
Economics is about how a nation funds and spends. The Ulema (Islamic scholars) have derived a principle that many of the ahkams (rules) related to economics relate to solving poverty and have understood that Islam obligated that the State must focus on distributing the wealth amongst its people thereby eliminating this poverty. Allah (swt) says in the Qur’an: “…in order that it may not make a circuit between the wealthy amongst you” [Surah Al hashr (59): Ayah 7] ie so wealth does not become a monopoly of the rich.
The poverty is understood by those who cannot meet their basic needs. It is authentically reported that the Rasulillah (Prophet Muhammad, saws) said “The son of Adam has no better right than that he would have a house wherein he may live and a piece of cloth whereby he may hide his nakedness and a piece of bread and some water” [at Tirmidhi]
It is understood that although the resources are limited, they are sufficient to produce enough wealth to satisfy every basic need. All that is required is the distribution of this wealth to the people.
This is contrary to capitalist economic view of scarcity: that says there are not enough resources to satisfy everyone’s desires so they must concentrate more on production (ie to produce more so to keep up with those desires). It failed to differentiate between the ‘needs’ of an individual and his/her ‘wants’. This is due to its creedal concept of liberty (ie a person should not be deprived of anything he/she desires). It believes that if every individual is left to do what he/she desires then in aggregate it helps the society as a whole, so it abhors regulation or interference of the government [Adam Smith, ‘Wealth of Nations…’]. The government in its view exist to protect the freedom (liberty) of the individual [John Stuart Mills, ‘On Liberty’]. It again failed to realise, in fact hesitant to admit, this is what led to extremes like anarchist communism and fascism and the current moral decay of the societies and even the current financial crisis (greed).
So Islam distributes this wealth and we know historically it eliminated poverty (eg in the time of Khalifah Umar Abdul Aziz (ra), where there was no one in Africa to receive the zakah!). As the capitalist do not differentiate between the need and wants of people it views the bonus of £20m to a business man as important as (or more than) feeding a person to live. See how quickly the governments bailed the banks out; the sad reality is that it takes only a small percentage of that money to eliminate world poverty!
[Extracted from the article ‘Our Philosophy’, by Abu Yusuf al-Karanshi]
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