LOCATED in modern-day Saudi Arabia, the ancient city of Madinah is significant to Islamic history since it was here that the Prophet Muhammad (PBUH) founded the first Islamic state in the seventh century CE. The socioeconomic and governmental structures put in place during this time provide insightful understandings of enduring governance, economic fairness, and social welfare concepts. The Prophet Muhammad (PBUH) founded a distinctive political system in Madinah, the birthplace of the early Muslim community, based on the ideas of responsibility, justice, and consultation (Shura). Majlis al-Shura, a council of elders and community leaders that counselled the Prophet on matters of state affairs and policymaking, served as the cornerstone of governance. The community’s inclusion and representation of a range of viewpoints were guaranteed by this participatory method to decision-making (Ibn Ishaq 2014).

In addition, the creation of the treasury, or Bayt al-Mal, was crucial to social welfare and wealth redistribution. This organization collected taxes, including the mandatory alms (Zakat), and distributed the proceeds to charitable organizations, interest-free loans to business owners, and investments in public works initiatives. The equitable distribution of income and the transparent management of resources (Siddiqui 2011) fostered economic stability and social cohesion. The goals of economic fairness, reducing poverty, and facilitating access to education defined Madinah’s socioeconomic structure. Islamic economics was founded on........

© Pakistan Observer