بسم الله الرحمن الرحيم
الحمد لله، والصلاة والسلام على رسول الله، وعلى آله وصحبه ومن والاه، وبعد

Distinguished Audience

السلام عليكم ورحمة الله وبركاته

You have been witnessing the global financial crisis; the flames of which started in the United States of America and engulfed other countries by the arm of capitalism and the splinters of globalisation such that no country could be immune to the scorching effects of its flames - however small or far-away it may be.

Similarly, you have been witnessing the various ‘solution' packages to overcome the crisis being prepared around the world. These solution packages are being drawn up by individual countries as well as alliances and unions in their conferences and summits such as the European Union, the Group of 20 in Washington, and the Lima Summit and the Qatar Summit etc...but these packages have not resulted in solving the crisis; rather these solutions have at best only provided a short-term and momentary respite, lasting only days or even a few hours before the crisis returns to haunt them again.

Distinguished Audience!

A keen observer who examines the rulers and the economists of these countries will find that in terms of these solutions, there have been two approaches to solve the crisis:

The first is the one which has been based upon the shutting of eyes to the very principles of the corrupt capitalistic system that caused this crisis in the first place. This category has ‘worked out solutions' based on the outward symptoms and not examined the real inner causes behind these symptoms. They have concluded that the financial institutions have lost liquidity; therefore they decided to pump billions and billions to provide these financial institutions with liquidity. They felt that the investments and financial markets are stagnant and frozen; therefore they decided to reduce interest rates on loans in order to encourage lending and thereby stir up the markets. They saw that shares, bonds and financial instruments have lost most of their value and crossed the red-light; so they decided that the state should intervene and buy the fallen shares and bonds.

Thus in their attempts to treat the problem, they focused on the outward and apparent symptoms and closed their eyes to the real basis of the corrupt and failed capitalistic system, which was left as it was. They forgot or ignored that the system itself was responsible for the crisis and therefore all their solutions were merely a consolation, and provided a temporary drug fix to overcome the effects of the crisis for some moments before the crisis re-emerged even stronger and destructive than before.

Their examples are that of the man who observes a deep crack in the walls of his house and rushes to fetch some cement mixture and paint to fill and cover the crack and presumes that he has solved the problem and retires to the bed for some rest! Moments later the crack re-emerges, not strange or surprising at all, because the man only treated the crack and not the actual deeper cause that caused the crack in the first place, which was weakness in the foundation.

Thus, this category was the one that merely covered the crack and ignored its real cause.

As for the other category, the basic principles of the corrupt and failed capitalistic system were not totally ignored and solutions for the crisis were sought, however, they restricted their thought and searched for solutions within the two systems and did not look beyond to the third option. They looked at the communist system, which already had failed and disintegrated, and capitalism which is shaking but not dead yet. They view capitalism with all its fault lines and shortcomings as better than socialist communism. Hence for a solution, they approached the critics of capitalism's failures and asked them:"What is the alternative then?" while fully knowing that there is no alternative and that socialist communism should not be accepted as the solution and they and their economists do not look beyond these two systems: The failed and disintegrated communism and rapidly cracking capitalism on the verge of collapse whose head has not hit the ground yet!

Strangely, this group either neglected or is unaware of an economic system which has stood the test of time over centuries and lasted longer than any other system can boast; has proved safe and provided security, and led people to enjoy economically prosperous and secure lives free from the scaring worries and uncertainties of crises for thirteen centuries, during which time one had to hunt for a destitute person to feed from the bait ul maal of the Muslims! And yet one could not find the destitute. As opposed to this, there are millions of poor and needy people even in the wealthiest of nations. This is the direct result of economic systems of either capitalism or communism, which have resulted in such human hardships and misery.

Indeed, it is strange that this group ignores the fair and equitable economic system of Islam which for centuries provided safe & secure economic prosperity to people without misery and exploitation.

This group presumes that there are only two alternative economic systems, capitalism or communism and all their efforts and searches are restricted to these two systems alone: either the state sector owns everything or the individuals that constitute the private sector owns everything, there is no third option for them. Either the state owns agriculture, industry and trade, whereby it becomes socialist communist ownership; or the companies and individuals own agriculture, industry and trade, whereby it becomes private ownership and free markets and the state would not interfere in the financial markets!

If only this group could look at these economic sectors it would find that they are very different to each other. Owning a deep mine of minerals or petrol is not the same as owning a house or a piece of land; neither is owning petro-chemical plants or various energy generating units or a weapons manufacturing facility the same as owning a cotton weaving factory or a sweet meat confectionary; and neither is owning a railway network similar to car ownership.

If this group examines the economic system of Islam, it would find that wealth and properties are grouped into three distinct categories:

The First: These are public properties whose revenues are disbursed among the Ummah after deductions for incurred costs; these include mines-whether of solid minerals or liquids like petrol or gases etc... all these are public properties and it is not permissible for the state, or individuals or private companies to own them. Rather, they are public property under the guardianship of the state and the proceeds from these properties are distributed among them after incurred costs are deducted.

The Second: These are the state properties and are used at the discretion of the state, which spends the revenues generated from these for its own expenses and investments in agriculture, industry and trade etc. which are not in the public sector, and also  from this may be spent to create balance between people in terms of wealth as has been detailed in the economic system of Islam.

The Third: These are the individual properties which are owned by persons in the agriculture, industrial and trade sector and excluding the public & state properties and are detailed in the economic system of Islam.

Islam has identified these properties with mind boggling precision:

First Example: Transportation:

Islam has distinguished between various forms of transport like those that move on tracks such as the railways, or the electric-operated over ground tramways and trolley buses; and those moving on asphalt roadways etc. like cars and buses.

The first group invariably uses public utility and proceeds along fixed permanent tracks, like the railways that run that shuttle over railway tracks upon the ground and the electric cable system which uses the over ground or underground tracks. Since these are public properties, these must always be reserved for the public sectors and it is not allowed for the state, companies or the individuals to own them, they are eternally for the public sector only. Thus, the trains, tramways and trolley buses etc must always be owned by the public sector under the state supervision and their revenues must be disbursed to the people after deducting incurred costs.

As for the buses and cars, they move over roads that are not reserved in a permanent fashion for them alone, but are capable of being used freely by others. In addition  cars and buses can also be owned by the state as well as individuals which implies that it is permitted for the state, and permitted for individuals and permitted for companies to own them.

Second Example: Electricity:

Electricity is used to drive plants i.e. it is used as fuel for engines, for lighting etc.

As for its use in the plants, it is described as ‘fire' in the hadeeth:

«الناس شركاء في ثلاث الماء والكلأ والنار»

"People are partners in three; Water, Pastures and Fire."

Therefore, ‘fire' includes all that implied by it in terms of energy, whether derived from burning of trees, coal or electricity etc. all of these would be categorised under the public wealth and the state, individuals or companies are not allowed to own these sources of electricity used as fuel to drive industrial plants. These resources are public properties supervised by state and revenues generated from these are to be disbursed to the state citizens after deduction of costs.

As for the use of electricity for the purpose of lighting, it is not a part of the public properties and is not implied by the term ‘fire'. It is therefore allowed for the state, individuals and companies to own electric generators for the purpose of lighting private houses or offices under the condition that electricity cables are not extended into the public domain, whereby they would be subjected to the public wealth group.

I would only cite these two examples to illustrate the preciseness with which Islam has categorised wealth into three domains.

Despite the fact that this exhaustive and comprehensive system is not merely a philosophical ideology lost in the pages of books, but rather is the economic system that had been implemented continuously for the longest period of recorded economic history; we say that this group of capitalists has chosen to shut its eyes and ignore it without searching it for solutions to their problems.

Thus, this group of capitalists has also failed to find real solutions for the economic crisis because they confined their search to the two failed man-made systems and ignored the truth of the rightful economic system. Their example is that of one who has eyesight but cannot see, and if he opens his eyes does not ask for the alternative for which he has been searching, even if it were in front of him staring him in !

Distinguished Audience!

Indeed the economic system of Islam under the Khilafah "Caliphate" state is the only system that provides a secure and prosperous economic life, free from calamities and crises for the people.

This is the system revealed and mandated by Allah سبحانه وتعالى, who is the Creator and knows what is best for His creatures, He سبحانه وتعالى says:

أَلَا يَعْلَمُ مَنْ خَلَقَ وَهُوَ اللَّطِيفُ الْخَبِيرُ
"Should not He Who has created know? And He is the Most Kind and Courteous (to His slaves), the Well-Acquainted (with everything)." [TMQ al-Mulk 67:14]

I pray to Allah سبحانه وتعالى, success for your conference and that during the course of it, you are able to appreciate that the economic system of Islam is truly and rightfully the one that provides a secure and prosperous economic life, free from calamities and crises.

والسلام عليكم ورحمة الله وبركاته

Sheikh Abu Yasin Ata ibn Khalil Abu Rashta

Ameer of Hizb ut-Tahrir