Oyekola Nabeel-Ahmad, Student, Jamia Ahmadiyya International, Ghana
In the aftermath of the Great War, new socio-economic systems emerged across the world. The capitalist system took root in the USA and Western Europe, while fascism gained prominence in Italy, and communism, also known as Bolshevism, became established in Russia. These systems created a new order of social and economic structures. However, they have proven inadequate in addressing mankind’s needs comprehensively across all spheres of life.
The application of these systems has led to a decline in human development in certain areas. For instance, communism tends to stifle individual intellect and initiative, turning people into mere cogs in a machine. It also conflicts with religious principles. Moreover, it diminishes the incentive for the wealthy to be productive, as the system requires them to surrender their surplus to the government, leaving them feeling aggrieved.
On the other hand, the capitalist system exacerbates the wealth gap, making the rich richer and the poor poorer. Wealth becomes concentrated in the hands of a few, leading to economic inequality. The Holy Quran addresses this issue:
وَتَاۡکُلُوۡنَ التُّرَاثَ اَکۡلًا لَّمًّا وَّتُحِبُّوۡنَ الۡمَالَ حُبًّا جَمًّا
“And you devour the heritage [of other people] wholly, and you love wealth with exceeding love.” (Surah al-Fajr, Ch. 89: V. 20-21)
It is observed that both capitalism and communism lead to a dependency on others rather than fostering individual effort and struggle. Capitalism ties individuals to the stake of hoarded wealth, while communism binds them to the stake of government control, potentially making people passive and complacent. (Seal of the Prophets [Sirat Khatam an-Nabiyyin], Vol. III, p. 60)
These systems fail to adequately address the basic human needs, which are fundamental to Islamic teachings. The Holy Quran states:
اِنَّ لَکَ اَلَّا تَجُوۡعَ فِيۡہَا وَلَا تَعۡرٰي وَاَنَّکَ لَا تَظۡمَؤُا فِيۡہَا وَلَا تَضۡحٰي
“It is [provided] for thee that thou wilt not hunger therein, nor wilt thou be naked. And that thou wilt not thirst therein, nor wilt thou be exposed to the sun.” (Surah Taha, Ch. 20: V.119-120)
These verses emphasise that the primary duty of a civilised government or socio-economic system is to provide for the basic necessities of life. Failure to do so results in social upheaval and moral degradation within society. The stark economic inequalities, where some sections of society live in opulence while others starve, must be eliminated for true societal progress.
Islamic solution to socio-economic challenges
Islam presents a comprehensive solution that adapts to the needs of every era, maintaining consistent principles while allowing flexibility in application. Hazrat Musleh-e-Maudra outlines four key principles that Islam establishes to ensure a well-organised socio-economic government:
Abolition of slavery: Islam abolished slavery 1400 years ago, long before other civilisations. It categorises the freeing of slaves as a virtuous deed in the sight of God. Even in cases of war, where taking prisoners as slaves was historically permitted, Islam emphasises humane treatment and encourages their freedom through manumission, ransom, or as an act of goodwill.
Prohibition of hoarding money: Islam mandates that money should always be in circulation. It must be spent or invested to fulfil its role as a medium of exchange and to promote commercial and industrial activity. The Holy Quran expresses strong disapproval of those who accumulate wealth without spending it:
وَيْلٌ لِّكُلِّ هُمَزَةٍ لُّمَزَةٍ الَّذِي جَمَعَ مَالًا وَعَدَّدَهُ
“Woe to every backbiter, slanderer, who amasses wealth and counts it time after time.” (Surah al-Humazah, Ch.104: V.2-3)
Also, the Holy Quran says:
وَالَّذِينَ يَكْنِزُونَ الذَّهَبَ وَالْفِضَّةَ وَلاَ يُنفِقُونَهَا فِي سَبِيلِ اللّهِ فَبَشِّرْهُم بِعَذَابٍ أَلِيمٍ
“And those who hoard up gold and silver and spend it not in the way of Allah — give to them the tidings of a painful punishment.” (Surah at-Taubah, Ch. 9: V. 34)
Prohibition of interest: Many socio-economic systems, particularly capitalism, rely heavily on interest. Islam abolishes interest in all its forms because it encourages the accumulation and hoarding of wealth within a small group, to the detriment of others. The Holy Quran states:
الَّذِينَ يَأْكُلُونَ الرِّبَا لاَ يَقُومُونَ إِلاَّ كَمَا يَقُومُ الَّذِي يَتَخَبَّطُهُ الشَّيْطَانُ مِنَ الْمَسِّ ذَلِكَ بِأَنَّهُمْ قَالُواْ إِنَّمَا الْبَيْعُ مِثْلُ الرِّبَا وَأَحَلَّ اللّٰهُ الْبَيْعَ وَحَرَّمَ الرِّبَا فَمَن جَاءهُ مَوْعِظَةٌ مِّن رَّبِّهِ فَانتَهَىَ فَلَهُ مَا سَلَفَ وَأَمْرُهُ إِلَى اللّٰهِ وَمَنْ عَادَ فَأُوْلَـئِكَ أَصْحَابُ النَّارِ هُمْ فِيهَا خَالِدُونَ يَمْحَقُ اللّٰهُ الْرِّبَا وَيُرْبِي الصَّدَقَاتِ وَاللّٰهُ لاَ يُحِبُّ كُلَّ كَفَّارٍ أَثِيمٍ
“Those who devour interest do not rise except as rises one whom Satan has smitten with insanity. That is because they say: ‘Trade [also] is like interest;’ whereas Allah has made trade lawful and made interest unlawful. So he to whom an admonition comes from his Lord and he desists, then will that [which he received] in the past be his; and his affair is with Allah. And those who revert to it, they are the inmates of the Fire; therein shall they abide. Allah will abolish interest and will cause charity to increase. And Allah loves not anyone who is a confirmed disbeliever and an archsinner.” (Surah al-Baqarah, Ch.2: V.276-277)
The practice of usury often results in the exploitation of the poor, perpetuating their financial struggles.
Establishment of compulsory levies and voluntary contributions: While the aforementioned principles ensure that wealth remains in circulation and doesn’t concentrate in the hands of a few, they don’t directly address poverty alleviation. To complement these principles, Islam introduces a system of compulsory levies and voluntary contributions, with Zakat being a prime example.
“Under the institution of Zakat, it is the duty of an Islamic State to levy a tax of 2.5% on average upon all wealth and capital which has been in the possession or under the direction of an assessee for one year. The proceeds of this tax must be devoted exclusively towards the relief of poverty and the raising of the standard of living of the poor. It must be noted that this tax is to be levied not merely upon the income or profits, but on capital and accumulations, so that sometimes this 2.5% may amount to as much as 50% of the income or profits, and in the case of accumulations, has to be paid out of the accumulated money. This also has the effect of encouraging investment, for, if a person has a certain amount of money accumulated in his hands or lying to his credit, he will have to pay Zakat on it at the rate of 2.5% per annum, so that gradually the money will begin to disappear in payment of the tax. Every normal person, therefore, is compelled to invest his money and to put it into circulation so that he may be able to meet the assessment out of the profit earned.” (The New World Order of Islam, pp. 91-92)
This system not only ensures a regular flow of funds for poverty relief but also incentivises the productive use of wealth, addressing issues of economic stagnation and wealth concentration.
Huzoorra elucidates the benefits of Zakat:
“This results in a double benefit to the community as it secures the circulation of wealth and thus provides employment for all sections and in addition secures 2.5% of the capital and the profits made for the benefit of the poor.” (Ibid., p. 92)
This system addresses the issue of high unemployment rates and promotes economic activity.
It is crucial to understand that while Islam recognises the right to private property and individual ownership, it simultaneously implements measures to prevent wealth from exerting undue power or influence over the community.
The Islamic economic system aims to create conditions of peace and justice while fostering a spirit of progress. A careful examination of Islamic principles reveals their promotion of holistic peace and progress.
It is crucial to understand that Zakat, while a fundamental pillar of Islamic economic principles, has never been the sole means of addressing societal needs in Islamic governance. Historically, Islamic authorities have implemented additional taxes and measures to fulfil their responsibilities.
The concept of modern nation-states with their expansive governmental roles is a relatively recent development. In both pre-modern and contemporary Islamic societies, the authorities are primarily responsible for poverty relief and addressing societal needs. This responsibility is a constant principle in Islamic governance, regardless of the changing forms of state structure over time.
It is important to note that in Islamic governance, the authorities have always held and continue to hold the responsibility to ensure that no one under their jurisdiction remains in poverty. This principle extends beyond mere charity and is considered a fundamental duty of Islamic leadership.
However, Islam strongly encourages voluntary contributions, not primarily to fill gaps in social welfare, but as a means for individuals to attain spiritual growth and nearness to God Almighty. This spiritual aspect is emphasised in the Holy Quran, which categorises those who spend out of their wealth as successful believers:
الَّذِينَ يُؤْمِنُونَ بِالْغَيْبِ وَيُقِيمُونَ الصَّلاةَ وَمِمَّا رَزَقْنَاهُمْ يُنفِقُونَ والَّذِينَ يُؤْمِنُونَ بِمَا أُنزِلَ إِلَيْكَ وَمَا أُنزِلَ مِن قَبْلِكَ وَبِالآخِرَةِ هُمْ يُوقِنُونَأُوْلَـئِكَ عَلَى هُدًى مِّن رَّبِّهِمْ وَأُوْلَـئِكَ هُمُ الْمُفْلِحُونَ
“Who believe in the unseen and observe Prayer, and spend out of what We have provided for them; and who believe in that which has been revealed to thee, and that which was revealed before thee, and they have firm faith in what is [yet] to come. It is they who follow the guidance of their Lord and it is they who shall prosper.” (Surah al-Baqarah, Ch.2: V.4-6)
Furthermore, Allah emphasises the importance of spending in His cause:
وَأَنفِقُواْ فِي سَبِيلِ اللّٰهِ وَلاَ تُلْقُواْ بِأَيْدِيكُمْ إِلَى التَّهْلُكَةِ وَأَحْسِنُوَاْ إِنَّ اللّٰهَ يُحِبُّ الْمُحْسِنِينَ
“And spend for the cause of Allah, and cast not yourselves into ruin with your own hands, and do good; surely, Allah loves those who do good.” (Surah al-Baqarah, Ch.2: V.196)
Hazrat Musleh-e-Maudra explains this verse and says:
“In addition to compulsory taxes you must make voluntary contribution towards the relief of the poor, and must not by failing in this duty provide for your destruction. This means that those, who have a surplus of wealth, will suffer no real loss by contributing towards the relief of the poor, but that if they do not do so, they will in the end themselves be destroyed.” (The New World Order of Islam, p. 111)
This explanation highlights the potential fate of economic systems where the wealthy fail to contribute voluntarily to the poor, leading to their own eventual downfall.
The Islamic economic system places greater emphasis on seeking God’s pleasure through voluntary contributions rather than relying solely on forced taxation. To instil a sense of responsibility in Muslims, it imposes a tax as a form of worship while encouraging voluntary contributions to foster compassion towards fellow humans. Hence, the verse concludes with:
وَأَحْسِنُوَاْ إِنَّ اللّهَ يُحِبُّ الْمُحْسِنِينَ
“And do good; surely, Allah loves those who do good.” (Surah al-Baqarah, Ch. 2: V. 196)
This principle was exemplified during the life of the Messengersa of Allah. In addition to the obligatory Zakat, the Holy Prophetsa would occasionally call for voluntary contributions when Zakat alone was insufficient to meet the community’s needs. The Companionsra, understanding this sacrifice as a means of attaining nearness to Allah, would bring their wealth for the pleasure of God. Notable examples include Hazrat Abu Bakrra and Hazrat Umarra, who brought all and half of their wealth, respectively, when the Holy Prophetsa called for voluntary contributions.
The Holy Quran affirms this understanding:
وَمِنَ الأَعْرَابِ مَن يُؤْمِنُ بِاللّهِ وَالْيَوْمِ الآخِرِ وَيَتَّخِذُ مَا يُنفِقُ قُرُبَاتٍ عِندَ اللّهِ وَصَلَوَاتِ الرَّسُولِ أَلا إِنَّهَا قُرْبَةٌ لَّهُمْ سَيُدْخِلُهُمُ اللّهُ فِي رَحْمَتِهِ إِنَّ اللّهَ غَفُورٌ رَّحِيمٌ
“And among the Arabs of the desert are those who believe in Allah and the Last Day and regard that which they spend as means of drawing near to Allah and [of receiving] the blessings of the Prophet. Aye! it is for them certainly a means of drawing near to God. Allah will soon admit them to His mercy. Surely, Allah is Most Forgiving, Merciful.” (Surah at-Taubah, Ch. 9: V. 99)
The Islamic system is so comprehensive that it even specifies the categories of people upon whom these funds should be spent, beyond just providing for basic amenities. Allah says:
إِنَّمَا الصَّدَقَاتُ لِلْفُقَرَاء وَالْمَسَاكِينِ وَالْعَامِلِينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ اللّهِ وَابْنِ السَّبِيلِ فَرِيضَةً مِّنَ اللّهِ وَاللّهُ عَلِيمٌ حَكِيمٌ
“The alms are only for the poor and the needy, and for those employed in connection therewith, and for those whose hearts are to be reconciled, and for the [freeing of] slaves, and for those in debt, and for the cause of Allah, and for the wayfarer — an ordinance from Allah. And Allah is All-Knowing, Wise.” (Surah at-Taubah, Ch. 9: V. 60)
The revenue from Zakat was allocated to the groups mentioned above. The history of early Islam bears witness to the success of this system. The Holy Prophetsa and his rightly-guided Caliphsra administered this system in an unprecedented manner. There are accounts of how Hazrat Umarra instituted an allowance for infants as soon as they were born, demonstrating the thoroughness and rigour of the system.
The principles of Zakat and Islamic economic teachings, as implemented by the Holy Prophet Muhammadsa and his rightly-guided Caliphsra, remain the gold standard for Islamic socio-economic systems. Their application in early Islamic history demonstrated remarkable success in addressing societal needs and ensuring economic justice. As societies have evolved and economic systems have become more complex, the challenge lies in applying these timeless principles effectively in contemporary contexts.
The application of Islamic economic principles in modern times requires divine guidance to ensure their proper implementation. Human-devised systems have often shown limitations and shortcomings in addressing global economic challenges. A divinely guided approach should effectively fulfil the objectives of Islamic socio-economic teachings, providing relief for the poor and fostering peace and contentment for all of mankind.
Those who believe in the Holy Prophet’ssa prophecies regarding a reformer in the Latter Days recognise that one of the functions of the Promised One is to provide divine guidance in applying Islamic principles to contemporary global issues, including economic challenges.
Al-Wasiyyat
In light of Surah al-Baqarah, Ch.2: V.196, Hazrat Mirza Ghulam Ahmadas, the Promised Messiah of the age, initiated the al-Wassiyat scheme in 1905. This scheme aimed to implement Islamic economic principles in a manner suited to modern times, while predating the establishment of many contemporary capitalist and socialist systems.
This scheme fulfils these four essentials of the Islamic social and economic system:
The needs of all human beings should be provided for;
In achieving the first objective, the incentive behind individual effort and enterprise should not be weakened;
The system should be voluntary and should not involve forcible dispossession or confiscation;
The system should not be confined to one country or one nation but should be universal.
Thus, the Promised Messiahas announced this scheme according to the needs of the time. He stated that those who desire the pleasure of God and paradise should devote between a tenth and a third of their properties and incomes for the sake of God. He prescribed that the properties obtained through this means would be devoted to strengthening the foundations of Islam through the propagation of Quranic teachings, the spread of Islamic literature, and the establishment of Islamic missions. (Al-Wasiyyat, Condition No. 2)
He also mentioned: “Every matter pertaining to the proposals about the propagation of Islam, going into the details of which will be premature, will be paid for out of these funds.” (The Will, pp. 27-28)
Hazrat Musleh Maudra explains: “This meant clearly that all the objects, which were to be fulfilledout of this money, could not be fully explained at the time. Time was soon to come, however, when the world was to cry out for a New Order. From every quarter, voices were to be raised, announcing New Orders. […] At that time a successor of the Promised Messiahas would announce from Qadian: ‘The New Order has already been set out in Al-Wasiyyat.’ If the world desires to proceed along the path of peace and prosperity, the only way to it is to put into effect the New Order set out in Al-Wasiyyat.” (The New World Order of Islam, p. 122-123)
This means that the money and properties received from this scheme would be used to implement Islamic teachings and give effect to them. This can only be achieved when the beauty of Islamic teachings is appreciated and valued worldwide.
The Promised Messiahas also outlined conditions for the administration of funds under this scheme in this book, The Will. He stated:
“The Anjuman controlling these funds shall not be authorised to spend them for purposes other than those pertaining to the objectives of Ahmadiyya Jama‘at and of these, the objective of the propagation of Islam will take precedence over all others. And it shall be permissible for the Anjuman to augment these funds through trade and commerce with the members’ consensus.” (The Will, Appendix, Condition 9, p. 41-42).
That is to say, it would be proper for the Anjuman, after recovering a tenth, an eighth, a fifth or a third of people’s properties from them, to increase the funds at its disposal by means of investments.
This indicates that the funds are not solely for the propagation of Islam but also to support the social and economic system of the world.
Also, unlike other systems, once the properties and funds are taken, they can be refunded. The Promised Messiahas stipulated that if a member of the scheme, for any reason, no longer wishes to participate, their properties and funds would be returned. (Appendix, Condition No. 12, The Will, p. 42)
Furthermore, it is among the conditions that the administrative body of this fund should be transparent and just in all its dealings. (Appendix. Condition 13, Ibid.)
To ensure the universality of the system, the Promised Messiahas stated that it is permitted to help far-off places and to set up subsidiaries of the administrative body to facilitate the administration of funds in each location. (Appendix. Condition No. 15, p. 43)
Addressing potential concerns about the growth of this system, the Promised Messiahas said:
“Do not think that these things which I have said are inconceivable. No, they are the Will of that Mighty One Who is the Lord of the earth and the heaven. I am not worried how these funds will be collected, nor do I grieve over how such a Jama‘at will be raised who, inspired by their faith, shall perform such heroic feats. Rather I am worried that, after I am gone, those who will be entrusted with these funds may not, seeing their abundance, stumble and fall in love with the world. So I pray that such honest people may always be found by the Jama‘at who work for God alone.” (The Will, p. 28)
In conclusion, the Islamic solution to inequality and human needs, as exemplified by the Al-Wassiyat scheme, offers a comprehensive and adaptable approach to addressing socio-economic challenges. It combines divine guidance with practical implementation, striking a balance between individual rights and societal welfare. As the world continues to grapple with economic disparities and social injustices, the principles outlined in this Islamic system provide a framework for creating a more equitable and prosperous society for all.