AL-HUDA
Foundation, NJ U. S. A
Article 1: - Article 2: - Article 3: - Article 4: - Article 5: - Article 6: - Article 7: - Article 8: - Article 9: - Article 10: - Article 11: - Article 12:
Self-Determination:
The Fundamental Moral Principle of Islamic Economics
by Dr. Robert Dickson Crane
The issue in all
normative economic theory, whether Islamic or Christian or
natural law, is whether human equality or human freedom is the
essence of justice and therefore the ultimate goal.
Justice is taught in the Qur'an only through general moral
guidelines, because what is just and what is not depends partly
on circumstances of time and place. There are only three
exceptions to this generality, namely, grave personal crimes,
inheritance, and taxation on wealth. Specifics for these three
areas are given because without them there would never be any
consensus on what is just.
For example, adultery deserves a hundred lashes (this punishment
was in lieu of the popular practice of stoning, which was
forbidden in classical Islamic law but is still practiced in
some African countries). Inheritance laws were exceptionally
strict in order to avoid the concentration of wealth, a fondness
for which seems to be common in all animals but can produce
grave economic and social injustices among humans. Justice in
the case of a number of moral issues could be restored only if
the perpetrator freed a slave (a politically wise stipulation
designed incrementally to eliminate ownership of human beings).
The most strict of all the Islamic laws deal with taxation,
about which there has never been any dispute. The only area for
debate concerns whether additional taxes than those required are
moral. In a society of widespread ownership of the means of
production, no further taxation would be required to provide a
distributive social safety net. Unfortunately, such a society
was never more than a dream throughout most of human history,
which is why utopian schemes of economic "socialism" became
attractive once capital rather than labor became the major
source of wealth production.
The entire basis of the Islamic system of taxation is the
distinction between capital and labor. To begin with, taxation
is based not on income but on the accumulation of wealth. Taxes
are paid on the net worth of every person and enterprise at the
end of the tax year, not on the income received during that year
(the new discipline of Islamic accounting has been developed to
make this practical in the modern world). Those whose income
comes from wages are taxed at a flat rate of 2 and a half
percent. Those whose income results from the application of
capital in irrigated farming are taxed at 5 percent. Those
whose income results from dry farming in reliance on the rain
provided by nature must pay ten percent. Those who generate
wealth in reliance on the natural resources provided by the
Creator in the ground must pay a tax of 20 percent on their
total wealth.
The rationale for the high tax rate on natural resources is
based on the concept that God, not human labor and ingenuity,
created these resources. Land and what is beneath it belongs to
God, though presumably manmade land would belong to those who
create it. The logical deductions have not been made for modern
economics, but the principle would dictate that taxation on the
processing of natural sources would depend on the capital
invested in the processing, so that wealth acquired through the
sale of diesel would be taxed at 20 percent, gasoline at perhaps
18 percent, petrochemicals at 15, and plastic consumer products
at 12, all in proportion to the capital expended in their
production, including the invisible tool of production known as
ingenuity.
This system of taxation is designed to help people appreciate
the role of nature (God) in their well-being, so that they would
be thankful for the infinite bounties available to them. A
rock-bottom principle of the concept of justice, which comes
next after belief in God, is that an all-merciful God has
provided in unlimited quantities everything that humans would
ever need for their own prosperity, so that the only limits to
growth would be man's own failure to use his ingenuity in
multiplying what is freely available.
The elaborate code of human responsibilities and rights
developed over the centuries in Islamic jurisprudence, and never
matched in any other legal system even today, provides that all
the human rights are interdependent, just as order, justice, and
liberty are meaningless except as they are pursued as essential
to each other.
The most fundamental concept that underlies all the universal
principles of Islamic law is self-determination. This is the
root of the duty to respect life, family and community, dignity
(which includes gender equity and religious freedom), and the
search for knowledge, known, respectively, as haqq al haya, nasl,
karama, and 'ilm. Self-determination is also at the root of the
two other basic, universal rights, namely, private property and
political freedom, known as haq al mal /and haqq al hurriya. Of
course, most of these duties and rights have been observed over
the centuries more in the breech than in the fact.
The greatest evil in human society is known as the pharonic
impulse, exemplified by the Egyptian Pharoah who claimed that he
was god and acted accordingly. He owned everything (as in
practice do the royal families in Arabia today) and controlled
the lives of all his subjects. This is why the dirtiest name
given to America is not "the great Satan" but "the Pharaoh,"
because most of people in the world perceive that it acts as if
it owns them.
The two most basic universals in the Islamic code of
jurisprudence designed to counter the Pharisaic impulse, namely,
the duty to respect private property and political
self-determination, can be reduced to the simple slogan coined
by Norman Kurland: "own, or be owned".
If an economic
oligopoly and a government installed and managed by it controls
the system of money and banking, this paranoiac cabal will
assure that in practice they will own everyone else, because
this system controls access to credit. In the modern world of
capital intensively, such access is the key to economic
production and power, both economic and political. Therefore,
ownership can be broadened only through removing the barriers to
broadened and indeed universal access to credit.
This is the only approach that relies on and protects the
sanctity of private property ownership as a universal human
right, which is what haqq al mal /is all about. Unfortunately,
most modern Muslim economists violate their own religion by
advocating various kinds of socialism, whereby the government,
not the human person, is ultimately responsible for one's own
well-being and for justice in society. This is why the utopians
known generally as Islamists, whether led by Syed
Qutb in Sunni Islam or Ali Shari'ati among the Shi'a, call for
revolution and the destruction of governments in order to bring
in the historically "inevitable" age of justice, inevitable only
if they first carry out their divine mission to destroy the
pharoahs of the world.
The specific issue now under discussion in Georgist versus
Kelsonian theories of economic justice is ownership of land and
natural resources, not ownership of capital. The classical
Islamic position is that the principles are the same. Ownership
is permitted and encouraged in both, but only subject to widened
access to it. Homesteading, whether in Lincoln's sense of land
ownership, or in the Kelsonian paradigm further developed in the
Just Third Way for capital ownership, respects the
right of every person to the riches of the earth. It calls also
for the corresponding duty of persons in community to assure
that neither those already wealthy nor the governments that made
them so have exclusivist power over these riches.
The Georgist approach in theory vests control of these riches in
the people, but in actual fact it might merely further empower
the government (the state), the defective institutions of
society, and their self-serving economic and political
supporters. Iraq is a perfect case study. There one faction
advocates the nationalization of the oil in order to give
ownership to the people, but this in fact would concentrate
ownership in a political elite itself perhaps owned by foreign
oil companies. Others, bitterly opposed by the U.S. government,
want to privatize all Iraq oil in equal voting shares of stock,
inalienable for life, so that every Shi'i, Sunni, and Kurd would
have an equal stake in supporting the government that made this
possible. They would hold the purse-strings which is the
ultimate power over every government.
The theory of either de jure or de facto government ownership in
order to give control to the people is beguiling, but so were
the theories of Karl Marx, Syed Qutb, and Ali Shari'ati. They
purport to promote equality as the essence of justice and the
source of freedom, but in the process of actualization they may
deny the human economic and political rights to
self-determination through economic and political democracy as
the essence of peace and freedom through justice.
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