MODERN MUSLIM WORLD

Module A
Foundation of the Muslim World

Topic No. 4
Cornerstone of Islamic Ethics

o Aamir Yazdani
o University of Central Punjab
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o Email: aamiryazdani@yahoo.com
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 Cornerstone of Islamic Ethics

1. Generosity and
1. Freedom of Leniency in Business
Enterprise Transactions 1. Hoarding of Foodstuff
2. Islamic Tenets 2. Honouring and 2. Exploitation of one's
Concerning Business fulfilling Business Ignorance of Market
Transactions Obligations Conditions
3. Keenness to Earn 3. Fair Treatment of 3. Cheating and Fraud in
Legitimate (Halal) Workers Business Transactions
Earnings 4. Prohibited Matters in 4. Giving Short
4. Trade through Business Transactions Measures
Mutual Consent Dealing in Prohibited 5. Dealing in Stolen
5. Truthfulness in (Haram) Items Goods
Business 5. Arbitrarily Fixing the
Transactions Prices
• Codes of morality are called
ethical codes.
• Business ethics can also be
defined as business morality.
• It also gives prescriptive
advice on how to act morally
in a given situation.
• Broadly, business ethics is
concerned with the study of
what is good and bad, right
and wrong, and just and
unjust in business.
 Ethics in Islam

Islam places the highest

emphasis on ethical
values in all aspects of
human life.
 Freedom of Enterprise
• Islam gives complete freedom to economic enterprise.
• Each individual in an Islamic society enjoys complete freedom in the earning of
his livelihood.
• The business enterprise has to be within the limits set by the Islamic Shari'ah
(choosing things lawful and shunning matters unlawful).

The Holy Qur'an and the

Prophet’s (sws) Sunnah
serve to set a scale to
distinguish between the
lawful and the unlawful
means of earning.
 
• Islam, as a matter of principle, prohibits all activities which may cause harm either
to the traders or the consumers in the market.
• Islam encourages free market where everyone earns his sustenance without
government intervention.
• It puts certain restraints to eliminate injustice and check malpractices and unlawful
operations.

If the people fail to take guidance in business

transactions, the government can organize the
market transactions on Islamic principles:
(i) dictates of the Holy Qur'an and the
teachings of the Prophet Muhammad (sws)
and
(ii) the directives of the temporal (worldly)
authority.
 Keenness to Earn
Legitimate (Halal) Earnings

• Islam places great

emphasis on the code of
lawful and unlawful in
business transactions..
• The Prophet (sws) was
asked 'what form of gain
is the best? [the Prophet]
said, 'A man's work with
his hands, and every
legitimate sale'. (Ahmad,
No: 1576).
 A Muslim businessman should be wary
A person should also distance himself of the doubtful things because one who
from matters dubious and doubtful. falls into doubtful matters is sure to fall
into that which is unlawful (Haram).
The Prophet (sws) is also reported to
have said: “Leave what makes you doubt A tradition of the Prophet (sws) states:
for things that do not make you doubt”. “A time will come upon the people when
(Tirmidhi, No: 2442). one will not care as to how he gets his
  money whether legally or illegally”.
(Bukhari, No: 1941).
 Foremost among the unacceptable business practices strongly condemned in Islam is
Riba.

Riba since it
involves both
oppression and
exploitation,
Islam strictly
forbids this form
of tyrannical
dealings and
condemns it in
severe terms.
 Trade through Mutual Consent

• Mutual consent between the parties is a necessary condition for the validity of a
business transaction.
• A sale under coercion is not acceptable in Islam. Taking advantage of someone's
plight and charging high price is also a form of exploitation and forbidden in
Islam.

The Prophet
(sws) is
reported to
have said:
“A sale is a sale
only if it is
made through
mutual
consent”.
(Ibn Majah,No:
2176).
 The Prophet (sws) has also exhorted the
believers to strictly adhere to
truthfulness in business transactions.

He says:
Truthfulness in Business Transactions
“The seller and the buyer have the right
to keep or return the goods as long as
• Islam encourages truthfulness in
they have not parted or till they part;
business transactions and raises the
and if both the parties spoke the truth
status of a truthful merchant so much
and described the defects and qualities
so that he will be at par with the holy
[of the goods], then they would be
warriors and martyrs, in the Hereafter.
blessed in their transaction, and if they
told lies or hid something, then the
blessings of their transaction would be
lost”.

(Bukhari, No: 1937).

 
 Trustworthiness in Business
Transactions

• Trustworthiness is one of the

most important principles of
ethical discipline in
commercial transactions.
• A true Muslim trader will not
barter his Akhirah (hereafter)
for worldly gains.
• It demands sincerity in work
and purity of intention from
every believer.
• He will avoid fraud,
deception, and other dubious
means in selling his
merchandise.
 Generosity and Leniency in Business Transactions

• One should be lenient and generous in bargaining.

• Whoever demands his debt back from the debtor should do so in a decent manner.

  Abu Rafi' reports that the Prophet (sws)

took a young camel on loan. When
camels came to him in charity, he asked
Abu Rafi' to give the creditor a young she
camel. Abu Rafi' pointed out that there
was no young camel except for a four–
year old camel of a very good quality.
The Prophet (sws) said: “Give him the
best one, for the best amongst you is he
who repays the rights of others
handsomely”. (Muslim, No: 3002).
 Honouring and fulfilling Business Obligations

• Islam attaches great importance to the fulfilment of contract and promises.

• Islamic teachings require a Muslim trader to keep up his trusts, promises and
contracts.
• The basic principles of truth, honesty, integrity and trust are involved in all
business dealings.

A tradition of the Prophet (sws)states

thus:
“The Muslims are bound by their
stipulations”.
The Holy Qur'an emphasizes the moral (Abu Da'ud, No: 3120).
obligation to fulfill one's contracts and  
undertakings. A verse states thus: Another tradition condemns promise-
“O you who believe! Fulfill [your] breaking as the hallmark or trait of a
obligations”. hypocrite:
(5:1). “If he makes a promise, he breaks it, and if
he makes a compact, he acts
treacherously”.
(Bukhari, No: 32).
 
To safeguard the interest of both the buyer and the seller, Islamic teachings clearly
define all the necessary details concerning the business deal.

Specify the quality, the

quantity and the price of the
commodity in question.

Offer and acceptance

should be made on a
commodity which is with
the buyer and, which he is
able to deliver.

Non-existent or not
deliverable commodity is
not allowed to be
transacted.
 Fair Treatment of Workers

• According to the Islamic teachings it is the religious and moral responsibility of

the employer to take care of the overall welfare and betterment of his employees.

The Prophet (sws) said:

“Those are your brothers [workers under

you] who are around you, Allah has
placed them under you. So, if anyone of
you has someone under him, he should
feed him out of what he himself eats,
clothe him like what he himself puts on,
and let him not put so much burden on
him that he is not able to bear, [and if that
be the case], then lend your help to him”.
(Bukhari, No: 2359).
 The Prophet (sws) is also reported to
have said:
Dealing in Prohibited (Haram) Items
“Allah and His Messenger made illegal
the trade of alcoholic liquors, dead
• Dealing in unlawful items such as
animals, pigs and idols”.
carrion (dead meat), pigs and idols is
(Bukhari, No: 2082).
strongly prohibited in Islam. A Muslim
 
will not deal in the flesh of the animal
  The Prophet (sws) also said:
that has been killed or slaughtered in
ways other than Islamic.
“If Allah makes something unlawful,
he makes its price also unlawful”.
(Ahmad, No: 2546).
 Sale of Al-Gharar (Uncertainty, Risks, Speculation)

In Islamic terminology, this refers to the:

• sale of a commodity or good which is not present at hand;
• or the sale of an article or good, the consequences or outcome of which is not yet
known;
• or a sale involving risks or hazards where one does not know whether at all the
commodity will later come into existence.

The Prophet (sws), therefore, prohibited the sale of what is: Advance sales would
• still in the loins of the male; be acceptable if the
• or sale of whatever is in the womb of a she–camel; element of Gharar
• or sale of birds in the air; does not exist and
• or the sale of fish in the water, the quality and the
• transaction which involves Gharar (anything that quantity of the goods
involves deception). are pretty well
• He also forbade the sale of fruits before they look healthy known and
and also the sale of crops until the grain hardens. predictable.
 Arbitrarily Fixing the Prices

• Islam does not encourage the practice of price–fixing and leaves the traders to earn
the profits from each other within the lawful limits.
• Public authorities are not allowed to fix the prices of commodities by force. Rise
and fall in the prices are linked to various factors other than the greediness of the
traders and fixing the prices may endanger both public and private interests.

It is reported that once the prices shot up during the

period of the Prophet (sws). The people said:

“O Messenger of Allah! Prices have shot up, so fix

them for us. Thereupon the Messenger of Allah
said: 'Allah is the One Who fixes prices, withholds,
gives lavishly, and provides, and I hope that when I
meet Allah, none of you will have any claim on me
for an injustice regarding blood or property.'”

(Tirmidhi, No: 1235)

 
If a trader adopts
unfair means, charges
unjust prices with a
view to doing harm to
the smaller traders,
public authorities
have the right to
intervene in the
market.
 Exploitation of one's Ignorance of Market Conditions

• One of the most common unethical practices in modern business is to exploit one's
ignorance of market conditions.

Sometimes it may happen that a person

arrives in a town with objects for
selling them in the market.
The Prophet (sws) has prohibited this
A local trader may obtain the
practice:
commodities on a price that is lower
than market price and then sell them at
“A town dweller should not sell the
a high or exorbitant price.
goods of a desert dweller”.
(Bukhari, No: 2006).
The practice was prevalent in pre-
Islamic society.

 
 Al-Najsh (Trickery)

• The term Al-Najsh means an action in which a person offers a high price for
something, without intending to buy it, but just to cheat or defraud another
person who really means to buy it.
• The person practising it may collaborate with the seller to offer high prices in front
of the buyers merely as a means to cheat them.
• This type of fraudulent transaction is totally prohibited in Islam

The Prophet (sws) is reported to have said:

Such practice means he is offering a “Do not harbour envy against one another; do
higher price in order to spoil the not outbid one another [with a view to raising
agreement reached between the the price]; do not bear aversion against one
parties. another; do not bear enmity against one
another; one of you should not enter into a
It may give rise to disputes and transaction when the other has already
disagreements between brothers. entered into it; and be fellow brothers and
true servants of Allah”.
(Muslim, No: 4650).
 Cheating and Fraud in Business Transactions

• The traders and businessmen generally have a tendency to motivate the customers
by adopting fraudulent business practices.
• Islam strongly condemns all such practices in business transactions (Al-Ghashsh).

Sale of dead animal, dubious and

Sale of dead animal, dubious and
vague transactions, manipulating the
vague transactions, manipulating the
prices, selling the items belonging to
prices, selling the items belonging to
a desert dweller by a townsman Al-
a desert dweller by a townsman Al-
Najsh (trickery), false eulogy and
Najsh (trickery), false eulogy and
concealment of defects are all
concealment of defects are all
examples of cheating and fraud
examples of cheating and fraud
i.e.Al-Gashsh.
i.e.Al-Gashsh.
The Prophet (sws) is
reported to have said:

Swearing [by the seller] may

persuade the customer to
purchase the goods but the
deal will be deprived of
Allah's blessing.
(Bukhari, No: 1945)
 Giving Short Measures

• It refers to the act of taking full

measures from others and giving them
short measures in your turn.
Dealing in Stolen Goods

The Prophet (sws) made the

person knowingly buying a
stolen commodity a partner
to the crime. He said:

The one who knowingly

purchases a stolen good, is a
partner to the act of sin and
the shame.
(Kanz Al-'Ammal, No: 9258)
• Qur’ān mentions the objective of mankind is to enter Paradise. The criterion is to
purify our souls.
• The prophets were sent and the whole religion was revealed to guide man in
attaining this objective.