Author: M. Farahi Tojegi
A Concise Overview of the History and Ideologies of Communism (Part 17)
The Economy during the Era of the Prophet Muhammad (PBUH):
When a person establishes the foundation of his life within the framework of a society, he seeks a livelihood and gradually settles down, striving to provide a decent and comfortable life for himself and his family. As long as life in that environment remains secure and manageable, he devotes his energy to acquiring wealth, meeting basic needs, and discovering more profitable avenues for income.
However, there are times when circumstances compel a person to make a choice—between staying at any cost or leaving at any cost. This is precisely what happened to the Muslims at the dawn of Islam. Though they had lived in Mecca for years and established businesses and trade in its markets, they were eventually forced to secretly migrate to Madina to preserve their faith and beliefs—abandoning everything and everyone. Some even had to leave their families behind in Mecca and journey alone to Madina. In this context, relinquishing property and wealth to be looted by enemies was considered a minimal sacrifice for the sake of faith and ideals. Moreover, Muslims in Mecca faced economic sanctions, mistreatment by idolaters, and other challenges that made earning a decent income increasingly difficult.
A New Life in Madina:
The emigrants settled near the Prophet’s Mosque (Masjed) and accepted modest shelters in the land of migration. The Prophet Muhammad (PBUH) took several initiatives to improve their economic conditions, resulting in a relative prosperity for all. In the subsequent years, the emigrants acquired housing, jobs, and income—not only meeting their own expenses but also generating surplus income, opening the doors to a better life.
The Prophet’s Economic Measures during the Early Years of Migration
1. Establishing Brotherhood Between Emigrants and Helpers (Ansar): This created mutual responsibilities, including the obligation of each Ansari brother to provide financial assistance to his emigrant counterpart.
2. Contracting Musaqat and Muzara’ah Agreements: While the Ansar initially intended to give away half of their wealth to the emigrants, the Prophet (PBUH) discouraged this and instead facilitated agricultural partnerships. These arrangements not only generated employment and boosted agricultural and orchard productivity but also increased public income. [1]
3. Promoting Trade and Commerce: At first, trade was monopolized by the Quraysh, and Muslims were barred from commercial activities. Through strategic actions such as disrupting the Quraysh’s trade security at the Battle of Badr and capturing their caravans, the Prophet (peace be upon him) obtained spoils of war which, after allocating one-fifth (khums), were distributed among the soldiers. [2)
Sources of Revenue in the Prophet’s Government:
Thanks to these initiatives, the Muslims’ financial situation improved, and the Islamic government established multiple revenue streams:
1. Private Wealth:
Including voluntary charity (infaq) and interest-free loans (qard al-hasan), emphasized in Quranic verses and Prophetic traditions.
2. Public Wealth:
• Kharaj: A land tax on agricultural lands owned or occupied by Muslims. For example, the Prophet (peace be upon him) sent agents to estimate the produce of Khaybar and collect taxes accordingly. [3]
• Jizya: A tax levied on non-Muslims who, while benefiting from security, public services, and financial protection under the Islamic state, chose not to convert to Islam. For instance, the Prophet (peace be upon him) collected 300 dinars annually from the people of Eilat, who were 300 in number. [4]
• Other sources: Ransom payments, endowments (waqf), vows (nadhar), expiations (kaffarah), lost-and-found property (luqatah), alms (Zakat), unclaimed wealth, and state-owned economic activities.
3. Government-Owned Wealth:
Includes state ownership over anfal such as mines, forests, pastures, lands, and royal properties.
Government Expenditures:
The public treasury (Bayt al-Mal) functioned as the national treasury, with revenues designated for specific purposes. The Prophet (peace be upon him) followed this approach. The main areas of expenditure included:
1. Security Expenses:
The Prophet (peace be upon him) planned and successfully executed numerous military expeditions (ghazawat and sariyya) to ensure public safety. The government’s income was used to finance equipment, provisions, and manpower.
2. Missionary Activities:
After every military victory, he would send educators to teach Islamic principles in the newly conquered regions. For instance, after conquering Mecca, he appointed ‘Attab ibn Asid as governor and sent Mu’adh ibn Jabal to teach Islamic rulings. [5]
3. Welfare Expenditures: Part of the treasury was allocated to help the poor and underprivileged manage their lives.
4. Infrastructure Development: These included housing land allocation, marketplace designation, building public baths, and more.
5. Educational Expenses: The Prophet (peace be upon him) placed great emphasis on education. After the Battle of Badr, he declared that any prisoner who taught ten people to read and write would be freed. [6]
6. Military Expenditures: A significant portion of public funds was used for military needs like weapons, provisions, and logistics. In some cases, the Prophet (peace be upon him) even borrowed weapons from non-Muslims—for example, he borrowed a hundred armors and other supplies from Safwan ibn Umayyah during the Battle of Hunayn. [7]
The Prophet’s Strategies for Economic Development
The Prophet (peace be upon him) took various steps to ensure the people’s economic welfare, including:
Curbing Inflation:
One major cause of inflation is the role of unnecessary middlemen. Eliminating such intermediaries is key to price stabilization. The Prophet (peace be upon him) said: “Do not go out to meet merchandise before it enters the market.” “A townsman should not act as an intermediary for a villager’s goods.” [8]
These actions helped prevent price inflation, protected traders from being cheated due to lack of information, and ensured that goods were available to the general public. [9]
He also prohibited hoarding, stating: “Whoever hoards food for forty days has disassociated from Allah, and Allah has disassociated from him.” [10]
Additionally, the Prophet (peace be upon him) appointed market supervisors—Sa’id ibn al-‘As for Mecca and ‘Umar for Madina. [11]
Solving Unemployment and Encouraging Work: Despite his role as the divine messenger, the Prophet (peace be upon him) himself engaged in agriculture and trade and encouraged others to work. He said: “Allah hates the idle person who neither works for his worldly needs nor for the Hereafter.”
One narration mentions a man who repeatedly asked for help, and each time, the Prophet (peace be upon him) replied: “If you seek help, we will assist you, but if you strive to be self-sufficient, Allah will make you independent.” [11]
Eventually, the man took an axe, gathered firewood, sold it, and gradually became wealthy.
Promoting Fair Pricing: Once, the Prophet (peace be upon him) asked a man who sold goods cheaper than the market rate: “Do you sell for a lower price to gain reward?” [11]
He answered yes. The Prophet (peace be upon him) then said: “Whoever strives to invigorate the market is like one who fights in the path of Allah.” [12]
Establishing Marketplaces: The Prophet (peace be upon him) also paid attention to market locations. When someone showed him a proposed marketplace, he approved it and said: “This is a good market area—free from harm and not subject to taxes.” [13]
Continues…
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References:
[1] Al-Bayhaqi, Al-Sunan al-Kubra, n.p., Dar al-Fikr, n.d., Vol. 6, p. 116.
[2] Al-Waqidi, Al-Maghazi, Beirut, Al-‘Ilmi Institute, 1409 AH, Third Edition, Vol. 1, pp. 18 & 377; Ibn Sa’d, Al-Tabaqat al-Kubra, Beirut, Dar al-Kutub al-‘Ilmiyyah, n.d., Vol. 2, p. 7.
[3] Ibn Hisham, Al-Sirah al-Nabawiyyah, Beirut, Dar al-Ma‘rifah, n.d., …
[4] Al-Waqidi, ibid., p. 786.
[5] Al-Waqidi, Al-Maghazi, ibid., Vol. 3, p. 889; Ibn Sa’d, ibid., Vol. 2, p. 104.
[6] Ibn Sa’d, ibid., Vol. 2, p. 16.
[7] Ibn Hisham, ibid., Vol. 2, p. 440; Al-Ya‘qubi, Tarikh al-Ya‘qubi, Beirut, Dar al-Sadir, n.d., Vol. 2, p. 62.
[8] Al-Maqrizi, Imta‘ al-Asma‘, Beirut, Dar al-Kutub al-‘Ilmiyyah, 1420 AH, Vol. 14, p. 388.
[9] Hariri, Muhammad Yusuf, Islam and the Economic System, Amiri Publications, 1983 [1362 Solar Hijri], p. 188.
[10] Ahmad ibn Hanbal, Musnad Ahmad, Beirut, Dar Sader, Vol. 2, p. 33; Ibn Hazm, Al-Muhalla, n.p., Dar al-Fikr, n.d., Vol. 9, p. 64.
[11] Halabi, Al-Sirah al-Halabiyyah, Beirut, Dar al-Ma‘rifah, 1400 AH, Vol. 3, p. 424.
[12] Al-Suyuti, Al-Jami‘ al-Saghir, Beirut, Dar al-Fikr, 1401 AH, Vol. 1, p. 559.
[13] Al-Tabarani, Al-Mu‘jam al-Kabir, Cairo, Dar Ihya’ al-Turath al-‘Arabi, n.d., Vol. 19, p. 264.
