This post is co-written by Inside Islam blogger Colin Christopher and Anwar Bin Hayat, Secretary to the Vice Chancellor of Lahore Islamic University. Bin Hayat has also served as a financial officer for more than 25 years and has graduate degrees in economics, Islamic studies, and a higher diploma in Islamic Law and the Judiciary.
Given the current fiscal crises in wealthy countries and the Occupy Movement’s response to wealth distribution, Islamic perspectives on economics have garnered increasing attention in even non-Muslim majority countries. In this post, we’ll attempt to highlight some core Islamic principles that specifically address wealth, distribution, and justice. Islam not only requires the fulfillment of everyone’s basic needs, primarily through a respectable source of earning, but also emphasizes an equitable distribution of income and wealth so that, in the words of the Holy Qur’an, “Wealth does not circulate only among your rich.” (59:7)
Inequalities are permitted in a Muslim society only in proportion to the distribution of skill, initiative, effort, and risk. Extreme or highly skewed inequalities are incompatible with Islamic teachings, which emphasize that resources are not only a gift of God to all human beings (Qur’an 2:29), but also a trust (Qur’an 57:7).
Previous posts here on Inside Islam have discussed zakat, one of the five pillars of Islam. Inheritance is another important aspect of Islam, in line with the Islamic vision of creating dignity and brotherhood throughout humankind, not only in Muslim societies.
Sharia, or Islamic Law, provides specific guidance on inheritance for both men and women, and these laws are to be followed with the goal of establishing socioeconomic balance through more equitable distribution. Under Islamic inheritance law, no one can make a will for more than one third of their estate (property). Further, that third has to be given toward charitable objectives or for persons not already entitled to a share in the estate. Both the living parents of the deceased are assured a share. This not only ensures their welfare, but also enables the distribution of the parents’ shares to the brothers and sisters of the deceased after the parents pass on. If applicable, spouses are also given a share. The balance of the remainder goes to the children of the deceased, and it is impermissible to pass the entirety of the remaining amount to a single child if there are other siblings. All of these rules are intended to generate a wider span of wealth distribution.
Timur Kuran, Professor of Economics at Duke University, highlights inheritance law in his recent book, The Long Divergence. Kuran argues that Islamic inheritance law explains the high degree of fragmentation of family fortunes at each generation. Thus, there are hardly any examples in Islamic economic history of “successful business or merchant families that remained dominant for more than a few decades.”
There are other interesting aspects of Islamic law related to economics that relate to an equitable distribution of wealth. Although it is obligatory for every Muslim man to earn his own livelihood, there are further obligations on the part of the entire Muslim community as well. The Muslim society, or ummah, is required to satisfy the needs of all who are unable to help themselves due to something that is out of their control (e.g., a disability). Abu Zar Ghaffari, a companion of the Prophet, was of the opinion that it is not proper for a Muslim to possess wealth beyond the essential needs of his family. Interestingly, most of the Prophet’s companions did not agree with him in this extreme view.
Regardless of where Muslims stand on the level of wealth redistribution, it is also important to note that the fundamental Islamic principle of adalah (justice) should be applied in each and every situation. And because poverty still exists alongside affluence in Muslim contexts, this alone calls into question the Islamic character of many places that claim Islamic piety and justice.
As the international community continues to discuss austerity measures and other painful fiscal decisions, it would well serve all countries–whether Muslim majority or not–to reflect upon the teachings of Islam around wealth distribution. There will always be a few people at the decision-making table who hold different perspectives on the question of just distribution. However, these “differing opinions” often derive from similar philosophical traditions, and rarely give space to fundamentally divergent conceptions of distribution and justice. The inclusion of Islamic principles in current financial discussions in the West could provide important points of reflection, and facilitate an opportunity for western perspectives of capitalism to more clearly define their conceptions of wealth distribution and economic progress.
What do you think about the philosophical principles behind Islamic economic activity? In what ways does Islamic law attempt to prevent poverty, and do you think that these rules adequately address wealth inequality? Please share your thoughts below.