Chapter 5: Fundamentals of Islamic Economic System by Dr. Muhammad Sharif Chaudhry

 

 

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Fundamentals of Islamic Economic System

By Dr. Muhammad Sharif Chaudhry

CHAPTER 5

EXCHANGE

  1. Exchange

  2. Trade

  3. Sale

  4. Swearing in Trade

  5. Forward Transactions

  6. Speculative Business

  7. Weights and Measures

  8. Monopoly

  9. Price Control

I- Exchange

Meaning and Importance: Exchange means transfer of one thing for another or for money. Thus any commercial or business transaction which involves transfer of one thing for another-it may be one commodity in exchange for another commodity or one commodity in exchange for money-is called exchange.

In primitive times exchange was through barter only i.e. one commodity was exchanged for another commodity. Since barter was an inconvenient, rigid and unjust method of exchange, man looked for a medium of exchange which was ultimately developed in the form of money. Now in all organised and developed societies exchange takes place through money.

Exchange has ever been, and now it has become more, indispensable to human existence, because man is not self sufficient. He does not produce all his necessities of life and everything he needs. For many things he needs he is dependent upon others. Thus he satisfies his wants through exchange. Therefore, exchange has assumed vital importance in economics as it coordinates and adjusts consumption and production.

Forms of Exchange: Forms or methods of exchange have been changing with the needs of the time and the place. Broadly speaking, exchange has generally existed in two forms: exchange of one commodity for another commodity called barter and exchange of commodity for money. Barter exchange or barter trade existed in ancient and medieval times. It still exists in very under-developed communities or in villages especially in agricultural sector. But mostly this method of exchange has given place to money as medium of exchange, because the value of commodities or services can be easily expressed and instantly translated into terms of money.

Money has also been assuming many forms i.e from coins of metals especially of gold and silver to paper currency and banknotes.

Islamic Approach: At the time of advent of Islam i.e. in the beginning of sixth century AD money was already known to the people and the coins of various denominations were in circulation among the then developed communities. The Arab traders who were in frequent touch with other countries were not only aware of these coins but also used them in their daily business transactions. But barter was still in vogue and a large number of transactions were still conducted through barter system particularly in agricultural commodities. This was, in brief, the situation when Prophet Muhammad (PBUH) was busy in establishing a small Islamic state at al-Madinah.

The Holy Prophet clearly saw elements of exploitation, injustice and usury and many other economic ills in the barter system of exchange. He, therefore, decided to replace barter system by exchange through money. Following traditions of the Prophet of Islam highlight his attitude towards exchange.

1.   Umar reported that the Holy Prophet said: “To sell wheat for wheat, barley for barley, dates for dates is ‘Riba’ except when sold from hand to hand (i.e., transaction is completed on the spot) (and also in equal quantity)

-(Bukhari, Muslim)

2.   Abu Saeed and Abu Hurairah reported that the Holy Prophet appointed a man as tax collector to Khaiber. He returned to him with best dates. So he (the Prophet) enquired: “Is every date of Khaibar like this”? “No by Allah” he said “O Prophet ! verily we take one sa’a of this for two sa’a and two sa’a for three sa’a. The Prophet said: Don’t do it, sell (your) dates for Dirhams and then purchase the best dates for Dirhams.

-(Bukhari, Muslim)

3.   Abu Saeed Khudri reported that one day Bilal came to the Messenger of Allah with green variety of dates. The Messenger of Allah enquired, “wherefrom did you bring this”? Bilal replied, “We had dates of inferior quality,. We therefore, gave two Sa’a of that quality in exchange for one Sa’a of this (superior) quality with the object of presenting it to the noble Prophet.” On hearing this the Prophet said:”…this is clear riba. Don’t do it again, rather when you wish to acquire dates of superior quality, first sell your dates of inferior quality for money, and then purchase dates of superior quality therewith.”

-(Bukhari)

Thus the Prophet of Islam discouraged barter transactions. Exchange of two commodities of same kind was not allowed except that the quantity was equal and possession was transferred at the same time. Although barter transactions were tolerated (with certain conditions) due to their prevalence, but the same were not considered desirable. In many cases the Prophet issued clear instructions to his companions not to enter into barter transactions. He rather advised them to sell their commodity for money and purchase the desired commodity with its price. The object was partly to abolish the practice of “riba’ in commercial dealings and partly to encourage adoption of money as medium of exchange.

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II- Trade

Trade (Tajarah) plays significant role in acquisition of wealth. It is certainly superior to agriculture, service and even industry. History is witness to the fact how individuals and communities have gained prosperity through trade and how nations acquired territories and built up colonial empires through trade. Islam recognises role of trade in acquiring fortune and greatness. There are many verses of the Qur’an about trade and sale. The Prophet of Islam also highlighted importance of trade. Let us have a glance through the relevant verses of the Qur’an and traditions of Holy Prophet.

The Verses of the Qur’an:

1. It is no sin for you that ye seek the bounty of your Lord (by trading). But, when ye press on in the multitude from ‘Arafat, remember Allah by the sacred monument. Remember Him as He hath guided you, although before ye were of those astray.

-(2:198)

2.   That is because they say: Trade is just like usury; whereas Allah permitteth trading and forbiddeth usury…..

-(2:275)

3.   O ye who believe! Squander not your wealth among yourselves in vanity, except it be a trade by mutual consent, and kill not yourselves. Lo! Allah is ever Merciful unto you.

-(4:29)

4.   Say: If your fathers and your sons, and your brethren, and your wives, and your tribe, and the wealth ye have acquired, and merchandise for which ye fear that there will be no sale and dwellings ye desire are dearer to you than Allah and His messenger and striving in His way: then wait till Allah bringeth His command to pass. Allah guideth not wrong-doing folk.

-(9:24)

5.   Men whom neither merchandise nor sale beguileth from remembrance of Allah and constancy in prayer and paying to the poor their due; who fear a day when hearts and eyeballs will be overturned;

-(24:37)

6.   O ye who believe! Shall I show you a commerce that will save you from a painful doom? Ye should believe in Allah and His messenger, and should strive for the cause of Allah with your wealth and your lives. That is better for you, if ye did but know.

-(61:10-11)

7.   O ye who believe! When the call is heard for the prayer of the day of congregation, haste unto the remembrance of Allah and leave your trading. That is better for you if ye did but know. And when the prayer is ended, then disperse in the land and seek of Allah’s bounty, and remember Allah much, that ye may be successful.

-(62:9-10)

Ahadith of Muhammad (PBUH):

1. Jaber reported that the Messenger of Allah said: May Allah be kind to a man of gentle dealings when he sells, when he purchases and when he gives decision.

-(Bukhari)

2.   Hazaifah reported that the Messenger of Allah said: There was a man amongst those who were before you. The angel came to him to take his breath. He was questioned: Have you done any good deed? “I don’t” know” replied he. “Look” it was directed to him. He said: I don’t know anything except that I used to carry on business with the people in the world, show kindness to them, give time to the solvent and remit the needy. Then Allah admitted him in Paradise.

-(Bukhari and Muslim)

3.   Abu Sayeed reported that the Messenger of Allah said: The truthful trustworthy merchant will be with the prophets, truthful and martyrs.

-(Tirmizi, Ibn Majah (Rare))

4.   Obaid-bin-Rafa’a from his father reported that the Holy Prophet said: The merchants will be gathered on the Resurrection Day as transgressors except those who were fearful of Allah, pious and truthful.

-(Ibn Majah, Tirmizi (Approved, Correct))

5.       Abu Hurairah reported from the Messenger of Allah who said: The two (seller and buyer) must not part away except by mutual consent.

-(Abu Daud)

6.       Ayesha reported that the Messenger of Allah ordered to enjoy the skin of dead animals when tanned.

-(Malek, Abu Daud)

7.       Abdullah-bin-Omar reported that the Prophet forbade the sale of fruits till the good ones become ripe. He prohibited the seller and the buyer. Agreed upon it. And in a narration of Muslim. He forbade the sale of dates till they are ripe, and of corns till they become white and safe from mishaps.

-(Bukhari, Muslim)

8.       Ibn Omar reported: They (people) used to purchase food-grain in a place confronting the market and sell it also in its place. Then the Holy Prophet forbade them to sell it in its place till they take it in possession.

-(Abu Daud)

9.       Ibn Abbas reported: As for that of which the Holy Prophet prohibited sale, it is food-crops till they come in possession. Ibn Abbas said: I don’t consider anything but just like it.

-(Bukhari and Muslim)

10.   Abu Hurairah reported that the Messenger of Allah said: Nobody shall bargain over the bargain of his brother Muslim.

-(Muslim)

The Prophet of Islam himself adopted the profession of trade during his youth and worked as agent of Khadijah, a wealthy lady of Makkah, who was very impressed by his honesty, fair dealing and trust-worthiness and who later on became his wife. His companions Abu Bakr and Usman traded in cloth whereas Umar carried on trade in corn. He issued instructions to his followers to be honest and trust-worthy in their commercial dealings as the trustworthy merchant will be with the prophets, truthful and the martyrs on the Day of Judgement. His followers not only carried on maritime and land trade throughout the then known world but also became the torch bearers of Islam to the darkest corners of the world causing the spread of message of Allah.

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III- Sale

Just and fair dealings have been stressed in sale or ‘Bai’ by the Qur’an and the Prophet of Islam. Let us have a look at the relevant verses of the Qur’an and the Sunnah before elaborating dimensions of this subject.

The verses of al-Qur’an:

1. ........ Be not averse to writing down (the contract) whether it be small or great, with (record of) the term thereof. That is more equitable in the sight of Allah and more sure for testimony, and the best way of avoiding doubt between you; save only in the case when it is actual merchandise which ye transfer among yourselves from hand to hand. In that case it is no sin for you if ye write it not. And have witnesses when ye sell one to another, and let no harm be done to scribe or witness. If ye do (harm to them) Lo! it is a sin in you. Observe your duty to Allah. Allah is teaching you. And Allah is Knower of all things.

-(2:282)

1.       Men whom neither merchandise nor sale beguileth from remembrance of Allah and constancy in prayer and paying to the poor their due; who fear a day when hearts and eyeballs will be overturned;

-(24:37)

Ahadith of Prophet Muhammad (PBUH):

1. Abu Hurairah reported from the Messenger of Allah who said: The two (seller and buyer) must not part away except by mutual consent.

-(Abu Daud)

2.       Ibn Omar reported that a man said to the Holy Prophet: Verily I am cheated in sale. He said: When sale is held, say—There’s no cheating. The man used to utter it.

-(Bukhari, Muslim)

3.       Ibn Omar reported that the Messenger of Allah said: The buyer and the seller each of them has got option on his partner so long as they have not separated themselves except the option of buying. Agreed. In a narration of Muslim—When the buyer and seller carry on transaction, each of them has got option with respect to his sale so long as they do not part away or their sale is held conditional on option. When their sale is held on option, it becomes binding. And in a narration of Tirmizi: The buyer and seller are on option till they do not become separate till they choose.

4.       Hakim-bin-Hizam reported that the Messenger of Allah said: The buyer and seller have got option so long as they do not part away. If they speak the truth and disclose (defect), they are blessed in their sale transaction, and if they conceal and speak falsely, the blessing of their sale in decreased.

-(Bukhari, Muslim)

5.       Abdullah-bin-Mas’ud reported that the Messenger of Allah said: Where the seller and buyer differ, swearing is the swearing of the seller, and the purchaser has got the right of option. Tirmizi narrated it. In a narration of Ibn Majah, he said: When the seller and the buyer disagree, and the seller is standing on his own position while there is no proof between them, then the oath is what the seller takes or both should rescind the sale.

6.       Anas reported that the Messenger of Allah sold a saddle and a cup and said: Who will purchase this saddle and cup? A man replied. I shall take them both for one dirham. The Holy Prophet said: Who will increase over one dirham? A man offered him two dirhams. Then he sold them both to him.”

-(Trimizi, Abu Daud, Ibn Majah)

7.       Jaber reported that the Messenger of Allah forbade Mukhabarah, Muhaqalah and Muzabanah. Muhaqalah is a man’s selling corn for one hundred Farq of wheat, and Muzabanah is to sell dry dates upon the heads of date trees for one hundred Farq. And Mukhabarah is to let out land for one-third or one-fourth (of produce).

-(Muslim)

8.       Abdullah-bin-Omar reported that the Prophet forbade the sale of fruits, till the good ones become ripe. He prohibited the seller and the buyer. Agreed upon it. And in a narration of Muslim: He forbade the sale of dates till they are ripe, and of corns till they become white and safe from mishaps.

9.       Jaber reported that the Messenger of Allah forbade the sale (of fruits upon the trees) for years, and ordered to wait for mishaps.

-(Muslim)

10.   Jaber reported that the Messenger of Allah said: If you purchase dry date from your brother and then mishap afflicts it, it is not lawful for you to take out of it for what you take unjustly from your brother’s property.

-(Muslim)

11.   Abu Hurairah reported that the Messenger of Allah said: Don’t go forward to meet the caravans for purchase, and none of you shall purchase on the purchase of others. Don’t interfere with one another in bargain, and no citizen shall sell to a villager, and don’t keep back the milk of camels and goats. Whoso purchases them after that has got two options after milking them. If he likes, he may keep them and if he does not like, he may return them with one sa’a of dry dates.

      Agreed upon it. And in narration of Muslim: Whoso purchases a goat full of milk in udder has got an option for three days. If he then returns it, he shall return one sa’a of food-grain with it and not wheat.

12.   Abu Hurairah reported that the Messenger of Allah said: Don’t meet corn merchant ahead. Whoso meets him ahead and then purchases from him---when its owner comes to market, he has got an option.

-(Muslim)

13.   Ibn Omar reported that the Messenger of Allah said: Don’t meet merchandise beforehand till it is taken down in market.

-(Bukhari, Muslim)

14.   Ibn Umar reported that the Holy Prophet said: Nobody shall bargain over the bargain of his brother, nor will he seek the hand in marriage which his brother (Muslim) sought unless permission is granted to him.

-(Muslim)

15.   Abu Hurairah reported that the Holy Prophet forbade the sale by stone-throwing and the sale of unpossessed thing.

-(Muslim)

16.   Ibn Omar reported that the Holy Prophet forbade bargain of Habalul Habajah: and it was a bargain which the people of ignorance used to carry on. A man used to purchase a camel till a she-camel became pregnant and then till what was in the womb became pregnant.

-(Bukhari, Muslim)

17.   Jaber reported that the Holy Prophet prohibited the bargain of camel’s sock and sale of water and cultivable land.

-(Muslim)

18.   Abu Hurairah reported that the Holy Prophet passed by a heap of corns. He thrust his hand therein but his fingers touched moisture. He asked, O owner of corn! What is this? He replied: Rain fell on it, O Messenger of Allah. He enquired: Have you not done so over the corn so that people may see it? Whoso acts with deceit is not of me.

-(Muslim)

19.   Ali reported that the Messenger of Allah forbade the (forced) purchase from a needy person, and purchase from the inconsiderate and purchase of fruit before it reaches maturity.

-(Abu Daud)

20.   Abu Hurairah reported that the Holy Prophet forbade two bargains in one sale.

-(Malek, Tirmizi, Abu Daud, Nisai)

21.   Waselah-bin-Asqa’a reported: I heard the Messenger of Allah say: Whoso sells a defective thing without disclosing it continues to be in the wrath of Allah or angels continue to curse him.

-(Ibn Majah)

Now in the light of the verses of the Qur’an and particularly in the light of Ahadith of the Prophet, let us understand various aspects of sale.

What is Sale? Sale is contract, like any other civil contract, which is made by declaration and acceptance expressed clearly in words or in expression conveying the same meaning. The declaration may be made personally or by letter or message. The acceptance may be deferred until the breaking up of the meeting. An offer made by purchaser cannot be restricted by seller or to any particular parts of the goods. A little deviation from the offer or acceptance will not make the sale complete. If the acceptance be not expressed in due time, the declaration is null and void. A sale may be entered into either for ready money or for payment within a fixed time. In case of a house sale, the foundations and superstructure are included. In the sale of land, trees upon it are included but corn is not included unless there is stipulation.[1]

The contract of sale, according to the Qur’an, should be made in writing, be it small or great, along with its terms and conditions and also witnesses. However, there is no sin if you write or do not write a contract of sale involving merchandise which you transfer among yourselves from hand to hand.

Kinds of Sale: There are four types of sale:

1.   Muqaezah: It is sale of kind for kind.

2.   Sarf: It is sale of cash for cash as sale of gold for silver.

3.   Salm: It is sale of a credit for kind in cash as crops are taken for payment in future.

4.   Mutleq Sale: Free sale as sale of a thing in cash for price in cash, is called Mutleq sale.

Option in Sale: The power to withhold or accept in trade is called option. It occurs before the sale is complete and there are due proposal and acceptance. A purchaser has got the right of option and may reject an article upon inspection of the article if he has not seen it at the time of purchase. A seller has no option of inspection after sale. Option of inspection continues in force to any distance of time after the contract, unless destroyed by circumstances. A condition of option may lawfully be stipulated by either party provided it does not exceed three days. Imam Muhammad and Abu Yusuf fixed no time limit. The possession of option may annul the sale with knowledge of the party or confirm it without his knowledge. A purchaser detecting any defect in the article may annul the sale.[2]

Unlawful Sales: Following types of sales, which were very common in Arabia in those days, were prohibited and declared unlawful by the Holy Prophet as they involved some element of riba, exploitation, fraud, blackmail, deception, misrepresentation, injustice, gamble, chance or unfairness:

1.   Sale Muzabanah: Sale of a known quantity for unknown quantity or price. It is applicable to fruits on trees which are sold in exchange for dry fruits.

2.   Sale Munabazah: Sale by stone-throwing at commodity of sale. One man throws the cloth he has for sale towards another and the sale becomes confirmed, even though the other man may not have touched it or seen it.

3.   Habal-Al-Habala: Sale of foetus in womb. One purchased a she-camel with the promise that he would pay the price when it would give birth to a she-camel.

4.   Mulamasah: Sale by touch. One purchases cloth by touching it without opening it or seeing it or examining it.

5.   Muhaqalah: Grain in ear was sold for dry grain.

6.   Mu’awamah: Sale of fruits while upon trees for one year, two years or more whether the fruits appear or not.

7.   Mukhabarah: Transfer of a limited and not absolute interest in a land.

8.   Sunnayah: Sale of fruits upon trees after leaving some fruit from the subject matter of sale.

9.   Talqi-Jalab: Purchase of corn and food-stuffs on the way before merchandize actually reach their destined places. It was a common practice with the people of Madinah that, when the farmers brought grain to the town, they would meet them outside the town and purchase all the grain, and then sell it at their own price.

10.  Sale by Al-Hadir-Libad: Some people worked as agents of the grain-sellers (middle-men) and all grain was sold through them. They earned a profit from both the seller and the buyer and often deprived the cultivator of his just profit and the buyer of a just and fair price. The Holy Prophet forbade this type of bargaining in the interest of the cultivator as well as the buyer.

11.  Sale Ainiyah: Sale of commodities, especially perishable, without obtaining their possession.

12.  Sale Sarf: Sale of gold and silver for gold and silver is prohibited unless sold hand to hand and in equal quantity, otherwise it is `riba’.

13.  Sale al-Gharar: Any sale by deceiving the opposite party. Examples of such type of sale are as follows.:

(a)  Misrat: Sale of animal which is not milked for a number of days and its milk is left in the udder to deceive the buyer.

(b)  Najsh: Raising the price of an article of merchandise or outbidding in sale, not from a desire to purchase it, but with a view to trap the buyer.

(c)   Sale by Oath: To sell articles by taking oaths regarding their superior quality.

(d)   Adulteration of articles of inferior quality with superior quality as water in milk.

14.   Sale of fruits and corns till they are ripe and fit for human consumption.

15.   Sale or lease of water and grass.

16.   Sale of grapes till they are black, and corns till they become hard.

17.   Sale of goods without delivery and cash price i.e. sale with a promise of delivery of goods for a promise of price.

18.   Bargaining with the needy persons and the poor.

19.   A sale in exchange of carrion, blood, person of free man, uncaught fish in water, a bird in air which will not return, milk in udder, and hair or wool upon an animal.

20.   Sale of wine, pork etc.

21.   Any article which cannot be separated from its situation without injury or of which the quality or existence cannot be ascertained or the quantity of which can be judged by conjecture.

22.   The sale of an absconded slave, woman’s milk, bristles of heg, human hair and undressed hides. It is lawful to sell or apply in use bones, wools, sinews, horns or hairs of all animals which are dead excepting those of men and hogs.

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IV- Swearing in Trade

It was a common practice in the times of the Prophet, as today, that the sellers used to sell their goods by taking oaths to convince the buyers about the superior quality of their goods although they were of bad or defective quality. This practice has been strictly prohibited and condemned by the Holy Qur’an and the Prophet. Relevant verses of the Qur’an and traditions of the Prophet are as under.

Verses of the Qur’an :

1. Lo! Those who purchase a small gain at the cost of Allah’s covenant and their oaths, they have no portion in the Hereafter. Allah will neither speak to them nor look upon them on the Day of Resurrection, nor will He make them grow. There’s will be a painful doom.

-(3:77)

2.       Allah will not take you to task for that which is unintentional in your oaths, but He will take you to task for the oaths which ye swear in earnest………..

-(5:89)

Ahadith of Muhammad (PBUH):

1. Abu Qatada reported that the Messenger of Allah said: Be careful of excessive swearing in sale, because it finds market but then reduces (blessing).

-(Muslim)

2.       Abu Hurairah reported that the Messenger of Allah said: Oath is a means of bargain for the commodities but a cause of deterioration in blessing.

---(Bukhari, Muslim)

3.       Qais-bin-Abi-Gerzata reported: We were called ‘Samaserah’ at the time of the Holy Prophet. The Prophet passed by us and named us with a name which is better than the former. He addressed: O chamber of merchants ! (As) for) sale, futile words and false swearings are often used in it. So mix it with alms.

-(Tirmizi, Nisai, Ibn Majah, Abu Daud)

4.       Abu Omamah reported that the Prophet said: Whoso takes the right of a Muslim with his oath, Allah makes hell sure for him and Paradise unlawful. A man asked him: O Prophet of Allah, even though it be a small thing? He said: Even if it is a rod of Arak.

-(Muslim)

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V- Forward Transactions

Islam disapproves business involving forward transactions. The Holy Prophet has prohibited to sell goods which are not in one’s possessions. Following traditions of the Prophet indicate the prohibition of such business:

1.       Amr-bin-Shuaib reported from his father who from his grandfather that the Messenger of Allah said: Advance loan and sale are not lawful, and there are no two conditions in a sale, and no profit till it comes in possession, and no sale what is not in your possession.

-(Abu Daud, Nisai, Tirmizi (correct)

2.       Ibn Omar reported: They (people) used to purchase food-grain in a place confronting the market and sell it also in its place. Then the Holy Prophet forbade them to sell it in its place till they take it in possession.

-(Abu Daud)

3.       Ibn Omar reported that the Messenger of Allah said: Whoso purchases food stuffs should not sell them till he takes their full measurement. In a narration of Ibn Abbas till he measures it.

-(Bukhari, Muslim)

4.       Hakim-bin-Hezam reported: The Messenger of Allah prohibited me to sell what is not in my possession. Tirmizi narrated it. And in a narration of Abu Daud and Nisai, he said, I asked: O Messenger of Allah ! a man comes to me and intends to make bargain with me, but it is not in my possession. Shall I purchase it from the market? He said: Don’t purchase what is not in your possession.

It has been proved by the modern economic theory that trade cycles, which cause disruption in economy, are partly caused by brisk activity of those who indulge in forward transactions.

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VI- Speculative Business

Speculation signifies the phenomenon of buying something at cheap rates and selling the same in future at higher rates. When the future price is expected to be higher than the present price of a thing, speculative buyers purchase it with a view to selling it at a higher price in future. Similarly, if the future price is expected to be lower than the present, speculators will sell now in order to avoid selling at a lower price in future. This type of business has been disapproved by Islam. Especially the withholding of cereals or other essential articles of common use with a view to raise their prices artificially (which is also called hoarding) has been strongly condemned by the Prophet of Islam. His Ahadith are:

1.       Ma’mar reported that the Messenger of Allah said: whoever withholds stocks of grain to make them scarce and dear is a sinner.

-(Muslim)

2.       The Holy Prophet once condemned the mentality of a hoarder thus: He is a very bad man, who is grieved at low prices and is pleased at higher prices.

-(Bukhari)

3.       ‘Umar reported: The Prophet (be peace on him) said : “One who imports grain from outside and sells at the market rate his maintenance is blessed, while he who withholds grain from sale in view of an estimated dearness in future, he is thrown away from God’s pleasure.

4.       Umar said: “one who brings grain in our city will be blessed with (abundance of) wealth and one who hoards will be cursed. If any one withholds grain (or other articles of use) while men of God (i.e. the people) need it, the ruler can forcibly sell his grain (or other articles of use)”

-(Mutta)

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VII- Weights and Measures

Deceiving the buyers or customers and harming their interest by spurious or defective weights and measures has been strictly prohibited by Islam. The Qur’an has strongly condemned the practice of wrong weighing and wrong measuring among the people of old specially the people of Median to whom Prophet Shuaib was sent. The believers have been warned to give full measure and weight with the true balance in order to escape punishment of God. The Qur’an says:

1.       Give full measure and full weight, in justice.

-(Al-Anam 6:152)

2.       And unto Median (We sent) their brother Shuaib. He said: O my people ! Serve Allah. Ye have no other God save Him! And give not short measure and short weight. Lo! I see you well-to-do, and Lo! I fear for you the doom of a besetting Day.  O my people ! Give full measure and full weight in justice, and wrong not people in respect of their goods. And do not evil in the earth, causing corruption.

-(Hud 11:84-85)

3.       Fill the measure when ye measure, and weigh with a right balance; that is meet, and better in the end.

-(Bani-Israil 17:35)

4.       Give full measure, and be not of those who give less (than the due). And weight with the true balance. Wrong not mankind in their goods, and do not evil, making mischief in the earth.

-(Ash Shuara 26:181-183)

5.       And the sky He hath uplifted; and He hath set the measure. That ye exceed not the measure, But observe the measure strictly, nor fall short thereof.

-(Ar-Rahman 55:7-9)

6.       Woe unto the defrauders: Those who when they take the measure from mankind demand it full, But if they measure unto them or weigh for them, they cause them less. Do such (men) not consider that they will be raised again Unto an awful Day, the day when (all) mankind stand before the Lord of the Worlds?

-(Al-Mutaffifin 83:1-6)

The Prophet of Islam took every possible step to popularise the use of standard weights and measures in the market. He blessed those who were honest in weighing and measuring. It is reported by Anas bin Malik and Abdullah bin Zaid that the Messenger of Allah prayed once: O God ! bless the measure of the people of Madinah (Mishkat)

The Prophet also emphasised that the goods should be measured or weighed before purchasing or selling them. Usman reports that the Holy Prophet told him to always weight and measure anything he bought or sold (Bukhari). Ibn Umar reports that the Apostle of Allah told them that measure of Madinah was trustworthy and weight of Makkah (Mishkat).

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VIII- Monopoly

Monopoly or Ijarah is said to exist when the sole control of the supply of any commodity or service is in the hands of one person or a one business organisation. The monopolist controls the supply of the commodity or the service and fixes its price at his discretion to the determent of the interest of the consumers or the public. Islam does not permit the establishment of monopolies over commodities or services which are harmful to the interests of the community. Especially monopolies over food-stuffs or articles of daily use are banned by Islam and those essential things which are required by everyone are maintained under joint or common ownership of the community. Following traditions of the Prophet of Islam bring home this point:

1.       It is reported by Ibn Abbas that the Messenger of Allah said: Grazing land belongs to Allah and His Messenger and no one is permitted to keep it to himself.

_(Bukhari)

2.       Ibn Abbas reported that the Apostle of Allah said: All Muslims jointly share three things i.e., water, grass and fire.

-(Abu Daud)

3.       Abyaz bin Hamal Marbi reported that the Holy Prophet took back allotment of salt mine from him when he found that it was for common use of all Muslims.

-(Tirmizi, Ibn Majah)

4.       Ma’mar reported that the Messenger of Allah said: Whoever monopolises is a sinner.

-(Muslim)

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IX- Price Control

The artificial scarcity of goods created by unscrupulous businessmen generally results in price-like. It may be on account of speculative business, hoarding, black marketing or smuggling. As we have studied earlier, all these practices are banned in Islamic society. Therefore, ordinarily there is no fear that price would rise artificially because the true Muslims are not expected to indulge in hoarding or speculation. However, black sheep are there who do not abstain from indulging in these malpractices with a view to harvest undue profits and thus cause inflationary rise in price. Such situation took place once even during the reign of the Prophet. The relevant tradition is as under:

Anas reported that the current price once became dear at the time of the Messenger of Allah. They asked: O Messenger of Allah! Fix a rate for us. The Holy Prophet replied: Verily Allah is One who controls price, curtails, gives amply and provides sustenance; and certainly I hope that I should meet my Lord while there will be none amongst you who will hold me responsible either for blood or for property.

-(Tirmizi, Abu Daud, Ibn Majah)

Although the Prophet declined to intervene to fix or control prices, yet steps were taken by him so often to eliminate hoarding, abolish monopolies and forbid speculative business so that prices should not unduly rise.

However, the jurists hold that Islamic government can intervene and fix prices if unscrupulous businessmen, speculators and hoarders have raised prices of food-stuffs and articles of common use by artificially creating scarcity of these things in the market. But the government should not generally interfere in natural flow of prices in free market in normal circumstances.

[Back to the start of this chapter]


[1].      Fazlul-Karim: Al-Hadith.

[2].      Fazlul Karim: Al-Hadith.

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