Islamic Economics: A Short History

(Elliott) #1

272 chapter six


for manufacture. Fourth, the manipulation of the market is for the
purpose of achieving a price higher than the fair value of goods.
Fifth, the fixation of prices should be fairly exercised with the aim
of achieving a fair value for the buyer and the seller, the consumer
and the producer. Any fixation of price below or above the fair value
is impermissible. Sixth, the ultimate objective of price fixation is to
remove injustice to the community. Without these conditions and
with no such purpose, intervention in market forces is not permissible.


Provision of Essential Supplies
On the production side, another form of state intervention in mar-
ket forces, in ibn Taymìya’s opinion, is the case of the provision of
essential goods. Market forces should not be left to operate freely in
the production section if they fail to provide the community with
the type of goods that may be regarded essential to the community.
In that he explained, “It may be that people are in need of the
industry of certain individuals, e.g. the public need for farming, weav-
ing and building, unless the citizens import sufficient for their needs
they will require someone to weave their cloths for them.” (ibid.) Using
the educational approach, he stated that initiating and operating
these industries is a collective obligation, fardh kifayah, on the capable
individuals in the community, since the public welfare is incomplete
unless these industries are provided. The nature of these obligations
is that when one man performs those tasks, which are collective
duties, they become the personal responsibility of this individual, fardh
ayn, especially if there is no one else is capable of performing them.
In a formal approach, he regarded the state as responsible for ensur-
ing that these industries are provided when there is no individual is
willing to do so. In his words, “If people are in need for farming or
weaving or building, the task becomes a binding duty on those capa-
ble of performing them, and the authority may exert compulsion if
they refuse, setting a fair rate of remuneration”, (ibid.) The role of
the state is therefore twofold: (a) to encourage those who are able to
meet these essential needs of the society to set up these industries
voluntarily with all possible help from the government motivated by
the pursuit of a reasonable profit, and (b) when this fails, to use
enough force to see that the able individuals are engaged in the pro-
vision of these needs providing that this is done without the exploita-
tion of individuals through paying them fair wages, (Holland, 1983).

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