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Prophet Muhammad, the financial system and social solidarity at the time

Prophet Muhammad (peace be upon him) and the financial system and social support

Prophet Muhammed (peace be upon him) and the financial system and social support

{Take zakat from their wealth to purify and cleanse them} [Surah At-Tawbah: 103].
Zakat is a clear example of social support which Islam introduced. One of the most amazing hadith concerning social support is Prophet Muhammed’s saying to his Companions,  [related by Muslim]. 
The narrator stated, “He (Prophet Muhammed) mentioned so many other types of wealth that we thought that none of us had any right to have surplus wealth.” 

Prophet Muhammed’s guidance concerning zakat

Prophet Muhammed’s guidance concerning zakat were the best directives with regards to the time it was given, how much should be given, the amount above which zakat has to be paid and how it is spent. Prophet Muhammed (peace be upon him) took into account the benefits of both those who have wealth and the needy. 
The advice Prophet Muhammed (peace be upon him) gave to Mu’adh ibn Jabal (may Allah be pleased with him) when Prophet Muhammed sent him as an embassador to Yemen highlighted the importance of zakat and the idea behind it, upon whom it is obligatory and to whom it should be given. Prophet Muhammed (peace be upon him) said to Mu’adh,  [related by Al-Bukhari]. 

Prophet Muhammed’s directives to Mu’adh clarified how important zakat is, as Prophet Muhammed (peace be upon him) mentioned it straight after the two testimonies of faith and the prayer.

Moreover, Prophet Muhammed (peace be upon him) explained what zakat actually is: a system where individuals of any one city support each other, as wealth is taken from the rich of the city and then given to its poor. Prophet Muhammed (peace be upon him) explained that its aim was not to just collect money, as Prophet Muhammed (peace be upon him) warned Mu’adh not to harm the people’s private wealth and property [above what was given as zakat], if they obeyed him by agreeing to pay what was due from them of zakat. The aim is not just to collect money, but to serve the dictates of justice (by placing money where it should rightly be).
Prophet Muhammed’s Companions understood this, as when Mu’adh sent the zakat that was taken from the people in Yemen to Umar, Umar (may Allah be pleased with him) disapproved of such an action. Umar said, “I did not send you to be an oppressor or to take wealth by force. I sent you to take from the wealthy people there and then give [the collected wealth] to the poor!!”

The types of wealth upon which zakat is obligatory

Prophet Muhammed (peace be upon him) made zakat obligatory upon four types of wealth. These four types are the most common types of wealth that are in circulation in any community:

  1. Cattle (camel, cows and sheep).
  2. Crops and fruit.
  3. The two precious metals upon which the world relies. These are gold and silver.
  4. Different types of profit from trade.

Next, Prophet Muhammed (peace be upon him) made it obligatory to pay one time in a year; for crops and fruit it has to be given when the produce is ripe and harvested, but for other forms of wealth it should be paid once a year. This benefits both the rich and the poor and needy. If it was obligatory more than that, it would harm the rich. And if it was obligatory less than that, it would harm the poor and needy. For this reason, Prophet Muhammed (peace be upon him) made it obligatory to pay once a year.

Dividing zakat on those who deserve it
These are eight types of people, as stated in the Quran, {Zakat is only for the poor and the needy, and those employed to collect it, and those whose hearts are to be reconciled, and for [the freedom of] the slaves and the debtors, and in the way of Allah, and for the traveller. [This is] an ordinance from Allah, and Allah is All-Knowing, All-Wise} [Surah At-Tawbah: 60]. 
Ibrahim ibn Ata’ (the slave of Imran ibn Hussain) related from his father, who said, “Ziyad or some princes sent Imran ibn Hussain [to take zakat from the people]. When Imran returned, he asked Imran, ‘Where is the money?’ Imran said, ‘You sent me to bring money?! I took the wealth from where we used to take it during the lifetime of Prophet Muhammed and placed it where we used to place it during the lifetime of Prophet Muhammed’” [related by Abu Dawood and Ibn Majah].

Prophet Muhammed (peace be upon him) was in the habit of distributing zakat to the needy in the city where the zakat was collected. The poor of the city have more right to the zakat from the wealth of the rich of the city than the poor of another city.

This point is clear in Prophet Muhammed’s discussion with Mu’adh when Prophet Muhammed (peace be upon him) sent him to the people of Yemen. Prophet Muhammed (peace be upon him) said,  [related by Al-Bukhari].
Prophet Muhammed (peace be upon him) was in the habit of giving zakat to a person if he learnt that he was poor. However, if anyone of those who said they deserved zakat asked for money, but Prophet Muhammed (peace be upon him) did not about him and did not know his condition, Prophet Muhammed would give him zakat after telling him that the rich have no right to it and neither one who is strong and able to earn his living. Prophet Muhammed (peace be upon him) said,  That is, zakat should not be given to the rich, the physically able or the strong who work. [Related by Abu Dawood and An-Nisa’i].
Allah (Glorified is He) says, {Zakat is only for the poor and the needy, and those employed to collect it, and those whose hearts are to be reconciled, and for [the freedom of] the slaves and the debtors, and in the way of Allah, and for the traveller. [This is] an ordinance from Allah, and Allah is All-Knowing, All-Wise} [Surah Tawbah: 60]. 
Spending on others can be either an obligatory, like zakat, or a preferred act, like charity. Explain the affect of this type of support on the society.

Taking the interest of the rich into consideration

Although Prophet Muhammed (peace be upon him) encouraged people to give charity, be generous and spend in Allah’s cause in many different situations, he also took the interests of the rich into consideration!!

When Kaab ibn Malik (may Allah be pleased with him) erred by not joining the Muslim army when they left for Tabuk, he wanted to expiate for his sin by giving all his money in charity. However, Prophet Muhammed (peace be upon him) told him,  [related by Al-Bukhari].

In this situation, Prophet Muhammed (peace be upon him) took into consideration the interests and needs of Kaab ibn Malik more than Kaab himself! Prophet Muhammed (peace be upon him) was more merciful to Kaab’s family than Kaab himself!!

Prophet Muhammed (peace be upon him) took into consideration the interests of the money and the owner of the money, so he ordered the people to do trade with the money and make it grow. Prophet Muhammed (peace be upon him) advised the orphans’ guardians, saying,  [related by At-Tabarani].
Saad ibn Abi Waqqas (may Allah be pleased with him) said, concerning him wanting to give his money away in charity when his became ill, < Prophet Muhammed (peace be upon him), when he had come to perform the Farwell Pilgrimage, came to visit me as my illness was causing me extreme pain. I told him, ‘You can see what has happened to me, and I have much money but only one daughter who will inherit from me. Shall I give two-thirds of my money away in charity?’ Prophet Muhammed (peace be upon him) said, ‘No.’ I asked, ‘[Shall I give] one half of it?’ Prophet Muhammed (peace be upon him) said, ‘No.’ I then said, ‘[Shall I give] one-third of it?’ Prophet Muhammed (peace be upon him) said, ‘One-third is a lot. If you leave your inheritors rich is better than leaving them in difficulties, having to ask others for their needs. Any money you spend in order to gain Allah’s pleasure, you will receive a reward for it, even what you put into your wife’s mouth> [related by Al-Bukhari]. 
Prophet Muhammed (peace be upon him) also said,  [related by Muslim].
Zakat is not a duty or tax which is levied from the people. Explain how zakat is different from duties and taxes, referring to Prophet Muhammed’s guidance about zakat.
Why did Prophet Muhammed (peace be upon him) make spending on one’s family and close relatives the best type of spending? And why did Prophet Muhammed (peace be upon him) stipulate that zakat should be taken from the rich of any one community and given to their poor?

How can you take Prophet Muhammed (peace be upon him) as an example to follow?

  1. Give zakat from your money and give much charity, following the guidance Prophet Muhammed (peace be upon him) gave us about giving zakat; Allah will bless your money. Be careful to take care of your close relatives, as your family deserve your good treatment more than others.
  2. Follow Prophet Muhammed’s sunnah (ways) and avoid socialistic ideas (collective ownership of the means of production) which crush the rich and impoverish them, and capitalistic views (individual ownership of the means of production) which crush the poor and destroy them.
  3. Study Prophet Muhammed’s biography to learn how to balance your spending between doing good deeds, being righteous and helping the poor and at the same time taking into consideration the needs of your children, family, and those who will inherit from you.
  4. Beware of not giving the zakat which is due on your property; this will result in your ruin and the ruin of your money, and will also ruin the society. Prophet Muhammed (peace be upon him) said,  [related by Muslim].
Furthermore, Prophet Muhammed (peace be upon him) said,  [related by Ibn Majah].
      5.Beware of miserliness, greed and this world being the main love of your life. Prophet Muhammed (peace be upon him) said, <…fear Allah with regards to miserliness, and do not be miserly. Miserliness ruined those before you, made them kill each other and made then make the prohibited permissible> [related by Ahmed].

Remember that Prophet Muhammed (peace be upon him) was the most generous of people.

       6.Be careful to support others in your community with regards to expenditure, being generous, and giving supererogatory charity and also zakat, but do not forget to enjoy the blessings Allah (Glorified is He) has given you. Allah (Glorified is He) says,{Seek the abode of the next world with what Allah has given you, without forgetting your portion of this world} [Surah Al-Qasas: 77].
And Prophet Muhammed (peace be upon him) said, <Eat, drink and give charity without being a sprendthrift or being arrogarnt. Allah loves to see the effect of His blessings on His slaves> [related by Ahmed].