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One of the earliest caravan routes led along the Red Sea coast of Arabia. It was at the intersection of this “incense route”, and another important route – leading from Iraq to Yemen – that the pre-Islamic Mecca arose to prominence. Scholars agree that its prominence was not solely due to its position as the cultic center of pre-Islamic paganism, but also to its thriving trade. The bulk of its population consisted of merchants, brokers and bankers.

Outside of Mecca and Medina, trade was the foremost concern in Hijaz. Dhu’l Majaz and `Ukaz are especially referred to as early pre-Islamic trading places. [Bukhari, Hajj, 150].

The Prophet himself was a trader before receiving his divine call to be a prophet. Abu Bakar and Uthman were drapers. Umar is reported to have been a corn-dealer.

Islamic attitude to trade and economic development was very favorable since the earliest times. The Qur’anic teachings are also welcoming of the trade which is free from fraud.

The Qur’an teaches that;

• The day is appointed for a profit-making occupation [Qur’an 78:11];

• shipping is a bounty of God to mankind [17:70]

• winter and summer caravans, (the two most important business transactions of the Meccans), were set up for “civilizing” the Quraysh [106:1, Pickthal uses: “taming”, footnote: “civilising”].

• Several passages regard frauds in trade, like short measures, to be among the despicable acts [e.g., 83:1; 6:153; 7:83].

• Believers are enjoined to “spread over the land and seek the abundance of God.” [62:10]

However (as mentioned above), TWO restrictions are made:

1. A difference is established between decent trade –  which is lawful — and usury, which is unlawful. [2:275; 3:130; 4:161]. The FORMER falling into the category of search for lawful earnings.

2. The warning of materialism, including the possession of merchandise, implies the obligation of preference of God and His Prophet over interests of family and clan as well as of goods and chattel [9:24].

There is only one restriction that follows from this general injunction, and that is the cessation of trading during the congregational prayer on Friday, before and after which it is PERMITTED. [62:9-11], just as it is explicitly permitted during the pilgrimage to Mecca [2:198].

The regulations of contracts of debts for fixed terms [2:282ff.] also demonstrates the complete freedom of trade in the Qur’an, with its minimal restrictions in the interest of the unhindered fulfillment of cultic obligations and in conformity with the moral requirement of fair dealing.

The same spirit of economic liberalism permeates prophetic traditions (Ahadith) as well. This is evident from a collation with each other of all the recognized canonical collections of traditions.

As in earliest times, doubts were frequently expressed as to which classes of merchandise could be excluded from trade, the Prophet instructed to exclude only three classes of merchandise:

1. In conformity with ethical principles, anything which is NOT one’s OWN property CANNOT be sold. [Musnad Ahmad b. Hanbal, ii, 189-90].

2. Things, that are considered to be ritually unclean (which specifically include wine & swine etc.), are, of course, unmarketable. [loc. cit.]

3. Water — the sale of water is forbidden. [Ibn Maja, Ruhun 16, because it is, together with air, an article of common use. Both are “Res Communes” in Roman Law as well.]

Trade is to be carried on by mutual agreement, which may be cancelled by only by a tacit agreement of both the partners. [Musnad Ahmad, ii, 536].

Decency is an explicit prerequisite of every merchant [inferred from Qur’an 16:90]. Traditions enjoin certain restrictions, in the spirit of decency, on the honest dealers:

1. In matters of QUALITY and QUANTITY of goods, fraud and deceit are inadmissible. [Ibn Maja, Tijarat, 45].

2. Delay in payment may be granted to customers unable to pay in cash, and even remissions should be made for total inability to pay. [Bukhari, xliii, 3-9]

3. Swearing in closing a sale is discouraged, because: “swearing furthers the disposal of goods but diminishes its blessing.” [Bukhari, Buy`u, 26].

4. The use of full weights and measures is a positive injunction in the Qur’an [6:151; 17:35; 26:181].

Regarding Barter trade, while the exchange of one kind of commodity for the same kind (like gold for gold, grain for grain etc.) is encouraged [Bukhari, Buy`u, 74-9], methods in which the elements of uncertainty in evident were forbidden. The most typical cases are as follows:

1. Joint transactions in one contract whereby one portion of a commodity is contracted for cash and another for credit [Ibn Hanbal, i, 398]

2. The storing up of food stuffs with the object of selling them at higher prices in times of need and scarcity — a practice, which is considered a sin [Ibn Hanbal ii, 351].

3. The resale of food can be allowed only if the seller already possesses it (Qabz al-istifa); by way of extension, this rule may refer to all kinds of goods [Ibn Hanbal, iii, 402].

4. Before the close of the bargain, both parties have the right of option (khiyar), i.e., they may withdraw from the transaction if they have not seen the commodity negotiated until they separate or stipulate a term for the sale [Bukhari, Buy`u, 42-6].

5. In concluding a sale, bargaining, raising the price (najsh) and outbidding one’s fellows are condemned [Ibn Hanbal, ii, 351].

Speculation in trade is explicitly prohibited. Even at the primitive stage of Arabian economic life, the period of transaction from the system of Barter into money economy, the following types of forward transactions were usual and PROHIBITED in Tradition:

1. Bay` al-Muzababa; when goods — the weight, size and number of which are NOT known — are sold in bulk for a definite weight, measure or number of some OTHER goods, for example, still-green-dates for a definite measure of RIPE dates. [Bukhari, Buy`u, 82-94]

2. Bay` al-Munabadha: when the handling over of goods is contracted WITHOUT both parties having seen them or when, as a sign of conclusion, a small pebble is handed over in place of the goods. [Bukhari, Buy`u, 62-3].

3. Bay` al-Gharar; (meaning: “dangerous” or “hazardous” trading); when the quality and the quantity of goods are NOT previously fixed. For Example; milk in the udder, fish in the water, etc. [Ibn Hanbal, i, 302, 388 etc.]

With regard to payment; advance payment (silm) contracted for:

• Goods to be delivered at a latter date; is LAWFUL when the measurements (length and breadth) are known;

• Animals; it is LAWFUL according to ash-Shafi`i but UNLAWFUL according to Abu Hanifa.

All these injunctions and prohibitions unmistakably imply the guarantee of the buyer against the possible abuses of the seller, and is a characteristic feature of Islam’s economic reforms.

It is entirely at variance with the English common law, the rule of which is: “caveat emptor” (i.e., Let the Buyer Beware”, or as they say in Farsi: “Mushtari Hushyar Baash”).

This liberal attitude towards trade in Islam is thus one of its characteristic features since its earliest days.

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