Economic system  Capitalism Vs Islam
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Economic system Capitalism Vs Islam

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Islamic economic system Vs Capitalist economic system

Islamic economic system Vs Capitalist economic system

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  • (to the nearest meaning)
  • http://www.lcurve.org/ If we divided the income of the US into thirds, we find that the top ten percent of the population gets a third, the next thirty percent gets another third, and the bottom sixty percent get the last third. If we divide the wealth of the US into thirds, we find that the top one percent own a third, the next nine percent own another third, and the bottom ninety percent claim the rest. (Actually, these percentages, true a decade ago, are now out of date. The top one percent are now estimated to own between forty and fifty percent of the nation's wealth, more than the combined wealth of the bottom 95%.)
  • http://www.lcurve.org/ If we divided the income of the US into thirds, we find that the top ten percent of the population gets a third, the next thirty percent gets another third, and the bottom sixty percent get the last third. If we divide the wealth of the US into thirds, we find that the top one percent own a third, the next nine percent own another third, and the bottom ninety percent claim the rest. (Actually, these percentages, true a decade ago, are now out of date. The top one percent are now estimated to own between forty and fifty percent of the nation's wealth, more than the combined wealth of the bottom 95%.)
  • The Economic System versus Economic Science The economic system is that which determines how to distribute the wealth, how to possess it, and how to spend or dispose of it. This determination follows a particular viewpoint in life, or ideology. Therefore, the economic system in Islam is different from that of Socialism/Communism and that of Capitalism, since each of these systems follows its own ideological viewpoint of life. Economic science discusses production, its improvement, invention and improvement of its means. Economic science, as is the case with other sciences, is universal to all nations and is not associated with a particular ideology. So for example, the view towards ownership in Capitalism differs from that of Socialism/Communism, and differs from that in Islam. However, discussing the improvement of production is a technical issue, which is purely scientific, and the same for all people, no matter what their viewpoint about life is. This merger between the study of the needs and the means of their satisfaction i.e. between producing the economic material and the manner of its distribution, and bringing them as one issue and one subject, is an error, which resulted in mixing and interference in the capitalists studies of - -------------------------------------------- The resources available on earth are sufficient to secure the basic needs (food, clothing, shelter etc.) of fifty billion human beings. Such a misunderstanding has concealed the reality that starvation, poverty, and economic backwardness, result from misdistribution exasperated by man-made laws and systems
  • Out of 16,000 industrial units only 3000 units pay taxes Income tax mostly from employees Agricultural sector : 40% of the GDP but only 1% tax Sales tax contributes 37% Kharaj and Ushr and Zakt not taken properly
  • Taxes are haraam due to the following evidences. The messenger of Allah (saw) said: "Any deed is rejected, if it is done without our order" (Narrated by Muslim, Ahmed) These taxes have no evidence from Shara’ . 2) The messenger of Allah (saw) said: "Anyone who collects taxes will not enter heaven" [Narrated by Ahmad, Abu Daoud and Al-Hakem]. That includes customs and taxes on sale and purchase. And (saw) said: "He who collects taxes is in hell" [Narrated by Ahmad], 3) As these taxes become part of the price so they are haraam. The evidence is the saying of the messenger of Allah (saw): "Anyone who increases the price of anything for the Muslims, then Allah Al-Mighty has the right to put him in hell on doomsday." (Narrated by Ahmad) 4) Besides, the evidences like; "All the Muslim is haram (not allowed) on the Muslim, his money, his honor and his blood ." [Narrated by Abu Daoud and Ibn Majah] And said: "The money of a Muslim person does not become legal, unless taken with his consent" , And said: "If you find a person who takes money without right, kill him." ( Musnad Ahmed) The government loots the property of Muslims in the shape of sales tax and surcharge without a right. Moreover these taxes are imposed as conditionality of Kuffar and grant authority to them over the Muslim. These acceptance of these IMF and World Bank conditions are haraam because in the Qur’an Allah (SWT) said; " And never will Allah grant to the unbelievers a way (to triumph) over the believers." [An-Nisa': 141]
  • “ What Allah has bestowed on His Messenger (and taken away) from the people of the townships, belongs to Allah and His Messenger, to the kindred, orphans, the needy and the wayfarer; in order that it may not remain a circuit between the wealthy among you... ” [Al-Hashr: 7] These verses have been used by ‘Umar to support his argument about not dividing the lands of Iraq, Ash-Sham and Egypt among the fighters, as requested by Bilal, Abdul Rahman and Al-Zubayr. Ummar (ra) told Ansar during his consultation with them: “I have decided to make the land and their trees an inalienable property, and to impose on them the Kharaj and on their owners the Jizya , these would be a Fai ’ to the Muslims, be it the fighters, their children and those who come after them…” Umar then backed his argument with evidence from the Qur’an. He recited the verses of Al-Fai ’ until he reached Allah’s (SWT) saying: “ And those who came after them ” [Al- Hashr: 10]. Sahabah accepted his understanding and thus did Ijma on it. Tariq Ibnu Shihab reported: ‘‘Umar b. Al-Khattab wrote to me about the tribe of Dahqana in Nahr Al-Malik, who had embraced Islam. He wrote: “Give the tribe her land so that they pay the Kharaj of that land.” This clearly indicates that ‘Umar b. Al-Khattab did not waiver the Kharaj imposed on the land conquered by force and whose owners embraced Islam, and he ordered them to continue to pay the Kharaj of that land after becoming Muslims.
  • Revival of an agricultural land is accomplished by encompassing the land to seclude it, distinguishing it from other lands, transferring water to it or digging a well in it, if it is a dry land where crops depend upon irrigation. It could be by blocking the water from it and drying it if the land is submerged with water or by ploughing the land, flushing the highland and inundating the lowland. By completing the revival, ownership is completed and the land is officialy transferred to the peasant. All this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.” Ownership of this land is not accomplished except by reviving it after its allocation. While the allocation gives the allottee a legal right in it, ownership is not completed except after achieving its cultivation and this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.”
  • Revival of an agricultural land is accomplished by encompassing the land to seclude it, distinguishing it from other lands, transferring water to it or digging a well in it, if it is a dry land where crops depend upon irrigation. It could be by blocking the water from it and drying it if the land is submerged with water or by ploughing the land, flushing the highland and inundating the lowland. By completing the revival, ownership is completed and the land is officialy transferred to the peasant. All this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.” Ownership of this land is not accomplished except by reviving it after its allocation. While the allocation gives the allottee a legal right in it, ownership is not completed except after achieving its cultivation and this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.”
  • Revival of an agricultural land is accomplished by encompassing the land to seclude it, distinguishing it from other lands, transferring water to it or digging a well in it, if it is a dry land where crops depend upon irrigation. It could be by blocking the water from it and drying it if the land is submerged with water or by ploughing the land, flushing the highland and inundating the lowland. By completing the revival, ownership is completed and the land is officialy transferred to the peasant. All this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.” Ownership of this land is not accomplished except by reviving it after its allocation. While the allocation gives the allottee a legal right in it, ownership is not completed except after achieving its cultivation and this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.”
  • ------------ He said: ‘Whosoever revives a land that belongs to nobody then he is more deserving of it’. Bukhari reported the same Hadith with the words: ‘Whosoever inhabits a land that belongs to nobody he is more deserving of it’. ---------------- From ‘Umar b. al-Khattab from the Messenger of Allah he said: “Whoever revives dead land then it is for him.” And from ‘Amru b. Shu’aib from his father from his grandfather from the Prophet , he said: “Whoever cultivates dead land then it is for him.” 22 23 24 25 such as Iraq, Ash-Sham and Egypt-then it has to be examined. If the allocation is from cultivated land, whether Kharaj has ever been imposed upon it or not, then the allottee will only possess its benefit not its neck as its neck is owned by Muslims. The Khalifah may grant ownership of the -------------
  • Check Al-amwal for Hard Currecny
  • Interest rates form the backbone of the capitalist system in many ways. It is used as a tool to regulate economic growth and monetary supply by acting as an 'incentive' for those who have surplus money to save/hoard
  • Check Al-amwal for Hard Currecny
  • Interest rates form the backbone of the capitalist system in many ways. It is used as a tool to regulate economic growth and monetary supply by acting as an 'incentive' for those who have surplus money to save/hoard
  • Check Al-amwal for Hard Currecny
  • Interest rates form the backbone of the capitalist system in many ways. It is used as a tool to regulate economic growth and monetary supply by acting as an 'incentive' for those who have surplus money to save/hoard
  • Check Al-amwal for Hard Currecny
  • Check Al-amwal for Hard Currecny
  • Furthermore, taking foreign aids by the state is haram in Islam, because though they are basically allowed (mubah), they become haram when they bring harm to the state (its authority, its economic or its security). This is based on the Shari’ah principle which states that if any particular thing allowed (mubah) leads to harm then this individual action becomes haram while the thing continues to remain mubah. Accordingly taking the foreign aid is haram. Besides that these loans are only taken with interest (usury), and zina usury is haram then taking the foreign loan is haram. Thus in view of these dangers which result from taking the foreign loans and becomes usury (interest) is haram, then it is not allowed in Islam to take foreign loans, and it is proper not to fund the projects, even the production ones, through the foreign loans. They have rather to be funded independently by the country itself. Hizb ut-Tahrir ------------------------------ As for borrowing from foreign countries or international financial institutions, it is not allowed by Shar’a because such loans would not be except with bank interest or with imposed conditions. Bank interest is prohibited by Shar’a , whether from individuals or countries, as the imposition of conditions gives the lending countries and institutions control over Muslims and makes the will of Muslims and their disposition subject to the will of the lending countries and institutions, a matter which is prohibited by Shar’a . The international loans were among the most dangerous afflictions and among the causes for imposing the authority of the Kuffar upon the Islamic lands; and how often has the Ummah suffered from the calamities of these loans? Therefore, the Khalifah is not allowed to resort to international loans to cover the expenditure on these areas.
  • Islam prohibited pricing absolutely, due to what Imam Ahmad narrated from Anas who said: “Prices increased at the time of the Messenger of Allah , so they said, O Messenger of Allah, we wish would you price (fix the prices). He said: “Indeed Allah is the Creator, the holder (Qabidh) , the Open-handed (Basit) , the Provider (Raziq) , the Pricer (who fixes prices); and I wish I will meet Allah and nobody demands (complains) of me for unjust act I did against him, neither in blood or property.” Also Abu Dawud narrated from Abu Huraira, he said, “A man came and said, O Messenger of Allah, fix prices. He said: “Rather Allah reduces and increases.”
  • Revival of an agricultural land is accomplished by encompassing the land to seclude it, distinguishing it from other lands, transferring water to it or digging a well in it, if it is a dry land where crops depend upon irrigation. It could be by blocking the water from it and drying it if the land is submerged with water or by ploughing the land, flushing the highland and inundating the lowland. By completing the revival, ownership is completed and the land is officialy transferred to the peasant. All this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.” Ownership of this land is not accomplished except by reviving it after its allocation. While the allocation gives the allottee a legal right in it, ownership is not completed except after achieving its cultivation and this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.”
  • Protecting some Public Property Assets (Hima) Protecting some of the public property assets of petroleum, gas and minerals, such as when the Khalifah designates specific petroleum and gas wells or specific mineral mines like, for example, phosphate, gold and copper mines, where he protects them and designates their revenues for the expenditure on the mentioned areas, is allowed by Shar’a . It is a useful method to raise the necessary revenues to spend in these areas. It is permitted for the Khalifah to do this based on the following: 1. The Messenger of Allah and the Khulafa’a after him shielded specific places which were part of the public property. From Ibn ‘Abbas from Sa’ab b. Juthama, he said: “The Messenger of Allah said: ‘No protection (Hima) except for Allah and His Messenger’”. That is, no protecting except for the State similar to what Allah and His Messenger shielded for Jihad , the poor, the needy and the interests of Muslims generally. This is not similar to what they protected in the days of Ignorance ( Jahiliyyah ) where the noble alone among them protected for himself. From Nafi’ from Ibn ‘Umar: “The Prophet protected An-Naqi’i (this was a famous place in Madinah) for the horses of the Muslims.” Similarly Abu Bakr protected Al-Rabatha for the camels of Sadaqat and appointed his servant Abu Salama, over it. ‘Umar also protected Al-Sharaf in Al-Rabatha and appointed his servant, who was called Hani. This protection was of places of pasture and grazing and they were of the public properties. Al-Naqi’i which was protected by the Messenger of Allah was outside Madinah, and water used to stagnate in it and pasture would grow when it dried up i.e. it was owned as public property by all Muslims. Abu ‘Ubaid, in explaining this, after mentioning the Hadith “No protecting except for Allah and His Messenger” said: “The interpretation of the protection which is prohibited in our view (and Allah knows best) is that you shield the things which the Messenger of Allah made all the people partners in, which is water, pasture and fire.” The Messenger of Allah , Abu Bakr and ‘Umar designated places and protected them for the horses which were,used in the way of Allah, the camels and livestock of Sadaqat , and they used to prevent others from grazing in them. From ‘Amir b. ‘Abdullah b. Az-Zubair (RA), he said: “A bedouin came to ‘Umar ibn Al-Khattab (RA) and said: ‘O Amir al-Mu’mineen , our land that we fought upon in (the days of) Jahiliyyahh and upon which we became Muslims in (the days of) Islam, why did you protect it?’ ‘Umar bowed (his head), twisted and breathed into his moustache (whenever a matter troubled him, ‘Umar would twist his moustache and breathe into it) and when the bedouin saw how he reacted, he repeated his question to him. ‘Umar replied: ‘Property is the property of Allah, and the servants are the servants of Allah. By Allah, were it not for what I carry upon it in the way of Allah, I would not protect a handspan by handspan.’” And from Aslam, he said: “I heard ‘Umar b. al-Khattab as he was speaking to Hani when he appointed him over the Hima of Al-Rabatha: ‘O Hani, withhold your hand (i.e. restrict yourself) from the people and fear the Dua’a of the oppressed for it is accepted. Allow to enter the owner(s) of camel and sheep, but turn away the grazing livestock of ibn ‘Affan and ibn ‘Awf for if the livestock of these two die they will return to palm trees and palms. But if the livestock of this miserable man die he will come shouting: ‘O Amir al-Mu’mineen, has the pasture become of little importance to me or has gold and money suffered loss?’ For verily it is their land upon which they fought in (the days of) Jahiliyyah and became Muslims in (the days of) Islam, and their view is that we are oppressing them. Were it not for the livestock upon which things are borne in the way of Allah, I would never have protected anything from the people of their land.’ These Ahadith and other reports denote clearly that the State can shield from the public properties what it needs for Jihad and what relates to it, and for any other interest of the Muslims, however much it may be. ---------------------- The amount taken from Zimmi and Harbi merchants is delegated to the Khalifah . He may increase or decrease it according to the peace agreements either already contracted or to be contracted. He may also act reciprocally to how Muslim merchants are treated in accordance to the interest of the Muslims and the conveying of the Da’wah . Abdullah bin ‘Umar narrated that “‘ Umar used to take half-tithe (5%) from oil and wheat so as to increase their load into Madinah and took the tithe from vegetables (peas, beans, lentils).” ---------------------------- Taxes: Taxes are collected from the Muslims who have wealth surplus to the satisfaction of their basic needs and luxuries. Nothing is taken from those who have no surplus wealth. This is due to the saying of the Prophet : “The best Sadaqah is that given out of richness.” The richness here means that which the person can afford after satisfying his needs. It was narrated from Jabir that the Messenger of Allah said: “Start with yourself when giving Sadaqah. If there remains any excess, then to your family. If there remains any excess, then to your relatives. If there remains any excess, then do like this, give those in front of you and those to your right and those to your left.” He deferred the obligation to spend upon anyone else till after spending upon oneself. Similar to this are taxes as they are like financial maintenance and like Sadaqah .

Transcript

  • 1.  
  • 2. Capitalism: An exploitative System Let us observe some important stats of the beacon of Capitalist State The United States of America
  • 3. In America: In America: 37 million people live below the official poverty line—12.6 percent of the total population At least 2.3 million people experience homelessness at some point each year, including nearly 1 million children The richest among them has more wealth than the bottom 45 percent of the households combined
  • 4. Capitalist system: Polarization of Wealth is the Hallmark of Capitalist system
  • 5.  
  • 6.  
  • 7. Net worth and financial wealth distribution in the U.S. in 2007
  • 8. Rich getting richer and poor getting poorer
    • Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of American households combined.
    • Business Week reports that in 1999 top executives earned 419 times the average wage of a blue-collar worker, up from 326:1 in 1998. In 1980, the ratio was 42:1.
  • 9. Percentage of wealth held by the Top 10% of the adult population in various Western countries Concentration of Wealth in the West Country wealth owned by top 10% Switzerland 71.3% United States 69.8% Denmark 65.0% France 61.0% Sweden 58.6% UK 56.0% Canada 53.0% Norway 50.5% Germany 44.4% Finland 42.3%
  • 10. Where is the world headed!!!!! An analysis of the trend of the widening gap between the rich and the poor countries Year Poor: Rich ratio 1820 3:1 1913 11:1 1950 35:1 1973 44:1 1992 72:1
  • 11. System not Resources Pakistan's misery due to the rotten Capitalist system not because of lack of resources!
  • 12. Comparison Islamic Economic System vs Capitalist System
  • 13. Economic Problem Khilafah Democracy
    • Human needs are of two types
      • Basic Needs (limited)
      • Luxurious Needs
    • World resources are enough to fulfil basic needs of all the people of world 1
    • Human needs are unlimited while there are limited resources to fulfil them
    • Solution:
    • Distribution of wealth and resources to guarantee all basic needs to each individual
    • Create opportunities so that maximum number of people can work to fulfil there luxurious needs
    • Solution:
    • Needs of all the people won’t be fulfilled
    • Increase Production to fulfil needs of as many people as possible
    • Rules related to collection of funds and its distribution constitute “Economic System” and cannot be taken from other than Islam
    • Methods to increase production is “Economic Science” and can be taken from other civilizations including the West
  • 14.
    • The United Nations Development Program (UNDP) reported in 1998 that the world's 225 richest people now have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorest people.
    • As of 1995 (the latest figures available), Federal Reserve research found that the wealth of the top one percent of Americans is greater than that of the bottom 95 percent
    • According to the US Census Bureau, 35.9 million people live below the poverty line in America including 12.9 million children. ( http://www.census.gov )
    • The wealth of the three most well-to-do individuals now exceeds the combined GDP of the 48 least developed countries
    • UNDP calculates that an annual 4 percent levy on the world's 225 most well-to-do people (average 1998 wealth: $4.5 billion) would suffice to provide the following essentials for all those in developing countries: adequate food, safe water and sanitation, basic education, basic health care and reproductive health care.
    Resources are limited- Non sense
  • 15. Ownership
  • 16. Economic System: Ownership & Types of Properties Khilafah Capitalism
    • Three types of ownership
      • Individual
      • Public
      • State
    • Oil, Gas 1 , non-delectable minerals 2 etc and anything on which society depends and people will disperse in pursuit for it, remains in public ownership
    • If these were owned individually this will deny the public from benefiting from these huge resources, creating misery for the common man
    • Freedom of ownership
      • Individuals or companies can own anything and everything
    • Multinational companies are ‘free’ to own public properties such as oil, gas, parks etc
    • They are ‘free’ to spend or hoard the wealth as they please
    • Huge resources for people’s welfare
    • Cost of utilities much lower
    • The foundation of economic colonisation
  • 17.  
  • 18. Economic System: Pakistan’s Privatization Drive Privatized To Be privatized
    • ABL, HBL, UBL, MCB
    • Bankers Equity Ltd
    • Hub Power Co, Kot Addu Power Co
    • PTCL (Ufone, Paknet, TIP, CTI)
    • Steel Mill (Decision Reversed)
    • Ghee Corporation of Pakistan
    • KESC
    • UCH Power Ltd, Saba Power Ltd
    • Dharki Power Ltd
    • Oil and Gas exploration Licenses are innumerable
    • OGDCL, PSO, PPL, SNGPL, SSGPL
    • NIT, ICP
    • Sindh Engineering, Bolan Textile
    • Lyallpur Chemical and Fertilizer Co.
    • Javedan Cement, Karachi Shipyard
    • Republic Motors, Lasbella Textiles
    • Heavy Mechanical Complex
    • HPFL (Hazara Phosphate Fertilizer Limited)
    • Jamshoro Power Co, Pak Arab Fertilizer, Mustahekam Cement
    • In first ten month of 2004-2005 assets worth $3.6 billion has been sold: Survey 2005:2006
    • Current year privatization target is 75 billion rupees.
  • 19. Taxation
  • 20. Taxation in a Capitalist System
    • Tax the poor and average man
    • Give tax-breaks to the
      • Rich
      • Multinational companies
      • Landlords
  • 21. Taxes in America
    • Who Benefits from Bush's Tax Cuts?
    • George Bush's 2001 $1.3 Trillion tax cut was the largest in US history
    • The Top 1% supper-rich got 37 % of Bush's tax cut as saving ($481 billion)
    • Whilst the bottom 80% of Americans only got 29 % of the total tax cut ($377 bn)
    • The tax cut savings clearly shows that Bush works for the Super-Rich, and that he is willing to promote their interests above those of all other Americans
  • 22. Taxes in Pakistan
    • Agriculture sector in Pakistan contributes 40% to the GDP whilst astonishingly its contribution to the tax revenue is a meager 1%
    • GST, which is an indirect tax extracted from common man, constitutes 37% of the total tax-revenue of Pakistan
    • No Zakat taken from the land mafia which owns billions of rupees of land for the last decade or so. Islam requires a Muslim to give two and half percent of the value of the tradable goods in alms as Zakat
    • Currently No Ushr and Kharaj being levied on Agriculture produce
    • No wonder in democracy the elite legislate laws to tax the poor and give tax breaks to themselves
  • 23.  
  • 24. Taxes Comparison 2009-10 2008-9
  • 25. Evidences
  • 26. Economic System: Taxes Khilafah Capitalism
    • No Taxes on common man 1
      • GST, Income Tax, Withholding tax, toll taxes etc are all haram and will be abolished
    • There will be following permanent sources of revenues
      • Al-Kharaj 2
      • Al-Jizya 3
      • Al-Ushr 4
      • The fifth of Al-Rikaz 5 (hidden treasures minerals)
      • Import and export duty on foreign traders 6
      • Zakat on import and export of the Muslim Trader 7
      • Hima (Protecting from public properties)
    • 63.93% (Rs 840 billion) of revenue of Pakistan comes from taxes on the people as per the budget 2006-07 figures.
    • Out of these taxes 67.66% (Rs 569 billion) are indirect taxation that are to be paid by even a beggar, unemployed, handicapped, widow, elderly people and children without any differentiation.
  • 27. Laws related to Agricultural land
  • 28. Economic System: Agriculture and Land laws Khilafah Capitalism
    • Lease of agricultural lands (Muzariyat) is haram 1
    • Leasing of agricultural lands is permitted
    • Agricultural land if not used for 3 years will be confiscated 2 and allotted to someone who would cultivate it
    • No such restriction applies to an owner. He is “free” to do whatever he pleases
    • Anybody who occupies a dead land (outside the planned city area) and revives it by building a house or a factory etc becomes the owner of the land as well
    • No such incentive in the current Pakistani system
    • Prohibition of Muzarat coupled with obligation to cultivate land will give rise to land distribution of optimum productivity
    • Eradicates injustice to Muzarays. Delivers a fatal blow to the colonialist Feudal system (“jageer darana nizam”)
  • 29. Evidences
    • It was narrated by al-Bukhari that the Messenger of Allah said: “Whoever has land let him plant upon it or grant it to his brother. If he declined let him hold his land.”
    • Muslim also narrated, “The Messenger of Allah forbade a rent or a share be taken for the land.”
    • The Sunan of An-Nisai states: “The Messenger of Allah forbade leasing the land.We said, ‘O Prophet of Allah, can we then lease it for some of the grain.” He said, ‘No.’ We said, ‘We used to lease it for the straw.’ He said, ‘No.’We said, ‘We used to lease it in return of that on the irrigating Rabee’a.’ He said, ‘No, plant it or grant it to your brother.’”
    • Abu Dawud has narrated from Rafi’a ibn Khadeej that the Prophet also said, “Whoever has land, he has to plant upon it or let his brother plant upon it, and he cannot lease it for its third or fourth or a specified food.”
  • 30. Evidences
    • Bukhari related from ‘Aisha (ra) that the Messenger of Allah said: “Whosoever cultivated a land that is not owned by anybody, then he deserved it more.”
    • Abu Dawud narrated that the Messenger of Allah said: “Whosoever fenced a (dead) land it becomes his”
    • Bukhari narrated from Umar (ra) that he said: “Anyone who cultivated a dead land it becomes his.” Muslims and the Dhimmi are equal in this matter, because the Hadith is general in its words.
  • 31. Evidences
    • By completing the revival, ownership is completed and the land is officially transferred to the peasant. All this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from ‘Umar ibn Al-Khattab who said: “The muhtajir (who shield a land) has no right after three.” ‘Umar implemented this ruling while Sahabah were present and they all approved of this. Hence it becomes Ijma as-Sahabah for us and a Shari daleel.
  • 32. Residential Land Khilafah Capitalism
    • The State guarantees housing for the one who is in capable to build a house for himself and his relatives are also poor cannot support him
    • The Prophet (SAW) said: “The Son of Adam has rights to food, clothing and shelter.”
    • The system doesn’t allow the people to use the resources which Allah has bestowed to man
    • Common man’s biggest problem in building a house is the inflated prices of residential land that can easily be solved through the Khilafah state.
  • 33. Currency
  • 34. Currency Khilafah Capitalism
    • Metallic Currency
      • Gold
      • Silver
      • Any other precious metal
      • Currency notes can be used in lieu of gold and silver
    • Fiat currency backed by confidence
      • Dollar
      • Euro
    • Protects the currency from foreign control
    • Puts a check on devaluation and fake inflation
    • Return of the Gold standard will strike a fatal blow to the colonialist economy
  • 35. Riba
  • 36. Riba Khilafah Capitalism
    • Interest transactions not allowed 1
      • No interest based debt servicing
    • Encourages the wealthy to under take local investment rather than depositing their money in high interest deposit accounts
    • Freedom of ownership allows people to hoard money
    • Riba is the bate for the people to take money out of circulation/ investment and to put into deposit account
    • In 2006:07 Pakistan will pay 295 billion rupees in interest payment. This is 55 billion more than all foreign loan and grants for the year.
    • Relief to common man/ investor
    • No interest servicing to IMF and WB.
  • 37. Evidences
    • “ That is because they say: Selling is just like usury. Whereas Allah permitted selling and prohibited usury .” [Al-Baqarah: 275]
  • 38. Investment before the advent of Banks
    • In a society devoid of Banks investors are in need of entrepreneurs and businessmen to help increase their wealth
    • On the other hand the skilled labour, inventors and businessmen are in need of investment in order to generate more wealth
    • Hence it is a marriage of convenience for both parties
    • They join together in a partnership to benefit from each other such that the investor bears the risk and the other partner does the work
    Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader
  • 39. Bank monopolizes the wealth of the society
    • The Bank drains the society off of its wealth by guarantying the investor of sure profit (interest)
    • As a result an entrepreneur and skilled labourer is forced to borrow money from the bank on exploitative terms.
    • According to the contract not only the borrower has to pay hefty interest but he also has to return the principle amount in full even though if his business was in loss.
    • This produces a win-win situation for the investor and the bank. Hence the rich becomes richer and the poor poorer
    Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader Bank Bank’s Profit = (20-12)% 12% 20% Profit Interest
  • 40. In Muslim societies Banks were not very successful
    • In Muslim societies since people considered Interest as haram therefore Banks was not in total control of the money flow in the society. Billions of dollars of money remained outside Banks control. And skilled labour didn’t need to go to the bank to borrow money as investors were there to help them.
    • As a result banks who thrive on monopolising the money and then forcing people into exploitative contracts couldn’t function properly.
    Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader Bank Bank’s Profit = (20-12)% 12% 20% Profit Interest
  • 41. Islamic Banking is helping Capitalist Banks
    • The Banks opened up a Window for Islamic Banking through which Muslims were encouraged to give their money to the banks instead of investing it themselves following Islamic laws
    • This achieved the objective of draining the society off of wealth and hence the skilled labour has become more dependent on the Banks
    • Hence Islamic Banking has actually helped Capitalist system by having stronger grip on the money flow and hence exploit the masses
    Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader Bank Bank’s Profit = (20-12)% 12% 20% Profit Interest Islamic Banking $ $ $
  • 42. Islamic Banking in the Capitalist system
    • Islamic banking is also tool via which the Imperialist forces engage sincere Muslim in the current Kufr system and deceive them in believing that they can have an Islamic system within the frame work of the existing Kufr Capitalist system. As a result enormous time and effort is wasted in trying to “reform” this kufr system instead of uprooting it and implementing Islamic system in a comprehensive and radical manner
  • 43. Banking System Khilafah Capitalism
    • Bank do not serve as financial intermediaries. Hence in capitalist sense there are no banks.
    • They will provide services of the like debit card, LC for import export, Online fund transfer, internet payments, etc.
    • They will facilitate/establish communication between the investor (Muwakkil) and worker (Mudharib)
    • Banks acts as financial intermediaries
    • They provide services like debit card, LC for import export, Online fund transfer, internet payments, credit cards. Financing for various heads on interest etc
    • A source of hoarding of wealth
    • Khilafah takes advantage of financial institutions providing financial services and networking whilst protecting the masses from the current banks system which spread their evil through hoarding of wealth, marginal reserve system and interest etc.
  • 44. Banks in the Khilafah
    • The banks can continue to undertake all non-interests based services and take service charges on them such as:
      • Current accounts for its customers
      • Money Transfer
      • Cash Station Cards
      • Lockers for valuable items
      • LC (Bank as a Guarantor)
    • The banks can also act as financial advisors and facilitate the marriage of investors and entrepreneurs /businessmen etc.
    • Government bank will also provide grants and interest free loans to its citizens to enhance economic activity
    Inventor Investor Investor Investor Investor Businessman Trader Bank
    • Bank is not a part of the financial contract
    • Bank is only a financial adviser and facilitator similar to that of a property dealer
    • Only introduces the two parties and takes service charges for its effort
  • 45. Company Structure
  • 46. Company Structure Khilafah Capitalism
    • All contracts should conform to contracts laid down by shari’ah. Hence exploitation of the needy is not possible
    • Man made laws aimed at benefiting corporates are to be complied. Rules have been written to benefit those who wrote them. Golden rule! “he who has the gold rules”
    • Public limited companies Illegal. i.e. no stock exchanges, futures trading etc. in Khilafah
    • Stock-exchange an integral part of western corporate business.
    • Speculative contracts lead to fiat (Alternative) economy and indexes which is used by the corporations to loot common man’s money while keeping them in dark as happened in the latest saga of energy giant Enron and second largest telecom company WorldCom .
    • Khilafah’s economy will be protected from economic crisis as were witnessed in South East Asia during the late ’90s when “Asian Tigers” were wiped by the powerful foreign investors
  • 47. Stock exchanges Khilafah Capitalism
    • No stock exchanges are there in Khilafah.
    • No speculative transactions are allowed as per Islam. Investment is done only in real trade strengthening economy.
    • No chance of drowning of money in stocks as recently happen when 4 billion dollars of small investors were lost in a matter of a week when KSE index dropped from 10,000 to 7000 points.
    • A major portion of investment is done in stocks whose more than 90 % portion has nothing to do with real trade.
    • Real trade has gradually been reduced to less than 10 % of international trade and 90% is only financial transaction.
    • Last year stock market crashed several times drowning trillions of rupees of investors.
    • Stock exchanges are a source of diversion of investment from real trade to speculative business.
    • If all the money that is invested in stocks is directed to real trade it will give rise to a robust economy
  • 48. Valid Companies in Islam Khilafah Capitalism
    • The Company of Equal (Al-’Inan)
    • The Company of Bodies (Al-Abdan)
    • The Company of Body and Capital (Mudharaba)
    • The Company of Reputation Faces (Wujooh)
    • Company of Negotiation (Mufawadha)
    • Public Limited Company
    • Private Limited Companies
    • Guarantee Limited
    • Unlimited Company
    • A Man is not separate from his company
    • He is responsible for the debt of the company. He the stake holder money is safeguarded
    • A man can not hide behind the corporate rules at the time of bankruptcy
    • The Company and the owner are two separate distinct bodies
    • Owner is not responsible for the debt of company beyond his investment
    • Owners always hide behind the corporate rules at the time of bankruptcy.
  • 49. Zakat
  • 50. Zakat
    • Zakat is only taken from Muslim citizen after the passage of one year if his wealth exeeds Nisab which is different for different catagories
      • Liquid Currency
      • Stocks (Raw material or Finish Goods)
      • Receivable – Debts
      • Live Stock
      • Land (Ushr)
      • Any tradable commodity including property
    • Hence as a whole more than 2.5% of the total wealth of the economy is collected from the society and injected back into the poorest echelons of the society.
    • This is a tremendous mechanism of producing a balance in the distribution of wealth within the economy apart from other Ahkam of Islam which allow the down trodden people to improve their economic situation
  • 51. Foreign Loans
  • 52. Foreign Loans- no way Khilafah Capitalism
    • Taking Foreign loans would not be allowed 1
    • Membership in colonial organisation is also not allowed like Paris club, ADP, Islamic Development Bank, World bank and of course IMF.
    • Foreign loans are the integral part of Pakistan’s capitalist economy
    • This year 239 billion rupees will be received as different type of foreign loans.
    • In 1980 Nigeria took a loan of $3.5 billion from the Paris club. By 1985 this debt had risen $5.8 billion. By 1998 it had risen to 20.9 billion, and is today estimated at 27 billion.
    • Sovereignty of Pakistan was mainly eroded due to foreign loans
    • IMF and WB dictate all our internal policies under the guise of ‘reforms’ and ‘good governance’
    • Khilafah would liberate us from IMF & WB Structural Adjustment programmes (SAP’s), Poverty reduction strategy Papers (PRSP) conditionalities and improve our economy
  • 53. Evidence
  • 54. Economic System: Foreign Traders − not MNC’s Khilafah
    • Foreign trade is assessed on the basis of the citizenship of the trader and not the origin of the goods except goods from countries we are in actual war with like Israel.
    • Merchants from countries that have treaties with the State are treated according to the terms of the treaties
    • Merchants from countries in a state of war with the State are prevented from trading in the State, unless given a special permission
    • Any country with whom we have actual war with, its citizens (such as Israel) is excluded from these rules. The rules applicable to the actual land of war ( Dar al-Harb Fa’lan ) apply to such country in all the relations
  • 55. Trade
  • 56. Economic System: Local Traders Khilafah Capitalism
    • Merchants who are subjects of the State are prevented from exporting any goods that the enemies could benefit of militarily, industrially or economically
    • No such provision, hence Pakistan is helping India fulfil her energy needs by building two gas pipelines. Which would further strengthen Indian industry and Military to be used against Muslims of Pakistan
    • This Trade Policy protects the state from potential enemies in the future
    • They are not prevented from importing any property they own under the pretext of protecting the local industry
    • The government hurts the local trader under the pretext of “Smuggling” while reduces import duty to give monitory benefit to the foreign trader under the guise of “foreign investment”
    • There is nothing known as “Smuggling” in Islam as long as the citizen of the state imports Halal items
  • 57. Import export duties Khilafah Capitalism
    • A Muslim trader only has to pay Zakat (2.5%) of the property during import and export once a year 1
    • No import or export duty other than zakat
    • Import and export duties may be as high as 15 to 20%.
    • Import duties on luxury cars reduced to suit the rich
    • A Zimmi (non-Muslim citizen) will pay according to the contract he had with state at the time of conquest 1
    • No such distinction
    • A Harbi (foreigner non-Muslim) will pay the same percentage of duty as his country applies on the traders of the Khilafah 2
    • No such distinction
    • Low import and export duties will enhance trade and improve not only the conditions of the trader rather it will also help our exports
    • In a Capitalist state people in the legislative assemblies reduce and increase duties to suit their interests and make money.
  • 58. Miscellaneous Ahkam
  • 59. Evidences
    • The hoarding of gold and silver was prohibited explicitly in the Qur’an. Allah (SWT) says: “And let those who hoard gold and silver and do not spend them in the way of Allah know that a severe and painful punishment is awaiting them.” [At-Tauba: 34] This warning of severe punishment for those who hoard gold and silver serves as a clear evidence that the Law Giver has decisively ordered us to refrain from doing so; it is therefore forbidden to hoard gold and silver.
    • Islam prohibited pricing absolutely, due to what Imam Ahmad narrated from Anas who said: “Prices increased at the time of the Messenger of Allah , so they said, O Messenger of Allah, we wish would you price (fix the prices). He said: “Indeed Allah is the Creator, the holder (Qabidh) , the Open-handed (Basit) , the Provider (Raziq) , the Pricer (who fixes prices); and I wish I will meet Allah and nobody demands (complains) of me for unjust act I did against him, neither in blood or property.” Also Abu Dawud narrated from Abu Huraira, he said, “A man came and said, O Messenger of Allah, fix prices. He said: “Rather Allah reduces and increases.”
    • S’aid ibn Al-Musayyab narrated from Mu’ammar ibn Abdullah Al-‘Adawi in Bukhari that the Prophet (saw) said: “No one monopolises except the wrongdoer.” Al-Athram narrated from Abu Umamah, he said: “The Messenger of Allah (saw) forbade that a foodstuff be monopolised”. And Muslim narrated through his chain of narrators from S’aid ibn Al- Musayyab that Mu’ammar said: “The Messenger of Allah (saw) said: “Whoever monopolised is a wrongdoer.”’ Monopoly is prohibited (Haram) in all things without a difference between the human foodstuff or animals foodstuff, a foodstuff or not, and of the people’s necessities or luxuries. This is because the linguistic meaning of the word monopolised (Ihtakara) is to compile a thing in its absolute sense (without specification). The word monopolised did not come in the meaning of compiling the foodstuff or the people’s necessities, rather compiling the thing, so it should not be confined to other than its linguistic meaning.
  • 60.  
  • 61. Evidences
  • 62. Economic System: Hoarding of Wealth & Price Fixing Khilafah Capitalism
    • Hoarding of wealth (money) is haram and state will take practical steps to prevent it 1
    • People are “free” to hoard wealth for no reason
    • Islamic system ensures circulation of wealth
    • In Capitalist system banks offer “interest” to encourage people to inject money into economy
    • Islam prohibits price fixing 2
    • Islam prohibits monopoly 3
    • Capitalist are still in dilemma as to how to get rid of monopolies; e.g. Microsoft break up litigation
  • 63. Evidences
    • The Islamic economic system came to secure basic needs, irrespective of market conditions for such products. Muhammad (SAW) 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 cover his nakedness and a piece of bread and some water.” According to this principle the Islamic State must ensure for all its citizens (Muslims or Non-Muslim) of the Islamic State a security which western people will never achieve in the heartless obduracy of the application of its free market.
  • 64. Economic System: Basic needs of the masses Khilafah Capitalism
    • Basic needs of all citizens are guaranteed such as food, clothing, shelter, education, health etc.
    • The land laws discussed earlier allow people to attain self-sufficient in food and housing as explained above
    • In the purest form of capitalism there is no concept of public welfare.
    • Khilafah alleviates the suffering of the masses
    • Decreases crime and insecurity in the society
    • Produces a secure economic atmosphere which increases economic activity and investment as the investor doesn’t run the risk of being homeless and struck by hunger in case of a loss
  • 65. Economic System: State Revenues Khilafah Capitalism
    • Sources of Bait -ul-Mal
      • The booties and the spoil of war 1 , Al-Fai 2 and the fifth 3
      • Al-Kharaj
      • Al-Jizya
      • Protecting some Public property ( Hima ) 4
      • State property of land, building utilities and their revenues)
      • Al-Ushur
      • Money attained illegally by the rulers, the employees of the State, illicit money and money from penalties
      • The fifth of Al-Rikaz (hidden treasures) minerals 5
      • The inheritance property of the one who has no inheritors 6
      • The property of apostates 7
      • Charity Funds – Zakat
      • Taxes (only from the rich Muslims and in specific situations)
    • Predominant source of income is Taxes from the common people. People in the west are taxed upto 35% of their income
  • 66.  
  • 67. State Expenditure Priorities Khilafah
    • The expenditures of the State are based around seven areas:
    • The Zakat funds – on fix 8 categories mentioned in the Qur’an.
    • Spending money on the destitute and the poor to ensure their basic needs is a must on the State.
    • Spending on defence, heavy industry and security of the State as well as carrying the Islamic Message to other lands.
    • Allowances of State employees such as salaries of soldiers, civil servants, judges, teachers and the like.
    • Provide utilities to the people such as roads, water services, power services, mosques, schools and hospitals and any other utility considered as necessity for the people.
    • Emergency expenditures such as during famine, flood, earthquake or attack by enemy.
    • Spending on development projects – Only if funds available
  • 68. Implementation of Economic System Khilafah
    • To implement Islam’s economic system we require its corresponding ruling system i.e. the Khilafah. In the Khilafah no one has the authority to change Allah’s laws or abrogated them
    • Dictatorship and Democracy cannot implement Islam’s economic system as man is the legislator in both these systems and the powerful can easily change the just laws of Islam in their personal interests to subjugate the rights of the weak and the poor
  • 69. Decision making in Autocracy (dictatorship of an individual) Decision making Legislative Mubah (General issues) Mubah (needing expertise) Economic Ruling Social Judicial Education Policy Foreign Policy The ruler The ruler The ruler
  • 70. Decision making in Democracy (dictatorship of an elite group) Decision making Legislative Mubah (General issues) Mubah (needing expertise) Economic Ruling Social Judicial Education Policy Foreign Policy Elite Group Elite Group Elite Group
  • 71. Decision making in Khilafah Decision making Legislative Mubah (General issues) Mubah (needing expertise) Economic Ruling Social Judicial Education Policy Foreign Policy Khaleefah is final authority after discussing with experts People Through their representatives decide based on Majority (if Khaleefah asks them) Allah’s Ahkam Are implemented derived from the sources, Qur’an, Sunnah, Ijma us Sahaba Qiyas
  • 72.