Islam seeks to guarantee the freedom of property owners to spend, give away, and invest it as he or she deems fit. With the exception of three general guidelines, set for the befit of society, such freedom of disposal is virtually unrestrained.

The first guideline is that earnings should not be based on cheating and swindling. It is imperative that the Muslim perform all his or her financial transactions and dealings with no cheating whatsoever. The Islamic stance on this point is so firm that the Prophet Muhammad (peace and blessings be upon him) said a phrase to the effect that one who cheats is not of the Muslims. Cheating infringes upon the rights of others and weakens the fabric of financial interdependence.

The second guideline is that there is no monopolization of necessities. Islam forbids the hoarding or monopolizing of goods and services, such as sources of water, that are necessary for the continuation of life and that properly belong in the public domain. Such monopolies would harm the public for the sake of a gain in the hands of a select few, thus the Islamic system expressly forbids them.

The third, and possibly the most well-known guideline, is that riba (loosely translated to mean “interest”) is strictly forbidden. The Qur’anic verses and Prophetic Hadiths (sayings or traditions of the Prophet Muhammad) that outlaw interest are clear and irrefutable.

Islam strictly forbids the giving or taking of interest on any loan in any amount. Interest is defined as a set return on a loan, and as such implies a profit based on no risk or effort – a principle completely against Islamic ideals. Financial profit is a result of effort or risk (or both), and interest seeks to undermine the risk-based nature of trade. Furthermore, in many instances interest is exploitative – it is typically used as a means of deriving profit from the financially weaker members of society by a wealthy class in whose hands the lent money is concentrated. With these people, a loan is not a favor done to help others or the society, but is used as a means of oppression and undermines social cohesion.

At the same time, Islam encourages investment and loans given as a means of charity. Such loans are given by Muslims with the expectation that they be paid back. However, the intention behind helping a fellow Muslim in distress is not profit but the pleasure of Allah. Interest, as known today, is ubiquitous in the financial markets of the world. It allows richer nations to capitalize on the resources of poorer nations under the guise of “paying back national debt.”

Interest has crumbled empires, while making oppressors out of others. Most importantly, our sustenance is determined by Allah, and He has promised to decrease the sustenance of the collector of interest and increase the sustenance of the one who gives alms. While the reality of this may seem against intellect, it is a fact that will be clear tone with a proper understanding of the Ability of Allah.

As the religion of the middle path, Islam decries extremism to either side and encourages moderation in all affairs. In terms of spending on oneself and on others, Islam condemns both niggardliness and extravagance. Niggardliness stems from a misunderstanding of the nature of wealth, which is from Allah and is bequeathed to people for a limited time. Whatever we do not spend of our wealth in this life is in reality not our wealth in the first place. Allah describes the abject nature of the niggard as a man having his hand tied to his neck and unable to extend it.

On the other hand, extravagance is also seen as distinctly un-Islamic. Lavishness and excess often lead to arrogance, and at the least, produce a tendency toward base desires. Additionally, they can breed envy and resentment between the affluent and less wealthy segments of society. The true Islamic way lies in temperance between extravagance and miserliness. It entails spending generously and practically, for to others, society, and oneself, while sincerely intending the pleasure of Allah.