Economy, Featured, The Khilafah

Is the Islamic State a Welfare State?

Every ideology has a creed from which systems emanate. The ideologies differ from each other in the implementation of these systems. According to Capitalism, society is only a collection of individuals. So if the affairs of individuals are organized, the society will be organized. If every individual has certain freedoms to manage his affairs, it can be understood that his affairs will be organized to his satisfaction. Since, according to Capitalism, society is just a collection of individuals, its affairs will automatically be organized when individuals will be able to organize their affairs. This philosophy leads to the idea of collective wisdom and holds these freedoms as fundamental to the capitalist ideology. This produces the thought about the state and its role in the society. In Capitalism, the role of state is to safeguard these freedoms and protect them from against any domestic or foreign elements. Hence if a person interferes in someone’s freedom against his will, the state will intervene. However, if it happens with mutual consent, this will not be considered a violation of freedom. The state will not intervene in such matters because the existence of state guarantees these freedoms, concordant to the capitalist theory of liabilities.

Economic freedom, arising from the freedom of ownership, is the most prominent of capitalist freedoms. It allows everyone complete authority over ownership and disposal of their wealth. Interfering in it is taking away the said freedom. This freedom was then connected to the best use of state property. The fundamental economic problem in the view of capitalist thinkers is the distribution of limited resources, to fulfill unlimited desires, i.e. when and what is the best use of combined resources. As the economic freedom is most prominent and dominant among other freedoms, it allows an individual complete freedom to use and dispose his wealth according to his will. Use of this wealth without the permission of its owner is robbery. This led to the declaration, by some, of tax as interference in this wealth, because tax is forced collection of a part of one’s wealth using state authority. It is justified by the argument that collecting tax from a capitalist to provide for the underprivileged of society is actually taking wealth from the most capable in economic activity of society, to give to the least capable, with an economic activity that is a waste of wealth.

According to this, it is best that this wealth be put to its best use which is only possible if it is with those who are most capable in economic activity. It is claimed that this would be beneficial for both the rich capitalist and the poor. The capitalist will profit, whereas the poor will earn a salary from work. Personal freedom ensures that everyone is free to engage with everyone else in any contract whatsoever. Both parties, who were free to offer and accept this contract, are bound to fulfill the terms and conditions of this contract. This led to the idea of sanctity of contract and it generated the basis of the labor problem. If an employee contracted to work for an employer for fourteen hours a day, he is now bound to work fourteen hours a day. If he does not, he will be considered as not fulfilling the contract and the employer will gain the legal right for prosecution.

This relationship of politics with economy, since the rise of Capitalism, produced a myriad of problems in Western states. As a parallel development, the socialist thought gained pace and became an alternate to capitalist ideology. The first state to back the socialist ideology had formed after the Bolshevik Revolution in Russia, prior to the end of World War I. The idea of the role of state being limited to guaranteeing the freedoms, was under pressure. The relationship between employer and employee began to take on the character of blatant exploitation, based upon the theory of liabilities. As discontent increased, the capitalists started using the state authority to protecting their own interests through courts. The carriers of socialist thought based their viewpoint on the tragic situation of employees, whether ordinary labor or technically skilled labor. They opined several services as compulsory, demanding rights for this exploited class in the name of justice. The Great Depression consolidated growing resentment and humanity began to feel the immense inequity of Capitalism. The Capitalist order took on the character of the Ignorance before Islam. Allah (swt) said, أَرَأَيْتَ الَّذِي يُكَذِّبُ بِالدِّينِ * فَذَلِكَ الَّذِي يَدُعُّ الْيَتِيمَ * وَلَا يَحُضُّ عَلَى طَعَامِ الْمِسْكِينِ * فَوَيْلٌ لِّلْمُصَلِّينَ * الَّذِينَ هُمْ عَن صَلَاتِهِمْ سَاهُونَ * الَّذِينَ هُمْ يُرَاؤُونَ * وَيَمْنَعُونَ الْمَاعُونَ “Have you seen him who denies the Recompense? (1) That is he who repulses the orphan (harshly), (2) And urges not on the feeding of Al-Miskîn (the poor), (3) So woe unto those performers of Salât (prayers) (hypocrites), (4) Those who delay their Salât (prayer from their stated fixed times), (5) Those who do good deeds only to be seen (of men), (6) And prevent Al-Mâ’ûn (small kindnesses like salt, sugar, water). (7)”

In the early Twentieth Century, there were only five companies in the United States, which gave pension benefits to their employees, which increased to 15% of companies by 1932, after the entire American population suffered from the Great Depression of 1929. Within the Great Depression, 10,000 banks defaulted, the US’s GNP fell from 105 billion USD to 55 billion USD (US Dollars) in two years. The salaries budget reduced from 50 billion USD to 30 billion USD. 200,000 American adults were forced to the street, jobless and homeless. Other than charity from wealthy, there was no hope for the poor. In this situation, several movements rose in the country based on various thoughts to redress the disaster. A few of them led to political reforms and are mentioned below.

Share Our Wealth:

The Governor of Louisiana, Huey Long, established an organization to ensure a share in wealth. The slogan of this organization was, “Every Man a King.” Its members demanded the confiscation of the property of capitalists of the state, so that the federal government would pay each family $5000 annually. It is to be noted that the average annual spending of a middle-class family at that time was around $3500. It also demanded to impose a ceiling of 5.1 million USD on inheritance, with one million USD as an annual income, whilst no one would be allowed to accumulate a personal net worth of more than 300 times the average family fortune. This movement was immensely popular. At the time when population of the US was 120 million, this organization attracted 7 million registered members with 27000 clubs.

The Townsend Plan:

Francis Townsend was a physician in California and became jobless at the age of 66. This experience motivated him to start a movement which demanded a monthly $200 for each retried individual, above the age of 60. It proposed funds collection by imposing a 2% sales tax. He also laid down some conditions on how to benefit from this plan. Townsend published his article in a local newspaper and attracted 2.2 million registered members in 7000 clubs, in a short duration of two years. This movement became so popular that the voting conducted in the US Congress in 1949 on the bill for adoption of this program, was short by only 39 votes.

EPIC Movement of California:

Upton Sinclair was a prominent socialist activist from California. A forward bloc in the Democratic Party sought his support to formulate the party agenda in order to address the economic problems of the state. They were so impressed by his plan that they requested him to run for governor in the elections, on the Democratic Party ticket. California is the most populated state of America. In this three-party election for governor of state in 1934, the Republican Party candidate secured 48% of votes, Upton secured 37% of votes and the Progressive Party candidate secured 17% of votes. It was truly remarkable that a prominent  socialist was in the race to become the governor of America’s biggest state.

Ham and Eggs:

Some movements were also built on ridiculous demands and achieved popularity. One of them was Ham and Eggs, which demanded the issuing of a hypothetical currency, with every jobless man above 50 years of age, given $30 on every Thursday. Their demands were lost in a referendum, though they secured 1.15 million votes for, with 1.4 million votes, against.

It is striking that the leaders of this movement had dubious characters, often embroiled in scandals that were press staple and their solutions could not be considered any more than entertainment on an intellectual level. However, despite that, their popularity in the masses indicates the state of the troubled people, in the miserable economy.

These are just a few examples of movements which achieved national popularity in the US. Volumes have been written on the peaceful and violent incidents in factories, towns and cities. The Chicago protests of 1st May 1886 carried an international popularity. By 1934 the situation was such that the people had lost trust in common institutions. The changes brought about by the Industrial Revolution in history had become irreversible. Conventional social security instruments, especially for aged people, like family support and support of philanthropists, had failed. Demand for radical change was spreading like wild fire. Meanwhile the capitalist class, considered any taxation of their wealth, to spend on the poor, as robbery. However the same class could see the whole system crashing down around them in the near future. It realized the urgency of quelling the anger of the exploited masses. Concurrently, the Soviet Russian state was consolidating, after assimilating all of Central Asia. It was now setting its sights on Europe. The crisis that consumed the US also arose in the colonialist states of Europe. France, England and Germany issued research reports and introduced programs, disconnected from each other, to quell public anger.

This ideological challenge forced western thinkers to change their attitude towards the sanctity of the contract and liability. The situation was such that if two people contracted on effort and compensation, in which the employee consented to fourteen hours of daily work, he was required to fulfill the contract, even if it cost him his life. These contracts were bound by laws, which were not more than a patchwork. Moreover, these laws were contradictory to their own beliefs and thoughts. In their opinion of personal freedom, any two individuals were free to mutually come up with a contract. Any interference by a third party was considered as cutting down the freedom of the two. This contradiction was advocated as a bitter pill in order to bind the contracts by principles and laws. These included limits on maximum working hours, minimum wage, minimum age for labor, rights for unions, striking protocols and pensions.

Just as in the US in the name of social security, such programs were introduced in Europe, in the name of the welfare state. These programs contradicted the idea of freedoms and were resisted by the capitalist class. This was similar to the US introducing laws against freedom of expression, under the pretext of national security, post 9/11, thereby contradicting their own ideas.

Social security, welfare state and social justice are all variants of the same approach to address the gross inequity of capitalism. They are treatments to the consequence of the huge concentration of wealth as a direct consequence of the overriding dominance of freedom of ownership within Capitalism. Yet, even right wing thinkers embraced the ideas as a lesser evil, compared to the complete collapse of Capitalism. However, as soon as the pressure from socialist ideas lessened, the matters of welfare state, social security and social justice were reined in within thirty years. With the advent of neoliberalism, US President Reagan and British Prime Minister, Margaret Thatcher, retracted amenities that were declared necessary for the poor class in the 1940s, with matters worsening through the globalization of the 1990s. The capitalist does not feed the hungry because it is an order of the Lord of the Worlds, but only because he fears that they would seize from his wealth. Any society which nurtures relations on material benefit alone, is a dangerous society indeed.

Social security, welfare state and social justice are related ideas in origin and in consequences. Not all the people of the state have conditional right to some benefits. Some benefits are made mandatory on the employer, such as pension and health care, and some on the state, such as education. In the era of the intellectual decline of Muslims, some shortsighted intellectuals adopted these ideas as Islamic. They connected the Islamic State with welfare to make a new term, the Islamic Welfare State. As Muslims, we must understand the reality of these ideas and the stance of Islam towards them.

Here three angles require explanation.

Firstly: Does Islam permit the ideas of social security, welfare state and social justice?

Secondly: Can there be any exploited community in the Islamic State?

Thirdly: What are the basic rights in Islam and who enjoys them?

Firstly: Does Islam permit the ideas of social security, welfare state and social justice? Muslims do not use any terminology that are tied to a specific viewpoint towards life, distinct to Islam. Regarding welfare state and social justice, the attributes of welfare and justice depend on the viewpoint above life. Change of this viewpoint will change the meaning of welfare and justice. The Western political thinkers view social justice as securing health and education for the needy in the society and protecting the rights of employees, whereas Islam sees justice as opposite to injustice.  Moreover, Islam mandates health and education equally for rich and poor. The protection of rights is ensured for all state citizens, whether ordinary or special, weak or strong, Muslim or non-Muslim, labor or farmer. As for terminologies in science and technology, they are not developed upon any ideological basis and rather are used to organize empirical or technical observations. Of course, this requires precaution as to what falls within science truly and what does not, such as the social sciences, which are rooted in the Western ideology. The use and adoption of scientific terminologies is not forbidden in Islam. However, any terminology rooted in a specific viewpoint about life is not allowed to be used or adopted, like calling elections for the Khaleefah, democracy. Welfare state is built on the idea that state matters are run according to Western freedoms as mandated by Capitalism. The patchwork for the damage caused by Capitalism is the welfare state. It is alien to Islam and it is not allowed to adopt it as a term.

Secondly: Can there be any exploited community in the Islamic State? The awful situation of labor under Capitalism is basically due to contracts between employee and employer that are based on freedom. The socialists exploited the dismal situation of employee to promote their ideology, whilst the capitalists proposed patchwork solutions, even when they contradicted Capitalism, such as subjecting the two contracting parties to laws and principles by a third party, the state. In Islam, there is no such existence of a class struggle or of competing parties, such as the capitalist and labor classes, who are struggling against each other for rights. In Islam, Allah (swt) has already legislated the rights and responsibilities of all contracting parties in all relations in the society through Sharia, whether husband and wife, ruler and ruled, employer and employee, seller and purchaser and so on. Therefore, labor does not need to make a union to pressurize employers for their rights. In origin, the state is responsible for the implementation of Islam, otherwise the Court of Unjust Acts will redress negligence on the part of the government. Finally, it is the responsibility of the Ummah to keep the ruler on the righteous path. Since there are no classes in the society, therefore any issue is not that of a laborer, doctor, lawyer or farmer, rather it is of a citizen of the state. The Ummah is made responsible through the rule of enjoining the good and forbidding the evil, so that it will account the ruler on every evil. Due to this reason the labor problem is neither present in Islamic State nor will it ever arise.

Thirdly: What are the basis rights in Islam and who enjoys them? Since freedoms take a fundamental place in Western civilization, their estimation and scrutiny are paramount. It is from here that the discussion of rights states: If a person has freedom of religion, he spends all his time to check if he can keep any belief or not. If a person has freedom of expression, he will push bounds until he has admonished for presenting his opinion. If a person is free to use his wealth as it pleases him, he must experiment as much as he wishes to decide in the best benefit of his own self. This is what generates right to belief, right to express, right to ownership in property, right to decide for one’s own self, including, “my body, my will”. These basic rights then further develop to include education, health and employment.

The basis of Islam is on the belief that Allah (swt) created man, life and universe and revealed the limits for man. Contrary to the Western intellectual basis, Sharia focuses on responsibilities rather than freedoms. So, Islamic law provides details for the responsibilities of each contracting party. The Prophet Muhammad ﷺ said that ruler is responsible towards his people and answerable for that. Similarly, there is the husband’s responsibility towards his wife and family, the wife’s responsibility towards her family and husband, the seller’s responsibility towards buyer, the investor’s responsibility towards his wealth, the land owner’s responsibility towards his land and the employer’s responsibility towards the employee. The question then becomes that what are the responsibilities of ruler, society and family towards any individual or all people collectively.

The Islamic State is responsible for providing the facility of health and education for all citizens. Rich and poor have an equal right to it. Implementation of any condition for access to this facility, whether of being poor, employed or from a specific area, will be injustice to those who are not extended the facility.

It is a necessity of our time to direct humanity to the fact that its problems are due to the capitalist system. Thus, the problems can only be solved by uprooting capitalism from its roots and implementing the Islamic Khilafah (Caliphate) system. The temporary patches of welfare state, social justice and social security will only add to the problems, pains and tragedies of humans everywhere. The use of all such terminologies and motives under them are similar to deceiving people, and nothing more.


Mohammad Akmal – Pakistan