A MUSLIM GUIDE TO SPENDING AS PRESCRIBED BY THE QURAN (Part 2)

This is Part 2 published on World Religion News on July 17, 2014 in a two-part series. Part 1 can be found here.

[Taken, with a slight adaptation, from a chapter in the author’s book Rediscovering Genuine Islam: The Case for a Quran-Only Understanding, 2014.]

THE SCOPE OF  IN GOD’S WAY: THE BROADER MEANING

Spending in God’s way means much more than is conventionally understood. A careful reading of the Quran does reveal that such spending should be from both income and wealth, that the amount we should spend should be a considerably higher proportion of our income and wealth than is currently being practiced, and that the purposes for which we should spend are much more varied than are usually thought.

The Quran urges us to spend out of our wealth and income or production (2:254; 6:141). Besides, we should use part of our income for our and our families’ current consumption, and save and invest part of our income for our future consumption, but we should not keep it idle or hoard it. Hoarding is bad for an economy. It deprives others; it curbs effective demand in the economy and holds back economic expansion, and if the hoarding is done in goods, it creates artificial scarcities and high prices of the hoarded goods. The Quran strongly condemns hoarding (3): 180).

Though everything prescribed in the Quran is  or obligatory for us, God specifically mentions  as fard for us, and mentions where such spending should go:

9:60 The alms (sadaqa) are for the poor, the needy, and those who administer them, and those whose hearts are to be reconciled (to truth), and to free the slaves and the debtors, and for the cause of God, and (for) the wayfarers; an obligatory duty (fard) imposed by God. God is Knower, Most Wise.

Such spending is for those who are needy, and for those who are deprived, or poor (70:25), for parents, near relatives, orphans, wayfarers, and for those who ask (2:177), and for other causes of God, including that for freeing of captives or slaves, and for necessary reconciliation or rehabilitation of new converts to religion (2:177, 215; 8:41; 9:60; 24:22). Spending is also for those who are in need of help, but being involved in the cause of God, are unable to move about in the land, and who do not beg importunately (2:273). Likewise, we need also to spend for other noble causes such as for relieving the burden of those who are heavily laden with debt (9:60) and for miscellaneous other noble purposes, which can be termed as causes of God. As for the spending for the new converts, the Quran speaks well of the God-loving believers during the Prophet’s time, who were so generous to those who came to them for refuge that they gave preference to the refugees over themselves in helping them, even though they were poor (59:9).

God advises those of us who are affluent that we should not make such promises as not to help our relatives, poor people, and those who leave their homes for the cause of God; and we are urged to forgive them and ignore their faults (24:22). He loves those who spend not only when they are in affluence or ease, but also when they are in hardship (3:134). He admonishes us to give others what is good, and not what we regard as bad and do not want to receive for ourselves (2:267). God characterizes freeing of war captives or slaves, or marrying them as equal partners as very important righteous deeds. Spending for such purposes is likewise a great virtue in the sight of God (2:177; 9:60).

The current practice of zakat at a low proportion (21/2 percent) of one’s wealth (which includes the value of most of one’s assets (with some exceptions such as the family house) appears inadequate in light of the Quran, especially for high-income people, as well as from the point of view of the demands of society for a multiplicity of beneficial works (for God’s cause) on top of the provisions for the poor.

Concerning what to spend in God’s way and how much, the Quran explicitly states:

2:267 O ye who believe! Spend of the good things, which ye have earned, and of what We bring forth from the earth for you, and seek not the bad to spend thereof when ye would not take it for yourselves unless ye close your eyes.
2:219 They ask thee concerning what they should spend. Say: That which is in excess (of your needs).
25:67 And they, when they spend (in charity), are neither extravagant nor stingy; they keep a just (balance) between these (two limits).

In these verses, the Quran asks us to spend out of what we earn and produce (i.e., from our income and production), out of what we like for ourselves, and from that which is in excess of our needs. Our needs can be understood as those for our own consumption, including needs that accommodate provisions for savings and investments for our needed future consumption. “Need” is a subjective term and hence can be interpreted variously. The same is true of the term “stinginess”. In one of the above verses the Quran exhorts us not to be stingy in spending as well. When deciding about how much to spend in God’s way, individuals concerned need to make their decisions according to what they feel or think about their own needs and what they consider as stingy. Thus the amount of spending in God’s way should be in excess of our needs and a reasonable balance between extravagance and stinginess.

Two other verses of the Quran also shed more light on how much one should spend out of windfall income or wealth like the spoils of war and other gains:

8:1 They ask thee (O Muhammad) about the spoils of war. Say: The spoils of war are for God and the Messenger.
8:41 And know: Of anything ye gain, a fifth is for God and His Messenger, relatives, orphans, the needy, and the wayfarer, if ye do believe in God and in what We have revealed to Our servant.

The first of these verses relates to gains such as the war booties. Such gains wholly belong to “God and the Messenger,” which means that such gains should be distributed entirely for God’s cause – for meeting the needs of the poor and needy people and other welfare needs. The handling and distribution of these gains should be done and administered by the state or by state-sponsored appropriate public or private sector organizations (modern-day NGOs, for example). There may be other gains of the nature of what economists call “windfall gains”, the handling and distribution of which warrant similar treatment. Some examples of such gains are instant treasure troves found by some people, and real estates, bank deposits, and other assets left by deceased people who have no near relatives with any legitimate claim to such assets. Lottery earnings also fall in the category of windfall gains, which deserve to be heavily taxed by the state for welfare needs. Note, however, that the Quran strongly discourages us to indulge in games of chance (2:219; 5:90–91). Hence, in Muslim countries lotteries and gambling should not be allowed in the first place. However, if any citizens in these countries receive profits from lotteries overseas, such profits deserve to be highly taxed by the Muslim state.

The second verse (8:41) calls for spending or distribution of a fifth of other gains or income we earn for God’s cause and for near relatives, orphans, needy, wayfarers, etc. That implies that there should be a twenty percent tax on normal or regular gains or income for both the state and other welfare activities. These verses warrant drawing the following summarized implications concerning how much we should spend in God’s way:

• First, we should spend in excess of our needs, and choose an appropriate balance between extravagance and stinginess;
• Second, the excess over needs implies a more than proportionate ability to spend in relation to income and wealth of a person suggesting a need for progressive taxation for welfare needs;
• Third, windfall gains such as war booties and other gains of the essentially same nature should be spent entirely in God’s cause, and their distribution should be left at the discretion of the public authority, i.e. the state; and
• Fourth, we should spend in God’s way one fifth of our normal gains – income or wealth, which are gains other than windfall gains of the nature of war booties. This entitles the state to tax people’s normal income or wealth at the rate of 20 percent to meet the welfare needs of the state. (I owe this interpretation to Layth Al-Shaiban, manager of the website free-minds.org/ and co-author of Quran: A Reformist Translation).

These directions of the Quran highlight that the proportion of our income, wealth, or gains to be spent in God’s way should normally be a considerably higher fraction than the 2½ percent (of wealth), which is generally believed as the zakat amount. Note that such spending should go not only to the destitute and the needy but also to a multiplicity of noble causes, which we can lump together as God’s cause. A substantial chunk of such causes is best handled at the state level, while others may be left for private individuals. During our Prophet’s time, considerable resources in the forms of believing men and goods were mobilized for conducting war against the invading infidels.

9:41 Go forth (O ye who believe), equipped with light arms and heavy arms, and strive with your wealth and your lives in God’s cause. That is best for you if ye only knew.

Resources mobilized in the forms of men and goods used for purposes of defense are spending in God’s cause. There are many such needs that need to be met at the government or public sector level. The government should cater to such needs, and sadaqa or appropriate taxation should finance such needs. All those parts of government expenditure, which are meant for social welfare – feeding and rehabilitation of destitute people, provisions for unemployed workers, education, labor training, health and hospital services, and similar spending directed especially to amelioration of the conditions of the poor, and those which are meant for making available what economists call “public goods” that are best produced at the public sector level – are indeed instances of spending for God’s cause. Public goods are those goods and services, the production of which, if left to the private sector alone, is grossly neglected or inadequately met. Public goods are similar to what Muslim scholars recognize as acts or goods of public interest (muslaha), but they are not exactly the same. Some examples of public goods are social peace and security, defense against external aggression, administration of law and justice, promotion of social, cultural, and spiritual development, economic policymaking, and general public administration for miscellaneous government functions. All such state functions should count within the purview of God’s cause.

And in an impoverished developing economy, the state has a special role to play in promoting economic development, which indeed is the best way to alleviate poverty for the poor. For promoting economic development, considerable investment is needed in physical infrastructure (such as roads, highways, railways, waterways, ports, telecommunications, power and energy, information technology, etc.) as well as in human skills and education, technology and research. Promotion of such development is crucial for expanding employment opportunities, raising living standards, and, in the long run, for dealing with the problem of the poor.

It is clear that spending in God’s way covers a lot more things than are currently being covered by the zakat or sadaqa system. It matters little whether one calls itzakat or sadaqa. But this system is in need of major reform in light of the directions given in the Quran and in light of recent developments in the conception of functions of a modern state. Spending in God’s way then of individuals will comprise both the taxes they pay for benevolent works of the government at the government level and whatever they can afford to spend voluntarily at the private sector level on top of the taxes they pay. It should be recognized that what the government can or should do efficiently is inadequate to deal with the total problem of social inequity and to promote overall social welfare; and there is much still left to be done at the private sector or individual level. But limiting such benevolent and humanitarian spending to just 2½ percent of one’s wealth will be taking a very narrow view of spending in God’s way in light of the Quran. Such spending should not be limited to a proportion of just wealth alone as is generally understood in the case of zakat. The verses (2:267; 6:141) cited above clearly point to spending from earnings and production. Hence earnings or production could also be used as a base for such spending. And the proportion should be a flexible one depending on how much one can afford neither being too generous nor too stingy as directed in verse (25:67) cited above, taking into account what he or she has already paid to the government in the form of taxes for God’s cause.

The ultimate aim of the zakat or sadaqa system should be to eradicate poverty and help people get work opportunities and become self-reliant, and not to perpetuate a beggars’ class in society, which is not only degrading for them but also a nuisance in society.

To the extent possible and economically efficient, such spending should be handled at the state level. Many modern developed countries have well-planned public welfare and social security systems embodying unemployment benefits, and certain medical benefits, and administered at the state level in conjunction with enterprise level retirement, lay-off and medical insurance benefits, and it is not left to the whims of individuals to cater to such welfare needs. Social security systems existing in some of the developed countries essentially exhibit the basic principles of the sadaqa system that the Quran propounds. The concessional aid developed countries provide and what their sponsored multilateral development financing institutions give to the developing countries is also a kind of sadaqa at state level on the part of the rich countries to the poor ones.

Such aid should also be counted in the calculation for how much more resources the government should mobilize domestically to cater to the needs of the poor and for development and social welfare needs. The need for paying sadaqa at the individual level will last as long as the state cannot pay full attention to the problems of the helpless people. The state in many developing countries is almost invariably unable to take full care of the poor and the needy. Also considering that public sector welfare systems in developing countries are found to be almost always plagued by significant corruption as available evidence suggests, there remains considerable room for charities at the private sector (NGO) and individual levels. When a believing man or woman can afford to spend and perceives the need for such spending, it becomes incumbent on him or her to do it. That is as good as his/her prayer for his/her own spiritual advancement. And a significant part of such spending should be given to reputable international charitable organizations, and international and domestic NGOs (non-governmental organizations), which engage in development and social welfare activities, and which are known to be more efficient and less corrupt than the relevant government departments.

Another point to note in this regard is that the scope of such spending should also embrace interest-free or concessional lending, which the Quran calls qarz-hasana (beautiful lending) (2:245; 57:11, 18; 64:17; 5:12; 73:20). In modern days, some of this concessional financing function is being performed in developing countries by developed country aid agencies and multilateral development financing institutions. The Quranic message of interest-free loans is applicable only for disadvantaged borrowers, who deserve to be treated with a humanitarian approach. The Quran also encourages the lenders to remit interest on remaining loans and postpone or write off the original loans in cases where the borrowers are in difficulty to repay them (2:278-280). In cases, which deserve humanitarian considerations, loans should indeed be extended free of interest, and where appropriate, such loans should be given as grants or alms, which is sadaqa in the Quranic terminology.

CONCLUSION

Spending in God’s way should be understood in a much broader sense than the generally understood zakat system. It involves considerable spending on the part of a modern state for a variety of functions financed through a well-devised taxation system, besides charitable spending at the private sector (NGO) and individual levels. The best kind of spending in God’s way is helping others stand on their own feet. To help another person in a way, which makes him or her look for help all the time, is inherently ill motivated and is like that of those who like to be seen by men and is of no intrinsic virtue to them (2:264). From this point of view, the modern state should take appropriate measures to promote investment and development to increase opportunities for gainful employment of unemployed people, along with crafting a well-devised social welfare and security system. At the individual level, such efforts should include saving, investment, and work that would help build infrastructure and industries for employment-generating development, along with their humanitarian spending in deserving cases.

 

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