Money
&
Trade

You know,

as the world of Islam spread around the globe,

those who held power had to deal with all those issues needed to unite an empire.

Now for a Deen to span an empire,

amongst other things

it needs to encompass the whole framework of the economic life

of all the varied people that lived within it.

New laws were needed

to detail understandings with regard to the ownership of land,

the defense of that land,

and what is done on that land

in the way of agriculture and industry,

local and far flung trade,

and associated business partnerships.

And as the Qur'an gave guidance as to the best way to live our lives,

so it gave guidance as to the principles of doing business in the world of Islam,

and the behaviour required for the Deen

has a huge effect on the economic relationships within a community.

It means they are set in a system based on honesty,

trustworthiness, balanced judgement, and good intentions,

and all set in a legal structure that brings the community together

through laws of shared responsibility.

The economic system needed laws

to define the limits and the essentials

for economic activity to be considered Islamic,

whether dealing with the requirements for individual trade

or business relationships,

or the requirements for local fair trade inspectors,

muhtasib,

checking weights and measures and quality.

And the system also had to set out

its approach to shared ventures,

both small scale business partnerships

and the monumental scale of provision of public services,

like the funding of the army,

or the building of dams or canals,

or the provision of schools or hospitals.

People had to understand

how the money system worked

throughout the world of Islam,

what was meant by money,

what could be used as money

and the way it could be used.

Laws were needed to define how money could be loaned and borrowed,

and what taxes should or could be collected,

and then once they'd been collected

how they were allowed to be spent.

So by the end of the thirteenth century hijri,

when Ibn Taimiya was writing on economics,

many of the issues he discussed

were much the same as are discussed today.

He considers market mechanics,

like supply and demand,

the right to profit,

price regulation, and price fixing,

and similar issues,

but beneath all the discussion of the mechanics

there runs an understanding

of the need for justice throughout the system.

The Deen is a system of justice,

so economic life within the Deen requires

fair pricing, fair compensation, and fair wages.

When people do business or trade together in the Deen

they should be able to trust their business and trade partners.

Contracts should be written down to legalise agreements.

Of course economic justice in the muslim way of life

is just part of the overall justice of Shari'ah.

But although market mechanisms may seem similar today,

the Deen's approach to trade and money is quite different in many ways

to the financial systems ruling the world at the moment.

And the difference comes in the way that the money system works,

in the relationship between lenders and borrowers,

and especially the lending relationship known as Riba,

which is forbidden.

Riba has many similarities to the way that banks work nowadays

when lending money to a borrower

who agrees to repay the debt over time

plus extra for the loan,

in the bank's case the extra being interest.

But the risk is all carried by the borrower,

and if it proves impossible to repay the debt in time

the extra payment can increase dramatically

on top of the original sum that is still owed to the lender,

who takes no risk,

especially nowadays

when loans are made against collateral.

This is against one of the cardinal rules of the Deen,

that muslims should not reap rewards other than from their labours and endeavours.

In an Islamic society each individual is bound by a duty to help the other

and to extort nothing from the other in return for such help.

When someone can make money risk free

simply by having money,

it goes against that basic understanding of social justice.

That kind of money system is usually known as capitalism,

which of its nature rewards those who have excess wealth

and in the process deprives the poor,

taking that reward from those who need to borrow.

But as ever, the Shari'ah treats the matter with great subtlety,

and scholars will tell you there is more than one kind of riba,

and that all kinds of interest are not riba

and all kinds of riba are not haram.

It all depends on how the money system works,

whether money is seen as having value in and of itself

rather than simply a marker or store of value.

Of itself money doesn't multiply

or grow into anything useful.

It is not wanted for itself,

but for what it can be exchanged for.

It's only real value to a community

is in the way in which it enables wealth to be easily moved and shared,

and this sharing of wealth goes to the heart of the Deen.

Because the Message deals with sharing wealth

as a part of the muslim way of life

that has an equivalence to prayer

and the fasting of Ramadhan.

In the annual Zakat muslims are required to surrender part of their wealth

to share with those who have less than themselves.

Charity is encouraged in the Deen,

but The Message makes clear that Zakat is essential to the muslim way of life.

But Zakat is not like an income tax.

It is paid on wealth that has been owned for a year

but which has not been put into circulation in the community.

There is nothing wrong with wealth production

and making a profit,

the Messenger himself led trade caravans,

but what purifies the wealth that is acquired is what is put back into society,

providing social cohesion and social justice in the community.