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Bayt al-mal is an
Arabic term that is translated as “House of Money” or “House of Wealth.” Historically, it was a
financial institution responsible for the administration of
taxes in
Islamic states, particularly in the early Islamic
Caliphate. It served as a
royal treasury for the
caliphs and
sultans, managing personal finances and government expenditures. Further, it administered distributions of
zakah revenues for public works. Modern Islamic
economists deem the institutional framework appropriate for contemporary Islamic societies.
History
Bayt al-mal was the department that dealt with the revenues and all other economical matters of the state. In the time of
Muhammad there was no permanent Bait-ul-Mal or public treasury. Whatever revenues or other amounts were received were distributed immediately. There were no salaries to be paid, and there was no state expenditure. Hence the need for the treasury at public level was not felt. In the time of
Abu Bakr as well there was not treasury. Abu Bakr earmarked a house where all money was kept on receipt. As all money was distributed immediately the treasury generally remained locked up. At the time of the death of Abu Bakr there was only one
dirham in the public treasury.
Establishment of Bait-ul-Maal
In the time of
Umar things changed. With the extension in conquests money came in larger quantities, Umar also allowed salaries to men fighting in the
army.
Abu Huraira who was the Governor of
Bahrain sent a revenue of five hundred thousand
dirhams. Umar summoned a meeting of his Consultative Assembly and sought the opinion of the Companions about the disposal of the money.
Uthman ibn Affanadvised that the amount should be kept for future needs. Walid bin Hisham suggested that like the
Byzantines separate departments of
Treasury and Accounts should be set up.
After consulting the Companions
Umar decided to establish the Central
Treasury at
Madinah. Abdullah bin Arqam was appointed as the Treasury Officer. He was assisted by
Abdur Rahman bin Awf and Muiqib. A separate Accounts Department was also set up and it was required to maintain record of all that was spent. Later provincial treasuries were set up in the provinces. After meeting the local expenditure the provincial treasuries were required to remit the surplus amount to the central treasury at
Madinah. According to Yaqubi the salaries and stipends charged to the central treasury amounted to over 30 million
dirhams.
The coins were of Persian origin, and had an image of the last Persian emperor, Muslim added the sentence
Bismillah to it.
A separate building was constructed for the royal treasury by the name
bait ul maal, which in large cities was guarded by as many as 400 guards. In most of the historical accounts, it states that among the
Rashidun caliphs,
Uthman ibn Affan was first to struck the coins, some accounts however states that
Umar was first to do so. When
Persia was conquered three types of
coins were current in the conquered territories, namely Baghli of 8
dang; Tabari of 4
dang; and Maghribi of 3
dang.
Umar( according to some accounts
Uthman ) made an innovation and struck an Islamic dirham of 6
dang.
Welfare state
The concepts of
welfare and
pension were introduced in early
Islamic law as forms of
Zakat (charity), one of the
Five Pillars of Islam, under the
Rashidun Caliphate in the 7th century. This practiced continued well into the
Abbasid era of the
Caliphate. The
taxes (including
Zakat and
Jizya) collected in the
treasury of an Islamic
government were used to provide
income for the
needy, including the
poor,
elderly,
orphans,
widows, and the
disabled. According to the Islamic jurist
Al-Ghazali(Algazel, 1058–1111), the government was also expected to stockpile food supplies in every region in case a
disaster or
famine occurred. The
Caliphate can thus be considered the world’s first major
welfare state.
[1][2]
During the
Rashidun Caliphate, various welfare programs were introduced by Caliph
Umar. In his time, equality was extended to all citizens, even to the
caliph himself, as Umar believed that “no one, no matter how important, should live in a way that would distinguish him from the rest of the people.” Umar himself lived “a simple life and detached himself from any of the worldly luxuries,” like how he often wore “worn-out shoes and was usually clad in patched-up garments,” or how he would sleep “on the bare floor of the
mosque.” Limitations on wealth were also set for governors and officials, who would often be “dismissed if they showed any outward signs of pride or wealth which might distinguish them from the people.” This was an early attempt at erasing “class distinctions which might inevitably lead to conflict.” Umar also made sure that the public treasury was not wasted on “unnecessary luxuries” as he believed that “the money would be better spent if it went towards the welfare of the people rather than towards lifeless bricks.”
[2]
Umar’s innovative welfare reforms during the Rashidun Caliphate included the introduction of
social security. This included
unemployment insurance, which did not appear in the
Western world until the 19th century. In the Rashidun Caliphate, whenever citizens were injured or lost their ability to work, it became the state’s responsibility to make sure that their minimum needs were met, with the unemployed and their families receiving an allowance from the public treasury.
[2] Retirementpensions were provided to elderly people,
[1] who had retired and could “count on receiving a
stipend from the public treasury.” Babies who were abandoned were also taken care of, with one hundred
dirhams spent annually on each orphan’s development. Umar also introduced the concept of
public trusteeship and
public ownership when he implemented the
Waqf, or
charitable trust, system, which transferred “wealth from the individual or the few to a social collective ownership,” in order to provide “services to the community at large.” For example, Umar brought land from the Banu Harithah and converted it into a charitable trust, which meant that “profit and produce from the land went towards benefiting the poor, slaves, and travelers.”
[2]
During
the great famine of 18
AH (638
CE), Umar introduced further reforms, such as the introduction of food
rationing using
coupons, which were given to those in need and could be exchanged for wheat and flour. Another innovative concept that was introduced was that of a
poverty threshold, with efforts made to ensure a minimum
standard of living, making sure that no citizien across the empire would suffer from hunger. In order to determine the poverty line, Umar ordered an
experiment to test how many
seers of flour would be required to feed a person for a month. He found that 25 seers of flour could feed 30 people, and so he concluded that 50 seers of flour would be sufficient to feed a person for a month. As a result, he ordered that the poor each receive a food ration of fifty seers of flour per month. In addition, the poor and disabled were guaranteed cash stipends. However, in order to avoid some citizens taking advantage of government services, “begging and laziness were not tolerated” and “those who received government benefits were expected to be contributing members in the community.”
[2]
Further reforms later took place under the
Umayyad Caliphate. Registered soldiers who were disabled in service received an
invalidity pension, while similar provisions were made for the disabled and poor in general. Caliph
Al-Walid I assigned payments and services to the needy, which included money for the poor, guides for the blind, and servants for the crippled, and pensions for all disabled people so that they would never need to beg. The caliphs
Al-Walid II and
Umar ibn Abdul-Azizsupplied money and clothes to the blind and crippled, as well as servants for the latter. This continued with the Abbasid caliph
Al-Mahdi.
[3] Tahir ibn Husayn, governor of the
Khurasan province of the Abbasid Caliphate, states in a letter to his son that pensions from the treasury should be provided to the blind, to look after the poor and destitute in general, to make sure not to overlook victims of oppression who are unable to complain and are ignorant of how to claim their
rights, and that pensions should be assigned to victims of calamities and the widows and orphans they leave behind. The “ideal city” described by the
Islamic philosophers,
Al-Farabiand
Avicenna, also assigns funds to the disabled.
[4]
When communities were striken by famine, rulers would often support them though measures such as the remission of taxes, importation of food, and charitable payments, ensuring that everyone had enough to eat. However, private charity through the
Waqf trust institution often played a greater role in the alleviation of famines than government measures did.
[5] From the 9th century, funds from the treasury were also used towards the
Waqf (charitable trusts) for the purpose of building and supporting public institutions, often
Madrassah educational institutions and
Bimaristan hospitals.
[6]
Treatment of conquered peoples
Caliph Umar was the first Caliph to provide Allowance to non-Muslims, or
Dhimmi, after they reached old age.
The very first Non-Muslim to receive pension from the Rashidun Administration was a Jew from the following documented record:
Once Caliph Omar was in the streets of Madina when he saw a man begging. He went to him and asked him; “why are you begging? Are you not receiving maintenance (allowance) from Bait al-mal”. The man replied; “I am a Jew and I am doing this so that I can pay the Jizya”. Hearing this the Caliph Omar took him by his hand to the Bait al-mal and decreed “In the name of Allah you pay Jizya all your life and then you get betrayed when you reach old age.” He ordered to provide that man Pension and from that day it was so ordered for all Jews and Christians and others.
This is how non-Muslims were being given relief from
Jizya, though Jizya was not abolished.
References
- ^ a b Crone, Patricia (2005), Medieval Islamic Political Thought, Edinburgh University Press, pp. 308–9, ISBN 0748621946
- ^ a b c d e Shadi Hamid (August 2003), “An Islamic Alternative? Equality, Redistributive Justice, and the Welfare State in the Caliphate of Umar”,Renaissance: Monthly Islamic Journal 13 (8) (see online)
- ^ Crone, Patricia (2005), Medieval Islamic Political Thought, Edinburgh University Press, p. 307, ISBN 0748621946
- ^ Crone, Patricia (2005), Medieval Islamic Political Thought, Edinburgh University Press, p. 308, ISBN 0748621946
- ^ Crone, Patricia (2005), Medieval Islamic Political Thought, Edinburgh University Press, p. 309, ISBN 0748621946
- ^ Crone, Patricia (2005), Medieval Islamic Political Thought, Edinburgh University Press, pp. 309–10 & 312, ISBN 0748621946
See also