Capitalism and Islam
Islam is neither capitalism (Right) nor socialism (Left). It is the comprehensive way of life decreed for mankind by Allah Almighty. In Islam we find principles and formulations aimed at shaping the individual as well as the collective life of man within the parameters of divine guidance contained in the Quran and the Sunnah. As Islam encompasses all areas of human life, both politics and economics come under its purview.
Although the true Islamic political system does not exist now, (of course, there are some countries that call themselves, "Islamic") it once flourished, producing dramatic results. It was Islam in its pristine purity that succeeded in transforming a primitive desert people into the most civilized nation of the time. The boundaries of the Islamic Empire then stretched between China in the East and the Atlantic Ocean in the West. It was the deviation from Islam that caused the failure of the Islamic Empire.
O you who believe! Be upright for Allah, bearers of witness with justice, and let not hatred of a people incite you not to act equitably; act equitably, that is nearer to piety, and be careful of [your duty to] Allah; surely Allah is Aware of what you do.
So the Islamic state would strive for social justice by all the means at its disposal; and naturally to lessen the material differences among the people has top priority for it. Capitalism, on the contrary, favors the rich and approves and contributes to widen the gap between the haves and the have-nots in the society; and this is one major difference between the two systems.
Islam recognizes the differences among people owing to their natural inborn talent, education, capacity for work, and so on, and makes allowances for these. But socialism would ignore these differences among people and impose its "concept of equality" on the society. That is why the Khmer Rouge in Cambodia (the radical Communists who controlled Cambodia for four nightmarish years from 1975 to 1979), for instance, compelled engineers and doctors to work in the farms, with disastrous consequences. But the Islamic state recognizes these differences and gives freedom to people by providing equal opportunities for all members of the society to develop and utilize their talents and tastes as best as they can.
The chief cause of economic problems, according to the capitalists, is the scarcity of natural resources; whereas according to the socialists, it is the exploitation of the workers by the capitalists. Islam differs from both as it realizes that the reason for the economic problems is man himself. The Quran says what means:
And He has made subservient to you the sun and the moon pursuing their courses, and He has made subservient to you the night and the day. And He gives you of all that you ask Him; and if you count Allah's favors, you will not be able to number them; most surely Man is very unjust, very ungrateful
This means that unjust and ungrateful man disregards God's laws that provide the principles of equality and social justice; thereby he creates discord between groups and wastes the resources and scatters destruction. Thus, from the Islamic point of view, it is man himself who is the root of all problems; so if man is taught to check his pride, his meanness and his greed, there will be peace on earth, as well as progress and prosperity.
For the above reason, the first endeavor of Islam is to develop in its adherents a commitment to honor God's laws in nature, in individual life as well as in social life. In brief, the political or economic system of Islam is an inseparable part of a complete code for the whole of human life. Therefore, it is pointless to isolate one area of human endeavor from the total Islamic system to analyze it. In other words, the economics or politics of Islam is of a piece with its morality and spirituality, which are reflected in Muslim life. The advantage Islam has over man-made systems is that Islam binds man to God. As someone has explained, Islam starts from the depths of the human conscience and proceeds in its endeavor to secure a happy life for all.