Capitalism is failing us all. Could Islamic economics be the answer?

Billionaire Ray Dalio, manager of the world’s largest hedge fund Bridgewater, recently shocked the world when he announced that “capitalism is failing” and that a “revolution” is coming.

There is no denying that global inequality is at unsustainable levels, and that interest-based economies are no longer fit for purpose (in many countries interest rates are too low to incentivise saving at all).

I believe that Islamic economics, with its 2.5% zakat wealth tax (and much lower taxes in other areas) might give us a clue on how to eliminate the worst social inequality. And with a prohibition of abusive high-interest businesses and the incentivisation away from interest-based savings accounts, it can reinvigorate the global economy. These are not just Islamic economic concepts; these are universalist traditional Abrahamic ethics, and a common sense way for us all to enjoy a truly free market.

Once we strip away the Arabic terminology, concepts like zakat can return our economies to the common sense-based, transparent and equitable set up that the architects of modern capitalism envisaged.

Muhammed Yesilhark Philanthropist

Dalio’s statements matter, not only because of how strongly worded they are but also because of how topical they are in today’s news climate. They are significant because of who Dalio is, that is to say probably the most successful hedge fund manager in the world. One of my colleagues commented last week that this was the equivalent of the Pope declaring that Catholicism is failing.

Dalio’s words are perhaps more shocking because they violate one of the most sacred unwritten rules of the global rich: you’re not allowed to criticise capitalism if you have benefited hugely from it. Protest – or even displeasure – with the system is a luxury only the poor can afford. It’s normal to see cleaners, or even Uber drivers, angry at inequality. It is less normal to see the world’s wealthiest publicly stating that the order to which they owe their success is “not providing the American Dream.”

The “no protest for the rich” rule has led billionaires to channel their sense of responsibility, frustration or even guilt into philanthropy. This means that we seldom have the wealthy discuss these issues, let alone the root causes from which these problems arise. Those root causes go deeper than many of us realise and addressing them will mean re-examining not only our economics, but our politics and values.

Source : https://www.euronews.com/2019/04/16/capitalism-is-failing-us-all-could-islamic-economics-be-the-answer-view

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