Islamic Economics

Islamic Economics

One blessing among the countless blessings of Allah is that He has made the earth obedient to mankind. Letting him benefit from it in many ways.

Land to grow crops to fulfil his hunger. Rivers to drink from. Different materials to provide him with shelter and much more.

“He it is, Who has made the earth subservient to you (i.e. easy for you to walk, to live and to do agriculture on it, etc.), so walk in the path thereof and eat of His provision, and to Him will be the Resurrection”
(Qur’an 67:15)

It is also duty of man to exert himself throughout the earth in order to seek the bounties of Allah.

Thus it is not permitted for a Muslim male to avoid working, if he is able bodied, due to laziness nor can he become a house husband and send his wife to work whist he stays at home looking after the children. But rather it is his wife’s duty to stay at home look after the children and the household and for the Husband to provide for her and their children.

However one should not go to the other extreme neglecting his families needs and his prayers in the pursuit of wealth. but rather everything should be balanced.

His wealth should not be earned by indulging haram (forbidden) work which includes dealing in interest, selling alcohol, drugs, stealing nad gambling.

Insha’ Allah in this section we will deal with what is Lawful and what is unlawful in Islam with regards employment and business transactions.

Faulty Product
Price Inflating
Trading on Jummah
Not Paying Loans
Cheating Employee
Bribery Gifts
Seizing Land
Haram Wealth
Changing Money


Consuming riba (usury or interest)

In the Qur’an, Allah does not declare war on anyone except the people who deal in riba (interpretation of the meaning):

“O you who believe! Be afraid of Allah and give up what remains (due to you) of riba (from now onward), if you are (really) believers. And if you do not do it, then take a message of war from Allaah and His Messenger.” [al-Baqarah 2:278-279]

This is sufficient to explain the abhorrence of this deed in the sight of Allah, may He be glorified.

One may easily discern the extent of devastation, at the individual and the international level, caused by dealing with riba – such as bankruptcy, recession, economic stagnation, inability to repay loans, high unemployment, collapse of many companies and institutions, etc. Daily toil has become a never-ending struggle to pay off interest on loans and societies have become class-ridden structures in which huge wealth in concentrated in the hands of a few. Perhaps all this is a manifestation of the war threatened by Allah to those who deal in riba.

Everyone who has something to do with riba, whether he is one of the main parties involved or is a middleman or facilitator, has been cursed by Muhammad (peace be upon him). Jaabir (may Allah be pleased with him) reported that the Messenger of Allah (peace be upon him) called “the one who consumes riba, the one who gives it to others, the one who writes it down and the one who witnesses it.” He said: “They are all the same.” (Reported by Muslim, 3/1219). Based on this, it is not permitted to do work that involves writing interest-based contracts and conditions, paying or receiving riba, depositing it or guarding it. Generally speaking, it is haraam to be directly or indirectly be involved with riba in any way, shape or form.

The Prophet (peace and blessings of Allah be upon him) was keen to explain the ugliness of this major sin. ‘Abdullaah ibn Mas’ood (may Allah be pleased with him) reported that the Prophet (peace and blessings of Allaah be upon him) said: “There are seventy-three types of riba, the least of which is as abhorrent as a man having intercourse with his own mother and worst of which is [violating] a Muslim’s honor and sanctity. (Reported by al-Haakim in al-Mustadrak, 2/37); see also Saheeh al-Jaami’, 3533). ‘Abdullah ibn Hanzalah (may Allah be pleased with him and his father) reported that the Prophet (peace and blessings of Allaah be upon him) said: “Knowingly consuming a dirham of riba is worse for a man than committing adultery thirty-six times.” (Reported by Imaam Ahmad, 5/225; see also Saheeh al-Jaami’, 3375). The prohibition on riba does not just apply to deals between rich and poor, as some people think; it is a general prohibition that applies to every person and every situation. How many rich people and big businessmen have gone bankrupt because of riba. The least harm riba does is to destroy the blessing (barakah) of the money, even if a person’s wealth is great. The Prophet (peace and blessings of Allah be upon him) said: “Even if riba is much, it will end up being a small amount.” (Reported by al-Haakim, 2/37; see also Saheeh al-Jaami’, 3542). This does not refer to whether the ratio of interest is high or low; all riba is haraam, and the one who deals with it will be raised up on the Day of Resurrection like the one who stands beaten by Shaytaan resulting in insanity and epilepsy.

In spite of the enormity of this sin, Allah has told us to repent from it and has explained how. Allah says to those who deal in riba (interpretation of the meaning): “. . . but if you repent, you shall have your capital sums. Deal not unjustly (by asking more than your capital sums), and you shall not be dealt with unjustly (by receiving less than your capital sums).” [al-Baqarah 2:279] This is quintessential justice.

The believer must despise this major sin and feel its abhorrence, even if he puts his money in interest-based banks because he has no other choice and is afraid that his money may be lost or stolen otherwise. He should feel that he is being compelled by necessity to do this, like one who eats dead meat, or worse. At the same time, he should seek the forgiveness of Allah and try to find an alternative if he can. He is not permitted to ask the bank for interest, and if the bank deposits it in his account, he must get rid of it in whatever way is permissible. This money cannot be counted as sadaqah (charity), because Allaah is pure and accepts only that which is pure. He cannot benefit from this money by using it to by food, drink, clothing, transportation or housing; he cannot use it to fulfil obligations such as spending on his wife, child or parents, or to pay zakaat or taxes, or to defend himself in court. Rather, he should just get rid of it, for fear of the wrath of Allah.

Concealing a product’s faults at the time of sale

The Prophet (peace and blessings of Allah be upon him) once passed by a pile of food that was for sale. He put his hand in it and felt dampness, so he asked, “What is this, O seller of the food?” He said, “It was rained on, O Messenger of Allah.” The Prophet (peace be upon him) said: “Why don’t you put it on top, so that people can see it? Whoever deceives (the people) is not one of us.” (Reported by Muslim, 1/99).

There are many traders nowadays who do not fear Allah, and try to conceal faults by wrapping it in plastic, putting faulty produce in the bottom of the box, using chemicals and the like to make a product look good, or concealing noises in engines that may indicate a fault – so that when the purchaser brings a product home, it soon starts to wear out. Some traders change expiry dates, or prevent the buyer from examining or trying out a product. Many of those who sell cars or other types of equipment do not point out the product’s faults. All of this is haraam, as the Prophet (peace be upon him) said: “The Muslim is the brother of his fellow Muslim. The Muslim is not permitted to sell to his brother anything which is faulty without pointing out the faults to him.” (Reported by Ibn Maajah, 2/754; see also Saheeh al-Jaami’, 6705). Some traders think that their responsibilities end when they tell buyers at an auction, “I’m selling a pile of metal, a pile of metal…” This is a sale in which there is no blessing, as the Prophet (peace be upon him) said: “The two parties involved in a sale have the choice (to end it, i.e. the sale is not final) until they part. If both have been truthful and honest about any faults, the sale will be blessed, but if they have lied and concealed any faults, the blessing of the sale will be lost.” (Reported by al-Bukhaari; see al-Fath, 4/328).

Artificially inflating prices

This mentions artificially inflating the price with no purpose of buying, in order to trick others, pushing them to add more to the price then they are offering. The Prophet (peace be upon him) said: “Do not artificially inflate prices.” (Reported by al-Bukhaari, see Fath al-Baari, 10/484). This is undoubtedly a form of deceit, and the Prophet (peace be upon him) said: “Double-dealing and cheating will end in Hell.” (See Silsilat al-Ahadith al-Saheehah, 1057). Many salesmen at auctions and in car salesrooms are earning unclean and haraam income because of the many haraam things that they do, such as conspiring to artificially inflate prices and deceive purchasers, or to lower the price of one of their products, or conversely pretending to be customers and raising the prices at auctions to deceive and cheat.

Trading after the second call to prayer on Friday

Allah says (interpretation of the meaning): “O you who believe! When the call is proclaimed for the salaat (prayer) on the day of Friday (Jumu’ah prayer), come to the remembrance of Allah and leave off business (and every other thing), that is better for you if you did but know!” [al-Jumu’ah 62:9].

Some people continue trading in their stores and in front of the mosque even after the second call to prayer; those who buy from them also share in their guilt, even if they only buy a siwaak (natural toothbrush). According to the soundest opinion, this sale is invalid. Some owners of restaurants, bakeries and factories force their employees to work at the time of Jumu’ah prayers; even if this leads to an apparent increase in earnings, they will ultimately be losers in reality. The employee is obliged to act in accordance with the teaching of the Prophet (peace and blessings of Allah be upon him): “There is no obedience to a created being if it involves disobedience to Allah.” (Reported by Imaam Ahmad, 1/129; Ahmad Shaakir said: its isnaad is saheeh, no. 1065).


Allah says (interpretation of the meaning):

“O you who believe! Intoxicants (all types of alcoholic drinks), gambling, al-ansaab (sacrifices to idols, etc.), and al-azlaam (arrows for seeking luck) are an abomination of Shaytaan’s handiwork. So avoid (strictly all) that abomination, in order that you may be successful.” [al-Maa’idah 5:90]

Gambling was very common during the Jaahiliyyah; in one of the most well-known forms of gambling, ten people would buy a camel, each paying an equal share, then they would throw down arrows – a form of drawing lots. Seven people would win unequal shares and three would be left empty-handed.

Nowadays there are many forms of gambling, including:

lotteries and raffles, in which people pay money to buy numbers, then numbers are drawn for first prize, second prize, and so on for a variety of prizes. This is haraam, even when it is supposedly done for charity.

Buying a product which includes something unknown, or paying for a number for a draw which will decide who gets what.

Another modern form of gambling is insurance, such as life insurance, car insurance, product insurance, insurance against fire or theft, third party insurance, comprehensive insurance, and others. There are so many types of insurance that some singers even insure their voices!

All of the above are forms of gambling. Nowadays there are even clubs that are devoted exclusively to gambling, in which there are so-called “green tables” (roulette tables) just for people to commit this sin. Other forms of gambling include betting on horse races and other sports, fruit-machines and the like in amusement centres, and competitions in which the victors win prizes, as a group of scholars have stated.


Allah says (interpretation of the meaning): “Cut off (from the wrist joint) the (right) hand of the thief, male or female, as a recompense for that which they have committed, a punishment by way of example from Allah. And Allah is All-Powerful, All-Wise.” [al-Maa’idah 5:38]

One of the worst forms of this sin is theft from the pilgrims who come on Hajj and Umrah to the Ancient House of Allah. This kind of thief has no respect for the limits set by Allah in the best region on earth and around the House of Allah. In the report about Salaat al-Kusoof (the eclipse prayer), it is reported that the Prophet (peace be upon him) said: “Hell was brought near, and that was when you saw me stepping backwards, because I feared that its heat would touch me. I saw there that the man with the crooked stick dragging his intestines in the Fire. He used to steal from the hujjaaj (pilgrims) with his crooked stick. If they spotted him, he would say ‘This got caught on my stick,’ and if they did not spot him, he would take whatever he had stolen . . .”

Another of the worst forms of theft is stealing from the public purse. Some of those who do this say “We are only doing what others do.” They do not realize that what they are doing is effectively stealing from all the Muslims, because the public purse belongs to all the Muslims. Imitating those who do not fear Allah is no excuse. Some people steal from the wealth of the kuffaar on the grounds that they are kuffaar, but this is wrong; the only kuffaar whose wealth we are allowed to take away are those who are actively fighting the Muslims, which does not apply to every kaafir individual or company.

Another form of theft is pick-pocketing, stealing something from a person’s pocket without him realizing. Some thieves enter people’s houses as visitors, and steal from them. Some steal from their guests’ bags. Some including women go into stores and hide things in their pockets or under their clothing. Some think that the theft of small or cheap items is of little consequence, but the Prophet (peace be upon him) said: “Allah has cursed the thief who steals an egg and has his hand cut off, and the thief who steals a rope and has his hand cut off.” (Reported by al-Bukhaari, see Fath al-Baari, 12/81).

Everyone who steals something must first regret to Allah then return the item to its rightful owner, whether openly or secretly, in person. If he fails to find the rightful owner or his heirs after much effort, then he should give the property in charity, with the intention that the reward should be given to the rightful owner.

Offering or accepting bribes

Giving a bribe to a judge to make him turn a blind eye to the truth or to make a false claim succeed is a sin, because it leads to injustice for the person who is in right, and it spreads corruption. Allah says (interpretation of the meaning):

“And eat up not one another’s property unjustly, not give bribery to the rulers that you may knowingly eat up a part of the property of others sinfully.” [al-Baqarah 2:188]

Abu Hurayrah (may Allah be pleased with him) reported that the Prophet (peace be upon him) said: “Allah has cursed those who give and accept bribes with regard to judging.” (Reported by Imaam Ahmad, 2/387; see also Saheeh al-Jaami’, 5069). However, payments made in order to reach the truth or avert injustice when there is no other way of doing so are not included in this warning.

Bribery is so widespread today that its more of a source of income than the regular salary for some workers. Some companies even include bribes as a factor in their budgets, under a variety of headings, and some dealings cannot begin or end without the payment of a bribe. Much harm is caused to the poor and many safeguards are broken because of bribes. Bribery is a cause of corruption where employees act against their employers, and one can only get good service if one pays a bribe, the person who refuses to pay will get late service, and people who come after him but are willing to pay will be served before him. Because of bribery, a great deal of money which is due to employers ends up in the pockets of sales representatives and those responsible for making company purchases. It is little wonder, then that the Prophet (peace be upon him) prayed to Allah to strip all those involved of His Mercy. ‘Abdullah ibn ‘Amr (may Allah be pleased with him) said: “The Messenger of Allah (peace be upon him) said: ‘The curse of Allah be upon the ones who give a bribe and the ones who accept it.” (Reported by Ibn Maajah, 2313; see also Saheeh al-Jaami’, 5114).

Apprehend land by force

When there is no fear of Allah, strength and cunning are a disaster because the one who possesses these qualities uses them to oppress others, such as apprehending other people’s possessions, including their land. The punishment for this is extremely severe. ‘Abdullaah ibn ‘Umar reported that the Prophet (peace and blessings of Allah be upon him) said: “Whoever apprehends any piece of land illegally, on the Day of Resurrection Allah will make the ground swallow him up to the seventh depth of the earth.” (Reported by al-Bukhaari; see al-Fath 5/103).

Ya’laa ibn Murrah (may Allah be pleased with him) reported that the Prophet (peace be upon him) said: “Any man who apprehends a hand span of land, Allah will tell him to dig it (according to al-Tabaraani: to bring it) to the seventh depth of the earth, then it will be placed around his neck on the Day of Resurrection, until Allah has finished judging mankind.” (Reported by al-Tabaraani in al-Kabeer, 22/270; see also Saheeh al-Jaami’, 9/27).

This also includes changing landmarks and boundaries in order to make one’s own land bigger at the expense of a neighbour, as is indicated by the words of the Prophet (peace be upon him): “Allah has cursed the one who changes the boundary markers of the land.” (Reported by Muslim, with commentary by al-Nawawi, 13/141).

Accepting a gift in return for intervene

To have a position of high standard among people is one of the blessings of Allah to His slaves, if he is grateful. One way in which a person may give thanks for this blessing is by using his position to benefit other Muslims. This is part of the general meaning of the hadith: “Whoever among you is able to benefit his brother, then let him do so.” (Reported by Muslim, 4/1726).The person who uses his position to benefit others by preventing injustice or bringing some good, without doing anything that is haraam and infringes on the rights of others, will be rewarded by Allah, as long as his intention is sincere, as the Prophet (peace be upon him) told us: “Intervene, you will be rewarded.” (Reported by Abu Dawud, 5132; the hadith is also reported in al-Saheehayn, see Fath al-Baari, 10/450, Kitaab al-adab, Baab ta’aawun al-mu’mineen ba’duhum ba’dan).

It is not allowed to accept anything in return for this intercession. Evidence for this may be seen in the hadith narrated by Abu Umaamah (may Allah be pleased with him): “Whoever intercedes for someone then accepts a gift (in return for it), has committed a serious type of riba.” (Reported by Imaam Ahmad, 5/261; see Saheeh al-Jaami’, 6292).

Some people offer the opportunity to benefit from their position, in return for a sum of money, in order to help someone get a job, or a transfer from one office or area to another, or treatment for the sick, etc. The soundest opinion is that this exchange is haraam, because of the hadeeth of Abu Umaamah quoted above, whose apparent meaning is that accepting such gifts is wrong, even if no agreement was previously made. (From the spoken statements of ‘Abd al-’Azeez ibn Baaz). The reward which the doer of good will receive from Allaah on the Day of Judgement should be sufficient. A man came to al-Hasan ibn Sahl asking him to intercede for him in some matter, which he did; then the man came to thank him. Al-Hasan ibn Sahl said to him, “Why are you thanking us? We believe that zakaat is due on positions of rank just as it is due on wealth.” (Ibn Muflih, al-Aadaab al-Shar’iyyah, 2/176).

It is worth pointing out here that there is a difference between hiring someone to do legal paperwork for you and paying him wages in return, which has to do with the legitimate hiring of labour, and using a person’s position to intercede for you in return for money, which is haraam.

Hiring someone and benefitting from his labour, then not paying him his wages

The Prophet (peace be upon him) encouraged quick payment of wages to people hired for their labour. He said: “Give the hired man his wages before his sweat dries.” (Reported by Ibn Maajah, 2/817; see also Saheeh al-Jaami’, 1493).

One form of injustice is common in Muslim societies is the failure to give workers their rights. This takes many forms, for example:

Denying an employee’s rights, where the employee has no proof of his rights. He may have lost his dues in this world, but he will not lose them before Allah on the Day of Resurrection. So the oppressor who consumed the money due to the victim will be brought forth, and his victim will be given some of his hasanaat in compensation (i.e. some of the oppressor’s good deeds will be added to his victim’s credit). If the hasanaat are not enough, some of the victim’s sayi’aat (bad deeds) will be added to the oppressor, then he will be thrown into Hell.

Not giving the employee his full rights. Allah says (interpretation of the meaning): “Woe to al-Mutaffifeen [those who give less in measure and weight (decrease the rights of others)].” [al-Mutaffifeen 83:1] One example of this action is of some bosses who bring workers from their homelands with a contract to pay a certain wage. Once the people are committed and have started to work for him, he then goes and changes the contracts, altering them to state a lower wage than the one actually agreed upon. The employees stay because they have no choice and have no proof of their rights; all they can do is complain to Allah. If the employer is a Muslim and the employee is not, this lowering of wages is a way of turning people away from the Straight Path, and he will carry his sin.

Making the employee do extra work or put in longer hours, without paying him overtime or giving him any more than the basic salary.

Some bosses put off payment of wages and only pay up after much struggle, complaining, chasing and court cases. Their aim may be to make the employee give up his claim to his rightful wages and stop asking; or they may want to invest this money, perhaps by lending it for interest. Meanwhile, the poor employee cannot buy his daily bread or send anything home to his needy wife and children for whose sake he left to work overseas. Woe to those oppressors on that painful Day! Abu Hurayrah reported that the Prophet (peace be upon him) said: “Allah says: ‘There are three whom I will oppose on the Day of Resurrection: a man who gives his word, swearing by Me, then breaks it, a man who sells a free man into slavery and keeps the money, and a man who hires another and benefits from his labour, then does not pay him his wages.” (Reported by al-Bukhaari, see Fath al-Baari, 4/447).

Asking people for money when one is not in need

Sahl ibn al-Hanzaliyyah (may Allah be pleased with him) reported that the Messenger of Allah (peace and blessings of Allah be upon him) said: “Whoever asks people for money when he has what is sufficient for him is only asking for more of the embers of Hell.” They asked him, “O Messenger of Allah, what is sufficient so that he does not have to ask for more?” He said: “Having enough to eat lunch and dinner.” (Reported by Abu Dawud, 2/281; see also Saheeh al-Jaami’, 6280). Ibn Mas’ood (may Allah be pleased with him) reported that the Messenger of Allah (peace be upon him) said: “Whoever asks the people for money when he has what is sufficient for him will come on the Day of Judgement with scratches on his face.” (Reported by Imaam Ahmad, 1/388; see also Saheeh al-Jaami’, 6255).Some beggars come to the mosques, interrupting people’s worship with their complaints; some of them lie, bringing forged papers, telling stories; some of them distribute their family members around different mosques, then they regroup and move on to other mosques. Some of these people may in fact be well-off, to an extent which only Allah knows; only when they die do others find out what they have left behind. Meanwhile, there are others who are truly in need, but people are not aware of it and may think they have enough, because they are too proud and do not beg of people at all; nobody knows their true situation so no-one gives them charity.

Seeking a loan with no intention of paying it back

The dues owed by one person to another are very important in the sight of Allah, so much so that if a person falls short in his duties towards Allah, he may be forgiven if he regrets, but when it comes to the rights of other people, he has to fulfil them before the Day comes when dinars and dirhams will not be avail, and only hasanaat and sayi’aat (good and bad deeds) will count. Allah says (interpretation of the meaning):

“Verily, Allah commands that you should render back the trusts to those to whom they are due . . .” [al-Nisaa’ 4:58]

One of the widespread problems in our society is this casual approach to loans; some people take out loans not for some urgent need but because they want to expand their businesses or keep up with others by buying new cars or furniture or other temporary luxuries of this life. Often these people let themselves in for the confusion of installment plans, which are dubious or maybe even haraam.

A casual approach to loans leads people to delay repayments, which in turn leads to loss and financial ruin of others. Warning of the consequences of this deed, the Prophet (peace and blessings of Allah be upon him) said: “Whoever takes people’s money with the intention of paying them back, Allah will pay him back, but whoever takes people’s money with the intention of wasting it, Allah will destroy him.” (Reported by al-Bukhaari; see Fath al-Baari, 5/54).People take the matter of loans very lightly, but in the sight of Allah it is a serious matter, so much so that even the shaheed, with his immense reward and high status, is not free of the consequences of debt. Evidence of this is seen in the hadith: “Glory be to Allah, Who has revealed the seriousness of debt. By the One in Whose hand is my soul, if a man were slain in the way of Allah, then brought back to life, then killed again and brought back to life again, then killed a third time, but he owed a debt, he would not be admitted to Paradise until his debt was paid off.” (Reported by al-Nisaa’i; see al-Mujtabaa, 7/314, and Saheeh al-Jaami’, 3594). Now will these squanderers be deterred from such a casual approach?

Consuming haraam wealth

The person who does not fear Allah does not care where he earns his money or how he spends it; his only concern is to increase his bank balance, even if it is haraam by means of theft, bribery, extortion, selling haraam things, riba, consuming an orphan’s wealth, earnings from haraam work like fortune-telling, immorality or singing, stealing from the Muslim treasury or public property, taking people’s money by or high-pressure sales tactics, begging when one is not in need, etc. Then he buys food, clothing and transportation with this haraam money, and builds or rents a house, and furnishes it, and fills his stomach with haraam food. The Prophet (peace and blessings of Allah be upon him) said: “Any flesh that grows from haraam gains is more deserving of being touched by Hell-fire . . .” (Reported by al-Tabaraani in al-Kabeer, 19/136; see also Saheeh al-Jaami’, 4495). On the Day of Resurrection, each person will be asked how he earned money and on what he spent it, and there will be doom and loss. Anyone who still has haraam money should hasten to get rid of it; if it is due to anyone else, then he should hasten to return it and ask for his forgiveness before there comes a Day on which dinars and dirhams will not be avail, and all that will count will be hasanaat and sayi’aat.

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