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Islam is not just a religion;
it is a total, all-encompassing way of life. Islam seeks to strike a chord
of harmony between the spiritual and the material. Islam is able to do this
through an economic system based on justice and equality. The Qur’ān clearly
lays out the foundations and principles of Islamic economics. For example,
God addresses us as His vicegerents on earth:
Spend [in charity] out of
the [substance] whereof He has made you Heirs. For, those of you who believe
and spend [in charity] – for them is a great reward. (57:7)
The Qur’ān warns the
possessing classes:
And there are those who
bury gold and silver and spend it not in the way of Allah; announce unto
them a most grievous penalty. (9:34)
Yet at the same time, the
Qur’ān ends class war with its call to reconciliation:
O mankind ! We created you
from a single pair of a male and a female and made you into nations and
tribes, that you may know each other [not that you may despise each other].
(49: 13)
Ultimately, Islam seeks to
create a system where justice, not profit reigns supreme. Islamic economics
has two primary goals: to combat poverty and provide for a just and
equitable distribution of wealth. The Islamic state does this through a
variety of voluntary and mandatory mechanisms. For example, Zakāh, a
powerful redistributive tool, transfers money from the hands of the rich to
the hands of the poor through charity. The abolition of ribā prevents unfair
lending schemes which penalize the poor. In addition, the state is required
to provide each citizen with a minimum standard of living. As the Prophet (sws)
said: ‘Any ruler who is responsible for the affairs of Muslims but does not
strive sincerely for their well-being will not enter Paradise with them’
(Muslim, vol. 1, p. 126). Yet, at the same time, Islam achieves balance and
maintains economic freedom by securing the individual’s right to private
property.
It sounds great, doesn’t it?
But, perhaps it’s just too good to be true. Perhaps it’s nothing more than
an empty dream of an Islamic utopia. But there is a precedent. I will argue
that the ideals of economic and social justice discussed above were
successfully implemented during the caliphate of ‘Umar Ibn Khattāb, one of
the great companions of the Prophet Muhammad (sws). ‘Umar (rta) took the
Sunnah of the Prophet (sws) and basic Qur’ānic principles and synthesized
them into a convincing economic program. The program’s success had a lot to
do with ‘Umar’s extraordinary vision and impeccable character. Here, it is
important to understand Islamic economics as a dynamic system in which there
is room for a variety of approaches. ‘Umar’s approach was consistent with
the demands of the fledgling Muslim empire. In the context of the times in
which he lived, he was able to propose solutions to the problems and
dilemmas that the empire was facing.
The Islamic state that ‘Umar (rta)
ruled was one where equality extended everyone, even the caliph himself.
‘Umar (rta) believed that no one, no matter how important, should live in a
way that would distinguish him from the rest of the people. ‘Umar (rta)
lived a simple life and detached himself from any of the worldly luxuries.
He wore worn-out shoes and was usually clad in patched-up garments. In one
particularly telling instance, some of his companions were waiting outside
for him and were curious as to why the caliph was taking so long to come
out. They later found out that ‘Umar (rta) had no clothes to wear. He only
had one suit in his possession and had to wait until it dried.
‘Umar (rta) could often
be found sleeping on the bare floor of the mosque. Other times, he was among
his people, helping the poor or delivering water and other goods to the
widows (Ya‘qūb, 387). When he would travel from Madīnah to Makkah, he
wouldn’t even bring a tent and instead would sleep under the shade of the
trees. His eating habits also resembled those of a poor man rather than the
leader of a great empire. His usual diet consisted of only olive oil and
bread (Nu‘mānī, 340). During the year of famine, ‘Umar (rta) suffered along
with his people eating even less than before. In ‘Umar’s (rta) mind, it
would not have been fair to eat well while his people were suffering. He
cared deeply for the welfare of his people and would go to great lengths to
ensure that everyone was content with his rule. Sometimes, he would even
wander the streets at night as an anonymous passerby, where he would get the
chance to meet and talk to his people, making sure that they were satisfied
(Nu‘mānī, 229).
‘Umar (rta) would expect
no less from the governors and officials of the empire. His officers were
not permitted to ride Turkish horses, eat sifted flour, wear expensive
clothing, or keep a doorman at their homes (Ya‘qūb, 66). In addition, when
an official was appointed, an inventory of all his possessions would have to
be taken. If any increase in his possessions or in his overall financial
position was noticed, then an inquiry into the matter would have to be made
and the added possessions were usually confiscated (Bilādhurī, 219).
Officers were often dismissed if they showed any outward signs of pride or
wealth which might distinguish them from the people. One time, after a
battle in 16 AH, ‘Umar (rta) saw Muhallim, a corpulent Bedouin leader
dressed in magnificent regalia with sashes, necklaces, and the like. ‘Umar (rta)
was disgusted by this extravagant display and so he ordered him to take
everything off in front of his own people (Tabarī, 2454). While these
specific actions were not based on any specific laws in the Qur’ān or the
Hadīth, they were certainly in keeping with the spirit of the Qur’ān and its
command to establish justice. To modern sensitivities, these restrictions
might seem contrary to individual freedom. In some cases, though, the good
of the community takes precedence over the individual. Infusing the empire
with the ideals of egalitarianism and justice would not have been possible
unless government officials set the best of examples. After all, it is
impossible to have true justice without leaders who themselves are just.
It is amazing how far
Muslim countries today have gone from the example set by ‘Umar (rta) and his
government. Muslim leaders today live in palaces as kings, separate from
their people. Ibn Khaldūn in his works speaks of this type of arrangement
where there is a clear distinction between the khāssah (the privileged) and
the ‘āmmah (the ordinary). The masses are constantly at odds with the
elites. ‘Umar (rta), in contrast, wanted to blur the lines between the haves
and have-nots, thereby erasing class distinctions which might inevitably
lead to conflict. If there is anything that captures the essence of Islamic
justice it is the idea that the leader of one of the greatest empires of the
time would sleep under a tree in the desert like any other man.
Till now, We have discussed
how the leaders of the empire lived as equals among their people. Now we
will go into more detail, looking at the workings and mechanisms of the
Islamic welfare state during ‘Umar’s reign.
While many West European
countries did not have unemployment insurance until the late 19th century,
the Islamic empire had it from the beginning. When a man was injured or lost
his ability to work, then it would become the responsibility of the state to
make sure that his minimum needs were met. He and his family would receive
an allowance from the public treasury (Ya‘qūb, 85). ‘Umar’s state also
provided ‘social security’ for the elderly; the old who had stopped working
could count on receiving a stipend from the public treasury. Abandoned
babies were also taken care of. One hundred dirhams per year were spent on
each orphan’s development (Bilādhurī, 452).
‘Umar (rta), acting as
guardian of the poor, would go to great lengths to make sure that no one in
his empire went hungry. Sometimes ‘Umar (rta) would even distribute stipends
among the people with his own hands (Nu‘mānī, 228). During the great famine
of 18 AH, the Islamic welfare state was tested. In the end, though, those
who were in need of food, regardless of social position, received food
coupons with which they could obtain wheat and flour (Nu‘mānī, 226).
In distributing the
spoils of war, the caliph abolished all distinctions based on wealth,
privilege, or position. He instead distributed the stipends based on service
in the path of God. And while this was certainly subjective, some of the
criteria that were looked upon included one’s performance in battle and
one’s overall service to the community (Ya‘qūb 456). Uthāmah Ibn Zayd, for
example, a slave, received a greater sum than ‘Abdullāh, ‘Umar’s own son (Nu‘mānī,
205).
Justice and equality were
ideals that ‘Umar (rta) and his government upheld in every facet of life.
With all the money that was pouring into the treasury during ‘Umar’s time,
one would expect that it would be used to build magnificent and ornate
buildings. Yet the caliph was very careful to maintain the simplicity of
government buildings (Nu‘mānī, 90). Showy and extravagant displays were
avoided. ‘Umar (rta) did not want to waste money on unnecessary luxuries. He
believed that the money would be better spent if it went towards the welfare
of the people rather than towards lifeless bricks.
This brings us to the
concept of public trusteeship or ownership, another integral part of the
Islamic economic system under ‘Umar (rta). What this means is that
utilities, infrastructure, or resources are allotted for public consumption
as opposed to individual ownership. Specifically, Awqāf, or charitable
trusts, serve to transfer wealth from the individual or the few to a social
collective ownership (Iqbāl, 183). Awqāf are intended to provide services to
the community at large. For example, ‘Umar (rta) once bought a piece of land
from the Banū Hārithah. Instead of keeping it for his own individual
benefit, he made it into a charitable trust. The profit and produce from the
land went towards benefiting the poor, slaves, and travelers (Nu‘mānī, 339).
The goal of Islamic
economics is to establish social and economic justice. Implicit is the
recognition that Muslims will be able to focus on Allah if their basic needs
are provided for. The caliphate of ‘Umar (rta) succeeded in ensuring a
minimum standard of living for all; virtually no one lived under the poverty
line. We should look into how this was possible. ‘Umar (rta) did this by
first determining the poverty threshold. He then ordered that twenty-five
seers of flour be baked. This amount of flour fed thirty men. The conclusion
was then drawn that fifty seers would be sufficient to feed a man for a
month. And indeed, the poor would receive a food ration of fifty seers of
flour each month (Nu‘mānī, 223). Not only that, but the poor and disabled
were guaranteed a cash stipend as well. Today, in the richest and most
advanced country, the United States, thousands are homeless and must
struggle day-in and day-out to find enough food to survive. This notion of
an income floor was quite innovative and ‘Umar (rta) and the Islamic state
should be credited with beginning this practice.
In the spirit of balance
though, to make sure that these government services weren’t taken advantage
of, begging and laziness were not tolerated. Those who received government
benefits were expected to be contributing members in the community (Nu‘mānī,
226-7). Furthermore, the Islamic state did not go so far as to advocate
absolute equality, for such a notion is clearly at odds with the different
capabilities and talents that God blessed us with. And, absolute equality
could only come about at the expense of the individual economic freedom that
God has granted us. The Qur’ān acknowledges the inevitable existence of
inequality:
God has bestowed His gifts
of sustenance more freely on some of you than on others. (16:71)
The goal of the Islamic state
is therefore not to abolish inequality but rather to minimize it as much as
possible.
The caliphate of ‘Umar (rta)
provides students of history with a fascinating example of the historical
application of Islamic economics. But, ultimately, why is this relevant? It
is relevant because humanity is in need of economic and spiritual
alternatives to the existing socio-economic structures. Socialism and
capitalism both have advantages, yet they also have grave defects which make
them far from ideal. Socialism is essentially a reaction to the evils of
capitalism. It replaces the dictatorship of the economic elite with a
dictatorship of the proletariat. Ultimately, the individual is subject to a
totalitarian system devoid of a moral or spiritual compass. Capitalism is at
best morally neutral. At worst, it is a system that dehumanizes the
individual and makes him a slave to profit maximization. The Islamic
economic system is unique in that it strives to achieve a balance between
these extremes. It seeks to strike a chord between the need for individual
economic freedom and the need to serve the common good.
Man is motivated by
self-interest and this is inevitably true in both socialist and capitalist
systems. Without religion or a spiritual foundation, self-interest can only
lead to an ever-widening gap between the rich and the poor. That is why
socialism failed to accomplish what it set out to do – establish economic
equality. Yet, Islam resolves the conflict between self-interest and the
collective good. It expands and stretches the usually narrow concept of
self-interest to include not only the desire for worldly things but also the
desire for Paradise (Chāprah, 28). It is in every Muslim’s self-interest to
reach Paradise. This interest cannot be served except by fulfilling one’s
social obligations and by working for social and economic justice in one’s
community. So, in other words, in an Islamic system, one’s desire for
material wealth will be kept in check by one’s greater desire for Paradise,
resulting in a synthesis of the material and spiritual.
The emphasis here is on the
spiritual foundation of Islamic economics. ‘Umar (rta) was just in his rule
because of his genuine love for the people but also because of his love of
God and his fear of hellfire. He knew he would be held accountable in front
of God for the welfare of his people. This accountability, which does not
exist in secular economic systems, motivates rulers to be more just in how
they use the wealth and resources at their disposal.
‘Umar’s economic model
provides us with an attractive alternative. But, the question is how to
apply it in today’s world? Of course, it would be impossible to copy ‘Umar’s
model. The challenges that we face in today’s world are quite different than
the challenges that Muslims faced in the 7th century. Today, countries must
provide for millions of citizens. Back then, there were less people to
account for. In addition, the phenomenon of globalization has given us a
challenging paradigm in which to work.
Nevertheless, the spirit of
‘Umar’s economic decisions can certainly serve as useful markers for
students of economics everywhere. Specific redistributive measures such as
Zakāh, income floors, poverty threshold, and Awqāf can certainly be
implemented within the modern context. But for these measures to ensure
equality and distributive justice, then they must be accompanied by a strong
religious and spiritual foundation.
Yet, the turbo-capitalist-globalist
model which currently dominates international economics is a model which
ignores the complexity of man and his spiritual needs. It is an imbalanced
system that encourages greed and condones exploitation. Capital is used to
make a profit. The profit is then reinvested in order to accumulate even
more capital. And, so on. In the Islamic system, the means are not confused
with the ends. Acquiring wealth and making profit is simply a means to the
greater end of establishing justice and fulfilling God’s will. The
spirituality of man is not neglected. And this is what sets the Islamic
economic system apart.
Today, the world is ripe
with gross economic inequality and extreme poverty. To plot a better future
for our children, perhaps we would be well-served to look at and learn from
the past. We need not be restricted to either capitalism or socialism. The
Islamic alternative is one that deserves the careful attention of all
students of history, Muslim and non-Muslim alike. In a world where darkness
and despair reign supreme, perhaps the spirit and the principles of Islamic
economics can provide us with a ray of light.
Works Cited
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Al-Tabarī, Tarīkh al-Umam
wa’l-Mulūk, vol. 13, Trans. Gautier H. A. Juynboll. Albany, New York: State
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‘Alī, Abdullāh Yūsuf, The
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Chāpra, M. ‘Umar, The Islamic
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Foundation, 1979.
Hussain, Mirza Mohammad. Islam
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Ibn Khaldūn, ‘Abdu’l-Rahmān,
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