How the Western Economic System got it all wrong

It would be reasonable to say that the purpose of having a system for economics is to make sure that all the citizens get their basic needs met. The essentials of survival for all must be guaranteed by the state. The need for food and water, clothes and shelter. Islam obliged the state and the kin to make sure all people are guaranteed these fundamentals of life.

Uthman ibn Affan reported: The Prophet, peace and blessings be upon him, said, “There is no right for the son of Adam other than these things: a house in which he lives, a garment to cover his nakedness, a piece of bread, and water.”

Source: Sunan al-Tirmidhī 2341

What did the Western economists say? They had some theories that are applied across the globe and why we live in a world that we see so much poverty, suffering and misery. These theories are pushed as the universal principles of economics. It is very rare that Islam is allowed to state its case.

Let us look at the basic points of western economic theory which is agreed upon by all politicians and economists of the west. Those who have studied basic economics will also be familiar

Point 1 – There are no basic needs. Everything that man could desire is a need that he needs to fulfil. Mans needs are limitless. This point is incorrect and clearly false as it goes against reality.

Point 2 – If the needs and wants are limitless then there is a shortage of resources to supply all these needs. This again is false there are enough resources in the world to meet the needs of food clothing and shelter. Every individual having the latest phone is not a need or is having a sports car the capitalists say it is.

Point 3 – Therefore you need production to fulfil these demands so economics has to focus on production not needs. If you have high production like the USA yet still millions are homeless and go hungry. Another false idea.

Point 4 – Capitalism uses price in 2 ways.

The first way is to introduce a profit motive. So if people want cocaine (for capitalist economists the harm does not matter as long as people want it) and if it can be sold at price which includes a profit people will enter the market and produce it. If there was no profit then they wouldn’t. So in this way they ensured production.

Secondly for people to buy cocaine as an example, they would need to produce ( i.e work to make something or labour ) to exchange for money. With that money they could them buy what they desire.

These 4 points summarise the capitalist thinking on economics. This is why the world has become an ugly place where the only thing that is valued is material value. The good of the people and the basic needs of those that are not in a position to work (and even those that are) are not met. There is inequality where the wealth in the hands of a few elites is colossal whilst most struggle to survive.

Recently president Erdogan set a target of GDP growth of 5% for the Turkish economy for 2020. He too follows Western economic principles. He thinks if there is growth in GDP the economy is successful whilst many in Turkey do not receive the basics the government can pat itself on the back that they reached a growth target.

Until Islam returns to the world and challenges these ill thought man made principles the basic needs of perhaps billions in the world will go unfulfilled.

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