Home Economics Arctic Islam’s Doctrine and Capitalism

Islam’s Doctrine and Capitalism

by admin
0 comment 5 minutes read

The middle-of-the-road policy for a society’s economic well-being that Islam adopts is unique and rewarding in so many ways, especially when viewed against the backdrop of the extremist ideologies of socialism and capitalism. To give this policy a practical shape, Islam raises the grand edifice of its economic scheme on the twin foundations of law and morality. Through its moral teachings, it mentally prepares the society and each of its members to subscribe to this scheme voluntarily; while by the force of its legal code, it imposes restrictions that compulsorily keep them within the ambit of that scheme. These moral principles and legal regulations are the basic ingredients and mainstays of the Islamic economic system. In order to grasp its tone and tenor fully, it is essential to examine it in more detail.

The distinction between Lawful and Forbidden Means of Livelihood

The first thing to note is that Islam does not give free licenses to its followers to earn a living or to conduct their economic activities as they choose. Instead, it lays down distinct criteria of what is  Halāl (lawful) and Harām (forbidden) for all economic activities, both public and private, in the best interests of society. This distinguishing feature of Islam’s economic system is based on the guiding principle that all means of production and earning wealth are unlawful where one person’s gain is another’s loss, and that every economic activity is lawful which permits the equitable distribution of dividends among the persons involved. The Qur’anic injunction to ‘let there be trading by mutual consent’ involves the exchange of goods and services on a substitutional basis. By making it conditional on ‘mutual consent,’ every form of transaction is rejected as unlawful where there is an element of coercion, deception, fraud, or trickery, which may make the deal undesirable if discovered by the other party. In addition to the above fundamental injunction, the Qur’an has declared unlawful in different places the following means of money-making.

  • Bribery and embezzlement
  • Breach of trust and misappropriation of funds, public or private
  • Theft and burglary
  • Mishandling of the orphan’s property
  • Fraudulent transactions/disregard of weights and measures
  • Trading in immorality and all means of obscenity and promiscuousness
  • Income generated through the sex trade, brothels, adultery or fornication
  • The production, sale, transportation and marketing of alcoholic beverages
  • Gambling, betting, lottery and all means of income based not on one’s labour but on chance
  • Idol-making, trading in idols and serving in temples
  • Fortune-telling and soothsaying
  • Usury and all forms of interest-based transactions

The Accumulation of Wealth

The second injunction regarding the conduct of economic activities is that wealth produced through lawful means must not be allowed to accumulate, because its circulation is thus checked and the balance is lost in the distribution of wealth. This injunction cuts at the very roots of capitalism. To amass savings and then use them to produce more wealth is the basis of capitalism. Islam, on the other hand, does not encourage a person to pile up wealth in excess of his needs.

Money is to Spend

Instead of stockpiling, Islam guides us to spend the money we have earned through lawful means. However, this does not imply that Islam seeks to promote profligacy and extravagant living. The command to spend is conditional on some checks and balances, and the biggest check of all is that the wealth has to be spent ‘Fi Sabīlillāh,’ i.e. ‘in the Way of ALLAH TAA’LA.’ In this, Islam’s approach totally differs from that of capitalism. A capitalist thinks that he would go bankrupt by spending, but become wealthier by stockpiling his riches. Islam, on the other hand, guides us to spend our wealth as this would further bless whatever we have and would actually multiply our wealth. A capitalist’s viewpoint is that whatever he spends is consumed and finished. Islam tells us that, instead of losing, we actually gain, and the advantages of what we spend for a good cause eventually revert to us. A capitalist believes that, by accumulating wealth and then reinvesting it in interest-based schemes, he is multiplying his money. But Islam tells us that, instead of multiplying, the wealth diminishes because of the interest and the best way to increase our wealth is its utilization in a good cause.

This is an absolutely new theory and is diametrically opposed to the capitalist viewpoint. The stockpiling of wealth and its reinvestment on interest to amass more wealth eventually leads to its accumulation in a few hands. By contrast, the money spent in the Way of ALLAH TAA’LA and for Zakāh and Sadaqāt leads to its wider circulation. No capitalist would ever think of lending his money free of interest. Islam, on the other hand, enjoins the lender not only to help the needy in giving a loan but also tells him to be more generous and conscientious when demanding the loan amount back. The capitalist spends his money on good causes in order to boost his image because the best he can expect from his charity is the promotion of his name and public acknowledgment.

Islam, on the other hand, forbids such glory-seeking and an exhibitionist approach. Our goal must invariably be the ultimate gain of the Hereafter. The capitalist, if he is inspired at all to perform an act of charity, generally does it quite reluctantly, giving away the most undesirable part of his possession; whoever he honors with his favors is thus made to feel encumbered under the weight of his ‘generosity.’ On the contrary, Islam teaches its followers to give the best they have in their charity, and the charity is not allowed to harm the recipient’s sense of dignity. The big difference between the two mindsets from a moral point of view is quite obvious. Even when we look at them from a purely economic standpoint, it becomes crystal clear which of the two divergent theories of gain and loss is sounder in terms of its far-reaching social impact and economic benefits.

You may also like

@2023 – All Right Reserved