Philosophy of Islam – Islam Vs. The Modern World: By A. Siddiqui


The term paper for the course of “Philosophy of Islam” is composed of five pieces of work, on the current issues facing the Muslim world, as against those being witnessed by the Modern states, dominated by the west. The topics under the scope of this term paper include “Epistemology: Sources of Knowledge”, “Theory of Understanding”, “The Social Setup”, “The Political Structures” and “The Economic Establishments”.


A detailed study of each topic, based on understanding the ideals of each issue has been conducted through a variety of sources, including a number of key books on religion as well downloading articles from the internet. The results of these compilations, coupled with my own views on the issues has enabled me to write this paper, on the current state of Islamic ideologies as well as those of the Modern states.


The term paper is systematically presented, with each issue taken up one by one and discussed in detail, before the other is touched. As a result, firstly the Islamic Epistemology is discussed and the Islamic sources of knowledge are given a briefing. These are then compared to the Modernist sources of knowledge and their practicality is questioned. The second section takes up the issue of understanding life through the religious perspectives as against the models being used by the Modernist states. The third section takes up a detailed look at the ideal Islamic society and its current state. The Modern society and its elements are then discussed and compared to those of the Islamic State. Next, a study is presented on the Islamic Political State and its basic elements, features and responsibilities are discussed, followed by elaborating the Modern political states, tracing a historical perspective of the various forms of Western States and the current ideal Modern Political State. The final section is based on a study of the Islamic Economic System, its basic principles and the inherent philosophies that form the guidelines for such an economic state. This is then compared to the Modern Economic State, with a study of its ideals and forms as in existence today.











Role of Freedom: Present day Standing




Islam Versus Racism

Islam Versus Racism

Islamic Family Life

Islamic Concept of Justice

Living in Harmony













MEANS OF UNIVERSALIZATION _______________________________ 25

THE CALIPHATE ______________________________________________ 27

DUTIES OF THE STATE ________________________________________ 28

FORM OF GOVERNMENT ______________________________________ 29

CONSULTATIVE DELIBERATIONS _____________________________ 30

FOREIGN POLICY _____________________________________________ 31


DEMOCRACY IN ISLAM ________________________________________ 36

PURPOSE OF THE ISLAMIC STATE _____________________________ 37

FUNDAMENTAL RIGHTS _______________________________________ 38

EXECUTIVE AND LEGISLATURE _______________________________ 39

WESTERN POLITICAL SYSTEM_______________________________ 40

TYPOLOGIES OF GOVERNMENT _______________________________ 40

SUPRANATIONAL POLITICAL SYSTEMS ________________________ 41

Empires________________________________________________________ 41

Leagues________________________________________________________ 42

Confederations_________________________________________________ 43

Federations____________________________________________________ 44

The United Nations Organization________________________________ 45

NATIONAL POLITICAL SYSTEMS ______________________________ 46

UNITARY NATION-STATES _____________________________________ 47

FEDERAL SYSTEMS ___________________________________________ 48


Autocracy / Dictatorship / Despotism____________________________ 50

Communism ______________________________________________ 50

Conservatism ______________________________________________ 51

Democracy ________________________________________________ 51

Fascism __________________________________________________ 52

Imperialism _______________________________________________ 53

Monarchy _________________________________________________ 53

Pluralism _________________________________________________ 53

Plutocracy ________________________________________________ 54

Socialism _________________________________________________ 54

THE INDIVIDUALISTS _________________________________________ 55

ROLE OF A MODERN GOVERNMENT ___________________________ 58



ISLAMIC ECONOMIC PHILOSOPHY___________________________ 66

THE ECONOMIC PROBLEM IN ISLAM – COMPARISON WITH THE WEST_________________________________________________________ 68




Principles And Policies To Meet the Issues & Achieve The Objectives 70

Ownership_____________________________________________________ 70

Disposal of the Ownership_______________________________________ 72

Distribution of Wealth__________________________________________ 72

Economic enterprises and the prohibition of interest and hoarding_ 73

THE ROLE OF THE STATE_____________________________________ 74

Sources of revenue for the state__________________________________ 75




RELATIVE SCARCITY__________________________________________ 82


PITFALLS IN THE CAPITALIST SOCIETY_______________________ 84

Mixing the Needs and Means of Satisfaction______________________ 84

Economic System and Economic Science__________________________ 85

Needs are not only Materialistic_________________________________ 86

Production Given Preference over Distribution____________________ 86

CONCLUSION_______________________________________________ 89

CONCLUSION TO THE REPORT_______________________________ 91


The term report, as a comparison between Islam and the Modern world ideologies, is a detailed philosophical study between a number of issues being confronted by the people at large today. The main issues being discussed through this report have been divided into five main sections with the Islamic view compared to the Modern ideals in each sections. These sections have been classified under the studies of “Epistemology: Sources of Knowledge”, “Theory of Understanding”, “The Social Setup”, “The Political Structures” and “The Economic Establishments”.


The basic theme of the term paper is based on a comparative study on the above mentioned segments. The report starts of with the Islamic Epistemological overview and discusses the role of Revelation in the Muslims’ source of knowledge. This is then compared to Reasoning as the central knowledge source in Modernism’s philosophical views. The next section takes up the issue of theory of understanding as seen by the Doctrines of Islam. These are defined in terms of ones niyat, haal, muqaam, mushahida and mujahida. The modern basis of this understanding are derived from the role freedom plays in the daily life of the modernists. The third section takes an in depth look at the Islamic social ideals as those adapted by the Western or Modern world and identifies the reasons for the decayed modernist social setup. The issue of the Islamic political state are taken up next with a detailed study of its characteristics and goals. This is in turn compared to the various forms of Western Political Systems and their shortfalls are discussed. In the final section, the economic ideals of the Islamic state are compared to those of the Modern Western states.


Through this report, I hope to develop a clear understanding of the philosophical issues of Islam as against those of the West. The structure of this report will go a long way towards this understanding.



“Already We have urged unto hell, many of the jinn and humankind, having hearts wherewith they understand not, and having eyes wherewith they see not, and having ears wherewith they hear not. These are as the cattle nay, but they are worse! These are the neglectful”



The main source of Knowledge in Islam is Revelation. The Qur’an was revealed in pure Arabic to Prophet Muhammad (SAW) over a period of twenty-three years ending in 632 A.D., the year he passed away. The first revelation was only five verses, the first five verses of Chapter 96. Among the very early revelations are Surah 73, 74, 80 and 97. The revelations were sent by Allah, Subhanahu wa Ta’ala (SWT), the creator and sustainer of the universe, and transmitted to him by the Archangel Jibril (as) (Gabriel). The revelations he received were sometimes a few verses, a part of a chapter or the whole chapter. Some revelations came down in response to an inquiry by the nonbelievers. The ordering of the Qur’an is not the same as the revelations.


The Qur’an is the direct Word of Allah and it does not contain a single alphabet from anyone, even Prophet Muhammad (SAW). The sayings of Prophet Muhammad (SAW) are contained in separate compilations known as Hadith, and include his deeds, lifestyle, and decisions on a variety of issues. The Qur’an and Hadith form the foundation of daily life of a practicing Muslim. The Qur’an has not changed by even an alphabet since its revelation fourteen centuries ago. Allah (SWT) has promised in the Qur’an that He will preserve it to the end of time. It is also for this reason there is no need for any new prophet or revelation (guidance) to come to humankind. The Qur’an is read in Arabic with great emphasis on the accuracy of recitation, including the recognition of diacritical marks and places where one pauses momentarily or stops.


We find that faith is the starting that leads man to the submission to God. Thus Islam requires that a Muslim believes in the Qur’anic Revelations and the Hadiths. According to the Qur’an, Allah (SWT) sent numerous Nabi (prophets) and Rasool (messengers), i.e., those prophets who were also given revelations or books from Allah. Among them are many that are also mentioned in the old and new testaments, and others that are specifically mentioned in the Qur’an. The Prophet Muhammad (SAW) came about six centuries after Prophet ‘Isa (Jesus) and was the last prophet of Allah. He is the seal of the Prophets. The words Islam and Muslim are defined in the Qur’an, and Allah (SWT) states in the Qur’an that the religion of all Prophets was Islam and called them Muslims. Specifically, Prophet Abraham, among others, is called a Muslim in the Qur’an. The word Islam means total submission (to the will and commandments of Allah). It is derived from the root word SALM and Salaam means peace (shalom in Hebrew). A Muslim is one who submits to the will and commandments of Allah. The Qur’an is sent for both humankind and Jinns.

He is Allah, than whom there is no other God, the Knower of the invisible and the visible. He is the Beneficent, the Merciful. He is Allah, than whom there is no other God, the Sovereign Lord the Holy One, Peace, the Keeper of Faith, the Guardian, the Majestic, the Compeller, the Superb. Glorified be Allah from all that they ascribe as partner (unto Him).He is Allah, the Creator, the Shaper out of naught, the Fashioner. His are the most beautiful names. All that is in the heavens and the earth glorifieth Him, and He is the Mighty, the Wise.

SURAH 59, AYAT 22-24



Ideals                                                          To Please God

Goals                                                            Ways and means of achieving the above task

The central theme is that Ibaadat is the only possible way to please God. Ibaadat has a very wide connotation and includes all those acts done to please God.

The building of Islam rests on the edifice of the five pillars. It is the duty of every Muslim to observe these five pillars as they form the basis of Islam. The absolutely necessary God is the ultimate cause of all other beings. In Moslem thought he is also a personal being who knows all that proceeds from him.

The role of reason is below the role of revelation in Islam. Man has been given Freedom as an end to please God and live the live according to the requirements of the Sunnah.

“Blessed be He Who hath placed in the heaven mansions of the stars, and hath placed therein a great lamp and a moon giving light!” SURAH 25, AYAH 61:


It is in Allah’s creations that the true attributes of Allah are found. No scientific method can explain the unanswered questions of the Universe. Islam urges us to use our rational thinking and explore the world:

“Lo! in the creation of the heavens and the earth, and the difference of night and day, and the ships which run upon the sea with that which is of use to men, and the water which Allah sendeth down from the sky, thereby reviving the earth after its death, and dispersing all kinds of beasts therein, and (in) the ordinance of the winds, and the clouds obedient between heaven and earth: are signs (of Allah’s sovereignty) for people who have sense”

SURAH 2, AYAH 164:




As the century and the millennium draws to a close, the paradoxical thought preoccupying philosophers is whether or how philosophy is at an end. According to the now common opinion – among many academic philosophers, indeed, a certainty – the ideal of a universal knowledge through principles, philosophia, has long since been exposed as spurious so that no person of right mind would nowadays recognize or indulge in it as a legitimate pursuit. This is not to deny that there is something logically unclear about arguments which claim to set absolute limits to argument or a theory to end all theory, which is what the war over the end of philosophy being waged in the journals is mostly about. Modernism saw the role of reason and the rebirth of learning. . Imperialism leads to global warfare. The ramifications in the modernist world are:

  • France and England have a world rivalry.
  • England and Spain, likewise.
  • Russia under Peter the Great and Catherine expands Russian interests to the Pacific Ocean.  It becomes a transcontinental empire.

Adam Smith wrote The Wealth of Nations (1776) and Thomas Malthus wrote On Population (1798): in the former instance concerning the revolutionary character of capitalist marketplaces with the social and technical division of labor and in the latter case vividly describing the devastating consequences of laissez-faire capitalism in creating conditions of war, famine, and disease with the invocation for the state not to intervene and allow natural processes to weed out the unfit that is the powerless. The signers of the Declaration of Independence claim to be disinterested, speaking for mankind or a General Interest; in fact, they were either landed property owners with slaves or wealthy merchants, that is traders.  Too, there are many lawyers.  Citizens, however, are vocally irreverent in local politics.



Post-modernism sees that liberation is not achieved through meta-arguments that, in seeking to limit the standpoint of philosophical reason, only tacitly recognize it, thereby reinstating the same issues and conundrums of traditional thought in another form. Its sole object will be to point out how all discourses of the kind which pretend to a privileged viewpoint from which to execute true judgements of universal accounts of the world are spurious; It follows that all attempts to carry out a critique of such accounts participate in that discourse and so are equally to be judged spurious.


Adopting no position, philosophical or meta-philosophical, the post-philosopher occupies a “non-locus” on the boundary between philosophy and its negation, from which vantage point to interrogate positions and counter-positions in such a way as will simply allow their self-refuting tendency to do its own work.


Role of Freedom: Present day Standing

Equality is a substantive, social issue and freedom a formal, political standing in civil society.  You can be free before the eyes of the law or God but not equal because you do not have the means for human self-realization. Obviously, all people do not enjoy the empirical manifestations of equality.  The real issue is that of equality of opportunity in contrast to equality of outcome.  That distinction has defined the politics of affirmative action.
They have adopted a pragmatic approach to the World affairs.  The central problem of modernity has been the problem of freedom. There has been the concept of Positive and negative freedom and the west is in a dilemma of the definition of the Freedom to target.


This section is on the Islamic Society, in a comparison to the Western Society as we see in practice today, as well as the ideals of each society, from where actually the foundations of these were laid.


The main focus of the section lies more towards the Islamic Society with an in depth discussion of the values and foundations upon which the Islamic Societies are built. These also include the codes, principles and duties of Islamic Society towards the Muslims that are living in such a society.


The study will be followed by an insight into the Western Society, the various views and critiques on such a society, tracing a philosophical path through the minds of various thinkers of the Modern West and constructing an image of how we see the Western Society today.





Islam and Society


One of the unique features of Islam is that it establishes a balance between individualism and collectivism. It believes in the individual personality of man and holds everyone personally accountable to God. It guarantees the fundamental rights of the individual and does not permit anyone to tamper with them. It makes the proper development of the personality of man one of the prime objectives of its educational policy. It does not subscribe to the view that man must lose his individuality in society or in the state. The Qur’an says:

“Man shall have nothing but what he strives for” (the Qur’an 53:39)



“And whatever suffering you suffer, it is what your hands have wrought.”

(the Qur’an 42:30)


“God does not change what any people have until they change what is in themselves” (the Qur’an 13: 11)


On the other hand, Islam also awakens a sense of social responsibility in man, organizes human beings in a society and a state and enjoins the individual to subscribe to the social good. The Prophet Muhammad (peace be upon him) said:

“Live together; do not turn against each other; make things easy for others and do not put obstacles in each other’s way”


“He is not a believer who takes his fill while his neighbor starves.”


“The believer in God is he who is not a danger to the life and property of any other.”


Islam Versus Racism


As the message of Islam is for the whole of human race, and God in Islam is the God of the whole universe, so in Islam, all human beings are equal, whatever be their colour, language, race and nationality. It addresses itself to the conscience of humanity and banishes all false barriers of race, status and wealth. Although no one can deny the fact that such barriers have always existed, and do exist today in the so called enlightened age, but Islam removes all these impediments and proclaims the ideal of the whole of humanity being one family of God. God said in the Qur’an:

“O Mankind we created you from a single (pair) of a male and female, and made you into nations and tribes that you may know each other, and the noblest of you in the sight of God is the one who is best in conduct…” (the Qur’an 49:13)


“Mankind were one community and God sent prophets with glad tidings and warnings, and with them He sent down the Scripture in truth to judge between people in matters wherein they differ…”(Qur’an 2: 213)


And Islam teaches man that the difference of languages and colors is one of the signs of God, as He said:

“And among His signs is the creation of the heaven and the earth, and the difference of your languages and colors. Verily, in that are indeed signs for men of sound knowledge.” (the Qur’an 30: 22)


The social life of the true Muslims is based upon supreme principles and designed to secure happiness with prosperity for the individual as well as for the society. Class warfare, social castes and dominion of the individual over society and vice versa are alien to social life of Islam. The unity of mankind is conceived in the light of the common parentage of Adam and Eve. Every human being is a member of the universal family established by the First Father and the First Mother, and is entitled therefore to enjoy the common benefits as he is entitled to share the common responsibilities. When people realize that they all belong to Adam and Eve and these were the creation of God, there will be no room for racial prejudice or social injustice or second class citizenship.


The unity of humanity is not only in its origin but also its ultimate aims. According to Islam, the final goal of humanity is God. From Him we come, for Him we live and to Him we shall all return. In fact, the sole purpose of creation as described by the Qur’an is to worship God and serve His cause, the cause of truth and justice, of love and mercy, of brotherhood and morality (the Qur’an, 51: 56-58).


Islamic Family Life


A family starts with marriage, then it is extended with children and grand-children and so on. Whatever meanings people assign to marriage, Islam views it as a strong bond, a challenging commitment in the fullest sense of the word. It is a commitment to life itself, to society, and to the dignified and meaningful survival of the human race. It is a commitment that married partners make to each other as well as to God. It is the kind of commitment in which they find mutual fulfillment and self-realization, love and peace, compassion and serenity, comfort and hope. All this is because marriage in Islam is regarded first and foremost as a righteous act, an act of responsible devotion. Hence a very serious commitment.


In the husband and wife relationship, the consummation of marriage creates new roles for the parties concerned. Each role is a set of equitable, proportionate rights and obligations, which are described clearly in the Qur’an and the Tradition of the Prophet. In summary the Qur’an says:

“Women have rights in proportion to their duties (with regard to their husbands), according to what is equitable…” (the Qur’an,2: 228)


and similarly the Prophet Muhammad (peace be upon him) said:

“O people! Your wives have rights over you even as you have rights over them..”


In the Parent-Child Relationship, Islam also prescribes a set of rights and duties, that is: the parents’ duties towards their child and the child’s duties towards the parents. In principle, it is a Divine injunction that no child may become the cause of harm to the parents. And by implication, the parents should reciprocate and cause the child no harm either.

As result of the strong parent-child relationship, in the Muslim world and most Asian countries, there are no old people’s home. The strain of caring for one’s parents that have reached the feeble age, in this most difficult time of their life is considered an honor and blessing, and an opportunity for great spiritual growth. God told the believers not only to pray for their parents, but also they have to treat them with kindness, love and compassion, and not even to hurt their feeling or offend them in any way. Mothers are particularly honored . The Prophet Muhammad (peace be upon him) taught that Paradise lies at the feet of mothers.


In Islam, serving one’s parents is a duty second only to Prayer Service, and it is their right to expect it. In this regard God said in the Qur’an:

“Your Lord has commanded that you worship none but Him, and be kind to your parent. If either or both of them reach old age in your care, do not say ‘Ugh’ to them and do not scold them, but speak to them with respect and kindness. And lower to them the wing of humility out of mercy, and say (in your prayer): ‘My Lord! Have mercy upon them as they cared for me when I was a child’.” (the Qur’an 17: 23-24)


Islamic Concept of Justice


Islamic justice is something higher than the formal justice of any human law. It is even more penetrative than the subtler justice in the speculation of the Greek philosophers. It searches out the innermost motives, because we are to act as in the presence of God, to whom all things, acts, and motives are known. God said in the Qur’an:

“O you who believe! Stand out firmly for justice, as witnesses to Allah, even though it be against yourselves, or your parents, or your kin, be he rich or poor, Allah is a Better Protector to both (than you). So do not follow the lust, lest you deviate from justice…”(the Qur’an 4: 135)


Justice is God’s attribute, and to stand firm for justice is to be a witness to Allah, even if it is detrimental to our own interests, or the interests of those who are near and dear to us. Some people may be inclined to favor the rich, because they expect something from them. Some people may be inclined to favor the poor because they are generally helpless. Partiality in either case is wrong. According to Islam, we have to be just without fear and favor.

Islamic justice is a universal justice which is meant for every body. Therefore, the Muslim has to be just and kind to anyone, Muslim and non-Muslim alike, even as God said in the Qur’an:

“Allah does not forbid you to deal justly and kindly with those who do not fight you on account of religion, and nor drive you out of your homes. Verily, Allah loves those who are just.”(the Qur’an 60: 8)


An objective study of the history and political administration during the rule of the early four Caliphs (the Prophet’s Successors) reveals how a popular government was administered by an elective chief with Justice in individual and institutional terms. The authority of the head of the state was confined to administrative and executive matters, such as the regulation of the police, control of the army, conduct of foreign affairs and disbursement of finances etc; but no step could be taken against the established law.


The Shari’ah courts were not dependent on the government. Their decisions were supreme; and the four Caliphs could not exercise the power of pardoning those whom the Shari’ah courts had found guilty. They did not make any distinction between the poor and the rich, the black and the white, the man in power or a laborer in the field.


The administration of Justice during that period was perfectly even-handed , and the Caliphs set an example of equality by holding themselves amenable to the orders of legally constituted courts. The Qur’an has clearly emphasized the significance of equity and justice in the following verse:

“Help you one another unto righteousness and piety, and help not one another unto sin and hostility (transgression)… ” (the Qur’an 5: 2)


Living in Harmony


The Muslims in particular, especially the current generation, are proud of their culture, and always try to maintain them, and to pass it on to the next generation. This is also true, to some extent, of other Asian and African ethnic communities. This is so because for them it is the only way to preserve their precious social values which have proved to be very effective in preventing and minimizing social problems, such as crime, violence, rape, pregnancy under marriageable age, drugs, alcoholism, family breakdown, etc. That is why in free societies like Australia or Europe, they feel that their way of life is sometimes in danger or under threat, as their children live in an environment where the youngsters do not have respect for the elders, everybody is free to do what he or she likes, and to go where he or she wishes, even though it is at the cost of his or her own life or against the law.


Islam does not prevent the Muslims from abiding by the law of the land where they live, yet it does not allow them to give up their faith and neglect religious rites. They would rather die or suffer than give up their faith, because they believe beyond doubt that suffering in the life to come is more severe and everlasting. Therefore, the Muslims do not expect much from their fellow men, except security, tolerance on both parts and mutual understanding. When people in a society feel secure, understand each another, and are tolerant towards one another, then everybody will live in peace and harmony.


Different cultures can co-exist side by side in the same environment, and such an environment even becomes more colorful, just like different kinds of flowers growing in the same garden. Both Occidental and Oriental cultures can supplement each other, or borrow from each other in areas where such an interplay does not lead to conflict. In Occidental cultures no doubt there are many good values which the Oriental cultures can adopt and vice versa.


To achieve the above goal, the following measures are essential:

  • Education both formal and informal. Especially at schools, the children need to be educated about different cultures to make them recognise those cultures and become familiar with them.
  • Organising multi-cultural functions in which people can learn more about different cultures and customs.
  • Organising seminars on Multiculturalism in which people can question about different issues.
  • Conducting more campaigns for the above purposes.






Of the five fundamentals of Islam, Zakat occupies the second position, the first being prayer (salat). This word is derived from Zakd, which means it (a plant) grew. The second derivative of this word carries the sense of purification, e.g. Qad aflaha man zakkaha (he is indeed successful who purified himself). The other word used for Zakat both in the Qur’an and the Hadith is sadaqa which is derived from sidq (the truth). In either context, the concept of Zakat is a fundamental social building block for any ideal Islamic society.


Its social significance is that it awakens in man the sense of brotherhood with less fortunate members of society, and stirs his moral conscience to make sacrifice for their sake. From the economic point of view it discourages hoarding and concentration of wealth and helps its steady and constant flow from the rich to the poor. It is in fact a good means of providing purchasing power to the poor, for ameliorating their hard lot and enabling them to stand on their own legs.


“(O Prophet), take sadaqa (zakat) out of their property-thou wouldst cleanse them and purify them thereby (Qur’an, ix. 103). And away from it (the Hell) shall be kept the most faithful to duty who gives his wealth, purifying himself” (XCII. 17-18)




Honesty in commercial dealings is more strictly enjoined by Islam than by any other religion. It is because Islam is a religion which regulates and directs life in all its departments. It is not to be regarded, like the modern man’s religion. as a personal, private affair, which has nothing to do with his economic and social life. It is not merely a body of dogmas or a bundle of rites and rituals; it is a practical code which governs life in all its spheres. Its laws are as effectively operative in our commerce and politics as in our domestic life and social relations.


Islam censures political chicanery and economic exploitation as strongly as social excesses and individual dishonesty. Indeed, a true Islamic society is based upon honesty, justice and fraternity, and is absolutely intolerant of dishonesty in all its various forms. That is the reason why perfect honesty in business and truthfulness in trade are much emphasized by the Holy Prophet (may peace be upon him). It will not be an exaggeration to say that absolute honesty in business and commerce is really an Islamic concept. The Hindus and Jews were (and still, are) worshippers of the Mammon. Both of them have been mercenary nations, notorious for their greed.


The pre-Islamic Christians. too, did not possess any high standard of business morality. It was Prophet Muhammad (may peace be upon him) who, on the one hand, urged his followers to adopt trade as their profession, and, on the other band, exhorted them to observe truthfulness and honesty in their business transactions.

Islam lays the greatest emphasis on Qat Haldl (food earned through lawful means). The pious among us believe that just as nasty food spoils our physical health, similarly. food earned through unlawful means spoils our spiritual and moral health. A man who liver on income derived through illicit means and fraudulent practices cannot be morally advanced and spiritually elevated.


If we try to comprehend the exact, implications of the term Haram (unlawful) we can form an idea of the high standard of morality on which Islam wants us to conduct our business. And, if business is conducted strictly in accordance with the Islamic principles of commerce, there can be absolutely no scope for any kind of commercial dishonesty varying from the simplest and most glaring type of business fraud to the most cunning and subtle type of profiteering which is often masked under a semblance of honesty.


Islam is most vehement in its condemnation of commercial dishonesty. It denounced, in the strongest possible terms, all sorts of deceitful dealings and illegal profits. It has disallowed all transactions not based upon justice and fairplay The Holy Prophet (may peace be upon him), while reprimanding the dishonest dealer, said:


“Whosoever deceives us is not one of us”


The Holy Qur’an has stressed the importance of fairness in business:


“And, O my people, give full measure and weight justly, and defraud not men of their things, and act not corruptly in the land making mischief. What remains with Allah is better for you, if you are believers” (XI. 85-86)







The Islamic Society’s treatment of an institution gives the society its basic ideology, a focal point where the Islamic Society distinguishes itself from the ideals of other societies. Such an ideology is based on a number of functions that the institution is seen performing in an ideal Islamic Society:


  • Institutions never promote injustice or wrongful practices. They actually facilitate the process of Ibaadat, or provide the environment where people are encouraged and motivated psychologically to present themselves in prayers to Allah.
  • The institutions should promote the attitude of encouraging a ‘That Worldly’ feeling, where the individual self comes after the society. This is where the Islamic Society is directly in conflict with the Western Society, where the individual is supreme over the interests of the society as a whole.
  • Mosque takes up the role of the central institution, as was the case with Masjid-e-Nabwi at the time of our Holy Prophet (PBUH)


The role of institution development is highly stressed in the teachings of Islam and they have been given a central authority and status in the Islamic Society, only on the basis that it is only the institutions that provide the major infrastructure and framework upon which the foundations of successful nations are built.










Since the 15th century the Western Society has been marked by a continuing interaction between systems of thought based on a mechanistic, materialistic interpretation of the world and those founded on a belief in human thought as the only ultimate reality. This interaction has reflected the increasing effect of scientific discovery and social change on philosophical speculation.


The aim of human life has no longer been conceived as preparation for salvation in the next world, but rather as the satisfaction of people’s natural desires. Social institutions and ethical principles cease to be regarded as reflections of divine command and come to be seen as practical devices created by humans. In this new Western Social environment, experience and reason have become the sole standards of truth, upto the post modern era.




The concepts of Western Society as it exists today has taken an influence from a wide number of philosophers over the past three to four centuries. The ideals of existence and the role of each individual have been shaped through the grinds of numerous theories and declarations, that have given the modern society its structure that we see today, most prominently in the west. Some of the more influential works in this direction have been by the following thinkers.


The mechanistic world view of the 17th century and the faith in reason and common sense of the 18th century, although still influential, were modified in the 19th century by a variety of more complex and dynamic views, based more on biology and history than on mathematics and physics. Particularly influential was the theory of evolution through natural selection, announced in 1858 by Charles Darwin, whose work inspired conceptions of nature and of humanity that emphasized conflict and change, as against unity and substantial permanence.


The German revolutionists Karl Marx and Friedrich Engels met in Paris in 1844. Together they developed the philosophy of dialectical materialism, based on the dialectical logic of Hegel, but they made matter, rather than mind, the ultimate reality. They derived from Hegel the belief that history unfolds according to dialectical laws and that social institutions are more concretely real than physical nature or individual mind. Their application of these principles to social problems took the form of historical materialism, the theory that all forms of culture are determined by economic relations and that social evolution proceeds through class conflict and periodic revolutions. This theory became the ideological basis for the Communist movement.


The British philosopher Herbert Spencer developed an evolutionary philosophy based on the principle of “the survival of the fittest,” which explains all elements of nature and society as adaptations in the cosmic struggle for survival. Like Comte, he based philosophy on sociology and history, which he considered the most advanced sciences.



The Post-Modern Western Society, which stems from the 19th-century romantic revolt against reason and science in favor of passionate involvement in life, became influential in Germany through the work of Martin Heidegger and Karl Jaspers. Heidegger combined the phenomenological approach of Husserl with the Kierkegaardian stress on intense emotional experience and with Hegel’s conception of negation as a real force. Heidegger’s philosophy substitutes Nothingness for God as the source of human values; Jaspers finds God, which he calls Transcendence, in the intense emotional experience of human beings. Jose Ortega y Gasset, the principal figure of existential philosophy in Spain, defended intuition against logic and criticized the mass culture and mechanized society of modern times. The Austrian-born Zionist author and scholar Martin Buber, combining Jewish mysticism with strains of existential thought, interpreted human experience as a dialogue between the individual and God


Such recent views have given the mental framework to a Modern Society based on values that are weak and unsure of the past achievements and are merely viewed with skepticism,  now that results of the modernistic movement are unfolding in front of us. The Modern Society is one that has broken down the family culture and as such the thinkers are now even looking towards the Divine explanation as not the ultimate answer to their growing vows of social degradation.




The foundations for an ideal Islamic Society have been laid down in institution development, self-interest giving way to societal benefits and importantly, upon the main themes of Islamic codes; of Zakat and Honesty in dealings. All such factors lead to just one junction, that in order to achieve that perfect state of idealism, all evil from the society must first be eliminated and then such social and moral values be integrated within each individual that they refrain from committing bad deeds by their own choice.


Such a situation however is not possible, as today we are under a tremendous influence of the western domination, both from media, and otherwise. Our cultural values are mixing and no more are the same teachings viewed with the same ideology as they once were. The scientific revolution, followed by the technological revolution have blinded the Muslim Ummah of today in the wake of ever increasing challenges and threats. The need for that ideal Islamic Society is being felt more than ever before, yet no one remains prepared to adapt those principles of honesty and piety, that are the groundwork for such a society.


The Muslim world is under threat from stronger economic and military world forces and the unity of one Islamic Society still lacks that is needed to tackle this Western Domination. Still, the essence lies simply in the understanding that unless the societal feeling can be rekindled, the realization that benefit of the overall society over the individual should always be upheld, this rebirth is not within sight.


The Western ideals are also very shaken and unstable at this stage. The transition from the modernist to the post-modernist era has taken the western ideals at a stage where they are facing serious social breakdown and that fact alone is evident from their family structures and lifestyles. The philosophical thoughts of presenting reasoning for each argument and ideology are diminishing fast, as the roots of post-modernism are growing stronger by the hour.


Thus, the basic element for any society building effort that must be present is morality, and unless this flame is re-lighted in the hearts of every individual, the success of any society is just not possible.






This section is based on a comparative study between the Islamic Political System and the Western Political System, as it has developed over the recent past. A simple approach has been adapted in tracing the fundamentals of the Islamic System of governance and then pitting them against the basic foundations of the Western Political Systems.


The section has been split into two major parts; the first on what political fundamentals our religion teaches us and the second section focuses on the history of the Western political ideologies, and how they have shaped the current Western States.


The Islamic Political System starts off with some basic concepts of what fundamentals form the foundations of an ideal Islamic State. Important aspects such as issues of nationality, foreign policies, the Caliphate and the duties of an Islamic State are discussed in detail. This leads us to the discussion of what elements form the functional arms of the Islamic State. In this important concept, the Islamic Executive, Legislature and the purpose of the Islamic State are taken up.


The second section takes up the Western State concepts, starting of with a description of the historical Western State structures and typologies. This is followed by a historical account leading us to the present day, of the major movements and ideologies that have shaped the face of Western States over the past centuries. Rounding of the section, a detailed look is taken at the Modern Western Government; its purpose, functions, responsibilities and an insight is given on the general divisions or arms of the State; i.e. the Executive, legislature and the Judiciary.


The assignment is ended on a comparative note, analyzing the value of each form of political system and which ideology takes a preference over the other.




Since the Islamic conception of life is a co-ordination between the body and the soul, it was natural that a very close relationship should have been established between religion and politics, between the mosque and the citadel. In its social conception, Islam is “communal.” It prefers a social life, demands worship in collectivity and congregation, in which every one turns towards the same center (the Ka’bah), fasting together at the same time in all parts of world, and visiting the House of God (the Ka’bah) as one of the principal duties of all Muslims, men and women. It lays emphasis on strictly personal responsibility, and does not forget the development of the individual, and yet it organizes all individuals in a single whole, the world Muslim community. The same law regulates the affairs of all – whatever the class or country. And as we shall see, the same chief, Caliph, receives the allegiance of all the faithful of the world.




One finds in human society, by and by, two contradictory tendencies: centripetal and centrifugal. On the one hand, separate individuals group themselves in wedlock, families, tribes, city-states, states and empires – sometimes willingly and at other time under compulsion. On the other hand, descending from the same couple and ancestors, groups detach themselves from bigger units in order to lead separate and independent lives, away from their relatives. Sometime this separation is occasioned amicably for the purpose of finding the means of livelihood elsewhere and lightening the charge on a locality too restricted to furnish food for all. At other times, it is dictated by passions, quarrels and other motivations.


In spite of the almost unanimous concept that all human races have the same common origin, two factors have powerfully contributed to accentuate the diversity: death and distance. Man is instinctively attached to close relatives and ancestors, yet the cementing factor disappears with the death of the common parent. With regards to distance, not only does it make us forget the ties of relationship, but also, as history has shown, creates insurmountable obstacles. One ceases to speak the same language, uphold the same interests or defend the same values.


At the dawn of Islam, in the 7th century of the Christian era, differences and prejudices arising from race, language, place of birth among other things, had become the rule rather than the exception. They developed deep-rooted notions, which grew to be almost natural instincts. It was so everywhere in the world, in Arabia, in Europe, in Africa, in Asia, in America and elsewhere. Islam came to class these notions among the evil traits of humanity, and tried to bring about a cure.


The unifying ties of family, clan, and even tribe proved too weak to serve the needs of defense and security in a world where egoism and cupidity had rendered inevitable wars of everybody against everybody else. But groups bigger than tribes were created sometimes by the use of force by warriors and emperors. However, failing to create an identity of interests among the totality of the subjects, these artificial unions were constantly menaced by disintegration.


Without entering into the history of the several thousand years of the development of this aspect of human society, it would suffice to consider the idea of nationality prevalent in our own time in order to illustrate the point. If nationality is based on the identity of language, race, or place of birth, it goes without saying that it will make the problem of aliens or strangers exist perpetually, and such a nationality will be too narrow, ever to be able to embrace the inhabitants of the entire world. And if the aliens are not assimilated, there will always be the risk of conflicts and wars. In fact, the tie of nationality is not a very sure bond at all. For two brothers may be enemies, and two strangers, having a common ideology, may be friends.


The Qur’an (30:22, 49:13) has rejected all superiority on account of language, color of skin or other ineluctable incidences of nature, and recognizes the only superiority of individuals as that based on piety. A common ideology is the basis of “nationality” among the Muslims, and Islam is this ideology. Among the religions of universal applications, Islam distinguishes itself by the feature that it does not exact the renunciation of the world, but insists on the body and soul growing and operating simultaneously.


Naturalization is a feature now admitted among all “nations” but to be naturalized in a new language, in a new color of skin, and in a new land is not as easy as to adhere to a new ideology. For others nationality is essentially an ineluctable accident of nature. In Islam it is a thing which depends solely upon the will and choice of the individual.




Apart from the means already mentioned, namely the same law for all, the same direction to turn to in the service of prayer, the same place for meeting in the universal pilgrimage, etc., the institution of the universal caliphate plays a particular role.


Muhammad (SAW) of holy memory had proclaimed himself to be a messenger of God, sent towards the totality of human beings (cf. Qur’an 34:28) and also to be the last of such

messengers (cf. Qur’an 33:40), and therefore for all time, till the end of the world. His teaching abolished the inequalities of races and classes. Moreover, the Prophet himself exercised all powers, spiritual as well a temporal and others, in the community, which he had organized into a state and endowed with all its organisms. Thus cumulation of powers was passed in heritage, after his death, to his successors in the state, with this difference that these successors were not prophets, and so did not receive the Divine revelations. The Prophet Muhammad (SAW) had always insisted on the necessity of community life, and he went so far as to declare that “Whoever died without knowing his imam (caliph) dies in paganism.” He had also insisted on unity and solidarity inside the Muslim community.


The caliph inherited from the Prophet the exercise of double power; spiritual as well as temporal. He presided over the celebration of the service of worship in the mosque, and he was the head of the State in temporal affairs.


To recognize the Prophet (SAW), one used to take the oath of allegiance, (bai’ah, or contract of obedience). One did the same for the caliphs at the moment of their election. The basis of the state organization is a contract concluded between the ruler and the ruled. In practice only persons who are the most representative of the population take this oath of allegiance. This nomination, under a contract of course, implies the possibility of the annulment of the contract and the deposition of the ruler by the same representative personalities.


It was by virtue of being the messenger of God, that the Prophet Muhammad (SAW) commanded his community; and the law which he promulgated and left to posterity was equally of Divine inspiration. For his successors, the sovereignty of God continued to exist as a reality, in the sphere of their competence; therein they were the successors of the Prophet of God. But for them there was no possibility of receiving Divine revelations. Thus their power in the matter of legislation was restricted (i.e., they could not abrogate the laws established by the Prophet in the name of God, they could however interpret these laws, and legislate in cases where the law of the time of the Prophet was silent). In other words, the caliph could not be a despot, at least in matters of legislation: he is a constitutional head, and as much subject to the laws of the country as any ordinary inhabitant of the State.


The theory and practice of the caliphate have however not always been identical in Muslim society. A rapid sketch of this history would be useful for understanding the actual position.




The Qur’an speaks of kings, both good and bad, and never refers to other forms of government, such as a republic. The fact that there have been differences of opinion, at the death of the Prophet, shows that he had not left positive and precise instructions regarding his succession. Certain groups wanted that the state power should rest, as an heirloom, in his family – and since he had left no male issue, his uncle ‘Abbas, or his cousin ‘Ali were the next of kin to succeed him. Others wanted an ad hoc individual election. And inside this group, there were differences as to the candidate to be chosen. An overwhelming majority rallied in favor of an election. The form of government thus established was intermediary between hereditary monarchy and a republic – the caliph was elected for life. If the fact of election makes it resemble a republic, the duration of the power was like that of a monarchy. From the very beginning, there have been dissidents to the elected caliphs; later there have been even rival claimants and these caused bloodshed in the community from time to time.


Some observations suggest themselves in this connection. The Prophet (SAW) had predicted that after him, the caliphate would continue only for thirty years and that afterwards a “biting kingship” would follow (cf. Ibn Athir’s Nihayah, Tirmidhi, Abu

Dawud). Another saying is attributed to the Prophet (SAW) to the effect that the caliphate belongs to the tribe of Quraish. The context of this last direction is not known; but the practice of the Prophet himself does not seem to confirm the obligatory character of this qualification. For history shows that since his arrival in Madinah and the founding of a City State there, the Prophet left his metropolis at least 25 times, in order to go on military expeditions to defend the state territory as well as for pacific avocations (such as contracting alliances, making a pilgrimage). On all such occasions, he nominated a viceregent in Madinah, yet it was not the same person that he chose always for carrying on the interim government.


The universal caliph does not exist nowadays among the Muslims, nevertheless the masses continue to aspire for it. The very independent existence of Muslims is also subject to fragmentary re-conquest. Before restoring the institution of a universal caliphate, it may be that they could have recourse to the precedents of the time of the Prophet, in order to avoid regional rivalries and susceptibilities. One may have, for instance, a ‘Council of Caliphate’ composed of the heads of all the Muslim States, Sunnites as well as Shi’ites, Quraishites as well as non-Quraishites. By rotation every member could preside over the Council, say for a year.




The duties and functions of a Muslim state seem to be four: (i) Executive (for the civil and military administration), (ii) Legislative, (iii) Judicial, and (iv) Cultural.


The Executive does not require elaborate examination. It is self-evident, and obtains everywhere in the world. The sovereignty belongs to God and it is a trust, which is administered by man, for the well being of all without exception.

The restrictions of legislative competence in the Islamic society have already been discussed in light of the fact that there is the Quran, the Word of God, which is the source of law in all walks of life, spiritual as well as temporal.

In the domain of judiciary also, the Quranic guidance emphasizes the equality of all men before law, in which the head of the state is not exempt even vis-a-vis his subjects. The Qur’an (5:42-50, 5:66) has ordained another important disposition: The non-Muslim inhabitants of the Islamic State enjoy a judicial autonomy, each community having its own tribunals, its own judges, administering its own laws in all walks of life, civil as well as penal. The Qur’an says that the Jews should apply the Biblical laws, and the Christians those of the Gospel. It goes without saying that in the case of conflict between laws, where parties to litigation belong to different communities, special dispositions would solve the difficulties for the law as well as of the judge; and it is a kind of private international law which regulates such cases.


By cultural duty, we mean the very raison-d’etre of Islam, which seeks that the Word of God alone should prevail in this world. It is the duty of each and every individual Muslim, and a fortiori that of the Muslim government, not only to abide by the Divine law in daily behavior, but also to organize foreign missions in order to inform others what Islam stands for. Far from implying a lethargy and indifference, a perpetual and disinterested struggle is thereby imposed to persuade others for the well foundedness of Islam.





Islam attaches no importance to the external form of government. It is satisfied if the well being of man in both the worlds is aimed for, and the Divine law applied. Thus the constitutional questions take a secondary place. Thus as we have already mentioned, a republic, a monarchy, a joint-rule, among other forms, are all valid in the Islamic community.


If this aim is realized by a single chief, one accepts it. If at a given time, in a given surrounding, all the requisite qualities of a “commander of the Faithful” or caliph are not found united in the same person, one admits voluntarily the division of power also for the purpose of the better functioning of the government. A division is thus made between the spiritual and temporal functions, yet no arbitrary power is tolerated for either of them. The politics and the king remain as much subject to the Divine law as the cult and the prophet. The source of authority and codes of law remain the same, only the application of law and the execution of necessary dispositions relate to different persons. It is more a question of specialization than a divorce between the two aspects of life.




The importance and utility of consultation cannot be too greatly emphasized. Again and again the Qur’an (3:159,27:32,42:38,47:21) commands Muslims to make their decisions after consultation, whether in a public matter or a private one. The practice of the Prophet has reinforced this disposition. For, in spite of the exceptional quality of his being guided by the Divine revelations, the Prophet Muhammad (SAW) always consulted his companions and the representatives of the tribes of his adherents, before making decisions. The first caliphs were no less ardent in their defense of consultative institutions.


In this respect also, the Qur’an does not prescribe hard and fast rules. The number, form of election, duration of representation, etc., are left to the discretion of the leaders of every age and every country. What is important is that one should be surrounded by representative personalities, enjoying the confidence of those whom they represent and who possess integrity of character.



The relations with foreign countries are based on what is called ‘international law.’ The rules of conduct in this domain have had an evolution very much slower than those of the mutual behavior inside a social group. In pre-Islamic antiquity, international law had no independent existence as it formed part of politics and was dependent on the will and pleasure of the head of the State. Few were the rights recognized for foreign friends, still less for enemies.


We may bring into relief the historic fact, that it was the Muslims who had not only developed international law as a distinct discipline – the first in the world – but also made it form a part of law (instead of politics). They composed special monographs on the subject, under the name of siyar (conduct, i.e., of the ruler), and they also spoke of it in the general treatises of law. To the very first originators of these studies (of the early second century of the Hijrah/8th century of the Christian era), the question of war formed part of penal law. So after discussing brigandage and highway robbery of local people, the jurists logically spoke of similar activities by foreigners, demanding a greater mobilization of the forces of order. But the very inclusion of war under the heading of ‘penal law’ means unequivocally that it had to do with legal matters, in which the accused had the right of defending himself before a judicial tribunal.


The basic principle of the system of international relations in Islam, in the words of jurists, is that “the Muslims and non-Muslims are equal (sawa ‘) in respect of the sufferings of this world.” In ancient times, the Greeks, for instance, had the conception that there was an international law, which regulated the relations amongst only the Greek city-states. As for the Barbarians, (i.e., non-Greeks) nature had intended them, as was said by Aristotle, to be the slaves of the Greeks. Therefore it was an arbitrary conduct, and no law, which was the rule with regard to relations with them. The ancient Hindus had a similar notion, and the dogma of the division of humanity into castes together with the notion of un-touchability rendered the fate of the defeated even more precarious.


The first Muslim State was founded and governed by the Prophet (SAW). It was the city-state of Madinah, a confederacy of autonomous villages, inhabited by Muslims, Jews, pagan Arabs, and possibly a handful of Christians. The very nature of this State demanded a religious tolerance, which was formally recognized in the constitution of this State, which document has come down to us. The first treaties of defensive alliance were concluded with non-Muslims, and were always scrupulously observed. The Qur’an insists in the strongest of terms on the obligation of fulfilling promises and on being just in this respect (otherwise imposing punishment in the Hereafter).


The jurists have so greatly insisted on the importance of the given work, that they say that if a foreigner obtains permission and comes to the Islamic territory for a fixed period, and if in the meantime a war breaks out between the Muslim government and that of the said foreigner, the security of the latter would not be affected. He may stay in tranquility until the expiration of his visa of sojourn. Not only may he return home in all safety and security, but he may also take with him all his goods and gains. Moreover during the sojourn, he would enjoy the protection of the courts even as before the outbreak of the war.


The person of the ambassador is considered immune from all violation, even if he brings a most unpleasant message. He enjoys his liberty of creed, and security of sojourn and return. The question of jurisdiction has also certain peculiarities. Foreigners residing in the Islamic territory are subjected to Muslim jurisdiction, but not to Muslim law, because Islam tolerates on its territory a multiplicity of laws, with autonomous judiciary for each community. A stranger would belong therefore to the jurisdiction of his own confessional tribunal. If he is a Christian, Jew, or anything else, and if the other party to the litigation is also of the same confession – no matter whether this other party is a subject of the Muslim State or a stranger – the case is decided by the confessional court according to its own laws.


Two Jews, guilty of adultery, were brought by their coreligionists, and the Prophet (SAW) caused to bring the Bible (Book of Levites) and administered Jewish law to them, as is reported by Bukhari. It may be mentioned, by the way, that the concern for legality has forced the Muslim jurists to admit that if a crime is committed even against a Muslim, who is the subject of the Muslim State, by a foreigner in a foreign country, and this foreigner later comes peacefully to the Muslim territory, he will not be tried by the Islamic tribunals, which are not competent to hear a case that had taken place outside the territory of their jurisdiction. Muslim jurists are unanimous on the point. Muhammad ash-Shaibani, pupil of Abu Hanifah, has recorded even a saying of the Prophet in support of this law:


‘Atiyah lbn Qais al-Kilabi relates that the Prophet has said:

“If a man takes refuge in enemy country after having committed murder, sexual immorality or theft, and later returns after obtaining safe-conduct, he would still be judged for what he had fled from. But if he has committed murder, illicit sexual intercourse or theft in the enemy territory and later came on safe-conduct, no punishment would be inflicted on him for what he had committed in the enemy territory.”


Islamic law does not admit exemptions in favor of the head of the State, who is as much subject to the jurisdiction of the courts as any other inhabitant of the country. If the head of the Muslim State does not enjoy such privileges (of injustice, excesses of class discrimination) in his own country, one should not expect them in favor of foreign sovereigns and ambassadors. All regard, appropriate to their quality as guest and their dignity, is paid to them, yet they are not held to be above law and justice.


Several cases of classical times bring to relief another peculiar feature of Islamic justice. Hostages were exchanged to guarantee the faithful execution of treaties, stipulating expressly that if one of the contracting parties should murder the hostages furnished by the other party, this latter would have the right to be avenged on the hostages in its hands. Cases of this kind happened in the time of caliph Mu’awiyah and al-Masur, and the Muslim jurists unanimously observed that the enemy hostages could not be put to death, because the perfidy and treachery was employed by their ruler and not by these hostages. The Qur’an (S:l64, 53:38, etc.) forbids formally vicarious punishment and inflicting reprisals on one for the crime of another.


The Muslim law of war is humane. It makes a distinction between belligerents and combatants. It does not permit the killing of minors, women, the very old, sick, and monks Debts in favor of the citizens of the enemy country are not touched by the declaration of war. All killing or devastation beyond the strict indispensable minimum is forbidden. Prisoners are well treated, and their acts of belligerency are not considered crimes. In order to diminish the temptation of the conquering soldiers, booty does not go to the one who seizes it, but to the government, which centralizes all spoils and redistributes them, four-fifths going to the participants of the expedition, one-fifth to the government coffers; the share of a soldier and of the commander-in-chief are alike and equal.


In an interesting passage (47:35), the Qur’an enjoins peace and says:

“Do not falter, and cry for peace when ye are the uppermost: God is with you and He will not forget your (praiseworthy) actions.”


It reverts to it again (8:61) and says:

“If they incline to peace, then incline to that and have confidence in God.”


The Qur’an attaches such great importance to the given word, that it does not hesitate (8:72) to give it preference over the material interest of the Muslim community. It teaches us the Islamic law of neutrality even in the case of religious persecution, in the following terms:

“. .. with regard to those who believe (in Islam) but do not immigrate (into Islamic territory), ye have no duty to protect them till they immigrate; but if they seek help from you in the name of religion then it is your duty to help (them) except against a folk between whom and you there is a treaty of peace (mithaq): and God is Seer of what ye do.”




The political system of Islam is based on three principles: Tawhid (unity of Allah), Risalat (Prophethood) and Khilafat (vicegerency). It is difficult to appreciate the different aspects of Islamic political system without fully understanding these three principles.


Tawhid means that only Allah is the Creator, Sustainer and Master of the universe and of all that exists in it, organic or inorganic. The sovereignty of this kingdom is vested only in Him. He alone has the right to command or forbid. Worship and obedience are due to Him alone, no one and nothing else shares it in any way. Life, in all its forms, our physical organs and faculties, the apparent control which we have over nearly everything in our lives and the things themselves, none of them has been created or acquired by us in our own right. They have been bestowed on us entirely by Allah. Hence, it is not for us to decide the aim and purpose of our existence or to set the limits of our authority; nor is anyone else entitled to make these decisions for us. This right rests only with Allah, who has created us, endowed us with mental and physical faculties, and provided material things for our use.


This principle of the unity of Allah totally negates the concept of the legal and                     political independence of human beings, individually or collectively. No individual, family, class or race can set themselves above Allah. Allah alone is the Ruler and His commandments are the Law.


The medium through which we receive the law of Allah is known as Risalat. We have received two things from this source: the Book in which Allah has set out His law, and the authoritative interpretation and exemplification of the Book by the Prophet, blessings and peace be on him through word and deed, in his capacity as the representative of Allah. The Prophet, blessings and peace be on him, has also, in accordance with the intention of the Divine Book, given us a model for the Islamic way of life by himself implementing the law and providing necessary details where required. The combination of these two elements is called the Shari‘ah.




No individual or dynasty or class can be Khilafah, but that the authority of caliphate is bestowed on any community which accepts the principles of Tawhid and Risalat. In such a society, each individual shares the Allah-given caliphate. This is the point where democracy begins in Islam.


Every person in an Islamic society enjoys the rights and powers of the caliphate of Allah and in this respect all individuals are equal. No one can deprive anyone of his rights and powers. The agency for running the affairs of the state will be established in accordance with the will of these individuals, and the authority of the state will only be an extension of the powers of the individual delegated to it. Their opinion will be decisive in the formation of the Government, which will be run with their advice and in accordance with their wishes. Whoever gains their confidence will carry out the duties of the caliphate on their behalf; and when he loses this confidence he will have to relinquish his office. In this respect the political system in Islam is as perfect a democracy as ever can be.


What distinguishes Islamic democracy from Western democracy is that while the latter is based on the concept of popular sovereignty the former rests on the principle of popular Khilafat. In Western democracy the people are sovereign, in Islam sovereignty is vested in Allah and the people are His caliphs or representatives. In the former the people make their own laws; in the latter they have to follow and obey the laws (Shari‘ah) given by Allah through His Prophet. In one the Government undertakes to fulfill the will of the people; in the other Government and the people alike have to do the will of Allah. Western democracy is a kind of absolute authority which exercises its powers in a free and uncontrolled manner, whereas Islamic democracy is subservient to the Divine Law and exercises its authority in accordance with the injunctions of Allah and within the limits prescribed by Him.




The Holy Qur’an clearly states that the aim and purpose of this state, built on the foundation of Tawhid, Risalat and Khilafat, is the establishment, maintenance and development of those virtues which the Creator of the universe wishes human life to be enriched by, and the prevention and eradication of those evils, which are abhorrent to Allah. The state in Islam is not intended for political administration only nor for the fulfillment through it of the collective will of any particular set of people. Rather, Islam places a high ideal before the state for the achievement of which it must use all the means at its disposal. The aim is to encourage the qualities of purity, beauty, goodness, virtue, success and prosperity, which Allah wants to flourish in the life of His people and to suppress all kinds of exploitation and injustice. As well as placing before us this high ideal, Islam clearly states the desired virtues and the undesirable evils. The Islamic state can thus plan its welfare programs in every age and in any environment.




Although an Islamic state may be set up anywhere on earth, Islam does not seek to restrict human rights or privileges to the geographical limits of its own state. Islam has laid down universal fundamental rights for humanity as a whole, which are to be observed and respected in all circumstances irrespective of whether a person lives on the territory of the Islamic state or outside it and whether he is at peace with the state or at war. For example, human blood is sacred and may not be spilled without justification; it is not permissible to oppress women, children, old people, the sick or the wounded; woman’s honor and chastity must be respected in all circumstances; and the hungry must be fed, the naked clothed, and the wounded or diseased treated medically.


These, and a few other provisions, have been laid down by Islam as fundamental rights for every man by virtue of his status as a human being, to be enjoyed under the constitution of an Islamic state. The rights of citizenship in Islam, however, are not confined to persons born within the limits of its state but are granted to every Muslim irrespective of his place of birth. A Muslim ipso facto becomes the citizen of an Islamic state as soon as he sets foot on its territory with the intention of living there; he thus enjoys equal rights of citizenship with those who are its citizens by birth. Citizenship must therefore be common to all the citizens of all the Islamic states that exist in the world; a Muslim will not need a passport for entry or exit from any of them. And every Muslim must be regarded as eligible for positions of the highest responsibility in an Islamic state without distinction of race, color or class.


Islam has also laid down certain rights for non-Muslims who may be living within the boundaries of an Islamic state, and these rights must necessarily form part of the Islamic constitution. According to Islamic terminology such non-Muslims are called dhimmis (the covenanted), implying that the Islamic state has entered into a covenant with them and guaranteed their rights. The life, property and honor of a dhimmi is to be respected and protected in exactly the same way as that of a Muslim citizen. There is no difference between Muslim and non-Muslim citizens in respect of civil or criminal law; and the Islamic state shall not interfere with the personal law of non-Muslims. They will have full freedom of conscience and belief and will be entitled to perform their religious rites and ceremonies. As well as being able to practice their religion, they are entitled to criticize Islam. However the rights given in this respect are not unlimited: the civil law of the country has to be fully respected and all criticism has to be made within its framework.




The responsibility for the administration of the Government in an Islamic state is entrusted to an Amir (leader) who may be likened to the President or the Prime Minister in a Western democratic state. All adult men and women who accept the fundamentals of the constitution are entitled to vote in the election for the leader. The basic qualifications for the election of an Amir are that he should command the confidence of the largest number of people in respect of his knowledge and grasp of the spirit of Islam; he should possess the Islamic attribute of fear of Allah; he should be endowed with the quality of statesmanship. In short, he should be both able and virtuous.


A Shura (consultative council), elected by the people, will assist and guide the Amir. It is obligatory for the Amir to administer the country with the advice of his Shura. The Amir can retain office only so long as he enjoys the confidence of the people, and must resign when he loses this confidence. Every citizen has the right to criticize the Amir and his Government, and all responsible means for the expression of public opinion should be available. Legislation in an Islamic state should be within the limits prescribed by the Shari‘ah. The injunctions of Allah and His Prophet are to be accepted and obeyed and no legislative body can alter or modify them or make any new laws, which are contrary to their spirit. The duty of ascertaining the real intent of those commandments which are open to more than one interpretation should devolve on people possessing a specialized knowledge of the law of Shari‘ah. Hence, such matters may have to be referred to a sub-committee of the Shã r~ comprising men learned in Islamic law. Great scope would still be available for legislation on questions not covered by any specific injunctions of the Shari‘ah, and the advisory council or legislature is free to legislate in regard to these matters.


In Islam the judiciary is not placed under the control of the executive. It derives its authority directly from the Shari‘ah and is answerable to Allah. The judges will obviously be appointed by the Government but, once appointed, will have to administer justice impartially according to the law of Allah. All the organs and functionaries of the Government should come within their jurisdiction: even the highest executive authority of the Government will be liable to be called upon to appear in a court of law as a plaintiff or defendant. Rulers and ruled are subject to the same law and there can be no discrimination on the basis of position, power or privilege. Islam stands for equality and scrupulously adheres to this principle in the social, economic and political realms alike.






The most important type of political system in the modern world is the nation-state. The world today is divided territorially into more than 175 states, in each of which a national government claims to exercise sovereignty–or the power of final authority–and seeks to compel obedience to its will by its citizens. This fact of the world’s political organization suggests the distinction employed in the following section among supranational, national, and sub-national political systems.




The formation of supranational relationships is a principal result of the division of the world into a number of separate national entities, or states, that have contact with one another, share goals or needs, and face common threats. In some cases, as in many alliances, these relationships are short-lived and fail to result in significant institutional development. In other cases, they lead to interstate organizations and supranational systems. The discussion below examines several types of supranational political systems.




Because they are composed of peoples of different cultures and ethnic backgrounds, all empires are ultimately held together by coercion and the threat of forcible re-conquest. Imposing their rule on diverse political structures, they are characterized by the centralization of power and the absence of effective representation of their component parts. Although force is thus the primary instrument of imperial rule, it is also true that history records many cases of multiethnic empires that were governed peaceably for considerable periods and were often quite successful in maintaining order within their boundaries. The history of the ancient world is the history of great empires–Egypt, China, Persia, and imperial Rome–whose autocratic regimes provided relatively stable government for many subject peoples in immense territories over many centuries. Based on military force and religious belief, the ancient despotisms were legitimized also by their achievements in building great bureaucratic and legal structures, in developing vast irrigation and road systems, and in providing the conditions for the support of high civilizations. Enhancing and transcending all other political structures in their sphere, they could claim to function as effective schemes of universal order.



One of the commonest forms of supranational organization in history is that of leagues, generally composed of states seeking to resist some common military or economic threat by combining their forces. This was the case with the early city leagues, such as the Achaean and Aetolian leagues in ancient Greece and the Hanseatic and the Swabian leagues in Europe; and to a great extent it was the case with the League of Nations. Other common features of leagues include the existence of some form of charter or agreement among the member states, an assembly of representatives of the constituent members, an executive organ for the implementation of the decisions of the assembly of representatives, and an arbitral or judicial body for adjudicating disputes.


The League of Nations was one of the great experiments in supranational organization of the 20th century and the predecessor in several important respects of the United Nations. The Covenant of the League was drafted by a special commission of the Peace Conference after World War I, with Pres. Woodrow Wilson of the United States as its leading advocate, and approved by a plenary conference of the victorious powers in 1919. The initial membership of the League consisted of 20 states. The United States failed to take membership in the League, but by 1928 the organization had a total membership of 54. The machinery of the League consisted of an Assembly of all the member nations, acting through agents of their governments; a council on which the great powers were permanently represented and to which the other member powers were elected by the Assembly for three-year terms; a Secretariat to administer the internal affairs of the League; and a number of specialized agencies, such as the International Labor Organization, that were responsible for implementing various economic and humanitarian programs on an international basis. The Covenant required that international disputes be submitted to peaceful settlement with a provision for adjudication or arbitration by the Permanent Court of International Justice or for intervention by the Council of the League.




Confederations are voluntary associations of independent states that, to secure some common purpose, agree to certain limitations on their freedom of action and establish some joint machinery of consultation or deliberation. The limitations on the freedom of action of the member states may be as trivial as an acknowledgment of their duty to consult with each other before taking some independent action or as significant as the obligation to be bound by majority decisions of the member states. Confederations usually fail to provide for an effective executive authority and lack viable central governments; their member states typically retain their separate military establishments and separate diplomatic representation; and members are generally accorded equal status with an acknowledged right of secession from the confederation. Historically, confederations have often proved to be a first or second step toward the establishment of a national state, usually as a federal union. Thus, the federal union of modern Switzerland was preceded by a confederation of the Swiss cantons; Germany’s modern federal arrangements may be traced to the German Confederation of the 19th century (the Deutsche Bund); and the federal constitution of the United States is the successor to the government of the Articles of Confederation. In some other cases, confederations have replaced more centralized arrangements, as, for example, when empires disintegrate and are replaced by voluntary associations of their former colonies. The British Commonwealth, or Commonwealth of Nations, and the French Community are cases of this type.





The term federation is used to refer to groupings of states, often on a regional basis, that establish central executive machinery to implement policies or to supervise joint activities. In some cases such groupings are motivated primarily by political or economic concerns; in others, military objectives are paramount. Examples of the former include the European Communities (EC), actually a combination of three main structures–the European Coal and Steel Community, established in 1952; the European Economic Community (Common Market), established in 1958; and the European Atomic Energy Community (Euratom), established in 1958. The Communities quickly developed executive machinery exercising significant regulatory and directive authority over the governments and private business firms of the member countries. Although each of the member governments retains a substantial measure of sovereignty, and a systematic effort by one or more of the governments to resist the authority of the Communities’ agencies could endanger the whole fabric of cooperative effort, the Communities have developed significant supranational features. These include the staffing of executive organs with persons other than governmental representatives, the making of binding decisions on important matters by majority vote, and the capability of the Communities’ agencies to deal directly and authoritatively with individuals and companies within the member states. For example, the high authority of the Coal and Steel Community acts by majority vote of its members, without instruction from any of the governments, to “assure the achievement of the purposes stated in the Treaty”; and in pursuing this function it involves itself deeply in the economies of each of the member nations. The North Atlantic Treaty Organization (NATO), established in April 1949, is an example of a modern military alliance endowed with complex and permanent executive machinery, employing multilateral procedures, and involving the continuous elaboration of plans for the conduct of joint military action by its member states (Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Italy, Luxembourg, The Netherlands, Norway, Portugal, Spain, Turkey, the United Kingdom, and the United States).




A supranational political system that does not fit precisely any of the conventional classifications of such systems is the United Nations, a voluntary association of most of the world’s nation-states. Its membership had grown from an original 51 states to more than 175 by the late 20th century. (The government of the People’s Republic of China was admitted in place of the government of Taiwan in 1971.) The United Nations was founded in 1945 at a conference in San Francisco that was attended by representatives of all the nations that had declared war on Germany or Japan. The purposes of the organization are declared in its Charter to be the maintenance of international peace and security, the development of friendly relations among states, and international cooperation in solving the political, economic, social, cultural, and humanitarian problems of the world. Its organizational structure consists of a Security Council of five permanent members (China, France, Russia, the United Kingdom, and the United States) and 10 nonpermanent members elected for two-year terms, a General Assembly, a secretary-general and a Secretariat, an Economic and Social Council, a Trusteeship Council, and the International Court of Justice. Attached to the United Nations are a number of specialized agencies, including the Food and Agriculture Organization, the International Atomic Energy Agency, the International Civil Aviation Organization, the International Labor Organization, the International Monetary Fund, the International Telecommunications Union, the Universal Postal Union, the United Nations Educational, Scientific and Cultural Organization, the World Health Organization, and the International Bank for Reconstruction and Development (World Bank).




The term nation-state is used so commonly and yet defined so variously that it will be necessary to indicate its usage in this article with some precision and to give historical and contemporary examples of nation-states. To begin with, there is no single basis upon which such systems are established. Many states were formed at a point in time when a people sharing a common history, culture, and language discovered a sense of identity. This was true in the cases of England and France, for example, which were the first nation-states to emerge in the modern period, and of Italy and Germany, which were established as nation-states in the 19th century. In contrast, however, other states, such as Pakistan, India, the Soviet Union, and Switzerland, came into existence with a common basis in religion, economy, culture, or language. It must also be emphasized that contemporary nation-states are creations of different historical periods and of varied circumstances. Before the close of the 19th century, the effective mobilization of governmental powers on a national basis had occurred only in Europe, the United States, and Japan. It was not until the 20th century and the collapse of the Ottoman, Habsburg, French, and British empires that the world could be fully organized on a national basis. This transformation was completed in 1991 with the dissolution of the U.S.S.R. In 1920 the League of Nations recognized seven nation-states as “Great Powers” (Britain, France, the United States, Germany, Italy, Japan, and Russia) and eventually admitted more than 40 other states to membership; the United Nations had more than 175 member states in the late 20th century. States in the post-Cold War world include the United States as the preeminent power; the established powers of Britain, France, China, Japan, Germany, and Russia; emerging powers such as Ukraine and Brazil; and a host of old and new states such as Denmark, Namibia, Kazakstan, Switzerland, Egypt, Turkey, Malaysia, and Chile.


The characteristics that qualify these variously composed and historically differing entities as nation-states and distinguish them from other forms of social and political organization amount in sum to the independent power to compel obedience from the populations within their territories. The state is, in other words, a territorial association that may range in size from Russia to Singapore, in population from China to Luxembourg, and that claims supremacy over all other associations within its boundaries. As an association, the state is peculiar in several respects: membership is compulsory for its citizens; it claims a monopoly of the use of armed force within its borders; and its officers, who are the government of the state, claim the right to act in the name of the land and its people.




A great majority of all the world’s nation-states are unitary systems, including Belgium, Bulgaria, France, Great Britain, The Netherlands, Japan, Poland, Romania, the Scandinavian countries, Spain, and many of the Latin-American and African countries. There are great differences among these unitary states, however, specifically in the institutions and procedures through which their central governments interact with their territorial sub-units.


In one type of unitary system, decentralization of power among sub-national governments goes so far that in practice, although not in constitutional principle, they resemble federal arrangements. In Great Britain, for example, there are important elements of regional autonomy in the relationship between Northern Ireland, Wales, and Scotland and the national government in London; and the complex system of elected local governments, although in constitutional theory subject to abrogation by Parliament, is in practice a fixed and fairly formidable part of the apparatus of British government. In other unitary systems of this type, decentralization on a territorial basis is actually provided for constitutionally, and the powers of locally elected officials are prescribed in detail. Thus, the Japanese constitution, for example, specifies certain autonomous functions to be performed by local administrative authorities. A second type of unitary system makes substantially less provision for territorial decentralization of authority and employs rather strict procedures for the central supervision of locally elected governments. The classic example of this type is France. Until March 1982, when a law on decentralization went into effect, the French administrative system was built around départements, each headed by a préfet, and subdivisions of the départements, termed arrondissements, each headed by a sous-préfet. The préfets and sous-préfets were appointed by the government in Paris to serve as agents of the central government and also as the executives of the divisional governments, the conseils généraux, which were composed of elected officials. The system thus combined central supervision of local affairs through appointed officials with territorial representation through locally elected governments. (Following the passage of the decentralization law, the executive powers of the préfets were transferred to the conseils généraux.)


Yet a third type of unitary system provides for only token decentralization. In such cases, the officials responsible for managing the affairs of the territorial subdivisions are appointees of the central government, and the role of locally elected officers is either minimal or nonexistent. Examples of this kind of arrangement include Germany under Adolf Hitler and also several formerly Communist countries. The Third Reich was divided into 42 Gaue, each headed by a gauleiter chosen for his personal loyalty to Hitler. In Eastern Europe, the people’s councils or people’s committees were named by the centrally organized Communist parties; their appointment was confirmed by elections with one slate of candidates.




In federal systems, political authority is divided between two autonomous sets of governments, one national and the other sub-national, both of which operate directly upon the people. Usually a constitutional division of power is established between the national government, which exercises authority over the whole national territory, and provincial governments that exercise independent authority within their own territories. Of the eight largest countries in the world, seven–Argentina, Australia, Brazil, Canada, India, Russia, and the United States–are organized on a federal basis. Federal states also include Austria, Germany, Malaysia, Mexico, Nigeria, Switzerland, and Venezuela.


The governmental structures and political processes found in these federal systems show great variety. One may distinguish, first, a number of systems in which federal arrangements reflect rather clear-cut cultural divisions. A classic case of this type is Switzerland, where the people speak four different languages–German, French, Italian, and Romansh–and the federal system unites 26 historically and culturally different entities, known as cantons and demicantons. The Swiss constitution of 1848, as modified in 1874, converted into the modern federal state a confederation originally formed in the 13th century by the three forest cantons of Uri, Schwyz, and Unterwalden. The principal agencies of federal government are a bicameral legislature, composed of a National Council representing the people directly and a Council of States representing the constituent members as entities; an executive branch (Bundesrat) elected by both houses of the legislature in joint session; and a supreme court that renders decisions on matters affecting cantonal and federal relations. The Russian Federation’s arrangements, although of a markedly different kind, also reflect the cultural and linguistic diversity of the country. Depending on their size and on the territories they have historically occupied, ethnic minorities may have their own autonomous republic, province, or district. These divisions provide varying degrees of autonomy in setting local policies and provide a basis for the preservation of the minority’s cultures. Some of these areas were integrated into the Russian Empire centuries ago, after the lands were taken from the Mongols of the Golden Horde, and others resisted occupation even late in the 19th century. It is not uncommon for Russians to constitute a plurality of the population in these areas. The national government consists of the executive branch, led by the nationally elected president; the parliament; and a judicial branch that resolves constitutional matters.



This group considers mankind the raw material from which to construct a society. The forms of society differ, the means by which its design is arrived at differs, but what they all have in common is the notion that one/some/many men should rule the others – whether it be king, dictator or majority.


An autocracy is characterized by a supreme, uncontrolled, unlimited authority, or right of governing in a single person, as of an autocrat. It is very similar to a dictatorship. The key here is that the autocrat has absolute power. An autocrat requires a massive amount of force (in an army for instance) to exert control over an unwilling people. A benevolent autocrat is a contradiction in terms. A (rational) benevolent person recognizes that benevolence is not something which can, by its nature, be forcibly created. A benevolent leader would seek to undo the social engineering and return the society toward the sovereignty of the individual. Iraq under Hussein is a good example of dictatorship, as was Russia under Stalin.


Strictly speaking, communism means a scheme of equalizing the social conditions of life; specifically, a scheme, which contemplates the abolition of inequalities in the possession of property, as by distributing all wealth equally to all, or by holding all wealth in common for the equal use and advantage of all. The means to achieve this is by collectivization of all private property. Although meant to indicate the means of production, to be consistent communism requires that no individual may own anything exclusively, privately. Not the product of his work (thus his mind), nor any personal material benefit he may achieve as a result of it. All material is centralized and distributed by legislators, the intention being to achieve equal utility (of material) by all. Freedom of expression tends also to be mediated by the state for the same reasons and to maintain the ‘integrity’ of the collective. You can find a Marxist book in a US bookstore but you cant find Ludwig von Mises in a Cuban library

In practice communism fails dismally. The only way it can be achieved is if every single member of a communist society is in absolute agreement with the above arrangement – and that the legislators are not open to corruption in the form of personal acquisition or favor.

A political philosophy that tends to support the status quo and advocates change only in moderation. Conservatism upholds the value of tradition, and seeks to preserve all that is good about the past. Irishman Edmund Burke, in his Reflections on the Revolution in France (1790), compared society to a living organism that has taken time to grow and mature, so it should not be suddenly uprooted. Innovation, when necessary (in the states’ judgement), should be grafted onto the strong stem of traditional institutions and ways of doing things: “it is with infinite caution that any man ought to venture upon pulling down an edifice which has answered in any tolerable degree for ages the common purposes of society.”. Conservatives are usually social engineers by default (status quo).

There are two major modes of democracy. 1. Government by the people; a form of government in which the supreme power is retained and directly exercised by the people. 2. Government by popular representation; a form of government in which the supreme power is retained by the people, but is indirectly exercised through a system of representation and delegated authority periodically renewed; a constitutional representative government.

The latter form is that which exists in the UK. It is possible (though unlikely) to achieve the same results as a vicious nazi state through democracy. In democracy majority can ‘vote away’ the freedom of a minority. To use an extreme example imagine that you live in a village of 100 people and 99 of them vote to take your house. Despite the ‘landslide’ democratic victory there is no change in the morality of the theft they vote for. To a lesser extent this is what happens when one person votes for tax raises. The whim of a majority is no more moral than the whim of a dictator, just less likely to result in an extreme atrocity. The other problem is that it pits one interest group against another. Where the government decides to use one persons’ private property to pursue a goal with which he/she does not agree, the two parties oppose. Democracy can rapidly decline to a series of adversarial groups seeking to have the government favor them, at the necessary expense of another. Thus we have young vs. old, healthy vs. ill, employed vs. unemployed, road user vs. non-road user, county vs. county, race vs. race and so forth. where the government serves only as a policeman there can be no such adversariality.



A relative newcomer (1919 – Mussolini) fascism is characterized by elements of pride in the nation, anti-Marxism, the complete rejection of parliamentary democracy, the cultivation of military virtues, strong government, and loyalty to a strong leader. Whereas in communism the individual is second to the society, in fascism the individual is second to the state or race. It is not ‘right wing’ per-se, but is virtually the same as national socialism (Nazism), it therefore shares much with Marxism in its view of mankind as a collective. All are aware of what can happen when sufficient people in a state are in eager support of National Socialism, hence its widespread repulsion.


The policy that aims at building and maintaining an empire, in which many states and peoples, spread over a wide geographical area, are controlled by one dominant state. Much of the twentieth century history of the Third World, for example, is of the dismantling of the legacy of nineteenth century European imperialism. An imperialist state can also be any other type of collectivist, but not a type of individualist, nation. In Britain the growth of classical liberalism can be said to have contributed to the negation of the belief in imperialism as being ‘good’.

Form of rulership whereby a queen or king, empress or emperor holds absolute or limited power, usually inherited. In this century most European monarchies have become constitutional or limited, such as with the British Monarchy. Such monarchies often represent a strong symbol of national identity in (some of) the people’s minds (but exist at the expense of all). In some countries in Africa, the Middle East, and Asia monarchs still continue to hold absolute power. Under these conditions the state is similar to autocracy.


A form of government, carried out by a process of bargaining and compromise between a variety of competing leadership groups (business, labour, government, etc.). Advocates of pluralism claim that it best serves the democratic ideal in a complex modern society, in which individual participation in every act of decision-making is impractical. According to pluralism, individual rights and interests are protected by a sort of extra-constitutional checks and balances: No single group holds the dominant power position, power is always shifting, and individuals can have influence on policy-making through being active in one of these power groups. Some claim that America is such a pluralistic society; other theories say that pluralism is in fact a myth and American society is elitist. Despite this pluralism is not limited, other than by the common sense of its participants. Therefore it is still, in essence, collectivist and adversarial.

This is a government by the wealthy, or by a government primarily influenced by the wealthy. This system is as open to the social engineers as any other, and is against any principle of individual liberty. One of the criticisms of the US political system is that some wealthy people and organizations exert enormous influence over political power. This is not to be mistaken for a criticism of the free market or of wealth but as a criticism of unlimited political power.



Sharing the same collective view of mankind as communism socialism is a political system in which the means of production, distribution and exchange are mostly owned by the state, and used, at least in theory, on behalf of the people (whose ‘good’ is decided by the legislator). The idea behind socialism is that the capitalist system is intrinsically unfair, because it concentrates wealth in a few hands and does nothing to safeguard the overall welfare of the majority, we will see later that this is fallacious. Under socialism, the state redistributes the wealth of society in a more equitable way, according to the judgement of the legislator. Socialism as a system is anathema to most Americans, but broadly accepted in Europe – albeit in a much diluted fashion. Socialism is a system of expropriation of private property (regardless of how this was earned) in order to distribute it to various groups considered (by the legislator) to warrant it, usually the unemployed, ill, young and old and significantly, those with political pull. Since all property must be created before being distributed modern socialists allow some free market enterprise to exist in order to ‘feed’ from its production. This seems to admit that the free market is the best way to produce wealth.

A state or government which is run by priests or clergy. A recent example of a theocracy is Iran immediately after the overthrow of the Shah in 1979, when Ayotollah Khomeini gained power. Theocracies are becoming more common as Islamic fundamentalism grows in strength, but its influence is almost non existent in the West, with the exception of the USA where the ‘religious right’ have some influence. The social engineering is derived from the mythical content of the state religion and could include any number of atrocities against the individual.



This is described as a doctrine that advocates the abolition of organized authority. Anarchists believe that all government is corrupt and evil. Anarchism was a force in nineteenth century Russia, associated with Prince Peter Kropotkin (1842-1921) and Mikhail Bakunin (1814-76). Types of anarchism range from pacifism to violent revolution. While most often anti-capitalist (and tending to more collectivist philosophies), there are pro-capitalist strains, depending on the view of private property. The major problem with anarchism is in maintaining the freedom of the individual. Without an organized objective system of law an anarchic society might be at the mercy of the criminal and the powerful, with only personal and communal self defense to rely on.
A term which has changed its meaning, in the nineteenth century in Europe, the great age of liberalism, the term stood for freedom from church and state authority and the reduction of the power of royalty and aristocracy, free enterprise economics, and the free development of the individual. Liberalism advocated freedom of the press, religious toleration, self-determination for nations. It was liberalism that established parliamentary democracy. The Founding Fathers of the USA might be termed liberals. Liberal 19th century Britain became an industrial power, and a source for much of the worlds’ technological innovation, despite the prevalent class structure, due to the freedom and property rights enjoyed by the people. The current Conservative party (in its current leader) retains some classical Liberal ideology, albeit without the apparent philosophical courage to challenge opposing doctrines.

In the twentieth century, liberal parties were caught in between conservatives and socialists, despite being fundamentally different, and their influence declined. Today, liberalism stands for something rather different than it did in the nineteenth century. Now it tends to mean more government rather than less and is characterized by a diluted socialism and/or populism (doing what it believes most people would (or should!) want it to do).


A philosophy of freedom, particularly from any unnecessary restraints imposed (or indeed any restraints) by governmental authority. It is central to America: liberty is one of the inalienable rights described in the constitution (“life, liberty, and the pursuit of happiness”), and it has always been what America sees itself as standing for, although it can be argued that America has become more of a typical European nation (economically and politically) and has greater freedom simply because it has yet to decline to European standards.


Similar in ‘appearance’ to libertarianism, objectivism is different because it is based upon a specific philosophy of reality as first detailed by Aristotle and further extrapolated in the mid to later part of the 20th century by philosopher Ayn Rand, well known for her best selling fiction novels which encompass her philosophy in dramatic form. Objectivism supports individualism with reference to the nature of reality and this differentiates it from being just another political opinion. It is not an easy philosophy to understand, or for many, to accept.


Contrary to popular belief capitalism is not a ‘system’ as such. It is the consequence of individual liberty and corresponding property rights (the right to own that which you create, or are born owning). Capitalism is readily blamed for various inequalities despite having never been practiced in fact, with the closest examples being 19th century USA and to a lesser extent 19th century Britain.


Many people appear to have a very different idea about what is meant by capitalism. It is not a system of force imposed by people. It is a lack of such a system. It is what happens when people are free from the force of other people. In order to have people ‘free’ of the force of natural conditions something must be done to make those conditions better for mankind. That is exactly what people have been doing with the invention of the wheel, of machines, the production of energy and everything that followed. All of this is the product of mans mind, without it mankind is returned unprotected to nature. Capitalism itself forces nothing.
Capitalism doesn’t aim at equal ends because they do not occur where people are free to choose their own paths. Those better off do have more opportunities (not more freedom), but that in no way gives one person (or group) the right to rob them of these opportunities and give them to another. Life can be very hard for an impoverished man in a desert compared to a rich man in a European landowners family. That does not give anyone the right to rob the European and give to desert dweller.
A republic is a political system whereby political power is explicitly is granted with consent of the people and ruled according to law. The purpose of the government is to protect the rights of the people and in discharging that purpose it derives its just power from the consent of the people. Hence the words “we the people”. It is not a democracy, nor is it populism or pluralism. In fact it is quite a strictly limited system where the people essentially delegate (note – delegate, not forfeit) the protection of their individual rights to a government of their choosing. The limitations would be made explicit in a constitution and an excellent example is the US constitution, which sadly is largely unknown by the American people and constantly undermined by their governments.




What is a modern government?
Government is a force. A government can achieve no more than any other person if it does not have force to back it up. The government needs to have force to accomplish any task that people do not freely choose for themselves, or to take over the things which people had been freely choosing. If everyone was doing exactly what the government intends then there would be no need for it at all. A government can only act against your free choice, or remove it (same thing in practice) – if it agreed with you it would require no legislation, nor government bodies. A government ideally exists to protect each individual from the initiation of force (or fraud) by others, including itself. It must be, therefore, self limiting and subject to constant vigilance.
Thus the government ideally serves to protect a nation from invasion, protect its citizens from criminals and provide law courts for settling contractual disputes. The law necessary for this would need to be objective (based on fact, not whim or feeling).


How often do we blame the government for the state of the roads, the healthcare system, schools and a whole host of problems. How often do we observe the government claim credit for success in business or economy following interventions (paid for by us, without consultation) such as incentives and protectionism. Observe the recent beef debacle and the decline of the British motor industry. The government does not have the right to decide these things for us, even if we request it ‘we’ cannot speak for anyone but ourselves. Majority does not make moral, might does not make right.
This leads us to another important issue of whether we even need any government at all? Anarcho-capitalism suggests that law and order be supplied by the market. That the results would not only be ‘no worse’ than our current system – but actually betters.
The need for objective law, and a force to practice it would seem paramount to society which is to be free of criminality and mob rule. How to finance such is an issue I shall not cover in detail. Law should not exist in order to provide any person with some material good they have not created or earned for themselves. Not schooling, not healthcare, not financial security nor any other good. It should exist only to supply justice in a manner consistent with a free society.




In his Politics, Aristotle differentiated three categories of state activity–deliberations concerning common affairs, decisions of executive magistrates, and judicial rulings–and indicated that the most significant differences among constitutions concerned the arrangements made for these activities. This threefold classification is not precisely the same as the modern distinction among legislature, executive, and judiciary. Aristotle intended to make only a theoretical distinction among certain state functions and stopped short of recommending that they be assigned as powers to separate organs of government. Indeed, since Aristotle held that all power should be wielded by one man, pre-eminent in virtue, he never considered the concept of separated powers. In the 17th century the English political philosopher John Locke also distinguished the legislative from the executive function but, like Aristotle, failed to assign these to separate organs or institutions.




The characteristic function of all legislatures is the making of law. In most systems, however, legislatures also have other tasks, such as selection and criticism of the government, supervision of administration, appropriation of funds, ratification of treaties, impeachment of executive and judicial officials, acceptance or refusal of executive nominations, determination of election procedures, and public hearings on petitions. Legislatures, then, are not simply lawmaking bodies. Neither do they monopolize the function of making law. In most systems the executive has a power of veto over legislation, and, even where this is lacking, the executive may exercise original or delegated powers of legislation. Judges, also, often share in the lawmaking process, through the interpretation and application of statutes or, as in the U.S. system, by means of judicial review of legislation. Similarly, administrative officials exercise quasi-legislative powers in making rules and deciding cases that come before administrative tribunals.


Legislatures differ strikingly in their size, the procedures they employ, the role of political parties in legislative action, and their vitality as representative bodies. In size, the British House of Commons is among the largest; the Icelandic lower house, the New Zealand House of Representatives, and the Senate of Nevada are among the smallest. Most legislatures are bicameral, although New Zealand, Denmark, the state of Queensland, in Australia, and Nebraska, in the United States, have all abolished their second chambers.


It is often said that the 20th century has dealt harshly with legislatures and that this is an age of executive aggrandizement. Certainly, executives in most countries have assumed an increasingly large role in the making of law, through the initiation of the legislation that comes before parliaments, assemblies, and congresses, through the exercise of various rule-making functions, and as a result of the growth of different types of delegated legislation. It is also true that executives have come to predominate in the sphere of foreign affairs and, by such devices as executive agreements, which are frequently used in place of treaties, have freed themselves from dependence upon legislative approval of important foreign-policy initiatives. Moreover, devices such as the executive budget and the rise of specialized budgetary agencies in the executive division have threatened the traditional fiscal controls of legislatures. This decline in legislative power, however, is not universal.






Political executives are government officials who participate in the determination and direction of government policy. They include heads of state and government leaders– presidents, prime ministers, premiers, chancellors, and other chief executives–and many secondary figures, such as cabinet members and ministers, councilors, and agency heads. By this definition, there are several thousand political executives in the U.S. national government, including the president, dozens of political appointees in the Cabinet departments, in the agencies, in the commissions, and in the White House staff, and hundreds of senior civil servants. The same is true of most advanced political systems, for the making and implementation of government policy require very large executive and administrative establishments.


The crucial element in the organization of a national executive is the role assigned to the chief executive. In presidential systems, such as in the United States, the president is both the political head of the government and also the ceremonial head of state. In parliamentary systems, such as in Great Britain, the prime minister is the national political leader, but another figure, a monarch or elected president, serves as the head of state. In mixed presidential-parliamentary systems, such as that established in France under the constitution of 1958, the president serves as head of state but also wields important political powers, including the appointment of a prime minister and Cabinet to serve as the government.


The manner in which the chief executive is elected or selected is often decisive in shaping his role in the political system. Thus, although he receives his seals of office from the monarch, the effective election of a British prime minister usually occurs in a private conclave of the leading members of his party in Parliament. Elected to Parliament from only one of more than 630 constituencies, he is tied to the fortunes of the legislative majority that he leads. By contrast, the American president is elected by a nationwide electorate, and, although he leads his party’s ticket, his fortunes are independent of his party. Even when the opposition party controls the Congress, his fixed term and his independent base of power allow him considerable freedom of maneuver.


An important area of contrast between different national executives concerns their role in executing and administering the law. In the U.S. presidential system, the personnel of the executive branch are constitutionally separated from the personnel of Congress: no executive officeholder may seek election to either house of Congress, and no member of Congress may hold executive office. In parliamentary systems the political management of government ministries is placed in the hands of the party leadership in parliament. In the U.S. system the president often appoints to Cabinet positions persons who have had little prior experience in politics, and he may even appoint members of the opposition party. In the British system, Cabinet appointments are made to consolidate the prime minister’s personal ascendancy within the parliamentary party or to placate its different factions. These differences extend even further into the character of the two systems of administration and the role played by civil servants.


In nearly all political systems, even in constitutional democracies where executive responsibility is enforced through free elections, the 20th century has seen an alarming increase in the powers of chief executives. The office of the presidency in the United States, like the office of prime minister in Britain, has greatly enlarged the scope of its authority. One of the challenges of representative government is to develop more constitutional restraints on the abuse of executive powers while retaining their advantages for effective rule.


Like legislators and executives, judges are major participants in the policy-making process; and courts, like legislatures and administrative agencies, promulgate rules of behavior having the nature of law. The process of judicial decision making, or adjudication, is distinctive, however, for it is concerned with specific cases in which an individual has come into conflict with society by violating its norms or in which individuals have come into conflict with one another, and it employs formal procedures that contrast with those of parliamentary or administrative bodies.




Like legislators and executives, judges are major participants in the policy-making process; and courts, like legislatures and administrative agencies, promulgate rules of behavior having the nature of law. The process of judicial decision making, or adjudication, is distinctive, however, for it is concerned with specific cases in which an individual has come into conflict with society by violating its norms or in which individuals have come into conflict with one another, and it employs formal procedures that contrast with those of parliamentary or administrative bodies.


Established court systems are found in all advanced political systems. Usually there are two judicial hierarchies, one dealing with civil and the other with criminal cases, each with a large number of local courts, a lesser number at the level of the province or the region, and one or more courts at the national level. This is the pattern of judicial organization in Britain, for example. In some countries–for example, in France–although there is a double hierarchy, the distinction is not between courts dealing with criminal cases and other courts dealing with civil cases but rather between those that handle all civil and criminal cases and those that deal with administrative cases or challenges to the administrative authority of the state. Reflecting the federal organization of its government, the United States has two court systems: one set of national courts and 50 sets of state courts. By contrast, Germany, which is federal in governmental organization, possesses only a single integrated court system.

Local courts are found in all systems and are usually of two types. The first type deals with petty offenses and may include a traffic court, a municipal court, a small-claims court, and a court presided over by a justice of the peace or a local magistrate. The second type, sometimes called trial courts, are courts of first instance in which most cases of major importance are begun. These are the state superior courts in the United States, the county courts and quarter sessions in Britain, the tribunal de grande instance in France, and the district courts, or Landgerichte, in Germany. In some systems there is a level above the local court, usually referred to as assize courts, in which exceptionally serious crimes, such as homicide, are tried. Courts of appeal review the procedures and the law in the lower court and, in some instances, return the case for a new trial. Also, outside the regular court systems, there are sometimes found specialized judicial tribunals, such as administrative courts, or courts of claims that deal with special categories of cases.






In order to address the economic system in Islam, firstly the position of Islam in relation to the quest for material well being must be discussed. This is because the word Dunya, which is associated with material wealth or worldly matters has become an impure word for many Muslims.


The separation of Deen from Dunya (secularism) is a Western-Christian concept that has recently become widely internalized amongst Muslims. Consequently, seeking to increase in economic or worldly matters is frowned upon, while continuous engagement in prayer and other personal ibadaat is regarded as meritorious. As such, many people get confused and conduct a double life. On the one hand, money talks, it gives status and makes life comfortable, so they seek it vigorously. On the other, they feel guilty, thinking that their effort should be spent on ‘religious’ duties.


This is due to a misunderstanding of the position of the economic question in Islam. There is no doubt that Islam is opposed to monasticism and views the economic activities of man as quite lawful and sometimes even obligatory and necessary. We find many injunctions in Islam that allude to this. For example, Allah (SWT) says in the Qur’an:

‘Disperse through the land and seek the bounty of Allah’ (TMQ-62:10)


He also says:

‘Seek the other world by means of that which Allah has bestowed upon you, and do not be negligent about your share in this world.’ (TMQ-28:77)


These are all in reference to economic activity.

In the Sunnah, we find that one of the most commonly said du’as that the Prophet (SAW) taught us is:

‘our lord give us the good in this life and the good in the hereafter’.


But despite this, we find expressions in the Qur’an which state:

‘The life of this world is but a delusion’ -3:185


‘The mutual rivalry for piling up the good things of this world diverts you from the more serious things’. – 102:1


and many others, stating that man has lust and greed for wealth(89:20) and that he is violent at this greed (100:8) and that he becomes boastful and proud (11:10) and so on.


This apparently sounds like a contradiction in terms. But actually, what we are taught by Islam is that the real objective of our existence is to worship Allah (SWT) through righteous conducts by living as humans in this world. So all those things that are necessary for this life become essential for man. It is one thing to say that material well being is important and even compulsory but it is quite another to say that it is the ultimate goal and center of thought and action in life. This is where the confusion arises about the Islamic economic question. The fundamental difference between Islamic economics and all materialist ones is precisely this. The materialists view that economic well being is the ultimate end of human life, while Islam says that these things may be necessary and indispensable, but cannot be the true purpose of life. Economic endeavors only become an allurement or delusion if man loses sight of his real purpose in their pursuit.


The right path to follow therefore is to fully engage into worldly economic life in the manner prescribed by Allah (SWT) and His Prophet (SAW), both at societal and individual level. The prophet said:

‘Work for your worldly life as you were going to live forever, but work for the life to come as if you were going to die tomorrow.’




Unlike the current world view, as pushed by the capitalist west, Islam considers that the main economic problem that mankind will ever have is that of distribution of wealth and not of production. In the eyes of the capitalist West, there is relative scarcity of resources available in the world, and peoples’ demands for these resources are endless. Hence each nation and in fact the world should concentrate on more and more production. The higher the amount of wealth produced, the higher the number of people that will satisfy their demands through the process of economic activity.


Islam distinguishes between basic needs which include food, clothing and shelter, and luxurious wants which includes all those things that are not necessities in life. It views that there are enough resources to satisfy the basic needs of all people all the time and to satisfy some of the luxurious wants of people and that economic problem is that of distribution and not production. There are enough resources to feed, clothe and house everybody in the world fully as can be seen by the food mountains of Europe and the excesses of the few rich in each country, including the 3rd world countries. In accordance with their capitalist philosophy of maximizing profit, we find governments paying farmers to produce less as in the EC countries, or to destroy what has already been produced as happened in poor Latin America where a huge amount of coffee was burnt. Far more wealth leaves the poor countries of Africa for the rich West than vice versa due to unjust economic deals. Even at the height of the Ethiopian famine crises in the late eighties, the country was exporting millions of dollars worth of resources to the West.


Allah (SWT) says in the Quran:

‘It is Allah who created the heavens and the earth, and sent down from heaven water wherewith He brought forth fruits to be your sustenance. And He subjected to you the sea at His commandment; and He subjected to you the rivers and He subjected to you the sun and the moon constant upon their courses, and He subjected to you the night and the day, and gave you of all that you asked Him. If you count Allah’s blessing, you will never number it; surely man is sinful, unthankful’ (4:32-34)


This verse among many others show that Allah (SWT) has pooled in this universe all the needs and beneficial things for man, and has provided sufficient resources to satisfy material need of man.


In Islam, a distinction is made between economic science, which is to do with the means of production and economic system is concerned with the problem of distribution of wealth, namely the rules by which wealth can be acquired, used and disposed of. It is through the economic system that is specific to Islam that wealth is distributed equitably, while economic science is not particularly specific to Islam as such but can be acquired from any other people or developed as seen fit.






  • Need Fulfillment.
  • Respectable source of earning.
  • Equitable distribution of income and wealth.
  • Growth and stability.



The objectives of the Islamic economic system can be classified as follows:


1) To satisfy the basic needs of each and every individual in the Islamic state completely

2) To provide the citizens of the Islamic state with the means to satisfy their luxurious needs

3) To achieve 1) and 2) through a naturally workable system with due incentives for economic activity and an equitable system of distribution.


Principles And Policies To Meet the Issues & Achieve The Objectives


The basis upon which the economic system is built constitutes three principles:

  1. Ownership,
  2. Disposal of the ownership, and
  3. The distribution of wealth amongst the people
  4. Economic enterprises and the prohibition of interest and hoarding




Ownership constitutes one of the important incentives for engaging into economic activity as the owner of wealth has the right to use or dispose of it. The means of acquiring such rights is one of the fundamental principles through which the objectives of the Islamic economic system are achieved.


In the Islamic economic system, it is understood that the real owner(Creator) of all wealth is Allah (SWT). We only ‘own’ wealth by proxy as guardians. Some of us acquire wealth by engaging in the production process and hence have a direct access to wealth. These include the factors of production as defined by Islam. Others have an indirect access to wealth simply because Allah (SWT) as the real owner of wealth has stipulated that those with direct access to wealth through engagement in the production process must pass some of it on to them as He (SWT) made clear in the Qur’an:

‘Give to them from the property of Allah (SWT) which He (SWT) has bestowed upon you’ (24:33)


This usually takes the form of Zakat, Kaffarat, Sadaqat-ul-fitr, inheritance, etc. which are given to the poor, the needy and later generations. It is the duty of the government to ensure that such wealth is duly transferred by law.


Notwithstanding this, Islam does not impose a limit on the amount of wealth that one can own. Rather, it controls the means of ownership such that people acquire the right to wealth in a just manner. This excludes speculation, forward transactions, lottery, and dealing with interest among other things.


Additionally, Islam also stipulates in accordance to the ahadith of the prophet (SAW) that certain properties are to be collectively owned for the use of all citizens. These include sources of energy, pastures and natural resources including water.


Through these ownership principles, Islam ensures that everyone gets what is rightfully due to him from his creator, unlike the capitalist system where only those who take part in the production process have the right to wealth. At the same time, it gives full incentives to individuals to fully participate in the economy by not imposing a limit on how much they can own.




Disposal of the Ownership


The disposal of ownership is another key element of the economic system. Islam encouraged the giving of charity, gifts, interest free loans, and the like. It also prohibited the hoarding of money and spending it in the pursuit of unlawful things. It also gave general guidelines for the contracts by which goods are exchanged and made them suitable for all times and all situations. This allows the citizens in the Islamic State, male or female, to seek their provision in an unhindered way and satisfy their needs without the concern of exploitation and corruption arising from their actions.


Distribution of Wealth


The distribution of wealth in the society is a critical factor in determining the availability of resources for people to satisfy their needs. Thus, Islam designated the ownership as one of three types, public, private, or state.


Public ownership means that the wealth is owned by the citizens, Muslim and non-Muslim, of the State. This includes the basic utilities without which the life of the community cannot be sustained. In one hadith, the Prophet (saws) mentioned that “People share in three things: water, pastures, and fire.” The details of this ownership are beyond the scope of this book; however, they are well documented in the Islamic legal texts. The public ownership also includes things that by their nature cannot be individually owned, such as the rivers, seas, streets, the town squares, and the like. Besides these, Natural resources such as oil, minerals, and metals are also publicly owned. The public ownership is administered by the State on behalf of the public. The State utilizes the revenue from these items for running and providing the public with utilities such as water and gas, and facilities such as parks, highways, and the like.


Private ownership is that which the individual earns through his own efforts or receives as a gift, charity, inheritance, or any other means. It includes one’s home, car, appliances, money, real estate, businesses, and the like. The individual is free to deal with them as he pleases, within Islamic law. Private property may belong to men, women, or children, all with the same rights over it.


State ownership is that which belongs to the state and is necessary for the execution of its duties. This includes the military, the buildings that it occupies as its offices, and the heavy industry that it constructs to build the infrastructure of the society. In addition to the ownership, Islam also defined the revenues and the expenditures of the state, such as the nature of the taxes and the channels of distribution for the wealth.


These kinds of ownership are defined by Islam and cannot be altered. Thus, public property cannot become state or private property, private property cannot be confiscated by the state as public property, and so on. Islam thus insures that the rights of all individuals are protected and the society as a whole is conducive to earning ones provisions and living in security.


Economic enterprises and the prohibition of interest and hoarding


Interest rates form the backbone of the capitalist system in many ways. It is used as a tool to regulate economic growth and monetary supply by acting as an ‘incentive’ for those who have surplus money to save/hoard. In Islam both interest and hoarding are prohibited. Allah (SWT) says in the Qur’an:

‘And those who hoard up gold and silver and do not spend in the way of Allah (SWT), announce to them a painful chastisement’ (9:34)


Owners of capital therefore have to invest it either in the form of private business or partnership. The most fundamental criteria that must be met by all companies of partnership are that there must be offer and acceptance between two or more parties, and that once they become partners they have equal say in the running of the company. In addition to these criteria, the manner of sharing profit and loss is dependent on the type of company. In the Company of Equals; Anan, where partnership is formed by the wealth of two or more parties, any loss suffered by the company would be shared among the partners in proportion to the capital they put. In the Company of Persons; Abdan where partnership is based on services provided by the partners, loss is shared according to the salaries/wages of the partners. In the company of Mudharaba where partnership is based on capital from one party and labour from another, loss is incurred by the owner of capital while the provider of labour loses their wage/salary. From these elementary rules and structures, many other forms of companies can be formed. In all cases, profit is shared according to mutual agreement independent of the amount of capital or service/labour provided.


Through this arrangement, continuous business investment keeps employment level high and both the rich and the poor get richer.




The government plays an important role in the economic system of Islam. Islam makes it the responsibility of the state to provide food, clothing, shelter, education, health and security to every individual. It is also the responsibility of the state to enable citizens with the means of getting luxurious needs in addition to these basic needs by themselves. The state achieves this through the management of public property , through the use of income from other sources and through provision of good economic environment so that people satisfy their needs due to their involvement in economic activity.

Sources of revenue for the state


1) Taxation


Fai – Property captured from the enemy without fighting

Ghanima – Booty

Ushr – Land Tax on unconquered land

Kharaj – Land Tax on conquered land

Jizya – Head-tax on non-Muslims


2) Others


– Revenues from natural resources

– Fines levied


3) Facilitating luxurious needs


It is also the responsibility of the state to provide adequate infrastructure for the supply of such commodities to the people. The most fundamental aims of the economy of any nation is to provide adequate supply of goods and services for its citizens and to enable each citizen to acquire and use them to raise their standard of living. This requires that wealth be created in the form of usable goods and services and that people get the means of owning and/or using these goods or services.


The degree to which these aims and objectives are met and the efficiency with which the citizens of the state participate depends on the specific rules of engagement, namely the economic system which the nation implements. Apart from the general ideological framework upon which the economic system is based, the key ingredients for the economic success of any nation include:


1) Confidence in and stability of the system

2) Workability of the system by providing appropriate economic incentives for wealth creation and distribution

3) A just method of distribution.


Although only the capitalist economic system is practiced in the world today, the Islamic economic system gives the best rules of engagement in economic activity and would be the most successful towards raising the standard of living of any nation.



Economic activity by its very nature is risky as those who partake in it directly can gain or lose wealth. Hence in all economic systems, there is always an understanding by those who participate that they may lose their capital or effort . However, there are other phenomena that adversely affect the economic life of a nation by artificially creating an atmosphere of insecurity, and thereby reduce the level of economic activity. These arise because of the specific economic system implemented and include the followings:


  1. Booms and Busts:

In the capitalist system, periods of good and bad trade have become evident from the records. Although opinions differ widely among economists on the conditions responsible for trade fluctuations, a common feature is that root cause of these conditions stems from the foundations of the capitalist economic system.


  1. Runaway inflation:

The fact that money continually loses its value has become an intrinsic part of capitalist economies. Here again there are quite a few opinions from economists as to what causes runaway inflation. But the recipe for runaway inflation lies at the heart of established financial controls in the capitalist system.


  • Money market crashes:

These occur irregularly in the form of sudden exaggerated changes in foreign exchange rates and sudden fall in share prices.


The most fundamental characteristics of the capitalist economic system which form the root of these phenomena are speculation and false representation. These are manifested in the artificial creation of money:

There is nothing to prevent governments from literally creating money at will. Excessive creation of paper money which cannot be represented by real wealth is the root cause of inflation. In addition, high street banks can lend money that is not existent by crediting peoples accounts on paper. This false representation, that is meant to keep the system going, actually serves to create more artificial money.


In conclusion, the above points clearly outline certain fundamental differences between the capitalist economic system and the Islamic economic system. The inherent failing of capitalist economies can be seen today throughout the world, even in the Muslim countries, where it has been forcibly applied by west-influenced rulers. The details of Islamic economics should fill us with confidence that Islam provides solutions to the “economic problem”, which the world around us currently faces.


A detailed view of the Western Economic System now follows, so as to clearly identify where it is going wrong and how it compares to the Islamic Economic System.



The Western Economic System is a set of principles and techniques by which the ownership and allocation of economic resources are decided and organized by society. There are two main types of modern economic system, the private- or free-enterprise economy and the centrally controlled and planned economy. Neither of these is to be found in practice in its pure form; in reality, all economic systems contain varying degrees of each.


The basis of the private-enterprise system is the belief that when each member is allowed to pursue his rational self-interest the maximum common good will be generated. In effect, the greatest common good is simply a sum of its constituent parts, and anything that interferes with the pursuit of individual rational self-interest will reduce that sum. The mechanism that assures that the pursuit of myriad private goals will produce public good is the market, which impersonally sets prices for both the factors of production–land, labour, and capital–and the products of industry.


With the factors of production in private hands, the proportions in which these factors are combined to produce different goods and services are determined through the price mechanism. If something is supplied in quantities greater than are required, the price will fall or production will be reduced, or both results will occur. If there is unsatisfied demand for any product, the price will rise and, with profits in prospect, production will be stimulated.


The central-planning approach is based on the observations that the private-enterprise system accepts patterns of unequal wealth and income distribution and that, moreover, because of technological and other developments, some producers attain a size and importance that destroy the competitive conditions required for the operation of the market mechanism. The answer, for proponents of central planning, is public ownership of the means of production and the central determination and control of what is produced. In this way, inequalities of wealth and income are to be reduced or eliminated and economic activities organized according to agreed-upon social and political objectives.


The developed economies of western Europe, North America, and Japan are described as private-enterprise systems, while those few countries that are still communist have centrally planned and controlled economies, and in the developing countries have no established pattern; in many the rival philosophies coexist, often uneasily, with each other. Most developed free-enterprise countries, however, recognize the criticisms of the pure market economy and accept the need for a degree of state involvement. In many of these countries there is a degree of state ownership of economic enterprises, mainly in public utilities and some basic industries.


In addition, all governments take an active hand in influencing the nature and tempo of economic growth by controlling such key economic variables as the money supply, interest rates, and government expenditure and borrowing. In most cases, government action in these areas reflects a judgment relating to political, social, or economic objectives, but it is radically different from the prescriptions of the central-planning doctrine in stemming from the belief that freedom of enterprise is the most efficient way of maximizing economic growth. Although the extent of state involvement varies from country to country and may change with successive governments, Western countries agree that private enterprise is to be preferred on both philosophical and practical grounds.


Centrally controlled economies begin with the assumption that state determination of economic goals and detailed state control of economic activities are desirable as matters of principle. In centrally controlled economies, state ownership of the means of production is the rule. Resources are allocated to investment, and the output of goods and services is decided and organized in accordance with a detailed economic plan that attempts to ensure, by administrative direction rather than incentive, that all parts of the economy and every enterprise perform according to a complex set of officially determined interlocking objectives.


In practice, this has proved to be impossible. Despite a vast planning and controlling bureaucracy, the fulfillment of each of thousands of objectives cannot be guaranteed, yet such is the rigidity of the system that failure in one aspect will compromise the integrity of the entire plan. After the Stalinist era, Yugoslavia, Hungary, and China were among the communist countries that experimented with limited degrees of individual enterprise and decision making to overcome the inflexibility of the system without compromising state control over the basic aims of economic development.


After the Soviet Union abandoned its control over eastern Europe in 1989, the eastern European nations retreated from the rigid controls of central planning and adopted the economic model that had been pioneered by Hungary in the late 1960s. In subsequent years the eastern European countries came to rely more and more on private enterprise and the price mechanisms of the free market.


Meanwhile, the collapse of the Soviet Union and its communist government in 1991 was accompanied by the complete breakdown of that country’s system of central planning. New governments in Russia and other former Soviet republics then began to make the difficult transition to an economic system based largely on private ownership and market price mechanisms. The demise of the Soviet Union left the world with only a few nations still relying on undiluted central planning and complete state ownership of the means of production.




The thoughts related with the ruling system and the thoughts connected with economics are the thoughts the Muslims were most fascinated with, and the severest tribulation they suffered in their life. They are the greatest thoughts which receive much attention from Muslims, and which the West tries to implement and control practically and perseveres with in their application. The Islamic Umm’ah is formally governed according to the democratic system, in order to protect Western colonization and systems, but it is governed practically with the capitalist economic system in all the economic aspects of life.


It is necessary to give a clear picture of the capitalist economic system, which classifies the basic thoughts on which the political economies in the West are established, so that those who follow the Western economic system touch the corruption of this system and its contradiction with Islam.


On reviewing the economic system in the capitalist ideology we find economics is that which examines man’s needs and the means of satisfying those needs. It only discusses the materialistic side of man’s life; and it is established on three principles:


  1. The question of the relative scarcity of commodities and services in relation to the needs. That is, the insufficiency of commodities and services to meet the growing needs of man. This is society’s economic problem in their viewpoint.
  2. The value of the product, which is the basis of most of the economic research and study.
  3. The price, and the role which it undertakes in production, consumption, and distribution. It is the cornerstone of the capitalist economic system.




With regard to the relative scarcity of commodities and services, this condition exists because the commodities and services are the essential means which satisfy man’s needs. They say man has needs that require satisfaction, so there must be means to satiate them. These needs are purely materialistic, because they are either sensed and touched by man (tangible), such as the need for food and clothing, or they are needs sensed by man but are not tangible, such as the need for the services of doctors and teachers. As for the moral or spiritual needs, such as the glorification of the Creator or worship, they are not recognised economically, and are therefore disregarded or have no place in the economic discussion.


The means of satisfaction are called commodities and services. The commodities are the means of satisfying the sensed and touched (tangible) needs. The services are the means of satisfying the sensed but intangible needs. What achieves the satisfaction in the commodities and services, in their viewpoint, is the ‘benefit’ in them. This benefit is an attribute which renders the thing suitable for satisfying a need. Since the need means the desire economically, then the economically beneficial thing is everything desired, whether it is essential or not, and even if some people consider it beneficial and others consider it harmful. It is considered economically beneficial as long as there is somebody who wants it. This makes them consider things as beneficial from the economical angle even if the public opinion considers them of no benefit or harmful. Thus the wine and hashish are beneficial things to the economists since some people want them.


The economist looks upon the means of satisfaction, that is, the commodities and services, from the viewpoint that they feed a need, irrespective of any other consideration. Thus he looks upon the needs and the benefits as they are, not as they should be. So he looks at the benefit considering that it feeds a need as such, without taking notice of any other matter. So he looks at the wine in its capacity of having an economic value because it feeds the needs of some people, and he looks to the maker of wine as a person who provides a service, considering this service as having an economic value, because it feeds the need of some individuals.




This is the nature of needs in the capitalist economic system, and the nature of the means of satisfying these needs. So the economist does not care about what the society should be, but cares about the economic material, as it satisfies a need. Therefore, the function of the economist is to supply the commodities and services, i.e. providing the means of feeding man’s needs, irrespective of any other consideration. Therefore, the economist studies optimizing the means of satisfaction of man’s needs. Since the commodities and services, which are the means of satisfaction, are limited they are not sufficient to meet man’s needs, because these needs in their view are unlimited, constantly growing. Therefore, there are basic needs which man as a human being must feed, and there are needs which increase in number as man proceeds to a higher level of urbanization. These needs multiply and increase and they all need to be fed completely, a matter which can’t be fulfilled no matter by how much the commodities and services increase. From here the basis of the economic problem emerged, which is an overabundance of needs and the shortage of the means of their satisfaction, i.e. the lack of commodities and services to feed all of man’s needs completely.


From this basis the society faces the economic problem, which is the relative shortage of the commodities and services. The inevitable result of this shortage is that some needs stay either only partially satisfied or not satisfied at all. Since this is the situation, it is necessary that the members of society agree on rules that decide which needs have to be satisfied and which needs are deprived. In other words, it is necessary to set rules that decide the manner of distributing the limited resources amongst the unlimited needs. So the problem in their view is in the needs and resources, that is, optimizing the resources to satisfy the needs, and not satisfying the needs of every individual.


Therefore, it is necessary that the rules which are laid down, be rules that guarantee to achieve the highest possible level of production, so as to fulfil the highest supply of resources, i.e. to supply the commodities and services to the nation in total but not necessarily all the people as individuals. Therefore, the problem of distributing the commodities and services is closely connected to the problem of production, and the objective for economic studies and research is to work for increasing the consumption of commodities and services by the whole of society. It is not surprising therefore, that the study of the factors which affect the size of the national production takes precedence among all the economic subjects; because the study of increasing the national production is the basis of most studies to solve the economic problem, which is the shortage of the commodities and services relevant to the needs; as they think that the treatment of poverty and deprivation can’t be achieved except by increasing production. So the capitalist solution for the economic problem faced by society is only met by increasing production.




On a general scale, the following shortfalls can be attributed to, and critiques made on the Capitalist Society:


Mixing the Needs and Means of Satisfaction


Economy in the capitalist view is that which considers man’s needs and the means of their satisfaction; so the production of commodities and services which are the means of satisfying the needs together with the distribution of these commodities and services are considered as one subject. The needs and the means of their satisfaction are considered interrelated such that they are one thing and one subject inseparable from each other, rather than treating one of them as being included within the other.


So, the distribution of the commodities and services is included in the subject of the production of these commodities and services. Thereupon, they look at the economy from one view which includes the economic material and the method of its possession, without separation between them and without differentiating one of them from the other. Thus, they look at the economic science and the economic system as one matter with no difference between them, though there is a difference between the economic system and economic science.


Economic System and Economic Science


The economic system is that which demonstrates the distribution of wealth, it’s possession and it’s disposal. In its demonstration it follows a particular view point in life, or ideology. Therefore the economic system in Islam is different than that of socialism/communism and of capitalism, as each of these systems follows its ideological view point of life. The economic system is different from economic science which discusses production, improvement in production and in finding and improving the tools of production. The economic science is universal to all nations and not associated particularly with a certain ideology, as is the case with the other sciences. So for example, the view towards property in the capitalist system differs from that in the socialist/communist system, and differs from that in Islam. This is contrary to the improvement of production, which is a study of a reality, the view towards production is a scientific matter, which is the same for all people no matter what their view or ideology is.

This mixing of the study of the needs and the means of their satisfaction, i.e. between creating the economic material and the manner of its distribution, making them one thing and one subject, is an error. In taking this as one matter economic studies of the capitalists have been mixed and confused. Therefore the basis of establishing the economy in the capitalist ideology is wrong.


Needs are not only Materialistic


The reference to the needs which require satisfaction, as being purely materialistic is another error, and it disagrees with the reality of needs. There are moral needs, and there are spiritual needs, and each of them requires satisfaction as do the materialistic needs, and each needs commodities and services for satisfaction.


Production Given Preference over Distribution

By including satisfaction of needs within the subject of the means of satisfying needs, and by viewing the means of satisfaction only as satisfying a need, economists concentrate on production of wealth more than distribution of wealth. The importance of distribution of wealth to satisfy the needs has became secondary. Therefore, the capitalist economic system has one aim, which is to increase the country’s wealth as a whole, and works to arrive at the highest possible level of production. The capitalist considers that the achievement of the highest possible level of welfare for the members of society will come as a result of increasing the national income by raising the level of production in the country, and in enabling individuals to take the wealth as they are left free to work for producing and possessing it. So the economy does not exist to satisfy the needs of the individuals and to facilitate the satisfaction of every individual in the community, but it is focused on the augmentation of what satisfies the needs of the individuals, i.e. it is focused on satisfying the needs of the community by raising the level of production and increasing the national income of the country.


Through the availability of the national income, the distribution of income among the members of society occurs, by means of freedom of possession and freedom of work. So it is left to the individuals to obtain what they can of the wealth, everyone according to what he has of its productive factors, whether all the individuals or only some individuals are satisfied.


This is the political economy, i.e. the capitalist economy. This is manifestly wrong, and contradicts reality, it does not lead to an improvement in the level of livelihood of all individuals, and does not fulfil the basic welfare of every individual. The effect of this erroneous view is that the needs which require satisfaction are individual needs, they are needs of a man; so they are needs for Joe, Mary and Abdullah and not needs for a group of mankind, or a group of nations, or a group of people. The party who strives to satisfy his needs is the individual, whether he satisfies them directly such as eating, or he satisfies them through the satisfaction of the whole group such as the defense of the nation.


Therefore the economic problem has focused on distributing the means of satisfaction for individuals, i.e. the distribution of the funds and benefits to the members of the nation or people, not on the needs which the nation or the people requires, irrespective of each individual or the nations individuals. In other words, the problem is the poverty which befalls the individual not the poverty which befalls the nation. The concern of the economic system must only be in satisfying the basic needs of every individual, not the study of producing economic material.



The Relative Scarcity


We recall that the argument put forward in capitalism as the basis of the economic problem is the relative scarcity of commodities and services which faces society. It is further claimed that through the increasing individual needs and the limit of their satisfaction that there is insufficient commodities and services to satisfy all of mans needs completely. This view is erroneous and contradicts with reality. This is because the needs which must be met are the basic needs of the individual as a man (food, shelter and clothing), not the secondary or luxurious needs, though the luxurious needs are strived for.


The basic needs of man are limited, and the funds and the efforts which they call the commodities and services existent in the world are certainly sufficient to satisfy man’s basic needs; it is possible to satisfy all the basic needs of mankind completely. So there is no problem in the basic needs, besides considering it the economic problem that faces society. The economic problem is truly the distribution of these funds and efforts for every individual to satisfy all basic needs completely, and only then helping them to strive for satisfaction of their luxurious needs.


Price is not the Only Incentive for Production


The western economists say that the price is the incentive for production, because the motive for the person to spend any effort is to reward him materially. This view is contrary to reality and incorrect. Man often spends his efforts for a moral reward such as the attainment of the reward of God, or for undertaking an ethical merit such as faithfulness. The needs of man can be materialistic such as the material profit, and they can be spiritual such as sacredness, morality or praise. So confining the needs to only materialistic needs is untrue. In fact man could spend of his funds in satisfaction of a spiritual or a moral need more generously than he spends in satisfying the materialistic needs.


So, the price is not the only incentive for production. A stone mason could designate himself to work for months in cutting stones for building a mosque, and a factory may assign its production for some days of the year for distribution to poor people, the nation could allocate its efforts in preparing the facilities to defend her territories. This production is not motivated by the price. Moreover, the materialistic reward itself is not confined to the price, it could be other commodities or services. So, considering the price as the only incentive for production is incorrect.




The answer to the economic problems of the world and particularly the Muslim countries is to resort to nothing but Islam.
From the above observations and comments, it can clearly be seen that the Islamic economy, through the choice and management of money, will go a long way towards ridding society of the present day world economic ills and achieving the fundamental objectives of effective wealth creation and distribution. The dynamics of the Islamic economy would be an entirely different ball game from our experiences of the present day world economy which is based on capitalism. There would be a proliferation of small businesses in the form of partnership and individual private ventures. The problem of wealth concentration among few would be removed through business partnerships and also through indirect right to wealth in the form of Zakat, Kaffarat, Sadaqat-ul-fitr, Wisarat, Nafaqat etc. The motivation for business enterprise coupled with a stable currency would influence strong and real economic growth. Three of the major monetary forces that push and pull and even crash western economies, namely interest rates, exchange rates and runaway inflation would be absent. The economic structures such as financial markets and banks which sustain these and foster the concentration of wealth among a few would be absent.
With this approach to the economic problem in the society, Islam clearly distinguishes itself from the man-made ideologies of Communism and Capitalism. Both of these ideologies have failed to distinguish between the basic and luxurious needs of the people. Communism attempts to satisfy them equally for all people, suppressing their right to private property, ignoring the differences in the luxurious needs of the people in the level of satisfaction for each individual, and in their capabilities. In addition, by denying private ownership, Communism has ignored the human beings instinctual drive to own property. Overall, through the choice management and use of money, the Islamic system creates a more practicable and healthy system of economy with everyone getting what is rightfully due to them.


With the invasion of the Capitalist economic system into the Muslim lands near the end of the nineteenth century, and the defeat of the Islamic state, the economic situation of the Muslim world had begun to decline to its present situation. Thus, the return of the implementation of the Islamic Economic System, as a part of the total Islamic system is the only means by which the current economic crisis can be solved.




The final word on the issue of comparative study of Islam as against the Modern West, is simply that, in practice, the Islamic Ideals are non-existent. No Islamic state today practices the basic philosophies and ideologies as preached by our Holy Prophet (SAW). By simply adapting the name of an “Islamic Republic” the inherent qualities and features of such a state cannot be created. For a such a position and status, continuous struggle and harsh realities must be faced, with some strong enforcement capabilities to back them up.


On the other hand, it is common knowledge that today, in almost all countries of the world, the Modern Western ideologies are being practiced in some form or another. This is also the reason why in most places the social degradation issues are the main themes under discussion. There is no doubt that in the world today, the only reason for such a decay is the adaptation of such Westernized ideals.


In the wake of such developments, where neither ones money, nor life is safe from the volatilities of the state controlled elements, it is imperative to realize the importance of the Islamic ideals. These are the only solace that can be given to a decaying social and economic setup of life, as it teaches us exactly how a perfect life is lived, not just for the success in this world, but also for the life hereafter.


The result of this comparative study reveals that the Islamic ideals are definitely superior to those being practiced by the West world. Not only do the Islamic ideals broaden our understanding towards life, they also identify numerous ways to improve our social, economical and political life. By basing our habits in our daily life on such guidelines, not just on the individual level, but also on the state level we can raise the aggregate level of life generally.

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