Posted by: admin | November 10, 2008

MS09.5 – Protection of Wealth [Part 1 of 2]

In this post, we focus on the penultimate daroori, which in Arabic is “al-Maal” and is translated as ‘property‘, ‘possessions‘ and ‘wealth.’ The Arabic word maal is said to come from the root verb maala which means ‘to digress’ or ‘to turn away’ as “maala bihi al-Qalb” (the heart is turned away or deviated by it). This correlates to the famous saying that money is a necessary evil. It may well be at the root of many of society’s problems, indeed the current financial crisis is evidence of this, but it is an essential commodity for us to live and so is classified as one of the darooriyaat, the protection of which is one of the Maqasid of the Shari’ah.

Our discussion will be split over two posts and as previously, will focus on that which maintains and protects wealth and how this is legislated and encouraged as well as that which threatens wealth and how this is outlawed and discouraged.

From the Perspective of That Which Maintains al-Maal
Those things which help preserve and maintain al-Maal are encouraged, promoted and obligated. Some examples of these are as follows:

1) Encouragement of Trade (Tijara) and Investment (Istithmaar)
In the Islamic worldview, wealth, property and material possessions are considered one of the blessings of God. One of Allah’s most magnificent attributes is that He is al-Razzaq (The Provider) and everything that we may have in our possession is ultimately from Him. Anything we have is therefore only ours for the short period of our lives and the test we face is what we do with what we have been provided with by al-Razzaq. As with all blessings, the Day of Judgement will be Yawm al-Hisaab (The Day of Account), when our use of God’s blessings will be analysed and judged.

As members of a society, or indeed the world, we all have different resources, skills and abilities which we need to utilise and exchange in order to satisfy our varied needs and wants. Over time, from the days of bartering to the exchanging of gold pieces and coins, money has become the standard means by which goods are bought and sold and the needs of everyone in society can be met.

In order to keep an economy flourishing, this money needs to be kept in circulation, passing from the hands of those who have it to those who need it, in exchange for goods, services or profit. Trade (Tijara) and investment (Istithmaar) are two ways that this circulation is maintained.

Over time, however paper money (of no intrinsic value) has come to replace the exchange of gold and silver, as well as other commodities. Whereas initially this paper money was a convenient replacement for having to carry around gold and silver on one’s person, nowadays there is no mandatory requirement for it to be backed by any real wealth. This is termed FIAT money and a simple introduction on its role in the economy can be found here. Some have commented that this reliance on paper money is one of the main factors behind the current crisis and more generally the frailty of the global economic model. 

Returning to our discussion of the circulation of wealth through an economy, its antithesis is hoarding and monopolisation which is prohibited in Islam. While a detailed discussion on economics is beyond the scope of this post, the difference between trade and investment can be understood simply as follows. Trade refers to a direct exchange of goods and services, by bartering or by a medium of exchange, i.e. money. Investment on the other hand refers to the taking of risk for the hope of some future gain, whether this be through the production of goods for use or sale or the lending of money for a share of the profits returned. The Arabic word ‘istithmaar’ comes from a root meaning ‘to bear fruit’ and literally means ‘to utilise’ and ‘to return profit’. This meaning directly supports the nature of investment, the taking of risk for a increased return at some point in the future. On this point, there is an important distinction to be made here between the “lending” of money for a share in a business and the lending of money for interest. The latter is explicitly forbidden by the Shari’ah and is looked at in more detail in part 2.

While allowing trade and investment, this permissiblity is not absolute and there are guidelines governing the nature of investments, the formation of contracts etc. The application of this is the realm of Islamic Economics and Finance and has recently become an area of phenomenal area of growth. Having said that, this field is not without controversy, with some saying that Islamic Finance is merely plugging into the current system and adapting to the status quo rather than challenging the unjust principles on which it is based.

2) Permissibility of Private Ownership (Milkiyya Khaassa)
Islamic principles of economics allow for individuals to acquire and own their own private property. The Shari’ah acknowledges the very human desire to enjoy the fruits of one’s labour and this is appreciated and respected. This is in sharp contrast to Communism where the very notion of private ownership was challenged as being at the root of class inequality in a society. At the opposite spectrum to Communism is a purely Capitalist model where the means of production are distributed in a market economy. While in principle there is nothing wrong with this idea, the guiding principles of the Shari’ah are not completely in line with capitalism either. In line with what was mentioned above, the concept of private ownership in the Islamic worldview is radically different in that it is deemed to be temporal and ultimately a trust from God for the duration of our lives. In addition there are many checks and balances to ensure that while entrepreneurism is encouraged, wealth is not hoarded and the means of production are not monopolised.

Communism can be thought of as a heavy-handed reaction to the very real problems posed by a purely Capitalist economic system. One common misunderstanding is that Islam has it’s own economic “system,” a ready-made ideology which is sits in contrast to others. In the Qur’an and Prophetic Sunnah, there are guidelines and rules which serve the overall maqasid of promoting justice and equality and protecting wealth. While some of the guidelines are clearly opposed to both Communism and Capitalism, any system which adheres to the principles laid down in Islamic Law can be considered “Islamic.”

3) Charity (Sadaqah)
It may seem strange to include charity in our discussion but it is an essential part of Islamic economics and indeed the Islamic faith. Zakat is one of the five pillars of Islamic practice and mandatory on every Muslim who possesses wealth above a predetermined threshold called the nisab. In addition to this charity (sadaqah) is strongly recommended and encouraged as a means of gaining the pleasure of God and at the same time helping those less fortunate. As everything is a trust from God, we are only giving out from He has bestowed upon us. The Qur’an strongly emphasises the giving of charity as one of the characteristics of a true believer: “For, Believers are those who, when Allah is mentioned, feel a tremor in their hearts, and when they hear His signs rehearsed, find their faith strengthened, and put (all) their trust in their Lord; Who establish regular prayers and spend (freely) out of the gifts We have given them for sustenance: Such in truth are the believers: they have grades of dignity with their Lord, and forgiveness, and generous sustenance.” [Qur’an 8:2-4]

Charity therefore, is another way in which money can be kept circulating, getting to those that need it most, the annual collection and transfer of the 2.5% Zakat is evidence of this. There is a famous narration of the Prophet (s) where he said, “Charity does not decrease wealth” [Muslim]. This hadith is usually taken to mean that by giving charity, Allah will bless your wealth and give you more through other means; a perfectly valid explanation which is understood from the following Qur’anic verse, “The parable of those who spend their substance in the way of God is that of a grain of corn: it groweth seven ears, and each ear Hath a hundred grains. God giveth manifold increase to whom He pleaseth: And God careth for all and He knoweth all things.” [Qur’an 2: 261]

However, one of my teachers explained this is a slightly different way which I thought was quite unique and fascinating. He said that in any society those with the highest propensity to spend are the poor. For example if you were to give £1 to a rich person, he is most likely to put it in his pocket for later, whereas if you give the same £1 to a poor person, as they have more immediate and pressing needs, they are likely to spend it shortly after. And as they are poor they are more likely to purchase whatever they have bought, food for example, from a similarly poor person, who will in turn also go and spend that same £1 in the same way. So that single pound is effectively £3 when in the hands of poor people, whereas in the pocket of the rich person, it’s still £1. Therefore the giving of that £1 has not reduced wealth, rather it has increased it, in the sense of reward from Allah and also in a more material sense.

This concludes our discussion on the Protection of Wealth from the perspective of that which maintains and strengthens al-Maal. The next post will Insha Allah complete our discussion on Hifdh al-Maal by looking at those things which threaten its presence and how they are discouraged and prohibited.


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  2. […] previous post looked at the development of Islamic Economics in recent years as an attempt to offer an […]

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