Economic System of Islam

From: http://www.islamic-world.net/economic/main_page.html

BIBLIOGRAPHY
ISSUES IN ISLAMIC ECONOMICS
SOURCES ON ISLAMIC ECONOMICS AND FINANCES
ISLAMIC ECONOMICS AND FINANCE DIRECTORIES
ISLAMIC BANKING, FINANCE IN THE WORLD
MUSLIM BUSINESSES IN THE WORLD

Islamic Economic system is based on four principles:
1. All the wealth belongs to Allah (swt): "And give them of the wealth of Allah which He has given you." [An-Nur: 33]
2. The community is the trustee of the wealth: "Believe in Allah and His Messenger, and spend whereof He has made you heirs."[Al-Hadid: 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." [At-Tauba: 34]
4. Circulation of wealth is a duty:
"Whatsoever Allah may restore unto His Messenger - is due unto Allah and unto His Messenger - the orphans and the needy ...so that it may not be confined to the rich amongst you." [Al-Hashr:7]
Based on these principles, Islam differs fundamentally from man-made systems (such as communism/socialism and capitalism) in defining the economic problem.

Islam uniquely considers distribution as the economic problem, and Muslims do not share the obsession of capitalists and communists with production. Because Islam differentiates between the basic needs and luxuries, there exists no concept of relative scarcity of resources in Islam. The resources available on earth are sufficient to secure the basic needs (food, clothing, and shelter) of fifty billion human beings. Such a misunderstanding has concealed the reality that starvation, poverty, and economic backwardness, result from maldistribution exasperated by man-made laws and systems. Under the Islamic system, Nigeria alone could support the whole of Africa, as occurred in the past when, under the system of Islam, Africa sent food to relieve the famine in Medinah during the rule of Omar bin al-Khattab.
The current systems have created a vampire club of institutions - such as the IMF (International Monetary Fund), World Bank, and NGO's (Non Governmental Organizations) - that employ tactics such as loans and structural deficit replanning to siphon off the world's resources to the so-called developed nations, leaving behind a gross inequality in distribution of wealth. The world order has resulted in a bleak scenario in which most of the world chokes from the exploitation of a few elitist nations that continue, under the protection of laws and systems that are designed to serve their interests, to squander the wealth of the world and systematically tighten their control of societies around the globe.
Unfortunately, the current systems cleverly mask the inequality in wealth that they produce by assessing the wealth and productivity by the GNP (Gross National Product) or the average income per capita, deceptively duping the observer into regarding the total production as a means of measuring the well being of each citizen when, in actuality, such figures give no indication of the status of the individuals. America, for example, sucks up over a third of the world's resources, yet poverty in America has escalated to such levels that a new class of people - the "fourth" or under class - has emerged. In Cairo, the average income obscures the fact that while some reside in penthouse flats, others settle for the night in cemeteries. Such a contradiction results from the current systems that fail to differentiate between "economic system" and "economic science," and, as a result, view human beings not as humans but as statistics and figures on the stock market.
By using labels like "Third World" and "First World," this economic conspiracy has worked behind a deceived populace who fail to realize that the "Third World" countries are actually First World in terms of resources. While organizations like Mercy International and UNICEF keep the masses content under the circus act of "humanitarian aid," the capitalist machine works behind the stage to gobble up the resources of the world.
The implementation of Islam would eliminate the stranglehold by which the elites control the polices of the world and milk its resources. Unlike the current systems, Islam will not impose any limits on the amount of wealth that an individual can acquire, thus creating and maintaining an incentive to work. The shortsightedness of limiting production stems from the man-made ideologies that fail to understand the nature of creation. Because the Islamic system reflects the wisdom of the Creator, then the implementation of Islam will provide a society conducive to life that will address the needs of humanity based on the correct understanding of life. Muhammad (saaw) 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."
While generating massive abundance and wealth of resources by eliminating all the restrictions and oppressive systems that prevent production, Islam will safeguard against abuses of exploitation in acquiring wealth by limiting the way in which wealth is acquired. For instance, Islam denies the "free" market of Capitalism which has led to the situation of "survival of the fittest". Such an unrestricted environment has led directly to the current situation where multinational companies have scavenged the resources of the world like parasites unrestricted in their "freedom." Under the Khilafah, natural and vital resources would be categorized as public property and a right of every citizen of the state - Muslim or otherwise - in accordance with the Prophet's (saw) Hadith that states, "The humans have a right to three things - water, green pastures, and fire-based fuels (An-Naar)."
In Islam, public revenue from oil and natural resources would be used to secure the needs of the whole Muslim Ummah, and not to line the pockets of casino owners. The Khilafah would provide public and vital resources without charge to cover the needs of every individual and family, and the monopolies that multinational corporations maintain to dictate the lives of the people would dissipate.
The Shariah also defines certain rules that regulate company structure, effectively preventing abuse and corruption. For instance, Islam forbids monopolies by outlawing the hoarding of wealth (Al-Ihtikar), and eliminating copyright or patency laws that would open the avenue for potential monopolies to develop. Also, Islam protects the ownership of businesses and companies by restricting ownership of companies only to those who contribute both capital and effort to the company or business, thus effectively putting the seal on such concepts as "corporate takeover" from ever becoming a reality.
In the systems of today, the stock market offers no such protection and allows for any outsider to secure a share in any business or corporation and impose his policies on the company agenda, even if that individual puts no effort or work into the business. Today, food manufacturers have cultivated the art of burning surplus food and dumping surplus milk into the ocean to artificially inflate prices by creating "scarcity," an art that would cease to exist with the implementation of Islam.
Unlike today's system, which opens all doors for anyone to access wealth by any means, Islam categorizes wealth in a systematic way that both protects the right of individuals to access wealth and, simultaneously protects the society and secures the needs of the Ummah. Islam mandates vital and natural resources as public property while allowing for unlimited access to luxury items. Also, Islam protects the society in ways that corrupt man-made systems have overlooked by defining certain needs as "prohibited needs." For instance, to protect the honor (ird) of the woman, Islam would outlaw all forms of prostitution, pornography, or any type of sexual bombardment that exploits the charms and physical attractiveness of women. In addition, Islam would prohibit alcohol and gambling, killing every industry and institution derived from such filth that has seeped the Capitalist Nations in a downward spiral of corruption, social turmoil, and moral devastation.
In addition, the form of currency in Islam will break the economic hold of the Kuffar over the Muslim lands. The Khilafah would link the currency to gold, silver or some other precious resource. By backing the currency with resources of real value, Islam creates a stable medium of exchange and eliminates the concepts of linking currencies that allow nations to manipulate currencies and maintain a monopoly over the financial markets of the world.
Just a glance at the economic system in Islam suffices to explain the fear and dread that America and the West have shown towards Islam, and explains the dedication and effort exerted towards curtailing or suppressing the resurgence of Islam as a system. Such a system would not only break the grip that the Capitalist nations have secured over the wealth and resources of the Muslim lands and dethrone their upper hand over the policies of the world, but would provide the long-awaited solutions to life that they have kept a secret from their own people with their extensive media manipulation and education. Because the currency in Islam is linked to gold or other precious resources, the implementation of Islam would cut the economic chains that America employs by linking other currencies to the dollar.
In addition, the effectivity with which the Islamic economic systems correctly defines the economic problem and secures the needs of every individual, and eliminates all forms of economic and social corruption, would provide fuel for the foreign policy of the state that would enable the Khilafah to easily spread Islam ideologically throughout the world.
For such a system to emerge, the Ummah must revitalize within itself the Islamic way of life and cultivate the Islamic culture and the Islamic Aqeedah as the sole basis for providing solutions to its problems. Without the clear conviction in the Islamic Aqeedah and the comprehensive understanding of the Islamic system, the corrupt regimes will continue to tame and manipulate the Muslim masses with empty slogans, while behind the curtains, the feudal landlords of Pakistan will maintain their status and the Gulf sheikhs will continue to squander the public resources of the Ummah.

Blogger comment:
Interesting article though I do not agree on every thing.