Islam's Response to Contemporary Issues — Page 176
176 islam’s response to contemporary issues Alms are only for the poor and the needy, and for those employed in connection with their collection and distribution, and for those whose hearts are to be comforted, and for the freeing of slaves, and for those burdened with debt, and for those striving in the cause of Allah, and for the wayfarers. This is an ordinance from Allah. Allah is All-Knowing, Wise. 9 The treasury is charged the administration of this ordinance. In the early history of Islam, Hadrat Abu Bakr ra and Umar ra , the first two caliphs, were renowned for personally ensuring the speedy disbursement of alms in what became known as the first welfare state. This system had been at work with great success for centuries during the Abbasid period. As has already been explained, the motive force of interest is replaced by the driving force of Zakat. When we examine this system in operation, many differences between the Islamic economic order and other economic systems come to light. The features of a completely different economy begin to emerge. No amount of idle money, irrespective of it being large or small, can survive for long without multiplying faster than the rate at which it is taxed. That is precisely how Zakat propels the economy in a truly Islamic state. Imagine a situation where an individual with a small amount of capital is unable to directly participate in trade and there are no banks to credit him with interest on his deposit. Yet, if the deposit be sufficiently large to be taxable as Zakat, there are revenue collectors