Thread by @khrmBeigh

Some of the points I would like to mention. Piketty aim in the book is:
1. justify his thesis that r > g (return on capital is greater than income) in historical context.
2. This, of course, leads to rising inequality.
3. This inequality threatens the capitalist world order.1/13

https://twitter.com/dimashqee/status/1014148314139365378

His suggestion of wealth tax is only as a pressure valve to safeguard capitalism which is unstable. Ref: "reduce wealth inequality to more moderate levels than exist today...not necessary for growth)...This is not the place to resolve the issue. " 2/13

Now, classical fiqh can be used to either perpetuate it or rectify this. We can recreate the current dilemma under an "Islamic System".
Let's take an example of Zakah on shares for profit only. Majority of scholars will say it's 2.5% on profits. 3/13

Even if it's 20%, it won't counteract the factor of r > g over the long term.
Instead, can't it be base on both the profits and capital as Piketty suggests (inheritence+capital+income/profit) or some other model? 4/13

Also, we see foresightedness of Abu Bakr on the issue of Zakah. Unless zakah is compulsorily taken, there would always be some thieves around. And their facilitators all over the world. 5/13

One thing to be noted is that we must focus on trying to eradicate the harms of inequality, not the inequality itself which might be a losing cause. 6/13

Before the 17th century, the only growth of the economy was land based and people which amount to nearly 0% growth in today's rate. Two major events which caused the spurt in the economic growth are 1. Industrial age. 2. Improve banking system. 7/13

Capital can move all over the world quite instantly.
Another issue is this whole intricate system of securities and debts. Growth might not be higher than these. So what would it lead to? More public debts as well as private debt for the lower class. 8/13

Some might say that Islam abolished usury and that will solve this.
Nope, check the negative interest rate in some countries.
There's no size fit all solution. Some countries like the USA and Britain even had 2/3rd inheritance tax from 30-80s. 9/13

"The general principle according to which capital can provide income for its owner, who need not work to justify it, went unquestioned." He mentions lot of other stuffs which I don't agree with. 10/13

Instead, Muslim economists and financial experts should create their own stable economic models. We might need to have some capital controls and regulations like China. 11/13

We don't know whether we will get to implement this model in next generation or next century or after that but this project is the project of generations. 12/13

Not just what was written ages ago or would be or have been written in this generation. No one even has a solution to measure assets. Economic models and financial systems should be updated based on new understandings. 13/13

Now a bit of Maths:
One interesting law that he theorised: β=s/g where β is the ratio of wealth/capital and income. s is saving rate and g is growth rate. So, β=wealth/income=s/g.

What it implies is that if saving rate is constant, then wealth is inversely proportional to growth rate in long run. That is slower the growth, more capital gains would be there.

@AQ @FromCairoToBx @604yousuf