The Shaykh’s remarks on hoarding wealth while paying zakah.
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The Shaykh : Many people fall into a strange state of heedlessness. This heedlessness becomes apparent when we raise the following question: There is no doubt that it is permissible for a wealthy person to confine or hoard his wealth in gold and silver in an iron safe and not put it on the market for trade, provided that he pays the zakah on this wealth every year. I believe this is known to everyone. So, if a person does this, is he to be held accountable if he pays the zakah on his wealth every year? The answer is no. Consider another merchant who has not a single dirham or dinar in his safe; all of his wealth is put into trade. Let us assume that both merchants have equal amounts of wealth in terms of quantity. For example, one has a capital of one million, and the other has a capital of one million. The first one keeps his million in the safe, and every year it yields two and a half percent. The second one’s million is put on the market in any of the commodities of trade. Now the question arises: Which of these two wealthy men is more beneficial to the poor, the first or the second?
Now, tell us what you think, since many of you are merchants, and I am not a merchant. Which man is more beneficial? Do you have any doubt about this? So, when someone assumes that when we say that the one whose wealth is converted into trade commodities harms the poor, he is mistaken. If it is true that he harms the poor, it is the first man who harms them, because he has held back and hoarded his wealth. But the Lawgiver said to him: As long as you pay the zakah, there is no sin upon you. So how can it be said that this one harms the poor? If one of the two types is more harmful, it is the first man.
We say finally that the second man is the one who benefits the poor, because when he puts his capital to work, the town moves, and there is work for the poor. If we assume that all the wealthy people are of the first type, unemployment would strike the workers, the poor, and the needy. And the opposite is exactly the opposite. So we must now note something very important: Allah, Mighty and Majestic, did not impose zakah on trade commodities, and conversely, He imposed zakah on hoarded wealth. It is as if our Lord, Mighty and Majestic, is saying to the wealthy: Put your wealth out among... and engage in it in trade commodities, for that is better for people than hoarding it in your safes or in your treasuries.
So here is a profound wisdom: Allah, Mighty and Majestic, did not find in the Book of Allah or in the hadith of the Messenger of Allah (peace and blessings be upon him) a text that obliges this wealthy man who has put his capital on the market to conduct an inventory and appraise these vast amounts of wealth every year. Rather, He was lenient with him in this leniency because he deserves it, as his work is more beneficial to the poor than that of the wealthy man who hoarded his wealth. And yet, Allah was lenient with him as long as he pays two and a half percent from these accumulated, hoarded funds.
In summary, what we understand from this matter is that revelation and reason agree at the same time that there is no zakah on trade commodities, and that the wise Lawgiver’s lifting of the zakah from them is for the benefit of the poor, because it encourages the wealthy person not to hoard his wealth. If he hoards it, the poor’s benefit from it decreases. On the other hand, it encourages the wealthy person to put his wealth on the market, so the poor benefit from it more than they would from the hoarded funds. This is all I have on this issue.
Now, tell us what you think, since many of you are merchants, and I am not a merchant. Which man is more beneficial? Do you have any doubt about this? So, when someone assumes that when we say that the one whose wealth is converted into trade commodities harms the poor, he is mistaken. If it is true that he harms the poor, it is the first man who harms them, because he has held back and hoarded his wealth. But the Lawgiver said to him: As long as you pay the zakah, there is no sin upon you. So how can it be said that this one harms the poor? If one of the two types is more harmful, it is the first man.
We say finally that the second man is the one who benefits the poor, because when he puts his capital to work, the town moves, and there is work for the poor. If we assume that all the wealthy people are of the first type, unemployment would strike the workers, the poor, and the needy. And the opposite is exactly the opposite. So we must now note something very important: Allah, Mighty and Majestic, did not impose zakah on trade commodities, and conversely, He imposed zakah on hoarded wealth. It is as if our Lord, Mighty and Majestic, is saying to the wealthy: Put your wealth out among... and engage in it in trade commodities, for that is better for people than hoarding it in your safes or in your treasuries.
So here is a profound wisdom: Allah, Mighty and Majestic, did not find in the Book of Allah or in the hadith of the Messenger of Allah (peace and blessings be upon him) a text that obliges this wealthy man who has put his capital on the market to conduct an inventory and appraise these vast amounts of wealth every year. Rather, He was lenient with him in this leniency because he deserves it, as his work is more beneficial to the poor than that of the wealthy man who hoarded his wealth. And yet, Allah was lenient with him as long as he pays two and a half percent from these accumulated, hoarded funds.
In summary, what we understand from this matter is that revelation and reason agree at the same time that there is no zakah on trade commodities, and that the wise Lawgiver’s lifting of the zakah from them is for the benefit of the poor, because it encourages the wealthy person not to hoard his wealth. If he hoards it, the poor’s benefit from it decreases. On the other hand, it encourages the wealthy person to put his wealth on the market, so the poor benefit from it more than they would from the hoarded funds. This is all I have on this issue.