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ISLAM’S RESPONSE TO CONTEMPORARY ISSUESHazrat Mirza Tahir AhmadKhalifa-tul-Masih IVRehm’Allah talla
Prepared by Dr Shakeel Ahmad,National Tabligh Team, UK
ISLAM’S RESPONSE TO CONTEMPORARY ISSUES
Chapter wise seminars series:1. Inter-religious peace2. Social peace3. Economic peace4. Political peace5. Individual peace
SEMINAR 3ECONOMIC PEACE

Three Principle Economic PhilosophiesA Comparison
Three Principle Economic Philosophies A Comparison - 1
Capitalism-allows private enterprise & owning of wealth- interest basedCommunism/socialism- does not allow individual ownership of wealth- state monopolyIslamic System- allows private enterprise & owning of wealth- no usury & interest
Three Principle Economic Philosophies A Comparison - 2
Capitalism-interest is the driving force for investment- capital should grow even without effort by the owner- owner does not necessarily share risk - unscrupulous investmentCommunism/socialism- no option of individual investment- lack of incentive for productionIslamic System-checks non-productive capital withzakat- driving force for investment- owner has to make the effort of investment- owner shares risk - therefore careful planning
Three Principle Economic Philosophies A Comparison - 3
Capitalism- growth is monitored against some benchmarks eg interest, inflation- its legal & possible to exploit those in need of loan - allows rich to drain wealth from poor towards themselvesCommunism/socialism- lack of benchmarking for growth- lack of monitoring & accountability - more wasteIslamic System- prevents amassing wealth in the hands of few at cost of many e inheritance system and taxing the capital- prevents exploitation as any loan is either shared investment or ‘help’
Three Principle Economic Philosophies A Comparison - 4
Capitalism- raised interest puts extreme pressure on small businesses at times of recession - bankruptcies- facilitates unscrupulous investments by large financial establishments - investors are distant from investment anyway and only interested in profit which is fixedCommunism/socialismIslamic System- no interest to pay means increased capacity to sustain recession by just sharing loss - akin to nature’s way to protect, ‘hibernation’- honest investment is likely to grow more than dishonest competitors- investors’ discretion to select carefully as they share profit/loss - supporting honest investments
Three Principle Economic Philosophies A Comparison - 5
Capitalism- interest rise is used to control inflation- high interest reduces buying power, also undermines industrial growth- interest rate as a tool for control of national economy by the govtinterfereswith free economy- in long term, interest gained is below the inflation rateCommunism/socialismIslamic System- inflation is controlled by increase in overall production – supply & demand- no power is given to govt to manipulate the free economy- profit earned in business/trade investment is real
Three Principle Economic Philosophies A Comparison - 6
Capitalism-borrowing from your own future- encourages to live beyond ones means-marketing plays with the minds of people- encourages extravagance & greed,keeping up e Joneses- excessive consumerism leads to raised inflationCommunism/socialismIslamic System- prevents exploitation- encourages living within ones means- encourages simplicity, discourages material competitiveness- allows private enterprise but determines a code of spending behavior
Three Principle Economic Philosophies A Comparison - 7
Capitalism-raised inflation leads to recession- when poly-national a global economic recession occurs- desperate attempts to rectify- unfair trade treaties exploiting the needy countries- sometimes wars-2:279-80 O ye who believe, fear Allah & give up what remains of interest, if you are (true) believers. If you do not, then beware of war from Allah & His messenger; if you repent you shall have your principal, you shall not wrong nor shall you be wronged.Islamic System-prevents such negative consequences
Indications of Capitalist Societyin Quran
Race for worldly possessions102:2-4 Mutual rivalry in (seeking material) increase diverts you (from God), till you reach the graves. Nay you will soon come to know (the truth)Lack of concern for needy, monetary injustice & materialism89:18-21 Nay but you honour not the orphan. And you urge not one another to feed to the poor. And you devour (others share of) heritage wholly. And you love wealth exceedingly.Greed & selfishness4:54 Have they a share in the Kingdom (of God)? Then would they not give others as much as the little hollow in a date stone?Refusal to accept moral guidance on how to spend wealth11:88 They said ‘O Shoib, does thy prayer bid that we should leave what our forefathers worshipped, or that we cease to do whatever we may please with our wealth? Thou surely (consider this) very intelligent & right-minded’
Admonishments aboutCapitalism in Quran
2:276 Those who devour interest stand like one whom Satan has smitten with insanity. Because they insist that trade is like interest, whereas Allah has made buying & selling lawful but has made interest unlawful. He who desists because of the admonishment from the Lord may retain what he received in the past, & his affair is committed to Allah. But those who revert to the practice, are inmates of fire, therein shall they abide.2:277 Allah will wipe out interest and foster charity. Allah loves not confirmed disbelievers and arch-sinners.64:16 Verily, your wealth and your children are a trial; but with Allah is an immense reward.
Changing Economic Order of the World
Capitalist system – existing haves & have-notsSoon to be added are Eastern Europe & Russian revivalUS, united EU, Russia & developed capitalist Far East will competePoorer nations will suffer more
Points to ponder
1 Current trend of the world economic order is for the better or worst?2 What could be the likely consequences?3 How could the course be changed?Let us explore some of the Islamic teachings on this.
Islamic Economic SystemBasic Principles
To Allah belongs all who has bestowed us provisions on trust3:190 To Allah belongs the kingdom of heaven & earth, Allah has power over all thingsNatural resources are of universal ownership of mankindPossession or absence of wealth is a trial; mindfulness towards others’ needs v selfishness & callousness64:16 Your wealth & your children are a trial;; with Allah is an immense rewardMan to discharge this trust equitably & honestly4:59 Verily Allah commands you to give trusts to those entitled, and that when you judge between them, judge with justice. Surely best is that with which Allah admonishes you
Islamic Economic System -1Worship as means of economic unity
The five pillars of Islam:1affirmation of Oneness of God - oneness of mankind and all resources2congregational prayers - 5 times/day- equality between rich & poor3Haj- biggest spectacle of human unity- code of simplicity is strongly emphasized4fasting – shared refraining from food/other worldly activities - sharedIftar5Zakat– right of the poor from wealth of rich
Islamic Economic System - 2Simplicity of lifestyle
Lavish behavior is discouraged17:27-8 Give the due to kinsman & to the poor & the wayfarer; squander not your wealth extravagantly. Verily extravagant are brothers of Satan & Satan is ungrateful to his Lord.Social events-Nikahin mosque - where rich & poor mix- ‘feast where poor aren't invited is cursed in eye of God’7:32 O’ children of Adam! Look at your adornment at every (stage &) place of worship, and eat & drink but exceed not the bounds; surely He does not love those who exceed the boundsPrevents class difference - expenditure is to be modest in all respects, even if affording, and to be for charitable purposes
Islamic Economic System - 3Basic needs
Food, Clothing, Water & Shelter20:119-20 It is provided for thee that thou wilt not hunger, nor wilt thou be naked. And that thou wilt not thirst therein nor wilt thou be exposed to the sun.Collective Responsibility- not just individuals responsible for the suffering individuals- but all societies/govts, for all humanityIdeal Islamic State- no one without these basic rights – first concept ofWelfare State
Islamic Economic System – 4Zakat
Literally: ‘to purify something’One of five basic pillars of IslamImposed on capital beyond a limit if unused for more than a yearPrescribed conditions of use9:60 Alms are only for poor & needy & for those employed in connection with (collection & distribution), & for those whose hearts are to be comforted & for (freeing of) slaves & for those in debt & for those (struggling) in cause of Allah & for the Wayfarers. This is ordinance from Allah, Allah is all knowing & wise.Promotes joint economic ventures
Islamic Economic System - 5Islamic Law of Inheritance
Facilities distribution of wealthPrevents accumulation in the hands of fewDetermined sharesOnly a limited amount for those selected by the will-makerEven large inheritance is shared & spread within a few generations
Islamic Economic System – 6Commercial Ethics
Main purpose- moral war against dishonesty & arrogance- to raise sensitivity to economic rights of others, so one recognises it a crime to live in luxury without concern for others’ sufferingAbsolute trust & honesty -2:283-4Forbids use of false measures83:2-4 Woe to those who give short measure; those who when take by measure take it full, but when they give by measure, they give less.Forbids selling defective goods, not to conceal defects / buyer has right to return (Hadith - Muslim)Forbids false competition for sake of inflating price (Bukhari & Muslim)Prohibits bribery2:189 Do not devour your wealth among yourselves through falsehood, & offer it not as bribe to authorities so you knowingly devour others wealth through injustice
Islamic Economic System – 7Borrowing
Borrowing2:283-4 …when you take a loan, one from another, write it down…and let one who undertakes the liability dictate…and procure two witnesses…Main points are:- purpose is to help one in need and to help one in debt,Zakat- to write down if transaction is over a term - debtor to write- to have two witnesses- testimony not to be concealed, it is sinful to do so- debtor must make best effort to return acc to promise- debtor may add a gift at return, this must not be predetermined- to allow period of grace if needed- to write off loan as gesture of kindness is better in the eye of God- to lend without interest - no room for greed on part of lender, hence no pushing of credit - buying power of borrower remains realistic
Islamic Economic System – 8Hoarding
Prohibition on hoarding of wealth- Exploitation is forbidden- capital, commodities, supplies9:34-5 o ye who believe, surely many of priests & monks devour wealth of people by false means and turn away from the way of Allah. And those who hoard gold & silver, give them tidings of a painful punishment. On the day when it shall be heated in the fire of Hell and their foreheads, sides and their backs shall be branded with it, and it shall be said ‘this is what you treasured for yourself, so now taste what you used to treasure’
Islamic Economic Principles – 9International Obligations
90:14-17 Freeing of a slave. Or feeding on a day of hunger, an orphan who is near of kin, or a poor man in the dustAgain, not only individuals – international communities / countriesGlobal Implication:-Freeing of a slave: aid to liberate from deprivation - forbids aid e strings attached-Feeding on a day of hunger: provision of basic needs - period of lack of resource-Orphan-near of kin: individual/nations without enough resources-Poor man in dust: individual/nations without resources & ‘alliances’
Summary 1
3 SystemsCommunism/socialism– no private ownership – no incentive – slower growth – already collapsingCapitalism– interest based – exploitation of the poor – private ownership and growth but with potential for injustice – frictionIslamic– universal ownership concept – accountability to God - distribution of material resources – help for needy is integrated in the system - private enterprise & growth but without opportunity of injustice
Summary - 2
Changing economic order-of the world todayCapitalist system– existing haves & have-nots – on the spread – worsening the divide and friction – major world conflictsIslamic System– potential for respite – welfare for all mankind & aversion of humanitarian disaster
Summary - 3
Islamic Economic System – some hallmarks- All belongs to Allah - given to us on trust - a trial- Worship facilitates economic unity- Basic rights for all mankind - food, clothing & shelter- Honesty & accountability to God- Forbids interest & usury, taking away potential for exploitation- Zakat -tax on idle capital – encouraging contribution to economy- Borrowing & lending acc to given principles- Spending acc to principles- Simplicity, not lavishness- Rights of deprived, individuals and nations both- Economic equity at all levels- Prevents friction & wars -PEACE

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