Islamic Principles of Wealth Distribution

on Monday, September 23, 2013

The holy Quran lays down the guiding principles of distribution of wealth within the society with a certain goal. It is this goal or target that governs the dynamics of Islamic approach to finance and financial executions. This is the basis of financial Governance in Islam. Financial planning has been explained various times in the holy Quran and sayings by Prophet Mohammed.

The simple and primary principle is to follow the goal of equity in wealth distribution. That is why the guidelines suggest that there should be healthy bonding between an owner and his employees. It is not out of force, but the resources must be utilized in order to meet the dynamics of demand and supply, on equitable grounds. That is exactly the reason monopolistic exercise is strictly prohibited as against the guidelines of the Quran, it leads to unlawful exercises and practices. Islam teaches the duties to be followed humbly; the owner needs to pay the salary in time in a fair manner and the employee needs to realize that it is not mere work for which he gets paid; it is his duty to withstand all troubles to meet his work objective, sharing the burden with all.

Islam promotes sharing of production equitable to contribution in profit or loss. The investor would get his share, but so would the workers and managers involved; standing together, quite a contrast to capitalism. The holy Qur’an further states that apart from the contributors to production, the poor and destitute should also get their share as it is their right and not just work of donations.

The holy Qur’an further states a detailed law of inheritance for equal distribution of wealth in order to completely prevent the concentration of wealth in a few rich pair of hands. All these, in turn, form the very basis of Islamic finance with the core motive of equally distributed wealth for greater good. Parents must try to distribute wealth as fairly as possible. In Islam, men must receive double the inheritance that women receive because men usually have more obligations in life. It is not allowed to hold on to natural sources of wealth in the form of barren lands, rivers, mines, seas, etc.

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