An Overview of Economic Paradigm in Prophetic Era

Abstract

Economic activity is an indispensable part of human life. It should be based on ethical norms, without which, the markets tend to promote exploitation and inequality among the various social stratas.  At the advent of Islam, Ribā(usury), monopolized trade, lack of systematic welfare, concentrated wealth among elites and insecurity were dominant traits of pre-Islamic Arabia. Prophet Muhammad (peace be upon him) provided a revolutionary economic theory based on justice, openness and social accountability.

In this article, the author has discussed the economic structure of Prophetic Era with a particular focus on the reforms that changed the nature of trade, circulation of wealth and labour rights. The important reforms were the banning of Ribā, the codification of Zakāt as redistributive system, and the establishment of an open market in Madīnah. Sources of revenue like Zakāt, Jizyah (taxation on non-Muslims), fay’ (peaceful acquisitions) and Kharāj (land tax) provided fiscal stability as well as social welfare. The Prophet Muḥammad (PBUH) stressed the value of work, equity in the employment arrangement and responsibility in managing finances and viewed wealth as a divine gift but not a means of oppression.

These reforms are not regarded in the argument as transient, but as a universal paradigm which was a blend of spiritual values as well as practical aspect of governance. Today, humanity is facing injustice and absence of moral values in economic matters, hence the Prophetic model offers a classical balance of fairness and harmony.