The Economic System of Islam — Page 58
58 against. Hadrat 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, Hadrat 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 con- sumers 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’ 21 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 21 A measure of weight used in India, equal to about 82 pounds. (publishers)