An Introduction to the Economic System in Islam

The whole of the Muslim world today is in a dire situation. Despite tremendous stores of resources,
in the form of fuels and minerals, a young and growing population and a glorious past; the Ummah
of Mohammed (saws) is characterised today by incompetence, poverty and corruption, since having
fallen prey to ravage and rape of non-Islamic rule.
In this article, we will focus on part of the problem, the economic one; and will outline the vision
Islam provides for the resources with which Muslims have been entrusted by Allah swt).
(
The Economic System of Islam is based on four principles
1. All wealth belongs to Allahswt)
( -
"And give them of the wealth of Allah which He has given you." (TMQ 24:33)
2. The community is the trustee of the wealth -
"Believe in Allah and his Messenger, and spend whereof He has made you heirs." (TMQ 57:7)
3. Hoarding of wealth is prohibited -
"And those who hoard up gold and silver and spend not in the way of Allah; announce to them a
painful chastisement." (TMQ 9:34)
4. Circulation of wealth is a duty -
"Whatsoever Allah may restore unto His Apostle- is due unto Allah and unto his Apostle- the
orphans and the needy....so that it may not be confined to the rich amongst you." (TMQ 59:7)
Based on these principles, one striking difference between the Islamic view and the man-made
systems that presently plague the earth, i.e. communism/socialism and capitalism, is the way in which
it views the economic problem.
Islam uniquely considers the economic problem as being one of the means of distribution, and
Muslims do not share the obsession of capitalists and communists with production. For Islam does
not view that there is a relative scarcity of resources. That is because it differentiates between the
basic needs and luxuries. There are enough resources on earth to secure the basic needs (food,
clothing and shelter) of fifty billion human beings, not merely the present five billion. Starvation
today in Africa and elsewhere is a monument to this gross misunderstanding. They suffer due to
maldistribution. Nigeria alone, for example, could support the whole of Africa if it was left to
develop under Islam. Such a statement has precedence. Under Islam it was Africa that sent food to
relieve famine inMedina during the rule ofOmar bin Al-Khattab.
Currently, resources are being siphoned off by the so called developed countries, using institutions
such as the IMF, World Bank and NGO's (Non Governmental Organisations) and tactics such as
loans and structural deficit replanning. So it is nonsense to assess the wealth of the land by the GNP
(Gross National Product) or the average income per capita. For it says nothing of the well being of
each citizen. In America the champion of capitalism, poverty is so great that there is a new class of
people, the 'Fourth' or under class. In Cairo, the average income does obscure the fact that while
some reside in penthouse flats, others settle for the night in cemeteries. Nor does the GNP expose
the fact that the Muslim land should be one, and hence it is a crime that the Gulf region paid the
multi-billion bill of the Gulf War and funded London Zoo, but that wealthy region has not helped
those who are afflicted by starvation in other parts of the Muslim world e.g. Ethiopia, Eritrea,
Bosnia. Nor does it confront the worldwide conspiracy that the countries that are called the 'Third
World' are in fact the 'First World' in terms of resources. For example, it is the phosphates of the
Maghrib that enables plastic production, and the fuel of the developing world that powers the cars of
the world.
Islam alone will break this strangle hold by having such a view. At the same time it does not limit the
amount of wealth that is acquired, for this will kill the human desire to work, as happened under
socialism, leading to its demise. This shortsightedness will only appear in those who cannot possibly
understand fully the nature of Creation, unlike Allahswt).
( For Mohammed (saw) 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"
Rather Islam limits the way in which wealth is acquired. It denies the 'free' market of Capitalism
which has led to the situation of 'survival of the fittest'. This has led directly to the situation where
multinational companies have scavangened like parasites Muslim land, unrestricted in their 'freedom'.
This would never occur under Khilafah. For example, under Islam, oil is under the public resources.
This is in accordance with the Prophet (saws)hadith,
"The humans have a right to three things - water, green pastures and fire-based fuels (An-
Naar).'
Thus, this revenue would be used to secure the needs of the whole Muslim Ummah, and not to line
the pockets of casino owners. So the ownership of such multinational companies would be dissolved.
Even outside Muslim land, people suffer. In Britain, the old suffer the winter months, as the
government exercise their 'freedom' by taxing gas and electricity, which under Islam are public
resources. Under the Khilafah such resources would be provided without charge, within a certain
quota which would cover the needs of the particular family involved.
Instead the Divine Law (Shar'ia) defines numerous transactions by which humans can acquire wealth
which is allowed as private property, like the various types of Islamic company formations (e.g.
Adnan, Abdan, Mudarabah, and Mufawadah companies). Such companies would have 'fair' access
not 'free' access. So, for example, monopolies would be forbidden. One way to secure this is that
under Islam there is no copyright or patency laws for products. The hoarding (Al-Ihtikar) of wealth
would be outlawed under the Khilafah too. Unlike the ugly situation today where coffee is hoarded
and burnt to surface roads, so as to artificially inflate prices by creating 'scarcity' or the famous EC
butter mountains.
Access to wealth is limited in other ways; in ways that corrupt man-made systems do not consider.
Islam considers women as 'ird' (honour). The use of women for advertising, or in pornography is
forbidden. Such a world is far removed from one where filth can be bought and sold and is beamed
down via satellite to Muslim households, such as the recent worrying epidemics in Pakistan and the
Gulf countries. Such a disgusting cultural stranglehold would also be broken by the Islamic system.
In addition, the form of currency in Islam will break the economic hold of the kuffar over our
countries. In the Khilafah, the currency must be linked to gold or silver. For in Islam, currency
(dirhams and dinars) is a means of exchange, not a commodity. So the currency is not bought and
sold as is the dollar or pound sterling. This would break the influence America has over the
economies of Muslim land, by manipulating the money markets.
Having glanced over the economic system in Islam, it can be seen why America and her institutions
dread and work hard against the arrival of the Khilafah. Not only will it cut her hands from Muslim
wealth, but will dethrone her from her position as the leading state. As it is the economic system that
provides the fuel for the foreign policy of the Khilafah - which is Jihad. For example, the Department
of Heavy Industry actually comes under the Amir of Jihad, as it is linked with the production of
munitions.
For such a system to come into being, requires the Ummah to mature in the culture of Islam as a way
of life. That is the only way, for example, that the feudal landlords of Pakistan will consent to the
redistribution of the land by the state, or the Gulf sheikhs to reassign the oil as public property.
Presently, as many Muslims are unaware of Islam's view on economics, they do not work to change
the present situation. Due to lack of knowledge, they are completely unaware of the crimes that so
called Islamic regimes like Sudan, Iran, Pakistan and Saudi Arabia commit against the Deen in the
field of economics. ( These regimes are singled out from other regimes, as the others do not parade
themselves as Islamic, and hence divert the Muslims from the obligation of establishing the Khilafah.)
All this needs to change, and will only change as we grow in the understanding of Islam as a way of
life, and that it will take us out of our present situation.

Khilafah Magazine, May 1994