Economic Structure of the Madinah Society

An assignment for an Al-Maghrib class…I believe it was for A Shepherd’s Path taught by Sheikh Muhammad Al-Shareef…

Bismillahi Al-Rahmani Al-Raheem, 

                Living in today’s world, we groan and moan about taxes, bills, loans, mortgages, and interest. We live day to day paying what we have to pay unaware of the ideal economic society set for us by our religion. Before the establishment of the Islamic State in Madinah at the time of the Prophet peace and blessings be upon him, the Arabs lived a life of fraud, slavery, and cruelty to the needy and the orphans. When one examines the economic structure before and after the time of the Prophet, it is easy to note the advancement that the religion and Islamic laws instilled in the society. The conduct of businesses and trade fell under certain guidelines that had to be implemented. Slavery was demolished and equality between the rich and the poor, the white and the black, had been established. The love for charity entered the hearts of the Muslims and changed their lives from what was a backwards Arabia to one of the most highly developed economic systems observed.

                In pre-Islamic Arabia, the strongest tribes and figures held the most power and control on the order of society. Mental and economic exploitation of the masses governed the people and paralyzed their lives. Businesses ran on interest and high rates were adopted when the money was not returned on time. At the expiry of the third year, the money was usually doubled and tripled at times if not yet returned. In cases where the debtor failed to repay the amount, their wives and children along with other possessions were taken from them. The position of the Ka’bah was another factor that greatly influenced the economic structure. It was in a geographically strategic position for business routes and traveling caravans. High taxes were thus usually placed on goods and materials entering Makkah for trading and exchange. As well, during the yearly pilgrimage, all of the offerings, sacrifices of money, food, and animals were collected at the ka’bah. This enabled a few minorities to control and dictate the society. Those powerful tribes who had control of the society had control of the money and income.  

                When the prophet (S) came to the Arabs, he warned them of the great injustice they lived in and helped them change the society to the better by following the guidelines Allah had sent down. The Prophet (S) was one of the most trusted and truthful men of his time. He was known for these characteristics that he strictly followed in his businesses and trades. He was a successful merchant and had travelled for trading of goods and selling to Bilad Al-Sham before his marriage to Khadeejah (R). There are many Qura’anic verses in which Allah teaches the believers how to deal with money and avoid interest and fraud. In Surat al-Mutaffifeen and Surat Al-Ma’un, Allah says:

“Woe to those that deal in fraud- Those who, when they have to receive by measure from men, exact full measure, but when they have to give by measure or weight to men, give less than due. Do they not think that they will be called to account? On a Mighty Day, a Day when (all) mankind will stand before the Lord of the Worlds? Nay! Surely the Record of the Wicked is (preserved) in Sijjin.” [83. Mutaffifeen – v. 1-7]     

“Then such is the (man) who repulses the orphan (with harshness), and encourages not the feeding of the indigent. So woe to the worshippers who are neglectful of their Prayers, those who (want but) to be seen (of men), but refuse (to supply) (even) neighbourly needs. [Surat Ma’un v.2-7] 

When the Prophet (S) migrated to Madinah, things were very tough on him and his followers. Although the Islamic State had been established, it was in its early stages and the immediate problems could not be solved instantly. The material resources of the Muslims were very limited and they had to face starvation due to the shortage of food they faced. At the time, Quraish had also placed economic sanctions against the people of Madinah, so all tribes with treaties or who were on good terms with the Quraish opposed dealing with Madinah. The Muhajirun had a drastic change of diet when they arrived in Madinah. In Makkah, their diets consisted of meat and milk however in Madinah most of their diet was dates. Many had left their wealth behind in favour of being with the Prophet (S) in Madinah.

After building the mosque, the Prophet (S) ensured that the brotherhood thrived amongst the Muslims. Ninety men gathered in the house of Anas ibn Malik, consisting of muhajirun (emigrants) and ansar (helpers). Each man from the Muhajirun was paired with a man from the Ansar as brothers. They shared their belongings and supported each other in every aspect. There was no discrimination between race, age, social status or colour.

                Following the orders of Allah subhanahu wa ta’ala, the Prophet peace be upon him was able to take the Arab tribes out of their economic despair and transform their society into one filled with justice and unity. Businesses were equally conducted between the rich and the poor, the black and the white, regardless of race, color, or ethnicity. The fairness and intelligence of the Prophet set an example to dealing merchants and traders. As equality and freedom were established, zakat and charity was implemented and the economic situation flourished in Madinha. There are many verses and ahadeeth regarding zakah and charity and their implementation in society. The benefits of such economic basis cannot be underestimated. Their presence proved to be crucial and important to the Arabs as they moved forward helping each other overcome all obstacles and challenges. After the building of the mosque, the Prophet (S) established a set of rules and guidelines for the believers to abide by and implement in their transactions within each other.

“The believers in their mutual love, are like the human body where when the eye is in agony, the entire body feels the pain; when the head aches, all the body will suffer.” [Muslim] “None amongst you believes (truly) till one likes for his brother that which he loves for himself.” Through fasting and giving sadaqah, the Muslims came together as one, and improved their economic structure.

                Charity enabled the believers to be on the same level where everyone was treated with equality. The Muslims followed Islam’s rules and soon found it in their own nature to care about others and donate charity. “He is not a perfect believer, who goes to bed full and knows that his neighbor is hungry.”

“Each person’s every joint must perform a charity every day the sun comes up; to act justly between two people is a charity; to help a man with his mount, lifting him onto it or hoisting up his belongings onto it is a charity; and removing a harmful thing from the road is a charity.” [Bukhari and Muslim]

The Prophet (S) also established a public treasury  that was called Baitul Mal; the house of money. This served as an important and necessary part of the economic system of the Islamic State. Baitul Mal was funded by income from the limited resources of Madinah and Sadaqah by those who could afford it. The money from the Baitul Mal was distributed amongst the poor, people with financial difficulties, and those in debt. An example of this is seen in the story of Jabir ibn ‘Abdullah(ra) who had taken a loan from a Jew and could not pay it back in time because of the bad produce of dates that year. When he was given some more time, the produce was again bad. This time the Jew demanded the loan be paid back without any more extensions. Jabir went to the Prophet(s) and explained what happened. The Prophet(s) told Bilal, who was made in charge of Baitul Mal, to help Jabir repay the loan by taking resources out of the institution.

Charity was also such an important part of Madinan society that everyone wanted participation. All of the Muslims gave whatever they could, even in their state of poverty. On the authority of Abu Dharr(R):

“Some of the Sahaba said to the Prophet(s): ‘O Messenger of Allah, the affluent have made off with the rewards: they pray as we pray, they fast as we fast, and they give away in charity the superfluity of their wealth.’ He said: ‘Has not Allah made things for you to give away in charity? Truly every tasbiha is a charity, every takbira is a charity, every tahmida is a charity, and every tahlila is a charity; to enjoin a good action is a charity, to forbid an evil action is a charity…’(Muslim)”

As for Zakah, Allah (SWT) tells us about the people worthy of it in the Qur’an:

  1. Fuqar, poor people who do not beg
  2. Al Masakin, the poor who beg and
  3. Those employed to collect the (funds) and to
  4. Attract the hearts of those who have been inclined (towards Islam)
  5. To free the captives and
  6. For those in debt and
  7. In the cause of Allah (Mujahideen) and for
  8. The traveler who is cut off from everything;

A duty imposed by Allah, And Allah is All Knower, All Wise. (Tawba 9:v.60)

The love for charity and brotherhood had grown in the hearts of the Muslims to an extent that has not been implemented since their time. It is reported that once, when they were favoured with great wealth,  Aishah bint Abu Bakr was given a gift of one hundred thousand dirhams. She was fasting when she received the money, and distributed all of it to the poor and needy, even though she had no food in her house. Shortly after that, her maid servant said to her: “Couldn’t you have bought a dirham’s worth of meat with which to break your fast?” She replied: “If I had thought of it I would have done so.”

It was thus clear how the rulings of Islam and the way in which the Prophet dealt with the economic situations in Madinah changed the lives of the Arabs from a backwards economy to a prosperous one where everyone was able to live in peace and financial stability. It is up to us to stand up to the challenges and implement what our past generations have taught us and left for us as guidelines for the betterment of all.




1.       Al-Banna, Hasan. The Seerah of the Final Prophet. Awakening Publications. Swansea,    SA: December 1999 C.E./ Ramadan 1420 A.H.


2.       Al-Mubarakpuri, Safi-ur-Rahman. Ar-Raheeq Al-Makhtum (The Sealed Nectar). Dar-us  -Salam Publications. Riyadh, Saudi Arabia: 1996.


3.       Ibrahim, Ezzeddin & Johnson-Davies, Denys. An-Nawawi’s Forty Hadith Translated.         The Holy Koran Publishing House. Beirut, Lebanon: 1976.


5 Responses to Economic Structure of the Madinah Society

  1. Bushra says:

    Where is this from?

  2. hiddensouls says:

    I wrote it for one of the Al-Maghrib assignments…
    I think it was for Rizq Management, waAllahu a3lam…

  3. hiddensouls says:

    Actually…I looked it up…it wasn’t for Rizq Management…it was for A Shepherd’s Path taught by Sh. Muhammad Al-Shareef…

  4. Anonymous says:

    Great assignment mashAllah

  5. hiddensouls says:

    Jazakum Allahu khairan
    If only we can be living in such a place right now!
    This was written a REALLY long time ago…but subhanaAllah…with the current economy, I can’t help but wonder how it would be like in an real islamic state…

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