By S M WASIULLAH
The “Occupy Wall Street” movement that began more than a month ago has now successfully claimed a global public space and public attention. Thousands of US citizens gathered at Times Square in New York City as part of a wider “Global day of rage” against the economic system of the West which has failed to create equality and justice in society.
The protesters included the youth, students, the urban middle classes, union members, the working poor and the underemployed and unemployed. They criticised the growth of inequality and the erosion of social mobility in the United States. They condemned the collusion of the state (US government) with corporate lords (companies and financial institutions). And they shared the common belief that it is the bankers, speculators, and traders who are responsible for the economic recession that has left in its wake vast inequality in society.
This movement is the reflection of anger of people who have been deprived by selfish government leaders and their financial policies which preferred to entertain the demands of rich corporates at the cost of the poor. The slogans, “Loan Sharks Ate My World”, “End the Federal Reserve”, “Wall Street Sold Out, Let’s Not Bail-Out”, “Kill the Over the Counter Derivatives Market”, “The Middle Class is Too Big To Fail”, “Eat the Rich, Feed the Poor”, “Greed is Killing the Earth”, etc. witness the loss of faith of US citizens in the prevailing vulnerable financial system.
The protesters symbolised themselves as the “99%”poor people, against the hypothetical “1%” rich who hold the country, its government and much of its national resources hostage. This movement is nothing but a symbol of disagreement of US citizens with the country’s capitalistic economic system.
The failure of the prevailing financial system can be traced to the 2008 economic collapse that resulted in a high rate of unemployment, inequality, economic problems and lack of financial and social security in the United States. For instance, according to the Washington-based Economic Policy Institute, average incomes between 1979 and 2008 in the U.S. grew by over $10,000, but all that growth went to the richest 10 per cent of the country, while the incomes of the remaining 90 per cent effectively declined. This shows how inequality in the US has increased in the last few decades despite the many short-term measures taken to tackle this problem.
There are various contributing factors for this crisis, namely total economic freedom, allocation of resources through interest-based lending, credit-based business, trade-in-risks market, etc. These are the salient features of capitalism which are accused of engulfing the various national economies in unstable conditions leading to the ‘Global Meltdown’ of 2008. Many experts raise concerns that the same factors may drag the world economy still further into a great economic depression more disastrous than the earlier ones.
The markets operating on exotic financial instruments like derivatives, swaps, futures and options result in risk-trading and speculation. With such type of instruments, one sells what one does not own and makes the entire market susceptible to high volatility. On the other hand, ‘Interest’, as argued by many of the Islamic economists, makes the individual and society selfish and greedy. It pushes for exploitation and increases the gap between the haves and the have-nots.
However, the inequities and injustices in acquiring, utilisation and distribution of wealth are being questioned globally. This movement has had its impact all over Europe and UK where the philosophy of free-market economy prevails. It has also received immense global support, as citizens from almost 80 nations are in support of this movement.
At this crucial juncture for the US economy the crying need is for a financial system which is capable of protecting and safeguarding property of individuals as well as society. The experts of Islamic Economics have an opportunity at hand to challenge the prevailing economic systems and prove that the best alternative can be the theories derived from Islam (Qur’ān and Sunnah).
Moreover, the global community in general and the US in particular must strive to replace the prevailing vulnerable financial system (prone to ambiguity, gambling, and deception) with a transparent one. This is the right time for US and other western nations to experiment with the interest-free financial system that is more transparent as well as less vulnerable.