Human life is largely based on goods and services, which is commonly referred to as the economy. While light, heat, air, and water are naturally found, while food resources require human labour and capital investment.
Therefore, labour and capital are required to produce and deliver goods and services, while acquiring such wealth is today's economic problem.
Before the invention of currency, the barter system was used to obtain various necessities of life. However, this system had many problems, and the currency was invented to solve it. Currency has become so crucial that our era is now called the "Age of Economics."
The Problem with Currency and Usury
While the currency has solved the problems of the barter system, it has also become a new issue that has caused ongoing dilemmas for humanity. Through the power of the currency, developed nations have exploited underdeveloped and non-developed countries, and the curse of usury has further reinforced this, stranging the dignity of humanity.
The Islamic Perspective on Usury
In Islam, taking compensation for capital (regardless of its form) is known as interest (riba). However, according to the Holy Quran, compensation is for labour, not capital.
In the Holy Quran, Chapter 2, verses 275–279, Allah has declared usury as haram (forbidden) and stated that Allah decreases usury and increases charity. Furthermore, it is said that if you do not give up usury, then be prepared for war with Allah and His Messenger (peace be upon him).
One simple step can change today's economy
Islam establishes a system for the economy in which individuals (elite capture) do not have ownership over the nation's resources like land, government entities & industries, tax monies etc.
Instead, the government is responsible for fulfilling the needs of every citizen based on the citizen's skills and net worth.
In the Holy Quran, Chapter 59, Verse 7, Allah has laid down the fundamental principle and rule of the economic policy of the Islamic government (and society) that the circulation of wealth should be shared throughout the society.
Elite capture is a form of corruption where a certain group of individuals abuses their social-economical and political power to control the masses for their own personal benefit.
The methodology used by elite capture is to influence or take a governance position within the government and launch such schemes and projects, legitimising the diversion of national resources towards the elite class without labelling such acts as embezzlement or corruption.
The money does not circulate among the masses in the elite capture system. Instead, the money flows from poor to rich, known as the hitman policy.
Further, certain legislation and laws are passed to legitimize such hitman policies. And this is what has been happening in Pakistan since its inception.
Everyone should work according to their abilities and skills, fulfilling the country's needs. The government's task is to tax the rich and spend it on the poor.
The Importance of Spending for the Sake of Allah
Islam's economic system primarily depends on spending for Allah's sake. Since it is impossible to provide equal employment to all people, and not all people have the same abilities for work or business, spending for the sake of Allah ensures that wealth is distributed evenly.
Hazrat Umar Farooq's decision to fix the stipend for children as soon as they were born is a glimpse of this economic system.
The GDP as a Measure of Economic Condition
Today, the index used to measure the economic condition of any country is its GDP (Gross Domestic Product), which varies from country to country based on its financial situation. In the current economic position, Pakistan's GDP should be between 3.5 and 4.0 to reflect the economic conditions of the time.
The Importance of Implementing New Economic Policies
A gradual increase in GDP will reflect the success of the government's economic policies, which require implementing new economic policies with the essential elements of eliminating interest (riba) and increasing productivity. The government's top priority should be to address the dangerous situation people are witnessing in society, where wealth (capital) only circulates among the rich, and the poor keep getting poorer.
Thinkers Page was founded in 2022 by two professionals, Usama Zulfiqar and Muhammad Aslam Ch, to offer their opinions and thoughts on numerous subjects that affect human lives and society at large.