Economic System of Islam 18 – Economic Policy

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Jamal Badawi

Channel: Jamal Badawi

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The name of God the benevolent the Merciful, the creator and Sustainer of the universe, peace and blessings upon the surface and Mr. Mohammed forever.

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I greet you with their usual reading on Islam focus program, assalamu Aleikum which means peace be unto you. Today we have our 18th program in our series dealing with the economic system of Islam. We'll be looking at economic policy or the role of government in the Islamic economy. I'm your host, Tama Rashid and I have joined me on the program as usual. Dr. Jamal betta. We have St. Mary's University brother Jamal Hassan, let them sit down. Could I ask you before we get into the discussion of today's topic to very quickly summarize and highlight the main points we touched on our last program dealing with the law of inheritance in Islam, okay, the law of inheritance of Islam

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was dealt with last time as the fourth means of achieving some distributive justice or social justice. In Islamic Society. In an ideal Islamic Society, I should say, we discuss the basic characteristics of the law of inheritance in Islam, mainly that it is

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something which is consistent with human nature, it recognizes the instinctive desires to leave something for one.

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Secondly, that it is mandatory. And there are some shares that are specified in the Quran. So you don't need a court ruling or nobody can deprive you except in very rare and specified case.

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Thirdly, that it is broader in scope, which includes the young and old, weak and strong male and female.

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It involves wider scheme so that the world could reach more people in a society.

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And that, firstly, it achieve some form of equity, which take into account the reciprocity of financial obligations and responsibility lies between parents and children, as well as the differentiation of duties and responsibilities financially of male and female. And then we look a little bit further into this question of male and female chairs and try to explain why the variations exist still within a fair and equitable total scheme.

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Then we'll discuss briefly the priority for distribution of the state, mainly for the payment of the funeral expenses, debts, and then exclusion of the will and testament up to one third of what is left. And then after that, the primary is an entitled to the specific specified chairs, which are

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in the Quran, actually, following this there is the agnate is like, you know, son,

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Father, brothers and Uncle in that order. And they take whatever remains, it's not specified that they take whatever remains after distribution. And then the third category would be the non agnate relatives a little bit more farther relatives, if you will.

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Another question was what happened if the state is not divisible? Like the other piece of equipment or one home, in which we say this could be valued, and whoever wants to keep it can pay the rest

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in proportion of their shares? And finally, was the question of deprivation from inheritance. And we said that a person could not be deprived from inheritance except in some rare cases, like somebody killing the person from whom he wishes or hopes to inherit. So this is a punishment that he does not inherit anything. We talked also about the difference in religion as in some cases affecting the the succession. And by the way, even if there is this difference in religion, for example, as you said before, the non Muslim cannot inherit from a Muslim. Somebody might say, Well, I suppose you'd marry a Christian or Jewish? Does she not get anything at all? The answer is that she could get but not

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within the scheme of distribution, she can get her share as part of the will and testament. And as we have indicated earlier, the person that the season is entitled, of course, before is this to bequeath up to one third of his property for people who would not otherwise inherit. So still it can cover cases like that, but in general,

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similarity and religion at a requirement.

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And then we mentioned also that there are categories who are not really deprived of inheritance. But if there is a more closer relatives, it takes priority before them.

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Now moving on to today's topic, generally speaking, what is the position of Islam with respect to the government role and in the economy, in principle, invented? Well, in principle, the first thing to emphasize

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Is that in Islam, whether we're dealing with the

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economic system, social system or political system,

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the dependence is not primarily on the force of law or interference of government and the heavy hand of some higher authority. The appeal is always in all these aspects of life to the conscious of the individual, to his commitment and obedience to God's which in fact is perhaps the most important part and enforcement of any law. The laws are simply like controls.

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A second basic principle, which apply also to economic, social political systems, that means that freedom is the foundation is the basis and freedom cannot only be restricted, unless there is some necessity to achieve social justice. In other words, there would be no interference in economic activities, and an ideal Islamic system except where there is a social necessity to ascertain justice. This has been explained nicely by Prophet Muhammad peace be upon him. In a hadith narrated in Bukhari, when he says people who are standing to make sure that there is fairness done, and that the limits of God are not trespassed, unlike people sitting in a ship. And there are some people who

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are staying in the lower deck, other people in the upper deck. So the people in the lower deck said to themselves, why do we have to every time we want to get water, pass through this whole thing and get up and bother everybody? Why would you make a hole right here, it's our business, we're making a hole only in our side. And of course, he concludes, he says, unless they are stopped from doing that everybody would be would drown.

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And that's a very nice analogy, that society at large, if everybody's apathetic, if there is no government to try to ascertain justice, the whole society will drown. So there must be some limits. But like I said, freedom is the basis it's only a necessity, which require government intervention.

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A third fundamental principle is that the basic role in essence of the government is to ascertain justice and to prevent injustice in the economic life. Now, could you give us some explicit some specific examples of what an ideal Islamic government can do to achieve this justice? In terms of measures? Yes, well, there are measures, which may relate to the production process distribution others, but maybe let's take this to measure areas. On the question of production, for example,

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in principle, Islam, encourages a government or people in power, to assist in the maximum and efficient use of resources. In previous previous programs, under productivity, we have given sufficient evidence from the Quran and from the saying of the Prophet, to show how in Islamic understanding, all of the resources created are created for the benefit of mankind, or humankind. And it is our duty really, to benefit from them. So maximum and efficient use of resources is a principle which is enshrined in the Quran already the Word of God.

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Secondly, in some previous program, also we spoke of restriction on labor, that there are certain types of work which are contrary to the ethical teachings of Islam, such as prostitution, gambling, sorcery, and magic works and all that. And if this is morally wrong, because then it is incumbent on a Muslim government, a truly Islamic government to make sure that this kind of professions or this

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work could not be done.

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A third aspect is that basic philosophy in Islam is that they should be equal opportunities for all to learn and develop their capability and skills to the maximum they could there is no barrier, Socratic or institution and that should stand in the way of anyone developing capability. It's not like the kinds of things that you find emphasized in some cultures where some jobs seem to be an exclusive domain of some group or that that's that's not.

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So that's, again, a duty of the state to make education available free to all

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efforts. or third, I should say, aspect is not only to prohibit unfair, or appropriate work, but to have control on permissible work also, to make sure that it is done without cheating, and in a proper way, that does not constitute danger for the populace.

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This includes and you might be surprised to hear this name. They are only translation in modern terms of issues which Muslim jurists have dealt with hundreds and hundreds of years ago. Things like control on what you call today. Production standards, product safety, as we call it today. Consumer Protection

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was a principle also enshrined.

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The professional standards, or trade standards for doing jobs are all things that Muslim jurists have long ago addressed. In terms of labor, we find that Muslim jurists also have spoken of the possibility that Muslim government truly standard government may intervene to specify minimum pay, or minimum wages, as you call it minimum wage legislation in modern terms today, if there is need for that, of course, there is some fear of exploitation of labor. But on the other hand, it is not one sided. It's not like an ideology or system of economics, where the bias is always for the working class or for the managing or ownership. Muslim jurist equally also said that, if labor, for

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example, exceeds its limits and become oppressive to management, or to owners, it is a duty of the government also to stop them. So it's a kind of balance and justice rather than bias for one or the other.

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Another aspect of specific measures

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is to prevent actions which may hurt the population, you'd be surprised to hear some of these things because we call it today's zoning regulations. And that existed long time in Muslim jurisprudence. They talk for example about prohibiting someone from having, let's say, a blacksmith shop in the midst of a residential area because people will be hurt from the smoke, and it might endanger them to

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making sure that the person would not have a very noisy plant, that people would not be able to sleep peacefully in the residential area. Another thing, which is really interesting,

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even within specific loads, under ideal Islamic system, they spoke also of Prevention of Cruelty to Animals. They spoke, for example, on the government representative making sure that you're not overloading the horse or Kammen or beating, it's really being cruel in your treatment of even animals as part of the law.

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The question of safety.

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We think, for example, that ship safety regulations is a modern term where these government inspectors to make sure you know that the lives of people on the ship is safe. Of course, you must have heard of many tragedies, as a result of laxity and enforcement of this security. We think that this is modern, but you find in very early references hundreds of years ago, called Bella tawnya, by judges, known as Abuja labs, he speaks also of the possibility of prohibiting the owner of a ship from letting it sail, if there's too much load on it, or there is dangerous for people working on it.

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We have spoken under distribution, for example of the unethical attitude of the monopoly in the basic needs of people like food and withholding it white people are in need. Again, this is a method that could be enforced in terms of general public services offered by the government or what some people would call the infrastructure of the economy, roads, bridges, and so on. Again, jurist have addressed that and as early as the seventh century, the fourth scale is Ali, Allah be pleased with him, wrote to him the local ruler in Egypt.

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And he talked to him and that's revealing. He said, Don't make your major concern, simply the collection of the taxes on land, but rather the development and prosperity of that land.

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That really contrasts quite sharply with the attitude of colonial powers, you know, trying to sack the wealth of, of a poorer country said no, don't worry about taxes, develop a thirst, let people prosper, so that taxes to finance, government expenditures would be legitimate to collect, not just squeezing those who are in need. And these are all varieties of I hope, specific measures that goes back to even sometimes to the day the property in some form. What about the case of distribution Now, what's covered role in this area of distribution and distribution, for example, in

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capital programs, in this series, we spoke about the collection of the care or institutionalized charity. And in Islamic law, while it could be paid by the individuals, the state could collect it, and actually enforce it. If people are not doing their duty.

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The disposition of, of the care or charity would also be a duty of the state according to the categories specified in the Koran so that again, you

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Part of the roles of the government,

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we mentioned also that the government may be entitled to collect additional taxes. If this amount of charity is not enough, and or if there's an emergency. Again, that would be a role for the government to play

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a collection of taxes from non Muslims because Muslims face a cat because it was part of their worship. If you have non Muslim citizens, they enjoy the same security, Social Security like Muslim, but you can't expect them to pay for the care which has a religious connotation. So out of respect to their feelings, they pay an equivalent, which is called jizya, some sort of tax so that you will also be entitled that will be also around for government to collect and spend on the welfare of the people.

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In general, as we have indicated, the government should take all kinds of measures which assets in the reduction or narrowing of the gap between the rich and poor is sometimes called for complete equality. Because there's people vary in their ability and their attitude, aptitude and so on. But it's not cause for reduction of this gap, big gap between rich and poor, so that you don't get some people getting richer and people getting poorer, some kind of justice and affection and love and cooperation within society to avoid all this hard feelings in turmoil

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and society. In fact, in Islamic law, you'd be surprised to know that they say that the minimum responsibility of the state is to make sure that everybody has enough food, clothing, shelter, and some added even means of transportation.

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And that time they talk about the camel or horse, whatever. And if he's a professional, to provide him with tools for the sufficient and this is the minimum under a proper standard system that will be guaranteed to every citizen, the Muslim man came up with talking about the question, she of course, is right, the question of tools, what specific tools can be used by the government to perform the rules that you've just been discussing these last two questions, these tools can be looked at both in the economic sense and institutional sense also, which are interrelated anyway, that many economists for example, speak of basically, monetary policies and fiscal policies and

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monetary policies can be referenced in Islamic context to the collection of the funds, for example, the care fund or institutionalized charity, the administration of those funds, because this of course, constitute a large amount of money. And by using them, the government can somehow control the money supply in a way.

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We talked also about certain portion of institutionalized charity, which may be used for the purpose of interest free loans that we spoke also about the interest and other alternatives.

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This funds could be used also for

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to make sure that the resources are allocated efficiently. So all of this can be regarded more or less as a source of monetary tools that a government could be we could use for the welfare of the society at large.

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As far as the fiscal policies, policies relating to taxation, income and expenditure, the door is open again, because the government would have access to the care would have access to taxation, and other resources to like Gigi and others. And through a system of expenditures subsidy. Given what we call today, public expenditure of Public Works, the government could stimulate the economy could provide for employment. So all of this falls within stanic framework of economy.

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As far as the institution's specific institutions, which may take care of implementing those measures,

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we find that they include at least two which are common in standard jurisprudence books. One is the court or cost court system. And this started even as early as the days of the Prophet Muhammad peace be upon him in the seventh century, to resolve disputes, which may arise between people and achieve justice, better justice in society.

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But the second is really an interesting institution. And again, like I said, when you hear that you think that you're talking about something which is only the product of the 19th or 20th century as it existed since the days of the prophet in some form or the other, we must be more really true and try to implement the full teaching of their, their faith.

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And that's called hesper institution of Hesburgh. spelled like h i

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Ah hesper

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isn't Tamia, one of the great Muslim jurists define it as control on social behavior, to make sure that the good is ordained, and even as forbidden. Good and Evil in Islamic context is not just simply moral things, but things which pertain to economic life, social life, even political life. There's even this and goodness in each of these aspects of human pursuits or human living, life is all integrated.

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And this idea of history started even at the time of Prophet Muhammad, peace be upon him, when the Muslims migrated from Mecca to Medina, as you know, the return back victoriously after some years, and when Mecca was re opened again.

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Before the Prophet left to Medina, to spend the remaining couple of years of his life, he appointed

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one companions by the name of side of the last, and his duty was specifically control over the marketplace.

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To make sure again, there is no cheating and look after all this kind of things, which is basically the notion of control.

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We find an Islamic jurisprudence, many books that has been written on this institution, or costly about it, including such names as an hour, the Abuja that admitted Nia in the Hadoop Valley, all of these people have written among the I'm talking about others, or ancient type of Muslim jurists,

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this institution included surprisingly, many things that you consider really, as quite recent example, accreditation of people in certain professions or trades. The standards, if you will, productivity was there.

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inspection

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in what was today under the department's of health, inspection of meat, and bakeries, for example, they have spoken about that, for example, to give an example, of an inspector who may find that the baker is not using proper head cover or something like that, or not observing cleanliness, that he would have the right to destroy this particular consignment,

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the passive or the one working for this institution of his best may inspect the meat. And if there's anything tainted or you know, threaten the health of the population, he may have the right to order, its destruction, just as we happened today in our federal Inspector, for example, could do the same thing. And this has been done hundreds of years spent controls on weights and measures, which is based on the Quranic injunction that one should weigh or measure in an honest way. That again, was provided for control even on the action or behavior of cats, persons and professional doctors,

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pharmacists, even teachers, and other professionals, there are certain rules also in Islamic law to make sure that they are doing the job, honestly, without causing any harm to others.

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The difficulty which may arise in contractual agreements and commitments, contracts, if there is a difference and

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try to resolve the problem before it goes to court. That's another role for hisbah.

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Prevention of cheating in the marketplace is part of the duty of message.

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In addition to these two basic institutions, there are some recent authors like Dr. Mohammed and Mubarak who suggested that you could also add a third beside courts and his staff. And that is the police force. And he said that in many cases, you may need actually a police force to enforce the rules. And I think that makes a lot of sense. example, suppose we have a union on strikes, but they go too far. And the second thing by preventing anyone from entering the premises, for example, of course, you could go to the labor relations board and modern terms or you could go to court and issue an injunction. But still, you need a police force to make sure that there is some order, and

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that there is no sabotage and destruction of property until the dispute is resolved between the the two parties. So yes, there are specific

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tools. It's not just generalities deals with real life problems.

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Now, after this discussion of the economic system of Islam, I'd be interested in having you placed it in context or compared with the capitalistic and communist models or systems. How would you compare? Well, in essence, if we accept the premise which has been present throughout this whole series, that we will talk about an economic system

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Now our social system are critical, we have to base it first on divine guidance on the Quran, the Word of God and revelation given to Prophet Muhammad at least in the principles. Of course, some points are subject to interpretations, but the foundation is there.

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It follows from that, that there could be no other system really that could match it, because any other system which is divorced from divine guidance, dependent exclusively on human wisdom, falls into some exists or problem in one way or that. So from a Muslim standpoint, only a system, which provides for this interplay or interaction between the divine and the human would be more practical, that is assistant based on divine guidance. But in the meantime, it allows some flexibility for implementation, depending on the circumstances of time and place. With that perspective in mind, we find that the ideal solution in the mind of the Muslim really is the standard system, because it is

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the only system that provides for this balance between individual motivation and social welfare, between the rights of owners and Knights of Labor. It does not,

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it does not seem to be biased towards one group and society, rather than the others, as we said before, because God has no reason to be biased, we as lawmakers on earth could fall into this spiral. But if you follow the steps and that God has provided us there would be better justice, and even more welfare and prosperity in society. To put it perhaps in a very simple way, if you have like a continuum or lines, you find that on one end, you have the purely individualistic or capitalistic system. But if you look in terms of historical experience, you find that many of those principles have been compromised, and that there is have been a gradual move away from the extreme

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form of individualism, towards the introduction of some measures to achieve social justice. So it's no longer totally

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capitalistic. If you take a totalitarian system, like, ideally, the communistic system, which is totally collective system, we find, again, that they have seen that it doesn't work this way, it dehumanizes the individual because everything is in the hands of the few elite making decisions. So we find even in the communists, where the introduction of some measures which provide inducement for productivity, some division of many proponents of this Islamic solution or standard system that ultimately, the way things are going that both major system, collective or communist and capitalist seem to be moving away from the extreme towards the middle. And that middle effect would have to be

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a slog, because that is after long and bitter experience of the humans, they discovered that the only system

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and the only one who can give this balance and moderation would be a system based on divine guidance. But we only have a couple minutes left on today's program. And the next question is fairly broad one but I wonder if you could very quickly give some of the applied problems for Muslims living in a non Muslim society, when there are certain things that Muslim living here should watch for even though even though he might have to go through some minor inconvenience, first if a person has a store is not supposed to sell something which is forbidden because as the Prophet indicated, anything which is forbidden to eat, is forbidden to sell that was narrated in Abu Dhabi. assertion

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should not sell pork or wine, for example, or any other forbidden item. And he should depend on God and not see that his he will go bankrupt if he does that God will provide for him. Secondly, many Muslims are faced with the question of insurance managers seem to conclude that life insurance is not permissible the way it is done. But if a state is doing that, by way of security as Islam requires, then there is nothing wrong with it. But the way it's going now is not really Islam.

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property insurance is not exactly in line with the Islamic system, but some jurist lecture is to make it close to a system in Islam which provide for donation provided that you get some compensations. Similar to that, of course, will be like health insurance, it is permissible only in the absence of a proper Islamic system. Some people also ask about interest in the bank should they leave it to the bank, some jurist said that even though it is forbidden, you can take it not to use it for yourself not to pay as part of your soccer, but it could be used for benefits of starving Muslims just under these circumstances, but in general Muslim really should put their heads together

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and provide solution to the problems including even

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most difficult items to imagine like alternative to mortgage. But on that note, we'll conclude our program for the day and indicate to our viewing audience that our next few programs will be special programs. concluding this series they'll deal with the alternatives to mortgage after which we

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We'll begin our new series dealing with the political system of Islam. Thank you for watching today. Assalamu alaikum peace