In Islam wealth is only a trust given to us during our short term on earth. The real owner of all we own is God, which makes each and every one of us only a trustee or custodian. One day we all have to account for how we spent our wealth to the real master of our possessions – God Almighty Himself.
As the Qur’an says:
Believe in God and His Messenger and spend of that whereof He has made you trustees
Since God is the Real Master of all that we own, it is only right that we spend it the way He would have us spend it. Although He gives us the freedom to use our possessions for our wellbeing and enjoyment, he demands that we reserve a portion of it as alms for the poor. Thus when we give in charity, we give to God. Charity is in a sense our sacrifice to God, not burnt offerings as was demanded of the Hebrews of old. Why because we do it for God and God alone. When we help the poor we serve God. It’s simple as that!
The Holy Book stresses on the importance of charity again and again, so much so that one feels that a day ought not to pass without engaging in some form of charity:
It is not righteousness that you turn your faces towards the east or west; but it is righteousness to believe in God and the Last Day, and the Angels, and the Book and the Messengers; to spend of your substance, out of love for Him, for your kin, for orphans, for the needy, for the wayfarer, for those who ask, and for the ransom of slaves
Truly man was created impatient-fretful when evil touches him, and niggardly when good reaches him. Not so those devoted to prayer; those who remain steadfast in their prayer; and those in whose wealth is a recognized right for the (needy) who asks and him who is prevented (for some reason from asking)
(The Ways of Ascent:19-25)
Fear God as much as you can, listen and obey, and spend on charity for the benefit of your own souls. And those saved from the covetousness of their own souls – they are the ones that achieve prosperity
(Mutual Loss and Gain:16)
The Qur’an severely admonishes those who fail to take care of the poor, equating this act to the denial of religion itself:
Have you not seen him who denies the faith? It is he who repulses the orphan and encourages not the feeding of the poor
(The Neighbourly Assistance:1-3)
It does not stop at this, but threatens Divine retribution for those who hoard up wealth while assuring those who help others with their wealth of the supreme bliss of Paradise, like when it describes the Devotees of God as those who feed, for the love of God, the indigent, the orphan and the captive (saying) “We feed you for the sake of God alone. No reward do we desire from you, nor thanks. We only fear a Day of distressful wrath from the Side of our Lord” assuring them “God will deliver them from the evil of that Day, and shed over them a Light of Beauty and Blissful Joy” (Man: 8-11). On the other hand, we are told that the Fire of Hell would pluck out (the evildoers) right to the skull, inviting (all) such as turn their backs and faces (from the Right) and collect (wealth) and hide it (from use) (The Ways of Ascent:15-18).
When we give in charity we have always to bear in mind that we give for the sake of God and He alone. A tradition related by the Prophet to his companions has it that the best charity given is that which is given in secret, so that none knows of it except God:
The angels asked, “O God! Is there anything of Thy creation stronger than rocks?” God said, “Yes; iron is stronger than rocks, for it breaketh them.” The angels said, “O Lord! Is there anything of Thy creation stronger than iron?” God said, “Yes; fire is stronger than iron, for it melteth it.” And the angels said, O defender! Is there anything of Thy creation stronger than fire?” God said, “Yes; water overcometh fire; it killeth it and maketh it cold.” Then the angels said, “O Lord! Is there anything of Thy creation stronger than water?” God said, “Yes; wind overcometh water: it agitateth it and putteth it in motion.” They said, “O our cherisher! Is there anything in Thy creation stronger than wind?” God said, “Yes, the children of Adam, giving alms; that is, those who give with their right hands and conceal if from their left, they overcome all”
However Islam goes further. It declares that a certain portion of one’s wealth is due to the poor not as charity, but as an obligation to the poor, in other words an alms tax:
Those in whose wealth is a recognized right for the (needy) who asks and him who is prevented (for some reason from asking)
(The Ways of Ascent: 24-25 )
This due share the Qur’an speaks about is the payment of the Zakat or Alms Tax which it obliges every Muslim man and woman to pay as a duty towards their less fortunate brethren. Indeed in Islam, the Zakat occupies a place only second in importance to the Salat or Prayer Service:
This is the Book whereof there is no doubt, a guidance to those who are pious, who believe in the unseen and keep up prayer and spend out of what we have bestowed upon them
The believers, both men and women, are guardians one of another; they enjoin good and forbid evil, keep up prayer, pay the Alms Tax and obey God and His Messenger
The Qur’an lays down that such alms are due to the poor, those in debt, for the wayfarer and for God’s cause, to free captives and to win the hearts of those who have recently embraced Islam:
Alms are for the poor and the needy, and those employed in its administration, and for those whose hearts have (recently) been reconciled to the truth, for those in bondage and in debt; in the cause of God, and for the wayfarer
In the early days of Islam, the Zakat was paid to the Baitul Maal or Public Treasury whence it was disbursed to deserving persons and communities to uplift their lot. It was also used for the benefit of wayfarers and to free captives taken in Holy War as ordained in the Qur’an. Depending on the need, the Zakat could also be chanelled into social services like free medical treatment for the poor and welfare measures to meet the needs of weak or sick people.
In this sense, the Zakat differed from the other taxes of the time in that it was meant to tax the rich for the benefit of the poor. This was so unlike the Europe of the Middle ages where levying taxes was the prerogative of the rich who mercilessly taxed the poor, keeping them in a perpetual state of penury.
On the other hand, Islam proclaimed that the Zakat was a tax on the well-to-do for the benefit of the less fortunate sections of society. The Qur’an envisions a society where there is a continuous circulation of wealth rather than accumulation, in other words a redistribution of wealth:
What God has bestowed on His Messenger from the people of the townships, belongs to God, to His Messenger and to the kindred and the orphans, the needy and the wayfarer; in order that it may not make a circuit between the wealthy among you
Once the Prophet was asked by a companion: “Has God ordered you to take Zakat from our rich people and distribute it among our poor people?”. He replied: “By God, yes” (Saheeh Al-Bukhari). On another occasion he said: “When you pay your alms, you pay the rights of what you owe to the poor in your wealth” (Tirmidhi).
In Islamdom unlike in mediaeval Europe there was no need for folk heroes like Robin Hood to emerge to champion the rights of the masses against the robber barons. Why, because the Islamic rulers were obliged to take from the rich to give the poor, not in an illegal fashion, but in a totally acceptable divinely sanctioned manner. Poverty was a fact of life in most parts of the world in those benighted times, but Islamdom made all possible efforts to alleviate or eliminate it altogether to realize the Islamic ideal of economic justice for all. It shone like a light in those days when Europe was still in a feudal state where the serfs toiled on their masters’ lands only to be paid just enough to meet their daily needs, and often not even that, making them a little better than the slaves of the Roman Empire.
Let me give you just one example from the early days of Islam. One night the Caliph Umar on his usual nightly rounds in Medina to see how his people were faring, came across a woman and some children in a house. The children were crying and he espied a pot on the fireplace. When he asked the woman why the children were crying, she replied: “Out of hunger”. Umar’s eyes welled with tears when he found out that it was not soup the woman was boiling, but water with stones, so that the children would go to sleep thinking that they were going to have a meal. He rushed to the stores where the charity was kept, personally filling a large sack with provisions and carried it upon his shoulders to the family. When his companion Aslam offered to shoulder the sack, he refused saying: “I will carry it. I will be asked about these children in the hereafter”. He did not stop at that. He went to the house and did the cooking, blowing the fire and stirring the soup at the same time so that the smoke kissed his beard. He then personally dished out the soup to the children and stayed there until the children started to laugh and play.
Indeed, even those of other faiths were given monies for their upkeep if they could not fend for themselves. Once Umar was passing along a street when he saw an old blind beggar. “To which community do you belong?” asked the concerned Caliph, to which the man replied: “I am a Jew”. Umar asked: “And what has constrained you to the condition I see you in?”. The Jew replied: “I have to pay the poll tax (imposed on Non-Muslims) and I am poor and old”. Hearing this, the shocked Caliph took the man by his hand and led him to his house to give him something from his own savings. He then sent word to the public treasury: “Look after him and people like him. By God, we would never be doing justice if we eat out of his youth and desert him in his old age” (Kitab Al Kharaj). On another occasion, while returning from Damascus, he saw some Christian lepers and ordered they be given charity and stipends to sustain themselves from the public treasury (Futuh Al Buldan, Al Baladhuri).
So you will find that the ideal welfare states emerged not in Europe or Asia, but in the Middle East, in the days of the Islamic Caliphs. For example in the reign of the Umayyad Caliph Umar Bin Abdulaziz his governors could not find enough poor folk to distribute the alms due. Why? Because there were very few poor people around. So perturbed were the governors that they asked the Caliph what was to be done with the funds the state had collected from the rich. Contrast this attitude with the Catholic Church that accumulated so much wealth through tithes collected from the ordinary public and the patronage of an oppressive royalty that it was looked upon not as a benefactor but as an exploiter of the poor as in the days of the French Revolution. It’s still very much the case. Little is it known that while mother Theresa was ministering to the dying in Calcutta, the Church she served was the largest multi-national corporation in the world, holding billions of dollars, but nay, they would not even part with a little portion of it to save the people dying of starvation in front of the good lady’s eyes while at the same time portraying her as some sort of saint, as if her only duty was to care for the dying, not save them, as if they were children of a ‘lesser god’.
Even in the modern world, if the Zakat is collected properly and dispensed accordingly, either directly or as welfare services it could serve as the ideal tool for uplifting the poor. Zakat after all is not a small sum. It amounts to as much as one fortieth of one’s capital saved and invested over a given year. This includes monetary currency in any form, precious metals, trade goods, food crops and livestock, but excludes land, houses, vehicles, furniture, clothing and machinery used by a person.
Although 2.5 percent of one’s savings or invested wealth may at first impression seem a small sum, you must remember that it has to be calculated yearly and given accordingly, gradually depleting the wealth of those who do not put it to productive uses. It may thus be viewed as a mechanism against the accumulation of wealth, prompting those who possess it to put it to good use in productive ventures that are likely to create more wealth.
Zakat helps build a bond between the rich and the poor, bridging the gap between them in a manner acceptable to both. One of the biggest conflicts in human societies throughout history has been the conflict between rich and poor which we call by the name of class struggle. Wealth has a tendency to accumulate and once acquired by some tends to work to the detriment of others unless it is checked by some social mechanism. In most societies, the rich wish to maintain the status quo and tend to look down on the poor. The poor in turn may grudge and envy the rich, especially in a situation where they cannot get out of their poverty however hard they try and hence lead miserable lives day after day. This is what is called the poverty trap, where everything seems to go against the poor, from the laws of the land to lending practices to marriage preferences. Do you find the rich marrying into the poor? Nay, hardly ever. That’s the stuff fairy tales are made up of. In such a context, it is alms that bridges the gap between rich and poor, bonding one to the other like no other.
Since Zakat is an obligatory duty and given for the sake of God, the giver cannot regard his act as a favour he does for his less fortunate brethren nor is the receiver under obligation to the giver. He receives his Zakat as a right. Zakat bridges the gap between the haves and the have-nots, that is to say it mitigates the inequalities arising out of free enterprise so that the needy reach a level of sufficiency so essential for maintaining social harmony.
Besides the obligatory payment of Zakat, the Qur’an encourages believers to freely give in charity to their less fortunate fellows and warns those who hoard wealth of a terrible doom:
Spend of what We have bestowed upon you before death comes to any of you and he should say: “O my Lord! Why didst Thou not give me respite for a little while? I should then have given in charity, and I should have been among the doers of good”. But to no soul will God grant respite when the time appointed has come
They who hoard up gold and silver and spend it not in the way of God, unto them give tidings of a grievous penalty. On the Day when it will (all) be heated in the Fire of Hell, and their foreheads and their flanks and their backs will be branded therewith (and it will be said to them): “Here is that which ye hoarded for yourselves. Now taste of what ye used to hoard”
(The Repentance: 34- 35)
The Prophet also stressed so much on the importance of charity, like when he declared:
Generosity is a tree in Paradise whose branches extend to the world. Whoever catches a branch of it, it takes him to Paradise. Miserliness, on the other hand, is a tree in Hell, whose branches are in the world. Whoever grabs it, it takes him to Hell
He often adviced his beloved wife Ayisha:
Show compassion to the poor! Keep them near to you so that God keeps you near to Him on the Day of Judgement Never turn away a beggar empty-handed from your door. Protect yourself from the hellfire even with half a date
On another occasion, he remarked that there were even angels especially sent to bless those who gave alms and curse those who withheld it from the needy:
There is never a day wherein the servants (of God) get up at morn, but are visited by two angels. One of them says: “O God, give him more who spends” and the other says: “O God, bring destruction to the one who withholds”
Money not well spent becomes a curse to its owner, just as bread stored for a long time becomes mouldy and grain is devoured by vermin, so does accumulated wealth decrease in blessing. Like unused iron that gathers rust it becomes a curse to its holder. Love of wealth is like a thief- a thief who steals the rights of the poor over your wealth and in fact steals your very salvation. Love of wealth is an addiction, a craving which is hard to move away from, because the more you have, the more you want, until you don’t even know why you want so much. It’s like a thirsty sailor drinking seawater, the more he drinks, the more he thirsts, till the salt in it kills him. Love of wealth is a disease, a rot that eats into your eye so that you are blind to the plight of people around you who suffer due to poverty. It is a cancer that blackens your heart, for when one gives money a place in one’s heart rather than its due place in the wallet and charity, it becomes a poison that corrupts the heart to its core so that nothing good is left in it. Charity prevents all this with one stroke.
As in everything, Islam seeks a balance. The Jews you know had an excessive craving for wealth which is why even today you will find people saying that Jews are good at making money by hook or by crook. Shakespeare’s Shylock epitomizes this type of person. They left no stone unturned in finding ways to make money, even resorting to a religious license to charge usury from non-Jews despite being prohibited from doing so from their own kind: Unto a stranger thou mayest lend upon usury, but unto thy brother thou shalt not lend upon usury (Deuteronomy 23:20). Jesus who was sent to reform the Jews was on the other hand, so other worldly that he preached against worldly possessions in very strong terms, such as when he once told a rich man who came to him to give up all his wealth, upon hearing which the man’s face changed and he went away. Jesus then told his followers: “It is easier for a camel to pass through the eye of a needle than a rich person to enter the Kingdom of God”. When those who heard it asked: “Then who can be saved?” he replied: “What is impossible for men is possible for God” (Matthew 19:24 -26). The great teacher he was, all Jesus wanted to do was impress on his fellows the need to control one’s love for wealth, but of course even the most zealous of his followers find it hard to part with all their wealth.
Islam takes a middle path which is more in keeping with prudence and human nature. It does not require that we give up all our wealth for the sake of God, but just a portion of our superfluous wealth after all our needs have been met. In the days of the Islamic Caliphate, charity was so common that not only the wealthy classes, but even the rulers who could not touch the public funds for their own use, engaged in it. For instance in the early days of the Ottoman Empire, Sultan Mohamed, the Conqueror of Constantinople handed over a hundred shops that he had earned through the sweat of his brow to a charitable foundation and in its charter laid down that the poor folk of the city who could not make it to the soup kitchen for some reason or other, should have their food taken to their homes in closed containers after it is dark, so that they will not be humiliated for receiving charity.
His subjects likewise did all in their power to protect the honour of the poor. They put their alms in envelopes into what were known as charity stones – stones with holes on their top somewhat like a pillar box. These were placed in mosques and the poor would resort to these to get some money whenever they needed. It was a completely anonymous affair where the rich knew not who the recipients were and the poor knew not who their beneficiaries were. That only God knew!
While Islam encourages the giving of charity, it also seeks to minimise dependence on it by able-bodied beneficiaries so that its benefits flow to the really destitute sections of society, in other words, persons who are not in a position to fend for themselves. A man of the Ansar once came to the Prophet and begged from him. The Prophet asked: “Have you nothing in your house?’. The man replied: “Yes, a piece of cloth, which we wear, or which we spread (on the ground), and a wooden bowl from which we drink water”. The Prophet said: “Bring them to me”. The man brought these articles to the Prophet and he took them in his hands and asked the assembly of people: “Who will buy these?”. A man said: “I shall buy them for one dirham”. He asked twice or thrice “Who will offer more than one dirham?”. Another man said: “I shall buy them for two dirhams”. The Prophet gave these to him and took the two dirhams, and giving them to the man of the Ansar said: “Buy food with one of them and hand it to your family, and buy an axe and bring it to me”. The man brought him the axe and the Prophet with his own hands fixed a handle on to it and giving it to the man said: “Go, gather firewood and sell it, and do not let me see you for a fortnight”. The man went away and gathered firewood and sold it. When he had earned ten dirhams, he came to him and bought a garment with some of it and food with the others. The Prophet then told him: “This is better for you than that begging should come as a spot on your face on the Day of Judgement. Begging is right only for three people; one who is in grinding poverty, one who is seriously in debt, or one who is responsible for compensation and finds it difficult to pay” (Aboo Dawood).
Islam lays down a comprehensive moral framework for attaining its goal of a welfare state, from condemning wasteful spending so that society can benefit more from charity and productive spending, to prohibiting usury or charging of interest so that its aims are not undermined. Although God enjoins upon man to spend out of his wealth for the benefit of his fellow creatures instead of hoarding it to the point of miserliness, it also condemns wasteful spending in no uncertain terms:
And render to the kindred their due rights, as to those in want, and to the wayfarer. But squander not in the manner of a spendthrift. Verily spendthrifts are the brothers of the devils and Satan is to His Lord (Ever) Ungrateful
(The Nocturnal Journey: 26-27)
Wealth is after all a trust from God and has to be discharged in a manner that is acceptable to Him. Likewise earning wealth is subject to certain restrictions for the good of man himself, to prevent him from exploiting his fellow man. Foremost among these restrictions is the charging of interest or usury. Although today’s dictionaries define usury as exorbitantly high interest, usury in its original sense meant interest whether less or more and I stick to this definition. Even Church Law in Europe defined interest whether high or low as usury and its modern application is the
handiwork of Jewish bankers who wanted to take Christendom down to the path of usury, despite it being prohibited in the Bible:
You shall not demand interest from your countrymen on a loan of money or of food or of anything else on which interest is usually demanded” (Deuteronomy 23:20).
In Ezekiel we read that the one who oppresses the poor and needy and lends at interest and exacts usury shall not live, and that he shall surely die (Ezekiel 18:12-13). Likewise other faiths also condemned usury in very strong terms. The Zend Avesta, the scripture of the ancient Persians called usury the ‘worst sin’. Why because it has throughout been a tool for oppression and exploitation of man by man.
Likewise Islam prohibits usury and condemns it in the severest terms. God says in the Qur’an:
Those who devour usury will not stand (before God) except like one whom Satan has driven to madness by his touch. Because they say: “Trade is like usury”. Whereas God has permitted trade and forbidden usury. He that receives admonition from his Lord and mends his ways shall not be punished for the past. His case is for God (to judge); but he that pays no heed shall be among the People of the Fire and shall abide in it. God will deprive usury of all blessing but will bestow increase for charity. He bears no love for the ungrateful sinner
O ye who believe! fear God and give up what remains of your demand for usury if ye are indeed believers. If you do it not, take notice of war from God and his Messenger: but if ye turn back ye shall have your capital sums; deal not unjustly and ye shall not be dealt with unjustly
The Prophet went even further, classing those who receive, pay, record and witness interest payment as being all alike when he cursed all involved in it. Why because one needs to exist for the other to thrive:
The one who consumes interest, the one who gives it to others,the one who writes it down and the one who witnesses it. They are all the same
Usury leads to accumulation of wealth by a few privileged people, so that the poor masses are deprived of even the little wealth they have and in a sense become enslaved by the rich and powerful. Being indebted is bad enough, but to pay an extra payment on top of that is worse and it becomes all the more worse when these moneylenders work as a team calling themselves by the name of a bank. Then it becomes organized like a cartel, giving them a hold over the rest of society, to thrive at their expense and to suck their life-blood away drop by drop so that they have nothing left.
When we consider the ill effects of interest on human society, we can only agree with the Divine wisdom behind its prohibition. Needless to say, taking interest is ethically and morally wrong. It leads to a situation where the one who possesses wealth, instead of working or putting his monies to productive use by his own mental and physical exertion, chooses to live a life without labour by drawing on the sweat of others to increase his wealth, in other words “to suck the blood” of his less fortunate fellows.
One must also bear in mind that those who seek monies from others usually do so for a good reason, such as to meet the basic needs of themselves or their families in times of hardship, or if they have reached a higher level of subsistence, for some productive venture that could contribute to the good of society as a whole. As such, demanding a payment on top of the capital lent, increasing day by day due to one’s inability to repay, is nothing but a sledgehammer against the less fortunate sections of society, a tool for exploitation of the already downtrodden. Adding to this exploitative nature of interest must be mentioned its cumulative effects over time. Usury is an abuse of money itself, because money is intended to be used in exchange, as a medium of exchange instead of resorting to barter, like say, trading a sheep for wheat, not to be used to generate more money. It goes against the nature of things. It also amounts to selling time, which is God’s alone, which makes it all the more reprehensible.
Although the West with its highly sophisticated banking system likes to hide the fact, interest is nothing but an oppressive tool that seeks to make the rich richer at the expense of the poor, in the process widening the gap between the haves and have-nots, leading to social conflict that can take a heavy toll on society as a whole.
There is also reason to believe that interest contributes to inflation unlike the seasonal inflation that depends on the scarcity of goods at given times. This is because borrowers of capital who have borrowed on interest have to adjust their accounting books for increased liability, resulting in increased prices of saleable assets, whether goods or services. In an economy running on this basis, prices will increase with each cycle of lending, leading to a continuous trend of increase in prices which in turn reduces the purchasing power of ordinary people. Needless to say, it is mostly the poor and needy who are affected by rising prices. Such inflation is also a form of exploitation as it eats into the little money the poor have, daylight robbery if I may say so. The ultimate beneficiaries of this entire exercise are the bankers and lenders and depositors of money and nobody else. Can there be a greater injustice than this, I ask you?
So you might wonder, what the solution is? Simple, proper collection and distribution of Zakat monies so that all levels of society attain a level of self-sufficiency to engage in productive undertakings so that the need for borrowing for one’s basic needs does not arise. As for those who seek access to credit to embark on some business or industrial venture, Islam provides viable alternatives to interest-based loans including outright loans without any interest component whose repayment the state will guarantee:
And loan to God a beautiful loan, and whatever good you send forth for your souls, you shall find it in God’s Presence- Yea, better and greater in reward
(The Enfolded One:20)
And if this is not sophisticated enough to meet today’s financial needs for capital, an entire banking system based on Islamic values has recently emerged to fulfill the need sans of course the interest component. Rather it is based on the principle of profit and loss-sharing where the investors reap whatever profit they get from their venture while sharing the risk in proportion to their investment. What better, more equitable business proposition than this?
It ensures that those who have the money also take a risk which they can bear, as should actually be the case, rather than vesting their monies for a fixed rate of interest in a banking concern which will make a profit on top of it by lending at a higher rate of interest to cash-strapped entrepreneurs who in turn will take all the risk while passing on the interest component to unsuspecting consumers who will have to bear the brunt of it all by having to pay a higher price for their goods.
Even the West is now coming to realize its benefits, which is why the Vatican had this to say in its newspaper L’Ossevatore Romano: The ethical principles on which Islamic Finance is based may bring banks closer to their clients and to the true spirit which should mark every financial service.