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1. The Prophetic Economy
بسم اللَّه الرحمن الرحيم وصلى الله على سيدنا محمد وعلى ءاله وصحبه أجمعين وسلّم
Title: The Prophetic Economy
Author: Abdassamad Clarke
Publication date: 18/10/2014
45 • The Question Concerning Economics • Lecture 1 • The Prophetic Economy • 18.10.14 from The Muslim Faculty on Vimeo.
Assalamu alaykum. Welcome to the Civilisation and Society Programme of the MFAS. This is the first of 12 sessions which make up the Question concerning Economics module. The lecture will last approximately 40 minutes during which time you should make a written note of any questions that may occur to you for clarification after the lecture.
الاقتصاد النبوي
The Prophetic Economy
In contemporary discourse ‘economics’ is translated into the Arabic phrase ‘ilm al-iqtiṣād, but the word has other deeper meanings. It comes from the root qaṣada which is to intend or purpose something, and the word has the sense of ‘moderation’. Thus in the hadith:
5431- ما عال من اقتصد. (حم) عن ابن مسعود.
“Whoever is moderate will not be reduced to poverty.”
5433- الاقتصاد نصف المعيشة، وحسن الخلق نصف الدين. (خط) عن أنس.
“Iqtiṣād is a half of livelihood and good character is a half of dīn.”
So we enter a different conceptual zone entirely when we use these Arabic terms, something entirely lacking for modern Arabs. This conceptual and experiential zone has been entirely covered over by the centuries in which many Muslims wished only to emulate Western economics, resulting in our contemporary situation in which Islamic banking is merely a repackaging of conventional banking. It is this fresh foundation that we wish to recover. Its name is the Sunnah.
The Sunnah is the manifestation by the Messenger of Allah, may Allah bless him and grant him peace, of the revelation of the Qur’ān. It is the dīn demonstrated.
The Sunnah of the Prophet, may Allah bless him and grant him peace, has three aspects: fi‘liyya – what he did, qawliyya – what he said whether in command, approval or disapproval or prohibition or granting permission, and iqrāriyya – what was said or took place in his presence that he implicitly endorsed by not repudiating it, thus indicating its permissibility. An example of this latter is the flute player whom the Messenger of Allah, may Allah bless him and grant him peace, did not reprove, although for his own sake he blocked his ears, thus showing the permissibility of flute music and setting an example for the sāliḥīn by keeping a distance from it.
Our study of the Prophetic economy has three sources: the sīrah of Messenger of Allah, may Allah bless him and grant him peace, himself, the sīrahs of al-Khulafā ar-Rāshidūn since we are ordered to take their Sunnah just as we take the Sunnah of the Prophet, may Allah bless him and grant him peace. In particular, the Sunnah of ‘Umar is of significance since most of the great Companions were still alive and where they expressed no opposition it is a sign of their consent and thus many of his rulings reflect a consensus of the Companions.
And the last is the fiqh of the school of Madīnah. We choose this latter because it is based as closely as possible on the actual practice in Madīnah at the time of the Messenger of Allah, may Allah bless him and grant him peace, as transmitted by the later generations within Madīnah and is often a commentary on the Sunnah.
Another term for Sunnah is ‘amal – practice. It comprises two aspects: ‘ibādāt – acts of worship – and mu‘āmalāt – ordinary transactions, such as marriage, divorce, buying, selling, renting, and the laws of inheritance etc. Ordinarily people think of the latter as matters of indifference having no particular other-worldly reward, but the more penetrating people of knowledge make clear that the ordinary transactions can have reward within them depending on the intention of the person who does them. Our paper assumes that we agree that this is a pivotally important area and not a matter of indifference at all.
Before Islam, Quraysh had been traders. They had no agriculture or artisanal activity to speak of. Their winter and summer caravans went to the Yemen and Sham respectively. We know little about what their trade would have been but we can say that in the Yemen they may well have encountered the sailors who had plied the oceans to India, China and East Africa, and could have traded with them. Similarly in Sham, they almost certainly encountered and traded with the Romans who were part of a political empire whose capital was Constantinople but part of a culture that extended into Europe and as far as the borders of Scotland.
Quraysh organised caravans for their trade and there is some suggestion that they might have employed qirāḍ loans, perhaps in ways such as the Venetians did with the community putting their money to work in the trade. We do, however, know that they also accepted usury, since among the very last acts of the Messenger of Allah, may Allah bless him and grant him peace, was to abolish that usury, beginning with that of his own clansmen, al-‘Abbās in particular.
The Prophet, may Allah bless him and grant him peace, himself was brought up in this ambience and undertook at least one caravan journey as a boy and others later when he acted for Khadījah j, whom he subsequently married.
After the revelation of the Qur’ān, we have little evidence of economic activity on his part, may Allah bless him and grant him peace.
‘Umar , may Allah be pleased with him, established the dating of Islam at the suggestion of ‘Alī ibn Abī Ṭālib, may Allah be pleased with him, and upon this there was the consensus of the Companions, as beginning with the Hijrah from Makkah to Madīnah. In other words Islam began in Madīnah in spite of the fact that the revelation began in Makkah. Apart from the foundation of the mosque, two matters mark that beginning: the foundation of the market and the revelation of Sūrat al-Muṭaffifīn.
The latter was the first surah revealed in Madīnah. In other words, with the foundation of the community-city that was to be the model for all subsequent communities, Allah saw that the first matter to draw attention to was the matter of justice in weights and measures.
83|1|بِسْمِ ٱللَّهِ ٱلرَّحْمَٰنِ ٱلرَّحِيمِ وَيْلٌۭ لِّلْمُطَفِّفِينَ ٱلَّذِينَ إِذَا ٱكْتَالُوا۟ عَلَى ٱلنَّاسِ يَسْتَوْفُونَ
وَإِذَا كَالُوهُمْ أَو وَّزَنُوهُمْ يُخْسِرُونَ
The Stinters (al-Mutaffifin) begins with these words: “Woe to the stinters, those who, when they take a measure from people, exact full measure, but when they give them a measure or weight, hand over less than is due.” (83:1-3) Until that moment, the Madinans had thought that Islam consisted of prayer and other religious acts but did not extend to behaviour in the market place. In other words, they thought that Islam was a religion. The first revelation in Madīnah disabused them of this notion. The issue here is disparity in weights and measures. Careful reflection will show that this all-encompassing prohibition also covers usury, because its essence is disparity.
Famously, among the first actions of the Messenger of Allah, peace be upon him, was to found the mosque. It is less well known that at exactly the same time he established the market of Madina and laid down its ground rules. Those rules became the rules of all Muslim markets that were established thereafter.
روى ابن ماجه عن أَبِي أُسَيْدٍ أَنَّ رَسُولَ اللهِ صلى الله عليه وسلم ذَهَبَ إِلَى سُوقِ النَّبِيطِ. فَنَظَرَ إِلَيْهِ، فَقَالَ: (لَيْسَ هذَا لَكُمْ بِسُوقٍ) ثُمَّ ذَهَبَ إِلَى سُوقٍ فَنَظَرَ إِلَيْهِ فَقَالَ (لَيْسَ هذَا لَكُمْ بِسُوقٍ) ثُمَّ رَجَعَ إِلَى هذَا السُّوقِ _ يعني سوقَ المدينة _ فَطَافَ فِيهِ ثُمَّ قَالَ (هذَا سُوقُكُمْ. فَلاَ يُنْتَقَصَنَّ وَلاَ يُضْرَبَنَّ عَلَيْهِ خَرَاجٌ).
Ibn Mājah narrated from Abū Usayd that the Messenger of Allah @ went to the market of Nabīṭ and examined it and said, “This is not a market for you,” and then he went to another market and said, “This is not a market for you,” and then he returned to this market – meaning the market of Madīnah – and went around it and said, “This is your market. Let it not be diminished, and let no tax be imposed on it.”
وفي روايةٍ أخرى رواها الطبراني في الكبير عن أبي أسيد أن رجلاً جاء إلى النبي صلى الله عليه وسلم فقال: بأبي أنت وأمي إني قد رأيت موضعاً للسوق أفلا تنظر إليه؟ قال: "بلى". فقام معه حتى جاء موضعَ السوق فلما رآه أعجبه وركضه برجله وقال:
"نِعْمَ سُوقُكُمْ فَلاَ يُنتَقَضُ وَلاَ يُضْرَبَنَّ عليه خراج".
And in another version which aṭ-Ṭabarānī narrated in al-Kabīr from Abū Usayd also, there is that a man came to the Prophet @ and said, “May my father and my mother be your ransom! I have seen a place for the market; will you not then look at it?” He said, “Certainly.” So he stood up and went with him until he came to the place for the market, and when he saw it he liked it and he stamped on it with his foot and said, “Your market is blessed, so let it not be broken up and let no tax be levied on it.”
وروى في تاريح المدينة عن عطاء بن يسار قال: لما أَراد رسول اللّه صلى الله عليه وسلم أَن يجعل للمدينة سُوقًا أَتى سوقَ بني قَيْنُقَاع، ثم جاء سوق المدينة فضربه برجله وقال: "هذا سوقكم، فلا يُضَيَّقْ، ولا يؤخَذْ فيه خَرَاج" .
It is narrated in Tarikh al-Madīnah from ‘Ata’ ibn Yasar that he said, “When the Messenger of Allah, may Allah bless him and grant him peace, wanted to make a market for Madīnah he went to the market of Bani Qaynuqā‘ and then he came to the market of Madīnah and struck it with his foot and said, ‘This is your market, so it should not be constricted nor should any tax be levied on it.’”
ورُويَ في تاريخ المدينة عن محمدٍ بنِ عبدِ اللهِ بن حسنٍ قال {تصدق رسول اللهِ على المسلمين بأسواقِهِم}
وأمر عمرُ بنُ عبدِ العزيز î أنّه لا كراءَ لأمْكِنَةِ السوق.
It is narrated in Tarikh al-Madinah from Muḥammad ibn ‘Abdullāh ibn Ḥasan that he said, "The Messenger of Allah @ gave the Muslims their markets as a ṣadaqah." Meaning that they are free and that no rent can be charged on them.
‘Umar ibn ‘Abd al-‘Azīz, in conformity with this, ordered that no rents could be charged for space in the marketplace.
In subsequent years, the Prophet, may Allah bless him and grant him peace, set the rules for the market.
‘Umar, may Allah be pleased with him, set the fundamental rule of trade in the market:
لَا يَتَّجِرُ فِي سُوقِنَا إِلَّا مَنْ تَفَقَّهَ
“No one trades in our market except for those who know fiqh.”
He did not mean that only scholars of the sharī‘ah are allowed to trade, but that anyone who embarks on any matter must know the fiqh of that matter before doing so, and thus anyone who goes into the market to trade must know the fiqh of trade.
The Messenger of Allah, may Allah bless him and grant him peace, defined the two key systems of weights and measures when he said:
- حدثنا عُثْمَانُ بنُ أبي شَيْبَةَ أخبرنا ابنُ دُكَيْنٍ أخبرنا سُفْيَانُ عن حَنْظَلَةَ عن طَاوُوسٍ عن ابنِ عُمَرَ قالَ قالَ رَسُولُ الله صلى الله عليه وسلم: "الْوَزْنُ وَزْنُ أهْلِ مَكّةَ وَالمِكْيَالُ مِكْيَالُ أهْلِ المَدِينَةِ".
قَالَ أبُو دَاوُدَ: وَكَذَا رَوَاهُ الْفِرْيَابِيّ وَأبُو أَحْمَدَ عن سُفْيَانَ وَافَقَهُمَا في المَتْنِ، وَقالَ أبُو أَحْمَدَ عن ابنِ عَبّاسٍ مَكَانَ ابنِ عُمَرَ. وَرَوَاهُ الْوَلِيدُ بنُ مُسْلِمٍ عن حَنْظَلَةَ فقالَ: "وَزْنُ المَدِينَةِ وَمِكْيَالُ مَكّةَ".
“The weight is the weight of the people of Makkah and the measure is the measure of the people of Madīnah.” (Ibn ‘Umar narrated it in Abū Dāwūd and an-Nasā’ī.)
That is because the core of the system of weights is the dinar and the dirham which the Makkans knew best as traders, and the core of the system of measures is the ṣā‘ and the mudd, which were best known to the people of Madīnah since they were agriculturalists.
Ibn Khaldun said about the dinar and dirham:
فاعلم أن الإجماع منعقد منذ صدر الإسلام و عهد الصحابة و التابعين أن الدرهم الشرعي، هو الذي تزن العشرة منه سبعة مثاقيل من الذهب و الأوقية منه أربعين درهاً و هو على هذا سبعة أعشار الدينار و وزن المثقال من الذهب اثنتان و سبعون حبة من الشعير فالدرهم الذي هو سبعة أعشاره خمسون حبة وخُمُسَا حبة وهذه المقادير كلها ثابتة بالإجماع
It should be known that since the beginning of Islam and the time of the Companions and the Followers, the legal dirham is by general consensus the one, ten of which are equal to seven mithqal of gold, and an ounce (ūqiyah) of it [silver] is forty dirhams. Thus, the legal dirham is seven-tenths of a dinar. A gold mithqal weighs seventy-two average-sized grains of barley. Consequently, the dirham, which is seven-tenths of a mithqal, has a weight of fifty and two-fifths grains. All these values are reliably established by general consensus.
وقد اختلف الناس هل كان ذلك من وضع عبد الملك أو إجماع الناس بعد عليه كما ذكرناه. ذكر ذلك الخطام في كتاب معالم السنن والماوردي في الأحكام السلطانية و أنكره المحققون من المتأخرين لما يلزم عليه أن يكون الدينار والدرهم الشرعيان مجهولين في عهد الصحابة من بعدهم مع تعلق الحقوق الشرعية بهما في الزكاة و الأنكحة والحدود وغيرها كما ذكرناه و الحق أنهما كانا معلومي المقدار في ذلك العصر لجريان الأحكام يومئذ بما يتعلق بهما من الحقوق وكان مقدارهما غير مستخص في الخارج و إنما كان متعارفاً بينهم بالحكم الشرعي على المقدار في مقدارهما وزنتهما حتى استفحل الإسلام و عظمت الدولة و دعت الحال إلى تشخيصهما في المقدار و الوزن كما هو عند الشرع ليستريحوا من كلفة التقدير وقارن ذلك أيام عبد الملك فشخص مقدارهما و عينهما في الخارج كما هو في الذهن
People differ, however, as to whether that (the value of legal dirhams) was established (only) by 'Abd-al-Malik and by general consensus later on, as we have reported and as was mentioned by al-Khattabi in the Kitab Ma'alim as-sunan and by al-Mawardi in the Kitab al-Ahkam as-sultaniyah. Thorough scholars of recent times reject that because it would imply that legal dirhams and dinars were not known at the time of the Companions and subsequently, even though legal tariffs such as the charity tax, marriage (fees), fixed legal fines, and other such things are based on them, as we have (just) mentioned. The truth is that the value of (legal dirhams and dinars) was known at the (earliest) times (of Islam) for the implementation of laws involving tariffs based on (legal dirhams and dinars), but their value was not individually specified outside. It was an internal custom of the Muslims, which had become accepted under the influence of the religious law, and which used a fixed value and weight for (dirhams and dinars).
أما وزن الدينار باثنتين و سبعين حبة من الشعير الوسط فهو الذي نقله المحققون و عليه الإجماع إلا ابن حزم خالف ذلك و زعم أن وزنه أربع و ثمانون حبة. نقل ذلك عنه القاضي عبد الحق و رده المحققون وعدوه وهماً وغلطاً وهو الصحيح و الله يحق الحق بكلماته
The weight (in gold) of the dinar is seventy-two average sized grains of barley. This is reported by thorough scholars and is the general consensus from which only Ibn Hazm deviates. Ibn Hazm thought that the weight of the dinar is eighty-four grains. This was reported as Ibn Hazm's opinion by Qāḍī 'Abd-al-Haqq. Thorough scholars have refuted (Ibn Hazm's opinion). They considered it an unfounded assumption or an error, and rightly so. "God causes the truth to come true in His words."
It is not obligatory to trade with the dinar and the dirham, but it is obligatory to trade with things that have substance and value such as gold and silver. One may not trade with debts.
The ruling concerning values and pricing
Yaḥyā ibn ‘Umar said in his Aḥkām as-Sūq – Rulings on the Market:
As for your asking me to write something on the business of pricing which should be established on the butchers, bakers and people of the market, of that which the public are in need, as to whether that is permissible or not, and you claim that if they are left without pricing they will destroy the public, Yaḥyā ibn ‘Umar said:
“What is obligatory on all Muslims is to hold fast to the Sunnah and to follow the commands of our Prophet, may Allah bless him and grant him peace and his family, for when they do that and are in accordance with it, everything they love will come to them from their Generous Lord.
وقد أبان ذلك لنا ربنا جل ذكره وتقدست أسماؤه في محكم كتابه، إذ يقول تبارك وتعالى عما يقول الظالمون علواً كبيراً: (( ولو أن أهل القرى آمنوا واتقوا لفتحنا عليهم بركات من السماء والأرض، ولكن كذبوا فأخذناهم بما كانوا يكسبون )) .
“Our Lord, majestic is His remembrance and pure are His names, made that clear to us in the decisive and unambiguous parts of His Book, when He says, blessed is He and greatly exalted is He over that which the wrongdoers say: “If only the people of the cities had had īmān and taqwā, We would have opened up to them blessings from heaven and earth. But they denied the truth so We seized them for what they earned.” (Sūrat al-A‘rāf 7:95).
وقال جل ذكره: (( ولو أنهم أقاموا التوراة والإنجيل وما أنزل إليهم من ربهم لأكلوا من فوقهم ومن تحت أرجلهم )) .
And He, majestic is His remembrance, said, “If only they had implemented the Tawrāh and the Injīl and what was sent down to them from their Lord, they would have been fed from above their heads and beneath their feet.” (Sūrat al-Mā’idah 5:66)
يريد - والله أعلم - لو أنهم عملوا بما أنزل في التوراة والإنجيل وهذا القرآن لأكلوا من فوقهم ومن تحت أرجلهم، يعني - والله أعلم - لأسبغ عليهم الدنيا إسباغاً .
He meant – and Allah knows best – if only they had done that which was revealed in the Tawrāh and the Injīl and in this Qur’ān they would have eaten from above their heads and beneath their feet, meaning – and Allah knows best – He would have given them the world fully.
وقد صح الحديث عن النبي صلى الله عليه وعلى آله وسلم بمثل ما سألتموني عنه، حدثنا مشائخنا سحنون بن سعيد والحارث بن مسكين وأبو الطاهر، عن عبد الله بن وهب، عن ابن لهيعة، عن سليمان بن موسى، أن ثابت البناني حدثه عن أنس بن مالك:
Yaḥyā ibn ‘Umar said: The hadith from the Prophet, may Allah bless him and grant him peace and his family, in a similar sense as that which you asked me about is ṣaḥīḥ: our shaykhs Saḥnūn ibn Sa‘īd, al-Ḥārith ibn Miskīn and Abu’ṭ-Ṭāhir narrated to us from ‘Abdullāh ibn Wahb from Ibn Lahī‘ah from Sulaymān ibn Mūsā that Thābit al-Banānī narrated to him from Anas ibn Mālik:
أن أناساً أتوا رسول الله صلى الله عليه وعلى آله وسلم فقالوا: يا رسول الله سعر لنا أسعارنا، فقال:
(( يا أيها الناس إن غلاء أسعاركم ورخصها بيد الله سبحانه، وأنا أرجو الله أن ألقى الله وليس لأحد عندي مظلمة من مال ولا من دم )) .
That some people came to the Messenger of Allah, may Allah bless him and his family and grant them peace, and said, “Messenger of Allah, set our prices for us.” So he said, “People, your expensive prices and your cheap prices are in the hand of Allah, glorious is He, and I hope from Allah that I meet Allah without having wronged anyone in terms of wealth nor in terms of blood.”1
قال ابن وهب: وأخبرني غيره من أهل العلم أن رسول الله صلى الله عليه وعلى آله وسلم غضب يومئذ حتى عرف فيه ذلك وقال: (( السوق بيد الله يخفضها ويرفعها، ولككن مرهم فليخرجوا متاعهم في البراني، وليبيعوا كيف أحبوا، ولا يسألني الله عن سنة أحدثها فيكم، ولككن اسألوا الله من فضله )) .
Ibn Wahb said, and other people of knowledge informed me, that the Messenger of Allah, may Allah bless him and grant him peace and his family, became angry one day to such an extent that people could recognise that in him, and he said, “The market is in the hand of Allah. He lowers it and raises it, but tell them to bring out their goods into the open, and let them sell however they want, and Allah will not ask me about a Sunnah which I introduce among you; but ask Allah of His bounty.”
وكذلك حدثني من سميت لك من مشايخي، عن ابن وهب قال: سمعت مالك بن أنس يقول: لا يسعر على أحد من أهل السوق، فإن ذلك ظلم، ولكن إن كان في السوق عشرة أصوع فحط هذا صاعاً يخرج من السوق .
Similarly, those I named to you of my shaykhs narrated to me from Ibn Wahb who said: I heard Mālik ibn Anas saying, “Do not set the price for anyone of the people of the market because that would be injurious wrongdoing. However, if there are ten ṣā‘s in the market, and such a one lowers [the price] by a ṣā‘ then he must leave the market.”
قال يحيى بن عمر: هذا الذي آخذ به وأختاره لنفسي، لا يسعر على أحد، وكل من حط من السعر الذي في السوق يخرج، وقد فعل ذلك عمر بن الخطاب - رضي الله عنه -، قال لرجل يبيع زبيباً: إما أن تزيد في السعر وإما أن تخرج من سوقنا .
Yaḥyā ibn ‘Umar said: This is what I take and choose for myself. The price is not to be set for anyone, and everyone who lowers the price that is in the market, must leave, and ‘Umar ibn al-Khaṭṭāb, may Allah be pleased with him, did that. He said to a man selling raisins, “Either you increase the price or you get out of our market.”
وقد بلغني عن بعض أهل المدينة أنه قال: من فعل هذا من الولاة مثلَ ما فعل عمر بهذا الرجل فقد أصاب، ومن أقام على الناس بما في أيديهم من السلع جهل السنة وأثم في القيامة، وأطعم المشتري ما لا يصلح له، وإنما السعر لله يخفضه ويرفعه وليس للناس من ذلك شيء .
It has reached me from one of the people of Madīnah that he said, “Whoever in authority does the same as that which ‘Umar did to this man has struck the mark. Whoever establishes the prices for what goods people have in their hands is ignorant of the Sunnah and will be guilty on the Day of Rising, and he will have fed the purchaser with that which is not his right to have. Prices are only the province of Allah; He lowers them and He raises them and people have no part in that.
ولو أن أهل السوق اجتمعوا أن لا يبيعوا إلا بما يريدون مما قد تراضوا عليه مما فيه المضرة على الناس وأفسدوا السوق كان إخراجهم من السوق حقاً على الوالي، وينظر للمسلمين فيما يصلحهم ويعمهم نفعه ويدخل السوق غيرهم، فإنه إن فعل ذلك معهم رجعوا عما طمحت إليه أنفسهم من كثرة الربح ورضوا من الربح بما يقابلهم نفعه ولا يدخلون به المضرة على عامة الناس .
Yaḥyā ibn ‘Umar said: Even if the people of the market were to unite in agreement that they would not sell anything except for that which they want of that which they are mutually agreed upon of that in which there is some harm for people and they make a disorder in the market, then it is the duty of the man in authority to drive them out of the market, and investigate on behalf of the Muslims that which will put them right and whose benefit will generally encompass them and he should make others go into the market, because if he does that to them they will return from that which their lower selves had aspired to, such as much profit, and they would become contented with that amount of profit whose benefit they would receive, and through which they would not become involved in harming the public.
He refers to the act of Sayyiduna ‘Umar, may Allah be pleased with him:
1905 - وَحَدَّثَنِي عَنْ مَالِكٍ، عَنْ يُونُسَ بْنِ يُوسُفَ، عَنْ سَعِيدِ بْنِ الْمُسَيَّبِ : أَنَّ عُمَرَ بْنَ الْخَطَّابِ مَرَّ بِحَاطِبِ بْنِ أبِي بَلْتَعَةَ، وَهُوَ يَبِيعُ زَبِيباً لَهُ بِالسُّوقِ، فَقَالَ لَهُ عُمَرُ بْنُ الْخَطَّابِ : إِمَّا أَنْ تَزِيدَ فِي السِّعْرِ، وَإِمَّا أَنْ تُرْفَعَ مِنْ سُوقِنَا.
57 Yaḥyā related to me from Mālik from Yūnus ibn Yūsuf from Sa‘īd ibn al-Musayyab that ‘Umar ibn al-Khaṭṭāb passed by Ḥātib ibn Abī Baltha‘a who was underselling some of his raisins in the market. ‘Umar ibn al-Khaṭṭāb said to him, “Either increase the price or you will be ejected from our market.”
This is an example of acting as a muḥtasib or market inspector, and we will look at that later. Thus, the man in authority asks people who are selling above or below the market price to sell at the market price. So, in times of scarcity, traders cannot take advantage and make a fortune. Similarly, the practice of undercutting, which is the basis of all modern commerce is forbidden, i.e. selling cheaply in order to take trade away from others.
Allah, exalted is He, ordered His Prophet, may Allah bless him and grant him peace, to act as a judge between people, and this necessarily includes civil, commercial and criminal matters. In that he set the Sunnah for all qāḍīs ever after.
5|48|وَأَنزَلْنَآ إِلَيْكَ ٱلْكِتَٰبَ بِٱلْحَقِّ مُصَدِّقًا لِّمَا بَيْنَ يَدَيْهِ مِنَ ٱلْكِتَٰبِ وَمُهَيْمِنًا عَلَيْهِ ۖ فَٱحْكُم بَيْنَهُم بِمَآ أَنزَلَ ٱللَّهُ ۖ وَلَا تَتَّبِعْ أَهْوَآءَهُمْ عَمَّا جَآءَكَ مِنَ ٱلْحَقِّ ۚ لِكُلٍّۢ جَعَلْنَا مِنكُمْ شِرْعَةً وَمِنْهَاجًا ۚ
“And We have sent down the Book to you with truth, confirming and conserving the previous Books. So judge between them by what Allah has sent down and do not follow their whims and desires deviating from the Truth that has come to you. We have appointed a law and a practice for every one of you.” (Sūrat al-Ma’idah 5:48)
In many famous hadith, the Prophet, may Allah bless him and grant him peace, laid down the ground rules for justice, such as:
الحديث الثالث والثلاثون
عن ابن عباس رضي الله عنهما ، أن رسول الله صلى الله عليه وسلم ، قال : ( لو يعطى الناس بدعواهم ،لادعى رجال أموال قوم ودماءهم ، لكن البينة على المدعي واليمين على من أنكر).
حديث حسن ، رواه البيهقي [ في (السنن)10/ 252 ] وغيره هكذا ، وبعضه في (الصحيحين).
Hadith 33 from Imām an-Nawawi’s Forty – Claimants and Counter-Claimants
Ibn ‘Abbas k narrated that the Messenger of Allah, may Allah bless him and grant him peace, said, “If people were to be given according to what they claim, men would claim people’s property and blood, but clear evidence is required of a claimant and an oath is required of someone who denies [the claim].” A good hadith which al-Bayhaqi and others related as above, and a part of it is in the two Sahih books.
The meaning of the first part of this hadith is known in English as the ‘burden of proof’:
The burden of proof (Latin: onus probandi) is the imperative on a party in a trial to produce the evidence that will shift the conclusion away from the default position to one's own position.
The burden of proof is often associated with the Latin maxim semper necessitas probandi incumbit ei qui agit, the best translation of which seems to be: "the necessity of proof always lies with the person who lays charges."[1]
A more specific hadith on passing judgement in commercial cases is:
1967 - وَحَدَّثَنِي مَالِكٌ، أَنَّهُ بَلَغَهُ، أَنَّ عَبْدَ اللَّهِ بْنَ مَسْعُودٍ كَانَ يُحَدِّثُ أَنَّ رَسُولَ اللَّهِ a قَالَ : أَيُّمَا بَيِّعَيْنِ تَبَايَعَا، فَالْقَوْلُ مَا قَالَ الْبَائِعُ، أَوْ يَتَرَادَّانِ (114).
80 Mālik related to me that he had heard that ‘Abdullāh ibn Mas‘ūd used to relate that the Messenger of Allah, may Allah bless him and grant him peace, said, “When two parties dispute about a business transaction, the seller’s word is taken, or they agree to annul the sale.”
Thus, the Messenger of Allah, may Allah bless him and grant him peace, was himself the qāḍī and set the Sunnah of acting as a qāḍī for others.
Similarly, the Prophet, may Allah bless him and grant him peace, acted as a muḥtasib thus setting the Sunnah of that. The muḥtasib inspect the markets and keeps an eye on weights and measures and the behaviour in the market in general. Allah mentions his, may Allah bless him and grant him peace, walking in the markets.
25|7|وَقَالُوا۟ مَالِ هَٰذَا ٱلرَّسُولِ يَأْكُلُ ٱلطَّعَامَ وَيَمْشِى فِى ٱلْأَسْوَاقِ ۙ
“They say, ‘What is the matter with this Messenger, that he eats food and walks in the market-place?” (Sūrat al-Furqān 25:7)
An example of his, may Allah bless him and grant him peace, acting as muḥtasib is in this instance:
1329 - حَدَّثَنَا عليُّ بنُ حجرٍ. حَدَّثَنَا إسماعيلُ بنُ جعفرٍ، عن العلاءِ بنِ عبدِ الرَّحمَنِ، عن أبيهِ، عن أبي هُرَيرَةَ؛
- أنَّ رَسُولَ اللَّهِ صلَّى اللَّهُ عليهِ وسَلَّم مرَّ على صُبْرةٍ من طعامٍ. فأدخلَ يدهُ فيها، فَنَالت أصابعهُ بَللاً. فقال "يا صاحبَ الطَّعامِ ما هذا؟" قال: أصابتهُ السماءُ، يا رسولَ اللهِ! قال "أفلا جعلتهُ فوقَ الطَّعامِ حتىَّ يراهُ النَّاسُ" ؟ ثُمَّ قال "من غشَّ فليسَ منَّا".
Abū Hurayrah, may Allah be pleased with him, narrated that the Messenger of Allah, may Allah bless him and grant him peace, passed by a heap of food, and entered his hand into it, and his fingers encountered damp. He said, “Owner of the food, what is this?” He said, “It rained on it, Messenger of Allah.” He said, “Why did you not put it on top of the food so that people could see it?” Then he said, “Whoever deceives/adulterates is not one of us.”
Meeting traders before they reach the market in order to buy up their goods before the people of the market have a chance to is forbidden. In common law it was called forestalling and was similarly forbidden. Indeed, an interesting aspect of this issue is that common law was in many ways identical to the sharī‘ah of the market.
2 - وَحَدَّثَنِي مَالِكٌ، عَنْ أبِي الزِّنَادِ، عَنِ الأَعْرَجِ، عَنْ أبِي هُرَيْرَةَ أَنَّ رَسُولَ اللَّهِ @ قَالَ: لاَ تَلَقَّوُا الرُّكْبَانَ لِلْبَيْعِ،
96 Mālik related to me from Abū az-Zinād from al-A‘raj from Abū Hurayra that the Messenger of Allah @ said, “Do not go out to meet the caravans for trade …”
In essence, most modern business is based on pre-empting the traders getting to the market. The modern businessman buys from the traders before they get to the market, since there no longer is a market, and hoards their goods in his warehouse, then selling at the price he wishes to. The fact that there are a number of such entities, the great supermarket chains, reintroduces some competition into the system, but nevertheless the buyer is at the mercy of people who purchases goods before they get to the market and hoards them.
وَلاَ يَبِعْ بَعْضُكُمْ عَلَى بَيْعِ بَعْضٍ، وَلاَ تَنَاجَشُوا،
“…do not bid against each other, do not bid against each other in order to raise the price…”
That means that when someone has agreed a deal, it is forbidden for someone else to come in with a counter proposal. And it is forbidden for someone to bid up the price not intending to buy but merely to raise the price.
33 - باب النَّهْىِ عَنْ بَيْعَتَيْنِ فِي بَيْعَةٍ
31.33 Prohibition against two sales in one
1941 - حَدَّثَنِي يَحْيَى، عَنْ مَالِكٍ، أَنَّهُ بَلَغَهُ : أَنَّ رَسُولَ اللَّهِ @ نَهَى عَنْ بَيْعَتَيْنِ فِي بَيْعَةٍ.
72 Yaḥyā related to me from Mālik that he had heard that the Messenger of Allah @ forbade two sales in one sale.
1942 - وَحَدَّثَنِي عَنْ مَالِكٍ، أَنَّهُ بَلَغَهُ : أَنَّ رَجُلاً قَالَ لِرَجُلٍ : ابْتَعْ لِي هَذَا الْبَعِيرَ بِنَقْدٍ، حَتَّى أَبْتَاعَهُ مِنْكَ إِلَى أَجَلٍ. فَسُئِلَ عَنْ ذَلِكَ عَبْدُ اللَّهِ بْنُ عُمَرَ، فَكَرِهَهُ وَنَهَى عَنْهُ.
73 Yaḥyā related to me from Mālik that he had heard that a man said to another, “Buy this camel for me immediately so that I can buy it from you on credit.” ‘Abdullāh ibn ‘Umar was asked about that and he disapproved of it and forbade it.
1943 - وَحَدَّثَنِي مَالِكٌ، أَنَّهُ بَلَغَهُ : أَنَّ الْقَاسِمَ بْنَ مُحَمَّدٍ سُئِلَ عَنْ رَجُلٍ اشْتَرَى سِلْعَةً بِعَشَرَةِ دَنَانِيرَ نَقْداً، أَوْ بِخَمْسَةَ عَشَرَ دِينَاراً إِلَى أَجَلٍ، فَكَرِهَ ذَلِكَ وَنَهَى عَنْهُ.
74 Yaḥyā related to me from Mālik that he had heard that al-Qāsim ibn Muḥammad was asked about a man who bought goods for ten dinars cash or fifteen dinars on credit. He disapproved of that and forbade it.
1944 - قَالَ مَالِكٌ فِي رَجُلٍ ابْتَاعَ سِلْعَةً مِنْ رَجُلٍ بِعَشَرَةِ دَنَانِيرَ نَقْداً، أَوْ بِخَمْسَةَ عَشَرَ دِينَاراً إِلَى أَجَلٍ، قَدْ وَجَبَتْ لِلْمُشْتَرِي بِأَحَدِ الثَّمَنَيْنِ، إِنَّهُ لاَ يَنْبَغِي ذَلِكَ، لأَنَّهُ إِنْ أَخَّرَ الْعَشَرَةَ، كَانَتْ خَمْسَةَ عَشَرَ إِلَى أَجَلٍ، وَإِنْ نَقَدَ الْعَشَرَةَ، كَانَ إِنَّمَا اشْتَرَى بِهَا الْخَمْسَةَ عَشَرَ الَّتِي إِلَى أَجَلٍ.
Mālik said that if a man bought goods from a man for either ten dinars cash or fifteen dinars on credit, then one of the two prices was obliged on the buyer. Such a thing was not to be done because if he postponed paying the ten, it would be fifteen on credit, and if he paid the ten, he would buy with it what was worth fifteen dinars on credit.
1945 - قَالَ مَالِكٌ فِي رَجُلٍ اِشْتَرَى مِنْ رَجُلٍ سِلْعَةً بِدِينَارٍ نَقْداً، أَوْ بِشَاةٍ مَوْصُوفَةٍ إِلَى أَجَلٍ، قَدْ وَجَبَ عَلَيْهِ بِأَحَدِ الثَّمَنَيْنِ : إِنَّ ذَلِكَ مَكْرُوهٌ لاَ يَنْبَغِي، لأَنَّ رَسُولَ اللَّهِ @ قَدْ نَهَى عَنْ بَيْعَتَيْنِ فِي بَيْعَةٍ، وَهَذَا مِنْ بَيْعَتَيْنِ فِي بَيْعَةٍ.
Mālik said that it was disapproved of for a man to buy goods from someone for either one dinar cash or for a described sheep on credit and that one of the two prices was obliged on him. It was not to be done because the Messenger of Allah @ forbade two sales in one sale. This was a kind of two sales in the one.
1946 - قَالَ مَالِكٌ فِي رَجُلٍ قَالَ لِرَجُلٍ : أَشْتَرِى مِنْكَ هَذِهِ الْعَجْوَةَ، خَمْسَةَ عَشَرَ صَاعاً، أَوِ الصَّيْحَانِيَّ عَشَرَةَ أَصْوُعٍ، أَوِ الْحِنْطَةَ الْمَحْمُولَةَ خَمْسَةَ عَشَرَ صَاعاً، أَوِ الشَّامِيَّةَ عَشَرَةَ أَصْوُعٍ بِدِينَارٍ قَدْ وَجَبَتْ لِي إِحْدَاهُمَا : إِنَّ ذَلِكَ مَكْرُوهٌ لاَ يَحِلُّ، وَذَلِكَ أَنَّهُ قَدْ أَوْجَبَ لَهُ عَشَرَةَ أَصْوُعٍ صَيْحَانِيًّا، فَهُوَ يَدَعُهَا وَيَأْخُذُ خَمْسَةَ عَشَرَ صَاعاً مِنَ الْعَجْوَةِ، أَوْ تَجِبُ عَلَيْهِ خَمْسَةَ عَشَرَ صَاعاً مِنَ الْحِنْطَةِ الْمَحْمُولَةِ، فَيَدَعُهَا وَيَأْخُذُ عَشَرَةَ أَصْوُعٍ مِنَ الشَّامِيَّةِ، فَهَذَا أَيْضاً مَكْرُوهٌ لاَ يَحِلُّ، وَهُوَ أَيْضاً يُشْبِهُ مَا نُهِيَ عَنْهُ مِنْ بَيْعَتَيْنِ فِي بَيْعَةٍ، وَهُوَ أَيْضاً مِمَّا نُهِيَ عَنْهُ أَنْ يُبَاعَ مِنْ صِنْفٍ وَاحِدٍ مِنَ الطَّعَامِ، اثْنَانِ بِوَاحِدٍ.
Mālik spoke about a man saying to another, “I will either buy these fifteen ṣā‘s of ‘ajwa dates from you, or these ten ṣā‘s of ṣayḥānī dates, or I will buy these fifteen ṣā‘s of inferior wheat, or these ten ṣā‘s of Syrian wheat for a dinar, and one of them is obliged on me.” Malik said that it was disapproved of and was not lawful. That was because he obliged him ten ṣā‘s of ṣayḥānī, and left them and took fifteen ṣā‘s of ‘ajwa, or he was obliged fifteen ṣā‘s of inferior wheat and left them and took ten ṣā‘s of Syrian wheat. This was also disapproved of, and was not lawful. It resembled what was prohibited in the way of two sales in one sale. It was also included under the prohibition against buying two for one of the same sort of food.
But the significance for us of this prohibition is that two sales in one are the basis for most operations of banks and building societies and, in particular, the so-called Islamic banks. It is “buy that house for me and I will buy it from you”. But they skirt the prohibition by the device of a unilateral promise, which is simply a deception. Such deceptions are considered legal by some scholars, but Ibn Juzayy said:
( الأول ) أن يقول رجلا لآخر اشتر لي سلعة بكذا وأربحك فيها كذا مثل أن يقول اشترها بعشرة وأعطيك فيها خمسة عشر إلى أجل فإن هذا يئول إلى الربا لأن مذهب مالك أن ينظر ما خرج عن اليد ودخل به ويلغي الوسائط فكأن هذا الرجل أعطى لأحد عشرة دنانير وأخذ منه خمسة عشر دينارا إلى أجل والسلعة واسطة ملغاة
First, that a man says to another: “Buy me goods for such-and-such and I will give you such-and-such a profit”, for example he says, “Buy it for ten [dinars] and I will give you fifteen for it at a later date” because this leads to usury since the school of Malik is that one looks at what comes out of the hand and what comes into it and one ignores the intermediary steps. So it is as if this man gave someone ten dinars and took fifteen from him [to be repaid] at a later date and the goods were simply an intermediary step which is done away with.
1999 - وَحَدَّثَنِي مَالِكٌ، أَنَّهُ بَلَغَهُ أَنَّ عَبْدَ اللَّهِ بْنَ مَسْعُودٍ كَانَ يَقُولُ : مَنْ أَسْلَفَ سَلَفاً، فَلاَ يَشْتَرِطْ أَفْضَلَ مِنْهُ، وَإِنْ كَانَتْ قَبْضَةً مِنْ عَلَفٍ، فَهُوَ رِباً.
94 Mālik related to me that he had heard that ‘Abdullāh ibn Mas‘ūd used to say, “If someone makes a loan, they should not stipulate better than it. Even if it is a handful of grass, it is usury.”
We have seen how trade provides the backdrop for the early years of the Prophet, peace be upon him. We have also seen what concern the very earliest revelations in Madina showed for trade and the market. Equally, this is underlined at the end by the prohibition of usury, which was the last of the shari’a to be revealed: “But Allah has permitted trade and He has forbidden riba” (2:275). Usury – riba – is defined linguistically as ‘increase’ or ‘disparity’. That means extra in the exchange of quantities of gold, silver, or particular foodstuffs that are weighed or measured. Almost all modern banking and finance transactions are based on increase in the exchange for some and loss for others.
Profit is not the same as disparity. Trade is not the same as usury. “Allah has permitted trade and He has forbidden usury.” (Surat al-Baqara 2:275) There are numerous ways for people who are industrious or entrepreneurial to earn profit including qirad profit-sharing investment in trade or in acting as agents in wakala transactions or in seeking a markup on one’s price for work done or for transporting the goods from city and city.
Credit and Payment in Advance or Deferred Payment
The prohibition of usury was the last of the sharī‘ah to be revealed:
وَأَحَلَّ ٱللَّهُ ٱلْبَيْعَ وَحَرَّمَ ٱلرِّبَوٰا۟
“But Allah has permitted trade and He has forbidden riba” (2:275).
Usury – riba – is defined linguistically as ‘increase’ or ‘disparity’. That means extra in the exchange of quantities of gold, silver, or particular foodstuffs that are weighed or measured. Almost all modern banking and finance transactions are based on increase in the exchange for some and loss for others.
But āyat 281 in Surat al-Baqara shares something with the āyats on usury because some scholars also say that it is the very last āyat to be revealed. It is the longest āyat in the Qur’an. It is about debt, or you might say ‘credit’, since one man’s debt is another’s credit.
2|282|يَٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ إِذَا تَدَايَنتُم بِدَيْنٍ إِلَىٰٓ أَجَلٍۢ مُّسَمًّۭى فَٱكْتُبُوهُ ۚ...
282 You who believe, when you take on a debt for a specified period, write it down…
وَٱتَّقُوا۟ ٱللَّهَ ۖ وَيُعَلِّمُكُمُ ٱللَّهُ
Have taqwa of Allah and Allah will give you knowledge.
While this āyat does govern personal debts, the cause of the original revelation and its real significance relate to advancing credit commercially. That means it regulates delayed payment for goods that have already been delivered or, conversely, allowing for payment in advance for goods to be delivered later. These two uses are the lifeblood of trade and have been so throughout history. Such credit transactions in trade outweigh cash payments considerably. Credit is permissible when no charge is made for it.
Fascinatingly, the context was that the people of Madīnah made payment in advance for future crops. But this was not the establishment of a ‘futures market’ in which crops are sold repeatedly before they have been planted. Rather, when someone pays in advance for a crop he cannot resell it until he has taken possession of the crop itself, thus preventing the kind of speculative futures market that today artificially drives prices ever higher, making the prices of basic food commodities unreachable for poor people.
Allah, exalted is He, says:
“You who believe, when you take on a debt for a specified period, write it down.” (Sūrat al-Baqarah 2:282)
Al-Qurṭubī said:
The words of Allah “You who believe, when you take on a debt …" Sa‘id ibn al-Musayyib said, “It has reached me that the newest āyat from the Throne is the ayat of debt". Ibn ‘Abbas said, “This āyat was revealed about payment in advance in particular." That means that the advance payment of the people of Madinah was the cause for the revelation of the āyat.
His words, exalted is He, “a specified period". Ibn al-Mundhir said, “The words of Allah ‘a specified period’ show that payment in advance for an unspecified period is not permitted.” The Sunnah of the Messenger of Allah, may Allah bless him and grant him peace, shows the same as does the Book of Allah, exalted is He. It is reliably established that the Messenger of Allah, may Allah bless him and grant him peace, came to Madinah when they were paying two or three years in advance for fruits [such as olives etc.] and the Messenger of Allah, may Allah bless him and grant him peace, said, “Whoever pays in advance for fruits, let him pay in advance for a known measure and a known weight for a known period.” Ibn ‘Abbas narrated it and al-Bukhari and Muslim and others published it.
Thus the Prophetic period in Madīnah began with two decisive matters relating to business, one the revelation of Sūrat al-Mutaffifin and the other the establishment of the market, and it concluded with two decisive revelations related to business. In between there were many revelations with respect to business practice and the Prophet , may Allah bless him and grant him peace, himself set the Sunnah of business and commerce on many occasions, thus underscoring the importance of trade and business in the dīn.
That brings us to the end of my lecture. The best work on this matter are the chapters on business transactions in the Muwaṭṭa’ of Imām Malik. Thank you for your attention. Assalamu alaykum.
Muwaṭṭa’ of Imām Mālik
Aḥkām as-Sūq, Yaḥyā ibn ‘Umar, translated by Abdassamad Clarke (as yet unpublished)
Jāmi‘ al-Aḥkām, al-Qurṭubī
Al-Qawānīn al-Fiqhiyyah, Ibn Juzayy al-Kalbi
1 This is also narrated by aṭ-Ṭabarānī 1:261, No.761 .
760- حَدَّثَنَا الْمِقْدَامُ بن دَاوُدَ الْمِصْرِيُّ ، حَدَّثَنَا النَّضْرُ بن عَبْدِ الْجَبَّارِ ، حَدَّثَنَا ابْنُ لَهِيعَةَ ، عَنْ سُلَيْمَانَ بن مُوسَى الدِّمَشْقِيِّ ، عَنْ ثَابِتٍ الْبُنَانِيِّ ، أَنَّ أَنَسَ بن مَالِكٍ حَدَّثَهُ ، أَنَّ أُنَاسًا أَتَوُا النَّبِيَّ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ ، فَقَالُوا : سَعِّرْ لَنَا أَسْعَارًا يَا رَسُولَ اللَّهِ ، فَقَالَ رَسُولُ اللَّهِ صَلَّى اللَّهُ عَلَيْهِ وَسَلَّمَ : إِنَّ غَلاءَ أَسْعَارِكُمْ وَرُخْصِهَا بِيَدِ اللَّهِ عَزَّ وَجَلَّ ، إِنِّي لأَرْجُو أَنْ أَلْقَى اللَّهَ عَزَّ وَجَلَّ ، وَلَيْسَ لأَحَدٍ مِنْكُمْ قِبَلِي مَظْلَمَةٌ فِي مَالٍ وَلا دَمٍ.
أَنَسُ بن مَالِكٍ الْقُشَيْرِيُّ يُكْنَي أَبَا أُمَيَّةَ وَيُقَالُ أَبُو مَيَّةَ كَانَ يَنْزِلُ الْبَصْرَةَ