Written by: Sheikh Mubashir Ahmad Rabbani (Hafizahullah)
«غلا السعر على عهد رسول الله صلى الله عليه وسلم، فقالوا: يا رسول الله، قد غلا السعر فسعر لنا، فقال: إن الله هو المسعر القابض الباسط الرازق، إني لارجو، ان القى ربي وليس احد يطلبني بمظلمة فى دم ولا مال»
"During the time of the Messenger of Allah ﷺ, prices rose, and the people said: O Messenger of Allah, prices have risen, so set prices for us. The Prophet ﷺ replied: Indeed, Allah is the One who sets prices, restricts, grants abundance, and provides sustenance. I hope to meet my Lord while no one has any claim against me for injustice, whether it is concerning blood or wealth."
[Sunan Ibn Majah, Book of Trade, Hadith No. 2200; Abu Dawood 3451; Musnad Ahmad 156/3; Musnad Abi Ya'la 160/5; Al-Bayhaqi 29/6; Al-Darimi 249/2; Al-Tabarani Al-Kabir 761]
"This Hadith and similar narrations have been used to prove that price control is impermissible because it constitutes oppression. People have the right to manage their property as they see fit, and controlling prices infringes upon this right. The ruler is responsible for the welfare of all Muslims, but this responsibility does not extend to unjustly restricting trade. The Qur’an states:
'O you who have believed, do not consume one another’s wealth unjustly, but only in lawful business by mutual consent.' (Surah An-Nisa: 29)
The majority of scholars hold this opinion."
[Nayl Al-Awtar 248/5]
This means that if price control prevents exploitation and ensures justice, it is permissible. However, if it results in oppression or deprives individuals of their rights, it becomes impermissible.
Question:
Can the government or any authority set prices for goods according to Islamic teachings?Answer:
During the time of the Prophet ﷺ, there was an incident where the prices of goods in Madinah increased. People came to the Prophet ﷺ and complained about the rising prices. As narrated by Sayyiduna Anas (RA):«غلا السعر على عهد رسول الله صلى الله عليه وسلم، فقالوا: يا رسول الله، قد غلا السعر فسعر لنا، فقال: إن الله هو المسعر القابض الباسط الرازق، إني لارجو، ان القى ربي وليس احد يطلبني بمظلمة فى دم ولا مال»
"During the time of the Messenger of Allah ﷺ, prices rose, and the people said: O Messenger of Allah, prices have risen, so set prices for us. The Prophet ﷺ replied: Indeed, Allah is the One who sets prices, restricts, grants abundance, and provides sustenance. I hope to meet my Lord while no one has any claim against me for injustice, whether it is concerning blood or wealth."
[Sunan Ibn Majah, Book of Trade, Hadith No. 2200; Abu Dawood 3451; Musnad Ahmad 156/3; Musnad Abi Ya'la 160/5; Al-Bayhaqi 29/6; Al-Darimi 249/2; Al-Tabarani Al-Kabir 761]
Key Points from the Hadith:
The last part of the Hadith, where the Prophet ﷺ expressed his desire to meet Allah without having any claim of injustice against him, emphasizes that setting prices can lead to oppression. Therefore, he ﷺ refrained from fixing prices to avoid any potential injustice to either the buyer or the seller.Forms of Price Control and Their Consequences:
- Government-Set Price Lists:
The government may issue official price lists, display them at shops, and enforce compliance through inspections. However, this often leads to sellers offering substandard or low-quality goods at the regulated price, while charging higher prices for quality goods through secret deals. - Corruption and Bribery:
Sellers may bribe inspection officials to avoid penalties while continuing unethical practices, such as selling low-quality goods at regulated rates or hoarding goods to create artificial scarcity. - Government-Controlled Distribution Depots:
Some governments establish depots to sell essential goods at regulated prices. However, depot holders often favor acquaintances or relatives, leaving others to wait in long queues, sometimes forcing them to offer bribes to obtain goods.
Explanation by Scholars:
Qadi Shawkani (Rahimahullah) explained:"This Hadith and similar narrations have been used to prove that price control is impermissible because it constitutes oppression. People have the right to manage their property as they see fit, and controlling prices infringes upon this right. The ruler is responsible for the welfare of all Muslims, but this responsibility does not extend to unjustly restricting trade. The Qur’an states:
'O you who have believed, do not consume one another’s wealth unjustly, but only in lawful business by mutual consent.' (Surah An-Nisa: 29)
The majority of scholars hold this opinion."
[Nayl Al-Awtar 248/5]
Islamic Perspective on Price Regulation:
- In an Islamic society, trade is generally free, and goods should be openly sold without unnecessary restrictions. During the Prophet’s ﷺ time, traders were God-fearing and honest, setting fair prices without exploiting people. Price fluctuations were primarily due to natural causes like scarcity of goods or increased demand, not due to greed or manipulation. [Majalla Al-Buhuth Al-Islamiyyah 208/1]
- However, when traders deliberately manipulate supply to inflate prices and exploit consumers, this is considered injustice. In such cases, the government has the right to intervene and regulate prices to protect the public interest.
Imam Ibn Taymiyyah’s (Rahimahullah) View:
"Price control is unjust and impermissible in some situations but can be just and permissible in others."This means that if price control prevents exploitation and ensures justice, it is permissible. However, if it results in oppression or deprives individuals of their rights, it becomes impermissible.
Conclusion:
- The general principle in Islam is to allow free trade without interference unless necessary to prevent injustice.
- If price hikes are due to natural causes, as was the case during the time of the Prophet ﷺ, price control is not needed.
- However, when price increases are artificially induced by traders for personal gain, the government can intervene to establish fairness and justice.