In the economic sphere Islam recognises and safeguards the institution of private property, but makes all legal ownership subject to stringent moral obligations. It teaches that all ultimate sources of wealth, namely, the earth and all its treasures and capacities, the sun, the moon, the stars, the clouds that bring rain etc, are the bounty of God, which he has provided for the benefit of his creatures.

Allah it is Who has subjected the sea to you that ships may sail thereon by His command, and that you may seek of His bounty and that you may be grateful. And He has subjected to you whatsoever is in the heavens and whatsoever is in the earth; all this is from Him. In that, surely, are signs for a people who reflect. (Ch 45: Vs.13-14)

Again,

Allah is He Who created the heavens and the earth and caused water to come down from the clouds and brought forth therewith fruits for your sustenance; and He has subjected to you the ships that they may sail through the sea by His command, and the rivers too has He subjected to You. And He has also subjected to you the sun and the moon, both performing their work constantly. And He has subjected to you the night as well as the day. (Ch. 14: Vs.33-34)

Wealth is produced by the application of human skill, knowledge and labour to the resources, which God has provided. Produced wealth must, therefore, be shared not only between capital and labour, but also between these two and the general community.

Zakat

This is secured through the imposition of a levy, which is called the Zakat. The meaning of the word is ‘that which purifies and fosters.’ The Zakat purifies the earnings of capital and labour by deducting front the value of the goods produced, the share of the community and it fosters the welfare of the community, by its proceeds being applied towards purposes designed to secure the advancement of all sections of the people:

Take alms out of their wealth so that thou mayest cleanse them and purify them thereby. (Ch.9: V103)

The Holy Prophet^(sa) has defined the Zakat as a levy which is imposed upon the well to-do and is returned to the poorer sections of the community. The Zakat is not to be confused with charity, towards which there are frequent and detailed exhortations in the Qur’an. (Ch.2: Vs. 262-274)

Islamic Economic System

The object of the Islamic economic system is that there should be equitable distribution and constant circulation of wealth, and that there should be no holding back:

…that it may not circulate only among those of you who are rich. (Ch.59: V8)

Behold, you are those who are called upon to spend in the way of Allah;  but of you there are some who are niggardly. And whoso is niggardly, is niggardly only against his own soul. And Allah is Self-Sufficient, and it is you that are needy. (Ch.47: V 39)

Spending in the way of God means spending in the service of man. The object is further advanced by the prohibition against hoarding (Ch.9:V34) and against the lending of money on interest. (Ch.2: V.276)

Inheritance

The Islamic system of inheritance also tends in the same direction. A Muslim may dispose of the whole of his property as he may wish during his lifetime, but he may not dispose of, even for charity, more than one third by testamentary disposition. The rest of the property must be distributed according to the prescribed rules of inheritance. Under these rules all children, the widow or the widower as the case may be, and either or both parents, if surviving, are heirs. All heirs of the same degree share alike. As a general rule, the share of a male heir is twice that of a female heir in the same degree. This is not discriminatory in effect, inasmuch as under the Islamic system, the obligation of maintaining the family rests upon the husband and not upon the wife, even though, as often happens, she may be better off in her own right than the husband.

As already observed, the system is aimed at securing the widest circulation and most-equitable distribution of wealth. On the other hand, the production of wealth is not restricted. Trade, partnership, joint stock companies, and other commercial ventures and activities are lawful, and the enjoyment of a due share of the fruits thereof is ensured for those who participate in them. Every venture that puts wealth into circulation promotes employment and fosters the welfare of the community, is legitimate and its pursuit is encouraged.

Talents and Skills

Islam recognises and indeed stresses, the diversity of talents, skills, initiative, enterprise etc., and, in consequence, a disparity in earnings and rewards, wealth and worldly means. (XVI: 72). In fact it teaches that diversity is part of the purpose of life and is to be used for the purpose of promoting social and economic co-operation on a beneficent basis. It is through such cooperation, and not through coveting what others excel in, that healthy progress is to be achieved:

And covet not that whereby Allah has made some of you excel others. Men shall have a share of that which they have earned, and women a share of that which they have earned. Ask Allah of His bounty. Surely, Allah has perfect knowledge of all things . (Ch.4: V.33)