economic thought in the qur"àn and sunnah 81In addition we will see further how beginning from the mid eighth
century the state under the Abbasìd caliphate assumed the role of
entrepreneur in owning and running business enterprises when indi-
viduals were too risk averse to engage in these business activities
and/or when the return potential from some of these businesses were
too high for the state to want to sell its investments.
Second: Market Structure
The examination of market regulations as laid down in the Qur"àn
and the Sunnah leads to an important conclusion: the Islamic mar-
ket has the characteristics of a freely competitive market and that
prices should be determined by the forces of supply and demand
(Tuma, 1965). The Islamic market has, or should have, the follow-
ing characteristics (Ibn-al-Ukhùwwah, 1939, Ibn-Taymìya, 1983):
(1) The condemnation of monopoly: all forms of monopoly are con-
demned in the Sunnah. The Prophet is reported to have said,
“Those who practice monopoly are wrong-doers” (flaœìœMuslim),
and in a stronger tone, “That who interferes in prices in order
to increase them will be seated by God on a seat of fire on the
Day of Judgment”, also, “That who hoards food for forty days
is God’s enemy” (ibid). Hoarding food, or other commodities, is
not always wrong, however, if hoarding is not for the purpose of
controlling prices. Jurists have laid down conditions for monop-
oly, or hoarding, to be sinful (Al-Zuhailì, 1989):
(a) The object hoarded is a surplus over what the person and his
dependents need for a whole year, the person may hoard these
needs for a maximum of one year.
(b) The purpose of hoarding is to influence prices or with the
intention of selling the object when prices increase.
(c) The market shortage of the hoarded object.
(d) It should be noted, therefore, that monopoly, or hoarding, per
se is not regarded as a sin, rather, it is the purpose of hoard-
ing and the consequences of monopoly that characterise a
monopolist or a hoarder of being sinful or otherwise. For
example, if monopoly appears as a result of one producer, or
seller, becoming the only producer, or seller, of the product
monopoly is not a sin providing that the producer does not
use his monopolistic position to influence the market.