General Edifice Of Islamic Economics

The general edifice of the Islamic economics comprises three main elements. Its doctrine is distinguished from all other economic doctrines in their broad lines by these three elements. Its doctrinal content is also defined by these three. These elements are as follows:

1. The principle of dual ownership.
2. The principle of economic freedom in a limited sphere.
3. The principle of social justice.

We will soon explain and elucidate these elements, providing a general idea about the Islamic economics, so that we may be able to discuss more exhaustively its details and doctrinal characteristics.

A. The Principle Of Double Ownership

Islam differs significantly from both capitalism and socialism in respect of the nature of ownership that it allows. The capitalist society believes in private or individual form of ownership. Private ownership, as a general rule, allows the individuals to own various types of assets in the country according to their activities and circumstances. It does not recognize collective (public) ownership except when it is necessary to meet certain needs of the society, and when nationalization becomes essential in a particular sector on the basis of previous experience. This need would thus be an exceptional case in which the capitalist society is obliged to sacrifice the principle of private ownership and exempt a public utility or a certain assets from its purview.

The socialist society is completely the opposite. Common ownership constitutes the general policy in such a society, which is applicable to all types of assets in the country. It considers private ownership only an exception, for specific resources or wealth, in view of some dire social need.

On the basis of these two contrasting views of capitalism and socialism, the name ‘capitalist society' is given to any society that believes in private ownership as the only principle and that nationalization is an exception, being the last resort in order to meet a social need. Similarly, the name ‘socialist society' is given to a society that believes that common (public) ownership constitutes the fundamental principle and does not recognize private ownership, except under exceptional circumstances.

As for the Islamic society, neither one of the basic attributes of each of the other two societies – in terms of the mode of ownership - is applicable. Islam does not agree with capitalist principle on private ownership. Nor does Islam concur with socialism in regarding common ownership as the general principle. Instead, Islam establishes different forms of ownership simultaneously - thereby laying down the principle of dual ownership modes, instead of an inflexible single mode embraced by each of the other two doctrines.

Islam embraces private ownership, collective (public) ownership and ‘state ownership' simultaneously. It provides for each of these forms of ownership a particular space to function in. It does not regard any mode of ownership as an exception or an interim measure only necessitated by circumstances.

That is why it is incorrect to label the Islamic society as ‘capitalist’ despite the fact that it allows private ownership over a number of capital assets and other factors of production, because it does not recognize private ownership as a general principle. Similarly, it is also wrong to regard the Islamic system as ‘socialist’ although it embraces the principle of collective (public) ownership as well as state ownership over some types of resources and capital assets, because it does not accept common ownership as the universal principle.

It is also not right to regard the Islamic society as a mixture of the two, because the multiple mode of ownership in the Islamic society does not mean that Islam has blended the two doctrines - the capitalists and the socialist and adopted an attribute from each. This multiple form of ownership is only an expression of an authentic, religion-based arrangement rooted in certain ideological foundation that lies within a special framework of values and viewpoints - contrary to the ideological foundation, values and viewpoints on which liberal capitalism and the Marxist socialism are built on.

There could be no better evidence on the correctness of the Islamic attitude towards ownership - based on the principle of dual ownership modes - than the outcomes of the experiments by both capitalism and socialism. Both movements ended up having to recognize the other form of ownership - which was inconsistent with their universal principle - since the idea of having only one form of ownership had been proven faulty in actual practice.

As a result, the capitalist society had long started adopting the idea of nationalization, exempting some of the public utility industries from the system of private ownership. This trend of nationalization is an indirect admission on the part of the capitalist societies of the flaws of the capitalist principle in respect of the mode of ownership. It is an attempt to deal with the inconsistencies and problems arising out of that principle (of ownership).

On the other hand the socialist society, despite its being young, was also obliged to recognize private ownership - at one time officially, at another time indirectly. Its official recognition of private ownership was manifested by the seventh Article of the Soviet Constitution. Under the article, each family among the members of the cooperative farms has a piece of land of its own - adjacent to the place of its residence - over and above its basic income accruing from the economy of the common cooperative farm. Besides, each family has additional economic rights on the land, a dwelling place, productive livestock, birds and simple agricultural implements. All these, held under a private ownership. Similarly, the Ninth Article allows individual and professional farmers the ownership of small economic projects and the existence of these properties side by side with the mainstream Socialist system.

B. The Principle Of Economic Freedom In Limited Sphere

The second element of the Islamic economics can be described as limited individual freedom in economic activities, restricted by moral and spiritual values in which Islam subscribes to.

In this element, we also find a glaring difference between the Islamic economics and the other two systems, capitalism and socialism. Individuals enjoy unrestricted freedoms under the capitalist economic system and no freedom under the socialist economic system. Instead, Islam adopts an attitude that is in consonance with the human nature. It allows individuals to carry out their economic activities freely as long as they remain within the approved range in terms of Islamic values and ideals. This way, the Islamic system allows freedom but refines it further, thereby making it a means of achieving the well-being and goodness for the entire humanity.

Islam's restrictions of social freedom in the economic space are of two types. First, personal restrictions springing from the depth of one's inner self, deriving the strength from the spiritual and ideological contents of the Islamic personality. Second, tangible restrictions by an external authority that defines and regulates social behaviors.

As for the personal restriction, it is established through an organic grounding and specific education imparted to individuals in a society where Islam is dominant in all walks of life. The ideological and spiritual framework Islam employs to shape the personality - by providing an opportunity to lead life and reach great heights on its basis - have immense moral power and great influence in limiting the freedom granted to the individuals by the Islamic society. It also facilitates in channeling the freedom in a proper and refined manner, without the individuals feeling that they have been deprived of any part of their freedom.

Since these restrictions spring from their spiritual and ideological ideals, they do not sense that their freedoms have been curbed. That is why the personal restrictions, in reality, do not mean a curb on the freedom. It only means a mechanism for unleashing the vigor of man in a proper and ethical way so that freedom gets understood and practised appropriately. This personal restriction had a great and splendid effect in formulating the nature of the Islamic society and its general disposition. Although the complete Islamic experiment was brief, it was fruitful and allowed noble and ideal possibilities gush forth in man, and granted him a rich spiritual supply of the sense of justice, goodness and benevolence.

If this experiment could continue longer than it actually did in the short span of its history, it would have proved man's competence for caliphate (vicegerency) on earth and it would be replete with feelings of justice and mercy and would have uprooted the elements of evil and desire of oppression and corruption from man’s inner self. To prove the results of the personal restrictions it is sufficient to realize the fact that it alone had been mainly responsible for good and benevolent deeds in the Muslim society ever since the end of period of the genuine Islamic rule in terms of both political and social leadership.

A long time has elapsed since then and the Muslim society has deviated from that ideal path. The standards have fallen further as they began to adopt alien ideological and moral systems in their social and political lives. Yet despite all that, this personal restrain whose seed was laid down by during the genuine Islamic rule, has played positive and active role in ensuring deeds of goodness and benevolence.

This is represented by the fact that even without compulsion and enforcement, millions of Muslims - in the framework of that personal restrain – choose to come forward and pay up their religious tax (zakat) and perform other religious obligations and participate in the realization of the meanings of Islam related to social justice. Considering this reality, we may judge as to what the results would have been had these Muslims lived strictly according to the truly Islamic standards and if their society had been a complete embodiment of Islamic thoughts, values and governance, and a practical expression of its meanings and ideals.

As for the tangible restrictions of freedom, we mean the restrictions imposed on an individual in the Islamic society by an external authority by dint of the religious law (Shari’ah). The tangible limitation of the freedom in Islam is based on the principle that states that there can be no freedom for an individual in respect of such types of actions that according to the Shari’ah run contrary to the ideals and objectives that Islam subscribes to.

The implementation of this principle was realized in Islam in the following ways:

First, the Shari’ah has by its general foundations prohibited certain economic and social activities such as usury, monopolistic practices etc. In the Islamic view, they are obstacles in realizing the ideals and values embraced by Islam

Second, the Shari’ah has laid down the principle of leadership by the ruler (Wali’ Al-Amr), who heads the state and supervises the general activities of the residents in the country. Islam also authorizes state intervention with the view to safeguarding and promoting collective interests by regulating individual freedom in their activities.

It was necessary for Islam to lay down this principle so that it could ensure the realization of its ideals and concept of social justice continuous over the long passage of time. This is significant because the demands of the social justice which Islam calls for, changes with differing economic conditions and material circumstance of the society.

It is possible that carrying out a certain work is harmful to the society at one time and not at another. It is thus not possible, therefore, to specify the details in definite legalistic forms. The only way towards that end is to empower the Wali’ Al-Amr to discharge his duties as a supervisory authority, directing and regulating the freedom of the individuals in carrying out their activities which are permissible under the Shari’ah and in accordance with the Islamic ideals in the society.

The original legislative authority in respect of the principle of state supervision and intervention is contained in the Quranic verse:

“Obey God, and obey the Messenger and those in authority among you”. (4:59).

The text of this Qur’anic verse clearly proves the obligation of obeying the authorities (ulil-‘amr). There is no difference of opinion among the Muslims that أولي الأمر (authorities) means those who wield legal authority in the Muslim society, though there exist different opinions in determining their identities and their attributes.

Thus a top Muslim authority enjoys the right for obedience by the people and the right of intervention to safeguard the interest of the society and to maintain Islamic balance therein, provided the intervention is within the limits of the sacred Shari’ah. Therefore it is not permissible for the State or the Wali’ Al-Amr to make usury lawful, or to allow frauds, or to suspend the law of inheritance, or to nullify an ownership in the Muslim society established on an Islamic basis.

In Islam, b bona fide ruler or authority can only intervene in respect of activities and transactions that are permissible under the Islamic law. He can thus prohibits or orders such activities as to suit the Islamic ideals of the society. For instance, land reclamation, mining of minerals and excavation of canals etc. are the types of activities and business generally permissible under the Shari’ah. If the authority deemed it necessary to prohibit or allow any of these pursuits within his authority, he could do that, in accordance with the above-mentioned principle.

The Holy Prophet himself used to enforce this principle of intervention when the need arose and the situation necessitated intervention and direction. An instance of this is provided by an authentic tradition, in which the Prophet is reported to have decided among the people of Medina in a case about the watering troughs for the palm trees, by saying that surplus of anything should not be denied (to others). He also gave a verdict in a case that arose among the people of desert saying that surplus water should not be denied to others and it was similar with surplus herbage.

Similarly he said, "Harm not and be not harmed".1 The jurisprudents know it very well that under the Shari’ah, to deny surplus water or anything to others is not unlawful in a general sense. In light of this, we realize that the Prophet did not prohibit the withholding of surplus water or anything else in his capacity as a Prophet conveying general Islamic tenets.

He did that only in his capacity as the authority responsible for organizing the economic life of the society and directing it in such a way that it did not go against the collective interest. That may be the reason why the narrator has expressed the Prophet's prohibition with the term qada' (decision) rather than nahy (forbidding) in view of the fact that qada' (decision) is a sort of hukm2 (Judgment). We will take up this principle of supervision and intervention for discussion in greater detail and more elabourately in a future study.

C. The Principle Of Social Justice

The third element of the Islamic economics is the principle of social justice embodied in the system of wealth and income distribution in the Islamic society, with elements and guarantees that enable the application of Islamic justice in conformity with the values it is built on. While including social justice among the fundamental principles that constitute its economic doctrine, Islam does not adopt social justice in its general sense. Neither does it leave the interpretation of social justice to the respective societies with different views about civilization and understanding about life.

Instead, Islam has defined its meaning and developed specific social arrangements. Islam had been able to establish this social program in a real society, whose arteries and veins pulsated with the Islamic concept of justice. Thus it is not sufficient to know only Islam's call for social justice, but we must also be able to see the full picture of Islamic justice. The Islamic form of social justice comprises two general principles, each having its own outlines and components. The first one is that of mutual responsibility and the other one is that of social balance. It is through mutual responsibility and balance, with their Islamic characters, that equitable social values materialize. It is also with both that Islamic ideals of social justice come into existence, as we shall see in the coming chapter.

The measures taken by Islam towards bringing about a better human society in its radiant experiment clearly showed the great importance it attached to this main element in its economics. The significance accorded to social justice was reflected clearly in the first address given by the Prophet at the first political activity conducted in his newly established state (of Medina). It is narrated that the Prophet inaugurated his directive declarations in the following address:

“O people, send forth (some goodness) for yourselves. By Allah, one of you will certainly be stunned leaving behind his sheep without a herdsman, and then his Lord would say to him, "Did not my Messenger come to you and convey (My message)? I granted you bountiful wealth and favored you. So what did you then send forth for yourselves?" Thereupon, he would look at the right and left and would find nothing there, and then he would look in front of him where he would see nothing but the Hell. Therefore anyone who could possibly save himself from the fire (of Hell) even though by means of a portion of a date, he must do it. If he does not have (even) that, he (should secure safety from Hell) by uttering a pleasant word, because a good deed is rewarded from tenfold to seven hundred times. May peace and God's blessing and mercy be on you”.

He started his political activity by building fraternity between the emigrants (Muhajirun) and the helpers (Ansar) and the enforcement of the principle of mutual responsibility, with a view to realizing the social justice that Islam intends. Thus the main elements of the Islamic economics are as described below:

First, multiple forms of ownership in light of which the distribution system is defined.

Second, freedom restricted by Islamic values in the areas of production, commerce and consumption.

Third, social justice, which ensures happiness to the society based on mutual responsibility and balance.

There are two basic characteristics of Islamic economics, which radiate in its various lines and details. The Islamic economic doctrine is grounded on pragmatism and good ethics. It is realistic in terms of the objectives that it seeks, as and ethical in the method that it adopts for that purpose. It is pragmatic with respect to its goals, its systems and rules and is consistent with the nature of man.

It always attempts not to suppress humanity in its regulatory aspects, nor does it make man hover high in fantasy world, beyond his actual capabilities and potentials. Instead it always builds its economic programs on realistic views about man and aims to reach realistic goals, which are in alignment with that view.

A fantasy-based economic doctrine such as the communist economics may happily set unrealistic goals and aim at realizing a new humanity free from individual esteem and capable of distributing jobs and wealth - free from all sorts of conflicts - without the need for state authority. But this contrasts the Islamic legislative nature and its character of being pragmatic in its goals and approach.

Islamic economics is realistic in its method too. Just as it aims at realistic and achievable objectives, it also provides realistic tangible guarantees for their achievement and is not content with only advice and instructions that are tendered by preachers and instructors. It wants to achieve the goals and therefore it does not leave them to chance or fate. For instance, while it aims at instituting mutual responsibility in the society, employs legislative guarantees to ensure its achievement in any case. It does not seek to achieve this merely by issuing advice or by stirring sentiments.

The second quality of Islamic economics is the moral pillar. In achieving its economic objectives in the life of the society, Islam does not derive support from material and natural conditions separate from man himself - in the way Marxism gets inspiration, in respect of its objectives, from the situation of the productive forces and the economic conditions. It only looks at those objectives as being an expression of practical values, which are necessary to realize the moral aspect.

For instance, when it decides to provide social security for a worker, it does not view that this social insurance springs from the material conditions of production. But it regards this as a representation of the practical value that must be delivered, as we shall see in detail during the discussions in this chapter.

The moral quality means - in respect of method - that Islam attaches importance to the psychological factor in matters of the method it adopts to achieve its aims and objectives. Thus in seeking to achieve the desired outcome it considers not only the objective, but also the path in getting there. It takes particular pains to blend the personal and psychological factor with the method that helps realize those objectives.

For instance, wealth is taken from the rich to fulfill the need of the poor and thereby the tangible purpose of the Islamic economics behind the principle of mutual responsibility comes into being. But in Islam, this is not the whole issue. The method of instituting the mutual responsibility is also important. It can sometimes be done simply by use of force to extract tax from the rich to meet the needs of the poor. Although this is sufficient to achieve the tangible aspect of the goal - that is improving the condition of the poor - yet Islam does not deal with it in that manner.

In the Islamic view, the method of establishing the mutual responsibility should not be bereft of the ethical impulse and the sense of goodness in the rich person. That is why Islam intervenes and prescribes financial duties - whereby it seeks to establish mutual responsibility – as obligatory religious responsibilities, which must spring from luminous personal impulse urging man to participate in the materialization of the objects of the Islamic economics in a conscious manner, seeking thereby God's pleasure and blessing.

It is no wonder that Islam is so much concerned with the personal factor and is so anxious to make it spiritual and ideological, in accordance with its goals and viewpoints. It is because the personal senses that dash together in man, go a long way in constituting his personality and determining his spiritual content in the same way they have a great bearing on the social life, its problems and solutions.

It is clear to all today that personal factor play a role in the economic space. It has a bearing on the periodic crises under which European economies groan. It also affects on the paths of supply and demand, production capability of a worker and other elements of the economy. The Islamic doctrine and teachings are therefore not confined to organizing the society’s external form but they go deep into its spiritual and ideological depths so that the internal content may be in conformity with Islam's economic and social plans.

Towards this end Islam is not content with merely adopting any method that could ensure achievement of its goals, but it blends this method with the psychological factor and personal sentiments to set tem in alignment with those objectives and their underlying significance.

Islamic Economics Is A Part Of The Whole

To understand Islamic economics, we must not study it in isolation from other aspects of Islam. For instance, we should not examine Islam's prohibition of usury or its approval of private ownership as being separate from other parts of the general framework of the Islamic economics. Similarly it is not permissible to study the whole of Islamic economics as a doctrinal entity independent of the other aspects of the religion - the social, political etc. and the nature of the relationship between these different aspects.

We must understand Islamic economics as a part of the universal system of Islam, which organizes different aspects of life in the society. The view of a certain object seen as a part of a general form comprising a group of things, differs from another view of the object as an independent, single article. Just as a line when viewed amidst a certain arrangement of lines sometimes appears shorter, or longer in different arrangement of lines, similarly the overall form of any social doctrine play an important role in the assessment of its economic programs.

It is therefore incorrect not to give due attention to the overall Islamic system and take into account the nature of the relationship between the economic component and other parts of the religion and their mutual effect on its overall organic nature.

We must also not separate Islam the universal religion, from the peculiar ground on which it is prepared and on which all the elements of strength and survival of the religion have been provided. We comprehend perceptible forms on different backgrounds and each form fits a certain background and does not fit another. Similarly the general form of the religion, whatever it may be, needs a ground and soil which are compatible with its nature, and which strengthens it with faith, meanings and sentiments. It is therefore necessary that, while assessing the general form of the religion, we must study it in the context of the soil and ground it is prepared on and that which is within its general framework.

It is thus evident that Islamic economics is interlinked in with other parts of the religion, and that it performs its role as one of the functions of a general system of life on a ground peculiar to it. A genuine Islamic society materializes only when the form and the ground exist together - when the vegetation and soil are both present. Islamic economics could be discussed properly only when it is studied as a program integrated with the general way of life, functioning on the ground prepared for Islam and the genuine Islamic society.

The soil or the ground for the Islamic society and its social doctrine is composed of the following elements:

First is the faith, which is the central pillar in the Islamic thinking. It defines a Muslim’s overall worldview.

Second, the concepts that reflect Islam's viewpoint in light of the general outlook shaped by the faith.

Third, sentiments and emotions that Islam undertakes to disseminate and promote to the rank of core values. The values form an Islamic impression about a certain phenomenon and practice, and thus create a special sentiment about them in the mind of a Muslim and define his emotional attitude towards it.

The Islamic concepts with their respective significance are placed in light of basic Islamic faith. As an example, let us take piety (God-fearing, taqwa). In the framework of faith in oneness of God, the Islamic meaning of piety (taqwa) grows such that piety (taqwa) is the criterion for nobleness and honour among human beings. This concept gives birth to an Islamic sentiment for piety (taqwa) and the pious people (muttaqin), a sentiment of honour and respect.

So these are the three elements – the faith, the concepts and the sentiments that participate in making the ground congenial for the society. After the ground, comes the role of the general Islamic way of life as an integrated entity extending to various walks of life. It is only when the Islamic society fully prepares its ground and attains its general form that we can expect Islamic doctrine to fulfill its unique message in the economic life, and to ensure means of happiness and well-being for the society. It is only then that we can reap a great harvest.

But if the Islamic message is applied only in a certain aspect of life, isolated from the rest, it is wrong to expect of the greater Islamic message to yield its total results in that particular aspect of life. All aspects of the total Islamic arrangements for the society are closely connected and are interdependent. It is similar to the case of a beautiful building conceived by a brilliant architect. Unless his design is implemented in total, the beauty and elegance of the intended building will not be manifested. If we adopt the design to construct only a part of the building, we have no right to expect that part to reflect the entire design as conceived by the architect.

The same is the case with the Islamic social design. Islam has established a unique path. It is a comprehensive means to realize happiness for humanity provided that this great system is enforced in an Islamic environment, based entirely on its guidance in respect of its existence, thoughts and environment. The Islamic principles must be enforced in total, such that its different parts reinforce one another.

Thus if one part of the Islamic system is removed from its environment and is disconnected from other parts, the system is deprived of the necessary conditions under which it could achieve its great goals. In such a case, the Islamic teachings could not be blamed for the failure and the inability to guide the society. In that sense, it is similar to natural laws that operate only when the necessary conditions are met. We cannot fully describe in this work, the interdependence between Islamic economics and other elements of the Islamic system of life. We will only provide some examples, as summarized below:

1- The link between Islamic economics with the Islamic faith, which constitutes the source of spiritual provision of the religion. Faith makes a Muslim conditions himself according to the religion. It lends to the religion a character of conviction and a value of its own, irrespective of the nature of the tangible outcome in terms of his actual practice. It creates in the mind of the Muslim a feeling of personal fulfillment under the shadow of the religion, as being something emanating from the belief which he professes. Thus the force of implementation, the spiritual and religious character, and personal satisfaction are all features of Islamic economics, provided by the fundamentals of faith on which it rests. That is why these characteristics are not noticeable during the discussion, except when Islamic economics is studied in light of the faith and the extent to which it relies on.

2- The connection between Islamic economics with the Islam worldview, its unique way of prescribing issues such as the Islamic concept of private ownership and profit. The Islamic views on ownership are such that it constitutes a right, but carries with it a responsibility. Further, under the Islamic doctrine, ownership does not come with absolute authority. Similarly, in the Islamic view, the meaning of profit is much broader than the ordinary accounting concept that driven purely in the material dimension. Consequently, many elements normally regarded as a gain in the Islamic sense, are regarded as a loss according to a non-Islamic view.

It is natural that this Islamic concept of private ownership should have bearing on the exercise of this right and on regulating it according to the Islamic framework. It is also natural that the economic space should be affected by the Islamic concept of profit to the extent defined by the depth of the meaning and its intensity. Consequently the meaning should inspire the path of Islamic economics in its implementation. It must therefore be studied through that and it should not be isolated from the effects of different Islamic principles during its application.

3- The connection between Islamic economics with the unique sentiments and emotions, which Islam promotes in the Muslim social environments, such as the sentiment of universal brotherhood. It generates in the individual a sense of attachment for and a feeling of togetherness with others in their hardship. This pool of sentiments and emotions grow and intensify commensurate with the degree of the sense of brotherhood and the fusion of man's spiritual being with the Islamic sentiments and the education practised in the Islamic society. These sentiments and feelings play an important role in the economic life and help the religion in achieving its objects, by conditioning the thinking and behaviour of the Muslims.

4- The connection between the economic doctrine and the financial policy of the state, to the extent that the financial policy may be regarded a part of the program under the economic doctrine of Islam. The financial policy has been formulated in such a way in conformity with the general economic principles and work for the achievement of the objectives of the Islamic economics. The financial policy in Islam is not only about providing the state with the necessary expenses. It also aims at establishing social balance and collective and mutual responsibility. That is why it is necessary to regard the financial policy as part of the general economic strategy and to incorporate the rules on the State's financial administration in the general structure of legislation for the economic management, as we shall see in coming discussions.

5- The link between Islamic economics and the political system in Islam. Isolating one from the other leads to flaws in the study. The ruling authority enjoys broad economic powers and manages a large pool of assets as the state deems fit. These powers and assets must always be linked, in the study, with the Islamic leadership and the guarantees that Islam has provided on the integrity and uprightness of the Wali’ Al-Amr, that is to ensure his immunity from error. According to different schools of thought of Islam, the leader is to seek counsel and work at establishing justice. Thus, in light of these guarantees, we can study the position of the state in the economic doctrine and believe in the rationale of the authority and the rights given to the state in Islam.

6- The connection between prohibition of usury (and usury-based capital) and other Islamic tenets on business partnership, mutual obligations and social balance. If the prohibition of usury were studied in isolation, it would give rise to serious problems in the economic life. But if we consider it as being part of a single inter-dependent operation, we would find that Islam has provided clear solutions to these problems, which are in conformity with the nature of Islamic law and its goals. It is similar with respect to the rules about partnership, equitability, mutual obligations and funds, as we shall see in the next discussion.

7- The connection between some rules on private ownership under Islamic economics and those relating to jihad (religious war), which regulates the relations between Muslims and non-Muslims in times of war. Islam has permitted Wali’ Al-Amr to enslave prisoners of war and detain them as part of war booty and to distribute them among the army in the same way as other articles of booty are distributed. The enemies of Islam are accustomed to present this rule of the Shari’ah (Islamic law) in isolation from its conditions and with conjectures designed to show that Islam is a code of law that permits slavery, which is a source of suffering for humanity since the dark days of history. They also claim that it was the modern European civilizations alone had liberated mankind from slavery and wiped away the disgrace it brought about.

But to make an honest study of Islam and its rule about war booty, we must first of all know when an object is regarded as a booty (ghanimah) under the Islamic law. It is only after this that we could know as to how and to what extent Islam had allowed Wali’ Al-Amr to enslave a prisoner of war as booty and who this ruler has to be to have that authority to enslave a prisoner as such. Having comprehended all these aspects, we would be in a position to see the Islamic provisions about war booty from the right perspective.

The basic condition for war booty, according to Islam, is that it should have been obtained in a legitimate war based on faith (‛aqidah). Therefore, unless a war has the character of jihad (religious war), the goods and properties obtained as a consequence of the war cannot be treated as booty and this depends on two things:

Firstly, the war should have been declared under the orders of Wali’ Al-Amr with a view to promote the cause of Islamic propagation. Thus wars like those waged in pre-Islamic times with the purpose of looting and plundering, or the battles aimed at securing the wealth and markets of the countries such as the capitalist wars, all of these have nothing to do with jihad.

Secondly, the Muslim preachers should first of all preach the Islamic message and explain its main signposts supported by evidence and arguments, until Islam's truth had been fully established and all appropriate and logical arguments have been exhaustively presented. In the event that after all these, they continue to refuse to accept the light of Islam and no alternative is left for the Islamic mission - as a universal religion based on real benefits and well-being of humanity - but to apply physical force, that is the armed jihad (war). Under such circumstances alone are the war gains are regarded booty, in the eyes of Islam.

There are three ways of treating a war captive as a part of the booty. He may be pardoned and set free, or he may be set him free for a ransom or he may be retained as a slave. Enslavement is thus only one of the three alternatives, with which the Wali’ Al-Amr could deal with a prisoner of war.

We should know in this regard, that the Wali’ Al-Amr is obliged to adopt the most suitable of the three alternative manners to deal with the war captive, one that is the most compatible with the general interest. This has been stated by al-Fadil and ash-Shahid ath-thani and other Muslim jurisprudents. Moreover, as a general rule, Islam does not unconditionally permit waging of war to preach its message to citizens of a non-Muslim country.

War is allowed only under an infallible leader being present, who may lead the war efforts and the course of the military moves in battles fought on religious grounds. Keeping in view these two realities, we would come to the conclusion that Islam does not allow enslavement of a war captive except when the circumstances are such that it is more appropriate than both pardoning and release for a ransom. That too is not been permitted except for an infallible Wali’ Al-Amr, who can commit no mistake in deciding which of the three alternative treatments is the most appropriate in the given circumstances. There is nothing in this rule, for which Islam could be blamed.

This is a judgment in which various social doctrines agree on, no matter how different their notions are, because in certain situations to enslave is better than both pardoning and release on ransom. One such situation is where the enemy practises enslavement of their war captives. In such a case, therefore, it becomes necessary to deal with the enemy in a similar way. When the circumstances are such that enslavement is more appropriate than both pardoning and release on ransom, why should Islam not allow it? No doubt Islam has not explained the circumstances in which enslavement would be more appropriate but this purpose has been fully served by leaving the decision in the matter to the Wali’ Al-Amr, who is infallible from error and sentiments, and holds political leadership overseeing the religious war (jihad). He is, therefore, responsible for judging the circumstances and acting accordingly.

If the Islamic rules on war captives are enforced under a genuine Islamic rule, we find that enslavement would not have taken place except under those circumstances in which the enemy practised a similar treatment of prisoners from the Muslim side. In such situation, it would be the most appropriate among the three alternatives. There is, therefore, no ground for criticism or objection. There is no ground for criticizing or objecting to the general rule allowing enslavement, because Islam allows enslaving of captives only when it was in in line with the general interest, as gauged by the infallible ruler. Nor could there be any criticism or objection to its enforcement as it is allowed only under those circumstances in which enslavement was the most appropriate among the three possible options.

8- The connection between Islamic economics and the criminal legislation in Islam. The mutual obligations and the social guarantee in Islamic economics throw some light on the nature of punishments prescribed for some crimes. The punishment of cutting off hand may be harsh to some extent in capitalistic environments, in which some people are in hardship and left to the mercy of the rich. But in an Islamic society, a congenial ground for Islamic economics, where members of the society live under the shelter of Islam, it is in no way cruel to deal with a thief harshly as the system had provided him with the means for a free and respectable life and had eliminated all the reasons that would compel him to steal.

The General Framework Of Islamic Economics

The Islamic economic doctrine is distinct from other economic doctrines by its general religious framework. As the framework that encompasses all aspects of life, Islam links each component with the religion, setting it in the context of man's relationship with his Creator and the afterlife. It is this framework that enables the Islamic system to ensure the attainment of general social interests of man, as these social interests cannot be provided but through religion.

In order to make this point clear, we must study man’s needs in his life, in terms of subsistence, and the extent to which they can be provided for. It is after doing this that we may realize that is that man's social needs cannot possibly be secured except by means of a system that has a proper religious framework. While studying man's needs, we may divide them in two groups.

First, those needs which nature provides him like medicinal herbs, for instance. This need has nothing to do with his social relations with others. But being subject to harmful germs, man stands in need of the herbs, irrespective of whether he lives alone or amidst a mutually connected society.

Second, those needs that the social system provides for him as a social being related to others. For instance, a man may fulfill his need under the social system when he is allowed to exchange his products with those of others or when assurance is given to him of livelihood in cases of invalidity and unemployment.

We would call the first group ‘natural needs' and the second ‘social needs'. In order that man may be able to meet his natural and social needs, he must be equipped with the ability to know these needs and the ways and means to seek and obtain them. He should also be provided with the incentive to work at securing them.

Thus the herbs that are prepared and used for the treatment, for instance, are found with a man when he knows that there is a medicine for this illness and he discovers how to prepare it and when he also has an incentive which drives him to benefit from its discovery and its preparation. Similarly, assurance about livelihood in cases of invalidity - being a social benefit - depends on the man knowing the benefit of this assurance and how it is administrated as also on the incentives in relation to its regulation and implementation.

There are, therefore, two basic conditions without which it is not possible for humanity to enjoy full life provided with natural and social needs. The first is that man should know how these needs are fulfilled, and then he should have an incentive to work at achieving these.

When we look at man’s natural needs - like the preparation of medicines for the treatment of tuberculosis - we find that man has been provided with the potentials to acquire those needs. He possesses the intellect that enables him to realize the manifestation of nature and the hidden benefits. Although this ability develops slowly with the passage of time, it progresses in the desired path in light of new experiences and experiments. The more this ability develops, the more man is able to comprehend his interests and the benefits he could derive from nature.

Besides his intellect, man also has instincts. The instincts provide him with the urge for his natural needs. The natural needs of everyone are consistent with his instincts. The procurement of medicinal herbs, for instance, is not the exclusive needs of an individual or a particular group. The whole human society feels impelled by the collective force of personal impulse of the individuals, who are all concerned about their interests and needs, benefiting all individuals personally.

We thus realize that man was created with a special psychological and intellectual constitution that enables him to have numerous natural needs. The fulfillment of this side of his man’s livelihood is acquired through his experience with life and nature.

As for the social needs, they also depend on man having appropriate social organization and also on his personal instincts to work at obtaining his needs. We need to see the outcome for man in relation to his social interests, given the two conditions and given that man is equipped with thinking ability and instincts to obtain his natural needs.

Let us now consider the first condition. It is generally said that it is not possible to a social organization that could assure man all his social benefits, and at the same time, be compatible with his nature and general constitution, because he is most incapable of comprehending the social attitude, with all his characteristics, and the human nature with all its variations. Those holding this view conclude that it is essential that the suitable social organization be set up for humanity as it is not possible to leave humanity to bring about the organization itself as long as its knowledge is limited and its thinking capacity is unable to understand thoroughly the unknowns in the entire social problem.

On this basis they proposed the necessity of religion in man's life and the need for divine messengers and prophets, who could determine and apprise the people of the real well-being of man in his social life, by means of divinely revealed guidance. In our opinion, the problem could be more clearly seen when we study the second condition.

The basic issue is not how man could fulfill his social needs3. As a matter of fact, the real issue is how man is made to pursue his social interests and organize the society in such a way that could meet his social needs. The crux of the problem is that at times there are divergences between collective social interests and specific individual interests. The personal instincts that drive man towards the natural interests he has in common with the rest of humanity do not drive him in the same way vis-à-vis collective social interests.

Thus, even though his personal instinct drives man to work on a medicine for consumption (because manufacturing of the medicine is in the interest of all the individuals), we find that this personal instinct itself stands in the way of achieving many social interests, and prevents the formation of an organization that could ensure the pursuance of these interests.

For instance, the social security arrangement for a worker in in the form of an unemployment benefit is inconsistent with the interest of the wealthy elites who would have to bear the costs of this financial security. Similarly, nationalization of lands goes against the interests of those who could have monopoly over them. The same is the case with every other social interest because of its inconsistency with the personal desires of the individuals whose interest differs from the collective social interest.

In light of this, we come to know the basic difference between the natural and the social needs. The personal instincts of individuals do not conflict with the humanity's natural needs. Instead, they drive the individuals towards that common goal. Thus man possesses potentials for the pursuit of natural interests of humanity in a gradual way, according to the degree of these potentials, which accumulate and grow with experience.

But it is not the same with regard to social needs. Personal instincts spring from man's love for his own self and the preference to his own interest over that of others. These instincts stand in the way of exploiting any selfless inclinations in man towards pursuing social interests. They also prevent spontaneous development of social organization that could ensure achievement of collective interests.

It thus becomes clear that the difficulty that hinders progress towards the social perfection of mankind lies in the inconsistency existing between social interests and the personal instincts. As long as man is not equipped with the potential for reconciling the social interests to the personal desires rooted firmly in individuals, it is not possible for human race to achieve social perfection. What are then these potentials?

Certainly, humanity is in need of an incentive that could reconcile collective social interests to the natural individual needs, realigning both as allies in reaching a common goal.

Can Science Solve The Problem?

Some people often say that science, which has progressed enormously, ensures solution of social problems. It is said that man has been able to accomplish these great advances in the fields of thinking, life and nature and penetrate deep into its secrets and solve its most difficult mysteries. It has progressed so much that it has become possible for man to split atoms and unleash its gigantic energy. Man had launched rockets and sent spaceships to the outer space to explore the universe. Man had been able to exploit the nature's powers to detect and broadcast events taking place millions of miles away in such a way that they are immediately seen and heard.

This man who had achieved all these scientific progress in a brief period and who has emerged victorious in all the battles with nature is certainly capable - by dint of the knowledge and insight he has been endowed with - of building a happy and tenacious society and of bringing about a social system which could ensure social interests of humanity. Therefore man is no longer in need of an external source of inspiration in respect of his social attitude, other than science, which has enabled him to achieve success in all fields.

Such a pretense, in fact, only reveals ignorance about the role of science in human life. No matter how it may develop and progress, science constitutes only a means to discover objective realities in different fields and to explain the facts in a rational way, describing them with the highest possible degree of precision and depth. For instance, science tells us - in the social field - that capitalism leads to the strict application of iron laws with respect to wages, which are kept at a low level necessary for living. In a similar way science tells us - in the natural turf - that the use of a certain chemical substance leads to a harmful illness initiated in one's body.

Having described these realities, science indeed fulfills its role and presents to man a new knowledge. But the reality of this illness or that unkind ‘iron law’ being existent does not end only because science had disclosed the relationship existing between that particular substance and the illness or between capitalism and the iron law. It is only by avoiding the factors that cause the illness that man could get rid of or prevent the disease. Similarly he could get rid of the iron law pertaining to wages only by eliminating the capitalist framework from the society.

The question that arises here is what it is that could help man in preventing that illness or eliminating that capitalist framework. The answer in regard to the illness is quite obvious because the personal instincts man has is sufficient to keep him away from that substance whose dangerous consequences science had disclosed to us, because it is against his own personal interest.

As for the iron law in relation to wages and the elimination of the capitalist framework, the knowledge - obtained through science - about the relationship between that framework and that law, for instance, does not constitute a motivation to take an action to change the framework. The action in this regard needs a motivation, but individual’s personal instincts are not aligned with the society’s collective interest.

In this way we must differentiate between scientific discoveries and human actions. Science does disclose realities to some extent, but it does not do anything that could improve it.

Historical Materialism And Its Problem

On the basis of historical materialism Marxism advocates, in this regard, to leave the problem on its own as the laws of history guarantees its solution one day. Is this not the problem of individual personal desires failing to ensure the attainment of the society's interest, its happiness and well-being? Is this not because the personal desires that spring from individuals’ personal interests, differ in most cases with those of the society’s collective interests?

As Marxism views it, this is not a problem. This is indeed a reality about human societies since the dawn of history as everything has been proceeding in accordance with individual personal desires, which are reflected in the society in class form. So the struggle rages between the personal impulses of different classes, and victory always sides the personal desires of the class of people that controls the forces of production.

In this way, the personal desires get inevitably firm such that the laws of history bring about their basic solution to the problem, by creating a classless society. In such society the personal interests vanish and are replaced by collective interests, in accordance with collective ownership. As we have seen in our study of the historical materialism that such predictions made by the theory do not stand on any scientific ground, and it is not possible to wait for an effective solution to the problem.

Thus the problem remains and it is a problem of the society, in which the personal desires and interests are firmly rooted. As long as the personal desires of each individual - driven by his own interest - has the upper hand, the victory would be for the group that commands the stronger ability to enforce its will. Who could then ensure that the society, amidst the conflicting interests and desires, would formulate laws favouring its collective interest, given that it is the group with more power and influence that prevails in it?

It is not possible for us to expect from the social set-up, like the state, to solve the problem by force and restrict personal individual desires within certain limits. Such set-up is established by the society itself and therefore the problem is the same as in the society as a whole, because it is individual desires that are firmly rooted in it. We may realize from all these that the crux of the society’s problem is the individual desires and personal instincts. These are deeply rooted in man as they spring from his love and preference for his own self.

Is humanity, then predestined to always exist facing this social problem originating from personal desires and to suffer because of this nature? And is humanity an exception to the cosmic system that has provided every existence in the universe with the potentials of attaining perfection and guided by its nature to attain its respective state of perfection - as proved by scientific experiments and philosophical reasoning.

Hence comes the role of religion being the only solution to the problem, because religion constitutes the only framework, by which the social problem could be solved. This is because the solution lies in aligning the personal desires of individuals and the collective interest of the society. Religion could help humanity in the alignment of these two factors. Religion is the only spiritual influence, which can compensate man for the temporary pleasures that he foregoes in his worldly life in the hope of gaining well-being in the afterlife. It is this power that can makes man sacrifice even his own existence with the faith that his sacrifice of this temporal life only means a prelude to perpetual existence and eternal life.

It can establish in his thinking a new point of view vis-à-vis his interests and a perception about gains and losses above the ordinary commercial and worldly meanings. Thus hardship constitutes bridge to happiness, and suffering a loss for the sake of society indeed means a gain, and to safeguard the interest of others indirectly means safeguarding of one's own interest in the afterlife, which is more sublime and nobler than the present one.

In this way the collective social interests are aligned with an individual desires and interests, being beneficial for him in his religious and spiritual accounting. In the Holy Qur'an we find clear emphasis having been laid on this, at different places. All these aim at shaping this new viewpoint about an individual's benefits and gains. The Holy Qur'an, for instance, says:

“But whosoever does a righteous deed, be it male or female, believing — those shall enter Paradise, therein provided without reckoning.” (40:40).

“Whoso does righteousness, it is to his own gain, and whoso does evil, it is to his own loss.” (41:46).

“Upon that day men shall come forth in scattered groups to see their works.” (99:6).

“And whoso has done an atom's weight of good shall see it.” (99:7).

“And whoso has done an atom's weight of evil shall see it.” (99:8).

“Reckon not those who were slain in Allah's way as dead, but rather living with their Lord, by Him provided.” (3:169).

“It is not for the inhabitants of Medina and for the Bedouins who dwell around them to stay behind the Messenger of Allah, to prefer their lives to his; that is because they are smitten neither by thirst, nor fatigue, nor emptiness in the way of Allah, neither tread they any tread enraging the unbelievers, nor gain any gain from any enemy, but a righteous deed is thereby written to their account; Allah leaves not to waste the reward for the good-doers.” (9:120).

“Nor do they expend any sum, small or great, nor do they traverse any valley, but it is written to their account, that Allah may recompense them the best of what they were doing.” (9:121).

This is the brilliant picture that the Holy Qur'an presents to connect the personal desires and interests with charitable deeds in this life, and to nurture individual's interest in such a way that a person perceives that his personal interests are aligned to humanity’s collective interests. Thus it is religion that plays the key role in solving the social problems by mobilizing the personal instincts and desires (and harnessing them) for the society’s collective interest.

From this we come to know that religion is a natural need for humanity. As long as the basis of personal desires - from which the problem emerges– are nature-based, nature must have also provided potentials for solving the problem. Man is no exception to other creatures in that all been provided by their nature with the potentials that lead each of them to its respective state of perfection. These potentials, which are incorporated in human nature for solution to the problem, are an instinct for spirituality and the natural inclination and capacity to link life with religion and to adapt to it in the general framework.

There are then two aspects of human nature. On one hand it dictates to man his personal instincts, from which springs the conflict between his desires and interest and the society’s collective well-being, resulting in the great social problem. On the other hand, it provides man with the potential of solving the problem through a natural inclination towards spirituality and to embrace religious values in his life that reconcile with personal interest with the society’s collective interests In this way, nature has fully completed its function in guiding man to his perfection. If nature had left the gap without providing man a mechanism to solve it, humanity would continuously face its adverse consequences. Islam has very clearly affirmed this in the Qur'anic verse:

“So set thy face to the religion, a man of pure faith. Allah's original upon which He originated mankind. There is no changing Allah's creation. That is the right religion; but most know it not.” (30:30).

This verse affirms this:

First, that religion is a part of human nature, which is common to all human beings, and that there could be no change therein.

Second, the religion that forms part of human nature is the true (hanif) one. That is the religion of oneness of God, pure and unadulterated. Only a religion based on oneness of God alone can perform the great function of religion and organize humanity practically and socially, ensuring collective social interests.

As for the religions based on idol-worship or polytheism as described by the Holy Qur’an, they are in fact an outcome of the problem. Therefore they cannot possibly be its remedy, as stated by the Prophet Joseph to his two prison inmates:

“That which you serve, apart from Him, is nothing but names you yourselves have named, you and your fathers; Allah has sent down no authority concerning them” (12:40).

The religions are the outcome of personal desires and interests that have prescribed idol worship to the people - in accordance with their various personal interests - in order to make them deviate away from their natural inclination towards the true (hanif) religion. The beliefs stand in their way to properly respond to their natural religious tendency.

Third, that the true religion which constitutes part of the human nature is distinguished by its being the curator of life (ad-dinul-qayyim) and capable of governing and shaping it into its overall framework. But any other religion that does not undertake to guide or direct life, cannot fully meet man's natural demand for religion nor can it possibly remedy the key problem in man's life.

From this we derive a number of concepts that Islam has set about religion and life. The basic problem in man's life comes from the divergence between individual desires and interests and the collective interests of the human society. However, nature provides humanity with the remedy. This remedy is only the true (hanif) and guiding religion. Only such religion is capable of bringing about the realignment between personal desires and the collective interests of humanity, and establishing the practical standards of behaviour.

The social life, therefore, must accommodate an ideal religion. Similarly, the social organization in different aspects of life must necessarily be placed in the framework of that religion, which is capable of responding to the nature and of treating the key problem in man's life.

In light of this we realize that Islamic economics, being a part of the social arrangement and comprehensive system of life, must be included in the general framework. Thus the religion is the general framework of our doctrinal economics. The role of the religion, being the framework for the social and economic system in Islam, is to bring about the alignment between personal interests and needs of the individuals and the collective interests of the human society, from the Islamic viewpoint.

Islamic Economics Is Not A Science

Each one of the economic doctrines we have presented constitutes part of a complete doctrine covering different aspects of life. Similarly, Islamic economics is a part of the religion of Islam, which covers various branches of life in the same way capitalist economics is a part of the capitalist democracy or market democracy, a system that covers many other aspects of life. Similarly, the Marxian economics is a part of the Marxist doctrine that sets the entire social life in its own framework.

These doctrines differ from one another in their basic ideological seeds and their main roots, from which they derive their essence and their form. Consequently they differ in their characters. In the opinion of the proponents of Marxism, the Marxian economics bear a scientific character as it is regarded an inevitable result of the natural laws that govern and influence history. The capitalist doctrine is however, quite different. As we have seen in the earlier discussion, its advocates did not formulate it as a necessary outcome of the nature of the history and its law. Instead they adopted it only as an expression of the social form that agrees with the practical values and the ideals they embrace.

Islam does not claim to have the scientific character like the Marxian doctrine. Nor is it without a certain value system and worldview, like capitalism4. When we say that Islamic economics is not a science, we mean to say that Islam is a religion that calls for organizing economic life in the same way it deals with other aspects of life, and that it is not a science in the same sense that political economy is.

In other words, it means a transformation aimed at changing a damaged facet into a sound one, instead of being an objective explanation of the facet. For instance, when it lays down the principle of dual ownership, it does not thereby claim that it explains historical fact about a certain stage in the life of humanity or that it reflects the results of the natural laws of history, as Marxism did when it declared that the principle of socialist ownership as being an inevitable condition for a certain stage of history and its only explanation.

In this regard, Islamic economics resembles the doctrinal capitalist economics in being an operation of changing the state of affairs rather than one of explaining it. Thus the doctrinal function with regards to Islamic economics is to reveal the full picture of the economic life in accordance to the Islamic Shari’ah and to examine the ideas and general understandings which radiate from behind that picture, like the idea of independence of the distribution mechanism from the mode of production and other similar ideas.

As for the scientific aspects of Islamic economics, its role is to describe the real course of life in an Islamic society when the religion of Islam is practised in totality. So the scientific investigation takes the doctrinal economics in Islam as an established principle of the society, and tries to explain it and link the events therein with one another.

In this regard it is similar to political economy. The scholars of the capitalist economics who first draw their doctrinal lines and then start explaining the real state of affairs within those line lines - studying the nature of the laws firmly rooted in the society wherein they are enforced. This study of theirs resulted in the science of political economy. In the same way, a science may be developed for Islamic economics - after comprehensive study of the religion - by examining the facts in this framework.

The question is, when and how is it possible to formulate the science of the Islamic economics, as the capitalist formulated the science of the political economy, or in other words, the science of the economics that explains the events in the capitalist society? The answer to this question is that scientific explanation of the events of economic life revolves around these two matters:

First, collecting economic data from the real life experience and arranging them scientifically in such a way as may reveal the laws applicable and its special conditions.

Second, starting a scientific research from established facts and deducing from these the relevant economic patterns and trends.

As for the scientific explanation on the basis of the first point, it depends on the level of the application and practice of the religion in the real society, in order that the researcher could record events of this state of affairs and deduce general laws from their observations. And this is what the capitalists accomplished, when they lived in a society that believed in capitalism and which enforced it. They consequently secured an opportunity to form their theories on the basis of the real experience of the society, which they lived in.

But nothing like this is available to the Muslim economists as long as Islamic economics is not adopted and practised in actual life. They cannot gather empirical data from today’s life on Islamic economy from actual implementation of Islamic economics. They are therefore unable to deduce the relevant scientific laws applicable to an Islamic economy.

As for the scientific explanation on the basis of the second point above, it is possible to describe some of the features of economic life in an Islamic society, by starting with certain religious principles and deducing their outcome in a hypothetical situation where Islamic economic doctrines are implemented. General views can also be formulated on the economic aspects in an Islamic society in light of these religious principles.

For instance, it is possible for a researcher on Islamic economics to say that commercial interests in an Islamic society would be aligned with those of the financiers and bankers because in an Islamic society banking is based on the principle of partnership instead of interest-based lending. The bank carries out its banking business with the customers’ money. It shares the profit with them based on a certain ratio and ultimately its performance depends on the extent of the commercial profit it earns and not on the interest it charges on loans.

This phenomenon of the alignment of the interests of the banks and the businesses of their respective customers is naturally an objective, with which the researcher starts to deduce a point, that is, the elimination of interest-based banking system in the Islamic society. The research scholar can also proceed from a point like this to establish another objective phenomenon, that is, deliverance of the Islamic society from a main factor responsible for the crisis the capitalist economy suffers from.

In a society that adopts interest-based lending, the production and consumption activities have limited access to the society’s aggregate wealth. The rich could withhold the financial resources they own (and refrain from investing) and choose to only earn interest on their funds. This would cause stagnation in production and consumption. In an Islamic economy, where interest is prohibited and where hoarding or amassing wealth is also forbidden or discouraged via imposition of taxes, there is more incentive for behaviours that result in wider circulation of wealth.

Thus in these descriptions we assume that the social and economic realities stand on certain premises, and we adopt synthetic proposition and discover its general characteristics in light of those premises. But for us with strict scientific principles, these descriptions do not constitute the economic life in the Islamic society, unless the study is based on the gathering of empirical data from actual economic environment.

There are often differences between real life under a system and the descriptions presented based on the hypothetical analysis. This had happened before when the capitalist economists built most of their analytic theories on a hypothetical basis. They came with results that contradicted the reality they lived in, and discovered a number of factors in in real life that had not been taken in their hypotheses. Moreover, the spiritual and ideological element or in other words, the psychological temperament of the Islamic society, has a great influence on the course of economic life. But this temperament is not something quantifiable and therefore could not be estimated and projected in preparing the basis of the different theories.

Therefore, the science of Islamic economics cannot possibly exist unless the Islamic economic system is practised in the entire society. Under such scenario, the detailed features can be observed and measured in a systematic study.

Distribution (Of Wealth And Income) Is Independent Of The Mode Of Production

There are two different aspects of economic activities in a society - the production and distribution. Man struggles with nature, harnessing it to meet his needs. In this battle man is armed with all the tools of production obtained through their experience and knowledge. Man also forms certain relationships among themselves, which determine the relationship between individuals among them, in different affairs of life.

These social relations – which we call social system – include the manner of distribution of the wealth generated by the society. The individuals earn their gains from the production activities and from nature, while the social relations determine the basis on which the gains are shared and distributed among them.

The mode of production obviously evolves and develops continuously, mainly in line with the pace and intensity of developments in science. In the past man used to employ the plough in agricultural production, but he has now started using electricity and even nuclear energy for that purpose. Similarly the social relations - which determine the association among the members of the society, and the manner income and wealth are distributed - have also changed throughout history, assuming different forms and patterns due to the changing circumstances.

The basic question in this regard is, what is the relationship between the development in the mode of production and that of the social relations pertaining to income and wealth distribution (or the relations of distribution)?

This point is regarded as central in the differences between the Marxian economics and Islamic economics. The Marxian economics holds that every development in the production process and methods must necessarily be accompanied by a development in the social system, in general, and the basis for income distribution, in particular. Thus it is not possible that the mode of production may undergo a change while the social order still retains its old structure, just as it is not possible for the social system to precede the mode of production in its development.

From this, Marxism infers that it is impossible for one social relation to survive with the passage of time and remain suitable for human life in its numerous stages of development, because the mode of production continuously develops. The social relations will also develop in line with the changes in the mode of production. Thus the system, which suits a modern society in the era of electricity and nuclear energy, is different from one that suited the society of cottage industry, as the modes of production are different in the two societies. On this basis, Marxism presents the socialist doctrine as being the necessary remedy for the social problems in a certain historical stage, in accordance with the requirements under the respective mode of production in that stage.

But Islam rejects this so-called inevitable relationship between the development in production processes and that of the social system. The Islamic view is that there are two aspects. One is that, man does his work and encounters resistance in nature, trying different means to exploit it and overcome its resistance it in order to meet his needs. Second, man deals with his relationship with other individuals in various fields of social life.

The modes of production are the outcome in relation to the first aspect, while social relations are related to the second one. There have been significant developments in productions process and in the social relations, but Islam does not subscribe to the idea of the inevitable inter-dependence between the development in mode of production and that of social relations. That is why Islam holds that it is possible to retain one single social system - with its structure and capability intact despite the passage of time – no matter how different the mode of production may be.

On the basis of this principle – the independence of social system from the modes of production - Islam presents its social arrangement including its economic doctrine, as being a social system suitable for the nation in all stages of development of its production. It holds the social system as being adequately capable of ensuring the well-being of its members, either in the age they discovers and harness nuclear power, or when they were tilling the land manually.

This fundamental difference between the views of Marxism and Islam on social system is generally the description of the social life that the respective social systems seek to organize and regulate. According to the Marxist view, the social life of man is the results of the productive forces. The forces of production constitute the prime rule and the first factor in the entire history of mankind. Therefore, when the mode of production changed, it was only natural that the social relations - which are expressed by the prevailing social system - change accordingly. A new social order - that suits the new mode of production - should come into being.

On top of what we said in our previous discussion of historical materialism and our broad criticism of its meaning - with evidence from history - we shall make additional comments in this regard. We had clearly shown that the forces of production are not the fundamental factor in history.

In Islamic teachings, the social relations with its different forms do not result from various modes of production. But it ensues from the needs of man himself because it is the man, who is the moving force of history, not the forces of production. It is in man that we find the springs of the social relations, because man has been created in such a way that he loves his own self and tries to meet his needs. Consequently man exploits all things around him to achieve that end.

Naturally, he also finds himself obliged to employ another man in this regard because he cannot satisfy his need except through the cooperation with other individuals. This resulted in social relations developing on the basis of those needs. These relations expanded and grew throughout the long history of man. Social relations are thus the outcome of human needs, the social system being the form, which organizes social life in accordance with those needs.

We can see in our study of human needs that a significant part remained constant with the passage of time, while the rest continuously developed and changed according to the circumstances and environments. This constant that we find in man's organic constitution and his abilities generally are the needs in relation to food, procreation and the potentials related to understanding and emotions.

This means that the entire humanity possesses these characteristics, needs and general qualities and it is because of this, humanity was referred to as one single nation in God Almighty's address to His prophets as in this Qur'anic verse:

“Surely this community of yours is one community, and I am your Lord; so serve Me.” (21:92).

On the other hand we find that there are various other needs that enter the sphere of human life gradually, growing through the experience of life. Thus the primary needs are constant while the secondary needs continue developing, in accordance with the increasing life experience and the related complexities.

If we know that social relations arise from human needs and that social system means the structure which organizes the social relations in accordance with those needs - as mentioned before - we would come to the conclusion that a social system suitable for humanity should not necessarily develop and change significantly in order that it may adapt to the development of social life, just as it is not reasonable that it should permanently reinvent the general principles of life. The social system must have the core part that is constant, and the rest open to development and change; such that in total it suits the new environment.

The Islamic social system is such that it includes a core component that is constant, connected with the treatment of the basic and constant needs of man in his life. This includes aspects like the need for the guarantee of livelihood, procreation and security. These are in addition to the needs dealt with under the Islamic rules about distribution of inheritance and those relating to marriage and divorce and the laws pertaining to criminal punishment and others laid down in the Holy Qur'an and the sunnah.

The social system in Islam also contains aspects open to changes according to new interests and needs. These are the aspects, in which Islam has empowered the ruling authority (Wali’ Al-Amr), to decide upon according to the prevailing interest and need, in light of the variable aspects of the system.

It has also provided the constant part of the system with permanent legislative rules in their legal forms. But their implementation is conditional to specific circumstances. In that manner, the right way to satisfy the constant needs is determined, although their means of fulfillment differ despite their unchanging nature. An example of these is the rule of eliminating the detriments and impediments in religion.

In this way — and unlike Marxism, which holds that (wealth) distribution and consequently the entire social system being dependent on the modes of production — we can affirm the independence of (income and wealth) distribution relations from the mode of production. Thus it is possible for one social system to present to the human society a distribution arrangement that could be suitable in different circumstances and modes of production. No distribution system depends on the mode of production such that it may not precede or remain behind it, as held by Marxism.

It is on this basis that Islam and Marxism differ from each other in their respective views on other distribution systems that prevailed in history, and also in their respective judgments with regard to those systems. Marxism studies distribution systems and the prevailing modes of production in the society and judged that it was a suitable one if it reflects the development of the productive forces then. It would judge otherwise if it were an obstacle in the development of the forces of production and would deem that an uprising against it is warranted.

That is why we find Marxism readily approving slavery in a most detestable form in a society, in which production was driven by manual labour. In such an economy, Marxism’s view is that the society’s production output could only be driven higher when whips were held over the heads of the overwhelming majority of its members, who were forced to work at the points of bayonets.

Thus anyone who resorted to forced labour was the program man and the revolutionary vanguard in such a society because he was the ruthless person capable of realizing the will of history. And the other person who refrains from participating in the operation of slavery and missed this golden opportunity, and thus deserves all the attributes of a man who opposes the movement for human progress, a label the socialist ascribes to the capitalist of today.

As for Islam, it judges every system in light of its relationship with various human needs – that the system guarantees their fulfillment by arranging the conditions of life accordingly - taking these needs to be the basis for the growth of social life. Islam does not regard any particular mode of production as a justification for the establishment of a social system and wealth distribution method that ensures fulfillment of those needs, as it rejects that so-called inevitable relationship between the modes of production and the social systems.

In rejecting this relationship as claimed by Marxism, Islam does not only assert it theoretically. It had also proved this with practical evidence from its history. Islam had demonstrated evidence from real life – from the period the Islamic doctrine was practised - in support of its rejection of the idea about the relationship between the social system and the modes of production. It further proved that man’s social existence can be reset in a new and revolutionary manner while its mode of production remains unchanged.

The Islamic system was in place only for a very brief span out of humanity’s long history. Yet during the period, humanity witnessed the most brilliant development. It was a revolutionary experiment that had created a nation and established a civilization, which changed the course of history. But it had nothing to do with any change in the modes of production or the productive forces.

It would have been impossible - explanation of history based on the socialist logic, which links social system with the means of production - to bring about this universal revolution that embraced all aspects of life, without a prior change in the fundamental conditions of production. The Islamic reality thus challenged the Marxian logic of history in all its calculations. It challenged Marxism it in all aspects including the notion of equality, because the Marxists believe that the notion of equality is the outcome of an industrial society that is opened by the class that carries the banner of equality that is bourgeoisie. According to Marxism, it would not be possible to carry this banner before the history’s development reached this industrial stage.

But Islam scoffs at this logic that ascribes every conscience and thought to the developments in production. Islam had been able to raise the banner of equality and to create in man a right conscience and a comprehensive awareness. It had further been able to impact the reality of the social relations to an extent which bourgeoisie could not.

It had been there and survived before God Almighty let the bourgeois class appears, and this was twelve centuries before the material conditions (that should have matched the development) existed. It called for equality among men much earlier, in an era long before the modern production tools was discovered. It declared, "All of you came from Adam and Adam is from dust", "All persons are equals like the teeth of the comb" and "An Arab has no superiority to a non-Arab (‛ajam) except through piety".

Was this equality in the Muslim society inspired by means of bourgeoisie production, which only appeared but after a gap of a thousand years? Or was the Muslim society inspired of this equality by the means of production in agriculture and the elementary trades with which the Hijazi5 society lived, while better and more developed forms of these existed in other Arabian and foreign communities?

How could these means of production have inspired the Hijazi society with the notion of equality and enabled it to play a most splendid historical role for the realization of this notion, when they did not do the same in case of other Arab societies, of Yemen, al-Hirah or Syria? Islam also challenged the calculations of historical materialism once again by announcing the good news about the existence of a worldwide community rallying the entire humanity in one field, working assiduously to realize this idea in an environment as overwhelmed by tribal strife and a thousand conflicts.

It succeeded in uplifting these tribal units into a greater humanity and made the Muslims give up the notion of a tribal society defined by ancestry, blood relationship and locality, replacing it with the notion of a society not restricted by any of these parameters, instead defined only by Islam's ideological thoughts. What means of production, then, brought about a change in those people - who were not intelligent enough to even establish a nation - that made them leaders of the world community and its champions in such a short period?

Islam again challenged the so-called logic of history, for the third time, by establishing a distribution relation, which - under the calculation of the socialist economics - could not possibly be established in a society before it reaches an industrial stage of production. Islam narrowed the sphere of private ownership, limited its domain and refined its meaning. It also placed restrictions and conditions and made it incumbent to ensure support to the poor, besides providing sufficient guarantees to ensure balance and justice in distribution. And this preceded the material conditions - according to Marxism - for this kind of relations to emerge.

The eighteenth century saying was: "Everyone but an idiot knows that the lower classes must be kept poor otherwise they would not be hard working and industrious 6, while the nineteenth century saying was: "One, who is born in a world whose ownership has been completed, has no right to the food if he could not earn means of his livelihood, by means of his work or of his family’s. Such a person is a parasite in the society, there being no need for his existence because he has no room on the table of nature, which asks him to go, showing no leniency in the enforcement of this dictate".7

The world was saying these even until many centuries after the advent of Islam. But Islam - according to the prophet’s saying - in declaring the principle of social security as such: "He who leaves a household in a state of perishing, the responsibility over his family is on me, and he who leaves a debt, the responsibility over his debt is on me". The Islamic economics declares in an unambiguous manner that poverty and destitution did not spring from nature itself, but it was the outcome of poor distribution and deviation from the good relationship that must bind the rich with the poor. Thus, Islam stated, according to a tradition; "Nothing makes a poor person starve except that with which a rich person avails for luxury".

This conscience of Islam about the problems of the social justice in distribution - the like of which is not to be found even in those societies that are more advanced than the Islamic one in material conditions - could not have been the offspring of the plough implements, or the elementary trades of the handmade products, or such means of living known by all the societies of the earlier periods.

Some say that this consciousness or this social revolution – indeed this gigantic Islamic tide that spreads into the history of the whole world - was the result of the development of trade and of the commercial conditions in Mecca, which demanded the establishment of a stable state to support all its social and ideological requirements compatible with the prevailing commercial situation.

What a novel explanation to explain this historical change in the life of the entire humanity by those commercial conditions that existed in one of the cities of the Arabian Peninsula. I do not know how the commercial conditions of Mecca acquired such dominant historical role, while other Arab and non-Arab states and nations – with greater civilizations and more structured and tangible conditions and were superior to Mecca in respect of political and economic conditions – did not.

Was it not inevitable under the materialist logic of history that the new social development should have spread in those states and nations first? How could certain commercial conditions in a city like Mecca create a new human history, while similar circumstances or even more developed ones elsewhere did not? If Mecca enjoyed commercial conditions congenial to the passage of its trade between Yemen and Syria, the Nabataeans also had important commercial settings, when they established Petra as a station for the trade route.

They set up the most progressive Arabian civilization that their influence spread to the neighboring countries, where they set up garrisons for trade caravans and sites for exploitation of mines. The city became, for a long time, the main hub for caravans and constituted an important trade centre. Their commercial activities grew far and wide, so much so that traces of their trade were found in Seleucia and the ports of Syria and Alexandria. They used to trade in aromatic goods from Yemen, silk from China, henna dyes from Ascalon, glass and purple dyes from Sidon and Tyre, pearls from the Persian Gulf and porcelain from Rome. They also produced in their country gold, silver, tar and sesame oil. Yet, despite such progress in commerce and industry - which Mecca never achieved - the Nabateans remained in their social relations as they were in before, awaiting Mecca's divine role in the development of history.

There was al-Hirah (near Kufah) that experienced a great progress in industry and commerce during the period of al-Manadhirah (Lakhmid Kingdom). They prospered in various industries including textiles, weapon making, porcelain and pottery. The people of al-Hirah were able to have their commercial influence extended to the central, southern and eastern Arabian Peninsula. They used to send trade caravans to the main markets carrying their country's products.

There was also Tadmor (Palmyra) civilization that continued for several centuries, under which trade prospered so much and trade relations were established with nations in other parts of the world like China, India, Babylonia, Phoenician cities and Mesopotamia. There were also civilizations celebrated in the history of Yemen since ancient times.

A study of these civilizations - and their commercial and economic conditions - and their comparison with pre-Islamic Mecca in respect of its civilizational entity proves that the Islamic revolution in the social relations and the ideological life was not a consequence of material conditions, or of economic and commercial circumstances. Social relations, including the distribution relations, are therefore independent of the mode of production and the economic condition of the productive forces.

Is not Islam, after all this, entitled to condemn - with all certainty and confidence - that the so-called historical inevitability which links every mode of distribution with social relations, and declare by dint of tangible evidence that the system was based on ideological and spiritual framework, and not on the material conditions related production?

The Economic Problem From The Islamic Perspectives And Its Solutions

What Is The Problem?

All ideological currents in the economic field agree that there was a problem in economic life that must be tackled. They however differ in determining the nature of this problem and as to the way to tackle it.

Capitalism believes that the basic economic problem is scarcity of natural resources, in view of the fact that nature is limited. It is thus not possible to increase the expanse of the earth on which man lives, nor the amounts of various natural deposits underground. But man’s needs grow constantly with the progress and prosperity of civilization. Nature would be unable to meet the needs in respect of all individuals. This leads to competition among individuals in fulfilling their needs, which results in an economic problem. Therefore, in the view of capitalism, the economic problem is that the natural wealth cannot keep pace with the progress in civilization and is unable to guarantee fulfillment of all needs and desires that continue growing with development of civilization.

Marxism holds the view that the economic problem is always the problem of inconsistency between the mode of production and the distribution system. Therefore, when there is consistency between the two, there will be stability in the economic life. This is irrespective of the social system that results from the matching between the mode of production and the distribution system.

Islam does not agree with capitalism that the problem is that of scarcity of natural resources. It is of the view that nature can meet all the needs of life. Similarly Islam also disagrees with the view that the problem lies in the mismatch between the mode of production and the system of distribution as stated by Marxism. The problem, according to Islam is primarily the problem of man himself, and not nature nor the mode of production.

And this is what Islam establishes in the following Qur'anic verses:

“It is Allah who created the heavens and the earth, and sent down out of heaven water wherewith He brought forth fruits to be your sustenance, And He subjected to you the ships to run upon the sea at His commandment; and He subjected to you the rivers.” (14:32).

“And He subjected to you the sun and moon constant upon their courses, and He subjected to you the night and day.” (14:33).

“And He gave you of all you asked Him. If you count Allah's blessing, you will never count it; surely man is sinful, unthankful!” (14:34).

These holy verses clearly show that God Almighty has pooled in this vast universe all the needs and beneficial things for man and has provided for him resources sufficient to meet his material needs. But it was man himself who had missed this opportunity given to him by Allah, because of his transgression and ingratitude (surely man is sinful, unthankful). Thus man's unjust behaviour in his everyday life and his ungratefulness for the Divine bounty are the real causes of the economic problems in man's life.

Man's injustice in economic life is in inequitable distribution while his ingratitude for the divine bounties lies in his imprudent and damaging attitude in exploitation of nature. So when injustice in the distribution method is eliminated and man’s capabilities are pooled and harnessed to extract benefits from nature in the proper way, the real problem disappears from the economic field.

Islam has, indeed, guaranteed to eliminate injustice with the solutions it has presented pertaining to the distribution and circulation of wealth. As for ingratitude, it has tackled the issue through the principles and rules it has provided in respect of production. This is what we will explain in the following sections in so far as it relates to the first cause of the social problem in the eyes of Islam, which is inequitable distribution.

As for Islam's attitude towards the second cause - that is ingratitude towards divine blessing - we will examine this in a later discussion. We have prepared this study to present Islam's attitude with respect to production and the rules and the principles it has provided related to this matter.

The Distribution System

In the course of history man has suffered from different forms of injustice because of inequitable distribution. At one time distribution was purely individual-based. At another time, it was strictly on collective basis. The first method constituted an encroachment upon the rights of the community while the second one involved curtailing individual rights.

But Islam has laid down such a framework of distribution for the Islamic society that ensures appropriate regard for the rights of individual as well as those of the community. It stands for the rights of an individual to fulfill his natural needs. At the same time, it does not deprive the community of its collective rights and well-being nor threatens its survival. It is distinct from other distribution systems, which man had practised in the course of history.

In Islam, two primary factors are considered in distribution. First is work or labour, and the other is need. Each of the two factors has an effective function in a community’s total wealth. We shall soon examine these factors to know the role they play in distribution, drawing comparison between the significance of work and need in the Islamic framework of wealth distribution, and their respective positions in other systems and ideologies namely communism, socialism and capitalism.

The Labour Factor In Distribution

In order to consider the labour factor in distribution, we must examine the social link between labour and the wealth it generates. Labour is applied to different materials obtained from nature. Man’s labour is involved in all types of economic activities from extraction of minerals to harvesting of forest products, to mining at sea and hunting. There are other types of materials and resources acquired from nature with man’s efforts.

The question we are dealing with in this regard is to what extent does the material gains in value because of the work. And what is the relation between the worker and the wealth, which he obtains through his work? One view is that there is no connection in terms of social relation between work (and the worker) and his subject (the product). Therefore the work or the worker has no right except to fulfill his need whatever his work is, because the work is only a social duty discharged by the individual for the society and the society (already) pays him for that by guaranteeing the fulfillment of his needs.

This view is in line with the viewpoint of the communist economics. The communist economics regards the society as a large entity wherein individuals melt away. Each individual merely occupies the position of a cell in an organism. According to this view, the individuals dissolve into a big social crucible. The works done by the individuals of the society cease to appear as works of the individuals, because all the individuals have melted into an entity.

The link between a worker and the results of his work is thereby cut off. Thus the society becomes the real worker and owner of the work of all the individuals. Their only right is for the fulfillment of their needs, according to the communist form, which we have seen previously during our discussion of historical materialism, i.e. "from each according to his ability, and to each according to his need".

Thus the individuals in a communist society completely resemble parts of a mechanical apparatus, as every part in the apparatus is entitled to consume as much oil as it needs while it must perform its particular job. All the machine parts consume equal shares of the oil despite their functions being different in respect of their significance and complexity. Similarly each individual of a society is given a share in the communist distribution system according to his need, although the extent of his actual participation in the production of wealth may differ.

Thus an individual does a work but he does not own the fruit of his labour nor does he enjoy the result of his work exclusively. All that he is entitled to is to have his needs fulfilled, irrespective of whether it represents (an amount) more than his work or otherwise8. On this basis, the work has no relevance to the distribution of the output. Thus in light of the communist thought, work is an instrument is for producing goods, not an instrument for distribution. It is need alone that determines the basis on which distribution of goods among the individuals of the society takes place. The lots of the individuals of the society in distribution therefore vary in accordance their respective needs, not their works (or contribution).

But as far as the Marxian socialist economics is concerned, it determines the relation of the worker with the result of his work, in line with its peculiar concept of the value. Marxism holds the view that it is the worker who generates this exchange value of the material on which his labour is expended. Thus the material is of no value without the human labour added to it.

As long as labour is the significant source of the value, the distribution of the resultant values among the different branches of the wealth must be on the basis of labour. Therefore, every worker owns the outcome of his labour as well as the material whereon his labour has been expended. It had become of value due to his labour. This means that every person’s entitlement is according to his labour, rather than his need because every worker has the right to own the value created by him. Since labour alone creates values, it is therefore the only basis of distribution. Thus, while in the communist society, need constitutes the basis of distribution; in the socialist society labour becomes the fundamental means of distribution.

But Islam differs from both the communist and socialist societies. It differs from communism in so far as it severs relations between the labour of an individual and the results of his work, and firmly regards the society as the only owner of the labour of all the individuals. Islam does not look at the society as a giant entity hiding behind the individuals and moving them in one way or another. In Islamic view, the society is just a large collection of individuals. The individuals are viewed as human beings in a realistic way, moving about and working. Therefore, under no circumstance can the relation between the labourer and the product of his labour be cut off.

Islam also differs from the socialist economics, which says that it is the individual who by dint of his work lends to the material its exchange value. In the Islamic view, natural materials like wood and minerals and other natural wealth do not derive their value from the work. But the value of every product is the result of the society’s collective desire to acquire it, as we have explained in the course of our study of historical materialism.

In the view of Islam, labour is only a basis for ownership by the worker as the result of his work. And this personal ownership, which is based on work, constitutes an expression of a natural tendency in man for owning the results of his work. This tendency springs from the consciousness of every individual to gain domination over the output from his work and the gains associated to it.

Thus, ownership based on work has become man's entitlement, emanating from his natural sentiments. Even in those societies where private ownership does not exist, as we are told by communism, do not suppress the right of ownership based on work as being a manifestation of a natural tendency in man. It only means that work in those societies had a social impression, and therefore the work-based ownership is socially desired as well. Thus the reality and the natural inclination towards work-based ownership exists in any case though the nature of the ownership may vary in line with the different form of work, in respect of its being considered a personal act or that of society.

Labour, then, is the basis for the worker's ownership, according to Islam and on this basis it constitutes the main factor in the Islamic distribution system. Every worker secures - by dint of the work - the natural wealth he gets hold of and he acquires in accordance with the rule that work is the basis of ownership. In this way we can eventually derive different doctrinal stands vis-à-vis the social relation between the individual worker and the result of his labour.

The communist rule in this regard is "work constitutes the reason for the ownership by the society instead of the individual".

The socialist rule is: "Work is the source of the value of the commodity and consequently it constitutes a cause for the ownership by the worker".

But the Islamic rule is: "Work is the basis for the worker’s ownership of the product and it is not a cause of its value". Thus when a worker extracts a pearl, he does not bestow its value to it with his work, but he only owns it by dint of his work.

The Need Factor In Distribution System

Work is the first main factor in the distribution mechanism, as we have seen just now. The other factor in the distribution arrangement is need. In the Islamic society, work and need are both the primary factors that determine the method of distribution.

To explain the function of need in distribution decision, we can divide the individuals of the society into different groups. A society generally comprises three groups. The first group is made up of those who - with its talents, intellect and physical capabilities - could earn very well and live a luxury life with their wealth. The second group comprises those who could work but their labour can only generate income enough to fulfill their basic needs. The third consists of those individuals who are unable to work due to physical or intellectual disability, or other causes such as a major illness rendering them economically unproductive.

On the basis of the Islamic economics, individuals in the first group rely on their work for their share in the distribution system. Thus each individual of this group gets his share from the distribution in accordance with his respective personal ability even though the share may be in excess of his needs, as long as he utilizes his potentialities within the limits that Islamic economics had determined in respect of the economic activities of the individuals. Therefore, need has no significance in respect of this group of people. Work is the only basis for determining their share in the distribution decision.

While the first group relies on work alone, the third one - in an Islamic economics - relies only on need. Those individuals in this group are unable to work. Therefore the distribution is such that they get as much share that fully ensure their livelihoods, on the basis of their needs, in accordance with the principles of universal assurance and social solidarity in the Islamic society.

As for those in the second group, who could work yet are only capable of securing the minimum amount for their basic needs, their share of income relies jointly on work and need. Their work ensures their share corresponding to the amount essential for basic livelihood, while their need -according to the principles of assurance and social solidarity - calls for supplementary share for them by the ways and means determined in Islamic economics, as described in the following discussion. It has to be such that a life compatible with a universal degree of well-being is made available to those in this group.

In this way we can realize the difference between the significance of need in Islamic economics, as a basis in the distribution decision and its corresponding roles in other economic doctrines.

Need According To Islam And Communism

According to the view of communism - which says that ‘from everyone according to his ability and for everyone according to his need’ – need is regarded as the only basic criterion in the distribution of the economic output among the working individuals in the society. Therefore it does not allow the work to stake a claim of ownership beyond the need of the worker. But Islam recognizes work as being a basis of distribution besides need, and entrusts to it a positive role in this regard. It thereby opens the channel for the appearance of all the abilities and talents in the economic life and facilitates their respective development somewhat on the basis of competition and rivalry. It also encourages talented individuals to harness all their potentials in the social and economic lives.

This is in contrast with Communism, which recognizes need as the only means of distribution, irrespective of the nature and activity of the person’s work. It thus deprives man of incentives that would have made him work harder. As a matter of fact, what induces one to hard work and intense economic activity is his personal interest. When the distribution mechanism excludes work, and embraces need alone as the criterion for determining the share of each individual - as practised in communism - it means a death sentence to the most important force that drives the economy ahead and raises it to a higher level.

Need According To Islam And Marxist Socialism

Socialism, believes in the basis of ‘from everyone in accordance to his ability and for everyone in accordance with his work’, relies on work as the fundamental basis for distribution; hence every worker is entitled to the output of his work whatever is the result, be it small or big. In this way, the role of need in distribution is eliminated and the share for the worker is not confined to only his need, if he produces (with his work) more than his actual need. Similarly he does not get the amount that might fulfill his need fully, when he fails to render work that matches his need. Thus every individual gets to receive the result of his work, irrespective of his need and regardless of the value produced by the work.

This is at variance with the Islamic viewpoint, which assigns an important and positive role to the need. Although this socialist principle does not deprive a talented worker of the fruits of his work (in case they exceeded his need), it is a significant factor for distribution and could have adverse implications in respect of the second group of a society, described earlier. That is the group whose intellectual and physical abilities are merely adequate to enable them to earn enough for the minimum necessities of life.

Based on Marxist socialism economics, this group must be content with the little output of its work and accept the big gap between its living standard and that of the first group, which is capable of earning a luxurious living since according to socialism work alone determines distribution decision. Hence it is not possible for a worker to desire better living than that provided for him by his work.

In Islamic economics, the scenario differs because Islam does not consider only work in the of distribution arrangement among the workers. It also fixes a role for need. It regards the inability of the second group to secure the general standard of luxury as a sort of need and lays down certain ways and means to deal with this type of need. Thus a talented and fortunate worker would never be deprived of the fruits of his work that exceed his need, while a worker who could offer only the minimum work ability would still get a share greater than the value of his production.

There is another point of ideological difference between Islam and Marxist socialism regarding the third group of individuals in the society. They are deprived of work due to their intellectual and physical limitations. The dissimilarity between Islam and Marxist socialism about the entitlement of this underprivileged group emanates from the difference between their respective concepts about the distribution formula.

I do not propose to take up the attitude of the socialist world today in this regard vis-à-vis the third group. Also, I am not trying to restate the assertion that an individual incapable of work is doomed to starvation in socialist societies because I want to study the question from theoretical point of view, not from the actual practice. I do not wish to bear the responsibility for those claims often repeated by the enemies of the socialism.

From the theoretical point of view therefore, it is not possible for the Marxist socialist economics to explain the rights of those in the third group, and justify them getting a share in the distribution of the total production because in the view of Marxism distribution does not stand on any firm moral basis. It is only determined in accordance with the condition of the class struggle in the society, dictated by the prevalent mode of production. Therefore Marxism also held that slavery and the death of slave under forced labour, and his deprivation of the fruits of his work was something tolerable under the circumstances of the class struggle between the lords and the slaves.

In light of this Marxist premise it is necessary that the share of the third group in the distribution decision be studied considering its class position, so long as the shares of the individuals in the distribution were determined in accordance with their class positions in the social struggle.

But since the third group was deprived of the ownership of both the means of production and productive labour, it was not one of those in the class struggle between the two - the capitalist class and the working class. It did not constitute part of the working class that played the role in the victory of the workers and the establishment of the socialist society. And since these individuals - who are incapable of work by their nature - were separated from the class struggle between the capitalists and the workers (and consequently from the working class which controls the means of production in the socialist stage), there ought to be found a scientific explanation along the Marxian principles, which might justify the share of this third group in the distribution - and their right in life and the wealth which was controlled by the working class - as long as they remained outside the scope of the class struggle. Thus Marxism cannot justify - based on its principles – the economic assistance and economic security accorded to the third group in the socialist stage.

But Islam does not determine the process of distribution on the basis of class struggle in the society. It determines it in light of the higher ideals of a happy society and on the basis of moral values that dictate the distribution of wealth in a manner that ensures realization of those values, the prevalence of those ideals and the elimination of hardship arising from poverty to the greatest possible extent.

A distribution process which revolves around these principles naturally accommodates the third group, as being a part of the human society, in which wealth must be distributed in a way that minimizes the pains of poverty in order to realize the higher ideals for a happy society and the moral values on which Islam establishes social relations. It becomes natural, then, that the need of this deprived group be regarded a sufficient reason to give it its right in life and to be one of the basis of the distribution decision.

“Those in whose wealth is a known right for the beggar and the outcast”. (70:24-25)

Need According To Islam And Capitalism

As for the capitalist economics in its apparent form, it is entirely contradictory to Islam in respect of its attitude towards need. In the capitalist society need is not a factor in the distribution mechanism. It is a factor of an opposite attribute and its role contradicts that it plays in an Islamic society. The greater is the need factor with the individuals, the lesser is their share in the distribution. This ultimately leads to a large number of them withdrawing from work and distribution.

The reason for this is that the intense and widespread need mean existence of more labour supply in the capitalist market, exceeding the amount needed by the owners, who provide work opportunities. Human labour is a commodity in the capitalist economics and its fate is governed by the laws of supply and demand, as is the case with all other commodities in the market. It is therefore only natural that the wages should decrease accordingly. The decrease in wage continues as long as the capitalist market refuses to fully absorb the supply of available labour, resulting in unemployment of a large number of needy persons. They must do the impossible in order to survive or bear the pains of deprivation and starvation.

Thus need is not a positive factor in the capitalist distribution mechanism. It only means abundance of the work capacity or labour supply. Any commodity with an excess of supply over demand must have its price reduced and its production stopped until it is fully absorbed by the market such that the supply matches the demand. Therefore, in the capitalist society need implies diminishing share of an individual worker in the distribution. It is not a positive factor for distribution.

Private Ownership

Having established that work is the basis for private ownership in accordance with the natural inclination in man to own the results of his work, and having regarded work - on this basis - a main factor for distribution, Islam accepts the following two premises:

The first is allowing private ownership in the economy. Since work is the basis of ownership, the worker should naturally be allowed to privately own the output of his production and the wealth he helps generate, in the form of crops, textile products etc. When we assert that the ownership of the wealth by a worker who produces it is a manifestation of a natural inclination in him, we mean that there exists in man a natural tendency to exclusively own the output from his work. This is expressed in the social concept as ownership. But the rights that result from this ownership are not established in accordance with the natural tendency. It is the social system that determines the rights, in line with the ideas and goals that the society embraces.

For instance, is it the right of the worker, who owns the commodity by dint of his work, to squander it since it is his private asset? Or, is it his right to exchange it for another commodity or develop his wealth by using it for commercial purposes or to lend it to others on interest? The answer to these and other similar questions is given by the respective social systems, which determine the rights of private owners, and these are unrelated to nature and instinct.

For this reason, Islam intervenes in determining the rights and privileges - recognizing some and rejecting others in accordance with its values and ideals. For instance, it rejects an owner's entitlement to squander his wealth or to spend lavishly but grants him the right to utilize it without being wasteful or extravagant. It denies the owner the right to grow the wealth which he owns by means of usury, but allows him to develop it through trades within special limits and conditions, and in accordance with its general theories about the distribution which we, God willing, shall soon study in the coming chapters.

The second premise is deduced from the principle of “work as the basis for ownership”. It sets limitation on the scope of private ownership in accordance with the demands of this principle. Since work is the main basis of private ownership, it is necessary that the scope of private ownership be confined to the wealth generated by the work, and excludes that for which the work has no consequence.

On this basis, wealth is divided into private and public assets according to how it is generated. Private asset is that which comes into being or is produced in accordance with the private human labour expended thereon, like agricultural commodities (crops) and textiles. It also includes commodities extracted from the earth or sea or the atmosphere, using human labour and intervention. In these cases, human work and intervention are needed - like the work of the farmers in respect of the agricultural produce, in conditioning it and preparing it in such a form that makes it possible to benefit therefrom, or human work in generation of electricity and its transmission with the powers lines, or in extraction of water and petroleum from the earth.

Some resources such as water, electrical energy and petroleum are not creation of human. But human efforts made them available in forms beneficial for use. These types of assets - where human work is involved - constitute the scope Islam had fixed for private ownership. These are within the area in which Islam allows private ownership. Since work is the basis of ownership and as long as these types of assets are mingled with human work, the worker is entitled to own them and benefit from his ownership by way of enjoying their use and selling them.

As for public assets, they comprise all those that do not involve human efforts like the earth, as it is an asset which is not made available through human work or intervention. Although man sometimes does intervene by conditioning the land so as to make it suitable for cultivation and exploitation, his contribution is limited. Irrespective of its duration of his efforts, it is minute relative to the age of the earth, which is vastly longer. Placed on the scale of the earth’s age, the works done by human could be nothing more than a brief and temporary conditioning. Minerals and natural wealth lying hidden underground resemble the earth itself in this respect. They do not owe their existence and condition to the human work involved in extracting and refining them.

These are public assets because of their nature or their initial form. According to the (Muslim) theologians, these assets are not private property of any individual because the basis of private ownership is work. Therefore, assets, which do not involve work, do not fall under the scope of the limited private ownership. They are public assets, accessible by all.

Land, for instance, does not involve human work and could not be owned as a private property. Since works performed in reviving an infertile land means only a temporary conditioning for period far shorter than the age of the earth, it could not bring the land under the scope of private ownership. It only creates a right for the worker on the land, whereby he is allowed to gain some benefits, and other people are not allowed to stand in his way because he has the distinction of having spent his efforts on the land.

It would therefore be unjust to treat him on an equal basis with others who had not worked on the land. It is for this reason that the worker is given an exclusive right over the land, without being allowed ownership. This right continues as long as the land is conditioned according to his work. When the land is neglected, this special right discontinues.

It becomes clear that the principle is that private ownership does not take place except in case of those types of assets whose existence and conditioning involve human labour. It does not apply to natural assets that do not involve human efforts. Since the reason for private ownership is work, assets outside the scope of human work fall beyond the range of private ownership. However, there are exceptions to the rule for considerations relating to Islamic mission, as we shall point out in the following discussion.

Ownership As A Secondary Basis Of Distribution

After work and need, comes the role of ownership being a secondary basis of distribution. While allowing private ownership on the basis of work, Islam is opposed to capitalism and Marxism simultaneously in respect of the rights bestowed on the owner and the range in which he is permitted to exercise these rights. It does not allow him to utilize his assets in developing his wealth in an absolute and unrestricted manner, as capitalism does, allowing all types of profits. Nor does Islam close the opportunity of earning profit (from the assets) as Marxism does. Marxism disallows individual profit and the (commercial) use of the assets in all forms. Islam holds the middle ground, prohibiting certain types of profit like that from usury-based lending and permitting profits from some other commercial uses.

The prohibition of certain types of profit by Islam reflects its fundamental difference from capitalism in respect of economic freedom. We have earlier criticized the capitalist concept of freedom, in our discussion of the doctrine. In the coming discussions we will deliberate on certain types of profit disallowed in Islam such as the usury-based profits and the Islamic viewpoint in prohibiting usury.

Similarly, by permitting commercial profits, Islam expresses its fundamental difference from Marxism. Islam disagrees with Marxism’s concept of value and surplus value and its peculiar way of explaining the capitalist profits, as we have dealt with in our study of historical materialism. With Islam's recognition of commercial profits, ownership itself has become a vehicle for development wealth by means of trade in accordance with the legal conditions and limits. Consequently, it also becomes a secondary instrument of distribution within the parameters guided by the spiritual values and social interests embraced by Islam.

The Islamic distribution system can be summarized as the foregoing:

Work is a primary factor for distribution, being the basis of ownership. Thus he who works in the nature's field, earns from the fruits of his labour and owns the output from his work.

Need is also a primary factor for distribution, being the expression of an established human right in a dignified life. Human needs are thereby provided for in a Muslim society and their fulfillment is assured.

Ownership is a secondary factor for distribution, by way of commercial activities allowed by Islam within special conditions that are consistent with the Islamic principles of social justice, which Islam had ensured. We will see this in the discussion of the details later

Trading And Circulation Of Goods

Circulation (trading and exchange) is one of the fundamental elements in economic life and it is of no less importance than production and distribution, though it comes in a later stage. Historically, production and distribution was always connected with man’s social existence. Thus whenever a human society exists, it must necessarily have - in order to continue its life and earn its living - some form of production and distribution (of the wealth produced) among its members in any manner agreed among them.

Therefore, there could not be social life for man without production and distribution. As for exchange, it was not necessary that it should be found in the life of a society since the very beginning. During the early stage of their formation, societies had a generally rather primitive and closed economy, which means that each family in the society produces all that it needs without relying on the efforts of others. This type of closed economy leaves no scope for the exchange as long as everyone produced such quantity that meet his simple needs and was content with the commodities he produced.

Commerce started its effective role in the economic arena only when man's needs grew and became varied, and when the commodities needed by him in his life become numerous that each individual is unable to produce on his own the various commodities that he needs. The society is therefore obliged to distribute work among its members and every producer or group of producers begins to specialize in the productions of a certain commodity from among the many, which he could produce better than the others.

As for his other requirements, he fulfills them by exchanging the surplus from the commodities that he produced with the commodities he requires, produced by others. Thus commerce began in the economic life as a means of meeting the needs of the producers, instead of everyone fulfilling all his requirements by producing on his own. In this way commerce grows as a facility in the social and economic life, and in response to the expanding needs and the increasing tendency towards specialization in the development of production.

On the basis of this, we come to know that in reality, commerce functions in the economic life of the society as a bridge between production and consumption, or in other words between producers and consumers. Thus the producer always finds – through trades - the consumer who needs the commodity that he produces, while this consumer in turn produces another commodity and finds – in the trading process - a consumer who needs to buy his product.

But it is man's injustice - according to Qur'anic terminology – that had deprived humanity of the blessings of life and its bounties and had distorted distribution and commerce. Trading and commerce had become an instrument of exploitation and cause of hardship, instead of a means of fulfilling needs and facilitating life. At times it becomes a bridge between production and hoarding9 instead of being a link between production and consumption. The oppressive conditions in commerce led to the tragedies of different forms of exploitations, similar to those that resulted from the inequitable distribution in the societies practising slavery and feudalism, or in the capitalist and communist societies.

In order that we may explain the Islamic viewpoint on commerce, we must know Islam's view about the key factor which made trade an oppressive tool of exploitation and its consequences. Then we shall study the solutions that Islam presents for the problem and as to how it had lent its equitable framework and its commercial laws in respect of trading to serve its noble objectives in human life.

Before proceeding further we must note that trade has two forms. First, exchange on the basis of barter. Second, exchange on the basis of payment with money.

The exchange on the basis of barter means exchanging one commodity with another, which is the oldest form of exchange. Each producer, in societies that adopt specialization and division of work, used to obtain the commodities not produced by him against the surplus commodity that he specializes in producing. Thus one who produces a hundred kilograms of wheat retains half of the quantity, for instance, to meet his own requirements and exchanges the remaining fifty kilograms for a certain amount of cotton, which is produced by someone else.

But this form of exchange (barter) could not facilitate circulation in the economy. On the contrary it became more and more difficult and complicated with the passage of time as specialization grew and the needs also expanded and became more diverse. The barter system required the wheat producer to find the cotton required by him with a person who desired to have wheat. But in case the cotton producer was in need of fruit instead of wheat, while the wheat producer did not have fruit, it would be difficult for the wheat producer to secure the cotton he needed.

In this way there are difficulties arising from the mismatch between the needs of the purchaser and those of the seller. In addition to this, there is also the difficulty because of the differences in the values of the articles being bartered. A person who owned a horse could not obtain a chicken, because the value of a chicken was less than that of the horse. Naturally, he was not prepared to exchange a horse for one chicken, nor was the horse divisible so that he could secure the chicken by trading a part of his horse.

Similarly, the barter trade operations also used to face another problem that is the difficulty in ascertaining the values of the respective goods prepared for the exchange. It is necessary to measure the value of one object by comparing it with another so that its value could be known relative to all others. It was for these reasons that the societies that depended on trading began to think of amending the exchange system in such that those problems were overcome.

The idea of using money a medium of exchange, instead of the commodities themselves, was widely accepted and practised. The second form of exchange – using money – soon became mainstream. Thus money became the substitute for the commodity, which the purchaser used to be obliged to present to the seller, in barter. Instead of making the wheat producer - as in our example - present the grains to the owner of the cotton (in exchange for the cotton he purchases from him), it became possible for him to sell his wheat for cash and then purchase the cotton he required with the money he received. The cotton owner in turn purchased the grains he required with the cash he had obtained.

The representation of commodity with cash in the trade operations solved the problems that arose from barter and overcome the difficulties faced. Thus the problem of mismatch between the needs of the buyer and that of the seller disappeared, as it was no longer necessary for the buyer to give to the seller commodity, which he needed. He only had to give him money with, which the latter could purchase that commodity (which he was in need of) from its producers at a later time.

The difficulty of disparity between the values of articles was also overcome as the value of every commodity was now assessed in monetary terms, which was divisible. Similarly it became easy to assess the values of the commodities because these values were now measured in relation to only one standard, which is money, being a universal scale for value.

All these advantages emerged as a result of money becoming the medium of exchange for all goods. This is the bright side of the use of money as replacement for the commodity. It explains how money as the medium performs its social role for which it was created, that is to facilitate of trade transactions.

But the significance of this medium did not stop there. With the passage of time it began to play an important role in the economic life until it gave birth to new difficulties and problems, which were no lesser than those under the barter transactions previously. While the earlier problems were natural, the new ones - which arose from the use of money - were man-made problems, being a manifestation of injustice and exploitation. The use of money as a medium of exchange paved the way for these.

In order to understand this, we must note the developments that took place in commerce subsequent to the use of money in place of pure barter trades. In the case of barter exchange, there used to be no difference between the seller and the buyer, as both of the trading parties were seller and buyer at the same time. Each party delivered a commodity to the other and in turn received another commodity in exchange. The barter therefore, fulfilled the need of both parties simultaneously in a direct way. By exchanging, each of them obtained the commodity he needed for consumption or production like wheat or plough.

Considering this, we understand that in the barter era man was not afforded an opportunity to shift the personality of the seller without being a buyer at the same time. So there was no selling without buying. The seller gave with his one hand to the buyer his commodity (as a seller), to receive from the latter, with the other hand, a new commodity (as a buyer). Selling and buying were fused in one deal.

But in trading that used money as a medium, the matter differed greatly because the money drew a differentiating line between the seller and the buyer. The seller was thus the owner of the commodity while the buyer was he who paid money for that commodity. The seller, who sold wheat to obtain cotton, could sell wheat and obtain the cotton he required in a single barter transaction. In the money-based trade, he now must enter into two transactions in order to meet his needs. In one transaction, he was a seller by selling wheat for a certain amount of money. In the other transaction, he was a buyer by purchasing cotton with that money.

This means separation of selling from buying, which were earlier combined together in the barter trade. The separation of selling from buying in the money-based trading expanded the scope for separating buying from selling, and deferring the buying transaction. Thus the seller, in order to sell his wheat was no longer obliged to buy from the buyer his produce of cotton. It was possible for the seller (now) to sell his wheat for a certain amount of money and keep the money with him, putting off the purchase of the cotton to another other time.

This new opportunity for the sellers to delay the purchase - after the selling their commodities - changed the general character of trading. In the barter age, producers resorted to selling in order to buy a commodity that they needed. But in this money age, a new purpose has developed with respect to selling. It is for a producer to dispose of his commodity, not actually intending to secure another commodity. He does so in order to have more money, which constitutes a universal medium in the trading of all commodities and which enables him to buy any commodity he wanted at any time.

In this way, selling for the purpose of buying changed into selling for the purpose of accumulating money. This led to amassing of wealth in the form of stored money. Money - we mean particularly metal and silver coins - has advantages over other commodities. Any other commodity could not be amassed with such advantage as most of them have their value eroded with the passage of time. In addition to that, numerous expenditures are incurred on their storage. Furthermore, the owner cannot easily exchange it for another commodity in time of need. Amassing these commodities could not ensure ready exchange for other commodities needed, as amassing money would.

As for money, the situation is very different. Money can be amassed and stored with ease, and with little or no expenditure. Moreover, being the general medium of exchange, the owner can purchase any commodity at any time. That is how the motivation for accumulating money was so strong in those societies in which money began to be the medium for exchange, particularly in case of gold and silver coins.

As a result of this, commerce ceased performing its real function in the economic life as a bridge between production and consumption. Instead it became a bridge between production and wealth accumulation. Thus the producer produces and sells - exchanging his produce with money - so that he may add to his accumulated wealth. The buyer paid money to the seller to secure the commodity that he buys. Having bought his needs, he could not in turn sell his produce easily because the earlier producer/seller was accumulating money, resulting in some money being withdrawn from circulation.

Another result is the appearance of a great disruption in the balance between the quantity of supply and the quantity of demand. In the barter age, supply and demand levels tended towards equilibrium, since every producer used to produce to satisfy his needs and exchange the surplus with other commodities he needed in his life, of the types other than what he produced. Therefore the production or supply always corresponded with his requirement. The supply level always matched the demand and thereby market prices tend towards their natural level, which expressed the real values of the commodities and their actual importance in the life of the consumers.

But when the age of money began and money dominated trades, production and sale took a new direction until production and sale became a means for accumulating money and building wealth, instead of fulfilling needs. At this stage, naturally, the balance between supply and demand is disturbed and the motivation to accumulate money has a critical role in widening the gap between supply and demand so much so that the trader sometimes creates a fake demand. He would buy all of a commodity from the market not because he needs it, but to raise its price later. He could also supply a commodity at a price lower than what it costs with the view to forcing other producers and sellers to exit the market or become insolvent.

In this manner prices are subject to artificial conditions and the market comes under the domination of large and powerful traders. Thousands of small players in the market submit, all the time, to the larger players who dominate and manipulate the market.

What happens thereafter? Nothing, except that we see the strong players in the economy taking advantage of the opportunities presented to them by the use of money as a medium of exchange. They pursue trading and their goal in wealth accumulation. Thus they go on producing and selling in order to draw the money from circulation in the society into their treasuries, and gradually absorb the available money.

This consequently disrupts the function of the trading and commerce as the link between production and consumption and causes a large number of people to fall into misery and poverty. Consumption declines because of the erosion in purchasing power, and the overall standard of living drops. Similarly production activities also slow down because of the decline in consumers’ purchasing power and demand. With the decline in both consumption and production, economic depression sets in all sectors of the economy.

The problems (resulting from the use of money) do not end here. There are other problems more critical than those we have just noted. Money has not only made market manipulation possible, but it has enabled the build-up of wealth through interest, which creditors demand from their debtors, or which the wealthy demand from the capitalist banks where they deposit their money. In this way, in the capitalist environment market manipulation through hoarding has become a factor for the growth of wealth, instead of actual production. Large amount of capital have shifted from production activities to the deposit boxes in the banks. Now, one does not have to come forward to undertake production or trade except when he is satisfied that the return which the project brings is generally greater than the interest which he could secure by lending his money or depositing it in the banks.

The money gained on the basis of usurious profit began to sneak to the money changers ever since the capitalist age as they began to attract idle money kept with different individual custodians, by alluring them with the annual interest which the bank customers demand on the money deposited. As a result of this, these sums of money got accumulated in the vaults of the moneychangers instead of being utilized in productive economic activities. This money accumulation also led to the establishment of big banks and finance houses that held the reins of wealth in the country, disrupting the balance in the economy.

This is a brief review of the problems of circulation and trading. It shows clearly that all these problems sprang from the use and abuse of money in commerce as it is used as a tool for market manipulation and consequently as an instrument for wealth accumulation.

It throws some light on the hadith (tradition) of the Messenger of Allah. He said:
“Yellow dinars and white dirhams (gold and silver coins) are going to destroy you as they had done in the case of those who were before you.”

Islam has dealt with these problems springing from the use of money and it has succeeded in restoring trading to its natural function as the bridge between production and consumption. The main points with regard to the attitude of Islam vis-à-vis the problems related to trading and commerce are summarized below:

First, Islam has prohibited hoarding of the money, by the imposition of zakat (religious tax on wealth) on the accumulated money. The zakat is applied in a recurring manner such that it erodes most of the accumulated money if it remains hoarded for a number of years. That is why the Holy Qur’an regards amassing of gold and silver as a crime, which is punishable with the fire (of hell).

Hoarding naturally means being remiss in the payment of the obligatory religious tax. This tax, when duly paid, works against the accumulation and hoarding of money. No wonder then that the Holy Qur’an warned those who hoard gold and silver and threatened them with punishment with the hell-fire. The Holy Qur’an says:

“Those who hoard up gold and silver, and do not expend them in the way of Allah — give them the good tidings of a painful chastisement.” (9:34).

“On the Day they shall be heated in the fire of Jahanam and therewith their foreheads and their sides and their backs shall be branded: "This is the thing you have hoarded up for yourselves; therefore taste you now what you were hoarded!” (9:35).

In this way Islam ensured that wealth remains in production, trading and consumption activities and resisted its being accumulated and hoarded in the vaults.

Second, Islam prohibited usury absolutely without any tolerance, thereby dealing a death sentence to interest and its adverse consequences in (wealth and income) distribution and to the disruption it caused in the general economic equilibrium. Similarly it had prevented money becoming an independent instrument of wealth accumulation and restored to it its original role as general a medium to facilitate the exchange and circulation of goods.

Many people, who have had experienced and were accustomed to the capitalist economic life - in its various forms - think that the prohibition of interest means closure of banks and suspension of the economic apparatus and disabling of all of its nerves and veins provided by these banks. But this belief on their part is due to their ignorance about the real role, which the banks play in the economic life, as also about the real Islamic economic system, which ensures solution to all problems arising from prohibition of interest. We shall discuss this in detail in later discussion.

And third, it (Islam) gave the Wali’ Al-Amr significant authority that empowers him to completely supervise trading activities and control the market in order to check any action that might harm and disrupt economic life, or that which might pave the way for any individual to dominate the market and the trading activities in an illegal way.

We shall explain these points and discuss them in detail in the coming chapters of the book, in which we shall elabourate on Islamic economics.

• 1. al-Wasa'il, III, Kitab Ihya'u 'l-mawat.
• 2. Some Islamic jurisprudents believe - in respect of the Prophet's verdict prohibiting denial of surplus water or anything else - that the prohibition falls under the category of undesirable (makruh) rather than the unlawful (haram). They interpreted the Prophet's verdict as such - stripping it off its character of necessity - because they think that the tradition could be interpreted only in two ways; either the prohibition by the Prophet is taken to mean unlawfulness (haram) so that the denial of surplus water and herbage be regarded as unlawful under the Islamic law (Shari’ah) in the same way as the drinking alcohol and other unlawful matters. Or the prohibition is taken to mean encouraging the benevolence of the owner to give in charity his surplus wealth. Since the former interpretation is alien to the jurisprudence sense, it is necessary to adopt the latter one. But in reality this does not justify interpretation of the Prophet's verdict as conveying the sense of desirability (or encouragement) as long as it was possible to ascribe the character of need and necessity to it. This is evident from the wording, and to understand it as being a decision given by the Prophet in the capacity of Wali’ Al-Amr keeping in view the peculiar circumstances, in which the Muslims lived and not as being a general legal verdict declaring the matter in question unlawful like drinking and gambling.
• 3. We have studied and assessed, at a great length, the potentials of man in realizing the ideologically most suitable social organization and understanding real social interests, in our book Contemporary Man and the Social Problem. We have explained therein the role of social and scientific experiments and how much services they have rendered in this regard. Available online at:
  https://www.al-islam.org/contemporary-man-and-social-problem-sayyid-muha...
• 4. Refer to the discussion of the difference between the religion of Islam and the capitalist doctrine in this regard in the preface of (the book) Falsafatuna. Available online at:
  https://www.al-islam.org/our-philosophy-falsafatuna-sayyid-muhammad-baqi...
• 5. Hejaz or Hijaz refers to the geographical region covering the western part of the present day Saudi Arabia [Note of Al-Islam.org].
• 6. Arthur Young, an author in the 18th century.
• 7. Malthus, who lived in early 19th century.
• 8. This is so in non-Marxist communist trends. But Marxism has its own peculiar way to justify that in light of its historical materialism concept of the communist stage. Refer Volume 1, Part 1.
• 9. This refers to hoarding by market speculators who buy large quantities of certain products with the intention of benefitting from price increase later. [Note of Al-Islam.org].