Wealth in Islam

Should Billionaires Exist?

How can we really fix the problems of wealth inequality and poverty? What does Islam say about wealth and billionaires?

ٱلْيَوْمَ أَكْمَلْتُ لَكُمْ دِينَكُمْ وَأَتْمَمْتُ عَلَيْكُمْ نِعْمَتِى وَرَضِيتُ لَكُمُ ٱلْإِسْلَـٰمَ دِينًۭا

“Today I have perfected your faith for you, completed My favour upon you, and chosen Islam as your way.” — Qur’an 5:3

Islam came to us as a faith that was perfected in the 7th century CE but how is it able to account for modern day economics?

Summary:

Islam provides simple, effective, moral and practical solutions to issues we see today.

In a world where millions of people live on less than a dollar a day, money and wealth comes with a moral obligation to spend it well.

وَعِبَادُ ٱلرَّحْمَـٰنِ ٱلَّذِينَ يَمْشُونَ عَلَى ٱلْأَرْضِ هَوْنًۭا وَإِذَا خَاطَبَهُمُ ٱلْجَـٰهِلُونَ قَالُوا۟ سَلَـٰمًۭا ٦٣

وَٱلَّذِينَ إِذَآ أَنفَقُوا۟ لَمْ يُسْرِفُوا۟ وَلَمْ يَقْتُرُوا۟ وَكَانَ بَيْنَ ذَٰلِكَ قَوَامًۭا ٦٧

“The ˹true˺ servants of the Most Compassionate are those who walk on the earth humbly, and when the foolish address them ˹improperly˺, they only respond with peace.

…

˹They are˺ those who spend neither wastefully nor stingily, but moderately in between.”

— Qur’an 25:63/67

Whether we have ten pounds, ten thousand, ten million or ten billion pounds. That obligation is on all of us to spend it well; not wastefully and not stingily but moderately. At the end of the day we’re only accountable to God for our own actions, not those of others who may have more than us.

لِيُنفِقْ ذُو سَعَةٍۢ مِّن سَعَتِهِۦ ۖ وَمَن قُدِرَ عَلَيْهِ رِزْقُهُۥ فَلْيُنفِقْ مِمَّآ ءَاتَىٰهُ ٱللَّهُ ۚ لَا يُكَلِّفُ ٱللَّهُ نَفْسًا إِلَّا مَآ ءَاتَىٰهَا ۚ سَيَجْعَلُ ٱللَّهُ بَعْدَ عُسْرٍۢ يُسْرًۭا ٧

“Let the wealthy man spend according to his wealth. But let him whose provision is restricted spend according to what God has given him: God does not burden any soul with more than He has given it- after hardship, God will bring ease.” — Qur’an 65:7

The Ethical Billionaire

Do ethical billionaires exist?

Take for example the “reluctant billionaires” the founders of outdoor clothing brands “Patagonia” and “The North Face”. The life long friends and passionate outdoorsmen, it is clear from their actions they weren’t motivated by wealth but rather their genuine love for the outdoors and the planet Earth.

Douglas Tompkins (founder of The North Face) poured millions into conservation of national parks in South America. More than being a side-project or an exercise in green-washing, he mostly just loved the outdoors. He loved spending time in nature to the extent that he tragically passed away not on a “billionaire’s yacht” but in a tragic kayaking accident in southern Chile, he had spent his life trying to preserve the area’s natural eco-system and protect it from deforestation.

Similarly Yvon Chouinard the founder of Patagonia, gave away his entire company. Instead of going public and making billions he donated the company to a trust designed to combat climate-change and preserve the Earth.

In the right hands, wealth can be hugely beneficial for society as we see in many cases of philanthropy. For example Douglas Tompkins pouring millions into conservation of national parks in South America and, closer to home, Asif Aziz (philanthropist behind the Aziz Foundation) enabling 100s of British Muslims to pursue higher education for free.

Moral Obligation of Wealth

In a world where millions of people live on less than a dollar a day, money and wealth comes with a moral obligation to be responsible with it. Any wealth is a blessing that we should spend diligently:

مَّثَلُ ٱلَّذِينَ يُنفِقُونَ أَمْوَٰلَهُمْ فِى سَبِيلِ ٱللَّهِ كَمَثَلِ حَبَّةٍ أَنۢبَتَتْ سَبْعَ سَنَابِلَ فِى كُلِّ سُنۢبُلَةٍۢ مِّا۟ئَةُ حَبَّةٍۢ ۗ وَٱللَّهُ يُضَـٰعِفُ لِمَن يَشَآءُ ۗ وَٱللَّهُ وَٰسِعٌ عَلِيمٌ ٢٦١

The example of those who spend their wealth in the cause of Allah is that of a grain that sprouts into seven ears, each bearing one hundred grains. And Allah multiplies ˹the reward even more˺ to whoever He wills. For Allah is All-Bountiful, All-Knowing.

— Quran 2:261

The median income in the UK is around £32,300, and wherever we land with respect to that — whether we have ten pounds, ten thousand, ten million or ten billion pounds — we should strive to spend it well. At the end of the day we’re only accountable to God for our own actions — and how we spend the wealth he has blessed us with.

لِيُنفِقْ ذُو سَعَةٍۢ مِّن سَعَتِهِۦ ۖ وَمَن قُدِرَ عَلَيْهِ رِزْقُهُۥ فَلْيُنفِقْ مِمَّآ ءَاتَىٰهُ ٱللَّهُ ۚ لَا يُكَلِّفُ ٱللَّهُ نَفْسًا إِلَّا مَآ ءَاتَىٰهَا ۚ سَيَجْعَلُ ٱللَّهُ بَعْدَ عُسْرٍۢ يُسْرًۭا ٧

“Let the wealthy man spend according to his wealth. But let him whose provision is restricted spend according to what God has given him: God does not burden any soul with more than He has given it- after hardship, God will bring ease.” — Qur’an 65:7

Poverty and Wealth Inequality

One of the biggest problems of unequal wealth distribution in our society is the huge amounts of poverty that exist alongside great riches. While such high levels of poverty exist we should all strive to spend carefully and not be wasteful or excessive.

وَعِبَادُ ٱلرَّحْمَـٰنِ ٱلَّذِينَ يَمْشُونَ عَلَى ٱلْأَرْضِ هَوْنًۭا وَإِذَا خَاطَبَهُمُ ٱلْجَـٰهِلُونَ قَالُوا۟ سَلَـٰمًۭا ٦٣

وَٱلَّذِينَ إِذَآ أَنفَقُوا۟ لَمْ يُسْرِفُوا۟ وَلَمْ يَقْتُرُوا۟ وَكَانَ بَيْنَ ذَٰلِكَ قَوَامًۭا ٦٧

“The ˹true˺ servants of the Most Compassionate are those who walk on the earth humbly, and when the foolish address them ˹improperly˺, they only respond with peace.

…

˹They are˺ those who spend neither wastefully nor stingily, but moderately in between.”

— Qur’an 25:63/67

What has gone wrong in our society to enable such high rates of poverty in the face of such huge wealth creation? How do a minute handful of people live in such decadence while the majority of their kinsmen live in poverty?

Where Does This Wealth Inequality Come From?

Free markets need regulation. It was John Maynard Keynes, a pivotal figure in modern economics, who underscored this need. Unregulated capitalism is a race to the bottom resulting in exploitation — it needs to be balanced with regulation that mitigates these externalities (negative effects).

Regulation is an essential tool to protect the vulnerable and mitigate the negative externalities of the system such as environmental degradation and escalating poverty, that can arise from unbridled capitalism.

A good example of this is a an online shop called Amazon. While they are able to deliver their wares extremely quickly and at a good price — this comes at an expense somewhere in the supply chain.

Many Amazon warehouse workers are paid on extremely aggressive contracts struggling under strict working conditions while the CEO is one of the richest people in the world living a life of luxury.

Is the onus simply on the CEO to be better? This is a true failing of society, but where has society gone so wrong to allow this to happen? Who should fix this?

The System That Enables Unethical Billionaires

It doesn’t make it right but it’s important to acknowledge that If Amazon didn’t do it some other company would. If Amazon paid their workers well and fairly, some other company would simply undercut Amazon and offer cheaper products by being more exploitative.

This isn’t to let Amazon off the hook, 100% they’re wrong for underpaying and exploiting their labour but if we were to fix Amazon overnight we wouldn’t fix the problem as a whole. Another company would just spring up and exploit their workers instead.

Who Can Fix the Problem?

How then can we enforce corrective measures for the externalities and problems that have been caused to society?

This is a larger problem than just the individual companies and the billionaires involved. There needs to be regulation in place to stop ALL companies from exploiting workers. That onus is on the government. Their failing to implement adequate taxation and minimum wage laws lead us to the predicament we find ourselves in today.

What More Could The Government Do?

Fundamentally the government exists to run, manage and protect the country. Their debt is to honour, protect and serve society. By failing to implement adequate minimum wage laws the government is failing to protect some of its most vulnerable citizens. Unfortunately companies are exploiting this and becoming very rich off of the backs of underpaid workers.

The very fact that there is a gap between our minimum wage and our “liveable wage” is an inditement of the pay that labour receives.

An Islamic Living Wage

Islam emphasises the importance of fairness, equity and good dealings with one another throughout all aspects of life, and employment law is no exception.

وَيْلٌۭ لِّلْمُطَفِّفِينَ ١

ٱلَّذِينَ إِذَا ٱكْتَالُوا۟ عَلَى ٱلنَّاسِ يَسْتَوْفُونَ ٢

وَإِذَا كَالُوهُمْ أَو وَّزَنُوهُمْ يُخْسِرُونَ ٣

Woe to the defrauders!

Those who take full measure ˹when they buy˺ from people,

but give less when they measure or weigh for buyers.

— Qur’an 83:1-3

The Qur’an condemns those who are unfair in their payment towards others, those who take their full-share but don’t pay others what they are owed for their due work. Clearly underpaying labourers is reprehensible, immoral and would be considered sinful in Islam.

قَالَ رَسُولُ اللَّهِ صلى الله عليه وسلم ” أَعْطُوا الأَجِيرَ أَجْرَهُ قَبْلَ أَنْ يَجِفَّ عَرَقُهُ “

The Prophet Muhammad (ﷺ) said: “Pay the worker his wages before his sweat dries”

[Sahih hadith in Sunan Ibn Majah]

It’s clear then that Islam emphasises swift payment, paying people their due share, on time. All of this is inline with the Islamic moral code emphasising honesty and openness in all aspects of one’s life, especially transactions.

۞ إِنَّ ٱللَّهَ يَأْمُرُكُمْ أَن تُؤَدُّوا۟ ٱلْأَمَـٰنَـٰتِ إِلَىٰٓ أَهْلِهَا وَإِذَا حَكَمْتُم بَيْنَ ٱلنَّاسِ أَن تَحْكُمُوا۟ بِٱلْعَدْلِ ۚ إِنَّ ٱللَّهَ نِعِمَّا يَعِظُكُم بِهِۦٓ ۗ إِنَّ ٱللَّهَ كَانَ سَمِيعًۢا بَصِيرًۭا ٥٨

Indeed, Allah commands you to return trusts to their rightful owners; and when you judge between people, judge with fairness. What a noble commandment from Allah to you! Surely Allah is All-Hearing, All-Seeing.

— Quran 4:58

We can clearly see that from an Islamic point of view exploitation of workers is immoral. Oppression of others is something to be condemned and truly an act displeasing to God. Workers have a right to a living wage and should be paid their due share.

When talking about workers and slaves, the Prophet Muhammad (ﷺ) told us to treat them as our own kind. It seems odd to talk about slavery in today’s age when it has been so successfully abolished in many countries. Islam encourages good treatment of slaves and for obvious reasons we would want to ensure that workers in our society are treated better than slaves.

هم إخوانكم، وخولكم جعلهم الله تحت أيديكم فمن كان أخوه تحت يده فليطعمه مما يأكل ويلبسه مما يلبس ولا تكلفوهم ما يغلبهم، فإن كلفتموهم فأعينوهم

“Your slaves are your brothers. Allah has placed them under your authority. He who has his brother under him, should feed him from whatever he eats, and dress him with whatever he wears, and do not burden them (assign burdensome task to them) beyond their capacity; and if you burden them then help them.” [Sahih Hadith in Bukhari and Muslim]

How many workers in today’s age are genuinely paid enough by their employers that they can dress with the same clothes as the CEO? How many people are paid enough that they can eat as well as their CEO? We need only to look at the huge rise in food-bank usage within the UK to answer that question.

“Between 2008/09 and 2020/21, the number of foodbank users increased in every year, from just under 26,000 to more than 2.56 million” — The Trussell Trust; 2008 to 2023

Wealth Tax – An Islamic Solution

Islam builds in safe-guards against poverty, ensuring that any wealth that is amassed is beneficial for society at large, feeding back into providing welfare and continuing to alleviate poverty. zakaat is not just voluntary charity but an obligatory wealth tax upon all Muslims.

In an Islamic framework of governance zakaat is spent on certain legislated causes:

۞ إِنَّمَا ٱلصَّدَقَـٰتُ لِلْفُقَرَآءِ وَٱلْمَسَـٰكِينِ وَٱلْعَـٰمِلِينَ عَلَيْهَا وَٱلْمُؤَلَّفَةِ قُلُوبُهُمْ وَفِى ٱلرِّقَابِ وَٱلْغَـٰرِمِينَ وَفِى سَبِيلِ ٱللَّهِ وَٱبْنِ ٱلسَّبِيلِ ۖ فَرِيضَةًۭ مِّنَ ٱللَّهِ ۗ وَٱللَّهُ عَلِيمٌ حَكِيمٌۭ ٦٠

“Alms-tax is only for the poor and the needy, for those employed to administer it, for those whose hearts are attracted ˹to the faith˺, for ˹freeing˺ slaves, for those in debt, for Allah’s cause, and for ˹needy˺ travellers. ˹This is˺ an obligation from Allah. And Allah is All-Knowing, All-Wise” — Qur’an 9:60

Currently in our society billionaires don’t pay tax on their assets until they sell them and trigger capital gains tax. This structure of capital gains tax favours wealthier individuals who can afford to hold assets over the long term and slowly increase in wealth, while not paying tax on their increasing wealth.

Meanwhile someone earning a minimum wage job will still be paying income tax. Ironically, and tragically, this means that someone on minimum-wage may be paying a much higher percentage of tax (on their overall wealth) than someone who owns millions.

Under a wealth tax as defined in Islamic economic theory, people pay zakat on the assets they own, not just their income.

To give an example this means that if the richest man in the world were to be sitting on billions of assets, to the tune of around $200 Billion, assuming that was eligible for zakat he would pay 2.5% of that annually to charity. That would mean $5 billion dollars given to charity. To put that in perspective it would only cost $13 billion dollars to end homelessness in the UK.

That is to say if the top 3 billionaires paid zakat we could end homelessness in the UK, while each still retaining 97.5% of their wealth.

رَسُولِ اللَّهِ صلى الله عليه وسلم قَالَ ” مَا نَقَصَتْ صَدَقَةٌ مِنْ مَالٍ وَمَا زَادَ اللَّهُ عَبْدًا بِعَفْوٍ إِلاَّ عِزًّا وَمَا تَوَاضَعَ أَحَدٌ لِلَّهِ إِلاَّ رَفَعَهُ اللَّهُ “

Allah’s Messenger (ﷺ) said: “Charity does not decrease wealth, no one forgives another except that Allah increases his honour, and no one humbles himself for the sake of Allah except that Allah raises his status.” [Sahih Muslim]

In short Islam enjoins us with a clear moral code that includes paying labourers fairly and instituting a wealth tax that would redistribute wealth and allow society to help those in need.

Rich People at the Time of the Prophet (ﷺ)

Even among the best of generations, the companions of the Prophet Muhammad (ﷺ), they had differences in their riches, many of the early Muslims were from humble backgrounds, while others were from the richest people in their society.

أَنَّ نَاسًا، مِنْ أَصْحَابِ النَّبِيِّ صلى الله عليه وسلم قَالُوا لِلنَّبِيِّ صلى الله عليه وسلم يَا رَسُولَ اللَّهِ ذَهَبَ أَهْلُ الدُّثُورِ بِالأُجُورِ يُصَلُّونَ كَمَا نُصَلِّي وَيَصُومُونَ كَمَا نَصُومُ وَيَتَصَدَّقُونَ بِفُضُولِ أَمْوَالِهِمْ . قَالَ ” أَوَلَيْسَ قَدْ جَعَلَ اللَّهُ لَكُمْ مَا تَصَّدَّقُونَ إِنَّ بِكُلِّ تَسْبِيحَةٍ صَدَقَةً وَكُلِّ تَكْبِيرَةٍ صَدَقَةٌ وَكُلِّ تَحْمِيدَةٍ صَدَقَةٌ وَكُلِّ تَهْلِيلَةٍ صَدَقَةٌ وَأَمْرٌ بِالْمَعْرُوفِ صَدَقَةٌ وَنَهْىٌ عَنْ مُنْكَرٍ صَدَقَةٌ وَفِي بُضْعِ أَحَدِكُمْ صَدَقَةٌ “

Some of the people from among the Companions of the Messenger of Allah (Muhammad ﷺ) said to him: Messenger of Allah, the rich have taken away (all the) reward. They observe prayer as we do; they keep the fasts as we keep, and they give Sadaqa (charity) out of their surplus riches. Upon this he (the Holy Prophet) said: Has Allah not prescribed for you (a course) by following which you can (also) do sadaqa? In every declaration of the glorification of Allah (i. e. saying Subhan Allah) there is a sadaqa, and every Takbir (i. e. saying Allah-O-Akbar) is a sadaqa, and every praise of His (saying al-Hamdu Lillah) is a sadaqa and every declaration that He is one (La illha ill-Allah) is a sadaqa, and enjoining of good is a sadaqa, and forbidding of that which is evil is a sadaqa, and in one’s sexual Intercourse (in a halal way with their spouse) there is a sadaqa. [Sahih]

There was an understanding at the time that people all start at different places in life but still do what they can to worship Allah. This isn’t to justify the existence poverty, rather alleviating poverty through the giving of charity (sadaqah) is one of the most noble acts one can do.

سَمِعْتُ النَّبِيَّ صلى الله عليه وسلم يَقُولُ: لَيْسَ الْمُؤْمِنُ الَّذِي يَشْبَعُ وَجَارُهُ جَائِعٌ

The Prophet Muhammad (peace be upon him) said: “He is not a believer whose stomach is filled while the neighbour to his side goes hungry.” (Sahih al-Bukhari)

All of us at the end of the day have been given wealth in some form or another. On the day of our final accountability, everyone will be asked about what we did with our wealth, our faculties and the responsibility God entrusted us with. We will all be accountable whether we had a few pounds, a thousand pounds or even a million pounds:

إِنَّ اللَّهَ لَا يَنْظُرُ إِلَى صُوَرِكُمْ وَأَمْوَالِكُمْ وَلَكِنْ يَنْظُرُ إِلَى قُلُوبِكُمْ وَأَعْمَالِكُمْ

“Indeed, Allah does not look at your appearance or wealth, but rather He looks at your hearts and actions.” – Prophet Muhammad (ﷺ) in a Sahih hadith

Summary

Islam provides simple, effective, moral and practical solutions to issues we see today in our society.

In addition to just making sure workers get fair remuneration, the wealthy in our society should pay proper taxes. Not just a basic income tax but a wealth tax instead. A wealth tax would be hugely beneficial for society. Allowing people who hoard assets and generational wealth to be adequately taxed and to pay their fair share to support society.

We see examples of this in a handful of ethical billionaire philanthropists.
For all of us with even a little bit of money there is a moral onus on us to spend it well and not to hoard wealth stingily or to be excessive in our spending.
The number of people living below the poverty line is a huge problem in our society. Often jobs don’t pay enough to help people to get out of poverty.
Who enables this huge wealth inequality? It is the government that don’t implement adequate taxation or minimum-wage laws.
Islam advocates for fair payment and treatment of labourers.
Islam enjoins a 2.5% wealth tax on society.
Islam enjoins all of us to do what we can to worship Allah. Whether we can give money to charity or not, we can still strive to live a God-fearing life and worship Allah in our everyday life.

۞ يَـٰٓأَيُّهَا ٱلَّذِينَ ءَامَنُوٓا۟ إِنَّ كَثِيرًۭا مِّنَ ٱلْأَحْبَارِ وَٱلرُّهْبَانِ لَيَأْكُلُونَ أَمْوَٰلَ ٱلنَّاسِ بِٱلْبَـٰطِلِ وَيَصُدُّونَ عَن سَبِيلِ ٱللَّهِ ۗ وَٱلَّذِينَ يَكْنِزُونَ ٱلذَّهَبَ وَٱلْفِضَّةَ وَلَا يُنفِقُونَهَا فِى سَبِيلِ ٱللَّهِ فَبَشِّرْهُم بِعَذَابٍ أَلِيمٍۢ ٣٤

“Give good news of a painful torment to those who hoard gold and silver and do not spend it in Allah’s cause.” — Quran 9:34

Let us make sure we’re not from those people who hoard their wealth instead of giving to noble causes. Let us ensure that even for our limited means we are spending sensibly and not being excessive. Let us strive to worship Allah sincerely in all our actions, all of the time.

إِنَّ ٱلْإِنسَـٰنَ لِرَبِّهِۦ لَكَنُودٌۭ ٦

وَإِنَّهُۥ عَلَىٰ ذَٰلِكَ لَشَهِيدٌۭ ٧

وَإِنَّهُۥ لِحُبِّ ٱلْخَيْرِ لَشَدِيدٌ ٨

۞ أَفَلَا يَعْلَمُ إِذَا بُعْثِرَ مَا فِى ٱلْقُبُورِ ٩

وَحُصِّلَ مَا فِى ٱلصُّدُورِ ١٠

إِنَّ رَبَّهُم بِهِمْ يَوْمَئِذٍۢ لَّخَبِيرٌۢ ١١

Surely humankind is ungrateful to their Lord—

and they certainly attest to this—

and they are truly extreme in their love of ˹worldly˺ gains.

Do they not know that when the contents of the graves will be spilled out,

and the secrets of the hearts will be laid bare—

surely their Lord is All-Aware of them on that Day.

— Qur’an 100:6-11