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Poverty is rampant
in Western Europe
Lining up patiently
together with old ladies, foul mouthed youths and people reeking of
alcohol, a highly qualified engineer waits his turn in the queue to
collect his 'dole' otherwise known as 'job seekers allowance'. This
scene is not uncommon in the Western world where graduates and
professionals from all manner of fields find themselves without work
and struggling to make ends meet. For some professionals the handout
from the dole office every Wednesday morning is what barely keeps
them afloat until the next week.
Mind numbing call centres around the country are bursting at the
seams with graduates answering calls, having to log the time they
spend in the toilet, earning on average 4 - 6 pounds an hour despite
having been through three years or more of university education.
The above case is just
another in a long list of derisory and ineffective attempts to deal
with the ever-growing problems besetting western society. Similar,
misguided initiatives have been made to deal with other problems,
such as drugs. Rather than seeking to remove the scourge of drugs
from society, the law has been changed to effectively
''de-criminalize'' possession of so-called soft drugs! Hence, the
twisted logic is that by legalising a problem, it is no longer
regarded a problem!
These ridiculous solutions are borne out of addressing the symptoms
of a problem, without any attention being paid to the source of the
problem. The reason for this is clear; the source of the problem
lies in the incorrect thoughts that western society has adopted as
the foundations of its society. As such, these false thoughts are
not subject for debate and discussion.
Although being the fifth largest economy in the world, Britain has a
poverty problem one would think applicable only to the developing
world. According to 'The New Policy Institute', an independent think
tank, just fewer than 1 in 4 people in the UK live below the poverty
line. This equates to 12.5 million people or 22 per cent of the UK
population. Of these, 3.8 million are children, 2.2 million are
pensioners and 6.6 million are working-age adults, equivalent to 30
per cent, 23 per cent and 19 per cent of their respective
populations.
People may assume that living below the poverty line in the West
doesn't mean much, as the basics are available to everybody. This is
a misnomer born out of the illusory image conjured up by glitzy
movies, the celebrity dominated media and a society obsessed with
self-gratification.
One recent survey showed that about 6.5 million adults go without
essential clothing, such as a warm waterproof coat, because of the
lack of money. Over 10.5 million people live in financial
insecurity: they can't afford to save, or spend even small amounts
on themselves. About 9.5 million can't afford adequate housing -
heated, free from damp, and in a decent state of decoration. The
crucial factor about these findings is that they are based on a
survey of what the general population sees as necessities.
[Poverty and Social Exclusion in Britain, Joseph Rowntree
Foundation, 2000]
Foreign students, especially from the Muslim world are often amazed
as they walk through cardboard city in London or when beggars hassle
them for money on the tube, for isn't this Britain - a superpower,
the former ruler of the seven seas?
Cause : Wealth Creation or Wealth Circulation ?
''A problem adequately
stated is a problem on its way to being solved'' (Buckminster
Fuller)
Poverty is wrongly taken by some as a norm and a problem that will
not go away. One must ask the question, how can societies that have
a history of colonialism including looting the riches in Africa and
India and the neo colonialism of multi-nationals, have such high
levels of poverty? How can they spend billions on the mythical 'war
against terrorism' when one in five non-working families on low or
moderate incomes reported to being unable to afford some basic food
items on most days?
At a first glance it seems baffling to the mind, how can this occur?
However when we study the underpinnings of the Western Capitalist
economy the cause for this situation becomes apparent.
The root of the capitalist economy stems from what every economics
pupil is taught in their first lesson, understanding the economic
problem. A particular view towards the economic problem has
dominated Western economies since the time of the founding father of
capitalist economics, previously a Professor at Glasgow University,
Adam Smith.
In 1776 (CE) Smith published what became the bible of capitalist
economics, 'An Inquiry Into the Nature and Causes of the Wealth
of Nations'; it articulated his laissez faire view towards the
economic problem.
In essence capitalist economists believe that the economic problem
is caused by the unlimited needs of people and the scarcity of
resources, this leads to the dilemma of how to bridge the gap
between the two - how do people get their needs satisfied? In answer
to this question, Smith developed the 'invisible hand theory'. It
denotes that if the economy is left to run in a free manner the
resources will be distributed fulfilling the needs of society almost
in an automatic way.
The basis of the theory is that by focussing on production the gap
between the unlimited needs and limited resources is lessened, it is
assumed that people will work to achieve their own interests. By
working and earning a wage they can in turn purchase the goods and
services they require. This has also come be known as 'trickle down
economics' where the focus is on increasing the size of the cake,
believing that it will somehow trickle down into the bellies of the
hungry.
However the theory is not that simplistic, in order to explain the
'invisible hand' the price mechanism is seen as key. It is seen as
the incentive for production, the regulator of distribution, and the
link between the producer and the consumer i.e. it is the means,
which achieves a balance between production and consumption.
The price mechanism is cited as the incentive for production because
the principal motive for people to undertake any productive effort
or sacrifice in view of the capitalist economists is material
reward. The capitalist economists exclude the possibility that man
expends effort for a moral or spiritual motive .The utilitarian
calculus of Jeremy Bentham states: The value of a thing
or an action is determined by its utility. They consider that
man expends his efforts to satisfy his materialistic needs and
wishes only. This satisfaction is either through the consumption of
commodities, which he produces directly such as a farmer who eats
from his crops, or through receiving a monetary reward that enables
him to obtain the commodities and services produced by others.
In modern society people depend on satisfying most of their needs,
if not all of them, on exchanging their efforts with money. Gone are
the days where people would grow their own food, make their own
clothes and even build their own houses. Monetary reward allows
people to obtain commodities and services. Therefore it is concluded
that the monetary reward, which is the price, is the motive for man
to produce. Hence, the price is the means, which motivates the
producers to offer their efforts. Thus the price is seen as the
incentive for production.
This magical 'price' is also in their eyes the means that regulates
distribution because people like to satisfy all of their needs
completely and they strive to obtain the commodities and services,
which satisfy these needs. According to them had every human being
been left free to satisfy his needs he would not stop short of
possessing and consuming whatever commodity he likes. Accordingly
since every man strives for this same aim, everybody has to stop in
satisfying his needs at the limit at which he can afford to exchange
his efforts with others, that is at the limit of the monetary
compensation, which he receives for expending his effort i.e. at the
limit of the price. Therefore, the price is the constraint which
acts naturally to restrict man in his possession and consumption to
a level which is proportional to his income. So the existence of the
price makes people think, evaluate, and differentiate between their
competing needs which require satisfaction, so they take what they
find necessary, and leaves what they find of less importance. Thus,
the price forces the individual to settle for partial satisfaction
of their needs.
So, the price is the tool which regulates the distribution of needs
required by individuals. It is also believed that price regulates
the distribution of limited utilities to the consumers who demand
them. The disparity in income of the consumers makes the consumption
of each individual confined to that which his income allows. This
makes some commodities confined to only those who can afford them,
while the consumption of other commodities would become common
amongst people who can afford the lower prices. Therefore, the price
will become the regulator in distributing utilities among consumers
by setting a higher price for some commodities and services and a
lower price for others, and also by the suitability of the price to
some consumers more than others.
Case study : AIDS in
Africa
AIDS has been allowed
to spiral out of control in Africa and Asia precisely because the
utility of producing medication and pharmaceutical industries in the
developing nations is non-existent. The people are unable to pay the
price of such commodities. Therefore, there is no incentive
to undertake this measure even though it may save the lives of
hundreds of thousands of people. Instead such industries focus their
marketing and products for the western lucrative markets where
individuals, authorities and governments are capable of paying the
demanded price! This is because arbiter in determining who gets what
is the factor of 'price'. The market's 'natural forces' of supply and
demand dictate this demarcation. Then only those who can afford the
commodity or resource are eligible for it. Hence today we witness
the plight of the millions who simply can't afford the life saving
drugs in which case they deserve nothing but inevitable
death from the capitalist's viewpoint!
Fundamental flaws exist in their theory:
1. Failing to differentiate between basic needs and luxurious
'wants'.
The view of the insufficiency of commodities and services to satisfy
all of man's needs is completely erroneous. The only reason it
sounds believable is due to the fact that there is no distinction
made between basic needs which are required by people such as food,
clothing, shelter and the luxurious 'wants' of people. Many may
desire the latest Ferrari and a country mansion, however they are
not needs that people will suffer without.
The basic needs of human beings are limited, and the resources and
the efforts which they call the commodities and services existent in
the world are certainly sufficient to satisfy human basic needs; it
is possible to satisfy all of the basic needs of mankind completely
many times over.
So, there is no problem in the basic needs, quite apart from
considering it as fundamental economic problem that faces society.
The economic problem is, in reality, the distribution of these
resources and efforts enabling every individual to satisfy all basic
needs completely, and after that helping them to strive for
attaining their luxuries. Therefore increasing production alone will
not solve the economic problem.
Western societies have high levels of GDP (Gross Domestic Product)
yet still have high levels of poverty as was established earlier.
This fact itself disproves the 'invisible hand theory' and the free
market as the solution to the economic problem.
The production centric approach to the economy has led to the
obsession amongst Western economists in increasing national income
through increasing production. GDP and GNP (Gross National Product)
are even used to measure the success of economies globally. These
measures indicate the collective wealth of a nation but do not
indicate the distribution of wealth and levels of poverty.
An increase in the level of production leads to a rise in the level
of the wealth of the country and does not necessarily lead to the
complete satisfaction of all the basic needs of each and every
individual. A country could be rich in its natural resources, as in
the case of Iraq and Saudi Arabia, but the basic needs of most of
their citizens are not satisfied completely. Therefore, the increase
of production by itself, does not solve the basic problem which must
be treated first and foremost, which is the complete satisfaction of
the basic needs of each and every individual, and following that
enabling them to satisfy their luxuries. Thereupon, the poverty and
deprivation required to be treated is the non-satisfaction of the
basic needs of man as a human being (i.e. food, shelter and
clothing), not the increasing luxuries resulting from urban
progress. Hence, the problem to be treated is poverty and
deprivation of individual members of the society, not the poverty
and deprivation of the country measured as a whole. The poverty and
deprivation from this perspective (i.e. for every individual) is not
treated by increasing national production, rather it is treated by
the manner in which the wealth is distributed to the individuals in
society enabling complete satisfaction of all their basic needs, and
then enabling the individuals to satisfy their luxuries.
2. The assumption that people will be able to find reasonable work
The capitalist view towards the economic problem reflects the time
in which it was theorised as it assumes that people will be able to
work and earn a reasonable amount of money to be able to purchase
goods and services to satisfy their needs. Finding work in the late
1700's and 1800's in Britain may not have been difficult due to the
high level of demand for labouring jobs during the industrial
revolution. This continued until the advent of automation and mass
production which led business owners replacing workers by machines.
Machines are more efficient, do not demand rights and can't go on
strike. This obviously increased unemployment decreased the demand
for labouring jobs and led to the growth in the service sector.
This situation has been compounded by the information technology
revolution in the last decade. The development of technologies in
control systems, advanced robotics and the like have further
increased mass production and decreased the reliance on human
involvement. Where once factories that produced cars would employ
hundreds of employees in the manufacturing process, this now is
accomplished by an almost fully automated process.
Corporations in the developed world have also taken advantage of the
cheap labour found in the developing world. Such that the jeans we
wear and the Nike and Reebok trainer's children aspire to have, are
produced by underpaid labourers in the sweatshops of Indonesia,
India, Pakistan and other countries. This form of globalisation has
negatively impacted domestic employment. The heavy industry which
used to characterise British economy is now a thing of the past.
The reality of unemployment, obviously limits peoples ability to
obtain money to satisfy their needs. These changes in the economy
should have led Western economists to re-evaluate the fundamentals
of their economic theory. The following questions, if not so
apparent in the initial conception of the theory have become so now:
What if circumstances prevent people from working?
What if as is the
case for hundreds of thousands of people today that they want to
work but there are no jobs for them, or the jobs available do not
pay enough to meet their needs?
The economic solution
is viewed from the perspective of how to make more resources
available. They view man as a free entity who through his own
self-interest should vie for his slice of the cake. Therefore, the
bigger you make the cake, the more the people can eat. But what if
man can't access the economy or is incapable? In the words of Ayn
Rand (or Anna Rosenbaum) the mind behind the philosophy of
Objectivism, ''all disabled people should be killed.''
So, what the capitalists address is the resources and not man. Hence
we find GDP orientated and infatuated economies and economists who
are only interested in growth per se. What is irrelevant is how many
people have nothing at all? How many people are starving or are
homeless etc?
In the words of a World Bank official, ''If the only effect of
the AIDS epidemic were to reduce the population growth rate, it
would increase the growth rate of per capita income in any plausible
economic model,'' In other words, like the 14th-century bubonic
plague in Europe, AIDS in Africa might propel an economic rebirth!
3.Consumer is the
king
It seems as though free
markets have created its own monsters, which have started to destroy
the very system it was suppose to serve. A system where the consumer
is supposed to be king where through the mechanism of demand and
supply the market should function most efficiently and serve the
needs of the consumer. Which of course makes the assumption that the
market will have many suppliers and no one single or group of
companies will be able to dominate the market and harm the
consumers. In reality the exact opposite has happened with the rise
of large multinationals and corporations. We observe the market
dominance of Microsoft, IBM, General Motors, Coca-Cola, Pepsi, and
Wall Mart etc who continue to grow bigger but the wealth remains
within the handful of minority and as yet to ''trickle down'' with
any real significance. These companies do not respond to consumer
demand or the natural forces of 'demand and supply', but rather they create the consumer demand by manipulating
the market and the media. Hence the consumer is more like a slave
then a master in the market, working like slaves for the creation of
wealth and then waiting for it to ''trickle down''. The society, as
it stands in the west, is the product of a paradox. For example, on
the one hand there is an obsession with being thin. There are
several cottage and trans-national industries that thrive on this
obsession. On the other hand there is another industry that thrives
on selling low quality high calorie over-processed and over-priced
food. One would have thought that these two would oppose each other.
However, the companies and individuals that benefit from the
''well-being sector'' live in a milieu of mutual benefit with the
junk food sector. One, quite literally, feeds of the other. Between
the two, both the clinically obese and the chronic anorexic exist in
a neurosis governed by body weight. The consumer is a slave
sandwiched between, lets say, the junk food industry and the diet
industry.
The concept of Rizq
in Islam
It starts with the idea
in Islam that the Rizq (provision, sustenance) is set by Allah. This
alleviates us from the burden of worrying about how much we are
going to get at the end of the day, and instead redirects our
attention towards focusing on HOW we choose to attain our Rizq.
We don't believe in the utilitarian calculus of Jeremy Bentham
(The belief that the value of a thing or an action is determined by
its utility), rather, for Muslims, the value of a thing or an action
is determined by the Akham Shariah (i.e. Halaal and Haraam) for the
sole purpose of seeking Allah's pleasure. We
do not know how much Rizq Allah has set for us, as this information
is known only to HIM. Because the amount of Rizq is unknown to the
human being, this will encourage the human being to strive and work,
without resorting to fatalism. At the same time, because he is
convinced that whatever Rizq he earns is from Allah, he will be
content at the end of the day. This mentality will deter the people
from crime because, if you are convinced that the Rizq is set by
Allah and the end result will be the same, whether you choose to
earn the Rizq through honest work or through theft and bribery (once
again, you do not know how much the end result will be until it
actually happens), you will naturally opt for the route of honest
work. Also, this will guard the people from arrogance when they
attain wealth; rather than boasting about how ''I earned it'' or ''I
did this myself,'' a wealthy individual will thank Allah for the
wealth that He has bestowed upon him and will use this wealth wisely
because he knows that it is not ''his'' wealth but rather the wealth
that Allah entrusted him with. At the same time, a person who does
not attain much wealth will not chide himself for being a failure or
having a defect, but will rather thank Allah for whatever Rizq he
attained and analyze his shortcomings constructively.
Islam wages war on poverty
Islam views the economic problem in a radically different way. Islam
focuses on the distribution of wealth not just the production. There
are enough resources in the world to provide the basic needs for
over 60 billion people according to some statistics. The problem of
poverty will not be solved by producing more and more for the rich
to consume rather it will be solved by ensuring that basic needs of
every individual are satisfied completely.
Islam looks at every individual by himself rather than the total of
individuals (GDP or per capita income) who live in the country. It looks at him as a human
being first, who needs to satisfy all of his basic needs completely.
Then it looks to him in his capacity as a particular individual, to
enable him to satisfy his luxuries as much as possible. The purpose
of the economic policy in Islam is not to raise the standard of
living in the country without looking to secure the rights of life
for every individual completely. Nor is it just to provide the means
of satisfaction in the society, leaving people free to take from
such means as much as they can, without securing the livelihood
right for each individual. Rather, it addresses the basic problems
of everyone as human beings, then enabling each individual to raise
his standard of living and achieve comfort for himself.
The Ahkam Shari'ah has secured the satisfaction of all of the basic
needs (food, clothing and housing) completely, for every citizen of
the Islamic State (Khilafah).
The Prophet (saw) said,
''The son of Adam has no better right than
a piece of food to eat, a drink of water to quench his thirst and a
piece of cloth to hide his nakedness and anything else is luxury.''
This is achieved by obliging each capable person to work, so as to
achieve the basic needs for himself and his dependants.
Allah (swt) the Supreme said:
''So walk in the paths of the earth and eat
of His sustenance which He provides.'' [ Al-Mulk :15].
Many Ahadith came to encourage earning. In one narration, the
Prophet Muhammad (saw) shook the hand of Sa'ad ibn Muadh (ra) and
found his hands to be rough. When the Prophet (saw) asked about it,
Sa'ad said:
''I dig with the shovel to maintain my family.'' The Prophet (saw)
kissed Saad's hands and said: ''(They are)
two hands which The Supreme loves.''
Islam obliges the children or the heirs to support the parents if
they are not able to work, or obliges the State Treasury (Bait
al-Mal) to do so, if there is nobody to support them. Muslim
narrated from Jabir that the Prophet (saw) said,
''Start with yourself and make charity for
it, and if anything is left give it to your family, and if anything
is left after that give it to your relatives, and if anything is
left after that, do it like that, and that i.e. to that in front of
you, at your right hand and at your left hand.''
When the Islamic rules are inculcated into the Islamic society the
rules of aiding the family will become more apparent to the people
and adherence to them will increase as occurred in history under the
Khilafah. The feeling of responsibility towards relatives still
exists today amongst millions of Muslims worldwide in the absence of
the Islamic state, many of them in the Muslim world even looking
after their extended families.
It is the feeling of responsibility to care for the weak and needy
that demonstrated the greatness of the some of the Islamic rulers of
the past. Not a night would pass where they felt comfortable
resting, until they were sure that needs of their Ummah were being
catered for. It is narrated by Abu Naim in Hilliyah that Umar ibn al
Khattab, the second Khalifah of the Muslims, came out on one dark
night. Talha ibn Ubaidullah (ra) noticed him and followed him to his
destination. He saw Umar (ra) entering one house and then another.
Next morning, Talha (ra) went to one of the houses that Umar (ra)
had visited the night before and saw that an old blind and crippled
women lived in the house. He asked the old lady why that man (Umar)
came to her before. The women responded ''This man looks after me,
provides me all necessities of life and removes any cares and
anxieties''.
Islam also gave the responsibility of the community to help people
in financial difficulty.
Al-Bazzar narrated from Anas that Muhammad (saw) said from one of
the sayings from his Lord (swt):
''He who would not have believed in me, the
one who slept with his stomach full when his neighbour on his side
was hungry and he knew of it.''
Allah (swt) ordered the caring for the poor people.
The Supreme (swt) said:
''If you reveal your almsgiving, it is
well, but if you hide it and give it to the poor (people) it will be
better for you.'' [ Al-Baqarah :271]
If an individual has not been able to earn through employment or
other means and their family and community are not able to aid them
to meet his basic needs then the Islamic state will aid him to
satisfy his needs. This is accomplished in a number of ways.
If the person is unable to earn due to a disability whether physical
or mental, the state will give he or she the necessary funds from
the Bait ul Mal.
If the person is able to work but has been unable to find work then
the state could employ them within the public sector after reviewing
his reality. The public sector in the Islamic state will be much
larger than in Capitalist states due to prohibition in Islam of
owning public utilities such as gas and oil. The Islamic state can
also give the citizen a grant for a business project or the means
for them to provide for themselves such as purchasing a computer for
a web developer or tools for the farmer.
Alternatively the state can enter into a partnership with the
individual which is a type of Mudharaba, company structure. This is
where the state invests capital and the individual carries out the
work and the profits are shared. However this will be done for the
interest of the people, as the Khilafah is not a businessman, it is
a guardian and must act as such. Hand-outs are a last resort, as the
aim is to enable citizens to be able to provide for themselves, if
they are unable to - then the state must provide each individual a
sufficient amount according to their specific needs.
Islam has made the circulation of wealth between all citizens an
obligation, and it has forbidden the restriction of such circulation
to a certain group of people to the exclusion of others. Allah (swt)
says:
''Lest it circulates solely among the
wealthy from amongst you'' [ Al-Hashr :7].
If there were a wide gap within society between individuals in terms
of securing the needs, and if society needed to be rebuilt, or if
this disparity was caused by neglect of or the indifference in the
implementation of the Islamic rules, the State would be under
obligation to redress the situation by handing out financial
assistance to those in need, until these basic needs were satisfied,
and until a balance in distribution was struck. The State should
endeavour to provide both movable and immovable commodities, for its
aim should not only be to temporarily fulfil one's needs, but also
to provide the means which would assist the individual in his quest
to fulfil his own needs over the long term.
A word about finance
The form of currency in Islam is based on gold and silver
standardisation. By
backing the currency with resources of real value, Islam creates a
stable medium of exchange and eliminates the worthless paper money
standardisation,
which enables the rich to become super rich by manipulating
currencies and maintain a monopoly over the financial markets of the
world.
Also Islam stipulated that money can not make money, no money can
sit in some fat bank account and regenerate itself. As for the stock
market, forget it. There are no stocks in Islam. Any person is
welcome to enter into a partnership, but he has to be there and not
shield himself behind all kind of corporate rules enabling him to
milk the profits while running to tax payers when the going gets
rough.
Conclusion
Capitalism teaches that
individualism is sacred. Every person is entitled to the pursuit of
happiness as he sees fit. Such unchecked freedom can go to the
extreme, and many times the state has to contradict itself by
stepping in and imposing some limit to such freedom. But the
underlying thought accompanying this ''individualism'' is ''mind
your business'' if somebody is making millions or billions out of
the stock market he must be sharp or smart. It's his right… much as
it is the right of the homeless to die in the street of hunger and
sickness meanwhile you just mind your business. See no evil, do no
evil, hear no evil...the fact that the economic policy of the land
is geared towards making the rich super rich and the poor super
poor, this is not your business ''let George do it''. Well sorry,
this does not work, or rather it will work but only to the benefit
of the few at the expense of the miseries of the majority of the
society, both locally and globally. Simply because the rules have
been written to benefit those who wrote them.
We, as Muslims, have
high ideals that we adopt for this world. However, these ideals,
whether achieved or not, will benefit us in this life and in the
next. That is our ultimate goal.
''But seek the abode of the Hereafter in
that which Allah has given thee, and neglect not your portion of
this World: and be kind, as Allah was kind to you and seek not
corruption in the earth: For Allah loves not those who seek
corruption'' [ Al Qasas: 77].
This is the principle that underpins the Islamic system. We are to
do good on the earth rather than to make corruption, not merely to
make the world a better place, but to reap the rewards in the
hereafter.
Quotes
'In a political
democracy, each person gets the vote. In the market, one dollar is
one vote, and you get as many votes as you have dollars. No dollar,
no vote.' [David Korten: Harvard Graduate Business school]
''Our flawed choice
results in part from our nearly universal failure to distinguish
between money and real wealth. An experience I had a few years ago
in Malaysia illustrates the distinction I have in mind. I had a
brief encounter with the minister responsible for Malaysia's
forests. Seeing that I was Western and assuming I was probably an
environmentalist, he wasted no time in poking my buttons by
explaining to me that Malaysia would be better off once its forests
are cleared away and the money from the sale is stashed in banks to
earn interest, because the financial returns will be greater. The
image flashed into my mind of a barren and lifeless Malaysian
landscape populated only by branches of international banks, with
their computers faithfully and endlessly compounding the interest on
the profits from Malaysia's timber sales. It is a metaphor that sums
up all too well the future to which our confusion of money and real
wealth is leading us. ''[David Korten]
''Capitalism is the
astounding belief that the most wickedest of men will do the most
wickedest of things for the greatest good of everyone.''
John M Keynes, Margaret Thatcher's guru
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