Distribution of Produced Wealth
- :T. M. Aziz
Sadr, furthermore, develops an Islamic theory of distribution of produced commodities. Produced wealth is classified into: (1) primary commodities, such as agricultural produce and raw materials; and (2) secondary commodities, which are the primary commodities manufactured into different products. In both of these stages of production, capital generated from previous economic endeavour as well as the means of production (tools and machineries) take part in the production process in these advanced economic activities. However, contrary to the capitalist theory, each of these components has no share of the product but they gain special rights for their use and their wear-and-tear in the production process.
As mentioned under the previous principle, Islam gives the worker the sole right of ownership of produced goods. However, Sadr realizes that human labour is but one of the components in the production of primary commodities. The other components are the natural environment and the tools which help man in the process of production. The tools, or means of production, according to Sadr, "contain stored up work of previous stages of production that will be exhausted and depleted during their use in the process of production." 14 In this case, if the tools are not property of the worker who benefits from their use during the process of production, then the legitimate owner of these tools must get paid for the use of his tools, i.e., the depleted stored up work in the tools. 15 According to Sadr, herein lies one of the major 'ideological differences between capitalism and Islam. The former regards the owner of the means of production as the sole owner of the produced commodities, whereas Islam considers only the labourer to have the legitimate claim to the commodities produced. In capitalism, tools get a share of the product because their use, like human labour, represents expenditure of a certain amount of work in the production process. In Islam, tools only assist and aid man to facilitate the process of production; thus, they must be compensated for in rent, not in profit sharing. 16
Accordingly, only the labourer has the legitimate claim to the products of his effort. Therefore, it is unthinkable in Islamic economics, states Sadr, for someone to employ others and provide them with rent and tools so that he alone owns the products of their labour. 17 Likewise, industries and production units that employ many workers can function in an Islamic State only if they are owned publically. In Sadr's theoretical vision industrial capitalist production can no way evolve in an Islamic economic system except through State's direct involvement and control in economic development. The State, on behalf of society, which is the sole owner of economic resources, can employ people and pay them only wages for their work and not give them share of the produced commodities.
Furthermore, since the utilization of the economic wealth of the environment is the responsibility of society as a whole-the sole proprietor and beneficiary of natural resources-it gets a share of the produce of primary commodities. The State, in this stage of production, has the right to collect what is known as tasq (income tax) from producers to finance social welfare expenditures and meet the economic needs of the people. 18
As for the production of secondary commodities, Islam gives the owner of primary commodities the right to establish his claim to final products. The legitimacy of his ownership does not cease because someone aids him in transforming his commodity into different forms. An individual, if he/she owns the raw materials, has the right to manufactured commodities produced out of that material. To put it plainly, the worker, in this case, does not only own the product of the natural resources but also the produced commodities in latter stages of production. If the State, for example, extracts or mines certain natural resources through its publically owned enterprises, then it also has the right of ownership of all the finished goods extracted from those natural resources. People who participate in the production would get paid for their labour. Industries that develop natural resources, such as oil and minerals, theoretically speaking, cannot be owned privately in an Islamic economic system. It is because the State is the primary owner of natural resources, which gives it the right to own the produced product. However, there is a theoretical loophole to make capitalists flourish in an Islamic economic system, which is through the obtaining of natural resources from the State on lease by private enterprises, where the latter can claim legitimate ownership of the produced commodities.
In any case, ownership is not affected by the use of the means of production belonging to someone else. The owners of tools and machines get paid for the use of these in the production process. By the same token, the owner of primary commodities may also hire someone else to manufacture his goods. The worker, this case, gets the salary for his labour, which should be specified in the job contract. The worker, consequently, has no claim on the final product he produces. 19
Islam specifies two means of payment for a hired worker: the first one is through wages, where he is paid for the amount of work he performs in accomplishing a task; the second is by sharing in the profit of the final product. In this case, the worker gets only a percentage of the profit specified in the agreement between him and the owner of the primary commodities. The general principle, in Islam, for earning is:
... that earning is only based on contribution of labour during the process (of production), so the contributed labour is the only legitimate means for some one to get paid by the owner of the process...and without such contribution, there is no legitimacy for his earning. 20
Based on this economic principle, the owner of capital will not receive fixed payment from the owner of primary goods, i.e., it is usury, which is prohibited. Monetary capital will not be considered as contributing any amount of labour at all. 21 Fixed payment is allowed in Islam only in one case, where there is a consumption of labour, either directly through a worker, or indirectly (accumulated work) through the means of production. As for monetary capital, no such work is exhausted or depleted. In this matter, the owner of the capital is allowed to share the profit and the loss with the owner of primary commodities. The legitimacy of earning in this situation is based on his help in facilitating the process of production, for which he deserves to be rewarded in the form of profit sharing.
14. Iqtisaduna, 619.
15. Iqtisaduna, 584.
16. Al-Khutat al-tafsiliyyah, 97.
17. Ibid., 99.
18. Al-Khutat, 561.
19. Iqtisaduna, 605.
20. Iqtisaduna, 618.
21. Ibid., 625-627.
Adapted from: "An Islamic Perspective of Political Economy according to Ayatullah Sadr" by: "T. M. Aziz"
Share this article