Explore the Economic System of Islam - Part 01

System of Islam

Economic System of Islam (Part 01)

Mawlana Farman Ali Attari

Economics is a necessary part of human life. Explaining its importance, Muftī Amjad ꜤAlī al-AꜤẓamī رَحْمَةُ الـلّٰـهِ عَـلَيْه writes:

Human needs are many, and there are host of difficulties that come with attaining them. If everybody attempted to become solely responsible for all their needs, they would in all probability be unable to tend to them. One would sit down idle and not be able to live his life comfortably.

Allah Almighty divided the human community into different fields and numerous categories, so that each group should perform one task respectively, and needs can be fulfilled by a combination of all. For example, one farms, another manufactures cloth, and another carries out other crafts. Just as cultivators need clothes, those who produce clothes need grain. Neither can dispense with the other; each is need of the other.

A need arose for the product of one to reach the other and vice versa. This way, collective needs will be fulfilled and there is no difficulty in this process. The series of transactions initiated from here; buying, selling, and all forms of dealings then came into existence.^[1]

Just as Islam guided us in every sphere of life, it has also provided the best economic system in terms of trading and earning a living, and has taught us its detailed principles and regulations. The economic system of Islam is based on virtues such as goodness, benevolence, justice, reliance on Allah Almighty and contentment.

If we consider the economy and Islamic teachings, we can divide this topic into six aspects.

1) Earning a living and Islamic teachings

2) A cursory review of the economic system of the Age of Ignorance

3) The blessed Companions رَضِیَ الـلّٰـهُ عَنْهُم and means of livelihood

4) Causes of destruction of the economic system according to Islam

5) Islamic principles for the strengthening of the economic system

6) Modern economic sources and Islamic teachings.

Earning a living and Islamic teachings

It is the blessed Sunna of the Greatest Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم himself to strive for a living, and the teachings of Islam also instruct every Muslim to take on a means of livelihood to provide sustenance for himself and his family. Most certainly, Allah Almighty is the guarantor of the sustenance of all jinn, human beings, insects and animals. He is the absolutely All-Powerful. Undoubtedly, He has the power to sustain us without our toil and effort, but He has also commanded us to earn a living. This has been encouraged in many places in the holy Quran.

وَّ  جَعَلْنَا النَّہَارَ  مَعَاشًا (۱۱)

and make the day a time to earn[2]

وَ مِنْ رَّحْمَتِہٖ جَعَلَ لَکُمُ الَّیْلَ وَ النَّہَارَ  لِتَسْکُنُوْا فِیْہِ وَ لِتَبْتَغُوْا مِنْ فَضْلِہٖ  وَ  لَعَلَّکُمْ  تَشْکُرُوْنَ (۷۳)

 And from His mercy, He has made the night and the day for you that you may rest therein and seek His Grace respectively, and that you may express gratitude.[3]

The Beloved Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم not only encouraged this, but also praised those who work hard to support their families.

اِنَّ اللهَ یُحِبُّ الْمُؤْمِنَ الْمُحْتَرِفَ

Allah indeed loves the believer who practices a craft.^[4]

In another hadith, “Whoever enters the evening exhausted from his handiwork, enters it having been forgiven.”^[5]

He صَلَّى اللهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم further explained, “Whoever seeks the world in a lawful manner to save himself from begging, to strive for his family, and to be kind to his neighbour, shall meet Allah Almighty with his face as bright as the moon of the fourteenth night.” ^[6]

A cursory review of the economic system of the Age of Ignorance

Markets are a very effective means of buying, selling, and increasing capital. Via them, businessman sell their goods and buyers can purchase their necessities by paying a price. This ancient practice of marketplaces was widespread prior to Islam as well. In the Age of Ignorance, markets were set up with varying names: ꜤUkāẓ, Majanna, Dhū al-Majāz, Ḥubāshah, and Dabā, etc. The largest of these was ꜤUkāẓ.

The Greatest Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم would visit these markets with the intention of propagating Islam. He صَلَّى اللهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم would also observe the transactions taking place there.

He صَلَّى اللهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم explained the illegitimate forms of business in the Age of Ignorance and highlighted their harms, allowing for both buyers and sellers to avoid loss.

1) BayꜤ mulāmasa: This is where a person would touch another’s item of clothing and would not even turn it over for scrutiny.

2) BayꜤ munābadha: This is where a person would throw his item of clothing at another. He would throw it back to him, and in this way, the sale would be completed. In this, there no examination or agreement.^[7]

3) BayꜤ miṣrā: This is where milk would be restrained in the udder of the animal. It would not be milked,^[8] so that the purchaser believed that produces abundant milk and would desire to purchase it.

4) BayꜤ najash: This is where a person would increase the price of the item without the intention of buying it himself. The purpose would be to make another customer interested, so they buy it at a rate above its value. This is in actuality deceiving the consumer.^[9]

There were other forms of impermissible transactions during the Age of Ignorance, in which either there would not be agreement between two parties, there would be deceit, or room for disagreement emerged between the buyer and seller. For this reason, the Merciful Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم forbade these too.

The Greatest Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم himself engaged in business to remove any defects in buying and selling, and also travelled to different lands for business. When the Beloved Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم was twelve years of age, Abū Ṭālib went on a business trip to the Levant. Abū Ṭālib accompanied the Holy Prophet صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم during this, as the former loved the latter immensely.

The Messenger of Allah صَلَّى الـلّٰـهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم undertook business trips three times before his announcement of prophethood. He صَلَّى اللهُ عَلَيْهِ وَاٰلِهٖ وَسَلَّم went to the Levant twice and once to Yemen.^[10]