The Islamic Economic System: A way forward – Part VIII


Click here for Part VII

Fazal Masood Malik and Farhan Khokhar, Canada
Screenshot 20220609 015616 Samsung Notes

Islam does not provide a preference to one form of government over another.  It does, however, lay down detailed instructions on how a government should govern its subjects. The primary responsibility is to provide services that are uniquely suitable for the state. These services include military, health, law & order and justice. In terms of the Islamic Economic system, the primary directive is to provide for good governance which leads to society’s well-being.

An economic system, the building blocks of which were expounded by Hazrat Mirza Bashiruddin Mahmud Ahmadra based on the Ahmadiyya-Islamic economic principles, can assist with the development of economic policies that are human-centred and environment friendly. 

However, the ego of our world leaders with blind political ambition is leading us away from such a reality. Even in an age when Covid-19 is drawing sharp distinctions between wants and needs, we appear to turn a blind eye and favour the political ambition that favours our wants.  

The Ahmadiyya-Islamic economic system promotes a capitalistic model which is community-centric and not individualistic. The capitalist economic system prevalent in the world currently was founded on the principle that an individual is free to do whatever they please, in the way of trade, industry or other transactions. There are no limitations on quantity, distribution or type of article produced. Based on the principle of laissez faire, it deals entirely with the interest of the individual, making no provision for the welfare of the community or the nation.

The prevalent economic model has brought phenomenal successes, but with the successes come the darkness of misery, hunger and disease. The boom-bust cycle, societal ills of complacency and overconsumption are common occurrences, yet there appears to be a growing number of people who gain from such cycles while the rest of the world is pushed deeper into poverty. This instability appears mainly because wealth lies in the hands of a few people who hold a grip on the fates of the masses, including governments. With the recent unprecedented printing of money in the world due to Covid-19, the world governments are deeper in debt than ever, while a significant population is suffering from hunger and disease due to loss of economic resources. 

The Ahmadiyya-Islamic economic system enforces moral and ethical clauses that dictate the well-being of an individual through the well-being of a nation as a whole. It does not exempt an individual from these fundamental clauses owned to their status in the society or exemplary works, be they in line with faith, science or otherwise. It regards the interest of the community as a critical factor and ties the freedom of individuals to collective success.

Two factors govern the growth factor of this system. These two factors are the building blocks of Wasiyyat and by extension of Tahrik-e-Jadid. The first is the distribution of wealth into smaller possessions. The second factor is protecting the welfare of the nation by prohibiting activities that favour specific groups, for example, interest-based lending and slave labour.  

The distribution of wealth discourages its concentration in a few hands. The Islamic law of inheritance, especially Wasiyyat, divides the estate over a wide range of beneficiaries, one of them being the poorer element of the community. In this manner, Islam protects and preserves public interest. Numerous studies have shown that money alone cannot resolve poverty. Helping people stuck in the poverty cycle through education and providing a social safety net is fundamental to breaking the cycle. This finding not only resonates with Islamic teaching but also announces its credibility. One has to simply look at the time of Hazrat Umarra to understand the depth of this teaching. In modern times, Singapore stands out as an example where incorporating Islamic teachings has resulted in the overall well-being of society.

The second factor (of the Ahmadiyya-Islamic economic system) prohibits lending on interest while encouraging loans as either a grant (ihsan) or given on a profit and loss basis. In this manner, the investor and investee are equally engaged and appreciate that the gain will be according to the risk and effort. This “partnership” makes the idea of capital being ipso facto an alien concept in Islam. Islam defines interest as “any transaction where the profit is guaranteed. Therefore all trusts, [local monopolistic arrangements] which are set up to guarantee a profit by destroying competition, are to be considered un-Islamic.” (The Economic System of Islam, p. 54)

Islam also places an extraordinary emphasis on the importance of labour and strictly forbids slavery. In The Economic System of Islam, Hazrat Musleh-e-Maudra devotes an entire chapter to this subject, explaining how ancient and modern-day slavery is used to enhance the coffers of wealthy nations and beings. The exploitation of enslaved people and extraordinarily cheap labour is a competitive advantage in the current economy. Under Islamic law, the labour is due to their fair share.  

The recent global lockdowns due to Covid-19 outbreaks have highlighted the issue of equality even further. A significant portion of the world crosses geographical boundaries regularly to earn a minimum livable income. Some of them earn no more than pennies a day to survive. For some entrepreneurs, who work without any social safety net, a good year can mean as little as 100 Canadian dollars in income.  While on the opposite end of the spectrum, this $100 can translate to six figures or more for importers who enjoy the safety net of the Western world. This imbalance is what Islam strictly prohibits.

The imbalance between the rich and the poor is growing at a phenomenal rate.  The term “new world order” has become a cliché as it achieves nothing for the struggling population. To understand this issue, one has to merely glance at China, India, or the African continent. If a new world order has to be established, it has to be built on the moral blocks of the society, not monetary or other-worldly values.

Describing the salient features of the new world order, Hazrat Khalifatul Masih IIra explains that “the needs of all human beings must be fulfilled.” This goal cannot be accomplished at the cost of personal or family life. It cannot be attained through coercion (editor: taxes, for example). This new world order can never succeed if it is “confined to any one nation.” In other words, it has to be global in its reach.  

Keeping these guidelines in mind, Humanity First was born in 1995. It accomplishes the goals mentioned above through charitable donations and countless volunteers worldwide. From the viewpoint of state administrations, Hazrat Khalifatul Masih IIra guides us that “if the Islamic state has to provide food, clothing, shelter, medical relief and to eradicate the ignorance by providing education for everyone, it must have at its disposal a lot more resources than would have sufficed in the past times.”

At the current rate of 2.5%, Zakat cannot accomplish this task on its own. Consider the operation of a hospital in the Western world in the 21st century. Consideration of world demand for humanitarian aid and limitations of government expenditure budgets is what is addressed by Wasiyyat, which ordained that a person can, on their own accord, donate “1/10 to 1/3 of their properties and belongings.” (The New World Order, p. 121)

This is where Tahrik-e-Jadid comes into play. With full knowledge that the world is not ready to accept and implement the deep moral change required, Hazrat Khalifatul Masih IIra introduced the Tahrik-e-Jadid scheme as the stepping stone toward Wasiyyat. One clause of this scheme, in particular, is crucial for the formation of a utopia – simplicity in every walk of life.

We conclude this series of articles with a quote from a 1942 timeless lecture of Hazrat Khalifatul Masih IIra, titled The New World Order:

“The system of Wasiyyat comprises within itself the whole social and economic system of Islam. They are mistaken who think that the fund established by Wasiyyat can be used only for the verbal propagation of Islam. This is not correct.  Wasiyyat contemplates both verbal propagation and practical establishment.  It no doubt includes missionary effort, but it equally includes the complete establishment of the system under which the needs of every human being should be looked after in a dignified manner. When this system attains maturity, it will provide not only for missionary work but will also help to abolish want and distress by making adequate provision for the needs of all individuals. An orphan will not have to beg, nor will a widow have to ask for charity, nor a needy person to suffer anxiety. The system will be a mother to children, a father to youth and will afford security to women. Under this system, not by means of compulsion or coercion, but out of real affection and goodwill, a brother will be eager to help his brother. Nor will such sacrifice be in vain. Every giver will be recompensed many times over by God. The rich will not suffer loss nor will the poor suffer privation.  Nation will not fight nation, nor class will contend against class. The system will put everyone under an obligation.” (The New World Order, pp. 136-137)


The New World Order by Hazrat Mirza Bashiruddin Mahmud Ahmadra

The Economic System of Islam by Hazrat Mirza Bashiruddin Mahmud Ahmadra

“Ending global poverty: Why money isn’t enough”, Journal of Economic Perspectives 32, No. 4 (2018), pp. 173-200

“The geographies of social finance: Poverty regulation through the ‘invisible heart’ of markets”, Progress in Human Geography 43, No. 1 (2019), pp. 141-162

Causes and consequences of income inequality: A global perspective, International Monetary Fund (, 2015

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