ISLAM: SOLUTION TO FAILURE OF CAPITALISM?

by Nihal Javed

Why Capitalism Failed? Root of Global Financial Crisis ISLAM – A Comprehensive Solution ISLAMIC MODEL OF ECONOMICS Conclusion References

Agenda

Model based on greed: RIBA / Interest Exploitation of resources to maximize profits Societal benefit not considered Welfare of a few elite at the cost of:

◦ Massive poverty worldwide◦ Imbalance of wealth◦ Lack of justice ◦ Spread of corruption

Irresponsible lending Non – Production Based economy

Why Capitalism Failed?

UNJUST SYSTEM BASED ON OPPRESSION OF THE WEAK

Root of Global Financial Crisis

ARTIFICIAL MONEY GENERATION & EXCESSIVE GAMBLING

What is Islam? ◦ Tawheed, Religion of all prophets

Prophet Muhammad PBUH Quran: Instruction Manual from our Creator Divine Guidance from cradle to the grave

◦ From Ibadah, Fasting, Pilgrimage, Economics, Business, to Marital relations, bathroom etiquettes

Applying Divine Laws and guidance ensures success in this life and the next

ISLAM – A Comprehensive Solution

ISLAM: A COMPLETE WAY OF LIFE

Interest (RIBA) Forbidden◦ “Allah has permitted trade and has forbidden

interest” [Quran 2:275]◦ “O you who have believed, do not consume

usury, doubled and multiplied, but fear Allah that you may be successful.” [Quran 3:130]

Profit – Loss Sharing Model ◦ One party does not assume all the risk (like

conventional) ◦ No reward generated w/out risk◦ Leads to financers carefully assessing risk

Production Based Model◦ Cannot generate money out of nothing (recycling

money through interest) ◦ Promotes “real” growth of economy (Actual goods

produced) Prohibits gambling by third parties

◦ One of the main causes of Financial Crisis – Excessive hedging, speculation, gambling

Provides Implementable Solution ◦ Not just conceptual but practical and applicable ◦ Success demonstrated in History◦ Commands transactions be sale / lease based (not

imaginary)◦ Products: Murabaha, ijarah, salam, istisna etc

ISLAMIC MODEL OF ECONOMICS

No Interest Profit Loss Sharing

No Gambling

Production Based

Islamic Economic Model based on the Divine guidance◦ addresses all the reasons why Capitalism failed

Implementation would ensure a just and balanced system that would benefit mankind as a whole

Solution to eradicating poverty, corruption, injustice Islam is the submission to the Will of God Almighty The complete way of live – Governs mans

relationship with his Lord, and with other men Insure yourself against Hellfire by accepting Islam and

succeed in this world and the next!

Conclusion

ISLAM: SOLUTION for PEACE, SUCCESS & JUSTICE

“Islamic Finance: A Therapy for Healing the Global Financial Crisis” by Miranti Kartika Dewi1and Ilham Reza Ferdian

http://en.wikipedia.org/wiki/Riba

Refrences