You will not attain virtue unless you expend of what you love. (3:82)
Importance of economic affairs can be judged from the fact that the world, till recently, was divided into two hostile camps on the basis of diverging economic theories and was likely to go to war on this issue. On one side was the capitalist who stood for the freedom of individual but kept all the wealth and comforts for a few rich, giving the labourer only sufficient to keep him alive. On the other side was the Communist, who eliminated the Capitalist but handed over all the wealth to the state, which already held political power, leaving the labourer as before, tamed in the hands of a few clever opportunists, who captured power, at a lucky moment, by some means, fair or foul.
Right of Ownership
To possess is a basic human instinct, which has been responsible for all human progress from the beginning of time. It is the only incentive to work harder and harder. Without this instinct the earth would have been a habitat of lotus-eaters who would work only enough to live. How can such a basic human faculty become wrong by mere industrialization? Why should we place the whole of mankind at the mercy of a few tyrants, even for such necessities as food and reduce them to a herd of serfs.
Islam recognises the right to earn and to own for everybody, without limit. Indeed it is the first freedom. Islamic rules on trade, loan, usury, will, inheritance etc. bear testimony to this right. The general rule is:
You own only what you earn
Economic Differences Accepted
Without difference in economic status and in ranks, all men would be alike and care-free of others and, therefore, all organised, collective work will be impossible. Without these differences, man would have been still living in the stone-age.
Unlawful Earnings Disallowed
Hoarding of Gold and Silver
Any increase in borrowed money merely with the passage of time is usury, and is prohibited so emphatically that the Quern declares war against the usurers. It asks Muslims to forgo the balance of interest if they are Believers. Money is a measure and it must stay as such; money should not be used to breed money.
The reasons are important. Here, money flows to the rich, as the needy borrow and pay the interest. Again, the earnings are without effort on the part of the usurer; he gets money merely by means of previous holdings. Further, it disturbs the coin as a measure. The price of the commodities when interest is added to it is raised without raising their value. Thus, in a system where usury prevails, prices are ever- rising and value of coin ever-falling, affecting reserves, savings and fixed incomes adversely. The interest thus eats itself away through devaluation of money.
Muslim rulers are required to eradicate usury from the whole world and install an economic system free from it. At present, thanks to this system, the whole world is in the grip of jews.
Due-Alms - Giving
To meet the collective needs of the State and to help the needy, Quran makes payments of Due-Alms (Zakat or Sadaqat) obligatory on all Muslims possessing surplus wealth. Anybody refusing to pay is considered outside the pale of Islam.
No rates are fixed by the Holy Quran but a general rule is prescribed in these words:
The Holy Prophet said that the Due-Alms shall be taken from the rich and diverted towards the poor. Indirect taxes falling ultimately on the poor are thus undesirable.
After payment of State dues, one is still obliged to look after the needy living in the neighborhood and help charitable works. Hoarding is emphatically rejected by the Holy Quran. (see (9:34) above)
Due-Alms are a trust on the public functionaries and cannot be spent at their whims. Expenditure is specified in the Quran in the following words:
Thus public money can be spent for the good of the needy, to silence the mischievous, and to establish, maintain and strengthen the way (law) of God viz. Islam, so that it prevails over the world, resulting in unity of mankind, justice and peace.
Incidentally, limitations on expenditure of public money show that, in Islam, agriculture, commerce and industry are private enterprises. The State has only to guide and provide overall control, ensure justice between various groups, collect its share of Zakat and expend it on common good, defense and domination of Gods Religion.
A great equalizing factor given by Quran is its Law of Inheritance. The profit goes to children including daughters, parents and wife (or wives). Through daughters, it passes to other families. Through parents, it goes to the brothers and sisters and their inheritors. Through wife, it may go partly to her relations and even to next husband of a widow. It offends nobody, as it goes only to relations. Thus, the wealth is distributed in the whole of society, though unnoticed. The process is much slower than Zakat, as it operates at the close of a generation i.e. in about 25 years.
For just distribution of property and to save the inheritors from quarrels, bequests are required to be made before death.
Islamic Way For Large Concerns
If institution of Zakat and negation of usury do not allow individuals to become very rich, if the law of inheritance does not allow a family to stay rich and if Government is not a business concern in Islam, then, it may be asked, how large business, farms or industrial concerns could be raised and run.
The Islamic way shall be by pooling of money in co-operative societies and joint-stock companies, under the management of the co-operators and shareholders, where Government may check profiteering, hoarding and other ills.
Banks may be established for the purpose of credit- formation, safety and transaction of money.
Bank deposits may be used to help agriculture, trade and industry on profit-loss basis and, in that case, a part of the profit may be paid to the depositors, according to mutual agreement. Fee charged by banks for different services will also be lawful.
Land is no exception to other possessions. Owners may give it to others to till, provided they pay the tillers equitably. The correct way is to pay full wages against hours of work done and take all the produce, big or small, for self. Big farms may be managed through co-operative societies.
The old feudal lords have no place now. They were part of the old system of government. The revenue from the land, at that time, was not for merry-making, but was spent on peoples welfare, justice, security and defiance. This is no longer their responsibility and, therefore, jagirs may be taken over by the State and utilized in the best interest of the State and for the good of common man.
The Holy Quran Society