Paper Title: Assessing Universal Basic Income: An Islamic Historical and Maqāşidī Perspective

Author:        Prof. Abdulazeem Abozaid and Saqib Hafiz Khateeb

Publisher:    Journal of Islamic Economics, KAAU. Vol 39(1), 21–31.

This paper enters the global economic discourse at a time when artificial intelligence, automation, and post-pandemic disruptions are forcing a serious re-evaluation of social safety nets.

While conventional economic literature typically traces the conceptual lineage of a Universal Basic Income (UBI) back to Western political philosophy—specifically Thomas More’s Utopia in 1516 or Milton Friedman’s modern Negative Income Tax—this paper uncovers a deep, institutionalized parallel in early Islamic governance.

The authors identify a significant blind spot in modern Islamic economics, noting that contemporary Muslim jurists have historically ignored the concept of a universal, unconditional cash transfer. This silence stems from a long-standing academic preoccupation with targeted, faith-based wealth redistribution mechanisms like Zakāh and Sadaqah, which are structurally designed for selective poverty alleviation rather than serving as a baseline macroeconomic floor for every citizen regardless of financial status. By shifting the analytical lens toward the broader state obligation of ensuring collective welfare, the authors construct a fresh, normative framework that integrates UBI within an Islamic moral economy. 

A major contribution of this research is its demonstration that a functional, state-guaranteed basic income was actively operational during the 7th-century early Islamic Caliphate. During the eras of Prophet Muhammad (pbuh) and the first Caliph, Abu Bakr (rta), surplus state revenues were distributed equitably and immediately among the entire populace. This practice was later formalized by the second Caliph, Umar bin Al-Khattab (rta), who established the Bayt al-Māl (Public Treasury) and organized a highly sophisticated social security system known as the Dīwān al-‘Atā (Grants Register).

This historical register was remarkably inclusive and structurally unconditional; it allocated annual financial grants to all individuals under the state’s jurisdiction, encompassing the elderly, the young, newborns, free citizens, slaves, and non-Muslim (kitabīs) residents alike. However, as the state expanded and its fiscal responsibilities grew more complex, the Caliphate introduced specific eligibility criteria anchored to military service, conversion timelines, and geography.

The authors categorize this systemic shift under Al-Siyāsah Al-Shar’iyyah (welfare-oriented public policy), illustrating that while fulfilling primary human needs is a permanent Islamic mandate, the absolute unconditionality of public fund distribution was historically treated as an administrative courtesy that adapted to prevailing socioeconomic realities. 

From an objective-oriented legal perspective, the concept of a UBI aligns smoothly with the Maqāşid al-Sharīʿah (higher objectives of Islamic law) by directly maximizing public interest (maslahah) and mitigating systemic societal harm (mafsadah). Classical Islamic jurisprudence divides human welfare into three tiers—necessities (darūriyyāt), complementary needs (hājiyyāt), and embellishments (tahsiniyyāt)—and mandates that the state secure core necessities like food, clothing, and shelter to preserve the fundamental values of life and property. From classical academic literature, the authors use an example from the jurist Al-Ghazali, who quantified basic human needs by stating that five dinars of early Islamic currency would successfully cover the biological necessities of a single individual, but would be entirely inadequate to sustain a full family household. 

Furthermore, because Islamic legal thought dictates that natural resources belong collectively to society and cannot be strictly monopolized, a UBI conceptually functions as a legitimate public dividend derived from shared earthly wealth.  To safely implement such a program within a Shari’ah framework, however, the authors erect several strict operational parameters and fiscal boundaries. The most critical ideological line drawn by the authors is the absolute prohibition against using Zakāh funds to finance a UBI, because Zakāh is divinely restricted to specific vulnerable demographic channels, whereas UBI is blind to an individual’s net worth.

Additionally, a valid Islamic UBI must never compromise primary sovereign expenditures such as public administration or defense, must not be funded by increasing tax burdens on productive labourers and farmers, and must remain legally secondary to the liquidation of national debts.

Finally, the recurring pay-out must be mathematically optimized to cover only essential survival needs, ensuring it preserves human dignity without inadvertently discouraging active labour participation and productive economic output. 

The paper successfully dismantles Eurocentric monopolies on the history of social welfare and provides vital legal precision by separating restricted religious charities from general state asset distribution. It also brilliantly frames the private sector and philanthropic endowments (Waqf) as collaborative partners bound by collective social duty (fard kifāyah) to reinforce the fiscal sustainability of state welfare programs. 

Nonetheless, the paper operates mostly within a normative vacuum without providing concrete economic models or logistical roadmaps for how a modern, non-resource-rich Muslim nation can sustainably fund an expansive UBI without triggering aggressive taxation or inflation.

Furthermore, there is an unaddressed historical paradox in the core argument: the authors champion modern UBI based on the unconditionality of the early Caliphate, yet their own historical data demonstrates that the early Islamic state itself was forced to abandon true unconditionality as it scaled. This historical pivot strongly hints that absolute unconditionality may be structurally unstable over the long term, a reality that contemporary policymakers must carefully balance against the noble objective of universal equity.

A specific policy example from Umar’s (rta) reign includes his strategic decision to not divide the newly conquered agricultural lands of Iraq and the Levant among his military warriors; instead, he left the properties in the hands of their original owners and levied a Kharāj (land tax) to secure continuous revenues for the public treasury.

The authors assert that UBI will not discourage employment because it only covers basic survival needs. They paint an idealistic picture where a guaranteed income floor automatically unlocks human creativity and passion-driven productivity, completely minimizing the risk of labour market stagnation or withdrawal, especially in low-income, essential service sectors.

Finally, the authors construct a wall of strict religious and economic prohibitions: they argue that a state cannot fund UBI through Zakāh funds, cannot raise taxes on workers or farmers, cannot prioritize UBI over national debt liquidation, and must maintain high surplus reserves. Having blocked direct income taxes, religious charity funds, and deficit spending, while simultaneously acknowledging that alternative avenues like Waqf endowments are heavily mismanaged, the authors leave very little viable revenue streams for non-oil-producing states. The paper demands a massive, permanent state expenditure while legally outlawing some practical methods to fund it.