Similarly, Islam does not permit that prices be forced down by artificial means, because, as mentioned above, this too enables unscrupulous traders to strangle their rivals by forcing them to sell at reduced prices.
During his reign, Hazrat Umar(ra), while inspecting the market, came across a trader from outside Madinah who was selling dried grapes at prices that local producers and traders could not compete against. Hazrat Umar(ra) ordered the man to remove his produce from the market or to sell it at the price prevailing in Madinah. When asked for the reasons of this order, Hazrat Umar(ra) replied that without such an order the local merchants would have suffered a loss even though they were not charging an undue price.
It is true that some companions questioned the validity of this order in view of the saying of the Holy Prophet(sa) that market prices should not be interfered with. However, their objection was not well founded, since the prohibition against state intervention in market prices by the Holy Prophet(sa) pertained to interference with the free interplay of supply and demand. The government should avoid undue interference, as it would provide no benefit to consumers while inflicting serious losses upon traders.
The validity of this principle is borne out by recent events. The government failed in its attempt to fix the wheat price because, in the prevailing war conditions, no trader was able to sell at cost price and remain in business. The result was that the normal market activity for wheat came to a standstill and a black market emerged. Starving people were ready to buy wheat at whatever price they could afford. The price that was fixed at six rupees a ‘maund’1 by the government at once soared to sixteen rupees in the black market. People did not even report to the government about the black market because their survival depended on it. Several months ago, I had drawn the government’s attention to this danger but this warning went unheeded. The right course was adopted only after a great deal of suffering and serious unrest among the public. The earlier wheat price control order was meant to safeguard farmers’ interests, but in reality the farmers lost heavily while the traders netted large profits.
In short, the Holy Prophet(sa) prohibited only improper interference with price levels or unnecessary disruption in the normal operation of supply and demand. He did not forbid regulation to check abnormal price movements whether prices are driven artificially high or artificially low. The prohibition of ihtikar, which is firmly established according to the sayings of the Holy Prophet(sa), also bears this out, because ihtikar only means that artificial increases in prices be checked. Therefore, Hazrat Umar’s(ra) action, although an interference in the market, was a necessary regulation; it was consistent with shariah and demonstrated a sound principle of Islamic teachings.
The aforementioned are the three sources of unlawful wealth accumulation that Islam has prohibited. In this manner, Islam blocks all channels that lead to the unlawful and excessive accumulation of wealth.
Since clever and shrewd people might still find ways to accumulate excessive wealth, to the detriment of the less fortunate, Islam has adopted the following means to address this problem.
1 A measure of weight used in India, equal to about 82 pounds. (publishers)