Explore the Economic System of Islam - Part 02

System of Islam

Economic System of Islam (Part 2)

Mawlana Farman Ali Attari

The noble Companions رَضِىَ اللّٰهُ عَـنْهُم and earning a livelihood

Following in the footsteps of the Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم, the Companions رَضِیَ اللهُ عَنْهُم who took guidance from him and remained in his company gave preference to earning and exerting their own efforts to provide for their families and dependants. They took up various occupations to this end.

Prior to his appointment, the 1^st Caliph of Islam, Abū Bakr al-Ṣiddīq رَضِىَ اللّٰهُ عَـنْهُ used to trade in cloth.[1]

The 2^nd Caliph of Islam, ꜤUmar b. al-Khaṭṭāb رَضِىَ اللّٰهُ عَـنْهُ would engage in sharecropping, in which he would stipulate that if the other party brought seeds, they would get half of the crops, and if he provided the seeds, they would have a certain percentage of the produce.[2]

The 4^th Caliph of Islam, ꜤAlī b. Abī Ṭālib رَضِىَ اللّٰهُ عَـنْهُ would earn a living offering his services for a fixed number of hours.[3]

ꜤAbd al-Raḥmān b. ꜤAwf and Ṭalḥa b. ꜤUbaydullāh رَضِیَ اللهُ عَنْهُمَا were in the cloth trade.[4]

Abū ꜤAbdullāh al-Zubayr b. al-ꜤAwwām رَضِىَ اللّٰهُ عَـنْهُ was a butcher.[5]

ꜤAbbās b. ꜤAbd al-Muṭṭalib رَضِىَ اللّٰهُ عَـنْهُ traded in cloth and perfume.[6]

Salmān al-Fārisī رَضِىَ اللّٰهُ عَـنْهُ was the governor of Ctesiphon (Iraq) and would receive a wage from the treasury, yet preferred earning with his own hands and would make baskets from date palm leaves. He himself states, “I prefer eating from the earnings of my hands.”[7]

Causes of ruin of the economic system according to Islam

The dire state of our economy today is not something hidden. Everybody is in a state of restlessness and concern due to this, and they are seen complaining about lack of employment and an absence of blessings. If we ponder, we will realise the fundamental reason for this is our distance from Islamic teachings regarding earning a living. Today, people oppose Islamic principles in trade by engaging in lying, deception, dishonesty, the usage of inferior materials, usurious transactions, and countless other unlawful means, leading our economy rapidly towards destruction.

Let us read about some of the wrongs found in earning and business, as well as their harms:

Interest-based transactions

One Islamic principle of business is to avoid dealing in usury. The latter is a cursed thing that ruins trade and consumes our economy like a termite. Whilst income might appear to increase in interest-based business, over time, it not only ruins our personal financial endeavours, but even national economy at large.

Warning us of this, the Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم stated, “Although usury (visibly) increases, it ultimately leads to loss.”[8]

Shaykh ꜤAbd al-Raˈūf al-Munāwī رَحْمَةُ الـلّٰـهِ عَـلَيْه explains this ḥadīth: “Engaging in usury brings about a rapid increase in money but opens the doors of destruction and ruin for a person, causing his wealth to decrease until nothing remains.”[9]

Unfortunately, the prevalence of interest is increasing, and people are convinced into engaging in interest-based transactions via the use of false excuses and justifications. When an unemployed person mentions his financial hardships to others, they advise him to take out an interest-based loan, and sometimes, he himself has this mindset. Remember, Allah’s Messenger صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم cursed those who conduct interest-based transactions, those who write them down, and those who bear witness to them.[10]

Deception

Another Islamic principle of business is to stay away from deceiving others. In this regard, Islam teaches us that we must not conceal any defects in an item when selling it. Instead, we must inform the buyer of any faults. Additionally, adding inferior materials to something pure, gaining the trust of the buyer by taking false oaths regarding your defective goods, and being dishonest when weighing and measuring things, are all forms of deception.

Remember, deception not only betrays the trust of the buyer, but also makes you lose your value in his eyes and even harms your business. A ḥadīth mentions: “The Day of Judgement will not be established until a trader will reach two corners (of the world) but will not gain any profit.”[11]

Shaykh Muhammad b. ꜤAbd al-Rasūl al-Barzanjī رَحْمَةُ الـلّٰـهِ عَـلَيْه comments, “This (lack of profit in trade) indicates the fact that (near the Day of Judgement) deception and lying will be common among businesspeople. This will lead to a lack of blessings in trade.”[12]

It is stated in another ḥadīth: “Cursed is he who causes harm to a believer or deceives and swindles him.”[13]

Not paying zakat

One reason for economic ruin is not giving zakat from one’s wealth after the passing of a lunar year. Zakat is a pillar of Islam and one of the most important acts of worship relating to wealth. It is a beautiful system, by means of which the poor and less fortunate receive financial aid. If all financially able people paid their zakat correctly, there would be no poverty left in our society and our economy would become strong.

But unfortunately, due to miserliness, the well-off demographic amasses its wealth and does not even pay what is obligated of it in zakat, leaving their riches static. It does not reach those who are rightful to it, preventing them from purchasing essential supplies. When money ceases to flow, poverty and destitution spread. This also impacts our livelihood and economic system, causing its collapse.

The Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم warned us regarding this: “The nation which does not give zakat; Allah shall afflict them with drought.”[14]

He also stated, “The wealth lost in dryness and wetness is due to not paying zakat.”[15]

Hoarding

Another cause of economic ruin is hoarding, which is to amass large amounts of a thing in wait of its price increasing. In the terminology of Islamic law, it refers to stockpiling basic foodstuffs of humans and animals with the intention of selling when it becomes expensive, provided it causes harm to people by not selling it and one purchased it from a city or surrounding areas.[16]

Note that due to the greed of businesspeople, food and drink items become scarce in the marketplace and their prices rise steeply. This becomes a source of great concern for people, and it also damages economy.

Condemning the hoarding of this nation, the Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم said, “He who withholds grains for forty days with the intention of increasing its price has become distant from Allah, and Allah has nothing to do with him.”[17]

Mufti Aḥmad Yār Khan NaꜤīmī رَحْمَةُ الـلّٰـهِ عَـلَيْه writes, “The mentioning of forty days is not to set a limit as such, and that hoarding for less than forty days is permissible. The meaning is that he who does this regularly will be given this punishment.”[18]

“Whoever prevents Muslims from their sustenance (grain); may Allah cause him to die in leprosy and poverty.”[19]

Usage of the word “sustenance” highlights how hoarding is unconditionally prohibited. It is even worse when done to Muslims, as harming Muslims is worser than causing harm to others.[20]

Those involved in business should avoid this condemned action, as this results in the displeasure of Allah and His Messenger صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم, entails evil intentions towards Muslims, and results in a lack of blessings in one’s wealth and economic destruction.

Bribery

One reason for the dire state of our economy and official offices is the prevalence of bribery, due to which our national reserves are dwindling, and our economy is collapsing. For example, if a person wishes to open a small shop in the market or near it; to find a good location, he must first pay off officials and landowners. He must pay the landowners’ rent, as well as set aside a specific weekly or monthly amount for others.

Additionally, if an unqualified person wishes to find a job, he can receive any position he wishes through the forging of signatures and bribery, whilst the qualified individual is left unemployed. If one wishes to engage in other unlawful activity or is caught committing a crime, he can save his honour or get what he needs done by paying money.

In short, the use of bribery has become commonplace for getting any difficult task done. If a person does not engage in this, he often faces many difficulties and issues. Remember, if a person who owns even a small shop must pay up in the name of bribery, and not doing so would result in his shop being closed and him becoming unemployed, how will our economy thrive?

Now, what of a person without proper qualifications, who takes a position of authority by paying a bribe but is unable to do what is required of him? For example, he becomes a teacher but does not possess any teaching skills, cannot do what is required from him, cannot manage matters properly, and only continues to incur financial loss for his employers; what benefit will he bring them?

Likewise, when a criminal is freed after paying some money, it only leads to an increase in crime in our country and the spread of unemployment. Financial corruption in our state institutions has harmed our economy.

The Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم cursed those who give and take bribes, and declared both to be people of Hell.[21]

Besides these, there are many other matters damaging our economy, or leading to a lack of blessings in sustenance and resulting in us depending financially on others. We must earn a lawful income whilst always adhering to the Islamic principles of earning, trading and employment.

To be continued in next month’s edition…