Islam, Capitalism and Free Trade

[Viking]

In Europe, the rise of individualism was seen as one of the products of the European Protestant revolution (around the beginning of the 16th century) which they deem led to the rise of capitalism. With the Protestant revolution, it was not necessary for Christians to make confessions or ask for intercessions from the priest; man was held accountable for his own actions.

Protestantism also changed the view Europeans had on wealth and the pursuit of it. Protestantism taught that one could acquire wealth without feeling any guilt and the sin of avarice was made morally respectable. Piety was no longer the barometer for success in Europe, but the amount of wealth one had was also seen as a hallmark for success. People were initially taught to make a lot of money but to spend as little as possible, but with time, this changed and people invested more especially as the Industrial Revolution (towards the end of the 18th century) got underway. With the apparent rise of capitalism, the Protestant movement became linked to the rise of modern science.

Where does Islam come into all of this? As most of Europe lived in what was referred to as the Dark Ages, science was flourishing in Islamic Spain where the works of the Greek philosophers were translated into Arabic and then [mostly] to Latin and German. Many European scholars traveled to Spain after they heard about this intellectual movement and learnt and took with them a lot of knowledge which was brought forth by the pioneering spirit of Muslims scholars working incorporation with Jewish and Christian scholars in what the Spanish call LA CONVIVENCIA (meaning The Co-existence). This preceded both the Protestant Reformation and Industrial Revolution, so why isn’t it acknowledged as the force that paved way for modern science? If Europe came to know of Aristotle and Plato through the Muslims, why isn’t this acknowledged world-wide?

Occidentals today constantly shove terms like “free-trade” down the throats of the rest of the world. They feel that capitalism has been good to them and would like to teach the rest of us (the “Third World” or the “Developing World” as they prefer to often call it). Most of us know that this “free-trade” they vehemently promote is on their terms and benefits them more than it does other parties, but that is a whole chapter, or book, if not volumes of books one needs to cover this topic and there is a lot written about it (both for and against it).

But what is the view of Islam on free-trade? Many argue that Islam is socialist because of the amount of control the state is awarded and its welfare system or it is capitalist because it encourages private ownership and free-trade. Was Islam the first “capitalistic” system (as it is commonly defined) or was the European Protestant revolution with its Protestant ethics the force that led to the rise of capitalism in the world (as westerners claim)? Is free-trade a concept that is new to us as Muslims? What did our Noble Prophet PBUH think about such trade?

As we all know that our Noble Prophet PBUH started off as a trader working for his wife Khadija RA with trade caravans that traveled to Syria among other places. As a Messenger of God, what was his role in trade and how did he view it and thought it should be regulated?

The Prophet Muhammad PBUH always sought to remold the corrupt and morally desperate merchant class of Arabia and confined them to certain moral boundaries. Islam regulated production and consumption, distribution and exchange. He was opposed to price controls, i.e. the setting of a maximum price on products which he deemed unfair to merchants. He believed in an economy in which money and commodities were free to interact without impediments or any sort of external influences. He trusted the forces of supply and demand and wanted them to be the only barometer for prices. He strongly prohibited hoarding which would adversely affect the supply and demand of commodities. He condemned speculation especially of food produce (the Jews often sabotaged Muslims) and the institution of AL-HISBA had the role of checking for foul play (see AL-HISBA FI AL-ISLAM by Ibn Taymiya). The role of the Hisba was [among others] to see to it that merchants were not overcharging for their products.

Al-Hisba is a moral and socio-economic institution that ensures morality and protects society from exploitation, fraud, bad workmanship etc. This is naturally based on the Islamic concept of ‘amr bilmacruuf wannahi anil munkar’. The Prophet PBUH also forbade merchants or others gaining an ‘unfair known advantage’, vis-à-vis RIBA.

Our Noble Prophet also told merchants to inform consumers about faults in their products, this was a hallmark of a truly honest businessman. This in turn issued consumer protection and ensured that there was fair play. The quality of the component being sold was supposed to determine its marketability and NOT the advertising done by the seller. As it is often today – big companies (i.e. Coca-Cola) that invest millions upon millions in advertising reap huge profits.

During the reign of Omar ibn Khattab, Islam spread further beyond Arabia with a larger population and greater prosperity and more opportunities. Slowly the high standards of economic justice that was set by our Noble Prophet declined and regressed as the empire expanded. The empire went forward in terms of ‘culture’, arts, scholarship and as a ‘civilization’. The empire later turned into a kingdom, then smaller and more decentralized fiefdoms. The standards of economic justice declined onwards with time and we can today witness a very fragmented, weakened and downtrodden Ummah that is divided along state lines.

We clearly see that Muhammad PBUH believed in free-trade, and the only way to conduct trade (as a Muslim) is to make sure that it is fair to both the seller and the consumer. Islam is neither right nor left on the political scale, it is neither socialist (despite the welfare state) nor capitalist (although it was the first system to apply capitalistic mentality in trade). The rules of the game are set by the state according to the teachings of Islam. Islam also incorporates both state and private ownership and since our faith is about submission to One True God and subordination to the Laws of the Almighty, secularism and all other -isms westerners shovedown our threats should not be an option for any Muslim indivudal, nation or [future] Islamic state.

The conclusion that we naturally ought to come to is that we urgently need to go BACK TO BASICS. I know we have heard this phrase many a times, but whenever this is said, westerners (and alas some Muslims) often see this as regressing, but we know it is definitely not the case. Islam champions justice, fair dealings and the seeking of knowledge, it is about time we really practiced our Deen in the manner our noble Prophet Muhammad PBUH wanted us to practise.

[optimist_1]

well said.

[avowedly-agnostic]

Finally a topic with which I can bash Capitalists' heads in! As an ardent Socialist, I don't think Islam would be doing itself any favours by boasting about beating the West to the woeful and disastarous implementation of exploitative Capitalistic policies which only serve to increase the wealth of the rich and deprive workers and the masses of people of the wealth which they in large produce.

Islam I think would better favour a Socialist run economy since the state plays a significant role in buisness and industry, and rightly so. Private ownership of industries only leads to the hoarding of wealth by the minority of shareholders, and since Islam claims to be just, then I would assume that it would reject the implementation of such unjust policies.

The welfare state it could be argued is yet another example where Islam favours the fairer and more egalitarian Socialist policies. Capitalist run states only ever provided welfare programs because of workers' demand, not because Captalism is a just economic and political system. Indeed, it is Socialism where the means of production collectively owned and administered democratically by all of society that there can be fair distribution of wealth, and is the only sure way of eliminating the abject poverty which is created and is directly attributable to Capitalism.

Also, think of it this way, if we run our economies along Socialist lines, then you can forget ever paying Zakah!

[AMAT-ALLAH]

I don’t necessarily think ‘Islam favours the socialist run economy’ as you mentioned, although they do share the very fervent view of equality in many respects to the socio-economic status that can be up-rooted from hegemony and many other explanations of class-polarisation. But again the notion of equality in economic equity, I personally don’t think Islam pursues that purely because this censorship of ownership and assets is too rigid and can cause a lot of strain on the economy as a whole, which im sure your well aware of already.
But great explanation Viking, very interesting bro.

[avowedly-agnostic]

I didn't fully understand all your points except that of:

"I don’t necessarily think ‘Islam favours the socialist run economy’ as you mentioned, although they do share the very fervent view of equality in many respects...."

Could you possibly rephrase it please?

[AMAT-ALLAH]

Sorry

Just my point being Islam advocates free-ownership and censorship can cause alot of strains to the econmoy,,,that was just my input of the common 'con' of socalist ideology. Secondly my point about class-polerisation and all the problems that come from it can be narrowed down to hegemony, which im such is a element of capatlist approach, to which Marxist(im sure you admire) hate. So my point really is, on paper Socalists are pretty impressive but results of current communist countries are abismal and really poor. Theory for me great...practise crap....and Islam really doesnt fortunatly doesnt suit that system.My opinion.

[X.Playa]

Wasn't Mohamed a camel riding merchant, wasn't he married to an old Rich Sugar Moma Khadiija out of pure capitalist reason?

[avowedly-agnostic]

First of all, cheers for your explanation. Moving on to your objections to Socialism...

[quote] So my point really is, on paper Socalists are pretty impressive but results of current communist countries are abismal and really poor. Theory for me great...practise crap.[/quote]

I fully agree that the economic and political state of so-called communist nations in the current time such as Cuba, North korea etc aren't too great. There are several reasons for this, not least because the U.S. has imposed a trading embargo on them thus limiting their ability to trade freely with other countries.

Another point to bear in mind is that North Korea, and Cuba, and every other country which has in the past proclaimed itself as Communist or Socialist (with the exception of the 1917 Russian Communist goverment) hasn't implemented Socialism as outlined by Karl marx. These so-called communist states aren't by definition communist. They're in truth state-Capitalist.

These state-capitalist countries fulfill one criteria of a Socialist economy, in that the economy is state controlled, but not the other criteria, that is the state must be democratically controled by the workers. In short, the workers of these countries don't excercise any control or have any say over their economy. So it's not the failure of Socialism as a sound and progressive economic system that's holding these countries back, but rather a lack of these governments to allow workers to excercise decisions in the running of their own economy, coupled with the crippling effects of the U.S. imposed trade embargos.

[michael_ital]

Exactly. So what you're saying in other words, is exactly what AMAT said.
" Theory for me great...practise crap"

I also believe it has a LOT less to do with embargoes than it does with power mad corrupt "politicians". Question though. In your opinion, how does one actually implement true Socialism in the way you outlined ?Namely "These state-capitalist countries fulfill one criteria of a Socialist economy, in that the economy is state controlled, but not the other criteria, that is the state must be democratically controled by the workers."

Personally, I don't believe it can be done. But i'm anxious to hear your theory.

[avowedly-agnostic]

yey! some worth while debate at last. Moving on to your objections....

[quote]Exactly. So what you're saying in other words, is exactly what AMAT said.
" Theory for me great...practise crap"

I also believe it has a LOT less to do with embargoes than it does with power mad corrupt "politicians". [/quote]

I agree that Socialist theory as a political and economic philosophy and as a means of ending poverty and ensuring economic prosperity is sound. It is power hungry politicians that won't let workers excercise control that is the chief obstacle to a Socialist society.

[/quote] In your opinion, how does one actually implement true Socialism in the way you outlined ?Namely "These state-capitalist countries fulfill one criteria of a Socialist economy, in that the economy is state controlled, but not the other criteria, that is the state must be democratically controled by the workers."[quote]

I think it can be done, and it has been done before, by the 1917 Russian Communist government following the revolution. The way they did it was they had what they called Soviets or what is more commonly known as WORKERS' COUNCILS. In a workers's council you have the workers of any given place of work such as factories, schools, farms etc take COLLECTIVE control of the management of that particular place of work. Such a system requires no manager,or the manager is directly under the control of the workers' council.

Workers' councils would also have higher bodies which thay coordinate between one another. Workers would then send delegates to such bodies to represent them in whatever decision making there need be. Workers' councils would also have the power to recall delegates if they're not properly representing them.

Workers' councils are fundamental in the composition of any Socialist state. It is through such councils that workers excercise control over production and control over the state.

[Viking]

avowedly-agnostic,
Capitalism is a mode of production while Socialism is a mode of distribution. Both modes are incorporated within Islam albeit not in the manner proposed by socialists or capitalists. The problem with "grassroots" movements like socialism/communism is that they initially look out for the interest of the people but when it comes to the helm of power and runs the state, it changes its way and becomes very "state-conscious". They are forced to look out for the interest of the state instead of the people. The interests of the workers it initially represented are soon forgotten and the state takes centre stage. The consciousness of the people changes from "class-consciousness" to "state-consciousness". When workers capture the state, they commit what is usually referred to as class suicide. Poland is a perect example of this. The state eventually corrodes socialism, just like the state has corroded Zionism (a grassroots movement aimed to give Jews a homeland) and made Zionists aggressive oppressors who do unto others exactly what was done to them.

You say that a socialist state would do away with Zakat (a form of tax that ensures the mode of distribution), where will the money to support the wefare state come from?

[michael_ital]

So these Councils are, in essence, the predecessors of the modern day Union. And if so, then the only problem with them is that it's reps are easily intoxicated by the amount of power that comes with the position. And they become tempted by the opportunity of personal wealth that arises with it. Also, the majority of those it represents are the trades workers, and other blue collar working classes. Who among the administrating level is going to allow themselves to be represented by these councils ?? And who owns/controls those businesses that employ the working class??? Surely anyone who aspires to own/run a multi million$ corporation is NOT going to allow themselves to be dictated to by a Council, anymore than modern day corps no longer allow themselves to be dictated to by Trades Unions. The Mafia tried that with the Teamsters and other trades unions, and it failed. I just don't see or believe it can work in a free enterprise society.

[Viking]

mike,
That's why I was telling him that a socialist movement will always move from class-consciousness to state-consciousness when in power. This is not only power that is intoxicating them but an inevitability that is brought by the position, they would be forced to look at the interest of teh state as opposed to workers. They would be forced to make decisions that go against their beliefs.

[Viking]

X-Playa,
Muhammad SAWS did not marry Khadija RA for monetary reasons. He worked for her and she was impressed by his honesty and piety so much that she proposed to him. The man sew his own clothes and lived a humble life, if you bothered to read Islamic history instead of running clanist propaganda you would know this.

[michael_ital]

quote "mike,
That's why I was telling him that a socialist movement will always move from class-consciousness to state-consciousness when in power. This is not only power that is intoxicating them but an inevitability that is brought by the position, they would be forced to look at the interest of teh state as opposed to workers. They would be forced to make decisions that go against their beliefs."


Viking, wonderfully written. Thats what I was thinking. I just couldn't put it into words as well as you just did.