One of the most complex and challenging questions before economists and policymakers is the question of income distribution and social welfare. What should be the philosophy guiding poverty alleviation? Who are the poor and how much should we help them? Who should pay for social welfare, by how much and why? Should the state tax the rich and give it to the poor? Is it mandatory for the state to provide social security? The entire domain of welfare economics and public economics (study of how a  government might intervene to improve social welfare) grapples with these questions. 

If we summarise the Islamic philosophy of redistribution of wealth in one verse of the Qur’ān, it is Ayat 3 of Surah Baqarah which says: “...and spend of what We have provided for them.” The Qur’ān says that God’s revelation will benefit those who spend (on the poor) of whatever is provided for them by Allah. It must be emphasised that the true ownership of wealth is attributed to Allah. Man is merely a temporary custodian of the wealth provided for him by God and his job is merely to deliver its share to the poor and needy. 

Another phrase that is often repeated in the Qur’ān is: “And in whose wealth there is a right acknowledged.” (70:24) It means that the wealthy are not doing a favour by giving charity. They are merely fulfilling the rights of the poor, failing which they would be held accountable before the court of justice established by God in the Hereafter. 

THE NEED FOR WELFARE

An important fact to recognise is that disparity in income and wealth shall always exist in this world. The Qur’ān asserts: “Allah enlarges the sustenance (which He gives) to whichever of His servants He pleases; and He (similarly) restricts the sustenance, (as He pleases): for Allah has full knowledge of all things.” (29:62) It implies that there shall always remain in society two classes of people, who are popularly termed as “haves” and “have-nots”. However, Islam does not allow the “haves” to accumulate unbridled wealth. Their wealth is regulated by levying Zakat (a fixed percentage of wealth accumulation payable to the poor and needy) and Ushr (tax on the agricultural produce). 

The rationale for this redistribution of wealth for social welfare was explained by Prophet Muhammad ﷺ when he said: “Charity does not decrease wealth, no one forgives another except that Allah increases his honour, and no one humbles himself for the sake of Allah except that Allah raises his status.” (Sahih Muslim) 

The logic of increment of wealth in this world due to charity can be easily understood by students of economics through concepts such as ‘the multiplier effect’, ‘the paradox of thrift’ and ‘market failure’. The Qur’ān explains that charity breaks the chain of circulation of income only among the rich (Surah Hashr, Ayat 7). It creates new demand among the ‘have-nots’ who benefit from charity or social security payments. This leads to an increment in aggregate demand, because if the income circulates only among a specific class of “haves” then demand stagnates due to the law of diminishing marginal utility. 

SETTING THE STANDARD FOR BEING CHARITABLE

Giving charity and having social welfare is almost an undisputed rule in all countries, even those who swear by ‘free market’ economics and libertarianism. The difficult part is to decide who pays for social welfare and by how much. The Qur’ān lays down a principle that can be termed aspirational and the feasible level of charity that can be practised. The Qur’ān says: “They ask thee how much they are to spend; Say: “What is beyond your needs.” (2:219) 

Prophet Muhammad ﷺ and the members of his family and Companions showed the world that it was possible to lead such a life. The Prophet ﷺ gave up almost everything that came his way in charity. Abu Hurairah attests to the fact that “the family of Muhammad did not eat their fill for three successive days till he died”. (Sahih Bukhari) However, we know that the Prophet ﷺ enjoyed immense power described eloquently by Alphonse de Lamartine, who said that the Prophet ﷺ  “moved not only armies, legislation, empires, peoples and dynasties, but millions of men in one-third of the then-inhabited world; and more than that he moved the altars, the gods, the religions, the ideas, the beliefs and souls”. Yet the Prophet ﷺ practised superlative asceticism, so much, so that “at the time of his death, God’s Messenger left neither dirham or dinar, nor a male or female slave. Indeed he left nothing other than his white mule; his personal arms and a piece of land which he left for charity.” (Sahih Bukhari) 

We know that the Prophet Muhammad ﷺ was very strict when it came to the collection of zakat, ushr and anfal (spoils of war). There was no compromise or relaxation in those processes as it was the responsibility of the state to deliver them from the sahib e nisaab (those who possess a certain wealth that makes them liable to pay) to the sahib e zakat (those eligible to receive charity). Abu Hurairah reported Allah's Messenger ﷺ as saying: “If any owner of gold or silver does not pay what is due on him, when the Day of Resurrection would come, plates of fire would be beaten out for him. These would then be heated in the fire of Hell and his sides, his forehead and his back would be cauterized with them. Whenever these cool down, (the process is) repeated during a day the extent of which would be fifty thousand years, until judgment is pronounced among servants, and he sees whether his path is to take him to Paradise or to Hell.” (Sahih Muslim)

MOTIVATING FOR CHARITY

While it is incumbent on the government to ensure social welfare, it adds to the burden of the state. The financial burden of welfare that is carried by the taxpayer can be reduced if it is shared at the societal-level by the rich and those blessed by God with ample resources. The Prophet ﷺ motivated his followers to practise charity but never forced anyone to reach an unrealistic and impractical level. He followed the Qur’ānic rule of the golden mean – “And let not your hand be tied to your neck (like a miser), nor stretch it forth to its utmost reach (like a spendthrift), so that you become blameworthy and in severe poverty.” (17:29) 

Some gems of the Prophet ﷺ as he exhorted people to be generous and charitable are: “Generosity is near to Allah, near to Paradise, near to the people, and far from the Hellfire.” (Al-Tirmidhi) “He is not a Muslim whose stomach is full while his neighbour goes hungry” (Muslim). “Blessed is the wealth of the Muslim, from which he gives to the poor, the orphan and the wayfarer.” (Muslim) “None of you have faith until you love for your neighbour what you love for yourself.” (Muslim) “The person who assists and takes care of the widow is like the person who strives in the path of Allah.” (Bukhari and Muslim). “Give charity without delay, for it stands in the way of calamity.” (Al-Tirmidhi) “The believer’s shade on the Day of Resurrection will be his charity.” (Al-Tirmidhi) “Allah, the Exalted, says, ‘Spend, O son of Adam, and I shall spend on you.” (Bukhari and Muslim). “Do not show lethargy or negligence in giving alms and charity till your last breath.” (Bukhari and Muslim). Social welfare, poverty alleviation and reduction in income inequality require a time-tested model - the Prophet’s model.