous policies of Communism and Capitalism. The Communists had state ownership of heavy industries, oil, etc, but their prohibition of private ownership of agriculture, trade, etc resulted in the collapse of their system. The Capitalists, on the other hand, allowed private ownership of public utilities and properties like petrol, gases, energy sources, heavy and even strategic arms industry to individuals, enterprises and companies. This deprived the state of the resources and cash-flow required to manage the affairs of the people and ensure stability in the economy.
[Extracted from the article ‘Islamic Economics & the Current Crisis’, The PAM Website]
No comments:
Post a Comment