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Home arrow Business & Finance arrow The art of RF (riba-free) Islamic banking and finance

ELEMENTS OF THE RF ECONOMIC SYSTEM

Production

The RF system and lifestyle expects every individual to work and to produce. Prophet Muhammad (pp), as did all prophets before him, teaches: “Never be lazy and helpless.” There is no good in an individual who does not want to produce and earn money. It is taught that the unproductive hand is an unclean, impure hand (najas). The system also calls for products to be useful and not harmful as defined in the Judeo-Christian-Islamic Shari'aa law.

Distribution

In its efforts to do away with discrimination between people and classes in society based on color, national origin, gender, language, wealth, and affluence, and to reshape the relationship between classes, the RF Judeo-Christian- Islamic system makes the following points:

■ God owns wealth, power, and natural resources.

■ The individual or the institution is appointed by God as a trustee and custodian to manage them.

■ Every being, human or not, has a minimum requirement of being able to live in freedom and dignity. This should be provided by those who are in charge of government institutions to anyone who cannot meet his or her own needs.

■ Private property and ownership are sacred rights and must be protected.

The system is paid back and balanced out through the act of ritual alms giving (zakah) as one of the pillars of the RF Judeo-Christian-Islamic system. If these resources are not enough, the government is expected to apply an additional temporary tax on those who can afford it among the rich and affluent to balance the budget; this additional tax is looked upon as a religious duty (fard kefaya).

9:103 Of their goods, take alms, that so thou mightest purify and sanctify them; and pray on their behalf. Verily thy prayers are a source of security for them: And God is One Who heareth and knoweth.

Zakah is spent and distributed by the government, as explained in Chapter 2, to help the poor, the needy, the administrators, the oppressed, those who are heavily indebted to meet their basic necessities and pay off their debts, the traveler (wayfarer), and in the way of pleasing God in general.

9:60 Alms are for the poor and the needy, and those employed to administer the [funds]; for those whose hearts have been [recently] reconciled [to Truth]; for those in bondage and in debt; in the cause of God. And for the wayfarer: [thus is it] ordained by God, and God is full of knowledge and wisdom.

The RF banker must be trained to feel socially responsible for others in the community. He/she cannot enjoy life while others are suffering. A government that believes in the Judeo-Christian-Islamic values is responsible for the basic needs of every citizen: food, shelter, clothing, education, jobs, and health care. The RF system also calls for a very basic and fundamental understanding that the only road to wealth and achievement is hard work and the assumption of risk, not through gambling and speculation. That is why the RF law defines exactly how the estate is distributed after death (in a detailed description in the Qur'aan).[1]

4:7 From what is left by parents and those nearest related there is a share for men and a share for women, whether the property be small or large — a determinate share.

The system of inheritance calls for no one to make a will that attempts to alter the predefined and detailed distribution rates as revealed by God in Chapter 4 of the Qur'aan. In addition, if one wanted to include in his/her will a payout to others outside what the Judeo-Christian-Islamic Shari'aa law defines, this is limited to a maximum of one-third of the total estate. To keep social peace among the heirs, this one-third can only be allocated to benefit others outside the inheritance beneficiaries. This way, money is always distributed fairly and is trickled down through the system to rejuvenate the economy perpetually from a generation to the next.

Consumption

The RF Judeo-Christian-Islamic value system believes and preaches that the citizen should seek a life of moderation and a balanced pattern of consumption. Overconsumption is condemned as the work of Satan.

7:31 О Children of Adam! Wear your beautiful apparel at every time and place of prayer: eat and drink: But waste not by excess, for God loves not the wasters.

25:67 Those who, when they spend, are not extravagant and not niggardly, but hold a just (balance) between those (extremes).

According to the Judeo-Christian-Islamic Shari'aa law, spending in the wrong way (bribery, illegal business and profits, abusing the legal system, and/or reckless spending) and extravagant overconsumption (even of lawful materials) are not allowed. Everyone is trained to plan for the future and to be careful. The story of Prophet Joseph (pp) in the Torah, the Gospel, and the Qur'aan[2] — in which we are told about the seven productive and the seven lean years, and how Prophet Joseph (pp) attained prominence in the house of Pharaoh in Egypt by implementing and RF disciplined long-range plan of saving for the lean years — is an important lesson in long-range planning for all of us to emulate.

  • [1] The Qur'aan, Chapter 4, Nissaa — Women.
  • [2] Ibid., Chapter 12, Joseph.
 
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