Islam Vs. West: Resources and Desire
Muhammad Abubakar Siddique,
Lecturer, Int’l Institute of Islamic Economics (IIIE),
Int’l Islamic University, Islamabad.
Website: http://islamicfina.com/
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Efficient Use of Resources – PPF Curve 
A production possibility frontier (PPF) shows the maximum possible output combinations of two goods or services an economy can achieve when all resources are fully and efficiently employed. Conventional Economics provides general principles about how choices are made in a world of scarcity. It forms the foundation of neo-classical economics, which calls for the efficient allocation of resources into productive activities as scarce resource cannot be used wastefully. There are two important points need to understand the PPF-curve;
- Any point on the PPF curve shows that resources are being fully and efficiently used in production process and there is no wastage of resources.
- Any point below the PPF curve shows the inefficient utilization of resources which means some of resources are being wasted.
Area below the PPF curve is Undesirable: What is the Rationale?
Area below the PPF curve is undesirable as per Islamic as well as conventional economics. However, both economic system varies regarding the rationale behind the undesirability of this area.
Demand Oriented Rationale – Conventional Economics
According to conventional economics, scarcity of resources is an economic problem. Hence, resources are very limited to meet the demand which is triggered by desire. Therefore, conventional economists presented the idea of PPF curve which describes the efficient use of resources so that maximum demand (desires) could be met with limited resources. Otherwise, wastage of resources will cause so many economic problems. In short, conventional economics dislikes the area of production below the PPF curve because of demand oriented rationale.
Value Oriented Rationale – Islamic Economics
According Islamic economic system, there is no scarcity of resources. On the contrary, in Islamic economic paradigm, the Holy Quran insisted that Allah S.W.T. has complete earth and heaven with resources that are unlimited as sustenance for His creations seen and unseen includes human, animals, plants, jinn and etcetera.
روى زيد بن أسلم عن أبيه عن عمر بن الخطاب رضي الله عنه ،أن رجلا أتى رسول الله صلى الله عليه وسلم فسأله أن يعطيه ، فقال رسول الله صلى الله عليه وسلم ما عندي شيء ، ولكن ابتع علي فإذا جاء شيء قضينا فقال له عمر : هذا أعطيت إذا كان عندك فما كلفك الله ما لا تقدر . فكره رسول الله صلى الله عليه وسلم قول عمر ، فقال رجل من الأنصار : يا رسول الله : أنفق ولا تخش من ذي العرش إقلالا فتبسم رسول الله صلى الله عليه وسلم ، وعرف السرور في وجهه لقول الأنصاري . ثم قال رسول الله صلى الله عليه وسلم : ( بذلك أمرت ) .
A man visited the Holy Prophet (SAWW) and asked him for help. Holy Prophet (SAWW) replied “I don’t have anything, but buy whatever you need on credit, I will pay the debt of it”. Hadrat Omar (RA) said to Him (SAWW): “If you had something, you would give it to him. Allah (SWT) did not cost you what you cannot afford”. The Holy Prophet (SAWW) did not like Omar’s saying, and a man from the Ansar said: ‘O Holy Prophet (SAWW); Spend and do not fear of scarcity from the Allah (SWT). The Holy Prophet (SAWW) smiled, and the signs of happiness appeared on His face because of the words of the Ansari. He (SAWW), further, said: “This is what I have been commanded”.
(Al-Titmazi. Al-Shama’il. Bab maa jaa fi khulq e Rasul Allah (SAWW), p: 225.)
قال علماؤنا رحمة الله عليهم : فخوف الإقلال من سوء الظن بالله ; لأن الله تعالى خلق الأرض بما فيها لولد آدم
Our scholars said: The fear of scarcity is due to the mistrust on Allah. Because Allah Almighty created the earth and what is in it is for the son of Adam.
Islam announces the enrichment of resources along with some controls like dividing the desire into permissible and prohibited desire. In many verses, Allah (SWT) described it. For example, in Surah Al-Hadeed, He (SWT) said:
۞ٱعْلَمُوٓا۟ أَنَّمَا ٱلْحَيَوٰةُ ٱلدُّنْيَا لَعِبٌ وَلَهْوٌ وَزِينَةٌ وَتَفَاخُرٌۢ بَيْنَكُمْ وَتَكَاثُرٌ فِى ٱلْأَمْوَٰلِ وَٱلْأَوْلَـٰدِ ۖ كَمَثَلِ غَيْثٍ أَعْجَبَ ٱلْكُفَّارَ نَبَاتُهُۥ ثُمَّ يَهِيجُ فَتَرَىٰهُ مُصْفَرًّا ثُمَّ يَكُونُ حُطَـٰمًا ۖ وَفِى ٱلْـَٔاخِرَةِ عَذَابٌ شَدِيدٌ وَمَغْفِرَةٌ مِّنَ ٱللَّهِ وَرِضْوَٰنٌ ۚ وَمَا ٱلْحَيَوٰةُ ٱلدُّنْيَآ إِلَّا مَتَـٰعُ ٱلْغُرُورِ۞
Know that this worldly life is no more than play, amusement, luxury, mutual boasting, and competition in wealth and children. This is like rain that causes plants to grow, to the delight of the planters. But later the plants dry up and you see them wither, then they are reduced to chaff. And in the Hereafter there will be either severe punishment or forgiveness and pleasure of Allah, whereas the life of this world is no more than the delusion of enjoyment. (Al-Hadeed, 57: 20)
In Surah Al e Imran, Allah (SWT) said:
۞زُيِّنَ لِلنَّاسِ حُبُّ ٱلشَّهَوَٰتِ مِنَ ٱلنِّسَآءِ وَٱلْبَنِينَ وَٱلْقَنَـٰطِيرِ ٱلْمُقَنطَرَةِ مِنَ ٱلذَّهَبِ وَٱلْفِضَّةِ وَٱلْخَيْلِ ٱلْمُسَوَّمَةِ وَٱلْأَنْعَـٰمِ وَٱلْحَرْثِ ۗ ذَٰلِكَ مَتَـٰعُ ٱلْحَيَوٰةِ ٱلدُّنْيَا ۖ وَٱللَّهُ عِندَهُۥ حُسْنُ ٱلْمَـَٔابِ۞
The enjoyment of ˹worldly˺ desires—women, children, treasures of gold and silver, fine horses, cattle, and fertile land—has been made appealing to people. These are the pleasures of this worldly life, but with Allah is the finest destination. (Al Imran, 3: 14)
Same message has been conveyed in surah Al-Naazi’aat:
۞وَأَمَّا مَنْ خَافَ مَقَامَ رَبِّهِۦ وَنَهَى ٱلنَّفْسَ عَنِ ٱلْهَوَىٰ۞ فَإِنَّ ٱلْجَنَّةَ هِىَ ٱلْمَأْوَىٰ ۞
And as for those who were in awe of standing before their Lord and restrained themselves from ˹evil˺ desires. Paradise will certainly be ˹their˺ home.
In another surah, He (SWT) said:
۞أَرَءَيْتَ مَنِ ٱتَّخَذَ إِلَـٰهَهُۥ هَوَىٰهُ أَفَأَنتَ تَكُونُ عَلَيْهِ وَكِيلًا۞
Have you seen ˹O Prophet˺ the one who has taken their own desires as their god? Will you then be a keeper over them? (Al-Furqan, 25:43)
All these verses demonstrates that Allah (SWT) prohibited many of desires which cannot be desired by mankind. However, it is also extracted from these verses that there are also permissible desires.
وعن أبي جحيفة وهب بن عبد الله رضي الله عنه قال: آخى النبي صلى الله عليه وسلم بين سلمان وأبى الدرداء ، فزار سلمان أبا الدرداء، فرأى أم الدرداء متبذلة فقال: ما شأنك قالت: أخوك أبو الدرداء ليس له حاجة في الدنيا، فجاء أبو الدراداء فصنع له طعاماً، فقال له: كل فإنى صائم، قال: ما أنا بآكل حتى تأكل، فأكل، فلما كان الليل ذهب أبو الدرداء يقوم فقال له: نم، فنام، ثم ذهب يقوم فقال له : نم، فلما كان من آخر الليل قال سلمان: قم الآن: فصليا جميعاً، فقال له سلمان: إن لربك عليك حقاً، وإن لنفسك عليك حقاً، ولأهلك عليك حقاً، فأعط كل ذى حق حقه، فأتى النبي صلى الله عليه وسلم فذكر ذلك له، فقال النبي صلى الله عليه وسلم “صدق سلمان” ((رواه البخاري)).
Abu Juhaifah (May Allah be pleased with him) reported: The Prophet (ﷺ) made a bond of brotherhood between Salman and Abud-Darda’. Salman paid a visit to Abud-Darda’ and found Umm Darda’ (his wife) dressed in shabby clothes and asked her why she was in that state. She replied: “Your brother Abud-Darda’ is not interested in (the luxuries of) this world. In the meantime Abud-Darda’ came in and prepared a meal for Salman. Salman requested Abud-Darda’ to eat (with him) but Abud-Darda’ said: “I am fasting.” Salman said: “I am not going to eat unless you eat.” So, Abud-Darda’ ate (with Salman). When it was night and (a part of the night passed), Abud-Darda’ got up (to offer the night prayer) but Salman asked him to sleep and Abud-Darda’ slept. After some time Abud-Darda’ again got up but Salman asked him to sleep. When it was the last hours of the night, Salman asked him to get up and both of them offered (Tahajjud) prayer. Then Salman told Abud-Darda’: “You owe a duty to your Rubb, you owe a duty to your body; you owe a duty to your family; so you should give to everyone his due. Abud-Darda’ came to the Prophet (ﷺ) and reported the whole story. Prophet (ﷺ) said, “Salman is right”.
These text from Quran and Sunnah reveals where Islam announces enrichment of the resources, it also protect them through the strong controls of prohibition and permission of desires.
Secondly, Islam protects the resources by preventing their wastage. In Islamic paradigm, mankind is vicegerent of Allah (SWT) on the earth. He is not owner but trusty of Allah (SWT). Hence, it is obligatory upon mankind to utilize the resources in capacity of trusty who is not allowed to waste the trust. As the Holy prophet (SAWW) said:
عَنِ ابْنِ عُمَرَ رَضِيَ اللَّهُ عَنْهُمَا عَنِ النَّبِيِّ صلی اللہ علیہ وسلم أَنَّهُ قَالَ أَلاَ كُلُّكُمْ رَاعٍ وَ كُلُّكُمْ مَسْئُولٌ عَنْ رَعِيَّتِهِ فَالأَمِيرُ الَّذِي عَلَى النَّاسِ رَاعٍ وَ هُوَ مَسْئُولٌ عَنْ رَعِيَّتِهِ وَالرَّجُلُ رَاعٍ عَلَى أَهْلِ بَيْتِهِ وَ هُوَ مَسْئُولٌ عَنْهُمْ وَالْمَرْأَةُ رَاعِيَةٌ عَلَى بَيْتِ بَعْلِهَا وَ وَلَدِهِ وَ هِيَ مَسْئُولَةٌ عَنْهُمْ وَالْعَبْدُ رَاعٍ عَلَى مَالِ سَيِّدِهِ وَ هُوَ مَسْئُولٌ عَنْهُ أَلا فَكُلُّكُمْ رَاعٍ وَ كُلُّكُمْ مَسْئُولٌ عَنْ رَعِيَّتِهِ۔ (صحیح مسلم کتاب الامارہ، بَابٌ : كُلُّكُمْ رَاعٍ وَ كُلُّكُمْ مَسْؤُوْلٌ عَنْ رَّعِيَّتِهِ)
It has been narrated on the authority of Ibn ‘Umar that the Holy Prophet (May be upon him) said: Beware, every one of you is a shepherd and everyone is answerable with regard to his flock. The Caliph is a shepherd over the people and shall be questioned about his subjects (as to how he conducted their affairs). A man is a guardian over the members of his family and shall be questioned about them (as to how he looked after their physical and moral well-being). A woman is a guardian over the household of her husband and his children and shall be questioned about them (as to how she managed the household and brought up the children). A slave is a guardian over the property of his master and shall be questioned about it (as to how he safeguarded his trust). Beware, every one of you is a guardian and every one of you shall be questioned with regard to his trust.
(Sahih Muslim, KITAB AL-IMARA)
In holy Quran, Allah the Almighty has said:
۞ يَـٰبَنِىٓ ءَادَمَ خُذُوا۟ زِينَتَكُمْ عِندَ كُلِّ مَسْجِدٍ وَكُلُوا۟ وَٱشْرَبُوا۟ وَلَا تُسْرِفُوٓا۟ ۚ إِنَّهُۥ لَا يُحِبُّ ٱلْمُسْرِفِينَ ۞
‘O Children of Adam! Dress properly whenever you are at worship. Eat and drink, but do not waste. Surely He does not like the wasteful. (Al-Araf, 7:31)
These words of Allah the Almighty are describing that wastage of resources are not allowed. With this prohibition, Allah (SWT) also announces that He (SWT) would increase the resources, if one will be grateful to Him for His blessings (resources) as He (SWT) said:
۞وَإِذْ تَأَذَّنَ رَبُّكُمْ لَئِن شَكَرْتُمْ لَأَزِيدَنَّكُمْ ۖ وَلَئِن كَفَرْتُمْ إِنَّ عَذَابِى لَشَدِيدٌ۞
And ˹remember˺ when your Lord proclaimed, ‘If you are grateful, I will certainly give you more. But if you are ungrateful, surely My punishment is severe. (Surah Ibrahim, 14: 7)
Summary:
- Given the scarcity of resources, Conventional economics emphasize the efficient utilization of resources to meet the demand triggered by the desire (lawful and unlawful). It can be said that objective of the efficient utilization of resources is to meet the desires (lawful and unlawful) with limited resources.
- Given the enrichment of resources, Islamic economic system make efficient utilization of resources mandatory so that one can be protected from the painful punishment on the Day of Judgment, when one is inquired about the utilization of resources. It can be concluded that objective of the efficient utilization of resources is to obtain the will of Allah the Almighty which obviously constitute the fulfilment of permissible desire based demand as well as the reward of heaven in the day of judgment.
Wastage of resources and Risk Management
Risk management is closely related to effective and efficient deployment of resources in meeting with a bank’s corporate objectives. Inefficiency in resource utilization at any stage and on any side will expose the banks to various risks.
Various researchers have revealed that US subprime crises of 2007-08 and the Eurozone debt crises 2010-12 emerged because of many types of inefficiencies at various levels. These big crises have demonstrated that a robust risk management framework is needed to address the problems of banking firms and their risk-taking behavior in the handling of public monies. While risk is inherent in all businesses, managing risks effectively management of risk is a core competency within a bank. The legal maxim, “with profit comes risk” (al-ghonm bil ghurm) confirms that a business cannot expect to make profit without assuming potential loss or risk; it does not mean simply letting its fingers get burnt in the taking of risk. An Islamic bank relies on risk management disciplines to efficiently manage its risks including credit risk, market risk, liquidity risk, operational and Shariah non-compliance risk. As to the unknown outcome of business, one leaves it to the Will of God Almighty alone. The Quran says:
۞وَيُنَزِّلُ ٱلْغَيْثَ وَيَعْلَمُ مَا فِى ٱلْأَرْحَامِ ۖ وَمَا تَدْرِى نَفْسٌۭ مَّاذَا تَكْسِبُ غَدًۭا ۖ وَمَا تَدْرِى نَفْسٌۢ بِأَىِّ أَرْضٍۢ تَمُوتُ ۚ إِنَّ ٱللَّهَ عَلِيمٌ خَبِيرٌۢ۞
“It is He Who sends down the rain, and He Who knows what is in the wombs. Nor does anyone know what it is he will earn tomorrow; nor does anyone know in what land he is to die. Verily with God is full knowledge and He is acquitted with all things”. (Luqman: 34)
