Economic Implications of Land Ownership and Land Cultivation in Islam
Economiorent is the contribution of land or natural resources to output under conditions of perfect competition. Society as a whole is the rightful owner of economic rent. Therefore, such rent should be separated from all other types of returns and extracted from whoever receives it initially. Then, the economic rent should be distributed to all members . of society equally or equitably. Islam recognises four factors of production. But money per se is not a factor of production until it is transformed into physical assets. On agricultural land, the return on land as a free gift of nature should accrue to the society. Its taking by an individual (landlord) is akin to riba. However, the landlord can take a return on any capital improvements on land. Therefore, part of the contractual rent should be repaid to the society by the landlord. The most appropriate form of land rent is fixed contractual rent in the form of money. The implications of the above arrangement would be efficient agriculture, decrease in land speculation, increase in employment and a more equitable distribution of income. Analytical. For Muslim economists. Based on primary sources. Documented.