Introduction

How a state produces and distributes its wealth matters a lot. The economic collapses that we saw in the past or the ones predicted in the near future are a manifestation of policies that were not made in consistence with people’s needs. The distribution of wealth in Islam is a hot topic in the field of economy, one that can make or break a country’s future. In today’s discussion, however, we are going to talk about the distribution of wealth in a religion. Islam, a religion that gave the world revolutionary micro financial systems like zakat, has a system that promises to alleviate the financial woes of society, provided it is implemented in its truest spirit. In today’s discussion, we are going to discuss the key elements that make up the Islamic system of wealth distribution.

Islam’s Concept of Distribution of Wealth

Currently, the world is running on a capitalistic model of wealth distribution. For many years, the red wave of socialism inspired millions as well. But when we compare these systems with the Islamic system of financial management, there is a stark difference observed. The Islamic system of wealth is based on values that matter such as empathy and generosity. What is more, the wealth distribution system in Islam is per reality and promises to take care of all the members of an Islamic society.

Primary & Secondary Heads

There are two components that make up the distribution chain in an Islamic system. These are primary and secondary heads. In this section, we are going to talk about these heads separately. The primary head of the system compromises those who are involved in production directly. Here, we are talking about land, labor, and capital owners. The secondary head, on the other hand, compromises that segment of society which do not have the means to participate in the production of wealth and doesn’t have enough resources to meet their needs as well. The secondary head refers to wealth distribution/redistribution.

Now, we are going to talk about key elements of the Islamic financial system, briefly, in the following sections.

Legal Alms

Most of you must already be familiar with zakat, one of the five fundamental pillars of Islam. Zakat has the status of legal alms in the Islamic wealth system, a financial obligation that every Muslim who has Nisab threshold wealth must comply with. But zakat is a little more than an obligation, it is an economic activity that can transform the financial dynamics of society. As wealth circulates in society courtesy of zakat, the gap between the rich and the poor narrows down automatically. However, that ideal state can be achieved only if everyone eligible for zakat pays zakat.

Sadaqah

The term sadaqah means truth. The idea behind donating in form of sadaqah is to please Allah (SWT). However, it must be kept in mind that without an element of sincerity in sadaqah, there is no point in engaging in this type of charity. The moment someone pollutes their charity with the tiniest bit of arrogance, it loses its righteousness. Sadaqah is an effective tool to provide help to those who need further assistance apart from zakat.

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Zakat-al-fitr

Also known as fitrana, it is a charitable donation that must be given to the poor before the Eid-ul-Fitr prayer. By compulsion, a Muslim has to pay Fitrana by the end of Ramadan. For acquiring the love and closeness of Allah (SWT), helping out the Almighty’s subjects is important. Fitrana provides us with a chance to help those, who can’t help themselves. For propelling someone toward a stable and sustainable financial status, there is no better way than to assist them via Fitrana. What is more, this form of charity allows the underprivileged members of society to enjoy the festival of Eid with the same zest as others.

Zakat-al-Fitr

Maintenance Allowances

Maintenance allowances are what you might know as Nafqah already. You can think of these as responsibility allowances as well. By principle, one has to take care of himself or herself on their own. But in an event where one finds oneself in a position where they cannot manage their expenses, then the onus lies on the closest blood relatives. Let us explain that with an example. A father is responsible for his sons’ expenditure if they are at an age where they cannot support themselves. But if something happens to the father and renders him jobless, then the onus of supporting the man lies on his sons.  

Endowment

By endowment, we refer to the properties or any other assets that are devoted to Allah SWT. For example, a trust or a foundation. If the establishment generates any amount of income, that income is spent on those who cannot support themselves. Of course, here we are talking about widows, orphans, wayfarers, and other needy sections of society.

Policy Suggestions

Despite the glorious wealth distribution profile and history, most Islamic countries are currently struggling on the economic front. And one of the biggest reasons why their economies have collapsed is their non-implementation of the Islamic wealth model. But there is always a time for mending what has been broken, and economic revivals are not an impossibility. Islamic states need to implement zakat collection and disbursement policies, switch to Islamic banking and come up with welfare programs that are devised while remaining mindful of moral and social values.

Summary – Distribution of Wealth in Islam

Well, folks that would be all from this discussion. We hope that you learned something new about Islamic finance and its key elements. As you might have gathered and understood yourself during the discussion, the system of wealth distribution that Islam features focuses more on the welfare of secondary heads i.e. mostly the underprivileged section of society. And ideally, this is exactly what a welfare government’s policies must reflect. Capitalism has destroyed the social fabric in a manner that can be reversed only by implementing Islamic financial policies. And while the state does have a role to play in this implementation, it is the society that takes care of all the members on its own. This is the beauty of an Islamic economic system! 

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