The Bengali translation of the famous Urdu work “Islam aur Jadid Ma‘ashi Nazariyat” by Maulana Sayyid Abul A‘la Maududi (may Allah have mercy on him), the greatest Islamic thinker of the present century, was first published in 1961 under the title “Islam and Modern Economic Theories.” In this book, the author presents a profound and subtle fundamental discussion of all the economic theories prevalent in the present world. By referring comparatively to the economic systems of Islam, he has successfully proved the hollowness of modern economic theories and that a correct and harmonious solution to humanity’s real economic problems is possible only on the basis of the Islamic economic system. It is our firm conviction that, by reading this book, the educated community will be inspired to reach practical solutions to all their economic problems on the basis of Islam’s economic system. May Allah help us. —The Publisher

Capitalism, Communism and Islam

In principle, all the economic systems devised in the world up to the present may be divided into three categories:
First—the capitalist system.
Second—Communism.
Third—the economic system presented by Islam.

The Capitalist System

In simple terms, the essence of the capitalist economic system is that every individual will be the owner of the wealth he earns; no one else will have any share in his earned wealth, nor will anyone else’s right over it be recognized. He may spend and use his earned wealth in whatever manner he wishes; he may hoard whatever wealth and means of production he possesses and refuse to spend them on anything other than his personal interests. He has complete freedom in this matter. In fact, the capitalist economic system has arisen from the selfishness naturally present in every human being. When fully developed, it becomes so harmful that all human qualities and virtues conducive to the welfare and progress of human society become insignificant in its eyes. Even when discussed from a purely economic rather than a moral perspective, it will be clearly seen that wherever this doctrine is implemented, the disparity in the distribution of wealth will inevitably become disastrous. Wealth and the means and resources of production will gradually become restricted and fall into the hands of a fortunate or more vigilant group of people, and society will effectively be divided into two classes. One will be the fortunate class—the owners of immense wealth; the other will be the unfortunate poor, who cannot even obtain enough food to satisfy their hunger twice a day. The people of the first class will seize all wealth and means of production and spend them solely on their own comfort, luxury and pleasure; and in order to increase them further, they will not hesitate to sacrifice the greater interests of society and the nation. The unfortunate poor, on the other hand, will be forever deprived of every share in wealth and every opportunity. They will have no alternative but to obtain the means of livelihood by serving the wealthy without limit. Such an economic system creates, on the one hand, usurers, moneylenders, exploiters, factory owners and tyrannical landlords and jagirdars; and on the other, it creates a destitute, starving mass of laborers and peasants. In a society where such an economic system is operative, human sentiments such as sympathy, compassion, kindness and mutual assistance will naturally not be found even in the slightest degree. Every individual will be compelled to live self-reliantly; no one will be anyone else’s friend or helper. The lives of the needy and hungry will become increasingly constricted. Consequently, every individual in society will be forced to adopt an extremely selfish and vindictive attitude toward others in order to remain alive. Everyone will strive to obtain as much financial livelihood and means and resources as possible, hoard them for personal interests, and spend them only on increasing their amount. Those who fail in this campaign of accumulating wealth, or are unable to participate fully in it, will find not even a tiny place of refuge in the world. If they wish to beg, it will not be readily available; no compassion for them will arise in anyone’s heart, and no hand will be extended to help them. Thereafter, they will either commit suicide to free themselves from the torment of this life, or be forced to plunge into the filthy whirlpool of various crimes and inhuman activities to assuage the pangs of hunger.

In a capitalist society, it inevitably becomes the natural inclination of people to accumulate money and spend it on profitable activities. As a result, limited companies spring up, banks are established, provident funds are introduced, insurance companies begin operating, and cooperative societies continue to be formed. Behind all these means and methods of producing wealth, however, only one idea operates: “more wealth production and accumulation.” This accumulation of money may take place through commercial transactions or through interest-based dealings. In the capitalist view, there is fundamentally no difference between interest and business transactions. Therefore, in capitalist society these two things are not merely intermingled; rather, they become mutually dependent in all kinds of work and commerce. There, interest becomes indispensable to business, and business to interest-based transactions. Neither can flourish without the other. In fact, if interest-based dealings were not permitted, the entire capitalist system would be reduced to dust.

The Communist Economic System

The economic system that exists as the complete opposite of the capitalist economic system is the Communist system. The essence of this ideology is that all the means and resources of wealth are the collective property of the members of society. An individual has no right to seize them privately, interfere with them according to his own wishes, or personally take their profits. Individuals will work for the collective interests of society and will receive only their wages. Society will provide the means necessary for their livelihood, and in return individuals will work according to society’s directives.

This ideology establishes an economic organization completely independent of the capitalist economic system. There is not the slightest scope for private ownership in this organization; therefore, no one can accumulate money and privately employ it in wealth-producing activities. Since a great difference has arisen here in terms of ideals and principles, the methods of work have also changed. The capitalist economic system cannot function at all without institutions and organizations such as banking, life insurance and joint-stock companies. In the Communist economic system, however, these institutions not only have no place in its economic activities; they are not needed either. Interest-based dealings and transactions have a deep relationship with the nature of the capitalist economic system, whereas the Communist economic system is even more hostile to them. The Communist economic system uproots the very cause for which one person in society receives interest and another pays it. Under no circumstances and in no form can it accept interest as legitimate. In fact, it is impossible for a person who believes in Communist economics to engage in interest-based transactions and also be a Communist at the same time.

It is essential to remember that Communism has been analyzed here from the perspective of unadulterated idealism. In practice, however, the Communist system in Russia took a tremendous turn and, having failed in its attempt to put its extremist ideology into practice, turned back toward the capitalist system. Now there is no obstacle to people receiving salaries in excess of their needs accumulating surplus money, depositing it in banks, and receiving interest on it.

In fact, capitalism and the Communist system are two opposing, extreme ideals. Capitalism does grant individuals in society their natural rights; but it has no principle or ideal by which to inspire them to serve the collective interests of society or compel them to do so as necessary. Rather, it generally creates a kind of selfish attitude among individuals. Consequently, every individual is encouraged to wage an actual struggle against society and the community for his own personal interests. As a result of this struggle based on individual interests, balance in the distribution of wealth is destroyed. On one side, a handful of people devour all the wealth and means and resources of the entire society and nation, becoming millionaires and billionaires, and invest this money to begin plundering still more wealth on a broad and all-consuming scale. On the other side, the financial condition of millions upon millions of people in the country gradually begins to deteriorate, and their share in the distribution of wealth keeps shrinking until it reaches zero. It is certainly true that, in its initial stage, the vast wealth of capitalism creates dazzling splendor in society and civilization through its magnificent expression. But, as the ultimate consequence of the unequal distribution of wealth, the circulation of blood in the body of the economic world becomes completely obstructed; nearly all parts of the body dry up and approach destruction for lack of blood, while the vital organs are ruined by abnormal blood pressure.

Communism seeks to correct this defect, but adopts an extremely erroneous method for an unquestionably sound objective. It seeks to establish balance in the distribution of wealth, and this is undoubtedly a very good aim. But the method it adopts for this purpose actually declares war on human nature. Depriving ordinary members of society of private ownership and turning all people into mere slaves of society and the collective is not only harmful to the economic system; more broadly, it is extremely detrimental to the whole of human civilization. For it inevitably silences the vital pulse of economic activity and civilizational institutions and extinguishes their genuine motive force. In fact, in civilization and economics, personal interest inspires people to exert their utmost strength in effort, striving and struggle. In its initial intellectual and ideological phase, Communism denied this. Its extremist philosopher went so far as to say that no such thing as an innate inclination exists in human beings; everything is created by the environment, and through education and organization we can create a spirit of sociability and collectivism entirely free of personal-interest tendencies. But practical experience has dispelled this mistaken notion among the Communists. At present in Russia, methods are being adopted to encourage a sense of personal interest in order to awaken the Communists’ motivation to work. In fact, this is the selfishness innate in human beings; no argument and no science can remove it from the strands of their minds and brains. Apart from exceptional individuals, an ordinary person can employ the full strength of his mind, brain, hands, feet and arms only in work in which he has interest and prospects from the standpoint of his own interests. If there is no prospect of such interest at all, and he is told that his personal efforts cannot gain even a little beyond the limit fixed for his profit and interest, his powers of thought and action will become completely dull. Thereafter, he will be capable of doing nothing except remaining an ordinary wage earner or laborer and spending his life receiving a fixed wage. This is precisely the internal condition of Communist society. Its external and practical aspect is even more terrible. Communism abolishes all capitalists and creates one all-consuming and supreme capitalist: the Communist government. The subtle human sentiments and humane tender qualities observed among the capitalist individuals of a non-Communist government cannot be found even to one hundredth of that degree in a capitalist Communist government. Essentially, it makes people work like lifeless machines and distributes their means of livelihood like a machine, with complete despotism. There is no place for sympathy with it, nor any expression of mercy or generosity. It does not make these “machine-people” work as human beings or regard them as people; rather, it uses them as though they were different parts of a machine. For this reason, all freedom of thought, opinion and action is taken away from the people there. Without such fierce despotism, a Communist state system can neither be established nor remain in existence for a moment after being established. Human nature, after all, is ready to rebel at every moment against such total and all-consuming rule. Therefore, unless they are imprisoned in the iron cage of perpetual despotism, the Communist state system is bound to be shattered in an instant. This is precisely why Russia’s Soviet government is more cruelly despotic and ruthless than all the governments of the world. Its ordinary people have been confined in an iron cage in such a manner that examples of it are rare in any monarchical or democratic government in the world. Its barbarity and despotism are not merely because, unfortunately, a dictator like Stalin was born. Rather, Communist rule by its very nature gives birth to ruthless despots and dictatorial rulers; it can never escape from this.

The Islamic Ideal

Islam presents a sound and just system between the two aforementioned opposing and mutually conflicting economic systems. Its fundamental principle is that every individual must be given all of his personal and natural rights. At the same time, balance in the distribution of wealth must be properly maintained. On the one hand, Islam grants the individual the right of private ownership and the right to exercise control over his wealth; on the other hand, it imposes certain internal moral restrictions on the exercise of these rights and establishes the rule of law externally. As a result, wealth and the means and resources of production cannot become concentrated or remain stagnant in any one place. They remain in constant circulation, and consequently every person in society has the opportunity to receive his necessary share from them. This is why Islam has constructed the entire economic system in a completely new form and through a novel method. In its internal spirit, customs and methods of operation, it is completely distinct from both capitalism and Communism.

A brief introduction to Islam’s economic ideology is that, in Islam’s view, the personal interests of every individual in economic life and the collective interests of all people are deeply intertwined. Therefore, instead of conflict, rivalry and obstruction between them, complete harmony and cooperation are absolutely desirable. If an individual strives against the interests of society, seizes the wealth of the nation for himself, and makes his personal interest the basis for saving or spending it, not only society and the collective will suffer thereby; ultimately and essentially, that harm will also affect the individual himself. Similarly, if society, invoking the protection of collective interests, disregards the personal interests of its members, not only individuals will suffer; the whole of society will inevitably face severe harm. Thus, the welfare of the collective lies in the welfare of the individual; likewise, for the welfare of the collective, it is essential that the individual members within it enjoy independent and comfortable circumstances. The welfare of both the individual and the collective depends on the complete maintenance of a balance between selfishness and altruism, or sympathy and compassion, among the people of society. Every individual will work for his own personal interest, but he will do so in such a way that not the slightest harm is caused to anyone else. Everyone may freely earn as much as he is capable of earning; but the right of other people in his earned wealth must also be acknowledged. Every individual will profit from other people, while at the same time giving profit to others. A few moral qualities among individuals alone cannot be sufficient to ensure the effective distribution of profit and circulation of wealth; rather, the laws of that society must be such as to organize, regulate and balance earning and spending in complete harmony. No one should have the right to earn money through harmful methods and means, and wealth earned through legitimate means must not remain concentrated in one particular place. Rather, it is essential that a sound system for its circulation through expenditure and distribution also be put into effect.

The economic system founded on this ideology can never have as its objective that a handful of people become owners of billions while the remaining population remains hungry, half-fed, destitute and deprived of everything. Conversely, it can never be its objective that no one may become a billionaire and that the natural differences among human beings be forcibly made “equal” down to the last measure. Rather, its true role is to adopt a completely moderate principle between these two extremist doctrines. On the one hand, this economic system assumes responsibility for fulfilling the personal needs of every individual in society; on the other, it provides an uninterrupted opportunity for fulfilling collective responsibilities in society. If every individual in this society strives to earn wealth within his natural limits without harming others, and follows the principles of frugality and mutual assistance in spending the wealth he earns, then economic inequality and sky-high financial disparities like those of capitalist society can never arise there. For this economic system does not prevent anyone from becoming a billionaire, yet no one in this society can, by becoming a billionaire, cause thousands or millions of people to suffer hunger or semi-starvation. Conversely, this economic system gives every individual in society the opportunity to share in Allah’s countless blessings; but imposing artificial obstacles to earning according to one’s natural abilities and capacity for work is also completely contrary to its principles.

The Historical Background of the Present Civilizational Problem

It is universally known that, in the recent past, leadership and authority in the fields of the world’s thought and ideology and practical administration had been monopolized exclusively by Westerners. For precisely this reason, the numerous problems and complications that have emerged in our political, civilizational and economic spheres are the natural consequence of the problems that arose in the Western world and life and the complications caused by them. At the same time, it must also be regarded as a very natural result that most of our thoughtful and understanding people are eager to receive guidance for solving these problems from the methods presented by the thoughtful and skilled directors of the West. This is why it has become absolutely essential to shed light on the historical background of the present social and civilizational problems. At the same time, we shall try to examine the history of the origins of the methods generally proposed or adopted for solving modern problems. I believe that, in the light of this historical discussion, it will be very easy to understand our actual argument.

The Jagirdari Feudal Social System

When the Roman imperial system in the West was shattered in the fifth century CE, Europe’s civilizational, political and economic unity was torn apart. The essential bond that held different nations and kingdoms together was severed, and the causes that had made it possible to maintain those relations and connections also disappeared. Although an image of Roman law, Roman all-encompassing imperialism and the Romans’ political thought was imprinted on the minds of Westerners, the destruction of the central empire divided all of Europe into small fragments. Each geographical area was broken into countless pieces; in some places even people of the same lineage and language could not remain united. The entire empire became so torn apart and divided that the administration and governance of each part could in practice be carried out only on a local basis by some chief or feudal lord. The features that gradually appeared in this social system and became extremely firmly established in the later period are mentioned here one by one:

One: Ownership of land was the basis for acquiring governing power. All honor, precedence and authority remained permanently reserved exclusively for landowners, as though established in perpetuity. They alone acquired authority to maintain peace and order in their respective areas. They alone established direct relations with the head of society, the jagirdar or the king. The landless peasants, artisans and merchants of that region were compelled to live as mere subjects under their patronage. Different classes were again created among these subjects: some became higher-ranking subjects and others lower-class ones. Subsequently, this class division and the strange differences in honor, status and rights took firm root in the deepest foundations of the society of that time. In this way, the jagirdari feudal society came to resemble a ladder. Every person seated on an upper rung was the lord of every person situated on a lower rung, and those on the lower rungs became slaves of those seated above them. At the top stood the feudal families of the region, while at the bottom stood the poor people of the country who had never had the opportunity to establish influence or authority over anyone.

Two: The Christian Church had only just been established. The church authorities spoke to people in the name of Allah, although they possessed no divine law or foundational principle of guidance whatsoever. These established churches fully supported the developing jagirdari feudal system and gave a religious certificate to all the traditional institutions of rights, distinctions, inequalities and restrictions that had taken firm root in the society of that time as its accompanying features. Every ancient opinion acquired the status of a church creed, and thinking anything contrary to it began to be called disbelief. Whatever custom was once established became Shariah, and people began to believe that opposing it meant opposing Allah, the Messenger and his religion. The form assumed by literature, philosophy, society, politics, economics and other spheres under the jagirdari feudal system was declared by the Church to be God-given; for this reason, even the slightest attempt to change it became not merely a crime but outright haram.

Three: There was no central power ruling that could construct major highways, maintain them in proper condition, and establish peace or security on them. Consequently, all activities such as traveling long distances, conducting business and trade on a large and extensive scale, and producing and distributing large quantities of daily necessities came to a halt; commerce, industry and the outlook of the people likewise became confined within the small geographical limits of the areas ruled by the jagirdars.

Four: Each branch of industry and commerce became the preserve of a particular group of merchants and professional traders. No member of such a group could abandon his former profession, nor could an outsider gain entry into the group. Every group strove with all its might to keep its own work confined within its own small and narrow sphere. Goods were produced immediately and only to meet local needs. They were, however, also sold in the surrounding areas and exchanged for other goods. For all these reasons, the paths of progress, expansion, discovery and invention, technical improvement and the accumulation of capital had been closed.

The establishment of the great Roman Empire could not remove in the slightest the defects and shortcomings that had emerged as a result of the fall of the Roman Empire. The Pope and the Kaiser did give Europe a bond of unity in spiritual, moral and to some extent political terms; but not only was the miserable condition into which society, civilization and the economy had fallen under the jagirdari feudal system left unchanged; it was instead established on such a firm foundation that it was not even possible to imagine any other way of organizing life besides it.

The European Renaissance

How and for what reasons this all-encompassing stagnation was broken and how Europe’s comprehensive Renaissance movement began to emerge is not part of our present discussion. In brief, it may be said that, on the one hand, Muslim rule over Spain and Andalusia and, on the other, the Crusades brought the Westerners face to face with the leading nations of the civilization and culture of the world of that time. The influence of the Christian Church had placed a veil over the eyes of the Westerners, which, although it prevented them from being directly attracted toward Islam, nevertheless, as a result of their contact with the Muslims, enabled them to acquire a vast wealth of ideas, knowledge and science, and advanced methods of work; ultimately, this ushered in a new chapter.

The period from the fourth to the sixteenth century is renowned in European history as a transitional era in its advance from the Middle Ages toward the modern age. During this period, every aspect of Western life became active under the influence of the outside world.

The Westerners’ knowledge continued to grow in agricultural science, medical science, mathematics, engineering and other fields. The invention of the press greatly accelerated the spread of thought and the dissemination of knowledge. Alongside the extraordinary awakening in the fields of knowledge and science, critical and reformative activities necessarily began to proceed continuously in every sphere of life and society. The continuing flow of new knowledge and information, and developments in industry, agriculture and commerce, generally infused the entire civilization with new life. Moreover, the discovery of new geographical regions broadened thought and vision. At the same time, new markets began to emerge for the Westerners in distant countries, where they gained opportunities to sell their own manufactured goods and raw materials and to purchase industrial products and raw materials from other countries. Through this vast and unprecedented opportunity, businesses that had remained stagnant for centuries began to operate anew. Despite a hundred obstacles and difficulties, international merchants began to move throughout Europe and beyond it. New markets, towns and cities began to develop along major highways and in central locations. Centers of wealth, power, intellect, civilization and culture gradually shifted from suburban settlements under estates and small feudal states to the great cities. For these were beginning to become the centers of activity for commerce, industry, new knowledge, science and literature.

The pioneers of this new awakening were the people of the ‘bourgeois’ class. Merchants and moneylenders, industrialists and maritime traders were the chief among them. They alone gained all the opportunities offered by this new development. They were established in the towns and cities. They had contact and intercourse with the outside world; at least, the first touch of external influence had reached them, and an intense eagerness for transforming and advancing the social order had awakened among them. But the obstacles created through the collusion of the Church and the feudalists in the spheres of thought, morality, religion, society, politics and economics hindered them from advancing and progressing on every side. Whenever they stepped beyond the limits established over centuries in any sphere of life, the priests and estate-holders jointly blocked their path. Therefore, an all-out conflict began against this power, and this four-front struggle began in every sphere of life. In knowledge and literature, the Church’s ‘mental’ despotism was challenged, and greater emphasis was placed on freedom of thought and the necessity of inquiry. In economics, society and politics, resistance developed against the influence and authority of the estate-holders, and a vehement outcry arose against the distinctions and inequalities established in the feudal estate-based social order. As a result, the old social order began to retreat and the newer, rising forces began to advance. Before the sixteenth century had arrived, the small estates in various European countries began to be shattered and transformed into large national states. The spell of Europe’s spiritual influence and authority was broken, and the irreligious rulers of the new national states began confiscating the Church’s privately owned properties. Abandoning a universal religious system, the various nations devoted themselves to establishing their own national churches. Thus, as the bonds of the joint domination of the Church and the estate-holders were severed, the bourgeois class became completely free from the social and traditional restraints created by the old social order.

Liberalism in the Middle Ages

The collective title for the doctrines on the basis of which the struggle was waged against the Church and the feudal system is ‘liberalism’—in other words, unlimited liberality. The pioneers of the new age went about advocating expansiveness, unstinting giving, free use and unrestricted liberality in every division of life and every field of thought and action. Liberal principles were adopted in all fields, including religion, philosophy, knowledge and science, society, civilization, politics and economics. They strove to remove every kind of restraint, impediment, narrowness and rigidity from the path of the progressives.

In this conflict and struggle, just as the narrow-mindedness of the Church authorities and feudalists had reached an extreme on one side, the boundless, fearless liberality of the bourgeoisie had reached another extreme. On both sides, extreme selfishness had assumed an intense form. Neither had the slightest connection with honesty, justice, accurate knowledge and science, or sound and innocent thought. While one group invoked the names of Allah, religion and morality in preserving rights acquired through baseless notions and beliefs, irrational distinctions and disparities, and inhuman force and oppression, the other, driven solely by obstinacy, began weakening the foundations of the eternally acknowledged truths of religion and morality in the name of free thought and liberality. It was precisely at this time that the eternally recognized relationship between politics and morality was severed. Machiavelli openly advocated this doctrine, saying that there could be no need to observe moral principles when pursuing political interests and advantages. It was in this age that the concept of the national state was fashioned in opposition to the Church and feudalism, and the poisonous fumes of the deadly volcano of conflict and international hostility that has arisen in the present world began to accumulate from that day. From this time onward, interest was first regarded as permissible. Yet from time immemorial there had been complete agreement among the religious, morally conscious people and jurists of the entire world that interest was forbidden. Not only had the Torah and the Qur’an declared interest forbidden; Aristotle and Plato also considered it forbidden. It was prohibited under Greek and Roman law as well. But when the bourgeois class raised the banner of revolt against the Christian Church during the Renaissance, interest began to be called an ‘unavoidable sin.’ Indeed, influenced by powerful propaganda, even the Christian reformists began to regard it as permissible as a human weakness. Thereafter, gradually, all the moral discussions of prominent thinkers became concentrated on what the rate of interest should be. They placed all their emphasis on the debate that the rate of interest should be ‘reasonable.’ Ultimately, the notion became firmly rooted in their minds that religion and morality could have no place at all in business and commercial dealings. From an economic standpoint, interest was an entirely natural and rational thing. Just as nothing could be said against renting a house, no conclusive argument could likewise be presented against interest.

The particularly amusing thing is that, during the Renaissance, this bourgeois class, having driven priests, feudalists and landowners from the field by raising the cry of its own unrestricted and unstinting liberality, came and occupied that very vacant space. The intoxication of their extreme liberality had made them forget that a vast class of people existed below them and that the millstone of the feudal system had crushed that class most severely. Therefore, they too had the right to receive a share of the great benefits of the present liberal society. When parliamentary government began in England and the real power of Parliament passed from the hands of the lords into the hands of the people (the Commons), the liberal bourgeoisie seized all these powers and authorities. The arguments by which they had established their own right to vote were completely forgotten when they denied the lower classes of people the right to vote.

The Industrial Revolution

The revolution that had begun in the Renaissance increased a hundredfold in the eighteenth century as a result of the invention of machinery. Novel scientific theories, information and discoveries were applied to the development of industry, agriculture and communications. Production of goods, the collection of raw materials and the system for selling manufactured goods in every corner of the world then became extraordinarily effective.

The bourgeois class that had emerged during the Renaissance alone had the opportunity to seize all the comforts, power and authority that this vast revolution made available. For industry and commerce were in their hands. They alone also exercised exclusive dominance over knowledge, science and literature. By combining capital, technical skill and organizational ability, they created a new system of industry and commerce called ‘modern capitalism.’ Under this system, large factories and commercial establishments were set up in towns and cities. The guild organization of professionals was shattered. The scope of small factories, private businesses and shops owned by small capitalists became increasingly restricted. Workers from the villages and countryside were compelled to crowd into the cities and stand at the doors of large factory owners as laborers and day workers. Small-scale merchants and businessmen had no alternative but to accept employment or agencies under large industrialists and large-scale businessmen. Consequently, the bourgeoisie alone took control of all the power derived from new scientific discoveries, and the sphere of their influence began to expand further.

However, the national states created by the Renaissance movement emerged as the greatest obstacle to this expansion. The despotic kings of these states claimed to possess ‘God-given rights.’ The leaders of the former feudal system became sycophants of these kings, while the national churches provided them with religious and spiritual patronage. The domination of this alliance of three began creating various obstacles and impediments in the path of the bourgeoisie. These obstacles did not merely hinder its progress in industry and commerce; in the fields of civilization and society as well, many things from the feudal era remained that were intolerable to this rising class.

Modern Liberalism

In this age, the earlier victor in the struggle, ‘liberalism,’ rose again, equipped with newer weapons. In politics it began proclaiming secularism; in civilization, society, literature and economics, absolute individual freedom; and in economics, the slogan of an unrestricted open policy (Laissez-faire policy). It declared that neither the Church, the state nor society had any right to obstruct anyone’s efforts at self-development or activities conducive to gaining benefits. It was absolutely essential that every individual have unrestricted opportunity to use his strength, abilities and competence according to his inclinations and to advance and prosper as far as possible. Indeed, if every individual could obtain unlimited freedom—if he could enjoy absolute liberty in every division and sphere of life and in every line of work—that would fundamentally bring immense benefit to society as a whole. It was desirable that every individual in society be free in all matters from external influence and obstruction, rules and regulations, institutional restraints, religious and moral restrictions, and the intervention of law and society.

Thus, the supporters and standard-bearers of the new doctrine exerted all their strength to put into practice everywhere the slogans of liberality, non-restraint, the rationality of everything, and individualism—in their terminology, the slogans of being intellectual and rational.

In politics, they believed in the ideal that the power of government should be as limited as possible and individual freedom vast and unlimited. In their view, the government was to be merely an impartial force of justice. It would prevent individuals from trespassing into one another’s spheres and safeguard individual freedom. All activities of civilized and economic life, they held, had to be conducted entirely on the basis of individuals’ free and absolute efforts and thought and research. In this regard, the government could not intervene in the slightest, either as an effective force or as a guide. In politics, they further demanded that governing power and sovereignty could not be the property of any royal family, nor could they be the property of the landlord class; rather, they had to be vested in the common people of the country. Since all the government’s activities were carried out through the taxes paid by them, the formation, dissolution and alteration of the government had to take place solely according to their verdict, and in matters of legislation and the maintenance of order, only the influence of their voice was to be recognized. The newer democracy established in the world during the latter part of the eighteenth century adopted the foregoing doctrines and beliefs as its foundation.

In economics, they began to emphasize the principle that if natural economic rules were allowed to operate without external influence, obstruction or intervention, vast works for the welfare of society could be accomplished spontaneously through individuals’ personal efforts. Production would increase, and its distribution could also take place in a more improved manner. For that purpose, it was essential to grant people complete freedom in their efforts and activities and for the government not to interfere artificially in this natural process. This fundamental principle of an unrestricted economic system (Free Enterprise) is the basic formula of the modern capitalist economic system. There is no doubt that, just as the absolute liberality of the Renaissance age contained a considerable current of truth and honesty, the boundless liberality of the Industrial Revolution also contained a substantial measure of truth and honesty, and that this ultimately caused victory to dawn. But selfishness and an extremist mentality were inseparably bound up with this honesty—two great weaknesses of the Western mentality—and they had remained active since the age of papism and feudalism.

The height of selfishness was evident in the fact that, at the root of most of their demands for rights and justice, there was a frightening lack of sincerity and selflessness. It was not because they followed truth and justice that they put forward correct principles; rather, the sole reason was that these principles served and favored their own interests. The proof was that they were by no means prepared to acknowledge for their workers and the destitute people the rights they demanded for themselves.

Their extremist mentality became conspicuously manifest in the words of their learned scholars and writers at every turn. They accepted a few true ideals and expanded their limits abnormally. They completely rejected several other true principles. In their practical lives, they established their chosen true principles in the positions and degrees of importance they had assigned to them. Yet it is universally known that when any true principle transgresses its own limits, it can no longer remain a true principle; it then becomes an entirely false principle, and consequences contrary to it begin to appear. In fact, the imbalance described above is intensely present in every aspect of the system of life formed under the influence of these ideas of freedom from restraint, individualism and democracy. But since this discussion is confined solely to the economic aspect, no discussion of the other aspects will be undertaken. We wish only to discuss this aspect and show how greatly imbalanced an economic system they created by combining selfishness and an extremist mentality with the natural economic system, and how grave its consequences became.

Modern Capitalist Economy

I briefly stated in the preceding essay that the technical name for the economic system founded upon the policy of unrestricted and liberal economic plunder is modern capitalism (Modern Capitalism).

Fundamental Principles of the Unrestricted Economic System

There are seven fundamental principles of capitalism and the unregulated economic system, which are being mentioned below in order:

One: The Right to Private Ownership

In an unregulated capitalist economic system, private ownership is recognized not only over ordinary everyday necessities such as clothing, utensils, furniture, houses, vehicles and domesticated animals; the right of private ownership is also established over productive things such as machinery, weapons, land and raw materials. Every economic system has acknowledged without dispute the right of private ownership over the first kind of goods, but enormous disagreement has arisen among different economic systems over whether the means and instruments of production can or should be privately owned. The capitalist economic system, of course, has fully recognized private ownership in this field as well. Not only that, it is the foundation of the capitalist economic system and one of its principal characteristics.

Two: Freedom of the Right to Earn

The inhabitants of capitalist society enjoy complete freedom to employ their capital and means of production in productive work, either individually or by organizing themselves into small groups. Consequently, whether there is profit or loss, they themselves must bear it all; just as they must assume the risk of loss, there is likewise no obstacle to building mountains of profit. They also have complete freedom to increase or decrease the volume of production. The determination of the prices of produced goods is likewise subject solely to their will. They have complete freedom to employ people in return for fixed wages or salaries, to accept any conditions or responsibilities in their businesses, and to formulate rules and regulations for that purpose. In short, all matters between buyers and sellers, workers and owners, masters and servants must be conducted with complete freedom, and there must be complete freedom to implement any agreement reached between the parties, whatever its terms.

Three: Personal Profit as the Source of Motivation

The capitalist economy relies entirely on the lure of personal interest and the desire for plunder and profit in advancing the production of necessary goods. This self-interest and desire for profit naturally exist in every human being, and they motivate people to work and encourage them to plunge into productive labor. According to the supporters of capitalism, nothing is better than this—indeed, nothing else can create motivation and enthusiasm for work in people. If the amount of profit is reduced, people’s desire to earn, their labor and their exertion will decline considerably. But if the door to profit remains unrestricted and open, and every individual has a full opportunity to earn as much as possible according to his own labor, effort and ability, every individual will try to perform the greatest possible amount of work and of the highest quality. As a result, the volume of production will automatically increase, and its quality will continue to improve. Every possible means and resource will begin to be used to the greatest extent, and the supply of necessary goods will expand enormously. Thus, the desire for personal profit will render, in the interest of the whole, such an extraordinary service as cannot possibly be rendered by any other means.

Four: Competition and Rivalry

In advocating capitalism and unrestricted exploitation, the supporters of the capitalist economy say that competition and rivalry in such an economic system are the ultimate condition of individuals and the only means of maintaining harmony and balance among them. This system too is natural and innate. When an open market has numerous producers, many merchants and buyers of the same product, the pressure of competition and rivalry gradually establishes balance and equilibrium in commodity prices. As a result, profiteering cannot permanently exceed its limits. The rate of profit cannot fall altogether either, although sudden rises and falls and fluctuations in commodity prices are a separate matter. Similarly, workers and owners, each in their own place, gradually determine mutually acceptable wage rates through competition and rivalry. However, this competition and rivalry must be open and completely free, and it must not be narrowed by any kind of monopoly (exclusive right).

Five: The Difference between the Rights of Owners and Workers

In a capitalist economic system, the employees associated with every business establishment are divided into two parties. The first party consists of the owners of the establishment. They initiate and manage the business or industrial activity on their own responsibility and ultimately remain liable for its profit or loss. The second party consists of wage laborers, workers and salaried employees. They have no connection with the profit or loss of the main establishment. They merely employ their own time, labor and ability and efficiency in this business. Businesses often incur losses. But wage laborers and workers remain satisfied with only their own wages. At times, the entire business is ruined, leaving the owners completely destitute. But none of this blow reaches the workers. The only difference in their case is that, when the place where they are currently working is ruined, they are merely compelled to seek employment elsewhere.

The supporters of capitalism say that this situation itself proves that, in the interest of justice, the share of profit should go to the person who bears the burden of loss and endures the risk of the business. Wage laborers and workers are entitled only to an appropriate wage, and that wage will be one considered just according to the market rate, in view of the nature, character and quantity of their work. If the business makes a profit, there is no reason for this wage to increase on the pretext of the profit; conversely, even if the business incurs a loss, there can be no question of reducing the wage on that account. The worker’s responsibility is simply to work in return for a fixed wage; this alone makes him entitled to receive that wage. Any increase or decrease in this matter will occur according to the natural rule governing increases and decreases in the prices of other goods. If the number of people accepting work decreases and the number of job seekers increases, wages will spontaneously decline; and if the opposite occurs, wages will increase. Similarly, the work of a skilled and capable worker will naturally earn a higher wage. In its own interest and for the sake of profit, the business-owning side will continue to satisfy him by granting rewards and promotions. The more wages the worker himself receives, the more wholeheartedly he will labor for the improvement and proper functioning of the business. The owners will naturally think of obtaining greater profit at lower cost; therefore, they will try to pay wages as low as possible. Conversely, the laboring people will naturally strive to meet their needs with as much comfort and prosperity as possible and to improve their standard of living, however slightly. For this reason, it is natural that they will make sincere efforts to raise wages. Such opposing interests will naturally produce a conflict, but despite this, like other varied affairs of the world, this matter too will proceed through many decreases, increases, rises and falls, and wages will continue to be determined according to a rate acceptable to both parties.

Six: Dependence on the Natural Operation of Gradual Development

The advocates of capitalism say that when everything in business depends on earning profit through producing more at lower cost, the businessman, in his own interest, must strive to adopt the most scientific methods possible, maintain his machines and equipment in the best condition, acquire large quantities of raw materials at low prices, and improve all the methods and organization of his business. In a free and unrestricted economic system, this is accomplished automatically by the internal mechanism itself, without any external influence or artificial management. Through the personal efforts of a vast number of separate and scattered individuals and groups, it accomplishes, under natural law, such tasks for the advancement and comfort of society as could not be carried out so systematically even with the help of an overall plan. In fact, this is a special plan of nature, operating imperceptibly.

Seven: The Inactivity of the State and Government

The supporters of the capitalist economic system maintain that if individuals are given the opportunity to work with complete freedom, without any obstruction or restriction, nature has established such harmony, in accordance with the principles mentioned above, for promoting the welfare and progress of society that when people continue working together, everyone ultimately benefits, although in practice each person is working for his own personal interest. As stated above, when individuals can earn limitless profits as the reward for their own efforts, they devote all their strength, ability and competence to producing wealth on a vast and excessive scale. As a result, better goods will inevitably continue to be produced in abundance for everyone. When competition and rivalry begin in the open market among merchants, industrialists and suppliers of raw materials, a natural balance is established in prices, the quality of goods automatically improves, and society automatically comes to know which goods are needed and in what quantities. In all these matters, the state and government can in no way be justified in needlessly interfering with the natural process of wealth production and shattering this natural balance. Rather, its duty is to create the most favorable conditions for preserving individual freedom of action. It is its duty to maintain peace and security throughout the country. It must protect the private property of citizens. It must enforce law and authority to ensure that mutual contracts and promises are honored. It is the responsibility of the state to protect the country, its trade and commerce, and its wealth from external aggression, opposition and every danger. It is the state’s duty to act as a dispenser of justice, protector and regulator. It can never be desirable for it to become a merchant, industrialist or landowner itself, or repeatedly create obstacles that hinder the work of merchants, industrialists and landlords.

Causes of the Calamity

The principles mentioned above have been presented to the world since the birth of the modern capitalist economic system. Despite the exaggeration contained in them, they have generally been accepted throughout the world because, viewed realistically, they contain considerable truth. In fact, there is nothing new in them. From time immemorial, the affairs of human economics have been conducted on the basis of these principles. The only novelty in this respect was the excessive and exaggerated rigidity adopted by the bourgeoisie in applying certain principles in the economy of the Industrial Revolution. Moreover, the bourgeois economy was not built on the natural principles mentioned above; rather, many erroneous principles were joined to them. In addition, they abandoned certain essential erroneous principles necessary for a natural economic system. In reality, these were just as important as the principles of a free and unrestricted economy mentioned above. Driven by sheer selfishness, they denied many of the principles they themselves had put forward. The combination of these four things made possible all the calamities that arose in the capitalist economic system, and they assumed such a terrible form that the whole world cried out against it.

A brief examination and review of the faults and defects of the capitalist economic system is presented here:

One: The natural laws and principles to which people repeatedly appeal in support of a free and unrestricted economic system are not at all true in proportion to their statements and practices. Lord Keynes rightly said that there is no such firm rule of moral and natural laws in the world by which harmony between individual and social interests will spontaneously continue to be established. It is not at all correct to derive from the principles of economics the claim that extreme selfishness always strives for social welfare. Nor is it correct to say that selfishness is always generous. For it is often seen that a person striving to secure his individual interest is so ignorant and weak that, far from permanently securing any general or national interest through his efforts, he even fails to obtain his own interest.

Indeed, the exaggerated statements were not sound even from the standpoint of reason; moreover, the bourgeois capitalists proved by their own actions that their selfishness was not the least bit generous. They formed a united alliance against all three at once—the ordinary consumers, the laboring people, and the government responsible for establishing peace and security—and conspired collectively to seize the full benefit of the Industrial Revolution. Their mutual collusion itself shattered the greatest argument they had presented in support of a free and unrestricted economy. That is, it proved completely false the claim that a balance of profits is automatically established among everyone through natural adjustment. For this reason, Adam Smith, the greatest supporter of a free and unrestricted economic system, was ultimately compelled to say: “It is very rare for businessmen to meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices. Indeed, it is impossible to prevent such meetings, or to prevent them from ending in some such result.”

Similarly, the claim of the supporters of capitalism that, through private ownership and the opportunity for free individual effort and labor, people acquire certain rights that should never be subject to regulation is also extremely exaggerated and excessive. If a person, in exercising his ownership, adopts activities that harm the lives and livelihoods of thousands of people, or if, in pursuing his personal interest, he adopts methods of effort and action that disrupt the health, character and security of the whole society, what justification can there be for giving him unrestricted opportunity to do such things and for not enforcing the law to prevent him from harming the social interest through his individual rights? They have also extended the notion of government neutrality so far beyond its proper limits that its harmful consequences are inevitable. If powerful individuals begin exploiting vast numbers of people through an alliance, while the government remains a silent spectator watching the spectacle, or begins protecting the interests of those powerful people, then a fierce reaction is an entirely natural and inevitable result. And when such a reaction occurs, there is no guarantee that it will always follow proper constitutional and orderly methods.

Two: There is no doubt that, particularly in the age of the Industrial Revolution, the excess and exaggeration of the principles of the free and unrestricted system was profoundly erroneous. The Industrial Revolution brought about a fundamental change in the methods of production. Where human and animal power had previously been used, machines began to be used in the age of the Industrial Revolution. Once a “machine” was installed, ten people could perform the work of a thousand. Such a method of production naturally employs only a handful of people and confronts thousands with the problem of unemployment. In the case of such a production method, the demand for private ownership, the right to free and unrestricted individual struggle and effort, and the adoption of a neutral policy by the government are unjust even in principle. A person or a group suddenly establishes a huge factory by virtue of its own means and resources, but gives not the slightest thought to the kind of calamity this brings into the lives of thousands of working people who produce individually and on a small scale. How can this be justified? Of course, this does not mean that the justification for using mechanical power in industrial production is being denied here. The real point is that mechanical power should never have been used blindly and altogether indiscriminately, and it was the government’s duty, from the very first day, to consider and arrange employment for those whom this industrial power was making unemployed. But because no such arrangement was made, as soon as the mechanized method of production became active, unemployment appeared in human society as such a vast and permanent problem that earlier history had no acquaintance with anything like it. It is universally known that unemployment is not the name of any single issue; rather, it is the progenitor of countless complex problems in the biological, spiritual, moral and civilized life of human beings. But the question is: what right can one person or a handful of people have to adopt, in the sphere of their private ownership, activities that create such a grave complication in social life? And can any intelligent person dare to describe such a step as protecting the general interest and as generous and innocent selfishness at the individual level? Moreover, it is impossible to state how serious a folly it was for the national government to remain silently inactive while granting such individual arbitrariness unrestricted and open opportunity, without giving even a thought to the terrible calamity that the activities of a handful of people could bring upon the life of the entire nation.

Three: Thus, when mechanized production rendered millions of people unemployed and they left their villages, rural settlements, neighborhoods and slums, pleading with the owners of large factories and businessmen for opportunities to obtain employment and wages, these people, already on the road to death, were compelled to perform backbreaking labor day and night for their livelihood, receiving the minimum wage fixed by the capitalists. Yet not all the unemployed obtained work; a large portion remained permanently unemployed, and even those who found work had no ability to bargain with the capitalists and conclude agreements on favorable terms. They themselves had gone out in helpless circumstances in search of a livelihood. If they did not accept the terms dictated by the capitalists, there was no provision for their bread that night. Even so, thousands of other hungry laborers were waiting eagerly to snatch away this opportunity if they attempted any bargaining. In this way, the emptiness of the argument advanced by the supporters of capitalism—that in an environment of free competition, a proper and just wage between worker and owner is automatically determined through adjustment—was publicly demonstrated. For in reality, the opportunity for competition here was not free or open at all. One person had already taken absolute control of all the means and resources of livelihood for thousands of people. And when thousands of laborers, tormented by starvation, arrived at his door, he employed not all of them but only one-tenth, or twice that number, of the applicants. In such circumstances, all power to determine wages remained concentrated in one party, and none among the thousands seeking employment had the ability to persuade the owners to accept terms of his own choosing. For this reason, as modern capitalism expanded in the age of the Industrial Revolution, the calamities of poverty and want, in addition to unemployment, continued to assume a terrible form in society. Those who gathered at major industrial and commercial centers to obtain wages and employment were forced to give excessive labor and time in exchange for extremely meager wages. In reality, they began working like mere animals. They lived in the narrow, dark, pigeonhole-like houses of the cities, and consequently their health began to collapse. At the same time, their attitudes and dispositions became indescribably degraded. A squalid atmosphere of self-centeredness and extreme selfishness developed all around. Even between father and son, no trace of respect, affection or sympathy remained. Children became an unbearable burden to parents, and wives to husbands. In short, the poison of this erroneous, one-sided, free and unrestricted economic system severely afflicted and disrupted every sphere of life.

Four: Moreover, the amusing thing is that these claimants to boundless generosity and democracy, who had fought the landlords and secured recognition of their own voting rights, and who had become the sole owners and masters of the livelihood of millions upon millions of people, were not prepared to grant even the slightest voting rights to those millions. They fully enjoyed the right of business owners in the same profession to form their own associations and to determine commodity prices, employees’ salaries and workers’ wages; but they were not at all prepared to grant wage earners and laborers the right to organize and strive collectively to determine wage and salary rates. They even repeatedly claimed to possess the full right to close factories at will, throw thousands of employees and laborers into unemployment at the same time, and thereby drive them to starvation and force them to work for low wages; yet they were utterly unwilling to grant servants and wage workers the right to try to increase their wages through strikes. If a worker became old, ill or unfit while working in their business establishment, the authorities wanted to enjoy the full right to dismiss him immediately, but they had no answer to the departing worker’s anguished plea: “I have spent my health, strength and youth for the advancement of your business; now, helpless, where shall I go, and how shall I relieve the burning pain of hunger?” In these circumstances, the bourgeois class completely forgot the argument it repeatedly advanced—that personal gain is the sole source of motivation for work. Although, regarding themselves, they could not forget for a moment that only unlimited opportunities for profit would give them irresistible enthusiasm for work, and that in this way overall progress and comfort would become possible, in the case of servants and wage workers they completely forgot that their opportunities for profit were not merely limited but extremely narrow. Why, then, would those whose present was ruined and whose future was dark work with all their strength?

Five: In addition, the bourgeois capitalists abandoned the natural and proper methods of business and adopted methods for securing personal interests that were completely opposed to the social interest. As a result, prices were artificially increased, and progress and advancement, apart from wealth production, were slowed. A few examples may be mentioned here:

One method adopted in this regard is to use the power of capital to purchase essential goods and store them in warehouses, so that prices rise as supply becomes lower than need and demand increases.

Another method is for countless people to sit between the actual producers and actual consumers and, using only bank money and telephones, buy and sell goods through purely speculative means, causing prices to rise excessively, even though these intermediaries have no connection whatsoever with producing the goods, importing or exporting them, or making them fit for use. Therefore, they can have no legitimate right to extract profit from this. Indeed, goods that have been produced are sometimes burned or thrown into the sea for fear that their prices will fall merely because their quantity is too large.

Large amounts of capital are invested in producing luxury goods, and methods are adopted to intensify demand for them through advertising, free distribution, various kinds of meaningless talk and the stimulation of desire. They are forcibly imposed as daily necessities upon poor and helpless middle-class people who are not even able to fulfill the duties of their lives fully.

It has also been observed that, instead of investing capital and labor in producing and distributing goods that are necessary and extremely important to the public, the liberal and unrestricted policy is spent on acquiring wholly unnecessary goods. The sole reason is that there is a greater opportunity to extract profit from the latter activity than from the former.

In capitalist society, a person or group uses the power of capital alone to make goods that are extremely harmful to health, character and civilization and culture attractive and glamorous. The desires of the lower classes of the public are openly stimulated, they are induced to purchase these things, and ultimately they are forced to enter the ranks of the completely bankrupt. In the end, they become unable even to feed themselves and their families properly. The most dangerous and destructive method is that, for the sake of their own commercial and financial interests, the natural rights of various weak nations are seized. By dividing the world into different regions, the great wealthy merchants, moneylenders, industrialists and businessmen of each nation make their own nations abnormally and boundlessly selfish, and set them against one another in perpetual conflict and struggle. As a result, this situation can be brought under control neither through war nor through peace treaties.

In light of the foregoing discussion, one may ask whether it can be hoped that, if individuals are given the opportunity to work freely and unrestrictedly for their personal interests, work for the general interest will automatically be accomplished. By this, they themselves instead presented the world with proof that the principle of unrestricted and free economic exploitation can never be generous or selfless. Especially if economic and political power is also centralized, and if they themselves are the lawmakers, then most of the efforts of individuals will not be devoted to the social interest; rather, the interests of the nation and the community will be compelled to sacrifice themselves on the altar of personal interest.

Six: In addition to these destructive activities, the capitalists adopted another grievous principle. They granted individuals in society unrestricted rights to accumulate capital and invest it on the basis of interest. As a detestable sinful practice, interest has existed in almost every society in the world from time immemorial. The laws of the world have often tolerated it despite their abhorrence.

But after the ancient Arab Age of Ignorance, it was the bourgeois thinkers of the modern Western Age of Ignorance who elevated this practice to the status of the only rational method of business and the only sound foundation of the entire economic system, and created a favorable environment for enacting laws in the country that supported the interests of those receiving interest rather than those taking loans. A detailed discussion of this great error and its consequences can be undertaken elsewhere, but in the present context it is enough to indicate briefly that the result of lending at interest, borrowing at interest and adopting interest as a financial foundation was that, because of the unrestricted Industrial Revolution, the currents of power, wealth, influence, all interests and profits began to flow with even greater force than before, and as a consequence the imbalance of social life reached its extreme.

Thereafter, those who had managed by one means or another to accumulate some wealth became the fortunate people of society. Compared with the person who was able to invest capital in interest-based business and sit carefree at home, the more intelligent and hardworking businessmen, planners and organization-builders, and those who worked with all their strength to conduct business under every circumstance and perform all the tasks involved in producing and supplying necessary goods, became utterly inferior and negligible. For the profits from all these activities were wholly uncertain and indeterminate, whereas the profit from interest-based dealings was fixed and entirely assured. There was a possibility of loss in the activities mentioned above; but in the latter activity, fixed and pure profit was completely guaranteed. Those people had to concern themselves with the success and failure, progress and decline of business; but the interest dealer was concerned only with interest. When progress in business became evident, he continued investing capital in it wholeheartedly. But when, ultimately, every possibility of earning profit disappeared and business entered a depression, he did not extend a helping hand; rather, he began withdrawing the capital previously invested. As a result, a severe depression arose in the business of the entire world. In every circumstance, other people had to suffer all the losses, difficulties and dangers; in interest-based business, one faced only increases or decreases in the amount of profit. Not only merchants, industrialists and landlords, but even the governments of countries became his slaves. The government carried out road construction, bridge building, canal excavation and other development works with money provided by him, and taxes were collected from individuals and delivered to his door not merely for a few years but for several centuries. Even when the nation faced a war, the national treasury was not at all prepared to assume responsibility for those who would be killed, whose homes would be destroyed, or who would be deprived of fathers, sons or husbands. But the people killed in that war themselves had to pay for collecting, over one or two hundred years, the money lent for the war by the handful of people in the nation who had provided the loans. Thus, the interest-based economic system perpetrates the greatest injustice in every way and from every direction against the main factors producing society’s wealth. This system has handed control of the entire national economy to a handful of capitalists. They have no concern for the least bit of welfare or progress of society, nor do they perform any work beneficial to society and the community. But since the life-blood of the entire economic enterprise—that is, capital—has fallen into their hands, and domestic law has granted them full rights to accumulate it and invest it in return for interest, they have not only become the principal partners in the wealth produced by the labor of society as a whole; they have also acquired the power to make the entire society slaves to their interests and to play a destructive game with the fate of various nations and countries.

Seven: In the new society formed upon the stated foundations of the modern capitalist economy, there is no place at all for sympathy, cooperation, compassion, kindness or qualities of this kind. In such a social system, let alone other people, even a brother has no recognized right to receive assistance from his own brother. On the one hand, the invention of every new machine makes hundreds of thousands of people unemployed in an instant. On the other hand, the government, society and factory owners alike retained no responsibility whatsoever for these unemployed, livelihood-less, incapable and disabled people. That is not all: this new system created such conditions and instilled such morality among the public that no sense of duty to raise the fallen by the hand remained in anyone. Every remedy this society offered for accidents, illness, death, old age and all other adverse circumstances was made for earning people and for those earning enough to save beyond their needs. But those who could earn nothing at all, or who earned only enough to preserve their lives, where could they obtain help in their difficult circumstances? The sole answer of the modern capitalists was that such a helpless person would mortgage his clothes, household goods or his wife’s jewelry to a moneylender and take a loan at interest at the rate of three taka per hundred annually. And if ultimately he could not repay the loan with interest, he would again borrow on the basis of interest from that same moneylender in order to repay it.

In fact, if millions of people in society remain without livelihood and employment, and if tens of millions earn so little that they cannot afford to buy essential commodities even though the shops are full of them, how can progress in industry and trade be initiated? This is why we see the astonishing situation that the world possesses abundant usable means and resources, millions of able-bodied people wander about unemployed, and millions who wish to purchase luxury goods exist despite the scarcity of necessities; yet, despite all this, the factories of the world are producing less than their capacity would permit. Even that limited output remains piled up in the markets, solely because people do not possess the financial means to purchase it. Millions of people cannot be employed because even the small quantity of goods produced remains piled up unsold in the markets. On the other hand, capital and natural resources cannot be utilized to a sufficient extent either. For even the small amount being utilized can scarcely be made productive, let alone risking the deployment of additional capital and natural resources. Such a situation itself proves that the argument advanced by bourgeois thinkers in favor of capitalism—that under a free and unrestricted economic system the pursuit of private profit automatically ensures the development of means and resources and an increase in production—is entirely baseless. Indeed, far from bringing progress and increased production under such circumstances, experience has proved that, through their own ignorance, they have themselves obstructed the path to their own proper profit.

Socialism and Communism

It was precisely because of the causes analyzed in the preceding chapter that various defects, flaws, and disasters appeared in the society and economic system produced by the Industrial Revolution. If we reflect deeply on the explanation and analysis presented in the preceding pages, it will become clear that the defects and disasters under discussion did not arise from the natural principles advanced by the bourgeois class in support of a free economy; rather, their fundamental cause was the additional errors they mixed with these sound principles.

Thus, if it had been possible to become alert to these errors at the proper time, and if the Westerners had been able at this new revolutionary stage to build a balanced and just economic system, the Industrial Revolution would have appeared as an extraordinary blessing and immense benefit for them and for all humanity. But, unfortunately, just as they had displayed this weakness several times before, the Western mind and character displayed the same weakness at this stage as well. Consequently, just as they had gone astray in earlier times, later history too continued along the path of this inconsistency and imbalance. The bourgeois class has now occupied precisely the position formerly occupied by landowners, church administrators and authorities, and dynasties, who stood there practicing bigotry, oppression, and undesirable excesses; and the position formerly occupied by the bourgeoisie, when it became the embodiment of demands for rights, grievances, anger, and protest, is now occupied by the working masses. Formerly, in the feudal social system, the contented and satisfied classes had tried to silence the deprived masses by misusing certain truths of religion, morality, and natural law in support of their undesirable distinctions and disparities and their unlawful privileges and oppressive restraints. Now, under the capitalist system, the satisfied classes have begun doing exactly the same thing. Formerly, instead of understanding and properly opposing and remedying the real errors of the feudal lords and priests, the bourgeoisie, with anger, obstinacy, and irritation, expended its greatest effort against the fundamental truths to which their opposing groups appealed. Now the working people and their leaders, likewise driven by the irresistible pressure of anger and hatred, have lost all sense of harmony and balance; instead of striking at the real defects and errors of bourgeois society and civilization, they attack those true and natural principles upon which human society, civilization, and economics have been reconstructed from the very beginning of creation.

The people of the middle class, despite their thousand weaknesses and shortcomings, possessed at least some talent and education. For this reason, even amid the intensity of their grievances and inflexibility, they were able to preserve some balance of mind. But when the masses, oppressed and crushed for centuries—among whom there was an obvious lack of knowledge, talent, thoughtfulness, experience, and everything of that kind—became restless and frantic with sorrow and suffering, and their hearts overflowed with deprivation and grievance, they became truly violent and agitated. At that point, there was no question of their examining anything they accepted by the standards of reason and logic. Whatever principle or method seemed most fiercely and intensely capable of satisfying their hatred, anger, and desire for revenge at that time was able to attract their minds most powerfully.

In fact, the offspring born in the world of ideology from this expression, anger, and resentment of the poor class is called “socialism” in terminology. [Note—The original meaning of “socialism” is sociability. This term was coined to express a meaning opposed to individualism, the basis of the capitalist social system, in the sense of modern collectivism. Even before Karl Marx, numerous and diverse ideologies and conceptions began to be presented under this name; their common purpose was to establish a way of life through which the welfare of the whole society could be achieved collectively and comprehensively. In practice, however, they all remained merely printed on paper. In response to this general demand, Marx presented a particular type of socialism, called “scientific socialism,” “Marxism,” or “communism.” That is what is being discussed here, because it has taken root on the earth. We have deliberately set aside terminological subtleties and shall use here the words current in common language, with which ordinary readers are familiar and which are easy to understand.] It was born within half a century after the birth of modern capitalism, and before half a century had passed after its birth, the world had become overwhelmed by its all-consuming devastation and destructive activities.

Socialism and Its Principles

The authors of this new doctrine first launched an attack on the “right of ownership.” They said that this was the root cause of every kind of disaster. There was no harm in clothing, household utensils, furniture, and similar articles remaining privately owned. But land, fields, textile factories, tools, and other productive forces and things should never be privately owned. For as soon as someone became the owner of any one of these things, he would produce wealth through it; and once he produced wealth, he would certainly collect and accumulate it. He would then purchase more land, fields, or textile factories and greatly expand his means of producing wealth. Having expanded them, he would employ others on the basis of fixed wages, remuneration, or contracts; and as soon as he did so, he would do everything that bourgeois capitalism does. Therefore, uproot the root from which such dangers arise. “No bamboo, no flute.”

The question arose: the right of private ownership of the means of production, like that of articles of use, is not in the least a new thing in human society; nor is it merely something invented and contrived by bourgeois capitalists. In reality, it is the foundation of social life; from ancient times, human society and its economy have been based upon it. Is it really so easy to decide to uproot such a foundational system?

In reply, a complete history was immediately composed and presented, and it was said that from the very beginning of human society no right of private ownership over the means of production had been recognized; later, powerful classes had established it in society solely in pursuit of their own interests.

It was said that all the religions of the world, all moral codes, and all the laws of the world had recognized this right of private ownership from time immemorial, and that not one of them had ever considered a society and economy founded on private ownership of the means of production to be wrong. The reply came without a moment’s thought: religion, morality, and law had each been used as instruments by influential people in every age. Once people had established monopolies over the means of production, the need arose for certain doctrines, customs, and legal provisions to protect and strengthen their own monopolistic ownership. Those who composed and presented these according to their own designs attained in society the status of prophets, messengers, sages, teachers of morality, lawgivers of the Sharia, and legislators. The working people had long remained immersed in this labyrinth, but now they would shatter it once and for all.

It was said that eliminating these rights would require creating a severe and all-out conflict and an endless struggle, in which people of different views within every nation would have to engage in mutual combat; the fire of class conflict would blaze from village to village and neighborhood to neighborhood. In response, a novel philosophy of history was immediately composed and presented. It claimed that the entire development of human civilization had been accomplished through class struggle. Apart from this, there could be no other path of development.

The question then arose that working for one’s personal profit and interest is a fundamental tendency embedded in every human being’s nature, and that every human child is born from its mother’s womb with this inclination. If the right of ownership of the means of production were taken away from individuals, and they were denied the opportunity to earn profit in proportion to their own efforts, the innate impulse to labor and strive would be extinguished. In the end, this would prove extremely harmful to human civilization and culture.

The immediate reply was: natural and inborn tendencies, inclinations inherited through heredity—these are all inventions of the bourgeoisie. No such thing exists in human beings at all. All their inclinations and dispositions are solely the product of the social environment. If one environment is changed and a person is placed in a different kind of environment, his mind will begin to think in an entirely different way. His heart will become stirred by a different kind of disposition. His mind will acquire a novel outlook. As long as the system of private ownership remains established, an “individualistic mentality” will exist. And as soon as a system of social ownership is established, all people will become “socially minded.”

It was asked: how can the entire economic activity be conducted after abolishing private ownership? The answer was that all the means of production—land, fields, factories, and every kind of business and industrial establishment—would be taken out of private hands and made nationally owned. Their profits would be distributed among those who worked in these establishments. The entire economic system would be run by the managers elected by the votes of these workers.

The question arose: what means would be used to abolish the ownership of those who currently own land, factories, and other means of production, and to establish social national ownership? In answer to this question, two distinct views were presented:

1. The followers of one principle replied that democratic methods would be adopted to achieve this objective. Public opinion would be changed, state power would be captured, and, through legislation, agriculture, property, industries, and businesses would gradually be brought under national and collective ownership—sometimes with compensation and sometimes without it. Those who held this view were specifically called socialists. Sometimes this view was called “evolutionary socialism.”

2. The adherents of the other view believed that democratic activity could not initiate any fundamental change. Therefore, a revolutionary program was necessary and indispensable. The destitute working masses would be organized, and war and struggle would be waged against the owning class by every possible means and method. The foundation of the bourgeois government would be uprooted, and the dictatorial rule of wage earners and laboring people would be established. Then land would be forcibly taken from landowners, factories from factory owners, and business establishments from businessmen; whoever came forward to obstruct this objective would be cast into the jaws of destruction. All forms of class distinction would be abolished, and the entire population of the country would be transformed into a single class—the class that earns through labor with its own hands—and the employment of anyone at the individual level in exchange for wages, and the taking of his profit, would be prohibited by law. [Note—It should be remembered that, in the view of communist doctrine, it is permissible for a tailor or cook to sew clothes or prepare bread personally and give it to another. But if he employs anyone in exchange for wages or a salary and takes his help in this work, he then becomes a “bourgeois.” All his activities become such a serious crime that the minimum punishment is confiscation of property.]

When the revolution had reached completion and no fear remained that the capitalist class could rise again, this dictatorial system of government would of itself—how, God alone knows—fall away like a dry leaf. Then, on its own—but how?—a system of government would take its place in which every sphere of life would continue to function beautifully, without governmental machinery or coercion, on the basis of the mutual will, satisfaction, consultation, and cooperation of the people. This method and doctrine of social change is called “revolutionary socialism.” It is also called “Bolshevism.” Its philosophical name is “Marxism,” but today it is known and famous throughout the world as “communism.”

For seventy or eighty years, this new doctrine of socialism continued to spread throughout Europe and the countries influenced by it, with countless branches and diverse systems of thought. In its early days, it was the madness of a few misguided people. Its arguments, methods, proofs, and results were all meaningless ravings. It gained popularity only among angry and agitated wage earners and workers—not through any foundation of intellect or knowledge, but solely on the basis of frenzied and turbulent emotional enthusiasm. Yet one notable and remarkable weakness among the many weaknesses of Westerners is that any kind of extremism and revolutionary role fascinates and attracts them. Especially if it is a thoroughly worthless thing, a meaningless madness, and is presented in a bold voice and fearless manner, shamelessly denying and disregarding every universally accepted truth; if its claims are somewhat systematized and refined in a scientific manner, and as a result a system is built around it [Note—There is no geographical hatred or hostility behind this statement. The condition of those in the East who possess a pro-Western mentality is even worse than this. Western people’s mental condition is considerably better. They are attracted by forceful words and prefer a system or a scientific method and procedure. But the people of this country who possess a servile mentality blindly accept the words of any Western leader and become fascinated and influenced by them.]—then nothing more is needed. These qualities were present in full measure in the scientific socialism under discussion. For this reason, many talented people from the lower middle class, as well as some madmen or clever individuals from the bourgeois class, became attracted to this doctrine. Piles of books and periodicals began to be produced for explaining and analyzing this view and for propagating and publicizing it. Numerous parties and groups supporting socialist ideas became organized in different parts of the world, and ultimately many people began to believe with particular seriousness that a social, cultural, and economic system could be established on the basis of this doctrine.

Communism and Its Merits and Demerits

No achievement or contribution of regulated or evolutionary communism has yet been presented before the world; consequently, it is not possible for us to form any idea of the practical process of transforming private capitalism into a socialist system or of its results. We shall therefore examine and assess the accomplishments of revolutionary communism instead. Taking advantage of the First World War of 1914–18, it effectively brought about a revolution in Russia and succeeded in establishing a complete social and governmental system according to permanent ideals, doctrines, and viewpoints. [Note—It must be remembered that the difference between socialism and communism lies in their policy of action. Both are in complete agreement regarding the nationalization of all means of production. In this respect there is not the slightest difference between them. Therefore, whatever is written about the nationalization of property and the means of production, and its consequences, apart from the question of policy, will apply to both doctrines.]

Russian communism remained a subject of intense controversy for several years. As a result, both its supporters and its opponents engaged in considerable dispute and wrangling over assessing its advantages and disadvantages.

Its supporters have included among its merits many things that are not actually attributable to communism itself, but are merely the result of the administration falling into the hands of capable and competent people. Conversely, its opponents seek to attribute to it certain faults and defects that are not fundamentally defects of communism, but arose because tyrannical and narrow-minded people came to power.

One principle of Russian supporters is that they compare Russia’s scientific, intellectual, artistic, and cultural condition under the tsars with its later condition, and credit communism with all the progress shown by the difference. But there is no doubt that this is fundamentally a great mistake. If whatever progress Russia achieved in thirty or thirty-two years is compared with the developmental work accomplished by America, Japan, or Germany during a similar period, the rate of progress in the latter countries will probably appear greater. For example, Japan’s progress in education, industry, commerce, the utilization of natural resources, and wealth production in 1818 was surpassed in all these fields by 1904, when Japan defeated Russia. Germany’s condition in 1870 had, by the beginning of the twentieth century, advanced to a point that was far beyond its earlier state in the scientific and intellectual condition of its inhabitants and in the rate of production of its economic means and resources. If these developmental activities are compared with Russia’s development over corresponding periods, how much of the credit will remain Russia’s? Must we then accept the principle that whenever a country achieves some extraordinary progress during a particular period, all the praise it deserves must also go to that country’s way of life, economy, and system of government? Yet often, even when all the activities of social life operate on erroneous principles, the personal abilities and efficiency of the leaders, together with the dedication of their assistants, can produce such enormous results. Similarly, among the defects for which Communist Russia is criticized in propaganda, many are found in full measure even in the administration of powerful communist rulers. Why, then, should these defects be attributed to that country’s social system and economy instead of being charged to bad individuals?

Merits

Leaving aside irrelevant matters, if we examine the achievements of communism itself that have emerged before us through the practical experience of Russian communism, we find the following items on the side of its merits:

One: Taking land, fields, factories, and all business and commerce out of private hands had the result that the profit between the cost of goods and their market price, which was initially distributed among landlords, factory owners, and businessmen, subsequently began to accumulate directly in the government treasury. It thus became very easy to spend this profit on works beneficial to the whole community.

Two: Since the means of production of the entire country came under one system, it became possible, on the one hand, to develop them further and use them for comparatively more beneficial purposes according to a well-designed plan. On the other hand, an organized system for meeting the needs of the entire country could be put into operation.

Three: Once the government took control of all the means of production and began operating them according to a comprehensive plan, it became possible to employ all the able-bodied and capable people in the country. Moreover, by providing education and training according to a well-designed scheme, it became easier to prepare a suitable number of workers for the urgent tasks and positions of the overall economic system.

Four: Since the profits from agriculture, industry, and business mentioned in point one came into the government’s possession, a portion of them was allocated to “social insurance”—that is, assistance from a collective national fund to people throughout the country who are unable to work for their livelihood, who become temporarily or permanently incapacitated, or who require assistance because of illness, childbirth, or various other circumstances.

Demerits

Indeed, it cannot be denied that the diseases that had appeared in social life as a result of the free economy were effectively treated by this operation of communism. But its hollowness becomes apparent as soon as we examine what price Russia had to pay for it and what new disease emerged in place of the earlier disease after it had been removed:

One: Taking land, fields, factories, and other means of production away from individuals’ ownership and control and declaring all these to be nationally owned could not, in any event, have been accomplished as a game or joke. In reality, it was an extremely difficult and arduous task. It was carried out through several years of continuous and unremitting severe oppression and repression. It is easy to understand that, if one resolved to forcibly take small and large properties from the possession of millions of people, they would not readily be prepared to bow before it. Wherever and whenever such a thing is done, it must create an all-out orgy of bloodshed and slaughter. In carrying this out in Russia, the revolutionaries had to send approximately 1.9 million people into the jaws of death. Two million people were subjected to various punishments. And forty to fifty million people were expelled, exiled, and dispersed from their homeland, forced to suffer and die in various places around the world. Many supporters themselves cried out at the manner in which several hundred thousand lower- and middle-class landowners (Kulaks) were so tragically destroyed merely to implement the policy of national agricultural administration.

Two: If those who, according to the religious, moral, and legal principles endorsed by the entire world, are the lawful owners of their respective wealth and property are forcibly deprived of and dispossessed of this ownership in order to implement some arbitrary and novel scheme devised by a particular person or group of people, then those who seek to do so must also openly repudiate all these religious, moral, and civilizational laws and regulations that oppose their ideology. Not only that, but along with destroying ownership, they must devote all their strength to uprooting those religious and moral laws completely. Moreover, in order to implement their scheme with the help of every kind of brutality, cruelty, oppression, falsehood, and deception, they must formulate a novel philosophy of principles on the basis of which every kind of oppression, injustice, tyranny, exploitation, brutality, and harshness will be considered entirely legitimate. For this very reason, Communist leaders and officials were compelled to conduct extensive propaganda against Allah and religion in order to complete their planned revolution; at the same time, they ruthlessly uprooted religious people from bourgeois society as well as from Muslim and Christian communities, and had to develop a new ideology concerning character and morality. In Lenin’s words, this ideology is as follows:

“We reject every kind of moral philosophy that is based on belief in a higher world or derived from any thought opposed to notions arising from class distinctions. In our view, morality is wholly and exclusively subordinate to the class struggle. Whatever work or thing is deemed necessary for eliminating the old profiteering social system and organizing the working people is, from the moral point of view, entirely proper and legitimate. By morality we mean only that we must be strong and well organized and must struggle with full consciousness against the profiteering class. We do not acknowledge at all any principle of morality that is primordial and eternal. We shall do no more than tear away this veil of deception. Communist morality can be nothing other than fighting to establish firmly the absolute rule of the workers.”

“For this task, it is absolutely essential to employ every kind of stratagem, deception, fraud, unlawful measure, evasion, and lie.”

In fact, this enormous price had to be paid in the second stage for establishing a Communist society in Russia. That is, not only the lives of ten million people, but also religion, faith, moral character, humanity, humaneness, honor, and dignity all stood as formidable obstacles in the way of implementing such a ‘raw’ ideology and plan.

Three: In our own country, we have ourselves witnessed that when, on the one hand, moral restraints become lax and, on the other, various essential commodities are placed under government control, a flood of bribery, embezzlement, plunder, and fraud engulfs the whole society. Whenever an essential commodity depends on obtaining a permit, license, ration card, or quota, the people have to face all sorts of difficulties to obtain it. They have to seek the favor of senior government officials. Under such circumstances, it can easily be imagined that when, on the one hand, the foundations of all universally accepted moral principles are uprooted and people are made firmly to believe that whatever is necessary for achieving an objective is therefore true and must be done, while the country’s leaders themselves display the height of such novel morality through inhuman oppression and exploitation—and, on the other hand, not merely a few essential commodities but the country’s entire wealth and all means of livelihood are placed under government control—there can be no doubt that a tremendous flood of bribery, treachery, plunder, and harassment of people will arise. This is not being said merely as an inference; among the reports that continue to reach the outside world, after being screened and selected, from behind Russia’s iron curtain is the serious report that government employees and the directors of various institutions in its financial administration have created a vast problem of corruption. Nor is the emergence of such a problem in a country like Russia a surprising or unprecedented event. Rather, it would have been astonishing if it had not occurred. It is very easy to shatter an established system through an assault of moral corruption, but it is extremely difficult to run a newer system soundly on the basis of moral corruption. In fact, soundly administering such a system requires people of good and steadfast character. But there, this character had already been uprooted.

Four: To run a country’s economic system soundly and successfully on the basis of social and national ownership after abolishing private ownership, it is first necessary to carry out several measures. For this purpose, selfishness and the urge to seize personal profit must be removed from people’s minds. In their place, the inclination to work for the general welfare must be made so powerful in their minds that it becomes their foremost source of motivation. The Communists claimed that human nature, disposition, and inherited tendencies were merely deceptions of bourgeois philosophy and science. In reality, no such thing exists. We shall expel and eliminate the idea of personal profit and selfishness from human beings and create a collective and national mentality by changing the environment. But the Communists failed tragically in putting this baseless claim into practice. They could not increase even by a particle the collective attitude and outlook among the people and economic and social officials of their countries beyond the degree naturally present among the people of every country. Far from eliminating selfishness and the desire for profit from the people and officials, they could not reduce them even slightly. Rather, exhausted, they were ultimately forced to acknowledge them openly and to stimulate people’s selfishness in order to get work out of them. Up to this point, they remain on the same level as bourgeois society. But the factor that plunged them into even greater ruin than bourgeois society was this: when they closed the natural avenues of agriculture, industry, commerce, and other profitable enterprises in order to satisfy the people’s personal desire for profit, and through artificial propaganda declared the simple and reasonable expression of this desire to be needlessly and forcibly reprehensible, the impulse sank into the depths of the mind. Like other accumulated human impulses, it became perverted and sought such wrong channels for outward expression that it gnawed at the foundations of society from within and made it hollow. This factor has had an immense influence at the root of the growth and predominance of bribery, treachery, theft, abduction, plunder, and many other serious vices in Communist society. In Communist society, only one thing is forbidden: no individual may employ his personally earned wealth for acquiring more wealth or for any productive activity. Apart from this, every other avenue for using wealth is freely open there, just as in other societies of the world. Everyone may spend as much money as he wishes on all kinds of clothing, food, houses, vehicles, furniture, and luxury goods for his own use. He may raise his standard of living as high as he wishes. Indeed, whatever means may be adopted in Western society to satisfy luxury, comfort, pleasure, and the desire for enjoyment may likewise be adopted freely in Communist society. Whatever money remains after this may all be saved. This accumulated money may be invested in profitable ventures through the government system, even if not directly by the individual, and annual interest may be received on it at a rate of up to eight or ten percent. A person may even die leaving this accumulated wealth to his heirs.

Five: Such widespread bloodshed and destruction, and this tragic devastation and ruin of religion, character, and humanity, were endured for one purpose only. That purpose was to ensure that the profit between the cost of producing a commodity and its selling price (surplus value), instead of being seized only by landlords, factory owners, and the business class and pocketed by a handful of people, would be accumulated in society’s collective treasury, from which it could be distributed among all with complete equality and justice. This was also the purpose of abolishing private ownership. And if this could actually have been achieved, it might have been regarded as a great advantage of collective and national ownership. But has this objective really been achieved? Once private ownership has been abolished, examine how the profits of agriculture, industry, and commerce that are accumulating in the national treasury are being distributed.

Throughout all departments of the Russian government and its economic activities, there is a difference between the salaries of lower-level employees and high-ranking officers of every institution as vast as in any bourgeois society. On the one hand, the salaries and standard of living of ordinary employees are undesirably lower than those of wage workers in America and England. Although their condition is somewhat better than that of workers in India and Pakistan, it is certainly not very much higher. On the other hand, the incomes of directors, managers, government officers, military officials, actors and actresses, and authors and compilers, among others, have increased until they have reached several hundred thousand ‘rubles’ annually. Thus, although not completely, the profits of commerce and industry are being distributed extremely unequally between the higher and lower classes—exactly as they were distributed between workers and the bourgeoisie in the pre-revolutionary era.

Moreover, the fire of hatred, hostility, and all-out vengeful rage that was kindled between the working people and the bourgeoisie in order to create the Communist revolution made the non-Communist societies and peoples of the entire world hostile to Russia. For this reason, after abolishing private ownership, Russia was compelled not to distribute the profits of commerce and industrial production among the bourgeoisie but to accumulate them in the state treasury and devote a large portion of them to military preparations.

After expenditure on these two major areas, only the portion of the national profit that fell to the share of the working people could be invested in ‘social insurance.’ But what proportion is that compared with the total profit? Even with considerable exaggeration, it would in no case be more than one or two percent.[Note—In Russia, the method of collecting the ‘social insurance’ fund is that, according to a special rule, ten to twenty percent of the total amount spent in each department on employees’ salaries is deposited as part of the ‘social insurance’ scheme. In this way, fourteen percent of the country’s total wages and salaries is spent for the general welfare of employees. And this amounts to only one or two percent of the total financial profit.]

But the question is this: if an amount of money equal to this, or even much greater, can be obtained for spending on the general welfare by some other means, then what necessity or justification can there be for imposing upon innocent people, as in the Russian Revolution, an artificial social system based on national ownership—along with wholesale oppression, tyranny, persecution, exploitation, and the abolition of religion, morality, and private ownership?

Six: The devastation carried out in Russia—the destruction of life and property, religion and morality, and humanity itself—in order to introduce national ownership, military discipline and administration, and national planning was only the initial price of this experiment. But it is also necessary to present a comparative discussion of what benefit it has brought to the people’s daily lives after being put into practice, and what price has been exacted from them in return.

An examination of what Russia’s present overall system is giving the people reveals the following points:

At least enough employment has been provided for each person to obtain two meals a day, enough clothing to cover the body, and some sort of shelter over his head. They have also gained the social benefit of shelter being provided for individuals in times of hardship. These two things, essentially, are all that Russia’s new system has given its people—nothing more.

It must now be examined how much, and what things, Russia has taken from the people in return.

In order to implement a system of national ownership in place of private ownership, it was inevitably necessary to entrust the entire power of the country to the Communist Party, the bearer of this ideology. As a result of the party’s ideology and this inevitable demand, a dictatorial rule under an absolute leader was established over the country. By exercising total power, the party had to crush the system of private ownership and introduce the new system through the iron force of an inexorable hand. This dictatorial rule was called the dictatorship of the proletariat; but it is universally known that the wage workers, peasants, and all employees in the various sectors and departments of Russian society are not members of the Communist Party. Probably no more than five percent of the Russian people could be members of the party. Thus, although outwardly it is called the ‘dictatorship of the workers,’ in reality it is merely the dictatorship of the Communist Party imposed upon the workers.

And this dictatorship is no trivial matter. The establishment of national ownership means that all landlords have been eliminated and the government has become the sole, undivided landlord and exclusive owner of all the country’s land and fields. There is now no individual who is a factory owner or business capitalist; after overthrowing them all, a capitalist has taken everyone’s place whose absolute monopoly encompasses every aspect and form of the means of production. At the same time, the entire state power of the country has been concentrated under his dictatorship. This is the reality of the Communist Party of Russia.

Now, even if it is found that those who exercise all of Russia’s economic, civilizational, and political power have been elected by the votes of ordinary people, can this really be called democracy? Even if someone dares to compete with the Communist Party, would he have any means of obtaining food and shelter in a vast country like Russia? Could he use any press to propagate views opposed to the government? … To convey his views to the people, how long would it take him to travel through the country in some vehicle, crossing the distance between life and death?

The real fact is that under a system of national ownership, so much power becomes concentrated in the hands of the government that no one in any chapter of human history has ever controlled such power. No Genghis Khan, Hulagu Khan, tsar, or Kaiser ever had so much power concentrated in his hands. In fact, once any party succeeds in seizing such power, the country’s millions of people become utterly helpless before it. Replacing any bad government in the world is not so difficult and arduous as replacing a Communist government becomes difficult or impossible.

Under such a system of government, the ruling party uses the press, radio, cinema, educational institutions, the entire administrative machinery, and the country’s economic activities in a particular manner to manage and implement the plan and program it adopts for the nation’s collective life. For such a plan to succeed, the exclusive right to think, form opinions, and make decisions throughout the country must belong to the handful of people who sit at the top of the central administrative machinery and devise the plan. Apart from them, the country’s millions of ordinary people will be merely its hands and feet, working according to their instructions and unable to make the slightest mistake in obeying orders. In such a system, there can be no place other than prison or the gallows for those who criticize, point out faults, or express opposing opinions. If such a critic is exiled, it must be understood that great mercy has been shown to him. For precisely this reason, even leading workers and officials of Russia’s own Communist Party have been sentenced to death or life imprisonment. Yet it was through their sincere efforts, ability, competence, and self-sacrifice that the Communist experiment had once advanced toward success. Nevertheless, merely daring to disagree with the ruling party brought them face to face with such a fate.

Not only that, but anyone arrested for the crime of expressing a difference of opinion was charged with serious and terrible offenses. Before Communist courts, according to the accusations brought by the ruling party, every accused person was compelled to recite his own list of crimes ‘fluently’ and, rather than mumbling it indistinctly, to admit in clear language that he was a great traitor, an agent of the capitalists, and a venomous snake bred and nurtured within Russia. On the one hand, all this displays the ugly and vile form of Communist morality; on the other, the world cannot help being stunned by the astonishing feats of the Communist courts.

Secondly: Since the Communist system was established only after private ownership had been abolished and religious groups had been suppressed with tremendous force, the people whose feelings, beliefs, hopes, and aspirations were buried beneath the construction of this Communist palace have not yet been completely eradicated from the world, or from Russia. For this reason, the Communist dictatorial government remains terrified at every moment by the danger of counterrevolution. Moreover, Communist officials know and understand very well that, however much they deny it, something called human nature and disposition does exist, and it is making an unmistakable demand for personal profit. It is striving powerfully to reestablish a social system based on private ownership. For these reasons, the Communist Party itself is constantly busy, on the one hand, ‘purging’ its own system and continually disciplining anyone in whom even a trace of affection for, or reformist sentiment toward, the previous system is detected.[Note—This purging operation has so far been carried out against several hundred thousand members of the Communist Party. In Russia, this does not merely mean that an unsuitable person is denied party membership and thereby dismissed; after the operation, very few fortunate people have escaped the torment of being sent to the secret police’s torture chambers. The way out of these chambers has led either toward the cemetery or toward forced labor camps, where people are compelled to endure the torment of hell while still alive.] On the other hand, the party government is constantly occupied throughout the country with completely eradicating every trace of the danger, possibility, suspicion, or remotest notion of counterrevolution. This government has spread an extensive and enormous network of soldiers and secret police throughout the country. Its countless agents search in every institution, every home and family, and every public gathering for the scent of opponents of progress. This invisible and mysterious network of the secret police has erected a wall of suspicion and doubt even between husbands and wives. Children do not hesitate to serve as secret-police informers against their own parents. The carefully planned and supposedly judicious (?) view of the Russian police and CID is that if, through error, several hundred or several thousand innocent people are arrested and killed, that is far better than allowing a few guilty criminals to escape and enabling them to create a counterrevolution. For this reason, they search factories, every office, and every institution: if any worker or employee dislikes the administration of the country or his own department, or expresses any kind of unease or dissatisfaction—or even merely thinks in such a way—then, if there is any suspicion at all concerning him, he is naturally arrested. Since this is an everyday occurrence, when a worker does not return home at night, his wife naturally understands that he has been arrested. The next day she begins taking his necessary belongings to the police office herself, and the acceptance of these belongings means that what she had supposed was correct. If she asks anything, the office naturally gives her no answer. Sometimes the things she sends are returned; when that happens, it is understood that her husband has been sacrificed for ‘Great Lenin.’ If the woman herself does not wish to face a similar fate, it is her duty to spend her days completely silent, like a reliable comrade, without uttering a single word about the matter; she should also seek another husband regarding whom there is no suspicion of being ‘reactionary.’

In fact, the millions of inhabitants of Communist Russia had to pay this enormous price in exchange for two meals a day and security in times of hardship. But the question is: can this bargain be called cheap at such a price? It is true that a hungry person is sometimes so overcome by the severe assault of hunger—so defeated—that he prefers a life in prison to his sorrow-laden freedom, simply because there he will at least obtain two meals a day, clothing, and shelter. But has such a problem now arisen before all humanity that it cannot obtain food and freedom together? Is turning the entire earth into a prison and appointing a few comrades as its jailers and wardens really the only and final means of obtaining food today?

Reaction

The scale of the oppression and tyranny carried out by Communism in order to establish a state system based on its own ideology, and the way this success poured oil on the blazing fire of class struggle in every country of the world, compelled thinkers in all non-Communist countries to engage in new thinking. They devoted themselves to revising the rules of the free economic system, removing the grievances and deprivation of working people, and devising ways to save their countries from the danger of Communist revolution. Although all the internal defects of the free economic system were being pointed out, and its defects were continually being criticized and exposed, while its external, superficial, and partial corrections were also being made to some extent, the need for change and reform was truly felt only after witnessing the activities, influence, and results of Russian Communism. This reaction assumed two mutually opposed forms in two major regions of the capitalist system.

Fascism and Nazism arose in those countries whose entire social fabric had been shattered by the terrible blow of the First World War, where the danger of their final destruction had intensified through Communism’s brief class struggle, and where democracy had failed to take firm root.

And those nations among whom democracy was firmly established, and whose systems of life had not been particularly disrupted by the war, retained their old liberal, open, democratic capitalism on its ideological foundations and merely attempted to make such corrections to its unrestricted and unconditional character as would remove the possibility of its harmful effects.

Fascism and Nazism

Communists generally try to denounce Italian Fascism and German Nazism as reactions of the capitalists. They have alleged that the bourgeois capitalists, fearing defeat in the struggle, brought Hitler and Mussolini forward. But the actual fact is that they were not agents serving the evil purposes of any particular class or any particular interest. Like Marx and Lenin, they too were bearers of a particular ideal. They were as devoted, intellectually capable, and crooked-minded as the others. They saw, on the one hand, that the terrible and all-consuming blows of war had so thoroughly devastated their nation that all its glory and dignity accumulated over several centuries had been dragged into the dust. On the other hand, the internal defects of the unregulated economic system and the external glitter of communism were about to plunge people of different views within the nation into fierce, bloody mutual warfare and deadly conflict. For this reason, they devoted themselves to devising effective means of ending the latent conflict of class interests and saving their national unity from destruction. At the same time, they set about strengthening the economic, civilizational, and political power of their respective nations and re-establishing their superiority and dominance. But they and all their supporters and followers had inherited the historical defects and weaknesses of the Western mind. Like the thinkers and leaders before them, they accepted several true and eternal principles and mixed with them a number of extremely exaggerated ideas and policies. They rejected several true principles and substituted for them a number of erroneous follies. Thus, by patching things together, they laid the foundation of an inegalitarian system of life.

It may be examined in what proportion and according to what rules good and evil, erroneous and sound principles were combined in the system of life they fashioned by patchwork, and what the net result of its benefits and harms has been. Although, after being defeated in the Second World War, these two “twin brothers” outwardly submitted; they still exist in various countries under the innovative names and forms propagated by them. Our own country too is not above or free from these dangers. It has therefore become extremely necessary to identify the good and bad elements within Fascism and Nazism. This need is no less urgent today than it was before the war.

Good and Beneficial Works

The Communists claim that mutual hatred, hostility, and warfare between the landlord and capitalist classes and the working class of society and the nation constitute the real and natural relationship. But the Fascists and Nazis oppose this. Their objection is entirely correct. In their view, the real thing is not “class”; society and the nation are the true and fundamental entities. Their various parts and components perform different welfare-oriented functions for the whole. The truth of this Fascist and Nazi conception is undeniable. In reality, the true relationship between society and the nation and the working people is not one of hostility, war, and conflict; rather, it is a relationship of mutual support, cooperation, and joint work. Their responsibility is to produce the goods necessary for everyone and to increase national strength and resources by increasing production at the general and national levels. If any deficiency, incompleteness, or exception is found in this mutual support and cooperation, it should be removed. When conflict and disagreement arise, they must be eliminated. It is in no way desirable to allow them to grow or for the various parts of the same society to set about destroying one another and production.

The Communists claim that, in the interest of the whole, private ownership and the pursuit of private profit are inherently harmful and should disappear. The Fascists and Nazis have proved this view false as well. Their idea is quite true that these two things are themselves beneficial and absolutely necessary for the general interest. The condition, however, is that they must not be unlimited, as in an “unregulated economic system”; rather, some limits must be imposed on them. They said that every individual has the right to strive and work for his own profit and interest; but this right is subordinate to the general interest and must be used in its service, not against it. High Finance, mineral resources, shipbuilding and shipping, war matériel, industry, and other such large-scale businesses should not remain under private ownership. Leases and monopolistic businesses in which the general interest is sacrificed to private interest must be ended immediately. Speculation must certainly be driven out of the sphere of business. Interest in the system of lending and recovering loans must be abolished completely.[Note—Although they could not actually eliminate interest, the state itself borrowed money and paid interest. Some Nazis and Fascists alike considered interest unjust and favored abolishing it.]

Trade and commerce must be organized under rules and regulations that are compatible with the interests of all people connected with them, not merely favorable to the interests of one class. If a factory owner properly sets the prices of his goods, produces quality products, keeps wage earners and workers prosperous and satisfied, strives to develop his industry, and takes a profit within reasonable limits in return for these activities, what crime does he commit that he should be needlessly regarded as an enemy of the nation and society?

They quite reasonably rejected the liberal and impartial view that the government should merely perform the duties of the police and courts and pay no attention whatsoever to extensive economic activities and affairs of life. They said that arranging harmony among the various sectors of the national economy, establishing mutual support and cooperation, and removing the causes of conflict and struggle were among the earnest duties of the national state. On the one hand they tried to prevent strikes and, on the other, to use the means and power of production.[Note—When the Nazi Party came to power in Germany in 1933, approximately eight million people were unemployed and without work, but within a few years the situation changed and a shortage of workers became apparent.] They legally prohibited factories from declaring a “lockout.” They formed joint councils of owners and employees. They tried to determine rights and duties between them fairly and established a well-regulated system of negotiations, appointment of arbitrators, and, as a final stage, judicial decisions for settling disputes and quarrels.

Under the capitalist system, no responsibility is accepted for the unemployed, disabled, or incapacitated. But Fascism and Nazism attempted to remedy this defect of capitalism. The Nazis and Fascists understood the grave harm that could result from allowing people without means of livelihood to remain without shelter, and established social security on a broad basis through “social insurance.” This made it possible to provide workers with benefits in times of illness, old age, unemployment, and accidents. In addition, they established large institutions for maternity care, child maintenance, child welfare, care of the disabled and incapacitated, assistance to wartime amputees, care of elderly people without heirs, and other such welfare activities. Before the war, institutions of this kind operating in Germany had arranged for the security and maintenance of nearly five million people.

Under capitalism, all economic activities proceed without any planning, deliberation, or coordination. As a result, economic means and resources cannot be used to their full extent. Nor is balance maintained in what is used and in the amount used. The Fascists and Nazis devoted their full attention to removing this defect of the unregulated economy. For this purpose, they entrusted the state (government) with national economic planning, organization, and coordination. They formed special councils for every department of economic life and, through a well-organized and systematic set of rules and methods, increased the volume of production astonishingly and initiated coordinated progress among the various departments.

Folly and Harm

The beneficial aspects of Fascism and Nazism have been discussed in detail above. But it is also necessary to examine how great a price Italy and Germany paid, and what that price was, for obtaining these benefits.

To counteract the dangerous influence of class hatred, the Nazi and Fascist parties provided the intoxicating wine of nation-worship, intoxication with ancestral glory and pride, stimulation of hatred, envy, anger, and hostility toward other nations, and emotional enthusiasm for conquering the world and seizing states. But the result of such actions has never been beneficial for any nation. The sound rise and cultivation of a nation can rest only on constructive morality and a pure, sacred aim in life. A leader who adopts hatred, risk-taking, and the creation of excitement, instead of this path, as the means of nation-building, development, and strengthening, destroys the temperament and nature of his own nation. There can be no doubt that a nation raised and formed by such means must sooner or later suffer an all-out blow.

Instead of implementing simply, directly, and rationally the programs of economic and civilizational reform they had formulated for the welfare of their respective nations, they constructed a completely meaningless and hollow philosophy of society and the state. It contained countless exaggerations, cunning devices, practical follies, and stupidities. They therefore formulated as their first principle: the individual exists for the social order; otherwise the individual has no value. Proceeding further, they said that anyone who was not integrated into the social order, or who obstructed its stability and effectiveness, ought not to exist or become anything. Then, building a palace of logic, they declared that the true operation and expression of the social order were possible only through the national state, and that the organization, administration, and consolidation of the national state depended entirely on the party that had adopted this program of national unity and progress as its own. Thus, “If you are German, join the Nazi Party,” and “If you are Italian, be a Fascist”; nation and state, and government and ruling party, were made wholly one and the same thing. Anyone who dared to disagree with the ruling party on any matter was declared an enemy of the nation and the national state. Criticism, debate, and freedom of expression were made into terrifying things. No party other than the one party was allowed to remain alive throughout the country. Elections were turned into a farce—an empty game. In order to seize the national mind completely and comprehensively, the government took total control of the police force, radio, schools, the arts, literature, theater, and the like, so that no voice other than a single one could reach the nation’s ears. Not only that, every opinion other than that of the ruling party was prevented from arising in people’s minds; and if any unruly mind produced a thought opposed to the ideas and opinions of the nation’s “lords,” complete arrangements had been made either for it to be extinguished within the mind itself or for the entire head, together with its brain, to be buried in the earth. Outwardly, they had devised a highly rational ideology. That ideology was this: if no central plan was devised for social and national life, disorder, distinction, and mutual conflict would arise, and, broadly speaking, strength, capacity, and resources would be extensively wasted. Therefore the whole of national life had to be organized, and under a centralized government all the people of the country had to work in due order like the various parts of a machine, according to the plan and program determined by a central power. In their view, this was the means of advancing production, development, and the activities that secured prosperity at a very rapid pace. According to this ideology, they bound every aspect and department of the people’s lives—economic, civilizational, religious, cultural, and political—in an unbreakable bond of a single system. They began directing all these matters according to a fixed rule. In their system of life, everything was specified and organized. The work of every institution was specified, wages were specified; prices, rights, and duties were specified; the method of using strength and ability was specified, and the fields for using capital and resources were specified. Even thought and imagination, research, and the avenues for expressing inner ideas and inclinations were specified. Detailed programs extending over several years were even fixed for all these things. Now, how could those who had endured so much hardship and exercised so much intellect solely for the sake of the nation, and had devised such a vast plan for the whole of national life, tolerate anyone’s criticizing it and damaging the minds of ordinary people through criticism? How could they tolerate involving employees who ought to devote themselves to their specified tasks in argument, and destroying the people’s confidence and trust in a plan produced through such immeasurable labor and toil? Therefore, by the very demand of the inner tendency of this “planned” life, they were not prepared in the least to tolerate free opportunity for criticism and the expression of opinions. Rather, their emphatic demand was that anyone expressing an opinion must do so in favor of and in support of the program determined by the authorities. Otherwise everyone had to keep his mouth shut; that is, once planning had been undertaken, mouths had to be closed, and the work of thinking and imagining had likewise to be stopped. The path of dissent was closed, debate was closed, criticism was closed, questioning and examination were closed; in short, apart from the minds of a few people, the thinking of the entire nation had to remain completely closed and inactive.

Here the same question raised at the beginning arises once again. Is whatever the Nazi and Fascist ideology offers worth accepting at such an extraordinary price? Among the entire nation, only a few people would be human, while all the rest would be like animals—or rather, merely parts of a lifeless machine. If this price is paid, security in obtaining the necessary food may be gained there; otherwise not.

Internal Reform and Correction of the Capitalist System

At this stage we shall discuss what kinds of corrections and reforms the people of countries where liberal ethical democracy had firmly taken root implemented while preserving the capitalist system on its fundamental basis, and what the results were.

As indicated earlier, in the eighteenth century the bourgeois class, on the one hand, was presenting “free economy” for the sake of its own economic interests and advantages, while on the other hand this same bourgeois class was stirring heaven and earth with slogans of democracy, equality, equal rights, and the sovereignty of the people in order to secure its political interests. It demanded freedom of expression, freedom of thought and research, freedom to write and speak or deliver speeches, and the right to hold meetings and form organizations. It even loudly proclaimed that, in response to intolerable persecution, oppression, and the use of force, the people could declare rebellion against the government. At first, when they expressed these opinions, they had only royal dynasties, landlords, and the clergy of the churches before their eyes. They could see these people before them, and regarded only themselves as standing against them. For this reason, they could neither perceive nor imagine that the economic system based on the unrestrained individualism and the system of government based on democracy and civilizational equality that they wished to establish might at any time become opposed to one another and enter into severe conflict.

As a result of their efforts, when a new democracy began to be implemented in various countries and the right to vote spread from landowners to merchants, factory owners, and moneylenders, it was no longer possible on any grounds to deprive workers, wage earners, and the peasant masses of it. Yet the bourgeois group continued trying to deprive them. Consequently, their own stratagems began to work against them. In the end they were gradually compelled to recognize universal suffrage, just as the landowners themselves had earlier been compelled to accept their own right to vote. After that, no argument could be found on the basis of which it could reasonably be held that owners might form their own organizations but it was improper for workers to form any organization. Nor could it be maintained that owners might impose their own conditions and rules upon wage earners with the help of their collective strength, while working people would have no right to have their own conditions and demands accepted through the strength of their own organizations—all this proved irrational and baseless. Thus it was gradually acknowledged that wage earners and employees had the full right to form their own associations; to negotiate, not individually but through collective strength, over wages, salaries, and other conditions; to use the weapon of strikes to fulfill their needs and complaints; and to build resistance to make strikes successful.

The old political view that the state’s task was merely to preserve individual freedom and that the national state had no positive duties or responsibilities at all disappeared with the end of the nineteenth century. In its place, new ideas about popular rights and democracy began to take shape. A democratic state is the expression of the collective opinion of the country’s people; the people transform their own political power into the form of the state and centralize and organize it through membership in the state. If so, why should efforts still be made to keep the jurisdiction of democratic government restricted, like that of former monarchical governments? The duty of democratic government should not be merely negative; it should be responsible for working positively for the general interest. If any form of oppression, injustice, or wrongdoing continues in society, it should be the duty of democratic government to remedy it through both legislation and administrative intervention.

It was precisely in such circumstances that the drums of the First World War began to beat. Then the Communist revolution took place in Russia. This revolution yoked the women and children of the bourgeois class to the means of production like oxen at an oil press. Thereafter, its reaction appeared in Germany and Italy respectively in the form of Fascism and Nazism. As a result, the bourgeoisie and the working people alike became trapped in the tentacles of a harsh, oppressive system of government. These events made the capitalist system somewhat more “liberal” and, partly under pressure from the people’s growing power and partly by their own choice, introduced the following changes into the old free economic system:

One: The right of wage earners and employees to representative organizations in every sector of economic life was duly recognized. At the same time, the opportunity to adopt certain practical arrangements, sanctioned to some extent by custom and law, was also recognized—arrangements that the unions of wage earners and employees could use to secure their demands and apply as much pressure as possible for that purpose. Thus, although the mutual conflict and tug-of-war between capital and labor did not end completely, labor was no longer helpless before capital as it had been under the free economy.

Two: Increases in wages, reductions in working hours, improvement of working conditions, restrictions on employing women and children as workers, greater attention to the life and health of wage earners, efforts to improve their homes and surroundings, compensation in the event of physical injury or loss of limbs, and the implementation of some social-security schemes—all these measures, although they did not reach the desired standard, meant that the condition of workers and lower-level employees was no longer as degraded as before.

Three: The government was accepted as judge and “arbitrator” in the mutual conflict between labor and capital. Various lawful methods and means were prescribed for removing their conflict and settling quarrels and disputes. Although this was not carried out on a very broad scale, although it was not possible on this basis to determine rights and duties fully and justly between workers and owners in every economic sector, and although the government has not yet taken judicial settlement of economic disputes into its own hands, its right and duty to do so was nevertheless acknowledged in principle.

Four: It was also accepted as a basic principle that restrictions must be imposed on the plundering pursuit of private profit so that it cannot become contrary to social and general interests. It is the government’s duty to impose such restrictions.

Five: Many governments assumed responsibility for carrying out economic activities that could not be undertaken privately, or that might damage the general interest if entrusted to individuals. These included postal and telegraph services, transport systems, road construction and maintenance, forest preservation and distribution systems, water supply and irrigation, hydroelectric generation and distribution, distribution, and monetary control. The government also took mineral resources under its own leasehold. It began operating major industries under its own management.

Six: Arrangements were made for low-income workers and employees so that they could save small amounts and purchase low-priced shares in commercial establishments and industrial companies. In many places, under special rules, employees and wage workers received part of their remuneration in cash, while another part was added on their behalf to the company’s capital. In this way, countless working employees became shareholders in the ownership of their companies or corporations. In many renowned factories, 80 to 90 percent of the wage earners and employees became participants in ownership, and because shares could easily be purchased by installments, their share in industrial enterprises continued to increase.

Remaining Defects of Capitalist Society

But even after all these changes, corrections, and reforms, the fundamental defects of capitalist society still remain just as before; they have not been eliminated in the least.

The problem of unemployment has still not been eradicated from capitalist society. Rather, except during wartime, it has become a permanent disease of capitalist society in every period and condition. In a country like America, which has touched the sky in industry, commerce, and the production of wealth, more than 3.2 million people become unemployed as soon as war-related activity declines. Between April and May of 1949, their number rose to more than 3.5 million and reached as many as 4 million in June. In reality, whether the market for business, industry, and commerce is booming or depressed, unemployment remains an indispensable part of capitalist society.

The astonishing mystery to which we previously alluded still remains obscure and unexplained. On the one hand, millions upon millions of people suffer from a lack of the means of life and livelihood and are eager even for luxury goods; limitless natural goods and materials are piled up, which could be used to produce still more goods; and there are also millions of people who could be put to work. Yet, on the other hand, under the capitalist system, even the much smaller quantity of goods it produces than the world’s needs and potential consumption remains unsold in the market. This is because people do not have the money necessary to buy them. And when even this small quantity of goods cannot be sold, there is no courage to employ more people or use more natural means and resources. And when people cannot be employed, there can be no means of creating purchasing power among them.

Not only this, another defect exists in the capitalist system. Every year, vast quantities of manufactured goods, crops, fruits, and other commodities are deliberately destroyed instead of being released onto the market. Yet millions upon millions of people remain in need of these goods. The capitalist is prepared to destroy these commodities and spend millions of taka on their destruction, but is not at all willing to release them onto the market, lower their prices, and make them available to people in need at comparatively cheap prices.

Another defect of the capitalist system is extremely serious. The state, society, the wealthy class—in short, no one—considers itself responsible for the maintenance and alleviation of the want of the hundreds of millions of needy people. Yet among them are many who, despite being able to work, are unemployed or have not yet become employable, or have become temporarily or permanently incapacitated and crippled. In capitalist society, even now only those patients whose pockets contain money are entitled to medical treatment; education is available only to the orphan boy whose father died leaving behind a life-insurance “policy.” After an accident, even now only the person whose prosperous days are past and who himself has made provision for shelter against bad times can rise again. In short, responsibility for distressed, needy and helpless people has still not been entrusted to anyone; the fact that someone may happen to receive some unusual assistance is, of course, a separate matter.

In capitalist society, commodity prices are still artificially raised; shortages of certain goods are deliberately created through properly devised plans. And this is by no means a lesser defect. The various rules and practices of unknown buying and selling and of commercial gambling continue day and night to shatter the nature of the economy as a whole. Even now, if a person can somehow accumulate sufficient capital, he may produce any commodity in whatever quantity he wishes out of greed for personal profit, and may try by any means to force it upon the people of society. Whether society needs it or not, there is no obstacle to this; even if the commodity is harmful to society, it may still be produced and sold. Even now, socially and nationally vital work is kept suspended there, while labor and capital are spent in vast quantities on producing luxury goods for amusement and pleasure, gathering materials to satisfy bestial lust, and creating mountains of comfort and ease, indulgence and sensual enjoyment. Is this not astonishing? Even now, the kings of industry and commerce and the emperors of finance employ, secretly and openly, all sorts of devices and diplomacy to advance their own interests, as a result of which the fires of international conflict, hatred and hostility, and war blaze fiercely.

Under the capitalist system, wealthy capitalists, bank owners and moneylenders still exercise authority over society and the state. They assess the entire national value by the standard of the interest rate and make it revolve in a circle around that center. Those capitalists still possess the authority to decide for what purposes capital will be spent and for what purposes it should not be spent. In making these decisions, they pay not the slightest attention to the needs and welfare of society and the nation. Rather, they look only at which activities can yield profits equal to or greater than the prevailing market rate of interest. As a result of this standard of assessment, if exporting liquor promises greater profit than supplying water or irrigation, they will not hesitate in the least to devote themselves to devising ways and means of supplying liquor to the luxurious classes, even while leaving the people thirsty for want of water.

The disease of the business cycle still afflicts the body of capitalist society. Consequently, after every period of high prices lasting several years, a cycle of depressed markets develops in the world economy. The world of trade and commerce continues to operate freely, intensely, and apparently unconcernedly; then, suddenly and unexpectedly, merchants realize that the goods accumulating in their warehouses are not going out and being sold at the proper rate. They then stop placing orders for new goods for a while. Seeing this condition, industrial producers somewhat withdraw from production. As soon as the capitalist receives this signal of danger, he stops lending and also seeks to recover the loans he previously gave. As a result, factories begin to close, unemployment increases, and commodity prices continue to fall. Merchants and buyers temporarily stop placing orders and purchasing in the hope that prices will fall still further. Factories that continue operating reduce their rate of production. Consequently, unemployment becomes even more acute. Governments, seeing their revenues decline, reduce expenditure, and the depressed market becomes still more depressed. Thus each step backward becomes the cause of still greater retreat. At last, when it approaches the brink of complete and general bankruptcy, the movement suddenly changes. Commodity prices gradually begin to rise, and a period of high prices begins again. This cycle has become a permanent disease of capitalist society. To this day, no treatment or remedy for it has been initiated.

Numerous defects, large and small, of this kind still remain in the regulated and revised capitalist system, just as they existed in the unrestrained and savage capitalist system of the nineteenth century. This clearly proves that democracy has made not the slightest effort, nor adopted any effective method, to understand and remove the fundamental causes of the inherent defects of this economic system with caution and wisdom. The only thing that has happened is that, as the pressure of the laboring masses has increased, or as the growing terror of communism has become more intense, the bourgeois class has introduced many corrections and changes into its own rules, policies and methods of action. As a result, the people’s complaints have been reduced to such an extent that the Communist deceivers have been unable to gain very much advantage.

The Lessons of History

If one casts an overall glance at the historical discussion of economic systems presented above, several important matters will become clearly evident to everyone.

First of all, this discussion makes clear the economic history of Western countries and the combined problems and complexities of our present collective life. It is seen that the feudal-landholding system is still present here in person and in full vigor, with many distinctive features. Alongside it, modern capitalism has also raised its head with many kinds of defects. Some diseases we inherited from the era of our decline. Others reached us through the Industrial Revolution and the capitalist system of the West. The only difference is that no papacy or ecclesiastical domination exists here. Nor is there any priest class that could form an alliance with the wealthy and, invoking Allah and religion, assist and support unjust privilege, distinction and coercive rights.

Every reader can learn from the foregoing historical discussion where the amusing proposals constantly put forward by our country’s so-called dignitaries to solve the problems and complexities of the country and society originate. We hear that some describe the importance of social planning, some express a desire to make “revolutionary” changes in the country’s economic system, some say that the fields and lands must be freed from private ownership and converted into national ownership, while from another direction arises the call for nationalizing all heavy industry. Some inexperienced “doctor,” after newly conducting deep thought and research, presents the extraordinary prescription of abolishing private ownership of land. All of these things have merely been stolen from the rough notebooks of the inept thinkers of Western countries. Attempts are now being made here to implement precisely those experimental plans that were previously tried in Russia, Germany, Italy, America and England. Yet there is one difference in our resemblance to them. Even the inept people of those countries are independent thinkers. But the dignitaries of our country have merely opened shops selling medicines. They are inept, and at the same time blind followers and imitators of others like themselves. When the inept people of Western countries see harm occurring, they will revise the original prescription itself. Here, unless news arrives from that country of some change—which is a separate matter—the doctors will continue administering medicine according to the same prescription until the patient reaches his final death throes. They will feel no need to alter it in the slightest.

Another matter has become very conspicuous in the history of Western society, civilization, culture, thought, research and activity. In a word, that history is a history of ceaseless conflict and struggle, tug-of-war, quarrels and disputes, and wars. One group takes control of the field of life and begins pulling morality, religion, law, customs, and the entire system of society and culture in a particular direction. As a result, the utmost injustice is inflicted upon the other group. Later, one of these oppressed groups raises its head and creates conflict and confrontation with the oppressors. Along with explicitly rejecting their evil deeds, it also rejects the importance of their good deeds, turning the entire system of thought, research and action back from the first extreme and carrying it to the opposite end. Thus an extreme situation of oppression and injustice arises. Then, passing beyond the stage of complaint and attack, a third revolt emerges. The current of hatred, hostility and obstinacy sweeps away truth along with falsehood. Ultimately, a system more extreme than that of its predecessors is established. Seeing the violence and destructive devastation of this current and flood, another counter-storm arises in the opposite direction. They too are no less extremist than those before them. Because of this tug-of-war, Western history appears to advance as though a drunkard were crossing a road with staggering steps in a crooked, stealthy manner, rather than walking with parallel, firm steps like a conscious person of sound judgment. Hegel and Marx, observing this scene, assumed that this must be the natural pattern of the development of human civilization and culture. In reality, however, all of this is the consequence of one single thing: the people of the West have long been living without Allah’s law and Allah’s light. The Christian doctrine they received through Saint Paul had already become separated from the original Shariah. Apart from a few valuable words of admonition from Jesus (peace be upon him), they possessed no part whatsoever of Allah’s guidance. Consequently, their culture, economy and politics had no divine foundation on which to build a vast, magnificent palace. The Bible’s Old Testament contained only two percent of Allah’s law mixed with ninety-eight percent of man-made words. For this reason, even if they later turned toward it with half-belief and half-disbelief, they were still unable to obtain any particular guidance from it. Islam had been presented before Europe immediately after the Roman Empire was shattered and at the very beginning of the medieval darkness. But Europe, which had agreed to accept Christianity on the condition of being freed from the bonds of the Shariah, could not in the least turn toward or advance toward Islam in order to obtain guidance. For Islam is not at all prepared to offer merely religion and faith while excluding the Shariah. For this reason, and partly because of the malicious hatred and hostility instigated by Christian priests, Europe was unable to receive the flood-like light of Islam. Thereafter, the Europeans had no alternative but to devise a way of life and system for themselves solely from their own intellect and conscience. In practice, that is what they did. But human beings are not at all capable of reaching purely intellectual decisions. It is clear and universally known that, alongside the intellect, the misleading Satan of desire remains constantly attached to a person. Nor is it unknown to anyone that humanity as a whole does not collectively devise a system of life. A few gifted and alert-minded people devise a way of life. Consequently, such a way of life can seem suitable and acceptable only to people possessing an ideological disposition like theirs. For precisely this reason, all the systems and ways of life devised in Europe from time to time have been unbalanced. As an inevitable result of this imbalance, conflict, struggle and tug-of-war continue to rage intensely in that land.

But in reality, no book has at all been given to us in this world to dispel the fog of ignorance regarding any kind of guidance and thought, belief, true knowledge and science, or way of life. The ignorance of the ancient Hindus, the Hegelian system of government of the Middle Ages, and modern Western civilization and culture have combined, united and blended to confront us with the complex problems we face. In order to solve them, must we too adopt the means and methods that communism, Nazism, fascism and capitalism have adopted in the Western countries? Besides, is there truly no alternative for us? Is there really no torch of light with us by which we can devise a harmonious system of life?

Anyone who has even the slightest understanding and knowledge of Islam can never answer yes to this question.

The Real Problem—The Real Complexity

How can we properly solve these problems on the basis of Islamic ideals and principles? To understand this, we must first clearly understand what problem and what complexity we, as inhabitants of the world at the present time, are actually facing. In brief, the nature of that complexity—that problem—is this:

If we too adopt an economic system in which every individual may freely control the means of production according to his own wishes and desires, may strive and labor as he pleases to fill his storehouse of personal profit to the brim, and in which the establishment of justice and fairness in society depends entirely upon competition, disruption and reconstruction, and established laws, then all the defects attributed to the capitalist system will inevitably arise, and all the previously discussed defects of the feudal-landholding system will inevitably raise their heads in our society. [Note: This has been discussed in detail in the article entitled “Modern Capitalism.”]

On the other hand, if we abolish the principle of private ownership and place all the means of production under national ownership and authority, most of these defects will certainly disappear. But, first, this fundamental change cannot possibly be achieved without immeasurable waste and destruction of lives and property and, exactly as in Russia, an open declaration of rebellion against religion and morality. Second, even if it is assumed that this could be done in a very peaceful and constitutional manner, there can still be no doubt that national ownership and the totalitarian policy (socialism) completely abolish individual freedom. Establishing socialism through constitutional and democratic means is in reality equivalent to bringing democracy to its final end with the help of democracy. For democracy to function properly, it is absolutely essential that a large number of people in society and the nation be independently earning their livelihoods. Under socialism, however, the exact opposite condition arises: all people possessing independent professions and means of livelihood are deprived of them forever. In fact, whichever department of the economy is placed under national ownership, all its employees will be just like government servants. No one is unaware of how much freedom of expression and action government employees in every country enjoy. As this policy is increasingly altered and expanded in the economic sphere, there can be no doubt that the scope of freedom of thought, speech, assembly, organization, writing and publication, and action will become increasingly restricted and narrower. Gradually, on the day when the entire economy has been completely nationalized, every inhabitant of the country will become a government employee. And the very nature of such an all-encompassing system is that once any group comes to power, it will never again be possible to remove it from power.

Instead of abolishing an economic system incorporating private ownership, if we impose firm government control upon it and operate the entire national economy according to a centralized plan—as in fascism and Nazism—many kinds of defects of the capitalist system can be remedied. But even this degree of control may prove fatal to individual freedom. Its result will in practice undoubtedly be similar to that of socialism.

But if, while leaving the capitalist economic system established upon its fundamental foundations, we impose some modifications upon it—as is still practiced in countries such as America and England—democracy and private ownership may remain in place, but not one of the major causes for which the capitalist economic system has become a grave danger and a great curse to the world will be removed.

In other words, if on one side there is a vast yawning well, then directly on the other side there is a vast pit. If a system of collective welfare is adopted, individual freedom comes to an end. And if individual freedom is preserved, collective welfare is obstructed and shattered. The world has not yet found a system of life under which the Industrial Revolution can properly continue, with all its contributions and beneficial results, continue to grow, and allow both individual freedom and overall social welfare to operate together, at the same time, in complete balance. Indeed, the future of the world depends upon finding such a system of life. If it truly proves impossible to find, the people of the world will commit suicide with the pistol of the Industrial Revolution. But if it can truly be found, then whichever country can present a successful form of it before the world will be the undisputed leader of the world of the future.

The Fundamental Principles of the Islamic Economic System

Islam has adopted an economic plan midway between communism and capitalism. According to this plan, it lays between the individual and society certain moral and practical foundations for building a social edifice, so that these foundations may firmly support the edifice of Islamic economics upon their own base. For this purpose, it properly cultivates the mind and character of every individual in society and seeks to create within them the correct outlook that is essential among those who operate this balanced economic system. Islam imposes certain limits and obligations upon individuals so that they may not harm the collective interest but may positively benefit and assist it. Islam also establishes in society certain rules and principles that eliminate the causes destructive to economic life.

Indeed, in order to properly comprehend the solution Islam has presented for removing modern economic complexities, it is essential to understand the foregoing fundamental principles of the Islamic economic system.

One: Distinguishing Permissible from Impermissible Means of Earning Wealth

The first point is that Islam has not provided its followers with an unrestricted, open opportunity to acquire wealth. Rather, among the means and methods of earning, it has established a distinction between permissible and impermissible, lawful and unlawful, from the standpoint of national and collective interest. This distinction has a particular fundamental principle: all methods and means of earning wealth in which one person’s gain causes harm to another person or persons have been declared impermissible. Whatever ensures that profit and benefit are distributed fairly among the parties concerned is lawful and sound. This fundamental principle has been stated in the Qur’an as follows:

بأَيُّهَا الَّذِينَ آمَنُوا لَا تَأْكُلُوا أَمْوَالَكُم بَيْنَكُم بِالْبَاطِلِ إِلا أَنْ تَكُونَ تِجَارَةًعن تراض مِنْكُمْ قد وَلَا تَقْتُلُوا أَنْفُسَكُمْ ، إِنَّ اللَّهَ كَانَ بِكُمْ رَحِيْمَانَ وَمَنْ يفعل ذلك عنوانًا وظُلْمًا فسوف تصليه نارا – – النساء : ٢٩-٣٠

“O believers! Do not consume one another’s wealth unlawfully among yourselves. All transactions must take place by mutual consent and agreement. And do not kill yourselves. Surely Allah is ever Merciful to you. Whoever transgresses the limits and does such a deed unjustly, We shall cast him into Hell.” —Surah al-Nisa’: 29–30

This verse declares that transactions with one another can be valid subject to two conditions. First, all transactions must be completed on the basis of mutual satisfaction and consent. Second, the transaction must not preserve one person’s benefit and interest while causing harm and misfortune to another. In this sense, the phrase “Do not kill yourselves” is highly meaningful and profound. It can have two meanings, and both are intended here: first, do not kill one another; and second, do not destroy yourselves. In other words, the person who harms another for his own interest is as though he is drinking that person’s blood, and ultimately opening the way to his own final destruction. In theft, bribery, gambling, fraud and deception, interest, and every kind of business prohibited in Islam, these two causes of unlawfulness are fully present. Although in some cases there may be some scope for mutual consent, the other conditions contained in the phrase “Do not kill yourselves” mentioned in the verse are absent there (rather, such transactions cause self-destruction).

Two: Prohibition of Hoarding Wealth

The second important command is that wealth earned through lawful means must not be accumulated and turned into capital. For this blocks the circulation of wealth and prevents balance from being maintained in the distribution and expansion of wealth. By accumulating and capitalizing wealth, a person does not merely become afflicted with a serious moral disease; in reality, he commits a grave crime against the whole of human society. As a result, his own extreme misfortune begins. That is why the Qur’an is strongly opposed to stinginess and the Qarun principle. The Qur’an says:

ولا يَحْسَبَنَّ الَّذِينَ يَبْخَلُونَ بِمَا أَنَّهُمُ اللَّهُ مِنْ فَضْلِهِ هُوَ خَيْرًا لَّهُمْ بَلْهوَ شَرٌّ لَّهُمْ – – ال عمران : ۱۸۰

“Those who are stingy with the bounty Allah has granted them should not think that this is good for them. Rather, it is very bad for them.” —Surah Al ‘Imran: 180

وَالَّذِينَ يَكْذِرُونَ الذَّهَبَ وَالْفِضَّةَ وَلَا يُنْفِقُونَهَا فِي سَبِيلِ اللَّهِفيشر هم بعذاب اليمن – التوبة : ٣٤

“Give those who hoard gold and silver (money) and do not spend it in the way of Allah the news of a painful punishment.” —Surah al-Tawbah: 34

This strikes a severe blow at the foundation of capitalism. Keeping surplus money hoarded and not investing accumulated wealth in producing more wealth is the basic creed of capitalism. Islam, however, does not approve at all of keeping wealth exceeding one’s needs as capital and savings.

Three: The Command to Spend and Invest

Instead of hoarding wealth, Islam commands that it be spent and invested. But the command to spend never means that people should use this opportunity to squander money on personal ease, comfort, luxury and extravagance, or on satisfying their lusts. The command to spend is conditional upon its being “in the way of Allah.” That is, whatever surplus a person has beyond his own needs must be spent and invested for the welfare of the nation and the community. For this is the way of Allah.

ويَسْئَلُونَكَ مَاذَا يُنْفِقُونَه قُل العقود – البقرة : ۲۱۹

“They ask you what they should spend. Say: whatever is beyond your needs and in surplus.” —Surah al-Baqarah: 219

وبالوالدين إحسانًا وبذي القربى واليتمى والمسكين والجاردي القربى والجَارِ الْجُنُبِ َالصَّاحِبِ بِالْجَنبِ وَابْنِ السَّبِيلِ ، وَمَا مَلَكَتَْيْمَانُكُمْ – – النساء : ٣٦

“Deal kindly with your parents, close relatives, orphans and needy people, near and unrelated neighbors, companions, friends, travelers and slaves.” —Surah An-Nisa: 36

وَفِي أَمْوَالِهِمْ حَقٌّ لِلسَّائِلِ وَالْمَحْرُومِ . – الذاريات : ١٩

“And in their wealth there is a right for the beggar and the deprived.” —Surah Adh-Dhariyat: 19

At this point, Islam’s viewpoint is wholly distinct—entirely different—from the capitalist viewpoint.

The capitalist believes that spending wealth inevitably leads to poverty, and that becoming wealthy is possible only by saving it. But Islam declares that spending brings blessing and increases prosperity; wealth will not be depleted or diminished, but will continue to grow.

الشيطنُ يَعِدُكُمُ الْفَقْرَ وَيَأْمُرُكُمْ بِالْفَحْشَاءِ وَاللَّهُ يَعِدُكُمْ مَّغْفِرَةً مِّنْهُوفضلاً – – البقرة : ٢٦٨

“Satan threatens you with poverty and deprivation and urges you toward shameful deeds such as miserliness. But Allah promises you forgiveness and added bounty.” —Surah Al-Baqarah: 268

Islam holds that what is spent does not perish; its better benefit returns to you.

ومَا تُنْفِقُوا مِنْ خَيْرٍ يوف اليكم وانتم لا تُظْلَمُونَ – البقرة : ۲۷۲

“Whatever good you spend will be repaid to you in full, and you will never be wronged.” —Surah Al-Baqarah: 272

وَانْفَقُوا مِمَّا رَزَقْتُهم سراً وعلانية يُرْجُونَ تِجَارَةً أَنْ تَبُورَ ، لِيُوفِّيهمأجورهم ويزيدهم من فَضْلِهِ – – فاطر : ۲۹-۳۰

“Those who spend, openly and secretly, from the wealth We have given them, hoping for a trade that will never suffer loss—Allah will grant them their reward in full.” —Surah Fatir: 29–30

Capitalists believe that accumulating and capitalizing wealth and investing it in interest-bearing transactions will yield substantial profit and increase the amount of wealth. Islam says this is incorrect: in interest-bearing transactions wealth instead diminishes; the proper way to increase wealth is to spend it on good works.

يَمْحَقُ الله الربوا وَيُربي الصدقت – – البقرة : ٢٧٦

“Allah obliterates interest and causes charity to increase.” —Surah Al-Baqarah: 276

ومَا أَتَيْتُمْ مِنْ رِبًا لِيَرْبُوا فِي أَمْوَالِ النَّاسِ فَلَا يَرْبُوا عِنْدَ اللَّهِ ، وَمَاَتَيْتُمْ مِنْ زَكَاةٍ تُرِيدُونَ وَجْهَ اللَّهِ فَأُولَئِكَ هُمُ الْمُضْعِفُونَ

“Whatever interest you give, hoping that it will increase people’s wealth, does not increase with Allah. But whatever wealth you give as zakat, seeking Allah’s pleasure—those are the ones who receive manifold increase.” —Surah Ar-Rum: 39

Indeed, this is a novel Islamic ideology, completely opposed to capitalist ideology. That wealth increases through spending, and money spent is not destroyed but is received in full with additional profit and benefit; whereas wealth does not increase through interest-bearing transactions but instead diminishes; and that wealth increases rather than decreases through zakat and charity—this is an ideology that appears extremely astonishing outwardly. The listener is led to think that these statements perhaps concern only the reward of the Hereafter. There is no doubt that they are also related to reward in the Hereafter. There is likewise no doubt that, from Islam’s perspective, this is their true value and importance. But deeper reflection shows that this kind of ideology rests on an extremely strong and firm foundation even from the worldly economic viewpoint. The inevitable result of accumulating wealth and employing it in interest-bearing transactions is that wealth gradually becomes concentrated in the hands of a few individuals, while the purchasing power of the greater number of inhabitants steadily declines; industry, commerce and agriculture fall into depression; the nation’s economic life approaches ruin; and ultimately capitalism has no opportunity to invest its accumulated wealth in productive work. [Note—This alludes to a hadith in which the Noble Prophet (peace be upon him) said:

ان الربا وان كثير فان عاقبته تصير إلى اقل

“No matter how large the amount of interest, in the end it is bound to become smaller.” —Ibn Majah, Bayhaqi, Ahmad]

The outcome of the Islamic economic system is the opposite. Under this system, the result of spending wealth and giving zakat and charity is that wealth is spread and distributed among every person in the nation, and everyone can attain sufficient purchasing power. Industrial production increases, the fields and farms become green with crops, and trade and commerce flourish remarkably. Even if no one in this society becomes a millionaire, there is no harm; for everyone here will be prosperous and comfortable, and life will be secure and happy. To understand the truth of this economically beneficial ideology, one may observe the present economic condition under the capitalist system, where the balance of wealth distribution has been destroyed solely because of the interest system. The depression in industry and commerce has brought the people’s economic life to the brink of destruction. On the other hand, consider the condition of the early Islamic society. When the Islamic economic system became fully established there, the people’s financial prosperity rose to a very high level within only a few years. People began looking for those eligible to receive zakat. Yet they could find very few who were eligible to receive zakat rather than eligible to pay it. A comparative examination of these two opposite conditions makes it perfectly clear how Allah “destroys interest and causes zakat and charity to advance and develop.”

The attitude Islam creates among the people is completely opposite to the capitalist mentality. A capitalist cannot even conceive of giving his money to another without interest. In return for lending, he not only takes interest; to recover the principal and interest, he does not hesitate even to seize the borrower’s clothing and household utensils. But Islam’s teaching is entirely the opposite. Islam teaches people not merely to lend to the needy and those in want, but, if the person truly becomes financially constrained, not to be at all strict in demanding repayment of the loan. Indeed, if he has no ability to repay it, forgive him.

وَإِنْ كَانَ نُو عُسرة فنظرة إلى ميسرة ، وَأَنْ تَصَدِّقُوا خَيْرٌ لَّكُمْ إِنْ كُنتُمْ تَعْلَمُونَ – البقرة : ٢٨٠

“If the debtor is in hardship, grant him respite until his circumstances improve. And if you forgive the debt, that is better for you. If you had knowledge, you would understand its benefit.” —Surah Al-Baqarah: 280

In capitalist society there is a system of mutual assistance; but its method is that one must first become a member of a cooperative by contributing money to it. Then, when necessary, the organization will lend a member money at a rate lower than the prevailing interest rate. If one has no money of one’s own, no one can receive any assistance from such a cooperative. Islam’s concept of “mutual assistance” is entirely different. Those who have means and are prosperous must, in times of need, not merely lend to those less capable than themselves, but also help them, for Allah’s sake, with repayment of the loan. That is why one of the specified categories for zakat expenditure is “al-Gharimin”—the repayment of the debts of debtors.

Even when a capitalist spends money on a good cause, ostentation and the pursuit of fame and reputation remain powerful motives behind it. For a narrow-minded person, gaining at least reputation, renown, popularity, influence and prestige in exchange for spending money becomes essential and extremely important. But Islam has instructed that there should be no attitude of ostentation in spending money. Whatever you spend, publicly or secretly, you should not immediately intend to gain some kind of return for it. Rather, you must focus your attention on the outcome of the deed. As far as your sight reaches—from this world to the Hereafter—you will see your spending flourishing and bearing fruit, gaining profit after profit. Indeed, “the example of one who spends his wealth merely to show off is that of a stony ground covered with soil, on which seed has been sown. Then a stream of water comes and washes away all the soil. But the example of one who spends his wealth with a sound intention, seeking Allah’s pleasure, is that of a garden planted on good fertile land. When rain falls, it yields double produce; even when no rain falls, a drizzle is sufficient for it.”

إِنْ تُبْدُوا الصَّدَقْتِ فَنِعِمَّا هِيَ ، وَإِنْ تُخْفُوهَا وَتُؤْتُوهَا الْفُقَرَاء فَهُوَخَيْرٌ لَّكُمْ – – البقرة : ٢٧١

“If you give charity openly, that is good; but if you do so secretly and deliver it to the poor, that will be better for you.” —Surah Al-Baqarah: 271

Even when a capitalist performs a good deed, he does so most unwillingly, trying to get rid of the worst-quality goods. And after giving something to someone, he half kills him through bitter verbal reproaches. Islam does not support this in the least. Islam tells people to spend the better and finest goods for Allah, and forbids them, after giving something to anyone, from reminding that person of their favor. Indeed, it is entirely improper even to wish inwardly that someone who has benefited from your charity should express indebtedness to you.

انْفِقُوا مِنْ طَيِّبَتِ مَا كَسَبْتُمْ وَمِمَّا أَخْرَجْنَا لَكُمْ مِّنَ الْأَرْضِ مَن وَلَا تَيَمَّمُواالخبيث مِنْهُ تُنْفِقُونَ – البقرة : ٢٦٧

“Spend, in Allah’s way, from the good things you have earned and from what We have produced for you from the earth. Do not deliberately spend the worst of it.” —Surah Al-Baqarah: 267

لا تُبْطِلُوا صَدَقَتِكُمْ بِالْمَنِّ وَالأذى ٧ – البقرة : ٢٦٤

“Do not invalidate your charities by reminding others of your favor and causing them harm.” —Surah Al-Baqarah: 264

يُطْعِمُونَ الطَّعَامَ عَلَى حُبِّهِ مِسْكِينًا وَيَتِيمًا وَأَسِيرَانِ إِنَّمَا نُطْعِمُكُمْ لوَجْهِ اللَّهِ لَا نُرِيدُ مِنْكُمْ جَزَاءً وَلَا شُكُورًا – الدهر : ۸-۹

“They give food, despite their love for it, to the needy, the orphan and the captive, saying: We feed you only for Allah’s pleasure. We do not seek from you any recompense, reward or thanks.” —Surah Ad-Dahr: 8–9

Let us set aside the difference between these two kinds of mentality from the purely moral viewpoint; even from the purely economic viewpoint, one may judge which ideology, among these approaches to profit and loss, is stronger and more far-reaching, and which is sounder and more accurate in its consequences. Moreover, when Islam’s view of profit and loss, harm and benefit, is what has been described above, how could Islam tolerate interest-bearing transactions in any form? How could that possibly be?

Four: Zakat

As I have said before, Islam aims to prevent wealth from becoming concentrated and accumulated in any one sphere. Its instruction is that those members of the nation who, through superior ability or good fortune, have acquired more wealth than they need must not keep it capitalized with themselves. Rather, it is their duty to spend it. It must be spent in such fields and sectors that, through the circulation of wealth, the less fortunate members of society can obtain sufficient resources. For this purpose, Islam seeks, on the one hand, through the effective means of moral instruction, encouragement and warning, to create a sincere spirit of generosity and genuine mutual assistance. Thus people will naturally come to detest hoarding wealth and become more eager and enthusiastic to spend it. On the other hand, Islam has also laid down certain laws, whose basic purpose is that, despite these excellent teachings and exhortations concerning generosity, those who, influenced by a crooked disposition, become more accustomed to plundering money and hoarding wealth, or those in whose possession wealth accumulates in some way, must have at least a specified portion of it taken out for expenditure on the welfare of the people. This is zakat. Zakat is so important in Islam’s economic system that it has been counted as one of Islam’s pillars. Immediately after salat, the greatest emphasis has been placed on it. It has been stated plainly that wealth accumulated and collected by a person can in no way be halal unless zakat is properly paid from it.

خُذْ مِنْ أَمْوَالِهِمْ صدقة تطهر هم وتزكيهم بها – التوبة : ١٠٣

“Take zakat from their wealth and thereby purify and sanctify them.” —Surah At-Tawbah: 103

The word zakat itself establishes that if the owner does not spend at least two and a half percent of the wealth accumulated by a wealthy person each year in Allah’s way, it can never be halal for him.

What does the expression “in Allah’s way” mean? Allah is above all need and self-sufficient. No wealth reaches Him, nor is any wealth at all necessary for Him. His way is that the wealthy person, by spending his own money, should strive to make the poor and needy prosperous and should spend and invest it in advancing beneficial works whose benefit the entire nation, without distinction, can enjoy.

انما الصدقات للفقراء والمسكين والعملينَ عَلَيْهَا وَالْمُؤَلَّفَةِ قُلُوبُهُمْوفِي الرِّقَابِ وَالْغَارِمِينَ وَفِي سَبِيلِ الله وابن السبيل – التوبة : ٦٠

“Charity and zakat are primarily for the poor and needy, those employed to collect them, those whose hearts are intended to be won over, the freeing of people from bondage, debtors, spending in Allah’s way, and travelers in distress.”

Indeed, this is the Muslims’ cooperative mutual-aid organization. It is also their “life insurance.” It serves as their provident fund as well. It is the assistance fund accumulated for their unemployed and income-less people, and the means of caring for their disabled, crippled, invalid, sick, orphans and widows. Above all, zakat is a system that frees a Muslim entirely from anxiety about the future. Its simple rule is this: those of you who are prosperous now should help others. If in the future you become poor, others will help you. No one needs to be anxious and burdened with thoughts about what will happen if he becomes poor, what will become of his wife and children if he dies, what will happen if a sudden calamity strikes, if he falls ill, if his house burns down, if he is swept away by a flood, or if he becomes bankrupt—how he will face these grave hardships—or what will happen if he is left without provisions in a foreign land and how he will manage to live. For zakat alone can free people from all such anxieties and make them secure. Their only duty is to give two and a half percent of their accumulated wealth and insure themselves through Allah’s life-insurance company. For now, they can manage without this money. It will be spent for the welfare of other needy people. And if in the future they themselves become needy, or their children fall into severe poverty, not only the wealth they gave but much more than it will be returned to them.

Here again, a fundamental conflict and disparity can be seen between the rules and methods of capitalism and Islam. Capitalism aims to collect and accumulate wealth and to take interest for its further increase, so that the wealth scattered among people becomes concentrated and accumulated in one place in the hands of such persons.

Islam’s aim is directed entirely in the opposite direction. Islam’s aim is, first, that wealth should not become concentrated and capitalized in one center at all. If it does become so, then a stream of zakat must flow from its reservoir, so that the dry and barren fields all around may be irrigated and the entire land in every direction may become green with crops and full of flowers and fruits. In capitalist society, the circulation of wealth is blocked and its field restricted; in Islam, it is free, unrestricted and unimpeded. To draw water from the reservoir of wealth in capitalist society, one must already have one’s own “water” stored there. Otherwise no one can obtain even a drop from it. But the rules of Islam’s water reservoir are entirely opposite. Whoever has excess water must pour it into the reservoir, and whoever needs it may take water from there. It is clear that these two systems and methods are opposed in their very foundations and nature, and that they can never be combined within the same economic system.

Five: The Law of Inheritance

Even after personal needs have been met, spending in Allah’s way and paying zakat, whatever wealth becomes accumulated in one place, Islam has adopted a special method for dispersing and distributing it. That special method is the “Law of Inheritance.” The aim of this law is to divide abandoned property—whether small or large—into portions and distribute it among near and distant relatives according to their categories. Even if a person has no heir, or no heir can be found, he may not be allowed to keep the property concentrated by appointing an adopted son; his property will be deposited in the Bayt al-Mal of the Muslims so that the whole nation may benefit from it. No other economic system has an inheritance law like the one found in Islam. The aim of other economic systems prevalent in the world is to keep wealth confined to one person or a few persons [Note—the purpose of the Law of Primogeniture and the Joint Family System is also this]. But Islam does not approve of keeping wealth concentrated and accumulated. Its aim is to disperse it, spread it among many people, and thereby facilitate the circulation of wealth.

Six: Distribution of Ghanimah, or the Spoils of Victory

Islam’s aim is fully operative in the distribution of ghanimah and conquered property as well. Regarding the wealth captured by soldiers in an Islamic war, the law provides that it be divided into five parts. Four parts are distributed among the soldiers, while one part is deposited in the Bayt al-Mal to be spent on general national welfare.

وَاعْلَمُوا أَنَّمَا غَنِمْتُمْ مِّنْ شَيْءٍ فَإِنَّ لِلَّهِ خُمُسَهُ وَلِرَّسُولِ وَلِذِي الْقُرْبي واليتمى والمسكين وابن السبيل – – الانفال : ٤١

“Know that whatever spoils you capture, one-fifth belongs to Allah, His Messenger, close relatives, orphans, the needy and helpless travelers.” —Surah Al-Anfal: 41

The share of Allah and His Messenger means the share designated for social purposes and the general welfare. In accordance with the commands of Allah and His Messenger, it is entrusted to the Islamic government.

The special reason for reserving a share of the spoils for the close relatives of the Messenger is that they were given no share from zakat. In addition, within this one-fifth, specific shares have been reserved for three further categories:

a. The orphan children of the nation. Their education and training will be arranged from this, and it will be spent on making them capable of taking part in the efforts and struggles of life.

b. The needy, widows, the crippled, disabled, sick and poor—all such people are included in this category.

c. Travelers and foreigners. Through its moral teachings, Islam creates among people a special spirit of honoring guests. In addition, the rights of travelers are recognized in zakat, charity and the spoils obtained in war. Indeed, this is a highly important institution in Islam. In Muslim countries, travel for trade, tourism, education, study, and visiting monuments and historical remains is thereby made easier.

A special law has been enacted to keep all lands and property that come under the control of the Islamic state as the state’s own property as a result of war.

ما أَفَاءَ اللَّهُ عَلَى رَسُولِهِ مِنْ أَهْلِ الْقُرَى فَلِلَّهِ وَلِرَّسُولِ وَلِذِي الْقُرْبي واليتمى والمسكين وابن السبيل ( كى لا يَكُونَ دُولَةً بَيْنَ أَغْنِيَاء مِنْكُمْ . الفُقَرَاءِ الْمُهَاجِرِينَ الَّذِينَ أُخْرِجُوا مِنْ دِيَارِهِمْ … وَالَّذِينَ تَبَوَّهُ الدَّارَ والإِيمَانَ مِنْ قَبْلِهِمْ …. وَالَّذِينَ جَاءُوا مِنْ بَعْدِهِمْ – الحشر : ٧-١٠

“Whatever wealth Allah has granted His Messenger from the inhabitants of the towns is reserved for Allah, His Messenger, the Messenger’s close relatives, orphans, the needy and travelers………. The purpose is that this wealth should not circulate only among the wealthy of you. ……… A share also belongs to the needy Muhajirs who were expelled and exiled from their homes and property. ……. A share also belongs to those who accepted faith in Madinah before the arrival of the Muhajirs. And a share belongs to future descendants who will come later.” —Surah Al-Hashr: 7–10

The field of expenditure for the wealth acquired as fay has been clearly described in the above verse. Not only that, the purpose has also been expressed in clear language—a purpose that stands before Islam not merely regarding the distribution of fay wealth, but throughout the entire economic system. And that is:

كي لا يَكُونَ دُولَةً بَيْنَ الْأَغْنِيَاء مِنْكُمْ.

“So that all wealth may not remain confined only among the rich among you.” —Surah al-Hashr: 7

This was stated in the Holy Qur’an in a very brief phrase; nevertheless, it is the foundation stone of the edifice of the Islamic economic system.

Seven: The Command to Adopt a Moderate Policy

On the one hand, Islam has arranged for wealth to circulate among the members of the nation and for the poor to share in the affluence of the rich (a detailed account of this was presented earlier); on the other hand, Islam has instructed every individual to adopt moderation and frugality in spending money. The purpose is that, by adopting frugality and moderation in expenditure, individuals will not disrupt the balance of wealth distribution through narrowness or excess—through stinginess or wastefulness—in using their financial means and resources. The Qur’an’s comprehensive teaching on this matter is stated in the following verse:

ولا تجعل يدك مغلولة الى عنقك ولا تبسطها كُلَّ الْبَسْطِ فَتَقْعُدَملوما محسورا – بنى اسرائي : ٢٩

“Do not keep your hand tied to your neck; nor extend it completely open. Otherwise you will be left blameworthy and regretful.” —Surah Bani Isra’il: 29

وَالَّذِينَ إِذَا أَنْفَقُوا لَمْ يُسْرِفُوا وَلَمْ يَقْتُرُوا وَكَانَ بين ذلك قومًا .

“The righteous servants of Allah are those who, when they spend, are neither wasteful nor miserly. Rather, they follow a firm course between these two extremes.” —Surah al-Furqan: 67

The purpose of this Qur’anic teaching is that every person should spend within the limits of his means and earnings. He should neither ever exceed those limits nor spend more than his income, until eventually he is compelled to stretch out his hand at another’s door because of his unnecessary expenditure. He should not deprive others of their livelihood and employment, nor borrow from people without genuine need. Nor should he take loans from others and fail to repay them, or become so deeply indebted that, in order to settle the debt, he spends all his financial means and resources and, as the consequence of his own actions, places himself among the poor and destitute. There is no doubt that this is an extremely tragic condition.

On the other hand, one should not be excessively miserly either. It is entirely improper not to spend as much as one’s financial means and resources permit. Moreover, spending within the limits of one’s income does not mean that, if one earns well, one should spend all one’s earnings on personal comfort, luxury, and splendor. For then one’s relatives, friends, and neighbors would live amid extreme hardship while one remained immersed in such luxury. Such selfish expenditure is also regarded in Islam as the height of wastefulness.

وات ذا القربي حقه والمسكين وابن السبِيلِ وَلا تُبَذِّرْ تَبْنيران انالمُبَذِّرِينَ كَانُوا إِخْوَانَ الشَّيطين ، وَكَانَ الشَّيْطَنُ لِرَبِّهِ كَفُورًا.

“Give your near relative his due, and the indigent and the traveler as well. Do not spend wastefully. Indeed, the wasteful are brothers of Satan, and Satan is ungrateful to his Lord.” —Surah Bani Isra’il: 26–27

Islam did not stop at merely imparting moral instruction in this matter; it did not consider saying only this sufficient. It also enacted the necessary laws to prevent the vile forms and manifestations of stinginess and wastefulness, and sought to eliminate all customs and practices that disturb the balance of wealth distribution. Islam declared gambling haram. It completely prohibited drinking alcohol, amusements, expenditure on entertainment and merriment, and many other extravagant bad habits, because their inevitable result is the waste of time and wealth. Islam does not allow the natural attraction of music and singing to reach the point where, along with giving rise to various moral and spiritual faults, it becomes a cause of disruption in economic life. It also regulates the display of form and beauty within particular limits. The rules reported from the Noble Prophet (peace be upon him) concerning highly valuable clothing, jewelry set with diamonds and precious stones, vessels made of gold and silver, pictures, and statues contain great benefit and profound wisdom. A major and important beneficial principle in this matter is that wealth which could be spent to meet the minimum needs of countless poor brothers, and could provide the goods and articles essential to their lives, should not be spent merely on one’s own body and household furnishings; such spending is truly no sign of good taste. Rather, it demonstrates sheer cruelty and vile selfishness. In short, through both moral instruction and penal legislation, Islam inspires people to live a simple and uncomplicated life. The simple life Islam encourages does not allow the sphere of human needs and gratification of desires to expand so far that a person cannot live at an average standard on his income and must instead exceed his natural limits and seek a share in other people’s livelihoods and means of earning. Nor can it allow a person who is able to earn more than an average amount to spend all his wealth on himself, leaving no possibility of spending anything from it on those who earn less than average.

The Islamic Solution to Modern Economic Problems

In discussing “The Lessons of History,” we mentioned certain economic problems. At this stage, we shall discuss how those problems can be solved on the basis of the principles presented by Islam. In this connection, we consider it necessary first to keep several fundamental truths in mind.

Several Fundamental Truths

To understand the Islamic social order correctly, it is first necessary to know that, from the Islamic point of view, the primary importance belongs to the individual, not to society, the nation, or the collective. In reality, the individual does not exist for the nation or the collective; rather, the collective or nation exists for the individual. Before Allah, a society, nation, or collective will not be held accountable as a whole; each individual, as a distinct person possessing full individual dignity, will be responsible and compelled to answer for himself. The whole moral value and dignity of human beings rests upon this foundation of individual responsibility and accountability. The fundamental aim of social life is not merely collective welfare; in reality, the welfare of the distinct individual is what is sought. The true criterion by which a social system is judged good or bad, beneficial or disastrous, is the answer to the question of how far it helps and facilitates—or obstructs—the development and advancement of individuals as distinct persons and the expression of their personal abilities and capacities for work. For this reason, Islam cannot accept as proper any form of social organization or any arrangement made in the name of collective welfare that would compel individuals to lose their individuality and cause vast populations to become confined like parts of a machine in the hands of a handful of rulers.

Without absolute freedom of thought and action, the individuality of the human person cannot develop properly, nor can his personality be correctly expressed. For this purpose, freedom of opinion, writing and speech, striving and endeavor, and forming assemblies, conferences, and organizations is not enough; freedom of earning a livelihood is equally necessary. This is such a natural and self-evident truth that no lengthy discussion is needed to prove it. Ordinary common sense is sufficient to understand its necessity and indispensability. Even an ordinary traveler knows well that a person who lacks freedom in his livelihood can possess no other kind of freedom—neither freedom of opinion, speech, writing, nor striving and endeavor. Therefore, the only society beneficial to humanity can be one in which a servant of Allah can obtain food for two meals through his own effort without selling himself. In the age of the Industrial Revolution, the opportunity for this has become very limited. Heavy industry and commercial establishments, together with large-scale agriculture, have narrowed the lives of individual handicraftsmen, artisans, small traders, and farmers so severely that they cannot successfully maintain their independent businesses and professions in competition with the large enterprises. Nevertheless, in a society where the principle of private ownership is recognized, those with sufficient means and ability can have the opportunity to establish independent industrial, commercial, or agricultural enterprises. On the other hand, such a society still leaves at least enough room for propertyless workers that, if a person is unwilling to work for wages or employment at a particular establishment, he can go to any other door. But where all or most of the means of production are made nationally owned, or where, despite allowing private ownership, all economic activities are brought under the state’s absolute control through Nazi or fascist methods and conducted according to an all-embracing comprehensive plan, the people’s personal economic freedom cannot be preserved in any way. Once that freedom ends, mental, social, and political freedom must immediately be completely extinguished as well. Therefore, a way of life that values individual distinctiveness and gives purposeful importance to the development and advancement of the human personality has no alternative but to trample upon all policies, ideals, and doctrines of social welfare formulated to nationalize land, factories, and businesses or to operate the entire economic machine under centralized management subject to the state’s absolute dominion.

Islam has adopted precisely this position. The reason for Islam’s opposition to communism is not limited to this alone. Communists use force and inhuman oppression and persecution to remove the means of production from private ownership and place them under national ownership. But even if this plan were not implemented through such an oppressive and predatory method, and instead the gradualist socialist policy of gradually converting lands and industrial and commercial establishments into national ownership through law were adopted, Islam’s nature could never accept it. This is because such a social policy is inherently harmful and destructive to humanity. The regimentation and planning methods of the Nazi and fascist systems are also completely contrary to the nature of Islam. Whatever their general interest may be, these ideals and policies are clearly opposed to the growth and attainment of perfection of the human personality.

Another aspect must also be considered. The basis of the mentality and moral outlook Islam seeks to create in people is fear of Allah and an intense awareness of one’s responsibility to answer before Allah. If people possessing these two qualities are entrusted with overall national affairs, they cannot themselves be prepared to establish and administer a system in which, along with understanding their own personal responsibilities, they would take upon their shoulders the personal responsibilities of millions upon millions of people. The Noble Prophet (peace be upon him) said precisely this during a famine in Madinah. It was submitted to him that prices were rising sharply and that he should himself fix the prices of goods. The Noble Prophet (peace be upon him) clearly refused to do so. In explaining his inability in this matter, he said:

إِنِّي أُرِيدُ أَنَّ الْقَى اللَّهَ وَلَيْسَ لِأَحَدٍ عِنْدِي مَظْلَمَةٌ يَطْلُبْنِي بِهَا .

“I wish to meet Allah in such a state that no one has any complaint against me of having wronged him, nor will anyone demand such a right from me.”

[Note—This does not mean that the Noble Prophet (peace be upon him) favored allowing high prices to continue without restriction or that he took no steps to prevent or remedy them. In reality, what he refused to do was shatter the complex system of prices through artificial government intervention. Instead of adopting this course, he devoted his efforts to the moral reform of the merchants. Through continuous and uninterrupted preaching and instruction, he instilled in them the idea that deliberately raising prices excessively is a grave sin. This preaching and instruction of the Prophet did not fail; its excellent results became evident. Within a short time, the prices of all goods began to return to their normal level.]

Moreover, Islam seeks to keep people close to their natural condition in every matter. Islam does not approve of artificiality in any aspect of life. In human economics, the natural condition can only be that individuals bring under their control the means of livelihood Allah has created on this earth, use and enjoy them individually or collectively, and benefit from them. They should continue to exchange goods, labor, and work freely with one another. Since time immemorial, the human livelihood system has operated precisely in this way. The only natural system is one in which a person, while living within society, remains free and self-sufficient in earning his livelihood and stable in life. The countless major and minor ideologies (isms) devised by inexperienced or inadequately experienced people offer one artificial social and economic system or another; under these systems, people do not have the opportunity to live as independent, conscious personalities possessing a distinct spirit and purposeful importance. There they are compelled to remain lifeless parts of a social machine.

Islam does not support revolutionary economic policies any more than it supports artificial methods. During the Age of Ignorance, the Arabs earned their livelihood through many methods that Islam later declared haram and intensely detestable. But Islam raised no question concerning the wealth and property that had already passed into people’s possession, nor did it announce the confiscation of wealth previously acquired through haram means. It did not even consider it necessary to question usurers, prostitutes, or thieves and bandits about their past deeds and activities. Whatever a person possessed, Islamic civil law recognized his ownership rights over it. However, for the future it closed every avenue of haram earning, and through Islamic inheritance law it gradually distributed and divided previous holdings into smaller portions.

Diagnosis of the Disease

After grasping the foregoing principles, we must recall once more the preliminary discussions of this book. At the very beginning of the book, we said that although the capitalist social system in the age of the Industrial Revolution had been established upon economic customs and practices that had continued since time immemorial, four fundamental causes of its severe crises were present from the outset, and these ultimately became the causes of its severe reaction. Those four causes are:

First: The founders and directors of this system carried those eternal principles to an extreme, although such excess was in no way appropriate for another industrial age.

Second: They added several erroneous principles to those eternal natural rules.

Third: They disregarded certain fundamental principles of the natural economic system, although these were as important as the seven fundamental principles of capitalist society.

Thereafter, in these chapters, we explained in detail that the efforts made, on the one hand, by socialism, communism, fascism, and Nazism, and, on the other hand, by the capitalist system, to treat the faults, deviations, and diseases they had produced all failed solely because none of them was able to identify the real and fundamental cause of the disease. One group came to regard customs used since ancient times as the actual cause of the disease and, while removing them, also eliminated individual distinctiveness. The other group concentrated entirely on refuting the accusations and allowed the fundamental causes of the faults and disasters to remain as they were. In the social system it established, individual freedom remained, but in practice it became just as harmful from the standpoint of collective interests as it had been disastrous during capitalism’s darkest phase.

A little reflection on this method of diagnosing the disease makes it easy to accept that genuine humanity needs a scientific, harmonious, and balanced economic system that

First: Will preserve the natural fundamental principles of economics—for they are essential to individual freedom—but instead of carrying their application to excess, will regulate individuals’ freedom of striving and endeavor in such a way that they do not remain enemies of social and collective interests and welfare. Not only that, in practice they will become its servants.

Second: Will keep every kind of combination of erroneous principles with the aforementioned natural principles away from the entire economic system.

Third: Along with those principles, will put into effect the other fundamental principles of the natural economic system.

Fourth: Will not allow individuals to oppose those natural fundamental principles or continue denying their genuine claims.

Islam’s Remedy

Islam has adopted precisely this method. Islam transforms the “unrestricted economic system” into a “free economic system” and binds it within certain rules, restrictions, and limits, just as it limits human freedom in all other areas of society and civilization. At the same time, it completely closes every avenue through which the particular effects and evils of the destructive capitalist economic system could arise within the free economic system. We shall then endeavor to present, in as much detail as possible, what kind of economic system emerges on the basis of Islam’s fundamental principles.

1. Ownership of Land

In Islam, private ownership of land has been recognized and supported just as it has for other things. Land, like other things, may become the property of an individual through any of the legally prescribed forms by which ownership of an object is established and made effective. No limit is specified: whether the land amounts to one square yard or several thousand acres, if it becomes someone’s property through lawful means and procedures, he is unquestionably its lawful owner, and it is considered his legally owned property. There is no condition for the validity of this ownership that the owner must cultivate his own land himself. Just as houses and furnishings may be rented out, land may likewise be leased. Agriculture may also be conducted through crop-sharing arrangements. If land is given to someone without rent, and someone is allowed to cultivate one’s land without taking a share of the crop, this is considered sadaqah or a gift. But transactions based on rent, annual lease payments, crop distribution, partnership in a business, or hiring out an object are legally permissible. However, the defects of the feudal system existing in our society are neither simply the result of the zamindari system, nor can abolishing private ownership of land be their treatment or remedy. Nor can imposing artificial obligations, like the agricultural reforms proposed by the half-baked experts of this age, bring benefit. Rather, on the basis of the fundamental principles of the Islamic ideal, its proper remedy may be as follows:

One: All barriers and restrictions introduced in the way of buying and selling land must be removed, and its transactions must be made as easy as those of other ordinary things in the world.

Two: The practice of permanently distinguishing between agricultural and non-agricultural classes must be abolished forever in every respect and in every form.

Three: All the special rights arranged for landowners in our life and society should be legally abolished.

Four: The mutual rights, duties, and responsibilities of landowners and cultivating farmers should be determined by law. Apart from those specified rights, no other kind of right of landowners over farmers should be recognized.

Five: Zamindari, in the simple sense of landownership, should be allowed to remain only in one particular form: the relationship between the owner and the farmer should be allowed to resemble that between equal partners in a remaining business partnership. But zamindaris that serve as instruments of oppression, coercion, and exploitation, gain the opportunity to become a “state within the state,” or are unjustly made a means of acquiring political “power,” lie outside the scope of lawful and legitimate zamindari. Therefore, they cannot receive the protection afforded to legitimate zamindari or equivalent lawful ownership.

Six: All anti-Islamic customs and practices prevailing in the distribution of inheritance must be abolished. The current property of landowners must be distributed among their living heirs according to the provisions of the Shariah, and Islamic inheritance law must be properly implemented in agricultural property in the future as well.

Seven: Controls must be imposed on leaving agricultural land uncultivated. For example, if land that the government has granted to someone free of charge remains uncultivated for more than three years, this “grant” must be revoked. Similarly, if purchased land is left idle, a tax must be imposed on it after a specified period has elapsed.

Eight: A specified portion of the crops produced by landowners and cultivating farmers must be collected for expenditure in the designated categories of zakat.

Nine: To conduct large-scale agriculture through modern scientific methods, organizations based on mutual assistance must be established, so that small landowners, while retaining their private ownership rights, may, through mutual consent and satisfaction, transform their properties into large-scale farms and complete the work collectively as an organization.

If these reform measures are implemented, no defect of zamindari or large-scale landownership can remain that could reasonably be brought forward.

2. Other Means of Production

From Islam’s perspective, no distinction whatsoever is recognized between consumer goods and the means of production; therefore, it is never acceptable that private ownership should be permitted in one case but unlawful in the other. Islam regards it as lawful for a person to produce or procure an item needed by others in their daily lives and sell it to them. He may do this with his own hands or have others do it for wages. He may own all the raw materials, equipment, and workplaces used in producing or procuring such goods. This was lawful before the Industrial Revolution, and it remains lawful in its subsequent phase. But unrestricted industrial enterprise was never lawful before, nor can it in any way be proper now. According to Islamic law, it was—and remains—the duty of the authorities to compel him to observe the following rules and regulations:

1. Before applying an industrial invention that opens the way to using mechanical power instead of human strength, labor, and effort in industry, agriculture, or commerce, it is essential to properly assess and analyze how many people’s livelihoods it will destroy and how the unemployed will be provided with a livelihood. Without doing this, permission to use such an invention must under no circumstances be granted.

2. The detailed determination of the mutual rights and duties of workers and owners, the conditions of employment, and so forth must be left to the mutual agreement of the two parties. However, the government must itself establish certain basic rules of justice, such as the minimum wage or remuneration rate for a worker, maximum working hours, medical treatment in illness, compensation for physical injury, and the minimum right to a pension when a person becomes completely incapacitated.

3. The government must assume direct responsibility for settling disputes between workers and owners and establish a system of mutual agreement, arbitration, and courts such that no situation arises requiring the declaration of a strike or lockout.

4. Hoarding in trade and commerce (in Islamic terminology, ihtikār means gradually stockpiling essential commodities and withholding them from sale in order to raise prices), speculation, commercial gambling, and invisible buying and selling must be completely prohibited. At the same time, all methods of artificially influencing commodity prices must be stopped by law. Note—The laws of Islamic Sharīʿah concerning trade are fundamentally an important means of reforming economic life. But the people of the world have not tried to apply them and benefit from them. Rather, Muslim society itself has shown them the utmost criminal disregard. There is no opportunity here to present a detailed account of these laws. God willing, a separate book on this subject will be written and published. Here it is intended only to say that all trade practices which are seriously harmful to the general interest must be legally prohibited.

5. The deliberate destruction of manufactured goods and crops must be treated as a crime.

6. Every branch of industry and commerce must be opened, as far as possible, to free competition. No person or group may be granted a special discriminatory right by being given the opportunity to operate a monopoly, nor may others be deprived of it.

7. Industries and businesses harmful to the moral character or health of the public must not be permitted to operate. If any such thing is considered indispensable in some respect, appropriate restrictions and controls must be imposed on its production and trade.

8. The government will not bring all industry and commerce completely under its own control according to the Nazi system, but it must provide direction and coordination so that industry and commerce in the world do not proceed along misguided paths and complete harmony is established among all sectors of economic life.

9. Through Islam’s law of inheritance, the accumulated wealth of industrialists and merchants must be continuously distributed, just as the property of landowners is distributed, so that no permanent wealthy class can arise.

10. Like agricultural workers, merchants, industrialists, and businesspeople must be required to contribute a portion of their income for expenditure in the categories of zakat.

Islamic Economic Law

In economic matters, Islam upholds the individual’s rights. It places no restriction on a person saving the portion of his income that exceeds his needs, lending it to another, investing it in one of his own businesses, or contributing capital to an industrial or commercial enterprise and sharing in its profits and losses. Although, from Islam’s perspective, investing surplus money in works of social welfare is the best course, it nevertheless declares all four of the above-mentioned activities lawful. For that reason, however, it is essential to observe the following rules and regulations properly.

1. When wealth is kept in savings, 2.50 percent of it must be collected annually as zakat and spent in the categories of zakat expenditure. When he is nearing death, all his property must be distributed among his heirs according to Islam’s law of inheritance.

2. When money is given as a loan, the lender may recover only the principal he advanced. Under no circumstances is he entitled to receive interest. It makes no difference whether the borrower takes the loan to meet his personal expenses or to invest in an industry or trade. Likewise, if land or property has been taken from the borrower as collateral to guarantee repayment of the loan, the lender may derive no benefit from it. Any benefit received in exchange for a loan is interest. Therefore, it cannot be accepted in any form. On the basis of this ruling, it can readily be inferred by analogy that it is also impermissible to set one price for a commodity in a cash purchase and another price in a deferred purchase.

3. When capital is invested directly in industry, commerce, or agriculture, the rules and procedures described concerning land and other means of production must be observed.

4. In a partnership, both parties must share equally in profit and loss. Both must participate according to a specified ratio. Any partnership in which the capital owner shares only in the profit and is guaranteed a profit at a fixed rate—without having to bear any loss—will be legally rejected and deemed invalid.

Zakat

Islam has not placed upon society and the state the responsibility of securing employment for citizens. For it would never be possible to fulfill the responsibility of providing employment without nationalizing all the means of production—or at least establishing domination over them as under the Nazi system. The error and grave harm of this have already been explained. Nevertheless, Islam cannot approve of leaving individuals in social life entirely to their own resources and circumstances, while assuming no responsibility for caring for people in distress. On the one hand, Islam places upon every individual the moral duty to help, according to his ability, anyone—relative or stranger—whom he finds in need of aid and support. On the other hand, Islam demands of industrialists, merchants, and landowners that they properly fulfill the rights of all those whom they employ in their work. Above all this, it places upon society as a whole and the entire state the responsibility of ensuring that no person within its sphere of governance remains deprived of the minimum necessities of life. It is the state’s responsibility to provide necessary assistance and shelter to all who are unemployed and without a livelihood, temporarily unable to work for some reason, permanently incapacitated, or struck by a sudden calamity or accident. It is the state’s duty to arrange for the care and upbringing of helpless children. It is even the government’s responsibility to arrange for the release from debt of those who are indebted and unable to repay. In fact, this is a comprehensive plan for social insurance, and it must be implemented directly under state administration. To raise the financial means for this purpose, Islam has proposed the following methods:

1. Every person who has accumulated capital exceeding a specified amount of wealth must pay annually from that capital 2.50 percent as zakat.

2. Every landowner and farmer must contribute to this fund ten percent of the produce of land irrigated naturally and five percent of the produce of land irrigated by artificial means.

3. Every industrialist and merchant must contribute, at the end of each year, 2.50 percent of the value of his merchandise.

4. When a herder keeps more animals than a specified number, he must deposit each year in the state Bayt al-Māl a portion of his livestock wealth according to a specified rate and calculation.

5. One-fifth of minerals and buried treasures must be collected for this fund.

6. If any war takes place, twenty percent of the spoils of war will be collected for this purpose.

The wealth collected through these methods will be kept in reserve for expenditure in the categories of zakat and khums described in the Qur’an. A substantial portion of these categories consists of administering the social insurance described above.

Limited Government Intervention

Islam does not approve in principle of the government itself becoming an industrialist, merchant, or landowner. From Islam’s perspective, the government’s work should be limited to administration, establishing justice, removing disorder, harm, and unrest, and providing for the general welfare of society. The consequences of combining commercial activity with political strength and power are so bad that they cannot possibly be tolerated for the sake of a few superficial benefits. However, Islam permits the government to operate only those industries and businesses that are indispensable to national life but which individuals are unwilling to operate, or whose private operation would likely harm the general social interest. If, apart from such enterprises, the government itself initiates other industrial or commercial activities for the country’s development and welfare, it must operate them successfully up to a certain limit and then hand them over to private individuals to run privately.

Four Fundamental Principles of a Balanced Economic System

Earlier, in discussing the “modern capitalist system,” we mentioned seven plausible principles concerning economics. If these are combined with the limits, rules, regulations, and corrective measures described above, it may be possible to eradicate all the defects of feudalism and capitalism. Moreover, on this basis a balanced economic system may be established in which both individual distinctiveness and freedom, and the general welfare, will be properly established with pure justice, while the progress of the present Industrial Revolution will not be hindered in the slightest.

The four principles of this balanced economic system may be stated here:

1. A free and independent economic system, subject to certain legal and administrative controls and limits.
2. Zakat being obligatory.
3. The law of inheritance.
4. The prohibition of interest.

Those who have witnessed the disasters of present-day unrestricted capitalism and the curses of communism and fascism laid bare before them have all begun, in principle, to support the first of these four principles. Of course, some hesitation and difficulty still remain in people’s minds concerning its details. But we hope that, as a result of reading what we have said in this chapter’s discussion of land and other means of production, that hesitation and sense of difficulty will disappear. Another of our books, entitled “Land Ownership,” will also greatly help remove this complexity and hesitation.

The importance of the second principle has now become almost clear to the people of the world. The vast system of social security proposed by the three ideologies of communism, fascism, and capitalist democracy is far less extensive than the system of social security that zakat can provide. But because the detailed rules of zakat are unknown, this issue too gives rise to many complications in people’s minds. It becomes incomprehensible to them how zakat and khums can be harmoniously incorporated into the economic system of the modern state. The booklet entitled “The Rules of Zakat” will be able to bring them profound peace of mind on this subject.

Regarding the third foundation, Islam has adopted a path and method of its own, distinct from all other laws in the world. Previously, people were not aware of its rationale, and therefore raised various questions and objections concerning it. But now the whole of human society is gradually beginning to incline in this direction. Even Russian communism has been compelled to imitate it.

Note—Under the Soviet Union’s newer law of inheritance, children, wives, husbands, parents, brothers, sisters, and adopted children have been made heirs. A rule has also been established allowing every person to bequeath his property to needy close relatives and social-welfare institutions. However, the rights of relatives take precedence. At the same time, making a bequest with the intention of depriving minor children or poor heirs has been declared forbidden. On seeing this law, no one can avoid concluding that the “Communist progressives” returned in 1945 to the law that had been formulated in 625.

But people today find it particularly difficult to understand the rationale of this fourth foundation in Islam’s economic plan. Since the last century, bourgeois economics has deeply entrenched the idea that regarding interest as haram is merely an emotional impulse, and that lending someone money without interest is simply an act of courteous generosity. Religion, it is claimed, makes such a demand only out of needless extremism. Otherwise, from the standpoint of reason, interest is entirely intelligible and rational; not only is it unobjectionable economically, it is in practice highly useful and necessary. Under the influence of this false ideology and its vigorous propaganda, critics notice all the defects of modern capitalism except its most fundamental and gravely defective institution—interest. Even Russia’s communists are nurturing this supreme satanic practice of capitalism just like Britain and America. Nor is that the end of the matter: the Muslims who were once the world’s greatest enemies of interest have now been gravely influenced by Western propaganda of this erroneous kind. Among our defeated and defeatist religious people, the misconception has spread that interest can be objectionable only when it is taken from borrowers who borrow for their personal needs. But interest on loans taken for investment in industry and commerce is said to be entirely rational, sound, and proper—pure and halal. Therefore, from the standpoint of Islam, morality, reason, and the principles of economics, it supposedly cannot be objectionable in any way. There are also several other forms of self-consolation. It is thought that the interest taken by the moneylenders of old and the modern interest-based banking system are not the same thing. It is further thought that the “clean” business of these banks is completely pure and that establishing any kind of relationship with them is proper.

But even those who have freed themselves from all these and similar misconceptions do not understand how the economic system can be operated in this age after interest has been legally prohibited.

A separate book on these matters must be written. There is no opportunity to give a detailed account in this small booklet. My book “Interest and Modern Banking” is devoted specifically to discussing these issues; therefore, those who wish to dispel misconceptions concerning them should study the book entitled “Interest and Modern Banking.”

The End