Wednesday, March 28, 2012

What Are the Objectives of Distribution of Wealth in Islam?

As a comprehensive economic system, the good governance of Islamic economics has delineated some objectives of distribution of wealth in the Holy Quran. These objectives must be in mind while imparting executive education in Islamic finance, which tell its approach towards wealth, and the aims which it wants to achieve through it. Here is a brief summery of these objectives:
1. Islam wants to initiate an equitable distribution of wealth. To attain this objective Islam wants its followers to establish a healthy relationship between the two main factors of production: employer and employee. Islam wants that a proper utilization of natural resources should be made, there ought not to be any compulsion on the employees or employer. They should work together in a normal way meeting the requirement of demand and supply. This is why Islam does not approve monopolies which give the employer the sole power of exploitation. Following is the verse which tells God's scheme mentioned above:
''We have distributed their livelihood among them in worldly life, and have raised some above others in the matter of social degrees, so that some of them may utilize the services of others in their work." (43:32)
These "work" and "services" must be in conformity with the injunctions enunciated by Islam. The good governance of Islam advises the employer to pay his employee in full and fairly, his salary should be in his hand before the sweat of brow dries up. On the other hand it asks the employee that he is not only the worker but a guardian of the duties and stuff under his care and he will be answerable to God for how he fulfilled his duty.
2. Islam wants that the factors of production should get their rightful share from the production. Contrary to capitalism in which the capitalist has been given unbridled power to exploit and get his share without taking the risk of loss, Islam wants that the investor should get his share in profit but in loss too, and the other factors: manager of business, workers, should get their share as wages and lose their wages in case of loss, it is the natural and justified principle in the real world of economy.
3. Thirdly, not only the factors of production, which are directly involved in the production, are the rightful receivers of wealth but Islam appoints shares of certain types of people as rightful share holder in the wealth. They are the poor, pauper, destitute etc. It is not merely charity to give out some money to them; it is their "right" to get it. As Quran states:
4. "In their wealth there is a known right for those who ask for it and those who have need for it." (70:24-25) Moreover, this right of poor and paupers has been called the right of God in the Holy Quran which increases its significance manifolds:
"And pay what is rightfully due to Him on the day of harvesting." (6:142)"
5. Islam is against the concentration of wealth in a few hands. To eradicate this evil it takes some measures:
i) It restricts unbridled exploitation of wealth by the capitalist. It prohibits interest or usury.
ii) It forbids hording and any kind of manipulation of free market to create artificial price hike and inflation.
iii) It does not allow monopoly over the primary sources of wealth. These sources are mines, forests, un-owned barren lands, hunting and fishing, wild grass, rivers, seas, spoils of war etc. moreover.
iv) It has given a detailed and comprehensive law of inheritance which split the great concentration of lands into smaller units to rightful heirs. All this is done to:
"So that this wealth should not become confined only to the rich amongst you". (59:7)
These are some fundamentals of Islamic finance which must be in high focus on the very outset of the executive education in Islamic finance to keep the right perspective of Islamic finance.

No comments:

Post a Comment