Economic system Vs Capitalist Economic System (English)

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This presentation provides a comparison between Islam's economic system and the Capitalist economic system in the context of Pakistan.

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<ul><li> 1. Taken from the literature ofHizb ut-Tahrir</li></ul><p> 2. Capitalism: An exploitative System Let us observe some important stats of the beacon of Capitalist State The United States of America 3. In America: In America:37 million people live below the official poverty line12.6 percent of the total populationAt least 2.3 million people experience homelessness at some point each year, including nearly 1 million children The richest among them has more wealth than the bottom 45 percent of the households combined 4. Capitalist system: Polarization of Wealthis the Hallmark of Capitalist system 5. 6. 7. Net worth and financial wealth distribution in the U.S. in 2007 8. Rich getting richer and poor getting poorer </p> <ul><li>Microsoft CEO Bill Gates has more wealth than the bottom 45 percent of American households combined. </li></ul><ul><li>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. </li></ul><p> 9. Percentage of wealth held by the Top 10% of the adult population in various Western countries Concentration of Wealth in the West Country wealth owned by top 10% Switzerland 71.3% United States 69.8% Denmark 65.0% France 61.0% Sweden 58.6% UK 56.0% Canada 53.0% Norway 50.5% Germany 44.4% Finland 42.3% 10. Where is the world headed!!!!! An analysis of the trend of the widening gap between the rich and the poor countries Year Poor: Rich ratio 1820 3:1 1913 11:1 1950 35:1 1973 44:1 1992 72:1 11. System not Resources Pakistan's misery due to the rotten Capitalist system not because of lack of resources! 12. Comparison Islamic Economic System vs Capitalist System 13. Economic Problem Khilafah Democracy </p> <ul><li>Human needs are of two types </li></ul><ul><li><ul><li>Basic Needs (limited) </li></ul></li></ul><ul><li><ul><li>Luxurious Needs </li></ul></li></ul><ul><li>World resources are enough to fulfil basic needs of all the people of world1 </li></ul><ul><li>Human needs are unlimited while there are limited resources to fulfil them </li></ul><ul><li>Solution: </li></ul><ul><li>Distributionof wealth and resources to guarantee all basic needs to each individual </li></ul><ul><li>Create opportunities so that maximum number of people can work to fulfil there luxurious needs </li></ul><ul><li>Solution: </li></ul><ul><li>Needs of all the people wont be fulfilled </li></ul><ul><li>Increase Productionto fulfil needs of as many people as possible</li></ul><ul><li>Rules related to collection of funds and its distribution constitute Economic System and cannot be taken from other than Islam </li></ul><ul><li>Methods to increase production is Economic Science and can be taken from other civilizations including the West </li></ul><p> 14. </p> <ul><li>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. </li></ul><ul><li>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</li></ul><ul><li>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 ) </li></ul><ul><li>The wealth of the three most well-to-do individuals now exceeds the combined GDP of the 48 least developed countries </li></ul><ul><li>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.</li></ul><p>Resources are limited- Non sense 15. Ownership 16. Economic System: Ownership &amp; Types of Properties Khilafah Capitalism </p> <ul><li>Three types of ownership </li></ul><ul><li><ul><li>Individual </li></ul></li></ul><ul><li><ul><li>Public </li></ul></li></ul><ul><li><ul><li>State </li></ul></li></ul><ul><li>Oil, Gas 1 , non-delectable minerals 2etc and anything on which society depends and people will disperse in pursuit for it, remains in public ownership </li></ul><ul><li>If these were owned individually this will deny the public from benefiting from these huge resources, creating misery for the common man </li></ul><ul><li>Freedom of ownership </li></ul><ul><li><ul><li>Individuals or companies can own anything and everything </li></ul></li></ul><ul><li>Multinational companies are free to own public properties such as oil, gas, parks etc </li></ul><ul><li>They are free to spend or hoard the wealth as they please </li></ul><ul><li>Huge resources for peoples welfare </li></ul><ul><li>Cost of utilities much lower </li></ul><ul><li>The foundation of economic colonisation </li></ul><p> 17. 18. Economic System: Pakistans Privatization Drive Privatized To Be privatized </p> <ul><li>ABL, HBL, UBL, MCB </li></ul><ul><li>Bankers Equity Ltd </li></ul><ul><li>Hub Power Co, Kot Addu Power Co </li></ul><ul><li>PTCL (Ufone, Paknet, TIP, CTI) </li></ul><ul><li>Steel Mill (Decision Reversed) </li></ul><ul><li>Ghee Corporation of Pakistan </li></ul><ul><li>KESC </li></ul><ul><li>UCH Power Ltd, Saba Power Ltd </li></ul><ul><li>Dharki Power Ltd </li></ul><ul><li>Oil and Gas exploration Licenses are innumerable </li></ul><ul><li>OGDCL, PSO, PPL, SNGPL, SSGPL </li></ul><ul><li>NIT, ICP </li></ul><ul><li>Sindh Engineering, Bolan Textile </li></ul><ul><li>Lyallpur Chemical and Fertilizer Co. </li></ul><ul><li>Javedan Cement, Karachi Shipyard </li></ul><ul><li>Republic Motors, Lasbella Textiles </li></ul><ul><li>Heavy Mechanical Complex </li></ul><ul><li>HPFL (Hazara Phosphate Fertilizer Limited) </li></ul><ul><li>Jamshoro Power Co, Pak Arab Fertilizer, Mustahekam Cement </li></ul><ul><li>In first ten month of 2004-2005 assets worth $3.6 billion has been sold:Survey 2005:2006 </li></ul><ul><li>Current year privatization target is 75 billion rupees. </li></ul><p> 19. Taxation 20. Taxation in a Capitalist System </p> <ul><li>Tax the poor and average man </li></ul><ul><li>Give tax-breaks to the</li></ul><ul><li><ul><li>Rich </li></ul></li></ul><ul><li><ul><li>Multinational companies</li></ul></li></ul><ul><li><ul><li>Landlords </li></ul></li></ul><p> 21. Taxes in America </p> <ul><li>Who Benefits from Bush's Tax Cuts? </li></ul><ul><li>George Bush's 2001 $1.3 Trillion tax cut was the largest in US history </li></ul><ul><li>The Top 1% supper-rich got 37 % of Bush's tax cutas saving ($481 billion) </li></ul><ul><li>Whilst the bottom 80% of Americans only got 29 % of the total tax cut($377 bn) </li></ul><ul><li>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</li></ul><p> 22. Taxes in Pakistan </p> <ul><li>Agriculture sector in Pakistan contributes 40% to the GDP whilst astonishingly its contribution to the tax revenue is a meager 1% </li></ul><ul><li>GST, which is an indirect tax extracted from common man, constitutes 37% of the total tax-revenue of Pakistan </li></ul><ul><li>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 </li></ul><ul><li>Currently No Ushr and Kharaj being levied on Agriculture produce </li></ul><ul><li>No wonder in democracy the elite legislate laws to tax the poor and give tax breaks to themselves </li></ul><p> 23. 24. Taxes Comparison 2009-10 2008-9 25. Evidences 26. Economic System: Taxes Khilafah Capitalism </p> <ul><li>No Taxes on common man 1 </li></ul><ul><li><ul><li>GST, Income Tax, Withholding tax, toll taxes etc are all haram and will be abolished </li></ul></li></ul><ul><li>There will be following permanent sources of revenues </li></ul><ul><li><ul><li>Al-Kharaj2 </li></ul></li></ul><ul><li><ul><li>Al-Jizya3 </li></ul></li></ul><ul><li><ul><li>Al-Ushr4 </li></ul></li></ul><ul><li><ul><li>The fifth of Al-Rikaz5(hidden treasures minerals) </li></ul></li></ul><ul><li><ul><li>Import and export duty on foreign traders6 </li></ul></li></ul><ul><li><ul><li>Zakat on import and export of the Muslim Trader7 </li></ul></li></ul><ul><li><ul><li>Hima(Protecting from public properties) </li></ul></li></ul><ul><li>63.93% (Rs 840 billion) of revenue of Pakistan comes from taxes on the people as per the budget 2006-07 figures.</li></ul><ul><li>Out of these taxes 67.66% (Rs 569 billion) are indirect taxation that are to be paid by even a beggar, unemployed, handicapped, widow, elderly people and children without any differentiation. </li></ul><p> 27. Laws related to Agricultural land 28. Economic System: Agriculture and Land laws Khilafah Capitalism </p> <ul><li>Lease of agricultural lands (Muzariyat) is haram 1 </li></ul><ul><li>Leasing of agricultural lands is permitted </li></ul><ul><li>Agricultural land if not used for 3 years will be confiscated 2and allotted to someone who would cultivate it </li></ul><ul><li>No such restriction applies to an owner.He is free to do whatever he pleases </li></ul><ul><li>Anybody who occupies a dead land (outside the planned city area) and revives it by building a house or a factory etc becomes the owner of the land as well </li></ul><ul><li>No such incentive in the current Pakistani system </li></ul><ul><li>Prohibition of Muzarat coupled with obligation to cultivate land will give rise to land distribution of optimum productivity </li></ul><ul><li>Eradicates injustice to Muzarays. Delivers a fatal blow to the colonialist Feudal system (jageer darana nizam) </li></ul><p> 29. Evidences </p> <ul><li>It was narrated by al-Bukhari that the Messenger of Allahsaid: Whoever has land let him plant upon it or grant it to his brother.If he declined let him hold his land.</li></ul><ul><li>Muslim also narrated, The Messenger of Allahforbade a rent or a share be taken for the land.</li></ul><ul><li>The Sunan of An-Nisai states: The Messenger of Allahforbade leasing the land.We said, O Prophet of Allah, can we then lease it for some of the grain. Hesaid, No. We said, We used to lease it for the straw. Hesaid, No.We said, We used to lease it in return of that on the irrigating Rabeea. Hesaid, No, plant it or grant it to your brother.</li></ul><ul><li>Abu Dawud has narrated from Rafia ibn Khadeej that the Prophetalso said, Whoever has land, he has to plant upon it or let his brother plant upon it, and he cannot lease it for its third or fourth or a specified food. </li></ul><p> 30. Evidences </p> <ul><li>Bukhari related from Aisha (ra) that the Messenger of Allahsaid: Whosoever cultivated a land that is not owned by anybody, then he deserved it more.</li></ul><ul><li>Abu Dawud narrated that the Messenger of Allahsaid: Whosoever fenced a (dead) land it becomes his </li></ul><ul><li>Bukhari narrated from Umar (ra) that hesaid: Anyone who cultivated a dead land it becomes his. Muslims and the Dhimmi are equal in this matter, because the Hadith is general in its words. </li></ul><p> 31. Evidences </p> <ul><li>By completing the revival, ownership is completed and the land is officially transferred to the peasant. All this must happen before the end of three years after the allocation. This came in the narration narrated by Tawus from Umar ibn Al-Khattab who said: The muhtajir (who shield a land) has no right after three.Umar implemented this ruling while Sahabah were present and they all approved of this. Hence it becomes Ijma as-Sahabah for us and a Shari daleel. </li></ul><p> 32. Residential Land Khilafah Capitalism </p> <ul><li>The State guarantees housing for the one who is in capable to build a house for himself and his relatives are also poor cannot support him </li></ul><ul><li>The Prophet (SAW) said:The Son of Adam has rights to food, clothing and shelter. </li></ul><ul><li>The system doesnt allow the people to use the resources which Allah has bestowed to man </li></ul><ul><li>Common mans biggest problem in building a house is the inflated prices of residential land that can easily be solved through the Khilafah state.</li></ul><p> 33. Currency 34. Currency Khilafah Capitalism </p> <ul><li>Metallic Currency </li></ul><ul><li><ul><li>Gold</li></ul></li></ul><ul><li><ul><li>Silver </li></ul></li></ul><ul><li><ul><li>Any other precious metal </li></ul></li></ul><ul><li><ul><li>Currency notes can be used in lieu of gold and silver </li></ul></li></ul><ul><li>Fiat currency backed by confidence </li></ul><ul><li><ul><li>Dollar </li></ul></li></ul><ul><li><ul><li>Euro </li></ul></li></ul><ul><li>Protects the currency from foreign control </li></ul><ul><li>Puts a check on devaluation and fake inflation </li></ul><ul><li>Return of the Gold standard will strike a fatal blow to the colonialist economy </li></ul><p> 35. Riba 36. Riba Khilafah Capitalism </p> <ul><li>Interest transactions not allowed 1 </li></ul><ul><li><ul><li>No interest based debt servicing </li></ul></li></ul><ul><li>Encourages the wealthy to under take local investment rather than depositing their money in high interest deposit accounts </li></ul><ul><li>Freedom of ownership allows people to hoard money </li></ul><ul><li>Riba is the bate for the people to take money out of circulation/ investment and to put into deposit account </li></ul><ul><li>In 2006:07 Pakistan will pay 295 billion rupees in interest payment. This is 55 billion more than all foreign loan and grants for the year. </li></ul><ul><li>Relief to common man/ investor </li></ul><ul><li>No interest servicing to IMF and WB.</li></ul><p> 37. Evidences </p> <ul><li> That is because they say: Selling is just like usury. Whereas Allah permitted selling and prohibited usury . [Al-Baqarah: 275] </li></ul><p> 38. Investment before the advent of Banks </p> <ul><li>In a society devoid of Banks investors are in need of entrepreneurs and businessmen to help increase their wealth </li></ul><ul><li>On the other hand the skilled labour, inventors and businessmen are in need of investment in order to generate more wealth </li></ul><ul><li>Hence it is a marriage of convenience for both parties </li></ul><ul><li>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 </li></ul><p>Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader 39. Bank monopolizes the wealth of the society </p> <ul><li>The Bank drains the society off of its wealth by guarantying the investor of sure profit (interest) </li></ul><ul><li>As a result an entrepreneur and skilled labourer is forced to borrow money from the bank on exploitative terms.</li></ul><ul><li>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. </li></ul><ul><li>This produces a win-win situation for the investor and the bank.Hence the rich becomes richer and the poor poorer </li></ul><p>Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader Bank Banks Profit = (20-12)% 12% 20% Profit Interest 40. In Muslim societies Banks were not very successful </p> <ul><li>In Muslim societies since people considered Interest as haram thereforeBanks was not in total control of the money flow in the society. Billions of dollars of money remained outside Banks control.And skilled labour didnt need to go to the bank to borrow money as investors were there to help them. </li></ul><ul><li>As a result banks who thrive on monopolising the money and then forcing people into exploitative contracts couldnt function properly. </li></ul><p>Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader Bank Banks Profit = (20-12)% 12% 20% Profit Interest 41. Islamic Banking is helping Capitalist Banks </p> <ul><li>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 </li></ul><ul><li>This achieved the objective of draining the society off of wealth and hence the skilled labour has become more dependent on the Banks </li></ul><ul><li>Hence Islamic Banking has actually helped Capitalist system by having stronger grip on the money flow and hence exploit the masses </li></ul><p>Investor Skilled labour Inventor Investor Investor Investor Investor Investor Businessman Entrepreneur Trader Bank Banks Profit = (20-12)% 12% 20% Profit Interest Islamic Banking $ $ $ 42. Islamic Banking in the Capitalist system </p> <ul><li>Islamic banking is also tool via which the Imperialist forces engage sincere Muslim in the current Kufr system and deceive them in believing that they can have an Islamic system within the frame work of the existing Kufr Capitalist system.As a result enormous time and effort is wasted in trying to reform this kufr system instead of uprooting it and implementing Islamic system in a comprehensive and radical manner </li></ul><p> 43. Banking System Khilafah Capitalism </p> <ul><li>Bank do not serve as financial intermediaries. Hence in capitalist sense there are no banks.</li></ul><ul><li>They will provide services of the like debit card, LC for import export, Online fund transfer, internet payments, etc. </li></ul><ul><li>They will facilitate/establishcommunication between the investor (Muwakkil) and worker (Mudharib) </li></ul><ul><li>Banks acts as financial intermediaries </li></ul><ul><li>They provide services likedebit card, LC for import export, Online fund transfer,...</li></ul>

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