By: Nadeem Haque
The best economic system that maximizes justice and peace should be the optimal system for both humanity and nature. In this article it will be illustrated, in a brief but hopefully concise manner, that what I call Equi-nomics is that optimal system, because it is the only one that has the ability to foster the crucial four Ecognitions (ecological recognitions) which comprehensively embrace both nature and humanity and lead to the ultimate sought after justice and peace. These Ecognitions are as follows:
Ecognition 1: Everything ultimately belongs to a single non-anthropomorphic creator.
Ecognition 2: The Equigenic Principle must be upheld (based on al-mizan – the balances in nature: equi (equal/balance); genic (origin)). See Endnotes.
Ecognition 3: Community rights must be upheld for all humans and animals as they all live in communities.
Ecognition 4: Personhood rights exist and are to be upheld for all humans and animals.
THE LION GUARDIANS by Nadeem Haque, 2018 Here is a test: Can you spot the humans in the picture?
How significant are we in comparison to nature? What ought our true role to be?
Note that each ecognition works in concert with the others and there is a hierarchy among them, the most foundational one being Ecognition 1. To understand the relationship between these ecognitions, take Ecognition 3, for example; it is necessary for Ecognition 2 (equilibrium): Since animal communities operate with dynamic equilibrium, Ecognition 2 is maintained. But Ecognition 2, recursively creates Ecognition 3!
In an optimally healthful society, all these ecognitions would be upheld, and, like ‘Newton’s’ three laws, these four ecognitions have the ability to define the totality of the socio-environmental ethical policies for this, and any other planet in the universe, where carbon based life abounds, according to the Quran. In failing to understand this concept and to continue to base our economics on the ‘interest-based’, monopolistic and plutocratic economic systems, is like basing an understanding of the solar system on geocentrism. In addition, trying to fix such a faulty system would be like adding epicycles to geocentric orbits, only compounding the ever-growing problem. We must go back, or rather, move forward to these four principles of ecognition if we are to extricate ourselves from the maze of confusion and destruction. Indeed, we have no choice if we are to avert the decay of ‘civilization’, a madness which humans have brought upon both themselves and nature, as irresponsible Johnny-come-lately ‘managers of nature’. Everything flows from these ecognitions. The breakage or non-fulfillment of any one of them inevitably causes a disruption in the natural flow towards justice and peace. Analogously speaking, these ‘geocentric’ economic systems that we have been plagued with have arisen because of various socio-political developments several hundred years ago, of which we are, most of us at least, hapless victims. Let us now dig into this assertion to gain further insights through history to see the proximate cause of our victimhood.
Hapless Historical Victims
The current economic system is primarily based on the present banking system which has caused a great strain on humans and the environment, because the creation of money has been transferred to the private banks. It should be realized that it is not merely a problem of interest bearing loans, but the very banking structure itself which compounds the problem, in that, the Central Banks make interest payments to the Chartered Banks, who they gave the money creation rights to them in the first place. What is the basic banking mechanism for money creation and how did we inherit such a detrimental structure? Why is the current banking system “unjust”? Here is a brief summary: The origin of the modern banking system is from England, where the monarchy had usurped the gold and silver that the rich had deposited in the Tower of London. These rich, therefore, decided to keep such precious items with Goldsmiths, who had strong boxes already, for their own valuables. These Goldsmiths gave the depositors receipts for their deposits and convinced them that the Goldsmiths ought to be able to lend the money to their friends at a rate which was higher than 5%, the rate which the Goldsmith’s would pay the depositors. The depositors then saw the advantage in using the receipts from the Goldsmiths to pay their bills instead of actually withdrawing their gold. In addition, the Goldsmiths realized that they could make more loans than the amount of gold the kept at hand, especially since not everyone demanded back their gold at the same time. Thus evolved the modern banking system which was given a boost when the government became a partner to this fraudulent system, after chartering the Bank of England. Gold reserves in the U.S. which used to be 25% in the early 20th Century, meant money could be loaned four times over; the reserves’ requirement was reduced over the years. Cash reserves in the U.S. are currently 3% for current accounts and 0% for savings accounts. In Canada, cash reserves have been 0%, since the 1991 Bank Act amendments.
Money is created every time you take a loan from the Chartered Bank, with you providing a collateral. You then repay with interest. In Canada, for example, over 90% of the taxes go into making interest payments to the chartered banks. However, if money creation returns to the hands of the central government, then the central government would have the sole power to create and direct the money for schemes that would benefit all peoples, including social and educational programs, healthcare, ecological clean-ups, environmental intitiatives and innovations etc. A new vision for banking, along these lines, is desperately needed, as perhaps a first step, which can then evolve into a transactional system that is radically different and does not involve the banking system that arose in the Middle Ages, but a whole new type of system based on trading in ‘representational tangibles’. 
Within the general plutocratic framework of most societies, there have been periods in the history of many nations, where less insane and more inclusive policies have been enacted. In Canada, for example, in 1939, when war broke out, the Bank of Canada was engaged in money creation when: The government sold their bonds to the Bank of Canada. The interest due on these bonds was cancelled by the Bank of Canada issuing dividends to the government, effectively making the net exchange an interest free loan. This money creation led to the positive development of Canada, through the central bank’s self-generating money for such developmental schemes. Since 1974, this mechanism for money creation has been abandoned, helping to lead to a decline in social services development and the many interconnected environmental issues. Indeed, with many of the politicians in the west and east having become subservient to corporations, it is difficult to pass proper social and eco-sensitive legislation. The Central Banks of the Western Nations after 1974 were bamboozled into passing the money creation facilities onto this private bank-corporation complex. The elites who hold the reins of these corporations are not really concerned with the environment or social welfare, but only with their short-term gains. Tragically, it is not recognized by them, that they are part of the system, where the social and atmospheric system will adversely affect themselves, in both this life and the next. In this callous atmosphere of unconcern, propelled by greed and selfishness, anything and everything can be bought or expertly marketed to serve the narrow interests of the elite.
A totally rational reform that benefits humanity and nature would be to revert to the just transactional system focused on trading, and if the world does freely and peacefully, without any coercion, come to their senses and become united or federated in the future, it would apply socially and ecologically sound policies, wherein the purse-strings are controlled directly by such a just world system which legislates according to socio-sensitive and eco-sensitive principles that most of the public would adhere to by rational choice and without compulsion. It cannot be overstressed that if sane social and environmental policies are to be bolstered, the modern banking system must be transformed to a radically alternative one as the one in vogue right now violates the ecognitions through both its overall intentions, mechanisms and goals.
Equi-nomics: an all-embracive economic system
The ecognitions form Equi-nomics and they takes into consideration the fact that all levels are interlocked together in the transient chain of existence constituting all life and non-life. In contrast to such an approach, the present notions of “GNP” (Gross National Product) are completely inadequate for such an integrated realization of reality. This shortcoming only serves to create an illusion of progress as to what constitutes development. In fact, it is becoming ever so blatantly obvious that, as we erode our resources, the “costs” will eventually end up showing even in our present very limited economic measures such as GNP or GDP. For example, when contaminants are leaked into the environment they travel up the food chain causing health problems among human beings. This results in an increase in health costs and the reduction of productivity and these are not captured by such measurements and indices.
The equation of balance (al-mizan in Arabic)¾which is the paramount concern in Islam—includes the effects of human interactions upon the existing balances in nature (Ecognition 2) . Not only must all of these natural resources be dealt with as if they were assets, but the notion of assets must itself be re-assessed as being encapsulated by the foundational understanding that these assets ultimately belong to the Creator of the balance and not to human beings (Ecognition 1). These balancing components and entities deserve proper treatment because it is their natural and not synthetic or artificial right. Such rights are not man-made, but are inherent rights realized from the fact that if we do not maintain the balance, then disorder will ensue (via the concept of the violation of Equigenic Rights).
In an economic system operating along the lines of the Quran, there would tend to be a minimization or elimination of the consumption and demand for harmful products, both for human beings and nature. But how can we help to direct consumption? Economist Omer Chapra, in his illuminating book, Islam and the Economic Challenge, succinctly discusses how such a consumption pattern can be brought into being:
The relative scarcity of resources compared with unlimited claims on them necessitates a filtering device. All claims on resources must pass through this filter…
From the Islamic perspective, this natural filtering device is the “…system, which influences the inner consciousness of the individual, makes him aware of the trust nature of resources and provides the criteria needed for their efficient and equitable allocation and distribution”. Market prices and governmental regulation would be gauged according to the scarcity of resources, keeping in mind the balance in nature. These would, in fact, be the secondary filtering mechanism both flowing out from and supporting that first natural filtering mechanism (of the behavioural pattern emerging from a consciousness of a Creator (taqwa) and the balance). In such a system, it would become easier to evaluate and appreciate the natural resources on earth, both for ourselves and for the other creatures that depend on them. This would be so, due to the fact that the pricing of resources itself would be fair and just, and not skewed, inflationary or exploitive as it is today; indeed, our financial assessments would be based on a reflection of a deeper understanding of nature, due to the realization of the pricelessness of the balances in creation.
A truly socio-environmentally friendly financial governing system has the filter of the consciousness of God as sovereign through the constitution of the Quran, the corroboration of facts, and the structuring of policies and legislation through the evidence, all of which espouses socio-ecological equilibrium via the Equigenic Principle. This filter, filters out harm by rational and objective sieving, that is, by capturing and discarding anything that causes disequilibrium in the causal nexus, be it in the environmental, social or biological realm. This concomitantly leads to local and universal peace and justice. Conversely, it becomes apparent that capitalistic systems possess contaminated filters, as the concepts of God as the Sovereign and respect for the created balance are either not present, are distorted or are minimalized, leading to injustice and socio-environmental destruction. If greed, corruption and mismanagement were eliminated one could mend both environmental and sociological problems simultaneously, one without the expense of the other. Needless to say, we cannot even begin to have such a system that resolves our problems globally and in many cases locally, unless the Creator is seen as the Owner and Inheritor of the universe, a view which would lead humans to deal with property, with respect to God, in all senses of the word ‘respect’.
The new mathematical equations of Equi-nomics
It is a fact that measurement can produce awareness, and awareness can lead to change. In Equi-nomics, the primary concern would be the socio-environmental deficit, that is the measure of how far away from the balance we are. What needs to be taken into account is a socio-techno-ecological equation and concept¾a new measure of deficit. The following generic equations whose parameters could be quantified, show the various relationships between some of the major concepts being discussed here:
- Socioenvironmental Deficit = Cost of what you displace from nature that destroys a natural cycle + cost incurred by the misapplication of purpose-designed objects or entities in nature.
- Socioenvironmental Deficit = Amount of deviation from the Equigenic Principle.
- Health of Society = 1 – Socioenvironmental Deficit (where 1 is the optimum, i.e 100%): you can call this the Equigenic Index (EI).
- Equigenic Principle = Quranic Principles.
All of the above would form the EI that can then be multiplied with GDP or the Human Development Index, thereby reducing their values (because EI will always be less than 1), so that we can understand where societies really stand in relation to their well-being/health.
Sanctity as part of Equi-nomics
It is certainly a noteworthy distinction that a creature such as Man, from among things in nature, has been given the trust associated with being able to choose to a wider degree, an ability not commensurate or structured for any other type of carbon-based corporeal or inanimate thing on earth:
Assuredly, We did offer the trust to the celestial systems, the earth and the mountains: but they all refused to bear it because they were cautiously afraid. Yet man took it up verily, he was unjust and ignorant. (33:72-73)
According to the Quran, due to our ungratefulness we have forgotten that we are not ultimately the creators of anything. We only use things and transform them. The simple truth, is that whatever we make with our own hands, is in the ultimate sense, made by God, because it is God who has created and designed the humans:
Do you worship that which you have carved (idols), even though it is God who has created you and all your handiwork? (37:95-96)
He is the ultimate creator in the sense that He has given us the ability to develop things. However, God is not the creator of that which is harmful since God wants Man to utilize his limited choice mechanism to do good and avoid indulging in harmful practices:
Whatever good happens to you is from God; and whatever evil
befalls you is from your self. (4:79)
God does not wrong anyone by as much as an atom’s weight. (4:40)
In the following context, note the reference to “ships” which is juxtapositioned with natural phenomena that God has made, reminding us exactly who their Ultimate Creator is:
And He it is who has engendered opposite sexes; and who has made for you ships, as well as beasts on which you ride, that you many mount firmly on their backs and, while so poised, may recall to mind the favours of your Sustainer and say: “Glory be to Him who has put these in our service, for we could never have accomplished this.” (43:12-14)
With the development of such an interconnective outlook and thinking pattern, the sanctity of the totality of creation is realized without dichotomies, where the earth, society, nature, worship, work, rest and play would be seen as a means to a higher end. As said Prophet Muhammad:
The whole earth has been made a mosque for me, pure and clean.
The concept of Zulm: Dislocation
Zulm in Arabic means: the placement of an entity or object where it does not belong or fit, or conversely, the removal of something from its natural setting where it does fit by the nature of its design: in other words, a misallocation or dislocation. The highest dislocation is ascribing a partner with God or shirk as it is denoted in Arabic in the Quran. In fact, in his advice to his son, zulm of such an ascription is at the top of the list of ten pieces of advice the pious personality Luqman gives to his son:
My son, ascribe no partners with the One God; certainly, such ascription is a great injustice (zulm). (3:13)
This universe is based on cause and effect and each of the components fit in a specific way by their structure and function that ensures balance, functional harmony and justice. Now since the human being has the ability to misplace and misutilize things without regard to their actual intended usage due to the structure and function, this causes the converse, that is, harm. By following the ecognitions, everything is put in its rightful place and there is no dislocation, or zulm. The Creator Himself is not unjust (zulman) to His creation (see Quran: 3:108, 109), but we humans are and can be.
Riba: exploitation compounded
Monopolistic systems are governed by the Arabic word riba which means the increase in the wealth of a party or parties by unjust means that are based on zulm if we take the Quranic root meaning of the word riba and its uses in the Quran and Hadith. Riba disrupts the flow of things in nature and leads to a lack of balance because the natural transformation efforts that are made to the elements of nature for human use are not given a value that is based on natural needs that regulate supply and demand, in turn based on fair competition, efficiency and co-operation. This creates a disruption in the natural flow of things and diverts funds to a small group thereby sabotaging the proper distribution of wealth. Therefore, although trade in things that maintain socio-environmental balance can be deemed as part of nature, riba transactions go against the grain of nature by creating a primarily one-way vortex of exchange, as if, to draw an analogy of a vital form of exchange in the rest of nature, humans exchanged carbon dioxide but never received oxygen from the plants. Rather money should be seen as a two-way form of exchange for overall stability, just as the mutual carbon dioxide and oxygen exchange between plants and animals is a beneficial cycle. In other words, in Islam, the meaning of riba covers, monopoly, charging interest and so on, that is, anything that causes this financial imbalance, hence socio-economic imbalance and resulting environmental imbalance. There is no room in the ecognitions for any riba.
One of the main problem with the interest-based economy is the way loans are made for business ventures. The Islamic model bases exchange on co-operation where the borrowers and lenders (and any intermediaries, such as restructured banks along Islamic lines) are in the same boat, being involved in ventures on the same scheme, as official partners, where all parties have an interest in keeping the boat afloat, not to blast it to smithereens by torpedo, if the boat met high seas and was in jeapardy, as would do radical capitalistic institutions at present and have been doing so for centuries, in one form or another. In fact, all parties would also then be concerned about the type of enterprise they may be getting involved in, in terms of environmental soundness, especially if, that is, the government was the applying Quranic legislation to uphold the balances in nature. True Islamic loans are ‘brotherly’ whereas interest based loans are ‘otherly’.
Under the present scheme there is the urge among various institutions to fund projects, be they detrimental to the receiving countries, because interest can be charged, this monetary goal being the be all and end all of the true goals of such international money-lending institutions. Here, there is no real concern for the welfare of nature or the indigenous populations, from the controllers of such organizations, despite hypocritical consolations to the contrary. The other crucial aspect, from an Islamic point of view, is that the printing of money (electronically or otherwise) would be taken out of the hands of corporations such as private banks, where it has come to reside in Western countries; whatever solid monetary system then evolves from the ecognition principles outlined would be under the full control of a government upholding these principles, as opposed to the current financial system that is the root cause of financial instability and income distribution inequalities that feed into ecological pressure, which is an exploitive system that is so grossly sub-optimal. Tragically, currently most nations in the world that consider themselves as being free after independence from the colonial powers, are, in fact, quite the opposite, because of the impositions of international banking lending schemes that dictate severely onerous terms to them. This is a mutation of the old-style colonialism, for it is colonialism by remote control or proxy, by which such poor nations find themselves entrapped and enslaved, their peoples and animals suffering, leading to the current mess we find ourselves in globally.
Given all these considerations, it is high time that we should take a stand and demand a better future for all life-forms. This basic change towards the sustenance of true wealth will not occur unless we, in sufficient numbers, recognize and act upon the fact that we are trustees of the natural dynamic balance, under God and for His creation based on the correct type of a transactional system whose foundational mechanism is solid representational tangible modes of exchange tied to the ecognitions and not vaporous monetary instruments. Economics will then serve us, rather than us serving economics, and this will be the best solution and outcome for all humanity and nature, and not just the proverbial one percent of the human population.
Call me overly optimistic but I am confident that a better system along the lines being espoused here will eventually develop, since I do have hope for humanity. However, it will be a long struggle and humanity will have to, it seems, pass through many not so nice phases, where injustice and exploitation will be the order of the day. It does not have to be that way, but this projected outcome is due to the fact that rebelliousness against the Prime Originator is a dominant feature of the human race, and that sad predisposition has the tendency to override humanity’s true innate, pure nature.
- This comprehensive and highly original paper by Nadeem Haque and Al-Hafiz B.A. Masri gets into great depth in discussing Ecognitions:
- From Facts to Values: Certainty, Order, Balance and its Universal Implications discusses the Equigenic Principle in depth and is a good primer on this subject from the very formulators of the term: Nadeem Haque and Mehran Banaei. It was published in 1995 in Toronto by Optagon Publications Ltd. and the original hard copies are available from email@example.com; there are plans to update the work, and put it online in the near future.
- The following talk was given on this subject by the author and can be found here:
https://www.youtube.com/watch?v=tX7vtBNtn4M (Haque’s talk starts at 15 minutes 15
- Islam and the Economic Challenge by the economist M. Omer Chapra is one of the best books on Islam and Economics, published by the Islamic Foundation and the International Institute of Islamic Thought, in 1992, Leicester.
 This is a modified chapter from a soon-to-be-published book on Islam and the Environment.
 Do You Know Where Money Comes From? (2002): A Publication of the Canada Action Party. See also: www.comer.org (The Committee on Monetary and Economic Reform). Zeshan Shahbaz, a former candidate for the Action Party states that the way in which the modern banking system is structured is as if one owns a grocery store, but then forsakes it and purchases goods that one needs from a neighbouring grocery store, owned by a competitor. Such behaviour would be considered the height of insanity. Yet this is exactly what is currently being done by the West’s Central Banks. Even the Federal Reserve Bank of the U.S.A. is a private corporation; it is not Federal and has no reserves either!
 Hellyer, Paul, (2001), Goodbye Canada, This view which is collinear with Islamic principles, in fact, has been advocated as one of the main platforms for the reform of the economy for every nation state, starting out with Canada, by the Canadian Action Party, in the 2004 Canadian federal elections, as initially propounded by its founder Paul Hellyer.
. Chapra, M. U. (1992), Islam and the Economic Challenge, p. 214.
. Ibid., p. 348.
. Narrated by Jabir ibn Abd-Allah and others. Bukhari, Muslim, Tirmidhi.
. Q. 2:275, 276, 278; Q. 3:130; Q. 4:161; Q. 30:29. (Q=Quran)
 This parallel view, in fact, has been advocated as one of the main platforms for the reform of the economy for every nation state, starting out with Canada, by the Canadian Action Party, in the 2004 Canadian federal elections, as initially propounded by its founder Paul Hellyer.