Rise of Islam
Agriculture was the principal occupation of the settled populations. In Iraq and Iran, land existed in fairly large units cultivated by peasants, and in some cases by the state. In areas where people shifted from pastoral to a settled agricultural system, land was the common property of the village. Big estates that were abandoned by their owners after the Islamic conquests were acquired by the state and handed over mainly to the Muslim elites of the empire.
The state derived bulk of its income from land revenue. The lands conquered by the Arabs that remained in the hands of the owners were subject to a tax (kharaj) from half to a fifth of the produce; depending on the conditions of cultivation. The lands held by the Muslims were subject to a tax of one-tenth of the produce. If a non-Muslim converted to Islam, he was eligible to pay a lower tax. But this system resulted in loss of revenue. So, the caliphs first discouraged conversions, and later adopted a uniform policy of taxation.
From the tenth century onwards, the state authorized its officials to claim their salaries from agricultural revenues from their territories. This was called iqtas (revenue assignment).
Political stability translated into agricultural prosperity. The state supported irrigation systems in many areas. Islamic laws gave tax concessions to people who brought land under cultivation. Land under cultivation expanded which resulted in increased productivity. Many new crops were grown and even exported to Europe (examples: cotton, oranges, bananas, watermelons, spinach and brinjals).
Islamic civilization flourished and a number of cities witnessed phenomenal growth. Many new cities were founded, mainly to settle Arab soldiers. These garrison-cities were called misr (the Arabic name for Egypt), e.g. Kuf, Basra, Futsat and Cairo. A vast urban network developed, linking one town with another.
There were two building complexes at the heart of the city. These were: the congregational mosque and the central marketplace (suq). A marketplace had shops in a row, merchants’ lodgings (fanduq) and the office of the money-changer. Administrators, scholars and merchants lived close to the centre. Ordinary citizens and soldiers lived in quarters in outer circle. Each quarter had its own mosque, church or synagogue, subsidiary market and public bath (hammam). The outskirts had houses for the urban poor, a market for green vegetables and fruits, caravan stations and ‘unclean’ shops, such as for tanning and butchering. Beyond the city walls were inns for people to rest, in case someone came after the city gates were shut. Cemeteries too were outside the city walls.
Influence on Trade:
Geography favoured the Muslim empire, which spread between the trading zones of the Indian Ocean and the Mediterranean. For five centuries, Arab and Iranian traders monopolized the maritime trade between China, India and Europe. Goods from India and China came to the ports of Aden and Aydhab (Red Sea), and Siraf and Basra (Gulf). From these ports, goods were carried overland in camel caravans to the warehouses of Baghdad, Damascus and Aleppo. The caravans passing through Mecca got bigger whenever the hajj coincided with the sailing seasons (mawasim) in the Indian Ocean. At the Mediterranean end of these trade routes, exports to Europe from the port of Alexandria were hadnled by Jewish merchants. From the tenth century, the Red Sea route gained greater importance. This happened because of the rise of Cairo as a centre of commerce and power and because of growing demand for eastern goods from the trading cities of Italy.
Towards the eastern end, caravans of Iranian merchants set out from Baghdad along the Silk Route to China, via Burkhana and Samarqand. Transoxiana also formed an important link in the commercial network which extended north to Russia and Scandinavia for the exchange of European goods and Slavic captives.
Fiscal System and Market Exchange
The fiscal system and market exchange increased the importance of money in the central Islamic lands. Coins of gold, silver and copper were minted and circulated, often in bags sealed by money-changers. Rising demand for money forced people to release their idle wealth into circulation. Credit combined with currencies to facilitate commercial activities. The greatest contribution of the Muslim world was the development of superior methods of payment and business organization. Letter of credit (sakk) and bills of exchange (suftaja) were used by merchants and bankers to transfer money from one place or individual to other. The widespread use of commercial papers eliminated the need to carry cash and also made a trader’s journey safer. Family businesses were customary but formal business arrangements (muzarba) were also common.