Some Forms Of Riba Al-Fadl In Trade And Commerce

Some Forms Of Riba Al-Fadl In Trade And Commerce

- By Ziaul Haque

According to the Muslim Traditionists and Jurists, riba (literally an increase or excess) is of two broad categories: (1) riba al-nasi’a (increase charged in loans of capital and commodities against fixed time extensions); and (2) riba al-fadl (increase charged in direct sales and exchanges of capital and commodities, from hand to hand). The first category pertained to money-lender's and usurer's capital, whereas the second category related to myriad of economic sales, transactions and barters in Which commodities of superior values were exchanged for commodities of inferior values, such as, forward buying of crops of many years, lease of land for a share of its produce or for any other commodity, sales of risk and chance which have elaborately been discussed in the compendiums of Hadith and Fiqh under the title, kitab al-buyu, i.e., chapter on economic sales.

In contradistinction to money-lender's or usurer's capital, riba al-fadl created in the domain of medieval commerce is not only more mysterious and hidden, but is also the result of cheating, deceit, speculative and aleatory deals. Medieval trade in agricultural products generally involved sale and purchase of future values in order to get -increases' and profits through fluctuations in prices. Such transactions of riba al-fadl were of numerous types and over-lapped many agricultural practices. All these have been discussed by the Traditionists and Jurists in great details which shows the importance of the subject in medieval times.

In this article we shall examine some specific forms of riba al-fadl in order to delineate their general nature and common characteristics. Our general hypothesis is that riba al-fadl in the medieval trade was subsumed under aleatory and speculative commercial transactions involving sales of risk and chance.

1. The Sales of Risk and Chance :

A broad class of aleatory or risk- transactions, called buyu al-gharar, was considered by the Fuqaha' as riba al- fadl They define such sales as "exchanges of commodities which are not known to the buyer, as the sale of a run-away slave, or of an animal which has been lost by its owner ; or the sale of an offspring still in the womb of its mother; or as buying of olive with olive-oil, or sesame with sesame-oil; or butter with butter oil." These are all illegal sales (involving riba al- fadl), says Malik ibn Anas (d. 179/795-6), for, he thinks that an element of chance or uncertainty enters into them. The person who buys grains of sesame or a similar thing with the sesame-oil does not actually know whether the grains will yield him any oil at all. Such aleatory sales were common in ancient times. Malik says that to this category belong the ancient sales of mulamasa (exchange-of goods by mere touching without seeing them), and Munabadha (exchange of goods by throwing them to each other, a sort of gambling which amounts to windfall profits).¹

According to us", says Malik, "it is also an aleatory transaction, Mukhatara and gharar, to buy the offsprings still in the wombs of women-slaves and animals, because it is not known whether they will give birth to them or not. If the offsprings are born, it is still not known whether they are fair or ugly, normal or abnormal, male or female. These conditions will cause fadl, an increase, because if the price is paid in anticipation of a normal offspring and a dead animal is born, all the profit paid to the seller in advance will be an increase, fadl, so on and. so forth" -(i.e. it will be. pure riba al- fadl)²

From this the Jurists derive the general legal principle that an economic contract whatever its area-commerce, agriculture or simple barter-must not be doubtful and uncertain as far as the - rights and obligations of the parties are concerned. The object of the contract must be precisely determined, and other terms like price and wages must be clear and known (mallam). This is generally true of the commodities which can be measured, counted or weighed (which may involve 'increases' in sales) and which are subject to the prohibition of riba. Therefore, no undetermined quantity (juzaf) can be transacted at random in exchange of a measured and known quantity. It is not permissible to sell dates which are still unripe on the trees to be delivered when they have ripened because it is not known whether they will actually ripen or not. The practice is called muzabana.³

This had led the early Fuqaha, like Abu Hanifa (d. 150/767), Malik and Shafi (d. 204/819), to conclude that muzara'a or metayage was basically an aleatory transaction in which cultivators and sharecroppers were hired for a share of the land's produce which might or might not grow. This was null and void in Islam as it was contrary to many fundamental ethic-economic principles of the Sharia.⁴

Malik and Shafi had justified only fruit-metayage on the analogy of mudaraba (profit-sharing) taking the fruit-tree as an ad (capital, material substance, similar to the capital of mudaraba) which the owner of the fruit-tree gives to the metayage, muzari, for a share of the-fruit.. mudaraba itself was a pro-Islamic institution and is thus justified on the basis of custom. This is not strictly based on the Qur’an or the Sunna of the Prophet. ⁵

Similarly, the Fuqaha argue that the workers and productive instruments must be paid their 'just' wages, prices and recompenses ; no labourer can be engaged in any work without clearly specifying before. hand his wages and rewards. "No personshould give some yarn to a weaver (that after weaving cloth out of it) he will sell the cloth and the profit thus earned will be equally shared by them ; or the owner of some building material gives it to a worker to build a house and the latter will get it leased to someone with the condition that the rent will be divided equally between them. Or a net-owner gives his net to a fisherman for the purpose of catching fish on the condition that the fish will be divided between them. Or a transporter takes a pack animal from its owner for carrying goods on it on the condition that they both will share the income."⁶ Abu Hanifa considered such hiring of labourers without pre-fixing, their wages in clear terms as improper and unsound contracts. The worker must be aid his equivalent wages (ajr mithlihi).⁷

The notion of equivalent wages (ujrat al-mithl) is a very important concept in Islamiclaw : it implies that a labourer must get an ‘iwad or recompense, equivalent to his labour. "The equivalent, wages recompense (iwad al-mithl)", says Taqiy al-Din Ibn Taymiya (d. 728/1327-8), "is necessarily a just wage which fulfills the criteria and principles of (economic) justice, ‘adl, on which depends the perfection, of the affairs of this world and of the world here-in-after. 'Adl is one of the important pillars (arkan) of Sharia. 0ther similarly important terms are equivalent or just price of a commodity (qimat al-mithl), and just dower (Mihr al-mithl)”^8. equivalent recompense or wage" continues ibn Taymiya, “takes various forms and magnitudes in different places, epochs, and social conditions. It also varies according to the nature of the commodities, which are paid or exchanged. Any equivalent recompense or return (‘iwad al-mithl) will then depend on the price (si’r) and the socio-economic customs and. Conditions (‘ada).”⁹

The ethical principle that the wages of a worker must be accurately defined and clearly specified, as a certain sum of money, or an amount of corn or commodities, will then invalidate the contracts of muzara’a (share-cropping) and mudaraba (profit-sharing) in which workers are hired for proportionate sliares in crops or in commercial profits which may or may not be earned. Abu Hanifa had, for this reason, argued that muzara'a was not permissible since it was an aleatory, gharar, transaction which was null and void in Islam.

Another speculative and aleatory transaction, called habal 'al-habala was also banned by the Prophet. In this sale a person used to buy offsprings still in the wombs of their mothers. Such sales also involve riba because the seller of non-existing animals benefits by the price which he charges for a thing which is not at hand.¹⁰

In the agricultural and commercial spheres muzabana was another form of riba al-fadl Malik records in his Muwatta' a Hadith on the authority of Nafi' who says that 'Abd Allah ibn 'Umar related that the Prophet had forbidden muzabana. Itwas the sale of raw fruits still on the fruit tree, for ripe fruit of certain weight or measure; or it was the sale of raw dates for ripe ones of a certain weight; or the sale of raw grapes for raisins of a certain weight.¹¹

Malik gives another muzabana-Hadith: "Abu Sa'id al-Khudri says that the Prophet had prohibited muzabana and muhaqa1a. Muzabana is the purchase of (ripe) dates or fruits for (unripe) dates or fruits which are still on the trees. And muhaqala is lease of land for wheat" (i.e., for a share of the crop, or other grains, or in kind). In another Hadith, muhaqa1a is explained, first, as a purchase of standing crop for wheat, and secondly, as lease of agricultural land for wheat. ¹²

Muzabana was, therefore, a form of usurious sale in which a commodity, whose quantity was not known, was exchanged for another commodity whose weight or quantity was calculated and known. For example, grains stiff in the ears (standing green crop) which cannot be weighed, are sold for a certain definitely known weight of grains; or raw fruits still on the trees are sold for a certain measure or weight of ripe fruits. All such sales were considered by the Jurists as speculative exchanges, of the nature of gambling causing riba al-fadl, as they involve unjustified 'increase' in one commodity. ¹³

Mukhadara and muawama were also some other types of forward buying of green crops in which the merchants used to buy, in advance, the crops of one or many years.¹⁴Such ribawi or usurious transactions, as our evidence shows, were banned early in Islam by the Prophet himself and by his Companions.¹⁵

He had also in categorical terms warned the merchants not to hoard consumers’ goods order to create artificial scarcities and thus rob the helpless poor masses. The Hadith treatises have collected many such traditions under the chapter "Prohibition of Iktikar (hoarding) in Food-stuffs".

The Prophet had, in particular, forbidden the people of towns from defrauding the helpless peasants of villages by buying their commodities as middlemen and brokers (samasira; singular simsar), at very low prices. That is, the real producers must be allowed to sell their products direct to the consumers. The middlemen and agents must not be permitted to intervene and buy goods from the producers and to sell them at higher prices to the consumers, thereby reaping illegal profits.

This also shows that the economic ethics of Islam requires abolition of parasitic elements operating between production and consumption, and all their usurious commercial profits. It appears that the time factor in these sales was very important. The prices of commodities, during the periods they were transacted and hoarded increased, thus resulting in wind-fall profits for the merchants, hoarders, brokers and agents. This suggests that the Prophet and the Companions had prohibited the people from hoarding and storing goods in order to increase their prices after controlling their supply. This arbitrary fixation of prices and control of supply and production by the merchants/ monopolists was abhorred in early Islam. Some reports indicate that the Prophet was asked by the People to fix prices of commodities (tas’ir). But he refused to do so, saying that God was the only fixer of prices. He meant to say that prices must respond to the seasonal or 'natural' supply and production, i.e., prices must fluctuate according to the actual production of crops in a given season, and that no person should hoard them.¹⁷

In the chapters on Sarf (money or bullion exchange), the Hadith treatises record several traditions in this connection. Not a single moment of delay was allowed between purchase and payment of commodities for fear of its becoming a riba transaction:

"Ma1ik-Ibn Shihab-Malik lbn Aws-Ibn al-Hadathan al-Nasriyy said that he wanted to exchange (in Sarf) his one hundred dinars (gold) for silver. Talba Ibn 'Ubayd Allah agreed for the deal. He took the gold from him saying that he should wait for the payment of silver till the arrival of his treasurer from a certain place. 'Umar ibn al-Khattab was witnessing this. He said : "By God, he should not leave him (i.e. permit any delay) unless he is repaid in silver. Then 'Umar related the Prophetic tradition : exchange of gold for silver is riba if they are not exchanged immediately, and similarly wheat for wheat, dates for dates and barley for barley (they must be exchanged immediately, without time intervals).¹⁸

"The explanation for reprehending such transactions," says Malik, "which involve time-factor, like riba-loan of gold payable in silver after some time, as suggested by the Prophetic tradition referred to above, and as elaborated by the Sarf-tradition of 'Umar ibn al-Khattab disallowing any respite to the buyer, is that if in a Sarf-exchange of dirhams (silver) and dinars (gold) a counterfeit dirham is found, it would be a mutually incompatible exchange of bullion. The counterfeit silver is returned and its equivalent gold is taken back immediately at the time of exchange. Now if the counterfeit dirham (of the sarf-exchange) is returned after both the parties have separated, i.e., after some time when payment is separated from purchase, it would be tantamount to a loan (dayn), or it would be a commodity whose equivalent is sought after a time interval. This is the reason for its reprehension as it makes the Sarf-exchange inconsistent. Actually what 'Umar meant was that sales of gold, silver and food-stuffs in the present time for commodities to be delivered in future were all interdicted. And there should not be any delay or deferment in the payment of these commodities whether they belong to the same or todifferent species (asnaf). ¹⁹

'Ina is another form of sale considered analogous to riba: it is a sort of clever device to cover riba. It has been variously defined in the Hadith and Fiqh literature.²⁰ In general, it is a sort of Sale in which the price is paid in advance and the commodity is withheld to a certain future period.²¹ It is a sale involving stratagem for buying what one has sold, for less than that for which one has sold it.²² Such 'Ina-transactions are fully explained in the Hadiths :

Ma1ik-Nafi'-'Abd Allah ibn 'Omar related that the Prophet had said : "One who buys food-stuffs should not sell them until he takes them into his possession."²³ From such "ina-traditions, Malik derives the principle that any purchaser of corn or any other food-stuff which is legible for Zakah should not sell them before he actually takes them into his possession. ²⁴ This shows that speculations in food-stuffs and sales of future values are all ribawi-sales as they are mainly transacted because of profit-motive, to increase profits through difference in prices of purchase and sale.

It is evident that riba is broadly taken as an unjustified profit whether occurring in unequal exchanges due to delays in payment, differences in prices of purchase and sale, future values, or because of the differences in transport costs, i.e., delivery of commodities in different markets. Malik tells us that he had heard that when "Umar ibn al-Khattab came to know that acertain person used to give loans of food-stuff/grain on the condition that the commodities would be repaid in a different town/market, he abhorred it because the creditor did not bear the freight charges for transferring the commodity to another market. ²⁴ That is, saving of transport costs will be a net profit or riba for the creditor.

All this has been clearly explained by some traditions which Malik has carefully recorded. He relates that he had heard about a certain person who came to 'Abd Allah ibn 'Umar and told him that he had given some loan to a certain person with the stipulation that the debtor would return the loan with an excess. 'Abd Allah told him that that was exactly' riba. The person asked him about the reason for considering the excess over the loan as riba. 'Abd Allah explained to him that "loan (salaf) could be given for three reasons : loan given for the sake of God (when you seek the pleasure of God) ; loan given for the sake of a friend (to please him and you get his pleasure) and loan which you give in order to earn the khabith (forbidoen, illegal, i.e., through exploitation and corruption), in exchange for tayyib (lawful). This is riba. 'Abd Allah then asked the creditor to destroy the loan-document and to accept from the debtor the same principal sum which he had originally lent out to him. Or if he is repaid in an amount less than the actual loan he would be rewarded (by God). And if the debtor returned the loan with an excess (the sum greater than the actual loan) of his own free will, this would be a mutual act of thankfulness: the debtor thanks the creditor and the latter is rewarded for allowing the debtor delay in repayment of the loan. ²⁵

Malik further records that it was reported to him that 'Abd Allah ibn Mas'ud, the renowned Companion of the Prophet famous for his jurisprudential (fiqhr) knowledge of Islam, used to say: "One who gives a free loan, but takes (from the debtor) some 'animal-fodder, turns the loan into riba."²⁶

From such traditions a general principle was inferred: that every loan on which some profit was earned was riba²⁷. Al-Bayhaqi has given, in his Sunan al-Kubra, some traditions under the chapter entitled, which suggest that if a creditor advances (free) loan to a debtor for a certain period and at the expiry of the term the lender accepts from the borrower , some gift, like a basket full of corn or even animal-fodder, it will be riba. Or if the borrower gives his creditor a ride on his horse, it will be riba, since it appears as an 'increase' over the loaned capital. ²⁸

The Traditionists and Jurists have, in particular, collected reports on gift-riba which a creditor accepts from his debtor. 'Abd al-Razzaq (in his al-Musannaf) has also given many such reports in greater details under independent chapters suggesting that any undue advantage or profit, however ordinary it may be, will amount to riba because in such cases the creditor exploits weak position of his debtors. "Such ordinary and insignificant 'increases' on capital in loans, it is feared," says Malik, "will become the means, dhari'a, for legalizing the illegal."²⁹

2. Riba in Barter Economy and Juristic Contradictions

The Traditionists and Jurists, living under the general economic conditions of a barter economy of agrarian nature, came to hold different legal opinions on the 'illat al-riba, i.e., the actual sense (ma'na) in which the Shar’i hukm, or the rule of riba-prohibition is extended and applied to commodities in sales, other than the "six commodities" mentioned in the RibaHadiths. This was a creative effort to enquire into the causes or common attributes of the commodities which are subject to the Riba-prohibition. This was an important aspect of the problem of riba. This section of the article will show how the Fuqaha', through a circle of casuistic reasoning, reached contradictory conclusions about the nature of riba al-fadl in barter trade.

All the Jurists belonging to various schools of legal thought and regions hold that the hukm of riba-prohibition which explicitly states (Mansus) six commodities of gold, silver, wheat, barley, dates and salt, is of general application: it extends to all other commodities, money, capital, and productive resources (amwal) which are not covered by the Hadith (i.e. which are ghayr Mansus). But Da'ud al-Zahiri, the famous literalist Jurist, held that the hukm of riba was limited only to these 'six commodities' since he did not allow validity of the hukm through analogical deduction (qiyas) of ghayr Mansus commodities basing on those which are Mansus that is, which are clearly stated in the Riba-Hadith. But on the contrary, for the generality of the Fuqaha, analogical reasoning (qiyas) is an authoritative source, hujja, to extend the hukm established by t4o explicit text, (nass), to other cases. ³⁰

Furthermore, the Jurists think that the Riba-Hadith does not imply that money, commodities, capital (mal) which involve riba are only these six things and that the mention of hukm al-riba in these six things was for the reason that the economic transactions in the times of the Prophet were, in general limited to these six commodities.³¹

The Jurists differ as to the actual sense and reason (ma’na) in which the hukm of the riba prohibition is extended and applied to commodities, money and capital other than the ‘six commodities.’ For the Hanafite Jurists this reason or the 'illat al-riba is genus/or species (jins) and measurement/weight (qadr), i.e., the commodities which are subject to the ban of riba are similar and homogeneous goods, as the Riba-Hadith says that gold is sold for, gold, and wheat for wheat, etc. The sense of measurement (qadr) is derived from the Prophetic words mithlun bi-mithlin, like for like, similar for similar, i.e. qadr, by which something is measured (yukal) or by which something is weighed (yuzar).³²

According to Malik, the 'illa for the Riba-prohibition is (the attribute of) aqtiyat (nutrimentality, eatability) and iddikhar-cum-jins (storability or accummulability along with species) of the commodities concerned.

For Ibn Sirin (d. 110/728-9) the ‘illa for the prohibiting riba is the equivalence of utility of the similar and homogeneous goods.

For Shafi’i, the ‘illa of the Riba-prohibition for wheat, barly, salt and dates is measure (kayl) and eatability (ta'm); and for gold and silver it is thamaniyya (valuability) because, according to Shafi’i, those precious metals constitute the essence, standard and measure of all values. According to him, therefore, jinsiyya is a shart (condition, stipulation), and jinsiyya is not realized unless it is present (in sales, from hand to hand); for this reason he holds that in the nasi'a-prohibition, jinsiyya has no effect. Therefore, the Hanafites believe that the sale of all those commodities which are measured and weighed, for commodities of the same jins, is permissible only when there exists the purifying attribute (mukhlis) and that is, equivalence or mumathala in weight and measure of the commodities exchanged, and further that the material substance is exchanged for the material substance.

But, on the contrary, according to Shafi’i, the sale of every eatable thing (mat’um), for another eatable of the same jins, and the sale of every precious metal (thaman, money) for another precious metal, of the same jins is lawful only when the purifying attribute is the parity and equality, musawat, as the legal norm, al-mi’yar al-Sha’ri of the commodities exchanged, and further that these commodities are physically handed over in a single sitting. For Shafi’i the prohibition of the sale of these commodities is the basic principle (as1) and therefore permissibility of the sale would contradict exchange of parity and equality (as his legal norm), from hand to hand, in a single sitting. And for the Hanafites, the permissibility of the sale of these commodities, Eke other commodities, is the basic principle. Then invalidity would contradict the absence of mumathala, because there would accrue in the exchange a fadl without an equivalent recompense in the other commodity. Shafi’i 's concept of 'illa is actually intended to prevent derivation of validity through qiyas, of non-eatables from eatables, and of non-metals from metals, basing all this on his principle that the correct 'illa is applicable only on the originally mansus commodities and not on others. But for the Hanafites 'illa must extend the explicit rule (hukm al-nass) to those commodities which are not explicitly stated (ghayr mansus).³³

"For example,” says Sarakhsi "the sale of one apple for two is invalid for Shafi’i, because prohibition (of such exchanges) here is the asl, and validity of this sale will contradict the legal norm of parity or equality (musawat) in number, which does not exist, i.e., two apples must be exchanged for two whatever their actual weights. Therefore, this sale, according to him, is illegal. But for us this sale is valid because, if one apple is equal to the other two in weight,. there will be no fadl (increase); therefore, this sale will not involve any riba: the equality of weight is the legal norm. , But this is not a legal norm for Shafi’i, so he disallows this sale. Similarly, Shafi’i permits the sale of one qafiz of jibs (gypsum, plaster ) fortwo qafiz of jiss (gypsum, plaster). This is invalid for us because these are similar commodities and involve exchanges of certain weight. He legalizes it because these are non-eatables. Likewise, if one buys a handful (of wheat?) for two handfuls (of barley?), it is unlawful, for Shafi’i, since these are eatables and are not equal in number. But we allow this sale, because these two commodities are neither measured nor do they belong to the same jins."

"A sale of one maund of sugar for two maunds of sugar is invalid for us because the commodity is the same and of different quantities. Shafi’i also invalidates it, because, for him, both are eatables and are similar in jins. But an exchange of one maund of cotton for two maunds of cotton is illegal according to us because of a similar jins and unequal weights ; but it is valid for Shafi’i as it is not an eatable commodity."

"For him the authoritative source (hujja) to establish this principle is the Hadith according to which the Prophet had forbidden the sale of wheat (or any eatable grain) for wheat except equals for equals. In another version of this Hadith the Prophet had said : 'Do not sell wheat for wheat except equals for equals! This shows that hurma or the prohibition of bay' is the basic principle and permissibility of this bay' would be against parity or equality of the exchanged commodities. The equality (musawat) here means equality in weight and measure (and not in number)".34

The Hanafites, Shafi’ites, and Malikites have thus developed various theories on the ‘illat al-hukm of the ban on Riba al-fadl, as the above passages indicate. About the 'illa of riba al-nasia, the Hanafite Jurists hold that one of the two attributes (of Riba al-fadl), species (jins) or weight/measure (qadr) will be applicable. This is, for them, based on the Prophetic Hadith which suggests that if the commodities in exchange belong to different species and genus, they may be exchanged according to the wishes of sellers and buyers provided they are exchanged from hand to hand. This would then mean that this transaction of different or heterogeneous commodities will not be riba al-nasi'a inspite of the fact that the other quality (i.e. qadr, weight/measure) still remains effective. The Shafi’ites also hold similar views on the 'illa of riba al-nasi'a. However, they differ on jinsiyya (species) arguing that the attribute is shart (stipulation) and not an 'illa.³⁵

These theories of 'illa relating to Riba al-fadl and riba al-nasi'a have been harshly criticized by Ibn Hazm (d. 456/ 1063-4) who rejects qiyas, deductive reasoning of analogy, and believes that it is not an authoritative source for deriving principles and rules of law. He remarks that the theories of various 'ilal developed by the Fuqaha' on the basis of qiyâs are arbitrary, confusing and contradictory to each other. Talking about the 'ilal of nutrimentality and storability/accumulability, that is, riba occurs only in those commodities which can be stored or which are nutritious, he says

"The later Jurists found these 'ilal self-contradictory because they realized that garlic, onions and many other species, even salt, which is based on an explicit text, or nass, have no nutritious value at all. But a little quantity of some of them, like salt or pepper, can kill a man. They also found these 'ilal inconsistent with milk and eggs which are perishable and cannot be stored for long. And these two nutritious commodities, according to them, are liable for riba. They also find these 'ilal inapplicable to salt, some nutritious spices and many other commodities-thus they contradict their own rules". ³⁶

Ibn Hazm says that such theories of 'ilal can be multiplied according to the characteristics and natures of the "six-commodities." He continues :

"One can also derive an analogical principle, on the basis of wheat and barley, that every thing which grows in ears (dha sunbulin), like wheat and barley, is of the nature of riba. Similarly, on the analogy of dates, all fruits and products which have stones in them would also be usurious. Everything which is saltish in taste must also be prohibited. Likewise every mineral/metal is usurious on the analogy of gold and silver. Moreover, the Jurists construct, through the reasoning of qiyâs the 'ilal for wheat, barley, dates and salt, but they fail to define and extend the common 'ilal of gold and silver to similar commodities. The Hanafites merely infer from gold and silver the general attribute of weight and for other four commodities the attribute of kayl (measure). This is all arbitrary, capricious and irrational-neither based on the Qur'an nor on the Sunna. And the claim that all this is based on ijma' (consensus) is not true because the Hanafites themselves differ as to the real 'ilal of the 'six commodities.' Some of them hold that the 'ilal for gold and silver is weight, but others believe that 'ilal for the remaining four commodities is kayl (measure). There is after all no basis, and no criterion for all these 'ilal which they generally attribute to Sunna of the Prophet and ijma".³⁷

Ibn Hazm rejects all juristic theories of 'ilal and gives a literalist interpretation of the Riba-Hadith. He refuses to extend, through qiyâs, the "Ilat al-Hukm to commodities other than the "six commodities." He assumes that riba-profits are created in bay' (sale) qard (loan, credit), or salam (forward buying of commodities). He explains that riba is not permissible in bay'. And in salam, prohibition of riba is applicable only in six commodities : dates, wheat, barley, salt, gold and silver which have been, explicitly stated in the Riba-Hadtth. In the sector of loans and credits (qard) riba occurs in everything which is loaned; therefore it is not permissible, says Ibn Hazm, to advance anything on credit in anticipation of its repayment in a value greater or lesser than the original loan. Nor can it be repaid in the form of a commodity other than the originally loaned commodity. Loan must be repaid in the original commodity, in the same species and weight.

For him the factual difference between bay', salam and qard is that bay' and salam generally take place in commodities of one type for similar or dissimilar types ; but qard necessarily takes place in commodities of one type of similar species of commodities.³⁸

Ibn Hazm says that Tâ’us, Qatâda, 'Uthmân al-Batti, Abu Sulaymân and those who followed Dâ'ud, the literalist, (including Ibn. Hazm himself) had held that only the 'six commodities' were subject to riba-which is based on the Riba-Hadith.³⁹

These detailed juristic discussions of the riba al-fadl in the specific domain of barter in agrarian communities of pre-capitalist epoch point to the importance which the. Jurists attached to the riba profits created in the sphere of sales and exchanges. Such ribawt transactions of commodities were, according to them, the cause of corruption and exploitation, since these tended to impoverish the masses, because the payment of increases in sales and loans of common commodities and food-stuffs to the money-lenders and hoarders-merchants did not bring any equivalent values to the needy people.⁴⁰

This shows that like the historically manifest category of riba al-nasi'a in the sector of loans, the hidden and mysterious category of Riba al-fadl in medieval agriculture, trade and commerce had the same economic and social implications. Both operated in a total economic process, comprising economic activity as a whole: production as well as exchange of goods and commodities. The money and commodity-lenders appropriated the means of production and labour-conditions of the peasants artisans and the poor people through advancing loans at exorbitant rates of 'return'.

Landlords, tax-farmers, merchants, middlemen and brokers, operating in the sectors of production and exchange, earned profits on their investments in metayage, fixed landleases, tax-farming, forward buying of crops, hoarding, speculation and all sorts of jobbing. The indeterminate and inadequate wages of the workers/cultivators who were hired for certain shares of the non-existing profits, as in agriculture or manufacturing, were considered by the Jurists as invalid, because in the case of a crop failure or loss in trade the workers lost every thing which made their existence precarious. But these profits of riba al-fadl, as compared to the pre-fixed and tangible profits of riba al-nasi’a, were uncertain and indefinite.⁴¹

Working under the general conditions of a barter economy the Fuqaha' took the problem of riba al-fadl as a specific problem of simple barter which is evidenced in their misplaced emphasis on the riba al-fadl which occurs in direct exchanges of commodities, from hand to hand ; and which is apparent in their legal casuistry of the 'ilal of riba al-fadl.⁴¹

Nevertheless, the important conclusion which the Jurists and Traditionists derived from their observance of all these categories and forms of Riba was that the original Qur’anic ban on Riba was essentially a ban on total Riba, i.e., on all its forms and categories which function in loans and credits as well as in the commercial sales of speculation, risk and chance.

NOTES AND REFERENCES

1. Malik, Muwatta', (Cairo: Dâr Ihya'al-Kutub al-'Arabiyya, 1951/1370), II, 664-667.

2. Ibld., II, 665.

3. Ibid., II, 624-7.

Malik gives the bay'al-gharar tradition as follows:

" Sa’id ibn al-Musayyib relates that the Prophet had prohibited bay' al-gharar. Malik

observes that "sales of risk, gharar and mukhatara are al banned."

See also Bukhari, Sahih, kitab al-buyu'. Muslim, Sahih, kitab al-buyu'.

4. Malik, Muwatta'. II, 707.

Shafi’i, Kitab al-Umm, (Cairo : Maktaba al-Kulliyât al-Azhariyya, 196111381), VII, 101-102.

Zurqani, Sharh Muwatta',(Cairo : Maktaba Tijariyyaal-Kubra, 1954). IV, 343, 356-8 Tabari, Kitab Ikhtilaf al-Fuqaha, 120-124.

Tahawi Mushkil al-Athar (Hyderabad : Da'ira al-Ma'arif, 1914), III, p. 293.

5. See Lanlord and Peasant in Early Islam, (Islamabad: Islamic Research institute, 1977 pp.12-28.

6. Abu Yusuf, Ikhtilaf Abi Hanifa wa Ibn Abi Layla (Hyderabad : 1357 A.H.) p. 30. Also

Sarakhsi, Mabsut, XXII, 34-35.

7. Abu Yusuf, Ikhtilaf, p. 30.

Sarakhsi, Kitab a1-Mabsut. (Cairo : Matba'a al-Sa'ada, n.d.), XXII, 36.

8. Ibn Taymiya, majmu Fatawa (Riyad : 1383 A.H.), xxix, p. 520.

9. Ibid., P. 522.

10. Malik, Muwatta', II, 653-654.

'Abd Allah ibn Abbas relates that the Prophet had said that the salaf (loan) transactions in hallal al-habala were riba

Also Abmad ibn hanbal, Musnad, (Cairo : Dâr al-Ma’ârif, 1946-56), iv, 16-17, and 225

11. Malik, Muwatta', 11, 624.

12. Ibid, II, 625-627.

13.Ibid, II, 626-627

In the version of the Hadith recorded by Buhâri and Muslim in their Sahihs, Sahl ibn Abi IIathma relates that the Prophet had prohibited the exchange of fruits, thamar, for tamr (i.e., the sale of dried dates of a certain quantity for unripe dates still on trees). This is riba and mazabana. But the Prophet had allowed rukhsa (exception to the general ban on Riba) for the sale of 'âriyya consisting of one or two date-palms whose owners are poor and want to exchange without weighing the unripe dates still on trees, for fresh and ripe dates which they have to cat (i.e., they are so poor that they have no other source of sustenance). The Fuqaha', however, place a limit in the quantity of 'arâyâ, of five wasaq of dates.