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With
the collapse of communism in Eastern Europe and in its heartland,
the Soviet Union, the world is dominated by the practices and
laws of capitalism. Today's world economy is shaped according
to Adam Smith. No other alternative routes for economic
development but to let "the laws of the market"
to play its course in the marketplace, and the "invisible
hand" of the market is more visible now than at
anytime in history to be the determining and decisive factor
of the life of men and nations. Consequently, the
self-interested acts of members of the society are to become
the driving force of the economy, and the law of supply and
demand is the regulating mechanism of the profiteers in the
society. Even economists in what used to be the Marxist
bloc, are subscribing to such economic behaviour as the only
alternative to save the ills of the economies of their nations.
Not
quite true says many Muslim thinkers and political activists.
They believe that Islam provides humanity with solutions to
problems created by imperfect manmade political systems and
moral values. Islam, according to them, is a divinely ordained
social framework that should guide humanity to peace and
tranquillity in all aspects of life, physical and metaphysical. One of those thinkers and political activists was
Muhammad Baqir al-Sadr of Iraq. Sadr was executed when he led
a revolt against the Ba'thist regime in Iraq in 1980. He had
conceived an Islamic political system to replace the existing
regimes in the Muslim World, which he considered corrupt. His
program for the future is to create a new socio-economic order
that would replace the capitalist and socialist orders that
are the dominates system in Muslim World. This paper is to
focus on his views and the basic principles of the Islamic
economic system that he believes is more capable of solving
the contradiction of the capitalist system, therefore, more
able to satisfy the human needs; and more importantly, has the
capacity to develop and progress in accordance with human
potentials.
As an Islamic jurist, Sadr derives his basis of argument from
Islamic tenets and divine scriptures. Here we are not to
question those beliefs but rather to present his conceptual
argument and economic engineering of the society and to see
how these views and programs are applicable to reality. The merit
of the study here is to highlight his argument and try to
understand the structure of the Islamic economic system.
Suffice it to say that Sadr does not believe that his views
should be put to the test since they are not put into practice for
a period of time within a social setting. His views in
economics are parts of his general political theory that are designed for the establishment of a complete Islamic social
system. The behaviour of the Islamic economic system should be
judged after the creation of an Islamic state where the socio-economic realm of human behaviour is engineered
according to Islam. Sadr's major work in economics was written
in 1960-61, and asides from the few pamphlets that he wrote
later in his life, the main argument of his thoughts are contained
in one work, Iqtisaduna (Our Economics).
The economy of the Islamic state, according to Sadr, is
divided between that of the individual as vicar of God (khalifah),
and the ruler as the witness (shahid) that supervises
the applications of the laws of God. The economic structure of
the Islamic state, thus, consists of private property and
public property. However, one should not think that the
economic structure of the Islamic state is some sort of
combination of capitalism and socialism. Sadr strongly rejects
this misconception. He argues that the juxtaposition of
private and public rights of ownership stems from the
fundamental beliefs of Islam. This is similar to the way that
private ownership is advocated in the capitalist system or
public ownership is advocated by socialists as the logical
conclusion of their ideological and philosophical beliefs. To
justify private ownership and public ownership in Islam, one
must understand the rights and obligations of the individual
and the state in Islam. Sadr's detailed description of the
economic relationship in the Islamic state, and the
establishment of its economic structure, represent the best
available argument for the notion of Islamic economics.
Man's
behaviour, according to Sadr, is categorized into three types
of relationships: social, economical and religious; stems from
mans basic relationship to other men, to the environment, and
to God. The economic relations, however, is the outcome of his
inner instinct of self-love that "always drives him to
bring good things to himself, to secure his interests, and
satisfy his needs." Accordingly, man, in his
relationship with the environment, is predisposed to utilize
all possible resources to satisfy his needs and increase his
pleasure. In due time, he is willing to use animals and plants
to help him in his struggle with the environment. Although his
essential needs were simple in the early period of history,
his mental capacity enabled him to develop new means to help
him utilize the resources of the environment. Thus, his needs
were always expanding due to the complexity of utilizing the
resources of the environment.
Man's relationship with others of his kind was the natural
outcome of his need to satisfy his desires. The complexity of
life, i.e., his relationship with the environment, made it
difficult for him to sufficiently cope with his needs.
Cooperation with others makes the effort to satisfy his needs
manageable. Cooperation with others results in a sharing of
benefits with all participants of the community. The inner
instincts of self-love that drove man to create the first
community are evident. These instincts gave rise to man's
exploitation of his brother.
Because people were not equal in their physical and mental
capacities, they obviously were different in their utilization
of the resources of the environment. Such differentiation of
capabilities is part of the divine plan for bringing cohesion,
through the division of labour, to the human community. People
of different capabilities function in different tasks within
the social order. However, man's desire to maximize his
interests drove some men to exploit the situation for their
benefit. Human needs were growing due to man's mental and
economic development. His experience broadened his capacities
to utilize the resources of his environment. His passion to
acquire more of the environmental resources for himself became
prevalent. Consequently, some men were willing to oppress
others to satisfy their greed and egos (both instincts- the
outcome of self-love). It is then that the human community
faced oppression in the form of economic exploitation.
This conflict between social peace and individual instincts of
maximizing interests is persistent throughout history. This
historical conflict, Sadr argues, is between two classes:
those individuals who possess the environmental resources
(economical and social) who are endeavouring to protect their
interests, and the rest of the society who strive to live in
peace and cooperation. Marxists believe the problem originated
with a few people controlling economic resources. The only way
to bring about peace to the social order is through the
revolution of the oppressed class of the society to destroy
the special interests of the privileged class. Capitalists, on
the other hand, believe such social conflict is the result of
the limited natural resources of the environment, which are
not sufficient to satisfy the needs of all people. Thus,
social conflict will always be prevalent. Human society can
only hope to manage, through incremental and gradual reforms,
the social conflict from overtaking human progress. Based on
this, capitalists oppose any type of social revolution.
However, Islam disagrees with both views and considers the
environmental resources to be sufficient to satisfy people's
needs.
According
to Sadr, the problem rests with human nature: how can the
instinct of self-love be directed in a proper manner? Unless a
solution comes to control human desires and deflect the
potential of human energies for exploitation of others, the
social order rests on superficial foundations. Therefore, Sadr
clearly states that the socio-economic problem is the result
of the misdeeds of man. He specifies two reasons for the
socio-economic problems:
-
The oppressive nature of man,
i.e., his self-love; and
-
Man's inefficiency in the
utilization of the economic resources.
According
to Sadr's interpretation, the ills persistent in the economic
realm of life stem from man's oppressiveness are in the form
of inequitable distribution of economic resources on the one
hand, and from the inefficient utilization of these resources
which result in underdevelopment of economic resources and
their waste. A solution must overcome the two basic ills of
the economic behaviour of man. Sadr specifies three components
to the Islamic solution:
-
The cessation of forms of
oppression which is manifested in the unjust distribution of
economic resources.
-
Purification of human nature to achieve
control of the desires of self-love; and
-
Utilization of
economic resources to satisfy the needs of all humanity.
The first step to end the contradiction of the economic
structure of society begins with the distribution of economic
resources between people. A just social system is the one that
allows all people to benefit from the economic wealth. The
Islamic economic system, accordingly, is judged upon this
criterion.
The first form of economic wealth is the natural resources of
the environment. The unjust distribution of the economic
wealth begins with the problem of ownership of these natural
resources. One must know who has the right of ownership of
these resources in Islam. Sadr, thus, must develop the theory
of distribution of the natural resources at two stages: pre-production
and postproduction stages, or what he calls primary wealth and
secondary wealth, respectively. His endeavour is to discover
the doctrinal basis of Islamic teaching concerning economic
ownership. For him, the study of economics in its empirical
sense at this stage is irrelevant to the issue of social
justice. In other words, he is building an ideological theory,
which addresses this issue. The empirical study of economics
comes much later to evaluate whether the application of the
ideological theory in the realm of life has an adequate basis
in reality.
In
constructing the conceptual framework of his theory, Sadr also
disagrees with political economists on the scope of economic
resources. He disregards capital and labour to
be considered as part of the economic resources. It is only
nature that can be taken into account in the theory of
distribution of natural resources.
"For
capital
is in fact a produced wealth and not a primary source of
production, because it represents, economically [speaking],
any wealth which is produced and generated through human labour
that can be reinvested in the development of new wealth."
On the other hand, nature itself is classified into four
categories:
-
Land
-
Raw
material
-
Water; and
-
Other
natural resources such as living species in air, sea and on
land.
Although the canon laws of Islam seemingly contain
different regulations for each one of these categories, Sadr
used his ingenuity to discover the common ground between them,
and revealed his interpretation of what he calls "The
General Economic Theory of Islam."
The sole owner of the land and raw materials is the
Islamic state/government. People may gain special rights of
ownership if they invest their labour to develop these natural
resources, such as cultivating land and mining minerals.
Individuals may gain precedence over others for a piece of
land or the minerals, which they worked. The special right of
ownership may be gained only through labour invested in
developing that land or raw material, and such right expires
as soon as that development ends. People utilizing these
resources must pay property taxes for their usage to the
Islamic state.
Water,
on the other hand, can be owned if it is possessed for
economic development. Although the sole proprietor of the
natural resource of water is the state, all people have access
to it for their use. The only exception is underground water,
where the individual who invests his labour to develop its
utility has an exclusive right to its usage and benefits.
Other natural resources, such as birds, animals, plants and
marine life, are publicly owned. These sources of economic
wealth may become private property through individual efforts.
As such, people, not the state, have the exclusive right to
own resources via their labour. They may not lose this right
indefinitely, or pay property taxes for their possession.
Based on this view, Sadr concludes that people themselves, or
in a more concrete term, their representative government, are
the sole and legitimate owner of the natural resources.
Individuals may gain special privileges to make use of these
resources only through their invested labour to develop these
resources. Other types of individual labour, such as the use
of force to possess, are not considered legitimate means to
ownership. Specifically, it is only invested human work that
has legal significance for ownership of the natural resources.
Generally speaking, Islam gives individuals the right to own
private property only through their continuous effort to
develop these resources to benefit society as a whole. Once
private development of these natural resources is suspended,
the right of private ownership would cease too. From this Sadr
derives the first principle of his theory:
All
natural wealth is part of the public sector and individuals
gain the special rights to use them only on one ground, that
is labour which characterized by development [of these
resources] by the direct work [of the individual himself].
According
to the above principle, the individual may not use other
individuals to develop the natural resource to have the right
of ownership of a large estate, for example; otherwise they
share the ownership and the benefits of that natural wealth on
the basis of their labour. Islam totally rejects the
capitalist principle of individual ownership of vast natural
resources on the ground that they are developed by the labour
of others. For the same token, industries for the development
of the natural resources, e.g., oil and minerals, can be owned
and managed only by the state. Notwithstanding the emphasis of
public ownership of the natural resources, Sadr introduces the
concept of the "priority right of use" of the
natural economic resources by the individual. He states that
those who possess the labour and the will to exploit the
resources, have the right to gain access to them, so long as such
exploitation serves the public interest.
Sadr,
furthermore, develops an Islamic theory of distribution of the
produced commodities. Produced wealth is classified into:
-
The primary commodities, such as agricultural produce and raw
materials; and
-
The secondary commodities, which are the
primary commodities manufactured into different products.
In
both of these stages of production, capital generated from
previous economic endeavours as well as the
means-of-productions (tools and machineries) take part in the
production process of these advanced economic activities.
However, contrary to the capitalist theory, each of these
components has no share of the product, but they gain special
rights for their usage and their wear-and-tear in the
production process.
As
in the previous principle of theory, Islam gives the worker
the sole right of ownership of the produced goods. However,
Sadr realizes that human labour is but one of the components
of the production of the primary commodities. The other
components are the natural environment and the tools, which
help man in the process of production. The tools, or any means
of production, according to Sadr, "contained
potential works of previous stages of productions that will be
exhausted and depleted during their usage in the process of
production." In this case, if the tools are not the
property of the worker who benefited from their usage during
the process of production, then the legitimate owner of these
tools must get paid for the amount of usage of his tools,
i.e., the exhausted potential work of the tools.
According to Sadr, herein lies one of the major ideological
differences between capitalism and Islam. The former regards
the owner of the means of production as the sole owner of the
produced commodities; where Islam considers the labourer to
have the only legitimate claim to the produced commodities. In
capitalism, tools get a share of the product because they, as
human labour, expend a certain amount of work in the
production process. In Islam, tools only assist and aid man to
facilitate the process of production, thus, they must be
gratified in rent, not in profit sharing.
Accordingly, the labourer only has the legitimate claim for
the products of his effort. Therefore, it is unthinkable in
Islamic economics, states Sadr, for someone to employ others
and provide them with rent and tools, where he alone owns the
products of their labour. Likewise, industries and production
enterprises that employed many labourers, in an Islamic state,
can only function if they are owned publicly. There is no way
in Sadr's theoretical vision that an industrial capitalist
production can evolve in an Islamic economic system except
through state's direct involvement and control in the economic
development. The state, in the name of the society which is the
sole owner of the economic resources, can employ people and
pay them only wages for their labour and not give them a share
of the produced commodities.
Furthermore, since the utilization of the economic wealth of
the environment is the responsibility of the society as a
whole, the sole proprietor and beneficiary of the natural
resources, society gets a share of the product extracted from
the primary commodities. The state, in this stage of
production, has the right to collect what is known as tisq
[property tax] from producers to finance the social welfare
expenditure and meet the economics needs of the people.
As
for the production of the secondary commodities, Islam gives
the owner of the primary commodities the right to establish
his claim to the final products. The legitimacy of his
ownership does not cease because someone aids him in
transforming his commodity into different forms. An individual
if s/he owns the raw materials, then s/he has the right to the
manufactured commodities produced out of that material. To put
it plainly, the worker, in this case, does not only own the
product of the natural resources but also the produced
commodities in latter stages of productions. If the state, for
example, extracts or mines certain natural resources through
its publicly owned enterprises, then it also has the right of
ownership of all the processed goods extracted from those
natural resources. People who participate in the production
should get paid for their labour. Industries to develop
natural resources, such as oil and minerals, theoretically
speaking, in an Islamic economic system cannot be owned
privately. It is because the state is primary owner of the
natural resources, which gives it the right to own the
produced product. However, there is a theoretical loop-hole to
make capitalist flourish in an Islamic economic system which
is through the leasing the natural resources from the state by
private enterprises where the latter can claim legitimate
ownership of the produced commodities.
In any case, the ownership is not affected by the usage of the
means of production belonging to someone else. The owners of the
tools and machines get paid for the usage of these tools and
machines in the production process. By the same token, the
owner of the primary commodities may also hire someone else to
manufacture his goods. The worker, in this case, gets the
salary for his labour, which should be specified in the job
contract. The worker, consequently, has no claim for the final
product he produces.
Islam
specified two means of payment for a hired worker: the first
one is through wages, where he is paid for the amount of work
he does in accomplishing a task; the second is the sharing in
the profit of the final product. In this case, the worker gets
only a percentage of the profit specified in the agreement
between him and the owner of the primary commodities. The
general principle, in Islam, for earning is:
...that
earning is only based on contribution of labour during the
process [of production], so the contributed labour is the only
legitimate means for someone to get paid from the owner of the
process...and without such contribution, there is no
legitimacy for his earning.
Based
on this economic principle, the owner of capital will not
receive fixed payment from the owner of the primary goods,
i.e., usury is prohibited. The monetary capital will not
contribute any amount of labour at all. Fixed payment is
allowed in Islam only in one case, when there is a consumption
of work, either directly through a worker, or indirectly
(reserved work) through the means of production. As for the
monetary capital, no such work will be exhausted or depleted.
In this matter, the owner of the capital is allowed to share
the profit and the loss with the owner of the primary
commodities. The legitimacy of earning, in this situation, is
based on his help in facilitating the process of production,
and he is deserving of gratitude and appreciation, which is
expressed in profit sharing.
The first task of the Islamic political system is to
eliminate forms of oppression within the economic relationship
and to lay the ground for the establishment of a just system
of distribution of economic resources. However, the source of
the injustice, according to Sadr, is neither the social
settings nor the means of production, but rather human nature
itself, the inner instincts of self-love that drive man to
secure survival for himself only. Such an instinct is
essential for the survival of human life on earth. Profit,
which is the economic manifestation of self-love and is
generated from private investment, is the great engine of
human economic accomplishment. It gives the individual the
personal incentive to work hard and to overcome difficulties
and challenges. However, when left without moral control it
will manifest itself in different forms of oppression. Man
will be concerned only with securing his own interests to the
point of abusing the interests of others. Unless a solution to
the problem of human nature is found, man will find the escape
routes to abuse even in the just system of distribution. In
fact, the social contradiction stems from the individual
prejudice of self-love. In the capitalist system, it manifests
itself in the form of economic exploitation of others. In the
communist system, where private property is eliminated, man's
self-love manifests itself in political oppression, such as
the struggle for power and the securing of special social
privileges.
Religion, according to Sadr, gives humanity the only solution
to these basic and deep-rooted problems of human nature.
Religion overcomes the problem of human nature by specifying
many channels of self-control that properly regulate or direct
man's instincts into the appropriate social behaviour. In
other words, it will end the contradiction between social and
private interests.
The
first of these mechanisms for self-control is a spiritual one,
the psychological power that makes man control his behaviour.
Man is the vicar of God, which means he is the representative
of the Almighty on earth. In the economic sense, he is the
trustee of God for the wealth created for mankind. This sense
of vicarage implies that man is responsible for his economic
deeds before God. Vicarage also means controlling personal
behaviour, and limiting the usage of the natural resources
according to God's will. Improper behaviour and the waste of
the wealth of God will make man accountable for his deeds and
bring severe punishment. In the same manner, abiding by God's
will guarantees a good reward and overwhelming gratitude.
It
is He who has appointed you viceroys in the earth, and has
raised some of you in rank above others,
that He may try you
in what He has given you.
Surely thy Lord is swift in
retribution;
and surely He is All-forgiving,
All-compassionate.
(4:165)
Accordingly,
man is expected to receive guidance as to how the wealth of
God should be distributed and treated. It is this link between
the here and now and the hereafter that brings accommodation
between social and private interests. Anyone who sacrifices
for the sake of others is rewarded. The religious solution,
then, is not materialistic, but spiritual and trains man in
the service of others, and in the sacrifice of private
interests for the sake of social benefits. In doing so, he is
serving and benefiting himself as well. In Islam, it is the
fear of God and the desire of His gratitude that replaces the
competitive greed of human nature. Once religion succeeds in
bringing up this man who has control over his inner instincts
and passions, the social order can be saved from
contradictions and individual abuses and manipulations.
Since
this goal is utopian in its outlook, Islam has derived a
social mechanism to secure peace and harmony in the human
society. God has assigned the vicarage role not to the
individual per se, but rather to mankind. It is
the social group that is the trustee of God over economical
wealth. They, as a group, hold the responsibilities of
managing the natural resources and human wealth to benefit the
welfare of the group.
The following Quranic verse refers to
such social responsibility.
But
do not give to fools their property that God has assigned to
you to manage.
(4:5)
According
to Sadr's interpretation of the above verse, God considers the
financial wealth of the ignorant as the wealth of the general
public. The whole society is then responsible for not allowing
any misappropriation of the ignorants' wealth. Such social
control over economic wealth makes the individual accountable
not only before God, but before his own people.
Islam
also disavows any values that a society attaches to the
possession of economic wealth. Affluence and economic
prosperity of the individual are not signs of social prestige.
Islam wants the individual to consider wealth as burdensome
and places a responsibility on the shoulders of the wealthy
individual to serve both himself and others. It is a means to
achieve the goal of humanity. Affluence should not be the goal
for the individual to achieve in his life, as in a capitalist
society, which makes man use all possible means to increase
his possession of wealth, even if it brings harm and oppresses
others' interests. However, if one thinks of wealth as the
means to realize the appreciation of God, then helping others,
not oppressing them, becomes the social norm of the rich and
wealthy. In other words, Islam is determined to change the
social values related to the possession of wealth and private
property. There is no need to abolish ownership of private
property as suggested by Marxism. The social policy of
elimination of private property, according to Sadr, will not
be successful because it goes against human nature. The only
solution is to reform social values in such a way that wealth
is changed from an individual goal to a social means to
achieve a higher moral goal.
The third part of the Islamic solution to the economic
problem, according to Sadr, deals with "fostering the
production and the utilization of the natural resources of the
environment to its fullest extent." God has created
an abundance of resources in nature to satisfy the human needs
on earth. Man, accordingly, is encouraged to use the abundance
of God's gift to his benefit. According to Sadr, "Islam,
ideologically speaking, has set the development of economic
wealth and the utilization of the natural resources to the
greatest possible extent as a goal for the society."
Islam is similar to capitalism in affirming this economic
objective; however, they differ in their approach to achieving
it. While capitalism "rejects any means of development of
production or increase of wealth that hinders the principle of
economic freedom, Islam, on the other hand, rejects those
means which are contrary to its theories of distribution (of
the economic resources) and its principle of justice."
Zuhd
( Austerity)
Notwithstanding, Islam, as mentioned before, discourages
individuals from pursuing strictly materialistic objectives,
downgrading gains in this contemporary existence. Sadr regards
economic prosperity as the goal of the virtuous society, not
of the individual. God, after all, has created everything on
earth and the heavens to serve the existence of man. Islam
only rejects materialistic gain as the ultimate ambition of
man, which in such cases leads him to the oppression of
others. Islam encourages zuhd [austerity] as a
pedagogy, which trains man not to consider materialistic
wealth as his final goal in life. Zuhd is man's
mechanism for self-regulation, which he utilizes to fight his
desires and direct his objectives toward God. However, it is
not the goal of social order of the faithful.
Suffice it to mention that affluence and a high standard of
living help mankind in his journey to God. Suffering can
hinder such efforts. In fact, there is direct effect between
man's relationship to God and his relationship to nature. The
more men strive for God, the more bountiful nature will be in
providing for man's needs. Social affluence is the sign of
God's gratification to man. On the other hand, man's thankless
attitude to God, of which his social injustice is the outward
expression or symbol, results in the ruin of the economic
resources and productivity, and the degeneration of man's
social existence.
Islam also expedites the social drive toward production in its
religious regulation. Under the Islamic economic system,
earning is exclusively linked to working. All other means of
earning and ownership are abolished. The possession of natural
resources is not considered legitimate without continuous
human efforts to develop it. Any type of earning that does not
require any human labour, in commerce as well as in
production, is forbidden. For this reason, the usage of the
financial capital to generate earning is abolished. The only
legitimate way to make use of the capital is to invest it in
the production process and share the risk of profit and loss.
To insure the utilization of capital in the economic
development, Islam strongly forbids the conservation of money
and initiates a yearly tax to downgrade any wealth that is not
enrolled in the production process. Additionally, any type of
useless economic activities, such as gambling, magic and
superstition, jugglery, is forbidden in Islam.
Furthermore, Islam made it a requirement for Muslims to
explore all fields of knowledge and seek any efficient means
of production in order to utilize to maximum benefit the
natural resources of the environment. The economic strength of
Muslims is analogous to their military strength. The power of
the Islamic political state is judged on the merit of their
economic progress and social prosperity. For this reason,
Islam places a heavy emphasis on the role of political
leadership to regulate social economic activities to enhance
economic development and eliminate waste.
As indicated in the theory of distribution, the Islamic
state possesses the sole right of ownership of natural
resources. Consequently, it has absolute control of all
aspects of economic activities. The owner of the natural
resources, or the primary commodities, according to Sadr, is
the sole owner of the secondary commodities. Basically, the
government of the Islamic state can determine the flow of
wealth in the society and define the economic process. The
major objective of the Islamic state is to set up policies to
develop the natural resources to the fullest extent to benefit
the entire bulk of the society.
To
achieve such an economical objective, the state has the right
to distribute the social economic resources to attain the
maximum amount of production that brings prosperity to all
people. The state has the responsibility to provide the
minimum of the essential needs of the society and ensure the
economy of the people. It is unlike the capitalist state,
which leaves that function to the fluctuation of the market.
Nor it is like the Marxist-Leninist theory that advocates the
state control all aspects of the economic activities. The
Islamic state sets the direction of the economic activities,
while giving individuals the right of private ownership to
achieve the social goal. The government has the role to
oversee and regulate economic activities. Accordingly, Islam
has left the government with a high degree of flexibility in
developing new regulations to meet rising economic
circumstances. Sadr called the absence of restrictions in the
Shari'ah as manatiq al-furagh (the discretionary sphere
of the law), where the jurist has the authority to make
judgments and rulings according to the principles of
jurisprudence. He considers this area of legislation on the
part of the law-giver as a realistic approach to ensure the
development of economic activities and the means of
production. The leadership of the Islamic state then could
initiate any new legislation and regulations that they see as
appropriate to the new rising circumstance in order to meet
the economic needs of the people and secure the maximum
utilization of the economic resources. In other words, the
Islamic government is free to adopt a wide range of economic
policies from full control of the economy to free-enterprise
in order to achieve its social goal. In this case, the
government must depend on the economists and experts to watch
for the best possible alternative policies to set the
direction of the state economy (provided that it will not
overrule the theory of distribution.)
Social
Welfare in an Islamic State
Such
an unlimited role of government in the economy of the Islamic
state is justified because of its substantial social
involvement. The state is responsible for the social welfare
of the all people. The economic resources in the Islamic state
are distributed not only according to work and ability to
produce, but also according to needs. Not all people in the
society are able to work, or if some do, they are not able to
satisfy their needs. Sadr identifies three economic classes in
the society:
-
those who have the mental and/or the physical
power to produce more than their needs
-
those who are able
to work, but only to the extent of meeting their essential
needs; and
-
those who do not have the mental or the physical
power to work productivity.
The government's responsibility is
to provide for the needs of the latter two classes, which are
not limited to the essential human needs. The people in the
Islamic state must live in dignity, i.e., their economic
status must be raised to the acceptable general level. Therefore, the state must have the economic resources to be
able to finance the social welfare program.
Whatsoever
spoils of war God has given to His Messenger from the people
of the cities belongs to God,
and His Messenger, and the near
kinsman, orphans, the needy and the traveller,
so that it be
not a thing taken in turns among the rich of you.
(59:7)
The
verse, according to Sadr, indicates two things: first, the
allocation of economic resources between the government and
the needy people; and second, the distribution of wealth in
such a way as to prevent the rich from controlling the state
of the economy. Based on the above interpretation, Sadr argues
that the main principles of Islamic economics are:
-
Public
(i.e., state) ownership of the means of production and
distribution; and
-
Centralized economic planning.
It is only
through the control of all the resources in the community by
the society that the common need of the society to be
protected is guaranteed, and the essential economic rights of
the individual are insured. Accordingly, the legitimate
Islamic government has the responsibility to make a long-term
plan for serving the common good and overcoming instability in
the market.
Islam
recognizes differences in income between people, but strives
to create equitable standard of living. To realize such
a socio-economic condition, Islam, although it specifies fixed
taxes to be collected from the prosperous people, establishes
a social and moral mechanism. A lavish and extravagant style
of living is totally discouraged in Islam. Islam also forbids
waste in production and consumption in order to direct the
resources of the economy to produce the commodities that
satisfy the needs of all people and bring about social equity.
The state also has the authority to regulate wages and prices
so as to overcome the selfishness and greed of those who
possess economic wealth and ensure an equitable standard of
living for all people. In sum, the major goal of the Islamic
state is for the prosperity of all citizens.
©T.M Aziz © Photography
by S. Abidin
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