Under the Islamic economic system, disputes are settled on the basis of ‘truthfulness’. The truth as it is has greater importance in the Islamic system overall and violating the truth, refusing to reveal the truth of a given disputable situation can lead to the shameful punishment of the liar. Islam is based on truth and the lies of the people are punishable. Telling the truth to the judges under the Islamic system is the essence of one’s Islamic faith.

 

 

 

Let us take a new look at the present economic system in use in the world, in the Islamic world in particular, and the one proposed by the Islamic system itself. This article offers a new outlook of the Islamic economic system and it is hoped that the readers will find it challenging and interesting indeed.

Islam has brought an economic system that surpasses capitalism and communism because it is based on justice, equality and fairness. The Islamic economic system is based on the concept of a welfare state that takes care of the financial, economic needs of the people. Islam is just faith and its economic system is altogether just and fair. It is clear that the Islamic economic system is devised in such a way as to liberate the people from economic dependency and from the ugly grip of ‘interest’.

The capitalist system in place in most Muslim countries, and most of the world altogether, is a system that imposes control on the freedom of the small and average members of the society to progress. The system is oligarchic in nature, which means it allows the rich to become richer while the poor can become poorer. Capitalism has very little to do with fairness as it imposes a free market system that allows the few to have control on the many.

A clear example of the unfair ways business is conducted in the capitalist system is the importance borne on the value of the money. The people who own the more money are bound to control the business circles and can impose their terms and conditions on the producers of goods.

The farmer who labours the land and raises the herd of cows has to sell his products to distributors who make a bigger margin of profitability than the farmer. The shops that sell the products too make more money than the farmer. The capitalist system puts emphasis on the end product and the end vendor while the middle man earns more than the producer.

In the Islamic system, it is the government in place that is in control of the pricing policy and the government is also responsible for safeguarding the profit margin of the farmers, for example.

The Islamic system of welfare state guarantees the three major needs of the people: Firstly the government must guarantee a roof for every single citizen in the country. Secondly, the government must guarantee jobs for the working class (which also means putting food on the table). Thirdly, the government must ensure absolute transparency in the economic system, which also suggests there will be no extortions of the farmers and producers by the middle men.

Implementing these three fundamentals of the Islamic economic system is not impossible since it will only take strong political will to do so. To depart from the current economic system will take time, indeed but this too is not an impossible task.

Then there will be the implementation of other fundamentals of the Islamic economic system, which is the writing off of all existing ‘interest’ based systems. The financial services will have to be cleansed of the evil of interest, which is one of the fundaments that is attacking the capitalist system today and is causing its downfall.

Ridding the economy of interest will liberate the consumers from the burden of paying off debts with high interest rates. This may cause the slowdown of credit facilities to the individuals but its effects will be curtailed by the provision of Islamic based finances and the creation of the now defunct system called the Baitul-Maal.

The Baitul-Maal is a finance house that is run and controlled by the government and is destined at assisting the people at all levels of the society with funds that are non-refundable. A new system of funding may be improvised to compensate the government for granting the people with ‘free’ money.

This ‘democratic’ way of spending for the government will also bring new cultures in the country, that is the culture of clean governance. There will be no corrupt practices if the money given to the public is free and is to be given to everyone in need of funds.

The government will still be able to collect funds through a variety of taxes and excise duties but the implementation of an Islamic economic system will also mean that the end of personal taxes. Islam does not impose taxes on the individuals or on corporations, big or large. However, every individual must pay the Zakaat and this may be extended to corporations too.

The paying of the Zakaat is to be made to the Baitul Maal or the government finance house. This is where all other taxes, duties and levies are collected and redistributed among the government for reconstruction work and towards the people finally. The Zakaat is a 2 percent charge on the earnings, belongings and savings of the individuals and this can also be imposed on companies, corporations and even government bodies that generate funds through the sale of products and services.

The 2 percent is indicative of the fairness of the system in which no one is to feel frightened of earning more than others or of having more possessions than others. The system guarantees that the government will not create an Inland Revenue board that will act as a financial police, attacking people in their privacy and dismantling their businesses simply because they evaded the high taxes as they are imposed under the capitalist system.

The government is to ensure education for the people and this comes under the development projects of the society. The funds will be taken from the Baitul Maal or from special funds created by the authorities. These special funds allow the people to contribute freely any extra amount of money they may think is necessary in an act of benevolence.

The Islamic economic system is indeed focused on the benevolent society system where the richer group of people will freely donate funds to the government for the development of social and economic projects.

The benevolent system includes the Waqaf system in which houses, buildings, lands or even businesses can be donated to the government or the authorities by any members of the society. These are then used by the government for the development of the society.

Under the Islamic economic system, disputes are settled on the basis of ‘truthfulness’. The truth as it is has greater importance in the Islamic system overall and violating the truth, refusing to reveal the truth of a given disputable situation can lead to the shameful punishment of the liar. Islam is based on truth and the lies of the people are punishable. Telling the truth to the judges under the Islamic system is the essence of one’s Islamic faith.

Hence the judiciary system is based on the truth and the truth is guaranteed by the faith the Muslims in dispute has on the holy book of Islam, the Holy Al Quraan. The fact that the ‘truth’ is the basis of the law in the Islamic society, this eliminates the need for the complex and expensive compulsory law system imposed by the capitalist system. The law, in the capitalist system is not based on the truth as it is based on technicalities and it can be as corrupt as the political system is. In the capitalist system, the law is not followed by what is black and white but rather by who has greater influence over the system and whose lawyers are better at lying or twisting the facts to get away with lies.

With the implementation of the Islamic economic system, the people are liberated from the scourges that come with capitalism, that is ‘interest rates’, corruption, lack of transparency and nepotism to name some.

It is high time for Muslim world, the Organization of Islamic Conference (OIC) and the Islamic Development Bank (IDB) as well as the World Islamic Economic Forum (WIEF) to start focusing on an alternative. Islam has its own system on how to develop the economy and how to maintain the growth level of the economic system. These should be studied and should be applied in the modern economic system. The Islamic system is the system that has been left behind for the Muslims to exploit in order to bring justice – one of the most important fundament of the Islamic system overall is Justice! – to the people.

Countries like Malaysia, Saudi Arabia, Egypt, Bangladesh, Pakistan and the rest of the Islamic world which are majority Muslim, will have to divert their economic system from the largely market driven economy (which is based on the capitalist system) to an Islamic driven economy (which is based on justice and the truth).

This may avert the impending crisis that will unfold and affect the economies of the Muslim world too in the event the U.S. is to enter a long period of recession.

Even if the recession subsides after a while, it does not mean the Muslims must stick to the system of unfair practices. Things must change but the political will is not there since we have the wrong leaders who are leading the Muslims in most Muslim majority countries.

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