Man rushes naturally to spend effort in producing the property by which He fulfils his needs. Man’s needs are numerous and He cannot meet them in isolation of other people. Therefore, it becomes inevitable that man lives in a society in which He exchanges with others the products of their efforts. Therefore, man who lives in a society spends his effort to produce both for his direct use (consumption) and for exchange. Because his needs are numerous, He does not spend all his efforts for his direct consumption only, for He is in need of properties which He does not have. It becomes necessary for Him to benefit directly from the efforts of others, as in his need for education and medicine and the like.

Therefore, the types of properties which man produces, however different and numerous they are, are not enough to fulfil all his needs. This is because He cannot produce by his own effort the things that fulfil all his needs. Rather He must depend on the efforts of others. So He has to exchange his effort or his property with the fruits of the others efforts. Therefore, the exchange of people’s efforts is necessary. Since these efforts may be recompensed by another effort or property it becomes necessary to have a measure that defines the values of all the fruits of efforts, relative to each other, in order that they may be exchanged. This defines the values of properties, so that they can be exchanged with each other or for labour. Therefore it is necessary that the measure used to define the value of efforts, and the measure used to define the value of properties is the same, so as to enable the exchange of properties with each other, the exchange of property with effort and the exchange of effort with effort.

Accordingly, people agreed upon a monetary reward that enables them to obtain the properties and the labour necessary for the fulfilment of their needs. This monetary reward, concerning commodities is the price, and concerning labour is the wage. This is because, in the exchange of commodities, it is a recompense for the commodity itself, and in the exchange of labour it is a recompense for the benefit of the effort spent by man. Thus, trade transactions and hiring deals are indispensable for man, though there is no connection between trading and hiring except that they are transactions between individuals amongst human beings. So hiring does not depend on selling (trading), nor does the wage depend on the price. Therefore the estimation of the wage is different from the estimation of the price, and there is no relationship between them. This is because the price is a recompense for property, so it is inevitably a property in return for a property, whether the property was estimated with the value or the price. The wage is the recompense for an effort, which does not necessarily produce a property; rather it may or may not produce a property. The benefit from effort is not restricted to the production of property, as there are benefits other than property which result from labour. Accordingly, the efforts spent in farming, trading and industry, whatever their kind, and whatever their amount, produce property and this directly increases the wealth of the country. But the services, provided by the doctor, the engineer, the solicitor, the teacher, and other similar services, do not produce property nor directly increase the wealth of the nation. If a manufacturer took a wage He would have taken it in exchange for a property He produced, but if an engineer took a wage, He would have not taken it in exchange for a property, because He did not produce any property. Therefore the estimation of the price is inevitably in return for a property. This is contrary to the estimation of the benefit resulting from effort, which is not a return of property but rather a return of benefit, which may or may not be a property. In this way, selling is different from hiring an employee, and the price differs from the wage regarding the actual estimation

However, the difference of selling from hiring, and of price from wage, does not mean the absence of a relationship between them. Rather their difference means that hiring is not to be built upon selling or selling upon hiring. So the estimation of the price is not based upon the estimation of the wage, nor is the estimation of the wage based upon the estimation of the price. This is because establishing one of them upon the other leads to the prices of commodities which the worker produces, controlling the wages He receives, whereas the prices of the commodities control the employer, not the employee. If the prices were left to control the employee then this would lead to the employer controlling the employee, thus He may reduce and increase the wage whenever He likes, under the pretence of the decline and increase of the prices, a matter that is not allowed. This is because the wage of the employee is in return for the benefit of his work, so his wage equals the value of his benefit, and it should not be linked to the prices of the commodities He produces. It is untrue to claim that forcing the employer to pay the estimated wage, when the price of the commodity falls, leads to his loss, and accordingly leads to making the worker redundant. This only occurs when the prices of the commodity fall down in the whole market. Therefore, this matter is left to the estimation of the experts for the benefit of the worker and not left to the employer. This is because the experts consider the whole benefit of the labour in general, and do not consider one case only. Therefore, the estimation of the wage is not based on the price of the commodity, but decided by the estimation of the experts.

Moreover, building hiring upon selling, and selling upon hiring leads to the prices of commodities needed by the worker controlling his wage, though the prices of his needed commodities should control the sustenance of the worker, and not his wage. So if the prices of the commodities needed by the labour were given control over his wage, it would make the sustenance of the worker a duty upon the employer, which He has to secure. However, the sustenance of every person is a part of his affairs which have to be cared for by the State, not by the employer. It is also not allowed absolutely to link the sustenance of the worker with his production, as the worker could be of a delicate body and not able to produce but a little, which is below his need. So if his wage is linked to that which He produces then He will be deprived of a decent livelihood, a matter which is not allowed. Thus the right of livelihood has to be secured for every person of the citizens whether He produces much or little, and whether He was able or unable to produce. Therefore, his wage is assessed by the value of his benefit, whether his wage was enough to meet his needs or not.

In this way, it is wrong to estimate the wage of the worker by the prices of the commodities that He produces, or by the prices of the commodities that He requires. So it becomes wrong to build the hiring upon selling and selling upon hiring; i.e. it is not allowed to build one of them upon the other. Therefore, it is not allowed to build the wage upon the price, nor the price upon the wage. This is because the estimation of the wage is a matter different from the estimation of the price; and each of them has particular factors and special considerations, which have control over the estimation. The wage is estimated by the benefit that the effort produces, so the estimation is only by the benefit and not by the effort, though the benefit produced is due to the effort spent by the person. The experts estimate the wage by this benefit, according to its utilisation. The estimation of the wage is not permanent; rather it is linked to the period agreed upon, or to the job which is agreed to be performed. Once the period finished or the work is accomplished, a new estimation of the wage starts, whether by the two contracting parties or by the experts, in estimating the equivalent wage. The period could be daily, monthly or annually.

The price is the ratio of exchange between the quantity of money and the quantity of equivalent goods (commodities). So the price is the money given in return for a unit of a certain commodity at a certain time. In regard to its estimation, it is decided naturally by the market based upon the need of the people for that commodity. It is true that the price could be estimated by the extent of the need of the buyer for the commodity, so He takes it whatever it’s price. It could also be estimated by the amount of the need of the seller, so He sells it whatever is its price. However this is not allowed; it is dangerous for the society and must not be permitted. This is what is called Ghuban (fraud). Therefore, what matters in this situation is what the sellers and buyers in the market decide and not what the (particular) contracting seller and buyer agree upon. In other words, the price is the value of the commodity estimated by the market. So the acceptance of the buyer of the price defined by the market is compulsory, and the acceptance of the seller of the price defined by the market is compulsory. The matter that defined this price and forced the seller and the buyer to accept it is the demand for the benefit of the commodity in the society in which it was sold, irrespective of its production costs. Therefore, the estimation of the price differs from the estimation of the wage, and there is no relationship between the two estimations. So, the estimation of the wage is not based on the estimation of the price. The price is only defined by the demand for the commodity, taking the shortage of the commodity in the market as a factor in this estimation. The price cannot be measured by the cost of production, as the price may not be equal to the production costs, since it could be less or could be more according to the circumstances in the short term. But in the long term, a balance occurs naturally between the price defined by the market and the production costs. However this does not make the wage linked to the commodity’s price, as the buyers and the sellers, in the short and long terms, do not look at the cost of the commodity when they trade it. Rather its price in both cases is defined by the demand for the commodity, taking into consideration the factor of its scarcity in the market.

Capitalists and Communists differed in estimating the wage of the worker to the point that they became contradictory. Capitalists give the worker the natural wage which is, in their view, that which the worker needs of the living means at their minimum standard. They increase this wage as the living costs increase over this minimum standard, and they reduce the wage if the living costs decrease. Hence the wage of the worker is estimated according to the living costs irrespective of the benefit which his effort produced for the employer and the society. Whereas, what the workers take of wages in Europe and America as Capitalists states, is an amendment of the Capitalist system by giving the worker more than his rights and more than that which the freedom of ownership gives him. Despite that amendment, that which the worker takes is still at the minimum standard of living, without which He can’t live except in discontent. Raising the level of living in Europe and America allows the minimum standard of wage the worker receives, showing Him to be better off, however He does not take equal to what He produces. So the estimation of the wage of the worker in Europe and America, though it does not make the worker poor compared with other countries, and enables Him to fulfil his basic needs and some of his luxuries is, compared with the standard of living in the community in which He lives, relatively low. Despite raising the standard of living of workers in Europe and America, the estimation of the wage there, and in all Capitalist countries, is still at the minimum standard of living compared with their society.

However, as long as the estimation of the wage is dictated by what the worker needs of means of living at their minimum, it will result in the ownership of the workers being limited to the amount they require to meet their needs, at their minimum standard compared with the community among which they live. This is regardless of whether their living was to meet their basic needs only, as is the case of workers in the intellectually declined countries (like the Islamic countries), or to meet their basic needs and luxuries, as is the case of workers in the intellectually progressed countries (like Europe and America). The ownership of the worker in all such countries is limited to the minimum standard of living in relation with the community among which He lives, whether the standard of living is high or low. This is the case, as long as the estimation of the wage is dictated by what the worker needs of the means of living at their minimum standard.

The Communists consider that the work, which the employee carried out, is the main factor in producing the commodity and completing its manufacture; so the work, or the ability to work, plays an essential role in producing the commodity. Thereupon, Communists consider the work of the employee is the basis of production, so the wage of the employee is equal to what He produces, and all the production costs are attributed to one element, which is the work. This is, of course, wrong and in disagreement with the reality. The tangible reality is that property in the universe, (which is created by Allah (swt)), is the basis of the value of the commodity; the costs spent on increasing the benefit of that property or in creating a benefit in it, together with the work, are the elements which transferred it to the form by which it provides a certain benefit. Hence making the work as the basis is wrong and contradictory to the reality. Moreover, making the produced commodity equal to the wage of the employee is an invalidation of the raw material and the costs spent on its production, which could have been spent by another employee who already took a wage for it. So the current employee did not produce the commodity, and the production is not attributed solely to his work, in order to be given the commodity as his wage.

However if we assume that what is meant by the worker a worker in general, then the raw material which Allah (swt) created still remains (as part of the benefit) and it is improper to be considered as not existent and not accounted for. Moreover, considering the worker in general terms for estimation of the wage is wrong, because the workers are designated persons and the wage is but for these persons. So considering the worker in general does not lead to estimation of the wage, rather it leads to the abolition of the wage and the abolition of ownership, a matter which contradicts with man’s nature. It is also an incorrect thought that has no tangible reality.

The tangible reality indicates that man rushes to fulfil his needs by himself; thus He strives to obtain products from the universe, or from another person, or by attaching some of his effort to the things which exist in the universe, so that the property becomes suitable to fulfil his needs. Therefore, the Communist’s theory of the estimation of the wage of the worker as being equal to the commodity He produced is wrong; and defining the wage as equal to what He produced excluding the raw material is wrong also. This is because the tools which the worker used and the expenses He spent have contributed to forming the commodity, yet they are not a part of the worker’s work. If they were considered as a part of the workers’ work looking at work in general, this leads to abolition of the wage which is wrong as was discussed previously.

The worker’s wage is not linked with the commodity, whether its value or its price. Rather it is linked with the benefit which his effort provided to the individual and the community, whether this benefit exists in the raw material, like the mushroom and the apple, or it exists in the worker’s contribution to the work like in the steam engine. Thus the estimation of the wage is linked with the benefit not with the commodity which He produces. Therefore, limiting the worker’s wage by a certain limit, whatever its scale, is wrong and contradicts to the tangible reality. It is sufficient that the wage be known rather than defined by a certain limit. Thereupon, the theory of the wage estimation used by the Capitalists, the Communists, and the Socialists is wrong and contradicts the reality. It also causes disruption in the relationships which necessarily arise among the people during the work for fulfilling their needs.

This difference in estimating the wage of the worker is due to their differences in assigning the meaning of the value of the commodity i.e. in defining the value of the commodity. Some of the Capitalists defined the value as equal to what the commodity costs of time, effort and raw materials. As an example, the steam engine is evaluated more than the bicycle. This value is considered according to the scarcity of these commodities to them. Others said that the value of a thing depends on its benefit i.e. on its ability to fulfil the needs. Others said that the value of any commodity depends on the amount of work spent in its production, in addition to the amount of work spent in producing the machinery and tools used in the production process. The most recent theory, (called the ‘marginal utility theory’), looks at the value from the viewpoint of the producer and consumer together i.e. from the viewpoint of supply and demand, thus depending on the supply and demand. Thus the marginal benefit controls the demand i.e. it is the minimum limit of the commodity’s benefit for fulfilling the need, such that the keenness for fulfilment after this marginal limit diminishes or becomes harmful. While the marginal costs of production control the supply i.e. they are the last amount of work spent in producing the commodity such that spending any more work in production becomes a loss. Thus the value fluctuates such that it maintains a balance between these two phenomena.

With regard to the value according to the Communists, Karl Marx mentioned that the only source of the value is the work spent in its production, and that the Capitalist financier buys the power of the employee for a wage which is not more than He needs to stay alive and able to work. Then He exploits this power to produce commodities whose values greatly exceed the wage which He pays to the employee. Marx called the difference between what the worker produces and what is really paid to Him ‘the surplus value’. He stated that this surplus value represents the amount which landlords and businessmen usurp of the worker’s rights under the name of the revenue, profit and the capital interest whose legality He of course, did not acknowledge.

The fact is that the value of any commodity is the amount of its benefit, taking into consideration the factor of its scarcity (shortage). Though work is a means to obtain this benefit, or a means to produce it, it is not considered at all when this commodity is exchanged with another, nor when using it. Therefore the true view for any commodity is the view of its benefit, taking into consideration the element of its shortage, whether this commodity was possessed by man initially like from hunting, or by exchange like trading. There is no difference regarding this matter in the society of Moscow, the society of Paris and the society of Madinah. This is because man everywhere, when He strives to obtain a commodity assesses the amount of benefit that exists in it, taking in to account its shortage in the market. This is the value of the commodity as men view it, which is its true value.

But the actual value of the commodity is estimated by the amount of its exchange with another thing, whether a commodity or money. This value, by this sense, remains constant despite the change of time, place and circumstances. With regard to the price of the commodity, it is the amount of money which is given in exchange of one unit of this commodity in a certain time, certain place and in certain circumstances. This amount changes as the time, place and circumstances change. In other words, the price is the ratio of exchange between the amount of money and the equivalent amount of commodities.

So if a person married a woman and made, as a part of her dowry, a certain described cupboard, and He mentioned its value as fifty dinars, and He eventually handed it to her, then the value of the cupboard had been designated through her receiving it as a commodity. If He later took it from her and she brought a lawsuit against Him over it, then He has to hand over to her the cupboard itself not its price. If the cupboard was proved to be damaged, or He alleged that it was damaged, then He should pay her fifty dinars, because this is the value of the cupboard whether the identical cupboard at that time of the court case was more or less than fifty dinars, because this is its actual estimated value. The price of an identical cupboard is not considered. This is different than the case if it were mentioned in the marriage contract that the price of the cupboard was fifty dinars and the husband eventually handed the cupboard to his wife. Then if He took it from her and she brought a lawsuit against Him over it, He would have the choice to hand the cupboard to her or to pay her its price (fifty dinars), or to buy her another cupboard with fifty dinars (whether the cupboard at the time of the court case was more or less than fifty dinars.) So He is obliged to hand to her a cupboard whose price is fifty dinars at all times.

This is because the value does not change but the price changes. So the actual value of the commodity is the amount of its exchange at the time of estimation, and the price of the commodity is the amount of money paid in the market as an exchange for it. This differentiation between the value and the price applies in trading and the different types of exchange. But the wage of an employee is the amount at which the benefit of his effort is estimated, at the time of contract. It is estimated again at the end of the hiring period. Thus it appears that there is no relationship between the wage of the worker and the value of the commodity or between the wage of the worker and the costs of production, nor between the wage of the worker and the standard of living. It is a different matter; it is the worth of the benefit which his employer obtains. The estimation of this benefit is not left to the employer but to his need for this benefit. So the unit of estimating of the worker’s wage is the described benefit. This wage differs according to the type of work, and varies with the degree of perfection in the same work. So the wage of an engineer differs from that of a carpenter, and the wage of a skilled carpenter differs from that of an ordinary carpenter. The wage of people who do the same work increases according to their perfection in their effort’s benefit. This is not considered a promotion to them, but rather it is their wage which they deserve as they improved the benefit of their effort.

The Islamic Shar’a defines the employee as every person who works for a wage, whether the employer is an individual, or a group, or a State. So the term employee applies to everyone who works in any type of work, with no difference in the divine rule between the employee of the State and the employee of others. So concerning the employee of the State, the employee of the group, and the employee of the individual, each of them is a worker, and the laws of labour apply on them. In other words each of them is an employee and the rules of hiring apply on them. So the farmer is an employee, the servant is an employee, the workers in factories are employees, the clerks of merchants are employees, the civil servants are employees, and every one of them is a worker. This is because the contract of hiring is over the benefits of the assets, the benefit of the work or the benefit of the person. If this were to be applied on the benefits of the assets then the subject of the employee is not included in it, as He has no relation with it. If it were to be applied on the benefit of the work such as hiring a craftsmen for certain works, or if it applies on the benefit of the person such as hiring servants and workers, then these relate to the employee, and this is what the subject of employment applies upon.