Islam has defined three types of property within the Economic System. These are : Individual Property, Public Property and State Property.
- Individual Property
Allah (swt) has permitted human beings to utilise capital, whether by consuming, using or exchanging it. Islam has made ownership a legal right for the individual, and it does not impose a limit on the amount of wealth that one can own. Accordingly, people may own moveable property, such as livestock, money, cars and clothes, or immoveable property such as land, houses or factories.
However, the Shari’ah controls the means of ownership such that people acquire the right to wealth in a just manner, and it also regulates the ways in which it is disposed of.
Means of Ownership
There are a variety of ways in which ownership of wealth can be achieved. Work is one example of this, whether it be for ones self or for others in exchange for a wage. This includes any type of permitted work, such as farming, mining, trading etc. Other means of ownership which Islam has permitted include inheritance, grants of the States property to citizens, gifts, blood money or dowry.
Islam restricts the means in which wealth can be earned or invested by forbidding persuits such as gambling, fraud, theft and bribery, or trading in wine, pigs, crosses and other forbidden items.
- Public Property
This is defined as the commodities which Islam has made the property of Muslims as a whole, such that individuals are allowed to utilise them, but are forbidden from owning them as their own property.
These commodities come under three main categories :
a) The utilities of the community without which the everyday life of the community cannot properly function. Under this category comes things like water or oil reserves. Muhammad (saw) said, “The people are partners in three things : water, pastures and fire.”
However, the order is not restricted to these three things, but it includes everything that is a common need for the whole community. All machinery used for such purposes is similarly regarded as public property, like that required for drawing water for public use, the pipes for transporting water to consumers, or hydro-electric power stations and their pylons and distribution cables etc.
b) Commodities that by their nature cannot be an individuals property like the seas, rivers, public parks, mosques and public highways. The Messenger of Allah (saw) said, “Whoever reaches Mina first has the right to it.”
This category includes trains and other forms of public transportation, or sewerage drains along the public roads; they cannot be an individuals property for they belong to the public.
c) Natural uncounted minerals. These include the many minerals, such as salt, magnesium or copper, which are vast in quantity. They are the property of all Muslims and individual or corporate possession of these things is forbidden. The mining, manufacture, storage or distribution of these minerals is not given to individuals or companies on an exclusive basis. It is necessary that they remain the common property of all Muslims. The State as the representative of the Muslims should itself mine them or sub-contract their collection, and all revenues should be kept in the Bait al-Mal (the State treasury). There is no difference, as regards the law, between the minerals whether they are in open mines like salt and antimony sulphide (mascara) or if they are deeply hidden underground and difficult to mine, like gold, silver, iron, uranium etc. The Shari’ah reason for this derives from the narration of Abaydh ibn Hamman al-Mazni that he requested the Messenger of Allah (saw) to allot him certain property in the Ma’reb, which he (saw) gave to him. When he turned back, the Messenger of Allah (saw) was asked, “O Messenger of Allah, do you know what you have given him? You allotted to him unaccounted water.” The narrator said, “He (saw) took it back from him.”
As regards small amounts of minerals like ornaments of gold or silver, it is allowed for individuals to own them. As an example, the Messenger of Allah (saw) allotted Bilal ibn al-Haris al-Mazni the minerals of Qabaliyh in al-Hijaz. Bilal had asked the Messenger of Allah (saw) to allot it to him therefore he (saw) did so and made him the owner.
The Way of Utilising the Public Property
Since the Public Porperty is the property of all Muslims, it is accordingly the right of every individual to enjoy its utilisation. If the commodities of this property are such that every person can utilise them directly, like water, pasture, electricity, public roads, rivers and seas, then he is allowed to do so by himself.
However, if the commodities of Public Property are such that they are not easy for every individual to make use of directly, like oil and minerals, then it is for the State to mine them and collect their revenues in Bait al-Mal and for the Khaleefah to spend from it in ways that are useful to all Muslims. It is possible that he decides to undertake the distibution of the products and revenues in a variety of ways :
a) It can be spent on the running and mining of Public Property commodities, as well as on public buildings, staff, advisors, experts, machinery and factories.
b) It can be spent upon the Muslims since they are the common owners of the commodities. He can distribute amongst them things like water, gas, oil or electricity without charge or he can grant them money from their revenues according to the situation of Muslims for their general betterment.
c) He can take from it revenue to spend on jihad and what the jihad requires such as ordinance factories, establishing the army and other expenses of Bait al-Mal which are obligatory for the State to provide for the people.
3. The State Property
This includes every commodity of land or building which is connected to the right of the public and is not included in the Public Property. So the State Property consists of things that are liable to individual possession such as land, buildings and moveable things. Included within this category are state office buildings, or state money. The public has a right to these and therefore their running and control over use is given to the Khaleefah (i.e. to the State) because he has the resposibility to exercise his powers regarding everything that is associated with the public right, like deserts, mountains, river banks, uncultivated lands not owned by people, buildings and property which the State has purchased and made suitable for dwelling, or has captured from enemies in war like state department buildings, schools, hospitals and the like.
The State has the right to give of its property to individuals, such as lands and buildings, because the Khaleefah can give them to the people on an ownership and utilisation basis, or on the basis of utilisation only, or people can be permitted to cultivate dead land and thereby acquire its ownership.Whichever way the State Property is used, it is for the good of the citizens.
Through these ownership principles, Islam ensures that everyone gets what is rightfully due to him from his Creator unlike, for example, the Capitalist system where only those who take part in the production process have the right to wealth. At the same time, it gives full incentives to individuals to fully participate in the economy by not imposing a limit on how much they can own. As well, it guarantees the rights of the people over the wealth that Allah (swt) has endowed upon them, and prevents greedy individuals from exploiting and monopolising it at the expense of others.