Some Economic Functions of the Islamic State

Some Economic Functions of the Islamic State

Ghazy Bin Subh-O-Mujahid

The Islamic Economic System is a distinct economic system, in that it has its own basic principles. To ensure the implementation of any principle an enforcing authority is very essential. Under the Islamic system, the State is entrusted with the duty of seeing that the economy functions according to the desired principles. The Islamic economy is hence, basically a directed economy, and in no way can it be considered as being based on principles of Iaissez-faire. The word “Iaissez-faire” is foreign to the Islamic economy, for it implies economic disparity, exploitation, unjust distribution of wealth and haphazard production. It can be compared to lawlessness in the economy, and Islam does not like lawlessness. The essence of an Islamic society is order and justice.

The Islamic State is hence not outside the economy – it is an integral part of it. It has to guide and regulate the economy and also carry on certain types of production. It is, besides having other duties, responsible for effecting a just distribution of wealth as laid down by the Holy Qur’an, and for fulfilling all the basic necessities of life of every citizen. The purpose of this article is to analyze the scope of .State action vis–a–vis the economy in an Islamic society.

Economic Functions

The important economic functions of the Islamic State may, at the very outset, be enumerated as follows: —

a.     Defence, and maintenance of law and order.

b.     Implementation of the moral code of Islam.

c.      Currency issue and banking.

d.     (cl) Collection of taxes.

e.     Economic planning.

f.       Price control and regulation of monopolies.

g.     Providing economic and social overheads.

h.     Ensuring the proper distribution of wealth.

i.       Fulfilling the basic necessities of life of all citizens.

The most important function of the State is to defend the country from external dangers, and maintain internal law and order. This is a general function of every state (even of a police state), but also has an important bearing on the economy. No economy can function properly without law and order, and in the absence of a peaceful atmosphere. Hence, the maintenance of law and order is of great significance for economic life. Closely allies to this function is that of ensuring the implementation of the moral code of Islam. The State must prevent cheating and fraudulent practices in the economy. In this connection particular reference may be made to a watch that must be kept on honesty in weights and measures, for the Holy Qur’an makes specific mention of dealings involving them, and condemns those who

“When they measure out to others or weigh out for them, they are deficient" (LXXXIII : 3).

The Islamic State, like any other state, has also the function of issuing currency and keeping a vigilant check on the monetary system. Since Islam provides for a nationalized banking structure, the State is also entrusted with the task of maintaining the banking system. The duty of collecting taxes, particularly zakat, is also an important function of the State. Development planning, price control and regulation of monopolies also form an important part of the State’s functions. The State has to set priorities and production targets, fix prices and keep an effective check against monopolies. The provision of economic overheads, such as power, irrigation and transport, is also the responsibility of the Islamic State.

Just Distribution of Wealth

An important responsibility of the Islamic State is to ensure that the distribution of wealth takes place strictly in accordance with Qur’anic principles. Economic justice is a fundamental aim of Islam, and can be achieved only if distribution of wealth takes place according to Islamic principles. Islam is the sworn enemy of exploitation, and the State must therefore endeavour to eliminate all forms of economic oppression. There can be no two opinion regarding the principle that Islam recognizes labour as the only rightful claimant of the national product:

“And that Man shall have nothing but what he strives for" (Holy Qur’an, LIII : 39).

“They shall have (their) portion of what they have earned, and Allah is swift in reckoning” (Ibid, II: 202).

The State is therefore duty bound to fix reasonable minimum wages and ensure a timely and just payment of wages to the workers.

Basic Necessities of Life

Finally, we come to the most controversial functions of the Islamic State—that of providing the basic necessities of life of all citizens. This is the function on the dispute over which revolves the crucial controversy whether Islam and Socialism are in any way similar or not. Those who believe Socialism as similar with Islam in this respect strengthen their case by drawing attention towards this function of the Islamic State. It may be noted that Allama Iqbal recognized the importance and implications of this duty of the Islamic State, for in 1937 he wrote in a letter to Ghulam-us-Saiyadain:

“. . . . and as far as Socialism is concerned, Islam is itself a form of Socialism from which Muslim society has till now failed to derive much benefit.”

The fact that admitting the fulfillment of basic necessities as a function of the Islamic State, makes Islam resemble the much-maligned demon of Socialism, should not however make us strike out this function from the list of duties entrusted to the Islamic State. The provision of basic necessities is definitely a duty of the Islamic State and the fact has to be admitted whatever may be its consequences or implications.

That the function of providing all the basic necessities of life of every citizen is a duty of the Islamic State is evident from various Qur’anic injunctions. Islam aims at making for Man this life comfortable, and the Hereafter peaceful. It wants to save Man from the clutches of the devil and guide him to the right path. This essentially involves the elimination of poverty; for poverty and hunger, the Holy Prophet (ﷺ) said, could even lead Man to disbelief (ktfr). The Holy Qur’an attributes the spreading of poverty to the devil, and hence it becomes a duty of every Muslim to strive for the elimination of poverty:

“The devil threatens you with poverty and enjoins you to be niggardly. . . .” (II : 268).

Moreover, Allah has promised sustenance for all, and the Qur’an points Allah as the one Who gives freedom from hunger and want:

“Who feeds them against hunger and gives them security against fear” (CIV :4).

The Will of Allah is hence that everyone be provided with basic necessities of life, and there is no doubt that the Islamic State’s primary duty is to carry out the Will of Allah. Furthermore, Islam also considers Man to be the most elevated of the creatures, commanding respect and having dignity. It cannot therefore possibly allow any individual to suffer from starvation, go unclothed or remain shelter less.

The very recognition of the dignity of Mankind makes it imperative for the State to see to the fulfillment of the basic necessities of life of every citizen, so that no Man may have to live under sub-human conditions.

Scope of Nationalization

Thus, the Islamic State has various economic functions. For the performance of any function, authority and resources are required. Just as a police force is required to maintain law and order, a machinery is also essential for the performance of every other duty. Legislation is the weapon for implementing the moral code. What is necessary to enable the State to perform its function of fulfilling the basic necessities of all citizens, is the right to command productive resources. And this is what Islam does allow the State to exercise. This brings to the fore the question of nationalization, and its place in an Islamic economy.

Islam allows nationalization of public utilities, but it also allows the State a wider scope if it is necessary for the performance of its functions. If the basic necessities of all citizens can be fulfilled without the intervention of the State, well and good. Then there would be no justification for pushing nationalization beyond public utilities and key industries. But if the basic necessities are not fulfilled, wider nationalization is not only permissible but becomes a duty of the State. The property and lives of the individuals are to be put at the disposal of the State if need arises. The Holy Qur’an is not silent on this issue.

“Surely Allah has bought the believers’ persons and their property for this, that they shall have the garden...." (IX:111).

Thus the believers must be ready to give up their lives and property in lieu of the ‘garden’. In the narrower sense ‘garden’ means Paradise, and hence implies salvation in the life Hereafter. But looked at in a broader sense, ‘garden’ has a wider meaning. This becomes plain from the description of the ‘garden’ given in Surah Tahah:

“So we said: O Adam! this is an enemy to (you) and to (your) wife; therefore let him not drive you both forth from the garden so that (you should) be unhappy.

Surely it is for (you) that (you shall) not be hungry therein nor bare of clothing, And that (you shall) not be thirsty therein nor (shall you) feel the heat of the sun" (XX: 117-119).

Thus the ‘garden’ implies a condition where there is no thirst or hunger, nor the need for clothing nor of shelter from the hazards of climate. For the establishment of such a condition too, the property and lives of the individuals may be taken away. Thus, the State has the right to use the weapon of nationalization if such use is necessary for the performance of its legitimate functions, particularly that of fulfilling the basic necessities of all citizens.