Hajj & the Solution to the World Economic Crisis

By Hamid Choudry-  The pilgrimage to Makkah is traditionally viewed as a spiritual journey…exclusively. There is no doubt that the pilgrimage is a spiritual journey. It is the fifth pillar of Islam, and a duty for all those Muslims who have the means to perform it. For those who fulfil it’s commandments, there is the promise of forgiveness of pass sins, such that the haji is as if he is newly born from his mother’s womb. The worshiper visit’s the one ‘house’ which was built on the earth, for the singular worship of Allah (swt). He seeks forgiveness of his sins, and renews his relationship with his Creator.

So, from an individual’s perspective, the hope of forgiveness in this life makes it a spiritual journey, the like of which has no comparison in any other faith or event.

The hajj however can be viewed from different perspectives as well. There is a social and political aspect to this amazing spectacle. We can also take an economic learning from the event. Given the unprecedented challenges facing the world’s economy in current times, it is worth exploring these further, to understand how we can address the global economic crisis through the message of hajj.

Firstly, let us briefly reflect on the social and political aspects.

Is there a better way to remove social inequality than by discarding all the status symbols man wraps himself in? When all worshippers have the same simple attire, all outward signs of prestige, power, status and worldly standing are left behind. This demonstrates the power of the hajj in promoting social equality.

In a similar way, this gathering of peoples from all nations of the globe, east to west, black and white, united in their purpose of worshipping the same One Supreme entity, sends a strong political message about the true nature of unity. National allegiances and political and racial affiliations are discarded as temporary and transient. Is there a stronger message of true and permanent unity?

We will all be quite familiar with these examples of how the hajj is an extremely powerful symbol for social and political change. But what about the economic symbol?

For this, we need to look back to the hajj at the time of the Holy Prophet (saw). Islam is a system for all man for all time. It is down to Muslims to ensure the eternal message is kept relevant, demonstrating the timeless nature of the message, and it’s ability to resolve the problems of the modern world.

The day of Arafat, being the ninth of Dhul-Hijjah, is also known as the day of Hajj. This year it fell on Saturday 5th November. Muslims made the arduous trek from the camp city of Mina to the open plains of Arafat, spending the day in prayer, repenting and seeking forgiveness. This plain is reported to be the location for the resurrection and standing of humankind on the Day of Reckoning.

In the year 632, the Day of Arafah fell on a Friday. It was in this year that the Prophet (saw) performed his (saw) final hajj. It was also the setting for the deliverance of what is now known as his Final Sermon.

The speech was phenomenal in that it covered the whole spectre of subjects that address the human psyche. Today’s orators and leaders are typically single dimensional when delivering speeches to their listeners. The timelessness of the message within the speech is apparent, as we can take the content as solutions to the problems of today, fourteen hundred years after it was originally delivered.

To demonstrate this, let us explore the financial crisis the world is currently facing. Whilst recognising there are many facets to the financial problems we are facing, we can also easily pinpoint some fundamentals that are the root cause of the problem. The reckless action of investment institutions, the endless printing of paper money, the absence of ‘real wealth’ backing paper money, the concept of limited liability, speculation leading to wide stock market fluctuations, the trading –buying and selling – of ‘money’ as if it is a commodity itself. This final point is only possible due to the common acceptance of applying interest as a measure of the cost of money.

Lets take a closer look. It’s a simple concept that the net position of all debtors and creditors should be nil. So the total sum of what is owed must equal the sum of what is owned. However, we are continually being told that the net position is one of debt. One that needs to be repaid…by the taxpayer! So who is it owed to? And what is it owed for?

A basic understanding of the banking system and money supply allows us to begin understanding the roots of the problem. If we take a look at the money supply in the UK, 3% of money is created by the Bank of England. 97% of money is created by commercial banks. Banks ‘create’ this money because they can ‘sell’ this money to borrowers for a profit – interest. Banks have the ability to create money out of nothing. They then lend this money out for profit. Once the money is repaid, the money ceases to exist (as it was created from nothing in the first place). However, the banks have earned a profit (interest), which is essentially profit created from nothing.

The total UK money supply is around £2,200 billion. This has risen from £500bn in 1990, and £800bn in 2000. Money supply has increased by approx £1,500bn in the last ten years – almost a three-fold increase.

Of the £2,200bn money supply, less than £60bn exists in actual notes and coins – actual money. A staggering £100bn is merely inter-bank debt: money that banks owe to each other. So when the government raises taxes or reduces spending, this is in order to facilitate the payment of inter-bank debt. Whenever a bank defaults on a loan, the size of the debt increases further, due to additional or compound interest.

As demonstrated, due to compound interest, the public’s debts are now greater than all the money that exists in the economy. According to Bank of England figures, if the UK public collectively took all the money in our bank accounts and used it to pay down off our debts, we would end up with no money at all and still owe £306billion (plus interest) to the banks.

These simple points demonstrate how paper money, debt and interest are at the heart of the economic malaise.

So what, we need to ask, is the answer to the problem? Government’s responses globally have been to further increase the money supply, in an attempt to pay off the debts, and encourage further lending to create growth. This is, to any rational thinker, a futile exercise.

Coming back to the hajj, and the Final Sermon of the Prophet (saw). After praising, and thanking God, the Prophet, may God send His praises upon him said:

“O People, lend me an attentive ear, for I know not whether after this year, I shall ever be amongst you again. Therefore, listen to what I am saying to you very carefully and take these words to those who could not be present here today.

…..God has forbidden you to take usury (interest), therefore all interest obligation shall henceforth be waived. Your capital, however, is yours to keep. You will neither inflict nor suffer any inequity. God has Judged that there shall be no interest, and that all the interest due to Abbas ibn Abd’al Muttalib shall henceforth be waived…”

This message is as relevant today as it was 1400 year ago. It demonstrates the need for divine knowledge in solving the problems of yesterday, today, and tomorrow. Economists, politicians, experts and the like need to dismantle current thinking and start afresh. Their attempts to dig us out of the mess will inevitably end in failure. When this happens, there will be alternative but to implement the learning from the Final Sermon. Is it conceivable that the US will ever pay off $14trillion in debt? Each time the US defaults, the debt ceiling is raised, and additional ‘debt’ created to pay off the existing debt.

There is only one solution to the current crisis. To write off the debts, in the same way the Prophet (saw) wrote off all the interest due to Abbas. The second step is to remove the incentive to trade in money, which would curtail the growth of money supply, and put a stop to the vicious cycle of debt creation. This would be achieved by outlawing interest, which is the motive behind creating money and ‘debt’.

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