Islam believes in justice and fairness in the economic field. It recognises intervention of state in the economic activity for the purpose of ensuring welfare of its citizens. Abolition of interest, institution of sadaqat and Zakat (the share of wealth), concept of lawful and unlawful, equitable distribution of wealth, prohibition of hoarding and stress on circulation of wealth, concern for wellbeing of the poor are the distinctive features of the Islamic economic system.
What is Capitalism? Capitalism, as defined by the Collins Dictionary, “is an economic system based on the private ownership of the means of production, distribution and exchange”. The profit motive constitutes the prime stimulus to productive. It is a type of economy in which capital is privately owned and may befreely used by the owners as they wish in attempting to make profits from their economic enterprises.
Capitalism and Islam are compared in respect of their basic economic concepts as under:
1. Right to ownership:
The existence of right of private ownership of property is the hallmark of capitalism. It gives unrestricted rights of ownership to the individual. The individual may acquire andown his property in whatever manner he likes. The system believes in the private. The unrestricted right to own property and earn profits leads to concentration of wealth in few hands. This necessarily disturbs the balance of distribution of wealth and income in society. The economic disparities and the ever-increasing gulf between the rich and the poor sows the seeds of discord and destruction inthe capitalist society.
Islamic concept of ownership is unique one. Ownership, in reality, belongs to God while some rights only vest in man so that he may fulfil the purpose of God, that is the purpose of community by acting as a trustee for those in need. In other words, what Allah has created for benefit of and service to man belongs collectively to the whole humanity. Legal ownership by theindividual is recognised in Islam but it is subject to the moral obligation that in all wealth all sections of society have the right to share. Thus private or individual ownership in Islam is not unlimited or unrestricted.
All the means of production are not placed under private ownership as public ownership of certain things of common utility exists side by side with it in an Islamic state.Islamic state has also the right to nationalise certain things which are under private ownership for the benefit of the community. In this way the limited right of private ownership with law of inheritance which distributes the estate of the deceased among fairly large number of heirs averts concentration of wealth in few hands and thus prevents class-conflict.
2. Economic Freedom:Unrestricted economic freedom and non-interference of the state in such freedom is another feature of capitalist economy. Every individual is at liberty to initiate, organise and establish any enterprise, business, trade, profession, etc. He has full freedom to earn as much income as he can and spend his wealth in whatever manner he likes. This unrestricted economic freedom generally leads to earning ofwealth through foul means such as smuggling, black marketing, profiteering, hoarding, speculation, forward transactions, fraud, exploitation etc. Capitalism, in fact, has come to signify a religion of money.
Islam also allows economic freedom to an individual who is at liberty to earn wealth, own it and spend his wealth. But the freedom given by Islam in economic sphere is not unlimited. Islammakes distinction between halal (permitted being lawful) and haram (forbidden being unlawful) in every economic activity of production, exchange and consumption. Certain means of earning wealth such as interest, games of chance, speculation, monopoly, sale of wine and narcotics, immoral and exploitive methods, etc. are prohibited to a Muslim. Similarly consumption of wealth on luxus living and...
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