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Distribution of Wealth in Islam


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Distribution of Wealth in Islam
By Mufti Muhammad Shafi Usmani
Note From Author: In the present study, we propose to state as clearly as possible the point of view of Islam in this matter, such as we have been able to deduce from the Holy Qur'an, the Sunnah, and the writings of the "Thinkers" (to use a current idiom) in the Islamic tradition. The time and space at our disposal being short, it would not be possible to discuss the subject in detail so as to cover all aspects. We shall, however, try to set down the essential and fundamental points in a concise but comprehensive manner.

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Distribution of Wealth in Islam

  1. 1. Distribution of Wealth in Islam By Mufti Muhammad Shafi Translated by Muhammad Hasan Askari/Karrar HusainRead at the International Islamic Conference, Rawalpindi, Pakistan on February 13, 1968.Published by Begum Aisha Bawany Wakf, Karachi, 6th edition 1979.
  2. 2. CONTENTS Introduction 03 The Position of the Economic Question 04 The Real Nature of Wealth and Property 06 The Objects of the Distribution of Wealth according to Islam 09 Those who have a Primary Right to Wealth 13 The Difference between Rent and Interest 18 The Prohibition of Interest and its Effect on the Distribution of Wealth 19 The Problem of Wages 22 The Secondary Heads of the Distribution of Wealth 26 Eradication of Beggary as a Profession 31 Conclusion 32
  3. 3. IntroductionThe distribution of wealth is one of the most important and most controversial subjectsconcerning the economic life of man, which have given birth to global revolutions in theworld of today, and have affected every sphere of human activity from international politicsdown to the private life of the individual. For many a century now, the question has beenthe center not only of fervent debates, oral and written both, but even of armed conflicts.The fact, however, is that whatever has been said on the subject without seeking guidancefrom Divine Revelation and relying merely on human reason, has had the sole and inevitableresult of making the confusion worse confounded.In the present study, we propose to state as clearly as possible the point of view of Islam inthis matter, such as we have been able to deduce from the Holy Qur’an, the Sunnah, andthe writings of the “Thinkers” (to use a current idiom) in the Islamic tradition. The time andspace at our disposal being short, it would not be possible to discuss the subject in detail soas to cover all aspects. We shall, however, try to set down the essential and fundamentalpoints in a concise but comprehensive manner.Before explaining the position of Islam on the subject of the distribution of wealth such aswe have been able to understand from the Qur’ân, the Sunnah, and the Fiqh, it seems to beimperative to clarify certain fundamentals that have an essential and basic importance withregard to almost every aspect of Islamic economics. Give them whatever name you please-call them “the principles of the theory of the distribution of wealth”, or its “philosophy”, orthe “ultimate object” of this theory. In any case, they are certain basic principles which onecan derive from the Qur’an, and which distinguish the Islamic point of view in economicsfrom non-Islamic systems of economy.
  4. 4. The Position of the Economic QuestionNo doubt, Islam is opposed to monasticism and views the economic activities of man asquite lawful, meritorious, and sometimes even obligatory and necessary. It approves of theeconomic progress of man, and considers "lawful or righteous livelihood" ( ‫ )کسب حلل‬as"an obligation next to the obligation" (‫فریضۃ بعد الفریضۃ‬ ) – that is to say, an obligationof the secondary order. Notwithstanding all this, it is no less a truth that it does not consider"economic activity" (‫معاشی‬ ) to be the basic problem of man, nor does it view economicprogress as the be-all and end-all of human life.Even common sense can suffice to show that the fact of an activity being lawful ormeritorious or necessary is one thing, and its being the ultimate goal of human life and thecenter of thought and action is quite another. Many misunderstandings about Islamiceconomics arise just from confusion between these two distinct and separate things. It is,therefore, very essential to make the distinction as clear as possible at the very outset. Infact, the profound, basic, and far-reaching difference between Islamic economics andmaterialistic economics is just this— according to materialistic economics, "Livelihood" is thefundamental problem of man and economic developments are the ultimate end of humanlife, while, according to Islamic economics, these things may be necessary andindispensable, but cannot be the true purpose of human life. So, while we find in the HolyQur’an the disapprobation of monasticism and the injunction to "seek the munificence ofAllah" (62:10 -ِ ّ ِ ْ َ ِ ُ َْ َ ‫ ,)وابتغوا من فضل الله‬while we find the honorific terms like "themunificence of Allah" (‫ )فضل الله‬for trade and commerce, "good things" (38:32 ;100:8 - ‫;خیر‬ ِ ّ ِ ْ َetc.), and "what Allah has caused to be your sustenance" (4:5 - ‫)التي جعل الله لكم قياما‬ َِ ْ ُ َ ُ ّ َ َ َ ِّfor possessions, "the clean and pure things by way of nourishment" (- ‫الطيبات من الرزق‬ ِ ْ ّ َ ِ ِ َّّ ْ7:32) for food, "adornments from Allah" (7:32 - ‫ )الطيبات من الرزق‬for dress, "place of rest" ِ ْ ّ َ ِ ِ َّّ ْ(16:80 - ‫ )سكنا‬for dwellings, we at the same time find an expression like "allurement or ًَ َdelusion" (3:185 - ‫ )متاع الغرور‬for worldly life. And all these things in their totality have ِ ُ ُ ْ ُ ََbeen designated as "ad-Dunya" (‫" - الدنیا‬the mean") – a term which, in its literal sense,does not have a pleasant connotation. Even from the total context of the Holy Qur’an onecan infer the meanness and worthlessness of the thing so designated.On this particular point, shortsightedness may easily lead one to suspect a contradiction interms. But, in fact, the secret behind the apparent contradiction is that, according to theQur’anic view, all the means of livelihood are no more than just stages on man’s journey,and his final destination lies beyond them — and that destination is the sublimity ofcharacter and conduct, and, consequently, the felicity of the other world. The real problemof man and the fundamental purpose of his life is the attainment of these two goals. But onecannot attain them without traversing the path of this world. So, all those things too whichare necessary for his worldly life, become essential for man. It comes to mean that so longas the means of livelihood are being used only as a path leading towards the finaldestination, they are, "the munificence of Allah", "good things", "adornment from Allah",and "place of rest"; but as soon as man gets lost in the mazes of this pathway and allowshimself to forget his real destination, the very same means of livelihood turn into an
  5. 5. "allurement or delusion" ( ِ ُ ُ ْ ُ ََ ‫ ,)متاع الغرور‬into a "trial" (8:28 - ‫ ,)فتنۃ‬into a veritable "foe" ( ‫عدو‬64:14 - ).The Holy Qur’an has enunciated this basic truth very precisely in a brief verse— "Seek theother world by means of what Allah has bestowed upon you" ( ُ ّ َ َ َ ِ ِ َْ َ ‫وابتغ فيما آتاك الله‬ َ َ ِ ْ َ ّ28:77 -‫الدارالخرة‬ ). This principle has been stated in several other verses too, but it is notnecessary to cite them all before this learned gathering. The writer believes that if thisattitude of the Holy Qur’ân towards the economic activity of man and its two aspects arekept in view, it would be very helpful in solving many problems of Islamic economics.
  6. 6. The Real Nature of Wealth and PropertyThe other fundamental principle which has a great importance with regard to the problem ofthe distribution of wealth is that, according to the elucidation of the Holy Qur’an itself,“wealth” in all its possible forms is a thing created by Allah, and is, in principle, His“property”. The right of property over a thing which accrues to man is delegated to him byAllah. The Holy Qur’an explicitly says: ْ ُ َ ِ ّ ِ ّ ِ ّ ّ ُ ُ َ ‫وآتوهم من مال الله الذي آتاكم‬“Give to them from the property of Allah which he has bestowed upon you.” - 24:33Why this should be so has also been explained by the Holy Qur’an in another place. All thatman can do is invest his labor into the process of production. But Allah alone, and no oneelse, can cause this endeavor to be fruitful and actually productive. Man can do no morethan sow a seed in the soil, but to bring out a seedling from the seed and make the seedlinggrow into a tree is the work of someone other than man. The Holy Qur’an says: ‫أ َفرأ َيتم ما تحرثون‬ َ ُُ ْ َ ّ ُْ َ َ َ‫أ َأنتم تزرعونه أ َم نحن الزارِعون‬ ُ ّ ُ ْ َ ْ ُ َ ُ َ ْ َ ْ ُ َ“Have you considered what you till? Is it you yourselves who make it grow, or is it We whomake it grow?” - 56:63And in another verse: ‫أ َولم يروا أ َنا خلقنا لهم مما عملت أ َيدينا أ َنعاما فهم لها مالكون‬ َ ُ ِ َ َ َ ْ ُ َ ً َ ْ َ ِ ْ ْ َِ َ ّ ِ ْ ُ َ َْ ََ ّ ْ َ َ ْ ََ“Have they not seen that, among the things made by Our own hands, We have createdcattle for them, and thus they acquired the right of property over them?” - 36:71All these verses throw ample light on the fundamental point that “wealth”, no matter whatits form, is in principle “the property” of Allah, and it is He who has bestowed upon man theright to exploit it. So, Allah has the right to demand that man should subordinate hisexploitation of this wealth to the commandments of Allah.Thus man has the “right of property” over the things he exploits, but this right is notabsolute or arbitrary or boundless– it carries along with it certain limitations and restrictionswhich have been imposed by the real owner of the “wealth”. We must spend it where Hehas commanded it to be spent, and refrain from spending where He has forbidden. Thispoint has been elucidated more explicitly in the following verse: ‫وابتغ فيما آتاك الله الدار الخرة ول تنس نصيبك مِن الدنيا وأ َحسن كما أ َحسن الله‬ُ ّ َ َ ْ َ َ ِ ْ َ َّْ َ َ َ ِ َ َ َ َ َ َ َ ِ ْ َ ّ ُ ّ َ َ َ ِ ِ َْ َ ‫إ ِليك ول تبغ الفساد في ال َرض‬ ِ ْ ْ ِ َ َ َ ْ ِ َْ َ َ َ َْ
  7. 7. “Seek the other world by means of what Allah has bestowed upon you, and do not benegligent about your share in this world. And do good as Allah has done good by you, anddo not seek to spread disorder on the earth.” - 28:77This verse fully explains the Islamic point of view on the question of property. It places thefollowing guidelines before us:-(1) Whatever wealth man does possess has been received from Allah- “Allah has bestowedupon you” ( ‫.)اتاک اللہ‬(2) Man has to use it in such a way that his ultimate purpose should be the other world-“seek the other world” ( ‫.)و ابتغ فی ما اتاک اللہ الدار الخرۃ‬(3) Since wealth has been received from Allah, its exploitation by man must necessarily besubject to the commandment of Allah.(4) Now the Divine Commandment has taken two forms:a. Allah may command man to convey a specified portion of “wealth” to another. ThisCommandment must be obeyed, because Allah has done good by you, so He may commandyou to do good by another– “do good as Allah has done good by you” ( ‫و احسن اللہ‬‫.)الیک‬b. He may forbid you to use this “wealth” in a specified way. He has every right to do so,because He cannot allow you to use “wealth” in a way which is likely to produce collectiveills or to spread disorder on the earth– “do not seek to spread disorder on the earth” (‫.)و ل تبغ الفساد فی الرض‬This is what distinguishes the Islamic point of view on the question of property from theCapitalist and Socialist points of view. Since the mental background of Capitalism is,theoretically or practically, materialistic, it gives man the unconditional and absolute right ofproperty over his wealth, and allows him to employ it as he likes. But the Holy Qur’an hasadopted an attitude of disapprobation towards this theory of property, in quoting the wordsof the nation of Hazrat Shu’aib (‫ .)علیہ السلم‬They used to say: ۖ‫أ َصلوتك تأمرك أن نترك ما يعۡ ءاباؤنا أ َوۡأن نفعَ َل فى أ َموٲلنا مانشـٰ ٓؤا‬ ْ ُ َ َ َ َ ِ َۡ ِٓ ۡ ّ َ َٓ ُ ‫َ َ ٰ ُ َ َ ۡ ُ ُ َ َ ّ ۡ ُ َ َ َ ب َ ُ َٓ د‬ ُ“Does your way of prayer command you that we should forsake what our forefathersworshipped, or leave off doing what we like with our own property?” - 11:87These people used to consider their property as really theirs (“our property”- ‫ ,)اموالنا‬andhence the claim of “doing what we like” ( ‫ )نفعل ما نشاء‬was the necessary conclusion oftheir position. But the Holy Qur’an has, in the chapter “Light” ( ‫ ,)سورة النور‬substituted ّ ُ َۡ ُthe term ‫“( مال اللہ‬the property of Allah”) for the expression ‫“( اموالنا‬our possessions”),and has thus struck a blow at the very root of the Capitalistic way of thinking. But, at thesame time, by adding the qualification ‫“( الذی اتاکم‬what Allah has bestowed upon you”), it
  8. 8. has cut the roots of Socialism as well, which starts by denying man’s right to privateproperty. Similarly,‫“( فھم لما مالکون‬thus they acquired the right of property overthem”– a verse in the chapter “Ya Seen”, ‫ )یس‬explicitly affirms the right to privateproperty as a gift from Allah.Now we are in a position to draw clear boundary lines that separate Islam, Capitalism, andSocialism from one another: –Capitalism affirms an absolute and unconditional right to private property.Socialism totally denies the right to private property.But the truth lies between these two extremes– that is: Islam admits the right to privateproperty but does not consider it to be an absolute and unconditional right which is bound tocause “disorder on the earth” ( ‫.)فساد الرض‬
  9. 9. The Objects of the Distribution of Wealth According to IslamIf we consider the injunctions of the Holy Qur’an, it would appear that the system for thedistribution of wealth laid down by Islam (a sketch of which will be presented later on)envisages three objects:–(a) The establishment of a practical system of economyThe first object of the distribution of wealth is that it would be the means of establishing inthe world a system of economy which is natural and practicable, and which, without usingany compulsion or force, allows every individual to function in a normal way according to hisability, his aptitude, his own choice and liking, so that his activities may be more fruitful,healthy and useful. And this cannot be secured without a healthy relationship between theemployer and the employee, and without the proper utilization [1] of the natural force ofsupply and demand. That is why Islam does admit these factors. A comprehensiveindication of this principle is to be found in the following verse: – ۬‫نحن قسمنا بيۡہم معيشتہمۡفى ٱلحيوة ٱلدنۡاۚورفعنا بعضہمۡفوق بعض۬درجـت‬ ٍ َٰ َ َ ٍ ۡ َ َ ۡ َ ُ َ ۡ َ ۡ َ َ َ ‌‫ََۡ ٰ ِ ّي‬ َ َ ِ ُ ََ ِ ّ ُ ‫َ ۡ ُ َ َ ۡ َن‬ َ َ ‫ليتخذ بعضہم بعضا سخريا‬ ّ ِ ۡ ُ ً۬ ۡ َ ُ ُ ۡ َ َ ِ ّ َ ّWe have distributed their livelihood among them in worldly life, and have raised someabove others in the matter of social degrees, so that some of them may utilize the servicesof others in their work. - 43:32(b) Enabling everyone to get what is rightfully due to himThe second object of the Islamic system of the distribution of wealth is to enable everyoneto get what is rightfully his. But, in Islam, the conception and the criterion of this right issomewhat different from what it is in other systems of economy. Under materialisticeconomic systems, there is only one way of acquiring the right to wealth, and that is adirect participation in the process of production. In other words, only those factors that havetaken a direct part in producing wealth are supposed to be entitled to a share in wealth, andno one else. On the contrary, the basic principle of Islam in this respect is that wealth is inprinciple the property of Allah Himself and He alone can lay down the rules as to how it is tobe used. So, according to the Islamic point of view, not only those who have directlyparticipated in the production of wealth but those too whom Allah has made it obligatoryupon others to help, are the legitimate sharers in wealth. Hence, the poor, helpless, theneedy, the paupers, and the destitute– they too have a right to wealth. For, Allah has madeit obligatory on all those producers of wealth among whom wealth is in the first placedistributed that they should pass on to them some part of their wealth.And the Holy Qur’an makes it quite explicit that in doing so they would not be obliging thepoor and the needy in any way, but only discharging their obligation, for the poor and theneedy are entitled to a share in wealth as a matter of right. Says the Holy Qur’an:
  10. 10. ۬‫وٱلذي َن فى أ َموٲلهمۡحق۬معلوم‬ ٌ ۡ ّ ّ َ ُ ِ ِ َۡ ِٓ ِ ّ َ ‫للسٓــــٓٮل وٱلمحروم‬ ِ ُ ۡ َ ۡ َ ِ ِ ٕ ٓ ٓ‫ّ ٓا‬ ّ[1] The condition of ―proper utilization‖ has been postulated because it is possible to makean improper use of the forces, and it has been the case under Capitalism. Islâm has struckat the very root of such an improper use, and has thus eradicated the unbridledexploitation of private property.In their wealth there is a known right for those who ask for it and thosewho have need for it. - 70:24-25In certain verses, this right has been defined as the right of Allah. Forexample, this verse in connection with harvests: ِ ِ َ َ َ ْ َ ُ ّ َ ْ ُ َ ‫وآتوا حقه يوم حصاده‬And pay what is rightfully due to Him on the day of harvesting. - 6:141The word ―right‖ in these two verses makes it clear that participation inthe process of production is not the only source of the right to wealth,and that the needy and the poor have as good a right to wealth as doesits primary owners. Thus Islam proposes to distribute wealth in such amanner that all those who have taken a part in production should receivethe reward for their contribution to the production of wealth, and then allthose too should receive their share whom Allah has given a right towealth (These two groups of sharers will be discussed in greater detaillater on).(c) Eradicating the concentration of wealthThe third object of the distribution of wealth, which Islam considers to bevery important, is that wealth, instead of becoming concentrated in afew hands, should be allowed to circulate in the society as widely aspossible, so that the distinction between the rich and the poor should benarrowed down as far as is natural and practicable. The attitude of Islamin this respect is that it has not permitted any individual or group to havea monopoly over the primary sources of wealth, but has given everymember of the society an equal right to derive benefit from them. Mines,forests, un-owned barren lands, hunting and fishing, wild grass, rivers,seas, spoils of war, etc., all these are primary sources of wealth. Withrespect to them, every individual is entitled to make use of themaccording to his abilities and his labor without anyone being allowed tohave any kind of monopoly over them. ‫كي ل يكون دولة بين ال َغنياء منكم‬ ْ ُ ِ َِْ ْ َ َْ ً َ ُ َ ُ َ َ ْ َSo that this wealth should not become confined only to the rich amongstyou. [2] - 59:7
  11. 11. Beyond this, wherever human intervention is needed for the productionof wealth and a man produces some kind of wealth by deploying hisresources and labor, Islam gives due consideration to the resources andlabor thus deployed, and recognizes that man‘s right of property in thewealth produced. Everyone shall get his share according to the labor andresources invested by him. Says the Holy Qur’an:[2] It should be kept in mind that this verse initially concerns the spoils of war which areone of the primary sources of wealth.َ‫نحن قسمنا بينهم معيشتهم في الحياة الدّنيا ورفعنا بعضهم فوق‬ ْ َ ْ ُ َ ْ َ َْ َ َ َ َْ ِ ََ ْ ِ ْ ُ ََ ِ ّ ُ ََْ َْ َ َ ُ ْ َ ‫بعض درجات ليتخذ بعضهم بعْضا سخريا‬ ِّ ْ ُ ً َ ُ ُ ْ َ َ ِ َِّ ٍ َ َ َ ٍ ْ َWe have distributed their livelihood among them in worldly life, and haveraised some above others in the matter of social degrees, so that some of themmay utilize the services of others in their work. - 43:32But in spite of this difference among social degrees or ranks certaininjunctions have been laid down in order to keep this distinction withinsuch limits as are necessary for the establishment of a practicablesystem of economy, so that wealth should not become concentrated in afew hands.Of these three objects of the distribution of wealth, the first distinguishesIslamic economy from Socialism, the third from Capitalism, and thesecond from both at the same time. (This point will be discussed in detaillater on.)Having indicated these basic principles of Islamic economy, we wouldnow proceed to a brief exposition of the system of the distribution ofwealth which one can derive from the Qur’an, the Sunnah, and theelucidations of the Muslim jurists (Fuqaha).The Capitalist View of the Distribution of WealthIn order to understand the Islamic point of view fully, it would be betterto have a look at the system of the distribution of wealth that is obtainedunder the Capitalist economy. This theory can be briefly stated like this –wealth should be distributed only over those who have taken a part inproducing it, and who are described in the terminology of economics asthe factors of production. According to the Capitalistic economics, thesefactors are four: -1- Capital– which has been defined as ―the produced means ofproduction‖ (that is to say, a commodity which has already undergone
  12. 12. one process of human production, and is again being used as a means ofanother process of production).2- Labor– that is to say, any exertion on the part of man.3- Land– which has been defined as ―natural resources‖ (that is to say,those things which are being used as means of production withouthaving previously undergone any process of human production).4- Entrepreneur or Organization– the fourth factor which brings togetherthe other three factors, exploits them and bears the risks of profit andloss in production.Under the Capitalist economy, the wealth produced by the cooperation ofthese four factors is distributed over these very four factors like this: oneshare is given to capital in the shape of interest, the second share tolabor in the shape of wages, the third share to land in the shape of rent(or revenue), and the fourth share (or the residue) is reserved for theentrepreneur in the shape of profit.The Socialist View of the Distribution of WealthUnder the Socialist economy, on the other hand, capital and land,instead of being private property, are considered to be national orcollective property. So, the question of interest or rent (or revenue) doesnot arise at all under the philosophy of this system. [3]Under the Socialist system, the entrepreneur too is not an individual butthe state itself. So, profit as well is out of the question here – at least intheory. Now, there remains only one factor– namely, labor. And laboralone is considered to have a right to wealth under the Socialist system,which it gets in the shape of ―wages.The Islamic View of the Distribution of WealthThe Islamic system of the distribution of wealth is different from both.From the Islamic point of view, there are two kinds of people who have aright to wealth: (1) Those who have a primary right – that is to say,those who have a right to wealth directly in consequence of aparticipation in the process of production. In other words, it is those very―factors of production‖ which have taken a part in the process ofproducing some kind of wealth. (2) Those who have a secondary right –that is to say, those who have not taken a direct part in the process ofproduction, but it has been enjoined upon the producers to make themco-sharers in their wealth. We shall discuss in some detail these twogroups of people who have a right to wealth.
  13. 13. [3] Let it be made clear that we are here concerned with the basic philosophy, or theory, ofSocialism, and not with its present practice, for the actual practice in Socialist countries isquite different from this theory.Those who have a Primary Right to WealthAs indicated above the primary right to wealth is enjoyed by ―thefactors of production‖. But ―the factors of production‖ are not specifiedor technically defined, nor is their share in wealth determined in exactlythe same way as is done under the Capitalist system of economy. Infact, the two ways are quite distinct. From the Islamic point of view, theactual factors are three, instead of being four: -1- Capital- that is, those means of production which cannot be used inthe process of production until and unless during this process they areeither wholly consumed or completely altered in form, and which,therefore, cannot be let or leased (for example, liquid money or foodstuffs etc.).2- Land- that is, those means of production which are so used in theprocess of production that their original and external form remainsunaltered, and which can hence be let or leased (for example, lands,houses, machines etc.).3- Labor- that is, human exertion, whether of the bodily organs or of themind or of the heart. This exertion thus includes organization andplanning too. Whatever ―wealth‖ is produced by the combined action ofthese three factors would be primarily distributed over these three in this
  14. 14. manner: one share of it would go to capital in the form of profit (and notin the form of interest); the second share would go to land in the form ofrent, and the third share would be given to labor in the form of wages.Socialism and IslamAs we have said, the Islamic system of the distribution of wealth isdifferent from Socialism and Capitalism both. The distinction between theIslamic economy and the Socialist economy is quite clear. SinceSocialism does not admit the idea of private property, wealth under theSocialist system is distributed only in the form of wages. On thecontrary, according to the Islamic principles of the distribution of wealthwhich we have outlined above, all the things that exist in the universeare the property of Allah Himself. Then, the larger part of these things isthat which He has given equally to all men as a common trust. Itincludes fire, water, earth, air, light, wild grass, hunting, fishing, mines,un-owned and un-cultivated lands etc., which are not the property of anyindividual, but a common trust. Every human being is the beneficiary ofthis trust, and is equally entitled to its use.On the other hand, there are certain things where the right to privateproperty must be recognized if only for the simple reason that withoutsuch a recognition it would not bepossible to establish the practicable and natural system of economy towhich we have alluded while discussing the first object of the distributionof wealth. If the Socialist system is adopted and all capital and all landare totally surrendered to the state, the ultimate result can only be this-we would be liquidating a large number of smaller Capitalists, andputting the huge resources of national wealth at the disposal of a singlebig Capitalist- the State- which can deal with this reservoir of wealthquite arbitrarily. Socialism, thus, leads to the worst form of theconcentration of wealth. Moreover, it produces another great evil. SinceSocialism deprives human labor of its natural right to individual choiceand control, compulsion and force becomes indispensable in order tomake use of this labor, which has a detrimental effect on its efficiency aswell as on its mental health. All this goes to show that the Socialistsystem injures two out of the three objects of the Islamic theory of thedistribution of wealth- namely, the establishment of a natural system ofeconomy, and securing for everyone what rightfully belongs to him.These being the manifold evils inherent in the unnatural system of theSocialist economy, Islam has not chosen to put an end to privateproperty altogether, but has rather recognized the right to privateproperty in those things of the physical universe which are not held as acommon trust. Islam has, thus, given a separate status to Capital and toLand, and has at the same time made use of the natural law of ―supplyand demand‖ too in healthy form. Hence, Islam does not distributewealth merely in the form of wages, as does Socialism, but in the formof profit and rent as well. But, along with it, Islam has also put aninterdiction on the category of ―interest‖, and prescribed a long list ofthe people who have a secondary right to wealth. It has thus eradicatedthe great evil of the concentration of wealth which is an essentialcharacteristic inherent in Capitalism, an evil which Socialism claims toremedy.
  15. 15. Islam and CapitalismThis is the fundamental distinction of the Islamic view of the distributionof wealth which sets it apart from Socialism. It is equally essential tounderstand fully the difference that exists between the Islamic view ofthe distribution of wealth and the Capitalist point of view. This distinctionbeing rather subtle and complicated, we will have to discuss it in greaterdetail.By comparing and contrasting the brief outlines of the Islamic and theCapitalist systems of the distribution of wealth, we arrive at the followingdifferences between the two: -(1) The entrepreneur, as a regular factor, has been excluded from thelist of the factors of production, and only three factors have beenrecognized instead of four. But this does not imply that the veryexistence of the entrepreneur has been denied. What it does mean isjust this- the entrepreneur is not an independent factor, but is includedin any one of the three factors.(2) It is not interest but profit which has been considered as the rewardfor Capital.(3) The factors of production have been defined in a different manner.Capitalism defines capital as the produced means of production. Hence,capital is supposed to include machinery etc. as well, beside money andfood stuffs. But the definition of capital that we have presented whilediscussing the Islamic view of the distribution of wealth, includes onlythose things which cannot be utilized without their being whollyconsumed, or, in other words, which cannot be let or leased- forexample, money. Machinery is to be excluded from “capital”, accordingto this definition.(4) In the same way, “land” has been defined in a more general way.That is to say, all those things have been brought under this head whichdo not have to be wholly consumed in order to be used. Hence,machinery too falls under this category.(5) The definition of “labor” too has been generalized so as to includemental labor and planning.Let us now go into the details of this discussion. Under the Capitalistsystem, the most important characteristic of the entrepreneur (whichentitles him to profit) is supposed to be that he bears the risk of profitand loss in his business. That is to say, from the Capitalist point of view,―profit‖ is a kind of reward for his courage to enter into a commercialventure where he alone will have to bear the burden of a possible loss,while the other three factors of production will remain immune from loss,for Capital would get the stipulated interest, Land the stipulated rent,and Labor the stipulated wages.On the other hand, the Islamic point of view insists that the ability totake the risk of a loss should, in reality, inhere with capital itself, and
  16. 16. that no other factor should be made to bear the burden of this risk- inother words, the man who wants to invest his money in a certainbusiness venture must take this risk. Consequently, the Capitalist, in sofar as he takes the risk, is an entrepreneur too, and the man who is anentrepreneur is a Capitalist as well.Now, there are three ways in which capital can be invested in a businessventure: -(1) Private business: the man who invests capital may himself run thebusiness without the help of any partners or shareholders. In this case,the return which he gets may be called profit from the legal or popularpoint of view; but in economic terms, this reward would be made up of(1) “profit”, in as much as capital has been invested, and (2) “wages”, asearnings of management.(2) Partnership (‫شرکت‬ ): The second form of investment is that severalpersons may jointly invest capital, jointly manage the business, andjointly bear the risk of profit and loss. In the terminology of the Fiqh,such a venture is called “Shirkat-ul-‘Uqood” ( ‫ )شرکت العقود‬or“Partnership in contract”.According to the terminology of economics, in this case too all thepartners will be entitled to “profit” in so far as they have invested capital,and also entitled to “wages” in so far as they have taken part in themanagement of the business. Islam has sanctioned this form of businessorganization too. This form was common before the time of the HolyProphet ‫ .ﷺ‬He permitted people to retain it, and since then there hasbeen a consensus of opinion on its permissibility. [1](3) Cooperation of Capital and Organization ( ‫مضاربت‬ ): The third formof investment is that one person may invest Capital while another maymanage the business, and each may have a share of the profit. In theterminology of the Fiqh, it is called “Mudarabat” ( ‫مضاربت‬ ). Accordingto the terminology of economics, in this case, the person who invests hiscapital (“Rabb-ul-Mal”- ‫رب المال‬ ) will get his share in the form of“profit”, while the person who has actually managed the business will getit in the form of “wages”. But if the person who has been managing thebusiness (“Mudarib”- ‫مضارب‬ ) eventually suffers a loss in the business,his labor will have gone to waste just as the capital of the investor hasgone to waste.This form of business organization too is permissible in Islam. The HolyProphet ‫ ﷺ‬himself had made such an agreement with Hazrat Khadijah (‫ )رضی اللہ عنھا‬before their marriage. [2] Since then there has been acomplete consensus of opinion on this too among the jurists of Islam. [3]
  17. 17. Beyond these three forms, Islâm does not allow any other way ofinvesting capital in a business.[1] ‫المبسوط للسرخسي ص ۱۵۱ ج ۱۱ مطبع السعادۃ، مصر‬[2] ‫)زرقانی شرح المواھب ص ۸۹۱، ج ا )الزھریۃ، مصر‬[3] ‫المبسوط للسرخسي ص ۸۱ ج ۲۳ مطبع السعادۃ، مصر‬Money Lending BusinessThe fourth form of investing Capital which has since ever been practicedin non-Islamic societies is the money lending business. That is to say,one person lends out capital in the form of a debt, and a second personputs in his labor; if there is a loss, it has to be borne by labor, but, profitor loss, interest does accrue to capital in any case. Islam has interdictedthis form of investment. ‫يا أ َيها الذين آمنوا اتقوا الله وذروا ما بقي من الربا إن كنتم‬ ُ ُ ِ َّ َ ِ َ ِ َ َ ْ ُ َ َ َ ّ ْ ُ ّ ْ َُ َ ِ ّ َ ّ َ َ ِِ ْ ّ ‫مؤمنين‬ ِ ِ ُ َ َ ِ ّ ‫فإن لم تفعلوا فأذنوا بحرب منَ الله ورسوله‬ ّ ٍ ْ َ ِ ْ َُ َْ ْ َُ ْ َ ْ ّ َِ“O, believers, fear your Allah, and give up what is still due to you fromthe interest (usury), if you are true believers. But if you do not do so,then take notice that Allah and His Messenger shall war with you.” -2:278-9The Holy Qur’an also says: ‫وإن تبتم فلكُم رؤوس أ َموالكُم ل َ تظلمون ول َ تظلمون‬ َ ُ َْ ُ َ َ ُ ِْ َ ْ ِ َ ْ ُ ُ ُ ْ ََ ْ ُُْ َِ“Yet if you repent (of usury) you shall have your principal. Do not beunjust to any one, nor should anyone be unjust to you.” - 2:279In these two verses, the phrases “what is still due to you from theinterest” and “you shall have the principal” make it quite explicit thatAllah does not condone the least quantity of interest that “giving up theinterest” implies that the creditor should get back only the principal.Thus, one can clearly see that Islam considers every rate of interest(except zero %) to be totally inadmissible.In the pre-Islamic period, certain Arab tribes used to carry on their tradewith the help of money borrowed on the basis of interest from othertribes. Islam put an end to such transactions altogether. Ibn Juraij ( ‫ابن‬‫ )جریج‬says:
  18. 18. ‫کانت بنو عمرو بن عوف یاخذون الربا من بنی المغیرۃ فجاء‬ ‫السلم و لھم علیھم مال کثیر و کانت بنوا المغیرۃ یربون لھم‬ ‫فی الجاھلیۃ‬“In the pre-Islamic period, the tribe of Banu Amr bin Auf used to takeinterest from the tribe of Banu-al-Mughira, and the Banu-al-Mughiraused to pay this interest. When Islam came, the latter owed aconsiderable amount of money to the former.” [4]And further on: ‫کان بنو المغیرۃ یربون لثقیف‬“The Banu-al-Mughira used to pay interest to the Banu Thaqif.”[4]۱ ‫تفسیر الدر المنثور بحوالۃ ابن جریر، ص ۱۹۳، ج‬Let it be understood that the position of every Arab tribe was like that ofa joint company, carrying on trade with the joint Capital of its individualmembers. So, when a tribe would borrow collectively from another tribe,it would usually be for the purposes of trade. The Holy Qur’an prohibitedeven this practice.Thus, under the Islamic system of economy, if a man wants to lend hismoney to a businessman for being invested in business, he will have firstto decide clearly whether he wishes to lend this money in order to have ashare in the profit, or simply to help the businessman with his money. Ifhe means to earn the right to a share in the profit by lending his money,he will have to adopt the mode of “partnership” ( ‫ )شرکت‬or that of“cooperation” ( ‫مضاربت‬ ). That is to say, he too will have to bear theresponsibility of profit or loss- if there is eventually a profit in theenterprise, he shall have a share in the profit; but if there is a loss, heshall have to share the loss too.On the other hand, if he is lending this money to another person by wayof help, then he must necessarily regard this help as no more than help,and must forgo all demand for a “profit”. He will be entitled to get backonly as much money as he has lent out. Islam considers it not onlyunjust but also meaningless that he should fix a rate of “interest” andthus place all the burden of a possible loss on the debtor.This discussion makes it clear that Islam places the responsibility of“taking the risk of loss” on Capital. The man who invests capital in a risk-bearing business enterprise shall have to take this risk. [5] Thus while,according to most economists, the essential characteristic of an“entrepreneur” is that he takes a risk, Islam considers it to be inprinciple the characteristic of “Capital”. Thus, under the Islamic system
  19. 19. of economy, Capital and Entrepreneur become one and the same, andtheir share in the distribution of wealth is profit, not interest.But if one were to regard (as some economists do) the essentialcharacteristic of an entrepreneur to be management and planning, thenthis activity falls under the head of “labor” and to consider it as aseparate factor is unnecessary elaboration.[5] If a man invests capital borrowed on the basis of “debt without interest” (‫)قرض حسنۃ‬and has not made any agreement with the creditor (‫ )دائن‬for a "partnership" (‫ )شرکت‬or"cooperation" (‫ ,)مضاربت‬the debtor (‫ )مدیون‬himself becomes the owner of this capital afterhaving borrowed it, and now he invests it in the capacity of a Capitalist. So, he himselfshall have to bear the responsibility of loss.The Difference between Rent and InterestThe foregoing discussion has sufficiently established the fact that Islamconsiders “profit” and ―wages‖ to be lawful and “interest” to be unlawful.Now we are left with the fourth item - namely “rent”. Islam considers thistoo as lawful. But there arises a question in the minds of some men onthis point- when taking or giving interest on capital is unlawful becauseof there being a fixed rate, why should rent on land (which includesmachinery, according to our terminology) be lawful, rent also beingsomething fixed?In order to answer this question, one should first understand thatimportant distinction. The material resources employed in economicoperations are of two kinds. On the one hand are those goods which, inorder to be utilized and exploited, do not have to be wholly consumedbut may retain their form as such while being utilized - e.g., land,machines, furniture, carriages, etc., which can be utilized withoutimpairing their identity. Since such commodities are exploitable inthemselves, and the modes of utilizing them are such that the personwho takes them on rent does not have to exert himself in the least, whiletheir constant use depreciates them in value, so taking or giving
  20. 20. ―wages‖ for the utility yield is quite just and reasonable. It is to these“wages for the utilities provided” that Islam gives the name of “rent”.On the other hand, money is a commodity which has to be whollyconsumed in order to be utilized. One cannot derive any benefit from ituntil one has bought something for this money. So, money is notutilizable in itself. Hence, on the one hand, no matter what the benefitwhich the debtor wishes to derive from it, he has to spend the moneyand then to put in his own labor in order to derive that benefit; on theother hand, the value of money does not suffer on account of being usedby him. That is why it would be unreasonable to impose a fixed rate ofinterest on this money. The owner of the money has the free choiceeither not to lend his money at all or to enter into a “partnership” (‫)شرکت‬or “cooperation” (‫ )مضاربت‬with the person who needs the money. But if helends the money in the form of a debt, Islam cannot allow him to chargean interest on it according to a fixed rate.It is on this basis that we have defined our terms like this - the thingswhich are not utilizable in themselves without being wholly consumedwould be called “capital”; when they enter into a commercial enterpriseas a factor of production, they would be entitled to profit; the thingswhich are utilizable even without being wholly consumed would be called“land”, and on account of having participated in the process ofproduction they would receive some part of the wealth in the form ofrent.The Prohibition of Interest and its Effect on theDistribution of WealthAs the foregoing discussion has made clear, one of the basic differencesbetween the Islamic system and the Capitalist system with regard to thedistribution of wealth is thatCapitalism allows interest, while Islam forbids it. Now, it would be properto have a cursory glance at another aspect of the problem too - what arethe consequences that follow from the interdiction placed upon interest?In fact, the prohibition of interest has very far-reaching, beneficial, andprofound effects on the whole system of the production of wealth itself.
  21. 21. But this discussion would lead us far beyond the subject of this article.So, for the moment, we shall only summarily indicate the effects whichIslamic injunctions do have on the system of the distribution of wealth. Avery simple consequence of the prohibition of interest is that it producesa balance and uniformity in the distribution of wealth. The necessarycharacteristic of the economy based on interest is that the profit of oneof the parties (i.e., Capital) is assured in a fixed form under allcircumstances, but, contrarily, the profit of the other party (i.e. Labor)remains uncertain and doubtful. Big commercial enterprises, no matterhow profitable they become, can never be considered immune from risk.In fact, while the “risks” of big business have been decreased becausethe means of production are available in an adequate measure, theyhave at the same time been increased by certain external factors. Thebigger is the enterprise, the greater these risks are. So, under theCapitalist economy, the balance of the distribution of wealth becomesvery unsteady. Sometimes the debtor has to bear severe loss, while thecreditor goes on minting money. Sometimes, on the other hand, theentrepreneur earns a huge profit, while the man who has provided thecapital gets only an insignificant share from it.Contrary to it, since Islam prohibits interest, it would in practice allowonly two forms of investing capital in the modern world- “Partnership” (‫ )شرکت‬and "Cooperation" (‫ .)مضاربت‬Both these forms are completelyfree from this injustice and imbalance in the distribution of wealth. Underthese two forms of investment, if there is a loss, it has to be borne byboth the parties, and if there is a profit, both have a proportionate sharein it. This mode of investment to a great extent serves as an effectivecheck on the concentration of wealth, which is the greatest evil of theCapitalist economy. Wealth, instead of becoming accumulated in thehands of a few, is so distributed over a very large number of individualsin the society that no injustice is done to anyone. Under the Capitalistsystem, economy being based on interest, Capitalists come not only toown the greater part of national wealth, but also to control the wholemarket and to run it in their own selfish interest. As a result of this, thesystem of “the supply of commodities” and that of “prices” can no longerfunction in a natural manner, but becomes artificial in so nefarious a waythat no sphere of life, from economy, manners and morals to politics,can escape its evil influences.By prohibiting interest, Islam has struck at the very root of these evils.Under the Islamic system, everyone who invests his money has a sharein the enterprise and its policy, bears the responsibility of profit and lossboth, and thus he is no longer allowed to have his own way in business.A Doubt and its ClarificationIt is necessary to clarify a doubt that may arise here. In discussing theevils of the economy based on interest, we have said that it produces animbalance in the distribution of wealth, and that one of the two parties ina business enterprise is necessarily affected by it. Some people are quitelikely to raise the objection that the man who suffers a loss in atransaction based on interest, suffers it through his own choice - if he
  22. 22. deliberately exposes himself to such risk, why should the law of theShari‘ah interfere with his right to do so?Even a little reflection would easily solve this problem. A slightacquaintance with the Islamic way of life should be sufficient to bring outthe principle that, according to Islam, the mutual consent of two partiesdoes not always justify a certain transaction. If a man is willing to getmurdered by another man, this fact would not absolve the murderer ofhis crime. Even in the case of fornication, which the West in itsshortsightedness considers to be a private affair of the individual, mutualconsent of the two parties cannot absolve the criminals. The question ofthe distribution of wealth and economic welfare goes much beyond this.We have already explained, with due quotations from the Holy Qur’an,that wealth is in principle the property of Allah Himself, and that theownership He has bestowed upon man is, far from being unconditionaland unbridled, subject to certain principles laid down by Allah Himself.That is the reason Islam does not allow the mutual consent of the partiesconcerned to be treated as a justification for a transaction which Islamregards as intrinsically unjust or which can prove to be detrimental tothe collective welfare of society. This is the raison d’être behind thestrong prohibition, in the tradition of the Holy Prophet ‫ ,ﷺ‬of ‫تلقی‬‫( الجلب‬buying grain from the caravans coming from the country-sidebefore they reach a town), of ‫( بیع الحاضر للباد‬buying goods broughtfrom the country-side through a middle man in the days of famine), of‫(محاقلۃ‬exchanging grain that is yet in the ears for grain that hasalready been harvested), of ‫( مزابنۃ‬exchanging fruits on a tree forplucked fruits), and of ‫( مخابرۃ‬taking a fixed amount of grain from theharvest of a land given on lease), in spite of their being based on themutual agreement of the parties involved. Hence, the mere fact that theparties involved have agreed upon it, cannot serve as a valid justificationfor a transaction based on interest.In the early days of Islam, the objection which people bred in the pre-Islamic ways generally raised against the prohibition of interest was this: ‫إ ِنما البيع مثل الربا‬ َّ ُ ِْ ُ َْْ َ ّTrade is exactly like interest. - 2:275The Holy Qur’an refutes this argument in a concise phrase: ‫وأ َحل الله البيع وحرم الربا‬ َّ َ ّ َ َ َ َْْ ُ ّ ّ َ َAnd Allah has permitted trade, and forbidden interest. - 2:275It is worth noticing here that, in refuting this objection, Allah the Exaltedhas not enunciated any principle or purpose of the prohibition of interest,but has, so to say, simply indicated that since Allah has declared trade
  23. 23. lawful and interest unlawful, one shall have to abide by thiscommandment, whether one understands its raison d’être or not.Instead of elucidating the justifying principles in this place, the HolyQur’an has adopted the mode of authority, which cuts off the very rootof all objections to the prohibition of interest.In short, the prohibition of interest by Islam is the wisest solution of theproblem which, on the one hand, eliminates many evils of the Capitalisteconomy, and, on the other, leaves no need for the adoption of thetyrannical and unnatural economic system of Socialism. This is themiddle way which alone can save the modern world from the twoextremes of license and servitude, and lead it towards a balanced andequitable economic system. The French orientalist Louis Massignon hassaid something very pertinent on this point: -“In the conflict between Capitalism and Socialism, only that culture canbe assured of a secure and bright future which not only prohibits interestbut also makes people abide by this prohibition.” [1]
  24. 24. [1] ‫ڈاکٹر یوسف الدین ، اسلم کے معاشی نظرے ، ص ۸۲۴ ، ج ۲ بحوالہ ڈاکٹر حمید اللہ انجمن ھائے قرضہ حسنہ کی اھمیت‬The Problem of WagesSo far we have been able to establish one basic distinction betweenIslam and Capitalism with regards to the distribution of wealth - and thisdistinction is related to the subject of interest. Now, there is anotherdistinction between the two which one must bear in mind, and whichconcerns the relationship between the employer and the employee. Thiswould necessitate a discussion of the problem of wages.The violent reaction against the Capitalist system in the present age islargely an outcome of the conflicts between employers and employeesand of the problems arising from the fixation of wages. Since theCapitalist economy is based on the principle of selfish and unqualifiedprivate ownership, the relationship of “Supply and Demand” between theemployer and the employee is only a mechanical, harsh, and formalrelationship which rests on undiluted self-interest. The employer respectsthe humanity of the employee (laborer) only so far as he is obliged to doso in the interest of his own business. As soon as he no longer feels thisobligation, he readily adopts oppressive measures. On the other hand,the employee is interested in the work of the employer and prepared tocarry out his orders only so long as his livelihood depends on theemployer. The moment this dependence is over, he will unscrupulouslyshirk his work and even go on strike. This results in a perpetual strugglebetween the Laborer and the Capitalist, making it impossible for ahealthy rapport to emerge between the two.On the contrary, although Islam does admit the principle of supply anddemand as affecting, to a certain extent, the relationship between theemployer and employee, yet it has at the same time imposed certainrestrictions on the supply as well as the demand of labor in such amanner that their business relationship no longer remains merelymechanical, but becomes almost fraternal. As to what should the attitudeof the employer be towards the employee, the Holy Qur’an has made itquite explicit in a short but comprehensive phrase, while citing the wordsof Hazrat Shu‘aib (‫ .)علیہ السلم‬Hazrat Shu‘aib (‫ )علیہ السلم‬stood in theposition of the employer for Hazrat Musa (‫ )علیہ السلم‬and said: ‫وما أ ُريد أ َن أ َشق عليك ستجدني إن شاء الله من الصالحي‬ ِ ِ ّ َ ِ ُ ّ َ ِ ُِ ِ ََ َ ََْ ّ ُ ْ ُ ِ َ َI do not desire to lay (an undue) burden of labor on you. If Allah wills,you will certainly find me to be one of the righteous. - 28:27
  25. 25. This verse makes it quite clear that an employer who is a Muslim andwhose ultimate goal in life is hence to become “righteous”, cannot be“righteous” until and unless he has the desire to protect his employeefrom the burden of unnecessary labor. The Holy Prophet ‫ ﷺ‬haselucidated this point further in explicit terms: ‫ان اخوانکم خولکم جعلھم اللہ تحت ایدیکم فمن کان اخوہ‬‫تحت یدہ فلیطعمہ مما یاکل و لیلبسہ مما یلبس و ل تکلفوھم ما‬ ‫یغلبھم فان کلفتموھم ما یغلبھم فاعینوھم‬"Your brethren are your servants whom Allah has made yoursubordinate. So, the man who has his brother as his subordinate shouldgive him to eat from what he himself eats, and to wear what he himselfwears. And do not put on them the burden of any labor which mayexhaust them. And if you have to put any such burden on them, thenhelp them yourselves (in this work)." [1][1] ‫صحیح البخاری ، کتاب العتق‬Another tradition says: ‫أعطوا اللجیر اجرہ قبل ان یجف عرقہ‬ [2]“Pay his wages to the worker before his sweat gets dried.”The Holy Prophet ‫ ﷺ‬also said that there are three people who will findhim on the Day of Judgment as their enemy. One of these three is: ‫رجل استاجر اجیرا فاستوفی منہ و لم یعطہ اجرہ‬ ً“The man who employs a worker on wages, then takes the full measureof work from him, but does not pay him his wages.” [3]How solicitous the Holy Prophet ‫ ﷺ‬was about the rights of the laborercan be gauged from a tradition which comes down from Hazrat Ali (‫رضی‬‫ .)اللہ عنہ‬He reports that before his departure from this world, the lastwords of the Holy Prophet ‫ ﷺ‬were: ‫الصلوات و ما ملکت ایمانکم‬“Take heed of the (daily) prayers & of (the rights of) those who aresubordinate to you.” [4]In consequence of these injunctions, the laborer was able to receive adignified and brotherly position in Islamic society, and we find countlessexamples of this in the history of the Early Period of Islam. One can saywith absolute confidence and certainty that it is not possible to safe-guard the rights of the laborer in a better way.
  26. 26. On the other hand, Islam has laid down certain other injunctions whichbind the employee as well, and has thus made his relations with theemployer still more congenial. From the Islamic point of view, thelaborer, in undertaking the responsibility of doing some work for anemployer, enters into a contract which he must honor not only forearning his livelihood but also for his felicity in the other world which ishis real and ultimate goal. The Holy Qur’an has this to say on thesubject: ‫يا أ َيها الذين آمنوا أ َوفوا بالعقود‬ ِ ُ ُ ْ ِ ْ ُ ْ ْ َُ َ ِ ّ َ ّ َ“O believers, fulfil your bonds.” - 5:1And further on: ‫إ ِن خير من استأجرت القوي ال َمين‬ُ ِ ْ ّ ِ َ ْ َ ْ َ َْْ ِ َ َ َْ ّ“Surely the best man you can hire is the one who is strong and trustworthy.” -28:26[2] ‫)ابن ماجہ و طبرانی عن ابن عمر )جمع الفوائد‬[3] ‫صحیح بخاری ، کتاب الجارہ ، بروایۃ ابو ھریرہ‬[4] ‫)ابن ماجہ )جامع الفوائد‬And still further: َ ِ ّ َ ُ ّْ ٌ َْ ‫ويل للمطففين‬ َ‫الذين إ ِذا اكتالوا على الناسِ يَسْتوفون‬ ُ ْ َ ّ ََ ْ ُ َْ َ َ ِ ّ َ ُ ِ ُ ْ ُ َُ ّ َ ْ ُ ُ َ َ َ ‫وإ ِذا كالوهم أو وزنوهم يخْسرون‬“Woe to those who are dishonest in weighing and measuring- those who exactfull measure when they receive their due from others, but give less than duewhen they measure or weigh for them.” - 83:1-3According to the elucidations of the jurists of Islam (Fuqahâ), the word “‫تطفیف‬ ” (under-weighing and under-measuring) in this verse includes inits connotation even the laborer who receives in full the wages that havebeen agreed upon, and yet does not give the full measure of work, andemploys that portion of time which he has given away to the employer indoing some other work, contrary to the wishes of his employer. Theseinjunctions, thus, declare the shirking of work to be a great sin, andmake it quite clear to the employee that once he has taken upon himselfthe responsibility of doing some work for an employer, the work has nowbecome his own, and that he is under the obligation to complete it withperfect honesty, application, and zeal, otherwise he will not be able toattain the felicity in the other world which is his real and ultimate goal.
  27. 27. With regard to the problem of wages, in short, Islam, while admitting toa certain extent the principle of “supply and demand” has at the sametime laid down certain injunctions for the employer and the employeeboth, so that the system of supply and demand has come to be based onhuman sympathy and brotherhood, and not on self-interest.One may possibly have a doubt here- that the nature of the injunctionslaid down by the Qur’an and the Sunnah in order to control the employerand the employee both, is similar to that of moral precepts, which haveno validity from the economic or legal point of view. But such anobjection would arise from an improper understanding of the spirit ofIslam. One should all the time bear in mind that Islam is not a mereeconomic system, but a complete code of life in which all the spheres ofhuman life function as inter-related parts of a whole. The attempt toconsider any one of these spheres in isolation from others wouldnecessarily produce many misunderstandings. The true aspect of each ofthese spheres can emerge only when it is given its proper place withinthe total code of life, and is viewed in this perspective. So, it would notbe possible to exclude these so-called “moral precepts” from anydiscussion of the Islamic economy.Then there is another distinctive feature of Islam. If one takes a largerview, even these “moral precepts” are in reality legal injunctions, for thereward or the punishment of the other world finally depends on them-and it is the reward and punishment which has the fundamentalimportance in the life of a Muslim. It is just this “Doctrine of the OtherWorld” which has not only given the authority of Law to Ethics, but hasalso been at the back of “laws” in the technical sense. If you carefullyconsider the Qur’anic idiom, you will find that the notions of “fear ofAllah” and “solicitude for the other world” are always appended to everylegal or ethical injunction. The secret behind it is that, in fact, man cannever be made to abide by laws merely out of fear of human force orcoercion until and unless “solicitude for the other world” is there to keepa constant watch over each and every action, movement or thought ofman. As for that, the several thousand year old history of mankind,which has been full of numberless oppressions, inequities and crimes inspite of all the legal imperatives, can easily bear witness to thisirrefutable fact. And, in particular, the so-called “civilized world” of todayhas made it clear like day-light that the speed with which crimes havebeen increasing is far greater than the speed with which legal machineryis being strengthened to overtake them.So, the fond belief that the relations between the employer and theemployee can be improved with the help of legal provisions is no morethan a self-delusion of the worst sort. Its real remedy is only the“solicitude for the other world”- and nothing else. And Islam has put allpossible emphasis on just truth in this matter.The modern mind, which has gotten itself entangled in the confusions ofthe worldly life and has thus lost the capacity to look beyond matter,may perhaps find it difficult to understand this truth. But it is certain thatif mankind is at all destined to attain a peaceful existence, it will, after ahundred pitfalls, arrive finally at the truth which the Holy Qur’an has
  28. 28. stressed again and again. The world has already witnessed sufficientlythe veracity of this Qur’anic concept during the time when Islam wasreally functioning as a system in actual practice. In the history of thatperiod, one would seek in vain for an example of the conflicts betweenemployers and employees which have been upturning our world for sometime past. It was just these “moral precepts” of the Qur’an and theSunnah which made a practical demonstration of how this problem couldbe solved in a satisfactory way, and because of which the history of theEarly Period of Islam is almost free from the violent disputes andworkers’ strikes of today.The Secondary Heads of the Distribution of WealthSo far our discussion has been concerned with those who have a primaryright in the distribution of wealth. A significant characteristic of theIslamic theory of the distribution of wealth is that, in order to strengthenthe weaker elements of society and to make those who have no work todo capable of useful work, it has prescribed, beside the factors ofproduction, a long list of those who have a secondary right to wealth,and has laid down a regular system for gaining this objective.In the introductory part of this article, it has already been indicated thatwealth is in principle the property of Allah Himself, that He is the real
  29. 29. creator of wealth, and it is He who has bestowed upon man the right ofownership over it. Man is, no doubt, the owner of the reward which hegets in return for his endeavor, but it is Allah who, in His grace, giveshim the ability to make this endeavor and it is He who has createdwealth. So, man is not altogether free to put his property to any use helikes, but is bound by the Commandments of Allah. Man is hence underthe obligation to spend this wealth where Allah commands him to spend.This basic idea automatically leads to a second category of entitlement towealth outside the factors of production that is to say, according to theIslamic point of view every such person is entitled to wealth to whom theprimary owners of wealth are bound under an obligation laid on them byAllah to convey it. Thus we arrive at a long list of the secondary heads inthe distribution of wealth, under each of which there are persons entitledto a share in wealth.In laying down these categories, Islam in fact wants that wealth shouldbe given as wide a circulation in society as possible, and that therestrictions that have been imposed on the concentration of wealththrough the prohibition of interest should be further extended. It is notpossible to give a detailed account of these categories in this shortarticle. We would, however, enumerate them briefly: -(a) Zakat‫زکوۃ‬( ) The first and the widest of these heads is Zakat. The Holy Qur’anhas mentioned this obligation in numerous places along with Salah (thedaily prayers). Every person who possesses silver or gold or cattle ormerchandise in a certain prescribed quantity and above it is under theobligation to spend, after the passage of one year, a certain part of hispossessions on other needy persons. And with regard to the man whodoes not fulfill this obligation, the Holy Qur’an has this to say: ِ ّ ِ َِ ‫والذين يكْنزون الذهب والفضة ول َ ينفقونها في سبيل الله‬ ِ َ َ ُ ِ ُ َ َ ّ ِ ْ َ َ َ ّ َ ُ ِ َ َ ِ ّ َ ‫فبشرهم بعذاب أ َليم‬ ٍ ِ ٍ َ َ ِ ُ ْ ّ ََ ْ‫يوم يحمى عليها في نار جهنم فتكوى بِها جباههم وجنوبهم‬ ُ ُ ُ َ ْ ُ ُ َِ َ َ ْ َُ َ َّ َ ِ َ ِ َ ََْ َ ْ ُ َ ْ َ َ ُ ِْ َ ْ ُ ُ َ ْ ُ ُ َ ْ ِ ُ َ ْ ُْ ََ َ َ َ ْ ُ ُ ُ ُ َ ‫وظهورهم هذا ما كنزتم لنفسكُم فذوقوا ما كنتم تكنزون‬“Those who treasure up gold and silver, and do not spend them in theway of Allah - give them tidings of painful chastisement, the day this(wealth) shall be heated in the fire of Hell, and their foreheads, theirsides, and their backs shall be branded with it. (It will be said to them,)‘This is what you had treasured up for yourselves; now taste of what youwere treasuring.’” - 9:34-35Then the Holy Qur’an itself has laid down eight items where this Zakat isto be spent. By prescribing eight items of expenditure under the singlehead of Zakat, the Holy Qur’an has opened the way to the widestpossible circulation of wealth.
  30. 30. The common factor among these items of expenditure for Zakat whichentitles a person to receive it is “poverty” and “neediness”. And this head(Zakat) is chiefly meant for the eradication of poverty. An indication ofhow wide the distribution of wealth among the poor and the needy canbe made under the head of Zakat, is provided by the fact that thenational income of Pakistan was nearly Rs.15,300,000,000 in 1965; now,if we levy Zakat on this national income at its lowest rate (that is 2.5%),it comes to mean that at least Rs. 302,500,000 can be distributedamong the needy and the poor annually. One can easily see what a hugeamount of money will every year pass from the pockets of the Capitaliststo the hands of the needy and the poor, if all the factors of productionpay the annual Zakat regularly, and how soon the glaring inequality inthe distribution of wealth will thus be done away with.(b) ‘Ushr‫عشر‬( ) ’Ushr is in fact a form of Zakat which is levied on land produce.But, since human labor is comparatively less involved in this kind ofproduction, the rate of the levy here is 10%, or in some cases 20%instead of 2.5%. This levy is due only on the produce of those landswhich, according to the expositions of the Fiqh, come under the specialcategory of ‘Ushri lands. ‘Ushr is spent on the same items as Zakat.(c) Kaffarat‫کفرات‬( ) Islam has prescribed another regular mode of transmittingwealth to hundreds of individuals in a society - and that is the mode of“Kaffarat” (expiation money). If someone breaks his fast duringRamadan without a proper excuse, or kills another Muslimunintentionally, or compares his wife with the back of a female withinprohibited degrees of relationship (‫ظھار‬ - which amounts to taking anoath not to have connubial relations with her), or breaks a vow afterhaving taken it, he has been enjoined to spend (compulsorily in somecases, and voluntarily in others) some of his wealth over the needy andthe poor. This can be done in the form of cash, and also in the form offood or clothes.(d) Sadaqat-ul-Fitr‫صدقۃ الفطر‬( ) Besides this, it has been made compulsory for thosewhose possessions come up to a certain specified quantity that on theoccasion of the ‘Id-ul-Fitr they should, before going to the prayers,distribute among the needy, the poor, orphans and widows, wheat or itsprice at the rate of 1 3/4 seers per number of the family. Everyone hasto pay this sum not only on his or her own behalf, but even on behalf ofone’s minor children. To make such charity obligatory this condition toois not necessary that the possessions which give rise to the obligationshould consist of objects of growth or should have been held for onecomplete year. So, the sphere of this obligation is even wider than thatof Zakat, and it can lead to the greatest possible demonstration of theprinciple of brotherhood, particularly on the occasion of a collectivefestivity.
  31. 31. These four categories are intended to distribute wealth among the needyand the poor. Beside them there are two more categories which areintended to provide help to one’s relatives and to give them a share inone’s wealth. One of them is the category of “Nafaqat” (Maintenance)and the other is that of “Wirasat” (Inheritance).(e) Nafaqat‫نفاقات‬( ) Islam has placed on everyone the responsibility of supportinghis close relatives, some of these relatives are such as must besupported in any case compulsorily, whether one is well-to-do or poordoes not matter - among such relatives are, for example, one’s wife andminor children. Then, there are other relatives who have to be supportedonly if one possesses the means to do so. The Islamic law provides along list of such relatives. This injunction gives rise to a very finearrangement for the maintenance of the helpless and weak members ofa family.(f) Wirasat‫وراثت‬( ) The Islamic system of inheritance has a basic importance in theIslamic system of the distribution of wealth. It is not really necessary toexpatiate upon the inequity produced in the distribution of wealth by therestricted forms of inheritance. One of the greatest causes of theinequity that is found in Western countries in this sphere is just this, andmany economists have admitted this fact.The system of inheritance that is generally prevalent in Europe is therule of primogeniture – that is to say, all the property of the deceasedgoes to the eldest son and all the other children are totally deprived of it.Moreover, in certain places, a man can, if he so wishes, dispose of hiswhole property by will to any person, thus depriving even his maleoffspring of a share in the inheritance. As a result of this system, wealthgets concentrated instead of being circulated. On the other hand,according to the Hindu code, the male members of the family jointlyinherit the property, and the females are totally excluded frominheritance. This is an obvious injustice to women. Moreover, the sphereof the circulation of wealth is even here narrower than what it is underthe Islamic system.On the contrary, the system of dividing inheritance laid down by Islamdoes away with all these evils. The characteristics peculiar to this Islamicsystem are as follows: -(a) A long list of inheritors has been prescribed in accordance with thedegrees of relationship, because of which the inherited wealth gets avery wide circulation. It should be noticed here that, in order to give awide circulation to wealth, it could be as well enjoined that the wholeinheritance should be distributed among the poor or be deposited in theBait-ul-Mal (Public Exchequer). But, in that case, everyone would havetried to spend all his wealth during his own lifetime, and this would haveonly upset the economy. It is for this reason that Islam has laid down asystem which requires that the inheritance should be divided amongst
  32. 32. the relatives of the deceased- an arrangement which should be thenatural desire of the owner of this wealth.(b) As against all the other systems of inheritance in the world, Islamhas given to woman also the right to inherit property. The Holy Qur’ansays: ‫للرجال نصيب مما ترك الوالدان وال َقربون وللنساء نصيب مما‬ ّ ّ ٌ ِ َ َ ّ َِ َ َُ ْ َ ِ َ ِ َ ْ َ َ َ ّ ّ ٌ ِ َ ِ َ ّ ّ ‫ترك الوالدان وال َقربون مما قل منه أ َو كثر نصيبا مفروضا‬ ً ُ ْ ّ ً ِ َ َ َُ ْ ُ ِْ ّ َ ّ ِ َ َُ ْ َ ِ َ ِ َ ْ َ َ َ“There is a share for men from what is left by parents and kinsmen, andthere is a share for women from what is left by parents and kinsmen,whether it be little or much- and it is a determinate share.” - 4:7(c) The deceased has not been given the prerogative to deprive a legalheir of his or her share, nor to make any kind of modification in theprescribed share of any heir. This injunction puts a complete end to thepossibility of a concentration of wealth resulting from inheritance. TheHoly Qur’an says: ‫آبآؤكم وأبناؤكم ل َ تدرون أ َيهم أ َقرب لكُمْ نفعا فريضة من الله‬ ِ ّ َ ّ ً َ ِ َ ْ َ َ ُ َ ْ ْ ُ ّ َ ُ ْ َ ْ ُ ُ ََ ْ ُ ُ َ“You do not know which one of them, among your fathers and your sons,is nearer in profit to you. This is the law laid down by Allah.” - 4:11(d) No distinction has been made among children on the basis of priorityof birth. An equal share has been allotted to the elder and the younger.(e) It has been forbidden to make a bequest in favor of an heir, inaddition to the prescribed share. Thus, no heir can receive anything fromthe estate of the deceased over and above his or her own share of theinheritance.(f) A part of the property can be bequeathed to one who may not be anheir. This also helps in the circulation of wealth, for a part of theproperty is given away as legacy before the sharing of inheritance takesplace.(g) But a testator cannot dispose of all his property by will. He is allowedto bequeath up to one third of his property, and has no legal right toexceed this limit. This injunction thus serves to avoid that danger of theconcentration of wealth which would arise if a man were allowed todispose of all his property by will. At the same time, it also safeguardsthe rights of the near kindred.(g) Khiraj and Jizyah‫خراج و جزیۃ‬( ) Beside the above categories, there are two more whichrequire the owners of wealth to pay a part of it to the government of thecountry - one is “Khiraj” (tribute) and the other is “Jizyah.”
  33. 33. Khiraj is a kind of levy on land which is imposed only on those landswhich come under the category of Khiraji according to the expositions ofthe Fiqh, and the government can spend it on community projects.Jizyah, on the other hand, is received from those non-Muslims who arecitizens of an Islamic state and the protection of whose life, property,and honor is the responsibility of the state, and also from those non-Muslim states with which peace has been made on the condition of theirpaying the Jizyah. This sum as well is to be spent by the state onprojects of collective unity.The secondary categories of the distribution of wealth outlined above areonly those in which it has been enjoined upon the primary owners ofwealth to spend a part of it as a matter of individual responsibility.Besides these categories, there are, in the Qur’an and the Sunnah,exhortations to spend wealth on the poor and the helpless and for thecollective good of the Muslims. Says the Holy Qur’an: َ ْ َ ْ ُ َ ُ ِ ُ َ َ َ َ َُْ َ ‫يسألونك ماذا ينفقون قلِ العفو‬“They ask you as to what they should spend. Say ‘What is left over.’” -2:219This verse makes it clear that what is commendable in the eyes of Allahis that a man should not confine himself to spending only as much as heis under an obligation to spend, but should consider it to be a greatblessing for himself to give everything that exceeds his own needs tothose members of his society who are destitute of wealth. The HolyQur’an and the Traditions of the Prophet ‫ ﷺ‬are full of exhortations onthe subject of “spending in the way of Allah.”
  34. 34. The Eradication of Beggary as a ProfessionThe measures adopted for giving the weaker members of society theright to have a share in the wealth of the rich were at the same timelikely to produce another evil in society - that this section of societymight become parasitical, and live as a permanent burden on society. Inorder to check this tendency, the Shariah has subjected these people aswell to certain special regulations:-(i) A man who is healthy and physically fit has not been given the rightto beg, except under special circumstances. According to the HolyQur’an, the commendable quality of the genuine “Fuqara” (beggars) isthat: ‫ل َ يسألون الناس إ ِلحافا‬ ً َ ْ َ ّ َ َُْ َ“They do not beg of men importunately.” - 2:273(ii) The man who has the wherewithal for a day has been forbidden tobeg.(iii) A tradition of the Holy Prophet ‫ ﷺ‬condemns begging as ahumiliation.
  35. 35. (iv) The man who possesses wealth up to the prescribed quantity hasbeen forbidden to accept charity even without begging.(v) The poor and the helpless have been persuaded to shun charity, toearn their livelihood through their labor as far as possible, and to lookupon hard work as noble.(vi) Those who possess wealth have been admonished that it is notenough merely to set apart a sum of money for charity- they are alsoresponsible for seeking out those who are really needy and thusgenuinely entitled to charity, and for distributing it among them.(vii) Through the department of moral censorship, provision has beenmade for the eradication of beggary.In consequence of the healthy system of the distribution of wealth whichIslam has instituted by means of these injunctions, our history offersinstances of a state of society where one sought in vain for a man whowould accept charity.ConclusionThese are only some of the salient features of the Islamic system of thedistribution of wealth. In this short article, we have not been able to domore than to show a glimpse of this system. But we hope that thesescanty observations must have made it clear how the Islamic economydiffers from Capitalism and Socialism both, and what its fundamentalcharacteristics are. ‫و للہ الحمد اولہ و احرہ و ظاھرہ و باطنہ‬ 1st February 1968