What if the top one percent in USA were true Muslims?

· Americas, Economics, United States

By Dr. Zia H Shah

The short answer to this provocative question in the title is that the elite 1% will pay Zakat, which is a tax on savings and property. At a suitable rate of taxation, Zakat will have the potential to fulfill all the essential needs of the remaining 99%. If the top one percent in USA were true Muslims, they will gradually and genuinely abolish interest or usury and promote international free trade. This Op-Ed is a short presentation in favor of Zakat and an interest free economy and a more detailed exposition will be published later on. Read on and in the words of Sir Francis Bacon, “Read not to contradict… but to weigh and consider.”

John R. Gribbin is a British science writer, who earned his Ph.D. in astrophysics from the University of Cambridge, writes in his very well written book, the Scientists: A History of Science Told Through the Lives of its Greatest Inventors: “The renaissance was the time when Western Europeans lost their awe of the Ancients and realized that they had as much to contribute to civilization and society as the Greeks and Romans had contributed. To the modern eyes, the puzzle is not that this should have occurred, but that it should have taken so long for people to lose their inferiority complex.” In the same vein, it seems that the 99%, in the form of Occupy Wall Street protests, are finally ready to overcome their awe of the Nobel Laureates in Economics and fancily dressed rich investment bankers and throw away their inferiority complex and begin to understand the financial system. In this age of information, we should be ready to begin to learn from teachers like, Congressman Ron Paul, Prof. Niall Ferguson and Murray N. Rothbard, who have provided adequate education, in form of well written books, to understand and demystify our present day capitalism, grounded in Central Banking and interest based economy.

The Emperor of present day capitalism has no clothes! But, the masses until recently have not had the courage to see it. The human condition is as Plato would make Socrates say in the Republic (7.514a ff.), comparable to that of prisoners of an underground cave, whose unfortunate fate is to confuse reality with passing shadows created by a fire inside their miserable abode and kept in motion by clever manipulators, who in the name of politics, religion, science, and tradition control the human herd. This is the trick that the bankers and the economists have played on the naïve world in the last century or two. Usury (in the original sense of any interest rate) was denounced by a number of religious leaders and philosophers in the ancient world, including Plato, Aristotle, Cato, Cicero, Seneca, Aquinas, Muhammad, may peace be on him, Prophet Moses and Prophet Gautama Buddha. Not only Islam, but, the Catholic Church has also been against interest or usury over the centuries. What was a prohibition of usury in the teachings of the Prophet Moses was changed into a racist idea over generations in the form of treating a Jew differently from a stranger and the Old Testament records this distortion, “Unto a stranger thou mayest lend upon usury; but unto thy brother thou shalt not lend upon usury!” (Deuteronomy 23:20) This biblical teaching is certainly terribly impractical for our Global village.

It should not be hard to understand the case and practicality of interest free economy. Interest rate in Japan has been close to zero for a long time and more recently it has been close to zero, at least for the banks, in USA. So, an easy case can be made that economies can work without interest. If the functional interest rate is zero it only means that the rich cannot benefit from their hoarded wealth. Only way they can make money, would be to invest their savings in the economy, which would not only benefit them but also the rest of the 99%. Additionally, at present, whenever the Western Governments increase the money supply, they have to pay interest on the money created, to the privately owned Central Banks, which are called Federal Reserve Banks in USA. In an interest free economy, the government and indirectly the whole nation has the power to create new money and not a few families owning the Central Banks. To further elaborate the problems with interest based economy, let us borrow a simple example of compound interest narrated as a parable. The penny invested by Augustus Caesar in 8 BC would be worth 3 trillion, trillion, trillion, trillion dollars today at 6 percent compound interest. The world only has around 100 trillion dollars in total wealth today. Given this power of compound interest it is not hard to understand, why wealth has accumulated in few hands in our country, USA, and why several million have lost their homes to foreclosures during the recent crisis. This is also why not only companies go bankrupt but also states, cities and countries, as we have witnessed several times during the last few years. The Holy Quran describes all this recent chaos in political and financial affairs, by calling the end result of those who indulge in interest or usury, as if they have been smitten into insanity by Satan! The Quran states, “Those who devour interest stand like one whom Satan has smitten with insanity. That is so because they keep saying: The business of buying and selling is also like lending money on interest; whereas Allah has made buying and selling lawful and has made the taking of interest unlawful.” (Al Quran 2:276)

Now let us turn to Zakat. Historically, Zakat was charged at 2.5% rate on certain savings. But, governments can suitably increase the rate based on national and other circumstances. At 5% annual taxation, in an interest free environment, even the biggest estates will disappear in thin air over a twenty year period, unless the owners were gainfully employing the estates in business and trade. This means that if Zakat and interest free economy is in place, wealth will not stay in few hands over generations, who according to the famous dictum, ‘power tends to corrupt and absolute power corrupts absolutely,’ use their power to the detriment of the common man.

If we ask the wrong questions the answers will not matter and that seems to be a very common ploy, of keeping masses duped, while the rich, the top one percent and more specifically the bankers exploit them. The right questions at the present time are: Why did communism collapse? What are the limitations of capitalism? What are the pros and cons of privately owned Central Banks? What are the positive ramifications of governments owning the Central and other banks? Would such ownership mean that the interest they charge is another form of taxation only? How can government owned banks be kept honest and support useful investments? What are the lessons to be learnt from the Chinese success story? Why cannot we make the political system in USA more fair and honest by taking the money out of elections and providing relatively free and open access in the public media to genuine candidates?

Communism failed as it did not properly reward personal effort and as we try to find solutions for our current malaise, we do not want to repeat the past mistakes. If we follow the two Islamic principles, namely interest free economy and payment of Zakat then we may find the happy medium between communism and capitalism, wherein individual effort is rewarded but wealth is not hoarding in a few hands. In the short space of this Op-Ed we will not quibble about the final details. Occupy Wall Street movement could encourage appropriate scholars, who have shown expertise and integrity, to try to answer the above questions and educate the masses. One teacher that comes to mind is Congressman Ron Paul and scores of others can be found with a genuine effort. It is reasonable to assume that the present day institutions are not going to ask or answer the appropriate questions; they are cozily in bed with the present financial system. So, we should look for solutions to our present problems elsewhere!

As we move forwards, we will need to examine various forms of Pyramidal or Ponzi schemes and declare them against law, for individuals as well as governments. Any financial system, which adequately rewards labor and creativity and is administered fairly, can provide for progress of human race. So, as long as we can motivate people enough with reward and put them to hard work and at the same time promote creativity, we should have a pragmatic system that can serve the needs of not only the 1% but also the remaining 99%.

I am not proposing an economic revolution here. Islam does not like disorder or chaos. I am suggesting incremental change only. I am suggesting only two principles, firstly, an interest rate close to zero and secondly, introducing the concept of Zakat at some suitable rate in a gradual fashion, within the present monetary, financial and economic paradigms. It should be done slow enough that it neither disrupts the rich families, nor gives false hopes and pretensions to the poor.

Picture is courtesy of CNN.  The article is original Op-Ed of the Muslim Times.

To see a collection of articles by Dr. Zia H Shah on the theme of Religion, Politics and Human Rights, click here:


Comments RSS
  1. DrKoya

    Excellent work Dr. Zia Shah. Jazakallah Khair!

  2. Zia H. Shah

    Thank you Dr. Koya for your kind words. I will encourage everyone to add their useful insights or worth-while links on this theme here.

  3. Mohyuddin Mirza

    I agree with the ideas proposed by the respected author. If top decision makers can read this article “to weigh and consider” an effective change can start. Imagine the world we will live in without interest and a backup significant pool of money to look after the needy without them filling in forms and standing in line. Islamic principles of wealth creation and management could be highly beneficial for our materialistic world.

  4. Amtul Q Farhat

    Depends what type of Muslims make this 1% of the top. any Muslim countries have not been very fortunate to make their 1% work like you wish.

  5. Haseeb

    To work for pakistan and for the unity of the muslim ummah you can contact me on pureboy789@yahoo.com , i also a daeee means i propagate islam to the non muslims so if you have any other questions other than political scenarios like if you have questions related to religions u can mostly welcome in every manner to that just email me on pureboy789@yahoo.com and i will help you in that thing inshaALLAH , ok take care and over and out ……………………..

  6. Zia H. Shah

    Quoting from one of my other articles:

    It is my belief that further developments in global economy will bring Western interest based economics, Islamic guiding principles about economics and the Chinese experiment to the forefront and require them to offer utilitarian solutions for the future of mankind. Perhaps, some sort of amalgam of the three may offer panacea for the world. However, one aspect is crystal clear in my mind that no one with knowledge of only one or two of these candidates is going to offer useful solutions. Recently, I read that some Muslims have started some sort of interest free banking in France. Many Muslims behave and write just from the conviction of their belief, in problems associated with interest, without understanding the intricacies and basis of the present economic systems. Sometimes they assume, just because they have spoken, somehow, the Western system will melt away. In their tall claims are they casting a spell or providing adequate reasons for evolution of the economic system that has served the West well for three centuries? How often have they given up their special perks because a new kid or claimant is on the block? Isn’t it terribly naive to suggest that the rich and the powerful in the West suddenly give up, what has served them and a lot of masses well for three centuries? It is indeed the very interest based economies that brought the Muslims, as immigrants, to the Western shores in search of better livelihood.


  7. Zia H. Shah

    Yahoo news reports:

    WASHINGTON (AP) — The wealth gap between younger and older Americans has stretched to the widest on record, worsened by a prolonged economic downturn that has wiped out job opportunities for young adults and saddled them with housing and college debt.

    The typical U.S. household headed by a person age 65 or older has a net worth 47 times greater than a household headed by someone under 35, according to an analysis of census data released Monday.

    While people typically accumulate assets as they age, this wealth gap is now more than double what it was in 2005 and nearly five times the 10-to-1 disparity a quarter-century ago, after adjusting for inflation.

    The analysis by the Pew Research Center reflects the impact of the economic downturn, which has hit young adults particularly hard. More are pursuing college or advanced degrees, taking on debt as they wait for the job market to recover. Others are struggling to pay mortgage costs on homes now worth less than when they were bought in the housing boom.

    The report, coming out before the Nov. 23 deadline for a special congressional committee to propose $1.2 trillion in budget cuts over 10 years, casts a spotlight on a government safety net that has buoyed older Americans on Social Security and Medicare amid wider cuts to education and other programs, including cash assistance for poor families. Complaints about wealth inequality, high unemployment and student debt also have been front and center at Occupy Wall Street protests around the country.


  8. kaleem

    I must say, its fabulous. I am an accountancy professional and has read many books on the topic, but an article in such a simple language goes direct to your heart and does not gets lost in brain. May Allah give you ability and health to do more for your nation.

  9. Zia H. Shah

    Thank you so much for your kind words, dear brother Kaleem.

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