economic thought of the rightly guided caliphs 119bly economic argument. He was of the view that: (a) the land was
given to individuals on a rental not ownership basis, with the rent
being based on the principle of sharing while the full ownership still
resting with the state, (b) the new system would capitalise on the
personal incentive of the keeper, which would enhance the produc-
tivity of the land and increase the revenue generated from it to the
state, and (c) the assignment of land to individuals would alleviate
the state public expenses as it would cut down the state administrative
cost from operating the land, (d) with the extra revenue expected
through the introduction of the personal incentive and the reduction
of the state administrative expenses, the net revenue from this land
would increase (Mohammad, 1986). This argument found support
from the substantial increase in the state revenue from this source
which increased from a range between 4,000,000 and 9,000,000 to
50,000,000 dirhams during the reign of the third caliph (Al-Màwardì).
On the other hand, Caliph Uthmàn’s introduction of the new sys-
tem marked the beginning of feudalism in the economic history of
Islam, a change that was far from being expected by him. The new
policy led to various adverse consequences: (a) it opened the door
to what could be viewed as nepotism on a large scale, (b) what
started as giving away only the right of utilisation ended in giving
up the full right of ownership, (c) as the policy gradually transferred
a considerable amount of the state revenue and ownership to indi-
viduals the policy led to widening the base of the private sector and
reducing the base of the public sector, and (d) with the burning of
the registers of those lands during the civil disturbance that took
place during the Umayyads in 82 H an important source of infor-
mation to the state was lost, which led to false claims of ownership
and the ability of individuals to join lands they did not actually own
(Al-Màwardì). Consequently, despite Caliph Uthmàn’s genuine inten-
tion, his policy seemed to have carried with it the seeds of Islamic
feudalism.
Using modern economic, or political, terms one would say that
the third caliph Uthmàn was more in favour of privatisation and
less of the economic role for the state. By contrast, the second caliph
Umar was more in support of an economic role for the state and
of less for privatisation. Uthmàn was rich but Umar was poor.
The reign of Caliph Uthmàn ended, as mentioned above, with
a military revolt that besieged the caliph’s house and killed him in
656 A.C.