The Economic Principles of Islam

Islam has laid down certain principles and limits for the economic activity of man so that the entire pattern of production, exchange and distribution of wealth may conform to the Islamic standard of justice and equity. Islam does not concern itself with time-bound methods and techniques of economic production or with the details of organizational patterns and mechanisms. Such methods are specific to every age and are evolved in accordance with the needs and requirements of the community and the exigencies of the economic situation. Islam’s concern is that whatever the particular form of economic activity in operation, its underlying principles should always be the same.

According to the Islamic point of view, Allah has created for mankind the earth and all that it contains. It is, therefore, the birthright of every human being o try to secure his share of the world’s wealth and sustenance. Islam does not allow a particular person, class, race or group of people to create a monopoly in certain economic activities: equal opportunities for all is its watchword.

This is a new and revised translation of a talk given by the author on Radio Pakistan, Lahore, on 2nd March, 1948.

Right of Property

Resources which are provided by nature and which can be used directly by man may be utilised freely, and everyone is entitled to benefit from them according to his needs. Water in the rivers and springs, timber in the forests, fruits of wild plants, wild grass and fodder, air, animals of the jungle, minerals under the surface of the earth and similar other resources cannot be monopolised by anyone nor can restrictions of any sort be imposed on their free use by Allah’s creatures to fulfil their own needs. Of course, people who want to use any of these things for commercial purposes can be required to pay taxes to the state. Or, if there is misuse of the resources, the Government may intervene. But there is nothing to prevent individuals availing themselves of Allah’s earth as long as they do not interfere with the rights of others or of the state.

It is not right that things created by Allah for the benefit of mankind should be taken possession of, and then kept idle and useless. One should either benefit from them oneself, or make them available to others. On the basis of this principle Islam holds that no one can keep his land unused for more than three years. If, during this period, he does not himself use it for cultivation or for construction of buildings or for some other purpose, such lands shall be treated as ‘vacated’, and anyone else who makes use of it shall not be liable to be proceeded against in law, nor shall the Government have any authority to hand it over to someone else (including the previous owner).

Anyone who takes possession of the earth’s natural resources and puts them to good use acquires a rightful title over them. For instance, if somebody takes possession of an uncultivated piece of land, on which nobody has a prior right of ownership, and makes productive use of it, he cannot be arbitrarily dispossessed of that piece of land.

This is how every right of ownership originated in the world. When man first appeared, everything was available to everyone, and whoever took possession of anything and made it useful in any manner became its owner; that is to say, he acquired the right to use it specifically for his own purpose and to obtain compensation from others if they wanted to use it. This is the natural basis of all the economic activity of mankind.

The rights of ownership are to be honoured, though it is always open to ascertain if a particular ownership is legally valid or not. Islam cannot approve of economic policies which destroy the rights conferred by the Shari‘ah, however attractive their names may be and whatever welfare pretensions they may make. Social justice and collective good are very dear to Islam, but in their name the rights given by the Shari‘ah cannot be trampled. It is as unjust to reduce or remove the restrictions placed by the Shari‘ah, for the sake of the good of the community as a whole, on the rights of individual ownership as it is to add restrictions and limitations on them which do not fit into the Shari‘ah. It is one of the duties of an Islamic state to protect the legal rights of individuals and, at the same time to compel them to fulfil their obligations to the community as enjoined by law. That is how Islam strikes a balance between individualism and collectivism.

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