The Institution of Al-Hisbah

ALLAH SWT created man with greediness by nature to promote his hard works towards His bounties. However, the excessive and continuing greediness out of the control leads to injustice to the rest of the world. The Prophet Muhammad SAW said about man’s greediness in his hadith by saying:

“The son of Adam, if he had two valleys of gold, he will demand for a third valley and will not satisfied until he bites the dust”

Thus, the complexity of economic activities in our modern age will create harmfulness to the people if there are no regulatory frameworks to monitor and control. This is against to the objectives of Islam which brings peacefulness to all people regardless of religious and tribal status. A part from that, Islam makes a collective duty to promote good behavior and prevent bad behavior in the society. Whereby ALLAH SWT mentioned in the Holy Qur’an in surah al-Imran, verse 104:

“Let there arise from you a group calling to all that is good, enjoining what is right and forbidding what is wrong. It is these who are successful”

Thus, the existence of al-hisbah institution is essential as mentioned by ALLAH SWT in the above verse. Al-hisbah or a public regulatory body of the state has critical roles to safeguard the good social and economic life of the society so that each individual has equal treatments and opportunities to feed his/her life. Economically, the al-hisbah institution which is headed by al-muhtasib has to establish four essential roles as follows:

First of all, is to enforce proper ethical behavior and to restrain unethical behavior among all the economics agents in the economy i.e. households, firms and government. By having investigative and enforcement powers, al-hisbah will act accordingly to make sure all of them are conducting their economic activities within the limitations prescribed by ALLAH SWT in the Holy Qur’an and the Prophet Muhammad’s hadith. It is a duty to prevent them from the misuse of the divine guidance for the sake of their own interest to avoid ‘havoc’ among people in the society. The Prophet Muhammad SAW said pertaining to this matter as:

“Al-Qur’an is not only a counter fact to win over the argument. In fact, it is a universal guidance for all”

Nowadays in Malaysia, the government has established institutions to carry most likely similar roles of al-hisbah institutions such as ‘Jabatan Kemajuan Islam Malaysia (JAKIM)’, ‘Majlis Mufti Kebangsaan’ and all religious institutions at the states level such Jabatan Agama Islam Islam (JAIS),’Majlis Agama Islam Negeri Sembilan (MAINS)’, ‘Majlis Agama Islam Pahang (MAIP)’ and others.Secondly, to provide public goods and services which are not being produced by private firms because of no profitable return to them. Islamic economy does only not confine the diversifications of goods and services only to their marketability and profitability. There are some other goods which are really needed by the society as a whole but are not being marketable and profitable to produce by private firms such as street lighting, schools, universities worshipping places, playgrounds and etc.

In the case of Malaysia as a recognized Islamic countries in the world, the duties have been carried out thru various ministries and government agencies with their respective functions whether at state or federal level.

Thirdly, to act as solely market regulator in the economy which to avoid market violence and abuse among the players. By such authority, al-hisbah institution will legalize the registration and licensing of all business firms in the market. This is kind of practice is to establish a proper and effective supervision and regulations of the market so that it will efficiently and prudently operate. In the long run it will lower the cost of business in the economy later it will prolong the effect to the price paid by the households and then lesser the burdens. If the market is poorly regulated, there is a tendency in misleading of economic agents to create ‘havoc’ and harmfulness to the others. For instance in Malaysia, the government has taken the initiatives to establish the ‘Securities Commissions (SC)’ to regulate and monitor the capital market in the country with the objective to preserve the rights and welfare of investors.

In the modern days with the ‘secular practice of al-hisbah’ since the colonial dominations, cheating and no transparency in the ground of business transactions have caused the excessive increasing cost of production. Then, such cost will be burdened back to the households by higher price of goods and services in the market. Without such guidelines and strict enforcement by the ‘secular al-hisbah’, most of the awarded government contracts imply the very expensive cost of production. Then, of course it will imply a higher cost of production to the firms. Then, it will directly or indirectly be borne by the households!

Finally, it is to act as consultative and informative council to the market players in the economy. The institution of al-hisbah provides consultations and information to the households and firms about the market procedures and legislations imposed by the state authority such as certification procedures of halal products, good corporate governance in business transactions and shariah compliance. These all can be done thru seminars, short-term courses and face to face appointment at very affordable cost. Such information can also be distributed to via publications of journals, books, magazines and by developing official websites. They need such information to decide on business transactions. For example, the households need the clarity of status of halal before purchasing any products and services in the market. Without such information, it is not possible to practice in according to shariah with the complexity of the present business trends.