Mohammed Hamid Abdallah in Journal of King Abdual Aziz University
The author brought in historical background and also made comparison to earlier thinking on economic matters from the Greeks,etc
Main ideas of Ibn Taimiyyah-
Market Mechanism-
"Just price" - price of an equivalent good taking into account the subjective value to buyer and the seller
"market mechanism" - determined by supply and demand
"Price regulation" - policy of price control by government - just and unjust price regulation.
just - done at times of emergency such as famine or war and also at times of market imperfections
unjust - creation of a price thru manipulative means to increase or decrease supply or demand
Property Rights - all property belongs to Allah but all (individual, society or govt) can claim property rights and shld use it on behalf of Allah. Ibn Taimiyah not in favour of poverty as it would lead to a distraction from religious duties.
Money and Interest - money should not be traded as a commodity
State- its role in economic life, al hisbah, etc
Public Finance - from zakah, ghainimah, fai, kharaj and gizyah. there should also be financial obligations on the individual other than zakah
Taxation - shld not be heavy expecially if spent on luxuries by rulers rather than as benefit for the poor.
Sunday, October 25, 2009
Wednesday, October 21, 2009
Economic Thoughts of Redistribution of Income and Wealth: A Comparative Analysis
By Azizi Che Seman and Nor Aini Ali
Comparison between conventional and Islamic views on redistribution of wealth.
Distribution
Conventional – there are 2 types of people who have a right to acquire wealth and property and to dispose
• Those with primary rights – ie those that participate in the process of production (ie those that have any of the 2 factors of production – labour, land, entrepreneurship or capital)
• Those with secondary rights –
Islam – enjoins upon those in the primary group to share with the secondary group
Redistribution
Redistribution of wealth is important when the market system is imperfect.
Conventional:-
Arguments against redistribution
1. labour and capital are paid in accordance with the value they produce. Land and capital owners receive profit or interest because the land or capital they own is productive
2. freedom of contract
3. taxation and transfer programs interfere with the basic incentives
Arguments for redistribution
1. utlilitarian justice – ie a dollar in the hands of a rich man is worth less to him than a dollar in the hands of a poor man
2. or if someone has more than another, a utility gain will result from transferring income from those with more to those with less – utility function
3. simple fellow feeling
4. social contract theory – Rawlsian justice – inequality would only be tolerated in a society as long as some of the benefits went to those at the bottom
5. Marx – he places all value on labour and none on capital, so that profits are an expropriation by the capitalist of the fruits of labour’s effort
6. Income distribution as a “public goods”
Islamic
1. Redistribution is aimed to maintain justice and equity in society
2. Ibn Taymiyyah – eradication of poverty is an obligation of the state
• It is duty of state to help people better themselves financially
• Redistribution of income is duty of the state
• There are other obligations on Muslims apart from zakah = on the basis of need of the society
• Do this by right taxation, in addition to zakah
• Waqf for the use of the rich is considered invalid because wealth should not circulate among the rich only
3. “Ibn Hazm (994-1064) who says that it is the duty of the rich of every country to support the poor, and that the ruler has a right to force them to do so, if zakah and other public revenue is not sufficient.”
• Basic standard of living is food, shelter, clothes and water
• State must provide for the basics
• But the function of eradicating property is not just left to the state but also to the rich
• Taxes can be imposed if zakah is not sufficient
Comparison between conventional and Islamic views on redistribution of wealth.
Distribution
Conventional – there are 2 types of people who have a right to acquire wealth and property and to dispose
• Those with primary rights – ie those that participate in the process of production (ie those that have any of the 2 factors of production – labour, land, entrepreneurship or capital)
• Those with secondary rights –
Islam – enjoins upon those in the primary group to share with the secondary group
Redistribution
Redistribution of wealth is important when the market system is imperfect.
Conventional:-
Arguments against redistribution
1. labour and capital are paid in accordance with the value they produce. Land and capital owners receive profit or interest because the land or capital they own is productive
2. freedom of contract
3. taxation and transfer programs interfere with the basic incentives
Arguments for redistribution
1. utlilitarian justice – ie a dollar in the hands of a rich man is worth less to him than a dollar in the hands of a poor man
2. or if someone has more than another, a utility gain will result from transferring income from those with more to those with less – utility function
3. simple fellow feeling
4. social contract theory – Rawlsian justice – inequality would only be tolerated in a society as long as some of the benefits went to those at the bottom
5. Marx – he places all value on labour and none on capital, so that profits are an expropriation by the capitalist of the fruits of labour’s effort
6. Income distribution as a “public goods”
Islamic
1. Redistribution is aimed to maintain justice and equity in society
2. Ibn Taymiyyah – eradication of poverty is an obligation of the state
• It is duty of state to help people better themselves financially
• Redistribution of income is duty of the state
• There are other obligations on Muslims apart from zakah = on the basis of need of the society
• Do this by right taxation, in addition to zakah
• Waqf for the use of the rich is considered invalid because wealth should not circulate among the rich only
3. “Ibn Hazm (994-1064) who says that it is the duty of the rich of every country to support the poor, and that the ruler has a right to force them to do so, if zakah and other public revenue is not sufficient.”
• Basic standard of living is food, shelter, clothes and water
• State must provide for the basics
• But the function of eradicating property is not just left to the state but also to the rich
• Taxes can be imposed if zakah is not sufficient
Sunday, October 11, 2009
Philanthropy and Social Justice in Islam: Principles, Prospects and Practices
Samiul Hasan
University of Technology Sydney
This book analyses concepts pertaining to social (distributive) justice in Islam
Resource mobilisation options
Practices and issues in different Muslim polities
Giving in terms of cash and volunteering time
Islam emphasises philosophy not rituals
But charity straddles both worship and practice
Chapter 2 – he studies different Muslim nations
Table (pg 37) on Muslim nations and the State of the Nation
He finds that “around 50% of World Muslims live in countries with a British colonial past” subject to common law
A lot of inequality between the countries, and within them of socio economic background-
Measured by 2 yardticks of development (used by international bodies such as UNDP-
• Infant mortality rate
• Level of adult literacy
(see table pg 41)
Many Muslim nations only in existence for the past 50 years. His findings (see table pg 44)
• Generally, there is a direct correlation between low income inequality and human development potential (ie low infant mortality rate and level of adult literacy) although this is not applicable to all the countries
• 11 of them are OPEC members . Of these where the countries are dependent on petroleum export earnings for the largest percentage of the GDP All except for Indonesia (soon to be non OPEC), have monarchy or civil/military authoritarian system of govt. This applies to non-OPEC member petroleum exporting countries such as Egypt, Oman, Sudan and Syria. There is a direct relationship between a petroleum based economy and the citizen’s ability to control the policy regime
• Disparities in economic status are lower where philanthropic activities are high.
Chapter 3 – he studies the concept of social justice in Islam
Social justice – 3 types within the philosophy of Islam-
• Relational – ummah (brotherhood), asabiyah (social solidarity), kindness, non judment, do good deeds, respectful
• Retributive – qisas, hadd, repentance and mercy, adherence to the law
• Distributive – lawful activites such as trade, compassion to others, use of property in lawful, correct , responsible manner, trustee of all property belonging to God, non hoarding, charity, takaful (here he cites Kamali: Freedom, Equality and Justice in Islam 1999)
All within framework of fairness and equity
He says that Islam does not provide the principles, but the guidelines.
Chapter 5 – studies Property: accumulation and distribution
Eg by trade
Other economic activity
Chapter 6 – Philanthropy in Islam : basic principles and doctrine
Cites Gladstone 1979 (?) (not in the biblio) “the feeling which mkes men who are materially comfortable, mentally uncomfortable so long as their neighbours are materially uncomfortable”
Cites Payton (Robert L Payton 1988: Philanthropy: voluntary Action for the Public Good (NY: American Council on Education : Macmillan) – 3 facts to philanthropy –
• Voluntary giving
• Voluntary service
• Voluntary organization
He takes these 3 dimensions and studies the different aspects of philanthropy in Islam.
Charity vs Philanthropy – although he seems to suggest a difference, but he does not show any difference, although he says “ “In that sense we can truly say that philanthropy is more an Islamic concept than charity.” ???
Fundamental principles of philanthropy
1. seeking God’s pleasure
2. self purification
3. self contentment
4. timeliness
5. charity to begin at home
6. high standard of intentions and quality of charity
7. moderation
8. proactive in philanthropy
9. purposive philanthropy
10. inclusiveness
11. altruism
12. secrecy
Significance of philanthropy
1. charity as a form of prayer
2. charity as an investment (in the hereafter)
3. material rewards?
4. Heavenly rewards
Chapter 7 – Philanthropy in Islam: forms and facets
Islam promotes Obligatory and non obligatory
Obligatory-
• Zakat ul mal
• Ushr on agriculture produce
• Zakatul fitr
Non obligatory-
• Festival of sacrifice charity – eid adha
• Alms
• Sadaqa – in many forms, eg a glass of water, a smile , kind word
He also suggests that volunteering is accepted and encouraged – “do good deeds”
He cites SayyidQutb who “maintains that zakat is superior to the Western concept of charitable alms and has nothing to do with charity which is a non-islamic concept (see Carre 1984:151 (???) and Mitchell 1969:253 (???) (both no citation in bibliography)
Chapter 8 – talks about management of zakat
Chapter 9 - Islamic Charitable Foundations
He talks about the waqf
History
Conditions for waqf creation
Perpetuity
Purposes and motives for waqf formation
Purpose “a good work” or “an approach to God”
Motives-
• piety
• status
• politics
• protect property from confiscation (stimulated family waqfs)
• protect women’s rights ie property from predatory relaives
Chapter 10 – waqfs in different societies
Waqf management –
Over the years it has been by govt agencies, by private independent administrator and by community or group
Nation states – led to control of waqf by state – negative stand towards waqf – adding fees to the waqf fund – abolishment of family waqf in some countires (eqypt, libya, Syria, Tunisia and UAE). In Kuwait, they are restricted to 2 generations, in Lebanon they face compulsory termination of it become uneconomic, inflict irreparable damage or become extensively fragmented (see Rashid: see Awqf Experiences in South Asia (new Delhi: Institute of Objective Research)
New form of waqf – cash waqf
Social development : purposes and issues-
Mainly mosques, poor houses, shelters, -
urbans services, education , health and hygiene.
Used to provide urban services. Only when municipalities start to deliver urban services did these wane
Health and hygiene – hammams
Education
Mismanagement and misappropriation of waqfs
Q of perpetuity being challenged – see Egypt, Syria and Lebanon. In Morocco, a perpetual waqf is on that survives for more than a century
Other issues – selling of waqf properties, undertaking phohibited economic activities within the properties, management of the properties, mutawallie’s abilities, legislation
Chapter 11 – management of philanthropy in a poor muslim polity
Zakat management
Waqf management-
• Bangladesh situation
Chapter 12 – discussion, conclusion , recommendation
Places onus on governments
See table pg 287 on what govt can do to promote the waqf-
1. contributing to and leading the duty of Islamic scholars and advocates by organizing awareness and mobilization campaigns and serving the scientific dimension of waqf
2. adopting measures: transparency in management of waqf funds, involve scholars and honest people
3. using control, accounting and inspection
4. simplify laws regulations to waqf formation and amnagement
5. allow waf creators to choose waqf managemnt process
University of Technology Sydney
This book analyses concepts pertaining to social (distributive) justice in Islam
Resource mobilisation options
Practices and issues in different Muslim polities
Giving in terms of cash and volunteering time
Islam emphasises philosophy not rituals
But charity straddles both worship and practice
Chapter 2 – he studies different Muslim nations
Table (pg 37) on Muslim nations and the State of the Nation
He finds that “around 50% of World Muslims live in countries with a British colonial past” subject to common law
A lot of inequality between the countries, and within them of socio economic background-
Measured by 2 yardticks of development (used by international bodies such as UNDP-
• Infant mortality rate
• Level of adult literacy
(see table pg 41)
Many Muslim nations only in existence for the past 50 years. His findings (see table pg 44)
• Generally, there is a direct correlation between low income inequality and human development potential (ie low infant mortality rate and level of adult literacy) although this is not applicable to all the countries
• 11 of them are OPEC members . Of these where the countries are dependent on petroleum export earnings for the largest percentage of the GDP All except for Indonesia (soon to be non OPEC), have monarchy or civil/military authoritarian system of govt. This applies to non-OPEC member petroleum exporting countries such as Egypt, Oman, Sudan and Syria. There is a direct relationship between a petroleum based economy and the citizen’s ability to control the policy regime
• Disparities in economic status are lower where philanthropic activities are high.
Chapter 3 – he studies the concept of social justice in Islam
Social justice – 3 types within the philosophy of Islam-
• Relational – ummah (brotherhood), asabiyah (social solidarity), kindness, non judment, do good deeds, respectful
• Retributive – qisas, hadd, repentance and mercy, adherence to the law
• Distributive – lawful activites such as trade, compassion to others, use of property in lawful, correct , responsible manner, trustee of all property belonging to God, non hoarding, charity, takaful (here he cites Kamali: Freedom, Equality and Justice in Islam 1999)
All within framework of fairness and equity
He says that Islam does not provide the principles, but the guidelines.
Chapter 5 – studies Property: accumulation and distribution
Eg by trade
Other economic activity
Chapter 6 – Philanthropy in Islam : basic principles and doctrine
Cites Gladstone 1979 (?) (not in the biblio) “the feeling which mkes men who are materially comfortable, mentally uncomfortable so long as their neighbours are materially uncomfortable”
Cites Payton (Robert L Payton 1988: Philanthropy: voluntary Action for the Public Good (NY: American Council on Education : Macmillan) – 3 facts to philanthropy –
• Voluntary giving
• Voluntary service
• Voluntary organization
He takes these 3 dimensions and studies the different aspects of philanthropy in Islam.
Charity vs Philanthropy – although he seems to suggest a difference, but he does not show any difference, although he says “ “In that sense we can truly say that philanthropy is more an Islamic concept than charity.” ???
Fundamental principles of philanthropy
1. seeking God’s pleasure
2. self purification
3. self contentment
4. timeliness
5. charity to begin at home
6. high standard of intentions and quality of charity
7. moderation
8. proactive in philanthropy
9. purposive philanthropy
10. inclusiveness
11. altruism
12. secrecy
Significance of philanthropy
1. charity as a form of prayer
2. charity as an investment (in the hereafter)
3. material rewards?
4. Heavenly rewards
Chapter 7 – Philanthropy in Islam: forms and facets
Islam promotes Obligatory and non obligatory
Obligatory-
• Zakat ul mal
• Ushr on agriculture produce
• Zakatul fitr
Non obligatory-
• Festival of sacrifice charity – eid adha
• Alms
• Sadaqa – in many forms, eg a glass of water, a smile , kind word
He also suggests that volunteering is accepted and encouraged – “do good deeds”
He cites SayyidQutb who “maintains that zakat is superior to the Western concept of charitable alms and has nothing to do with charity which is a non-islamic concept (see Carre 1984:151 (???) and Mitchell 1969:253 (???) (both no citation in bibliography)
Chapter 8 – talks about management of zakat
Chapter 9 - Islamic Charitable Foundations
He talks about the waqf
History
Conditions for waqf creation
Perpetuity
Purposes and motives for waqf formation
Purpose “a good work” or “an approach to God”
Motives-
• piety
• status
• politics
• protect property from confiscation (stimulated family waqfs)
• protect women’s rights ie property from predatory relaives
Chapter 10 – waqfs in different societies
Waqf management –
Over the years it has been by govt agencies, by private independent administrator and by community or group
Nation states – led to control of waqf by state – negative stand towards waqf – adding fees to the waqf fund – abolishment of family waqf in some countires (eqypt, libya, Syria, Tunisia and UAE). In Kuwait, they are restricted to 2 generations, in Lebanon they face compulsory termination of it become uneconomic, inflict irreparable damage or become extensively fragmented (see Rashid: see Awqf Experiences in South Asia (new Delhi: Institute of Objective Research)
New form of waqf – cash waqf
Social development : purposes and issues-
Mainly mosques, poor houses, shelters, -
urbans services, education , health and hygiene.
Used to provide urban services. Only when municipalities start to deliver urban services did these wane
Health and hygiene – hammams
Education
Mismanagement and misappropriation of waqfs
Q of perpetuity being challenged – see Egypt, Syria and Lebanon. In Morocco, a perpetual waqf is on that survives for more than a century
Other issues – selling of waqf properties, undertaking phohibited economic activities within the properties, management of the properties, mutawallie’s abilities, legislation
Chapter 11 – management of philanthropy in a poor muslim polity
Zakat management
Waqf management-
• Bangladesh situation
Chapter 12 – discussion, conclusion , recommendation
Places onus on governments
See table pg 287 on what govt can do to promote the waqf-
1. contributing to and leading the duty of Islamic scholars and advocates by organizing awareness and mobilization campaigns and serving the scientific dimension of waqf
2. adopting measures: transparency in management of waqf funds, involve scholars and honest people
3. using control, accounting and inspection
4. simplify laws regulations to waqf formation and amnagement
5. allow waf creators to choose waqf managemnt process
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