First Principles of Islamic Economics

By Sayyid Abul A'la Mawdudi

Abul A'la Mawdudi laid down the foundations of modern Islamic economics. Drawing upon Islamic sources, Mawdudi spelled out a new paradigm for economic analysis and policy, wherein economic pursuits take place in the context of moral values and are directed towards the achievement of personal and social objectives. Integral to this approach is the concept of an interest-free economy that attempts to make efficiency and equity inseparable and interdependent. The creation and distribution of wealth thus become instrumental in promoting individual and social wellbeing, opening up pathways to development, social justice, and human welfare. This comprehensive anthology collects all of his major writings and provides a historic as well as an essential introduction to Islamic economics.

Abul A'la Mawdudi (1903-1979) was a leading Muslim intellectual and a chief architect of the Islamic revival in the twentieth century. In 1941 he founded Jama'at-i-Islami, a political party in Pakistan, which he led until 1972. He authored more than a hundred works on Islam, both popular and scholarly, and his writings have been translated into some forty languages.

• Language: English
• Publisher: The Islamic Foundation
• Release date: May 23, 2013
• ISBN: 9780860375319

Book preview

Author’s Preface

This book is a collection of articles that I contributed on different occasions over the last 30 to 35 years. They were published from time to time to explain and elucidate the economic principles and injunctions of Islam and their applicability in the context of today. I have long felt the need to piece them together and compile them in a single volume to provide readers with a complete picture of the economic system of Islam that can also serve as a text and a resource book for students of Islamic Sciences, particularly Economics. Because of my multifarious engagements, however, I was unable to do this until Professor Khurshid Ahmad finally undertook the job. I am grateful to him for the painstaking care with which he has compiled these articles better than I could have done myself. I have reviewed the whole manuscript and made amendments and additions where necessary. I am confident that the book will serve the purpose for which Prof. Khurshid has undertaken this labour of love.

Introduction

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Islam has laid down certain principles and parameters to keep the economic life of mankind firmly based on the twin concepts of justice and fairplay. It seeks to ensure that the entire system of the production of wealth, its use and distribution should function within the limits drawn for the purpose. How should wealth be produced and how should it be circulated? Islam is not much concerned with these issues because the ways and means are continually changing and assuming new shapes and patterns as time passes and civilizations grow and march on. Human needs and circumstances serve as catalysts which determine this change that takes place automatically in response. Islam is principally concerned with the strict observance of its basic principles on a permanent basis, under all circumstances and in all times and climes, irrespective of the shape that the economic affairs of mankind may take.

Islam tells us that the earth and everything it contains have been created by God for mankind. Therefore, it is every human being’s birthright to seek his means of living from the land on which he lives. All humans equally share this basic right: nobody can be deprived of this right, nor should anybody enjoy precedence over another in this respect. According to the Islamic Sharī ah, it is unlawful to impose any restriction on a person, class, clan or ethnic group regarding their right to use the means of subsistence or close the doors to certain vocations to them. Similarly, the Sharī ah does not allow any distinction or privilege that results in a particular means of living or source of income becoming the monopoly of a particular class, race or family. Every human being is entitled to work for his share of the means of subsistence made available by Allah subḥānahū wa ta ālā on His earth and there must, therefore, be equality of opportunity for all in this respect.

Nature’s bounties need no labour or entrepreneurship to be beneficial to mankind; they are humankind’s common inheritance. Everyone has the right to make use of them, according to his needs. The water flowing in rivers and streams, the wood available in forests, the wild-growing fruit, fodder and grass, the winged creatures of the skies, the animals of the desert, the fish of the free-flowing rivers or the sea and the mines wide open on the earth’s surface – each one of these is nature’s free gift. These cannot be monopolized by anyone, nor can any restrictions be imposed to prevent someone making use of them to satisfy his need. However, the government is entitled to levy tax on those who wish to make use of these bounties from God on a commercial scale.

Things that God has created for the benefit of man cannot be kept idle. If you so desire, take advantage of them yourself; otherwise, allow others to put them to their best use. Based on this principle, Islamic Law states that everyone in possession of land given by the government should not let it lie fallow for more than three years. If someone fails to make use of the land for farming, residence or any other purpose for three years, it is deemed to be an abandoned property. If someone else then puts this land to use, no lawsuit is permissible against him. The Islamic government can also cancel ownership of the land and give it to someone else for cultivation or habitation. Anybody who gains anything from the bounties of nature, and through his labour and enterprise makes it worthy of use, is the rightful owner of that property. For example, if a person takes possession of a wasteland that nobody owns the title to, and then starts putting it to some better use, he cannot be dislodged from that land according to the law. According to the Sharī ah, this is how all ownership rights are acquired in the world. In the beginning, when human settlements began to develop on God’s earth, everything that belonged to the treasure house of nature was a common legacy. When people started putting what they possessed to use, they eventually became the owners. Their labour, ingenuity and enterprise entitled them to have those things as their exclusive property and to seek compensation from those who subsequently also wished to make use of them. This is the natural basis of all economic transactions of mankind, and ought to remain intact under all circumstances.

The ownership rights available to anyone in this world through lawful means have to be respected at all cost. However, the legality of an ownership claim can be challenged under the terms of the Sharī ah. Any ownership without a legal sanction should be declared null and void; those found to be lawful can neither be taken away by any government or legislature, nor can the lawful rights of their owners be curtailed or enhanced in any way. No system can be introduced in the name of public interest in contravention of the rights guaranteed to individuals by the Sharī ah. In the same way that it is an act of high-handedness to ease the restrictions imposed by the Sharī ah on private ownerships in the name of public interest, it is similarly abominable to circumscribe them further arbitrarily. An Islamic government is obligated to safeguard the legal rights of its citizens, and also to ensure that they truly observe their duties to the State.

Under the Divine Dispensation, there is equity but not necessarily equality in the distribution of His bounties. In His infinite Wisdom, Allah subḥānahū wa ta ālā has elevated some people over others. Beauty of the exterior, mellowness of voice, physical strength, intellectual capability, family background and other similar gifts have not been awarded evenly. It is the same with the means of subsistence. Human instinct, itself a Divine creation, demands that humans should not have parity in their earnings. From the Sharī ah perspective, all measures that are taken to impose an artificial economic parity on the people are, therefore, wrong both in approach and objective. The equality that Islam stands for is not in the amount earned for living on, but in the opportunity to struggle for a better living. Islam aims at purging society of those legal and conventional hurdles which restrict mankind’s ability to struggle for economic benefits according to their own capacity and qualifications. It also removes those distinctions and privileges which seek to turn the inherited good fortune of a certain class, race or family into permanent lawful prerogatives. Both of these factors tend to replace the natural disparity forcefully with a system of artificial disparity. By eliminating these factors, Islam thus aims at bringing society’s economic order back to its natural position, where every individual enjoys an equal opportunity to make efforts to improve his

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