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Business Ethics in Islam- Rashid Mateen Khan

rashidmateenkhan@yahoo.com
Riphah international University

Introduction
A person can earn money by two means; one is agriculture and the other is
business. If business is not done according to the ethics then there will
always be inflation and shortage of goods. As it can be seen in the case of
many commodities like wheat, sugar etc. It is due to the stocking in,
speculation and the selfishness of some businessmen. The government has
also become a trader itself, while the shariah has stopped the Islamic
government from trading.
As it can be seen that business is an important part of life, the Prophet
Muhammad (P.B.U.H) said, “People get 9/10 of their daily bread by trade.”1
Islam explains the concept of righteous trade by telling business ethics. If
trade or any other thing is done against the morals and creed then this will
lead to the bad end on the day of resurrection. Also by the law the person
guilty of illegal business would end up no where. Islam emphasizes on the
importance of the business ethics a lot. Allah says in the Quran, “they say
that buying is also like interest but Allah has declared buying as permissible
and interest as forbidden.”2 And “When you buy or sell then make someone
a witness of it.”3 The Holy Prophet Muhammad (P.B.U.H) said, “If trade
was not there then you would have become a burden on others.”4 He also
said that “A trader is the guardian of the means of daily bread and a keeper
of the dignity of himself and other people.”5 The Holy Prophet Muhammad
(P.B.U.H) encouraged the trust worthy traders by these words, “A
trustworthy and truthful merchant shall be with the prophets and the truthful
and the martyrs and the righteous.”6 "God shows mercy to a person who is
kindly when he sells, when he buys and when he makes a claim"7 The
prophet emphasized on the truthfulness and the righteousness of the
businessmen a lot. He said that “Verily, merchants shall be raised up sinners

1
Kinzul Aamal, pg. 192
2
Surah Baqarah
3
Surah Baqarah
4
Kinzul Aamal, chapter Al Kasab, pg. 217
5
Mishkath
6
Narrated by Abu Issa Muhammad bin Issa (R.A) in Tirmidhi
7
Bukhari
on the day of resurrection, except he who fears God, and is good, and speaks
the truth.”8

Business and ethics


As Muslims, we have to adhere to ethical standards, not only in business but
also in all aspects of life. Both business and ethics are interrelated. There is a
reference to this point in the Qur'an, “For you in the Messenger of Allah is a
fine example to follow.”9 Allah Almighty says, “To the Madyan people (we
sent) Shu'aib, one of their own brethren: he said: ‘O my people! Worship
Allah. You have no other god but Him. And give not short measure or
weight. I see you in prosperity, but I fear for you the penalty of a day that
will compass (you) all rounds. And O my people! Give just measure and
weight, nor withhold from the people the things that are their due: commit
not evil in the land with intent to do mischief. That which is left you by
Allah is best for you, if you (but) believed! But I am not set over you to keep
watch!”
Prophet Muhammad was chosen by God to be His last prophet and
messenger at the age of 40. Before that he was very much involved in
business. He and his wife Khadija were both merchants. It is reported that he
traveled to Syria, Yemen, Bahrain, and many other places in Arabia for
trade. Some historians have also suggested that he probably traveled to Iraq
and Ethiopia. From his early age, he was involved in commerce. He had a
good reputation as a hardworking, honest, truthful, and very successful
businessman.

Fair dealings in business


The Holy Qur’an and Prophet Mohammad (PBUH) have made it clear that a
Muslim must be honest and upright in his business and monetary dealing.
Also the true Muslim should keep his word and fulfill his promises, shun
fraud and avoid deceit and perfidy, encroach not upon the rights of others,
nor take part in wrongful litigation. Also a good Muslim does not give false
testimony, and abstains from making unlawful money as from usury and
graft. According to Islam whoever is not free from these vices, is not a true
believer but a renegade and a worthless transgressor.

8
Narrated by Riffah (R.A) in Tirmidhi
9
Surah Al-Ahzab:21
And the Qur’an is rich with verses that confirm all this. Allah says in the
Quran, “Eat not up each other's property by unfair and dishonest means.”10
Allah forbids all unclean and corrupt means of making money, such as,
dishonest trading, gambling, and bribery. And the Holy Quran has explained
and described such practices in many of its verses. He says, “Woe to those
that deal in fraud, - those who, when they have to receive by measure from
men, exact full measure, but when they have to give by measure or weight to
men, give less than due. Do they not think that they will be asked on a
Mighty Day when (all) mankind will stand before the Lord of the lords.”11
Another example is given in the coming verse, where Allah urges Muslims
to be very particular about their trusts and about other people's rights. "Allah
does command you to render back your trust, to those to whom they are
due." 12

Major principles of fair business dealings


According to Islam, the following things must be avoided to commence fair
business.

1. No fraud or deceit, the Prophet (P.B.U.H) is reported to have said,


“When a sale is held, say, There's no cheating”13
2. Sellers must avoid making too many oaths when selling merchandise.
The Prophet (P.B.U.H) is reported to have said, “Be careful of
excessive oaths in a sale. Though it finds markets, it reduces
abundance.”14
3. Mutual consent is necessary. The Prophet (P.B.U.H) is reported to
have said, “The sale is complete when the two involved depart with
mutual consent.”15
4. Be strict in regard to weights and measures. The Prophet (P.B.U.H)
said, “When people cheat in weight and measures, their provision is
cut off from them.”16 He told the owners of measures and weights,
“You have been entrusted with affairs over which some nations before
you were destroyed.”17
10
Surah Nisa:29
11
Al Quran (33:1-6)
12
Al Quran(4:58)
13
Bukhari
14
Muslim
15
Bukhari
16
Al-Muwatta
17
Al-Tirmidhi
5. The Prophet (P.B.U.H) forbade monopolies. “Whoever monopolizes
is a sinner.”18
6. Free enterprise, the price of the commodities should not be fixed
unless there is a situation of crisis or extreme necessity.
7. Hoarding merchandise in order to increase the prices is forbidden.
8. Transaction of forbidden (Haram) items, such as intoxicants, is
forbidden.

Fraud and dishonesty in business


Prophet Muhammad (P.B.U.H) has stressed the importance of honesty in
most of his sermons, saying, “Remember, there is no faith in him who is not
trustworthy; there is no place for him in religion who cares not for his
pledged word or promise. He (PBUH) also said, “The signs of a hypocrite
are three, when he speaks, he is false, when he promises, he fails; and when
he is trusted, he plays false.”19
Condemning those who cheat in business Prophet Mohammad (PBUH) has
said, “He who cheats is not of us. Deceitfulness and fraud are things that
lead one to Hell.”
Once Prophet Muhammad (P.B.U.H) came upon a heap of corn in the
market of Madinah and thrust his hand onto it. His fingers felt damp. On
being asked, the trader replied that rain had fallen upon it. The Prophet
(P.B.U.H) observed, “Why did you not then keep (the wet portion of) it
above the dry corn, so that men may see it? He, who deceives, is not one of
us.”20
Thus traders who deceive by showing to customers a false sample or by
concealing from them the defects of the product they’re selling are not true
Muslims in the judgment of Allah Prophet (PBUH) and, they are going to
end up in hell.
Prophet Muhammad (P.B.U.H) said, “The seller must explain to the buyer
the defects, if any, in the quality of the article offered for sale. Should this
not be done, the seller will permanently be caught in the Wrath of Allah.”21
In short, all manner of deceit and dishonesty in business is prohibited in
Islam. The Holy Prophet has expressed his strong dislike for those who do
so.

18
Abu Dawood
19
Narrated in Bukhari
20
Narrated in Bukhari and Muslim
21
Narrated in Bukhari
Bribery in business transactions
Bribery and usury, although might be practiced by mutual consent and
agreement, are totally prohibited and forbidden. Those who are guilty of
them have been condemned by Allah and His Prophet (P.B.U.H). Prophet
Muhammad (P.B.U.H) said, “The curse of Allah rests on him who offers
loan on usurious terms, and on him who receives, and on those who are
witnesses to the transaction, and on the writer who writes the deed thereof."
Prophet Muhammad (P.B.U.H) said, “If a person made a recommendation
for anyone in a just manner and gratified party gave him something as a gift
(in return for it) and he accepted it, then he committed a grave error
(meaning that it, too, is a form of bribery).”
Usurpation of another's property by force or fraud or dishonest litigation is
even worse. Prophet Muhammad (P.B.U.H) made this clear, as he says,
“Whoever occupies land belonging to another unjustly will be sunk into the
ground along with the plot of land on the Doomsday till he reaches the
lowest layer of the earth.” And “He who acquires the property of a Muslim
unjustly by taking a false oath (before an Officer) is debarred by Allah from
entering Paradise and the Fire of Hell is made inevitable for him.” Prophet
Muhammad (P.B.U.H) again, is reported to have warned a person who was
very fond of entering into litigation with others in these strong words,
“Remember, he who will obtain the property of another by swearing a false
oath will appear as a leper before Allah (on the Day of Judgment).”22
And, again he (P.B.U.H) said, “Whoever laid a claim on a thing that was not
his is not of us.”23

Conclusion
The Prophet's general advice to all people was that, “What is lawful is clear
and what is unlawful is clear, but between them are certain doubtful things
which many people do not recognize. He who guards against the doubtful
things keep his religion and his honor blameless, but he who falls into
doubtful things falls into what is unlawful, just as a shepherd who pastures
his flocks round a sanctuary will soon pasture them in it. Every king has a
sanctuary, and God's sanctuary is the things he had declared unlawful.”24
Before the Prophet invited his people towards Islam, it was his truthfulness
and trustworthiness which had earned for Muhammad (S.A.W.) the glorious
titles of “Sadiq” (truthful) and “Amin”. Therefore, one must follow the

22
Narrated in Bukhari
23
Narrated in Bukhari
24
Narrated in Bukhari
teachings of the Holy Prophet (P.B.U.H) in regard to business and all other
aspects of life; to become a good Businessman and hence, a better Muslim.