Is it correct to say that there is no room for price fixing because the markets are governed by the law of supply and demand?
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The questioner : No, no, Shaykh, may Allah bless you.
The Shaykh : Yes, okay.
The questioner : If someone were to say that the markets are fundamentally governed by the law of supply and demand, and that competition among merchants is obligatory, and that a merchant wants to sell his goods, he might say, for example, that this objection is not valid, that it may result from injustice, and that people, the merchants, can manipulate prices, because this merchant and others want to sell, and the presence of competition along with supply and demand is what will govern the market, so there is no room for price fixing. How do we respond to him?
The Shaykh : Now, we respond to him by saying that the matter involves an element of this and an element of that. If we say that price fixing is necessary because of people’s injustice, for example, if they agree to monopolize, as the author mentioned: these merchants bought this commodity that people need and which is not available in the market otherwise, they bought it and then monopolized it and began selling it, earning a hundred from ten. It is necessary to prevent them from doing so. And if we say that price fixing is permissible or obligatory in some cases, then the one in authority must monitor the markets hour by hour, so that if demand increases, he raises the price, and if it decreases, he lowers the price, because as long as he is committed to justice, he must take care of the people hour by hour.
The questioner : Good, so, so.
The Shaykh : There was no mistake; the Companions (may Allah be pleased with them) preferred one another over themselves.
The questioner : We do not see the tracking of prices in this way, whatever it means, whereas if one tracks the natural flow, as it is in a commodity.
The Shaykh : In any case, we mentioned that if the cause of high prices is the scarcity of money or the increase in consumers, then price fixing is not permissible. But if it is due to the injustice of people, then price fixing is necessary.
The Shaykh : Yes, okay.
The questioner : If someone were to say that the markets are fundamentally governed by the law of supply and demand, and that competition among merchants is obligatory, and that a merchant wants to sell his goods, he might say, for example, that this objection is not valid, that it may result from injustice, and that people, the merchants, can manipulate prices, because this merchant and others want to sell, and the presence of competition along with supply and demand is what will govern the market, so there is no room for price fixing. How do we respond to him?
The Shaykh : Now, we respond to him by saying that the matter involves an element of this and an element of that. If we say that price fixing is necessary because of people’s injustice, for example, if they agree to monopolize, as the author mentioned: these merchants bought this commodity that people need and which is not available in the market otherwise, they bought it and then monopolized it and began selling it, earning a hundred from ten. It is necessary to prevent them from doing so. And if we say that price fixing is permissible or obligatory in some cases, then the one in authority must monitor the markets hour by hour, so that if demand increases, he raises the price, and if it decreases, he lowers the price, because as long as he is committed to justice, he must take care of the people hour by hour.
The questioner : Good, so, so.
The Shaykh : There was no mistake; the Companions (may Allah be pleased with them) preferred one another over themselves.
The questioner : We do not see the tracking of prices in this way, whatever it means, whereas if one tracks the natural flow, as it is in a commodity.
The Shaykh : In any case, we mentioned that if the cause of high prices is the scarcity of money or the increase in consumers, then price fixing is not permissible. But if it is due to the injustice of people, then price fixing is necessary.
Source
قناة «فضيلة الشيخ محمد بن صالح العثيمين»، [4033] هل يصح القول بأنه لا مجال للتسعير لأن الأسواق يحكمها قانون العرض والطلب؟ - تعليقات على الكافي — youtube.com
The Arabic text is a machine transcription of the audio recording.