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
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. Year Poor: Rich ratio
1820 3:1
1913 11:1
1950 35:1
1973 44:1
1992 72:1
Where is the world headed!!!!!
An analysis of the trend of the widening gap between the rich
and the poor countries
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 fromotherthan Islam
Methods to increase production is “Economic Science” and can be taken from
othercivilizations 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
16. Economic System:
Ownership & Types of Properties
Khilafah Capitalism
Three types of ownership
Individual
Public
State
Oil, Gas1
, non-delectable minerals2
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 forpeople’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 yearprivatization target is 75 billion rupees.
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
26. Economic System:
Taxes
Khilafah Capitalism
No Taxes on common man1
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.
28. Economic System:
Agriculture and Land laws
Khilafah Capitalism
Lease of agricultural lands
(Muzariyat) is haram1
Leasing of agricultural lands is
permitted
Agricultural land if not used for 3
years will be confiscated2
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 optimumproductivity
Eradicates injustice to Muzarays. Delivers a fatal blow to the colonialist
Feudal system(“jageerdarana nizam”)
29. Evidences
1. 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.”
2. Muslim also narrated, “The Messenger of Allah forbade a rent or a share be taken for the land.”
3. 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.’”
4. 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
1. 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.”
2. Abu Dawud narrated that the Messenger of Allah said: “Whosoever fenced a (dead) land it becomes his”
3. 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
1. 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.
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 fromforeign control
Puts a checkon devaluation and fake inflation
Return of the Gold standard will strike a fatal blow to the colonialist
economy
36. Riba
Khilafah Capitalism
Interest transactions not allowed1
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
1. “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
Investor Skilled labour
Inventor
Investor
Investor
Investor
Investor
Investor
Businessman
Entrepreneur
Trader
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
39. Bank monopolizes the wealth of the society
Investor Skilled labour
Inventor
Investor
Investor
Investor
Investor
Investor
Businessman
Entrepreneur
Trader
Bank
Bank’s Profit = (20-12)%
12%
20%
Profit
Interest
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
40. In Muslim societies Banks were not very
successful
Investor Skilled labour
Inventor
Investor
Investor
Investor
Investor
Investor
Businessman
Entrepreneur
Trader
Bank
Bank’s Profit = (20-12)%
12% 20%
Profit Interest
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.
41. Islamic Banking is helping Capitalist Banks
Investor Skilled labour
Inventor
Investor
Investor
Investor
Investor
Investor
Businessman
Entrepreneur
Trader
Bank
Bank’s Profit = (20-12)%
12% 20%
Profit Interest
Islamic
Banking
$
$
$
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
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 workof 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 systemin 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 systemand interest etc.
44. Banks in the Khilafah
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
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
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 telecomcompany 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.
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
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 oureconomy
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
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 frompotential 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 year1
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 traderratherit will also help ourexports
In a Capitalist state people in the legislative assemblies reduce and
increase duties to suit theirinterests and make money.
59. Evidences
1. 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.
2. 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.”
3. 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.
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 systemensures 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
1. 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 struckby hungerin case of a loss
65. Economic System:
State Revenues
Khilafah Capitalism
Sources of Bait -ul-Mal
The booties and the spoil of war1
, Al-Fai2
and the fifth3
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
oTo 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
oDictatorship 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
Notas del editor
(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
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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.”
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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’.
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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.”
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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
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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
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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.
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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).”
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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.