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Comments and Critique on HT's Economic Policy

Comments and Critique on HT's Economic Policy

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Published by econ_books_za
This article analyzes Hizb-ut-Tahrir's (HT) opinions on economics and economic polices, collects my comments and criticisms of said policies, and proposes solutions wherever possible.
This article analyzes Hizb-ut-Tahrir's (HT) opinions on economics and economic polices, collects my comments and criticisms of said policies, and proposes solutions wherever possible.

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Published by: econ_books_za on Jul 25, 2011
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Critical Analysis of HT’s Economic Policy
ZA
Revision HistoryRevision 0.32013-06Z
Table of Contents
1. Introduction ....................................................................................................................................... 21.1. Capitalism vs. Western Economics ....................................................................................... 31.2. Economic Science .................................................................................................................. 61.3. Tautological Reasoning ......................................................................................................... 71.4. Distribution as The Economic Problem ................................................................................ 81.5. The Political Attraction of Policy ........................................................................................ 111.6. Existence of the State .......................................................................................................... 122. Economic Systems of the World .................................................................................................... 152.1. Capitalism ............................................................................................................................ 152.2. Socialism .............................................................................................................................. 37Bibliography ........................................................................................................................................ 40This article analyzes Hizb-ut-Tahrir’s (HT) opinions on economics and economic polices, collects mycritical analysis of said policies, and proposes solutions wherever possible. Please enter any commentson the scribd page.
Note
This copy is an incomplete version. It may contain mistakes, omissions and misquotes. Thereferences and bibliography may not be complete or accurate.Economics is the science of human action.
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Every human being acts in a purposeful way. We work formoney, so wecan buy foodto sustain ourselves. Our ancestors spent their time hunting animals, andgrowing plants to f eed themselves. Men have needs. And the study of how man fulfils those needs iseconomics.
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It is therefore, extremely important to study this subject, but unfortunately this is not recognized asmuch as it should.We imagine economics to be the domain of smartly suited and neck-tied universitygraduates, who speak in a weird language we don’t seem to understand, about things that seem to haveno connection to our daily lives. Besides a fewbrushes with them on the news or in the annual statebudget, we barely recognize them. We imagine ourselves to be far more concerned with
active
matters.We give attention to things like war and peace, foreign policy, internal politics and drama and don’treally care what economistsend up doing.Yet economics is the number one thing that can make or break a nation. The Greeks reached theircultural heights due to their mastery of trade. The Arabs were instrumental in spreading Islam because
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Ludwig von Mises,
 Human Action
“Economics, as a branch of the more general theory of human action, deals with all human action, i.e., with mans purposive aimingat the attainment of ends chosen, whatever these ends may be.”
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The concept of purposeful human action is further elaborated by Murray N. Rothbard, in
 Man Economy and State
 
Critical Analysis of HT’s Economic Policy2of the immense network of trade relations they had built up. The United States and Britain, during theindustrial revolution owe all their progress to economic activity. On the opposite side, it was economicsthat finally pulled the carpet from under the Soviet Union’s feet. War was a catalyst, but the lack of economic understanding and an unreal economic policy was the basis of the Union’s demise.But we are content, more often than not, in relegating these matters to those who ‘know better’. Weleave all of these essentials to other people, corrupt or otherwise, and wash our hands clean of theissue. Yet, ignorance is not an excuse. Lethargy even less so. We
should 
‘know better’. We shouldstudy economics, and more importantly, economic policy as enforced by states. We are much morelikely to push ourselves down the pit of oblivion if we cannot see where we are going. Would we leaveour personal finances, our daily expenditures, the management of our own wallets to our neighbours,acquaintances, or colleagues? No, this is a very personal issue. Yet we continue to hand these essentialmatters over to total strangers.In my conversations with HT activists (not members), most of them have exhibited very little knowledgeof this important issue. Practically all of them are content with whatever the senior policy makers of HTdecide. This blind support of policies which one does not understand is dangerous. The example of theSoviet Union should serve as a strong enough warning. If we do not analyze HT’s economic policiesand cannot correct the flaws in them, we are headed for disaster. We have all discovered HT because wehave found the present system lacking and are looking for a solution that works. It falls on all of us toseriously scrutinize every possible policy matter forwarded by HT.While there are a lot of sources on HTwebsites, videos, books and articlessome of them areunauthenticated. The book under scrutiny is published by Al-Khilafah publications, bears the name of Hizb-ut-Tahrir on the front cover and an information page at the beginning. Therefore, I will treat thisbook as mirroring official HT policy or at least mirroring genuine sentiment among HT workers. Thiscompilation of comments therefore, seeks to identify the problems in HT’s economic policy, and suggestsolutions wherever possible. I hope it will serve to start a healthy debate in HT circles.
1. Introduction
The contents of this article cover the HT publication
The Economic System in Islam
by Taqiuddin-an-Nabhani. This is an exhaustive book, in which Sheikh Nabhani has explained how an Islamiceconomic system works. In my reading, I divide the book into four sections;1.Definition of Capitalism, Socialism and the Islamic system.2.Property, Private Ownership, Trade, Industry and Companies.3.Public and State Property.4.Money.The book starts with a categorization of the world’s economic systems into three types; Capitalism,Socialism, and an Islamic system. After explaining the substance of each of these, it submitsarguments to discredit both Capitalism and Socialism. I will discuss this section in detail and point outthe flaws inherent in the book’s analyses.Next comes a detailed analysis of the Islamic system as envisioned by HT. The book definesownership, means of ownership, as well as what can and cannot be owned, disposal of property, trade
 
Critical Analysis of HT’s Economic Policy3and industry. It also dedicates a large section to companies, both Islamic and Western. Due to mylimited related knowledge, I will comment only on selected topics.Following this are chapters that detail what can be owned by the state as well as what is specified as
 public property
. This includes ‘public necessities’, utilities, natural monopolies, and welfare services.I will discuss these matters in detail.Finally, the book discusses money and fiscal matters. This will also be discussed.During my talks with HT workers and members, in addition to reading the literature, I havediscovered certain fallacies that are rampant in common parlance.
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It is the duty of HT and its workersto identify and remove these incorrect perceptions so that they are not propagated. The rest of thissection is dedicated to explaining some of these common issues, so that readers do not fall in the sametrap.
1.1. Capitalism vs. Western Economics
A good deal of the antagonism hurled towards Capitalism in HT (and Muslims in general), is dueto the lack of understanding of the Western economic model. In point of fact, this vitriol should bedirected towards Western economics and not Capitalism. We should realize that the current economicsystem imposed on the world, the one forcing every country to run a central bank, that issues moneyon interest (riba), overseen by the World’s über banksthe IMF and the World Bankis a flawedsystem that has more to do with Socialism than Capitalism.
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Many capitalists throughout history,have vehemently opposed any step that brought them closer to centralization. Throughout the historyof the US, numerous presidents have opposed having a central bank at all. In fact, historians nowbelieve that the imposition of the Bank of England was one of the reasons for the American War of Independence. On numerous occasions, the Americans resisted the establishment of a central bank. Itwas only much later, in the early 20th century that the Federal Reserve was established in the US.Contrary to what is taught in HT’s books
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, Capitalism is not a system. It is, in fact, the
lack 
of an(imposed) system. Capitalists do not hold one ideology and develop their system from it. You canhold any ideology you want in a purely capitalist countryone that does not exist today, or has everdone soand continue to function productively.Capitalism is the expression of the basic needs of man. When you walk to a store, hand over somemoney and buy a soft drink, you are a capitalist. When you work for eight hours a day and get paidat the end of the day, week or month, you are a capitalist. When you save some of your money to beused later, to buy a car, or perhaps start a small business, you are a capitalist. As you can see fromthese examples, there is as much wrong in being a capitalist as there is in being human.As far as we know, man has always been a capitalist, a storer up of labor, and wecannot conceive of a time when he was not making such tools. Thus, the stone axewhich he made to subdue an edible beast became, after centuries of reflection and
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These are mostly general fallacies held by most of the world, and so HT should not be held solely to blame for holding them.
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Relevant material is present in Mises,
 Economic Policy
, Lecture 3; Mises,
Planned Chaos
Section 2; Hazlitt,
The Failure of the New Economics
, Section XXIV.An excerpt from Hazlitt:“Through its socialized investment … the State would decide which firms or industries to expand and which to freeze or contract.Even though the State did not technically own the instruments of production, this would lead to a de facto Socialism.”
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The System of Islam

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