Business and Trade Principles According to Shia Islam
By: Hussein Al-Rumaithi
Providing for family and dependents or even one’s self, is the primary goal of all humans, which varies according to each human’s complacency and satisfaction. Therefore, from the beginning of creation until this specific moment and regardless of ideological and political affiliations, the effort to secure a certain mean of financial security is a mutual tendency of all humans. The religion of Islam, Prophet Mohammad and his holy household (pbut) have presented enormous amount of solutions and plans for financial security and earning sustenance in a legitimate and un-proscribed way.
According to an ordinance by Imam Ali(a) to his son Mohammad Ibn Al-Hanafia, he categorizes sustenance and means of living in two parts.
- A sustenance (Mean of living) that rushes to you
- A sustenance (Mean of living) you have to rush to
Obviously, the first category is the sustenance that is guaranteed by God to all of his creations and subjects, as the Quran states, there isn’t one creation, which its sustenance is not provided by God. The second category has been interpreted by other Imams as pursuit of business and commerce, which has been presented as the primary source of blessed sustenance. Prophet Mohammad has narrated in an ordinance to Imam Ali, ‘sustenance is ten parts, nine of them are in commerce and one part in others ways. Therefore, the importance of trade and commerce in Islam is undeniable, which has urged some western scholars to argue that Islam is a capitalist system, since it praises free trade and circulation of wealth.
Islamic Conditions on Trade & Commerce
To distinguish the difference between the previous and contemporary economic systems and the Islamic system of commerce and economics, Islam has placed several conditions and standards. These conditions and standards are a combined sets of jurisprudential and ethical codes to govern the trading affairs of Muslims, regardless of capital, shares, costs, profits and market variables. In addition, these codes are sufficient to address social equality, wise investment, wealth distribution and transfer among different classes and the legitimate approach to accumulate wealth without confiscating the rights and efforts of others. The primary goal of Islam in urging the believers to invest and adopt trading as a mean of living, is to create a complete and strong socio-financial network that secures a stable, decent and honorable life for the members of society. In addition, the personal aspect of trade and commerce is directly linked to the importance of family and holding its strong bonds to create good members for the society as well.
The conditions and principles to conduct legitimate and proper trade and commerce are:
- A trader or an investor must gain knowledge in jurisprudence and know the specifics of what is permissible, impermissible, legitimate and illegitimate, to secure a safe and pure sustenance and wealth.
- Refrain from trading and investing in any product or service that harm humans. (Drugs, Alcohol)
- Refrain from trading and investing in any product or service that has been prohibited by the Islamic Law (Sharia Law…for example don’t sell alcoholic beverages).
- Islam prohibits the monopolization of any product or service that is considered a necessity for a specific nation. These products include the primary ingredients of any meal, like flour, salt, fuel and oil.
- Islamic strictly prohibits bribery in any transaction, which inclusively covers bribery in trade and commerce to gain special rights or favors above other investors and traders.
- Islam prohibits paying more for a product, although it is not demanded to increase its value in the market.
- Islam prohibits selling a product under its value to create instability in the market and cause losses for other investors and traders.
- Islam strictly prohibits misrepresentation. This notion is another type or definition of LYING, which has been identified by the narrations of Prophet Mohammad as the key to all sins and wrongdoings. Therefore, lying in business or any aspect of life is strictly prohibited and impermissible.
- Islam prohibits financial misconduct in business and trading transactions, which might cause hardships and difficulties for consumers and enables few individuals to accumulate wealth illegitimately.
- Islam prohibits trading and investing in stolen goods and products.
In addition, there are tens of other conditions and principles for investment and trading, which are the perfect means to protect all sides of any transaction. As mentioned in previous articles, the religion of Islam is a faith, which gives the best rights to all individuals regardless of their faith and affiliations. Therefore, commerce and trading business is not secluded from this notion, which has made the Islamic system as one of the most desired revenue and wealth generating methods in the world. The notion of banning interest accumulations on debts and lending funds, has created an alternative for the current global banking system, which is solely depended on interest and illegitimate business conducts to generate wealth. However, due to the lack of development in the Muslim countries, many scholars and western observers are skeptic about the implementation of the Islamic system of commerce and trade in business transactions. Although, it might be right to argue, why hasn’t Muslims taken any advantage from this system, it must not be forgotten that political instabilities in the Middle East has prevented many development and advancements in the region. The Islamic system has gone even further in securing the rights of all sides in any transactions by offering ethical, moral and social suggestions in trading.
- Do not ask for discount after the finalization of a transaction.
- Do not do business in a dark place, where the flaws of your product cannot be seen.
- Being a silent partner is very recommended if it helps a new or troubled trader.
- Do not sell something by quantity if it is sold by quality in a specific place.
And there are hundreds of other recommendations and suggestions for traders, investors and consumers which focus on a healthy, honest, fair, and ethical business transactions.