Islam is a unified way of life. It is not a political or a cultural system, nor is it an Economic System. But, being a unitary way of life it does have aspects upon which an Economic System can be built. It is necessary to remember, however, that when the Prophet Muhammad (saw) applied the Quran to the life of the community it was an Agricultural and Mercantile age. Today, we are in an Industrial and an Information Age and the world has become more complex and shrunk owing to the progress of technology, transport and communication and population congestion. Therefore, details that apply to specific economic conditions will be ignored and those principles will be described which have a much more fundamental application.

The main features relevant to Economics are:- 1. Allah is the supreme Authority and Owner of all things, 2. The vicegerency of man, 3. Property as a Trust, 4. Community and Brotherhood, 5. The freeing of slaves 6. Personal, Public and Ecological responsibility, 7. Consultation, agreements and Contracts, 8. Pursuit of only that which is truly beneficial. 9. The ban on Usury. 10. Zakah, distribution of wealth through charity. 11. Encouragement of spending 12. Discouraging hoarding, ostentation, greed and waste. 13. Freedom of responsible enterprise, individual initiative, independence and self-reliance 14. Competition and cooperation in only that which is beneficial. 15. Discouragement of speculation and gambling. 16. The pursuit of knowledge and its application. 17. Equitable Laws regulating trade and transactions, 18. Importance of accurate weighing and measuring. 19. The discouragement of package deals. 20. Distribution of wealth through the Laws on Inheritance.

The first thing, about a distinctive Islamic economic system, from which all other factors derive, is the existence and acknowledgment of Allah. This implies several things:-

(1) The Principle of the Sovereignty of Allah - Allah is the creator, owner and provider of the materials, energies, processes, forces and the laws on which the Universe and everything in it, including man and his environment, is based. He, not man, provides the heat and light of the Sun., the atmosphere and its weather and the climate, the rain and the nutrition by which crops grow the sea and its fish, the land and its resources. He also creates human needs and talents, and the conditions which give rise to organizations. The economic system is, therefore, dependent on Natural Laws and Processes. These Laws cannot be invented by man, but must be discovered, understood and applied if malfunctions and harm is to be avoided. The ultimate ownership and control of all things rests with Allah (4:132, 15:23 etc.).

This makes Islam incompatible with both Capitalism and Communism. It is not the Individual or the State but Allah who (a) is the controller of the economic system and conditions; (b) is the owner of all things; (c) the ultimate provider of all needs, knowledge, values and abilities; (c) has given to individuals the resources of the world as a trust and holds them responsible for what they do with them. (d) Man has a function with respect to Allah, the Community and the environment - his rights are conditional on fulfilling his responsibilities.

In natural justice a person has only that which he creates by his own talents and efforts. It is necessary to understand that the notion of ownership on which Capitalism is founded is an artificial legal right created by man backed up by force of arms. This enables people to gather more land and resources than they can use, depriving others, and then exploiting their needs by charging them a portion of their products for the use of this land and resources.

(2) The Principle of Unity, Tawhid, arises from the concept of Allah. This implies that there is absolute unity underlying all things. All things are interdependent parts of a single system, and each part is also a whole. Man is a unity and all aspects of his life will affect all others. The world is a whole and all things in it will affect all other things. Economics cannot be separated from other aspects of life. Nor can it be separated from the Ecological System. Each organism has a function with respect to the system it belongs to. It has an input from the environment, transforms this and produces an output into the environment which is used as an input by other creatures. They, too, transform this and produce an output. There is a Law of Reciprocity. The condition, welfare, growth or degeneration of an organism, therefore, depends on the balance between its input and output, between what it gives and receives. Economics can, therefore, be defined as the methods adopted to utilize that which is available for beneficial purposes. In more general terms, it is a bridge between "what is" and "what should be", between facts and values, between science and ethics. The economic value may be called utility which is the relationship between gain and sacrifice. The purpose is to maximize Utility by reducing sacrifice per unit of gain, or increasing gain per unit of sacrifice or increase the total gain and reduce the total sacrifice. This requires objective knowledge of what real gain and sacrifice consist of.

(3) The Principle of Universal Purposiveness. The Universe and all things in it, including man have arisen because they have a Purpose and function and seek to fulfill it.. Given the whole of existence, there cannot be an external cause for events in it, but only an internal cause and this is defined as Intention. There are objective values to be pursued using truth and knowledge. Man, like all other things, was created for a function with respect to the Universe or at least with this part of it, the planet. Human economics is part of the Universal Economy, particularly of the planetary economic or ecological system. The aim of existence is to achieve spiritual development. Human beings, as vicegerents have the duty to further this aim.

The social system should be arranged in such a manner as to facilitate this aim and the economic system should be arranged to serve the social aim. Islam is not against material wealth, but the pursuit of it should not be at the expense of the social and spiritual welfare and progress.

Many Muslims suppose that they need only perform religious rights and behave morally in a narrow sense of the word. They ignore science, technology, the arts and civic developments such as hospitals and health services, educational systems, social services, water supplies and sewage and rubbish disposal, postal services etc. Indeed, the Quran does not mention them. But these are means by which the goal of human welfare and development is advanced.

Indeed, all things have a material aspect and materials can be an aid to spiritual progress. It can be argued that the seeking and accumulation of Gold and other precious but useless metals and stones is a rather unintelligent, purposeless and futile thing to do. But in modern days people might wish, instead, to obtain books, televisions and computers which can have great educational value or cars which gives them freedom of movement and expansion of experience. They can broaden their minds by absorbing, or being stimulated by, other cultures acquire new ideas, or they can make and visit friends and relatives, which facilitates social unification. Machines of all kinds free people from drudgery so that attention, effort, time, and energy can be progressively transferred from what are necessities and only means to what are really valuable goals.

Those who apply technology:- (a) obtain great power in that instruments and machines are extensions of human faculties, of their senses limbs and brains and harness the energies of nature to human purposes; (b) they can also produce goods much cheaper - that is, with less effort and time; (c) utilize resources which had no use before and create new materials and possibilities. The result of this is that when there is global trade, those who have not kept up with technology not only remain backwards, but are even further impoverished because they cannot produce what is needed cheaply enough to exchange with others. They use resources uneconomically and these are taken away from them because they are more valuable to others. Connected with poverty is disease and ignorance. These three disabling factors are interdependent and reinforce each other. It is not possible that any spiritual progress can be made by people who are mentally, physically and socially disabled. On the other hand these things cannot be removed merely by the desire to remove them. Knowledge, Desire and Ability must go together. Nor can these be meaningful goals in themselves because all must die. They are means.

(4) The Principle of Harmony and Reciprocity. This follows from Unity. Things form parts of a system such that they interact, are mutually inter-dependent and form an order or pattern. Any changes affecting one will affect others and the whole system that will re-adjust to affect the part. There is a Harmony and order in the Universe and its parts, which must be preserved. But this is not a static order. Anything that flouts this suffers and is destroyed. An objective Law and Ethics must regulate the economy. As the purpose of the economy is to produce maximum benefits, all those means of making a livelihood or profit which are injurious to the community are forbidden. This includes the manufacture and sale of alcohol and other drugs, prostitution, perversions, professional dancing, gambling, speculation on stock markets, racing and lotteries. It includes all fraudulent transactions in which the exchanges are unequal, price manipulation by hoarding necessities of life, package deals in which a needed product is sold on condition that some other product is also bought (some are offered "free" when in fact their cost is included in the price). It includes all unfair methods of trading including adulteration, false description, pressure salesmanship, built-in obsolescence, dishonesty in weights and measures and so on. The manufacturer or merchant is responsible for all the harmful side effects that his business entails and must bear the cost of preventing such effects. No contracts, promises or undertakings that involve something injurious or morally dubious can be valid in law.

The second point of importance is the Vicegerency of man because he has the spirit of Allah in him (2:30, 32:9). This implies:-

(a) That there is a purpose for his existence. He has a function with respect to Allah and the world he lives in. This is the Principle of Objectivity. It refers not just to knowledge but also to motives and actions.

(b) That his welfare and fate depends on the fulfillment of this function.

(e) The Principle of Accountability. He is not independent but will be held accountable for what he does with what he has been given. It is not the Individual or the State but Allah who is the owner and holds individuals accountable. But the Law may reflect this. Islam is not against differences of wealth and rank, but requires that there should be a direct proportionality between privileges, responsibilities and abilities. Without this both the individual and the society will suffer.

(f) All things can be used by him for this purposes. They can be used as resources or as sources of knowledge or they can be rearranged to suit a purpose.

(g) That, as the agency rests on all human beings, they are both individually and collectively responsible. This responsibility cannot be taken away.

(h) That individuals, groups or States do not have the right to restrict the abilities, talents and potentialities given by Allah, to create either artificial inequality or equality, though they have the duty to develop these. Disaster will follow if they harm or do not develop these.

(i) That no one may make a living or benefit by methods forbidden by the moral law, by means which harm him, others or the common environment on which all depend. It is not a right, as in the West, to earn as much as one can or wants by any means whatever, but earning should be proportional to responsibilities fulfilled and benefits provided. One of the consequences of this should be that the manufacturers do not push or persuade people to buy their goods, but there is an independent organization which tests the goods and services, describes them and provides the information to the public. It also conveys the requirements of the public to the manufacturers and entrepreneurs. Even in cases such as doctors, the diagnosis and recommendations should be made by a set of people different from those who provide the treatment. This would prevent misdiagnosis and mistreatment because of greed for gain.

(j) All human beings have equal significance, rights and responsibilities. That everyone has an equal right to make a living and to opportunities to use the resources of the earth, according to their diverse needs and abilities. That monopolies which reserve resources exclusively for the few, or the control of these resources by the few or by states, cannot be allowed.

(k) That Justice should prevail. Everyone should be able to receive his rewards according to his abilities and efforts. "From each according to ability to each according to need" is not an Islamic principle. Neither should opportunities be restricted, nor their efforts and rewards. These rewards should depend on natural laws and the social good.

(l) The Principle of Brotherhood - Humanity is one, all human souls derive from a single soul (4:1). In so far as all are vicegerents, all men and women are related as brothers and sisters. They all belong to one family, are equal and responsible for each other. They should cooperate and help each other and also act collectively as a single organized body. They are not commodities to be controlled, used and exploited by each other. ( 2:267 70:24-25). This western idea that people like other objects, animals or machines can be used by others for personal profit and advantages is certainly inconsistent with natural ethics and Islam. Thus, partnership, contracts and mutual consultation and agreement should replace relationships such as master/servant, owner/slave, employer/employee. Islam does not recognize class, race or national distinctions.

(m) The Principle of Social Responsibility - Islam bases itself on the Umma, the Community rather than on individuals or the State. Actions are taken by, on behalf of, and for the benefit of the community. The individual, since he depends on and benefits from the community, has social responsibilities. Islam does not accept the Western idea that people have the right to make any contracts they wish or to manufacture or sell whatever they wish by any means whatever. On the contrary, it is the Islamic position that people have a duty to create and supply those facilities, services and goods which will provide maximum benefits and that they be rewarded accordingly.

As in a family, the wealth of the community can be regarded as the right of all members which could be re-distributed according to needs or to maximize their utility - The Prophet, as the leader in whom the vicegerency was vested, often did this on behalf of the Community, but particularly where there were urgent needs and some people had surpluses (anything over necessities). One application of this could be that in an Islamic community, everyone has all money in Banks, and these redistribute the surplus or invest it communally in Industry. All members of the community can then have shares in communal industries. The National Council could determine what percentage of the total national income is needed for public investment and how much should be left to individuals to dispose of for consumption or investment.

But unlike Communism, Islam recognizes individual responsibilities and rights as well as collective ones. The removal of individual initiative, creativity and responsibility reduces human beings to automatons, to spiritually dead entities. This is the reverse of evolution and the development which religions require. Automatons can achieve nothing new. In communities that practice coercion, regimentation and mental conditioning no leaders can emerge which are not also automatons. Stagnation and degeneration must be the inevitable consequence. Islam requires that each person is responsible for what he has control or influence over. Resources ought to be distributed according to the ability to utilize them in the best way to maximize utility. This means that it should be proportional to knowledge, ability and virtue. The individual is responsible for his own actions, not that of others. He cannot impose his will on others, or excuse his actions on the grounds that he is under orders by someone else. The manufacturer, the seller, the distributor and the buyer are all responsible for what they do. Neither the maker nor the seller or the distributor can be excused for dealing in a harmful product on the grounds that he is only providing what the buyer wants. Both the person who gives the orders and those who transmit them and obey them are to be held responsible for their actions. Each person has responsibility for everything that comes under the sphere of his influence, people as well as animals and the material environment. Everything that is good and beneficial to himself or others is allowed. This freedom is only circumscribed by that which is expressly forbidden. The reverse is not true i.e. that a person is forbidden everything except the permitted.

It is true that Islam tolerated slavery because it was the only way to deal with prisoners of war. But it did require that they should be treated kindly and made provision for the freeing of slaves. It is necessary to point out that slavery can have many degrees and that it can refer to physical, economic, political, social, mental, cultural or spiritual slavery. Anyone controlled by anything or anyone else so that his own self-determinism is suspended is a slave. In the West most people are in debt to moneylenders and are slaves to that extent. As they can be hired and fired at the will or whim of others this also makes them slaves. An employee who must obey the employer and who determines what he is worth and whether he will have a living or not and can throw him out when he ceases to be useful to him, is certainly a slave. It is not only his physical services which are bought, but also his mind and soul, his thoughts, feelings, motives and his conscience. The factory is arranged to make him work in certain ways and at certain speeds, and the firm may also dictate what he wears, what friends he has, where he lives, how he speaks and behaves. The individual has no say in how his factory or company is run or his town, or country. None of this compatible with Islam. It is true that Muslims are required to obey authorities, to follow a discipline and do that which is true, good, useful and beautiful, but they are required to do this voluntarily because it is good for their own souls. The authority that they obey is derived not from the person who has it but from objective factors, from his knowledge of truth and from his abilities and virtues, bestowed by Allah.

The purpose of the Universe and of man in it, from the Islamic point of view is to know and serve Allah, the ultimate Absolute Reality - to progressively become more conscious. The Quran requires us to learn from the order of the heavens and earth and to think in Universal terms. In order, therefore, to understand how and why an Islam based Economy differs from others we could consider things as follows:-

We are (a) individuals with an inner life who live in (b) communities in (c) a physical environment. We can, therefore, describe reality as having three interdependent aspects:- a psychological, a social and a material. As Vicegerents we have a positive or active role with respect to the physical environment which is relatively passive, and this relationship is catalyzed or mediated through the social system. We are required to arrange our material conditions in such a way as to ensure social welfare and our social life in such a way as to facilitate our psychological welfare and development.

We need (a) external resources - materials, energy, information (b) social resources - labour, organization (c) psychological resources :- (i) awareness, intelligence, ideas (ii) motives - needs, wants, desires, demands, the value system (iii) ability, talents, ingenuity, powers.

Here we must distinguish between objective and subjective factors, between true and illusory ones. True Knowledge, for instance, differs from opinions; true values and needs differ from mere desires; and true abilities differ from automatism. We may need a certain amount and quality of foods. But we may have formed attachments or addictions or phobias to tastes, smell or looks of foods or we may have formed habits of eating at certain times and in certain quantities. We may have been conditioned by propaganda, advertisement, association of ideas, the tricks and illusions created by manipulators in their own interests. The desires so formed are not needs nor do they have objective benefits. It is these that lead to over-eating, under-eating or unbalanced eating and to diseases and malfunctions. When someone pursues a desire that produces no real benefits then it will produce frustration, and because it wastes effort and also the resources upon which our energy and powers depend, it harms us. It is necessary, therefore, that we should cultivate objective motives and value systems for our own welfare and development.

We (a) receive an input which may be material, social or psychological (b) process it and (c) produce an output which changes the physical environment and the society from which we receive the input and also modifies us psychologically. These three processes are interdependent - each affects the other. The processing depends on the three psychological resources and creates a demand for input, but also a supply or output. The output may be a demand for the individual or the society or the environment and it controls what is supplied. Nothing can be regarded as a resource that is not needed or wanted, and something not previously useful becomes a resource when a use is found for it e.g. coal and oil. Thus the nature of resources changes according to human ingenuity. Real resources differ from false resources. It is, for instance, a wastage to have ten suits of clothing or cars when one can only use one at a time and the others are deteriorating without use. One money unit to a person A who has ten is more valuable than it is to a person B who has a hundred money units. Transfer of that unit from B to A increases the value without actually producing anything. Something that is more durable may use less material than something which is less durable. Thus we see that resources may consist of (a) quantity (b) quality or (c) relationships. This describes real Economics, which may be defined as the way items or parts fits into the whole or context to which they belong.

All this differs from Western or Capitalist Economic systems. These are based on the idea that every individual has the right to earn as much as he wants and in any way he can. This is called "freedom" despite the fact that this kind of behaviour is more likely to be unintelligent and compulsive and the freedom of those who do this restrict that of others. The independence of individuals on which this idea of freedom depends is clearly an illusion because human beings are in fact inter-dependent. Real freedom arises from recognizing this and arranging matters so as to increase self-fulfillment. In the West, human beings are divided into "consumers" and "labour" - one to be manipulated and the other is a commodity to be used. The word "Profit" is not understood as an increase in real benefits or value (i.e. the ratio of benefit/expenditure), but as a monetary difference. This leads to illusions. The nature and quality of goods does not now matter since they are only means to an end, and people can take advantage of others, exploit them, and can manipulate circumstances, resources, people and information, using deceptive advertisement and temptations for their own benefit. The notion of employment is really a modification of the notion of slavery (people can be used by others like machines for the latter's profit) with the advantage that, unlike the slave, the employee can be discarded when he is no longer useful to the employer. The owner or employer can waste resources in frivolous uses or make a profit in the Stock Exchange without creating any thing useful. The whole economy runs on the principle that profits are made from manufacturing, it matters not what, and persuading people to buy it whether or not it is useful or has any value. This is what is known as the Consumer Economics which also wastes the worlds resources, causes pollution and ecological disasters and enslaves people. The homes of people and the waste grounds are cluttered with unnecessary and useless things which cost labour and reources.

If people cannot be persuaded to buy then the economy collapses. Factories close down, men become unemployed earn no money and would not even be able to buy the necessities of life. This, therefore, justifies the consumer economy, but it is clearly a machine, a master, which has control over man and he must serve, not something he has control over. But the market does become saturated from time to time when no new invention comes to absorb the investment and temp consumers, leading to slumps. This would normally have led to civil disturbances and revolution resulting in a change of the economic system. Indeed it did, and led to communism. But this was also based on false premises and partial truths and, consequently, collapsed. Therefore, the system to keep itself going, provides some dole money to the unemployed - this may be cheaper than keeping large armies to control them. Since this money stands for no useful work it is obtained by taxes on the work of others or on goods. This reduces the effective wages or makes goods more expensive. There is, therefore, no longer any equitable relationship between work and its rewards, and this distorts the economy. It is further distorted by the many ways of gambling which also exist based on and encouraging greed and hopes of obtaining things without work. Whereas, dole money may be regarded as form of charity, which will have the same consequences, there is in fact a big difference between giving voluntarily out of compassion or fellow feeling and giving by compulsion. Proper charity, moreover, should not disable people by robbing them of dignity and personal effort and making them dependent, but to empower them to stand on their own feet.

This same asocial self-centered economic system has several other consequences. It is not difficult to see that it is the basis of the criminal mentality and, therefore, encourages the growth of criminal and psychopathic behaviour. It causes the transfer of wealth from the many to the few, which leads to increasing differences between the poor and the rich. This also leads to international conflicts, intrigues and wars, or when the foreign nation is militarily weak, to the impoverishment of nations. This in effect means suffering, disease, lack of education and the deprivation of the means by which they can get out of this state. The greed for useless or superfluous goods, the wasted surpluses, the crime and the wars, the locks, police, courts, armies and armaments, the security measures and so on absorb so great a proportion of the resources of nations (perhaps 70% of all their wealth) that it keeps the majority of humanity deprived, thereby propagating the very conditions which cause it. There have to be the poor in order that the rich may exist. We have a vicious circle. This monster controls humanity, humanity does not control its own affairs. All religions teach social responsibility, compassion, cooperation and charity. It is clear that without religion this system would have long disintegrated. It is, therefore, in the interest of this economic system that religion must also exist, but in a distorted form. What the system does is to tame religion, to counteract it only sufficiently for its own purposes while giving the outer impression of virtue and righteousness, thereby stopping any threats to it. But it also stops any further human evolution.

An Islamic economic system would require that true needs be determined first by research, perhaps by an organization of Shops or Consumers, and that industry be geared to manufacture things so determined. Though individual enterprise is recognised it is made socially responsible. This may mean that licenses have to be issued by an elected Council on behalf of the community and all factories and other public institutions be always open to inspection by members of the public and its representatives and all its affairs be free from secrecy of any kind. Inventors may be paid at a percentage of the price per item manufactured. Research may be paid for by a government department or Educational institutions and all inventions should be available at a fee to all manufacturers.

Islam favours cooperation and united action, but also competition, but only for good things (2:148). Though competition (certainly leads to invention and increasing efficiency, it also leads to many malpractices. It is possible to make profit from swindling and deceiving people, creating scarcity by hoarding, increasing demand through propaganda, creating monopolies and cartels, using inferior materials, reducing wages, making shoddy goods, building in obsolescence, causing changes in fashion, changing the names and wrappings, extortion, putting people at a disadvantage, and so on. All this constitute losses for the Community. It also leads to the ever increasing size of companies through amalgamations and take-overs and the ever increasing control over affairs by a progressively smaller number of people who are plying their own interests. Firms become powerful and international, and dictate increasing aspects of the behaviour of their employees and the policies of nations. Even when the governments of nations are democratically elected (which is doubtful because money controls things) national governments are powerless and Democracy becomes an illusion. A firm can always relocate from a country whose policies it does not like to ones that will cater to its wishes. It is in the interest of political authorities to ensure that their policies conform to the interest of these companies. People become increasingly powerless and the situation grows steadily more dangerous.

A third aspect of Islam is what might be called the Principle of Equitable Transactions. Natural Justice demands that man is, and should be, rewarded according to the quality, quantity and appropriateness of his efforts:- "..And that man shall have nothing but what he strives for, and that his striving shall be seen." (53:39-40). This is part of a Universal principle without which there would be no regularity or order in the world and nothing could be recognizable, predictable or controllable. For human societies this has certain implications: - it is the duty of human beings as vicegerents to decrease the chaos and increase justice. In a community, things should always be so arranged that gains are proportional to efforts made and exchanges should be equal. Usury (charging interest on money lent), gambling and forms of unequal exchange that involve getting something for nothing are forbidden. If a person has some land and he does not expend any labour or capital on it so that it is in the natural state, then he cannot charge rent for hiring it out. This, too, is usury. In fact, no one can own more than he can work and there is no benefit in simply hoarding land and resources and creating monopolies. It should not be possible under Islam to obtain power and control over people by controlling their means of subsistence. At a more fundamental level it means that though true economic value is created by Allah, relative and apparent economic value is created by human effort. This is proportional to the value he gives to things. But he is required to discover what is objectively beneficial and good otherwise it is waste (2:172, 5:87-88, 7:31)

In all exchanges between people the benefits or gain, and efforts or sacrifices (of energy, time, and money) should be equal. The exploitation of the ignorant or stupid by the clever is not morally justifiable. In contrast the Western idea of business is that each individual tries to maximize the benefits he obtains while minimizing his sacrifices even at the expense of others. The seller is expected to sell his products as expensively as he can and the buyer is expected to purchase them as cheaply as he can. Effort is directed by each to get into a more advantageous position with respect to the other. Thus a struggle arises which also leads to class distinctions. It divides the community and even the person into two conflicting interests. The Communist solution to this is the introduction of a third factor, namely State Agencies which determine the production, distribution and prices. But this produces a conflict between State and people. Even in Capitalist countries the State intervenes to regulate the relationship between workers and owners. Thus, though Capitalism is polarized, it produces a trinitarian system, while Communism tries to be Unitarian but produces polarization, Islam is Unitarian. It is the religion that is the unifying factor.

Both Hoarding and Squandering are forbidden while Spending is encouraged. This ensures the circulation of money. Money is like the blood stream of the economic system. It has to circulate. If it is hoarded and accumulates then it is not available for the purchase of goods, This prevents manufacture and leads to unemployment, a paralysis of efforts. The unemployed have no money to spend and this leads to further reduction in production and loss of employment. There is then a downward spiral. The restriction on how a person spends would cause an accumulation of wealth in the hands of the few and deprivation for others. This is the main cause of the dysfunction in Western Economies.

These requirements, plus the control on what may be produced and what money can be spent on, plus the limits on property rights can be taken together as parts of a single principle, namely the Principle of Maximization of the Utility of Resources. No such principle is found in any existing economic system and yet it is becoming ever more important.

The distribution of wealth is controlled by the Zakah. The Zakah is an integral part of the Islamic Economic system. Since wealth is a trust, the Zakah justifies wealth seeking. It has three effects:-.

(a) It redistributes wealth, thereby creating demand and stimulating production that employs people. (b) As it has to be paid out of the savings, it encourages the payer to top up these savings by making investments. This also creates wages.

(c) It has a stabilizing effect by removing great fluctuations and differences of wealth. Usury, being the opposite since it takes away rather than gives, has exactly the opposite effect.

(d) A money unit (mu) is more valuable to someone who has only ten mu, than it has to someone who has 100 mu or a 1000 mu. This is why the latter can waste it or use it to buy what is less urgently required. He may use it to buy jewelry and this encourages resources and labour to be diverted to the production of jewelry while other people may be starving. This diverted labour force could have been growing food, the increase in quantity of which would have brought prices down and the poor could then have afforded to eat. It is clear, therefore, that the redistribution of wealth from those who have much to those who have little increases utility or economic value.

Zakah may be regarded as a combination of obligatory charity, welfare insurance and wealth tax. It ensures a certain minimum standard of living. It is levied at 2.5 % of the total accumulated wealth, including investments, of everyone living above the minimum standard of living; 5% to 10% on agricultural products; and 20% on some mineral products. This is distributed as a right to those who live at below the minimum standard. It does not prevent people from making money. In fact, it makes it advantageous that they should.

The cause of such poverty may be illness, injury, and disabilities of various kinds, unemployment, natural disasters or other adverse circumstances. Zakah should be used not merely to relieve needs and suffering but to provide the means whereby the individual can once again stand on his own feet. Thus the same beneficial results attributed to usury, namely investment and expansion, can be obtained without the harmful ones.

Some Muslims insist on adherence to these rules to the letter. However, if we follow the spirit rather than the specifics, the percentages can be altered to suit changing conditions. It can also be imposed on a much wider number of items such as shares. It can be invested to create the means for social welfare. The Prophet brought guidance not a straightjacket, nor was the suspension of intelligence required. On the other hand the Zakah does not prevent the raising of other taxes for other purposes. What it does ensure is that no developing Muslim country can be tempted to divert its funds into development projects at the expense of social welfare.

Excess wealth should also be given away in voluntary charity. Charity usually means giving people work or the means whereby they can earn their own living. The distribution of wealth should be ensured without destroying personal incentives and ambitions. It can be lent to others without interest. It may also be invested in legitimate business. A person can enter this business himself or go into partnership with others on a profit and loss basis. There is a distinction between the owner of capital and the user of capital and they too can form partnerships based on agreements. It is perfectly possible for people to become millionaires, and it may even be a social advantage, given the Zakah, that they should. The power which wealth gives them also bestows greater responsibility on them. They have the resources that they could invest usefully in new developments rather than in consumption. Industrial progress depends on such Capital.

Islam recognizes the right of inheritance, but restricts it so that wealth is redistributed among children and relatives in well defined proportions. As it is not permissible to bestow the whole or a major portion of a person's wealth on only one child, this prevents its accumulation.

Usury, the lending of money for interest is forbidden. Usury flouts the principle of charity, brotherhood and fellowship and causes social disintegration. This is the main objection of the Quran to it.

Though, this is a simple idea, it has far reaching consequences: -

(i) It creates a difference in values. The one relates to social and psychological or spiritual success, benefits or profit and the other to a worldly one. Unlike Capitalism, the economy is to be based not on self-seeking but on social responsibility. The one creates a greedy, grasping, selfish, exploiting society and the other creates a compassionate, giving, caring and responsible one. No Islamic community can possibly be built where usury is practiced and every true Muslim is bound to oppose it.

(ii) Usury transfers wealth from those who produce it to those who do not, dividing the mainly consumers from the mainly producers; and earned money (wages, salaries and profits) from money not earned. This divides the society, diminishes its productivity and creates the injustices that generate resentment and conflict.

(iii) Trade is completely distinguished from usury, since the former is more personal and depends on exchange for mutual benefit, while the latter is more like extortion.

(iv) Unlike communism or socialism, the responsibility is not vested in the State but in individuals and the community.

(v) Usury causes money to be pursued for its own sake. It becomes a goal and this disrupts its function as a means of exchange.

(vi) It gives the lender power and control over the borrower. This causes enslavement.

(vii) It sells the present to an unpredictable future.

(viii) Whereas a person may be respected and admired because he earns his money by dint of his abilities and efforts, this cannot be said about money obtained through usury. This income does not stand for or encourage ability or effort. It has a negative evolutionary value.

(ix) The fluctuations in the interest rate destroy predictability and, therefore, control over the economy.

(x) Money is not a commodity. It is a symbol for utility or the relationship between work and satisfaction of needs and wants. Money may not, therefore, be bought, sold or hired because these are money transactions. When money becomes a commodity we get an illusory or parasitic financial economy which simply consists of buying and selling of pieces of paper, which are also symbols. Deals on the stock exchange which buy and sell shares have nothing to do with the products and work of the companies.

Islam allows investment. This is required in trade - money must be invested to buy goods in places where they are abundant and cheap so that they can be sold in other places where they are rare. The Prophet (saw) was himself a merchant and encouraged trade because it also led to travel, mixing with diverse culture and the expansion of the mind. It is trade that, by encouraging the manufacture of goods, led to the Industrial Revolution, but not in Islam. Unfortunately this led to the development of Capitalism based on Usury. The difference between Investment and Usury is this:- that the investor takes the risk and gains or loses according to his own discernment. But interest is gained without risk whether or not the enterprise succeeds. Partnership is a form of contract. Contracts are made between people who undertake the responsibilities. It is not possible to create Corporations or Companies with limited liabilities where the directors, as in the West, can transfer money or responsibility to himself or the company in order to get around paying debts on bankruptcy. This is a form of legal swindle. The bankrupt can then set up another company with another name to do the same again. Swindling and moral corruption are rampant in Capitalism and it claimed that Capitalism cannot work without dishonesty. That is why the legal system in the West does not criminalize many of these practices. This allows the large scale swindling of the public. This is seen as merely transferring money from some people to others which makes no difference to the nation as a whole. This, however, is an error because it creates a class of people who produce nothing useful but prey on others. It creates a climate of values where productive work has little value and cunning and "shrewdness" has greater value.

The combination of Zakah, the ban on Usury and the maximization of utility, are three factors that produce a complete reversal of the Capitalist system. But, because Islam insists on personal responsibility, initiative and creativity it is also quite incompatible with Socialism and Communism. These systems by removing the vicegerency reduce people to robots or mere extensions of the few in positions of control who are also robots. They reverse the very purpose of existence and religion, which is human development.

It would be in everyone's interest to increase the efficiency of the company or expand its operations, and to ensure that the workers were given full opportunities to expand their knowledge and expertise. No mutually destructive competition for limited positions of authority need exist. Each worker would also be able to work according to his needs and no unnecessary or unused money need accumulate to disrupt circulation or cause economic disintegration - goods accumulating in shops, money in banks and labour on the unemployment heap - the three aspects of the economy are separated because of non-coordination. It is because there is a distinction between owners and workers and both are separate from those who do the innovation and organization, that technological advances and the interest of the owners lead to the workers becoming unemployed. This not only reduces work, but also wastes talents and causes deprivation. Needs remain unsatisfied though the power to satisfy them exists and is paralyzed and resources lie unused. There could be no dismissals, take over bids to reduce competition; and no gambling on the Stock Exchange which produces income but stands for no production and merely takes it away from others who do produce. It also destabilizes the economy and makes it unnecessarily more unpredictable and uncontrollable.

But when workers are treated as commodities by owners, then the former can be thrown onto the scrap heap when no longer useful to the latter. Competition demands that production should be more efficient through technology and organization and this produces redundancies, which must be discarded. This increases the difference between the rich and poor and puts a burden on the community to pay the unemployed for idleness, money that comes through taxation. When dismissals and take-overs are not allowed, then the work and income will have to be distributed among existing workers and this produces incentives to seek work elsewhere, to diversify and for the company itself to take the responsibility for finding alternative employment. If there is say 10% unemployment in a country, then it makes sense that the existing work be reduced by 10% and given to them instead of being paid for idleness. The 10% unemployment may be regarded as a reduction in demand or increase in efficiency, which is a 10% increase in relative income. That is, a 10% reduction in prices or a 10% increase in wages or money income. This redistribution of work will, therefore, make no financial difference. But it makes considerable social difference. As for speculating on the Stock Exchange this could be prevented by requiring in law that the resale of a purchase within a certain period will have to be done at the same price as it was purchased, unless a service is being provided. For this a license is required and accounts must be provided for inspection.

Companies could be communities which apart from factories also set up their own educational and re-training institutions, research departments, housing estates, markets, health, social and welfare centers and Banks. People should be encouraged to keep their money in Banks, which can invest the money on their behalf or to produce an income for the Bank itself from which the bank staff are paid. All goods could be sold on a Hire purchase schemes and part exchanged periodically. For this facility a fee would be appropriate since it is a service and this would constitute a return for investment. It is these distributing companies, which make a bridge between consumer and manufacturer, and their orders to the latter could ensure smoothness and appropriateness of production. No false advertising and propaganda will be allowed, but a fully descriptive directory of Goods, Services and Facilities like a Telephone Directory should be available to all. This could be produced by an organization that tested the goods. It could also issue its own standards, requests and suggestions to the manufacturers. All goods produced should be licensed before being offered to the public except, perhaps those which are involved in private transactions.

Companies could cooperate and create joint research projects. They should also combine together to form a Central Economic Organization to discuss and plan all their affairs. This could be part of Central Government. It has responsibilities towards the community and cannot be secret. Secrecy is particularly dangerous in these and coming days when science and technology can give great power and do enormous harm. All companies must be open to inspection by anyone. There would be no secrecy if the Central Authority financed all research and if inventors were allowed a charge certain percentage for every item produced by any company which wished to do so. This cooperation would not destroy the competition, which provides incentives for invention and to increase efficiency. This is because these things have their own advantages. It would, however, remove the destructive aspects of competition - the need for pressure salesmanship and propaganda in order to sell to people what they do not need. It is this that causes wastage of resources, pollution, adulteration of foods, and destruction of the ecological system. The profit motive of employers requires people to work for a certain amount of time for certain wages. This causes a certain level of production that has nothing to do with needs, but these products must be sold if the Capitalist economy is to continue to function. Hence the pressure to sell. Production not done to meet needs - the product has no value but as a means of making Profit understood in money terms. Thus, it is not difficult to see, that the Capitalist system is an unintelligent robot that has humanity in its clutches.

It is probably true to say that the people in the West could maintain approximately the same standard of life on one third of the income they now need, if they (a) were not pressured into purchasing goods which they do not really need, (b) did not spend their money, time and energy on alcohol, cosmetics, fashions, gambling and other trivialities or harmful ways, (c) and did not have to pay interest on borrowing for their houses and consumer good. This means that they need only work one third as hard and devote the extra time to a better domestic, social, cultural and spiritual life. They would also reduce the stresses that cause their psychological and physical diseases and their social and environmental problems. This would save them even more unnecessary expenditure and preserve their resources.

Several facts need to be understood if an Islamic Economic system is to created:-

(1) The economic system is an interaction between three factors - population, resources and human ingenuity. The rise in population puts pressure of resources and demands that human ingenuity should be applied in the form of greater education (knowledge, motivation, skills), organization, and technology. Without this there will be increasing poverty and disability.

(2) But it is not only the population that increases but the demand per person also increases. People wish to make progress owing to an inherent urge. But the need for greater education, organization and technology themselves create demand. However, education can ensure that the motives, desires or demands are more efficient - that they produce real satisfaction.

(3) The application of technologies means that there is delay between expenditure involved in planning to manufacture something, setting up factories and machinery, manufacturing, distribution and sales, and obtaining a return. The future is uncertain and there is a risk involved in an enterprise. It may be that not enough of the goods can be sold to break even or make a profit. Economics seems to involve gambling. Islam, however, frowns on gambling and requires us to reduce the element of uncertainty with knowledge. It is the more discerning, sagacious and knowledgeable who make consistent profits. In Capitalist systems risk can only be taken in proportion to surplus wealth (beyond immediate needs) and in proportion to the incentive, the possible rewards. This is why enterprise depends on there being many rich people and that success should be highly rewarded. But we have a contradiction here in that the greater the wealth the less is each item worth. Therefore, the incentive in money terms decreases the richer a person is. The incentive in money terms has to be increased the richer the person. One way to overcome this contradiction is that all money remains in Banks, and it is the Banks that manage investments. Other ways of overcoming risk are through better market research and changes in technologies. Demands could be made known by the consumers to the distributors (shops) when they are organized to a have a centre of information and coordination. They can then place their orders to the manufacturers. This reverses the present trend where things are first manufactured and then forced on to consumers by all kinds of tricks. It is also entirely possible to create versatile but standardized and automated machines so that parts can be manufactured and assembled quite rapidly as demanded. The creation of a much more rational economic system is not beyond human ingenuity, but only if irrational factors such as greed and prejudice are removed.

The following verses tell us something about how the affairs of Muslims, including their economy should be regulated. Their significance should be meditated upon.

2:18, 2:182, 4:29, 4:32, 5:35, 7:166, 7:188, 9:34, 20:6, 42:27, 42:30, 57:7, 31:34, 3:14, 5:87

To put things in context:- a human being is dependent for his arising and needs on the community, genetically, physically, economically, socially, politically, culturally and psychologically. The human community is dependent on the rest of the biological and physical environment which is dependent on the rest of the Cosmos for its material, energy, order, forces, laws and processes, and ultimately on God, their source. There is a direction of development and the value things have depends on their function with respect to the ultimate Reality. This cannot be flouted. Anything that goes against the Cosmic Order will eventually suffer and be destroyed. From the Islamic point of view, therefore, the Economic system (which is connected mainly with the self-preservative drive) must serve the Social System, of which the Political system is a part. (This is connected mainly with the socio-sexual drive). The Social system must serve the Spiritual System, the purpose of which is human development. (This is connected mainly with a self-extensive drive that also leads to the recognition, worship and striving for what is greater and more comprehensive than the limits of the individual).

But the conditions of life established in the world under the Western System have reversed these priorities. The Spiritual has been sacrificed to the social and political and that has been sacrificed to the purely economic. The Social system based on the family has been destroyed, people have become isolated, self-centred, neurotic, insecure and escapist, and the community is, therefore, held together through external imposed forces. Politics has become about providing profits or material advantages to people. The Political system is controlled by those who have the financial power to their advantages, and the people vote to elect those whom they are persuaded by the media to think will provide them with security and wealth. But the Nation State in which alone the population has some control through the ballot box, is progressively become powerless and obsolete. This is because of technological advances in transport, communication and information processing. The world has shrunk and made people much more inter-dependent. People and goods move easily over borders. The Satellite and the Internet distribute news and information worldwide in minutes. Capital moves easily from country to country. Industrial companies have become international and dictate policies to governments. National governments have lost control and cannot provide the security the electorate requires.

Commercial Companies are set up in order to make profits for those who set them up. This requires increasing control (physical, mental and spiritual) over both the work force that creates the goods and services and the consumers who buy them. National governments in so far as they were run by enlightened people, were concerned mainly with modes of organization, tending to leave matters of ideology to the minds and conscience of individuals. This is because it was not really possible to control the sources of inspiration, initiative, creativity, enterprise, responsibility and personal effort upon which human progress depended - We can Call these Force H. But as diversity led to tensions and conflicts, physical control through police, military power, law and organization increased and this was reinforced by mental control through propaganda, information control and techniques of conditioning. A machinery was set up which was particularly advantageous to the ambitious, those addicted to power, wealth and prestige. We can call this Force S, which contradicts, negates or represses Factor H. Those who controlled became progressively more remote from those who were controlled. So we have a Consumer Society driven by the desire for Profit that puts increasing pressure on the world's resources and creates pollution and ecological disruption.

Western Economic Systems have the following features:-

(a) They are based on self-seeking, not to produce any social benefits or even to produce welfare or happiness for the few. Though altruism exists most actions are means to increase personal wealth, power, prestige or pleasure.

(b) Those who are most successful at this owing to advantageous circumstances or inherent predisposition and training also acquire the power to manipulate and control people and circumstances to their own advantages.

(c) The incentives that drive those who have control and the incentives they use and inculcate into those they control consist of materialism, greed, pride, vanity, triviality laziness, envy, lust, ambition and gullibility. Those in whom these are best developed attain positions of power. The psychological conditions, the value system and culture is, therefore, self-propagating.

(d) The system requires Capital and is constructed to create Capital. That is, a class of Wealthy and powerful people is required to run the system and the system creates wealth for the wealthy. The incentives for the system are the same as the results of the system. The System controls people. People do not control it. It traps them.

The result of this is:-

(a) Wealth and power is concentrated into progressively fewer hands. There is an increasing gap between the rich and poor, those with power and the powerless in every nation and between nations.

(b) The multinational companies grow larger, more remotely and abstractly controlled, and more powerful. Their power is greater than that of the national states. Elected Politicians, therefore, have less power and are controlled by the companies or belong to the companies. Democracy is eroded.

(c) There is increasing pressure on the worlds resources and on the environment. Resources are wasted and are running out, pollution is increasing, the ecological systems are disrupted, nutrition is adulterated, and the conditions of life are deteriorating leading to many malfunctions.

(d) There is an increasing number and intensity of harmful social, psychological and psychosomatic effects. This includes psychosis, neurosis, psychopathy, criminality, escapism into fantasy, alcoholism and drug abuse. Competition intensifies and there is increasing stress, selfishness, isolation, social irresponsibility, greed, lust, egotism, vanity, hatred, anxiety, tensions, aggression, prejudices, conflicts. Families are disintegrating owing to increase in fornication, adultery, sensuality and depravities and there is more violence between the sexes and abuse of children. There is spiritual and psychological stagnation or degeneration and corruption of the culture owing to the self-perpetuating tendencies of the system. The increasing poverty in the victim nations causes malnutrition, prevents health care and education leading to disease and ignorance, and little money or taxes can be raised to produce better organization or to invest in industry and research.

(e) Much hatred is caused by injustice and there is increasing social and political unrest. Protest, retaliation and terrorist activities increase. The rich who benefit from the system also suffer, but they spend enormous sums in all kinds of security measures and on the police and military, which diminishes the amount of effective wealth.

The solution to these problems lies in a reform of the Economic systems:-

(a) Moral principles will have to control economics and be incorporated in Law. No transactions and agreements should be allowed which are immoral and take advantage of disabilities, adverse circumstances, ignorance, or are based on deceit and misrepresentation..

(b) All workers should be regarded as owners, shareholders in the company they work for in proportion to their wages. The total income of the workers is the total income of the company minus its expenses. No member of the company should be paid more than say 5 times as much as another. The workers will have flexible employment such that they can adjust earnings to their needs. The company should be run on Democratic lines and should be responsible for the education, retraining, health and welfare, housing and employment of its members.

(c) Money is a medium of exchange between effective work and satisfaction of wants. It is not a commodity and cannot be bought and sold or hired. Investment rather than lending should be the norm. All transactions can be done through Banks and involves only transfer of figures between registers. The balancing of accounts must be a matter for government. Surpluses can be redistributed or used for public works.

(d) Speculation and gambling on the Stock Exchange should be banned to achieve stability. Purchased stocks or shares cannot be sold for more than the price paid within say a year. Advertisement and pressure salesmanship should be banned to relieve pressure on resources and prevent unnecessary work and stresses. This should allow sober transactions.

(e) Patent rights should be abolished or reformed. Knowledge should be freely available and is not a property to be owned. However, the cost of research can be compensated for by the State and incentives be retained by the right of the discoverer or inventor to say, 5% of the profit from application of the knowledge.

(g) The United Nations Organization must be reformed along Democratic lines. It should consist of a World Assembly containing representatives from all nations in proportion to their populations. An International Law should be agreed upon which deals with international affairs, but not with national internal affairs. It should also control a World Military Force which can gradually replace national military forces.

The main problems with the Western Capitalist Economic system are as follows:-

It is based on an emphasis on competition between individuals and groups, over co-operation and unity, which are also required for a balanced Social System. Competition certainly provides an incentive for research, innovation, efficiency, productivity, organization, education, self-extension i.e. development and growth. The System also depends on development growth to function.

(a) These developments require a different kind of attitude and effort than that required by the economic system. If there is no new innovation for which there is demand then the system tends to collapse. Some kind of co-ordination between the various elements is necessary.

(c) It creates inequalities and exaggerates them because those who have some advantage use it to increase their own advantages, but they also often use it to decrease the advantages of others. There is then no overall gain. Indeed, there may well be losses because in any competition there are only a few winners and many losers. Political means become necessary to counteract this, producing a contradiction. Advantages can be increased through patent laws, legally binding agreements, monopolies, cartels and so on.

(d) It provides the motives for selfishness, greed, unethical activities, crimes including murder, robbery, fraud, swindling, unscrupulous behaviour, deception, sabotage, intrigue, all kinds of conspiracies, terrorism, secret deals and plots, trampling over the rights and welfare of others and conflicts. These in turn produce fear, tension, suspicion, intrusion, spying, retaliation, all kinds of defense mechanisms, and other divisive and hostility creating activities.

(e) Some of this can be controlled within nations by their legal systems. But it is over come by the practice of secrecy, bribery, nepotism and various kinds of influence and group loyalties. Moreover, it is the fact that those who have the control over the various industries, companies and corporations also have the political power and run the government.

(f) There is, however, little international law, and it tends to be manipulated and carried out by those nations that have the commercial and armed power in their own interest. This allows large scale swindling, international banditry, subversion, exploitation of foreign nations by the powerful Corporations aided by government Secret Services. Whereas this is done usually in secret, it is also often done more overtly but under the influence of propaganda and a deceptive moral guise. This deceives the majority of the domestic populace mainly because of their apathy, gullibility or the lulling affect of the material advantage they directly or indirectly obtain. But it also leads to rebellions, insurrections, riots, civil and international wars.

(g) Because material wealth is limited, competition counteracts co-operation, fellow feeling, compassion and unity. Co-operation and Unity, therefore, has to be imposed by force from outside by political means. This interferes with the freedom of competition. It leads, therefore, to a contradiction and a conflict of interest.

(h) It arrests human development at a low immature, material and self-centred level, fixating consciousness on the superficial.

(i) As competition requires that efficiency be increased it leads to the people joining together into groups against groups. This leads to the creation of ever larger and larger Companies through take-overs and amalgamation. There is tendency towards monopolies, which counteract competition. The political system is required to counteract this, thereby creating another contradiction. But the prevention of the arising of monopolies would stop the increase in efficiency.

(j) Companies tend to go abroad to prevent restrictions by national governments. There are ever more International Companies that can dictate to National governments, nullifying Democracy or the pretense of it. If the national government does not conform to its demands, the Company can relocate to a country where the government will conform.

(k) The need for development and growth also means that the Companies expand to diversify and to control ever more aspects of life, both of their workers and their customers. Indeed, the owners, directors and managers also find that they are controlled by the Company. It tends to create global uniformity and conformity that stifles all diversity and originality. This is recipe for disaster because evolution and development require diversity and mutation. It is as if an invisible Frankenstein Monster has been created that enslaves all. The economic machine takes over, making humanity into Robots feeding it.

(l) The tension of increasingly intense competition brings health problems. The System also creates increasing environmental, social and psychological problems. These must be dealt with privately and publicly and this adds to the cost of living. But the cost of goods supplied by the Companies does not reflect these costs, nor does it affect their profits because they are paid for by personal incomes and taxes.

(m) The economic system based on competition gives some advantages to those who practice it. Others, who might have a better system which has not had time to come to maturity, are forced to adopt the same methods or else become severely disadvantaged. This is similar to having an aggressive community that destroys the peaceful ones with many talents until they develop an adequate defense technology.

(2) The system runs on the desire for personal Profits. The profit does not necessarily depend on supplying any kind of service to the community from which the profit is extracted. Profit depend on the difference between the cost of buying and selling, or the difference between the cost of producing goods, services or running facilities and selling them. The profit is increased when the cost of production is lowered relative to the selling price, which could be increased. This can be done by increasing the price per item, which can happen when demand is increased or supply is decreased owing to circumstances or deliberate manipulation. Or by increasing the number and variety of goods produced and sold.

(a) Things can be bought and sold for profit without producing anything or providing any service or facility whatever. In fact, much harm can be done by disruption of the economy through speculation on the stock or money market for instance.

(b) The cost of production can be reduced by paying workers less, or employing fewer workers by increasing efficiency, organization or by mechanization.

(c) There is a pressure to sell. This is done through advertisement and numerous other techniques that harness human greed, pride, lust, vanity, laziness, aggression, envy, gluttony, sensuality, pleasure seeking, frivolousness, impressionability, love of the sensational and that which glitters, gullibility, suspiciousness, jealousy, rivalry, malevolence, spitefulness and maliciousness. The people are, therefore, mentally conditioned to want material goods whether or not they need them at the expense of other desires and values and encouraged to desire, react and behave in these rather primitive ways.

(d) It does not matter to the producer whether the goods are useful or not and how they affect the buyers as long as they buy them. Useless and even harmful goods are, therefore, produced.

(e) A greater quantity of goods can be sold if they are made less durable and changes in fashion and wants are encouraged. However, changes in fashion also cause fluctuations that make the economic system unpredictable and uncontrollable.

(f) There is increasing pressure on the resources of the world, which are rapidly running out.

(g) Most of the goods people buy accumulate in homes and have little use. This wastes resources.

(3) The Economic System is based on the control by a few people, the owners, over the majority, the workers via intermediary managers. This ensures that the efforts of many is harnessed to the will of the few, thereby increasing the power to achieve the desired goals.

(a) A Pyramidal hierarchical organization is created with many levels so that control passes to fewer and fewer people the higher one goes.

(b) Those in control who issue the orders are remote from the floor where the work is being done. There is, therefore, often a tension, contradiction and conflict between the top and the bottom.

(c) As it requires the obedience of the employees, it is a kind of slavery in that it represses individual initiative, creativity and responsibility. However some companies do encourage the exercise of these. It is also true that it forces people, who would not otherwise do anything by themselves, to do and achieve things. However it keeps people dependent, preventing the development of self-reliance, self-motivation, independent thinking and autonomy.

(d) As the positions at the top are paid better and provide greater prestige and privileges, this provides an incentive to seek promotion. This is achieved by pleasing and ingratiating oneself with those who are at the top. But as the number of positions upwards diminishes, there is a struggle which involves intrigues, deception, lying, and ways of getting the better of colleagues that encourage the development of vices. It also involves trampling over the humanity of underlings. The whole system militates against justice, truth and compassion.

(e) Numerous conditioning techniques are used in order to achieve the obedience of the employees and extract the maximum work from them. This is done not for the good of the workers but the company and the profit of the owners.

(f) Those who have the power not only control the resources, but also control policies, organization information and the lives of the rest. This increases their power still further while decreases that of those at the lower end. Information is controlled through secrecy as well as by distortion and fabrication not only to protect profits against rivals, but also to disable the workers.

(4) Capitalism is based on Usury, which makes money into a commodity that can be bought and sold for profit rather being only a medium of exchange.

(a) Those who have surplus money can lend it out at interest to increase their surplus. Those who have little are encouraged to borrow money, which must be repaid with interest. Thus money is continually transferred from the poor to the rich. It creates increasing economic inequality between individuals and between nations.

(b) The control over resources and, therefore, of people who depend on them, passes into fewer and fewer hands and the population is increasingly enslaved.

(c) The control extends not only to the physical labour, but also to emotional loyalties, attitudes, intellectual labour, and to the consciousness, conscience and will and the way of life.

(d) In general the rich in every nation form communities distinct from the majority in those countries. International transport, communication and commerce makes them into one interactive and inter-dependent international community. This global community holds all the power and initiative. Its interests are different from those of the majority of the world population, which remains divided according to nationality and has little or no power over its own affairs.

(e) Economic poverty also means that there is a lack of resources for medicine, education and organization. This means that material poverty is also associated with debilitating diseases, ignorance and backwardness in political and civic organization as well as in technology. Their misery is compounded. Such people cannot even manage their land and the few resources they have, which if not taken away from them by the exploiting profit seekers, remain inefficiently under used. And so are their human potentialities. And every climatic or geophysical disaster has massive consequences for them.

Islam offers a solution to these ever worsening problems. There are certainly much better ways of managing human affairs than those employed currently anywhere in the world. This is fairly well known, but the will to implement them, and perhaps the ability also, is lacking, because those who are well off are indifferent, ignore the problems and their solutions, or are insufficiently concerned. Even when it affects them in the form of natural disasters or terrorist retaliations, their reactions are inappropriate like that of unintelligent apes. Nations are much more willing to spend vast sums, resources, energy and ingenuity in creating weapons of mass destruction and maintaining and deploying large armies to kill each other, thereby aggravating the problems. Meanwhile millions are starving, millions are suffering from the diseases of over indulgence.

Humanity, except for the few, is certainly still spiritually backward, living more like zombies, less than half awake. It probably requires a major global disaster that brings great suffering to awaken them.

The Capitalist system has brought about enough economic development to allow a change in motives and priorities from purely material concerns to social ones and then to spiritual ones without endangering the fulfillment of economic needs. Unless this transformation in the human psyche occurs it seems inevitable that the whole system will collapse.

Alternative systems to the Capitalist system have been proposed and even tried but they have failed for three reasons:-

(1)Though some of the problems were recognized, the solutions did not take adequate account of human needs and nature and, therefore, produced other tensions and conflicts.

(2) They could not compete with the Capitalist system not having had sufficient time to develop their advantages before Capitalist hostility destroyed them.

(3) The new systems tend to be established through revolution that brings a new set of leaders into power. These tend to be fanatical, intolerant and lack experience. Revolution brings chaos and the new leadership dismantles the old system faster than establishing adequate new substitutes. This brings other unforeseen problems and makes conditions worse than before. This can be taken advantage of by hostile elements. Dealing with the situation so caused distracts efforts into channels other than the original ideal demands. It takes much time to bring conditions back to the previous point before any further progress can be made. But by that time the flow of events can have gone too far astray and another painful revolution becomes inevitable.

Gradual reform rather than revolution is, therefore, the best policy. But this requires a constant but tolerant Idealism and strong persons of great ability and perception.

Capitalism, in the minds of different people tends to have different meanings:-

(1) It is associated with Usury - this is forbidden in Islam.

(2) It means free enterprise - this is approved of in Islam.

(3) In its true meaning it implies that a quantity of money is set aside for investment rather than consumption. Islam approves of this also. In fact the Prophet (SAW) was a Merchant and did have to set aside money to buy the goods required for trade.

Socialism also has different meaning for different people.

(1) It means Central State planning and control. This is not approved of in Islam which requires individual responsibility.

(2) It means social responsibility, rather than individual self-seeking. This is an Islamic requirement.

(3) It means facilitating the welfare and development of all the people and this includes their psychological welfare as well as that of the environment on which we depend. This is also an Islamic goal.

Ultimately, however, Islam is primarily interested in the spiritual or psychological development of man. The Social system must be arranged to serve that, and the economic system must serve the social system. However, all three are connected with the environment and human beings have a Cosmic role.