Gillian Tett and Robin Wigglesworth discuss with author Benedikt Koehler the surprising economic contributions of the Prophet Mohammed. He was an international trader who became wealthy, managing large camel caravans of 2,000 to 3,000 animals transporting high-value goods like gold, spices, and silk across vast distances. His background as a businessman, rather than a traditional saint, shaped many of his religious teachings, particularly concerning commerce and wealth.
Mohammed is credited with establishing an innovative market in Medina with zero tax, undercutting the four existing markets. During a famine, he notably deregulated prices, famously stating that "Prices are in the hand of God," a groundbreaking move for a leader of his time. This approach, however, was balanced by strong philanthropic initiatives, including the 2.5% zakat (a form of wealth tax) to fund a safety net, and the concept of muwakhat, encouraging brotherhood and reducing the wealth gap.
His economic model proved highly successful, attracting more people to Medina and leading to the spread of Islam and its commercial practices across the Middle East. Through raiding parties and rents (taxes) from newly incorporated areas, Mohammed became immensely rich, with an Islamic scholar, Leone Caetani, suggesting he was the highest-income Arab of his era. The article also highlights the emphasis on equity financing and true risk-sharing in Islamic finance, contrasting it with debt-laden global systems.
