Islamic Economic System
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peace,
But what do u mean by 'excess' in just profit? How do v decide what's excess? Do each of us decide this ourself?
This has been a question of 2219 for a while, excess/surplus of one's basic needs, basics needs are what one needs to survive and live comfortably, it has been speculated that it is 20% of one's income such as in 841, the reading/quran has said we must contribute of the excess (2219) Whether it left us to define excess/surplus is up for debate
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salam.
I am not aware, and correct me if I am wrong, Islam does not restrict the amount you can earn and neither does Islam restrict legitimate business.
islam does not restrict earning but it forbids hoarding .
Therefore the difference from capitalism becomes interpertation of what consitutes legitimate own needs-otherwise I have not come across a satisfactory explanation of how islamic economic system differs from capitalism.
i think our legitimate needs dont differ much . how much money does one require for those needs . after saving for those needs , the rest should be given away moderately to the needy .
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StillearningThat is one interpertation.
It could also be that the excess profit is invested to enerate more wealth for the society as whole to benefit i.e the cycle of reinvestment continues.
Let us take an example(hhypothetical) of an engineer invents a machine to plough the land more efficently-makes uge profits-reinvests in biggger factories to produce even more tractors hence more farmers work more effiently increase their output-more profits for the engineer-more investnent into research/machinery etc for better methods of farming leading to increased qunatity and quality of food.
How would that contradict islamic economic systemDo the 'bigger factories' need workers? If so, he would be putting people to work, which is a good thing. However, will he try to liberate these workers or keep them in perpetual bondage or will he provide them opportunities to emancipate themselves. That would determine if he contradicts Al-islaam or not.
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salaam
saladinislam does not restrict earning but it forbids hoarding .
Neither does capitalism it encourages circulation of wealth. If you thhink capitalism is about hoarding then you have misunderstood capitalism.
i think our legitimate needs dont differ much . how much money does one require for those needs . after saving for those needs , the rest should be given away moderately to the needy
Is that not the reason for zakat, taxes-social welfare system to help the needy. Is not an organised welfare system muchh better than the unpredictable nature of depending on charity?
But what do u mean by 'excess' in just profit? How do v decide what's excess? Do each of us decide this ourself?
Excellent point. That is why it is important to be precise how a particular system is to function rather than vague generalisations such as just, moral,needy etc without specifying exactly what we mean.
nothing is produced in a capitalist economy unless there is a profit to be made
Not true. Most capitalist systems have some form of social welfare system(quality of which can vary) and I dont know what profit is to be made from this.
there are many outside forces that may interfere with the process of investment that you mentioned, market economics is far from a stable science, for example there is no guarentee that there will be an increase in research of agricultural technology in your scenario
I am quite happy to accept better alternatives, such as?
we need a system where the means of production can be bettered without exploitation
Cannot we have laws to protect against exploitation. In fact most capitalist countries have these laws. The only objection may be what is regarded as exploitation.
How about the greed generated in a capitalist system? How about the unrealistic scenario of capitalists giving up their excess profits for the good of humanity?
Greed is not confined to capitalist or capitalism. I am not also sure wat you consider greed. Do most people not all desire for better material things such as house, car clothes etc. does this not constitute greed.
What constitutes a desire for better things and at what point does it become greed?Unjust profit shouldn't be allowed, but just profit earned from ones' labor should be allowed, though the excess should still be contributed for the good of society
Please outline what you consider unjust profit and what is just. Equally you will have to beprecise what is excess to ones need. As I might be happy with a donkey as means of transport but others may want a personal jumbo jet etc.
Whilst greed, unjust profit, excess to need etc all sound very good and are an excellent speech material for any politician but without quantifying what they mean it becomes difficult to explain what they mean.
For me Islam does not forbid business-same as capitalism
Islam does not prohibit profit-same as capitalism
Islam does not put a limit on profit-same as capitalism
Islam advocates zakat-a good capitalist system will have robust welfare system paid by taxes(amount is determined by earning) appears very similar to me.regards
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Whilst greed, unjust profit, excess to need etc all sound very good and are an excellent speech material for any politician but without quantifying what they mean it becomes difficult to explain what they mean.
1/5'th of ghanim/profitable utilisations are for the categories mentioned in 8/41. Furthermore, 'tasdeeq' or 'confirming' is needed to avoid a ribaa-based society (2/275-279)
For me Islam does not forbid business-same as capitalism
Islam does not prohibit profit-same as capitalism
Islam does not put a limit on profit-same as capitalism
Islam advocates zakat-a good capitalist system will have robust welfare system paid by taxes(amount is determined by earning) appears very similar to me.Sadly, in terms of overall strategic goals, i.e. what counts, capitalism is very different from al-islaam.
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1/5'th of ghanim/profitable utilisations are for the categories mentioned in 8/41. Furthermore, 'tasdeeq' or 'confirming' is needed to avoid a ribaa-based society (2/275-279)
I tink most would be more than happy to ive 1/5 of their excess earnings. as many pay far in excess.
I understood 8/41 referred to spoils of war.
What is riba based society?Sadly, in terms of overall strategic goals, i.e. what counts, capitalism is very different from al-islaam.
I am not sure what you mean please explain.
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I tink most would be more than happy to ive 1/5 of their excess earnings. as many pay far in excess.
I understood 8/41 referred to spoils of war.
What is riba based society?8/41 says 'ghanimtum min shai'in' which means profit/utilisation from a thing. The words in war isnt there.
A ribaa based society is where the murabis/practitioners keep their slaves under constant bondage and refuse them emancipation. Tasdeeq does not take place. Ribaa constantly multiplies its beneficiaries and weakens society (3/130).
I am not sure what you mean please explain
No economic philosophy is free of ethos. If you study economics as in the schools teach, it proposes the prediction of economic outcomes based on the prediction of human behaviour. The human behaviour is generally expected to be materialistic. No spiritual consideration is necessary. Capitalism is devoid of any purposeful ethical propositions but it doesn't mean it lacks them. To me, it proposes constant growth with no ethical restrictions.
Al-islaam on the other hand, bases its ethos on metaphysics. I call it the metaphysical economics because God becomes the fifth (read first) economic agent. You give to the weakest because God promises you success for all if you do.
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peace stillearning,
another thing, before you start replying you have yet to bring any verses to show capitalism is supported in the reading/quran, just thought i would remind you
Not true. Most capitalist systems have some form of social welfare system(quality of which can vary) and I dont know what profit is to be made from this.
True, some do, especially in European countries, but the welfare state has not always been prevalent, it became prevalent in the early 20th century to ease the suffering of workers so as to maintain the system from the growing communist revolution, and in many Third World countries where neoliberalism (extreme capitalism) is enforced by the World Bank/IMF/WTO along with SAPs there is no trace of a welfare, in theory capitalism is a free market system and government interference in economic matters goes against the heart of capitalism
I am quite happy to accept better alternatives, such as?
God's system is a good alternative, if you think not we can get into some participatory economics and many alternatives that I know of
Cannot we have laws to protect against exploitation. In fact most capitalist countries have these laws. The only objection may be what is regarded as exploitation.
Exactly, capitalists will not sign laws that change the system but merely reform it from within, the system itself is based on exploitation
Greed is not confined to capitalist or capitalism. I am not also sure wat you consider greed. Do most people not all desire for better material things such as house, car clothes etc. does this not constitute greed.
What constitutes a desire for better things and at what point does it become greed?Greed is wanting more than you need to live a moderate lifestyle, basically greed is a desire for excess, hoarding your wealth or maintaining profit, you may say that hoarding goes against capitalism because the theory wants us to have our wealth flow throughout the economy but in reality the rich just keep their extremely excessive profits in banks and dont use most of them, plus God's system is not about wealth flowing throughout the economy but to the poorest of society (597)
Please outline what you consider unjust profit and what is just. Equally you will have to beprecise what is excess to ones need. As I might be happy with a donkey as means of transport but others may want a personal jumbo jet etc.
A corporation can run without a boss but it can't run without workers, no capitalist will knowingly hire you unless the value of the goods/services that you produce is greater than the wage he pays you, ill give you a few good examples
All value inherited in commodities stems from labor, as opposed to capital. i.e. if one were left to his whims in the wilderness with only his labor to live by, he would be able to forge tools to create capital with, and thus an endless supply of wealth. If this man were a capitalist on the other hand, and tried to survive without working, he would be dead in a matter of days. Because capital alone is not enough to create wealth, you can see that labor alone IS enough to create wealth
Say for instance that a worker assembles simple toys in a capitalist's factory for $5 per hour. Let us imagine the worker combines 2 plastic pieces, which cost the capitalist $1 each, to create the toys. The worker creates ten new toys per hour, so the capitalist has put forward $25 to create ten new toys. Now the capitalist makes the toys available for sale for $3 each, so that he receives $30 for the 10 toys. From this we see that the materials to create ten toys cost the capitalist $20, and the labor-power of the worker cost the capitalist $5, so he received a profit of $5.*
Where does this profit come from? It comes from the exploitation of the worker! If the twenty plastic pieces alone were only worth $20, how then could the completed toys be sold for $30? What increased the value of these plastic pieces? It was the labor-power of the worker, which turned the raw materials into a new commodity. From this we see that the labor-power of the worker added a value of $10, but the worker was only played $5 for her hour of labor-power. Her labor-power was sold as a commodity to the capitalist, in hour increments, just as the plastic is sold to the capitalist in pieces.
What's unique about the labor-power of the worker is that it is the only commodity which creates new value. Therefor we see that the worker is exploited for her labor-power, the necessary commodity in all creation of value, and only receives a share of the value she has created. Now the worker who created 10 toys in one hour, can only afford to buy 1 of them with the $5 wage she received.
With this constant exploitation, the working class receives only enough of a share of the value it creates to keep it in working, and reproducing, condition. That is, to keep the workers alive, with enough wealth to create new workers.
Speaking on your other second part, this is besides the point, what do you think God means by the excess/surplus in 2219? Do you think God has no idea what hes talking about. I don't think it is relative, but excess is beyond your basic needs, food, clothes, water, shelter, transportation, you can be excessive in these as well, for example a jumbo jet or helicopter, do you really need such expensive technology for going from place to place when you can easily buy a car and give what you would have spent to the people who need it, you can be excessive in buying cars too, such as buying a Hummer that guzzles an insane amount of gas or buying one car for each person in a family when one car can fit 4 or 5 people
Whilst greed, unjust profit, excess to need etc all sound very good and are an excellent speech material for any politician but without quantifying what they mean it becomes difficult to explain what they mean.
Lol in a modern day U.S. politician were to speak in such terms, trust me, the business community would have his ass
For me Islam does not forbid business-same as capitalism
Neither does socialism or communism, but monopoly capitalism does prohibit small businesses
Islam does not prohibit profit-same as capitalism
Islam does not put a limit on profit-same as capitalismTrue but it does have laws which speak on what you can keep, how you should spend it, and how you should earn it, in capitalism there are no such laws and contradict the capitalism theory, the only laws are perhaps on how you earn it but these are rarely enforced among the capitalist elite and doesnt cut at the heart of the matter
Islam advocates zakat-a good capitalist system will have robust welfare system paid by taxes(amount is determined by earning) appears very similar to me.
Zakaa does not refer to a tax, but growth in general, check project root list and dictionaries to confirm this, btw the progressive income tax was supported by Karl Marx as well
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8/41 says 'ghanimtum min shai'in' which means profit/utilisation from a thing. The words in war isnt there
May be not. I dont know arabic but all the translators (the ones I have read anyway)have mentioned the word war. Wonder why? as the word profit/utilisation would seem far more ethical than spoils of war!
A ribaa based society is where the murabis/practitioners keep their slaves under constant bondage and refuse them emancipation. Tasdeeq does not take place. Ribaa constantly multiplies its beneficiaries and weakens society (3/130).
Working is not slavery. There may be anecdotal cases but vast majority in the capitalist societies today are not slaves-need to work is not the same as being forced to work. I was not aware that capitalism advocates slavery or perhaps you are refering to a different system?
To me, it proposes constant growth with no ethical restrictions
Not true every system as some form of ethics-just because they may be different from yours it does not mean there are none.
Al-islaam on the other hand, bases its ethos on metaphysics. I call it the metaphysical economics because God becomes the fifth (read first) economic agent. You give to the weakest because God promises you success for all if you do.
Again sounds good but what exactly does it mean?
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May be not. I dont know arabic but all the translators (the ones I have read anyway)have mentioned the word war. Wonder why? as the word profit/utilisation would seem far more ethical than spoils of war!
Well, translations aren't neutral. Your very choice of words can determine the perception of the reader. To say 'cohabit' and 'dwell together' amounts to the same thing but they evoke different reactions.
Translations however, in my experience cannot stand in the face of al-quraan's own tafseer methodology. I have seen false interpretations fall flat in the face of al-quraan's own explanation. When you say 'far more ethical', you're making a value judgement and if i may say so, this would hamper your engagement with al-quraan.
Working is not slavery. There may be anecdotal cases but vast majority in the capitalist societies today are not slaves-need to work is not the same as being forced to work. I was not aware that capitalism advocates slavery or perhaps you are refering to a different system?
They don't advocate slavery, they have no program to abolish slavery.
A slave is one who is under another and channels his energies into serving his master/rabb. We are ideally meant to be slaves of Allah alone.
Not true every system as some form of ethics-just because they may be different from yours it does not mean there are none
Would you mind showing where any capitalist thinker proposed this please?
Again sounds good but what exactly does it mean?
It means, if you live in al-madeenah, you give 1/5 of ur profits to Allah and His messenger.
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Hi all,
These are the verses, I found on the subject.
Please, add if there are more.2267 O ye who believe! Give of the good things which ye have (honourably) earned, and of the fruits of the earth which We have produced for you, and do not even aim at getting anything which is bad, in order that out of it ye may give away something, when ye yourselves would not receive it except with closed eyes. And know that Allah is Free of all wants, and worthy of all praise.
2268 The Evil one threatens you with poverty and bids you to conduct unseemly. Allah promiseth you His forgiveness and bounties. And Allah careth for all and He knoweth all things.
2269 He granteth wisdom to whom He pleaseth; and he to whom wisdom is granted receiveth indeed a benefit overflowing; but none will grasp the Message but men of understanding.
2270 And whatever ye spend in charity or devotion, be sure Allah knows it all. But the wrong-doers have no helpers.
2271 If ye disclose (acts of) charity, even so it is well, but if ye conceal them, and make them reach those (really) in need, that is best for you It will remove from you some of your (stains of) evil. And Allah is well acquainted with what ye do.
2272 It is not required of thee (O Messenger., to set them on the right path, but Allah sets on the right path whom He pleaseth. Whatever of good ye give benefits your own souls, and ye shall only do so seeking the "Face" of Allah. Whatever good ye give, shall be rendered back to you, and ye shall not Be dealt with unjustly.
2273 (Charity is) for those in need, who, in Allah's cause are restricted (from travel), and cannot move about in the land, seeking (For trade or work) the ignorant man thinks, because of their modesty, that they are free from want. Thou shalt know them by their (Unfailing) mark They beg not importunately from all the sundry. And whatever of good ye give, be assured Allah knoweth it well.
2274 Those who (in charity) spend of their goods by night and by day, in secret and in public, have their reward with their Lord on them shall be no fear, nor shall they grieve.
2275 Those who devour usury will not stand except as stand one whom the Evil one by his touch Hath driven to madness. That is because they say "Trade is like usury," but Allah hath permitted trade and forbidden usury. Those who after receiving direction from their Lord, desist, shall be pardoned for the past; their case is for Allah (to judge); but those who repeat (The offence) are companions of the Fire They will abide therein (for ever).
2276 Allah will deprive usury of all blessing, but will give increase for deeds of charity For He loveth not creatures ungrateful and wicked.
2278 O ye who believe! Fear Allah, and give up what remains of your demand for usury, if ye are indeed believers.
2277 Those who believe, and do deeds of righteousness, and establish regular prayers and regular charity, will have their reward with their Lord on them shall be no fear, nor shall they grieve.2276 Allah will deprive usury of all blessing, but will give increase for deeds of charity For He loveth not creatures ungrateful and wicked.
From all these verses, I deduce that Allah asks us to give of how much ever we can(after our needs are met/excess) in charity. There is no specific mention of what excess is or how much we should give. But the more we give, the better. And we are encouraged to give more.
And there is also no prohibition on how much u earn, as long as it is earned through correct means.
And for, 841,
This is how its translated.Yusuf Ali
841 And know that out of all the booty that ye may acquire (in war), a fifth share is assigned to Allah,- and to the Messenger, and to near relatives, orphans, the needy, and the wayfarer,- if ye do believe in Allah and in the revelation We sent down to Our servant on the Day of Testing,- the Day of the meeting of the two forces. For Allah hath power over all things.
Pickthall
841 And know that whatever ye take as spoils of war, lo! a fifth thereof is for Allah, and for the messenger and for the kinsmen (who hath need) and orphans and the needy and the wayfarer; if ye believe in Allah and that which We revealed unto Our slave on the Day of Discrimination, the day when the two armies met. And Allah is Able to do all things.
Asad
841 AND KNOW that whatever booty you acquire , one-fifth thereof belongs to God and the Apostle, and the near of kin, and the orphans, and the needy, and the wayfarer. if you believe in God and in what We bestowed from on high upon Our servant on the day when the true was distinguished from the false - the day when the two hosts met in battle. And God has the power to will anythingFrom which, its obvious it talks of booty obtained after war, Unless all of these translations are wrong.
So, for all those who say we need to give specifically 1/5 th of our income in charity, are there verses supporting this?
Peace!
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From which, its obvious it talks of booty obtained after war, Unless all of these translation are wrong.
2 questions please
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Show us where the words 'in war' appears in the text (not the translation)
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Tell us why the words 'in war' appears in paranthesis in 2 of the translations you employ.
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From which, its obvious it talks of booty obtained after war, Unless all of these translation are wrong.
2 questions please
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Show us where the words 'in war' appears
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Tell us why the words 'in war' appears in paranthesis.
Like I have repeated many times, I do not know arabic and so rely on english translation. This is what all the translations say. And in some of the translations, the word 'war' doesnt appear in paranthesis.
And one reason I can think, that slides the verse towars war is becoz, I understand its from the chapter '' Al-Anfal (The Spoils of War)'' and the chapter deals exclusively on the subject.
Peace!
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Like I have repeated many times, I do not know arabic and so rely on english translation. This is what all the translations say. And in some of the translations, the word 'war' doesnt appear in paranthesis.
But it doesn't in others (yusuf ali and asad) for a reason. Its not there.
And one reason I can think, that slides the verse towars war is becoz, I understand its from the chapter '' Al-Anfal (The Spoils of War)'' and the chapter deals exclusively on the subject.
How does the chapter deal 'exclusively with the subject' ? The second through fourth verses already speak of the characteristics of mumeena haqqa which isnt war. Even the word 'anfaal' has been used in al-quraan itself in 17/78 for example where it doesnt mean war spoils.
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. Even the word 'anfaal' has been used in al-quraan itself in 17/78 for example where it doesnt mean war spoils.
What does 'al-anfal' mean then?
And I find the verses of this chapter, do speak of war.
Peace!
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Well, translations aren't neutral. Your very choice of words can determine the perception of the reader. To say 'cohabit' and 'dwell together' amounts to the same thing but they evoke different reactions.
Translations however, in my experience cannot stand in the face of al-quraan's own tafseer methodology. I have seen false interpretations fall flat in the face of al-quraan's own explanation. When you say 'far more ethical', you're making a value judgement and if i may say so, this would hamper your engagement with al-quraan.
I am in broad agreement. however evry one makes a valued judement just as you ave judgged it will hamper my engaggement with Quran (however let us leave this at present I have no wishh to engage in this as detailed discussion)
They don't advocate slavery, they have no program to abolish slavery.
Capitalism is an economic system not rules for anything-your statement
A ribaa based society is where the murabis/practitioners keep their slaves under constant bondage and refuse them emancipation
i tout implied tat capitalism was about slavery. Now I see you did not mean this then that us fine.
Would you mind showing where any capitalist thinker proposed this please
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I am not interested in individual capitilistic-merely that system has rules according to its own ethics. I will give you one simple exampleinsider trading is that not an ethhical rule?It means, if you live in al-madeenah, you give 1/5 of ur profits to Allah and His messenger
Fine. I presume you give 1/5 of your profits to Allah and his messenger.
salamm Idris
another thing, before you start replying you have yet to bring any verses to show capitalism is supported in the reading/quran, just thought i would remind you
does this not count
For me Islam does not forbid business-same as capitalism
Islam does not prohibit profit-same as capitalism
Islam does not put a limit on profit-same as capitalism
Islam advocates zakat-a good capitalist system will have robust welfare system paid by taxes(amount is determined by earning) appears very similar to me.Anyhow I do not recall saying Quran advocates capitalism by name but questioning the assumption that Quran opposes capitalism and so far I have not been convinced.
True, some do, especially in European countries, but the welfare state has not always been prevalent
On that basis you could say same about the Quran-what abou 1400 yrs old. It is all relative really.
and in many Third World countries where neoliberalism (extreme capitalism) is enforced by the World Bank/IMF/WTO along with SAPs there is no trace of a welfare, in theory capitalism is a free market system and government interference in economic matters goes against the heart of capitalism
It could be actually argued thhat it is exreme religion in these countries that is being practiced.
God's system is a good alternative, if you think not we can get into some participatory economics and many alternatives that I know of
Gods system sounds great, who can argue with that in this forum but please explain the detail or as I said previousouly is Gods system against
Free trade or business
Against profit
Puts limit on Profit etcExactly, capitalists will not sign laws that change the system but merely reform it from within, the system itself is based on exploitation
Laws are made by goverments and I dont know where these laws do not exist.
Regards- will continue Have to go -
peace stillearning
Anyways enough of this, in the next thread can define for me the basic principles of capitalism using a unanimous text which it abides by (i suggest Adam Smith but even this is disputed)? if you cant do this then I will state the basic principles of capitalism which are abided by today by most capitalists
does this not count
For me Islam does not forbid business-same as capitalism
Islam does not prohibit profit-same as capitalism
Islam does not put a limit on profit-same as capitalism
Islam advocates zakat-a good capitalist system will have robust welfare system paid by taxes(amount is determined by earning) appears very similar to me.Yes but saying a system doesn't forbid something doesn't include it as a dependent part of the system
Anyhow I do not recall saying Quran advocates capitalism by name but questioning the assumption that Quran opposes capitalism and so far I have not been convinced.
Well, thats why we have tons of thread space to keep discussing, hopefully this debate will have productive results for us all
On that basis you could say same about the Quran-what abou 1400 yrs old. It is all relative really.
God's system has always existed though, I was merely arguing how the welfare state isnt an inherent part of capitalism, not the length of capitalism's existance
It could be actually argued thhat it is exreme religion in these countries that is being practiced.
I guess but it actually reflects the basic fundamentals of capitalism which are extreme, wahabism can be considered extreme sunnism but sunnism doesnt reflect the basic principles of God's system
Btw define capitalism for me and give me a standard text by which it unanimously abides, if it doesnt abide by any unanimous text than we are arguing a theory whose basic principles arent even established
Gods system sounds great, who can argue with that in this forum but please explain the detail or as I said previousouly is Gods system against
Free trade or business
Against profit
Puts limit on Profit etcThe problem is that merely making profit is not abasic principle of capitalism, many other economic systems such as anarcho-communism adhere to this but the nature of the profit and the trade are completely different, what is free trade? the freedom to trade how you please? obviously the reading/quran does not adhere to this and neither do most capitalist countries, but neoliberalism does and long as pre-welfare state capitalism of the 19th century which has come back in the 1980s
Laws are made by goverments and I dont know where these laws do not exist.
Laws are made by governments which are made by/for capitalists D
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From all these verses, I deduce that Allah asks us to give of how much ever we can(after our needs are met/excess) in charity. There is no specific mention of what excess is or how much we should give. But the more we give, the better. And we are encouraged to give more.
50% of the excess , in my opinion (2567). neither too much , nor too less . 50% would be perfect moderation .
http//rationalreality.50webs.com/interest.htm