 Okay, so Bismillahir Rahmanir Raheem. I'm starting to, all right, so hopefully my screen is visible to everybody. Can somebody just say yes to confirm? Yes, anybody? Can you hear me? Yes, it's visible sir. All right. So before we start the lecture, I want to go over some preliminary stuff. The complete video of the first lecture is available, but actually I have split it up into small pieces and rearrange them and added a little bit of material. So it is better to go through the online course, which is available for free from the Al-Nafi platform. And I've given a short link here and all of the course materials, including a lot of additional material, has been put on the platform. Lecture one, for example, is on crisis and Islamic economics, which was not covered. Lecture two is the lecture we covered, but it has been split up into small parts and some material has been added. Today's is lecture four, but there is some preliminary material which was distributed by email, which I will put on to the website soon. So the best place to follow the course is from the Al-Nafi platform in addition to the live lectures. And in particular, I'm especially interested in reaching teachers of Islamic economics and I would be happy to make special arrangements to have some live sessions with them. I'm already having some of these because I would like to equip teachers of Islamic economics to teach this subject using this new approach, which has no parallel currently anywhere. So there are some links on where you can join this to sign out of WhatsApp. So if you can just send me an email or join my WhatsApp group for IML, which is available from the about page on my blog, then you can contact me and we can set up some special sessions to help you set up to teach this course, the same course on your own. So now we will start the lecture formally. So the title is how capitalism shapes our minds and hearts. And this is the second lecture, live lecture, but the third dead lecture on the course outline. So before we start the lecture, I want to discuss a little bit about methodology. We are using a radically different methodology from that of conventional economics. So the methodology we are using can be called a Lumul Umran, it follows this methodology of Ibn Khaldun, and we will be discussing this in greater detail later, but fundamentally it's historical and qualitative, as opposed to mathematical and quantitative. So in Europe, actually this was also the methodology. Before the 1890s where a battle of methodologies took place and the old historical and qualitative methodology was replaced by the currently dominant quantitative and methodology, quantitative and mathematical methodology. The basic reason for this very briefly was that religious wars led to rejection of religion as a basis for organizing society and social science emerged as an alternative. So the idea was that instead of religion, the new religion which was science was to be used to study how societies should be built. And this had some very harmful consequences. Science is the study of the external world, it is objective, factual knowledge about things which everyone can observe. But my personal subjective experience is only known to myself, and this became regarded as no longer knowledge. And our internal experience is subjective. And this has been discarded by economists who claim to be using the scientific method. So they use axioms which are sort of scientific to define behavior instead of studying the human experience. These axioms reflect rejection of God after life judgment. And so basically they say that axiomatically we are all about maximization of pleasure. And also, after you reject God then humans are just another type of animal, and we are engaged in a cutthroat competition. Only morality is survival of the fittest. So these are the underlying foundations of modern social science. So an alternative to this which we are pursuing in this course is an Islamic methodology. So we reject axiomatics of human behavior and we start with an Islamic theory of behavior. Fortunately for us, a great strides have been made in Islamic psychology. And one of the recent textbooks which summarizes a lot of developments in this area is by Abdullah Rothman. And this is the model for personality which has developed. Note how different this is from homo economicus. So there's the Ruh which pushes us towards Allah and the Nafs which pushes us towards the shaitan. And then the qalb and the akal, the mind and the heart serve as moderators and they can be influenced in either direction. So we're not going to study that in great depth right now, but it is the fundamental basis for all social science. So since we have a superior theory of human behavior, we can build all of the social sciences on this foundation, because all social sciences must ultimately come from the study of human behavior and since they have a very bad model in the west of human behavior. So they can't build a very satisfactory social science. So what is social science all about? Well Ibn Khaldun set out to study the process of social change. And in social change, all dimensions come together, the political, the economic, the social, the educational and the environmental. No, we cannot isolate any one dimension and study it separately. Now, when we study social change, there are three possible methodologies. One is the modern methodology which says human beings and society, they're all subject to laws. Modern beings are just robots and we can, we're just trying to find the laws of motion. So we're trying to discover the universal laws of motion just like we can discover universal laws of motion for the planets and galaxies. So this basically reduces humans to a robot. The Marxist methodology is better. It says that human lives are bound within economic relations of production distributions. These economic relations are subject to certain laws which we can discover by thinking about them. But Marxists also believe in material determinism, which means that our thoughts and our feelings and our spirituality are all conditioned by the material forces. So basically our philosophies come from the environment. So the third methodology which is the Islamic methodology which we are studying now is that there is a two way influences. Material forces do shape our thoughts, feelings and spirituality, but also our thoughts and feelings and spirituality shape the material world. And the primary illustration of this causal sequence is that the Bedouin in Arabs were ignorant and backward and then a knowledge given to them by Allah Ta'ala and demonstrated and accompanied by spiritual training given by the prophet actually changed the course of history. So we see that man can also shape history, but also it is true and we don't reject that that history also shapes man. So we will study both directions of this influence in our course. So in the first course, in the first lecture we studied about how we can change ourselves and how we can improve ourselves spiritually. Now we will study the forces which are that is an internal force which can shape us. There are also external forces which shape us and those are the environment. So we'll study that in this term in this lecture. So basically the methodology for social change is depicted here briefly because it's very different from standard economic methodology and anybody who has studied economics will find it very strange and alien because modern methodology is entirely different. So we have some societies which are going along and then something happens which we can say is an exogenous event like for example the descent of the Quran. The exogenous event is outside human control and this starts to create social change. When this event happens then human beings respond and this response has to be studied collectively in groups. So for example when the revelation came there was a small group of believers who were trying to follow it and then there was a large groups of unbelievers and they were trying to destroy the change. So that's the response. Now different groups have different theories about these changes. So for example the Muslims believed that this is a revelation from God and the nonbelievers believed that the prophet is a magician and he's trying to control events for his personal benefits. So there is a class struggle and what the outcome has occurs is a result of the struggle and the power of the other different classes. But altogether these responses shape the course of history. So basically unlike the first two methodologies which go give no real role to human beings. This methodology puts human beings at the center and it acknowledges that we are we are subject to historical events but also it acknowledges the possibility that we can actually change history. So this is actually the natural methodology for social science, but it was abandoned by the West. Prior to the modern era, the study of society was based on the Bible and it's called the scholastics approach. But there was a century of extremely descriptive warfare between Protestants and Catholics. And that showed everybody that society cannot be built on Christian foundations because it leads to perpetual wars. So Western intellectuals decided to reconstruct all of knowledge on the basis of observations and reason alone and abandoning religion and also at the same time abandoning all invisible factors and also abandoning the heart and the soul as a basis for knowledge. And this is opposed to the Quranic message which says that it is not the eyes which become blind but the hearts. And it mentions in many different places how the heart is an instrument for cognition. Heart gives us knowledge and in particular the heart can be illuminated by the new of knowledge by Allah Ta'ala. That is the basis for all knowledge. There is a dramatic difference in epistemology, what West considers knowledge and what Islam teaches us as knowledge are very different. In fact, Islam teaches us that useful knowledge enters the heart. So with this basic preliminaries, we start our on the topic of our lecture today and we start with social change starting from very early era. So the hunter-gatherer societies were based on very basic living conditions they used to gather the food and to hunt for food. And this would tend to generally exhaust local supplies. And so we can see how the economic activity of hunter-gatherer affected human thought. So one of the things was that local supplies would become exhausted so you would tend to have nomadic societies because you would have to move from place to place to both gather and hunt. A philosophy that is natural to hunter-gatherers is that the earth is our mother, we take care of the environment and it takes care of us. As opposed to this in recent urban life, we have no connection to nature and so we are less sensitive to the massive large scale destruction of nature that is going on because it doesn't seem to, it doesn't directly seem to impact our lives. The politics of hunter-gatherers is fairly egalitarian because each man can fend for himself and subgroups can easily exit and find their own ways of living. And generally speaking because you're living so close to subsistence, there are no slaves which because each one must basically produce enough to feed himself, not enough to feed others which is what you need to have slaves. Also in a nomadic lifestyle there's no private property and so the Cherokee constitution of 1839 says that the lands of the Cherokee nation shall remain common property. Basically you travel through the land and everybody should be allowed to benefit and you can hunt wherever you want and you don't want to have privatization. Some people claiming that you can't hunt in our land. So that's the primitive society but what are the trigger for social change? One of them is cultivation of land and according to what I remember this was taught to mankind via the prophets by Allah himself. So once we start cultivating land then nomadic lifestyle has to be abandoned and also private property has to emerge because once you are cultivating a land you want to be able to harvest what you have put a lot of effort into. So if land is common property then once the fruit is on the land or the wheat then anybody else should be able to come and gather it. And this will make it very difficult for people to put in a lot of time and effort into the farming. So at that point a division emerged in society. Those who were gatherers became farmers and those who were hunters became soldiers and they found out that as soldiers robbing farmers is easier than hunting. So the farmers needed protection from these roaming soldiers and that basically led to the emergence of feudal society. You have one landlord and he has a group of soldiers and he provides protection to those people who are farming in the neighborhood and in return for that they get attribute in form of the food that is produced. So both sides and this also leads to emergence of class structures the landlords and the soldiers acquire a higher status and the farmers have a lower status. If you continue on this line and you get to city states which are basically collections of different feudal lords which band together to provide prosperity because a feudal society with just the original structure is quite unstable because two or three people can gang up and beat up one feudal lord and take it away from him. So pretty soon they decide that they have to cooperate in the society of Arabia which we have all studied in the pre-Islamic times. They were a Khalif. There were different tribes, but they also made alliances and contracts with nearby tribes for this purpose because no one on their own would be safe against an alliance of the Arabs. So once you get to this alliance, then cities can emerge naturally within a safe area. And once you have a city, then you have need of governance and the cities also allow for much more economic development. And the cities also allow for much more economic development. So once you get to this alliance, then cities can emerge naturally within a safe area. And once you have a city, then you have need of governance and the cities also allow for much more economic power and the economic power allows for the maintenance of armies. And if you look at the history of Europe, this is basically until the modern era, it's a lot of city-states and there's continuous wars among different city-states. And basically the politics of Machiavelli's The Prince is describing how princes should go about acquiring power and winning wars and governing their city. But ultimately, even alliance, even the city-state proved unstable against an alliance of multiple cities and that's what led to the, because that multiple cities had much more power, and that's what led to the emergence of the nation-state. Now, when, how did this nation-state emerge? One of them is one of the studies is by Benedict Anderson called Imagine the Communities. And he says that the essential tool for the creation of the nation was the print media. We had these newspapers and magazines which were available to print cheaply. This led to democratization of knowledge. Initially, only scholars used to read, but with print media, there was need to spread and sell these things at large level. And so the level of knowledge required for reading and writing became lower. And when you started distributing these newspapers on a wide scale, this created a common perspective and a sense of national identity. So there was a strong effort to create national identity because ultimately you needed armies and you needed people to fight for and to live for and to die for the nation. So it was essential to create this common identity. And so there's this poem, lives there a man with a soul so dead, he had never to himself said basically this is trying to arouse people to feel patriotism, to feel ready to die for their countries. And so basically this is the modern version of the Asabiyah of Ibn Khaldun. Ibn Khaldun remarked on the how you get groups to act on their together. And basically at that time the relationship was by Klan and by Kinfolk and by Abila. Today that's gone away, but the need for collective action is just as strong. And this collective action is created by a common identity. And one of the most common identities is the national identity. And this national identity is created by the process of education. And so this is what shapes our hearts and minds because we are trained to believe in our nation and to be ready to live and die for it and to philosophize for the benefits of the nation. And there's this famous debate between Allama Iqbal and Sayyed Hussain Ahmad Madini on the nation. And Iqbal says that this nation is a newly minted God and the clothing it wears is the coffin of religion because Iqbal is saying that allegiance to Adam, must be superior to allegiance to nations. And he saw clearly that national identity was a source of massive amounts of warfare and death in human history. It divides men against men and it tells people to die for causes which are not and to kill their own brothers and sisters and regard them as aliens. And this is against the teachings of the Quran. As opposed to this, Hussain Ahmad Madini was in favor of using nation and national identity, not because he disagreed with Iqbal on the ultimate goal that all of human being is one, but he thought of it as a pragmatic strategy to win liberation against British rule. So ultimately it was a question of tactics, not of strategy, but this is a question which continues to divide Muslims. So while Halakh has the most deepest study on this, the impossible state, he argues that the nation is antithetical to Islam. And also we know that the nations of the Middle East were created deliberately as a part of a divide and rule strategy and it seems to be quite effective in the sense that the nations are continuously fighting each other and this makes them weak and dependent on western power, which is exactly what was planned. There is a nice book of history called A Peace to End All Peace and that describes how this strategy was thought of and implemented to and a peace was created which would lead to continuous wars between these newly created nations so that the West would continue to an important role in that era. So I think the work of while Halakh is very important for us to read because this is a topic which is of greatly controversial. And there is a sequence of, there's the book and a sequence of video lectures, which you can find on YouTube, which I encourage people to watch and think about. But this is not our topic currently, so we just bypass it. Now one advice to students is that when you are seeking to learn, then you must abandon all emotions and see presenting it, why they're saying what they feel and how they feel. Instead of trying to assess, you read something and say, oh, I agree with this and you read another thing and say, I don't agree with this. This is a great obstacle to learning. Put aside all pre-existing prejudices and bias and try to understand what the other person is saying, emotions cloud understanding. Now, in other places I have said exactly the opposite because the thing to this and I said we have to be passionate about our causes. This is actually referring to different stages. At the student stage when you're trying to learn, you should put away all emotion and all passion and all recommitments and try to understand whatever is being said. After you have some amount of mastery of the field, then you can make decisions on who's right and who's wrong, but you're not trying to do that too early. And once you have an idea of what's right and what's wrong, then you can support the right and oppose the wrong. A larger lesson which we can draw from this history that we have gone through is that increasing levels of unity led to increasing strength. And the nation state, which is the biggest of these units, has been enormously harmful to human welfare and has led to continuous warfare. So Islamic ideals require unity at the level of ummah and also at the level of humankind. We are all brothers and sisters, sons and daughters of Adam and Allah. So we need to work for unity at this higher level and we should learn to look beyond the nation state, although we must deal with it at the present time because they are so powerful. We should be very cautious and we cannot use the nation state as a tool to implement Islam. Efforts to do this have mostly failed across the globe. So now we come to our topic, the emergence of capitalism. So in the feudal societies and in the emerging nation states, some lines of thought that are important is that the physiocrats thought that food and agriculture was most important and that is certainly true in a basic society. Food is what is needed to sustain the population, the working population, which doesn't produce directly and also the soldiers which you need to protect the population. So you need to have a surplus in agriculture in order to sustain society, otherwise you will be at subsistence levels. Once the nation states got going, the theory became that of the mercantilists that you trade with other countries to acquire gold and basically the wealth of nations is represented by gold. And the reason for that was the primary importance of armies because armies were important to the maintenance of the city state and necessary for warfare. And basically the way to acquire surplus was by wars by taking over the countries of others. But the industrial revolution changed this way of thinking and therefore also changed the economic theory. So the industrial revolution started with the agricultural revolution which produced surplus food. And this was got going by the way of enclosures where the rich people enclosed large tracts of land and prevented the peasants and the poor people from access to this land. And this led to creation of poverty because prior to this, although peasants were poor, they didn't have much, but they were able to get some sort of a living from the land and they were also in social relationships. But when they were detached from their social and environment relationships, then they flocked to the cities in search of jobs and food. And this is what disturbed the society and this led to the awareness of poverty. It also led to the creation of a labour force, people who had nothing and were therefore willing to work for a small amount of money under miserable conditions. And this is what was needed to start off the industrial revolution. So there were a number of inventions that created the industrial revolution. But basically from our point of view, you have to think of industrial revolution as the creation of large machines which required large labour forces to operate them. You could not be profitable on small scales like in cottage industry, in the industrial revolution. And so that's why a labour force was needed and many different. So this was the exogenous event, the industrial revolution. And this led to massive changes in society in the political, the economic and the philosophical spheres, as we will see. This is the main goal of this lecture to study the changes created by capitalism. So one of the consequences of industrial revolution was that there was a massive amount of surplus goods being produced far above and beyond the domestic demand or needs of the people. So this led to the creation of a market economy. A lot of surplus has to be market, so you had to start thinking like a consumer. Instead of basically in the pre-market economy, the goal of life was not to consume goods. It was, you consumed your basic levels and even comforts, but the goal of life was something other than purchasing things in the market place. So the market economy is actually very strongly opposed to the social economy. And the market economy has its own philosophy and culture and politics, which we will discuss. So the traditional economy, which is aligned with Islamic ideals, but I'm talking now about the historical traditional economy. Money was used only by the rich and the poor had very small amounts and it was not needed to live. Basic needs were met by the social relationships, networks, not by the market. You didn't have to go to market to buy food. So market was peripheral to society. There used to be fairs to which people would go and we see descriptions of these fairs also in the Arabian society in the Jahlia. So markets which were essential for existence did not exist, but markets were useful to many people. But the basic process of living was taken care of by your network of social relationships. And because life depends on social networks, so character was very important and in particular placing social needs above individual was natural and was required for survival. You could not survive in isolation. And so within a society, generosity, cooperation, social responsibility, taking care of the weaker and also one of the things that is discussed by Polanyi in his great transformation is that markets were strongly regulated. They were not allowed to interfere with social life because there was awareness that markets can disrupt social life. You can't buy or sell friendships. So in England after the Industrial Revolution, the markets acquired a lot of power. And one thing that economists are very confused about is the fact that social mechanisms and market mechanisms are in opposition to each other. And one case where you can see this clearly is the blood donations example which has been studied in the literature. So Solo and other leading economists thought that if we pay money to people to get blood, this will increase the amount of blood that is donated. That's standard demand supply. But in practice, the exact opposite happened because when people were asked to donate blood, they were doing it as a social service out of the feeling of helping fellow human beings. And this comes from our social mechanism. But when they were paid for this, then this became a market activity and very few people want to sell their blood. There was a very different class of people who were selling their blood. And even if you add money, what economists thought is that you can say that, okay, I'm doing this for a service and I'm also accepting money. But this doesn't happen. You can't, I mean, these two mechanisms interfere with each other. We do not sell our good deeds. We do it for the sake of humanity. The best things in life cannot be purchased. And the Quranic messages that all the gold in the world cannot purchase even one moment of our life. Our lives are infinitely precious. This is completely incompatible with the market society in which all human beings are for sale in the labor market. So Polanyi's book, The Great Transformation says that if you want to study the emergence of capitalism, you have to study two movements, what he calls the double movement. One is the desire of markets to expand. And this harms the market society. So society resists such expansion. So you have to look at both how the markets are seeking to expand and how the society is seeking to protect itself from the expansion of the markets. So there are two questions which emerge. Why do markets seek to expand? And I won't answer this, but basically markets work by increasing profits and markets has a good analysis of why you need increasing profits. And so markets need to expand to basically survive and markets are extremely harmful to natural society. And that is why society resists expansion. Again, I won't discuss this in detail, but it is available from Polanyi. So operation of markets requires three artificial commodities. And again, this is taken from Polanyi, The Great Transformation. And these artificial commodities are land, labor and money. So these commodities are artificial in the sense that they are not manufactured. They are not produced by our work. So as far as land is concerned, this is the earth on which we live. We have a symbiotic relationship to it. We get a lot of goods from this. And in turn, we should protect it and nurture it. Labor is the stuff which is made up, which our lives are made of. So it should not be for sale at any price. And money is a social convention which is created by agreement among ourselves. So it's not a manufactured commodity. It's actually a token of trust. So when we start using land as a commodity, it cheapens the land. It reduces the value of land as a gift from God. And we tend to forget about the miracle of land that it performs every day. Taking a seed and turning into a plant and food and many other materials of great value for our lives. And similarly, Mother Earth has a lot of organic materials which we use for a vast range of products. So basically, the natural relationship is a symbiotic relationship where we think of the earth as a trust, a mana from God. And we take care of it. And we are in only in temporary possession of it. And we want to pass it on to the next owners in better condition than we received it. But when you think of it as a material for sale and purchase, then it becomes a commodity for exploitation. And this change of spirit is the root cause of the current environmental crisis. When we start thinking of labor as a commodity, then basically human lives are for purchase and sale. And this cheapens human beings and turns us into human resources. It also makes the value of money much more because money can now be used to buy human lives. Labor markets first became possible because of the desperation created by the enclosures that people were starving. And so they accepted a very low wage in a market economy. Instead of, because they were unable to use the land for getting a bare living. And then once this became widely accepted, then this became a social norm. And so today we all take it as natural that we are going to sell ourselves in the market to the highest bidder. But this is extremely unnatural. And this is one of the most important elements of how our minds and hearts are shaped by capitalism. We are taught to think of ourselves as a commodity for sale and purchase. Students are taught to sell themselves in the job market. You don't realize that this is unnatural and artificial. And this is a creation of the market economy. This is not natural for us human beings. Finally, the third commodity is money. This becomes necessary in a market economy because markets are central to buying food. So you need money, so everybody needs money. And labor markets also require strengthening the motivation to labor for money. Money has two aspects. One is that it simplifies the complex exchanges that we need to run markets. So this is the famous barter theory of money. But there's a separate theory, which is that money is a creation of the government. And basically if you have money debts and money transactions, you are trading tokens for real goods. And you need to make sure that there is some power behind this so that the government rules and regulations and support of money is a very important aspect of ensuring that money, that markets exist. So the money commodity is a complex issue, which we will discuss separately later. But one thing that I would like to point out is that because it's a common misconception that gold money is somehow best or optimal. This is not true. Actually commodity money is highly inefficient. But if there's not sufficient government support and regulation, then gold works better than fiat money. So basically what we are studying is the process of social change. So when in a feudal society, the landlords are the most powerful people. Sorry, not quite in feudal society in the nation state, the landlords acquired land and their property was guaranteed by the state and land is the biggest source of wealth. Social responsibility for the rich for the poor was an essential philosophy for this class structure. Because basically it was not economy. And so the peasants worked for the landlord and the landlord took care of their needs. So as the industrial society got going, the power shifted from the landlords to the capitalists to the industrialists. So some of the signs of this shift is the corn laws. Industrialization as it was taking place, you need food to feed your labor. So there were imports, especially from Europe in England, after the era of the Napoleonic Wars came to an end, it became possible to cheaply import corn from Europe. But at that time the landlords were much more powerful and they succeeded in getting cheap imports to be banned from England. But as the industrial classes gained power and they wanted the cheap corn to feed their laborers, they succeeded in getting these coins repealed. So in 1846 the coins were repealed and this is just a sign of the rising strength of the industrial classes. Similarly, the poor laws were passed in 1795, these show the older ethos of the pre-industrialist society where the wealthy feel responsibility for the poor. And so basically these laws guaranteed a living to all members of the community and these were denominated in terms of amounts of bread. And if people were earning insufficient wages, they were supposed to be given enough money to be brought up to the minimum standard required. But this had an unexpected result that it killed the motivation to work slowly and gradually in industrially productivity declined because people were able to earn a living for themselves and so they didn't need to work in odious factory conditions. And this led to a massive decline in productivity and lots of damage to the industrialists and so they managed to get these poor laws repealed. This had a catastrophic effect on the poor, a lot of them starved and lived in miserable conditions but it had the result desired by the industrialists. It created a very docile labor market because it had been tamed by hunger. So one of the interesting insights of Polanyi is that economic theory was born in this period and it takes a conceptual framework which was created in that period and this conceptual framework is obsolete. One of the things that happened is that private property emerged as an absolute right prior to the industrial etc. The property was a responsibility in Amman just like in Islam in England also it has to be used with social responsibility. But in the England there were many wars for power different groups would take control of the state and then they would appropriate the properties of those who had lost the war. So ultimately the landlords said that somebody or the other is always fighting let's make sure that our property is protected against whoever happens to be currently the sovereign. So they succeeded in creating a theory of property lock is one of the key names here which would ensure that property comes first before the state. So the right to property is absolute and is guaranteed against anybody and there is no social responsibility. And so one of the key insights about capitalism is that the spirit of capitalism is the pursuit of wealth as an end in itself. You want to have more and more not because you want to enjoy this wealth for some other purpose but because it is desired for itself because it gives you social status. So it's a sort of irrational in the sense that wealth is not desired for its own sake it's desired for the benefits it brings but in capitalism wealth is desired for its own sake. So these are some of the attitudes that are created by capitalism because they are needed for capitalism to work. One of the key insights of Karl Marx into the nature of capitalism is that in traditional society money is used to get commodities. And so basically we have commodities and sometimes we trade we sell our commodities and we get money in order to buy some other commodities. So basically the start point is commodity and the end point is more commodities or different commodities or better commodities. But a monetary economy works in the opposite way. The producers have money. They use this money to produce commodities and to sell them to get more money. So the profit motivation is there and monetary economy. The goal is to get more and more money. Now, when you look at modern economic theory, general equilibrium theory and all of the models of the real economy etc. These are very strongly based on the CMC prime framework. The idea that we are individuals are motivated by consumption. So more goods we have the more better off we are but the monetary economy does not work like that. The producers wish to maximize profits because money is the goal that they have in mind and the consumers also desire to maximize savings. So they also want to get money because they want to protect themselves against the possibility of losing jobs and many other types of adverse shocks. So this insight of MCM prime is the basis for a monetary economy and it's not part of modern economics. It's understood by heterodox economists but it is not understood by new classical economic theory. So there are many false ideologies which are created by capitalism and which we end up absorbing. One of them is the labor market. Human lives can be bought and sold for money. So many students come to ask me that what line of education should I follow so that I can make the most amount of money. So they think that the purpose of our lives and the purpose of knowledge is to enable them to make money. And so another common conception is that the value of my life is the amount of money I can earn. So if a person earns more money, he's more valuable than a person who earns less money. One of the lessons which came out of the early industrial era is that helping the poor is harmful to productivity and ultimately to everyone because if the industrial production is harmed then no one gets the goods. So it is understood that motivation to work is created by poverty. So we need to cultivate indifference to poverty which is against our natural instinct because if we really work properly to wipe out poverty then no one will work and there will be no production and everybody will be poor. So that is one of the ideas which we are taught to believe. And of course the rejection of Christianity leads to the idea that the goal of life is to maximize pleasure, power and profits without any concern for society and that pleasure comes from conception of goods. This is necessary in order to enable the production of more and more goods which capitalism requires. And of course money is central to the working of capitalism. We are trained to believe that if you want to pursue pleasure, power and profits, you have to maximize the amount of money that you have. So goal of life becomes money for everyone in a capitalist society. So how can we clear our minds and free ourselves from these myths of capitalism? So there are a number of things that we need to unlearn. One of the central myths of capitalism is that the emergence of capitalism has been a great blessing. It's the greatest success in the history of mankind. Basically the last three centuries have been massively successful and we have had so much progress and so on. So the counter narrative is that emergence of capitalism has been a disaster for mankind and for the planet. And this is what we need to understand and learn and the fact is that painting capitalism as a great success is necessary for the survival of capitalism because it's actually causing a great harm to a large number of lives. And so for example right now there are more than a billion poor on the planet when in fact there is enough resources to wipe out hunger and take care of all basic needs, health, housing, education and food. All of these things can be taken care of. There is enough resources on the planet to take care of everything but capitalists keep saying that there is scarcity, we don't have enough. So we need to produce more wealth and more wealth always goes into the coffers of the already extremely wealthy. It doesn't go to help the poor. So how can we relearn to look at the world from the opposite perspective that instead of being a tremendous success of the past three centuries this has been a huge disaster. So one article which explains this is referenced here. So when we look for solutions to the way that capitalism poisons our minds and hearts. These solutions exist at the personal level one by one individually how can I free myself and at the collective level which we need for the ummah as a whole. So on the personal level there are many tactics that I can use or you can use to unlearn the myths that we have learned. But on the collective level as a whole we need something else which is called which we need to produce an alternative to Western education which doesn't exist. And this is what I have called in other places the Ghazali project which you can look up on my website or blog. This course in Islamic Economics which you are teaching is just one small piece of the massive effort which is required to replace the entire structure of the social sciences by an understanding of how we can shape societies according to Islamic laws. So what we are asking for is that we need to replace social sciences which tell us how to pattern our societies by using fiqh and applying it to the modern world. There are no easy solutions in the sense that we can't go and pick up the fiqh solutions of the period of Imam Abu Hanifa because they were developed for a different society and different times. We have instead to do the harder job of looking at the usulul fiqh and looking at them to understand what situation we are in and devising solutions which are appropriate for the modern world. So this requires a lot of hard is the hard. So to a little bit more on the personal level, there are some slides on unlearning jahlia and relearning Islam which go through a lot of different issues that we need to unlearn and relearn. But the primary is that our human lives are infinitely precious. Our success will be determined on the day of judgment. It doesn't matter how much money we have. Life on this earth is temporary, very short. So success or failure in this planet does not matter. But the success on the test depends on struggle. If we struggle, we make jihad for the good, that is success. Not if we achieve a successful outcome in this earth and wealth is not a sign of favor of Allah and poverty is not a sign of the lack of favor or displeasure of Allah. So some of the basics that we need to learn on a personal level is personal identity, which involves learning how to become a human being instead of being a human resource. Our education trains us to be a human resource. So we have to reeducate ourselves and learn how to be human beings. So if we want to overcome the traps which the way our minds are shaped by history, then we have to learn the forces which have shaped our minds. One of these is the capitalism which is the third force on this list that we have been studying in this lecture. There is also global colonization conquest which took place and that has led to a shock and awe of the West which has paralyzed Muslim intellectual thought and made it very difficult for us to develop our own intellectual tradition on the basis of our own past. So also, European transition to secular thought has led to a marginalization of religion. We study everything in our education but we don't understand and we don't study how religion affects these things because the secular society included religion. So now I am teaching this course as a way of showing how Islam affects economics because if you study the textbooks, you don't find anything. In fact, you get the opposite impression you learn that religion is irrelevant to economics. This is wrong but to counter this you need to step away from the secular modern thought itself. One of the basic antidotes and we are coming to the end of this lecture is that modern economics is basically the economics of the nafs Ammara. It says that you should take your nafs as your God and do whatever it commands and so it basically turns us into an animal which is bound by his desires. Islam teaches us that the soul of human beings is a battleground for good and evil and the nafs is driving us towards the evil but we also have a roof which drives us towards the good and we should try to make spiritual progress. So modern economics is for the spiritually stunted but Islamic economics is to make spiritual progress from nafs Ammara which we acknowledge but we don't accept the commands and so we go to nafs al-abama and to nafs Ahmad Main and this has a lot of impact on how we should think about economics. And I think this is the last slide. So Islam also teaches us an attitude towards wealth which is very powerful. Wealth appears to be sweet but it is not. We should think of wealth as the material and comforts and pledges of this life are just an illusion because they're only here for a very short time and they only have a very sweet appearance but they're nothing in compared to the pledges Allah Ta'ala has for us in the Akhira. So our attitude towards wealth is that we should be indifferent to it but if we are content and it is given to us as a gift this is a blessing of Allah and it can be used in many good ways but if we are striving for wealth if we have got greed in our hearts then the wealth which comes to us as a result of this greed will not bring us satisfaction. And this is a very deep lesson not available anywhere in the western philosophies. So I think we will end this lecture here with an dua Allahumma anfa'ani bimaa al-lamtani ba'alimni na'i anfa'ani wa zidni ilmah subhanah rabbika rabbil izzati ammai yasafoon wa salam al-mursaleen walhamdulillahi rabbil al-alameen. Alright so now we can open the floor for questions. So you can raise hands and ask or there are lots of questions in the chat I can try to have a look at that. So one of the questions that I see is the yes recording will be shared. Insha'Allah. Economic history is a very important topic but a lot of the his economic history books are basically justifying neoliberal capitalism so they're not very good. I don't have specific recommendations in mind right now. As far as gold is a common currency etc these are topics we will plan to cover in later lectures. They are too complex for quick answer. Alright so let me ask Qazi Imaduddin for his question please unmute yourself. Assalamu alaikum can you hear me? Yes I can hear you. I'm not sure if I'm getting your point correctly. So are you suggesting that about private property? Are you suggesting that Islam does not have any private property? Or are you saying that it's a mixture we've got public property but also private property? We have a mixture we have both public and private property but I was not talking about that. I was talking about absolute rights to private property these emerging capitalism. We have private property as Amana. It is given to us in trust. We don't have absolute rights. We burn down the trees and we can't cause damage to natural resources because we are owners and we are allowed to do whatever we want. So rights to our private property are limited to improving and making this private property of benefit to mankind. In fact our ownership is contingent upon and is given to us on the basis that we will use the private property to make this private property beneficial to mankind. If we use private property, if we use it to cause harm then this can be taken away from us. Somebody asked about the relationship of the RBC model, the real business cycle model. So this is again the idea that we are living. This is the CMC model which I discussed. It's about that economy is about providing commodities to people but this is not how the economy works. The economy is about making money for people and that's entirely different work. Alright, so next question by Qazi Imaddin. Oh, Henry came in. Henry Tanjoon? Yes. Yes, Henry. You have a question? Yes sir. Very interesting about talking about methodology. You said that the historical and qualitative methodology derived from Imaddin is very interesting to me because I've been studying in statistics for four years in BAC and saved my mind about qualitative. So how we convince people that qualitative is more powerful than qualitative? I've dealt with that question at length in my statistics course but basically you see the illusion is created that numbers are accurate measures of quality and this is wrong. For example, suppose I want to measure somebody's intelligence then I can give him an IQ test and I get a number. This is 137. So what statistics tells us is that this 137 is the measure of his intelligence but this is wrong. Intelligence is actually the qualitative thing which we cannot measure. 137 is just one indicator. So what is important and what is not important is reversed in statistics. In statistics you say okay it's the number which matters and you should do analyze the number but actually the truth is that it's what we cannot measure, what is hidden, what is qualitative, what is unobserved, that is what matters. And the numbers are just imperfect indicators. So once you take this point of view then you can reduce statistics. Okay sir, thank you. Zermal Abdullah. As-salamu alaikum wa rahmatullah. Thank you so much. I think you provided with enough information about the topic. But my question is specifically about the specific reasons behind capitalism that shapes the mindsets or the minds of Muslims. The question is, is capitalism a dominant concept or Muslims are not able to consider its side effects on the lives of Muslims. And the second reason is that as we all know, Western knowledge has better practical practices in today's world. And as the era of AI artificial intelligence, it enhanced so much more. So what will be our practical response or through Islamic worldview, do you have any specific practical response in order to shape the minds, to reshape the minds to Islamic economics and the next generation start to follow Islamic economics and then practice is and their lives. Thank you. Yes, I discussed some of these solutions in my lecture I said that basically it's all about spirituality, it's about Mu'arifat. Learning to recognize Allah Ta'ala through the manifestations that we see. And this is something that artificial intelligence cannot do. So an artificial intelligence is really artificial. In the sense that it is very impressive to non experts. That is, if I ask about something that I don't know about, then the chatbot will produce answers based on what the leading experts are saying. But if you ask expert itself about that answer, he will say that this is very wrong and very deficient. This guy is just copying the ideas which have been dominant in this field for a while, because that's what chatbots does. It just collects opinions of people and it takes the majority and it reports them it doesn't have any intelligence. So whenever you have an expert in a field, he will be ahead of the AI. Some people think that this will change as AI gathers more intelligence, but this is not true because every situation basically AI is the use of experience. So now the problem is that the world is continuously changing. So now if I want to assess what will happen tomorrow, because the situation today is completely unique. Nothing like this has ever existed before. So it is intelligence which allows me to say that such and such experience is not relevant for the future because things have changed. And if you don't have the relevant expertise, then you won't understand that things have changed and you will continue to predict on the basis of the past and you will end up with wrong results. But anyway, this is a complex topic and I can't go very deep into this. Alright, so any other questions? I'm looking at the chat and so somebody is talking about Gandhian models. Yes, I think that the capitalism is especially toxic model because it kills the heart and the soul, it kills our connection to environment. And many other models, the Buddhist model and the Gandhian model, even a Christian model are better and they provide some of the missing dimensions of the capitalist model. But Islam has its own complete worked out Fika and a thousand centuries of experience. So nothing else can really match up to that. People can invent theory on their own like there is this donut economics. It's very good, but it's invented by one person and it will be very hard for it to gain traction. If we can develop the same theory on the basis of Islamic principles of trusteeship, etc. Somebody says, can I ask a question? So if you raise your hand, I will be able to see it and I will ask you to ask. Yes, okay, Daniel, please ask a question. Yes, can we hear you? Daniel, we can't hear your voice. So anybody else has a question? Okay, Najeeb Ahmad. You mentioned that students look at their lives like they're selling their life. What's the alternative way to think about it? What's the other way? Yes, I have developed this in some of my other lectures, but our life is very brief. It's very precious. It's not about making money. It's about learning how to be the best that we can be. It's learning how to be a better person. And that is something which is not available by studying physics or chemistry or biology. How can I become... Lahtala has put us down as a seed which can grow into a human being. And how do we become human beings? For that we have to study the teachings of Islam in many different dimensions. Somebody asked about the slides. Yes, I had meant to put up the slides for download, but I did not do so yet. I will put them up on Slideshare and share a link via email later or also on my WhatsApp chat group. If you want to join the WhatsApp chat group, you can do so by going to my blog, IslamicWorldViewBlog, azprojects.wordpress.com, and looking at the About page, which has a link to the chat group. I am based in Islamabad. Can you ask a question? I would like to ask about efficiency, the concept of efficiency in capitalism. Because now our mind is colonized by capitalism. So everything must be measured by efficiency, like in Islamic banking, productivity and so on. So in my opinion, efficiency is only good for mission, mission activity, not for economic and social background for worship. Is that right? What do you have someone? Yes, please. Thank you. I think that economic efficiency is very harmful because it doesn't take into account the social impact of your work. So from an Islamic perspective, we should look at the social benefits that are being produced by your business and compare them to the social costs. This is as opposed to the money profits and the money costs, which is the current calculus. This money cost and money benefit has produced enormous damage to mankind. So Islamic accounting would be very different from monetary accounting that is currently being taught. So it is correct that Islamic banking uses efficiency as a measure for productivity or for performance. No, it's not correct. This is why I think I am concerned about this because efficiency is actually only suitable for mission, not for human activity. Yes. Thank you. Regarding this, I am putting down one more question. Yes, go ahead. Okay, I have a proposal for the concept of income and profitability. You know, income and profitability means that rationality in Islamic based worldview is different from rationality based on capitalistic worldview. So if we use the concept of rationality or vision, then we will be misleading. So in Islam, akal and fikar is different from reason and rationality. What do you think? Thank you. This is a very good question. Basically, you see, when the West defined rationality, it defined it in a different way from what we think of as rationality. You see, they rejected religion as superstition and they said it is not rational to believe in anything you cannot see. So you start by saying that rationality rejects God and rejects afterlife and rejects judgment because you can't see them. So there's no evidence for them. So it's a rational to believe in things for which there is no evidence. So you start with that rationality and then you say, okay, then it is rational to maximize pleasure on this earth because that's all we have. There is no life afterwards. So then you say that, okay, there is no God so we can do whatever we like. So there's no morality. So anything which gives me more money is good. So all of this is rational. And that's how an economic theory works that, okay, you can make a promise and you can break this promise if it brings you more benefits. So all of this is rational, but this is not rational according to Islam. If we take into account the longer perspective that we are going to live that success will be determined on the day of judgment. And so if you want to succeed forever and have infinite pleasure from conception, then you better obey the orders of Allah in this planet on this earthly life. And this may not involve. So it means that you should give away things that you love, things that will maximize your pleasure in order to in the path of Allah. One more question. Okay, if we compare the concept of ethics and ahlak, it's different because ahlak means Hablumina Allah and Hablumina Nanas. And I think it's not only, I think only Hablumina Nanas and the fundamental concept is different from ahlak. So I think it is better to use the concept of ahlak instead of ethics. What do you think? So as a Muslim, we have to not to translate ahlak into ethics because ahlak consists of Hablumina Allah and Hablumina Nanas. While I think it's only Hablumina Nanas and it is relative relative because Hablumina Nanas were in United States or in China, it's different whether it's good or bad or right or wrong. Thank you very much. Yes, yes, this is correct. There's a distinction between ethics, basically ethics is the rules of conduct, it's morality and character is different characters. So anybody can follow rules even if they don't have ahlak, but especially you can create rules and you can make punishments and rewards so that everybody wants to follow the rules of ethics. But what you want is an internal character which desires to follow the rules because out of the love of Allah, so that's a different level. So I think that we are reaching the end of the time. So I will take one more question if there is one, or we can just call it the end for now. Can you hear me? Yes, I can hear you. Who is that? So this is Daniel. Daniel, okay. I said, I don't have a question, I have an observation which I want to, you know, put it in front of you. Lately I did a massive research study. And like, you know, in today's session, you were telling us some systemic aspects, how do they control our minds and you know why how do they produce a specific kind of individuals. So in my research study, I was a bit interested in trying to understand the inside of the individual, why the individual is getting controlled and why you know he's susceptible to these kind of what you call manipulative what you call activity done at the system level. So what I've seen in my research is this, I'll put these observations in front of you. First, humans think in organizational terms. First. And second, I think that, you know, generally speaking humans lack political agency. Now what do I mean by organizational terms is this. I mean, for one day or two days or three days I can stay hungry, or I can stop but the idea that you know I'll burn the field and you know the idea that you know in future I'll not get food is not acceptable for me. So the moment when we talk about some alternatives or some ideas which are contrary to the dominant ideas. So in the individual get into this mindset okay fine you know this is a destructive idea because it is you know taking us taking away our you know, sustainance away from us. First thing and secondly, I mean as far as ethics and morals are concerned they would want their manager to they will want to have some good what you call or ethical aspects within the organization. The idea that you know the organization should be transformed and you know created in a very different spirit or every different structure. This is not acceptable for them because they think that you know this is an idea which is a destructive idea which is going to take away our sustainance away from us. So I'm just putting these observations in front of you and I would love to have your comment. I've been able to find these problems as to why you know we become vulnerable to these control activities. Good luck to have your comment on this thank you very much sir. Yes, well of course this is a very very complex question so let me just give a very simple simplified answer that when you are trying to make changes then there are three strategies, loyalty voice and exit. So when you are following the loyalty model that you say that if I try to make change this will cause damage, maybe to me maybe to the corporation, or whatever organization. And so out of loyalty I will not express any criticism because that will strengthen. And then the voice is that when you start to express your complaints and your problems in the hope that you can create internal reform. Finally exit is when you see that there is so much commitment to the organization that no one will listen to serious proposals for reform so you basically exit and you try to start change. And all three strategies are suitable for different situations for example for a while I tried to work within the economy. And I tried to show that look the utility theory maximization model is wrong. That's very easy to prove, but there was no response in the sense that people said that yes we know that it's wrong but we will still continue to use it so now there is no possibility for change. Ultimately I realized that economics is a strong ideological commitment it's a religion, not a science and so it cannot be, so basically it's pointless to work on economists. And so basically, instead of any making an in-house revolution, now I am working on training the youth because the avenue, the leverage that we have comes from knowledge. Allah Ta'ala gave a very powerful knowledge which changed the world and today we still have this knowledge. The knowledge that is being taught in economics all around the world is useless. It is useless in terms of understanding the world and we can provide alternative ways of thinking and knowing about the world which provide a lot deeper insights about how the world works and how we can work to change it. And this is not available in western economics. So the power of knowledge is what will attract people to this and this knowledge will have the power to change the world if we make the intention that we will use this for the benefit of the ummah for the sake of the love of Allah. Alright, so I think we can stop here and see you first Sunday of next week. Meanwhile if you're on my list then you will receive weekly mailings and also the best way to keep up with the course is via the Al-Nafi website which has an online course in which I'm recording everything in sequence and all the course materials are available. Alright, Assalamu alaikum warahmatullahi wabarakatuh. So we can stop now.