Quran & Hadith on Economics
Sources of Income Permissible In
Islam
Every source of income in which
benefits are enjoyed by all the concerning parties on the just basis.
Allah in Holy Quran says:
Do not devour one another’s property
wrongfully, nor throw it before the judges in order to devour a portion of
other’s property sinfully and knowingly. (Al-Baqarah: 188)
Do not devour another’s property
wrongfully – unless it be by trade based on mutual consent. (Al-Nisa: 29)
Sources of Income Prohibited In
Islam
a) Bribery
(Al-Baqarah: 188).
b) Usurping
others’ property (Al-Baqarah: 188).
c) Fraud
(Al-Imran: 161).
d) Stealing and
Robbery (Al-Maida: 38).
e) Income
from sources of vulgarity (Al-Noor: 19).
f) Gambling
(Al-Maida: 90).
g) Wine and its
business (Al-Maida: 90).
h) Interest
(Al-Baqarah: 275).
Moral Directives of Islam in
Conducting Business
Moral Conduct in Entrepreneurship
“And measure full when you measure.
And weigh with an even balance. This is better and its end is good.”
[Al-Bani-Israel: 35].
“They who hoard up gold and silver
and spend it not in the way of Allah, unto them give tidings (O Muhammad) of a
painful doom.” [Al-Tauba: 34].
“You resort to oaths as instruments
of mutual deceit, so that a person might take greater advantage than another;
although, Allah puts you to the test through this. Surely, on the Day of
Resurrection, He will make clear the truth concerning the matters over which
you differed.” [Al-Nahl: 92].
“Who so desires the reward of the
world, then with Allah is the reward both of the world and of the Hereafter.
And Allah is Hearing, Seeing.” [Al-Nisa:134].
“And that the man will not get but
what he endeavors. And that his endeavor shall soon be seen.” [An-Najm: 39-40].
“O Believers! Whenever you lend
money for a particular period, write and someone among you must write it
justly. And the one who can write must not refuse.” [Al-Baqara: 282].
Prophet Muhammad (pbuh) has said
that “Almighty Allah’s mercy descends on one who is gentle at the time of
buying, selling, and requesting payment.” [Tirmizi].
Prophet Muhammad (pbuh) said:
“whosoever sells a defective product without disclosing its defect to the
purchaser, shall earn the permanent anger of Almighty Allah and the angels continuously
curse such a person.” [Ibn-e-Maja].
Prophet Muhammad (pbuh) said: “The
seller and the buyer have the right to keep or return the goods as long as they
have not parted or till they part; and if both the parties spoke the truth and
described the defects and qualities [of the goods], then they would be blessed
in their transaction, and if they told lies or hid something, then the
blessings of their transaction would be lost.” (Bukhari, No: 1937)
Prophet Muhammad (pbuh) has exhorted
that we should refrain from taking oaths unnecessarily; for although, it helps
in the sale of one’s products, it reduces the blessings. [Bukhari; also in
Muslim].
Abu Qatadah related that the Prophet
said: “If anyone would like Allah to save him from the hardships of the Day of
Resurrection, he should give more time to his debtor who is short of money, or
remit his debt altogether.” [Muslim]
Prophet Muhammad (pbuh) said: “May
Allah’s mercy be on him who is lenient in his buying, selling, and in demanding
back his money [or debts].” (Bukhari, No: 1934)
Abu Huraira narrated that the
Prophet said: “A time will come upon the people when one will not care how one
gains one’s money, legally or illegally.” [Bukhari].
It is reported by Jabir that the
Prophet said: “The flesh and body that is raised on unlawful sustenance shall
not enter Paradise. Hell is more deserving to the flesh that grows on one’s
body out of unlawful sustenance.” [Ahmad].
Abu Said related that the Prophet
said: “The truthful and trustworthy businessman will be in the company of
Prophets, saints and martyrs on the Day of Judgment.” [Darimi, Tirmidhi].
Abu Huraira reported that the
Prophet of Allah (swt) said, “And what is most likely to send people to
Paradise? Being conscious of Allah and good manners.” [Bukhari, Tirmidhi &
Ahmed].
Islamic Teachings and Unethical
Trade Practices
“Allah will deprive usury of all
blessing, but will give increase for deeds of charity” [Al-Baqara: 276].
“Woe to those that deal in fraud,
those who, when they have to receive by measure from men, exact full measure,
but, when they have to give by measure or weight to men, give less than due. Do
they not think that they will be called to account?” [Al-Mutaffifin:1-4].
Keeping the commodities of general
use in possession and not supplying them in the market for the sake of
increasing the price is prohibited [Ahmed-Bin-Hanbal: 19802].
Prophet Muhammad (pbuh) said: “No
one hoards but the traitors (i.e. the sinners).” (Abu Da’ud, No. 2990)
Prophet Muhammad (pbuh) said: “The
importer [of an essential commodity] into the town will be fed [by Allah], and
the hoarder will have [Allah’s] curse upon him.” (Ibn Majah, No: 2144)
Narrated Jabir Ibn Abdullah: Allah’s
Messenger cursed the accepter of interest and its payer, and one who records
it, and the two witnesses; and he said: They are all equal [Muslim].
The Apostle of Allah (pbuh) cursed
the one who pays bribes and the one who takes bribes. [Abu Dawud, Hadith no
3573].
Do not harbour envy against one
another; do not outbid one another [with a view to raising the price]; do not
bear aversion against one another; do not bear enmity against one another; one
of you should not enter into a transaction when the other has already entered
into it; and be fellow brothers and true servants of Allah. (Muslim, No: 4650)
Trying to buy commodities before
they reach market is prohibited because market will decide the price [Muslim:
1517].
Futures & Forward Trading:
Islamic View
Ibn Abbas (May Allah be pleased with
Him) reported Allah’s Messenger (pbuh) as saying: “He who buys food grain
should not sell it until he has taken possession of it.” [Muslim].
Analogical Deduction in Matters:
Islamic View
Nu’man b. Bashir (Allah be pleased
with Him) reported: “I heard Allah’s Messenger (pbuh) as having said this (and
Nu’man pointed towards his ears with his fingers): What is lawful is evident
and what is unlawful is evident, and in between them are the things doubtful
which many people do not know. So he who guards against doubtful things keeps
his religion and honor blameless, and he who indulges in doubtful things
indulges in fact in unlawful things, just as a shepherd who pastures his
animals round a preserve will soon pasture them in it. Beware, every king has a
preserve, and the things Allah has declared unlawful are His preserves. Beware,
in the body there is a piece of flesh; if it is sound, the whole body is sound
and if it is corrupt, the whole body is corrupt.” [Bukhari; also in Muslim].
Benefits of Honest Conduct in
Partnership
Prophet Muhammad (pbuh) has said
that Almighty Allah proclaims: “I am a one third partner of a two man
partnership until one of them acts dishonestly to his partner, and, in such an
event, I then leave them.” [Abu Daud].
The importance of Paying One’s
Liability
It is narrated by Abu Musa Ashari
that the Prophet said: “After the major sins which must be avoided, the
greatest sin is that someone dies in a state of debt and leaves behind no asset
to pay it off.” [Darimi]
Job Responsibility of Employee:
Islamic View
Narrated Abu Musa Al-Ashari: The
Prophet said, “The honest treasurer who gives willingly what he is ordered to
give, is one of the two charitable persons, (the second being the owner).”
[Mishka’at]
Responsibility of Employer: Islamic
View
Prophet Muhammad (pbuh) said: “Give
the labor his wage before his sweat dries”. [Ibn-e-Majah]
Prophet Muhammad (pbuh) said: “Those
are your brothers [workers under you] who are around you; Allah has placed them
under you. So, if anyone of you has someone under him, he should feed him out
of what he himself eats, clothe him like what he himself puts on, and let him
not put so much burden on him that he is not able to bear, [and if that be the
case], then lend your help to him.” (Bukhari, No: 2359)
Prophet Muhammad (pbuh) said: “I
will be foe to three persons on the Last Day: one of them being the one who,
when he employs a person that has accomplished his duty, does not give him his
due.” (Bukhari, No: 2109)
Justice and Honesty: Islamic View
“O believers! Stand firmly for
justice, giving witness for Allah, may be therein your own loss, or of your
parents or of your relations. Against whom you be a witness, he be a rich or be
a poor, in any case Allah has more power than anyone over them, therefore
follow not passion lest you may be far away from justice; and if you distort or
turn your face, then Allah is aware of your doings.” [Al-Nisa: 135]
“O believers! Stand-up firmly by the
Commandments of Allah, bearing witness with justice and let not the enmity of
any people incite you that you should not do justice. Do justice that is nearer
to piety and fear Allah, undoubtedly, Allah is aware of your doings.”
[Al-Maida: 8]
Gender & Ethnic Discrimination:
Islamic View
‘O people! We created you from one
man and one woman and made you divided in branches and tribes so that you may
recognize one another. Undoubtedly, the most respected among you in the sight
of Allah is he who is more pious, verily, Allah is knowing, Aware. [Al-Hujurat:
13].
Directives of Islam to an Earning
Individual
Encouragement for Welfare
Spending
…Remember, the example of those who
spend in the way of Allah is like that of a grain, which sprouts into seven
ears, producing a hundred grains in each ear. Allah [by His mercy] increases
manifold [the rewards of such deeds] for whom He wills. And Indeed, Allah is
extremely bountiful [in rewarding His servants], fully aware [of your
circumstances and deeds]. [Al-Baqara: 261].
“Those needy ones who are wholly
wrapped up in the cause of Allah, and who are hindered from moving about the
earth in search of their livelihood especially deserve help. He who is unaware
of their circumstances supposes them to be wealthy because of their dignified
bearing, but you will know them by their countenance, although they do not go
about begging people with importunity. And whatever wealth you will spend on
helping them, Allah will know of it.” [Al-Baqara: 273]
“Look, you are being called upon to
expend in Allah’s Way, yet some of you are being niggardly, whereas the one who
is niggardly is, in fact, being niggardly only to himself. Allah is
Self-Sufficient: it is you who are the needy. If you turn away, Allah will
replace you by another people, and they will not be like you.” [Muhammad: 38]
“(O Prophet!) Tell those of My
servants who believe that they should establish prayer and spend out of what We
have provided them with, both secretly and openly, before there arrives the Day
when there will be no bargaining, nor any mutual befriending.” [Ibrahim: 31]
“Have you seen him who belies the
rewards and punishments of the Hereafter? He it is, who drives away the orphan
and does not urge giving away the food to the poor.” (Al-Ma’un: 1 – 3)
Those who blame Muslims who give
charity willingly and laugh at those who get nothing but with their hard labor,
Allah will punish them for their laughing and for them, is the painful.
[Al-Tauba: 79]
Asmah related that the Prophet said:
“Spend, and do not count, lest Allah counts against you. Do not withhold your
money, lest Allah withholds from you. Spend what you can.” [Bukhari; also in
Muslim].
Abu Huraira related that the Prophet
said: The Lord’s commandment for every one of His slaves is, ‘Spend on others,
and I will spend on you’. [Bukhari; also in Muslim].
Attitude of the giver of charity
“Those who spend their wealth in the
way of Allah and do not follow up their spending by stressing their benevolence
and causing hurt, will find their reward secure with their Lord. They have no
cause for fear and grief.
To speak a kind word and to forgive
people’s faults is better than charity followed by hurt. Allah is
All-Sufficient, All-Forbearing.
Believers! Do not nullify your acts
of charity by stressing your benevolence and causing hurt as does he who spends
his wealth only to be seen by men and does not believe in Allah and the Last
Day. The example of his spending is that of a rock with a thin coating of earth
upon it: when a heavy rain smites it, the earth is washed away, leaving the
rock bare; such people derive no gain from their acts of charity. Allah does
not set the deniers of the Truth on the right way.” [Al-Baqara: 262 – 264]
Islamic View on Unscrupulous
Consumption
“Give to the near of kin his due,
and also to the needy and the wayfarers. Do not squander your wealth
wastefully; for those who squander wastefully are Satan’s brothers, and Satan
is ever ungrateful to his Lord.” [Al-Bani-Israel: 26 – 27]
“Do not keep your hand fastened to
your neck nor outspread it, altogether widespread, for you will be left sitting
rebuked, destitute.” [Al-Bani-Israel: 29]
“Those people, who when they spend,
are neither extravagant nor miserly but keep the golden mean between the two
(extremes)” [Al-Furqan: 67]
Amr Ibn Shuaib, on his father’s
authority said that his grandfather related that the Prophet said: “When you
eat, drink, give charity and wear clothes, let no extravagance or pride be
mixed up with what you do.” [Ibn Maja; also in Nasai].
Stinginess & Wealth
Accumulation: Islamic View
“Those who do not spend their wealth
that has been given to them by Allah must not think that it is good for them;
indeed it is bad for them (Al-Imran: 180)”.
…“Allah does not love the arrogant
and the boastful, who are niggardly and bid others to be niggardly and conceal
the bounty which Allah has bestowed upon them. We have kept in readiness a
humiliating chastisement for such deniers (of Allah’s bounty)” [Al-Nisa:
36-37].
Jabir reported that the Prophet
said: “Avoid doing injustice to others, for on the Day of Judgment, it will
turn into manifold darkness, and safeguard yourself against miserliness, for it
ruined those who were before you. It incited them to murder and treating the
unlawful as lawful.” [Muslim].
Abu Said Khudri related that the
Prophet said: “There are two habits which are never present together in a
believer: miserliness and bad manners.” [Tirmidhi].
Abu Huraira related that the Prophet
said: “When someone is made rich but he does not pay Zakat for his wealth, then
on the Day of Judgment his money will be turned into a poisonous snake with two
black spots on its head. It will coil around his neck and bite his cheeks and
say: ‘I am your wealth, I am your treasure’. Then the Prophet recited verse Al
Imran: 180.“ [Bukhari]
Paying Zakat
“Say your prayers (Namaaz) and pay
Zakat”. [Al-Muzammil: 20].
“Establish Prayer and dispense the
Purifying Alms (Zakat) and bow in worship with those who bow”. [Al-Baqara: 43].
Entrepreneurship Vs Dependency
Narrated Hakim bin Hizam that the
Prophet Muhammad (peace and blessings be upon him) said: “The upper hand is
better than the lower hand (i.e. he who gives in charity is better than him who
takes it). One should start giving first to his dependents. And the best object
of charity is that which is given by a wealthy person (from the money which is
left after his expenses).” [Bukhari].
Social Responsibility: Islamic View
Anas related that the Prophet said:
“If any Muslim plants something or sows seed from which a man, a bird or an
animal eats, it counts as a charity for him.” [Bukhari; also in Muslim].
Communal Development: Islamic View
Abu Huraira narrated that the
Prophet said: “The best charity is that which is practiced by a wealthy person.
And start giving first to your dependents.” [Bukhari].
Salman Ibn Amer reported that the
Prophet said: “To give something to a poor man brings one reward, while giving
the same to a needy relation brings two: one for charity and the other for
respecting the family ties.” [Ahmad, Ibn Majah, Nasai, Tirmidhi].
Utility and Satisfaction: Islamic
View
Abu Huraira narrated that the
Prophet said: “Wealth is not in having vast riches, it is in contentment.”
[Bukhari; also in Muslim].
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