Monopoly – An Islamic View

Monopoly - An Islamic View 1
Monopoly - An Islamic View 2

Public prosecutors from 20 states, the District of Columbia and the United States Department of Justice, demanding Microsoft Corp. for allegedly violating anti-trust regulations. The Justice Department claims Microsoft is not fair to force consumers to use software products, especially Internet Explorer Web browser through the Windows operating system, which has prevented the occurrence of healthy competition. The U.S. government has accused Microsoft of monopolistic practices have been done.

Cases mentioned above, is not the center of our attention in this article. Our focus is whether the practice of monopoly or cartel also is a business model that is forbidden in Islamic perspective.

Islamic Perspective

There are so many in the Islamic literature relating to monopolies, and nearly all agree that monopolistic practices are strictly prohibited. The same applies to all forms of monopolistic competition (price, goods, etc).

All interviewees stated that the monopoly in all kinds of community needs is prohibited. Reasons for such restrictions, the monopoly will have enormous power to raise prices and control the supply of goods at will, and in the end, will torment the people.

Proof in The Koran

Monopoly (ihtikar) comes from the word hakr, which means collecting and controlling goods. Ihtikar used by scholars of Islamic jurisprudence to assert the privilege to collect and control of goods in an effort to anticipate the need for price increases. In other words, means the process of monopolizing ihtikar products to result in price increases.

Koran does not mention about ihtikar. Koran only show about hoarding gold and silver. However, in the hadith the Prophet Muhammad is mentioned that a lot of muhtakir (monopolist) is a sinner.

Monopoly and Spirit of Islam

In an article a consultant in the Islamic sharia Banker Magazine said that the spirit of Islam is opposed to monopolistic practices and the terms of any condition.

Dr. Zaki Badawi also argued that the same thing applies to the banking system and the efforts of others. Monopoly in the banking system as an example, the monopolist will provide the financial strength and commercial practices in the community. The spirit of Islam to realize that the monopoly will give the right of undue authority to a few groups will also affect the inefficiency.

However, sometimes there are events / circumstances in which some Muslim groups to monopolistic practices. For example, the Islamic banking system in some Muslim countries, has operated a national monopoly with state protection.

Such cases occur in Malaysia Islamic Bank Bhd, conducted by the state monopoly when founded in 1983, until then the government of Malaysia introduced the banks of two systems in 1993, which allows conventional banks to open bank services without proper Islamic bank interest.

Although there are many opposing views, especially those related to monopolistic practices recently, most experts argued that monopolistic practices in all its forms in the field of trade, politics financial and contrary to Islamic principles.

Passing through Thin Line

The question that arises is can the Muslim men participating in the activities of the company or investing in businesses involved in monopolistic practices that are not against the law and illegal activity?

According definition significant monopoly on supply groupings and one player to exploit consumers and workers, many experts tend to state monopoly as opposing the practice of law in Islam.

However, experts have argued subjectively. According one hadith says that, ihtikar only items related to household needs and motivation to store items that can trigger or anticipate rising prices of goods in the market.

Current monopoly, as practice generally conducted by some companies not only control the supply to affect prices, but also to maintain the business, the government’s desire and market penetration (by making significant price declines). Currently, more harmful monopolistic rival firms in the same industry than adverse consumer.

Return to the Microsoft case, several institutions of Islamic funds have been canceled from the list of Microsoft stock sharia. However, monopolistic practices more acceptable than that based on the practices of interest.

Monopoly - An Islamic View 2

Source by Mohammad Showwam Azmy
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