Alhassanain(p) Network for Heritage and Islamic Thought

Islamic Business Ethics

This treatise aims to help Muslim business people and professionals understand the Islamic perspective on life, this world, pursuit of material goods, and their responsibility towards society in general.

Author(s): Sayyid Muhammad Rizvi

Publisher(s): Al-Ma'arif Booksb

Table of Contents

Frequently Used Terms 4

Preface 5

Introduction 6

This World and the Hereafter 8

A. The Relationship 8

B. The Attachment 9

Wealth versus Poverty and Asceticism 9

Affluence and Charity 10

C. Seeking Livelihood 11

Sayings 12

Notes 12

You and God 14

A. Human Efforts and Divine Decree 14

B. Seek from Lawful Means 15

C. Tawakkul and Du’a 16

Tawakkul and Insurance 16

Notes 18

Your Time and Money 19

A. Time Management 19

B. Financial Management 20

The Problem of Extravagance and Waste 20

Notes 21

Your Customers 22

A. Sanctity of Property 22

B. Truthfulness and Honesty 23

C. Concern for Society’s Well-being 24

D. Fraud and Customers' Rights 25

Notes 27

Your Employees 28

Fixing the Wages 28

Notes 29

Your Partner 30

Types of Partnership 30

Importance of Written Contracts 31

Disputes and Arbitration 31

Notes 32

Your Business A: Five Types of Laws 33

Note 33

Your Business B: Haram Business and Trade 34

1. Intoxicating Drinks 34

2. Animal Products 35

3. Other ‘Ayn Najis 35

4. Hoarding Common Food Items 35

5. Tools and Machines for Haram Purposes 36

6. Money Related Issues 36

Riba and Interest 36

a) Two Types of Interest 37

Interest in Business and Trade 37

Other related transactions 38

Interest in Loan 38

b) Loan, Debt and al-Qarzu 'l-Hasan 39

Repaying al-Qurzu ‘l Hasan 39

c) Bank Activities 40

i. Banks 40

ii. Deposits in Non-Muslim Banks 40

iii. Islamic Banking 40

iv. Getting Loan from Banks 41

v. Use of Credit Cards 41

vi. Financing a Car Purchase 42

vii. Services of the Bank 42

viii. Working in the Banks 42

d) The Stock Market and Futures 42

i. Mutual Funds, the Stock Market and Bonds 42

ii. Futures Markets 42

7. Other Professions 43

Joining the police or armed forces 43

Sculpting and Painting and Drawing 45

Astrology and Palmistry 45

Legal profession 45

Notes 46

The Non-Muslim Work Environment 47

Introduction 47

First Principle of Conduct as a Minority 47

Second Principle of Conduct as a Minority 47

Problems Faced by Muslim Minorities 48

1. Beards for Men 48

2. Hijab or Dress Code for Women 48

3. Shaking Hands 49

4. Religious Holidays 49

5. Daily and Friday Prayers 50

6. Participation in the Christmas Party 50

Conclusion 50

Notes 51

Works Cited 52

Frequently Used Terms

Halal: permitted, allowed, lawful, legal. The acts or things which are permitted and lawful. There is neither reward for performing it nor any punishment for neglecting it. For example: drinking tea.

Haram: forbidden, prohibited. lt is necessary to abstain from the acts which are haram. If someone performs a haram act, then he or she will be punished either by the Islamic court or in the hereafter or both. For example: stealing.

Jaiz: same as halal. See above.

Makruh: reprehensible, disliked, and discouraged. Acts which are disliked but not haram. If someone docs a makruh act, then he or she will not be punished for it; however, if people refrain from it, then they will be rewarded. For example: eating with left hand.

Mubah: same as halal, except that the term “mubah” is exclusively used for lawful things and properties, not for acts.

Mujtahid: a jurist. The term is used to describe a Shi'a Muslim religious scholar who is an expert of' Islamic jurisprudence (fiqh). Commonly it is used for the high ranking mujtahids whose decrees are followed by the Shi'a people. Such mujtahids arc also known as “marja'” or "Ayatullah''.

Mustahab: recommended, desirable, better. It refers to the acts which are recommended but not wajib. If one neglects them, then he or she will not be punished; however, if one performs them, then he or she will be rewarded. For example: washing hands before eating.

Shari'ah or Shari'a: literally means a way, a stream: in Islamic terminology, it means the laws of Islam.

Sunnat: same as Mustahab. See above.

Wajib: obligatory, necessary, incumbent. An act which must be performed. A person will be rewarded for performing it and punished for neglecting it. For example: the daily prayers.

Preface

In the name of Allah, the Beneficent, the Merciful.

All praise is due to Allah, the Lord of the Universe.

May God’s blessings be upon Prophet Muhammad and his Progeny.

What you hold in your hands is a treatise whose genesis is in a 1996 seminar at the West Ja'ffari Islamic Centre (Toronto) where I made a presentation on "Islamic Business Ethics". Between the seminar and this publication, I have thoroughly revised the material and have added more details in all the sections of this publication.

The treatise begins with a discussion on the relationship of human beings with this world, with their Creator, and their personal attitude towards time and money. Then it moves on to describe their interaction with fellow humans while they go about pursuing material blessings: their customers, employees, and business partners.

This is followed by an overview of the types of businesses and trades which are considered legitimate or otherwise in Islam. Finally, I have appended the transcript of my 2003 speech on the challenges that Muslims face while working in the West as the last chapter of this treatise.

I would hereby like to thank my friends, businessmen and academicians alike, who reviewed the manuscript. Their comments and questions helped me to further improve the final text.

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The primary sources of Islamic teachings are two: the Qur'an (the Divine revelation) and the tradition of the Prophet Muhammad (peace be upon him and his progeny). According to Shi'a Muslims, the true interpretation of the Qur'an and the authentic tradition of the Prophet have been preserved by the Imams of Ahlul Bayt.

These sources have been extensively studied and thoroughly analyzed by the jurists (fuqaha' or mujtahidin) over the last fourteen centuries.1 What you see in this treatise is the Islamic view on issues related to business ethics.

Imam 'Ali (a.s), when he was the ruler of the Muslims, publicly announced: “O business people, learn the fiqh, then engage in trade; learn the fiqh, then engage in trade; learn the fiqh, then engage in trade...The business person is a sinner and the sinner is in the Fire except he or she who takes what is rightful and gives what is rightful."

Muslims are expected to learn the religious law (fiqh) of their trade and profession. Ignorance of the law is not an excuse for committing sins.

I hope that this treatise will help Muslim business people and professionals understand the Islamic perspective on life, this world, pursuit of material goods, and their responsibility towards society in general.

Wa ma tawfiqi illa bi-llah.

Toronto, Canada

Sayyid Muhammad Rizvi

DhullHiija 1426/ January 2006

Introduction

It is sometimes said that "business ethics" is an oxymoron. How can one do business and still be an ethical person? Isn't business all about self-interest, greed and making exuberant profits?

Yes, it is true that the physical, earthly dimension of a human is based on two main characteristics: greed and anger. The former attracts whatever it perceives to be beneficial and the latter repels whatever it perceives to be harmful.

But the spiritual, heavenly dimension consists of mind and conscience which have the potential of controlling the elements of greed and anger. One whose spiritual powers control the physical powers is indeed an ethical person; and one who lives life only by the elements of anger and greed has not actualized the potential of soaring from the worldly level to the heavenly level.

Adding the adjective "Islamic" to "business ethics" might surprise some. But one has to realize that Islam is more than just a religion in the spiritual sense of the word; it is a way of life. Even the secular aspects of life are greatly influenced by spiritual values.

There is no difference between the sphere of worship and the sphere of business; Islamic laws govern the family life of Muslims well as their social conduct.

******

The foundation of Islamic business ethics depends on delineating the purpose of human life. When Adam and Eve as well as the Satan were sent down to the earth, Almighty God declared:

“All of you get down from the Garden to the earth, some of you being the enemies of the others, and there is on the earth your abode and the necessities of life for a fixed period of time.” (The Qur'an 2:36)

“All of you get down from the Garden. Once you are on the earth, the guidance will certainly come to you from Me, and then whoever follows My guidance there will be no fear for them nor shall they grieve. But those who do not follow My guidance, who disbelieve and reject Our revelation, they are the inmates of the Fire, in it they shall abide”. (2:38-39)

The Quran further tells us that this earth and its surrounding atmosphere have the resources for us to sustain our lives on it:

“Allah is he who created the heavens and the earth, and send down the water from the sky with which He brought forth fruits as sustenance for you. He made the ships subservient to you so that they may flow in the sea with His command. He (also) made the rivers subservient to you, and He made the sun and the moon-which are persistent (upon their course) – subservient to you, and He made the night and the day subservient to you. (In short), He gave you all that you asked Him. If you count Allah’s blessings, (they are so many that) you will never be able to number them – (but still) the human is very unjust (and) very ungrateful!” (14: 32-34)

These verses clearly state the followings:

• This earth is our abode.

• This earth and its surrounding atmosphere have the resources to sustain our lives on it.

• Divine guidance will come to us and we are expected to follow it.

• Satan is our enemy and will try his best to misguide us.

• The life on this earth is for a fixed time only.

• The hereafter is the final destination. Whether the final destination will be blissful or painful depends on whether or not we follow the divine guidance.

So a human being is a creation of God, a citizen of this earth, surviving by wisely using its natural resources alone or with the, cooperation of fellow humans. Human interaction may be pictured as following:

As a creation of God, a human being is expected to obey the Divine commandments in relation to the self, to fellow humans, and also towards the earth. We cannot forget the satanic temptations that overwhelm many people.

This three way interaction defines the perimeter of Islamic ethics in the business sphere. The guiding principles in these interactions are:

1. Obeying the Divine commandments. (2:38 above)

2. Dealing with others on the basis of justice and fairness. “O you who believe! Be upright for the sake of Allah, in testifying for fairness: and do not let the hatred of a people urge you to be unjust, be just (since) that is closer to piety. Fear (from displeasing) Allah, verily Allah is Aware of what you do.” (5:8)

3. Being moderate in one's personal life and in the use of natural resources. “O you who believe! Neither forbid the (use of) good (things) that Allah has allowed for you nor exceed the limits because Allah does not love those who exceed the limits.” (5:87)

This World and the Hereafter

A. The Relationship

In the Islamic worldview, God has created human beings with a specific purpose: to attain the highest level of perfection in order to have a blissful life in the hereafter. The process of attaining perfection is to be done in this world by willingly submitting ourselves to God.

The relationship between this world and human beings can be clearly and simply put as the following:

• The world has been created for humans; it is only here that a person can attain the levels of perfection.

• Humans have been created for God: it is here that they have to submit by their own choice to the commandments of God.

In a hadith qudsi, God says: “I have created all things for you, but you I have created for Myself.”1 In the Quran, God says:

“And the earth- We have spread it forth and made in it firm mountains and cause it to grow in it of every suitable thing. And We made in it means of subsistence for you and persons for whom you are not the sustainers.” (The Qur'an, 15:19-20)

Muslims have to maintain a balance between their outlook towards this world and the hereafter. They cannot exclusively bind themselves to one without the other; neither is the world to be forsaken for the hereafter nor the hereafter for this world. A Muslim uses this world for the hereafter; or, to put it in a stronger form, one cannot prepare for the hereafter without this world.

*****

When Imam 'Ali deputed Muhammad bin Abi Bakr as the governor to Egypt. He wrote the following document as an advice to him and the Egyptians:

"Know, O people, that the righteous ones have acquired [the joys of] this transient world as well as the forth-coming hereafter. They shared with the worldly people in their mundane matters while the worldly people did not share with them in [the blessings of] their hereafter.

"They lived in this world in the best manner of living and ate the choicest food and so they enjoyed herein all that the worldly people enjoyed and achieved from it what the haughty and arrogant had achieved.

“Then they departed from it with the sufficient provision and profitable bargain [for the hereafter]. Thus they tasted the pleasure of renouncing the world in their world and were assured of being neighbors of Allah in their hereafter where neither their prayer shall be rejected nor their share of pleasure shall be diminished.”2

*****

Upon hearing a man abusing the world, Imam Ali (a.s) said, “O you who abuse the world, O you who have been deceived by its deceit and cheated by its wrongs. Do you covet the world and then abuse it? Do you accuse it or should it accuse you?

"Certainly, this world is a house of truth for him who appreciates it; a place of safety for him who understands it: a house of riches for him who collects provision from it (for the next world) [it is] the market-place for those devoted to Allah. Herein they earned mercy and therein they acquired Paradise by way of profit.

"Therefore, who can abuse it when it has announced its transitory nature and called out that it would leave! lt has given news of its own destruction and the death of its people. By its hardship, it set an example of their hard ship. By its pleasures it created eagerness for the pleasures (of the next world) ...The world recalled to them the next life and they bore it in mind. It related to them (things of the next lire) and they acknowledged them. lt preached to them and they took lesson there from it."3

B. The Attachment

The wealth of this world is a blessing of God: and. therefore, Islam does not condemn the world and its wealth. However, Islam has always emphasized to its followers that the attachment of humans to this world should be of a nature where you are in control of your life, and not the slave of this world and its pleasures.

“Say: If your fathers, your sons, your brothers, your wives, your clan, possessions that you have acquired, business that you fear may slacken and dwellings which you love- if these are dearer to you than Allah, His Messenger and to struggle in His way, then wait till Allah brings about His decision”. (9:24)

The .key word in this verse is "dearer;" a person can love the family and the worldly possessions but not more than the love that he or she has for God and His Messenger.

The Prophet Muhammad (s.a.w) said, ''The best help in piety is being free from need.''4 Imam Ja'far as-Sadiq (a.s) said, "The best help for the hereafter is this world."5 Imam Muhammad al-Baqir (a.s) said, "One who forsakes his world for his hereafter or his hereafter for his world is not from us."6

*****

Imam Musa al-Kazim (a.s) has very elegantly described the relationship of the believer to this world and the hereafter. He said,

Work for your world as if you are to live forever and work for your hereafter as if you are to die tomorrow.7

*****

Wealth versus Poverty and Asceticism

However, a question comes to mind: Docs not Islam, like other religions, prefer poverty to wealth and affluence? The reality is that Islam does not consider poverty or affluence as the goal; the ultimate goal is to submission to the will of God and whatever helps that submission is preferred.

Therefore, Imam as-Sadiq (a.s) said, "Wealth which prevents you from injustice is better than poverty which pushes you towards sin.''8

So what does Islam say about asceticism (zuhd)?

Imam Ja'far as-Sadiq explains the real meaning of asceticism as follows: "Asceticism (zuhd) in this world is neither neglecting your wealth nor making the permissible (halal things) into forbidden (haram); instead, zuhd in this world means that your wealth should not be stronger to you [in attachment] than what is with Allah." 9

Affluence and Charity

Once people have amassed enough wealth to ensure a comfortable standard of living for themselves and their dependents, then they must realize that it is better to share the extra wealth with the less fortunate members of the society.

They must engage in public service. After all, the affluent people are to consider themselves as the trustees of God's wealth and the poor as the dependents of God­ should not the trustees of God take care of His dependents?

Referring to the lack of concern for the society's well­being by corporate America in the nineties, Harvey Pitt, the chair of the Securities and Exchange Commission said, "We are coming off a period of enormous and probably excessive exuberance in the markets ...I don't want to condemn corporate America. I do condemn the fact that in the excesses of the 90s, the people really lost sight of fundamental values.''10

Even Alan Greenspan, the chairman of US Federal Reserve, talked about the "infectious greed" that has gripped "much of our business community.''

Sama'ah once asked Imam as -Sadiq (a.s) about a people who had excessive wealth while their brethren in faith were in such dire need that even the zakat was not sufficient for their needs: "Is it permissible for them to eat their fill while their brethren are hungry, since they are in financially depressing time?" The lmam replied,

"A Muslim is a brother of a Muslim, neither does he oppress him nor does he abandon him or deprive him. It is a duty upon the Muslims to work diligently on this matter, to connect and cooperate in it, to be charitable towards the needy, to show sympathy as Allah has commanded about them, and to be beneficent to one another."11

*****

'Abdullah bin Abi Ya 'fur narrates that at a person came to Imam as-Sadiq (a.s) and said, "By Allah, I like to seek the world (i.e., wealth) and love to be given of it."

Imam: "What would you like to do with it?"

The answer was "[I would like] to maintain myself and my family; to help my relatives and to give in charity; to do hajj and 'umra."

Imam said, ''Then what you are doing is not seeking of the world; instead, it is seeking the hereafter."12

*****

Once al-'Ala ' bin Ziyad al-Harithi, a companion of Imam 'Ali (a.s) became sick. The Imam went to visit him. After greeting him and inquiring about his health, when the Imam noticed the vastness of al-"Ala's house, he said:

"What will you do with this vast house in this world, while you need this house more in the next world? Of course, if you want to take it to the next world, then you should entertain guests in it, be charitable to the relatives, and discharge through it the dues as they should be discharged. In this way you will be able to take it to the next world.”13

*****

Let me conclude this section with an advice of a saint that I learnt from my late father:

"Son, if you want to be a fly, be a fly which sits on sugar; but, for God's sake, don't be a fly which sits on honey. Because a fly sitting on sugar leaves it the moment it wants; but a fly which sits on honey becomes imprisoned in it, unable to leave it and dies miserably."14

C. Seeking Livelihood

Islam is not an exclusively otherworldly religion. It strongly emphasizes that you work hard to fulfill the needs of yourself, your family, and to help others. A Muslim is expected to be financially independent.

Working hard to earn your livelihood is not in any way reprehensible in slam. The lives of our Prophet and the Imams of Ahlul Bayt clearly encourage us to hard work for our financial independence.

Examples:

The Prophet himself engaged in trade and business when he lived with his uncle Abu Talib. He was in charge of the trade caravan of Lady Khadija who later became his wife. lt is well known that Imam 'Ali emancipated a thousand slaves from the earnings of the toil of his own hands.15

'Ali bin Abu Hamzah saw lmam Abu’1 Hassan al-Kazim (a.s) working in his farm while his feet had become dirty with mud. He went forward and said,

''My life be ransom for you! Where are your men?”

The Imam said. "O 'Ali, those who were superior to me and my father have worked with their own hands in their farms."

'Ali asked, "Who can that be?"

The Imam said, "The Messenger of Allah. Amiru '1- mu'minin, and all my forefathers; they have toiled with their hands and this is the tradition of the prophets, the messengers, their successors and the good people."16

*****

Muhammad bin al-Munkadir used to think that Imam Zaynu '1-'Abidin (a.s.) could not have left a successor as good as himself until he met Imam Muhammad al-Baqir (a.s). While strolling once on a hot summer afternoon outside Medina, al-Munkadir saw Imam al-Baqir soaked in sweat and tired from working on his farm. Al-Munkadir said to himself, "Praise be to Allah! An elder from the elders of Quraysh at this hour of the day in this state of seeking livelihood for this world- I should surely admonish him." He went to the lmam and after greeting him , said:

"May Allah reform you-an elder from the elders of Quraysh at this hour of the day in this state of seeking worldly sustenance? What do you think of yourself if death comes to you in this state?"

Imam al-Baqir said, 'If death comes to me in this state,then let it come because I am in the state of obedience to the Almighty Allah by which I intend to make myself and my family independent of you and the people. I would indeed fear if death came to me while I was in the state of committing a sin."

Al-Munkadir said, "You have spoken the truth; may Allah shower His mercy on you! I intended to admonish you but am the one who stands to be admonished." 17

*****

'Abdu '1-A'la once saw Imam Ja'far as -Sadiq (a.s) in Medina on a very hot afternoon and said to him.

''May I be your ransom! With your status in the eyes of Almighty Allah and your relationship with the Messenger of Allah, you are exerting yourself [for your worldly needs] on such a day?”

Imam said, "O 'Abdu 'l-A'la, I have come out seeking the sustenance so that I may be independent from people like you."18

Sayings

Imam Ja·far as-Sadiq (a.s): "The person who works hard for his family is like one who fights in the way of Allah.''19

Imam ar-Rida (a.s): 'The person who seeks the blessings of Allah to maintain his family has more rewards than one who fights in the way of Allah."20

Imam as-Sadiq: "Verily Allah, the exalted and high, dislikes long sleeps and long idle times.”21

Imam al-Baqir: "I strongly dislike the person who is lazy in his worldly affairs because one who is lazy in the affairs of his world is lazier in the affairs of his hereafter."22

The Prophet: "Accursed is the person who puts his burden on the people.”23

When the verse:

"And whoever fears Allah, He will find a way out [for him] and provide for him from sources he never thought of,"

Was revealed, some people went to their homes and got busy in worship and said, "Allah will take care of us." When the Prophet Muhammad (s.a.w) came to know about it, he sent for them and said,

"What has caused you to behave in this manner?”

They said, "Allah [in the verse recently revealed to you] has guaranteed our sustenance, therefore we have devoted ourselves to worship."

The Prophet said, ''Whosoever does like this, his prayers will not be answered. I urge you to go out and seek [your livelihood]...” 24

*****

"Learn three characteristics from the crow," said Imam as-Sadiq (a.s):

"1. It conceals its act of cohabitation;

"2. It rises early for seeking sustenance;

"3. It is [always] alert.''25

Notes

1. Hadi as-Sabzwari, Sharhu ‘l - Asmai ‘l-Husna, vol.1 (Qum: Basirati, n.d.)p.139

2. Sayyid Radi, Nahju’l-Balagha, instruction no.27

3. Nahju ‘l-Balagha, saying 131

4. Al Kulayni, al-Furu’mina’l-Kafi, vol.5, p,71; al-Hurr al-Amili, Wasa’ilu sh-Shi’ah, vol.12, p. 16

5. Al-Fu’ru, vol 5, p.72; Wasa’ilu sh-Shi’ah, vol.12, p.17

6. As-Suduq, Man la Yahduruhu ‘l-Faqih, vol 3 ( Tehran: Daru ‘l-Kutub al-Islamiyya, 1367 A.H) p.94

7. Ibid.

8. AI-Furu, vol. 5. p. 72

9. Tahdhib, vol. 6. p. 327.

10. In an interview in USA Today, 2 July 2002.

11. Wasa’ilu’ sh- Shi'ah, vol. I I , p. 597.

12. At-Tusi, Tahdhibu ‘l-Ahkam,vol.6 ( Tehran: Daru l’Kutub al-Islamiyya, 1365 AH [solar]) p.327-8

13. Nahju '1-Balagha. Sermon no. 209.

14. S.S. Akhtar Rizvi, Inner Voice (Dar-es-salaam: BMM , 1989) p. 58

15. This has also been narrated by Imam Ja'far as-Sadiq (a.s). See Al -Furu ', vol. 5, p. 74.

16. Man la Yahduruhu '1-Faqih. vol. 3, p. 162

17. Al ·Furu ', vol. 5,p. 73.

18. Ibid, vol. 5,p.74.

19. Ibid, vol. 5,p. 88

20. Ibid.

21. Ibid, vol. 5,p. 84.

22. Ibid. vol. 5, p. 85.

23. Ibid, vol 5, p.72; vol.4, p. 12.

24. Ibid, vol.5.p. 84

25. Man la Yahduruhu 'l-Faqih, vol. 1. p.482