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AlQuran Economics
AlQuran Economics
AlQuran Economics
PHD PROGRAM
SEMESTER xxxx
Solitary existence with its sets of challenges has convinced Man of the
inevitability of government and its subsequent engagement in economic
management. Western thought has termed this as various forms of social
contract that does entail the “giving up” of certain natural rights for the
benefit of protection offered by governments.
Islam however is of the position that rights of Man come from Allah thus
compliance to the rules of Allah means achieving justice (entailing rewards)
and sanctions against for the practice of zulm. This also holds true for
collectives such as family, neighbourhood and government. All constituents
are tasked with the responsibilities of ensuring Amar Makruf Nahi Munkar
(propagate goodness and reject evil) permeates in all affairs. In the case of
Economics and Politics, the exercise of “Ijtihad” is necessary and of
abundance. Nonetheless the author question how far reaching and whether
Amar Makruf Nahi Munkar has permeated in all affairs.
(i)
TABLE OF CONTENTS
Pages
Abstract (i)
The living entity called Man has made Earth his domain. It is shared with
other forms from the microscopic to the largest, being the Blue Whale.
However, Man has been able to adapt to various conditions of existent. This
point to a more sophisticated cognitive ability associated with
logical/rational thought, the ability to gather information, build repository of
knowledge and make decisions. These entail the use of the outward senses,
the mental and the inner self e.g. the soul. In as much the body politic
having the executive, legislative and judiciary functions the same can be
said of Man. As Man struggles with the physical world in satisfying his
bodily needs, there arise other needs resulting from interaction with other
Man and needs arising out of experience and contemplation.
1
This exercise of reason entails that the “Self” is able to resolve the
predicaments faced by them. Philosophy itself developed into various
branches of studies and eventually developed into natural sciences with the
use of scientific approach of developing theories, employing assumptions,
hypotheses to be tested and re-tested as opposed to the social sciences.
Whilst philosophy initially engaged in descriptive analysis of the human
condition, it was also prescriptive analysis of how Man is to behave (morality
and ethics) often in social setting which is intertwined with politics and
economics (arrangements with regards to how to recognize, arrange,
distribute power and resources).
c) Position in Islam
2
Al-dayn and the concept of Mal (property)
Q 2-30:- Behold, thy Lord said to the angels: "I will create a
vicegerent on earth." They said: "Wilt Thou place therein one
who will make mischief therein and shed blood? whilst we do
celebrate Thy praises and glorify Thy holy (name )?" He said: "I
know what ye know not."
3
Since it provides Man with a position of Trust, a position to exercise
Allah’s justice on Earth, a position of enjoying Allah’s bounties on
Earth for his own comfort and for the comfort of others. This
position also entails choice, to choose good or evil (a choice that is
not available to other creations of Allah). A choice that if rightfully
exercised ensures immeasurable rewards and if wrongly chosen
entails sanctions.
b) The debt arising out of being provisioned and given the faculty of Aql’
Q 2-22:- Who has made the earth your couch, and the heavens your
canopy; and sent down rain from the heavens; a n d b r o u g h t
F o r t h t h e r e w i t h F r u i t s f o r y o u r sustenance ;
Q 3-7:- And those who are firmly grounded in knowledge say: "We believe in
the Book; the whole of it is from our Lord:" and none will grasp the Message
except men of understanding.
Earth was provided to Man with its resources, water provided to sustain life
via agriculture. Other verses points to other resources for human use. The
endowed faculties in a) is provided by Allah to Man. Aql’ renders Man the
ability in seeking understanding, to acquire knowledge and in it the means
to acquire the full comprehension of justice.
c) The debt arising out of being given the Al-Quran and the earlier scriptures
Q 2-185:- Ramadhan is the (month) in which was sent down the Qur'an, as
a guide to mankind, also clear (Signs) for guidance and judgment (Between
right and wrong).
4
Q 2- 192-196:-Verily this is a Revelation from the Lord of the Worlds, with it
came down the spirit of Faith and Truth, to thy heart and mind, that thou
mayest admonish. In the perspicuous Arabic tongue. Without doubt it is
(announced) in the mystic Books of former peoples.
Q 3-90:-Behold! In the creation of the heavens and the earth, and the
alternation of night and day, there are indeed Signs for men of
understanding
The early scriptures and Al-Quran speaks of faith, truth, guidance and
signs. Man may discover the signs via observation and understanding. The
Al-Quran also reveals the “Shari’ah” literally meaning “the path to water”).
Compliance ensures grace (barakah) whilst wrath entails the negative of
grace, peace and harmony.
d) The debt arising out of being provided with the messengers of Allah
Q 6-130:- "O ye assembly of Jinns and men! Came there not unto you
apostles from amongst you, setting forth unto you My signs, and warning
you of the meeting of this Day of yours?" They will say: "We bear witness
against ourselves." It was the life of this world that deceived them. So
against themselves will they bear witness that they rejected Faith.
5
Q 14 – 4-6:- We sent not an apostle except (to teach) in the language of his
(own) people, in order to make (things) clear to them. Now Allah leaves
straying those whom He pleases and guides whom He pleases: and He is
Exalted in power, full of Wisdom. We sent Moses with Our signs (and the
command). "Bring out thy people from the depths of darkness into light, and
teach them to remember the Days of Allah." Verily in this there are Signs for
such as are firmly patient and constant,- grateful and appreciative.
Remember! Moses said to his people: "Call to mind the favour of Allah to you
when He delivered you from the people of Pharaoh: they set you hard tasks
and punishments, slaughtered your sons, and let your women-folk live:
therein was a tremendous trial from your Lord."
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e) The debt arising out of being provided with the angels watching over Man
Q 82- 10-12:- But verily over you (are appointed angels) to protect you, Kind
and honourable, Writing down (your deeds). They know (and understand)
all that ye do.
f) The debt arising out of the guaranteed rewards from Allah for rule
compliant behaviour
Q 47-38:- God is the rich (ghaniy) and ye are the poor (fuqarā’)
Q 3-198:- On the other hand, for those who fear their Lord, are Gardens,
with rivers flowing beneath; therein are they to dwell (for ever),- a gift from
the presence of Allah. And that which is in the presence of Allah is the best
(bliss) for the righteous.
The above points to Allah being self sufficient only requires rule compliant
behaviour from Man. Out of love and mercy for Man, Allah equipped Man
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with all that is required for rule compliant behaviour including much if not
all of the rules themselves (discoverable through the exercise of reason and
our other faculties).
All of the above shows the power, authority, sovereignty and legitimacy
(terms synonymous with exercise of political power) of Allah in
commanding obedience and rule compliant behaviour from Man. It serves
to reconfirm the doctrine of the divine unity of Allah (al’ tawhid). The act
of challenging the sovereign entails the act of political disobedience or
transgression. The Arabic word Zulm implies transgression and also
covers harm, wrong and injustice. These acts have reference to
oneself (example suicide is transgression) and when the wrong is
done to others it implies tyranny and oppression.
8
Q 2 -35-36:- We said: "O Adam! dwell thou and thy wife in the
Garden; and eat of the bountiful things therein as (where and
when) ye will; but approach not this tree, or ye run into harm and
transgression. Then did Satan make them slip from the (garden),
and get them out of the state (of felicity) in which they had been.
We said: "Get ye down, all (ye people, with enmity between
yourselves. On earth will be your dwelling-place and your means of
livelihood - for a time. “
Q 6-70:- Leave alone those who take their religion to be mere play
and amusement, and are deceived by the life of this world. But
proclaim (to them) this (truth): that every soul delivers itself to
ruin by its own acts it will find for itself no protector or intercessor
except Allah. if it offered every ransom, (or reparation), none will
be accepted: such is (the end of) those who deliver themselves to
ruin by their own acts: they will have for drink (only) boiling water,
and for punishment, one most grievous: for they persisted in
rejecting Allah.
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Part 2:- Legitimacy of Government
Hegel (1770-1831) saw only via the state that Man gains
true reality. The state establishes laws and institutions that
educates and trains Man towards morality. Nevertheless he
also recognized that Man possesses his own standards of
morality and the State merely facilitates the move from
private to a higher ideal. The modern state requires rational
laws, government and sentiment or morals.
Marx (1818-1883) His thought revolves around the
interaction of opposites (thesis and anti-thesis) which was
evidence in Hegel’s philosophy. In such contradiction lay
movement/change towards synthesis namely an eventual
victory/assimilation of one the opposites. The ruling
principle of his socialist system is grounded in “From each
according to his ability, to each according to his needs”.
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b) Based on the Al-Quran
Q 49-13:- “O mankind! Lo! We have created you male and female, and have
made you nations and tribes that ye may know one another! Lo! the noblest
of you, in the sight of God, is the most righteous”
Q 4-59:- O ye who believe! Obey Allah, and obey the Messenger, and those
charged with authority among you. If ye differ in anything among
yourselves, refer it to Allah and His Messenger, if ye do believe in Allah and
the Last Day: That is best and most suitable for final determination
Q 3-159:- It is part of the Mercy of Allah that thou dost deal gently with
them. Wert thou severe or harsh-hearted, they would have broken away
from about thee: so pass over (Their faults), and ask for ((Allah) "s)
forgiveness for them; and consult them affairs (of moment). Then, when
thou hast taken a decision put thy trust in Allah. For Allah loves those who
put their trust (in Him)
Q 22-41:- They are those who, if we establish them in the land, establish
regular prayer and give regular charity, enjoin the right and forbid
wrong, with Allah rests the end and decision of all affairs
14
Following on it is clear that an Islamic government is subservient to the
rules of Allah, the Sunnah of the Prophet and in compliance with the
Shariah. Invariably it is a government that promotes justice (enjoin the
right and forbid wrong) in all areas including the economic sphere.
Q 9-60:- The alms are only for the needy and the destitute, and those who
collect them and those whose hearts are reconciled (to Islam), and to free the
captives and the debtors, and for the cause of Allah is Knower, Wise"
Q 59-7:- What Allah has bestowed on His Messenger (and taken away) from
the people of the townships, belongs to Allah,- to His Messenger and to
kindred and orphans, the needy and the wayfarer; In order that it may not
(merely) make a circuit between the wealthy among you. So take what the
Messenger assigns to you, and deny yourselves that which he withholds
from you. And fear Allah. For Allah is strict in Punishment.
15
The above verses points to the fact that Zakat is obligatory and is not
“charity”. This follows that all property, wealth and income derived belongs
to Allah and Allah has allocated a certain portion of the zakatable wealth as
belonging to the intended recipient of Zakat. To deny as such is
transgression and rendering injustice.
Exports (X
Shifts in the Aggregate Demand Curve
Price
Level
2.0%
AD2
AD
Y1 Y2
U = 5% U = 2%
Real GDP
Consumption has the effect of shifting the aggregate demand curve to the
right leading to increase in Real GDP. In this analysis, the impact on the
price level has been ignored.
Zakat also plays the role in reducing income disparities between the rich
and the poor. Retracing history, much turmoil has been linked to the
widening gap between the rich and the poor. Transgression in this particular
case letting wealth makes a circuit between the wealthy leads to further
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transgression largely due to “populist” or even genuine sentiments being
fanned by certain individuals/groups in society. Another important role of
zakat is that it has positive contribution towards developing human capital
if we are to take into consideration the intended recipients.
17
It is a spiritual investment of purifying “god given” income and wealth.
Secondly, Islam promotes self-reliance, disparages poverty and encourages
giving rather than receiving.
Q 4-32:- And in no wise covet those things in which Allah Hath bestowed
His gifts More freely on some of you than on others: To men is allotted
what they earn, and to women what they earn: But ask Allah of His
bounty. For Allah hath full knowledge of all things.
Q 2-83:- And remember we took a covenant from the Children of Israel (to
this effect): Worship none but Allah. treat with kindness your parents and
kindred, and orphans and those in need; speak fair to the people; be
steadfast in prayer; and practise regular charity. Then did ye turn back,
except a few among you, and ye backslide (even now)
Government must ensure the sanctity of private property and guarantee the
freedom to accumulate. Threats of confiscation and laws intent on force
distribution of income and wealth constitute zulm (transgression and
injustice). With this freedom intact, philanthropic Muslim of previous
generations established the waqf’, which has been recognized as the
voluntary 3rd sector in the economy. Throughout Muslim history, the
institution of waqf have provided for supplies of public goods namely which
in modern economics are essentially under-provided since there is no
market for such goods and it being subjected to the “free-rider” problem.
Besides the waqf’, the eligibility to pay zakat (Nisab) is subject to the
person/s attaining a certain level of income/wealth. Since zakat has direct
benefits on the recipient and the economy the more eligible person/s paying
the zakat the more benefit it accrues. Other form of charity like the sadaqah
in monetary form is also predicated by the person/s having excess wealth to
be given away out of the desire to attain Allah’s pleasure. On the treatment
of orphans, we need only to look at the social and economic status of Abu
Talib who became the guardian to Prophet Muhammad s.a.w.
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Lastly citing history, when the Muslims were evicted out of Christian Spain,
the rich had the opportunity to pay their passage out of Spain whilst the
poor Muslims were forced to convert to Christianity. This proved that wealth
in this instance assisted to secure religious freedom.
Q 26- 165-166:- Of all the creatures in the world, will ye approach males,
and leave those whom Allah has created for you to be your mates? Nay, ye
are a people transgressing (all limits)
20
Arrows points to a shift in the PPF
Q 7-31:- 0 Children of Adam! wear your beautiful apparel at every time and
place of prayer: eat and drink: But waste not by excess, for Allah loveth not
the wasters
Q 30-41:- Mischief has appeared on land and sea because of (the meed) that
the hands of men have earned, that ((Allah)) may give them a taste of some
of their deeds: in order that they may turn back (from Evil)
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4) Ensuring defense and propagation of Islam
Q 2-217:- They ask thee concerning fighting in the Prohibited Month. Say:
"Fighting therein is a grave (offence); but graver is it in the sight of
Allah to prevent access to the path of Allah, to deny Him, to prevent
access to the Sacred Mosque, and drive out its members." Tumult and
oppression are worse than slaughter. Nor will they cease fighting you until
they turn you back from your faith if they can. And if any of you Turn back
from their faith and die in unbelief, their works will bear no fruit in this life
and in the Hereafter; they will be companions of the Fire and will abide
therein.
Q 8-60:- Against them make ready your strength to the utmost of your
power, including steeds of war, to strike terror into (the hearts of) the
enemies, of Allah and your enemies, and others besides, whom ye may not
know, but whom Allah doth know. Whatever ye shall spend in the cause
of Allah, shall be repaid unto you, and ye shall not be treated unjustly.
Q 2-190-193:- Fight in the cause of Allah those who fight you, but do
not transgress limits; for Allah loveth not transgressors. And slay them
wherever ye catch them, and turn them out from where they have turned
you out; for tumult and oppression are worse than slaughter; but fight them
not at the Sacred Mosque, unless they (first) fight you there; but if they fight
you, slay them. Such is the reward of those who suppress faith. But if they
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cease, Allah is Oft-forgiving, Most Merciful. And fight them on until there
is no more Tumult or oppression, and there prevail justice and faith in
Allah. but if they cease, Let there be no hostility except to those who
practise oppression
War, killing, acts of violence, act of deceit and duplicity has been a common
feature of human history. These acts were committed in the name of states,
nations, race, and religion and for economic reasons. Allah abhors war and
killing yet repetitively Muslims have been told to be on their guards or to
take the offensive. Nevertheless, Allah has put rules on the conduct of war.
War is seen as an act of defending justice as long as the rules are not
transgressed.
Some human progress has itself been related to the idea of war and defence.
The harnessing of nuclear energy as we know it is partially related to the
Manhattan Project where scientists of American, German and European
origin worked on the atomic bomb. The fear of the Russians prompted
Kennedy to challenge America to put man on the moon before the end of the
1960s. The Internet itself was initially developed in collaboration between
academia and the Department of Defense. The Arab-Israeli Wars fought
pitched US made weapons of war against their Soviet counterparts and
these wars are usually used to test these weapons and battlefield tactics.
The outcome being the lost of Arab lands to the Israeli regime.
Wars have taken new shapes. Wars fought on the ideological front and using
economic might for instance the Cold War led to the demise of the Soviet
Union in a matter of 70 years (the Ottoman Empire survived 624 years from
1299-1923). Ideology, economic power combined with technological
superiority resulted in the current Western hegemony in world affairs.
24
With this arisen new economic challenges brought about by globalization,
the pressure to provide access to domestic markets and implement the
Western version of freedom only increases the tumult or oppression
forewarned by Allah to Muslims.
Q 8 – 22:- For the worst of beasts in the sight of Allah are the deaf and the
dumb, those who understand not
Q 3-118:- O ye who believe! Take not into your intimacy those outside your
ranks: They will not fail to corrupt you. They only desire your ruin: Rank
hatred has already appeared from their mouths: What their hearts conceal
is far worse. We have made plain to you the Signs, if ye have wisdom
25
Q 2 – 278-279:- O ye who believe! Fear Allah, and give up what remains of
your demand for usury, if ye are indeed believers. If ye do it not, take notice
of war from Allah and His Messenger. But if ye turn back, ye shall have
your capital sums: Deal not unjustly, and ye shall not be dealt with
unjustly
Allah and his messenger has declared war on the practice of usury
(contrasted to zakat (which reduces) usury widens the income disparities
between the rich and the poor), thus any rule compliant Muslim government
should follow suit. Usury is but one part of economic transgression, it relies
on the current conventional economic and financial system for its
legitimacy. Included in the system is the debt/credit creation machine,
money created within the fractional reserve system and out of seignorage, a
win-lose approach to risk taking and a system where rule compliance is
weak and the regulators themselves subjugate the rules for their own
interests.
Much of Islam’s experiment with government and the role it plays have been
via the exercise of Ijtihad. The validity of Ijtihad is unquestionable (Muaz ibn
Jabal case in point). Most scholars define Ijtihad as the effort of a “Mujtahid”
to coming to a decision pertaining to a legal matter by reference to the
sources of Islamic law (the collective term for Islamic law being Shariah, the
primary sources being the Al-Quran and Sunnah) and other secondary
sources namely qiyas, ijma, istihsan, urf etc.
26
The following tables captures but a glimpse of the past and present efforts
been made in the area of government and economics.
Ibn Khaldun
Muqaddimah Defence
Law and Order
Justice
Public administration
Basic Need fulfillment
Da’wah activities
Enjoining right conduct and
forbidding wrong
Fulfillment of such socially
obligatory duties as
the private sector fails to perform
27
Ibn Taimiyyah
Government is indispensable and Institution of Al-Hisba
a religious duty
Ensuring rule compliant i.e.
observance of the Shariah in an
Islamic economy
The decline of Islam has been commented as related to the decline in Ijtihad.
Perhaps this remains a simplification, the author points towards disunity,
the secular approach of some Caliphs post Ali Ibn Talib, the repression
meted out to scholars and perhaps lack of “religious” leadership who saw
large scale rebellion contrasted to one person opposition to zulm (which
is obligatory) as a valid weapon against zulm. Whether the Iranian
Revolution of 1979 can be classified under large scale rebellion against zulm
remains an area for discourse.
Much Ijtihad or thought have been applied in the area of Islamic Economics
but not much discussions have been employed in questioning the legitimate
authority of Muslim governments to rule.
Q 42-38:- Those who hearken to their Lord, and establish regular Prayer;
who (conduct) their affairs by mutual consultation; who spend out of what
We bestow on them for Sustenance
Democracy has often been associated with being the best form of
government that ensures the attainment of both political and economic
freedom however the practice of democracy have often resulted in zulm
employed by the majority on the minority.
29
Certain practices in democracy have been subjected to “interest group”
politics. Much of the Muslim world is not practising democracies or being
ruled by hereditary monarchs or various forms of dictatorship. Thus suffice
to say that even the institutions of government are practising zulm towards
its form and people.
Even in the area of Islamic Economics the writer cites the following.
The Pew Forum on Religion & Public Life (2009) estimated that there are
1.57 billion Muslims in the world making up 23% of the world population.
More than 60% of the global Muslim population is in Asia and about 20%
is in the Middle East and North Africa. Two-thirds of all Muslims
worldwide live in 10 countries, six are in Asia (Indonesia, Pakistan, India,
Bangladesh, Iran and Turkey), three are in North Africa (Egypt, Algeria and
Morocco) and one is in Sub-Saharan Africa (Nigeria). Economically these
countries rank low in terms of per capita income faced with numerous
handicaps such as ruled by corrupt and dictatorial governments, having
little or dwindling resources and subjected to international sanctions in the
case of Iran.
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compliant, perhaps the following serves to guide
Q 2-281:- And fear the Day when ye shall be brought back to Allah.
Then shall every soul be paid what it earned, and none shall be
dealt with unjustly.
Reason and revelation need not be at odds with each other. Imperfect
reasoning or “transgression” against our own fitrah is the cause of misery
and strife. Where strife and mutual distrust are implements of Iblis and his
supporters, much of these challenges can be met by building up the
spiritual, the intellectual and the material of the Islamic Ummah. Through
rule compliance being internalized, practiced and institutionalized in the
conduct of Man, governments, socio-economic institutions and in all other
areas the attainment of Justice with all its rewards is assured.
31
Bibliography:-
Keynes on Taxation
M.M. Metwally, "Fiscal Policy in an Islamic Economy" in Ziauddin et. al.
Fiscal Policy and Resource Allocation in Islam, Islamabad, The Institute
of Policy Studies and Jeddah, International Centre for Islamic
Economics, 1983, p. 61, pp. 72-73.
32
Siddiqi, Dr Muhammed Nejatullah, from Public Expenditure in An Islamic
State, Finance In Islam, Mukhtar Zaman (Ed.) Banking and Finance: Islamic
Concept, 1993, Karachi: International Association of Islamic Banks (Asian
Region) pp. 103-127
Mapping The Global Muslim Population, A Report on the Size and Distribution
of the World’s Muslim Population (October 2009), PewResearchCenter, The
Pew Forum on Religion and Public Life
33