Revisiting an Islamic Version of a DDI (Democratically Distributed Income)
but which any ‘less developed’ nation could implement
I have become fascinated by the compatibility with Islam (as I understand it) of an economic paradigm I have developed that features a democratically distributed income (DDI). Again, as I understand it, in Islam the existence of poverty among any Muslims is a sin for which all Muslims are held responsible. In addition, taxes are supposed to be limited to ‘emergencies’ and for expenses related to ‘defending the Faith’. Debt, or at least Muslims collecting interest from other Muslims on debt — including public debt — is also a sin. The DDI paradigm could eliminate poverty and taxes/public debt for any nation.
The ‘standard’ DDI paradigm as I have developed it could be implemented in any nation. In that iteration of it, money would be created as needed to pay the DDI to adult citizens who were retirees, unable to work, or employed in ‘minimum pay positions’. It would end poverty by ending unemployment — a job would be available for any adult citizen who was able and willing to work (through government, as a last resort) — with a minimum income in an amount on which a person could actually live. Employers would find themselves using benefits (as well as general working conditions) to compete for people to fill ‘minimum pay positions’. Clearly, the paradigm in that form is most compatible with fully developed economies such as exist in so-called ‘first world’ nations.
It occurred to me that a DDI could eliminate poverty without any need for eliminating unemployment (outside the home) by paying it to households of married couples. If they had children, they would get more income. One spouse could work outside the home (or not). Money earned outside the home would simply add to the household income. Households headed by widows and widowers would presumably still receive the DDI as when both spouses were alive. I don’t know enough about Islam to go into the subject of divorce — but I do know that its tenets regarding marriage would fully govern that institution for purposes of this paradigm. The point is that the DDI would be totally decoupled from employment (outside the home).
That would most definitely have a tremendous impact on the labor market in any nation that might adopt that form of the paradigm. Culturally, though, there would presumably still be pressure on men in particular to seek work outside the home. On the other hand, any income at all would be ‘gravy’, so finding employment of some kind would be made easier, as pay would not be much of an issue. (The issue of ‘women’s issues’, in Islam in particular, is a whole other matter that would affect the implementation of this paradigm in any nation that might adopt it.)
This paradigm could also fund government — all government, from local to central — without taxes or public debt by creating money as needed to fund government (thenceforth at the current per capita rate of total government spending). With this paradigm in place an Islamic nation would need very little government, given the role of Islam in governing society. As I understand it, taxes could still be collected from non-Muslim people living in an Islamic nation and non-Muslim businesses operating in one — and from Muslim people and businesses in case of an emergency (or, surely, to generate a contingency fund) or to fund defense.
There is a need in this paradigm (with any form of it) for a mechanism to withdraw money from the economy, but getting into that is beyond the scope of this little article. For any reader interested in more about the paradigm, including what that mechanism could be, “A Most Beneficial Economic Change” is a “2 min read” here in Medium with links to several articles about the paradigm from different perspectives within economics (with — for the benefit of ‘guest readers’ — nothing I publish here behind the paywall). “De-growth with Only Positive Effects” actually contains the most concise rendition of that mechanism for taking money out of the economy.