Sunday, December 12, 2010

Restoration of Caliphate Part IV-Economic Matters

Since the first organization of human activities within a civilization, mankind has been bound to the laws of economics and commerce. Indeed these aforementioned laws are as powerful, as present as that of gravity and of motion. Aristotle’s notion, while certainly true, was also incomplete. Man is both a political and economic animal, and it behooves the Muslim to recognize and to accept The Immutable Truths present in our human nature. In short, we submit that Economics and Politics are two arts, so intertwined, so closely related, remaining mutually exclusive that together represent the Master Art by which the Muslim statesman must rebuild his homeland. The Prophet Muhammad (SAAW) said: "If you are pleased with what God has (given you), you will be the richest of men. If you are kind to your neighbor, you will be a believer. If you like others to have what you want for yourself, you will be a Muslim." Indeed, Allah Almighty (SWT) Has Commanded Law within The Holy Qur’an that is strictly related to inheritance, wealth acquisition, commerce, spending, charity, and how each relates His Definition of Social Justice. There can be no doubt: under the banner of Islam, man has Sacred Economic Rights that must be maintained, for to do otherwise is to defy The Lord of The Worlds (SWT). Riba (or usury) is Forbidden within the Islamic economic system. The forced labor of slaves is Forbidden under the Islamic economic system. The deprivation of the social fabric begins with wealth, as the prophet alluded in relation to one being a Muslim in the previously cited hadith. Do we hope for, strive for, and legislate so that the neighbor is afforded the same opportunity as ourselves? Islam is not socialist system. Personal initiative, genius, employment; all are to be awarded to he, or she, who has distinguished themselves on a level practical paradigm. All must have access to the minimum necessary to sustain life and to cause it to flourish and blossom. This is the first of the Fifteen Rights. It is a political right that one’s life is considered sacred in that it should not be wasted for mere sport or to obtain some other unnecessary, reckless aim. Yet, within the polis-within the Ummah-the child of the Caliph must be educated and cared for by the same standard as the child of the ditch-digger. There must be an equilibrium in which both are afforded the same opportunity at achieving the success comparable to their talent and diligence. Islam came to free mankind from all human servitude. This includes the individuals’ freedom from the bondage of the wealthy within a capitalist society, as well as the freedom of entrepreneurs from bondage of the State. There will be a gap between the rich and the poor under the Islamic system. And it is with this simple statement that a great many questions arise. How will banks earn profits? How will individual obtain loans for cars, for homes, for small businesses? What is an acceptable rate of taxation? How will infrastructure be built, in some parts of the Ummah for the first time in centuries? What goods and services can the people of the Ummah provide better than any other? How will banks be regulated? What, if any, role will the State engaged upon within the economic framework?

From inquiry, let us consider some sobering facts about the most publicized portion of our Ummah, in that of the Middle East. On the blog, Sirocco, in March of 2006, the author wrote of the 18th Arab League Summit in Khartoum:

Prince Waleed's $4.2 million dollar car
But the Arab region has bigger problems — ones that, in a sane world, which ours of course is not, would have been addressed at the summit. Below are some statistics compiled from a number of sources, pertaining to the region stretching from Morocco to Iraq and encompassing a population of 289 million, or five percent of humankind…Wealth: Although Arab nations control three-quarters of the world’s energy resources, their combined GDP is lesser than Spain’s and a mere fifth of Japan’s. Without oil, they would have a GDP equivalent of Nokia’s revenues…Growth: The growth in per capita income has stalled for two decades, to a level just above that of sub-Saharan Africa. According to the 2002 Arab Human Development Report, it averaged 0.5 percent between 1982 and 2002. (In comparison, between 1993 and 2003, Vietnam’s GDP tripled.) Sweden, at 9 million inhabitants, attracts more foreign capital than the entire Arab world put together…Employment: The Arab Labor Organization reported in 2003 that about 25 percent of the active population in the Arab states are unemployed, ranging from 6–17 percent in Gulf countries to over 75 percent in Palestine and Iraq. For young people the unemployment rate is over 50 percent. Educated persons are especially marginalized: 57% of the unemployed Arab population have been educated to secondary level or higher…Economic equity: Despite the exorbitant petroleum resources of their countries, more than one in five Arabs lives on less than $2 a day, according to the UN. In Egypt — the most populous Arab nation, and one of the least inequitable — 1 percent of the population owns 90 percent of the wealth. In a country that is second in the world in terms of Mercedes Benz ownership, about half of the urban population live in absolute poverty and an estimated 60 percent of same dwell in shanty settlements. Inequality is increasing throughout the region…Female participation in work force: A 2004 UNIFEM report shows that Arab countries have the lowest female employment rate of any region in the world, at only 28 percent…Attitudes to gender equality: A survey conducted by the Egyptian government and reported by The Guardian in November 2004 found that one in three women has been beaten by her husband. Eighty-six percent of the women regarded this as normal. Twenty-six percent of women in their 20s believed that they deserve a beating if they burn dinner; 42 percent that they do so if they spend too much money; and 65 percent that they do so if they talk to another man. Conditions are probably as bad or worse in most other Arab nations…Contentness: One in two Arab youths wants to emigrate. Of those who make it to Europe, over 90 percent stay for good…Demography: Thirty-eight percent of Arabs are under 14 years old; 60 percent are under 20 years old. The population of the Arab countries is projected to grow to between 410 million and 459 million by 2020…Urbanization: In the Maghreb countries and Syria, every second inhabitant is now a city dweller. In Iraq, the proportion is two out of three. It is predicted that by 2015, 70 per cent of Northern Africa’s population will live in cities…Education: About 65 million adult Arabs are illiterate, two-thirds of them women. Education expenditure per capita has declined over the last two decades; in the mid-90s it was only 10 percent of that in industrialized countries. Some 10 million children between 6 and 15 years old do not attend school…Internet use: Less than four percent of Arabs have access to the Internet, according to the UN’s International Telecommunications Union (ITU). This is a lower rate even than in sub-Saharan Africa and means that the region accounts for just 0.5 percent of Internet users. Only one in a hundred Arabs has a personal computer…Literature: The 2003 Arab Human Development Report speaks of a “severe shortage” of new writing by Arabs. In addition, fewer than 4.4 books per million people are translated throughout the Arab world annually, as compared, for instance, with 519 in Hungary and 920 in Spain. Arab publishers translate only about 330 books yearly, or one-fifth the number rendered into Greek. Incidentally, this is not a new development: during the past millennium, the Arab world has translated into Arabic only as many books as Spanish publishers now annually translate into Spanish. The printing press was banned in the Middle East into the 19th century…Science: Arab nations spend less than one-seventh of the world average annual investment in research, in relation to the size of overall national economies. There are only a handful Nobel Prize winners from Arab countries…Governance: Monarchy remains the most dominant form of governance in the Arab countries, eight of which have the institution. Also, the longevity of rulers makes for few successions. Since its founding in 1932, Saudi Arabia has had only six rulers. Bahrain has had three rulers since 1971; Jordan has had four kings since 1946; Kuwait has had four emirs since 1950; Morocco has had three kings since 1957; Oman has had two sultans since 1932; Qatar has had three emirs since 1971. Among the republics, the UAE has had four presidents since 1971; Egypt three since 1952; Tunisia two since 1956. It is noteworthy that in no Arab state has an opposition party yet taken power upon winning an election, unless the Palestinian occupied territories be counted as one…Regional cooperation: After a half-century of “Arab unity” there is not even a customs union in place. There is less trade between Arab countries even than between sub-Saharan ones…Liberty: According to two international indices that are widely used to compare levels of freedom — including free speech, civil rights, political rights, free press and government accountability — the Arab region has the lowest level of freedom of any of the world’s seven regionsA couple of observations in closing. First, it is no mystery that, as The Angry Arab notes in connection with the summit, not a single Arab leader “is liked or respected by his people. Not one. In fact, every one of them is despised, deeply despised, by his people.” Second, this is not about Islam per se, or at least not exclusively. Only about 14 percent of the world’s Muslims are Arabs, and of the larger group, more than half live under elected governments (e.g. Indonesia, India, Turkey, Nigeria, Bangladesh). Many non-Arab Muslim nations are also more prosperous and have greater social mobility, as well as gender equity, than the Arab average. Third, those who wonder why populist Islamism is on the march across the Arab world can start wondering instead what the hell to do about it.[1]

We think of the words of al Farabi, when he wrote ‘The city may be necessary and may be virtuous. The necessary city is the one whose parts mutually assist one another in obtaining only what is necessary for a human being’s constitution, subsistence, and preservation of life. The virtuous city is the one whose inhabitants mutually assist one another in obtaining the best things for a human being’s existence, constitution, subsistence, and preservation of life.’ The facts and statistics of the Arab world are symptoms of a great disease of the heart, the mind, and accurately portray the current circumstances in which we currently exist. We are now, at this moment, an Ummah descended into barbarism. What shall be done? Politics and economics are local. Before we can connect with brothers and sisters tens of thousands of miles away, we must make a commitment to spend money in stores owned and operated by Muslims. This is a new perspective of Malcolm’s ‘Black Nationalism’ ideology, which in our case truly holds true for us as Muslims. Like the African-American community, we are accustomed to working, earning money, and then spending said funds outside of our community, whereas those of Jewish, India Proper, and Latino descent will spend money among the businesses and shops of their respective group. In other words, if I am a Jewish man who works at my local university, I am more apt to buy my kosher meat and other groceries from another Jew. My teeth are cared for by a Jewish dentist. My shoes are re-soled by a Jewish cobbler. My cell phone is purchased in a franchise owned by a Jewish family. The Muslim, in this case, must take what is good and leave what is bad, and follow this type of local, economic model of Islamic Nationalism. Moreover, the Muslim should expect a minimum standard of quality, fair price, cleanliness, and customer service from the Muslim businesses in which they spend their money. I should expect that not only that the chicken I eat be halal, but also organic. I should have no fear of airborne or bacterial viruses. I should expect 24 carat gold to be 24 gold. I should spend my money in the hope that the Muslim businessman will conduct his affairs in accordance with the laws, regulations of Islam and the nation in which we reside. In New Jersey, the cities of Paterson, Newark, and Jersey City Muslims own entire blocks of stores, restaurants, and shops. It is here that my money truly belongs, should I have a need. The internet allows me to purchase clothing from all over the globe. Hijabs, jeans, sweatshirts, etc., all can be purchased from Muslim establishments. If I spend, then the Muslim businessmen must organize and seek to make larger collective ventures that will allow for greater employment opportunities for our people, Inshallah. This is something anyone can do from the same location in which they are reading this essay. It is a matter of rejecting the non-Muslim and placing preferential, and where possible, exclusive right of Muslim businesses over my money. This is a small, achievable course of action that can and must be accomplished on the micro-level.

On the macro-level, we must look to ibn Khaldun. Al Sayed wrote of ibn Khaldun’s Muqaddimah that:

Ibn Khaldun’s attention to practical questions in a literary work shows admirable boldness. He succeeded in giving a picture of the role of capital and labor in society that not only does credit to his acumen, but bears witness to the high level legal circles of his time had reached in their understanding of these matters. In the first place, labor brings prosperity. At the highest stage of civilization, however, men get others to labor for them, often without any direct equivalent. Nevertheless, there is and was a growing awareness that men depend on others. Needs grow more clamorous, and taxes more oppressive. Rich spendthrifts and taxpayers grow poor; their unnatural life makes them discontended, and sometimes downright ill. Ibn Khaldun anticipated Marx by about five centuries in his interpretation of the impact of economic factors on political and social life. Ibn Khaldun conceived economics as independent of ethics, and concerned with a positive description of phenomena and an apprehension of the laws governing them, rather than an appraisal of their moral value. Unlike some of the mercantilists, he realized that production rather than trade is the source of wealth. He understood clearly the function of trade and declared it and most other services such as the function of trade and declared it and most other services such as teaching, singing, and medicine, as productive, in this area showing himself more clear-sighted than Adam Smith. He even went so far as to say that as civilization progresses, the relative importance of agriculture declines, while that of services increases. Before Durkheim, ibn Khaldun hinted that division of labor reinforced social solidarity. Like Karl Marx, he understood the enormous influence exerted by economic factors on political and social life. Ibn Khaldun had been deeply influenced in his economical theory by Muslim theologians and jurists such as al Farabi, ibn Sina, and especially al Ghazali, who as theologians were obliged to reach conclusions concerning the determination of taxes, the ethical and administrative problems of their collection, the lending of money, and the legitimate sources of income. Within that religious and theological frame he was essentially liberal-minded, ready to censure every regulation which restricted economic exchanges.

Cecep Maskanul Hakim wrote for the Bank of Indonesia of ibn Khaldun’s contribution to economic theory that:

Ibn Khaldun divides all revenues into two categories: ribh (gross revenues) and kasb (life revenue). Ribh is secured when a man works for himself and sells his products to others. In this context the value should contain cost of raw material and natural resources. Kasb is achieved when a man works for himself. Therefore ribh means profit or gross revenue, depending on the context. In this instance, ribh means gross revenue because raw material cost and natural resources are included in the selling price of an object. Whether ribh or kasb, revenue is the value realized from man’s labor i.e. all that is  obtained through human effort. According to ibn Khaldun, although commodity value compromises of cost from raw material and natural resources, it is through labor that value become increasing and hence, wealth grows. Without man’s effort, the opposite will occur. Ibn Khaldun underlines the role of extra effort that later known as marginal productivity, in the welfare of society. His theory on labor give th reason for the increase in cities, such as one indicated by his historical analysis, that becomes major element of civilization. If we interpret ibn Khaldun’s idea on work, it is clear that labor is necessary and a sufficient condition for revenue and natural resources is only necessary condition. Labor and effort tend to produce which in turn will be used against an exchange through barter, or through the use of money, namely gold and silver…Income for judges, crafters, even burglars, for instance, is directly related with welfare level and living standard in every city, achieved through labor result and crystallization of productive society. Adam Smith explains the difference in labor income by comparing between England and Bangladesh, similar to what ibn Khaldun did four centuries before, when he compares income in Fez and Tlemcen. It is ibn Khaldun, not Adam Smith who presents, for the first time, labor contribution as wealth creation for a nation, by stating that labor increases productivity, and that product exchange in a large market is the prime reason of wealth (and prosperity) of a nation. On the contrary, decrease in productivity may lead to decrease in economy and income of its society. In his words, ‘a civilization generates large profit [income] due to large number of labor force which is the cause of profit’…[ibn Khaldun would go on to state of the necessity of a free economy and free choice and competition in the market place] ‘Among suppressive action, and very perilous measure to the people, is to compel someone to do forced work unjustly. Because labor is a commodity, like the one we will show later, in income and profit, representing work value of its recipient…unfortunately most people do not have income source ofther than his own labor. Therefore, if they are forced to work for what they achieved through training, or compelled to do work in their own field, they will lose the result of their work and pulled out of the greatest part of, even all, their income

First, let us examine the latter prior to the former. In a true Islamic system, the artist should not starve, but be provided the best opportunity to do that which his passion compels him to perform. It is an indirect, but certain, act of suppression for a man to leave his hammer and chisel, his paint brush, his saw, or the other instruments by which can create works of arts within The Boundaries of Islam for the glare of a computer screen and a headset. The artist is suppressed so that the customer service agent can feed, house, and clothe himself and his offspring, though with the current mindset of the Muslim woman and her parents, it is doubtful he will have offspring. Yet we digress.

In relation to the former, we look to the work of Robert Lacey, and his text, Inside the Kingdom before reminding the reader of the platform of Algeria’s the Front Islamique du Salut prior to the 1990 civil war in that North African nation. Saudi Arabia subjects must operate under a system that makes enterprise depended upon the corruption of the provincial governors of the al Saud family, within a paradigm divorced of any civil society. Unemployment in 2003 was over twenty-five percent in the al Saud kingdom, and now stands at 12%, which is considerably higher than that of its American vassal lord. Lacey gives us some indication that this drastic 13% reduction in unemployment could be do to ‘[the Saudi monarch] Abdullah announce[ment of] of the creation of a new Supreme Economic Council to streamline economic decision making…Youth unemployment was a tradegy’[2]. The unemployment rate in Algeria currently stands at 10%, down twenty-one percentage points from its level of 31% in 2003. Lacey has provided further evidence of the assertions of the Sirocco blogger, when he writes:

The unrestricted entry of cheap foreign workers had flooded the Saudi labor market with millions of third-world workers who were willing to live in primitive camps and to work for seven hundred riyals ($190) per month. This was a third of the amount on which a Saudi could survive, and the logical solution-that young Saudis should be trained to work as managers-was handicapped by the rising generation’s embarrassing deficiencies in education, particularly when it came to practical knowledge and independent reasoning skills. The teaching of math, science, and English in schools had been drastically reduced in the early 1980s to make room for the extra religious classes that featured learning by rote-the post Juhayman backlash had almost guaranteed the production of more Juhaymans.[3]

The Muslim is ill-prepared and ill-equipped to compete in the global market place, and this is a condition by which he must change, for his survival depends upon it. Across the Ummah, the Muslim is far too dependent upon the state, both in historically Muslim homelands and in the West. He has been taught a version of Islam, or shall we state, a school of thought or jurisprudence; which has prepared for nothing except destruction, that of his own and others. He lacks the capacity to thinking critically and with the use of reason, so much so that Muslims who disagree with him, find themselves moving further from Islam and into the secular notions-the European notions-of civilization. However, we submit to them that it is within the True Deen wa Dawlat of Islam from which ibn Khaldun, al Farabi, ibn Sina, al Ghazali, and literally thousands of others less prominent men and women who worshipped Allah and followed His messenger(SAAW) brought forth the ideas, theories, and modicums of practice by which a society could be built and sustained. The Front Islamique du Salut of Algeria, with its most important member Abbasi Madani, offered a platform that included the Arabization of Algerian education system, a direct rejection of the French values and language which dominated the upper echelon of Algeria including its university system; dismantling the planned economy emphasizing competition in a private sector economy which would receive loans from banks within an interest free Islamic banking system; and began to win elections in Algeria. The pro-French Algerians, aided I would imagine by the French government and business community in need of Algerian petroleum, took power in a coup d’état. What could have been, Allahu Alim; but it must be again. Algeria is a prime example of what the West fears the most, and that is Muslims exercising their rights to political self-determination, rejecting post-colonial notions of progress and cultural emulation, and rebuilding viable, commercial, states in a Islamic framework. And in short, it was the Algerian ‘Uncle Toms’ that destroyed the Islamic Nationalists’ hopes in that gorgeous, North African nation.

We can do this. We can change our condition. We just need to use our minds and act openly and boldly, Inshallah. May Allah Grant us the courage before it is too late.

Isma’il ibn Bilal

[2] Robert Lacey, Inside the Kingdom: Kings, Clerics, Modernists, Terrorists, and the Struggle for Saudi Arabia  p.192
[3] Ibid. p192 (Lacey’s reference to Juhayman is of Juhayman al Otaybi, who was executed for revolting in the Sacred House of the Ka’bah)


  1. You forgot about the Gold Dinar
    Umar Vadillo
    Founder of World Islamic Mint

  2. Inshallah, Umar find us FB, so we can have you draft an article explaining the significance of this...Wallahi...I am so serious, Inshallah.