Friday, 27 January 2017

The Problem of Government Funding

What is the alternative when the state runs out of other people's money?

This video, which is about President's Trump's proposal to defund NPR and PBS, discusses the economic reasons why state-funded arts and humanities programmes, as well as radio and television, should cease to be, i.e. they should no longer be funded by the state but instead attract funding from private citizens and investors. If these programmes are indeed producing value and worth, people will voluntarily pay for them. The other factor to bear in mind is that these state-funded programmes are almost entirely run and directed by leftists, who use the funding to promote and endorse their ideology.

Arts and humanities programmes are certainly not considered an "essential" service, such as law enforcement, fire brigades, emergency services, hospitals etc., but as sovereign debts in western democracies continue to spiral out of control, cuts will have to be made. There is no alternative.  It should also be noted that the previous American president was by far the most fiscally irresponsible and reckless, ever.

The topic of government revenue and government debt is something that has been touched on more than once on this blog, and it is something that our scholars explained in details centuries ago. Back in 2012, when I translated Imam al-Ghazali's The Book of the Lawful and the Unlawful, I wrote the following in my introduction:

'Within the scope of carefulness, the Imam discusses the importance of looking at one’s sources of wealth and especially the sources of one’s nourishment, as one does not want to draw strength from that which is unlawful. Furthermore, the Imam goes into depth with regards to dealing with rulers, or governments. Indeed, an issue that is not normally discussed is where governments get their money from, but Imam al-Ghazālī lays out the matter in details and lists the various sources from which a ruler, or government, can acquire wealth. In an age of staggering government debt, the Imam’s words should remind us that governments, just like households, need to keep their finances in order. Like the rest of us, they do not have access to a bottomless treasure chest.'

This was just a warning of things to come. It is in the fifth chapter that Imam al-Ghazali lays out the eight sources of government revenue, the third of which is endowments, or waqf, and this can be lawful if the ruler is stipulated by the endower to be a beneficiary.

Therefore, the next big project was to translate what came to be known as The Book of Endowment, which was primarily a translation of al-Khateeb ash-Shirbini's chapter on waqf from his Mughni al-Muhtaj. This text, along with the introduction and appendices, provides wonderful illustrations and examples of how various services, especially healthcare and education, can be provided through the private sector. I wrote the following in my introduction:

'The topic of endowments was chosen in order to follow up on a theme touched on by Imam al-Ghazālī in The Book of the Lawful and the Unlawful[1], which is the sources that governments get their money from, and it is made clear that no government has access to a bottomless treasure chest. On the contrary, just about every government on earth, and especially those in the Anglosphere, are suffering under crippling debts, so crippling that they are never expected to be paid off. It is widely acknowledged that government spending needs to be cut and budgets needs to be balanced. While there is definitely a large element of crony capitalism, or corporatism, in how governments spend their resources, there is also the concern about basic public services, such as healthcare and education. If and when governments go bankrupt, what will happen to these services? How will they be funded and maintained?
            The answer lies right here in this book and any fiqh manual that describes the rules and regulations for establishing and running an endowment. Endowments, or awqāf, are how Muslims provided free education, healthcare and other services to the wider public from within the private sector. As the reader shall see, they were set up with a desire for everlasting reward in the Hereafter; reward that would continue to accumulate long after the endower had left this world and returned to his Lord. As Benedikt Koehler points out in his lecture ‘Early Islam and the Birth of Capitalism’,[2] endowments were a brilliant example of localism; instead of a small group of people in a faraway capitol deciding what is in the people’s benefit, we have thousands upon thousands of private individuals making those decisions for the benefit of their communities. Instead of one source for decision making, which causes endless complaints from taxpayers in liberal democracies regarding how their money is spent, we have endless sources, and when the individual makes his or her decision he or she backs it up with his or her own money.'

[1] Kuala Lumpur: IBFIM, 2013

The Anglosphere, or the west in general, is going through a transformation right now, and this will affect the rest of the world in due course. Leftist, big government policies and institutions (such as the European Union) are being rejected in the United States and Europe, and not necessarily because Europeans and Americans are becoming colder, meaner people but because leftism as an ideology is counterfactual by its very nature. Governments do not have access to bottomless treasure chests and eventually they run out of money, as they must. Leftists have tried again and again to create utopias, or paradise on earth, and each time it leads to massive death and destruction: the Soviet Union, Mao's China, Pol Pot's Cambodia, Fidel Castro's Cuba and so on and so forth. The attempt to create a utopia inevitably leads to the creation of a prison. Sheriff Joe Arpaio hits the nail on the head:

So, as this transformation takes place, Muslims should look back into their rich history and literature and rediscover the long-forgotten answer to these issues, i.e. waqf, and if Allah so wills, I will publish some examples in the near future.

Final point: I wholly acknowledge that these two books are not widely available in the Anglosphere, so we hope and pray that one day we can republish them along with far more effective and efficient distribution channels. 

And with Allah is every success.

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iDetective said...

السلام عليكم

I really support awqaf and agree that it is the way forward. How are we to explain this concept and keep the fuel burning to a God-less society? A lot of Conservatives believe that people are poor because of their poor standing with Allah. Well that's what it seems to be. Correct me if I'm wrong Ustadh.

Mahdi Lock said...

Wa alaykum Assalaam wa Rahmatullah,

Jazakum Allah khayran for writing and for asking questions.

1) To explain this concept, I would recommend you get a copy of the book on waqf that I translated, but I understand that it's not easy to order from Malaysia. However, I do intend to publish a few sections on my blog and I could do even a podcast on the book in the future. Allah knows best. Holding seminars in communities would also be an idea.

2) Some conservatives might think that, i.e. that wealth is a sign of divine favour and therefore poverty is a sign of divine disfavour, but the overall position, as I explain in my upcoming book The Big Step, is that "the poor" are a statistical category as opposed to flesh and blood human beings. In other words, there are poor people but it's not always the same people. A person is not expected to be poor their entire lives. Rather, a person moves in and out of income brackets as life goes on. The normal trajectory is to start out poor, as one has no experience or qualifications, but as one grows in experience and qualifications, one becomes worth more, and thus one gets higher and higher wages over time. Some people's wages also go down, especially if their specific trade becomes redundant, for example the way the camera business has been wiped out by smart phones, or the way news websites and blogs (and even social media) are wiping out newspapers and even threatening television. These people then have to retrain in some other field and start again.

So, in conclusion, there will always be poor people and they will need immediate help, but the long-term help, and this is where we side with conservatives against liberals, is that they should be given the means to get out of poverty, such as training, education, jobs etc.

And Allah knows best.