Monopoly in Islam: Prohibitions and punishment

Economics 14 Apr 2021 Contributor
Opinion
Monopoly in Islam
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Monopoly is a prohibited practice in Islam because it leads to injustice. It is one of the most economically dishonest ways to destroy the economic system. As a result of this, the purchase price of all types of goods, including necessities, skyrocketed is increased. It disrupts the lives of ordinary people and harms ordinary people. Making a living is especially difficult for low-income people. Therefore, hoarding is completely forbidden in Islam.

Nevertheless, such misdeeds, which hinder the normal flow of the market, have become an integral part of trade and the economy. Monopoly has become one of the foundations of the modern capitalist system and a feature of economic transactions in most companies. But inside it carries the seeds of destruction and annihilation. Because it causes oppression, injustice, inflation, and danger. Moreover, it undermines the freedom of trade and industry and closes the door to work and livelihood in front of non-stockists.

Definition of monopoly in Islam

The Arabic synonym for monopoly is ‘Al-Ihtikar‘ or ‘al-hukrah’.

In the technical sense, monopoly means refraining from selling the goods purchased by the trader during the rise in the price of the commodity, so that he can sell it at a higher price than the purchase price when the person is in dire need.

Imam Abu Dawood (Rah) said, “I asked Imam Ahmad bin Humble (Rah) what is forbidden to store things?” He said, “All the things that people need every day. That is, which contain human life and livelihood.”

Types of monopoly in Islam

There are basically two types of monopoly. 1) The trader or buyer does not wait for the price of goods to rise. Instead, they buy and store for themselves when they see that the price of the product is cheap and the product is sufficient. Such a person is not called a stockholder in Islamic terminology. Rather he is called the saver. He has stored the goods for himself. And it is permissible for any person to store the necessities of his home and family for one year.

2) The one who keeps stock of goods in anticipation of rising prices and sells them at high prices by controlling the price when the need of the people is acute. This second type of person is the real stockholder in Islamic terminology. In the hadith, such a hoarder has been found guilty and cursed.

Monopoly is the artificial crisis created in the market by stockpiling food in the hope of making extra profit. Basically, a group of middlemen/businessmen does this heinous act in the hope of making a profit illegally. Thus, Islam has declared it illegal to increase the price of goods in the market and to expect more profit. It is completely forbidden. As a result, the purchasing power of the common man decreases and most of the people suffer. Such work multiplies the suffering of the common man.

The provision of punishment for monopoly

That is why Islam has forbidden such acts. In this connection, the Prophet (SAW) said, “Whoever hoards the food of the Muslims, Allah will impose poverty and deprivation on him.” (Abu Dawood)

It is a social crime to try to make increased profits by selling, stockpiling, creating artificial crises without selling essential business products. The Prophet (SAW) said about them, “Cursed is he who stores food grains.” (Ibn Majah) He also said, “Whoever stockpiles food for 40 days, he is out of the responsibility of Allah.”

However, it is not illegal to stockpile goods in these conditions if the stockpiled goods are not a necessity of man or are not dependent on man, or if these products are in excess of demand.