Establishment of a Public Sector

And whatever the Almighty has bestowed on His Prophet from the people of the cities, it is reserved for Allah and His Prophet and the relatives of the Prophet¹ and the orphans and the needy and the wayfarers so that it may not circulate in only the rich among you. (59:7)

Since the wealth and assets referred to in the above mentioned verse were obtained without any assistance from the believers merely through the Almighty's help, all of these were reserved for collective purposes. The spoils of war obtained in the times of the Prophet (sws) in various battles fought in Arabia were owned by Allah and the Prophet (sws)² as well because of the peculiar nature of these armed offensives. However, since the believers had also assisted in acquiring them by using their personal weapons, camels and horses as well as the food and camps needed during these wars, it was necessary to give them their due from these spoils. Nevertheless, even in these spoils the Qur'an reserved 1/5th of the share for these collective purposes: 

[You should] know that a fifth of the spoils you get hold of are for Allah and the Prophet and the near relatives and the orphans and the needy and the wayfarer. (8:41)

As far as the way this public wealth and property are to be organized is concerned, the Shari'ah has left the matter to the circumstances which prevail in a society and upon the general well-being of the Muslims. Therefore, the ruler of an Islamic state in consultation with the elected representatives can adopt whatever measures he deems appropriate in this regard. 

Consequently, it is known that the Prophet (sws) in his times gave the lands of Khaybar for crop sharing³, left certain lands under the permanent control of certain people for which these lands had been reserved⁴, regarded certain lands as Hima⁵, left certain things to be shared equally by every one⁶, fixed the principle of 'the nearest, then the next nearest ...' for using the water of certain springs and canals⁷ or the way the Caliph 'Umar (rta) imposed a fixed amount of tribute (Kharaj) on the state owned lands of Syria and Iraq conquered in his times, according to the extent of their produce while leaving them in the hands of their owners⁸.