Islamic Economics for Boosting Individual Income

Economic challenge is the second biggest priority for individual Muslims. First is ofcourse security of life and property. Where I live there are millions of Muslims living in very terrible conditions. Terrible in the sense they have hardly any access to a descent living compared to others in their society. Money is always lacking in these poor areas. Families cant afford to send all their children to school, usually its the girls who get less priority when it comes to schooling, especially in higher grades. Economic system in Asian countries is unfairly managed to give few urban elites the biggest chunk of the pie while the large majority is forced to live miserably. This is a challenge facing the Ummah which is unfortunately not being recognized as such by the Ulama.

The Ulama tells us that it is better to remain poor than to be rich because the poor are closer to G-d, and that is because they are not as sinful as the rich. Somehow the silent message is that being poor is good, being rich is bad, so don’t wish to be rich, instead wish to remain poor. That sounds like a conspiracy theory to me. The wealthy business owners would obviously benefit most from this un-holy alliance where the religious head preaches such nonsense to the workers.

Islam is not like this. People may become poor due to economic hardships caused by scarcity of resources, war and weather. Economic system of Islam does not permit for the exploitation of workers by the wealthy land owners or business owners. The duty of the Islamic government is basically to ensure that wealth is distributed fairly amongst the citizens. Taxation is a tool by which the socio-economic balance is held in place. Zakat and Fitrah are tools which bring social harmony between the rich and the poor. In all this, the basic needs of a society are guaranteed to each and every single individual. The question should not be ìs that possible?`because the real question ought to be `how can we make it possible?`. That is why we want experts in the Islamic Economic System to guide the policy makers.

Above is for a collective struggle to bring back the Islamic Economic System of the Khulafa-e-Rashidin. At the moment, what do we do? Do we crush our desires for a better material life for the sake of protecting our spirituality? No, that´s not how I understood my role as a Muslim. I see the necessity of every individual Muslim to work harder to improve his economic situation. He should provide for his family, invest in educating his children, build a home, encourage the religious duty of giving Zakat, and he should also organize capital for investment in business enterprises with long term goals.

A financially wealthy Muslim can do a lot for Islamic Dawah. His wealth when channeled in the right direction could go a long way in advancing the cause of Khair in Duniya and Akhirah. The question for individuals should not be whether he is allowed to increase his wealth, but the real question should be how he should increase his wealth remaining within the boundaries of Islam.

Appended below is a nice article written by a well known Islamic writer Khalid Baig. I am sure you will enjoy and benefit from his thoughts.

Seeking Halal Earning

By Khalid Baig

According to Abdullah ibn Masud, Radi-Allahu unhu, The Prophet Muhammad, Sall-Allahu alayhi wa sallam, said: ‘Seeking halal earning is a duty after the duty.’ In other words working to earn a halal living is itself a religious obligation second in importance after the primary religious obligations like prayers, fasting and hajj.

This brief hadith contains three very important messages. First, it points to the Islamic way out of the apparent dichotomy between the material and the spiritual worlds. We often see them working in opposite directions. Indulgence in the material world does lead one away from the spiritual world. Spiritual uplifting seems to accompany a tendency to distance oneself from the material pleasures. There is a conflict, but is there a contradiction also? Is it possible to resolve the conflict in a way that one can take care of both? Or are they mutually exclusive? This has been a central question for all religions and many in the past suggested the second answer, making hermits as the ideal for the humanity. Unfortunately not much humanity is left when one moves too far in this direction. One can read today the horror stories of Christian and Hindu monks, among others, who tried to seek spiritual purification this way.

As a reaction, others took the other course, making material pleasures the goal of this life. The western civilization today is the prime example of that. Its toll on human spirit and morality is well known and is a constant reminder that something is wrong here as well.

In between the two extremes Islam points out the Straight Path. Man is both a material and a spiritual being. The solution does not lie in denying the material needs and desires but in denying their claim to primacy. They are part of being but not the reason or goal of being. As long as they are kept in place, they are an important part of our life. The problem is not money but the love of it. Wealth itself is not bad. In fact Qur’an refers to it as ‘ … your wealth which Allah has made for you a means of support.’ [Al-Nisa, 4:5]. And another hadith praises the merits of ‘the halal wealth of a pious person.’ The effort to earn a living is not only not against spirituality, it is a religious obligation!

But this earning must be through halal means. This is the second message of this hadith. Our obligation is not just to make money but to make halal money. This is a broad statement that is the basis for Islamization of a society’s economic life. Not every business idea or possible business enterprise is good for the society. And the decision regarding right and wrong here cannot be left to the so-called market forces. Right and wrong in the economic life, as in all life, must be determined by a higher source. Shariah guides us as to the halal and haram business enterprises and practices, and at both individual and collective levels we must follow that guidance.

At times that guidance may conflict with the prevailing practices. For example riba (interest), gambling, pornography, and liquor are haram, and no matter how attractive the financial rewards of engaging in those enterprises may seem to be, a Muslim must refrain from them. This is the economic struggle of a believer, and it is obvious why it should be carried out as a religious obligation. At the individual level the obligation is to engage is halal professions and businesses. At the collective level the obligation is to establish a system that facilitates such individual efforts and discourages their opposite.

Sometimes we lose the balance between obligations at the two levels. Obviously our ultimate responsibility is at the individual level; in the hereafter we will be asked about what we did in our personal lives. At the same time, in the era of multi-national companies, CNN, IMF, World bank, and GATT, it is obvious that individual efforts alone cannot steer the economic life of a society in the direction of halal. Why avoiding interest has become so difficult today? Not because of its inherent merits as a healthy financial instrument but because it is entrenched in the system. Can we build an Islamic life style when the CNN is advertising a western life style in the most enticing ways 24 hours a day in our homes? Can we resolve the issues of halal and haram in taxation in Muslim countries when the national budgets and tax decisions are dictated to these countries by the IMF and the World Bank? (Jurists say that taxes may be permissible if they are necessary, reasonable, fair, within the ability of the payers, and if the means of collection are not harsh. Otherwise they are unjust and haram). Obviously the struggle to avoid haram individually must, of necessity, include the struggle to change the system that forces haram.

Third, all this effort for halal earning should not eclipse our primary religious obligations. Indulgence even in a purely halal enterprise should not make us miss our Salat, or hajj, for example.

This point is more important than we may realize at first. In this century, some Islamic movements made the error of suggesting that the primary acts of worship. like Salat were not meant for their own sake, but were there to prepare us for the real challenge of establishing an Islamic state. It was stated to persuade the audiences to join such movements but the speakers had gone carried away and in effect it would result in an inversion of the relationship between the two. The result is that those drawn to collective struggles, in political or economic arenas, sometimes may ignore their primary religious responsibilities, in favor of the ‘bigger’ struggle. This hadith may help us set our priorities right: The economic endeavor is a duty after the primary duties. And let us remember: In economics, as well as in religion, getting the priorities right is part of being right.