Principles of Islamic Economy

Islam did not introduce independent economic principles which were divorced from other aspects of life, in the manner of positive concepts. Islam has a realistic view towards life. In its opinion, all aspects of life are inter-dependent and its materialist side has to rely on its spiritual side. For this reason, Islam's economic principles are mixed with others which may be material, social or educational.

  Nor does Islam, treat economics superficially, it makes a deep study of it, and in all other matters, it tries to find out the secrets of each problem. In The Holy Book and The Sunna these sound principles, based on a natural and realistic footing, are to be found everywhere. They are mentioned in these two sources in a way which follows the latest principles of education. This makes them directives for good behavior which can be easily assimilated and not just set principles which cannot reach the heart and which are difficult to apply except through violence and authority.

Islam allows ownership and gives this right to everybody, provided no harm is to be done to individuals or groups of individuals. It left to society the regularizing of its affairs within these limits according to environment and circumstances related to time and space. If the application of these principles is carried out properly and precisely, Islam is confident of their good results.  

It is easy for everyone studying The Holy Book and The Sunna to realize how Islam deals with economy. Islam's way of approaching this can be summarized under the following points:

1 - Developing man's mind :

The Relation between man's mind and the economy is a powerful one, since the human mind is a sound measurement which man has to exploit not leave idle Allah says what means :

" In the creation of the heavens and the earth, and the alternation of night and day, and the ships that run in the sea with that which profits men, and the water that Allah sends down from the sky, then gives therewith to the earth after its death and spreads in it all (kinds of) animals and the changing of the winds and the clouds made subservient between heaven and earth, there are surely signs for a people who understanding. (The Holy Quran)

  The Quran repeats this meaning many times and in many chapters. It teaches man how to contemplate, and then how to order his relation with his world, in order that he may start on his own from the beginning, without any disturbance or distortion.

2- Faith in Allah is essential for man :

If man thinks deeply he will soon have faith in Allah. if such a man continues contemplation and thought, endeavoring to know about time and space and whatever numberless and changing worlds they include, he will feel that he is an atom in these worlds, which are ordered by sound and steady laws and which aim at certain objectives known to none except Allah. Submissively and quietly, he recognized only Allah and fears neither poverty nor harm. Allah says what means :  

Those who believe and whose hearts find rest in the remembrance of Allah. Now surely in Allah's remembrance do hearts find rest. Those who believe and do good a good final state is theirs and goodly return And might belongs to Allah and His Messenger and the believers, but the hypocrites know not. (The Holy Quran)

3- Recognition of Private Ownership:

(i) Man must recognize and admit this principle. Allah says what means:

" Who make the earth a resting place for you and the heavens a structure, and sends down rain from the clouds then brings forth with it fruits for your sustenance; so do not set up rivals to Allah while you know. And make not over your property, which Allah has made a (mean of) support for you, to the weak of understanding, and maintain them out of it, and clothe them and give them a good education. (The Holy Quran)

  The verses of The Holy Quran which deal with this point are numerous and there is insufficient space to deal with them here.

(ii) Combating of divergent opportunities regarding ownership : There should not be discrimination regarding, ownership due to birth, race, color or wealth. persons, are equal and only by the merit and worth of work can a man be superior. Allah says what means:

"And that man can have nothing but what he strives for. O people, keep your duty to Allah, Who created you from a single being and created its mate of the same (kind), and spread from these two many men and women. And keep your duty to Allah, by Whom you demand one of another (your rights), and (to) the ties of relationship. Surely Allah is ever a Watcher over you. O mankind, surely We have created you from a male and a female, and made you tribes and families that you may know each other. Surely the noblest of you with Allah is the most dutiful of you. Surely Allah is Knowing, Aware. (The Holy Quran)

(iii) Delineation of the means for acquiring possessions : To have money is not a goal in itself, but a means by which life becomes stable and prosperous. In this respect, the fundamental principle of ownership that man can own anything without resorting to violence, should be taken into account. Man is forbidden from using force in obtaining ownership. Beyond this man is free to own anything. Allah says what means :  

Say : The bad and the good are not equal, though the abundance of the bad may please thee. So keep your duty to Allah, O men of understanding, that you may succeed. Say Allah forbids only indecencies, such of them as are apparent and such as are concealed, and sin and unjust rebellion, and that you associate with Allah that for which He has sent down no authority, and that you say of Allah what you know not. (The Holy Quran)

To achieve that goal, Islam ordains the following:  

(i) Individuals are forbidden to acquire money through gambling because to gamble is to usurp another's money without reward and because it constitutes an infringement of the rights of society, as opposed to the individual. It makes a member of particular society unable to perform his duties towards the community he lives in. Society requires from every member the offering of productive work. Allah says what means :

"O you who believe, intoxicants and games of chance and (sacrificing to) stones set up and (dividing by) arrows are only an uncleanness, the devil's work; so shun it that you may succeed. The devil desires only to create enmity and hatred among you by means of intoxicants and games of chance, and to keep you back from the remembrance of Allah and from prayer. will you then keep back? (The Holy Quran)

  (ii) People are forbidden from colleting money through usury. Usury increases the value of capital and encourages people with money not to work. In addition to that, it harbors hatred in the souls of the needy. In such a ease, the community cannot be stabilized and individuals feel no safety. Allah says what means:

" Those except as he arises who swallow usury cannot arises whom the devil prostrates by (his) touch. That is because they say, Trading is only like usury. And Allah has allowed trading and forbidden usury. To whomsoever then the admonition has come from Allah, and he desists, he shall have what has already passed. And his affair is in the hands of Allah. And whoever returns (to it) - these are the companions of the Fire : therein they will allude - Allah will blot out usury, and lie causes charity to prosper. And Allah loves not any ungrateful sinner. And whatever you lay out at usury, so that it may increase in the property of man it increases not with Allah; and whatever you give in charity, desiring Allah's pleasure, these will get manifold. (The Holy Quran)

(iii) Islam prevents the accumulation of wealth by plundering and exploiting the weakness of others. Allah says what means:

" And swallow not up your property surely Allah is ever Aware of what you do among yourselves by false means, nor seek to gain access thereby to the judges, so that you may swallow up a part of the property of men wrongfully while you luiow. O you who believe, devour not your property among yourselves by illegal methods except that it be trading by your mutual consent. And kill not your people. Surely Allah is ever Merciful to you. Those who swallow the property of the orphans unjustly they swallow only fire into their bellies. And they will burn in blazing fire. Surely Allah commands you to make over trusts to those worthy of them, and that when you judge between people you judge with justice. Surely Allah admonishes you with what is excellent. Surely Allah is ever Hearing. Seeing. O you who believe, be maintainers of justice, bearers of witness for Allah, even though it be against your own selves or (your) parents or near relatives - whether he be rich or poor, Allah has a better right over them both. So follow not (your) low desires, lest you deviate. And if you distort or turn away from (truth), surely Allah is ever Aware of what you do. (The Holy Quran)

(iv) The organization of relations between employees and employers. Islam ordains that such relations must be founded on a basis of the mutual exchange of services and equality between all. Allah says what means :

" Do they apportion the mercy of Allah? We portion out among them their live hood in the life of this world, and We exalt some of them above others in rank that some of them may take others in service. And the mercy of thy Lord is better than that which they amass". (The Holy Quran)

The Prophet Muhammad, peace be upon him, says on this point (The Muslim is the brother of the Muslim he should not do injustice to his brother nor leave him to the mercy of others). By adopting this principle, the morale of the worker rises and the employer's attitude towards him becomes free from any sense of exploitation or monopoly. Everybody has to offer something in order to obtain for himself whatever he is able or needs to obtain. Relations between both parties are to be based on collaboration, following the Prophet's words "There should be no harm for anyone".

(v) Islam combats man's excessive desire for ownership which may oblige one to resort to objectionable means or spend beyond his capacity in order to acquire something he does not need. Ownership is not an aim but a means for achieving cooperation between peoples in an attempt to secure happiness and welfare. The Holy Quran has a number of verses which explain that wealth and riches, like anything else, are determined by Allah and no power other than Allah's can increase or decrease what He decides for each human being. Allah says what means:

" Or who is it that will give you sustenance if he should withhold His sustenance? Nay, they persist in disdain and aversion. Is he who goes prone upon his face better guided or he who walks upright on a straight path? (The Holy Quran)

The Prophet also warns people against going to extremes.

As a practical religion, Islam guarantees for people their necessities. In case man should become unable to meet his requirements through his personal effort, the society in which he lives has to look after him. In such a case, Islam allows such a man to obtain money from the state treasury (Beit al Mal). Allah says what means:" Alms are only for the poor and the needy, and those employed to administer it, for those whose hearts are to be propitiated, for the captives for those in debt and in the way of Allah and for the wayfarer - an ordinance from Allah. And Allah is Knowing, Wise. (The Holy Quran).

(vi) Islam defines the ways in which a man may enjoy whatever he possesses. In doing so, it never restricts man's liberty, but it sets up a barrier between man and excess in enjoying himself lest he should forget the others who live with him in the same community, or tends to usurp their rights. In this context Islam introduced some prohibitions and imposed restriction. Allah says what means:

" O ,men, eat the lawful and good things from what is in the earth, and follow not the footsteps of the devil, Surely he is an open enemy to you. O you who believe, forbid not the good things which Allah has made lawful for you and exceed not the limits Surely Allah loves not those who exceed the limits. And eat of the lawful and good (things) that Allah has given you, and keep your duty to Allah, in Whom you believe. (The Holy Quran)

  The Quran not only asks people to be reasonable in enjoying themselves, but warns those who deviate from the right path and tells them that they will go astray. Allah says what means : 

"They are losers indeed who kill their children foolishly without knowledge, and forbid that which Allah has provided for them, forging a he against Allah. They indeed go astray, and are not guided. And He it is who produces gardens, trellised and untrellised, and palms and seed - produce of which the fruits are of various sorts, and olive and pomegranates, like and unlike. Eat of its fruit when it bears fruit, and pay the due of it on the day of its reaping, and be not prodigal. Surely He loves not the prodigals. And of the cattle (He has created) some for burden and some for slaughter. Eat of that which Allah has given you and follow not the footsteps of the devil. Surely he is your open enemy. Eight in pairs of the sheep two and of the goats two. Say Has He forbidden the two males or the two females or that which the wombs of the two females contain? Inform me with knowledge, if you are truthful; and of the camels two and of the cows two. Say : Has He forbidden the males or the two females or that which the wombs of the two females contain? Or were you witnesses when Allah enjoined you this? Who is then more unjust and he who forges a lie against Allah to lead men astray without knowledge? Surely Allah guides not the iniquitous people. (The Holy Quran)

(vii) Islam develops in man the spirit of Cooperation with others. It ordains that every man should give the needy a specified proportion of his wealth. By doing this, hatred against the wealthy people cannot be harbored by the poor. This is in accordance with Islam's aim which enjoins the achievement of security and order. Allah says what means: 

"And keep up prayer and pay the poor-rate and bow down with those who bow down. Only Allah is your Friend and His Messenger and those who believe, those who keep up prayer and pay the poor rate, and they bow down. Take alms out of their property thou wouldst cleanse them and purify them thereby - and pray for them. Surely thy prayer is a relief to them. And Allah is Hearing, Knowing. (The Holy Quran)

(viii) Islam safe and protects man's property. This is done in the following ways

(a) It protects peoples' properties from being stolen or pillaged by deterrent punishments. Allah says what means : 

"The only punishment of those who wage war against Allah and His Messenger and strive to make mischief in the land is that they should be murdered, or crucified, or their hands and their feet should be cut off on opposite sides, or they should be imprisoned. This shall be a disgrace for them in this world, and in the Hereafter they shall have a grievous chastisement. And (as for) the man and the woman addicted to theft, cut off their hands as a punishment for what they have earned, an exemplary punishment from Allah. And Allah is Mighty, Wise. (The Holy Quran)

  (b) Islam also protects people against fraud by forbidding anybody from using the property of another without any legal claim. Allah says what means 

"And swallow not up your property among yourselves by false means, nor seek to gain access thereby to the judges, so that you may swallow up a part of The property of men wrongfully while you know. (The Holy Quran)

  (c) Islam prohibits man from wastefully spending money, even for charity. Allah says what means:

" O men, eat the lawful and good things from what is in the earth, and follow not the footsteps of the devil. Surely he is an open enemy to you. And give to the near of kin his due and (to) the needy and squander not wastefully. Surely the squanderers are the devil's brethren. And the devil is ever ungrateful to his Allah. And if thou turn away from them to seek mercy from Allah which thou hopest for, speak to them a gentle word. And make not thy hand to be shakied to thy neck, nor stretch it forth to the utmost (limit) of his stretching forth, lest thou sit down blamed, stripped off. And they who, when they spend are neither extravagant nor parsimonious, and the just means is ever between these. (The Holy Quran)

(ix) Islam creates the incentives to ownership since the absence of these incentives may lead to disinterestedness and frustration with the rigors of life. An individual is to leave his property to his relatives and this property serves also as a further incentive which requires from man not to give up an active life because he has reached the stage of self-sufficiency. To achieve this goals, Islam provided the inheritance laws. Allah says what means : 

"For men is a share of what the parents and the near relatives leave, and for women a share of what the parents and the near relatives leave, whether it be little or much - an appointed share. And when relatives and the orphans and the needy are present at the division give them out of it and speak to them kind words. (The Holy Quran)

4 - Respect for the community:

Islam enjoins strengthening of family relations between its members since it believes that the family is the basis on which the society is founded. It also requires all members of every family to respect the rights and obligations towards the family and to consider the duties of rearing, protecting and looking after children. Allah says what means :

"And serve Allah, and associate naught with Him, and be good to the parents and to the near of kin and the orphans and the needy and the neighbor of (your) kin and the alien neighbor, and the companion in a journey and the wayfarer and those whom your right hands possess. Surely Allah loves not such as are proud, boastful, who are niggardly and bid people to be niggardly and hide that which Allah has given them out of His grace. And We have prepared for the disbelievers an abasing chastisement. And mothers shall suckle their children for two whole years, for him who desires to complete the time of suckling. And their maintenance and their clothing must be borne by the father according to usage. No soul shall be burdened beyond its capacity. Neither shall a mother be made to suffer harm on account of her child, nor a father on account of his child, and the similar duty devolved on the (father's) heir. And Allah has decreed that you serve none but Him, and do good to parents If either or both of them reach old age with thee, say not (Fie)to them, nor chide them, and speak to them a generous word And lower to them the wing of humility out of mercy, and say Allah, have mercy on them, as they brought me up (when I was) little. (The Holy Quran)

By these decrees the Holy Quran not only aims at the protection of the family, which is the basis of the society but it also protects the society against the following

(i) The accumulation of wealth. By the law of inheritance The Holy Quran decrees that big holdings be divided in a way which protects society against economic inflation and the accumulation of wealth by one single family, since it will harm society both in relation to its individual members in its general character and structure.

(ii) Selfishness dominating the members of society. Selfishness removes the element of harmony and cohesion in a society. Allah says what means : 

"If your fathers and your brethren and your wives and your kinsfolk and the wealth you have acquired, and trade whose dullness you fear, and dwellings you love, are dearer to you than Allah and His Messenger and striving in His way, then wait till Allah brings His command to pass. And Allah guides not the transgressing people. Go forth, light and heavy, and strive hard in Allah's way without your wealth and your lives. This is better for you, if you know. (The Holy Quran)

The restiveness of either the individual or the family and their deviation from the proper way is due to the dominance of the love of money, which they conceive of as a goal and not a means. Islam, in more than one of the verses of The Holy Quran, explains that wealth is not the means for securing stability and order-this is a fact which experience endorses. Allah says what means :

"Let not then their wealth nor their children excite thine admiration. Allah only wishes to chastise them there with in this world's life and (that) their souls may de part while they are disbelievers. Quran was surely of the people of Moses, but he oppressed them, and we gave him treasures, so much so that his hoards of wealth would weigh down a body of strong men. When his people said to him Exult not; surely Allah loves not the exultant. And seek the abode of the Hereafter by means of what Allah has given thee, and neglect not thy portion of the world, and do good (to others) as Allah has done good to thee, and seek not to make mischief in the land. Surely Allah loves not the mischief mackers. He said I have been given this only on account of the knowledge I have. Did he not know that Allah had destroyed before him generations who were mightier in strength than he and greater in assemblage? And the guilty are not questioned about their sins. And it is not your wealth, nor your children, that brings you near to Us in rank, but whoever believes and does good, for such is a double reward for what they do, and they are secure in the highest places. (The Holy Quran)

  (iii) The domination of materialism and disappearance of idealism destroy the most powerful communities. Islam demands that should be given to people of limited incomes; this raises the normale of such people and safeguards others against loss in case they become incapacitated due to illness. Allah says what means:

" It is not righteousness that you turn your faces towards the East and the West, but righteous is the one who believes in Allah, and the last Day, and the angels, and the Book and the Prophets, and gives away wealth out of love for Him to the near of kin and the orphans and the needy and the wayfarer and to those who ask and to set slaves free and keep up prayer and pay the poor-rate; and the performers of their pronuse when they make a promise, and the patient in distress and affliction and in the time of conflict. These are they who are truthful; and those are they who keep their duty. Alms is only for the poor and the needy, and those employed to administer it, and those whose hearts are made to incline (to truth), and (to free) the captives, and those in debt, and in the way of Allah and for the wayfarer - on ordinance from Allah And Allah is Knowing, Wise. (The Holy Quran)

Islam, by attractive promises, also persuades men to help others by granting them loans, without interest, seeking only the graciousness of Allah. Allah says what means :  

Who is it that will offer to Allah a goodly gift, so He multiplies it to him manifold? And Allah receives and amplifies, and to Him you shall be returned. (The Holy Quran).

  In respecting the collective identity of the community Islam not only protects them from aggression by individuals, but it gives preference, in case of conflict, to the community interest. Should it be necessary, the interest of the individual must be set aside in favor of the inter ests of the community.

Islam stipulates:

a) That individuals and their properties are to be placed in the service of the community. Sometimes, Islam persuades individuals to make sacrifices in this respect. Allah says what means :

"Surely Allan has bought from the believers their persons and their property - theirs (in return) is the Garden. They fight in Allah's way, so they slay and are slain. It is a promise which is binding on Him in The Torah and The Gospel and The Quran. And who is more truthful to his promise than Allah? Rejoice therefore m your bargain which you have made. And that is the mighty achievement. (The Holy Quran).

In case persuasion does not work, Islam gives it the shape of an order. The Holy Quran says what means:

" And spend in the way of Allah and cast not yourselves to perdition with your own hands and do good (to others). Surely Allah loves the doers of good. (The Holy Quran)

(b) Function which are of general utility are to be exercised by the community. They have to be controlled by the community through its rulers, as a means of giving everyone an equitable share in them. Allah says what means : 

He it is Who sends down water from the clouds for you; it gives drink, and by it (grow) the trees on which you feed. And He it is Who made the sea subservient that you may eat fresh fish from it and bring forth from it ornaments which you wear. And thou seest the ships cleaving through it, so that you seek of His bounty and that you may give thanks He it is Who made the earth subservient to you, so go about in the spacious sides thereof, and eat of His sustenance. And to Him is the rising (after death). Allah is He Who made subservient to you the sea that the ships may glide therein by His command, and that you may seek of His grace, and that you may give thanks. And He has made subservient to you whatsoever is in the heavens and whatsoever is in the earth, all from Himself. Surely there are signs in this for a people who reflect. (The Holy Quran)