Islamic Teachings Related To Economics - Islam for Muslims

As per Islamic teachings, other than the explicitly

identified impermissible sources of income, every

other source of income is permissible in which

the benefits are enjoyed by all the concerning

parties on just basis.

Allah in Holy Quran says:

“Do not devour one another’s property

wrongfully, nor throw it before the judges in

order to devour a portion of other’s property

sinfully and knowingly.” (Al-Baqarah: 188)

“Do not devour another’s property wrongfully –

unless it be by trade based on mutual

consent.” (Al-Nisa: 29)

Sources of Income Prohibited In Islam

a) Bribery (Al-Baqarah: 188).

b) Usurping others’ property (Al-Baqarah: 188).

c) Fraud (Al-Imran: 161).

d) Stealing and robbery (Al-Maida: 38).

e) Income from sources of vulgarity (Al-Noor:

19).

f) Gambling (Al-Maida: 90).

g) Wine and its business (Al-Maida: 90).

h) Interest (Al-Baqarah: 275).

Moral Directives of Islam in Conducting Business

Moral Conduct in Entrepreneurship

“And measure full when you measure. And weigh

with an even balance. This is better and its end

is good.” [Al-Bani-Israel: 35]

“They who hoard up gold and silver and spend it

not in the way of Allah, unto them give tidings (O

Muhammad) of a painful doom.” [Al-Tauba: 34]

“You resort to oaths as instruments of mutual

deceit, so that a person might take greater

advantage than another; although, Allah puts you

to the test through this. Surely, on the Day of

Resurrection, He will make clear the truth

concerning the matters over which you

differed.” [Al-Nahl: 92]

“Who so desires the reward of the world, then

with Allah is the reward both of the world and of

the Hereafter. And Allah is Hearing, Seeing.” [Al-

Nisa:134]

“And that the man will not get, but what he

endeavors. And that his endeavor shall soon be

seen.” [An-Najm: 39-40]

“O Believers! Whenever you lend money for a

particular period, write and someone among you

must write it justly. And the one who can write

must not refuse.” [Al-Baqara: 282]

Prophet Muhammad (pbuh) said: “Whosoever

sells a defective product without disclosing its

defect to the purchaser, shall earn the

permanent anger of Almighty Allah and the

angels continuously curse such a person.” [Ibn-e-

Maja]

Prophet Muhammad (pbuh) said: “The seller and

the buyer have the right to keep or return the

goods as long as they have not parted or till they

part; and if both the parties spoke the truth and

described the defects and qualities [of the

goods], then they would be blessed in their

transaction, and if they told lies or hid

something, then the blessings of their transaction

would be lost.” [Bukhari]

Prophet Muhammad (pbuh) has exhorted that we

should refrain from taking oaths unnecessarily;

for although, it helps in the sale of one’s

products, it reduces the blessings. [Bukhari &

Muslim]

Prophet Muhammad (pbuh) said: “If anyone

would like Allah to save him from the hardships

of the Day of Resurrection, he should give more

time to his debtor who is short of money, or

remit his debt altogether.” [Muslim]

Prophet Muhammad (pbuh) said: “May Allah’s

mercy be on him who is lenient in his buying,

selling, and in demanding back his money [or

debts].” [Bukhari & Tirmidhi]

Prophet Muhammad (pbuh) said: “A time will

come upon the people when one will not care

how one earns money, i.e. legally or

illegally.” [Bukhari]

Prophet Muhammad (pbuh) said: “The flesh and

body that is raised on unlawful sustenance shall

not enter Paradise. Hell is more deserving to the

flesh that grows on one’s body out of unlawful

sustenance.” [Ahmad]

Prophet Muhammad (pbuh) said: “The truthful

and trustworthy businessman will be in the

company of Prophets, saints and martyrs on the

Day of Judgment.” [Darimi & Tirmidhi]

Prophet Muhammad (pbuh) said: “And what is

most likely to send people to Paradise? Being

conscious of Allah and good manners.” [Bukhari,

Tirmidhi & Ahmed]

Islamic Teachings and Unethical Trade Practices

“Allah will deprive usury of all blessing, but will

give increase for deeds of charity.” [Al-Baqara:

276]

“Woe to those that deal in fraud. Those who,

when they have to receive by measure from

men, exact full measure. But, when they have to

give by measure or weight to men, give less than

due. Do they not think that they will be called to

account?” [Al-Mutaffifin:1-4]

Keeping the commodities of general use in

possession and not supplying them in the market

for the sake of increasing the price is prohibited.

[Ahmed-Bin-Hanbal]

Prophet Muhammad (pbuh) said: “No one hoards

but the traitors (i.e. the sinners).” [Abu Da’ud]

Prophet Muhammad (pbuh) said: “The importer

[of an essential commodity] into the town will be

fed [by Allah], and the hoarder will have [Allah’s]

curse upon him.” [Ibn Majah]

Prophet Muhammad (pbuh) said: “Allah’s

Messenger cursed the one who accepts interest

and the one who pays, and the one who records

it, and the two witnesses; and he said: They are

all equal.” [Muslim]

The Apostle of Allah (pbuh) cursed the one who

pays bribes and the one who takes bribes. [Abu

Da’ud]

Prophet Muhammad (pbuh) said: “Do not harbor

envy against one another; do not outbid one

another [with a view to raising the price]; do not

bear aversion against one another; do not bear

enmity against one another; one of you should

not enter into a transaction when the other has

already entered into it; and be fellow brothers

and true servants of Allah.” [Muslim]

Trying to buy commodities before they reach

market is prohibited because market will decide

the price. [Muslim]

Futures and Forward Trading: Islamic View

Prophet Muhammad (pbuh) said: “He who buys

food grain should not sell it until he has taken

possession of it.” [Muslim]

Analogical Deduction in Matters: Islamic View

Prophet Muhammad (pbuh) said: “What is lawful

is evident and what is unlawful is evident, and in

between them are the doubtful things which

many people do not know. So he who guards

against doubtful things keeps his religion and

honor blameless, and he who indulges in doubtful

things indulges in fact in unlawful things, just as

a shepherd who pastures his animals round a

preserve will soon pasture them in it. Beware,

every king has a preserve, and the things Allah

has declared unlawful are His preserves. Beware,

in the body there is a piece of flesh; if it is

sound, the whole body is sound and if it is

corrupt, the whole body is corrupt.” [Bukhari &

Muslim]

Benefits of Honest Conduct in Partnership

Prophet Muhammad (pbuh) has said that

Almighty Allah proclaims: “I am a one third

partner of a two man partnership until one of

them acts dishonestly to his partner, and, in such

an event, I then leave them.” [Abu Da’ud]

The importance of Paying One’s Liability

Prophet Muhammad (pbuh) said: “After the

major sins which must be avoided, the greatest

sin is that someone dies in a state of debt and

leaves behind no asset to pay it off.” [Darimi]

Job Responsibility of Employee: Islamic View

Prophet Muhammad (pbuh) said: “The honest

treasurer who gives willingly what he is ordered

to give, is one of the two charitable persons,

(the second being the owner).” [Mishka’at]

Responsibility of Employer: Islamic View

Prophet Muhammad (pbuh) said: “Give the labor

his wage before his sweat dries.” [Ibn-e-Majah]

Prophet Muhammad (pbuh) said: “Those are

your brothers [workers under you] who are

around you; Allah has placed them under you. So,

if anyone of you has someone under him, he

should feed him out of what he himself eats,

give him clothes like what he himself puts on,

and do not put so much burden on him that he is

not able to bear, [and if that be the case], then

lend your help to him.” [Bukhari]

Prophet Muhammad (pbuh) said: “I will be foe to

three persons on the Last Day: one of them

being the one who does not give dues to the

servant he employs even after he has fulfilled his

duty.” [Bukhari]

Justice and Honesty: Islamic View

“O believers! Stand firmly for justice, giving

witness for Allah, may be therein your own loss,

or of your parents or of your relations. Against

whom you be a witness, he be a rich or be a

poor, in any case Allah has more power than

anyone over them, therefore follow not passion

lest you may be far away from justice; and if you

distort or turn your face, then Allah is aware of

your doings.” [Al-Nisa: 135]

“O believers! Stand-up firmly by the

Commandments of Allah, bearing witness with

justice and let not the enmity of any people

incite you that you should not do justice. Do

justice that is nearer to piety and fear Allah,

undoubtedly, Allah is aware of your doings.” [Al-

Maida: 8]

Gender and Ethnic Discrimination: Islamic View

“O people! We created you from one man and

one woman and made you divided in branches

and tribes so that you may recognize one

another. Undoubtedly, the most respected among

you in the sight of Allah is the one who is more

pious. Verily, Allah is knowing, Aware.” [Al-

Hujurat: 13]

Directives of Islam to an Earning Individual

Encouragement for Welfare Spending

“…Remember, the example of those who spend in

the way of Allah is like that of a grain, which

sprouts into seven ears, producing a hundred

grains in each ear. Allah [by His mercy]

increases manifold [the rewards of such deeds]

for whom He wills. And Indeed, Allah is

extremely bountiful [in rewarding His servants],

fully aware [of your circumstances and

deeds].” [Al-Baqara: 261]

“Those needy ones who are wholly wrapped up in

the cause of Allah, and who are hindered from

moving about the earth in search of their

livelihood especially deserve help. He who is

unaware of their circumstances supposes them

to be wealthy because of their dignified bearing,

but you will know them by their countenance,

although they do not go about begging people

with importunity. And whatever wealth you will

spend on helping them, Allah will know of it.” [Al-

Baqara: 273]

“Look, you are being called upon to expend in

Allah’s Way, yet some of you are being niggardly,

whereas the one who is niggardly is, in fact,

being niggardly only to himself. Allah is Self-

Sufficient. It is you who are the needy. If you

turn away, Allah will replace you by another

people, and they will not be like

you.” [Muhammad: 38]

“(O Prophet!) Tell those of My servants who

believe that they should establish prayer and

spend out of what We have provided them with,

both secretly and openly, before there arrives the

Day when there will be no bargaining, nor any

mutual befriending.” [Ibrahim: 31]

“Have you seen him who belies the rewards and

punishments of the Hereafter? He it is, who

drives away the orphan and does not urge giving

away the food to the poor.” (Al-Ma’un: 1 – 3)

“Those who blame Muslims who give charity

willingly and laugh at those who get nothing but

with their hard labor, Allah will punish them for

their laughing and for them, is the painful.” [Al-

Tauba: 79]

Prophet Muhammad (pbuh) said: “Spend, and do

not count, lest Allah counts against you. Do not

withhold your money, lest Allah withholds from

you. Spend what you can.” [Bukhari & Muslim].

Prophet Muhammad (pbuh) said: “The Lord’s

commandment for every one of His slaves is,

‘Spend on others, and I will spend on

you’.” [Bukhari & Muslim]

Attitude of the Giver of Charity

“Those who spend their wealth in the way of

Allah and do not follow up their spending by

stressing their benevolence and causing hurt, will

find their reward secure with their Lord. They

have no cause for fear and grief. To speak a kind

word and to forgive people’s faults is better than

charity followed by hurt. Allah is All-Sufficient,

All-Forbearing. Believers! Do not nullify your acts

of charity by stressing your benevolence and

causing hurt as does he who spends his wealth

only to be seen by men and does not believe in

Allah and the Last Day. The example of his

spending is that of a rock with a thin coating of

earth upon it. When a heavy rain smites it, the

earth is washed away, leaving the rock bare.

Such people derive no gain from their acts of

charity. Allah does not set the deniers of the

Truth on the right way.” [Al-Baqara: 262 – 264]

Islamic View on Unscrupulous Consumption

“Give to the near of kin his due, and also to the

needy and the wayfarers. Do not squander your

wealth wastefully; for those who squander

wastefully are Satan’s brothers, and Satan is

ever ungrateful to his Lord.” [Al-Bani-Israel: 26 –

27]

“Do not keep your hand fastened to your neck

nor outspread it, altogether widespread, for you

will be left sitting rebuked, destitute.” [Al-Bani-

Israel: 29]

“Those people, who when they spend, are neither

extravagant nor miserly but keep the golden

mean between the two (extremes).” [Al-Furqan:

67]

Prophet Muhammad (pbuh) said: “When you eat,

drink, give charity and wear clothes, let no

extravagance or pride be mixed up with what you

do.” [Ibn Maja & Nasai]

Stinginess and Wealth Accumulation: Islamic

View

“Those who do not spend their wealth that has

been given to them by Allah must not think that

it is good for them; indeed it is bad for

them.” (Al-Imran: 180)

“… Allah does not love the arrogant and the

boastful, who are niggardly and bid others to be

niggardly and conceal the bounty which Allah

has bestowed upon them. We have kept in

readiness a humiliating chastisement for such

deniers (of Allah’s bounty).” [Al-Nisa: 36-37]

Prophet Muhammad (pbuh) said: “Avoid doing

injustice to others, for on the Day of Judgment,

it will turn into manifold darkness, and safeguard

yourself against miserliness, for it ruined those

who were before you. It incited them to murder

and treating the unlawful as lawful.” [Muslim]

Prophet Muhammad (pbuh) said: “There are two

habits which are never present together in a

believer, i.e. miserliness and bad

manners.” [Tirmidhi]

Prophet Muhammad (pbuh) said: “When

someone is made rich but he does not pay Zakat

for his wealth, then on the Day of Judgment his

money will be turned into a poisonous snake with

two black spots on its head. It will coil around

his neck and bite his cheeks and say: ‘I am your

wealth, I am your treasure’. Then the Prophet

recited verse Al Imran: 180.” [Bukhari]

Paying Zakat

“Say your prayers (Namaaz) and pay Zakat.” [Al-

Muzammil: 20]

“Establish prayer and dispense the purifying alms

(Zakat) and bow in worship with those who

bow.” [Al-Baqara: 43]

Entrepreneurship Versus Dependency

Prophet Muhammad (pbuh) said: “The upper

hand is better than the lower hand (i.e. he who

gives in charity is better than him who takes it).

One should start giving first to his dependents.

And the best object of charity is that which is

given by a wealthy person (from the money

which is left after his expenses).” [Bukhari]

Social Responsibility: Islamic View

Prophet Muhammad (pbuh) said: “If any Muslim

plants something or sows seed from which a

man, a bird or an animal eats, it counts as a

charity for him.” [Bukhari & Muslim]

Communal Development: Islamic View

Prophet Muhammad (pbuh) said: “The best

charity is that which is practiced by a wealthy

person. And start giving first to your

dependents.” [Bukhari]

Prophet Muhammad (pbuh) said: “To give

something to a poor man brings one reward,

while giving the same to a needy relation brings

two: one for charity and the other for respecting

the family ties.” [Ahmad, Ibn Majah, Nasai &

Tirmidhi]

Utility and Satisfaction: Islamic View

Prophet Muhammad (pbuh) said: “Wealth is not

in having vast riches, it is in

contentment.” [Bukhari & Muslim]