Interesting to see the justice of the islamic system, especially when comparing islamic rules of trade & economy to the western ones we see at present. This comes from Islamic Revival

The bankrupt in language is the one without money and without that by which he would pay for his needs. It is meant by this that he reached a situation in which it is said about him, ‘That he has no (fils) penny’ so he is muflis.

Muslim narrated via the way of Abu Hurayra “that the Messenger of Allah (SAW) said:
‘Do you know who the muflis is?’ They said: ‘The muflis among us is the one without a dirham or effects.’ He said: ‘The muflis in my Ummah is the one who comes on the Day of Judgement with prayer, fasting and zakat. He comes and has insulted this one, falsely accused this one, eaten this one’s wealth, spilt this one’s blood and struck this one. This one is given from his good deeds and this one from his good deeds. If his good deeds finish before that which is upon him is not paid off, it is taken from their sins and they are thrown upon him. Then he is thrown in the Fire.”

This statement of theirs is information about the reality of the muflis and the Prophet (SAW)’s statement, “That is not the muflis” is toleration (in using the word) and not negation to the reality but rather he intended that the bankrupt of the Hereafter is more severe and enormous such that the worldly bankrupt becomes like the rich man in relation to him. The bankrupt in the convention of the fuqaha is the one whose debts are greater than his wealth, and his expenditure greater than his income. They called him bankrupt even though he has money because his wealth is due to be spent in the payment of his debts so it is considered as if it does not exist.

Wherever the debts of the person are obliged immediately and his money is not enough to pay them off so his creditors ask the judge to interdict him, it is obliged upon him to respond to them. It is recommended to announce the (hajr) interdiction upon him so that people avoid transacting with him. If (hajr) interdiction was imposed upon him, four rules are established by that:-
The first of them is rights of the creditors relating to the his wealth itself. The second preventing him from the disposal of his wealth itself. The third is that whoever finds his wealth itself with somebody, he has more right to it than the remaining creditors if the conditions exist. Fourth, the judge has the right to sell his wealth and pay the creditors.

The evidence for the (hajr) interdiction over the bankrupt is what K’ab bin Malik narrated
“that the Messenger of Allah (SAW) interdicted the wealth of Muadh bin Jabal and sold it for the debt upon him” (narrated by Al-Hakim).

From Abdurrahman bin K’ab: “Muadh bin Jabal was of the best youth of his people and he would not hold onto anything. He would not stop borrowing until his wealth was engrossed in debt and his creditors spoke to the Prophet (SAW). Were anyone left for the sake of anyone, they would have left Muadh for the sake of the Messenger of Allah (SAW). So the Messenger of Allah (SAW) sold to them his wealth until Muadh stood without anything.”

When there is proved over the bankrupt rights for people or that which obliges a money fine via trustworthy testimony or a correct confession from him, it is sold from him all that he has and the creditors treated equitably. In principle it is not allowed that he be imprisoned just as it is absolutely not allowed to imprison a debtor in difficulty due to the statement of Allah (swt):

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“And if the debtor is in difficulty, then grant him time till it is easy for him to repay ” [TMQ 2: 280].

Muslim and Abu Dawud narrated also from Abu Said Al-Khudri who said: “A man was afflicted at the time of the Messenger of Allah (SAW) in produce he had bought and his debts increased. So the Messenger of Allah (SAW) said: ‘Give charity to him’ and the people gave charity to him but that did not reach the payment of his debts so the Messenger of Allah (SAW) said: ‘Take what you find, and there is nothing for you except that.’”

It is narrated also that he divided the money of the bankrupt between the creditors but never imprisoned.
From Muhammad bin ‘Ali bin Al-Husain who said: ‘Ali bin Abi Talib said: ‘Jailing the man in prison after it is known what is upon him of debts is injustice.’

As for what was narrated from Umar via the way of Said bin Al-Musayyab “that Umar imprisoned the relatives on the father’s side (‘asaba)—the men not the women–of the (manfus) child bed baby whom they financially support”, this does not indicate imprisoning the debtor but rather only indicates imprisoning the one upon whom financial maintenance is obliged if he does not maintain the child. Maintenance is of the money which is obliged upon the one capable to provide maintenance. That indicates the imprisonment of the one who does not support particularly the young child who is the child-bed baby.

The rule regarding the bankrupt is that the judge sells to the creditors the debtor’s wealth and divides it among them in portions as there is no way to do them justice other than this.
From Umar bin Abdurrahman bin Dalaf that a man from Juhayna would buy camels for a deferred period so he did this for high price. He became bankrupt and the matter was raised to Umar bin Al-Khattab who said: ‘As for what follows, O people. Verily Al-Asfa’a Asfa’a Bani Juhaynah was satisfied of his deen and trustworthiness that it is said he overtook the pilgrims. He expanded in taking debt till he became debted. So whoever has something from him, let him come tomorrow morning, for we will divide his wealth in lots.’ From Umar bin Abdulazia that he judged about the bankrupt that his wealth be divided between the creditors and then he is left until Allah provides sustenance for him.

The bankrupt’s wealth which is found with him is divided amongst the creditors by shares of the value only between those present claimants whose time of their rights became due. It is not included among them the one present but not claiming or the absent who did not delegate or the absent and present whose time of his right was not due whether he claims or not. This is because the one whose time of his right was not due has no right yet, while the one not claiming is not necessary to be given until he claims.

This is where the bankrupt is alive. As for the deceased bankrupt, it is judged for everyone, present or absent, claiming or not, and each one with a debt whether immediate or to a named period. This is because all periods become due at the death of the one who has right or the one against whom there is a right. If there combines on the bankrupt the rights of Allah and the rights of the people (‘ibad), the rights of Allah ta’ala precede the rights of the slaves. So it is commenced with what he missed of zakat or expiation (kaffara); if it does not cover everything, this is divided upon all these rights by lots without preferring anything over another. Similarly the debts of people; if his wealth is not enough to pay all of them then each one takes according to his money of what exists.

The evidence that the rights of Allah precede the rights of the people is what was proved of the Messenger of Allah (SAW) that he said:
“…the debt of Allah has more right that it be paid” and his statement: “…repay Allah as He has more right to be repaid” (Al-Bukhari narrated the two via the way of ibn Abbas).

When the wealth of the bankrupt is sold, his maintenance and the maintenance of those whose maintenance is obliged upon him is examined, so his house which he has need of residing therein is not sold. Whereas if he has two houses, one of them could be used without so the other, the one which there is no need for is sold. If the bankrupt earns what maintains him and those whom he is obliged to maintain or he is able to earn that actually by employing himself, in this situation all his wealth is sold except his house which he needs to reside therein.

If he is unable to do anything of that, it is left for him from hs wealth that which is enough for him to maintain himself and those whom it is obliged upon him to maintain according to what is (ma’rouf) reasonable of his wealth, until it is finished of its division between his creditors.

An Open Letter To the King of Saudi Arabia, The Prime Minister of Turkey and the President of Indonesia on their attendance at the G20 Leaders Summit in London on 2 April 2009

Since 1999, the G20 has been at the forefront of designing the financial architecture that has now crumbled before our very eyes. It has been complicit in the financial and economic policies that has fostered the worst international economic crisis since the great depression. It not only averted its gaze while financiers ran amok but positively encouraged the free and unfettered markets that has led to the horrendous situation before us. Yet today it claims to be the organisation that will rescue the world from financial ruin, a claim that would be laughable if it wasn’t for the grave situation that we witness today.

It is deeply ironic that the latest G20 summit is being held in the part of London which comprises the spiritual home of the world’s largest banks and the derivatives capital of the world, both instrumental in bringing the world to its knees. Instead of tackling the underlying causes of the modern capitalist system the G20 nations today are engaged in cosmetic changes while the world burns. Instead of seeking to restore worldwide financial stability, their policies increase instability in global markets day after day. Instead of securing a sustainable future for all countries, the G20 continue the politics of helping the elite at the expense of ordinary people. While trillions have been found at short notice to bail out banks and insurance corporations, the world’s poor are getting poorer and the world’s sick are getting sicker.

The financial markets and the global economy continue to face serious global challenges and the severity of the crisis and ongoing uncertainties demonstrate the need for urgent action. Yet the action that is required, is not to repeat the mistakes that got us into the crisis in the first place. What got us into this mess was reckless lending, yet today the G20 states are begging banks to resume such lending. What got us into this mess was a reckless monetary policy, yet today central banks through quantitative easing and printing money are debasing their paper currencies as if there was no tomorrow. What got us into this mess was a culture of greed and excess, the financial equivalent of Sodom and Gomorrah, yet today special interests are being given billions by taxpayers to buy cheap assets from banks already bailed out by taxpayers. What got us into this mess was regulatory failure of a massive proportion, yet the same regulatory authorities of finance ministries, central banks, financial supervisory agencies and the IMF are now being presented as part of the solution!

What we must truly understand are the roots of the international financial crisis and identify the lessons that we must learn to avoid this happening again. Instead we are being fed an anaemic diet of rhetoric and cosmetic policies. Yet what we need to desperately do is to take this opportunity to completely revamp the entire international financial system. Your countries are also facing economic meltdown, Saudi Arabia faces deficits and significant overseas losses despite having a glut of oil, Turkey a once proud nation has to rely on IMF bailouts while Indonesia the most populous Muslim nation has to beg the west for foreign currency to pay its bills. The Muslim Ummah cannot continue the same disastrous economic path. The Islamic economic model is tried and trusted, it balances the instincts of individuals with the needs of society, it puts economic progress alongside spiritual enhancement, it promotes trade while not forgetting that society’s greatest wealth is its values and beliefs. Hizb ut-Tahrir calls upon the Muslim world to do three things:

1 The Muslim world must establish an alternative economic model. The Khilafah State is the only vehicle to establish the Islamic economic system and today provides a unique opportunity to show the rest of the world that there is a better way to manage economic affairs. The Muslim world when it implemented Islam in its entirety and was united was a giant in global affairs, it led in science, prosperity, healthcare and was responsible for dragging Europe out of the dark ages. Today we constitute a quarter of the world’s population, we have two thirds of the world’s oil, we have a combined military of over 5 million yet our voices are insignificant and our lands are occupied. It is the rulers of the Muslim world including you, who are the obstacle to this revival, you prefer to be followers of the west rather than be real leaders, you prefer short term survival rather than making sacrifices for long term success, you value narrow nationalistic issues over the common problems that the Muslim world faces. Yet political unity today would allow us to come together stronger, a prerequisite if we are to be successful in challenging the global powers of the 21st century.

2 Establish a new currency based on the gold or silver metallic standard. The Islamic principles of sound and tangible money cannot now be disputed, nor should you ever allow your own economic well being to be tied to an overseas government’s reckless monetary policy. Your fiat paper currencies today either shadow the US dollar or you, for foolish reasons have decided to invest substantially in overseas dollar, euro or sterling assets, currencies so debased that they have caused financial distress all across the globe. This will only get worse with record deficits and the budget debauchery that the US and other western government are now involved in. End your dependence on the US dollar and other paper currencies now before it is too late and the Chinese government decides, as it will inevitably do, to abandon the dollar. At that time all your investments will be worthless as they are fast becoming now.

3 Close down the financial casinos that purport to be stock exchanges, investment banks or other avenues which sell toxic financial assets. Islamic economics prohibits interest and would not have allowed the kind of excessive borrowing sometimes at 30 times a bank’s overall capital, that we saw done repeatedly by western banks. Islam also prohibits speculation and hoarding which are core staples of the western financial system. Our economies must be restructured around real engineering not financial engineering, based on real manufacturing not phoney accounting. Invest in real projects at home not in idle financial assets abroad, tackle poverty as a priority, not just bail out the rich, invest in long term infrastructure not entertainment venues for western tourists.

We know that you as rulers have come to this summit offering no alternatives, rather you have come to sing the praises of this collapsed capitalist system. You have proven to be nothing other than accomplices in the global capitalist crime that is now affecting millions of people including the Muslim world. What the Muslim world needs today are not rulers who slavishly and shamelessly follow the west but visionary statesmen, not puppets who will do the west’s bidding but lions who will drag the world’s population into a bright new world. The G20 that you are proud members off will not propose any fresh thinking, nor does the world need another model of capitalism, the system is so bankrupt it needs to be completely replaced. What the world needs are radical new alternatives intertwined with new values, this is the essence of the Islamic Economic System.

This Friday, the 3rd April 2009, 8th Rabi` al-Akhar 1430 Hijri, Hizb ut-Tahrir is launching a new book in London and Beirut, a compilation of a series of papers delivered at its landmark international economic conference in Sudan in January 2009. The book, titled ‘Towards a Tranquil Safe World under the Shade of the Economic System of Islam’, deeply examines the causes of the crisis and outlines the Islamic alternative, the only alternative.

Allah (swt) says “Verily we have revealed the book to thee in truth for instructing mankind.” [Translated Meaning of Qur’an 39:41]

Hizb ut-Tahrir Britain

31st March 2009
5th Rabi` al-Akhar 1430 H

source: http://www.hizb.org.uk/hizb/resources/leaflets/ht-britain-s-open-letter-to-the-muslim-rulers-attending-g20-summit.html

This short piece comes from Islamic Revival

The capitalist system in economics was implemented upon the western world, and upon Russia before the communist party ruled it. Among the principles of the capitalist ideology is freedom of ownership from which resulted the owners manipulation (misuse) of the employees i.e. the workers as long as there existed mutual consent and as long as the theory of liability is the one dominating over them. Labourers received from the employers evil, injustice and exploitation of their sweat and efforts. When the socialist thought appeared and called for justice to the employee, it emerged upon the basis of solving the problems of the labourers; not on the basis of treating the hiring contract. Accordingly socialism came with solutions to give justice to the worker, by determining the time of work, the wage of worker, guaranteeing his leisure etc….So it destroyed the theory of liability and showed its incompetence to solve the problems. So the jurists of the western law were forced to change their view towards liability, so that the theory of liability can stand/face before the problems; therefore they inserted amendments to patch up their theory.

Principles and rules were inserted into the work contract aiming to protect workers and to give them rights which they did not have before, like the right to get together, the right to form syndicates/unions, the right to strike, beside giving them retirement bonuses or compensation etc…even though the text of the theory of liability does not permit such rights. However interpolation had been made to the theory to solve the problems of workers which Socialist thought provoked/evoked amongst the workers. Then the socialist theory came to prevent ownership of wealth and give the worker everything he needs. Due to the contradiction of the viewpoints between the two ideologies, socialism from which emanates communism and capitalism, in respect of ownership and in respect of the employee, there emerged to them the labours problem. Each one of the two came to have a specific method in solving this problem which was generated by their two different viewpoints with respect to life.

As for Islam, there does not exist a problem known as labours problem nor is the Islamic Ummah divided into classes of workers and capitalists, or peasants and landlords etc….The whole issue is related to the employee, whether he was hired based on the work like specialists or technicians (faniyyeen) or he was hired based on his work only, like the rest employees; and whether he was an employee for persons or an employee for groups or a State employee, and whether he is a private employee or a common employee; they are all employees. The rules for such employees have been clarified and explained.

Once the employees commenced with a named wage, they are entitled of the named wage for the hiring period, and they can leave their employer after their hiring period ends; and if they differed with him, there comes the role of experts to estimate the equivalent wage. These experts are chosen by the two parties but if they could not agree upon them, the ruler chooses them and obliges the two sides to accept the experts say by force. It is not allowed that the ruler decides a specific wage by making analogy with the impermissibility of price-fixing for goods, because the wage is the price of the benefit and the price is the price for the good. Just as the market of goods decides the price of the good naturally, the market of the benefits of workers is decided by the need for workers. However it is duty upon the State to prepare work for workers:

“The Imam is a shepherd (ra’i) and he is responsible (mas’ul) for his subjects (ra’iyah)” (narrated by Al-Bukhari).

It is duty upon the State to remove the injustice of the owners of work upon workers, for silence upon injustice with the ability to remove it is forbidden and therein is great sin. If the State was complacent in lifting injustice or it itself oppressed employees, then the whole Ummah is obliged to account the State over this injustice and to endeavour to remove it. The Court of Unjust Acts is also obliged to look in this injustice and lift if from the oppressed people, and its verdict in the matter is executed upon the ruler and the State. This duty is not left to the employees who were oppressed alone as is the situation today in solving the problems of workers with strikes and demonstrations. This is because the injustice against any invidual of the citizens and the State’s complacence in taking care of the affairs of any individual citizen is a matter related to taking care of the whole Ummah even if it were specific to a person or persons. This is because it is execution of a Shar’ai rule, and it is not related to a specific group, even if it falls upon a specific group.

As for what workers require of medical/health guarantee for them and their families, and guarantee of their expenses in the situation of leaving work and at old age and guarantee of education for their children and similar guarantees usually discussed to secure the labourers, Islam does not discuss them when discussing the employees and employers because these are not the duty of the employer but rather the State. They are not also for workers only but rather for each unabled person among the citizens. This is because the State secures health and education freely for all, and secures for the unable person his expenditure whether he is a worker or not, since this is duty upon Bait ul-Mal and upon all Muslims.

Accordingly there does not exist labours problem nor a problem specific for a particular group or section of the Ummah. Any problem related to taking care of the affairs of citizens the State is responsible to solve it. The whole Ummah accounts the State so as to solve this problem and remove the injustice, not the official alone is responsible for the problem, nor the one upon whom the injustice falls

We can all learn from this short poem/video. The Ummah’s downfall began way back in the early 1900′s and went downhill from there.