Energy and mineral wealth must be publicly owned by citizenry. The ruler must administer these resources on behalf of the community and ensure the benefits are distributed to the community.
The fact that oil is referred to as black gold is telling how important this resource is.
The colonial powers, Britain, France, Germany, and now the US, have launched many wars over the past hundred years to secure this gold to fuel its economic system that demands endless production.
In World War I, one of the key reasons that the European powers invaded the Ottoman Islamic State was to secure this precious resource. As noted in the WSJ:
After World War II, the US too had its sights on the Muslim lands for this purpose. In a memo to then President Truman, the securing of oil resources in Saudi Arabia was seen as a "national interest". The memo noted the following about the blessed land of Prophet Muhammad (saw):
This came to be known as the Carter Doctrine - the idea that the oil in the Muslim world belonged actually to the US. The idea was refreshed by President Obama - who unlike his successor presented a much better face to colonialism.
Of course, the most recent invasion of Iraq has been admitted by General Abizaid, Alan Greenspan and others as a war that was driven in part to secure oil.
But who is this oil for?
Trillions are spent. Millions are killed. But for what?
Freedom. The freedom of ownership: the essence of Capitalism; where the rich can own anything they want - even other people's oil. So when they say that they're fighting for freedom they are not lying.
How much money are we talking about?
Oil is but one resource that powers the Capitalist economic machine; so it's more important to discuss the entire energy sector.
The global energy sector (e.g. oil, gas, electricity, etc.) invests about $114 trillion in assets with a return on asset rate of 1.73%. This amounts to over $1.97 trillion a year in returns to the investors.
Mineral wealth similarly represents a large source of wealth. Globally, there are $38 trillion assets invested in this sector that has earnings of over $1.27 trillion or 3.32%.
This wealth, however, is held by the private sector and has made the 1% quite wealthy. For example, the Koch brothers, among others, have amassed massive fortunes ($34 billion each) through their involvement in the energy sector.
How is energy wealth treated in Islam?
Islam, literally gives "power" - electric power, gas power, nuclear power, wind power, solar power, etc. - to the people. Energy, as well as minerals, are publicly owned resource. The State administers these resources on behalf of the citizenry; granting them access to it as well distributing profits from the sale of such commodities. It is illegal to privatize such resources and no one should be barred from accessing such resources. The State also would own the factories and industries related to processing the minerals or energy resources.
The proofs for the public ownership of energy are:
"The Muslims are partners in three, water, pastures and fire" [Ahmed, ibn Majah]
"Three are not prevented – water, pastures and fire" [ibn Majah]
The ijthihad of "fire" means that the energy resources must be shared.
The proofs for mineral wealth being publicly owned are:
‘Amru b. Qays from his father from Abyad bin Hammal who said:
“I asked the Messenger of Allah (saw) to assign me a salt
laden land as a fief and so he granted it to me. It was said: O
Messenger of Allah , it is comparable to a countless water – in
other words, it does not deplete – and so the Messenger of Allah (saw) said: “In such a case: no”” [reported by Al-Nasa’i]
According to Abu Ubayd, "When the Prophet realised it included ground water (does not deplete), he revoked it, it is the Sunnah of the Messenger of Allah (saw) in relation to pasture, fire and water, to make all the people partners in their possession. So he disliked
limiting possession to one person at the exclusion of others". [Emphasis added]
What is the different between state property and public property?
Public ownership is different than state resources. An example of state resources would be the land taxes (kharaj; that was previously discussed) collected by the state.
The difference is that the use of the public property must benefit citizenry through expenditures that benefit the community at large, such as hospitals, roads, universities, etc. State property has less restrictions and can be spent according to the legal understanding (ijtihad) of the Khaleefah. It doesn't mean he has a free had to do whatever he wants, its just not as restricted.
In an Islamic society, the Khaleefah would be held accountable for failing to use the public owned wealth for the citizenry. In fact, there are special courts, the Court of Unjust Acts, solely designed to hold the ruler accountable for exactly such type of things.
Impact on the distribution of wealth
The common ownership of these contributes to the flow of wealth in society. Islam's approach ensures the society can access this wealth for personal use as well as ensuring the tide of income from such wealth lifts all boats. As noted in earlier posts, the core economic policy of Islam is ensuring that wealth is flowing in society and not jamming up in the hands of the few. This illustrates a unique concept in Islam of crystallization; where the laws are in sync with each other thereby enabling a harmoniously society.
In future posts, we will in sha Allah, look at how to discuss this topic of public ownership as a more natural reflection of the reality of things like water, energy and other resources that in reality are in common to society (and yes there is such a thing as society).