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organization”
Capitalism: An exploitative System
In America:
37 million people live below the official poverty line—12.6 percent of the total
population
At least 2.3 million people experience homelessness at some point each year,
including nearly 1 million children
The richest among them has more wealth than the bottom 45 percent of the
households combined
Capitalist system:
Polarization of Wealth
is the Hallmark of Capitalist system
Net worth and financial wealth distribution in the U.S. in 2007
Rich getting richer and poor getting poorer
Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of
American households combined.
Business Week reports that in 1999 top executives earned 419 times the average
wage of a blue-collar worker, up from 326:1 in 1998. In 1980, the ratio was 42:1.
Concentration of Wealth in the West
Percentage of wealth held by the Top 10% of the adult population in
various Western countries
wealth owned
Country
by top 10%
Switzerland 71.3%
United States 69.8%
Denmark 65.0%
France 61.0%
Sweden 58.6%
UK 56.0%
Canada 53.0%
Norway 50.5%
Germany 44.4%
Finland 42.3%
Where is the world headed!!!!!
An analysis of the trend of the widening gap between the rich
and the poor countries
1820 3:1
1913 11:1
1950 35:1
1973 44:1
1992 72:1
System not Resources
Solution: Solution:
Distribution of wealth and resources to Needs of all the people won’t be
guarantee all basic needs to each fulfilled
individual Increase Production to fulfil
Create opportunities so that maximum needs of as many people as
number of people can work to fulfil there possible
luxurious needs
As of 1995 (the latest figures available), Federal Reserve research found that the
wealth of the top one percent of Americans is greater than that of the bottom 95
percent
According to the US Census Bureau, 35.9 million people live below the poverty
line in America including 12.9 million children. (http://www.census.gov)
The wealth of the three most well-to-do individuals now exceeds the combined
GDP of the 48 least developed countries
UNDP calculates that an annual 4 percent levy on the world's 225 most well-to-do
people (average 1998 wealth: $4.5 billion) would suffice to provide the following
essentials for all those in developing countries: adequate food, safe water and
sanitation, basic education, basic health care and reproductive health care.
Ownership
Economic System:
In first ten month of 2004-2005 assets worth $3.6 billion has been sold:
Survey 2005:2006
Whilst the bottom 80% of Americans only got 29 % of the total tax cut
($377 bn)
The tax cut savings clearly shows that Bush works for the Super-Rich,
and that he is willing to promote their interests above those of all other
Americans
Taxes in Pakistan
Agriculture sector in Pakistan contributes 40% to the GDP whilst astonishingly its
contribution to the tax revenue is a meager 1%
GST, which is an indirect tax extracted from common man, constitutes 37% of the
total tax-revenue of Pakistan
No Zakat taken from the land mafia which owns billions of rupees of land for the
last decade or so. Islam requires a Muslim to give two and half percent of the
value of the tradable goods in alms as Zakat
No wonder in democracy the elite legislate laws to tax the poor and give tax
breaks to themselves
Taxes Comparison
2009-10 2008-9
Evidences
Economic System:
Taxes
Khilafah Capitalism
No Taxes on common man1
GST, Income Tax, Withholding tax, toll 63.93% (Rs 840 billion) of revenue of
taxes etc are all haram and will be Pakistan comes from taxes on the people
abolished as per the budget 2006-07 figures.
There will be following permanent Out of these taxes 67.66% (Rs 569 billion)
are indirect taxation that are to be paid by
sources of revenues even a beggar, unemployed, handicapped,
Al-Kharaj 2 widow, elderly people and children without
Al-Jizya 3 any differentiation.
Al-Ushr 4
The fifth of Al-Rikaz 5 (hidden treasures
minerals)
Import and export duty on foreign
traders 6
Zakat on import and export of the
Muslim Trader 7
Hima (Protecting from public properties)
Laws related to
Agricultural land
Economic System:
Khilafah Capitalism
The Company of Equal (Al-’Inan) Public Limited Company
The Company of Bodies (Al-Abdan)
The Company of Body and Capital Private Limited Companies
(Mudharaba)
The Company of Reputation Faces Guarantee Limited
(Wujooh)
Company of Negotiation (Mufawadha) Unlimited Company
A Man is not separate from his The Company and the owner
company are two separate distinct bodies
He is responsible for the debt of the Owner is not responsible for the
company. He the stake holder money debt of company beyond his
is safeguarded investment
A man can not hide behind the Owners always hide behind the
corporate rules at the time of corporate rules at the time of
bankruptcy bankruptcy.
Zakat
Zakat
Zakat is only taken from Muslim citizen after the passage of one year if his
wealth exeeds Nisab which is different for different catagories
Liquid Currency
Stocks (Raw material or Finish Goods)
Receivable – Debts
Live Stock
Land (Ushr)
Any tradable commodity including property
Hence as a whole more than 2.5% of the total wealth of the economy is
collected from the society and injected back into the poorest echelons
of the society.
This is a tremendous mechanism of producing a balance in the
distribution of wealth within the economy apart from other Ahkam of
Islam which allow the down trodden people to improve their economic
situation
Foreign Loans
Foreign Loans- no way
Khilafah Capitalism
Taking Foreign loans would not be Foreign loans are the integral part
allowed 1 of Pakistan’s capitalist economy
This year 239 billion rupees will be
Membership in colonial received as different type of foreign
organisation is also not allowed like loans.
Paris club, ADP, Islamic In 1980 Nigeria took a loan of $3.5
Development Bank, World bank billion from the Paris club. By 1985
and of course IMF. this debt had risen $5.8 billion. By
1998 it had risen to 20.9 billion, and
is today estimated at 27 billion.
Sovereignty of Pakistan was mainly eroded due to foreign loans
IMF and WB dictate all our internal policies under the guise of ‘reforms’
and ‘good governance’
Khilafah would liberate us from IMF & WB Structural Adjustment
programmes (SAP’s), Poverty reduction strategy Papers (PRSP)
conditionalities and improve our economy
Evidence
Economic System:
Merchants from countries that have treaties with the State are
treated according to the terms of the treaties
Any country with whom we have actual war with, its citizens (such
as Israel) is excluded from these rules. The rules applicable to the
actual land of war (Dar al-Harb Fa’lan) apply to such country in all
the relations
Trade
Economic System:
Local Traders
Khilafah Capitalism
Merchants who are subjects of No such provision, hence Pakistan is
the State are prevented from helping India fulfil her energy needs
exporting any goods that the by building two gas pipelines. Which
enemies could benefit of would further strengthen Indian
militarily, industrially or industry and Military to be used
economically against Muslims of Pakistan
This Trade Policy protects the state from potential enemies in the future
They are not prevented from The government hurts the local trader
importing any property they own under the pretext of “Smuggling” while
under the pretext of protecting reduces import duty to give monitory
the local industry benefit to the foreign trader under the
guise of “foreign investment”
There is nothing known as “Smuggling” in Islam as long as the citizen of the
state imports Halal items
Import export duties
Khilafah Capitalism
A Muslim trader only has to pay Zakat Import and export duties
(2.5%) of the property during import and may be as high as 15 to
export once a year 1
20%.
No import or export duty other than zakat Import duties on luxury cars
reduced to suit the rich
2. Islam prohibited pricing absolutely, due to what Imam Ahmad narrated from Anas who said: “Prices increased at the
time of the Messenger of Allah , so they said, O Messenger of Allah, we wish would you price (fix the prices). He
said: “Indeed Allah is the Creator, the holder (Qabidh), the Open-handed (Basit), the Provider (Raziq), the Pricer
(who fixes prices); and I wish I will meet Allah and nobody demands (complains) of me for unjust act I did
against him, neither in blood or property.” Also Abu Dawud narrated from Abu Huraira, he said, “A man came and
said, O Messenger of Allah, fix prices. He said: “Rather Allah reduces and increases.”
3. S’aid ibn Al-Musayyab narrated from Mu’ammar ibn Abdullah Al-‘Adawi in Bukhari that the Prophet (saw) said: “No one
monopolises except the wrongdoer.” Al-Athram narrated from Abu Umamah, he said: “The Messenger of Allah
(saw) forbade that a foodstuff be monopolised”. And Muslim narrated through his chain of narrators from S’aid ibn Al-
Musayyab that Mu’ammar said: “The Messenger of Allah (saw) said: “Whoever monopolised is a wrongdoer.”’
Monopoly is prohibited (Haram) in all things without a difference between the human foodstuff or animals foodstuff, a
foodstuff or not, and of the people’s necessities or luxuries. This is because the linguistic meaning of the word
monopolised (Ihtakara) is to compile a thing in its absolute sense (without specification). The word monopolised did not
come in the meaning of compiling the foodstuff or the people’s necessities, rather compiling the thing, so it should not be
confined to other than its linguistic meaning.
Evidences
Economic System:
Khilafah Capitalism
Hoarding of wealth (money) is People are “free” to hoard wealth for no
haram and state will take practical reason
steps to prevent it 1
State Revenues
Khilafah Capitalism
Sources of Bait -ul-Mal Predominant source
The booties and the spoil of war1, Al-Fai2 and the fifth3 of income is Taxes
Al-Kharaj from the common
Al-Jizya people. People in the
Protecting some Public property (Hima) 4 west are taxed upto
State property of land, building utilities and their 35% of their income
revenues)
Al-Ushur
Money attained illegally by the rulers, the employees of
the State, illicit money and money from penalties
The fifth of Al-Rikaz (hidden treasures) minerals 5
The inheritance property of the one who has no
inheritors 6
The property of apostates 7
Charity Funds – Zakat
Taxes (only from the rich Muslims and in specific situations)
State Expenditure Priorities
Khilafah
The expenditures of the State are based around seven areas:
The Zakat funds – on fix 8 categories mentioned in the Qur’an.
Spending money on the destitute and the poor to ensure their basic needs is a must
on the State.
Spending on defence, heavy industry and security of the State as well as carrying the
Islamic Message to other lands.
Allowances of State employees such as salaries of soldiers, civil servants, judges,
teachers and the like.
Provide utilities to the people such as roads, water services, power services,
mosques, schools and hospitals and any other utility considered as necessity for the
people.
Emergency expenditures such as during famine, flood, earthquake or attack by
enemy.
Spending on development projects – Only if funds available
Implementation of Economic
System
Khilafah
oTo implement Islam’s economic system we require its corresponding ruling system
i.e. the Khilafah. In the Khilafah no one has the authority to change Allah’s laws or
abrogated them
Decision making
The ruler
Education Foreign
Economic Ruling Social Judicial
Policy Policy
Decision making in Democracy
(dictatorship of an elite group)
Decision making
Elite Group
Elite Group
Elite Group
Education Foreign
Economic Ruling Social Judicial
Policy Policy
Decision making in Khilafah
Decision making