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Quran’s Comprehensive Economic System

 – islamicity

November 2022

As the largest mosque in Qatar, Imam Abdul Wahhab, also known as the Qatar State Grand Mosque, was inaugurated in 2011 (photo: iStock by Getty Images).

If Zakah is one of the pillars of Deen, it stands to reason that this pillar must stand on a firm foundation.  That firm foundation is comprised of each Muslim’s unshakable conviction, 100% commitment, utter sincerity, and complete dedication to the belief that Allah-owned resources on the planet must be made available to all creatures and human beings for their sustenance, nourishment, and growth.

The Arabic word Zakah, with its root (Z-K-W) means growth and development.  A tree is nourished and grows in the presence of Allah-owned resources such as the soil, the rain, the sun, and the air (56:63-72; 80:24-31).  Any interference in the flow of any of these resources will retard the growth and development of the tree.  Similarly, any individual, group, government, or system which disrupts the natural flow of Allah-owned resources on the planet to all human beings creates an imbalance in society: the rich/poor, the master/slave, owner/worker, etc.

In the West, this awareness is dawning in respect to plants, animal and insect species which are becoming extinct due to this imbalance in nature caused by the actions of human beings.

However, the global economic imbalance continues to grow unchecked because human beings have refused, in their greed, to believe in the basic economic principle of Zakah: unrestricted flow of resources to all human beings (41:10, 50:11, 55:10, 56:73, 79:33, and 80:32).

The capitalist New World Order of the West actively seeks to control the natural resources of weaker nations under the guise of “globalization.”  Using the United Nations as a tool, the weak are intimidated into submission either through economic sanctions or military force.  Allama Iqbal beautifully captured this mentality of the powerful when he said: “Hai wo sultan ghair ki kheti pe ho jiski nazar.” (The master is one who always has an eye on others’ lands.)

Muslims, too, have abandoned the Quranic Zakah, which is Allah’s assured challenge to this naked exploitation of the weak by the strong.  Unlike other religions, Islam is a Deen, a system of life, a constitutionally-run, collective life that encompasses the social, economic, political, judicial, and military aspects of a community.  The leaders of this community are not priests, or scholars, or the rich, or the strong: they are the most upright who commit to upholding the laws of Allah in the land, “Amr bil ma’aroof” (enjoining what is right) and “Nahya ‘anil munkar” (forbidding what is wrong).  They make sure the Quran, the Constitution of Allah, is enforced in society, i.e., put into action.

What then, is the position of the Quran on the Economic World Order that should prevail?  The Quran emphasizes the importance of economics in human life.  While describing the life of Heaven, the Quran says there will be no hunger and no misery there.

“There is therein (enough provision) for thee not to go hungry nor to go naked.” [Yusuf Ali (20:118)]

Too, the Quran teaches us to work for the good of this life, as well as the hereafter (2:201, 7:156), in contrast to the mindset of those who consider economic prosperity in this life to be an end in itself.  According to the Quran, such people live at the animal level:

“Verily Allah will admit those who believe and do righteous deeds, to Gardens beneath which rivers flow; while those who reject Allah will enjoy (this world) and eat as cattle eat; and the Fire will be their abode.” [Yusuf Ali (47:12)]

Taqwaa (righteous works) includes the use of economic prosperity to achieve a higher and nobler goal (10:63-64, 16:30).  Economic prosperity is a means, not an end; it is a source for life, not the end of life; it is a prerequisite for growth and development in life, not the final goal of life.  Since economic prosperity is so essential to human growth and development, Allah has addressed the issue of Zakah in great depth in the Quran.

To begin with, Allah says He is Rahman and Rahim:

“There is no moving creature on earth but its sustenance dependeth on Allah: He knoweth the time and place of its definite abode and its temporary deposit: All is in a clear Record.” [Yusuf Ali (11:6)]

“How many are the creatures that carry not their own sustenance? It is Allah who feeds (both) them and you: for He hears and knows (all things).” [Yusuf Ali (29:60). Also see verses (6:152) and (17:31)]

Allah, of course, does not personally feed anyone:

And when they are told, “Spend ye of (the bounties) with which God has provided you,” the Unbelievers say to those who believe: “Shall we then feed those whom, if God had so willed, He would have fed, (Himself)?- Ye are in nothing but manifest error.” [Yusuf Ali (36:47)]

Allah fulfills this promise by creating the resources for the nourishment and growth of all moving creatures.  No one, therefore, has the right to own or control the Allah-given natural resources or to restrict their flow to humanity at large (107:7, 17:20).  Otherwise, this is tantamount to belying the Deen of Allah (107:1-6). Any association or partnership with Allah in this respect is Shirk, an unforgivable sin in the sight of Allah.  Allah says:

“Join not anything as equal with Him; be good to your parents; Kill not your children on a plea of Want—We provide sustenance for you and for them.” [Yusuf Ali 6:151]

Secondly, Allah is clearly the real owner of the resources He has created.  The following verses in the Quran leave no doubt about this:

 The earth and all its resources belong to Allah. It is such an obvious fact that no one can deny it (6:12, 10:31, 29:61 &63, 31:25, 34:24, 39:10 &38, 43:9).

– Allah is the inheritor of the earth (19:40).

– The earth has been created for the benefit of all (55:10).

– It has been created to provide nourishment for all (56:73).

– To Him belongs all that is in heavens and the earth, “La hu ma fissamawati fil ardh” (2:116, 2:255, 4:171, 5:40, 14:2, 16:52, 20:6, 22:64).

– “Lillahi ma fissamawati fil ardh” (2:284, 3:109, 3:129, 4:131,132, 5:40, 10:55, 10:67, 14:2, 16:52, 20:6, 21:19, 34:1, 42:4, 42:53, 53:21).

– “Lillahi miraathus samaawaatti wal ardh” (3:180).

As Owner, then, Allah has given us these resources as a trust which we are required to disburse according to His Will (the system of Zakah), which is, to make available to all living creatures according to their needs, without any hindrance or control, the sustenance and provisions of life.

It was the Prophet’s (pbuh) unshakable conviction, his utter commitment, and total obedience to this system of Zakah that led to the establishment of the basic infrastructure of a universal, welfare-based economic system in Medina, and which reached its pinnacle during Khalifa ‘Umar’s (R) time when, it is said, hardly anyone was in need of charity.  The Prophet (pbuh) lived his life true to this principle: he was not an owner of anything, no land, no possessions; he was merely an enforcer of the Will of Allah – he established the system of Zakah.

Where did we go wrong then?

No one can argue that we, Muslims, are no longer the Ummah referred to in the Qur’an. We are divided into sects. We make excuses to justify our sectarian divisions in spite of Allah’s stern and clear warnings against it (6:159, 30:31-32). We play with the verses of Allah and compile books—such as the book of tricks (The Kitab-ul-‘Heil) to circumvent Allah’s clear orders about “giving Zakah.” According to the Qur’an, accumulating wealth and looking for ways to multiply it leads to hell (104:2-4).

On the other hand, if we follow in the footsteps of the Prophet (PBUH) and his companions there will be no doubt or skepticism about the universal goal of Qur’anic economics. The skeptics (both Muslims and non-Muslims) have to go back to the period of the Prophet (PBUH) and the rightly-guided Khalifas—and not to the Umayyad and Abbasi periods—to find a proof of the positive impact that the economics of Zakah created on the society. That society was established and ruled solely on the basis of the universal permanent values of the Qur’an.

Qur’anic Zakah Requires Its Own Independent State

The Qur’an requires its own independent and free state where its unique economic system of Zakah can and should be implemented. The positive output (growth and nourishment at all levels) of this economic system is termed by the Qur’an “Aata-wuz-Zakaat” or “to give Zakah.” The Qur’an says:

(They are) those who, if We establish them in the land, establish regular prayer and give Zakah “Aata-wuz-Zakaat”, enjoin the right and forbid wrong: with God rests the end (and decision) of (all) affairs. [Al-Hajj 22:41, Translation: Yusuf Ali]

“Establish them in the land,” means the establishment of an Islamic state by the momineen or the believers.  The beneficial outcome of Zakah must manifest in this world through its own government established along the lines of the Prophet (PBUH) and the companions (R).

Therefore, the establishment of this Islamic state is different from the ones established by the proponents of so-called Shariah, from the Ummayah and Abbasids down to the present. How can a so-called Islamic government under the control of kings/dictators, capitalists, and/or priests implement the Qur’anic economics of Zakah when, in fact, they are the ones who corrupt it? The Qur’an does not even recognize their existence, let alone allow them to rule in the name of God. In fact, the Qur’an condemns religious priests who unjustly devour people’s hard earned wealth (9:34).

Zakah Must Lead to Growth and Development of All

The term “giving Zakah” means: a) making available to all human beings the provisions of growth and development by providing equal opportunity within its jurisdiction and b) purifying a corrupt economic system. This is in contrast to the present situation where the Muslim governments “take away (a ritual) Zakah” instead of “giving (the Qur’anic) Zakah” to the people as instructed by Allah.

In the first place, the duty imposed by Allah for “giving Zakah,” i.e. making available the provisions of growth and development, cannot be fulfilled unless the Qur’anic government has the capability to discharge this responsibility. The needs of the people determine how much Zakah is taken. Zakah is not a special religious tax or levy that is different from the government tax.  In a Qur’anic state it is not possible for some people to hoard material possessions beyond their needs and indulge in excesses, while the rest are deprived of the basic means and provisions of life. The Qur’an explains the justification for this.

1. The Earth is the source of all the provisions of life. Like water, air and light, the Earth has been created by Allah for the benefit of all. Therefore, no one has the right to own it except Allah. We, humans, are only the trustees and beneficiaries. We are not owners. The claim of ownership of any part of the Earth by human beings is shirk in the sight of Allah as this is tantamount to becoming partners with Allah.

2. In this system, individuals cannot hold onto surplus wealth.

“They ask thee how much they are to spend; Say: ‘What is beyond your needs.’” (2:219).

3. Surplus wealth should go to the treasury (Baitul Maal) of the Islamic government, as was the case during the time of the rightly-guided Khalifas. Therefore, in this system, there is no question of individual, or group investment.

4. This system will provide all the basic needs of life like housing, hospitalization, and education. No one will need to borrow money with interest for the above; no one will have surplus money to invest with interest.

5. The question of individual business for profit also does not arise in this system. Shops will be cooperative distribution centers, not sources of individual profit. Those who run the centers will receive compensation for their efforts.

[Note: Some may claim that the above advocates Communism. Nothing can be farther from the truth. Contrary to Islam, Communism does not believe in any power higher than itself.  While people in a Communist state work for the good of the state in this life, Muslims work for the benefit of all to develop the individual soul for the Afterlife.]

Interest-free Economics Based on the Qur’an

The economic system of the Qur’an must be run on an interest-free basis. While this topic is hotly debated in Islamic circles, the proponents of interest-free Islamic economics mostly seek ways to adapt it to Western capitalism. But the economic system of Zakah, grounded in the Qur’an, is unique, relying on the desire of individuals to uplift themselves morally and spiritually, not materially. Just as Islam is opposed to Communism for putting the State before God and the “Self”(Soul), it is also opposed to Capitalism for putting money before God and the “Self.”

The term Riba in the Qur’an encompasses more than “interest.” Riba is the foundation of an economic system that is so directly opposed to the economic system of the Qur’an that Allah asks believers in the Qur’an to declare that this system is a war against “Allah and the Prophet (PBUH),” (2:279) and, therefore, to fight it. Ironically, today our Ulema occupy themselves with seeking solutions to the Riba-based economy of an un-Qur’anic system. Otherwise, what other explanation could there be for Imams (religious leaders) and Fuqahaa (religious jurists) who allow indirect silent partnership in business or land (read investment), a relatively serious form of exploitation compared to Riba?

To recollect, our discussion of Zakah thus far can be summarized as follows:

1. Whatever is collected in the name of Zakah nowadays is really a charity. It has nothing to do with the Qur’anic Zakah.

2. For Zakah, the existence of an Islamic government based solely on the Qur’an as its Constitution is essential (22:40). This must replace any man-made economic system (like Capitalism or Communism) or any system based on an amalgamation capitalistic system with the divine system like the one based on the so-called “Shariah” developed under the Abbasi rule.

3. It is this government that can truly give (the Qur’anic) Zakah  (“Aatawuz Zakah”) to its people by providing the means of growth and nourishment to everyone equally while demolishing such barriers as wealth, status, race, gender, ethnicity, language, etc.

4. To discharge this responsibility, the entire revenue of this government can be called Zakah. There cannot be a permanent fixed-for-all-time Zakah rate or Zakah items. The government will determine these based on the needs of the time and place. Whatever the Prophet (PBUH) fixed was based upon the needs of his time and place and was not meant to be permanent for all times and all places.

5. The charitable contributions to deal with emergency situations are called Sadaqaat (not Zakah) by the Qur’an.

The Function of Sadaqaat

Initially, Allah asks us for Sadaqaa (charity – voluntary giving), which is used to gradually change a wrong, unbalanced economic system (based on capitalist politics of greed) to a balanced one that guarantees equal economic opportunities and protection to all. The rich are asked to give their surplus wealth back to the nascent Islamic state for the benefit of the poor and suffering—the ones who really worked hard for creating that wealth in the first place. The instruction about Sadaqaat in verse (9:60) above would gradually change an unjust economic system to one that would ultimately be based on the economics of Zakah.

Thus charity is an emergency measure whereas Zakah is a permanent feature of Islam. Also, by making charity a short-term solution, the Quran recognizes that long-term or indefinite dependence of individuals and nations upon others invariably leads to degradation of the human self, to loss of human dignity, and to lack of human freedom and thought.

Incentive for Giving

As we have seen, according to the Qur’an, it is the responsibility of the Islamic state to provide equal opportunity to all as a basic human right for growth and development. For this purpose, every family returns its surplus wealth to the Islamic state (2:219). Moreover, it is the duty of Muslims to extend this system to include the entire humanity (1:2).

What is the incentive that will drive people to give their surplus wealth to the Islamic system willingly?  What benefit will the individual derive who gives his/her surplus wealth to this system?

Without satisfactory answers to the above questions, people will not be motivated to part with their surplus wealth. No one wants to part with his/her hard earned money without receiving some benefits in return.  The Qur’an says:

He sends down water from the skies, and the channels flow, each according to its measure: But the torrent bears away the foam that mounts up to the surface. Even so, from that (ore) which they heat in the fire, to make ornaments or utensils therewith, there is a scum likewise. Thus doth God (by parables) show forth Truth and Vanity. For the scum disappears like froth cast out; while that which is for the good of mankind remains on the earth. Thus doth God set forth parables.[ar-Ra`d 13:17, Translation: Yusufali]

The above verse reveals clearly and beautifully the answer to our questions: only that system will stay forever which is beneficial to all of humanity. This is the fundamental law that decides whether a system or an ideology is capable of being maintained or is transient and will disappear. According to this law, a system which is designed to benefit only a particular group or nation will disappear sooner or later.  The ruins of past empires (including Muslim ones) attest to the effectiveness of this law.

Therefore, when we choose an ideology of life other than what the Qur’an prescribes, we have to face the consequence of that choice.

Two Alternatives, Two Choices

Individuals tend to work for their own benefit. This is the driving force which motivates people to work. But according to the Qur’an:

 That system in which everyone works for one’s own individual benefit does not have the ability to stay—no matter how much tinkering or patch-up job is done to save it. On the contrary,

 The system in which everyone works for the benefit of entire humankind will stay forever. It stays on the basis of its own intrinsic strength and power.

In the second system, individual benefits are not ignored.  They just do not occur immediately or directly. Rather, they occur indirectly – and in the long run, while, in the first system, everyone gets his/her individual benefit right away. The Qur’an calls this  short-term gain or Mataa‘uddunya, while the long-term gain that comes to a person who has shared and circulated his/her worldly benefits with humankind, is called the future benefit or Aakhira. This is also referred to as the life of the future or Ha-yaatul Aakhira which includes the life after death as well (87:16-17).

Thus, according to the Qur’an, an ideology based on the welfare of the individual is short-sighted and doomed to perish, while the one based on the welfare of the entire humankind is just and will stay forever.

The Ultimate Goal of Qur’anic Economics: Universal Welfare

The Qur’an does not advocate this ideology on the basis of emotion or blind faith. Unlike other religions, the Qur’an provides objective proof for every claim it makes. So, why is an ideology based on the welfare of an individual or a family, or a race, or a nation wrong while the one based on universal welfare right? The Qur’an explains it through a practical example and provides an objective proof for this claim.

If human beings lived only at the animal level, then it would have been acceptable to look for one’s own self-interest. Eating, drinking, and the pursuit of happiness from material things in life would have been their goal (47:12). But life at the human level is different than at the animal level. Animals do not have a sense of tomorrow or future. 

This distinguishes human beings from everything else in the universe. The human body in this world, which is a vehicle for the “self,” or “soul,” is left behind while the soul journeys on to another dimension which the Qur’an calls Ha-yaatul Aakhira, just as the mother’s womb is a vehicle for the fetus which eventually separates and journeys on independently.

It is this sense of a larger future (or future life) that binds a human being with the rest of humanity just as individual members of a family work together for the future success of all the family members. Working for the benefit of humanity’s future leads, in turn, to development and growth of the “self,” an essential requirement for each individual’s future journey. For this to occur Allah-given resources must flow freely and nourish every human being on earth. 

Interrupting this flow from reaching some parts of humanity is like interrupting the blood flow from reaching some part of the human body. Then not only that part suffers but also it leads to death and destruction of the whole body.  Right now humanity is suffering because Muslims have stopped practicing the true system of Zakah as implemented by our Prophet (PBUH) and his companions (R). And there will be no way out unless Muslims truly start following this Sunnah of the Prophet (PBUH).

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