Resolution Methods for Privation & Adversity
Part 14: The economic factors for generating, sustaining and developing wealth to fight poverty (10) (Stimulating wealth flow)
(Based on the thoughts & theories of Ayatollah Sayed Murtadha Al-Shirazai)
By: Hussein Al-Rumaithi
The flow of wealth and funds will result in active and healthy economy, where citizens have access to funds for consumption, transactions are facilitated and inflation is contained and reduced. However, accumulation of wealth and funds, will freeze and prevent them from a healthy flow in the markets, which will also prevent the creation and flow of new wealth and fund generation methods. Therefore, the Islamic system has discouraged accumulation of wealth and the 34th verse of Quran’s 9th chapter indicates: “and those who hoard gold and silver and spend it not in the way of Allah, give them tidings of a painful punishment”. (Note: the phrase way of Allah would not necessary hold a religious aspect, as other verses of the Holy Quran and traditions of Prophet Mohammad and his holy household, indicate that any action, deed, statement and effort which would benefit the people is considered an action in the way of Allah.)
The prohibition of accumulation in this verse is not bound to gold and silver, but since those two items are the most notable and known examples their names are mentioned. Presently, states around the world have maintained a continuous policy of wealth accumulation under the name of (RESERVE) or (Emergency fund). Unfortunately, billions or hundreds of billions in dollars and precious metals are stashed in reserves and funds, where the entire management process of these funds are granted to administrational bureaucrats.
Nevertheless, the methodology of Imam Ali (P.B.U.H) shows that funds received from taxation or other sources were granted to the masses immediately, as Imam Ali never left any funds in the state treasury at the end of the day. This methodology and policy of Imam Ali would assure that all the funds and wealth of a nation is directed to the masses, including the lower class. Therefore, poverty and privation is minimized vastly, flow of wealth leads to stronger economy and this trend would ultimately benefit the state and its citizens on all levels and aspects. In general, once the consumption ability of the masses is increased, the investment opportunities are available in a broader range, infrastructures, cultivation, manufacturing and mining are sought to be excellent opportunities for wealth growth. Nonetheless, this strong and healthy economy would translate into an ability to pay more taxes, which will also end up in the hands of people in different shapes, services and plans.
Therefore, pouring the reserve funds into the hands of the masses would create and enormous direct and indirect ability to diminish poverty and privation, which would lead to a stronger state and public. This method would also increase the gross domestic production, which is the real reserve fund and power that could support and sustain any currency regardless of the size of an economy.
According to some historians and researchers, the necessity of stimulating flow of wealth and funds was among the primary reasons behind the Prophet Mohammad’s decision to change the goods exchange methods to currency and monetary system. The system considered gold and silver as standard for exchange, comparison and equivalency, where the worth of the currency was set. Therefore, for instance 1 Dinar was equivalent 4.6 g of gold and other measurement.
The shift to this system enabled the consumers to explore various options for trade transactions, as transportation and other related aspects to any trader deal were facilitated. Therefore, exchanging a good for another was not the method to conduct a transaction, which also prevented some goods being kept aside until expire, because the goods exchange method made them unpopular.