Islamic Economics: A Short History

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economic thought of the rightly guided caliphs 109

be spent in a particular manner specified in the Qur"àn in which
the beneficiaries are “the poor, the paupers, the people who collect
it, the new converts, the liberated slaves, the indebted, in the cause
of God and the wayfarer” (Qur"àn 9:60). A further reinforcement to
Zakàh revenues came from that of Khums, one fifth of spoils of war.
Qur"ànic verses stipulate that it is for “God, His messenger, the mes-
senger’s kinsfolk, the orphans, the needy and the wayfarer” (Qur"àn,
8:41). The earmarking characteristics of Zakàh and Khums that
implied taking from the rich and giving to the poor, would help,
therefore, alleviate misdistributions of economic resources in the com-
munity. Furthermore, in distributing those revenues to the poor Umar
emphasised further an important concept in distribution: the poor
should be given to enrich, if possible, not merely to meet his basic
needs. “If you give, enrich”, Caliph Umar recommended (Abù-Ubaid).
The story is also told that the second caliph gave a poor man three
camels, stating that he would continue to give even if it amounted
to a hundred camels to one person (ibid.). There was an emphasis
of the function of the tax in re-allocating economic resources. But
poverty was not accepted by Umar at face value. He is reported to
have reprehended those who were poor because they did not strive
to earn their living or because they spent all their time in the mosque,
even though it was for worshipping God and reciting the Qur"àn,
“Would not these people know that heaven does not rain gold and
silver!” exclaimed the caliph (ibid.).
The second tool of wealth distribution in the community was a
stipend system which was introduced by Caliph Umar. The caliph
was able to use Kharàj revenue in establishing his system in which
he granted Muslims two types of allowances: monetary allowances
and allowances in kind. All Muslims were entitled to those allowances
including children whose allowances would increase with the increase
in their age. In allocating allowances in kind to individuals he fol-
lowed a novel idea: he gathered a group of men (thirty) and fed
them to their full satisfaction for a few days. Then he used the results
of that experiment in deciding how much allowances in kind would
be given to the individual every month (Abù-Yùsuf ). Not all of
Umar’s monetary allowances could be classified, however, under
social-caring spending. The second caliph distributed stipends to
everyone though differentiating in distribution between individuals
depending upon the closeness of their relationship with the Prophet
and the person’s precedence in Islam. It is noted that Umar’s principle

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