An Islamic Perspective of Political Economy

Chapter 5 : Distribution of Produced Wealth

Sadr, furthermore, develops an Islamic theory of distribution of produced commodities. Produced wealth is classified into: (1) primary commodities, such as agricultural produce and raw materials; and (2) secondary commodities, which are the primary commodities manufactured into different products.

In both of these stages of pro­duction, capital generated from previous economic endeavour as well as the means of production (tools and machineries) take part in the production process in these advanced economic activities. However, contrary to the capitalist theory, each of these components has no share of the product but they gain special rights for their use and their wear-and-tear in the production process.

As mentioned under the previous principle, Islam gives the worker the sole right of ownership of produced goods. However, Sadr realizes that human labour is but one of the components in the production of primary commodities. The other components are the natural environ­ment and the tools which help man in the process of production. The tools, or means of production, according to Sadr, "contain stored up work of previous stages of production that will be exhausted and depleted during their use in the process of production.

" [^14] In this case, if the tools are not property of the worker who benefits from their use during the process of production, then the legitimate owner of these tools must get paid for the use of his tools, i.e., the depleted stored up work in the tools. [^15] According to Sadr, herein lies one of the major 'ideological differences between capitalism and Islam.

The former regards the owner of the means of production as the sole owner of the produced commodities, whereas Islam considers only the labourer to have the legitimate claim to the commodities produced. In capitalism, tools get a share of the product because their use, like human labour, represents expenditure of a certain amount of work in the production process. In Islam, tools only assist and aid man to facilitate the process of production; thus, they must be compensated for in rent, not in profit sharing. [^16]

Accordingly, only the labourer has the legitimate claim to the products of his effort. Therefore, it is unthinkable in Islamic economics, states Sadr, for someone to employ others and provide them with rent and tools so that he alone owns the products of their labour. [^17] Likewise, industries and production units that employ many workers can function in an Islamic State only if they are owned publically.

In Sadr's theoretical vision industrial capitalist production can no way evolve in an Islamic economic system except through State's direct involvement and control in economic development. The State, on behalf of society, which is the sole owner of economic resources, can employ people and pay them only wages for their work and not give them share of the produced commodities.

Furthermore, since the utilization of the economic wealth of the environment is the responsibility of society as a whole-the sole proprietor and beneficiary of natural resources-it gets a share of the produce of primary commodities. The State, in this stage of produc­tion, has the right to collect what is known as tasq (income tax) from producers to finance social welfare expenditures and meet the eco­nomic needs of the people. [^18]

As for the production of secondary commodities, Islam gives the owner of primary commodities the right to establish his claim to final products. The legitimacy of his ownership does not cease because someone aids him in transforming his commodity into different forms. An individual, if he/she owns the raw materials, has the right to manu­factured commodities produced out of that material.

To put it plainly, the worker, in this case, does not only own the product of the natural resources but also the produced commodities in latter stages of pro­duction. If the State, for example, extracts or mines certain natural resources through its publically owned enterprises, then it also has the right of ownership of all the finished goods extracted from those natural resources. People who participate in the production would get paid for their labour. Industries that develop natural resources, such as oil and minerals, theoretically speaking, cannot be owned privately in an Islamic economic system. It is because the State is the primary owner of natural resources, which gives it the right to own the pro­duced product.

However, there is a theoretical loophole to make capitalists flourish in an Islamic economic system, which is through the obtaining of natural resources from the State on lease by private enterprises, where the latter can claim legitimate ownership of the produced commodities.

In any case, ownership is not affected by the use of the means of production belonging to someone else. The owners of tools and ma­chines get paid for the use of these in the production process. By the same token, the owner of primary commodities may also hire someone else to manufacture his goods. The worker, this case, gets the salary for his labour, which should be specified in the job contract. The worker, consequently, has no claim on the final product he produces. [^19]

Islam specifies two means of payment for a hired worker: the first one is through wages, where he is paid for the amount of work he performs in accomplishing a task; the second is by sharing in the profit of the final product. In this case, the worker gets only a per­centage of the profit specified in the agreement between him and the owner of the primary commodities. The general principle, in Islam, for earning is:

...that earning is only based on contribution of labour during the process (of production), so the contributed labour is the only legitimate means for some­ one to get paid by the owner of the process...and without such contribution, there is no legitimacy for his earning. [^20]

Based on this economic principle, the owner of capital will not receive fixed payment from the owner of primary goods, i.e., it is usury, which is prohibited. Monetary capital will not be considered as contributing any amount of labour at all.

[^21] Fixed payment is allowed in Islam only in one case, where there is a consumption of labour, either directly through a worker, or indirectly (accumulated work) through the means of production. As for monetary capital, no such work is exhausted or depleted. In this matter, the owner of the capital is allowed to share the profit and the loss with the owner of primary commodities. The legitimacy of earning in this situation is based on his help in facilitating the process of production, for which he deserves to be rewarded in the form of profit sharing.


[^14]. Iqtisaduna, 619. [^15]. Iqtisaduna, 584. [^16]. Al-Khutat al-tafsiliyyah, 97. [^17]. Ibid., 99. [^18]. Al-Khutat, 561. [^19]. Iqtisaduna, 605. [^20]. Iqtisaduna, 618. [^21]. Ibid., 625-627.

Chapter 6 : Channelling Human Nature

The first task of the Islamic political system is to eliminate all forms of oppression within economic relationships and to lay the ground for the establishment of a just system of distribution of eco­nomic resources. However, the source of the injustice, according to Sadr, is neither social settings nor the means of production, but rather human nature itself, the inner instincts of self-love that drive man to secure survival for himself only. Such an instinct is essential for the survival of human life on earth. Profit, which is the economic manifes­tation of self-love and is generated from private investment, is the great engine of human economic accomplishment.

It gives the individ­ual the personal incentive to work hard and to overcome difficulties and challenges. However, when left without moral control it will manifest itself in different forms of oppression. Man will be concerned only with securing his own interests to the point of abusing the interests of others. Unless a solution to the problem of human nature is found, man will find escape routes to abuse even in a just system of distribu­tion.

In fact, the social contradiction stems from the individual instinct of self-love. In the capitalist system, it manifests itself in the form of economic exploitation of others. In the communist system, where private property is eliminated, man's self-love manifests itself in politi­cal oppression, such as the struggle for power and the securing of special social privileges. [^22]

Religion, according to Sadr, gives humanity the only solution to this basic and deep-rooted problem of human nature. Religion over­comes the problem of human nature by specifying many channels of self-control that properly regulate or direct- man's instincts into appro­priate social behaviour. In other words, it will end the contradiction between social and private interests.

The first of these mechanisms for self-control is a spiritual one, the psychological power that makes man control his behaviour. Man is the vicar of God, which means that he is the representative of the Almighty on earth. In an economic sense, he is the trustee of God for the wealth created for mankind. This sense of vicarage implies that man is respon­sible for his economic deeds before God. Vicarage also means controlling personal behaviour and directing the use of natural resources according to God's will.

[^23] Improper behaviour and the waste of God-given wealth will make man accountable for his deeds and bring severe punishment. In the same manner, abiding by God's will guarantees a good reward and Divine approval It is He Who has appointed you viceroys in the earth, and has raised some of you in rank above others, that He may try you in what He has given you. Surely thy Lord is swift in retribution; and surely He is All-forgiving, All­compassionate. (6:165)

Accordingly, man is expected to receive guidance as to how God­given wealth should be distributed and treated. It is this link between the here and now and the hereafter that brings accommodation be­tween social and private interests. Anyone who sacrifices for the sake of others is rewarded. The religious solution, then, is not materialistic, but spiritual and trains man to serve others and to sacrifice private interest for the sake of social benefit.

In doing so, he serves and benefits himself as well. In Islam, it is the fear of God and the desire to seek His good pleasure that replaces the competitive, greed of human nature. Once religion succeeds in bringing up men who have control over their inner instincts and passions, the social order can be saved from con­tradictions and individual abuses and manipulations.

Since this goal is utopian in its outlook, Islam has derived a social mechanism to secure peace and harmony in human society. God has assigned the vicarage role not to the individual per se, but rather to mankind It is the community that is the trustee of God over eco­nomical wealth. It, as a group, holds the responsibilities of managing natural resources and human wealth to the benefit and welfare of the group. The following Qur'anic verse refers to such social responsibility.

But do not give to fools their property that God has assigned to you to manage. (4:5)

According to Sadr's interpretation of the above verse, God considers the financial wealth of the mentally incapable as the wealth of the community. The whole society is then responsible for not allowing any misappropriation of the fool's wealth. Such social control over eco­nomic wealth makes the individual accountable not only before God, but before his own people.

Islam also disavows any values that a society attaches to the possession of economic wealth. Affluence and economic prosperity of the individual are not signs of social prestige. Islam wants the individual to consider wear as burdensome and places a responsibility on the shoulders of the wealthy individual to serve both himself and others.

It is a means to achieve the goals of humanity. [^24] Affluence should not be the goal for the individual to achieve in his life, as in a capitalist society which makes man use all possible means to increase his posses­sion of wealth even if it brings harm avid oppresses others' interests.

However, if one thinks of wealth as the means to realize the good pleasure of God, then helping others, not oppressing them, becomes the social norm of the rich and wealthy. In other words, Islam is deter­mined to change the social values related to the possession of wealth and private property. There is no need to abolish ownership of private property as suggested by Marxism. The social policy of elimination of private property, according to Sadr, will not be successful because it goes against human nature. The only solution is to reform the social ethos in such a way that wealth is changed from an individual goal to a social means to achieve a higher moral goal.


[^22]. "Al-Nizam al-Islami muqaranan," 170. [^23]. Iqtisaduna, 536-537. [^24]. Iqtisaduna, 568.