The Jurisprudential-Legal Foundations of Price Control by the Government

Abstract

One of the important issues in economics, especially Islamic economics, is how the prices of goods and services are determined in the market. This issue has multiple effects on fundamental variables such as investment, employment, production, supply of goods, and the general price level in the current and future economy. The pricing of goods or services in the Islamic market has been a subject of attention since the early Islamic period, under the Prophet Muhammad (PBUH), the Imams (AS), and, during the period of the Major Occultation, by prominent religious scholars and jurists. Based on numerous narrations and jurisprudential foundations, Islamic jurists (both Sunni and Shia) have presented various views on this matter. A review of jurisprudential texts shows that, although some, considering the short-term effects of government-imposed price controls, lean towards granting such authority to the state, most jurists maintain the prohibition of price-setting.