Islamic Economics

To this very day, the scholars of the Economic discipline debate the use of, or the means of determining, “minimum wage”.  In its most rudimentary form, wage is not just the concept of money paid to an individual but rather the tangible amount of value assigned to the intangible value of human labor.  Every school of Economic from the Mercantilists in the 18th century to the Neoclassicalists and Institutionalists today have tried with limited success to determine the true economic value of labor.  .  In Ayatollah Muhammad Baqir as-Sadr’s Iqtisaduna (“Our Economics”) we find Islam’s solution to this problem, predating even the Mercantilists.  The value of labor greatly differsgreatly between Capitalistic school of thought and the Islamic school because the worker is perceived differently.  We will use the wage each school appropriated to the workers as a gauge of their value in that respective school and then review Islamic Economic principles as imparted by Ayathollah Sadr. In Iqtisaduna, we find that human labor, , “is that of an end, not that of the means”1.   Rather than understanding the laborer as a tool that creates a product, the laborer is the owner of his or her produced item.  The owner of any tools or materials used by the laborer should be compensated but is not entitled to the product.  The laborer, not the investor, is central in the Islamic view - because the accumulation of wealth is not the objective.  It will, naturally be a byproduct as we are encouraged to produce as much as we are able and use our materials to their fullest extent.  After all, the Messenger of Allah once said “Riches are the prime help to [attain] the fear of Allah”.  We are encouraged to spend, not hoard, and spend on the only best items.  We are encouraged to create an economically comfortable society. Our only condition is that we accomplish this with justice and by our own efforts because our objective, as Muslims, is to elevate humanity in all fields – moral or material.  Those whose objective is the sheer accumulation of wealth are referred to where Imam as-Sadiq (a.s.) said “the love of this world is the head of every sin”.  We should produce with a greater goal than wealth in mind.  The wealth we obtain should be used in the way of God, to help fellow man.  Ayatollah Sadr eloquently says “Islam wants a Muslim to strive for the increasing of wealth in order to gain mastery over it and to derive the benefit from it through its creation, not to let it get mastery over him, surrender to it the rein of leadership and to obliterate the great objectives set before him”2. While Islamic Economics focuses on the laboring masses, it is clearly not Socialist as private enterprise is vital.  Furthermore, Islamic Economic policies may be structured similarly to Capitalistic policies, however, accumulation of wealth to the point of hoarding is contradictory to Islam.  Production in an Islamic economy heavily emphasizes the psychological motive of man to produce.  Islamic doctrine aims to inspire man into productive activity.  Labor is placed in high esteem and is correlated with one’s dignity, prestige and position with Allah.  Imam as-Sadiq (a.s.) once deemed a man who toils and uses God-given strength to feed his family a greater devotee than a man who remains at home, engaged in prayers. We are expected, by Allah, to produce much and often.  To labor with the Islamic objective in mind is a powerful form of worship. Throughout the history of Western Economic thought, theorists have attempted to determine the true value of labor. The objective of determining wage is still sought in the current socially conscious society.  As the perception of the worker has changed through the ages, the value of their product has also changed.  From subsistence level, wages to a wage floor that continues to rise, the worker has been realized as an integral part of the economy.  What Islam established centuries ago solves the current wage conundrum.  Capitalism has established that the worker’s wage cannot be determined; Islam attributes this problem to the incorrect perception of the worker.  The worker cannot be viewed as a tool but only as the foundation of the economy. While Capitalism rejects any notion against economic freedom, Islamic Economics rejects any notion against economic injustice, thus placing the economy in the worker’s hands.

 

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