The Economic System 51
As we have seen, Islam recognizes as inviolable the right of those unable
to actualize their potential to have equal liberties and opportunities in the
wealth of those more able. Thus Islam, as praxis for the believer, requires a
balance between libertarian and egalitarian values. Where payment of the
obligatory levies mandated under Shari’ah rules is shirked, the state has a
responsibility to correct the resulting misdistribution.
The eradication of poverty is undoubtedly one of the most important of
all duties made incumbent upon the state, second only to the preservation
and propagation of faith, whose very existence is considered to be threat-
ened by poverty. Islam regards poverty primarily as a failure on the part of
the more able and wealthy members of society to perform their prescribed
duties. Hence, the commitment to distributive justice, which normally con-
stitutes a large portion of governments’ budgets in other systems, is placed
squarely on the shoulders of the individuals with the fi nancial and economic
capability to meet it. Not only does the Shari’ah specify who must pay, but
it also designates explicit categories of recipients.
To summarize, the role of the state in an Islamic economy relates,
fi rstly, to ensuring that everyone has equal access to natural resources
and means of livelihood; secondly, to ensuring that each individual has
equal opportunity—including education, skills, and technology—to utilize
these resources; thirdly, to ensuring that markets are supervised in such
a manner that justice in exchange can be attained; fourthly, to ensuring
that transfer takes place from those more able to those less able in accor-
dance with the rules of the Shari’ah; and, fi nally, to ensuring that distributive
justice is done to the next generation through the implementation of the
laws of inheritance. The state is then empowered to design any specifi c
economic policy that is required in order to guarantee the attainment of
these objectives. To meet the necessary expenditures associated with the
performance of its duties, the Shari’ah has given the control, utilization,
and management of a portion of a society’s natural resource endowment
(mineral resources, for example) to the state. The consensus of opinion
among jurists is that the state is also empowered to impose taxes whenever
there is a gap between the resources it can command and its expenditures.
Borrowing by the state, when it does not involve paying interest, is permit-
ted when and if necessary.
SIGNIFICANCE OF BARAKAH
An important aspect of the analysis of an economic system relates to the
incentive-motivation structure which the system embodies. The purpose in
considering this aspect is to determine whether or not an individual within
the system will fi nd it utility maximizing to follow the behavior rules pre-
scribed by the system. If the answer is in the affi rmative, then the system
as a whole will operate according to its rules. If the rules are not incentive-
compatible, there will be deviations from those rules.