Capitalism: An exploitative System Let us observe some important stats of the beacon of Capitalist State The United States of America
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
Capitalist system: Polarization of Wealth is the Hallmark of Capitalist system
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.
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%
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
System not Resources Pakistan's misery due to the rotten Capitalist system not because of lack of resources!
Comparison Islamic Economic System vs Capitalist System
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.
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
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.”
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.
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.
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
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.
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
Zakat is only taken from Muslim citizen after the passage of one year if his wealth exeeds Nisab which is different for different catagories
Stocks (Raw material or Finish Goods)
Receivable – Debts
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
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
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
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.
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.
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
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
Protecting some Public property ( Hima ) 4
State property of land, building utilities and their revenues)
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
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
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
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
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