The economic law of Islam is based on the Qur’ānic
philosophy of creation: the Almighty has created this world as a trial and test
for man; every person has, therefore, been made to depend on others for his
living. No one in this world can live independently as regards his needs and
requirements. People of the highest rank must turn to the most ordinary to
fulfil them. In other words, every single person has an important role to play
without which this world cannot continue. This role depends upon his abilities,
intelligence, inclinations as well as his means and resources, which vary from
person to person. In fact, it is because of this variation that a society comes
into being. Consequently, labourers and workers, artisans and craftsmen, tillers
and peasants are as indispensable as scholars and thinkers, savants and sages,
leaders and rulers. Every individual is an integral component of the society and
contributes to its formation according to his abilities. The Qur’ān says:
"We have apportioned among them their livelihood in this
world in such a manner that] We have exalted some in ranks above others so that
they can mutually serve each other. And better is thy Lord’s mercy than what
they are amassing." (43:32)
By creating various classes of people, the Almighty is
testing whether the big and the small, the high and the low create a society
based on mutual co-operation and respect or create disorder in the world by
disregarding the role each man has been ordained to play. The latter attitude
would, of course, lead them to humiliation in this world and to a grievous doom
in the Hereafter. The Qur’ān says:
"We are trying you by giving you happiness and sorrow, to
test you, and unto Us ye will be returned." (21:35)
Consequently, it is necessary for everyone to acknowledge
that scholars and savants, workers and labourers, all are indispensable
components of a society. No doubt, the role played by each and the services
performed by each are different, but no one can be regarded as petty or ignored
in establishing a healthy society. Everyone deserves to be given respect and
honour and all the necessary means to prosper. A healthy and a sound society
cannot be created by eliminating the various classes, but by acknowledging their
existence and providing equal opportunities and ready justice to all.
Basic Principle
It is for the creation of a healthy society that the
Almighty has revealed this economic law. The basic principle of this economic
law is founded on two premises:
First, the well being and stability of an economy is not
based on saving money but on ‘infāq’.
Second, for this well being and stability all forms of
interest must be completely abolished.
‘Infāq’ is a special term of the Qur’ān. It means that a
person who has been blessed by wealth and riches in this world by the Almighty
should spend them in the way of Allah and on his fellow beings just as he spends
them on himself. The Qur’ān regards ‘infāq’ the most important deed after
prayers and an obligatory directive for all Muslims, as has been stressed in
many places. To quote Sūrah Baqarah:
"O ye who believe! spend out of the bounties] We have
provided for you, before the Day arrives when there shall be no bargaining, nor
will friendship be of any use and nor will intercession be of any avail. The
disbelievers of this Day are, in fact, the wrongdoers." (2:254)
The Qur’ān requires of its believers to generously spend
whatever remains, after fulfilling their personal and business requirements of
the present and future, on the needy as well as on other enterprises of national
and religious interest. Consequently, the Qur’ān has made it clear that if a
person while remaining indifferent to these needs of the society keeps even a
penny with himself then this would be hoarding wealth---something which shall
lead him to the raging fire of Hell in the Hereafter:
"Give glad tidings of a grievous doom to those who hoard
up gold and silver and spend it not in the way of Allah. On the Day when their
gold and silver shall be smelted in the flames of Hell and their foreheads,
their flanks and their backs will be branded with them. These are the riches
which you hoarded. Now taste of what you used to hoard." (9:34-35)
The Qur’ān , on the basis of its above mentioned concept
of infāq, unequivocally states that in certain situations like an enemy invasion
and jihād, if the need arises people should wholeheartedly give whatever they
have after fulfilling their essential needs. The Qur’ān says:
"They inquire from you that how much should be spent for
this purpose]. Say: whatever is left over after your needs have been
fulfilled]." (2:254)
It is self-evident that ‘interest’ is the direct opposite
of ‘infāq’. The Qur’ān , therefore has explicitly forbidden it. The spirit of
infāq creates high qualities like sympathy, courage and seflessness while the
incentive of interest creates such condemnable qualities as cowardice,
selfishness and cruelty. The Qur’ān has used the word ribā for it. It implies a
fixed increase which a lender demands from the borrower just because he has
given him the permission to use his money for a certain period. The Qur’ān has
vehemently prohibited it:
"Those who devour interest shall rise up on the Day of
Judgement like the man whom Satan has driven to madness by his touch because
they claim that trading is like interest and how strange it is that] Allah has
permitted trading and forbidden interest. Consequently, he who received this
warning from the Almighty and desisted in obedience thereto] then whatever he
has taken in the past belongs to him and his fate is in the hands of Allah. And
those who repeat the offence] shall be companions of the Fire and will abide
therein forever." (2:275)
"That which ye give in ribā in order that it may increase
on other] people’s wealth has no increase with Allah; but that which you give
as zakat, seeking Allah’s countenance, it is these people who will get manifold
in the Hereafter] of what they gave." (30:39)
This severity is evident in many traditions as well. Jabir
(rta) narrates:
"The Prophet has severely condemned the devourer of
interest and the one who pays interest and those who write an agreement for
such lending] and the two who are the witnesses over this document and has said:
All of them are equal." (Muslim, Kitāb -ul-Buyū’)
The Prophet (sws) has emphatically directed to refrain
from the slightest possible trace of interest while borrowing in barter as well:
"If you lend gold then take back the same type and the
same amount of gold and if you lend silver then take back the same type and the
same amount of silver; for he who desires more, then this is what is interest."
(Muslim: Kitāb -ul-Buyū’)
"If you lend gold in exchange for silver then there is a
possibility of interest in this. Similarly for wheat in exchange for another
type of wheat, barley in exchange for another type of barley, date for another
type of date. Indeed if the exchange is done on the spot, there is no harm."
(Muslim: Kitāb -ul-Buyū’)
It should be borne in mind that whether a loan is acquired
for personal use or for business or welfare purposes, the real meaning of ribā
is not ascertained on these bases. It is an indisputable fact that in the Arabic
language the word ribā, irrespective of the aim of the lender and the condition
of the borrower, just implies the fixed increase acquired on a loan. The Qur’ān
itself has clarified this in the following verse:
"If the debtor is in difficulty grant him respite until it
is easy for him to repay and if you write off the debt], it is better for you,
if you only knew." (2:280)
My mentor Imām Amīn Ahsan Islāhī comments on this verse in
the following words:
"Today some naive people claim that the type of interest
which prevailed in Arabia before the advent of Islam was usury. The poor and the
destitute had to borrow money from a few rich money-lenders to fulfill their
personal needs. These money-lenders exploited the poor and used to lend them
money at high interest rates. It is only this type of interest which the Qur’ān
has termed as ribā and forbidden. As far as commercial interest is concerned, it
neither existed at that time nor did the Qur’ān prohibit it.
This verse categorically refutes this ‘allegation’. When
the Qur’ān says that if the debtor is in difficulty he should be given respite
until he is able to pay back his debt, it clearly points out that in those times
even the rich used to acquire loans. In fact, if the style and stress of the
verse are correctly understood, it becomes clear that it was mostly the rich who
used to procure loans. Indeed, there was a stroneg chance that the debtor would
find himself in difficulty even to pay the original amount. The money-lender,
therefore, is directed to give him more time and if he forgoes the original
amount it would be better for him. The words of this verse strongly indicate
this meaning. The actual Arabic words of the verse are: wa in kāna zū ‘usratin
fa naziratun ilā maisarah. The particle of condition in (if) is not used for
general circumstances, but, in fact, is used for rare and unusual circumstances.
For general circumstances the particle izā is used. In the light of this, it is
clear that the debtors in those times were generally affluent (zū maisarah) but
in some cases they were poor or had become poor after acquiring the loan and in
that case, the Qur’ān has directed the money-lenders to give them a time
rebate." ("Tadabbur-i-Qur’ān ", Vol 1, Pgs 638-639)
He has concluded this discussion by saying:
"Obviously, the affluent would have turned to the
money-lenders not to fulfil their personal needs, but, of course, their business
needs. So what is the difference between these loans and the commercial loans of
today?" ("Tadabbur-i-Qur’ān ", Vol I, Pg 639)
Since the prohibition of interest totally elimates any
incentive of profit in lending money, therefore, as an obvious outcome, no
institution which provides capital on loan can be established. In other words,
this prohibition actually shields an Islamic society from the evils of a
capitalist economy. Consequently, in our opinion, interest-free banking and
other similar projects through which commercial loans are provided, are totally
against the objective for which the Qur’ān has forbidden interest.
There is no doubt that this prohibition of interest
entails that people from their own wealth and from the wealth of those who trust
them can pool their money on the basis of profit and loss sharing and invest it
in business projects, but they should not have the facility to acquire loans
which, in the present banking system, they are able to obtain thereby giving
rise to the evils which originate on account of concentration of wealth in few
hands.
No one can deny the fact that the whole framework of a
capitalist economy rests on the pillar of banking. The Qur’ān , therefore, by
prohibiting interest, does not merely prohibit a type of fiscal transaction, it
actually razes down this pillar of capitalism---which can only be left intact if
the spirit of the law which prohibits interest is violated without actually
violating the law.
Regulations For An Economic Framework
In concordance with the above stated basic principle, the
following regulations have been formulated in the Qur’ān and Sunnah for the
development and systematization of the economy of an Islamic State.
Right Of Ownership
According to this first regulation, the rightfully owned
wealth of a person cannot be usurped nor tampered with in any way, except if on
account of some violation by him the Shariah endorses so. The Qur’ān says:
"If they repent from all un-Islamic beliefs], establish
regular prayers and pay zakat, leave them alone." (9:5)
It follows from the words: ‘leave them alone’ (fa khallū
sabīlahum) of the above verse that once a person acquires the citizenship of an
Islamic State after fulfilling the conditions stated in the verse, just as the
state cannot tamper with his life, honour and freedom of expression, it also
cannot tamper with his wealth and property. If he refrains from what is
prohibited, establishes regular prayers and pays zakat, the Almighty bids the
state to leave him alone and not to demand a single penny from him once he has
paid zakat. The Prophet (sws), while explaining this directive, has said:
"I have been ordained to fight
with these people until they testify to the oneness of Allah and the Prophethood
of Mohammad, establish regular prayers and pay zakat. If they accept these
conditions, their lives shall be given protection except if they are deprived of
this protection on the grounds of some offence they may commit.
As far as their account is concernred, it rests with Allah." (Muslim, Kitāb -ul-Imān)
In the sermon of the Last Haj, the Prophet (sws) has
rephrased this in the following words:
"Indeed, your blood and your wealth are as sacred and
inviolable as this day
of yours, this month
of yours in this city
of yours."
(Muslim, Kitāb -al-Haj)
Collective Sharing
The second regulation is that everything which is not, or
cannot be owned by an individual shall, on the basis of the principle of
collective sharing, be regarded as state owned. The Qur’ān says:
"They ask you about the spoils of war. Say: The spoils
belong to Allah and the Prophet."
(8:1)
The Prophet (sws) has explained this principle thus:
"There are three things in which every Muslim has an equal
share: water, grass and fire,
and it is illegal for any person] to sell them by taking them in his
ownership]." Ibni Mājah, Kitāb -ur-Ruhūn]
Keeping in view the welfare and expedience of its
citizens, a state has the right to decide about the usage of such collectively
shared
items. Consequently, the Almighty, taking into consideration the specific
circumstances of that period relating to the spoils of war in the verse quoted
above, ordained that a fifth of them should be spent on collective needs while
the remaining amount should be distributed among the Mujāhidīn, though actually
all of them belong to the state. The Qur’ān says:
"You should] know that a fifth of the spoils you get hold
of are for Allah and the Prophet and the near relatives and the orphans and the
needy and the wayfarers." (8:41)
Moral Misconduct
The third regulation is that every economic activity which
leads to moral misconduct in a person should be prohibited. This regulation is
based on the following Qur’ānic verse:
"O ye who believe: this liquor and gambling, idols and
these divining arrows are abominations devised by Satan. Avoid them that you may
succeed. Satan seeks to stir up enmity and hatred among you by means of liquor
and gambling and to keep you from the remembrance of Allah and from prayers.
Will you not then abstain from them?" (5:90-91)
The basis for forbidding liquor, idols and divination of
arrows, together with gambling is that they are filthy and impure works of
Satan. It is clear that gambling has been regarded as an impure work of Satan
because it gives rise to moral misconduct in a person which gradually
encompasses his personality. The reason is that if an economic activity is based
on rights and services and rational decisions, it produces a high moral
character and if an economic activity is based on chance, fortune and fortuity,
it produces an attitude which is based on avoidance of hardwork and service.
This gives rise to such mean qualities as cowardice and faint-heartedness which
subsequently eliminate the innate qualities of honour, sincerity and
self-respect. As a result, the remembrance of the Almighty finds no place in a
person’s heart and he has nothing left but enmity and hatred for his fellow
beings. Gambling, on this basis, is a condemned handiwork of Satan, and it is
clear from the Qur’ānic directive which prohibits it that if any other economic
activity produces a similar moral misconduct in a person, then it should also be
prohibited in an Islamic State. Consequently, on this particular basis, other
things which have been prohibited by the Qur’ān and Sunnah are the following:
1. Excessive spending and squandering of wealth: ie, a
person instead of spending in the way of Allah and adopting a balanced attitude
towards his needs and desires, spends lavishly and wastefully so that his pets
live regally whilst his neighbours may have nothing to eat. The Qur’ān says:
"Eat the fruits of these orchards when they ripen and give
away the share of Allah on the harvest day and waste not: for Allah does not
like those who spend wastefully." (6:141)
"Give to the near of the kin their due and also to the
destitute and the wayfarer, and squander not in extravagance. Verily, such
squanderers are brothers of Satan and Satan is very ungrateful to His Lord."
(17:26-27)
The Prophet is said to have said:
"Eat, drink and spend in the way of Allah and clothe
yourself guarding against wastefulness and vanity." (Ibni Mājah, Kitāb
-ul-Libās)
If the various ways of squandering wealth which have been
explicity forbidden in the Qur’ān and Sunnah are kept in consideration, then no
one among the believers can:
(i) waste his wealth in gambling. (5:90-91)
(ii) throw away his money in drinking, adultery and other
similar acts of wantonness. (5:90), (17:32)
(iii) make clothes, rugs, pillows and pack-saddles from
silk, tissue and other types of expensive cloth and hides:
"He who wore silk in this world, shall never wear it in
the Hereafter." (Bukhārī , Kitāb -ul-Libās)
"The Prophet has forbidden us to wear silk and tissue and
to sit on bedclothes made out of them." (Bukhārī , Kitāb -ul-Libās)
"He who wore a dress for show and fame in this world, the
Almighty shall make him wear the dress of ignominy in the Hereafter and then
ignite fire in it." (Ibni Mājah, Kitāb -ul-Libās)
(iv) use jewellery and utensils of gold and silver
or use other expensive items:
"The Prophet has prohibited us from eating and drinking in
utensils of gold and silver." (Bukhārī , Kitāb -ul-Libās)
"The Prophet has forbidden us to ride on a pack-saddle
made from cheetah’s skin and to wear ornaments of] gold except if a few pieces
are stitched in an attire." (Abu Daud, Kitāb -ul-Khātim)
"The Prophet has prohibited seven things for us: 1. gold
rings 2. silk 3. brocade 4. tissue 5. red silk or an expensive hide as cover for
pack-saddles 6. silk-mixed clothes 7. utensils of silver."
(Bukhārī , Kitāb -ul-Libās)
2. Transactions of prohibited items: ie, those items whom
the Almighty has prohibited because of an intrinsic or extrinsic tendency in
them to lead to immorality; a person instead of informing others of this
immorality and urging them to refrain from them, makes them his means of
livelihood or sells them to make profit:
"The Prophet has prohibited the fee of a soothsayer and
a prostitute." (Bukhārī , Kitāb -ul-Buyū’)
"The Prophet has said: Do not buy and sell songstresses
nor give them the training to sing. There is no good for you in their trade and
to sell them is totally forbidden." (Tirmazi, Kitāb -ul-Buyū’)
"The Prophet has said: The Almighty has severely
condemned liquor, he who provides it, he who sells it, he who buys it, and he
who makes an essence out of it, and for whom the essence is made, and the one
who brings it, and for whom it is brought." (Abu Daud, Kitāb -ul-Ashribah)
"It is narrated by Jaber (rta) that on the occasion of
the conquest of Mecca he heard the Prophet saying: Indeed, the Almighty has
prohibited the selling of liquor, dead meat, pigs and idols." (Bukhārī , Kitāb -ul-Buyū’)
"The Prophet has said: God cusre the Jews. When the
Almighty forbade them to eat] the fat of animals, they sold it and devoured the
money." (Bukhārī , Kitāb -ul-Buyū’)
3. Hoarding: ie, when commodities of general use are
stored to create a shortage and thereby increase their prices in the market. The
Prophet (sws) is said to have said:
"He who hoarded edibles for forty days should know that he
has no relationship with the Almighty nor does the Almighty has any relationship
with him." (Musnad Ahmad Bin Hambal, Vol 2, Pg 33)
"He who interfered in any way to increase the rates in
the markets of the Muslims, the Almighty has the right to make his abode in a
great fire on the Day of Judgement." (Musnad Ahmad Bin Hambal, Vol 5, Pg 27)
4. Aklul-Amwālil-Bātil: ie, to eat up other people’s
wealth and property against all norms of justice and fairness. The Qur’ān says:
"Do not devour one another’s wealth by unjust means."
(2:188)
In this regard, the foremost thing which the Almighty has
forbidden is bribery:
"Do not devour one another’s wealth by unjust means and do
not use it as a means to reach the authorities in order that you may wrongly and
knowingly devour other people’s wealth." (2:188)
To quote Abu Daud:
"The Prophet has severely condemned the person who gives
bribes and the one who accepts bribes." (Kitāb -ul-Aqdhiah)
Similarly, theft, usurpation, misrepresentation,
co-operation with evil, embezzlement, misappropriation, fraudulent weighing and
consuming unclaimed items without publicizing them, all are various forms of
aklul-amwālil-bātil. According to the Qur’ān this is a major sin. Consequently,
about a similar sin the Qur’ān says:
"Indeed, those who are unjustly devouring the wealth of
the orphans, they do not but swallow fire into their bellies; they shall
certainly be flung into the raging Fire of Hell." (4:10)
Similarly dealings which lead to deceit and damage for the
parties involved, is also a class, which come under this directive. Following
are the traditions in which the Prophet (sws) has explained them:
Sale and Purchase]
"The Prophet has prohibited the deal which is based on
deceit." (Musnad Ahmad Bin Hambal, Vol 1, Pg 302)
"The Prophet has said: He who deceives others should
know] that he is not of us." (Muslim, Kitāb -ul-Imān)
"The Prophet has said: As long as a fish is in water do
not sell or buy it because there is a chance of deception in this deal." (Musnad
Ahmad Bin Hambal, Vol 1, Pg 388)
"The Prophet has forbidden the sale and purchase of
offspring of an animal prior to their birth and the selling of milk while it is
in an animal’s udders except if its quantity is ascertained, and the sale or
purchase of run-away slaves, and the sale or purchase of the spoils of war
before they are distributed, and the sale or purchase of charity before it is
given to the recipients and a deal in which a sea-diver is told that whatever he
shall obtain in a dive shall be bought for so much money."
(Musnad Ahmad Bin Hambal, Vol 3, Pg 42)
"The Prophet has said: the person who buys grain should
not sell it unless he takes it into his possession." (Bukhārī, Kitāb -ul-Buyū’)
"The Prophet has forbidden a person to rent out a bull for
breeding." (Bukhārī, Kitāb -ul-Ijarāh)
"It has been narrated by Abdullah Ibni ‘Umar (rta) that he
said: I observed that in the time of the Prophet, when people bought grain in
mounds, and before bringing it to their places sold it out then they were
punished for this." (Bukhārī , Kitāb -ul-Buyū’)
"The Prophet has said that no city dweller should sell and
buy for a villager and has further] said: Do not increase your bid at an
auction] only to deceive others], and no one among you should make a deal when
your brother is bargaining." (Bukhārī , Kitāb -ul-Buyū’)
"The Prophet has forbidden people to exploit others in
sale and purchase." (Musnad Ahmad Bin Hambal, Vol 1, Pg 116)
"The Prophet has forbidden a person to sell his crop when
it is still in spikes, and to sell a date tree in exchange for dates,
and to sell the fruits of an orchard for many years, and to adopt the methods of
crop division in which the profit of the landlord has been fixed, and to leave
an unspecified exception in a bargain."
(Muslim, Kitāb -ul-Buyū’)
"The Prophet has prohibited the deal of pebbles."
(Muslim, Kitāb -ul-Buyū’)
"The Prophet has prohibited the deal of pre-Islamic times
in which every person without thinking just touched the other person’s cloth and
a bargain would take place in this manner." (Muslim, Kitāb -ul-Buyū’)
"Abdullah (rta) narrates that the Prophet has prohibited
the deal in which people used to sell camels by saying that]: whatever
offspring this camel gives birth to and when that offspring gets pregnant,
whatever it gives birth to, then the last] offspring is bought." (Bukhārī ,
Kitāb -us-Silm)
"The Prophet has forbidden the deal of pre-Islamic times
in which people would throw something towards one another and, in such a way, a
bargain would take place." (Bukhārī , Kitāb -ul-Buyū’)
"The Prophet has forbidden the sale of fruits of a tree if
their nature has not become evident." (Muslim, Kitāb -ul-Buyū’)
"The Prophet has forbidden the selling of dates before
they catch colour, and the selling of spikes before they turn white and become
safe from calamities." (Muslim, Kitāb -ul-Buyū’)
"The Prophet has forbidden the sale and purchase of fruit
before their nature has become evident, and the sale of wool as well when it is
still on an animal’s body, and that of butter oil when it is in milk, and that
of milk when it is still in the udders." (Behqi, Kitāb -ul-Buyū’)
"The Prophet has said: losses caused by calamities should
be compensated for." (Muslim, Kitāb -ul-Buyū’)
"Uqbah Bin Amir narrates that he heard the Prophet saying
that no believer should sell a commodity to his brother which is defective,
except when he has informed him about these defects." (Ibni Mājah, Kitāb
-ut-Tijarāt)
"It is narrated that the Prophet has said: do not hold the
milk of camels and goats in their udders before selling it." (Bukhārī , Kitāb
-ul-Buyū’)
"The Prophet has forbidden people to intercept tradesmen
and buy their merchandise before they reach the markets." (Muslim, Kitāb
-ul-Buyū’)
"The Prophet has forbidden the deal in which money given
in advance becomes the right of the buyer if the deal does not ultimately take
place." (Ibni Mājah, Kitāb -ut-Tijarāt)
"The Prophet has said: The person, who makes a deal by
giving money in advance such that he shall obtain the item after it is ready,
should carry out this transaction for a fixed measure, a specified weight and a
definite period of time." (Bukhārī , Kitāb -us-Silm)
Muzāra’at]
"Rāfai’ bin Khudaij narrates that he says: we had most of
the agrarian lands among the people of Medina. We used to divide the produce in
such a manner that the produce of a certain part of the land called the
landlord’s part would be ours. Sometimes the produce of that part would be
defective while the rest of the produce would be secure and sometimes the
produce of the landlord’s part would be secure while the rest of the produce
would be defective. Consequently, we were forbidden from such a division of
crop." (Bukhārī , Kitāb -ul-Harth)
"Zaid Bin Thābit (rta) says: This only happened when two
people among the Ansār, who had a quarrel, came to the Prophet and the Prophet
said: If this is the result, then do not rent out your lands."
(Abu Daud, Kitāb -ul-Buyū’)
Pre-emption]
"The Prophet has decreed for all properties which have not
yet been divided that they should not be sold without giving the sharers a
chance to buy them. But if the boundaries have been determined and the paths
have been separated then this is not necessary." (Bukhārī , Kitāb -us-Shuf’ah)
"The Prophet has said: the neighbour is more entitled to
be given the chance to buy a property when it is put up for sale. If he is not
present, his arrival should be awaited; But this only necessary when both have
the same pathway." (Tirmazī, Kitāb -ul-Ahkām)
Since all the above directives are based on moral
misconduct, the directive of prohibition shall be dissolved in circumstances in
which this basis no longer exists, just as if as a result of evolution of
societies this basis emerges in a new economic activity, then those charged with
authority can prohibit the activity and it shall no longer be allowed.
5. Pettiness: ie, a person adopts a mean attitude in his
dealings and transactions or adopts a means of livelihood which is much below
his status as a human being. Abu Hajīfah narrates:
"The Prophet has prohibited the price of blood and that of
dogs."
(Bukhārī , Kitāb -ul-Buyū’)
The Prophet has said:
"The person who starts begging from people without having
any need should know that this habit shall become a stigma on his face on the
Day of Judgement." (Dārmi, Kitāb -uz-Zakāt)
It is on this basis that the Qur’ān has prohibited the
pledging of securities against acquired loans except in a journey when it is not
possible to write down such transactions and in this regard has further directed
the believers to return this security to the borrower as soon as written
documentation is possible.
The Qur’ān says:
"If you are on a journey and a scribe cannot be found,
then a pledge with possession should serve the purpose]. Then if a situation of
mutual trust arises, then the person who has been entrusted with the security]
should return this trust and let him fear Allah, His Lord." (2:283)
6. Bai’-’indat-tā’āt: ie, instead of responding to the
call for prayers during the time of worship, a person remains involved in his
business. The Qur’ān says:
"O ye who believe! when the call for prayers is sounded on
Friday, hasten earnestly to the remembrance of Allah and cease your trading.
This is better for you, if you but know." (62:9)
Evidence and Documentation
The fourth regulation is that in transactions, especially
those involving lending and borrowing for a certain period of time, the parties
involved should write down a document and call in witnesses over it to avoid any
dispute or damage in the future. Following is the detailed directive of the
Qur’ān in this regard:
"O ye who believe! When you acquire a loan for a fixed
period, record it in writing, and let a scribe write it down between you with
fairness; the scribe should not refuse to write, and just as Allah has taught
him to write, he should also write for others; the one who has incurred the debt
should have the document] written and fearing Allah his Lord, he should not
make any reduction in it. If the debtor is indiscreet or feeble or unable to
have it written, let his guardian do so with justice. And call in two male
witnesses from among your men, but if two men cannot be found, then one man and
two women
from among your likable people so that if one of them gets confused, the other
reminds her. And witnesses must not refuse when they are summoned. And whether
the loan is big or small, be not negligent in documenting the deal upto its
period. This is more just in the sight of Allah, it ensures accuracy in
testifying and is the most appropriate way for you to safeguard against doubts.
But if it be an everyday transaction, it does not matter if you do not write it
down. And call in witnesses also if you sell or purchase anything. And let no
harm be done to the scribe or the witness. If you do so, then this will be a
transgression which shall cling to you. And fear Allah. Allah is teaching you.
He has knowledge of all things." (2:282)
Incompetence
The fifth regulation is that since a person’s way of using
his wealth and property also influences the development and welfare of a
society, the state has the right to deprive him from using them if he is proved
to be incompetent. The Qur’ān says:
"Do not give to the feeble-minded the wealth and property
which the Almighty has made a means for your support and development. But feed
and clothe them with magnanimity, and speak to them with kindness." (4:5)
It is clear from the context of this verse that it
pertains to orphans and their guardians, but the basis of the directive is their
incompetence not their status as orphans. Therefore, the above right granted to
the guardians with regard to the orphans, by analogy, should also be granted to
a state with regard to its citizens. Consequently, if a person squanders away or
ruins his wealth and resources, it is the duty of the state to strip him from
their control and management and take charge of them. However, in this case, it
must generously cater for his requirements from his wealth and whole-heartedly
adjust all matters.
Curtailed Taxation
The sixth regulation is that a state cannot levy any tax
upon its Muslim citizens
other than zakat, whose various rates have been fixed by the Almighty Himself
through His Prophet (sws). The Qur’ān says:
"Then if they repent from all un-Islamic beliefs],
establish regular prayers and pay zakat, leave them alone." (9:5)
It is clear from the words ‘leave them alone’ (fa khallū
sabīlahum) of the above verse that after the believers have paid zakat an
Islamic State, in times of need, can though make an appeal to its citizens for
economic asssistance, it cannot force them to do so. The Qur’ān has binded it
not to demand anything from the believers after they have paid zakat. The
Prophet (sws) while explaining this Qur’ānic directive has said:
"I have been ordained to fight
with these people until they testify to the oneness of Allah and the Prophethood
of Mohammad, establish regular prayers and pay zakat. If they accept these
conditions, their lives shall be given protection except if they are deprived of
this protection on grounds of some offence they commit.
As far as their account is concerned, it rests with Allah." (Muslim, Kitāb
-ul-Iman)
If those in authority violate this directive, then this is
a grave transgression on their part. The Prophet (sws) has warned:
"No tax-imposer shall enter Paradise." (Abu Daud, Kitāb
-ul-Kharāj) It should also be borne in mind that according to the
various heads mentioned in the Qur’ān , zakat is not merely for the poor,
destitute, wayfarers and those inflicted with losses but under
al-āmilīn-a-alaihā, it can be used to pay the salaries of all government
officials, under al-mu’allafat-i-qulūbuhum, it can be spent to meet all
political expenditures in the interest of Islam, under fī sabīlillāh, it can be
expended on da’wah ventures and mosques, education and research, Haj and Umrah
facilities, Jihād and Qitāl, and public welfare projects like roads, bridges and
hospitals, etc. The Qur’ān says:
"Zakat is only for the poor and the needy, and for those
who are ‘āmils over it,
and for those whose hearts are to be reconciled to the truth],
and for the emancipation of the slaves and for those who have been inflicted
with losses and for the way of Allah
and for the wayfarers. An obligation decreed by the Almighty, the All-Knowing
and the Wise." (9:60)
The rates and nisāb of zakat which have been transferred
to the Ummah as Sunnat-i-Thābitah
and stated in various collections of Ahādith are all fixed and determined.
However, there are five more aspects which must remain clear in this regard:
(1) There is no basis in the Qur’ān and Sunnah for the of
personal-possession (tamlīk-i-zātī) imposed by our jurists. Therefore, in our
consideration, just as zakat can be given in the personal possession of an
individual, it can also be spent on projects of public welfare.
(2) Nothing except means of production, personal items of
daily use and a fixed quantity called nisāb are exempt from zakat. It shall be
levied annually on all sorts of wealth, all types of animals and all forms of
production of every Muslim citizen. However, if a need arises, an Islamic State
can give a relaxation on any item.
(3) If the basis of the directive is kept in
consideration, then all forms of industrial produce, all forms of production
based on various skills and all forms of rent of various items or buildings must
be classified as produce and not as wealth; therefore, their rates and nisāb
should be those specified by the Prophet (sws) for land produce.
(4) The rates of zakat in all forms of production should
be fixed on the basis of the principle derived from the Prophet’s directives.
According to this principle zakat on all items which are produced both by the
interaction of labour and capital is 5%, on items which are produced such that
the basic factor in producing them is either labour or capital, it is 10% and on
items which are produced neither as a result of capital nor labour but are
actually are a gift of God, it is 20%.
(5) According to the above principle, zakat on leased-out
houses, properties and other rented items should be 10% of the rent and if they
are not rented out, it should be 2 1/2 % of their net value.
Concentration of Wealth
The seventh regulation is that all forms of economic
ventures, and all types of projects of wealth allocation and distribution which
result in concentration of wealth in a particular sphere of the society should
be prohibited. In Sūrah Hashr where the directives relating to fai have been
stated, the Qur’ān explicitly says: ‘You have been given this directive so that
money does not keep circulating among your rich class’, (59:7). Following are
the Qur’ānic directives which are based on this regulation:
1. Every person has been directed to spend as much as he
can on the needy among his relatives, and on social and public welfare from the
wealth the Almighty has endowed him with:
"And spend of that which We have bestowed on you before
death befalls anyone of you and he would say with sorrow: O Lord! Why did not ye
give me a little more respite so that I could give largely] in charity. Had I
been able to do so, I would have been among the righteous." (63:10)
2. Everyone has been obligated to pay zakat to the
Bait-ul-Māl: If his wealth exceeds a certain quantity called nisāb at the annual
rate of 2 1/2 %; if he is a businessman at the annual rate of 2 1/2 % on his
trade capital; if he is a land owner at the rate of 5 % on the time of harvest
if his lands are irrigated by canals and at the rate of 10 % if they are rainy
lands; if he is an industrialist at the rate of 5% of his industrial produce and
at the same rate if he owns mineral reserves; at the rate of 10 % if he has
rented out his property; if he is a herdsman a fixed share from his heard,
and if he owns a treasure at the rate of 20% so that the state is able to
distribute the wealth of the rich among those who need it:
"And establish regular prayers and pay zakat and
generously lend to Allah for emergency needs]." (73:20)
3. It has been ordained for everyone that if he leaves
behind wealth, whether in a small or a large amount, instead of accumulating it
in a single place by handing it over to the eldest child or to the family
jointly, it should be distributed and divided among near and far relatives
according to their respective nearness with the deceased. The manner in which
this distribution should take place has been described by the Qur’ān in verses
11-12 and the last verse of Sūrah Nisā:
If a deceased has outstanding debts to his name, then
first of all they should be discharged. After this, any legacies he may have
bequethed should be paid. The distribution of his inheritance should then
follow.
After giving the parents and the spouses their shares, the
children are the heirs of the remaining inheritance. If the deceased does not
have any male offspring and there are only two or more girls among the children,
then they shall receive two thirds of the inheritance left over, and if there is
only a single girl, her share is one half. If the deceased has only male
children all his wealth will be distributed among them. If he leaves behind both
boys and girls, then the share of each boy shall be equal to the share of two
girls and, in this case also, all his wealth shall be distributed among them.
In the absence of children, a deceased’s brothers and
sisters shall take their place. After giving the parents and spouses their
shares, the brothers and sisters shall be his heirs. The proportion of their
shares and the mode of distribution will be the same as that of the children
stated above.
If a deceased has brothers and sisters, whether he has
children or not, the parents shall receive a sixth each. If he does not even
have brothers and sisters, then after giving the husband or wife his (or her)
share, one third of what remains shall be given to the mother and two thirds to
the father. If there is no one among the spouses, all of the inheritance shall
be distributed among the parents in the same proportion.
If the deceased is a man and he has children, his wife
shall receive one eighth of what he leaves and if he does not have any children
his wife’s share shall be one fourth. If the deceased is a woman and does not
have any children, then her husband shall receive one half of what she leaves
and if she has children, the husband’s share is one fourth.
Together with these rightful heirs, after them or in their
absence a deceased can make a near or a distant relative except his parents and
children the heir. If the relative who is made an heir has one brother and one
sister, then they shall be given a sixth of his share and he himself shall
receive the remaining five sixth. However, if he has more than one brother and
sister then, they shall be given a third of his share and he himself shall
receive the remaining two thirds.
If a person dies without making anyone his heir, his
remaining legacy shall be distributed according to the principle li aulā rajulin
zakar, (for the closest male relative).
4. It has been divinely ordained that the spoils of war
shall be regarded as state-owned and a fifth of them
shall necessarily be spent on collective needs and on the needy:
"They ask you about the spoils of war. say: these spoils
belong to Allah and the Prophet." (8:1)
"You should] know that a fifth of the spoils you get hold
of are for Allah and the Prophet and the near relatives and the orphans and the
needy and the wayfarers." (8:41)
5. Similarly, it has been ordained about fai
that it shall be spent on collective needs and on the needy:
"Whatever Allah takes away from these city-dwellers and
returns to His Prophet, it is for Allah and the Prophet and for the kindred and
for the orphans and for the needy and for the wayfarers." (59:7)
These are the directives based on the principle ‘kaī lā
yakūna dūlatam bainal aghniyāi minkum’ (so that money does not keep circulating
among your rich class). Today also, it is necessary that those charged with
authority should keep this principle in mind while deciding about the
prohibition
or legality of an economic venture.
Financial Responsibility of the Masses
The eighth regulation is that the government should
provide the basic necessities of life like food, clothing, shelter, health and
education to those who are unable to support themselves. According to the Qur’ān
, this is their right, and while highlighting the qualities of the believers it
says:
"In whose wealth the deprived and the needy who ask have a
fixed share." (70:24-25)
It is because of this right that the most important head
under which the taxes collected in the Bait-ul-māl are to be expended is the
poor and the needy. Therefore, this head is mentioned foremost in the verse
pertaining to the expenditure of the zakat fund:
"Zakat is only for the poor and the needy, and for those
who are ‘āmils over it, and for those whose hearts are to be reconciled to the
truth], and for the emancipation of the slaves and for those who have been
inflicted with losses and for the way of Allah and for the wayfarers. An
obligaton decreed by Allah, the All-Knowing, the Wise." (9:60)
The Prophet (sws) has further said about these taxes:
"They shall be taken from their rich and returned to their
poor." (Bukhārī, Kitāb -uz-zakat)
The importance of this right can be further appreciated
from the Prophet’s directive in which he has instructed the administrators of an
Islamic State to always leave their doors open to the needy:
"A ruler who closes his doors on the poor and the needy,
should know that] the Almighty shall close the doors of Heaven on his needs,
indigence and poverty." (Tirmazī, Kitāb-ul-Ahkām)
"If a person whom the Almighty entrusted with the state
affairs of the Muslims became indifferent] to their needs, requirements and
poverty hiding behind walls, then he should know that] the Almighty shall hide
from his eyes, remaining indifferent to his needs, requirements and poverty."
(Abu Daud, Kitāb -ul-Imārah)
It is clear from this that it is the right of the needy to
be provided by the society and it is the responsibility of the Islamic State to
discharge this duty by taking the zakat money from the rich and distributing it
among the deprived. In fact, it must provide the deprived and the needy with the
basic nessecities of life with a sense of responsibility epitomized by one of
its most illustrious rulers who went so far as to say: ‘The responsibility of
even the dogs that die of hunger on the banks of Euphrates lies with me’.
Resources for the Economy
If the economy of an Islamic State is constituted on these
regulations and the Muslims as a nation adopt a God-fearing attitude in the
other collective spheres as well by totally obeying and following the directives
of the Qur’ān , the Almighty has promised them that they shall never need to
depend on anyone as far as economic resources are concerned. The Almighty shall
provide them abundantly:
"Had the people of these cities accepted faith and kept
from evil, We would have showered the blessings of the heavens and the earth
upon them. But they rejected the truth] and so] We punished them for their
misdeeds." (7:96)
To quote the Old Testament:
"And it shall come to pass, if thou shalt hearken
diligently unto the voice of the Lord thy God, to observe and to do all his
commandments which I command this day, the Lord thy God will set thee on high
above all nations of the earth: and all these blessings shall come on thee, if
thou shalt hearken unto the voice of the Lord thy God. Blessed shalt thou be in
the city, and blessed shalt thou be in the field. Blessed shall be the fruit of
thy body, and the fruit of thy ground, and the fruit of thy cattle, the increase
of thy kine, and the flocks of thy sheep. Blessed shall be thy basket and thy
store. Blessed shalt thou be when thou comest in, and blessed shalt thou be when
thou goest out. The Lord shall cause thine enemies that rise up against thee to
be smitten before thy face: they shall come out against thee one way, and flee
before thee in seven ways. The Lord shall command the blessings upon thee in thy
storehouses, and in all that thou settest thy hand unto; and he shall bless thee
in the land which the Lord thy God giveth thee. The Lord shall establish thee
holy people unto Himself, as He hath sworn unto thee, if thou shalt keep the
commandments of the Lord thy God, and walk in his ways. And all the people of
the earth shall see that thou art called by the name of the Lord; and they shall
be afraid of thee. And the Lord shall make thee plenteous in goods, in the fruit
of thy body, and in the fruit of thy cattle, and in the fruit of thy ground, in
the land which the Lord sware unto thy fathers to give thee. The Lord shall open
unto thee his gold treasure, the heavens to give the rain unto thy land in his
season, and to bless all the work of thine hand: and thou shalt lend unto many
nations, and thou shalt not borrow. And the Lord shall make thee the head, and
not the tail; and thou shalt be above only, and thou shalt not be beneath."
(Deuteronomy, 28:1-13)
Conclusion
This is the economic law mentioned in the Qur’ān and
Sunnah. Today, whatever system is evolved on its basis, it is clear that every
scheme which provides capital on loan shall be eradicated owing to the
prohibtion of interest. Therefore, as a necessary consequence, it is essential
that:
Firstly, all Banks should be converted into various
branches of the Public Treasury (the Bait-ul-Māl), where people can deposit
their savings. These branches shall provide protection, exchange and other
similar facilities. In return for this service, the deposited money shall only
be spent by the government to create a broad-based public sector by keeping in
view the collective requirement and welfare of all the people with the
precondition that without being given any profit on the original amount, the
depositers would be returned their money whenever they demand it.
Secondly, the public sector so created shall not be run by
the government. Leaving it in state ownership, its running and management shall
be entrusted to the private sector by adopting either or both of the following
two modes, depending upon the circumstances: (i) selling a certain quantity of
shares to the private sector, (ii) imposing kharāj
(tribute) on the party of the private sector which is entrusted with the job of
management.
Thirdly, the only form of absentee partnership permitted
should be one in which people directly become shareholders in various projects
of the private and public sector.
As a result of these measures, without prohibiting the
right of private ownership and establishing an ‘iron curtain’, a naturally
developed broad-based public sector shall come into being parallel to the
private sector. This would, perhaps, rightly depict the moderate set-up of an
Islamic Economic System in contrast with the two extremes of Capitalist and
Socialist Economies.
This is the economic law the Almighty gave us centuries
ago. But Alas! After the industrial revolution, when the world most needed it we
were not in a position to guide mankind to the right path in this regard.
Undoubtedly, the future of the world still depends on this law but,
unfortunately, there is not a single country in the Muslim Ummah, extending from
Morroco in the West to Indonesia in the East where the splendour of this
majestic sun can irradiate its beholders.
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