Q: What does the author mean when he says, "Islam requires economists to focus on solving the wealth distribution problem, not growth." Who will focus on growth then?

A: Growth is ultimately natural in people. That is, there is no need to put extra incentives to get people to farm, manufacture goods or sells services. That is, the survival instinct drives people to produce things. As Muslims, one of the key challenges is to keep duniya from taking over our akhira. RasulAllah (saw) warned us that:

“If the son of Adam were given a valley full of gold he would always want another.” [Bukhari]

And so important to ask who made growth central issue of the economy? The Capitalists made this an issue. Why? The Capitalists believe that man’s wants and needs are infinite and so therefore the job of the economy is to maximize the production of goods and services to ensure that this well of infinite desire is filled. But the problem with this approach is that it does not distinguish between basic needs (e.g. food, shelter, clothing and healthcare) and luxurious needs. Consider:

GDP from 2007 to 2014 to the corresponding change in the level of poverty. For these 5 years, the GDP in the US grew from $14.4 trillion to $16.6 trillion. During the same period, the number of poor people didn't fall but actually rose from 37.3 million people in 2007 to 46.5 million people in 2014. So despite the fact that the GDP rose by over $2 trillion, there were 9.2 million more poor people. Consequently, those trillions of dollars added to the economy for 7 years did not improve the welfare of 15% of the US population!
The soda industry uses about 420 billion litres of water (Coke has about 50% of the industry). If we use the daily estimate of 50L/per person, this would be enough water to solve the water crisis for 23 million people (annually); roughly the population of Taiwan (See here for the full article that I wrote)
In Canada, about 40% of Canadians can’t replace their clothes when they wear out. Yet Zara produces about 450 million articles of clothing each year across the globe.

How can the Capitalists use a measure of the economy that does not focus on how people are doing? And that’s the challenge with focusing on the production of goods and services instead of ensuring the basic needs are satisfied. We can have trillions of dollars of wealth produced and yet people are going hungry. Conversely, an economy that produces less but ensures everyone’s needs are met is a much more successful economy.

Allah (swt) revealed:

“ And what Allah restored to His Messenger from the people of the towns - it is for Allah and for the Messenger and for [his] near relatives and orphans and the [stranded] traveler - so that it will not be a perpetual distribution among the rich from among you. And whatever the Messenger has given you - take; and what he has forbidden you - refrain from. And fear Allah; indeed, Allah is severe in penalty. For the poor emigrants who were expelled from their homes and their properties, seeking bounty from Allah and [His] approval and supporting Allah and His Messenger, [there is also a share].” [TMQ Hashr 59:7-8]

According to usul-al-fiqh (principles of Islamic jurisprudence), the verse that commanded the Muslims at the time to distribute the wealth to the poor was accompanied with the "illah" (legal reason) that the wealth is not meant to circulate in the hands of the wealthy. Rather, the priority is to circulate wealth to the poorer sections of society - such as the muhajireen (emigrants) who migrated to Madinah and were poor, i.e. just as any refugee fleeing his land would be. Consequently, even if a transaction is initially deemed to be halal - and it causes the wealth to concentrate - it can be overruled by this ayah (verse).

More generally, the Islamic rules overall are in harmony with this concept. We covered the prohibition of interest and illustrated how partnerships act as a distributor of wealth. However, this also applies to the zakat, which redistributes 2.5% of a person's assets (that haven't been used in a year) to the poor, the travelers, the debtors etc. We will cover this topic in more detail in sha Allah in the future, but it should be clear that this tax is based on assets and not income. Also, consider the inheritance laws that distribute the assets from the estate to many members of the family instead of just allowing it to be passed on to, say, the eldest child.

For more on the topic, see :

https://www.freshonomics.org/blog/2016/7/14/policy-3-distribution-is-the-problem