New Age Islam
Thu Sep 24 2020, 11:35 PM

Islamic Society ( 9 Jun 2020, NewAgeIslam.Com)

Islamic System Hits Racism and Capitalism and Presents A Different Model of Economy


By Shakeel Ahmad Ramay

 

June 10, 2020

 

The dream of equality is as old as the human history. Humans have been deceived in the name of equality time and again. The evolution of civilization could not present an answer. The world kept on experimenting but is nowhere near a solution. In recent years the spread of in-equality accelerated and now it is a widespread phenomenon. Technology is feared to further enhance those inequalities. The most concrete example can be quoted from the recent shock of COVID-19. For example, in USA more than 40 million people lost jobs but at the same time big technology-based companies added billions of dollars to their net worth. Companies like amazon, Facebook, Microsoft etc. are making money. During the first two months of lockdown Jeff Bezos added US$ 34.6 billion, Mark Zuckerberg, US$ 25. 3 billion and Bill Gates US$ 8 billion to their net wealth. Three people have accumulated US$ 67.9 billion and millions are looking for livelihood opportunities. This is for one country, if we look at the global level the picture would be scarier. It means the fourth industrial revolution would be accompany by a new wave of in-equalities.

However, the problem of in-equality cannot be attributed to technology only, it is already prevalent across the world. The main culprit of in-equality is our current economic system, which is built on the concept of ‘Capitalism’. The system is a deceptive one with a false promise of equal opportunity. Most prominent example of its deceptive nature is the calculation of per capita income. Second, it leads to accumulation of wealth in few hands by means of banking, financial institutions and capturing resources. Third, the system talks about profit, at any cost and without taking ethical considerations like human security or relevant externalities like climate change.

This is not only confined to capitalism, other experiments also presented the same results with the exception of, the Islamic system. The analysis of prevailing economic systems shows that there are two areas fostering the in-equalities, 1) accumulation of wealth in a few hands, and 2) no system of redistribution of resources. The accumulation of wealth is supported by Riba (interest) based system and there is no system of redistribution of resources. We can only find theory of trickle-down, which is deeply flawed. If the theory has the merit, then the most capitalist economies, countries, with best systems of governance, should not be facing the problem of in-equality. We can quote numerous examples from the present systems, like there are people with trillion-dollar companies and there are people who are struggling to find means of sustaining life. The biggest proponent of capitalism, USA is a perfect example of this in-equality.

The Islamic system hit these two fundamental flaws and presents a different model of economy. The system has two very unique rules, which determine the shape of society, economy and well-being of people. First, the Zakat and second the prohibition of Riba (interest system). Zakat is system of re-distribution of resources, which is only part of Islamic system of economy. It is mandatory for wealthy people to donate a certain portion of their wealth (2.5 percent) to poor. It is annual fixture; therefore, it is sustainable activity and must be continued without any break or exception. The proportion also increase with increase in resources or wealth without introducing any new rules or regulation. It also contributes to consumption, which is desired outcome for any business entity. Poor will have resources to spend, especially on the essential commodities. It will give impetus to local consumption and create new business opportunities of business. The best part of policy is that the use of Zakat is restricted for the poor only. It targets the poorest segments of society and leads to uplifting the poor sections of the society. Another important element of the Zakat policy is the process, which will continue till a society prospers and you cannot find people who need it or do not meet the criteria to receive it.

So, the redistribution continues to bridge the gap and in-equality remains low, if not eliminated completely. Although, it is to be implemented in a Muslim run system other models can also learn and try to create their own model of redistribution according to their culture, society and economies. However, this system can provide them a good case study and a best practice.

Second, element is prohibition of Riba (interest). Apart from other ills, it also discourages the circulation of wealth. The reason is that it presents a reliable way to secure the wealth for wealthy people without taking risk. You can earn profit without putting efforts. Hence, people do not like to invest in business, and they prefer to earn profit. It leads to less investment in productive sectors, the sectors which produce jobs. Therefore, the resourceless people do not find jobs but the people with resources multiple their resources. Therefore, the major beneficiaries are people with money and financial institutions at the expense of vast majority. It leads to in-equality or dependents.

Further analysis shows that whenever, Islamic economic model was implemented it created equalities and delivered sustainable development, where no one was left behind in practical terms. We can take examples from the periods of four Caliphs and from the period of Umar bin Abdul Aziz (RA). In the time of Umar (R.A) there was no person in the entire state, who was eligible for Zakat after a few years of his rule.

On contrary, the capitalist system, which presents itself as the champion of sustainable development, could not deliver on the perceived objectives due to these two fundamental flaws. In-equality is a wide spread phenomena, governments are trying to introduce programs that can help sustain their basic needs. However, the support system by governments is also under immense pressure from private sector and interest groups. They want to eliminate it. People are protesting against the initiatives. The yellow vest moment in France, the rise of nationalist parties, which are against migrants, is also result of this in-equality.

The present situation have made one thing obvious; there is no alternative for redistribution of resources. Moreover, we have to keep in mind that redistribution of resources is very important to sustain the society. If we look at the history of revolutions, the fundamental cause always seems to be the in-equality in a society, which originates from the economy. The most recent example can be quoted from the movement of people against racism in USA. The deep analysis shows that racism is deep rooted in in-equality. Racism is being used to create in-equality. Although, in-equality in USA is quite high among all segments of population but the black people are worst hit by it. We can also quote an example of the wall street movement few years back was also deeply rooted in in-equality.

Unfortunately, we are not ready to learn our lesson and are going all out to prove that the current system is the best. We have become deeply dependent on capitalism and does not want to look in any other direction. The elite or beneficiaries of the system are more powerful than some of the countries. We know that the system is creating problems, but they do not give any chance to world to move toward a fair system of distribution of resources. However, they need to be clear that this system of injustice and in-equality will have to come to end by choice or by force. This is the lesson of history; which keep on repeating itself.

Shakeel Ahmad Ramay is a Director Asia Study Centre

Original Headline: Redistribution of resources, equality and Islamic economic system

Source: The Daily Times, Pakistan

URL: https://newageislam.com/islamic-society/shakeel-ahmad-ramay/islamic-system-hits-racism-and-capitalism-and-presents-a-different-model-of-economy/d/122083


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