How can an Economic System be HARAM? Capitalist economy gives you the freedom to accept or reject interest, or to gamble, or to trade in haram products (like pork or wine). So, Muslims have the freedom to islamize the capitalistic model by way of reforms. The mushrooming growth of Islamic banks is a glaring example of a reformed modern islamic economy. Pakistani scholars have written volumes on how to islamize a capitalist economy. So it cant be haram, can it? Besides, its only an economic system, its not forcing you to believe or practice any other religion.
Capitalist Economic System is haram for Muslims as it strikes at the very heart of Islamic belief (i.e. Imaan in Allah swt), by separating God from all other activities of life in society, except for spirituality. For Muslims, dominion belongs to God alone, in both worlds, Rabbil Alameen (the Lord of Both Worlds). Allah swt is the Lord of Heaven AND Earth (Rabbis samaawate wal Earthe), and this belief is opposed to secularists reducing God’s dominion, sovereignty and Lordship into one metaphysical stage, stripped off His powers in this temporal world. Islamic Banking alone does not resolve this problem. Suggesting Islamic Banking as a solution to anti-Islamic Economic System is like suggesting to change tyres for a car whose engine is busted. We cant fool our ownselves with short cuts. Let’s get down and dirty to fix that broken engine!
Islam uniquely considers distribution as the economic problem, and Muslims do not share the obsession of capitalists and communists with production. Because Islam differentiates between the basic needs and luxuries, there exists no concept of relative scarcity of resources in Islam. The resources available on earth are sufficient to secure the basic needs (food, clothing, and shelter) of fifty billion human beings. Such a misunderstanding has concealed the reality that starvation, poverty, and economic backwardness, result from maldistribution exasperated by man-made laws and systems. Under the Islamic system, Nigeria alone could support the whole of Africa, as occurred in the past when, under the system of Islam, Africa sent food to relieve the famine in Medinah during the rule of Omar bin al-Khattab (2nd Caliph of Islam).
By using labels like “Third World” and “First World,” this economic conspiracy has worked behind a deceived populace who fail to realize that the “Third World” countries are actually First World in terms of resources. While organizations like Mercy International and UNICEF keep the masses content under the circus act of “humanitarian aid,” the capitalist machine works behind the stage to gobble up the resources of the world.
The implementation of Islam would eliminate the stranglehold by which the elites control the polices of the world and milk its resources. Unlike the current systems, Islam will not impose any limits on the amount of wealth that an individual can acquire, thus creating and maintaining an incentive to work. The shortsightedness of limiting production stems from the man-made ideologies that fail to understand the nature of creation. Because the Islamic system reflects the wisdom of the Creator, then the implementation of Islam will provide a society conducive to life that will address the needs of humanity based on the correct understanding of life. Muhammad (saaw) said, “The son of Adam, if he had two valleys of gold, would desire a third and would not be satisfied till he bites the dust.”
While generating massive abundance and wealth of resources by eliminating all the restrictions and oppressive systems that prevent production, Islam will safeguard against abuses of exploitation in acquiring wealth by limiting the way in which wealth is acquired. For instance, Islam denies the “free” market of Capitalism which has led to the situation of “survival of the fittest”. Natural and vital resources would be categorized as public property and a right of every citizen of the state – Muslim or otherwise – in accordance with the Prophet’s (saw) Hadith that states, “The humans have a right to three things – water, green pastures, and fire-based fuels (An-Naar).”
Public revenue from oil and natural resources would be used to secure the needs of the whole Muslim Ummah, and not to line the pockets of casino owners. The State would provide public and vital resources without charge to cover the needs of every individual and family, and monopolies of large conglomerates would dissipate.
The Shariah also defines certain rules that regulate company structure, effectively preventing abuse and corruption. For instance, Islam forbids monopolies by outlawing the hoarding of wealth (Al-Ihtikar), and eliminating copyright or patency laws that would open the avenue for potential monopolies to develop. Also, Islam protects the ownership of businesses and companies by restricting ownership of companies only to those who contribute both capital and effort to the company or business, thus effectively putting the seal on such concepts as “corporate takeover” from ever becoming a reality.
Today, food manufacturers have cultivated the art of burning surplus food and dumping surplus milk into the ocean to artificially inflate prices by creating “scarcity,” an art that would cease to exist with the implementation of Islam.
Unlike today’s system, which opens all doors for anyone to access wealth by any means, Islam categorizes wealth in a systematic way that both protects the right of individuals to access wealth and, simultaneously protects the society and secures the needs of the Ummah. Islam mandates vital and natural resources as public property while allowing for unlimited access to luxury items. Also, Islam protects the society in ways that corrupt man-made systems have overlooked by defining certain needs as “prohibited needs.” For instance, to protect the honor (ird) of the woman, Islam would outlaw all forms of prostitution, pornography, or any type of sexual bombardment that exploits the charms and physical attractiveness of women. In addition, Islam would prohibit alcohol and gambling, killing every industry and institution derived from such filth that has seeped the Capitalist Nations in a downward spiral of corruption, social turmoil, and moral devastation.
Islamic Economy would link the currency to gold, silver or some other precious resource. By backing the currency with resources of real value, Islam creates a stable medium of exchange and eliminates the concepts of linking currencies that allow nations to manipulate currencies.
Because the currency in Islam is linked to gold or other precious resources, the implementation of Islam would cut the economic chains that USD employs by linking other currencies to the dollar.
For such a system to emerge, the Ummah must revitalize within itself the Islamic way of life and cultivate the Islamic culture and the Islamic Aqeedah as the sole basis for providing solutions to its problems. Without the clear conviction in the Islamic Aqeedah and the comprehensive understanding of the Islamic system, the corrupt regimes will continue to tame and manipulate the Muslim masses with empty slogans, while behind the curtains, the feudal landlords of Pakistan will maintain their status and the Gulf sheikhs will continue to squander the public resources of the Ummah.