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

Edit: I am wrong in many parts in this article. As I have read and researched more, I realize that we cannot exclude the Ahadith and that there is a great deal of valuable input there. My present thinking can be found here.

DRAFT Work In Progress

This article considers an approach to a "21st Century" Islamic state. The attempt will be to develop a comprehensive framework within which a new consensus can be reached.

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.

I have therefore, taken it upon myself to build a framework which attempts to find a synthesis between the two seemingly divergent movements. I believe that such a model is of essence to the present political situation within the Muslim World.

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 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.

While this synthesis is a wider work and will involve a considerable amount of thought and time, and will perhaps need to be written in a far more comprehensive piece or work, I will attempt to first build a skeletal structure. 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. (I need to explain further why)

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 de-listed 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". Only derivatives allowed will be forwards and swaps, and these will be highly regulated to ensure that speculators are marginal to the market. Further, they will only be allowed in commodities and Forex. (Why? What is the rationale behind this?)

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 subsidize interest based lending (as in the west and discussed earlier) and there will be no "riskless interest" to artificially raise yield requirements for risk-sharing based investing.

Money supply will be maintained at a rate that would approximately keep prices constant. There will be 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. (Or alternatively perhaps, a ratio equal to what proportion of foreign trade to domestic consumption)

Economic modeling will need to be rethought as many of the key models have interest as a key element in the models. Perhaps Tobin's Q could be a replacement in some of these. We would probably need to write a couple of books to create the building blocks of Islamic econometrics.

My hypothesis on removing fractional reserve banking and an interest-based economy - this is likely to make booms and busts far less of a problem as the money supply in the economy is far less likely to fluctuate. Research could prove or disprove this thesis by doing a comparative study of economies where banking plays a greater role against economies where banking plays a lesser role and matching this to see how it correlates with the volatility of booms and busts. Of course, holding everything else constant will be difficult but this exercise may still be useful.

There is still the problem that a naturally increasing population would mean that keeping money supply constant per person would require a natural increase in the money supply. Who gets the benefit of this increase in the money supply? My suggestion would be that as each individual comes of age, he/she would be given an endowment equal to the amount that would result in keeping the economy in equilibrium (a value dependent on the consumption rate). This could also simultaneously be a source of financing for young men and women entering the economy needing an initial investment to get them going (i.e. for education, buying a starter home, etc). This would also strengthen the meritocratic nature of the state, evening the playing field.

The nature of the state, however, must remain fundamentally that of an open economy based on private enterprise and competition. (Need to expand on why)

The Legal System
(needs to be completely rethought. Can't do this with my limited knowledge).
The legal system will be run according to the Shariah. However, the old Ijma and Qayyas will not be taken. Instead, an Islamic Council will be set up to decide on issues of Ijma and Qayyas in light of the present state of affairs. The Islamic Council will be an autonomous body elected by the people in the general electoral mechanism (more on this system will follow later). The system will be tied in with the educational system of the country, and have a meritocratic basis on the level of Islamic education one has. Thus, a citizen who has taken Islam as a subject at the high school level will receive one vote, a citizen having done the same at a college level will receive 5 votes, and a citizen that has studied Islam at the graduate level will receive 10 votes.

There will be no lawyers in the wider legal system. Three judges will preside out of which one will have the responsibility to make sure all the points for the defendant have been considered in discussions, and another will be similarly responsible for the plaintiff. However, they will both keep their judgments neutral and decide, along with the third judge, the details of the given lawsuit. Whether a Jury should be convened, I am not certain about and will leave to someone else to decide, answer and write about.

The police force will be directly subservient to the Judiciary. As such, the Judiciary will be able to fire and replace any officer of the law. Officers will maintain habeas corpus, which, while a western term is easily supplanted into the time of Prophet Muhammad (peace be upon him). I do not believe any man was ever unlawfully detained in Medina. Further, examples of the importance for the writ of the law abounds in the example of the Last Messenger (peace be upon him). Examples of impartiality and fairness in the courts of Medina are also well documented.

The Islamic Council and the Judiciary will form an organization that will stand as one of the pillars of the Islamic State, and will be independent of the other arms of the constitution.

To Be Continued
S.M. Hussain
Vision Without Glasses


Anonymous said...

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

S.M. Hussain said...

Respected Sir or Madam, you may find the "shoora" you are referring to further down the article.

NoPCThoughts said...
This comment has been removed by a blog administrator.
Anonymous said...

Voting system
- no free access to college as you mentioned it for high schools?
- extra vote by armed service isn't explained and difficult to reason why. It would naturally tend to increase the political weight of men over women.
- continuous voting flow; the original reasoning sounded more pro-plebiscite.

Economic system
- good point on lack of taxes on interests
- interest rates can be avoided, but liquidity and investments still be guaranteed if national (state) investment funds invest to replace loans
- savings with interest rates can be replaced by investment in more durable goods, education and national (state) life insurances/house savings contracts that give at least a compensation for inflation

Legal system
- It should be noted that wealthier suspects will hire help equaling an unofficial lawyer to optimize their behavior and therefore their chances at court.
- Your system with the 3rd judge sounds a lot like assigned counsels, and assigned counsels work VERY poorly. It's important to assure motivation and capacity for a good defense.

James Raider said...

For Iraq, such strategy for renewal has to start with foreign troop withdrawal.....

Regardless what the original intent, it is high time Iraqis were given their nation back before too few are left to remember that most Shiite, Sunni or Kurd Iraqis described themselves as Iraqis above all else and religious or sectarian group members second…..

All best wishes.

Anonymous said...

Democracy is 'by the people'
Islam is 'by the 'Lord of the Worlds''...

Anonymous said...

I somewhat agree with the voting system, but i can hardly agree on the banking system. Gold backing never had any problems or negative effects. You are forgettin the history of mankind, they've always used gold/silver. The economic system can only be stable if its using gold/silver currency and the removal of fractional reserve banking. As far as investments are concerned, instutions should open, which should educate people on which business to invest in, on proper profi/loss basis.

Thoughtful democrat said...

Your loaded voting system will not be accepted by any group except for university educated married members of minorities, who will do their best to outvote the illiterate, poor majority.

Giving extra votes to the well-off upper middle class is not necessary reasonable, since the poor may have valid ideas and asperations for the advancement and education of their own children.

Keep thinking of these matters! It only took the liberal democratic countries several hundred years to evolve to their present levels. While no democratic system is perfect, it is far better than a state of instability where armed squads of desperados set off bombs in markets and on the steps of places of worship. Shame on them and on those who approve. Political power in a civilised world comes from universal secret voting.

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