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I-
Objectives
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Achievement of Falah
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Fair and Equitable Distribution
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Provision of Basic Human Needs
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Establishment of Social Justice
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Promotion of Brotherhood and Unity
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Achievement of Moral and Material Development
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Circulation of Wealth
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Elimination of Exploitation
II-
Principles
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Allah determines Right and Wrong
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Principle of Use
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Principle of Moderation
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Economic Freedom
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Principle of Justice
In this chapter we
would focus on the objectives which the Islamic economic system
aims to achieve and on the principles upon which it operates.
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I-
Objectives
Following are some
of the main objectives of the Islamic economic system which are
being highlighted in this section:
1. Achievement of Falah:
The first and the foremost aim and objective of Islam is falah or
well-being of the mankind in this world and in the next world.
That is why al-Qur’an, the revealed book of Islam, admires those
who pray to God : “Our Lord ! Give unto us in the world that which
is good and in the Hereafter that which is good, and guard us from
the doom of fire……” (2 : 201)
The Islamic concept
of falah is very comprehensive. It refers to spiritual, moral and
socio-economic well-being in this world and success in the
Hereafter. At micro level, falah refers to a situation where an
individual is adequately provided for in respect of his basic
needs, and enjoys necessary freedom and leisure to work for his
spiritual and material advancement; whereas at macro level, it
aims at establishment of an egalitarian and happy society with
clean environment, with freedom from want and with opportunities
to its members for progress in socio-political and religious
affairs. Although welfare of the individual and the society does
not necessarily lie only in economic prosperity because moral,
cultural and socio-political advancement is equally important, but
still Islam does not discourage achievement of material prosperity
through fair means.
The concept of
falah, in strictly economic field, refers to material well-being
of the citizens of an Islamic state. The economic system of Islam,
therefore, aims to achieve economic well-being and betterment of
the people through equitable distribution of material resources
and through establishment of social justice. Yet the basic
objective of Islamic system remains the same which has been
clearly laid down by the Qur’an thus : “But seek with (the wealth)
which God has bestowed on thee, the home of the Hereafter, nor
neglect thy portion in this world, but do thou good as God has
been good to thee and seek not mischief in the land, for God loves
not those who do mischief.”(28 : 77)
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2. Fair and Equitable Distribution:
The second most important objective of the economic
system of Islam is to make distribution of economic resources,
wealth and income fair and equitable. Islam discourages
concentration of wealth in few hands and ensures its circulation
among all the sections of society. Al-Qur’an, the revealed book of
Islam, says: “That which Allah giveth as spoil unto His messenger
from the people of the townships, it is for Allah and His
messenger and for the near of kin and the orphans and the needy
and the wayfarer, that it become not a commodity between the rich
among you.” (Al-Hashr 59:7)
It means that,
according to the Qur’an, the wealth should not be allowed to
concentrate in few rich hands, rather it should freely circulate
among all the people thus enabling the poor and destitute among
the nation to also take benefit from it. Thus it is the primary
objective of the Islamic economic system to bridge the gulf
between the rich and the poor by modifying the distribution of
wealth and economic resources in favour of the less-fortunate.
Islamic economic
system ensures fair and equitable distribution of wealth through
positive as well as negative measures, such as : institution of
Zakat and Sadaqat, laws of inheritance and will, abolition of
interest, prohibition of earning of wealth by Haram (unlawful)
means, prohibition of hoarding, etc.
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3. Provision of Basic Human Needs:
It is also an important purpose and objective of the Islamic
economic system that basic necessities of life like food, clothing
and shelter should be provided to all the citizens of the Islamic
state. The Prophet of Islam has beautifully defined the barest
necessities of life in his famous Hadith which says: “The son of
Adam has no better right than that he would have a house wherein
he may live, and a piece of cloth whereby he may hide his
nakedness, and a piece of bread and some water.” (Tirmizi). Thus,
in this Hadith the basic needs of an individual have been defined
to include a house to live in, clothing to hide one’s body and
food for survival and maintenance of health.
To get the basic
minimum necessities of life is one of the fundamental rights of
every human being. It is the obligation of the Islamic state to
provide the basic needs of life to those of its citizens who are
unable to earn due to physical disability, unemployment or any
other reason. God guarantees the basic needs to every creature on
earth as stated by the Qur’an : “And there is no animal in the
earth but on God is the sustenance thereof.” (11.6). The Islamic
state, being vicegerent of God, is duty-bound to fulfil this
purpose of God and provide the basic needs to its poor citizens.
The Islamic economic system ensures the provision of basic needs
to every needy person through its comprehensive system of social
security. This system of social security shall be elaborately
discussed at proper place in this book.
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4. Establishment of Social Justice:
One of the major objectives of the Islamic economic system is to
establish socio-economic justice among all the members of the
nation. Al-Quran says: “He (Allah) placed therein firm hills
rising above it, and blessed it and measured therein its
sustenance in four days, alike for (all) who ask” (41 : 10). Allah
has placed in the earth sustenance and provisions for all to cater
their needs. However, on account of various reasons, the
distribution of these provisions does not remain fair among all
the human beings, thus making some lucky ones very rich who
possess wealth more than their needs and making many others very
poor who possess nothing or too little to meet their very basic
necessities of life. Islam meets this challenge of
disproportionate division of wealth by making it obligatory on the
rich to surrender a part of their wealth for helping the poor and
unfortunate members of the community. Al-Quran says: “Establish
worship, pay Zakat and bow your heads with those who bow (in
worship)”- (2 : 43).
The Holy Book again says “Ye will not attain unto piety until ye
spend of that which ye love. And whatsoever ye spend, Allah is
aware thereof.”(3:92). It further pronounces: “And in whose wealth
there is a right acknowledged, for the beggar and the destitute”
(70 : 24-25).
In order to make
distribution of economic resources fair and just, the Islamic
economic system has established an elaborate system of Zakat and
Sadaqat. In addition to that, many restrictions have been placed
barring an individual to earn wealth through unfair, illegal and
unjust means. Besides that the Islamic state can also levy taxes.
If all the economic teachings of Islamic are acted upon, the
distribution of incomes and wealth properly based on the
principles of socio-economic justice will be automatically
achieved. The subject of social justice will be discussed in
detail later on. For the purpose of the present discourse it is
sufficient to say that the major objective of the economic system
of Islam is to establish social or economic justice among its
followers.
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5. Promotion of Brotherhood and Unity:
Another objective of the Islamic economic system is to establish
brotherhood and unity among the Muslims.
The Holy Quran
says: “It is not righteousness that ye turn your faces to the East
and the West; but righteous is he who believeth in Allah and the
Last Day and the Angels and the Scripture and the Prophets; and
giveth his wealth, for love of Him, to kinsfolk and to orphans and
the needy and the wayfarer and to those who ask, and to set slaves
free; and observeth proper worship and payeth Zakat” (2 : 177).
Again the Holy Book enjoins upon its followers: “They ask thee, (O
Muhammad), what they shall spend. Say : That which ye spend for
good (must go) to parents and near kindred and orphans and the
needy and the wayfarer. And whatsoever good ye do, Lo! Allah is
aware of it” (2:215). Thus by enjoining upon the rich and wealthy
to pay Zakat and spend for their poor parents, relatives, orphans
and needy, Islam lays the foundations of fellow-feeling,
brotherhood, friendship and love among all the members of Muslim
Ummah. By helping the poor, the rich persons not only discharge
their religious obligations but also earn their gratitude, love
and affection. So the Zakat and alms pave the way for national
solidarity and social cohesion by cementing the bonds of
fraternity among the rich and the poor.
Dr. Khalifa Abdul
Hakim writes: “Islam desires to mould the economic life of society
in such a manner that antagonistic class divisions of millionaires
and paupers shall not come into existence”. Shaikh Mahmud Ahmad in
his book ‘Economics of Islam’, writes, after discussing the
injunctions of the Quran regarding prayer and Zakat: “The
brotherhood of man is not realized only by bowing together of the
ruler and the subject, the lord and the peasant, the factory-owner
and the wage-earner shoulder to shoulder before One God, but is
established on a firm foundation even outside a mosque where the
king and the lord and the factory-owner are made jointly
responsible for the elementary necessities of life of the subject
and the peasant and the wage-earner.” Mr. M. A. Mannan in his book
‘Islamic Economics: Theory and Practice,’ writes: “Salat (prayer)
rouses the feeling of equality and brotherhood between the rich
and the poor, the high and the low, and Zakat puts that feeling of
brotherhood on a firm footing by making the rich and the
capitalists responsible for the maintenance of the poor and the
needy.”
Thus the Islamic
economic system through Zakat, Sadaqat and other means of helping
the poor, achieves social harmony and promotes brotherhood between
different sections of society. In an Islamic society there exist
no antagonist classes of haves and have-nots which are set against
each other. Despite existence of inequalities of wealth, the
Islamic society is not divided into conflicting classes because
the difference between the rich and the poor is not too wide to
provoke bloody revolution. Rather the rich and the poor are
brothers of each other. Full cooperation and unity exists between
them and it is all due to Islam’s economic system.
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6. Achievement of Moral and Material
Development:
The economic system of Islam aims at material as well as moral
development of the Muslim community. It achieves this objective
through its system of taxation and fiscal management particularly
through Zakat.
Zakat discourages
hoarding of wealth and encourages its circulation. Those persons
who possess hoarded wealth know that if they keep it like that, it
would be consumed by Zakat. So they would not keep it lying idle,
rather they would per force bring it into circulation by investing
or spending it. Thus the consumption and investment would have
multiplier effect on the growth of the national income. Moreover,
taxes like Zakat are collected from the rich and returned to the
poor and thus the purchasing power of the poor is strengthened.
The poor people now having purchasing power in their hands will
demand more goods. The industrialists would produce more in order
to meet the increasing demand. Thus the increase in demand and
supply will encourage industrialization and thereby expand the
scope of employment in the country. In this way, the human and
material resources of the country would be fully exploited and
national income would grow rapidly. The Quran perhaps refers to
this situation when it compares usury and Zakat and pronounces:
“That which ye give in usury in order that it may increase on
(other) people’s property hath no increase with Allah; but that
which ye give in charity, seeking Allah’s countenance, hath
increase manifold” (30 : 39)
Zakat and system of
voluntary alms also helps in moral and spiritual development of
the Muslim Ummah. Payment of Zakat and alms not only purifies
wealth but also human soul. Wealth is dear to everybody and
everyone loves to acquire and possess it. By encouraging a person
to voluntarily pay Zakat and part with his wealth, Islam promotes
sentiments of sacrifice, love, goodness of heart, mutual
cooperation. The Quran says: “And likeness of those who spend
their wealth, seeking to please Allah and to strengthen their
souls, is as a garden, high and fertile………” (2 : 265). Payment of
Zakat and voluntary alms purifies the human soul of vices like
greed, miserliness, selfishness, etc.
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7. Circulation of Wealth:
Another important objective of economic system of Islam is to
discourage hoarding and ensure the constant circulation of wealth.
About hoarding of wealth the Quran says: “They who hoard up gold
and silver and spend it not in the way of Allah, unto them give
tidings of a painful doom. On the day when it will (all) be heated
in the fire of hell and their foreheads and their flanks and their
backs will be branded therewith (and it will be said unto them).
Here is that which ye hoarded for yourselves. Now taste of what ye
used to hoard:” (At-Taubah-9 : 34-35). So the Quran not only
discourages hoarding of wealth but also threatens persons
responsible for this heinous crime with the dire consequences.
The economic system
of Islam achieves this objective through Zakat. Zakat is a great
enemy of hoarding. If it is paid regularly on the hoarded wealth,
it would eat away the whole or main portion of such wealth in a
few years time. Thus a person possessing such hoarded wealth is
forced to bring it into circulation by investing it or spending
it. The Prophet of Islam (PBUH) is reported to have said: “Beware!
Whoever is the guardian of an orphan who has property, should
trade with it and should not have it (hoarded), lest the Zakat
should consume it. (Tirmizi)
The objective of
circulation of wealth is also achieved through other compulsory
and voluntary Sadaqat, through laws of inheritance and will and
through monetary atonements.
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8. Elimination of Exploitation:
The last, but the most important, objective of Islamic economic
system is elimination of exploitation of one human by another. To
achieve this end Islam has taken many effective measures. First
such measure is the abolition of interest or usury which is and
has been perhaps the worst instrument of human exploitation. The
Qur’an calls it riba and declares it a heinous crime which amounts
to war against God and God’s messenger. The Qur’an says : “O ye
who believe ! Observe your duty to Allah, and give up what
remaineth (due to you) from usury, if ye are (in truth) believers.
And if ye do not, then be warned of war (against you) from Allah
and His messenger. And if ye repent then ye have your principal
(without interest). Wrong not and ye shall not be wronged.
-(2 : 278-279)
Another measure
taken by Islam for putting an end to human exploitation is
regarding slavery. The slaves have been the most exploited class
in human history. Islam declared the emancipation of slaves as the
most pious at and enjoined upon its followers to earn God’s
pleasure by setting free as many slaves as they could. The Qur’an
has made emancipation of slaves an expiation of some types of sins
and criminal acts committed by the believers.
To eliminate
exploitation of labour by the employer or the capitalist, the
Prophet of Islam has laid down that the workers would be paid
their wages promptly. On the authority of Abdullah-bin-Omar, it is
reported that the Messenger of Allah said : “Pay the labourer his
wages before his sweat dries up.” (Ibn Majah).
The tenants and the
farm workers are another most exploited class of humans which has
been subjected to the worst type of tyranny by the feudal lords.
To eliminate exploitation of this class, Islam almost abolished
jagirdari or feudal system by repealing the system of absentee
landlordism and by confiscating the lands of those who did not
cultivate them for three continuous years. The Prophet of Islam
also discouraged giving of land to others for cultivation on cash
rent or for share in produce.
The debtors have
been another exploited class. Islam has not only abolished
interest, but to help this class, the Qur’an has laid down that
the creditor should give as much time as possible to the debtor
for repayment of debt and if the creditor remits the debt it shall
be treated as almsgiving.
The orphans have
always been an exploited class in every society as their property
is generally devoured by their near relatives and their guardians.
In the sight of Islam, devouring the property of the orphans is a
major sin. The Qur’an warns such persons in these words: “Lo !
Those who devour the wealth of orphans wrongfully, they do but
swallow fire into their bellies, and they will be exposed to
burning flame.” (4 : 10)
The women have been
exploited by men throughout the history of humankind. They were
denied in the past even the status of a human being and were
treated as chattel. Islam restored their status of human beings
and gave them rights equal to men in every sphere. In the economic
field, Islam has given them rights to acquire property, own it,
enjoy it and alienate it as the men do. The women have also been
given rights of inheritance like men, they can inherit property
from their parents, from their spouses, from their children and
from their other near kindred. Thus Muslim women are no longer
economically exploited by the men.
Supra are some of
the steps, which have been taken by Islam to end economic
exploitation of the weak by the strong.
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2-
Principles
Some of the
principles of the Islamic economic system, as laid down by the
Qur’an and the Sunnah, are discussed as follows:
1. Allah determines Right and Wrong:
We have already discussed in the first chapter that Islamic
economic system makes distinction between what is permitted being
lawful (Halal) and what is forbidden being unlawful (Haram). To
determine what is permitted or lawful (Halal) and what is
forbidden or unlawful (haram) is the soul prerogative of God. None
but God is empowered to pronounce what is right and what is wrong.
Allah has made demarcation between lawful and unlawful in the
economic sphere and has allowed man to enjoy those food items and
other articles of use which are lawful and avoid those things
which are unlawful.
The Qur’an says: “O
ye who believe ! Forbid not the good things which Allah hath made
lawful for you, and transgress not, Lo! Allah loveth not the
transgressors. Eat of that which Allah hath bestowed on you as
food lawful and good and keep your duty to Allah in Whom ye are
believers.” (5 : 87-88)
No human being has
power to say what is right (Halal) and what is wrong (Haram). The
Qur’an clarifies this principle in unambiguous terms when it
commands: “And speak not concerning that which your own tongues
qualify (as clean or unclean), the falsehood: “This is lawful, and
this is forbidden”, so that ye invent a lie against Allah…”
(16:116)
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2. Principle of Use:
Within
the bounds of lawful (Halal) and unlawful (Haram) prescribed by
Allah and also keeping in view the rules of moderation and
prudence, the man has been allowed to make full enjoyment of God’s
gifts bestowed on him. The Qur’an says: “O mankind ! Eat of that
which is lawful and wholesome in the earth, and follow not the
footsteps of the devil. Lo! he is an open enemy for you.” (2:168).
At another place, the revealed book of Islam states: “So eat of
the lawful and good food, which Allah hath provided for you, and
thank the bounty of your Lord if it is Him ye serve……..” (16:114).
However, the principle of use should not be over stretched so as
to indulge in extravagance and wastage of economic resources. The
Qur’an brings home this point when it addresses mankind: “O
children of Adam ! Look to your adornment at every place of
worship, and eat and drink, but be not prodigal Lo! He (Allah)
loveth not the prodigals.”(7:31)
All things have
been created by Allah for man’s use and service. To restrain
oneself or forbid others from the enjoyment of lawful items of
food and other articles of use tantamounts to renouncing the
blessings and favours of Allah which has been strongly condemned.
The Qur’an prohibits it in very clear words when it says : “O ye
who believe ! Forbid not the good things, which Allah hath made
lawful for you, and transgress not, Lo! Allah loveth not
transgressors.”(5:87). In another verse, the Holy Qur’an questions
those who put restrictions on the use of certain things without
divine sanction: “Say! Who hath forbidden the adornment of Allah
which He hath brought forth for His bondmen, and the good things
of His providing?…..”(7:32). Thus the Qur’an has disapproved the
ways of monks and ascetics who consider the satisfaction of
physical urges an obstacle in spiritual development.
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3. Principle of Moderation:
Islam unequivocally discourages its followers to cross the limits
and follow extremes. The Muslims have been called by the Qur’an a
middle nation (2:143). Therefore, the principle of moderation
carries paramount importance especially in the economic field.
This principle is followed by the true believers in the production
of wealth as well as in the consumption and spending of wealth.
Although earning of wealth through permitted (Halal) means is
allowed, yet the piety demands that a Muslim should not become mad
after amassing wealth like a greedy materialist. He should
exercise restraint and earn wealth to meet his lawful needs. Extra
wealth, if at all is earned by him somehow, may be spent in the
path of Allah on charity and relief of the poor. Similarly, in the
consumption and spending of wealth, the believer is recommended to
strike balance avoiding miserliness and extravagance. Miser is he
who does not even provide for the legitimate needs of himself and
his family let alone spending on charitable and noble causes.
Extravagant or spend thrift is a person who squanders his wealth
in luxury, gambling, drinking, and on lavish expenditure on
festivities, weddings, day to day living. Islam condemns both
miserliness and extravagance and enjoins upon a believer to
exercise moderation. The Qur’an appreciates those who exercise
moderation in spending when it says: “And those who, when they
spend, are neither prodigal nor grudging; and there is ever a firm
station between the two.”(25:67)
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4. Economic Freedom:
Every individual, according to Islam, is accountable for his
actions done in this world. He would be rewarded for his good
actions and punished for his evil actions in the hereafter.
Accountability for individual’s actions is meaningless if the
individual is not provided reasonable freedom to act
independently. Therefore, Islam puts highest value on individual’s
freedom of action in every field of human activity such as social,
political, economic religious, moral, etc.
Islamic principle
of economic freedom means that an individual has been allowed
liberty by God to earn wealth, own it, enjoy it and spend it as he
likes. It also entails freedom to adopt any profession, business
or vocation to earn livelihood. But Islam has not allowed
unlimited freedom in the economic sphere. As we have already
discussed, Islam makes distinction between Halal (lawful) and
Haram (unlawful). In the field of production, distribution,
exchange and consumption, only Halal (lawful) means are permitted.
Remaining within the restrictions of Halal and Haram, an
individual enjoys full freedom to earn and spend wealth as he
likes. Thus Islam recognises free enterprise, human initiative,
and individuals potential. It also recognises role of organisation,
capital, labour and market forces in economic field. No
unnecessary curbs are placed on the individual or the organisation
regarding earning or owning of wealth. No upper limit or ceiling
is imposed on properties or holdings. Besides restrictions of
Halal and Haram, other restrictions are rarely placed on economic
activities, prices of goods, ownership or on monopolies unless the
same are really necessary for safeguarding the common interest of
Muslim community.
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5. Principle of Justice:
Islamic principle of justice operates in every sphere of human
activity, may it be legal, social, political or economic. Islamic
economic system, in fact is based upon the principle of justice
which governs all the basic aspects of economy like production,
distribution, consumption and exchange.
In the sphere of
production, Islamic principle of justice ensures that nobody is
exploited by the other and that nobody acquires wealth by unjust,
unfair, unlawful and fraudulent means. The followers of Islam have
been allowed to acquire wealth through just and fair means. Islam
admits the right of every individual to earn his livelihood, to
acquire wealth, to own property and live a comfortable life. But
it does not allow that people should amass wealth through bribery,
corruption, embezzlement, stealing, robbery, gambling, trade in
narcotics, exploitation, gambling, interest, fraud, hoarding,
black marketing, prostitution, malpractices in business, immoral
professions or through other unjust methods.
In the field
of distribution, the Islamic principle of justice plays the most
vital role. One of the greatest contribution of Islam to humanity
is that Islam ensures just and equitable distribution of wealth
among the people. Justice in distribution, which is called by
various names like economic justice or social justice or
distributive justice, demands that economic resources and wealth
should be so distributed among the members of the community that
on the one hand the gulf between the rich and the poor should be
bridged and on the other hand everyone should be provided with
basic necessities of life. Islam discourages concentration of
wealth in few hands and ensures its circulation in the community
not only through moral education and training but also through
effective legal measures. System of Sadaqat, Zakat and voluntary
alms along with laws of inheritance helps distribution of wealth
among the larger sections of society,
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