In the Name of Allah, the Most Gracious, the Most Merciful
Grande Strategy

Handbook to a 21st Century Islamic State

In the Name of Allah, most Compassionate, most Merciful


I am starting on this herculean task of addressing this issue. My attempt will be to work on this over the next 3 months, so my apologies in advance for constant changes to this page.

The purpose here is to find a viable solution to the perennial question of how we can have a viable Islamic state in the postmodern context. Today, we have secularists who want to relegate Islam to the mosque and transplant themselves to the western Weltgeist. Conversely, on the other side of the spectrum, we have people who want to reject the present world and recreate the period when Islam was ascendant, Prophet Muhammad (PBUH) was alive, and all questions of faith and life could be answered directly by the Prophet (PBUH).

While these two groups of people have hijacked the debate and become two colossus fighting a battle to the death against each other, the common man on the street does not necessarily agree with either side. The common man seems to know instinctively that the answer lies in between the ideologies of the two groups, yet have not articulated and rationalized a path in between the two. After all, an ideological compromise built only around the premise of moderation and taking the middle path is at best weak. What is in fact needed, is a synthesis of ideas, rather than a compromise.

In my model, I will not go into finding endless Ahadith (sayings of Prophet Muhammad PBUH) to support my case. The fact of the matter is that once one takes that route, it becomes an endless battle with others using a whole host of other Ahadith. The real problem here Ahadith are taken out of their contexts and there are just too many of them. One can argue any position using Ahadith, taking an argument into a never ending loop.

My model will will also not be a closed system, in that I am not trying to create the "perfect solution". I do not have a permanent cure for poverty, inequality, or a whole host of other evils. To attempt to create such a system is clearly beyond my ability. If one attempts such a system and fails, it often results in a far worse result, as is amply exemplified in the former Soviet Union. I will venture to say that there is in fact, perhaps no perfect solution, and one must aim to design a system that takes this into effect, that can adapt and has adequate "safety valves" and a mechanism to bring in emerging factors as they develop.

The areas I am going to address includes the political system, the economic system, the legal system and civil society in general. Each of these, however, are not independent of each other and cannot stand effectively on their own. Within each subsystem, adequate checks and balances are required.

Political System

When Prophet Muhammad (peace be upon him) was on his death bed and in high fever, he at one point wanted to give some indication of what was to be the future politically, after he passed away. It was insisted that he took his rest. When the Prophet (peace be upon him) passed away, a split evolved as to who and by what mechanism a successor was to be chosen. Rifts and disagreements developed even amongst the companions of the Prophet (peace be upon him). Hazrat Ali (one of this 10 companions and his nephew) felt that they should have let him speak. This rift continued to widen thereafter. Many questions remained unanswered. Should the Islamic state be a monarchy? elected? If elected by what method? How long should the Khalifa (leader's) term be? If Prophet Muhammad (peace be upon him) didn't give out clear guidelines, then is Islam really complete?

These are important questions, and the last one is perhaps blasphemous. To be brief, I believe what the Prophet (peace be upon him) meant when he said that our religion was complete and that Islam was a complete way of life, is not that all possible actions and issues have been cataloged like an encyclopedia or a computer program. Rather, that all the principles needed to address every action has been given. Applications of those principles are also given, in the example of the Prophet (peace be upon him). Just as a student when he is working on his arithmetic, looks at the relevant formula, and then if he has further trouble, looks at an example on how the formula is used, Islam gives us the principles and then an example on how it is to be used. It does not mean that every time we are given a new problem to solve, our answer will be the same as the example, but we will look at the "formula" (Islamic principles) and fashion our answer on the same pattern as the "example" (the life of the Prophet, peace be upon him).

This represents a break from the present hard line approach taken where every problem has to come up with the same solution as the example or the secular approach where instead, they reject the formula itself and take one out of the western book. This is one of the central corners of the model that I will develop, encompassing the "21st Century Islamic State".

From my reading of the Quran and readings of the life of Prophet Muhammad (peace be upon him), I believe that the Islamic state is meant to be run on the principles of merit; knowledge, wisdom and experience. Islamic knowledge as well as knowledge of worldly affairs. The Islamic state must also be inclusive of all citizens. However, while all men are equal in Islam, they are not equal in their knowledge and wisdom, and this principle of the importance of gaining knowledge and wisdom, and as the same being a differentiating criteria, is well documented.

Now this concept comes in fundamental clash with modern ideas such as democracy. We therefore cannot really continue with the concept of democracy. One person, one vote sounds great of paper and on slogans but has shown time and time again to lead to a whole host of problems and manipulations that in the end, do more harm than good. We instead look to develop a system that addresses our Islamic principles - both that all men are created equal, and that there should be a differentiating criteria for those who are more learned. The political system will look to thus create a balance between universal participation, and appropriately valuing quality over quantity.

The Islamic State will do this by having a "voting system" (not really, but for now lets consider this term) that has different weights for each voter. Universal suffrage will exist in that every individual over the age of 16 can vote. However, if he holds a high school diploma he gets an extra vote (and public schools will be maintained by the state to make sure all children have access to free education to this level). Individuals typically become more responsible and care more about the future when they get married. Therefore, getting married would earn them another vote. Individuals graduating from college will also gain an extra vote. And so will individuals above the age of 35, based on wisdom through experience. Individuals above the age of 60 will lose a vote, because age beyond a point has shown to deteriorate mental faculties. Individuals who have spent a minimum of 2 years in the armed forces will also gain an extra vote. Thus an individual who has graduated from high school and college (or above) and is married, will have 4 votes to his or her name.

Voting systems today rely on what operations research professionals call the "batch process"; a whole batch of votes are selected and counted, gaining the elected representatives a term until the next batch comes about (typically between 2-6 years). Today, this system has been shown to be fatally flawed. With the electorate only able to influence the elected around election time, while other interest groups do so 24/7/365. As has been seen in the US, this results in a great degree, the disenfranchisement of the electorate. In a truly Islamic state, a leader must be held accountable at all times, rather than just during the time corridors of elections. Meanwhile, we also need to address the sheer logistics of the election system, often outside the logistical capacities of today's Islamic countries.

The method here would be to use a continuous flow process, one where voting takes place continuously. At first glance this may seem to present two issues - a logistical and practical impossibility and a problem of governance - how would there be continuity in government policies if the government changes every week? However, if we took the voting process to involve one (or a few) voting district per fortnight, then an entire country could be covered in a 4 year period, with each voting district getting an election once every 4 years. The electorate would in essence be able to influence and indicated approval continuously while greatly simplifying the logistic process (which could be handled by a much smaller administrative system). Governments would also not constantly be changing as marginally, one (or a few) voting districts would not be enough to topple a government typically, unless the majority was marginal.

Economic System

The economic system would drastically need to change from the present. Riba is wrong, and there is no going around this. Presently, there are many islamic banks but most of them are designed to cloak riba in one form or another. Not only is interest (or riba) wrong, but so is fractional reserve banking as well as the concept of limited liability.

The fundamental question is how would savings-investment work? That is, how would savings in the economy be turned into effective investments? By taking out both interest-based banking and limited liability (and thus corporations as we know them and thus stock flotation) we seem to be taking out this important link between savings and investment. In the 21st Century Islamic state, this function can be taken over by creating an alternative venture capital based investment economy and by redesigning the corporation as we know it to incorporate liability.

Today western economies subsidize loans over investment in equity because interest payments are not taxable while dividends are. This puts investors at a disadvantage and gives banking a leg up. There does not seem to be any real rationalization for this without going into a conspiracy theory, but suffice it to say for intended or unintended reasons, this is the case. Within investments in equity, corporations created from limited liability (and the concept of the corporation as a legal entity) and by extension the stock market dominate. As a result, venture capital and other forms of investing suffer a double jeopardy. As a result, we see that venture capital is greatly marginalized in western economies both in quantity and in quality, focusing narrowly on the highest yield opportunities which also involve the highest risk.

Our savings-investment vehicles would include:

  1. Venture capital firms
  2. Investment banks
  3. Restructured corporations (restructured stock market)

Corporations would be restructured to include liability. However, it would be the responsibility of the top management to make sure that information is provided accurately. If the company fails because the management was hiding information in any way then the shareholders will not be held liable for the losses beyond the value of the stocks. Any stocks that are showing poor balance sheets, income statements and cash flow statements will be delisted from the stock exchange mechanism and moved to pink sheets. Investors investing in these pink sheet companies will be fully cognizant that they are dealing with companies that could default and fail, resulting in them being held liable for losses.

There will be no advanced derivatives markets. This is important to ensure that the financial system is subservient to the "real economy".

Venture capital firms will not be structured like the venture capital firms in western markets. They will instead be larger, more bank-like in their investment decisions and willing to take on lower yield investments. This will be because there will be no competing interest-based loan system to take the lower yield and lower risk side of the market, the financial system will not subsidies interest based lending (as in the west and discussed earlier) and there will be no "riskless interest" to artificially raise yield requirements for investing.

Money supply will be maintained constant with some natural variance, but nevertheless, constant. For this a completely independent monetary authority will be maintained. If the US constitution has three branches that are independent of each other, the Islamic State will have many more than three. The central bank will be one such independent authority that will be in charge of maintaining the value of the currency. Another institution will deal with statistical data and this will also be completely independent of the other arms of the state. This is important and is mentioned here because it would be less useful to have an independent central bank if it depended on data that was manipulated by governments as a means to sway the central bank.

There will however be no gold standard. A gold standard implies that the value of the currency remain constant to the value of gold, which has its own negative implications, as the value of gold can fluctuate independently to that of the goods and services bought and sold in an economy. Instead, the value of the currency will be dependent on a basket of goods and services that is reflective of the economy as well as the value of a basket of currencies that would be represented by their level of trade with the Islamic state. Of these two factors, the former (a basket of goods and services reflective of the economy) will be weighted more than the latter (basket of currencies being traded with). This ratio of decision-weighting should be about 80:20, heavily in favor of maintaining the value of the currency for the local consumers.


S.M. Hussain
Vision Without Glasses


Anonymous said...

no democracy???? what about " amru hum shoora bainahum"

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