Berkley Center

Although some people think that religious preachers should stick to spiritual messaging and leave economics to economists, in fact many great religions have economic messages that are profoundly relevant today given the bruising effect of the COVID-19 pandemic’s hard punch to neoliberalism and globalization.

Making sure people have the basics needed to sustain life—such as food, water, clothing, medicine, and shelter—is a universal and perennial issue each era faces. Social solidarity is not only an important aspect of individual well-being but also of communal peace. Religions, while obviously focused on tending to human beings’ spiritual side, have always recognized the interrelationship between the material and the transcendent.

The Islamic tradition is especially germane today, since it has developed a balanced socioeconomic policy that respects private property and the pursuit of wealth, while calling for compassion; recognizing that poverty ravages human dignity; and rejecting excessive consumption, materialism, and money-worship.

Once a man heard the Prophet Muhammad say, “O God, I seek refuge with You from disbelief and poverty.” The man asked him, “Are they equal?” To which the Prophet replied, “Yes.”

This concern that poverty could lead to resentment and lack of faith in God is one reason why the Quran elevates poverty alleviation to a form of worship, often paired with the importance of regular prayers. God instructs, “And perform the prayer, and give alms. Whatever good you forward for yourselves, you will find it with God” (2: 110).

The “alms” referred to here, known in Arabic as zakat, one of the five pillars of Islam, involves giving once a year 2.5% of one’s income and assets. Obligatory almsgiving, traditionally collected and distributed by the state but also an example of private philanthropy, is similar to one version of basic income that Ontario experimented with in 2017: the negative income tax. One is only obliged to give alms (zakat) when one’s income is above a certain amount for a year beyond that needed for basic living. If one falls below that, one receives zakat. In the Ontario basic income experiment, if one’s income was under $34,000 per year (for singles) or under $48,000 per year (for couples), participants received up to $16,989 per year (for singles) or $24,027 per year (for couples), less 50% of any earned income. There is therefore an analogy between an Islamic tool of poverty alleviation and a secular device like basic income.

"No doubt this wealth is sweet and green,” the Prophet Muhammad once said. He continued, “Blessed is the wealth of a Muslim, from which he gives to the poor, the orphans, and needy travelers.” This saying tells us that while wealth can be “sweet,” God rewards those who spend their wealth in charity. Indeed, the Quran has warned people not to let wealth circulate amongst an elite:

“What God has bestowed on His Messenger (and taken away) from the people of the townships—belongs to God, to His Messenger and to kindred and orphans, the needy and the wayfarer; In order that it may not (merely) make a circuit between the wealthy among you…” (59:7).

So, the problem is not prosperity per se, the problem is our choices about how to spend the wealth if we are blessed with it.

“Charity does not diminish wealth,” the Prophet Muhammad consoles us, knowing how hard it is for people to give up voluntarily their money to someone else. Charity purifies one’s wealth, cleansing one of the arrogance that often comes with prosperity; charity is compassion in practice, tutoring the soul to be more generous.

The Quran teaches that wealth comes to us as a trust from God: It is a gift to be looked after. That is why the Quran also reminds us, “And those in whose wealth there is a recognized right; for the beggar who asks, and for the unlucky who has lost his wealth” (70:24). The poor have a right on the wealthy’s affluence.

Emphasizing compassion and charitable giving, the flip side are warnings to those who hoard and are not generous: 

“O you who believe! ...Those who hoard gold and silver, and do not spend them in God’s cause, inform them of a painful punishment. On the Day when they will be heated in the Fire of Hell, then their foreheads, and their sides, and their backs will be branded with them: “This is what you hoarded for yourselves; so taste what you used to hoard.” (9: 34–35).

Islamic scholars have argued that these Quranic verses mean that the state needs to play a role in addressing basic needs, such as food, shelter, clothing, education and health care. Since the final responsibility for citizens’ well-being lies with those in leadership, ensuring basic needs are met cannot be left to the private market and charity alone; where private mechanisms like inheritance, endowments, and individual charity are not enough, the state should to step in and provide a basic level of subsistence for all. This is an Islamic idea analogous with the basic income concept, which argues a state has an obligation to give all citizens an income, regardless of their work status. 

Even before COVID-19, social justice activists were warning about the ill effects of intensifying income inequality, as if a rising global feudalism were overtaking freedom and democracy with fewer people owning more of the world’s wealth. Basic income advocates stressed that social welfare systems were broken and not coping with—let alone alleviating—poverty, even in supposedly developed economies like the United States and Canada. Basic income restores human dignity to the recipient, streamlines government bureaucracy, and increases freedom. While not identical, but similar in spirit, Islamic history shows that basic income is not an ideal but a realizable policy: The second Caliph Umar ibn Al Khattab would distribute to all citizens what was left over in the public treasury once a year; and the third Caliph Ali ibn Abi Talib would do the same every Friday.