Prohibited forms of Business

1. Monopoly business. As monopoly means concentration of supply in one hand, it leads to exploitation of the consumers and the workers, it has, therefore, been declared unlawful by the Holy Prophet (may peace be upon him). Gigantic trusts. cartels and monopolies should not exist in the Islamic society. The monopoly-dominated economic order betrays lack of harmony between private and social good and is, thus, a negation of the principle of maximum social advantage which the Islamic society sets out to achieve.

2. Speculative business basd on selfish interest. Speculation means buying something cheap in bulk at a time and selling it dear at another and, thus, controlling the whole market to achieve personal gains. A close observation will reveal that speculators are primarily interested in private gains regardless of the larger interest of the society. These speculators try to create artificial scarcity of goods and commodities and thereby create an inflationary pressure on the economy. As the poor masses have to pay for this. Islam has condemned such speculative business.

3. Interest transactions. All transactions involving interest are forbidden in Islam. Some people find it hard to submit to the injunction prohibiting interest, because they think interest and profit earned in trade are similar. Capital invested in trade brings an excess called profit; invested in banking it brings interest. Why should one excess be considered lawful and the other unlawful? They fail to take note of the basic difference between the two. Trade involves risk of loss. Also in its case, it is not only the capital invested that brings profit which is equally the result of initiative, enterprise and efficiency of the entrepreneur. Hence its rate cannot be predetermined and fixed. Moreover, trade is productive. A person reaps a benefit after undergoing labour and hardship. It creates conditions of full employment and economic growth. It will also be noted that trade acts as one of the dominant factors in the process of building up civilisation through co-operation and mutual exchange of ideas. The spread of Islam and Islamic civilisation In the Far East has been mostly due to the efforts of Muslim traders. Interest has no redeeming feature at all. The fixed rate of profit which a person gets from a financial investment without any risk of loss and without augmenting it with human labour creates in man the undesirable weakness of miserliness and Shylockian selfishness and lack of sympathy. In the economic sphere it initiates and aggravates crisis.

Rightly, therefore, has Islam strictly prohibited all transactions based on it or involving it in some form or other.

Advancing money on interest, keeping deposits in a bank for the sake of earning interest, or getting concessions in rates of goods or commodities against advance payments of price, mortgaging and utilising an income-yielding property against a certain sum,to be returned in full when the property is redeemed and investing money in a trade against a predetermined and fixed rate of profit-are all unlawfnl business transactions because they involve Riba (interest) in some form or the other.

4. Transactions similar (in nature) to gambling. The Arabic equivalent to gambling is Maisir which literarily means "getting something too easily", "getting a profit without working for it". The literal meaning of the term explains the principle on account of which gambling is prohibited in Islam. Any monetary gain which cornes too easily, so much so that one does not have to work for it, is unlawful.

The most familiar form of gambling among the Arabs in the days of the Holy Prophet (may peace be upon him) was gambling by casting of lots by means of arrows drawn from a bag. Some were blank and those who drew them got nothing. Others indicated prizes-big or small ones. Whether one got anything or nothing depended on pure luck. unless there was fraud on the part of someone concerned. The principle on which objection to gambling is based is that you gain what you have not earned, or lose on a mere chance. Dice, lottery, prize bonds and betting on horse races are to be held within the definition of gambling.

5. Munabadha and Mulamasa. Islam recognises barter trade subject to the injunctions of the Qur'an and the Sunnah. In fact, Islam has closed all doors of dishonesty and deceit in business dealings. It has prohibited all forms of transactions which admit of fraud in the least degree. It has impressed on the traders that defective and worthless goods should not be given in exchange for good ones, and if there is a defect in the goods sold it must be pointed out and made manifest to the purchaser. The Messenger of Allah (may peace be upon him) said: "The buyer and the seller have the option of cancelling the contract as long as they have not separated; then. if they both speak the truth and make manifest, their transaction shall be blessed, and it they conceal and tell lies, the blessing of their transaction shall be obliterated".

Besides issuing the instructions which govern all forms of trade, particularly barter trade, Islam has banned two forms of sale contract that were prevalent before Islam. These were Munabadha and Mulamasa. In neither of these was the purchaser offered an opportunity to examine the thing purchased. Munabadha means that the seller should throw the cloth to the buyer before he has carefully examined it. The very act of throwing the cloth will mean that the bargain has been struck. Mulamasa means touching the cloth without examining it, ie. the buyer was just supposed to touch the cloth to strike the bargain. Both these forms of transaction were prohibited because in either case the purchaser got no opportunity to examine the things sold to him, and the bargain was likely to prove unduly disadvantageous to one side.

In fact, Islam demanlds that goods and commodities for we should go to the open market and the seller or his agents must be aware of the state of the market before proposals are made for the purchase of goods or communities in bulk. He should not be taken unawares lest advantage be taken of his ignorance of the state of the market, and the prevailing prices. All this is ver clearly laid down by the Prophet (may peace he upon him).

As mentioned above, Islam tries to be fair to both parties to a transaction. Any step on the part of one, that is advantageous to him and disadvantageous to the other, is not permissible. The seller is expected to make the defects (if any) in the goods manifest to the buyer, nor is the buyer expected to take undue advantage of the ignorance of the seller.

Mozabana. It is the exchange of fresh fruits for dry ones in a way that the quantity of the dry fruit is actually measured and fixed, but the quantity of the fresh fruit to be given in exchange is guessed while it is still on the trees (Mishkat, 2710). The Holy Prophet (may peace be upon him) has forbidden this exchange because the quantity of the fruit on the trees cannot be definitely Determined and the transaction is just a leap into the dark.

Mu'awama. It consists in selling the fruit on the trees for a period of one, two or three years even before it has made its appearance. It is prohibited because like Muzabana it is also a leap into the dark. Such transactions may result in bitterness and frustration.

Bai' al-Gharar. It is to sell a thing which one doesn't have in one's possession, nor expects to bring it under one's control, e g. fish in the river, or birds in the air. Possession is one of the basic conditions of a sale. One cannot sell a thing which is not in one's possession.

Bai' al-'Uryan. It is getting a thing against a nominal advance on the condition that if the bargain is struck, the advance will be adjusted and if the bargain is cancelled, the seller will riot return the advance. The advance being nominal, the buyer has practically no liability. He will abide by the contract if he finds it advantageous to him and will withdraw himself from it otherwise.

Bai' al-Mudtar. It is to buy a thing forcibly or to purchase a thing when its owner is compelled under stress of want to dispose it of. Instead of purchasing the thing, and taking undue advantage of the seller's helplessness, one should help him. Bai' alal-Bai' (sale over and above the sale of another). When one person has sold goods to another, a third Person should not upset the bargain trying to sell his own goods to the latter, offering them at lower rates or pointing out the defect in the goods already sold to him by the former. "A Muslim should not purchase in opposition to his brother, nor should he send a marriage proposal over and above the proposal of another."

Bai' al-Hast (i.e. sale by means of pebbles). The purchaser will tell the seller that when he will throw a pebble on his goods, the sale contract will be confirmed or the seller tell the purchaser that on whatever thing a pebble thrown by him falls will be sold to him. Sale contract is a serious matter and it should not be accomplished by such hit-and-miss methods like throwing the pebbles on the goods. A sale completed in this way may lead to injustice and hardship to one side and is consequently prohibited.
Sale of unripe fruit and unripe corn. The Holy Prophet (may peace be upon him), according to Hadrat Anas (Allah be pleased with him), has prohibited the sale of grapes before they become dark and that of the corn before it ripens. Similarly, he has forbidden the sale of raw dates. The fruit of the date palms should not be sold until it becomes red or yellow.

Here is a brief account of the sale transactions prohibited by Islam. If one ponders over these forms of transaction described above and described in greater detail in "Kitab al-Buyu," one can arrive at the following conclusions:

1.Islam insists upon absolute justice and fairplay in business dealings.

2. According to Islam, a person who sacrifices his faith, and loses the good pleasure of his Lord to make a monetary gain has not made a good bargain. A Muslim will not go in for such a bad bargain. A Muslim merchant is not a worshipper of the Mammon with an inordinate love for money. He prizes faith, piety and righteousness above all.

3. Islam does not believe in the view that all is fair in business and that every kind of cleverness and deceit is justifiable in business transactions. Islam regards business or commerce as an economic activity to be carried on in a spirit of humanity. tarianism and justice. It does not approve of the cut-throat competition. Indeed, the very concept is un-Islamic.

4. Islam expects the buyer and the seller to look upon each other as Muslim brethren or fellow human beings, each trying to go all his way to help and serve the other. It the seller happens to overcharge the buyer, he, instead of feeling proud of his cleverness in doing so, should somehow compensate him for the excessive payment received.

5. All bargains that are clenched without giving the purchaser a fair chance of examining the things are prohibited because this amounts to denying him a right that was his due.

6. Forcible transactions or transactions in which the buyer takes undue. advantage of the helplessness or misery of the seller are also discouraged.

7. Islam has prohibited traffic in wine, swine, dead bodies of animals and other goods the use of which has been declared to be Haram (unlawful).

8. It has also forbidden trading in things that have a debasing or vitiating influence on the Muslim society.