[quote]dyskee wrote:
The Islamic economic system can be described as a mixture of the pros of capitalism and socialism without their cons.
There are 3 cornerstones to the Islamic economic system:
- Zakkat �??charity�??: the “taxing of certain goods, such as harvest, with an eye to allocating these taxes to expenditures that are also explicitly defined, such as aid to the needy.” It is an obligation on Muslims to pay 2.5% of their income to specified categories in society when their annual wealth exceeds a minimum level (nisab)
Who fair is it that the Farmer is taxed on their Harvest and on their “income” but the Banker is only taxed on his income minus out standing Ribba (which of course Ribba is forbidden)
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Gharar - “the interdiction of chance … that is, of the presence of any element of uncertainty, in a contract (which excludes not only insurance but also the lending of money without participation in the risks)”
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Ribba �??interest and usury�??: and is forbidden
Quran about ribba
�??Those who charge usury are in the same position as those controlled by the devil’s influence. This is because they claim that usury is the same as commerce. However, God permits commerce, and prohibits usury. Thus, whoever heeds this commandment from his Lord, and refrains from usury, he may keep his past earnings, and his judgment rests with God. As for those who persist in usury, they incur Hell, wherein they abide forever�?? (Qur’an 2:275)
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jizia: I don�??t know the word in English but the jizia was paid by non muslims who wanted to be protected by the muslims, back then they were given the choice to convert to islam or pay jizia to be under muslims protection.
Whom was the “protection” money protecting against?
doesn’t he Quran say (loose translation) that non believers shall be offered three chances to convert or the Muslim must take his sword and separate the non believers head from his body so that others will convert. Also that the non-believer shall give up their wealth to the believers when confronted. Is that what is meant by protection money?
These money were collected and sent to �??beit al mal�?? ie: the treasury. Where they were to be devided to build the state and the army and so , also to help the poor and needy.
It was once said that their shall be no poor muslim if all the muslims payed their zakkat and that�??s how it was in the days of the prophet �??pbuh�?? but now not all mislims pay which is why we are poor.
(Break)
Such innovations included the earliest trading companies, big businesses, contracts, bills of exchange, long-distance international trade, the first forms of partnership (mufawada) such as limited partnerships (mudaraba), and the earliest forms of credit, debt, profit, loss, capital (al-mal), capital accumulation (nama al-mal), circulating capital, capital expenditure, revenue, cheques, promissory notes, trusts (see Waqf), startup companies, savings accounts, transactional accounts, pawning, loaning, exchange rates, bankers, money changers, ledgers, deposits, assignments, the double-entry bookkeeping system, and lawsuits.
How do you have loans if “Ribba” is forbidden? Can God’s words be danced around when it benefits a Lender?
Organizational enterprises similar to corporations independent from the state also existed in the medieval Islamic world, while the agency institution was also introduced. Many of these early capitalist concepts were adopted and further advanced in medieval Europe from the 13th century onwards.
the systems of contract relied upon by merchants was very effective. Merchants would buy and sell on commission, with money loaned to them by wealthy investors, or a joint investment of several merchants, who were often Muslim, Christian and Jewish. Recently, a collection of documents was found in an Egyptian synagogue shedding a very detailed and human light on the life of medieval Middle Eastern merchants.
Business partnerships would be made for many commercial ventures, and bonds of kinship enabled trade networks to form over huge distances.
Networks developed during this time enabled a world in which money could be promised by a bank in Baghdad and cashed in Spain, creating the cheque system of today.
I.E. World Banks . . . Interest and profit over the people
Each time items passed through the cities along this extraordinary network, the city imposed a tax, resulting in high prices once reaching the final destination.
So the people at the far end are in essence poorer then the people at the port of entry of any given product. That sounds fair to you?
These innovations made by Muslims and Jews laid the foundations for the modern economic system.
The three necessary conditions for an operational markets are said to be upheld in Islamic primary sources:
�?� Freedom of exchange: the Qur’an calls on believers to engage in trade, and rejects the contention that trade is forbidden.
�?� Private ownership
�?� Security of contract: the Qur’an calls for the fulfillment and observation of contracts. The longest verse of the Qur’an deals with commercial contracts involving immediate and future payments.
�??Islam said that 9/10 of profits are in trading �??
How to deal with interest:�??ribba�??
You mean how to get around “God’s” word. Don’t you?
Islamic economic institutions, not just the Islamic bank but all those connected with Islamic banking operates on the basis of “zero interest.”
For example, purchasing a vehicle from an Islamic bank under a “zero interest” loan.
The procedure, generally, is that the client tells the Islamic bank which vehicle he or she would like to own.
The Islamic bank then purchases that vehicle in its name, and sells it to the client at a marked-up price, under an agreement that the new marked-up price of the vehicle must be paid in a certain number of instalments of a certain time period.
Thus a $20,000 car might cost $35,000 if purchased from an Islamic bank at “zero interest,” 5 year loan. Of course, the bank charges the extra $15,000 on top of the $20,000 cost of the car because money has a time value (that is to say, a payment of $20,000 5 years from now is worth less than a payment of $20,000 today).
Isn’t this just a “loop hole” of Ribba? Does God allow twisting of his rules to line the pockets of one by another?
So it is the principle of sharing and the bank is a partner who obtains losses as profits.
When is a loss a Profit? Except when it is the borrower’s loss.
This is because of a law in the Islamic financial theory that you are not allowed to enjoy the profits if you did not take its risk based on the famous tradition, return is determined by exposure to risk/liability.
In 2004 the UK’s first stand alone Sharia’a compliant bank was launched, the Islamic Bank of Britain. They offer products and services to its UK customers that utilise the Islamic financial principles; such as Mudaraba, Murabaha, Musharaka and Qard.
The Islamic finance sector was worth between 300 and 500 billion dollars (237 and 394 billion euros) as of September 2006, compared with 200 billion dollars in 2004.
No profit off the backs of Muslims here huh. .
The number of Islamic retail banks and investment funds number in their hundreds and many Western financial institutions offer products that comply with Sharia law, including Citigroup, Deutsche Bank, HSBC, Lloyds TSB and UBS. quote]
I can’t even begin to show you the flaws in this system. I do not have enough time in my day. I placed information where I believe it was needed.