The most basic fact about the human economy, which the Qur’an emphasizes repeatedly, is that all the means and resources for mankind’s survival have been provided by ALLAH TAA’LA. He created and established these resources on the laws of nature so that they are beneficial to man. He has granted human beings the opportunity and authority to make use of these resources as they please.
Parameters of Permissible and Impermissible
The Holy Qur’an has laid down the principle that man is not free to harness and make use of these resources, nor is he authorized to set his own parameters on the permissible and the impermissible, the lawful and the forbidden. It is entirely the Prerogative of ALLAH TAA’LA to define such limits. The Qur’an decries as ‘falsehood’ the idea that a man may himself pronounce something Harām (forbidden) and some other thing Halāl (lawful). It attributes this authority only to ALLAH TAA’LA and to His messenger as His Deputy.
Parameters of Private Ownership
The Holy Qur’an reaffirms the individual’s own right under the Supreme Ownership of ALLAH TAA’LA and within the parameters set by Him. Private ownership is essential for carrying out the Divine injunctions. The blueprint for the economy that the Book of God presents is entirely based on the individual’s right to own. According to this blueprint, no distinction has been made between consumer goods and the means of production that could restrict private ownership of the former and make the latter public property. It similarly treats earned income and unearned income, in which no personal labor is involved, equally. The Qur’an does not prevent public ownership, if so needed, rather than letting it continue under private management. However, the total negation of private ownership and the promotion of state control as an ideology and a system is contrary to the Qur’anic scheme for the human economy. The political system that the Book of God recommends for human society does not leave the option for any ‘Party’ to decide whether something should be taken away from private into public ownership. This decision rests entirely with the Shura council, elected through the exercise of people’s free will.
Irrational Concept of Economic Parity
It is an established fact that parity is not naturally possible among humans or other creatures either in their income or in their means of sustenance. The Qur’an tells us that ‘disparity’ is part of the Divine Dispensation on earth and is according to the Lord’s Infinite Wisdom. However, this does not include the artificial imbalance of human society that is wilfully created by different civilizational systems. In ALLAH TAA’LA’s entire scheme of things, His natural disparity ought not to be leveled out and a system established in which all human beings are brought on a par with each other in their economic resources. The Qur’an guides us to dispassionately accept this natural disparity and not to feel jealous or spiteful concerning the precedence that God has given one over another.
Monasticism or Moderation and Balance
The Qur’an repeatedly stresses that the Lord has created the bounties of this world for the benefit of His servants. It is neither His Desire nor His Design that man should abstain from these gifts of God and live a life of denial as a hermit. However, what is required of us is to differentiate between the pure and the profane, the permissible and the prohibited, and to remain within the limits of Halāl and Tayyib (lawful and pure) while making use of the means available to us and not cross the boundaries of temperance and moderation.
The distinction between Halȃl and Harȃm means of Livelihood
To achieve moderation and balance, the Qur’an has in place a rule that income has to be generated and earned strictly through lawful (Halāl) means, and all prohibited (Harām) means have to be avoided.
Forbidden means of Livelihood
Details regarding the wrong means of living disapproved by the Islamic Shari’ah are available in the Prophetic Traditions (Ahādith) and are duly elaborated by Muslim jurists (Fuqahā) in their books. The forbidden means of earning may be summed up as follows:
- Grabbing other people’s property without their consent or without paying them compensation, or occupying it with the owner’s consent and after paying compensation, but through deceitful means or fraud.
- Dishonesty in private and public funds
- Burglary, robbery, and theft
- Abuse or misappropriation of an orphan’s property
- Abuse of weights and measures
- Trading in anything that spreads obscenity and indecency
- Music and dance as a profession
- Income generated through prostitution and the sex trade
- The liquor industry, its trade, marketing, and transportation
- Betting and all those means through which one person’s wealth is transferred to another simply by chance or a stroke of fate.
- Idol-making, selling idols or services rendered in idol-houses
- The professions of fortune-tellers and sooth-sayers
- Usury and all forms of interest-based transactions, whether the rate of interest is large or small, and whether it has been imposed on personal loans, or commercial, industrial and agricultural credits.
Prohibition of Stinginess and Hoarding
The Qur’an forbids all wrong means of earning a livelihood, and strongly condemns the accumulation of wealth, even if it is earned through lawful means. It rejects miserliness as an evil.
Lust for Money and Greediness
The Qur’an also condemns a lust for power and wealth, the craving to pile up more and more worldly riches and taking pride in affluence and abundance. It tells us that these are among the greatest causes of mankind going astray and eventually facing his doom.
The Qur’an similarly condemns in strong terms anyone who squanders away the wealth he earned through lawful means in unlawful ventures, or who consumes it by living lavishly and with luxuries, as though he has no right use or purpose for his riches other than raising his living standards higher and higher. The best course for man is to follow the middle road in his spending. He himself, the members of his family and his dependents have a right to his wealth, and he must not be niggardly in discharging his obligations towards them. However, this does not mean that he should spend lavishly on them but must remain mindful of his other social and religious obligations.
Correct Way of Spending Money
The book of God tells us that the money one saves, after spending judiciously on one’s personal needs, should be used in the following manner: spending in the way of Allah (Qur’an, 2:219; 2:195; 3:92; 4:36-38), charity (Qur’an, 2:177; 24:33) descent earning (Qur’an, 2:273).
Reparation for Sinful Transgressions
In addition to these general and voluntary means of spending in the way of Allah, the Qur’an has also prescribed penalties as reparation for sinful transgressions.
Preconditions for The Divine Acceptability of Charity
Spending in the Way of the Lord are worthy of His Acceptance only if there is no element of selfishness or self-promotion in them; if no attempt is made to make others feel obliged; and as long as the recipient is not subjected to mental or physical torture. Whatever is spent in the Way of the Lord must be from the best that one has and not the worst and any philanthropy must be inspired by the sole motive of pleasing ALLAH TAA’LA with no other consideration.
Charity in The Way of ALLAH TAA’LA
Charity in the Way of ALLAH TAA’LA means to spend one’s wealth in His cause. This is what the Qur’an describes sometimes as ‘Infāq fi sabīlillāh’ (spending in the way of Allah), at some places as ‘Sadaqah’ (charity) and elsewhere as Zakāh (Mandatory Charity), which is not just an act of charity and almsgiving, but one of the five pillars of Islam. Zakāh was also a pillar before Islam. It is designed for the social welfare of society and the spiritual advancement of the one who pays Zakāh. It is for the improvement of his social conduct and for his success in this world and salvation in the Hereafter. Zakāh is not a tax, but an act of worship, similar to Salāh.
Collection and Distribution of Zakȃh
The Qur’an infuses into people a spirit of voluntary spending for a good cause.
The Last Prophet Muhammad (Peace Be Upon Him) prescribed Zakāh and the Islamic state was assigned the official duty of arranging its collection and distribution. The Last Prophet Muhammad (Peace Be Upon Him) fixed a minimum limit for the deduction of Zakāh on various kinds of Zakāhable assets. These deductions are to be made at the prescribed rates, as follows:
- 2.5 percent per annum on the wealth possessed in the form of gold, silver, and other cash
- 10 percent per annum on agricultural produce from rain-fed lands
- 5 percent per annum on agricultural produce from irrigated lands
- 20 percent per annum on minerals in private ownership and on buried treasure
- A deduction to be made, at different rates, on flocks intended for breeding or sale, like sheep, goats, cows, camels, etc.
One-fifth of Revenue from War Gains
In addition to Zakāh funds, the Qur’an levies a certain amount on the revenue from AmwālalGhanīmah (War Gains). The spoils of war must not be misappropriated by the soldiers as war booty. It is obligatory for them to surrender whatever they collect after a war to their Supreme Commander (or the State), who in turn will divide what is collected into five parts, with four to be distributed in equal shares to the soldiers engaged in the battle and the fifth goes to the Islamic State’s Public Treasury (Bayt al-Māl).
Disbursement of Zakȃh Funds
The revenue thus generated from Zakāh and Amwāl-al-Ghanīmah is not part of the public exchequer, which is mandated to provide facilities and essential services to the people, including those who pay Zakāh.
Division of Inheritance
According to the Islamic Law of Inheritance, whatever a man or woman leaves behind in their belongings at the time of their death must be distributed according to the prescribed proportions between their parents, children, and wife or husband. In the absence of parents and children, their brothers and sisters or others from their mother or father’s side will get their share of the inheritance.
The guiding principle of the Qur’an in this context is that the wealth gathered during a person’s lifetime should simply not be allowed to accumulate, but must be spread after his death among his close relations.
The Qur’an also directs us to leave behind a will concerning our legacy. The Islamic Law of Will and Inheritance confirms the Qur’ānic injunction on personal property that two-thirds from it must be distributed according to the Law of Inheritance, and one-third may be left to the dying person’s discretion, which he can bequeath through his will as he deems fit. However, he is bound by the Law to bequeath it in a lawful manner, which means that (i) the objective for which the will has been made must be lawful, and (ii) it should not entail depriving his lawful heirs.
Rights of those of Weaker Understanding
The Qur’an enjoins that property must not be handed over to those of weaker understanding, lest they fail to safeguard their own interests properly. The property should be entrusted to their guardians, the Magistrate or the Judge, and its custody should be transferred only after ensuring that such persons are capable of handling it properly themselves.
Safeguarding Public interest in State Holdings
Regarding state holdings, public funds, and government revenue, the Qur’an directs that they should not be used in the interest of a particular class of wealthy people, but in the public interest as well and with emphasis on the betterment and welfare of the poorer sections of the society.
Guiding Principle about Taxation
The fundamental principle laid down by the Book of God concerning the Islamic State’s taxation policy is that the burden of taxes should fall on the shoulders of those who own wealth in excess of their needs, and this should also cover that part of their fortune which they have saved after fulfilling their needs.
Salient Features of Islamic Economics – A Resume
Below is a summary of the basic principles that are contained in the 22-point Qur’anic scheme for the economic well-being of humankind, explained in the preceding sections: · The Qur’anic scheme introduces economic justice into society to check all forms of economic imbalance and exploitation and, to promote the growth and development of moral values.
The economic and moral values are integrated into a harmonious whole to resolve economic problems from an economic perspective and in relation to the social order. These values are based on the foundations of a God-fearing concept of this cosmic system and moral philosophy of life. All economic means and resources of the earth are blessings for the human race from the Almighty. No person, group, or national monopoly over the God-gifted resources of nature is encouraged, and humanity is provided with vast free means of and opportunities to make use of them and earn its living.
Individuals have been given the right of private ownership, although this is not unlimited. The natural way of managing the community’s economic system according to this scheme is to encourage and promote individuals’ free enterprise. However, this freedom is not unchecked or unlimited but has been circumscribed by certain limits in the best interests of individuals themselves and their social, moral, and economic well-being. It acknowledges both men and women as rightful owners of the wealth they earn, inherit or acquire through lawful means. In order to maintain an economic balance, people are exhorted to make proper use of resources, refrain from stinginess and, strictly forbidden from indulging in extravagance.
In the interests of economic justice, there is an arrangement to check the unwarranted flow of wealth in one particular direction, and also to prevent the unproductive accumulation of wealth in certain hands, even though it has been earned through lawful means. At the same time, it seeks to ensure a wider circulation and better use of wealth.
The Qur’anic scheme does not depend entirely on the intervention of the state or the law to establish economic justice in a society. It does make the state responsible for certain essential measures but then goes on to implement its remaining measures through the intellectual and moral training of individuals and by reforming society as a whole. By eliminating the causes of class conflicts, the scheme generates within the various segments of the society a spirit of cooperation and fellowship, instead of unhealthy competition and rivalry.