BISMILLAHER REHMAANIR RAHEEM

1) ISLAM AND WELFARE ECONOMICS

Islam is not just an economic system, but, a comprehensive doctrine. A comprehensive doctrine is not just concerned with one particular aspect of human life; rather it is concerned with all aspects of human life.
As per Islam, this worldly life is a test for humans. Design of this test requires human interdependence which then requires difference in ranks, i.e. endowments, abilities etc. This consequently results in difference in wealth and incomes people have. But, then, both, the rich and poor as part of this test are going to be judged on the basis of how they each individually act on the benchmarks of thankfulness, patience, obedience and upholding ethical guidelines prescribed by their Creator for them through an inbuilt conscience and through guidance provided via sending Prophets (peace be upon them all).
Humans are much more than utility maximizing machines. They are capable of using both material rationality and moral rationality to differentiate right from wrong and need reinforcement to adopt virtues influenced by an inner urge other than just material interests.
This inner urge can be reawakened by looking beyond utility maximization models to re-acknowledge the principal fact that humans are moral being than just an instrument for maximum material advancement for self.
History of economic man is fascinating. He has used the nature's blessings to find and create new and innovative ways of maximizing utility. But, nonetheless, at all points in time, he does not feel satiated. He remains poor `relatively' to the limitless desires and nature's limitations. The dream of being absolutely apart only remains a dream in everyone's life. But, then, everyone achieves it one day. There is one place that everyone reaches where he is not accompanied by anyone. It's his or her grave. Belief in life hereafter is the only thing that gives meaning to this world and life and this is the most important pillar of Islamic Economics.
In the mainstream economics, utility (satisfaction) is assumed to be attained when the person himself/herself consumes the material goods/services which bring satisfaction. Even though, there is room in utility maximization models to incorporate empathy, altruism etc, but, the models remain neutral and perhaps rightly so as long as their objectives are confined to `description' and `prediction' than `prescription'.
Islamic Economics incorporates ethical values and excludes from the consumption bundle various goods which bring either private loss or welfare loss to the society. Furthermore, the ethical values in Islamic Economics are more comprehensive.
Second, Islamic economics brings a long term perspective to the pursuit of self-interest by informing humans about the positive and negative consequences of their actions/choices in the life hereafter. Resultantly, an Islamic Economy will have to rely less on regulation and legal governance to encourage ethical behavior. 3
As per Islam, the tendency to seek worldly pleasures from certain goods/services and actions/behaviors is natural. The test is to nurture one's conscience and fight these tendencies to grow beyond a certain level. This test is for each person in his/her individual capacity. We cannot completely deny those tendencies. Neither Muhammad (peace be upon him) nor the pious caliphs (rta) used any means other than moral persuasion to inculcate a parallel righteous behavior alongside these natural tendencies so that they remain mere tendencies, i.e. weak enough to not influence important choices humans make in matters involving a moral issue.
Rather than complimenting humans in their animalistic instincts to keep having one-eyed focus on material well-being only, Islam inculcates piousness, kindness, cooperation and communal responsibility in humans. In some instances, Islam guides explicitly to avoid extravagance, lavishness & using certain products and services which harm a human's ethical existence and well being either individually and/or harm the society in the process.
Economics says that there is a tradeoff in every resource use as any resource has alternate uses. One may feel that striving for success in life hereafter would require a drastic tradeoff between material pursuits and following Allah's will. Indeed, if material lust is preferred over Allah's will, there will be permanent loss in life hereafter, but that does not preclude us from not having the ability to benefit from Allah's blessings in this world.
Islam does not discourage seeking Allah's bounty in the world. One prayer in Quran reads as follows:
"…But of mankind there are some who say: "Our Lord! Give us (Your Bounties) in this world!" and for such there will be no portion in the Hereafter. And of them there are some who say: "Our Lord! Give us in this world that which is good and in the Hereafter that which is good, and save us from the torment of the Fire!"
(Al-Baqarah: Verse 200-201)
In Economics terminology, Islam does not ask us to have a corner solution when the two goods in question are „worldly benefits and „investment for life hereafter benefits. Islam does not require us to completely abstain from blessings of this world, but to have a balanced life and a balanced composition of the two goods mentioned above.
Courtesy: Project Director, Islamic Economics Project
www.islamiceconomics.viviti.com

The Messenger of Allaah (salallaahu alayhi wasallam) said: “The upper hand is better than the lower hand (i.e. he who gives in charity is better than him who takes it). One should start giving first to his dependents. And the best object of charity is that which is given by a wealthy person (from the money which is left after his expenses). And whoever abstains from asking others for some financial help, Allah will give him and save him from asking others, Allah will make him self-sufficient.”[Saheeh al Bukhaaree, Narrated Hakim bin Hizam 1346 ]

Abu Huraira is reported to have heard the Messenger of Allaah (sallAllaahu alayhi wa sallam) as saying: It is better for one among you to bring a load of firewood on his back and give charity out of it (and satisfy his own need) and be independent of people, than that he should beg from people, whether they give him anything or refuse him. Verily the upper hand is better than the lower hand, and begin (charity) with your dependants. [Saheeh Muslim 2267]

The Advice of Sufyaan ath-Thawree (d. 161) to ‘Alee ibn Hasan  :
The Filth of the People

Sufyaan ath-Thawree said to ‘Alee ibn al-Hasan, while advising him, O my brother! You must take to acquiring that which is pure, and that which you yourself have earned, and beware of eating and dressing from the filth of the people [i.e. living from their charity and hand-outs]. Indeed the one who eats from the filth of the people is like a man who owns the upper story of a building, but not the lower story, so he is always afraid that the lower story will fall down causing his upper story to be demolished.

And the one who eats from the filth of the people speaks from whims and desires, agreeing with the people, out of fear of being shunned by them.

O my brother! If you were to receive anything from the people, you would hinder and prevent your tongue [i.e. from speaking the truth to them], and you would honor some people and treat others with contempt, despite the punishment that will befall you on the Day of Resurrection. For indeed the one who gives you something from his wealth, has indeed given you his filth.

And the explanation of why this is his filth is that the wealth he gives purifies his actions from sins [i.e. and hence becomes filthy for us, just like water becomes dirty in the process of cleaning a garment].

And if you were to accept anything from the people, then if they were to call you to do evil, you would accede to their wishes. Indeed the one who eats from the filth of the people is like the man who has some partners, and he feels that he is bound to them, by an oath. My brother! Hunger and starvation, and engaging in few acts of worship, is better than eating one?s fill via the filth of the people, and [hence being able to do] many acts of worship. And it has reached us that Allaah?s Messenger (sallallaahu ‘alayhi wa sallama) said, ?If one of you had taken some rope and then gathered some firewood [to sell it to the people], until his back became sore, then that would be better for you than being dependent upon his brother by asking for something or anticipating something.? [Related by al-Bukhaaree.]

And it has reached us that ‘Umar ibn al-Khattaab (radiyallaahu ta’aalaa anhu) said, ?Whoever among you works, then we commend him and whoever does not work, then we have doubts about him.? And he said, ?O Reciters! Raise your heads! [i.e. Don'?t go about with heads bent as if out of humility, for humility is of the heart.] Do not add humility to what is in the heart, while competing with one another for good deeds, and do not be dependent upon the people, for that way has become clear.?

And Alee ibn Abee Taalib (radiyallaahu tacaalaa canhu) said, ?Indeed the one who lives completely from the hands of the people, is like the one who plants a tree upon someone else?s land.?

So fear Allaah, my brother, being conscious of Him! For no one has acquired something from the people, except that he becomes despised and contemptible with the people, and the Believers are Allaah?s witnesses on the earth.

Be careful not to earn through evil ways and then spend that wealth in obeying Allaah, for indeed avoidance of it has been made an obligation and a duty by Allaah, and indeed He is Pure (Tayyib) and accepts only that which is pure (tayyib).

Do you not see that a man who had a robe upon which some urine dropped, so he wanted to clean it?but he washed it with some more urine?! Do you think that he has actually cleaned it? Of course not! Indeed dirt and filth cannot be purified except with that which is pure, and likewise the sin can only be wiped out with a good deed. And indeed Allaah is Pure and accepts only that which is pure, and indeed the Haraam is not accepted in any of the actions. Or can it be that someone commits a sin and then eradicates it with [another] sin?!?[Related by Aboo Nu'aym in al-Hilyah (8/71-72).]

 Taken from Words of Advice From the Salaf, published by Salafipublications
http://www.salafitalk.net/st/viewmessages.cfm?Forum=6&Topic=6550

Compiled, edited and adapted by Khalid Latif, www.thekhalids.org

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