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Islam’s Economic System vs. Capitalist Economic System. Capitalism: An exploitative System. Let us observe some important stats of the beacon of Capitalist State The United States of America. In America:. In America:
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Capitalism: An exploitative System Let us observe some important stats of the beacon of Capitalist State The United States of America
In America: 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 childrenThe 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
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
Where is the world headed!!!!! An analysis of the trend of the widening gap between the rich and the poor countries
System not Resources Pakistan's misery due to the rotten Capitalist system not because of lack of resources!
Comparison Islamic Economic System vs Capitalist System
Resources are limited- Non sense • The United Nations Development Program (UNDP) reported in 1998 that the world's 225 richest people now have a combined wealth of $1 trillion. That's equal to the combined annual income of the world's 2.5 billion poorest people. • 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.
Taxation in a Capitalist System • Tax the poor and average man • Give tax-breaks to the • Rich • Multinational companies • Landlords
Taxes in America Who Benefits from Bush's Tax Cuts? • George Bush's 2001 $1.3 Trillion tax cut was the largest in US history • The Top 1% supper-rich got 37 % of Bush's tax cut as saving ($481 billion) • 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 • Currently No Ushr and Kharaj being levied on Agriculture produce • No wonder in democracy the elite legislate laws to tax the poor and give tax breaks to themselves
Taxes Comparison 2008-9 2009-10
Investment before the advent of Banks • In a society devoid of Banks investors are in need of entrepreneurs and businessmen to help increase their wealth • On the other hand the skilled labour, inventors and businessmen are in need of investment in order to generate more wealth • Hence it is a marriage of convenience for both parties • They join together in a partnership to benefit from each other such that the investor bears the risk and the other partner does the work
Bank monopolizes the wealth of the society • The Bank drains the society off of its wealth by guarantying the investor of sure profit (interest) • As a result an entrepreneur and skilled labourer is forced to borrow money from the bank on exploitative terms. • According to the contract not only the borrower has to pay hefty interest but he also has to return the principle amount in full even though if his business was in loss. • This produces a win-win situation for the investor and the bank. Hence the rich becomes richer and the poor poorer
In Muslim societies Banks were not very successful • In Muslim societies since people considered Interest as haram therefore Banks was not in total control of the money flow in the society. Billions of dollars of money remained outside Banks control. And skilled labour didn’t need to go to the bank to borrow money as investors were there to help them. • As a result banks who thrive on monopolising the money and then forcing people into exploitative contracts couldn’t function properly.
Islamic Banking is helping Capitalist Banks • The Banks opened up a Window for Islamic Banking through which Muslims were encouraged to give their money to the banks instead of investing it themselves following Islamic laws • This achieved the objective of draining the society off of wealth and hence the skilled labour has become more dependent on the Banks • Hence Islamic Banking has actually helped Capitalist system by having stronger grip on the money flow and hence exploit the masses
Banks in the Khilafah • The banks can continue to undertake all non-interests based services and take service charges on them such as: • Current accounts for its customers • Money Transfer • Cash Station Cards • Lockers for valuable items • LC (Bank as a Guarantor) • The banks can also act as financial advisors and facilitate the marriage of investors and entrepreneurs /businessmen etc. • Government bank will also provide grants and interest free loans to its citizens to enhance economic activity
