INTRODUCTION
One of
the forms of capitalism, which has been flourishing in un-Islamic
societies, is the interest based investments. There are normally two
participants in such transactions. One is the Investor who provides
capital on loan and the other Manager who runs the business. The investor
has no concern whether the business runs into profit or loss, he
automatically gets an interest (sood) in both outcomes at a fixed
rate on his capital. Islam prohibits this kind of trading and the Holy
Prophet (SAW) enforced the ruling, not in the form of some moral teaching,
but as the law of land.
THE
ECONOMIC PHILOSOPHY OF ISLAM & INTEREST
The
economic philosophy of Islam has no concept of riba because according to
Islam, riba is that curse in society which accumulates money around
handful of people and it results inevitably in creating monopolies,
opening doors for selfishness, greed, injustice and oppression. Deceit and
fraud prospers in the world of trade and business. Islam, on the other
hand, primarily encourages highest moral ethics such as universal
brotherhood, collective welfare and prosperity, social fairness and
justice. Due to this reason, Islam renders riba as absolutely haram
and strictly prohibits all types of interest based transactions.
The
prohibition of Riba in the light of economic philosophy of Islam can be
explained with the cost of distribution of wealth in a society.
DISTRIBUTION
OF WEALTH
The
distribution of wealth is one of the most important and most controversial
subjects concerning the economic life of man, which has given birth to
global revolutions in the world of today, and has affected every sphere of
human activity from international politics down to the private life of the
individuals. For many centuries this question has been the center not only
of fervent debates, oral and written both, but also of armed conflicts.
The fact, however, is that whatever has been said on the subject without
seeking guidance from Divine Revelation and relying merely on human
reason, has had the sole and inevitable result of making the confusion
worse confounded.
ISLAMIC
PERSPECTIVE OF DISTRIBUTION OF WEALTH
Before explaining the
Islamic point of view, it seems to be imperative to clarify certain basic
principles which one can derive from the Quran, and which distinguish the
Islamic point of view in economics from non-Islamic systems of economy
1. THE
IMPORTANCE OF THE ECONOMIC GOALS
No doubt,
Islam is opposed to monasticism, and views the economic activities of man
quite lawful, meritorious, and some times even obligatory and necessary.
It approves of the economic progress of man, and considers lawful or
righteous livelihood an obligation of the secondary order. Notwithstanding
all this, it is no less a truth that it does not consider "economic
activity" to be the basic problem of man, nor does it view economic
progress as the be-all and end-all of human life.
Many
misunderstandings about Islamic economics arise just from confusion
between the two facts of considering economics as the ultimate goal of
life and considering it as a necessity in order to have a prosperous life
through lawful means. Even common sense can suffice to show that the fact
of an activity being lawful or meritorious or necessary separate from it
being the ultimate goal of human life and the center of thought and
action. It is, therefore, very essential to make the distinction as clear
as possible at the very outset. In fact, the profound, basic and
far-reaching difference between Islamic economics and materialistic
economics is just this:
According
to materialistic economics,
"Livelihood"
is the fundamental problem of man and economic developments are the
ultimate end of human life,
While
according to Islamic economics,
Livelihood
may be necessary and indispensable, but cannot be the true purpose of
human life.
So, while
we find in the Holy Quran the disapproval of monasticism and the order to:
"Seek the benevolence of Allah." At the same time we find in the
Quran to restrain from the temptations or delusion for worldly life. And
all these things in their totality have been designated as "Al-Dunya"
("the mean") — a term which, in its literal sense, does not
have a pleasant connotation.
Apparently one might feel
that the two commands are contradictory, but the fact is that according to
the Quranic view, all the means of livelihood are no more than just stages
on man's journey, and his final destination lies beyond them. That
destination is the sublimity of character and conduct, and, consequently,
the felicity of the other world.
The real problem of manand the fundamental purpose of
his life is the attainment of these-two goals. But one cannot attain
them without traversing the path of this world. So, all those things too
which are necessary for his worldly life, become essential for man. It
comes to mean that so long as the means of livelihood are being used
only as a path leading towards the final destination, they are the
benevolence of Allah, but as soon as man gets lost in the mazes of this
pathway and allows himself to forget his real destination, the very same
means of livelihood turn into an "temptation, or delusion"
into a "trial" ( 8:28).
The Holy Quran has enunciated this basic truth very
precisely in a brief verse:
"Seek the other world by means of what Allah has
bestowed upon you" (28:77).
This principle has been stated in several other
verses too. This attitude of the Holy Quran towards "the economic
activity" of man and its two aspects would be very helpful in
solving problems of man of Islamic economics.
2. THE REAL NATURE OF WEALTH AND PROPERTY
The other fundamental principle, which can help to
solve the problem of the distribution of wealth, is the concept of
"wealth" in Islam. According to the illustration of the Holy
Quran "wealth" in all its possible forms is a thing created by
Allah, and is, in principle His "property". The right of
property over a thing, which accrues to man, is delegated to him by Allah.
The Holy Quran explicitly says:
"Give to them from the property of Allah which He
has bestowed upon
you." (24:33).
According to Quran the reason for this philosophy is
that all a man can do is to invest his labor into the process of
production. But Allah alone, and no one else, can cause this endeavor to
be fruitful and actually productive. Man can do no more than sow the seed
in the soil, but to bring out a seedling from the seed and make the
seedling grow into a tree is the work of some one other than man.
The Holy Quran says:
"Have you considered what you till? Is it you
yourselves who make it grow, or is it We who make it grow?"
And in another verse:
"Have they not seen that, among the things made by our own hands.
We have created cattle for them, and thus they acquired the right of property over them?" (36:71)
All these verses throw ample light on the fundamental
point that "wealth", no matter what its form, is in principle
' 'the property'' of Allah, and it is He who was bestowed upon man the
right to exploit it. So Allah has the right to demand that man should
subordinate his exploitation of this wealth to the commandments of
Allah.
Thus, man has the "right of property" over
the things he exploits, but this right is not absolute or arbitrary or
boundless, it carries along with it certain limitations and restrictions
which have been imposed by the real owner of the 'wealth'. We must spend
it where He has commanded it to be spent, and refrain from spending
where He has forbidden. This point has been elucidated more explicitly
in the following verse:
"Seek the other world by means of what Allah has
bestowed upon you, and do not be negligent about your share in this
world. And do good as Allah has done good to you, and do not seek to
spread disorder on the earth." (28:77)
This verse fully explains the Islamic point of view
on the question of property. It places the following guidelines before
us:
(1) Whatever wealth man does possess has been received
from
(2) Man has to use it in such a way that his ultimate
purpose should be the other world
(3) Since wealth has been received from Allah, its
exploitation by man must necessarily be subject to the commandment of
Allah.
(4) Now, the Divine Commandment has taken two forms:-
(a) Allah may command man to convey a specified production
of "Wealth" to another man. This Commandment must be obeyed,
because Allah has done good to you, so He may command you to do good to
others - "do good as Allah has done good to you".
(b) He may forbid you to use this "wealth" in a
specified way. He has every right to do so, because He cannot allow you to
use "wealth" in a way which is likely to produce collective ills
or to spread disorder on the earth.
This is what distinguishes the Islamic point of view on the, question
of property from the Capitalist and Socialist points of view both. Since
the mental background of Capitalism is, theoretically or practically,
materialistic, it gives man the unconditional and absolute right of
property over his wealth, and allows him to employ it, as he likes. But
the Holy Quran has adopted an attitude of disapprobation towards this
theory of property, in quoting the words of the nation of Hazrat Shu’aib.
They used to say:
"Does your way of prayer command you that we
should forsake what our forefathers worshipped, or leave off doing
what we like with our own property?" (11:87)
These people used to consider their property as really theirs or
"Our property", and hence the claim of "doing what we
like" was the necessary conclusion of their position. But the
Holy Quran has, in the chapter "Light" substituted the term
"the property of Allah" for the expression "Our
possessions", and has thus struck a blow at the very root of the
Capitalistic way of thinking. But at the same time, by adding the
qualification ("what Allah has bestowed upon you"), it has
cut the roots of Socialism as well, which starts by denying man's
right to private property. Similarly, ("thus they acquired the
right property over them")
- a verse in the Chapter "Seen",
explicitly affirms the right to private property as a gift from
Allah.
DIFFERENCE BETWEEN ISLAM, CAPITALISM AND
SOCIALISM
Now we are in a position to draw clear boundary
lines that separate Islam, Capitalism and Socialism from one
another: -
Capitalism affirms an absolute and
unconditional right to private property.
Socialism
totally denies the right to
private property.
But the truth lies between these two extremes -
that is Islam admits the right to private property but
does not consider it to be an absolute and unconditional right which
is bound to cause "disorder on the earth".
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