Kevin Barrett
Economic inequality is a perennial problem. Throughout the history of civilization, elites have wallowed in unearned luxury, while masses of people struggled, suffered, and sometimes starved.
The Qur’an makes it clear that inequality is a spiritual problem as well as a material one. Greed, arrogance, and hoarding (Shuhh, شُحّ)—not just faulty institutions—are core causes of inequality, while generosity and a firm commitment to justice (‘Adl and Qist) and righteous stewardship (Khilafah and Amanah) are part of the solution.
It is precisely in their blindness to the spiritual dimension that secular approaches fall short. Political upheavals of recent centuries, notably communist, socialist, and social democratic movements, have sought to solve the inequality problem by establishing laws, bureaucracies, and secular institutions.
But communist elites have proved just as rapacious as capitalist ones, while socialist and social democratic parties have failed to stop capitalism’s rush to ever-greater inequality. That is because all of these secular movements are one-eyed dajjals: Their eye for the material dimension is keen, but their spiritual eye is blind.
Islam’s spiritual approach to addressing inequality shines forth from the Qur’an’s unequivocal condemnation of riba (usury). The Qur’an tells us that “Those who gorge themselves on usury behave as he who has been confounded by the touch of Satan” (2:275); that “Allah deprives usurious gains of all blessing” (2:276); that those persisting in usury will be “at war with Allah and His Apostle” (2:279); that “gorging on” the “doubling and redoubling” of compound interest is Divinely forbidden (3:130); and that there is no meaningful profit or gain from usury, whereas charity, specifically in the form of the zakah wealth tax, is what brings genuine increase or gain (30:39). (Translations from The Ascendant Qur’an, Muhammad al-’Asi.)
Riba or usury is most narrowly defined as charging interest on loans. More broadly, it can mean profiting from using money as a commodity rather than a medium of exchange. And still more broadly, it can mean rent-seeking in general: the use of titled ownership to leverage unfair economic gains that are not commensurate with the rent-seeker’s labor and risk. All of those activities are core causes of inequality.
Rent-seeking drives inequality over the course of generations. How? Consider the rise-and-fall cycle of families and societies. (In the simplified description that follows, I am drawing on the seminal historical sociology of Ibn Khaldun and his modern acolyte Peter Turchin.)
A generation that makes its fortune through shrewdness and hard work naturally wants to pass that wealth on to its descendants. But the descendants are usually less productive, less competent, and less diligently industrious. After all, they grew up in luxury, and were often attended to by servants or the equivalent.
What’s more, traits associated with success—physical strength, intelligence, and so on—are only moderately heritable, and generally regress toward the mean. So the children of any elite will inherit fewer of the traits that favored their forebears. And because they had it so easy, their characters will tend towards sloth and love of luxury, with none of the burning desire to succeed, and willingness to sacrifice along the way, that drove their forefathers.
Because the children of the prosperous are unlikely to prosper, left to their own devices, the parents rig the system. Over time they find ever-more ways to make laws, rules, and social practices to favor those who already possess wealth over those who are seeking it. (Turchin calls this the “wealth pump,” designed to pump all the wealth to the top so those already there can stay there without exerting effort. These mechanisms usually fit the definition of usury.) That dynamic produces ever-increasing inequality of opportunity as well as outcome.
Both Ibn Khaldun and Peter Turchin recognize that the rise of rent-seeking over generations leads to civilizational collapse. Turchin believes he has uncovered the mechanism that drives the collapse: not inequality per se, but the way it decreases the availability of elite “seats at the table.”
Once the elite has fortified itself against newcomers, ambitious young people, sometimes led by defectors from the decadent elite, grow frustrated and form a counter-elite. Elite fractiousness, sometimes leading to civil war, causes the society to collapse.
Islam has not permanently solved this problem—Ibn Khaldun developed his theory by studying mostly Islamic dynasties—but it does offer insights and tools for addressing it. First, a strict ban on usury, if adhered to, prevents Turchin’s “wealth pump” from forming and operating. Usury “doubles and redoubles” wealth exponentially, allowing those with money to use it to pump most of the money in the system into their coffers simply by watching it breed. Since usury is always the basis of the “wealth pump,” strictly banning it solves a good part of the problem.
But today’s society, which features a bewildering array of monetary technologies, requires us to broaden our concept of usury. If we only ban lending at interest per se, but allow other forms of unfair rent-seeking, the greedy faction of the elite, described as Al-Mala’ (الْمَلَأ) or Al-Mutrafīn (الْمُتْرَفِينَ) in Qur’anic terminology, will find workarounds and hacks.
The laws that govern the modern economy need to be explicitly designed to prevent and penalize all forms of unfair rent-seeking, not just lending at interest. Economic rules and laws should always be written to favor those who are (honestly and productively and in halal fashion) seeking wealth, not those who already have it. Antitrust legislation, severe regulation and enforced transparency for large enterprises and wealthy individuals but not for smaller and poorer ones, wealth taxes beginning with Zakat, inheritance taxes on large fortunes, are potential legal remedies. But most importantly, without a Qur’anic-based culture of spiritually-motivated justice and charity, even the best laws can wind up not being worth the paper they’re written on.
As the above paragraphs suggest, I don’t believe that Zakat and Awqaf, by themselves, can magically solve the inequality problem. Take “Saudi” Arabia—please! In the Gulf’s premier Arab sheikhdom, Zakat is obligatory and officially collected by the state through the Zakat, Tax and Customs Authority (ZATCA). The Saudis also have a Ministry of Awqaf which helps fund the two holy mosques and a broad range of other charitable and developmental activities. A recent study found that “despite recent reforms, the waqf sector continues to face structural weaknesses that limit its effectiveness.”
Whether or not reforms are making them more effective, it’s clear that Zakat and Awqaf have not solved the inequality problem in Saudi Arabia. Though that statement shouldn’t require statistical backup, it may be worth noting that Riyadh’s Gini coefficient of inequality is 45.9, making it the 22nd most unequal country on earth.
Why haven’t Zakat and Awqaf made Saudi Arabia a paragon of equality and social justice? Perhaps because the leadership there, the luxury-loving Mutrafīn, is neither spiritually-engaged nor sincerely applying Islamic precepts. Since they have more oil revenues than they know what to do with, Saudi leaders can afford to make a show of vaunting Islamic economic institutions. But the Saudis are not dedicated to applying Qur’anic precepts in a way that would repair the unfair distribution of wealth in their rentier-based society.
Zakat is better than a Bernie Sanders style wealth tax because giving zakat is not just a legal requirement that must be obeyed upon pain of prison, but a spiritual and religious practice that brings barakah. And a Waqf is better than a secular nonprofit corporation or NGO for similar reasons: Those who endow it, as well as those who benefit from it, gain a Divine blessing.
A secular state that points a gun at people to force them to redistribute their wealth may or may not succeed in increasing economic justice in the short term. But it lacks the higher purpose, the connection to a comprehensive system that orients us in the cosmic scheme and allows us to lead a rich, meaningful life, that comes with a comprehensive Islamic system in which people’s participation is largely voluntary.
For that reason, future efforts at achieving social and economic justice have a rich field to experiment with amidst Islamic traditions that point the way to a comprehensive system aimed at promoting the highest degree of felicity in this life as well as the next.
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