Ibn Taimiyah and Islamic Economics

Category: Faith & Spirituality, Featured, Life & Society Topics: Islamic Law (Sharia) Views: 8395
8395

Muslim countries who are considering to Islamize their economic activities are turning to some of the best and experienced brains of the past, for inspiration and guidance. While considering the subject, I have now chosen to write about Ibn Taimiyah to give my views to the readers of my treatise.

The Holy Quran was revealed some over 1400 years ago and its revelation has received acclamation and acceptance in many Muslim countries today. History tells us that last third of the seventh and first quarter of the century after Hijra -- Ibn Taimiyah had a firm grasp of the achievements of Islamic scholarship that preceded him. Although he followed the footsteps of Ahmad Ibn Hanbal, the last founders of the four main schools of thought, Ibn Taimiyah had enough independence of mind and vision to draw upon other schools and scholars to arrive at his own opinion on a given matter. This gave him a status above of all other schools and of all the scholars and jurists who followed him meticulously. There is no doubt that Ibn Taimiyah remains unsurpassed in the comprehensiveness of his works and clarity of his vision on what constitutes Islamic way of life or Islamic living.

History will tell us that Ibn Taimiyah was a teacher, and circumstances forced him to put on a soldier's uniform as they also pushed him into controversy and polemics. Ibn Taimiyah was born in an age of turmoil. The decay in Islamic society had already set in with all that it implied by way of stultification of creative thinking on law and society. His Fatawa reflect the nature of races and cultures and the fast changing political conditions that were creating a new scenario in trade and commerce, agriculture and industry. People were entering into new types of contracts and social relations were becoming increasingly more complex. With his intellectual roots having been secured in Shariah Law, Ibn Taimiyah answered many queries emanating from those complex situations with rare understanding and sympathy. Some examples are reproduced as hereunder:

Fatawa, Vol. 30 at P.311 is the authority for the proposition that, if due to migration of people in an area, the number of customers having declined due to fear or decay, or because the political authority shifts people elsewhere, or due to other reasons, then the rent due from the person hiring the premises will be decreased in proportion to the decrease in the conventionally expected benefits.

The borrower is obliged to repay the lender in the country in which he contracted the loan. He should not place the burden of traveling of lender to realize the loan. If the borrower says that "I will not repay you except in a different country" then he would be liable to defray, according to conventional standards, any cost incurred by the lender (in traveling and transporting). Fatawa, Vol.29 at P.530.

Yet there was another question so posed to Ibn Taimaiyah about a man lending more dirhams to another man to repay to him in another country and whether it was permissible for him to do so or not. In answer to this question Ibn Taimaiyah replied that it is permissible because the lender seeks the benefit of security in transporting his dirhams to that country. How the borrower too would have been benefited from repaying it in that country, being saved from the risks involved in the passage. Hence there are benefits to both of them in this transaction. It is clear that Law - giver did not prohibit what benefits them all. He prohibited only what hurts them. Fatawa, Vol.29 at P.530-1.

Fulus - In those days Fulus was extensively used to mean copper coin which used to be bought for cash paid on the spot and sold for credit at a higher price, and the question was whether this was permissible or not. Ibn Taimaiyah replied; "All praise be to Allah on this matter - of exchange of current copper coins with dirhams (of silvers) -- there is a well-known controversy among scholars". 

The more authentic opinion is to prohibit it as the copper coins, when they have gained currency, take on the same position as the money proper and become a standard of value for people's wealth. Fatawa, Vol.29 at P.468-469.

As a matter of fact, what contemporary Islam needs most with respect to the economy is a clear vision of what is desired and how can it be brought about. A perusal of the book will demonstrate how clear Ibn Taimiyah was on both these issues. He was off the opinion that the Muslims need a well provisioned society from which poverty is vanished and welfare is ensured for all. The way to realize this objective is freedom of enterprise and property, constrained by moral laws and supervised by a just State enforced by the Divine Laws i.e. the Shariah. 

Therefore, those who seek a just regime must be ready and willing to enforce the Shariah, the whole of it. In so doing the authorities will be frequently called upon to apply the principles of Shariah to new areas arising from changing circumstances, especially in economic affairs. This is where the jurist faces the real challenge; not to lose sight of the real purpose of law -- justice and human felicity -- while applying his legal principles to new situations. Ibn Taimiyah met this challenge with rare competence and therein lies his message to the present generation of Muslim jurists and economists. 

On the economic field, Ibn Taimiyah's vision was not narrow in fact it was clear and filled with wisdom. According to him all economic activities are permissible in Islam except those prohibited by the Shariah. So everybody was allowed to have their avocation with the limit set by Shariah, because a person knew that if he did something of which he was prohibited in Shariah, he would refrain from doing so. What was good for them and the people they were allowed freely to make transactions, enter into contracts and conduct their worldly affairs in a just and fair manner observing the standard of fairness set by 'urf and adah'. Here I must make clear the meaning of 'urf and adah' for the better understanding of my readers. 'Urf' meaning conventions and 'adah' meant customs. The Shariah intervenes only to ensure justice in human relations and to direct individual action to what was good for all. It sought to eliminate Zulm (injustice and oppression) from social relations. Riba (excess interest) and Qimar (gambling) were prohibited under Shariah Law. The essence of unilateral gains i.e. taking an increment without a quid was considered as unilateral gain. Fatawa, Vol. 20 at P.341. 

Acquisition of another person's property without a quid pro quo was also not permissible, because it was incumbent on the purchaser to pay the right price for the property he is buying and the seller to restore the property exactly of the value he has received. To be meaningful both the parties should base their agreement on adequate knowledge of what is involved in the contract. Nobody should take any advantage by coercion or deceptions or for that matter take advantage of dire circumstances or ignorance of a contracting party. When the contracting parties adhere to these rules, the resulting marketing prices are just and fair, provided there is no withholding of supplies with a view to raising prices. Normally State would not intervene in the free market economy or price or profits, wages etc. which was to be determined by the law of demand and supply. But a State's intervention is called for when some of the above conditions are violated. As and when public authority did intervene it was guided by expert advice and sought to approximate the price of similar goods or services which was to be determined fairly.

Source: The New Nation


  Category: Faith & Spirituality, Featured, Life & Society
  Topics: Islamic Law (Sharia)
Views: 8395

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Older Comments:
SYED FROM USA said:
The article is biased towards one person with downplaying other Imams. As such he is a late figure in the Islamic history and major influence of salafi ideology.
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HASAN FROM TORONTO, CANADA said:
check this out:

http://www.ansarhousing.com/main.htm

we've over 3,800 memberships, 700 houses purchased and asset of $ 53 millions, 6.4% dividend.
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ADEYEMI ABIOLA FROM NIGERIA said:
I strongly agreed with the Ibn Taimiyah.
the business we can not do is only prohibited by the Quran , about the collection pf usry and other related business
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SHAHID SERAJ FROM INDIA said:
Assalam-u-alaikum
I totally agree with this article but I want to know about share business. Is permissible according to Shariah law. Please give me answer according to Quran & Sunnah.
Thanking you
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SAIF KHAN FROM CANADA said:
Salam Alaikum,
I would appreciate if anyone (who has the knowledge) and could answer the following question:
In the modern economy, when a borrower returns money to a lender, the amount has been increased mainly because of two components. One is the interest charged by the lender (or MARR) and the second component is inflation. As far as my knowledge is, interest is totally haram and should not be charged by a "muslim" lender. As far as inflation is concerned, i would like to know if inflation should be included in the calculation. Also, if a country's economy is governed by shariah, how big will the inflation factor be? Also, if the investor had to invest his/her money in a business which will yeild a certain amount of profit to him/her. But instead he/she lends the money to someone else, shouldn't the investor be allowed to make up for the loss that he/she face due to lending of money? Your feedback will be greatly appreciated. Wassalam
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MUSHTAQ JAFFERY FROM USA said:
I agree with it but have a question?
I am haveing hard time to find some Intrest free loan to buy Property for my exixting business I dont know what to do now I am about to lose my existing business. no one doing riba free loan yet for commercial properties.
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ABDUL-ALLAH FROM CANADA said:
Response to Br Mukhlis and ZigZag...

Thank you for your advice and reminder...I agree that I over reacted..I withdraw what I have previously written...
I ask Allah for forgiveness for all of us inch'a Allah..
On the whole I agree with the article and more over with you when you write that riba is commonly defined as interest rather than excess interest...I think that in arabic it means whatever exceeds the principal is considerer as riba "ez-zaiid"
And Allah knows better...
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MUNTHASIR FROM INDIA said:
Salaam again. All forms of 'interest' are haram.

Islam doesnt provide dos and donts of modern day economics, sorry if you are expecting that from islam.
Islam as i mentioned in earlier post provide you alternative. One shouldnt assume hedge funds and equity market are permissible since it has become 'inthing' in modern economies. If you want islamic option for hedge funds, then you have to use the standard of islam to see whether it is permissible. If it is then, it is as islamic as it is western. If not, then ignore the options. If it is in mixer proportion than alter the part of it, which would suit the islamic idea of economy. This is duty of modern day furuqah, not of ibn taimiyah.

THis system applies for mutual funds, equity markets, mortgage, wealth management and several other hiccups in economy.

As for the exchange rate, between currencies, using US dollar as a standard is questionable, since unlike other currencies it doesnt have resources. But to explain the exchange rate in islamic terms it based on type of resources held and the relations between the two.

All the sophisticated systems has been groomed over years... unfortunately the financial system of islam, which is fool proof, it has stuck in past. Since it hasnt been developed it is improper to say it is incompatible to modern day economics.
One can be irritated abt our furuqah's inability to adapt with the current situation, not with financial system of islam.

As a matter of information, even though paper money is circulated, still silver coin and gold are held as resources.
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WILLIS FROM USA said:
I think Muslims commenting against this article underestimate the power of Muslim capital and their numbers. They also tend to discount and scoff at any mention of an Interest Free banking system when such institutions are now thriving in today's markets. Being in the banking industry myself, I can tell you that we are quite amazed ourselves at how Muslim financial institutions and Islamic Shariah based finance options have mushroomed both here and in Europe. HSBC, ING, Barclays and even Freddie Mac are now offering Shariah compliant mortgages, while Chase and Citibank will be offering such a program at the end of this year. It is an unusual but a very practical system. The lending bank enters into a partnership with the borrower, and the principal is paid back along with the rent for the percentage of the house the borrower does not own. The borrower can increase his equity and decrease the lender's interest by including any amount each month towards the purchase of the Lender's share. Other institutions such as Box Tree, La Riba and Guidance Finance have taken such a substantial piece of the action that we are all suddenly beginning to sit up and take notice. My bank is also considering not just halal mortgages but a halal hedge fund, similar to Meyer Capital. So for those Muslims who are afraid or embarrassed of their religious laws or religion and prefer to hide and duck the spotlight, you need not fear. We have begun to see the wisdom in such a system and, if you don't mind, are happy to seize the opportunity. After all there is sound and ethical business sense in the Islamic financial system and there is good money to be made-you simply cannot deny that.
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MUKHLIS FROM HONG KONG said:
This in is response to comment by Br. Abdullah of Canada ( comment 30966).

Brother, your response is only name calling. Pls refrain from it. The author has given his approach to this subject. One reader has given his opinion. If you have some knowledge & your opinion on the subject, let us see it in your response.

Jazakallahu Khair.

Mukhlis
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MUKHLIS FROM HONG KONG said:
You have defined "Riba" as excess interest. But the common Muslim thinks that every interest, excess or less than market ( Libor/Hibor ), even marginal; Muslims think that interest at any rate is forbidden, nay Haraam.

Those who have to deal with money know there is no free money in the world. The value of currency is going down ( See US$ rate against World currency basket !!).

Except for beggars or The Alim living on pure charity, we all are intertwined with the economic system of our time. One can only open a cycle shop with his own money but can not start car manufcaturing or airline. In Prophet's time there were no cycle shops also. How can you explain to those people who are stuck with 8th century value of copper coin or silver coin, what is money supply, inflation, costs & risks in borrowing / landing & America's trillion dollar debt to the whole world. What is the value of one paper (currency) today, tomorrow & its changing relationship with other papers (currencies. Today it is more likely a number in a central bank a/c, no relationship to "value" or even notes in circulation. Mutual funds, Hedge Funds & Fund of funds ??

Muslims are banking & borrowing & mortgaging - but they put a fig leaf of "Islamic Finance" "Islamic Banking". One can only pity or the Muslim has to be that crook to borrow Billions from state treasury under shariah law. At the end of the day, there is no profit for the landing institution (Ummah's Baitul Maal ). The Sharif has siphoned off all.

What will Ibn Taimiyah do ?

Mukhlis.
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MUNTHASIR FROM INDIA said:
Salaam, what so wrong abt bragging one's glorious past,if it revives to stand upto our responsibilities as in the past?!

Zig zag was right abt one thing, there was only abstact information on relationship between those fatwas and modern day economics. I have tried my hand.First of fatwas, deals in real estate industry and implies to those factor, which nullifies the existing contract and also doesnt have any direct influence from both of these parties. In such cases, the low hand of the contract was to be obtained better advantage, this also control demand and supply of the real estate areas in favour of market demand.

Second of fatwas adheres to the idea of having one standard through out the transaction. In other words, the form of currency involved should be the same,if not then cover the exchanges and the cost involved.

Third fatwa talks abt the intermediary in trasaction. In modern days there are institutional and individual intermediares to carry out any transaction.This fatwa provides permissibility to institution like WESTERN UNION to take service charges to transfer the transaction to the lender in the currency they sought.

Fouth Fatwas is islam's stand on 'paper money',to state this fatwa is against such currency,since it doesnt represent the amount of resource it held properly.The concept of Papermoney is too voluminous.

Fifth fatwa talk about economy as a whole and provides a alternative for the western economy.As a concept, it states that it will not involve in altering micro or macro procedures of the market, except that it police the violations of the existing contract and exploitations in new contracts.In other words, it is not socialistic economy nor the Ipso-free market economy. The role of islamic federation is only to police the violations, nor to interfere in the market.

As i see, these fatwas are not incompatible with time even if it was conceptualised 700 years before. All we need is matter of application.
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ABDUL-ALLAH FROM CANADA said:
Response to zigzag:

I think your nickname (zig-zag) is a good desription of your state of mind...In addition I think the dead here is not the past it is your heart...And still there is a good news: you can wake it up!
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ZIGZAG FROM VIET NAM said:
OK, here it goes again: Ahmad Ibn Hanbal - Ibn Taimiyah - Muhammad ibn Wahhab... Let me have a question for the great thinker of our time, does the facts in this article has any relevancy in our time? I cannot help but feel sad because after reading flowery articles about how good muslims are in the past, I feel like it put the muslim back to sleep not willing to accept reality. I don't know, call me stupid but the past is dead and you can't do any thing about it. Why keep bragging about it when reality is otherwise?
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