Within the next 50 years, most of the jobs that today employ people will not exist, because robots and computers will be able to do them better and cheaper.
Over the past 50 years there has been much talk of artificial intelligence, and much of it was empty and little came out of it. The true artificial intelligence revolution only started within the last 5 years. Today we have computers that are capable of looking at the picture of a person and telling us the emotion displayed on their face. There are programs that can write paragraphs that accurately describe the scene portrayed on a painting. This is a new type of machine intelligence that many people, even among technical professionals, are unaware of. What used to be exclusively in the realm of science fiction is now merging with our day-to-day reality.
We have the technology, and the computing power, to use artificial intelligence to automate large portions of the Western economy, because we have overcome the barrier that stopped a robot revolution from taking place in the 20th century. From an individual’s point of view, the automation revolution might be nearly invisible. You may not foresee any robot in the near future that could possibly do 10% of the work you do. To see the effects of automation, look at large companies and industries. Wal-Mart fired 7000 office workers in 2016. It wasn’t because some robot suddenly appeared on the scene that perfectly did the jobs of all of these people. Rather, Wal-Mart incrementally improved, optimized and automated its internal functioning over many years. These effects slowly mounted until the managers realized they’ve reached a point where they could get by just fine without these employees, so they fired them.
The Taiwanese manufacturing giant Foxconn that builds iPhones for Apple Inc. fired 60,000 workers in 2016, replacing them with robots.
This trend is going to continue. As the effects of automation mount year after year, a factory that requires 1000 workers today will probably function just as well with 900 employees in the next few years. Automation slowly and subtly reduces the load on a company’s workers so that every year fewer workers are needed to maintain the same level of production.
The world’s current economic systems are entirely unprepared to deal with the robot revolution. Some people expect widespread unrest and civil wars as employment opportunities continue to dwindle. What automation will do is similar to what the NAFTA did to small US towns. The NAFTA (short for the North Atlantic Free Trade Agreement) enacted free trade between the United States, Mexico and Canada in 1994. Vast numbers of factory jobs were sent to Mexico, creating widespread unemployment in these US towns. Alcoholism and drug addiction skyrocketed and life expectancies fell. People lost the will to live. On the other side of the border, millions of Mexican farmers were put out of work by cheap US corn, causing the largest Mexican illegal immigration wave to the US in history (and the rich on both sides of the border got richer because of it).
The effects of the NAFTA happened mostly in small US towns, out of the sights of big-city dwellers, so it went mostly unnoticed. Automation is going to be the next NAFTA, except this time it will not spare the snobby and educated city-dwellers who think the plight of America’s mostly white peasant class is something to laugh at. Automation will it make increasingly harder for skilled workers to find jobs, since the skill of the robots is continually increasing and encroaching on high-skilled fields more and more every year.
Islam’s basic income system
Basic income systems have been proposed as a way of remedying the joblessness caused by automation. The problem with basic income is that on the one hand it requires a potentially massive increase in taxes, and on the other it discourages employment by giving people a way of opting out of work.
Who will pay for this system, and who will benefit? Will it not continue the process of enriching the super-rich and feeding the poor at the expense of the middle class, like nearly all socialist policies?
The Islamic solution to these concerns is its zakat system and its ban on usury (interest), which together direct the economy into one that promotes employment and automation while also providing for everyone who needs help.
To understand this, let’s take the example of Wal-Mart’s firing of its 7,000 office workers. If the average annual salary of these workers was $35,000 USD, and if Wal-Mart spent another $10,000 annually per employee on various expenses, by firing them, Wal-Mart will save $315 million. If the costs of automating the jobs of these employees was $50 million, that means Wal-Mart will gain $265 million in net savings.
In an Islamic system, what would Wal-Mart do with this new cash?
If the company keeps the money in the bank, doing nothing useful with it, it will have to pay 2.5% of the money into the basic income system, meaning $6.6 million of the $265 million.
Islam forbids usury, therefore Wal-Mart will not be able to invest it in bonds or any other interest-bearing asset. Instead of being able to earn interest on its cash hoard, Islam will force the company to pay interest to society. In this way, even though Wal-Mart saved money, the savings will actually slowly go to society unless it does something else with it.
Wal-Mart’s other option is to invest the money speculatively, by buying assets like stocks and houses, so that it can sell them again at a profit. The problem for Wal-Mart is that Islam charges zakat on speculative investments. Assets bought with the intention of selling them again within the next 10 years are going to be charged a 2.5% annual zakat, therefore while the company might profit from this, society will continue charging their 2.5% annual interest on the company’s wealth.
The last option Wal-Mart has is to productively invest it, rather than speculatively. This is the only way the company can escape having to pay 2.5% interest on the cash. And by productive investment, we mean that it either has to spend it in research and development, improving its infrastructure and inventing new technologies (while hiring people to do this), or expanding into new businesses (and hiring people), or buying start-ups (and expanding them and hiring people), or buying shares in other companies, who have to go on to repeat these same behaviors.
This last option, buying shares in other companies, may seem like a way of escaping the zakat tax, but it is not, because the zakat tax will operate on that company too, since zakat is also charged at a rate of 2.5% on all corporate profits. In this way, if Wal-Mart spends its $265 million buying Apple shares, it will earn $4.6 million in dividends over the year, which is charged 2.5% interest for society, or $115000, which is not much. But the $265 million in wealth that is now “parked” at Apple is not going to lie dormant. It will increase Apple’s power to expand and profit, enlarging Apple’s cash hoard…which is charged a 2.5% annual interest for society.
In this way, the super-rich will not be allowed to hoard cash or speculate with assets without paying a 2.5% tax to society. And they will not be able to park their money in bonds and other interest-bearing assets, because all interest will be prohibited. If they want to avoid having their wealth charged a 2.5% tax, they will have to invest their money productively, creating new businesses, hiring people, bringing the economy to life.
By forbidding or taxing all anti-social profiteering mechanisms (usury and speculation), the wealthy are forced to either contribute to society by productively investing their wealth in businesses (which themselves pay zakat on their profits and cash hoards, unless the businesses go on to productively invest what they earn), or, if they have nothing productive to do with their wealth, they must give up 2.5% of it every year to society, in this way enabling others to use the wealth productively.
This process will end up creating a massive increase in wages and employment, because businesses will want to use their money productively, leading to increased spending on research and development and risky projects that may or may not profit. The wealthy will frantically search for all possible ways of using their wealth productively so that they can avoid paying the 2.5% annual interest on their wealth. Companies will compete with each other for the available talent, raising wages. People who are discouraged today from working due to low wages will be motivated to join the employment market again.
Through automation, the rich increase their profits, spending less money and earning more cash. The Islamic system forces them to either use their newfound money productively in the real economy, in this way creating jobs and raising wages, or to keep their money in the bank, and instead of earning interest like they do today, they will have to pay 2.5% interest on their cash to society.
Who pays and who benefits?
Only needless people pay zakat, people who have their own home, a car, and sufficient savings to enable them to survive for a year or more without extra income. In the United States, this may mean families with a net-worth of $1 million or more.
This means that only the rich will pay zakat, everyone else will be left alone.
For the middle class, the system will help them by massively increasing employment opportunities and increasing wages.
And for those who are struggling, it means they will have an income to support them until they can partake in the economy if they can.
In a town of 1000 families, 100 of which are rich, 400 of which are middle class and 500 poor, the 100 rich families may each pay $25,000 in zakat, meaning a sum of $2.5 million. When given to the poor, this means $5,000 per poor family.
In the first year of applying this system, no great change may be seen. What is going to happen as time passes is that the rich will create new businesses and launch new projects, competing for available talent with one another, in this way raising the wages for the middle class and the poor. Among the middle class, more people will enter the zakat-paying class thanks to the booming economy, in this way increasing zakat payments. Among the poor, more people will enter the middle class, so that they stop taking zakat, leaving more zakat for other poor families.
The middle class and the poor will have more money to spend, which benefits the rich, whose businesses profit more, and who end up paying zakat on those profits, giving it back to the poor, or end up expanding, in this way creating jobs.
And if automation progresses to a point where it seriously reduces employment opportunities, this means that the profits of the rich, and the zakat of the poor, will both increase, balancing things out.
An automated dystopia or utopia?
What will happen if most of the United States economy starts to be operated by robots owned by only 1000 individuals, so that there is nearly no need for workers for most of the economy to function?
The United States economy currently employs about 120 million people at an average annual salary of around $44,000. Their total salaries amounts to $5.28 trillion. If the US economy started to be run by robots overnight so that these people were no longer employed, this 5.28 trillion would go onto the cash hoards of those 1000 individuals who own the robots, who would have to pay $132 billion dollars in zakat on this newly earned money per year. If this money is divided over the US population, that is $406 per person purely from one year’s profits. This amount will increase by about $406 per year, since these rich individuals will be adding about $5.28 trillion to their cash hoards every year. Within 30 years, they will be paying out $8000 to every US citizen per year just from the extra cash they have earned through eliminating jobs.
This is a highly simplistic thought experiment that ignores various factors, it is meant to show one thing; the way the zakat system turns automation into a servant of society. Just as it increases the profits of the rich, it also increases the zakat earnings of the poor.
In a society where nearly all jobs are automated, people will either belong to either the “rich” zakat-payers or the “poor” zakat-receivers, since there will be few middle class jobs. The zakat-receivers will no longer actually be “poor”, they will be beneficiaries of the automated economy, getting a comfortable living without having to work.
In the Islamic system, the idea of farms and factories entirely operated by robots is no longer terrifying for workers. The robots will enrich the already-rich, who will, in turn, pay enough to society to ensure everyone else a comfortable living.
Automation and artificial intelligence will also lower the costs of production, so that even if people’s zakat earnings do not increase or increase slowly, and even if jobs do not increase, the price of things will decrease.
There will be no inflation, since inflation is driven by the creation of new money, which is done by governments to pay off bonds (which Islam forbids), and by banks to give interest-bearing credit to borrowers (which Islam forbids).
Why are Muslim countries so poor?
One who reads these utopian-sounding ideas may wonder why Muslim countries are so poor if they have such an amazing economic system at their disposal. The reason is that these so-called Muslim countries have governments and businesses that operate through usury and do not implement zakat, therefore there is nearly nothing “Islamic” about them. Their poverty is due to the low IQ of their populations in general, as shown by the fact that their non-Muslim neighbors suffer from similar poverty.
The zakat system is nowhere implemented in the world the way I describe; forcing the rich to either productively invest their wealth or pay interest to the poor, and because of this, no Muslim country is realizing perhaps even 5% of the benefits of this system. Zakat is often given by choice, so that many of the rich do not pay it. And usury is legal, so that the rich charge interest on the poor instead of giving them interest. Within most Muslim countries, only a small minority of devout Muslims pay zakat and avoid usury and what they can contribute to the nation’s economy is often insignificant.
Eliminating wealth inequality
America’s super-rich may have somewhere between $50 and $100 trillion dollars in cash hoards, usurious investments or speculative investments. This wealth is not doing anyone any good except themselves. If a zakat-like system was implemented, it could change the United States economy overnight, creating a new renaissance. About $2.5 trillion would be given to the poor per year, meaning $7600 per year for every single US citizen. This increased money will be spent, acting as a massive stimulus to the economy.
The rich will naturally hate the idea of people benefiting from their wealth, so that they will look for every possible way of avoiding benefiting society by their money. This means they will seek to productively invest their wealth, buying stocks, creating new companies, expanding businesses. Whatever they do, they will not able to escape the zakat system; either they will benefit society by creating jobs and inventing new technologies through their investments, or they will benefit society by directly giving their wealth to those who need it.
The system will continually take wealth from the top of society and give it to the bottom, either directly through cash payments, or indirectly through increased employment opportunities. The middle class would expand as jobs and business opportunities increase. The poor will find it easy to get well-paying jobs while also becoming financially independent through their zakat income.
While the rich will still have most of their riches, the zakat system raises up the rest of society so that everyone starts to enjoy a high standard of living. There will still be some wealth inequality, but it will never be obscenely high the way it is in the West, because anyone who is massively wealthier than the rest of society will either have to productively invest their wealth (in this way contributing to society and reducing wealth inequality), or give it directly to society (in this way, again, contributing to society and reducing wealth inequality).
Fixing the labor market without unions
By increasing the competition of businesses for available talent, wages will rise and working conditions will improve. Workers will have more choice on who they work for, since they will not be desperate for jobs (they won’t even have to work if they don’t want to), meaning that businesses will be forced to offer workers more and more privileges, better conditions and better pays to attract them and keep them working.
The way workers have often tried to get better working conditions and wages in the West has been through unions, which always lead to vicious conflicts with business owners, most of whom really hate the idea of helping people if it costs them even a cent. The zakat system fixes this issue by making businesses take better care of their workers out of their own selfish self-interest, in order to be able to attract and retain workers.
This aspect of zakat, of improving the living conditions of workers, is one of its most important but least appreciated benefits. It doesn’t just take wealth from the rich, it also forces them to be nice to their workers.
It is widely recognized that ideally, work should not be necessary. If we have machines to take care of all of our needs, what is the point of “job creation”, this thing that so many politicians claim to have on their agendas? Isn’t job-elimination better?
The Islamic system encourages automation by making labor more expensive. Businesses compete with one another for available talent on the one hand, and on the other, the available talent is not desperate for jobs, since there is a basic income system taking care of their needs.
Both of these forces encourage businesses to automate things to avoid the labor market as much as they can. When this happens, the result is that businesses become more efficient. They profit more, and end up paying 2.5% zakat on their new profits on the one hand, and are forced to either productively invest their profits or pay 2.5% of those newfound profits every year into the basic income system.
In this way, even as low-tech jobs get eliminated, basic income stipends raise. A worker, instead of being forced to work at McDonald’s to make a living instead has their job eliminated, and instead of suffering, gets paid more for their eliminated job. Every time a job is eliminated the zakat payments rise slightly.
Banning usury comes before zakat
This is a crucial point that must never be forgotten. Zakat is interest charged on the wealth and profits of the rich, for the benefit of the poor. Usury is its exact opposite, it is interest charged on the wealth and wages of society, for the benefit of the rich.
There is very little point to zakat if usury is allowed. A rich person may earn 5% interest from society while paying 2.5% interest to society in zakat, in effect stealing 5% from society and giving back 2.5%. If usury is allowed, the zakat system will not be able to force the rich to create new businesses and projects that benefit the economy, they will instead continue lending their money to society (through credit cards, student loans, mortgages and various other types of loans and bonds), taking more than they give, even if they are forced to pay zakat.
Enforcing zakat while tolerating usury is a way of taking much from society and giving a little bit back. It will do very little good in the long-term, and this is perhaps the most important reason why zakat is not doing much good in the Muslim countries.
The United States was able to spend trillions of dollars dropping bombs over the Middle East over the past 20 years. Where does the money for this come from?
Through the bond system, the US government borrows money from the rich, spends much of it by buying from the rich (buying weapons and servicing from their corporations), and uses this on its wars abroad. Who pays the ultimate cost? America’s tax payers. The US government will have to pay interest on this money it borrows from the rich to buy things from the rich, and that interest is paid through your tax dollars. The US government pays over $200 billion dollars of your tax money every year to the rich in interest payments.
This usurious system turns war into a cash-cow for the country’s super-rich. The government is forced to borrow money from them, paying them billions of dollars in interest, and it is also forced to buy goods and services from their corporations, again paying them. It is a double stream of massive amounts of cash, taken from the country’s citizens and placed right in the bank accounts of the rich.
This means that the country’s super-rich will always push the country toward more wars, since it is so profitable. Most of the rich are incredibly selfish and greedy, as the actions of their corporations abundantly show. They had zero qualms about killing millions of Afghans and Iraqis, and they will have zero qualms about killing millions of Iranians or Russians in the next war that they constantly lobby through the newspapers, websites, TV stations and politicians they own, which is nearly all of them.
To the super-rich, a war is nothing more than a way of taking money from their fellow citizens and enlarging their own cash hoards. The fact that people get killed abroad and countries destroyed is just a minor side effect (for American Jews, of course, there is also the very important benefit of turning yet another country that threats Israel’s hegemony over the Middle East into rubble.)
Banning usury will end this perpetual cycle of war, because the government will be banned from issuing bonds, so that wars will have to be directly funded, and American citizens, who are too foolish to see the harms of usury, will immediately rebel against having to pay anything right now to fund wars. If it is their children or grandchildren who will pay the ultimate cost, they are perfectly fine with it. But by banning usury, the government will be forced to fund wars directly, and it will not be able to do that, because the vast majority of Americans will not agree to have their comfortable lives inconvenienced just for the sake of killing more Muslims and benefiting some random Israelis who do not feel safe if a Muslim country like Iran is doing too well.
In this way the government will be forced to responsibly manage its finances, instead of acting like it has an infinite credit line enabling it to spend trillions killing foreigners for no good reason.
There can be no peace while there is usury. War is simply too profitable for usurers for them to stop lobbying for more of it.
Can such a system realistically be implemented?
The super-rich own the West’s media, and you will almost never see a single article or TV program that examines the evils of usury, of a system that takes money from the poor to enrich the already-rich, that enslaves young people to student debt, that enslaves families to mortgages, that enslaves workers to their employees since they are desperate for the work they can get.
This system is designed by and for the rich, and they will fight tooth and nail to prevent any reform to it that may threaten their parasitical profiteering, and they will use their Nobel-winning economists to prop up their system and direct attention toward side issues. You can expect them to propose a million and one clever solutions while always staying clear of the matter of usury and anything else that could threaten the wealth and power of the super-rich.
A movement to ban usury and enforce a wealth and speculation tax (zakat) will therefore have to be something widely supported by the conscience of the people and enforced by them despite an all-out propaganda campaign against it by the country’s richest and most powerful. They will use every dirty trick in the book to derail any such movement.
However, it is not all doom and gloom.
Creating an alternate anti-usury economy
Instead of trying to reform the system, something that is highly unlikely to succeed in the present climate, what can be done is create an alternate economy that bypasses the West’s usurious system. Today, it is easier than ever to achieve this.
- Avoid credit cards. Refuse to go to college on student loans.
- Use usury-free financing when buying a house.
- Do not invest in bonds and do not buy stocks in any company that practices usury or does not pay zakat on its cash and profits (which means do not buy stocks form perhaps 100% of publicly listed companies).
- Pay the zakat yourself if you are able and encourage others to pay it.
- Help launch usury-free businesses and support the ones already existing by preferring them over others.
- Help create a usury-free alliance of businesses and organizations that avoid it and also pay zakat.
- Help create a usury-free certification process so that products and services offered by usury-free businesses are easy to find.
- Launching a usury-free token (gift card or currency) system where part of the basic income payments are in the form of these tokens, which are accepted by usury-free merchants, who can in turn convert them back to cash by giving them to the issuing authority (the basic income organization / system). In this way trade within the anti-usury system is encouraged.
Besides doing the above, a basic income system could be launched today by independent communities (such as a large extended family, a town or a parish). A basic income system is created where the community is divided into three groups:
- Wealthy zakat-payers.
- The middle class: Individuals who neither pay nor receive zakat.
- Individuals who receive zakat to supplement their current income.
After every year, every member’s finances are reviewed to ensure that 1. everyone is avoiding usury to the best of their ability. 2. those who have to pay zakat are paying it. Anyone who betrays either of these requirements should not be allowed to remain a member.
The system’s effects will be limited at first, since those who would be interested in this experiment will probably be young and not very wealthy. However, as time passes, the benefits of the system will start to show. The wealthy members will not be able to invest their wealth in usurious investments, so that they are made to invest their wealth productively, creating businesses and job opportunities for fellow members of the system (who should be given preferential treatment in employment when this is legally allowed).
Members should be strongly encouraged to do business with the local anti-usury community, using goods and services produced by them (or by other anti-usury communities and businesses elsewhere), in this way not allowing wealth to escape into the hands of usurers.
If this system is implemented by most of the population of a small town of 500 people, it could quickly create an economic boom. The wealthy invest their money locally, increasing wages and job opportunities. The poor get extra monthly income, which they spend locally, with the profits going to the middle class and the wealthy, so that as time passes, the basic income they receive increases, since the profits of the wealthy increase and more people will be turned into zakat-payers thanks to the increase in wealth.
There will naturally be those who want to cheat the system, getting what they can out of it while doing their best to avoid contributing. Some may take the zakat when they are needy, but once they are wealthy, they may refuse to pay it. Such people and their businesses should be shunned by the community.
The failure of Western Muslims and the way forward
As Tariq Ramadan wrote in 2003 in his Western Muslims and the Future of Islam, the implementation of the zakat system by Muslims has been pitifully ignorant and misguided. The system is designed to heal local economies and turn zakat-receivers into zakat-payers. What is instead done is that Muslims keep their business lives separate from their charity lives, and often send their zakat money overseas, ignoring the crucial importance of healing local economies first.
In this way, instead of allowing local communities to benefit from the virtuous feedback loops that the system creates (rising wages, increased employment, growth in local business due to increased investment and increased money in the hands of the poor), local problems remain, zakat-payers perhaps fund the building of a mosque, while the rest of the zakat money goes toward random charities all over the place.
Muslims must instead implement the program I described above. Alternatives to usurious companies must be created and business with them encouraged. An all-encompassing basic income system should be created that every Muslim (and non-Muslims who pledge to avoid usury and pay zakat) should be able to join, earning a monthly stipend (a basic income) for every member of their family. This stipend might be very small at first, but through virtuous cycle of banning usury and paying zakat, it will continually rise as time passes if the system is implemented.
All members should be eligible for the stipend, it should be offered on an opt-out basis where those who do not need it can say “no”, rather than offering it on a per-need basis like it is done today, where people have to through a highly painful and undignified process to prove their neediness before they can be given zakat. It should truly be a “basic income” meant to equalize society, rather than something given in exceptional circumstances.
The system must also strongly encourage the recipients to do business with non-usurers, this is crucial for preventing wealth from escaping, otherwise the system will be like a balloon with a hole in it. Businesses that get the usury-free certification (whether owned by Muslims or not) should have their products and services listed on an alternative Amazon.com (and alternative supermarket chains) dedicated entirely to usury-free products and services. In this way zakat payments increase, since these businesses will be paying zakat, and they will be getting more business from the local communities.
These businesses should be encouraged to hire people who belong to the system, in this way increasing employment for those who avoid usury and who will pay zakat when they themselves get the chance.
If this system develops and spreads to multiple cities, it can create booming alternative economies, increase prosperity, and stop feeding the beast of usury, cutting the parasitical usurers out of the system.