In fact, I wanted to avoid answering this question because it is a question regarding the subject matter of our book, in fact. A book should be written on economic philosophy of Islam by some Ahmadis who have both the understanding of the Holy Quran as well as the understanding of the subject economy. But I can give you some hints now so that you can yourself develop if you have time. As I started telling you last night, for every motion there has to be a motive force, some compulsion to drive something on. So the wheels of economy are drawn, are moved, put into motion I should say, by some compulsion. But according to the capitalistic system, that compulsion is a promise of a reward for your money.
You deposit your money in a bank and you are assured that you will get a certain sum out of that deposit per year or whatever the timescale be. This is how the capital does not remain idle. Another way of doing the same thing would be to punish you if you keep your capital idle. With the result that through compulsion of fear you are forced to move the economic wheel anyway. Apparently the reward is much bigger in terms of percentages normally found today in the world as against the punishment, the threat of punishment which is 2.5% generally speaking. But in reality it is not so.
Because when you further examine the whole situation of the capital system and how it works, you will come to realize that in an interest run economy, the money loses its value by the passage of time. And in fact what you are left with is much less than your calculations would make you believe. By the time you have received 12%, that is 12 rupees extra to your 100, then money may have lost its value by even 15%. So there is a big fraud committed against the innocent people who think their money is doubling in six years or so. But the best way of judging whether money was actually doubling up or being halved is to buy something of the real estate and keep it as a test case. And after six years try to buy that piece of land with a doubled money.
If you really are able to buy that much piece of land with your doubled up money and save some, then you are in profit. If you have to borrow some more money to buy the same piece of land which you could buy six years before, then you are positively a loser. So through this interest system you deceive the whole society. And those who control the banks and the monetary sit at the sources of money manipulation, they can play havoc with the money of not only individuals but also of the poor nations. And this is exactly what is being done. Apart from that, the threat of tax on capital is a different thing. The profit which you receive is not calculated according to the whole capital. The fact is that when you are taxed at the capital, then you suffer quite a substantial sum. If you do not move that money, as I explained yesterday, within a matter of years you will be left with nothing.
So when you are compelled to move, obviously the rate of profit that you can make would be more than 2.5% or should be. Normally, this is, I mean considering the normal, I shouldn’t say normal because in every country it is different. But what I want to say is that you take the specimen economy of any country, even in the poorest countries the rate of genuine profit would be higher than 2.5%. So what you gain is a real gain and not an imaginary gain after paying the taxes. But that is not all.
Now I am going to compare the philosophy and what truly lies behind the Islamic philosophy. Amrullah s.a.w. once mentioned by way of a question. He wanted to convey some methods through a question regarding the interest. He asked someone, does your money give children, gives birth to babies? So he was surprised, he said no. He said then why are you charging so much for lending your money? What he pointed out was a much deeper thing than what appeared. The fact is that money in itself has neither the quality of growing nor the quality of lessening. It is an inert thing and it requires a quality whenever married to the talent or labor of somebody else.
In that case it would decrease as well as it would increase. So an essential quality is non-existent in the case of the money. It just becomes an instrument. An instrument which would be employed to decrease itself or to increase itself. The result would depend on who is using this instrument. So if this is kept in mind then the importance is transferred from money to the user. And he gains more importance in the economy. So this is why Islam does not permit, one of the reasons, does not permit usury. There are so many other reasons, I am not discussing all. But as I told you I am giving some hints which are very important and fundamental.
Now for instance, look at the capitalistic system. The banks assure you that they will give you a certain percentage. Regardless of the fact that that is just a fraud and more often than not you don’t get anything in return. The fact is that this system will kill your personal capabilities and also kill the standard of honesty in trade and industry and everything. Because you are not concerned with the standard of honesty in this regard. Because this is a government system and very rarely in this system a bank goes bankrupt. So it’s almost certain, it’s like a law that you deposit your money and you get your so called profit out of that. And you do not have to pay personal attention to it.
Islam abolishes this system and promotes a system of cooperative trade, cooperative industry and cooperative business. In that case you are not assured of any positive profit. Only the result would decide whether you should get a certain percentage out of your capital or the vice versa would happen. The very opposite is going to take place. Who is going to decide this? The person who is employed for some sort of business or who is interested in some sort of business. And also the system which has been agreed upon between the two parties, the lender and the one who is deposited with. If the lender is a sensible man then he would naturally take active personal interest in two things. Number one, he would judge the quality and the standard of honesty of the party whom he is entrusting with his money.
Secondly, he would like to have some personal relationship with that trade or business. He would not be just a sleeping partner because it would help him not to be a sleeping partner. So a mutual trade would develop in such a society with emphasis on maximum participation and emphasis on the standard of honesty. When this system was practiced in the early centuries of Islam, this is exactly what happened. It was a highly boosting economy in the early centuries of Islam which became the center of the entire world. And what actually was happening that the most pious and the most trustworthy had become banks automatically.
For instance, Hazrat Imam Abu Hanifa was a multi-millionaire because people would throw their money into his house or in his depositing coffers and leave a note just telling him that you can employ this and the profit would be divided 25% or 50% as they agreed. And some would leave the money without permitting him to employ that money. And that was Amanat. So this is the second thing. In Amanat, the conditions are different and in trade they are different. When you permit someone to go into trade with your money, then you share the profit as well as the loss. So neither of the parties suffers anything. Capital is not given importance. The quality of the man and his integrity are given importance. In such a system, these two qualities must flourish for the trade of a nation to flourish. And automatically economic compulsion brings this to limelight and helps them to flourish. As I was quoting, this began to happen when the system was in war in the early centuries of Islam. But if you lose, then you also share the loss with the depositor. And there is a risk. So instead of a fraud, this is the real life and this is truth. This is how it should be.
When you share somebody’s qualities of mind and heart, if those qualities suffer, you should also suffer. Why should there be a guarantee for your money? Money is just one partner and not the entire partner. It is a partner which cannot flourish by itself. As our Holy Prophet ﷺ pointed out, they don’t give birth to children. That means it does not have the intrinsic quality to multiply without being married to some other quality. So both become the joint shareholders in whatever they do and whatever they achieve. Loss should be shared as well as the profit. So this is the Islamic system.
Now in this way, you cannot usurp the rights of poor nations at all. It’s impossible. Employ this system in the modern economy and the big advanced nations will have to share the profit of their highly developed technology as well with the poor nations. If for instance, they keep the oil money as deposit, in this system they will have to share the profit of their high development and economy. They cannot defraud the poor nations at all. They will become helpless in doing so. For instance, I will further elaborate this point in application.
The Middle East oil has produced oil dollars. They are deposited with the highly developed nations because they are the controllers of the whole banking system. The entire banking system is in their hand. Now they have to pay them apparently some profit in the name of interest or some interest in the name of profit. It’s neither interest nor profit. It is a total loss in fact. What happens is that they sell. They of course employ their money in industry, in trade, in other systems which reproduce. So they know they have to pay them 12% or 13% and they know that they have to sell their goods in the same markets. With the result that they can increase the prices of the goods which they sell ultimately to their markets. Through cost accountancy, they add in one column the 12% which they have to give them. And after that, that will become cost. So there should be some profit.
So there 35% should be added to that. So whatever they get is much more than what they paid to them. And the poor nations cannot in any way share their profits. What is given over to them by way of profits is taken back by way of other profits plus it is nullified by an increased rate of inflation. Next year when they go to buy things, if it was 100 million dollars which had swollen to 112 million dollars, the same things which they could have bought at the early first year, for 100 million dollars for example, would after a year be not available for even 120 million dollars. So where is the profit? Through the system of interest, the capitalist nations are befooling the whole of the underdeveloped world and destroying their economy and the capital is getting amassed in fewer and fewer hands.
Now this is one aspect which is ultimately promotive to world wars. Hazrat Musleh Maud has written on this aspect of the dangers of a system run by on interest, that is the capitalist system. But I have also elaborated on this in some other, either addresses or some articles, I don’t know. But this aspect itself requires a full treatment. In fact the system of treachery is playing havoc with the whole world in so many ways. It’s not just one single way. On the other hand as I mentioned, if you stick to the compulsory system of zakat, to circulate your money, that is the national money, that has all the advantages of an honest society. And everybody shares equally, not even on individual basis but also on national basis.
All the poor nations would begin to become partners with the scientific developments of the rich nations and when they lend them their money, if the poor nations cannot employ them correctly and honestly, nothing would be lent to them. Because the rich nations will have to suffer the loss in the Islamic system. So they will be doubly wise before lending their money and would ensure to it that the money does not run into loss.
If they are ensured by a unitary system, that whatever money they lend to the poor countries has to be returned to them and with certain profits. Now there they become completely careless as to what is done to that money. In fact sometimes they promote it being run on loss. Because then more and more strings are attached to such poor people and political predominance is born out of this fact. Many poor nations have totally been enslaved through this unitary system and ultimately a time comes when the situation becomes extremely explosive. Some nations have run into bankruptcy. So is the case with many South American countries. Even such countries as Brazil, which is very rich, cannot pay back their interest, not to mention the capital.
So the whole world is being very cruelly treated by the rich people through the agency of this interest system. Now it is a strange thing, apparently it is paradoxical, but this is also true, that when rich people lend their money to the poor people, the rate of inflation does not help the poor people. Because their lending is in the form of not capital, but capital goods. Capital goods come from these rich people. So there is no question of them running into loss through inflation. For instance, if Pakistan is held, even if it is held in the form of capital, that capital will have to be employed in the western markets. More often than not, there are strings attached and instead of capital, the country is held in the form of goods.
You are allotted a certain sum, say one billion dollars, and you have to buy certain goods from certain markets, not free markets. If America is lending, then America would prefer herself to be the buying place. Now when you have to buy under the age, you have all the disadvantages of a person who cannot bargain. So price for the asking is a determined price in the end. And not only that, in the name of technical assistance, extremely high paid staff is sent along with such aid for loans, which draw a major portion of that aid in the form of their salaries and amenities. So there are so many ways attached to this through which the whole purpose of the aid is negated and exactly the opposite is produced. What is left is just the loan and the mounting loan for that matter. Until a situation arises where the whole nation is incapable of paying annually its interest alone.
This has happened to Pakistan, this has happened to other countries, Argentina, and other countries, so many others, Mexico, yes, Mexico, and to many other countries, I mean, there is long list, and they are helpless. Now if they ultimately say they are not going to pay, then war can start on this issue. So on the one hand, the capitalist countries also are running into a situation which is promoted to war. Those who gain, they are also being driven towards war. And those who are being robbed, they are also being driven to war. Now this has to be elaborated, but as I told you, I have no time. But I can elaborate this further to convince you that the system of interest is mainly responsible for global wars. Because whatever war there is today is the war of economy, essentially, initially. And this war is being waged through their economic system. In this war, when there are failures, then the second type of war takes over. That is the hot war. They are deeply linked together.
Moreover, there are Jews who control the monetary system of the entire world through very clever means. Now they are not parts of the governments. Apparently they are parts of the government, but they also sit aside. And at the time of great wars, they become the lenders. And again they play havoc with the whole world peace and the world economic system and everything. Because being of this world, yet they are not of this world. They do not share the losses of the world governments. But they share and they are insured of the profits of the world governments. And during the time of war, they see to it that their money is returned to them in the form of real profits, not in the form of just inflationary profits. So there are some of the disadvantages of the capitalist system which I have mentioned. But as I told you, there are so many other fields to be discussed and compared as well. If you think on, continue to think on these lines, and if you have other questions on the same aspect, you can ask me again.
Because as I said, it was impossible to treat the whole subject in this short session. So I have just concentrated on one aspect. Later on maybe I can throw lights on some others. If you think of some.
