The Amazing Islamic Economic System

Abdullah al Andalusi


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Episode Notes

The Solution to Poverty – the Islamic Economic System

University of East Anglia

15th March 2013


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The speakers discuss the human economic problem of poverty and the importance of maximizing resources and maximing production in achieving the solution to poverty. They emphasize the importance of planning for supply and demand distribution, balancing social and political needs, and using natural resources. The negative consequences of the caliphate system in Islamic banking, including the loss of money and the need for a state-approved legal system, are also highlighted. The speakers emphasize the importance of protecting people from fraudulent behavior and creating a base for life rather than just a political figure. YouTube is also mentioned as an educational tool.

Transcript ©

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Good evening, everyone.

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Peace be upon you all.

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Thanks for coming. My name is Mohammad Patel. I'm the president of the society.

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Yeah, so we organize some awareness week. And this is our final talk. So thank you all for coming. I'll also be your chair today. So yeah, the format of this evening will be a talk by brother Abdullah. And then there'll be a q&a session that we will look to finish around eight o'clock ish. All right. So the title of the talk is the solution to poverty. The Islamic economic system by Abdullah andalusi, just typically via by the speaker Abdullah andalusi, is an international speaker, thinker and intellectual activities for Islam and Muslim affairs. His work involves explaining and demonstrating the intellectual proofs for Islamic beliefs and promoting the Islamic way of life in

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Islam solutions for contemporary problems. Abdullah andalusi is a Christian Portuguese descent, but embraced Islam after 14 at 14 after a period of study that started when he was 10 years old. He has continued to study Islam in depth ever since. It's spoken in community centers, universities, colleges, and as numerous appearances of various TV channels, including BBC, ITV and Islam channel is also engaged in a number of debates with atheists, atheists, secularists, agnostics, liberals and Christians on a variety of topics from theology to political philosophy. In 2009, he co founded the public discussion forum and Muslim debate initiative, a forum that promotes open dialogue and

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critical debate between thinkers, academics, politicians and public speakers of all backgrounds. So without further ado, I'd like to introduce Abdullah andalusi.

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Assalamualaikum aleikum wa barakato peace be upon your

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mana Rahim al hamdu Lillahi Rabbil alameen wa salatu salam to be Karim Hamad Al e tv or Sufi Salim

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thank you to the University of East Anglia, Student Union and Islamic Society for inviting me and thank you all for coming for is very, very, I think, very pertinent topic, considering the current global situation with the very long long recession, which is, which is still ongoing. There's there's much suffering, not just in third world countries from compound debt, but it's also suffering in, in western countries, from people being unemployed, from industry slowing down. And I suppose the main issue would be the concentration of wealth, the wealth gap between the rich and the poor, which is, you know, getting larger. Now, I think these kind of questions. And this time,

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people started to question again, the, the, what's called the capitalist system. And some people said, No, we didn't see this recession coming, even though it's kind of very predictable. I mean, it's been this has been a cyclical nature with booms and busts in western economics for centuries. So I don't think it was anything surprising. But people started to ask questions. Now, obviously, the only alternative you think about is that there's communism, communism is the only alternative to the current system that we have. And of course, if you want to go down that route, obviously, we've had bad experiences, the world is that bad experiences with the communist economic system? So I

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suppose the world is in a bit of a quandary as to what are the solutions to go with.

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But I think that

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also, it's not just with the stability of the economic system that we have to look at, but also what the economic system, the political ramifications of an economic system are what has caused throughout the world. So we see for example, because of economic systems, because economics and because of the desire for resources, there's many wars occurring in the world and we see a revival of of neocolonialism in some some countries, especially in third world countries and so on, who are still struggling to free themselves from from the shackles of, of foreign control, especially their markets, you know, which is which is even worse than being under military occupation. So, if your

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market is under control, mainly due to, you know, compound interest.

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Now, there are basically three worldviews and philosophies concerning economics what is called the human economic problem. Obviously, there's, there's liberalism was called liberalism. Now, it used to be called libertarianism, but the economics facet of this of liberalism is called capitalism or you know, as capitalism. The second obviously, is communism, and I've heard I'd like to posit is Islam and each of these three worldviews has a different approach to the human economic problem.

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Now, we'll start with a

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Suppose the capitalist economic system, it frames the human economic problem as being one of humans have infinite needs, or infinite wants. And there is only scarce resources.

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So considering there's infinite needs, that humans will have infinite need for resources for service and things, but there are scarce resources, it poses a solution, which is maximizing production. The solution to this problem is quandary is to maximize production. And then hopefully through the what's called the trickle down trickle down theory, I suppose that if you maximize production, eventually everyone will get a share of the pie and get a share of the resources.

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in doing this, it will implement implement this this kind of trickle down distribution system through privileging entrepreneurs with incentives and tax break, entrepreneurs are seen as the kind of the spearhead of capitalism. They are the driving force of capitalism, about entrepreneurs, you wouldn't have development and growth, according to the capitas worldview. It has an overly permissive approach, I would say, to ownership and disposal with unrestrained means of disposal and of property and ownership, for example, you have interest banking, which started a system whereby you'd have money, big money, just from money, rather than you'd make it from investment. And this

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crazy idea that money is dead. So money is not no longer means of exchange, but money itself is dead. So it's up to the bank, to give you money, or the bank, even to print money, it's already dead. So with that, you know, the the Bank of England and the Federal Reserve Bank, which is not contrary to the name might depict. It's not the National Bank of America owned by the government. It's a private bank, and it prints money. And it prints money at a debt to the government, the government. So basically, the US government needs money for circulation, it will ask the bank to print this money and say, right, well, we'll make this money. But you have to pay us back,

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obviously, with interest. Of course, one wonders, then what how you What can you pay them back with? If they if they're the ones who are making all the money, printing it rather than how are you going to find the money to return that plus extra.

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And, of course, fractional reserve banking. So again, you know, this, this, the belief that we have, we can

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use all kinds of different ways of making money unrestrictedly LED banks to I think, quite unscrupulous they use fractional reserve banking, which is basically that they noticed that when you deposit money into the bank, that people generally don't you use about 12, or 13, you know, pass, what, 12 parts per 13. So what they did is they will lend that money out. So the money, you put $100 in the bank, or 100 pounds in the bank, and the bank will lend that out 13 times, to other people claiming to everyone that it lends out to that, don't worry, you know, this is money in the bank. So we're lending out to you, hoping that, you know, what we'll do would basically come to that bank,

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and withdraw that money at the same time. So if everyone, if everyone withdrew their money, at the same time, the bank would have to basically collapse, it would need to be bailed out by by the government. Because all the money it's basically is basically giving lending is actually doesn't actually exist. But it balances his his books by basically, if it, if it gives out money, it puts up in its account that there's a minus. So basically, when it gives that money, and it puts in his cows, a minus, on the accounting books, it looks like it's balanced. But really, they're actually, you know, inventing money, and then lending out and the fractional reserve banking is one of these,

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you could say, innovations which occurred in the capitalist system.

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And of course, in such a situation, when you need the entrepreneurs, to develop your economy, to grow your economy, you have to, but you have to basically, you know, give them some some latitude, give them some, some privilege. And, of course,

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when you do that, when the bill comes when that when you obviously have to, I mean, obviously, the money starts being concentrated in that in a society, who's going to pay, who's going to basically bail out the banks, it will be you the people. And when you bail out the banks, you're basically with with your own taxpayer money, you're basically paying the banks to lend you money with interest, basically, and this is, I think, some of the things which which, you know, has occurred, due to the idea that, you know, you'd have a very liberal approach to innovating kind of financial products and financial services, without no regard to the possible consequences that this might have

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such as obviously, inflation and interest is primarily the primary cause between concentration of wealth if you consider it and just think about how the process works. You have let's say, let's say the rich 1% over the richer the banks on a top and you have, you know, the remaining

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Let's say you have, you know, the meaning 99%. Rather, it's more like, right, they have 1%, then you have like the next 20%. And then you have the remaining 80%. Now, if you need, if you're one of these 8% people, and you need to basically

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have money, you need to quickly have money start business, you don't have the capital, so you have to ask that 1% of that 20% for the money, and they will lend it to you, with expectation of you paying back more than what you

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took from them. Now, okay, so you make your business and you sell it to your fellow poor people, and you make some profits. When the time comes to pay the piper, you have to pay back the principal, some back to the bank, plus the additional, you know, what was owed in interest.

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If you look at the net direction of money, where is the net flow of money, it's not going from the rich to the poor, the net flow of money is going from the poor, to the rich. And this is, this is the basic principles, why you have concentration of wealth, due to interest banking.

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And also, in the cabinet system, it has this understood this

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conception of human called the economic man, that basically what drives human beings is the model it uses is that no economic purely economic concerns, so that we'd be you know, humans would be would be the most efficient, you know, creatures when it comes to getting resources, and then disposing of those resources. But what it doesn't understand

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what it maybe ignores, is that humans can, you know, not just business, we're not businessmen, or business women, we're human. And we have many different drives and desires. Sometimes, for example, we'd want to donate money, just give money away to for spiritual causes for social causes, you know, not not just as part of some, you know, very shrewd investment. So there are many different motivations behind the human being beyond just purely the economic. So looking at human beings as the economic man, you actually framed humans as being very materialistic and selfish, but human beings have a capacity to be beyond materialistic and selfish they can they can actually be very

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altruistic. Now, okay, you hear it's very cliche about concentration of wealth. And it's cliche about you know, I mean, we've all heard about the fractional reserve banking problem, we've all heard that money is debt, and you can't have money without debt, you know, these two things are interlinked. But it wasn't always so. And I there is some evidences. I mean, there is very strong evidence, which I think many economists know here, of why this, the cabinet system has led to the kind of lead to concentration of wealth. And you see evidence for this, for example, the world Institute did a study for the filament economics research, and concluded that in the world globally,

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as you know, it's no mystery to many students here. 40% of global assets, 40% of global assets are owned by 1% of the population of the world.

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And, of course,

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50% of the population of the world, only own 1% of global assets, and finances.

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If you think that's bad, and you think that's just bad, globally, let's go into the rich country just go to America, you know, America, great standard of living living, according to the Hollywood movies at least. And you know, that they will pay this is very rich country, obviously, it's, it's benefited quite a lot from its economic adventures at the point of a gun. And it's basically been, you know, it's viewed as a very rich country, which has opportunities for all. But even in America, we actually see the same kind of concentration statistics we see again, in America, 1% of households, own 35.4% of all privately held wealth. So even in America, you see very similar

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concentrations of wealth.

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And we see that the the bottom, the bottom 80% of the population of America, Americans on 11% of the wealth in America, so we're seeing that even in a rich country, which implements capitalism, there is this concentration of wealth attributes.

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Now, if you might think, okay, sure, concentration of wealth, so what I mean, okay, so maybe, maybe, you know, you get the Bill Gates and you get the, the, you know, all the Donald Trump's and all these people, that's fine. But just because they have enormous, enormous wealth, and maybe even the largest share of the wealth, how is that a problem? How is it maybe that's not really an issue as everyone gets to eat, and everyone gets to live in the household? And that's fine, isn't it? Well, that's the problem, because not everyone gets to eat and not everyone gets to live in house, or at least not they don't get to eat from their normal means. For example, in 2008, it was discovered

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that 15% of American households were not food secure for the entire year. Not food secure. I mean, it's this in the country where one in three people are obese and there are 54

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And of households that were not food secure, even if you're just looking, you know, in the UK,

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you know, the UK consumer group, which noticed in 2011, that one in four people in the UK had to use their savings to buy food and the daily essentials in the UK.

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So so it's not just concentration of wealth is like, you know, maybe it's just something for the random, you know, socialist in speaker's corner, Hyde Park to rattle about, but rather than actually, there's actual effects we see on the ground. And of course, I mean, we know that other aspects of capital, which I will go through by juxtaposing with the atomic system has led to all sorts of problems such as obviously inflation, for the for the fiscal inflation,

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mainly due to quantitative easing, already called printing basic printing money. Basically, they previously print lots of money, the values, the money, we see that there's excessive production and waste, excessive wastage in, in western Western societies from food and from produce. And of course, further afield, we see that in many countries, who are the people who make the clothes you're wearing, and they make it for a pittance working sometimes 16 hour days, some of them a lot of them are kids, that slavery, as we call it, a wage slavery is a modern day wage slavery. And of course, we see that if you have to maximize production, and there's only a finite number of resources in any

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you know, I mean, in England, probably doesn't have any as much resources anymore for its modern industry compared to overseas industrial pollution when it used coal. And coal was a was abundant in England, but now how to use it uses petrol uses nuclear power, it has to get these resources from somewhere it has to maximize production by getting these resources, so does America. And how do they get that whenever they need to keep feeding resources into their into this juggernaut of their economy, otherwise, you'll see a collapse if there's no more resources to kind of facilitate the poorest people, hopefully, for this trickle down effect, you might you might get certain problems,

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your witness, so they have to go out to other countries, and they have to buy one, one means or the other, either, you know, diplomatic diplomacy through negotiation, a lot of time through, you know, economic bullying as it did in South America. And of course, in warfare if they need to. And this is the cause, that they that's motivates them. And we see this Thank you.

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Now, I've made a lot of assertions there. And again, I'm going to revisit those assertions when I juxtapose the Islamic solutions to a number of those problems, and then we'll we'll see the comparison for yourself.

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What about communism?

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Well, okay, communism is not really the system, which is practiced by many countries today, short of North Korea, and Cuba, although Cubans have good health system. But

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it is, obviously since the collapse of Soviet Union, people don't really take it seriously anymore. Whenever there's a recession, though, they will go to the book shops and buy more books of Karl Marx's Das Kapital, to make them feel better.

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But in essence, anyway, how communism views the kind of the humans. And this is a very gross simplification, because there's many different strands of communism, there are communists who probably all agree with this. But generally, the main stream of 40 is basic data matters, the basis of all things, all things matter. And the production of the material things is by the workers. So workers are all that matters. That is basically it. Okay? It's a very crude and simplified nutshell. But in essence, to the proletariat, the workers are the only thing that that matters. And we are all equal, in that, in that we all matter. We're all part of the part of the kind of dialectical

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materialism worldview of communism, we're all equal. And so, everyone deserves or should get equal share of what is produced by the economic system.

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Although this varies according to different kind of communist schools of thought. Now, he agrees with capitalism on one on one the basic things that production is that the problem, so it has to maximize production.

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But when it comes to distribution of wealth, it achieves that by most most predominant school believes in original equality. So whatever profession you do, and how much better you are at it than your colleague, you deserve to get the same wage, if you have, you know, the same number of people in your family to look after and so on and so forth. All things being equal, you get the same wage as anybody else, irrespective of your ability or merit.

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Now, there are problems with the, with the communist economic system, mainly because private property is seen as theft.

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No one can own any property, it's rather it's we all collectively own the property. So how they tried to manage this is that for a number of ways, many different means and it all sometimes

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contradictory, but in essence, they allow a free market, they don't believe in a free market. And in order to kind of regulate supply and demand, they use a plan the economic system, so they plan it, they plan how much supply be produced, and how much and you know, who, how it will be distributed, and who gets to have this distribution, and so on. The problem is that economic system is so complex, because it involves a whole number of human beings, you know, millions of human beings, that you just can't plan it, you just can't plan. That's it's that sophisticated level, because you see, if I want to, if I want to increase production of, of folks, for example, I need to have metal,

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and I need to have refineries available. And if I increase production of metal and divert it to, to folks that will be less metal being used to make life support machines, probably, or to make, you know, baking tins, or whatever. And without using the kind of the mechanism of supply demand and price, it leads to problems, because what you'll get, you'll get shortages that you didn't plan for See, this is why in the communist and Soviet system, we saw that people have, you know, lacked sometimes many times basic basic goods like bread and meat, and so on, so forth. So the human economics is too sophisticated for planning complex system to be to really cater for the

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intricacies, and sometimes the sheer chaos of the economic system. And, of course, that the main the main contention against communism is that humans need an incentive to work they have to, they need an incentive to improve their work and develop. Because if you if you're going to pay someone exactly the same amount of money, irrespective what they do, where is the incentive for them to improve themselves, whereas incentive to overtime, and to be able to do have attention to detail, you just can't have faith that people's

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materialistic worldview will generate in people a desire for the greater good. When you know, human beings don't work like that. I mean, we want to see some kind of reward or we want to feel some kind of reward by some means. Of course, communists then develops a way of motivating people and they will call political offices or commissars, and the trip to your family or expensive patriots or go to a gulag, so you can, that was one way of motivating people. But unfortunately, it doesn't, doesn't really help

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a vibrant and dynamic economic system. So then what about the Islamic economic system?

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Well, this is going to be some pretty radical humans have finite needs.

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Food, clothing, shelter, how much food do you need to eat, survive, and still comfortably survive comfortably? How much shelter do you need? Do you need a massive palace to survive? You know, this, everyone must ever want to have 10 houses or five houses or infinite number of houses, and so on, you know, how much clothing Do you need, or friends, Paris Hilton, she probably doesn't need infinite,

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and so on, that probably refutes me. But when it comes to anyone else, it's only a finite amount of clothes, you need to survive, you need a finite amount of energy, I hate to keep yourself warm, depending on where you live in the world of the climate. And, of course,

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you know, these things, these things have basic finite requirements to be human to live as a human being. Of course, Islam also looks into other other human needs, such as the need the right to have a reproductive partner, and also health care, and education are also rights.

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And they also finite, I mean, we need only so much medicine you can take, and there's only so much education, you know, you can take up to the limits of human knowledge. And then obviously, you'll be doing a PhD or something. So these are finite needs.

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Now, Islam recognizes that there is a profit motive as which is part of the human economic motivation. And Islam ensures that desires are directed by profit motive, but also by a spiritual motive in values, altruism and philanthropy, not just self interest.

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Now, the slide recognizing human humans to seek Prophet, the prophet Mohammed Al Salam said, if the son of Adam was given a valley full of gold, he would love to have a second one. And he was given a second one, he'd want to have a third one, and nothing fills his belly except das, which is an expression in Arabic meaning that you know, he will be 72 is dead, basically. So, the problem having some is commenting that humans they need to acquire, they need they obviously they want to acquire, but at the same time, the Quran says, and it says to Muslims and Muslims, but seek in a food that which God has given you, the home of the hereafter. And do not forget your share of this world and

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do good as God has done good to you and design not corruption in the land. Indeed, God does not like corrupters this, I mean this, this whole the whole

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sentence that whole verse actually sums up the entire economic system.

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That using the means that we are given to us, using the money we have the wealth we have our aims as humans is to worship the Creator is to do good. It's to actually help people and feel that reward of helping people, for its own sake, that spiritual value is not a materialistic value. You know, if I donate, you know, half my paycheck, let's just say for example, to the poor, that's a bad economic decision for me.

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in a spiritual value, it's a very good decision for me.

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So in a nutshell, that whole verse actually kind of sums up the Islamic economic system, that even while even seeking the spiritual values, don't neglect your portion. So don't say, right, I show, you know, become a pauper on the street, go around, and bacon becomes some wandering spiritual holy mantle, something that nobody's telling you, you don't neglect your portion of his life, you don't neglect it, right? You show that your discomfort to your family, you should compensate yourself, you improve the circumstances of your of your life, you improve the circumstances of your family, and your neighbors and so on. But your main drive is to do good in this life is to is to worship God.

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the Sunday economic human economic problem, then is not one of production. Its distribution. That's the Islamic economic problem, that this is what Islam and some thinkers will devote our lives to, is how do we distribute the wealth to satisfy everyone's basic needs as humans? And as for the issue of luxuries, or that is less a fair, right, you know, let the profit motive motivate you to get luxuries, that's fine. But we need to focus on satisfying everyone's basic fundamental needs to a comfortable standard.

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Now, I was once I was on the big questions on BBC One once, and I was brought on talk about

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Christian Pentecostal spiritual experiences. And they wanted a Muslim to kind of mix things up and say, like, you know, let's bring a Muslim talk about Christian Pentecostal mix experiences. And but one of the, one of the questions in the big questions was about, you know, was the pope right to condemn, you know, capitalism? And I thought, you know, Okay, I'm gonna get my shots in here, you know, I'm going to actually, you know, talk about Islam economic system. So I did.

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I was only very briefly menial, so to do so before they kind of cut me off. And then this, this kind of one of these staunch advocates of capitalism, but I mentioned about distribution is the is the is actually the more important thing. But what about production without production? You know, you wouldn't have resources, you wouldn't have the, you know, the kind of the things to actually

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consume. But someone understands that production takes care of itself.

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Because, firstly, in an economic system, when there is a high demand for something, and there's a small supply of it, in any entrepreneur in a system, and then entrepreneurs occur naturally, of course, they do, you know, rich people, people that have been to people that have a great idea. And they'll say, well, there's, you know, the height, the market, I can make a lot of money if I just increase the supply of this, or find new supplies of it. So production always takes care of itself, to focus on production myopically and ignore distribution, you know, this is absurd. Production takes care of itself. The economic system, the whole point of an economic system is for distribution

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to think rationally. Why Why do you even have an economic system? What is the point of an economic system for any ideology or any, any people throughout history? It's everyone lives in different parts of the world. For example, we all you know, in our parking lot, we all have little resources, and we can access those resources. That's not the problem. That's not an economic problem. Rather, it's how does each human

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get exchange those resources to other humans who have different resources of benefits? That is, that's what the most rational conclusion the first conclusion I've come to mind is, how do we do this? How do we exchange why because we need to actually distribute all the different resources because obviously a farmer might make corn but he needs to he needs to drink milk his family's drinking milk nice drink water isn't maybe didn't have water needs to get from somewhere else. So then it The question is naturally distribution, and not production. But Islam encourages mankind to seek and develop natural resources. We see in the Quran, God's system to Muslims, it is he who

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created for you all that exists on earth, and none of us and God says, Allah is He who puts at your disposal the seeds that the ships may sail by his command, and so you may seek His bounty. So seek the bounty which God has placed on the earth for us to use. And again, the God says in the Quran, he put at your disposal that which isn't the heavens and the earth, or is from him.

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So Islam motivates Muslims to exploit resources to find resources and to produce

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and transform these resources into that which is useful for mankind. So we do have the incentive to produce, but distribution is the more important

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Now, Islam has pretty basic in our stomach, you know, economic principles in this matter, it one is ownership, two is disposal of ownership, and three is distribution of wealth amongst people. First and foremost, we believe that all wealth belongs to God, and you can't really own anything rather we given you could say the least, so to speak, to use it while we're on this earth. So we see in the Quran, it says, and give them from the property of Allah, which he gave you,

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and spend from what he puts you in charge of this is we believe that God has put us in charge of the wealth to all wealth belongs to God.

00:30:46--> 00:30:58

Now, I've said about you know, production, so distribution is the site we need to, you know, look at rain seriously. But how does Islam manage distribution?

00:30:59--> 00:31:19

Well, first and foremost, contrary to what people might think, when I was going with this, Islam does believe in promoting a free market system. We see in the Quran, it says, Oh, you believe squander not your wealth amongst yourselves and vanity except by mutual trade. We see in the Quran, it says God has permitted trade.

00:31:20--> 00:31:35

We see that Islam allows supply and demand to determine the prices. So we see that the Prophet Mohammed amendment of the Prophet Muhammad SAW them and asked him if he could fix prices for a particular reason. And the Prophet Mohammed said not rather it is God who reduces and increases. So if you have a

00:31:36--> 00:32:07

firm that you can't fix prices in Islam, we actually can't you're not allowed to fix prices for all commodities. So it is actually supply and demand which determine price. And Islam believes and advocates trade. So it's not believes in what you might call a free market, but a free market with some things, something which are prohibited, and some things which are restricted, but within which your has permitted. It is no there's no regulation. And I'll discuss what I mean by things which are prevented, not prohibited.

00:32:08--> 00:32:16

First and foremost, Islam views, the distribution of wealth will come naturally, what you need to do is prevent concentration of wealth.

00:32:17--> 00:32:32

That's how you attack the problem of distribution is basically Yeah, people will trade normally, and you know, the price and amount of thought that the free market system will allow you to have resources. But the problem is preventing concentration of wealth. And Islam has a number of

00:32:33--> 00:32:41

kind of solutions to prevent the concentration of wealth. So we see that first and foremost, Islam prohibits interest.

00:32:42--> 00:32:46

And we see the Quran that God has committed trade and forbidden interest.

00:32:47--> 00:33:22

So we see that in a person that doesn't actually respond to people who said, Mohammed, it was some, some some Jews who he goes he engaged in interest. And they said, Well, you know, interest is like, just like trade, you know that the both of saying no, you invest in it with capital, and you make more money out of it than you put it in, hopefully. So it's the same. But the cron rebuked the person who was questioning this and said, Well, look, God has committed trade and forbidden interest. If they were the same, then how could you distinguish the difference between them? You see, and that's under the cron me that were made a very eloquent reputation.

00:33:23--> 00:33:29

with purpose and interest, you have to understand why was money invented? Why was it invented?

00:33:30--> 00:33:56

I mean, if you think about it, I mean, obviously, as you know, from a barter economy, it's not very convenient. You need to obviously exchange goods, which might not necessarily be your neighbor has. So you need to have some some kind of store of value, or to store of services or wealth. And this is what money was about. This is why it was invented, it was meant to be a storage of wealth, storage of value, so that you could trade that's the point of money.

00:33:58--> 00:34:10

The point of money wasn't to be a system where you can you can play games a bit, and then get more money out of that to not do any economic exchange at all. Just, you know, just exchange playing games and exchanging money and so on.

00:34:12--> 00:34:46

Islam believes that money should be based on gold and silver by metallic system. So it can't be printed by a private National Bank. And so the financial system starts out already free from debt. So you don't have to say money is dead. Money equals death in the society. And it's not a closed system. Money has no equal debt. Money is a commodity of itself, because it's made from gold and silver, these are commodities. So it has intrinsic value. And of course, obviously, you won't see the kind of inflation that will come about when you use quantitative easing, is it printing money.

00:34:48--> 00:34:49

Islam prevents

00:34:50--> 00:34:59

private and state ownership of public resources which provide water and energy for the people. So basically, there are the National Energy Resources

00:35:00--> 00:35:35

You know, like gas and coal and maybe nuclear power, no one is allowed to own them. It can be privately owned, it can be owned by the state. So I'm not we don't believe I'm not calling for nationalization, rather, it belongs to everybody. And we see that everyone has a right in these resources, because they belong to everyone. So we see, for example, puzzlement of the Prophet Mohammed sauce and asked him, can you give me an area of land has some salt there, I could find that to make some make some money from that, for mining that. And so the problem, hamming distance education issue, you know, you can, you can take it, and then someone who knew that area, knew that

00:35:35--> 00:36:11

land, went to the Prophet heard and said, you know, a prophet of God, did you know that in that place, there's actually a vast quantity of water, vast quantity of water. And when the Prophet had heard about this, he would call the guy and said, I can't give it to you, you can't, you can't receive it, because that water belongs to everybody. It can't be privatized. And you see, you see, part of construction of wealth is that these energy companies who privately owned the activity, obviously access to these resources, and they sell it, they sell you basic needs, and making a profit on it for a large profit as well, we see with, with the current energy companies, raising

00:36:11--> 00:36:20

prices, and so then making the making the kidding, in terms of in the current in the current economic environment, even though there's a recession, you know,

00:36:22--> 00:36:28

people who are rich or those that 1% should not have control over your basic needs.

00:36:29--> 00:37:10

And so, as long as the system of solving that problem, which is that the people will pay collectively, just enough to extract that and deliver it to them. Some obviously, back in medieval times, or pre medieval times, it was a well, you don't need to pay the one, you just got to the one use it. And no one, as long as no one stops you from going to that well, of course, but in this day and age, in a modern economic system, when you need to extract minerals and extract in a large mass of oil, and so on and so forth. There could be companies, which are hired out by the state, on behalf of the people to extract that and provided to you at cost price. And of course, the incentive

00:37:10--> 00:37:56

to improve production would be that if they can improve production, they could actually make more than that material and in decrease the price for you. So the state has a reason to even improve how it extracts those resources. But that the state can't own that money. And neither can any private individual own that money it belongs, the actual resource belongs to the people. And we also see that in Islam, contracts and debts are not commodities that can be sold as shares or derivatives. Did you know this is this is absolutely shocking when I encountered this, the world's GDP, the globe, the gross GDP of the world is $65 trillion estimate of $65 trillion that no, they do not

00:37:56--> 00:38:04

evaluate the derivatives market, the value of the derivatives market, which is basically you know, like you know, happy to sell some debts and sell all kinds of

00:38:06--> 00:38:12

kind of all kinds of financial products and things like this is worth close to $600 trillion.

00:38:14--> 00:38:20

The world doesn't have I mean, the world's you know, GDP is only about 10% of the derivative market.

00:38:22--> 00:38:41

We also see that it with stock markets where people are buying and basically, in essence, you're buying and selling shares or contracts of your share in a company. In essence, you're part of that company. And we're in all companies are formed by contracts, they form by contracts, which incorporate the people into a company into a corporation.

00:38:42--> 00:38:50

But what people do in stock in the stock exchange, as you know, is they buy and sell, in essence, they buy and sell these contracts with the value of this contract, which gives you a share in that in that company.

00:38:51--> 00:39:01

Now, this has the effect of undermining the free market system, which we're using, you know, price and supply and demand because

00:39:03--> 00:39:25

nothing can change in the company. It could be you know, still have exactly the same supply demand same price when as good as products selling at the same rate everything is all the same. But let's say the CEO walks into his office one day bangs his foot falls down and the price drops of the company the value of the company drops for all kinds of things, for the the ideas of speculators.

00:39:26--> 00:40:00

And that money is you know the money which obviously is how much money the company can use. Can it can it can lose that it can lose the money use it for its liquidity because of speculation and nothing to do with a real a real world economic difference. And lessons imagine the real world economy and the stock market and derivatives as two tables one table people are buying are exchanging goods real life goods and services and the other table they are exchanging the value of or speculative value of the price.

00:40:00--> 00:40:05

is of the first table. It's a parasite economy. Why did you even have that

00:40:06--> 00:40:14

and it causes so much trouble when that when that bubble burst and derivative market we don't want to be invoked in that system. But unfortunately,

00:40:15--> 00:40:16

now we also say that

00:40:18--> 00:40:55

Okay, so as I said, that is you know, some prohibits the ownership of public resources. There is a reason I say this, the Prophet Muhammad SAW solemn said that the people are not prevented from free things, the people collected the document from free things, which is water, pastures, which means by that livelihood, and fire energy, so people are not prevented from free things. And this is where it will guarantee the rights of the people from being denied or having to have to pay for their basic needs, at a profit to the person who supplies it. Islam also prohibits gambling, as well, because gambling exploits the poor. As you heard the saying the house always wins. It's not a it's not a

00:40:55--> 00:41:14

game of pure chance where anyone can win, it wouldn't be a lucrative business and a stable business for the people that the companies that do that unless they knew they could make more money out of it than they put in. So it tends to exploit the poor. Whenever you see a poor area, or an area becomes poor, you see a whole bunch of betting shops open up in that in that area.

00:41:15--> 00:41:29

So in essence, Islam, as you can see, it's been consistently disapproves of increasing money from money. So increasing your money from just money itself. Rather, Islam tries to advocate trading investment, and I'll get to that in a second.

00:41:30--> 00:41:35

So that that was the primitive means of ownership of how you acquire ownership, there's also prohibited means of disposal.

00:41:36--> 00:42:14

So in Islam, people are prevented from holding wealth. Firstly, you're not gonna make any money if your wealth just sits in your bank account, because there's no interest. So what you so if you want to just get get spent over time as you as you spend it, with no return, then it's up to you. But in essence, there's no incentive for you to leave your money doing nothing. But even then, Islam as Muslims tells Muslims, we see it from from the Quran, God tells us and let those who hold gold and silver and do not spend them in the way of God know that a severe painful punishment is awaiting them in the hereafter. So as Muslims, we are spiritually motivated, to not hoard our wealth to be

00:42:14--> 00:42:50

scared about hoarding our wealth, because this will be silently punishable in hereafter. That's a spiritual motivation. But there's a lot of motivations, we see as it but there's no interest money, there's no money you make on your own, you're just hoarding. We see that Islam prevents monopolies as well on foodstuffs and basic utilities. foodstuffs are things that we need to eat, right? No one can actually have a monopoly on them. So we see the Prophet Mohammed Hassan said, no one monopolizes except the wrongdoer. And we know narration he says, it was reported that he forbade that all foodstuffs foodstuffs be monopolized. So no one can control the food you eat.

00:42:51--> 00:42:52

We all see that Islam

00:42:53--> 00:43:32

has said, This is what is prohibited. So this way, you're totally permitted. Now, once you put these things out of the way, and everything else, it's free, there's no financial regulation, no regulators over your shoulder, monitoring what you're doing what you're gonna, what you're gonna do with it, you can do whatever you want, you keep those sticky, keep interest banking and out of the way, and you keep, you know, holding out the way you can now do whatever you want. And what you'll see is that there is an encouragement is the correct way to spend your money, and not just hoard every day, all the money that went that was that was owned by people or was earned by people will be

00:43:32--> 00:44:04

spent back into the economic system is some economic system would be the most dynamic economic system because as you say, you know, you have this idea of create, generate consumer confidence for them to spend, you know, generate consumer confidence. But otherwise, you know, the shops will make money and the money will circulate. If you're not getting the people to spend, right there. Don't talk about the the rich people who hoard them, don't look at them later, was a focus on us to spend our money into and the banks have lent us money in in debt. And we have to pay back the interest. But anyway,

00:44:05--> 00:44:46

we see that Islam gives a almost a spiritually based consumer competence, which encourages Muslim to everyday to spend, or invest their money, or even give them money. Give it to people in charity, and I'll come to that in a second. So now I've talked about what is prohibited. And I've talked about that, in general, everything else obviously is permitted. What How does this encourage wall circulation? How does it encourage investment? Well, firstly, we see that in Islam, there's a positive encouragement for the cultivation of agriculture. So the Prophet Mohammed Hassan said that basically, if you can reach it as land is not being used and you work on it, you own it

00:44:47--> 00:44:56

automatically. If you can find the land, not being used you and you work on it, you own it. If you have a land and you don't use it, you lose it.

00:44:57--> 00:45:00

So use it or lose it. So but the

00:45:00--> 00:45:19

For years, and if you don't use it, then you have to, you have to lose it, and you can't lease it. Either you work on it, or you go into a contract of sharecropping, which is basically your employer, you get other people and you come to the agreement that can you guys work on it, and you take a percentage of the produce as profits, or you take this yourself and you keep that

00:45:21--> 00:45:59

we see that in Islam. If a man is irrigated by water, for example, we saw that Prophet Mohammed Hassan, he reduced the tax on that land by 50%. So if you can irrigate that land, or we're using a waterwheel, for example, which was obviously an invention at a time, then you get less you have to pay less tax and obviously the irrigated, there's more production. So in essence, the taxes are still the same, because hopefully the more production but encourages us to develop our lands develop the these properties, we see that in Islam, the government gives grants to people to develop wealth and to develop land. So for example, in a hot tub, who was the profits right hand man,

00:46:01--> 00:46:43

he, he gave properties to farmers in Iraq, like seed and so on to help them plant and grow crops, for free, just give it to them, like you know, use this and then they became self sufficient. For example, because the in Islam, we believe that is the duty of us to help each other and not just for ourselves, the government will help and subsidize farmers to actually be self sufficient. We saw that the Prophet Mohammed Salim granted belong who was very famous companion, a place where he couldn't mine a small quantity of minerals for his upkeep. And so he became a miner to quantity admit over minerals. We also see that in Islam as well, the state revenues will be used to actually

00:46:43--> 00:47:19

get people who are in debt out of debt. So there is actually the government will actually help to get in to move debt from society. And of course, there's no interest. So there's not going to be problems of compound interest or an ever occurring debt because there's no money you make on it. And it's very interesting because it's because Islam in essence, bails out the people there if they're in, in problems, whereas in the cabinet system, what we're seeing in most of these countries, they bail out the banks, so they can lend you more money. And you'd be more debt using and the money they lending you is your own money you're paying to the government, and so on. The only person not only

00:47:19--> 00:47:46

government now, kudos where it's deserved is, was Iceland, Iceland basically come to Washington based fund, they just they decided to let the debt banks go bust, and instead put that money into widening the social net, the Social Security net for their people. And the Washington based fund noted that this actually led to them having a recovery from the economic decline. So that was that was that was an Islamic principle. Right, then

00:47:47--> 00:48:27

we see that, as I said, the the nature of the summit government is that it's a caliphate and in the caliphate system, unlike the democratic system, you can't have lobbies, which are big corporate interest, paying money to the Khalif for his election campaigns, because in Islam, okay, the cliff is elected, but he doesn't have to as long as he's competent, and he's not it doesn't become oppressive or, or corrupt. He remains in power, as long as he's doing his job correctly and right, then he stays in power. So you don't have to worry about getting money from corporate interests to fund his next election campaign. So he can't be influenced. And so and that's in that way, the

00:48:27--> 00:49:06

stomach system protects the people from the interests of corporate lobbyists. Unfortunately, can't say the same for the systems here. We also see that there's a spiritual motivation to give interest loans if you are a rich person in Islam. And this is why I'm talking about spiritual values. We see that the Prophet Mohammed Hassan said that no Muslim would give another Muslim alone twice, except that it would be written for him as charity. So that basically, in Islam, we believe that if you give money to give it away to someone, that's a great reward. If you lend money, that's something that's reward. But if you give money to someone to help them, that's a great reward. But if you lend

00:49:06--> 00:49:49

lend to people, twice, it is equal is equal to you giving money away to you being a philanthropist. So that's an encouragement and the rich person who might who's who you know, would be a believer in Islam or be motivated by spiritual values, he has nothing to lose just by lending money and getting the same money back. He doesn't lose anything in it, but he feels a spiritual contentment for doing so. And that motivation for doing so we see that there was these trusts were set up liquid wax in Arabic is trust was set up whereby a rich person would set up a hospital or university or any kind of institution of public good. And that institution would be set up with will generate income by

00:49:49--> 00:49:59

verse means, but it would go purely on helping people who were poor or poor people who couldn't afford an education at university or couldn't afford hospital bills. So we see

00:50:00--> 00:50:38

This came from the Prophet Mohammed salsola, who looked at who was discussing the palm oil is a palm orchard outside of city paper. And it belonged to some estate. And he said, Give it in charity with its land and trees on the condition, the land trees will need to be sold or given to the president not bequeathed. But the fruits are to be spent in charity, the problem having some kind of ring fenced that property, and that that the production of that of the of the goods from that property will go purely for charity or self self sustaining, charity or trust. We also see, as I said, Before speech motivation for consumer spending and investing, we've seen the crisis, it's the one who's

00:50:38--> 00:51:17

able to spend, spend the best he can we also see in the credit says, Let him who has an abundance benefit abundance, and he whose provision is measured, let him spend of that which God has given him. And we also see other things when Prophet Mohammed said, exchange gifts amongst yourselves, so that you may love each other. So we see this motivation to give gifts to seek spiritual values. And as for Muslim entrepreneur, who wants to please God, he wants to he wants a good afterlife, that'd be making lots of money or try to, you know, make lots of money, have a great meal, and develop their portfolio and make a lot of money so that they can have much more money to spend in charity to

00:51:17--> 00:51:27

help people and to get a lot of a lot of kind of good deeds nice God. That's how the mishap suddenly was the situation in medieval Islamic Society.

00:51:30--> 00:52:05

We also say that, if you can produce and you have excess production, don't throw it away. Because, for example, we saw in, in one case, I remember, there was a dairy farms and they will throw away excess milk, because if they sold it on the market, it would bring down the price and they just throw it away. Whereas in Islam, the prophet Mohammed sauce on said, Whoever prevented the excess water, we're talking about irrigation, so it would have prevented the excess water to prevent with it, the excess part got the pasture, God will prevent him of his bouncing their judgments. So basically, as Muslim, if you have an excess water, irrigating your land, then it goes your

00:52:05--> 00:52:41

neighbor's land, they can benefit from that. Otherwise, if you don't, then you know, God will prevent you from benefiting obviously, in in hereafter. We also see that Islam made it very easy to invest your money in a lucrative project. So forming companies with very flexible structures was extremely easy, it was so easy, but it's not even recognized verbal contracts. So the content has to be formalized. But in a court of law, if you can obviously show that you you and your partner acted according to a verbal agreement by by looking at your actions that the Court recognized. And apparently in British law, it's also the case as well, you can show that a verbal contract existed

00:52:41--> 00:53:09

as well. So it made it easy for investments to occur through contract for companies to be formed, even off the cuff. And we see, as I said, that public resources, free people's expenditure on basic needs, if you don't have to spend money, paying inflated bills for your gas, and your electricity, and so on, so forth, that gives you more money to then use as a private individual, to invest to spend on your family, and so on and so forth. And we see,

00:53:10--> 00:53:12

we see also, that,

00:53:13--> 00:53:50

despite all of these mechanisms of circulation of wealth, there will still be a slight in a disparity where there'll be rich people, rich people will be making money. And they'll be making more money at a faster rate than poor people, obviously. Because see, the more money you have, the more money you can make, even even in a site where you ban interest. So there is one final measure, which Islam uses to realign wealth. And this is called the circuit or the wealth tax. And we see in the Quran, it says, The Zakat are only for the poor, the needy and those who collect them, and those whose hearts are to be reconciled, and to free slaves and the debtors and for the way of God and for

00:53:50--> 00:54:28

the wayfarers. And what this means is basically the eight categories of the collections as a car first it is a car is for rich people, basically. So if you're rich, you pay the card. So the amount I believe is 20 gold coins, if you have well for equipment, 20 gold coins, or 200, silver coins, you reach the nisab, the minimum requirement, then you have to pay, there's a cut. And what we see is that the state collects it, and then must be distributed to eight categories of people. Those who live in absolute poverty have nothing like a homeless person also have nothing to their name. Those who cannot meet their basic needs. So those who have to die in a kind of delve into their savings to

00:54:28--> 00:54:59

pay their basic food, like we saw happening in UK, for example, these people need to be helped. Okay, the people collected themselves, those who were enemies and you want to reconcile them, they might have been non Muslims and you might have had to fight you helped to reconcile to free people from slavery, obviously, back then slavery was was a real thing. Obviously today we don't have legal slavery, you have all the forms of slavery, and I foresee that Islamic scholars using jurisprudence will deduce that we should free people from debt slaves.

00:55:00--> 00:55:26

And wage slavery as the modern forms of slavery, we also see that those who have incurred overwhelming debts, the debtors, as I mentioned earlier on this account be used to get them out of debt. And they and they don't have to pay compound interest because there's no interest in Islam. So that won't be such a, you know, a difficult thing to for the state to do a bailout the people, if the state of USA bail, you know, I mean, suspending stop spending all that money on its banks. It couldn't build other people.

00:55:28--> 00:55:38

You know, we could, we could have all had our debt erased, you know, if we were American, and then UK as well, but no, the banks, we must, we must pay the banks money for them to lend it to us. And it will interest.

00:55:40--> 00:55:50

Travelers as well, if you're a traveler and you run out of money, you can't get back home. Again, it's a common goal to to help you get back home at your abode. Now, coming to the last part of my lecture,

00:55:52--> 00:56:27

apart from all the other things, there is also other things such as temporary government levies, there is no such thing as a permanent tax in Islam, they've got this the Islamic State, the caliphate, doesn't charge permanent tax. But if there is insufficient amounts to satisfy its objectives or obligations to the people, it will have to levy a temporary tax in order to for that, for that need to be satisfied. Now what we see is that the Prophet Mohammed Hassan said, any community, whoever they are, if a person among them became hungry, they will be removed from the protection of God, the blessed in the Supreme, we still see the problem having Salam said, He who

00:56:27--> 00:56:41

goes to sleep while his neighbor is hungry, does not have faith. Now in Islam, we'd be the government, the coordinate of the nation of the Prophet Mohammed, the mom is in charge responsible for the people, the mama leader, means leader in

00:56:43--> 00:57:21

Islam. So the Imam is responsible for the people. So if people are hungry, the mom is responsible. And if he has insufficient money, then the obligation returns back to the people to actually give him enough money so that he can give it to the poor person, because this obligation upon all of us, then we all become a neighbor of that hungry person, we see that there's stability in the economic system, I was actually quite shocked when I discovered this, the price of the price of a goat, you know, in the time of the Prophet Mohammed sauce on them, the amount of gold and silver coins is exactly equivalent to the price of it today, in the Middle East, I was quite shocked. So you know,

00:57:21--> 00:57:55

1400 years 0% inflation. So that's quite the record. Okay, gold, gold goes up and down, it does go up and down. But on aggregate, in the long run, it's stable, because you actually see gold becoming deflated, inflated only by maybe 1%, or 2%. If we look at the gold standard, when it was implemented in the UK and Europe, before they got rid of it, it was generally very stable. But when they got rid of that, we saw inflation rates for the dollar, which is 3,000% since implementation, but 3,000% for the dollar. So

00:57:56--> 00:58:14

the Samak system with the PI metallic system is not official paper, it has interest that the money has intrinsic value, you'll see stability with its implementation. And again, that might bring up a lot of questions for people about or you know, why metallic system was this responses, but and sort of why wait for the q&a for that we can go into we can go through those questions.

00:58:16--> 00:58:56

There is state property and it's actually a very fascinating thing that Kelly khalifate as a states can actually own property. They own property, not publicly contract public property, but it can own private property, and in a way, be a corporation of itself. And unlike Corporation, which makes money for its shareholders, the shareholders of the state are the people saw the Khalif the caliphate might have owned businesses in my own heavy industry, most governments have connections heavy industry, because it's heavy industries too expensive for any one corporation to fund. In that situation, the profits made by the caliphate, the system as a corporation will go to this the

00:58:56--> 00:59:25

shareholders will go to the people in that city state. So in that the state, state property is property which Muslim masses have a right there is a right of it. And its management is left to the Khalif to assign some to whom he deems so for example, land lands owned by the state will be apportioned to people who can work it before I mentioned that the problem having to assign land to people that will state property and then he just gave it to people, because a grant and this is how the state helps the people. And as I said in conclusion,

00:59:27--> 00:59:59

I've gone through quite a lot. It's been quite quite, quite compact. But I think you'll see just by looking at the summit solution, then comparing it to the current system, a very wide disparity. And this system is not is not I mean, it's not one of those airy fairy systems where you see yes, Karl Marx has such great idea and implementing a B Trump pragmatic. It works. It was it's been applied for for 1200 years into the dissolution of the Ottoman caliphate. And it generated you know, stability it generate growth. It generated defense

01:00:00--> 01:00:37

meant, I mean, you know, the Muslims excelled in the Medieval Ages in technology, they excelled in industry, where I was from a landless, had highly sophisticated agricultural systems and manufacturing system. The Masters, for example, became famous for manufacturing a high quality, consistently high quality sorts, for example, the Masters blades, as they, as they call it today, in medieval in medieval age, being a blacksmith, the the quality of your product will never, it was never certain, you know, sometimes you have really great swords, if you have not so great sword, it was never really certain. But in medieval times, you had the equivalent of a factory, producing

01:00:37--> 01:01:22

standardized uniform product, maybe not disorders, but all the metal wear. But that's just an example because I was reading I was reading every regarding the Vikings borrowing techniques from from Damascus about how to make swords anyway, different subject about swords, and Vikings and the Masters. But you had the PI developed production facilities in the Muslim world, in the Medieval Ages, but you know, far in advance of his time. And all this was because of the entrepreneurialship, of of the Islamic colleges of the encouragement to develop your resources, and to expand upon them and to increase production, for what purpose it was to help each other, to give to each other, to

01:01:22--> 01:01:59

help the poor amongst us, and to seek the reward of God. Almost all our universities, almost all hospitals were working with trusts. And they were many hospitals and many wasn't just maybe one hospital every, you know, 200 kilometers, it was you know how to deal with many hospitals, one hospital in Damascus, and was serving 1000 patients, and so on, I've had all the statistics and back then 10,000 patients, I'm not sure how reliable that is, but certainly was a lot. And that was all done in the Medieval Ages. So all this progression was done by the implementation of Islamic system. And the regulatory state would only regulate the laws preventing people from using, you know,

01:01:59--> 01:02:22

engaging interest in fractional reserve banking. But this was a whole new paradigm. Now, people have asked this last point. But you haven't asked me bar, I'm asked this question that you're thinking, why don't we just take a system and apply it in a in a in a Western context, maybe my work that system, and there's only there's one key ingredient missing, though, if you have a materialistic worldview, it won't work.

01:02:24--> 01:02:33

It won't work. Because like, if I told you to basically today, spend gift, or invest all your money, and hopefully God will give it to you tomorrow.

01:02:35--> 01:02:59

You don't have to do that. Right? When there's recession going on. I got my money to hold it hold on, too tight. But as Muslims, you, you realize that if everyone in the society actually just said, we know that, you know what, let's all spend our money or invest it or gift it all together. Then next day, all that money that you know what money was that was in your pockets will be back into the markets for people to collect again.

01:03:01--> 01:03:19

And you can't do that you don't have a spiritual, you know, motive or drive won't work. Anyway, I hope you've got you've seen how an assignment system work, how it worked in the past, and the fruits it gives and inshallah the solutions that it can give to the world today, which I think is in dire need of it. Thank you.

01:03:29--> 01:03:29

Thank you.

01:03:32--> 01:03:40

So we're gonna jump straight into the q&a. That's okay. So if you have a question, just raise your hand and we'll put your hand up first out good. So

01:03:41--> 01:03:41

yes, well,

01:03:43--> 01:03:44

thank you so much.

01:04:03--> 01:04:03


01:04:05--> 01:04:09

Okay, well, the price supply and demand, that's natural mechanism by which?

01:04:11--> 01:04:13

Okay, I repeat the question yes.

01:04:14--> 01:04:32

gentleman asked, if I if I saw this, if you had bought a cup, one pound and you sold any? Could you sell it for 10 pounds, five pounds, whatever, if people willing to buy it. But obviously when everyone else is selling cups, and they will offer a competitive price, you might not get very far, and so on. And so you know, you'll have to judge that yourself as a as a competent businessman.

01:04:33--> 01:04:47

Islam allows the price and supply demand to determine, you know, price, like in like in, like in the cabinet system. So it's similar. They're not vastly different. There are similarities in all economic systems. But

01:04:48--> 01:05:00

you know that there is a natural equilibrium that will form between humans exchanging goods and Islam lets that equilibrium, you know, flourish, it just prevents those things that will that will disrupt the equilibrium outcome.

01:05:00--> 01:05:03

Concentrate into only a small area, which is I stayed on.

01:05:04--> 01:05:18

I'm interested in the Ottoman Empire was I mean, there was infinite resources at the time. So we were in a world that was finite resources. I just wanted to help the Islamic economic system to deal with.

01:05:22--> 01:05:48

I don't think I was ever infinite resources ever in the world, as always, I mean, there's only so much you can mine I, if an ottoman was here, he'd say, Well, what is the drilling techniques you have in all this fishing, you know, use you use radar on your fishing boats to the tech schools official? Man, you guys can produce infinitely. They think we're introducing infinity now, you see, but no, it was always finite. That's that's the that's the kind of leap Today we are routing the finite limits of the world.

01:05:52--> 01:05:57

And we can, for example, fossil fuels, because the temperature which

01:05:58--> 01:06:27

are you asking about? Okay, just to repeat the question, he's saying that in today's world, we're reaching the limits of resources. And then also, we're burning fossil fuels, which is causing global warming, I think global warming is a different discussion from outside of today's discussion. But when in terms of reaching the limits, we actually we actually really haven't reached the limit of people consuming. So there's not there's not more mouths to feed than there are food, there's actually much more food

01:06:28--> 01:06:39

potentially to be produced, then people can eat but what you're seeing is, if you look in the if you do some research on this, there's massive wastages, massive wastages in the world. I mean, it was I mean,

01:06:40--> 01:06:54

humans no longer no longer just, you know, satisfied their, their designs with food and resources, and so on so forth. they've, they've now in order to kind of justify this massive production the West, they've had, they've changed humans themselves to being consumers,

01:06:55--> 01:06:58

the high production, but where do we query for this production?

01:07:00--> 01:07:38

Well, the people gonna have to change, eat more have to consume more. And even then they can eat and consume movies, they throw a lot of a lot this food away, we will food wastage is horrific. And due to, you know, very kind of horrendous practices on the market, for example, what what miracle do the mechanic mentioned about America for at least an assertion by now backing up, what they'll do to various developing nations is they'll say, Okay, look, you will be developed, we'll get you give you a loan. And in exchange, you develop cash crops. So you know, forget that soft subsistence, you know, kind of farming you're doing, get current cash crops, and you'll make money and you can be

01:07:38--> 01:07:57

developed more, and we'll show you our produce, we'll sell you our products or industry. Of course, it comes with an interest, you know, bytes. And even these countries that have faith and say, Yes, okay, I will, I will get rid of subsistence farming, I will sell cash crops to you, and you will send us over overpriced, you know, industrial produce, and back.

01:07:58--> 01:08:36

Even then, you know, America or, Mike because one of the many countries, many countries doing this, but I'm just using America's example, America, from his point of point of view is create one, you know, country that's providing us a coffee, for example. But that's not the only country is told to provide coffee is also to other countries to make coffee too. And then it just picks which one provides me the, the thing of the the cheapest price. And of course, the cut, if it chooses a much more cheaper, you know, country, then that country that had faith in the system and adopted their subsistence subsistence farming and adopted this kind of cash, cash crops will go into poverty, and

01:08:36--> 01:09:07

then they can't compete. And then they're, then they're basically stuck. And then we see massive poverty, then we see wars, and we see famine, and we see all these things, which in Africa, they never really knew the level that we have today. You know, for Africa, you know, forget the 20th century being, you know, a boon to humanity. For Africans, it was the worst thing ever happened to them. You know, they had the ability to sustain themselves now they don't. So I would say that, again, the problem is not production, its distribution. But we're so we're taught to look at the world as production production production, and it's incorrect, it is destroyed, it's always been

01:09:07--> 01:09:11

distribution. I entirely agree with most of the things

01:09:12--> 01:09:15

you didn't address doesn't seem

01:09:18--> 01:09:18


01:09:19--> 01:09:55

okay, the issue about global warming, as I said, that's more of a scientific question with with scientists, and it's really been debate amongst scientists as to how do we reverse global warming, but what Okay, what I will say is that, thanks to corporate interests, for those who are energy companies who has a stake in the burning fossil fuels, they were using that lobbying, delayed, you know, delay governments from adopting you know, renewable energy. Whereas as Muslims, again, using the spiritual values that we that we are inculcate into us, we're taught to respect the environment, we're taught to the golf, the environment, the stomach. In medieval times, we actually had a kind of

01:09:55--> 01:09:59

areas devoted only to be untouched green areas, so to speak. That was the first of its kind

01:10:00--> 01:10:15

So, we actually have respect for nature because although we have given the world to us, we also responsible for at the same time and this is because many narrations by the prophet Mohammed salted himself. So, again capitalism has led to

01:10:16--> 01:10:26

lead basis this destruction of environment whereas a more environmentally conscious economic system would would would not be so destructive and he would try to make a solution for that

01:10:28--> 01:10:33

just before you answer the question, so people are wondering we Ambassador Lucha Salah is just a

01:10:35--> 01:10:41

teller respect for the Prophet peace be upon him? And that's why the Muslim say when you say, yeah, it's

01:10:43--> 01:10:45

just some this question that was asked

01:10:47--> 01:10:57

Are you able to call him he was from Poland suicide topic, but just about In alone, kind of exceeding using the sources and protect the environment?

01:10:59--> 01:11:03

from Quran Islamic Society different from the economies itself, but

01:11:04--> 01:11:41

the question what are Muslim countries doing to kind of the fossil fuels and other things being used? Okay, okay. Yeah. Okay. Okay, what are Muslim countries doing to in this regard? And, you know, where is the evidence in Islam about taking care of the environment? Well, there are many, one of them, for example, even from small things such as, you know, removing rubbish from the road, and keeping the road clean was the problem hamsterdam advocated to, to the best of the Congress, they said, God has made us a bicycle entirely from Earth, and so on, which, which he obviously is that we are now responsible for what we do on this earth. And so as I did, as I said, do not cause

01:11:41--> 01:11:49

corruption, the land, which I mentioned earlier on, don't corrupt the land. And unfortunately, in the current world, we're seeing massive corruption of the land due to over

01:11:51--> 01:12:31

over development without regard to you know, renewable, keeping it renewable, and so on. So you know, that that there are many verses and as I just picked a few, but with regards to Muslim countries, or Muslim countries, I mentioned earlier that the system Islamic State is the caliphate Caliphate system, don't see Caliphate in the Muslim world, you see post colonial secular states, affected by by colonialism during the last century and precision before that. And of course, the rulers there have a stake in, in the current economic system, basically. So even you know, I think Saudi Arabia, Iran, Egypt, under the Muslim Brotherhood,

01:12:32--> 01:12:44

wherever you want to mention, they actually have interest banking system in that country. Remember, interest is prohibited, you will say Iran and Saudi Arabia and Egypt only states are sovereign countries, but they actually permit interest banking.

01:12:45--> 01:13:21

You know, so then how are they Islamic? It's a veneer. I mean, just just by wearing different clothes, or Arabic clothes doesn't make you Islamic. You see, that's just the tip of the iceberg in terms of in terms of debt. So what we actually want to see is, is a caliphate, which will look after the needs of Muslim Now, I mentioned Muslims, I also, obviously, maybe I didn't have time to explain this fully, but also is also responsible for all human beings. So the son of Adam, so let's face it, the son Adam is all human beings. And so as Muslims, we also have to help out non Muslims who are poor. And so we've seen the Quran it says, you know, what is wrong with that you find not for the

01:13:21--> 01:13:57

weak and oppressed amongst the earth is a genuine for the weak and the oppressed amongst us, we have to fight for them, to protect them, defend them, militarily and economically, as well. So, we have we have to, we have this consideration, but the problem is, for capitalism, countries, if you see the caliphate restored, with a bio metallic system, not accepting dollars, not accepting in euros, not permitting, you know, exploitation of resources, developing our own industry, and not needing to buy, you know, exorbitant price, you know, goods from, you know, from from their countries.

01:13:58--> 01:14:36

It's not gonna be good for business, quite simply, they have an interest to prevent a caliphate from from develop, because they know exactly what that will lead to. Okay, forget, by this patch of civilizations and holy wars and crusades, there's more as a more simpler explanation really, is that it will really dent their economy severely, when they have to actually have to pay better, you know, prices for the resource that we give them. And we'll be devoting a lot of those resources to actually tourism industry, not just giving it to them back to development to our own industry, and making our own good, you know, as I'm now a supporter of Lenin and Stalin, but then installing

01:14:36--> 01:15:00

something very interesting. When they created their Russia instead of the Soviet state. They said that basically, we're not going to import tractors anymore, until we can make them basically, and that's not like that. I mean, don't get me out, they believe in but that is a good that is exactly that that outcome. The Sonic sentiment, obviously was just, you know, what they what they said is exactly what Islam would inculcate Muslims that we should be self sufficient. And then we just

01:15:00--> 01:15:04

trade is equals not trade as as big as in the global economic system.

01:15:13--> 01:15:15

If you're not wearing a scarf, then you're not gonna be

01:15:20--> 01:15:25

coming up until today I was completely unaware of my teachers, mystery faculty.

01:15:28--> 01:15:31

Just a question regarding something you touched on

01:15:36--> 01:15:41

Are you aware of any successful attempts taking place now, in smaller communities worldwide

01:15:43--> 01:15:50

or indeed any organizations successfully get the word out? Regarding the importance of using

01:15:54--> 01:16:08

the purpose said that am I aware of any organizations or groups or at any level I suppose, which are trying to call for the reestablishing of of the fire metallic system suppose in the world or just Muslim world or anywhere I suppose.

01:16:10--> 01:16:23

Okay, well, I mean, I only know the Muslim was having a Muslim world and I would argue is that obviously, there are many groups I mean, there are many groups which obviously groups which we know, are cool for Caliphate and cool for nostalgic state. So, I have this knowledge is what I've been taught, I believe,

01:16:24--> 01:16:30

they call for go DNR and they will try to unbundle godina. And you had other groups which call for Caliphate and reestablishing like his,

01:16:31--> 01:16:35

I suppose bears on Islamic groups around more, but

01:16:36--> 01:16:57

just calling for it, calling for just implementing a gold Dena devoid of us in a state is not gonna it's not gonna happen, because the state has to underwrite the economic system. So this is legal tender. If you don't have a stake, saying that there's no point just saying, hopefully, everyone, please use gold for the announcement, you know, distribute them around. They're not, it's not gonna happen, right?

01:17:00--> 01:17:39

Again, you can't, you can't make any, any kind of any, you can't change a paradigm of society without the thing that brings a society into existence as a society with a base of values and ideas. That isn't obviously an ideological state state that implements an ideal and more enforced rules. The ideal. So again, like, you know, it's like, I mean, just just to kind of look at it from let's say, from the west perspective, if I would say, No, we have a free market system. Without without government, basically, it won't happen because who's gonna police people who default on contracts or who still need? Who's gonna say that, you know, the banknote you have in your piece of paper you

01:17:39--> 01:17:44

have in your, in your wallet, of which you have so much confidence in his legal tender, you see,

01:17:45--> 01:18:06

in British Government, that piece of paper is just a piece of paper. So you need to you need to have you have to have a state to underwrite the legal tender of that country before it can actually be legal tender and being adopted by me must be a must gain currency. Currency must gain currency by means of a state.

01:18:08--> 01:18:08


01:18:13--> 01:18:18

So, just I'll get back to the just want to ask more many people as possible.

01:18:19--> 01:18:23

How does the principles of Islamic banking

01:18:28--> 01:18:59

Okay, the gentleman asked, How did the principles of Islamic banking compare with the current banking system? Well, I believe in I would, I would just make a kind of answer your question from medieval times what happened in medieval times, there was work of institutions, whereby they would allow you to basically deposit money in these institutions, and then you they'll give you a check and you can go halfway across the world and cash that check equivalent institution that will take that so it's not the first checking system basically.

01:19:00--> 01:19:36

And in essence, the worker was produced by people who donate money so that money can be in that institution to lend and get and obviously people pay it back no interest but that that will accrue good deeds for the good deeds and eyes of God for that rich person even though he uses no money. You say that was a great incentive. The modern banking system obviously is very different to that because they obviously want to make money from playing money games. And so what they'll do obviously as you know, is they will lend out money demanding interest in return even though this there's actually this there's not enough money in the world to pay back all the debt in the world it's not

01:19:36--> 01:19:52

not literally not enough money in the world. It's quite very strange system and of course fractional reserve banking. No let that when you when they could start talking about what the online banking now. Sure, oh, that the current state of Islamic banking

01:19:54--> 01:19:57

before talking about the current marketing strategy

01:19:59--> 01:19:59


01:20:04--> 01:20:05

Well, thank you.

01:20:08--> 01:20:22

Well, the current state of Senate Banking is they lend you money, and then you, you, you pay them back with plus bank charges, which seem to be proportionately related to how much money you're given. And now, you know, putting a spade a spade

01:20:24--> 01:20:28

is kind of like, it's calling me saying, Yeah, this is how pork basically

01:20:29--> 01:20:36

just say Bismillah, and so on, you know, if it looks like a duck, you know, stuck.

01:20:37--> 01:20:50

Concern so far. So I would say that, it's just, they just repackaged the same same financial services, same financial products, with different name, and so on. So don't give much credence to the modern ideas.

01:21:13--> 01:21:29

Okay, so this is a very good question. If you some academic system was implemented for quite some time, why did it cease to exist? Well, okay, it only seems to exist When, when, with the destruction of the Ottoman Caliphate in 1922, or 24, depending on where you want to set your dates with that.

01:21:30--> 01:21:46

But in essence, the the reason for maybe the collapse of the Islamic civilization itself, in terms of visit the, the western civilization as an old one, or the climate really collapsed over the climb, was not nothing to do with economics, it was actually more to do with

01:21:47--> 01:22:29

our kind of civilizational atrophy, I think the best way to put it is, the worst thing that ever happened to the Muslims was our success. And about 1500s we reached Pinnacle civilization. And we did what every civilization does what had been Hadoop, the grandfather of sociology, you know, kind of predicted, which is that once you reach a state of luxury, you reach a state of equilibrium, then you the site tend to just kind of relax, and enjoy the luxuries and just enjoy the good life. And they cease being innovative, dynamic, and kind of being forward thinking. And then if then a switch to, to say, Well, look, we've got such great diversity. We are, you know, supreme in economics,

01:22:29--> 01:23:05

politics, military, or in all these things. Let's just conserve what we have. This is what they meant this and that mentality, we conserve the birth of conservatism, it was the birth of, of looking back to the past or preserving the past as opposed to looking forward. And that occurred because of our success. Again, it's a sociological phenomena, it's, and then it's led to atrophy of thinking. So I give example, you know, this is across, you know, another kind of generalization. But you see some of the people who are like most, because they quote, unquote, dumbest people in the world, the kids of rich people have very rich people, let's say they are the ones who basically go

01:23:05--> 01:23:07

out and spend one grand on a T shirt.

01:23:08--> 01:23:12

Example, you know, and then have to, you know, like, rest the whole day, because they had a tiring day.

01:23:14--> 01:23:16

You know, such people,

01:23:18--> 01:23:46

you know, you've noticed why they like this one is so shallow one is because they don't have to think there's no problems in their life that motivates their thinking every day on a silver platter. So with the salmon civilization, from 1500s, when they had developed agriculture to the peak of its time, when they had, you know, they had their there were food secure, they were militarily, you know, dominant, they had no no threats, okay, there was a few Mongol problems, but that that was dealt with, and that one was in convert to Islam. And so,

01:23:47--> 01:24:22

you know, they just relaxed in essence, and they sat back and then the decline of thinking that how could the Muslims whereby Islamic became now a set of rituals, and was understood only superficially as just a set of what you know, words give lip service to, and they they forgot the spirit of Islam, the spirit of it, and of the entrepreneurialship of the innovative nature of Islam about it, Trump is a transforming project Islam, it's not, it's not meant to be kind of keep things fixed in time. It's actually meant to transform the law and make bring us close to God, by developing new technologies that help us make us possible, for example, I mean, just even just using a modern

01:24:22--> 01:24:59

example, if there was another kind of civilization, and we reached the point earlier, but this would be YouTube, for example, the equivalent right, you know, why wouldn't Why are we going to YouTube is because you could put a beneficial educational lectures on YouTube and get 1000s of people watching it with no further effort of Iran. You know, you just put your video up and 1000s of people were watching beneficial lectures or good you know, advice you give. And in Islam, we beat every person that benefits from you know, good advice you say or something you teach, you get a good rule, you get a word from God. So it'd be great for a person to say, you know what, I just don't know.

01:25:00--> 01:25:14

bit of effort, maybe five minutes from the camera, I get 1000s of good rewards from people all around the world, looking at and benefiting from my advice, see incentive motivation for development, motivation for making new technologies. This is exactly how

01:25:15--> 01:25:40

it can have an ideological Muslim look at it. But the Muslims that you know, from from the 15th century, 16th century, rather, we just kind of, we could stagnated in time. And we, we didn't know how to develop new markets Did you know, the ultimate, like they discovered the New World, right? There's got the new world full of opportunity. And there was a rush in a rush from the European nations to go there. And Conan lies, right? I ultimately was like, man,

01:25:42--> 01:26:15

like, what's been the thinking that we need to go over there, because such a such a good life here, and then obviously, they let Europeans go there. And then the Europeans basically got so much resources brought so much gold and minerals, then the Europeans basically made money. Basically, with that gold, they went into alternate markets and started buying out all the resources, not in the markets, and then made even worse for Ottomans, than their armies were equipped, because they have so much wealth, and then, you know, ultimate not to lose battles and things. I mean, it's a long discussion, but in essence, why wouldn't Ottomans, you know, also go to the new world and

01:26:16--> 01:26:44

develop it and see what they can do. I mean, if they actually did it, they wouldn't have actually even killed it in the natives and subjugate them, they will actually prevent the natives as Islam always does. When it goes to new area, it doesn't actually kill people massacre people forced them to, to be slaves or what have you, but rather actually co ops the people into the accounting system that's happening, the landlord's happened in all other areas in the world, and so on. That's quite, it's quite interesting, this discussion. So anyway, in a nutshell, I hope that answers your question systems in a somewhat

01:26:57--> 01:26:58

so sorry,

01:27:01--> 01:27:04

about that. Robot, Islamic finance.

01:27:06--> 01:27:10

Tomorrow, what are how it is currently done some standard,

01:27:11--> 01:27:21

which is, agree with you about that, that proper way of doing financial standard project, which is good way to finance yourself as

01:27:22--> 01:27:26

a businessman? How about in some country, now they do it the wrong way?

01:27:27--> 01:27:30

just covering it with with

01:27:33--> 01:27:39

illegal Islamic Finance, is there. Okay, I think you're agreeing with me.

01:27:41--> 01:28:02

Like, basically, yeah, the the principles of Islamic banking, obviously, you know, we agree with, but people are claiming to do it, but it's not actually something banking, it's using interest, and so on and so forth. So the prudent Islamic face on it, but I would agree this is this is the problem, because it misleads some Muslims who believe it is, you know, it is interest free banking, whenever

01:28:05--> 01:28:06

there is money

01:28:11--> 01:28:11


01:28:19--> 01:28:19


01:28:22--> 01:28:23

before you go,

01:28:24--> 01:28:31

Oh, yeah, sorry about that. I was going to be over time I would the questions, the food is arrived at their civic center. So

01:28:35--> 01:28:36

yeah, shut up. Okay.

01:28:37--> 01:29:17

Question one, one more question. Okay, so we have one more question after the question. Okay. I think if you, if you look in, in Saudi Arabia, what they do is, if the bank says that don't claim to offer interest, what they'll do is they'll, they'll buy, let's say, a house or a car for you and your behalf. And they calculate how much they would have made if they charge you interest, and then they sell it to you at this higher price. And in essence, it becomes exactly the same No, no difference to interest, interest banking. And of course, if you default, if you default, in, in pay the payments to the bank, they keep your money in the car, which as long as incomplete contracts,

01:29:17--> 01:29:30

because if you default, they have to return back the money you've paid so far, and they'd get back the product, but they don't do that. That's not an Islamic based agreement or deal. So I would disagree with you that there was someone from the audience I think,

01:29:31--> 01:29:35

the question I think you said my question about interest rate Sure.

01:29:37--> 01:29:37


01:29:40--> 01:29:47

Okay. Well, as I said before, the brother said, what the interest rate was in the form of investment,

01:29:48--> 01:29:59

Rocky in essence, all things you apply your wealth to it are an investment because everything you play involved in investment, but there are some things which you can't you're not allowed to make money from and you're not allowed to make money just for money. Playing

01:30:00--> 01:30:40

Games money itself money, that what is the purpose of money is meant to be a means of exchange for goods and services, or commodities not in itself a means to make money or to give extra, you see. So that's what that was why we were the stomach against, you know, interest will come from that you're abusing what money is. And secondly, this actually promotes concentration of wealth. And that is that is the primary culprits for concentration of wealth, and that you have to kind of deal, you know, deal with that to create a system that's more just for people. And so, that's that's basically, the purpose, obviously, as we believe that in Islam, you know, God knows best and we do

01:30:40--> 01:31:06

as you know, what is good and bad. And so we take it as a commandment. But this is the wisdom behind the command from God that you're preventing concentration of wealth, and it's just absurd. You're using money to make money in of itself to make money. Whereas money's meant to be useful has a purpose for something else, which is just to facilitate exchange. So make money through exchange, why do you need to, you're contributing to distribution if you do that, but why make money from money, you're not actually contributing anything to exchange. That's, that's the reason

01:31:08--> 01:31:38

that that is the end of the q&a session here. Thank you for coming. And let's say if you want to come for the food, but you're short of time, that just come down to the Islamic Center, we'll pack it for you. Otherwise, we're going to have dinner there. Brother, Abdullah andalusi is going to be there. So if you don't mind any questions that will give him to come harass me, you can't harass him, basically. Yeah. So yeah, thank you all for coming. If you don't know where the center is, we're all going together now is literally a minute away. It's just where CD Enix is so