The Economics

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:

Do not covet that whereby God has exalted some of you above others. For men is a share of what they earn, and for women is a share of what they earn; ask God of His bounty; surely God knows all things. (4:32)


You own only what you earn

O Believers, consume not your wealth between you by false means, except that it be a trade by mutual agreement. (4:29)


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.

It is We Who have distributed among them their livelihood in the present life, and raised some of them above others in ranks, that some of them take others in service. (43:32)


Unlawful Earnings Disallowed

Consume not your wealth between you by false means, and do not proffer it to the judges, so as to consume a portion of the wealth of the people sinfully, while you know. (2:188)

Fill up the measure and the balance, and do not diminish the goods of men, nor cause disorder in the land after its reformation. (7:85)

Woe to the stinters who, when they measure against the people, take full measure, but when they measure for themselves or weigh for themselves, give less. Do they not think that they shall be raised up on a Mighty Day, the Day when mankind shall stand before the Lord of the World. (83:1-6)


No Wastage

Eat and drink, but be not prodigal, for He does not love the prodigal. (7:31)


Hoarding of Gold and Silver

Those who treasure up gold and silver and do not expend it in the way of God, give them a good news of a painful punishment. (9:34)


Usury Prohibited

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.

Those who devour usury stand not but like the one whom Devil has confounded by touch; this is because they say, ‘trade is only like usury.’ But God has permitted trade and forbidden usury --- God blots out usury but adds to the offerings --- O Believers, fear God and give up the remaining usury, if you are Believers. And if you do not, take notice of war with God and His Messenger; and if you repent, then you shall have your principal, neither you do wrong nor be wronged. And if he is in difficulties, respite him till ease. (2:275-280)

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.

Take Due-Alms out of their wealth to thereby purify them and improve them. (9:102)

In their wealth is a known right for the beggar and the destitute. (70:24-25)

You will not attain virtue unless you expend of what you love. (3:82)

No rates are fixed by the Holy Quran but a general rule is prescribed in these words:

They ask thee as to what they should expend; say, ‘the surplus.’ (2:219)

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:

The offerings are only for the poor, the needy, those who work on them, those whose hearts are to be won, ransoming those in bondage and the debtors, in the way of God, and the traveller – it is a duty from God. (9:60)

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 God’s 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.

God charges you concerning your children – to the male the like of the portion of two females; and if they be women above two, then for them two-thirds of what he leaves; and if she be one, then to her a half; and to his parents, to each one of the two the sixth of what he leaves, if he has children; but if his heirs are his parents, then to his mother a third; or, if he has brothers, then to his mother a sixth after any bequest he may bequeath, or any debt --- And for you, a half of what your wives leave, if they have no children, but if they have children, then for you, of what they leave, a fourth; and for them, a fourth of what you leave, if you have no children; but if you have children, then for them, an eighth, after any bequest you may bequeath or any debt; if a man or a woman has no direct heir, but have a brother or a sister, then for each of the two a sixth; but if they are more than that, then they share a third – after any bequest he may bequeath or a debt not prejudicial. (4:11-12)

God pronounces to you on indirect heirs; if a man having no children but having a sister dies, she shall have half of what he leaves, and he shall be her heir, if she has no children; but if they are two sisters, then for them shall be two-thirds of what he leaves; and if there be brothers and sisters, then male shall have the portion of two females. (4:176)



O Believers, when you contract a debt for a stated term, write it down. And let a writer write it down between you justly; and let not a writer refuse to write as God has taught him, so let him write. And let him upon whom is the obligation dictate, and let him fear God, his Lord, and not diminish anything from it. Then if he upon whom is the obligation is foolish, weak or unable to dictate, let his guardian dictate justly. And call in to witness two witnesses out of your men, but if there not be two men, then a man and two women whom you approve of as witnesses, so that if one of the two errs, the other will remind her. And let not the witnesses refuse when they are summoned. And be not loath to write it, whether it be small or big to its term; this is very equitable before God and very upright for testimony and likelier that you will not be in doubt, unless it is a merchandise present that you give and take between you, then there is no blame on you if you do not write it down. And call in witnesses when you trade between you. And let no harm be given to a writer or to a witness; and if you do that, it will be your wickedness; fear God; God teaches you; and God knows everything. And if you are on a journey, and you do not find a writer, then pledge in hand; if one of you trusts the other, then he who is trusted should fulfil his trust and fear God, his Lord; and do not conceal the testimony, for he who conceals it, his heart is sinful; and God knows what you do. (2:282-283)



For just distribution of property and to save the inheritors from quarrels, bequests are required to be made before death.

Prescribed for you, when death visits any of you, if he leaves behind goods, is to make a bequest for the parents and kinsmen in a desirable way; it is an obligation on the godfearing. (2:180)

O Believers, testimony among you, when death visits any of you at the bequest, shall be two honest men, out of you; or two others from others than you, if you are on journey inn the land and affliction of death befalls you; detain them after the Prayer and they should, if you doubt, swear by God, ‘we do not draw from it any price even though it were a kinsman, and will not hide the testimony of God, for then we surely be among the sinful.’ If it is discovered that they have merited a sin then, in place of them, two others out of those against whom claim is made should stand and swear by God, ‘our testimony is truer than their testimony, and we have not transgressed, for then we shall be among the wrong-doers.’ Thus is more likely that they will bear testimony in its proper form and fear that oath, after their oath, may be rebutted. (5:106-108)


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 people’s 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