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Economic Role of Human Labour

Economic Role of Human Labour

From the foregoing study we come to the conclusion that the Almighty has put abundant natural resources at the disposal of man and has provided him with all that is necessary for life. There is no doubt that these resources have been provided to him so that he may make the best use of them in his life and not merely for watching them from a distance, or for disregarding them, resorting to monastic life and abandoning the world. Islam denounces renunciation. It is reported that the holy Prophet has said: "There is no monasticism in Islam ".

 Labour is the key of utilizing natural resources

Man can be benefited by the natural resources only if he works, exerts himself and makes efforts. Suppose a thirsty man is passing by a spring of sweet water. This spring has been created for his use so that he may quench his thirst. But his thirst can be quenched only if he at least stretches out his hand, takes a handful of water and drinks it. Suppose a hungry man passes by a wild chestnut tree. Its nuts, natural food, are available to satiate his hunger. But at least he has to stretch out his hand, pick the nuts and put them in his mouth. Hence work and only work is the key of utilizing the natural resources, which have been described by the Qur'an as the treasures of Allah's mercy.

 When that thirsty person stretched out his hand to the spring and took a handful of water or that hungry person plucked a few chestnuts, it is in the fitness of things that we acknowledge that that handful of water or those chestnuts belong to him, and that none has a right to snatch them from his hand and use them. This right and this bond between man and work is the bond of ownership.

 From the study of the economic teachings of Islam we deduce that ownership is the fruit of labour only. When man applies his labour to natural resources, they become his property. His work may be elaborate and complicated or may be very easy and simple such as lifting a thing from its source, taking a handful of water from a river, a canal or a spring, plucking a number of fruits from a wild tree, picking a thorny plant from the forest or catching a bird. In the Islamic jurisprudence such acts are called `acquiring'. If a person acquires a thing from such natural sources, as cannot be appropriated exclusively by anyone, techni­cally called `Mubahat ; it is his.

 In certain cases it is not so easy to reach a natural source. One has to plan and exert himself to get what he requires. Suppose there is a thirsty person and he wants to get water, but there is no water above ground. Then he will have to dig a well, arrange a bucket and a rope, and then draw water. Or alternatively he will have to make a pump and install it, or dig several wells and connect them by means of an arterial channel, till the water reaches the surface of the earth.

To encourage man to undertake such jobs it is necessary that his right to what he produces is acknowledged and he is assured that the more he will exert himself, the more prosperous his life will be. Of course, while giving him such a right, it is essential to take all aspects of human life into consideration. His encouragement should not pave the way for his indulging in the oppression and exploitation of others and consequently result in their discouragement and disheartening.

 That is why Islam, while recognizing man's ownership of the products of his labour, has also placed certain restric­tions on personal property.

 No gain without work

From an overall study of the economic teachings of Islam it may be deduced that the gain which anyone may make in life depends on his work. Nobody has a right to live on the labour of others without performing any useful work himself. The holy Prophet has been reported to have said: "Accursed is he who puts his burden on others". (Wasail al-Shi’ah, vol. 12, p. 18).

 It is reported that a supporter of the Commander of the Faithful, Imam Ali (P) requested him for financial aid. He was expecting that the Imam would grant. him a sum from Bayt al‑Mall, the exchequer.

 But the Imam said:

 "This money is neither mine nor yours. It is the output of the fights of the Muslims and the present of their swords. If you took part in the fighting you are entitled to a share. Otherwise nothing out of the produce of their labour will be given to others". (Nahj al‑Balaghah, vol. II p. 226).

 In order to safeguard the interests of those who work and exert themselves, the economic system of Islam is against any gains without work. It does not want to give the idle and cunning self‑seekers an opportunity to live on the labour of others and deprive the diligent and industrious workers and their families of the bread earned by them by the sweat of their brow. Unemployment and idleness both are harmful to the individual and to the society.

 Imam Musa al‑Kazim (P) is reported to have said: "Allah hates the idle, sleepy man".

 From the Islamic point of view a man who works hard to earn his livelihood is as good as a fighter in the way of Allah. Fighting in the way of Allah aims at strengthening the basis of human virtues and spreading social justice, whereas unemployment and idleness deal a hard blow to both of them.

 Production, distribution, services etc.

From the economic point of view of Islam useful work is not confined to such productive activities as agriculture, animal husbandry and industry. Distribution, services and every useful work which meets any human need, is recognized as an economic work, and it is the right of the person who performs it to be benefited by it and to manage the affairs of his life with profit from it.

 Production.

A farmer tills the land, scatters seeds in it, irrigates it, weeds it and sprays insecticides on it. At the time of harvest he gathers the produce and prepares it for consumption. But all the consumers cannot come to the farmer to purchase their requirements.

 Distribution

Here the requirement of social life paves the way for another essential and useful work. It is necessary that someone else should come, take the commodities of this farmer and other producers and make them available to the consumers. He may carry his wares to the doors of the consumers as a pedlar or may open a shop in the area where the consumers live. In either case it is his job to collect the required commodities from the centres of their production and to sell them to the consumers.

 The distribution, that is carrying the goods to the consumer, is in itself a positive, useful and essential work. It is necessary that he who undertakes it must get some profit. It is for this reason that the price of the commodi­ties purchased from a shop or a pedlar is always somewhat higher than the price of the same commodities if purchased direct from a producer.

 In healthy economy this difference of price remains within the limit of the value of the additional work undertaken by the distributor in carrying the commodities to the consumer. He is not allowed to make large profit by the goods by purchasing them from the producer at a nominal price and selling them to the consumer at exorbitant rates. The work which is performed by the distributor is called trade and commerce.

 Services

There are certain requirements of human life which are neither met by production nor by distribution. When your child falls ill, you take him to the physician. The physician must perform some work to cure him. This work is useful and essential. But is it production or distribution? It is neither. Then what is it? It is a service to you and to your child, a very valuable and effective service. In consideration for his services the physician must get such remuneration as may provide him with the means of living.

 In social life there are many occupations which can be considered neither to be a part of production nor that of distribution, but the wheels of life do not revolve without them. In modern terminology they are called services. Under the Islamic economy every kind of useful and essential work, whatever be its nature, production, distri­bution or services, is acknowledged to be of value, and hence it should fetch a suitable profit.

 False work or a device for exploitation

According to the economic principles of Islam only useful and value‑generating activity is considered to be true work, that is the work that facilitates basic human life and makes it more pleasant. A thorough study of some Islamic traditions makes it clear that under Islamic economy there is no place for the activities which have no effective role in production, distribution or services. Nobody has a right to contemplate any profit on account of such superfluous and fruitless work.

 Imam al Sadiq (P) is reported to have said:

 "I don't like to hire a water‑mill and let the same for a higher rent, without at least offering a security for it or adding anything to it or equipping it better". (Wasail al Shi'ah, vol. 13, p. 259).

 Imam al Baqir (P) was asked: "Is it lawful if a craftsman takes an order, but without doing anything himself transfers it to someone else and in this process makes some profit?"

 The Imam replied: "He should not do so".

 In another version of the report it has been added:

 "He should not do so, unless he has carried out the order partly". (Wasail al Shi'ah, vol. 13, p. 264 ‑ 265).

 A coppersmith referred his case to Imam al Sadiq (P). He said: "I sometimes take an order and then transfer the job to the apprentices working under me on the condition that they will get only 2/3 of the wages settled".

 The Imam said: "This is improper, unless you join them in carrying out the job". (Wasail al Shi'ah, vol. 13, p. 266).

 One of the very effective factors in the increase of the prices is the existence of several middlemen through whose hands the commodity passes from producer to consumer, each of them demanding income for himself without performing any useful and essential work. From the above traditions it may be deduced that so long as these middlemen carry out a useful role at least from the distribution point of view, they are entitled to get profit in proportion to their work, but those middlemen who simply slow down the process of distribution deserve no profit. They should be stopped from carrying out their false work which is only a device for exploiting the producer and the consumer.

 The brother of Imam al Kazim (P) asked him:

 "Can a man, who has bought some foodstuff, sell it to another person before actually taking possession of the same? "

 The Imam replied: "If he sells at profit, he can't; but if he sells it at the cost price, there is no objection".

 Usury

One of the false works of the worst kind is usury which should be regarded as one of the most cruel sorts of exploitation. Islam is severely against this dirty form of exploitation, in whatever garb it may appear, and rigorously denounces the usurers. Before we undertake the discussion of usury, it will be well to explain the real role of money in human society.

It is said that money has come into existence to facilitate the exchange of commodities.

 In small and primitive societies exchange was made by means of barter. If anybody produced a commodity in a quantity bigger than he required, and needed some other commodities produced or possessed by others, he would exchange his commodity with what others had at a ratio to be fixed mutually by the parties concerned. For example a farmer would exchange his food grains with other necessities of life, such as clothes and other household requirements. In spite of being simple, the barter system presented serious problems in bigger societies because for such a transaction it was necessary to find a person or a market:

 • Requiring the commodity offered;

• Ready to exchange it;

• Offering another required commodity of equal value.

 For this reason the system of business underwent many changes. Many kinds of markets at various levels were set up and at last money was introduced as a medium of exchange.

 Deviation of money from its course

This solution resolved many difficulties, but in its turn created new problems. One of these problems was that money which was designed as a medium of exchange and had to play the role of a measure of the value of production and distribution, gradually lost its original function and itself became an object of transaction.

 This situation arose in this manner that some people concentrated some amount of money with them and without accomplishing any work and taking any risk lent it as loan to those who needed it. They demanded from the borrower some additional money or services in lieu of making the loan to him.

 In doing so their only objective was to maintain their power and to increase their capital. They did not care whether by receiving that money the borrower made any gain or suffered a loss, and whether he had spent it for the purpose of production or to meet his personal needs. The practice of lending money with the condition that the borrower will return it along with something in addition thereto is called usury.

 Today the investment of their hoarded money in usury by the big capitalists has created a queer scene in the economic world. Now the capitalists control both produc­tion and consumption as well as the prices. This situation has led to the creation of two opposite classes of the rich and the poor, the well‑fed and the starving, the powerful and the powerless in society. This totally undesirable state of affairs may be described as imperceptible slavery.

Islam severely forbids usury and is not in favour of the use of money as an independent factor to earn profit, for such a practice causes economic rift. Islam is also opposed to the stagnation of money. It does not want that it should be withheld from circulation and hoarded by anybody. Money should be used for increasing economic activity, enhancing production and creating new jobs for the members of society so that it may play its correct and effective role. Under Islamic economy if the stagnant money reaches a certain level and is not utilized for one year, a tax of 21/z per cent, called zakat is levied on it.

 Precedents of usury in history

In Egypt: As recorded in history, usury existed in ancient Egypt. The only condition was that the total of interest should not exceed the principal, viz. the original sum lent.

In Greece and Rome: In these two lands usury was practised. If the borrower failed to repay the loan with interest, he was captured and enslaved.

 In China: In ancient China the practice of usury and the resultant malice and hatred between the exploiting class and the exploited had assumed such proportions that there is still a proverb in Chinese which says that "the major thieves are the money‑changers".

 In Arabia: Before the advent of Islam usury was rampant in this land. In Madina there were Jewish tribes engaged in trade. Though there are injunctions in the Old Testa­ment which forbid usury, they advanced money as loan on interest to the people who in their turn lent it at a higher rate of interest to others.

 Usury in the Qur'an

The basic objective of Islam being the emancipation of people from every kind of material and doctrinal slavery, in the economic field also it has paid due attention to all the factors which restrict the freedom of action and lead to material and intellectual bondage. It has formulated rules to save the situation. One of these rules is the prohibition of usury, which was enforced by the Qur'an in several stages. In the first stage the practice of usury was declared un­desirable, and attention was drawn to meeting the social needs of the needy without thinking of making any profit.

 "What you give by way o f usury, so that it may increase in the wealth of others does not increase it the sight of Allah. But what zakat you give in desiring Allah's pleasure, will be repaid to you manifold". (Surah al‑Rum, 30:39).

 In the second stage the Jewish usurers were denounced, as they indulged in. the practice of usury in spite of the fact that their own religious injunctions prohibited it. They were told that they were destined to painful chastisement:

 "Because of their practising usury, though they were forbidden it and their devouring the property of people wrongfully. We have prepared a painful punishment for the disbelievers among there ". (Surah al‑Nisa, 4:161).

 In the third stage exorbitant and compound interest was forbidden.

 "Believers, do not devour usury doubled and redoubled". (Surah Ale Imran, 3:130).

 At last in the fourth stage usury was abolished altogether and its practice was declared tantamount to an act of hostility against Allah and His Messenger. The Muslims were asked to return what they had taken by way of interest and this was declared to be one of the conditions of faith. "Believers, have fear o f Allah and forego what is still due to you from usury, if you are (true) believers. But if you do not do, be warred of war against you by Allah and His Messenger". (Surah al‑Baqarah, 2:278).

Why has usury been so strictly prohibited?

As to the reasons of the prohibition of usury and that too with such severity, a number of traditions have come down to us from the leaders of Islam who have pointed out how

 harmful it is to the moral and economic life of the indivi­dual and society. We quote one tradition as an example.

 One of his companions sent certain questions to Imam al‑Riza (P) and requested him to reply to them in writing. One of the questions was about usury. In this respect the Imam wrote as under:

 "Usury is unlawful, for Allah, the Almighty has forbidden it because it brings ruin and leads to the wastage of the property of the people. When a person borrows one dirham, but pays back two, he pays one in lieu of that what he had taken, but his second dirham has been wasted. Thus one of the two parties has suffered loss. That is why Allah has forbidden usury. It is just as Allah has decreed that the property of a person of weak intellect will not be made over to him until he has developed sufficient judgment and discretion, because it is feared that his property will go waste.

 For the same reason the charging of interest in the case of sale on credit is also forbidden. That also does away with fellow‑feeling and causes loss of property. Everybody becomes interested in making easy profit and gives up the practice of advancing interest‑free loans, though it is an act of virtue to help the needy and to lend them money without charging interest. In any case, usury leads to corruption, injustice, violation of the rights of others and the wastage of property". (Wasail al Shi'ah, vol. 12, pp. 425 ‑ 426).

In this tradition attention has been given to two basic reasons of the prohibition of usury:

 (1) Wastage of a part of the property of the man who pays interest and its transfer to the pocket of the usurer for nothing. Usury is a sort of plundering the people and stealing the produce of their labour. It is grave injustice. It paves the way for economic crises. It makes the rich, richer and the poor, poorer. Hence it must be stopped.

 (2) Kindling the fire of avarice, strengthening the spirit of profiteering and weakening that of fellow‑feeling and philanthropy.

 A scientific study of the effects of usury also points out the same economic and moral evils which have been reflected in this tradition. By studying the relation of the big and small usurers with life and the people everyone can feel this painful reality both in the economic and moral fields.

 Banking

Usually when the subject of the prohibition of usury is discussed, a question is raised as to whether with its abolition the whole system of banking will not come to a standstill, while it is known that banking is an essential part of our modern life.

 The reply to this question demands that we should discuss the problem in detail.

 Banking activity can be divided into two distinct parts, one not normally linked to interest, and the other normally linked to it.

 The first part includes such functions as those connected with drafts, pay orders and cheques, current account, saving account not bearing interest, money exchange etc.

 The second part includes the advancing of commercial, agricultural, industrial, occupational, house building, business opening loans etc.

 The first kind of activities are very effective in facilitating the life and commercial dealings and have no inherent harmful effects, neither for the individual nor for the society.

 Suppose a father wants to send money for the monthly expenses of the education of his son, studying in an education centre somewhere else, or a merchant of one city wants to make payment for the goods purchased by him in another city.

 They either will have to undertake a journey themselves to make the payment at the other end and thus undergo heavy expenses and much inconvenience, or they will have to look for an honest and trust worthy passenger going to the place concerned. Alternatively they may search for a merchant in their town having a business link at the other place and send a draft through him. Evidently each of last two cases involves much inconvenience and worry.

 Will it not be better to have a vast and reliable institution which may carry out this function conveniently and satisfactorily at a minimum cost? Such an institution is the bank.

 A man engaged in his business dealings the whole day wants to go home in the evening with relaxed mind and wants to spend his rest hours with his wife and children peacefully. He may have a hundred or a thousand or more dollars with him in his store. If he carries the cash with him, he is afraid of robbery and if he leaves it at his store, there is a possibility of theft. He is worried about the safety of this money and cannot sleep with his mind at rest.

 In these circumstances it is better if a well‑equipped institution takes his money daily for safe custody and, whenever he wants, pays him back against a cheque or pays to anyone else in whose favour he draws a cheque. This is a very useful function of a bank.

 An economical and discreet man, and for that matter a woman or a child, saves something from his daily income for the rainy day. However small this amount may be, it is difficult for him to keep it with himself for, on the one hand, any moment he may have a temptation to spend it, and on the other, there is a possibility of its being lost or stolen. If he hands over his savings to someone else for safe custody, that person may misappropriate it or may not be in a position to return it when demanded. It will be a great boon to the people if an institution undertakes to keep their savings and to return the same whenever required by them. This is another useful function of the banks.

 In the case of big transactions involving large amounts it is difficult to count the money, especially the small currency notes. Their counting takes a long time and whatever care is taken there is always a possibility of a mistake. In such cases if the payment is made by means of a cheque much time is saved and the possibility of a mistake is also averted.

 These and similar other advantages of the banking system cannot be denied, and it will be foolish to overlook them.

 The banks with their vast organization and reliable position render a very useful service in meeting such requirements of life, and this is enough vindication of the necessity of their existence.

 The prohibition of usury, howsoever vast its sphere is supposed to be, does not in anyway hamper such banking activities. In Islamic society both the state and the individuals can set up institutions to carry out such functions and can charge their commission on percentage basis for the service rendered by them, without being involved is usury.

 There is no reason why the banks instead of carrying out current account transactions free, giving interest on saving accounts, and meeting their expenses by charging interest from the borrowers should not charge adequate commission on current and saving accounts in the same way as they do in the case of drafts and letters of credit. Thus they will be able not only to meet their expenses but also to earn profit without being involved in usury.

 Thus the total prohibition of usury in Islam does not in any way hamper the banking activities of the first kind, nor does it deprive the Muslim society from such useful and beneficial facilities of life.

 As for the second kind of activities, in most parts of the world today they do not aim merely at economic welfare. Their main aim is usury accompanied by acquiring power and establishing grand formations. The economic welfare and the progress of knowledge and industry even if taken care of are only secondary considerations.

 The banks are always on the lookout for the most suitable projects to invest their capital with a view to earn the maximum interest. If in certain cases they are found to lend money for strengthening the economy of an institution or a nation, they do so only to serve their own interest and not that of the institution or the nation concerned. These capitalists are wise enough to be anxious to preserve the source of their profit‑making for ever. They are the discreet leeches. When they stick on a body, they do not suck so much blood out of it that it should fall totally exhausted. They leave some spark of life for it so that it may continue to struggle between life and death and keep on serving their interests.

 The financial and commercial laws of Islam have no doubt forbidden this side of banking.

 It is possible that with this prohibition, the big capitalists may not be found willing to invest their capital in bank loans and may not agree to lend their money without any interest. In this case the following questions will arise:

 (1) Big industrial, agricultural, transport and trade projects require huge capital investment. A part of the capital is normally supplied by the banks. If interest bearing loans are forbidden, the expansion of these activities and consequently the progress of science, industry and economy will be undermined.

 (2) It often happens that a worker, a professional, a farmer or a craftsman falls into straitened circumstances and the solution of his problem depends on a small loan. Even an interest‑bearing loan is a great boon for him. With the prohibition of interest such a solution will not be possible and many a family will have to face unbearable difficulties.

 (3) The loans for house‑building and starting business even if accompanied by interest are a means of the welfare of the under‑privileged classes. These classes should not be deprived of the only means at their disposal by prohibiting usury.

 Solution of the problem

in the foregoing question. each of these two has been put in the other's place.

 It is true that the accomplishment of vast and extensive industrial and agricultural projects and the scientific and technological progress in the fields of industry and agriculture require huge sums of money. But it is not necessary that big capital should always belong to a particular person or a limited number of persons, and the way of procuring vast capital is not confined to the usual practice of the capitalist countries of taking full‑interest or low interest loans from the banks. Vast funds can be created out of the capital belonging to small capitalists, by forming joint stock companies and co‑operative societies and invested in the development projects. There is no need of seeking any aid from the big capitalists and usurers. The profit of such companies, if any, will be distributed among a larger number of individuals, thus ensuring social justice and preventing the concentration of wealth in the hands of a limited number of self‑indul­gent and voluptuous capitalists in the society.

 Thus the prohibition of usury does not stop the creation of big capital. It only stops the emergence of big capitalists, and that is what is wanted by Islam and has been advocated by most of the progressive social thinkers of the past few centuries.

Furthermore, the efficient and sound governments can make investment on a large scale in big industrial, irriga­tional and agricultural projects in a far better way than the private capitalists. As a good government represents the nation, naturally the investment made by it will be utilized in the best interest of the nation.

 The nationalization of the big industries by the capitalist countries and their action to build dams, roads, railways and shipping lines in the public sector, shows that big investment is not the monopoly of the big capitalists, the usurers.

 It may possibly be said that the governments are not good traders and good employers and it is therefore, better to leave the management of economic affairs, and even of other development sectors like education, health and reconstruction and development in the hands of private sector subject to free competition. The governments should abstain from involving themselves direct in such activities. Their duty is only to undertake special projects and to provide correct guidelines in the best interest of the nation. In that event the duty of the government will be to set up special banks in the public sector to provide interest‑free loans to the individuals and the private institutions and thus control the economy of the country. Such a position will automatically give the government a good opportunity to give preference to the interests of the nation over the special interests of the borrowers and to see that the national capital does not fall into the hands of the private profiteers and hoarders. The government can impose heavy taxes on the profits earned by the receivers of these loans and spend the income to the national benefit. This way it can again check the emergence of the petty‑minded luxurious and licentious capitalists and guard against deep class rift in the society.

 As for the second and the third questions, there are two possible ways of dealing with them:

 (1) Setting up of `societies' for advancing interest‑free loans by individuals or by groups of persons.

Allah has promised abundant reward for advancing interest‑free loans and has regarded this act superior to giving alms and grants in aid. If this work is organized on proper lines and proper publicity is given to it, such `societies' are bound to become popular. Even now some such societies exist.

 These societies may charge a fixed percentage in the name of service charges to meet their current expenses but there being no question of interest on the actual money advanced. Their annual statement of account should not show any profit.

 (2) Establishment of interest‑free banks

If the above method does not prove adequate, it is again the duty of the government to set up banks out of the public budget to advance occupational, industrial, agricul­tural, house‑building and business opening loans. To cover the current expenses these banks may collect service charges, but should not be allowed to charge any interest on the actual loan. (For details a reference may be made to Al‑Bank al‑la Rabawi fil Islam (Interest free bank in Islam) by Ayatullah Muhammad Baqir al‑Sadr.)

 Conclusion

The prohibition of usury does not hamper any social or economic benefits of the banks. True interest‑free banking based on service charges is not lawful but is also a national duty obligatory on the Muslim community as a whole.

 With the prohibition of usury what has been forbidden is the interest‑bearing banking and the emergence of a self‑indulgent and voluptuous class. This in itself is a big distinction of the financial and commercial laws of Islam.

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