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Capitalism is an economic system in which capital assets are privately owned and goods and services are produced for profit in a market economy.

Source: http://en.wikipedia.org/wiki/Capitalism

Didn't the people of the prophets time privately own their own businesses, and buy and sell stuff for a profit? Isn't that capitalism?

Basically, I always here people talking about how capitalism is evil and that the islamic system is much better, I don't get it. Islam seems like it approved capitalism in the passed, so why do so many muslims proclaim it as being an evil system?

i.e. buying and selling goods via your privately own business for a profit is evil? How can that be evil?

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    with such a general definition there is no problem with capitalism from an islamic POV... BUT: capitalism as practiced today has several parts absolutely incompatible with Islam like interest, like a tendency to treat workers worse than slaves etc. – Yahia Sep 27 '13 at 18:42
  • So if I have a business, and I employ someone so I can expand my business, i.e. 2 people can make more goods, therefore more profit, am I evil for employing someone and paying him a wage to work? and rewarding him when he does a good job? No interest involved. – user3550 Sep 27 '13 at 18:46
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    The objection is with predatory capitalism, crony capitalism, lending practices, use of economic muscle to lobby against laws, etc. Many definitions of capitalism define profit at the sole motive of a corporation, without regard to justice or the rights of others. – Ansari Sep 27 '13 at 18:51
  • @Ansari, I see, so capitalism isn't the problem, the problem is when some people start misbehaving when they have money? – user3550 Sep 27 '13 at 18:53
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    At the most basic philosophical level, the concept of owning stuff and trading to make profit is Islamically sound. But modern-day capitalism has incorporated much more into the definition of capitalism itself. – Ansari Sep 27 '13 at 19:16
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This is not meant to be a full answer. Rather, my comment would be impossibly large so I want to include this here.

By definition, a lot of things may seem nice. However, in reality, these systems (as far as I've seen) are mere titles to various flawed or corrupt elements.

I think @Yahia and @Ansari have already shed some light on this. Let me give some more detail, insha Allaah.

Capitalism is to do business for profit. Hey who wants to do business for loss? Oh then there's communism that treats people equally (classless). Yeah right, we've seen that... Oh and that thing called democracy in many of our countries... Sure, we're all free to voice our opions - hmmm...

What I'm saying is that none of those things are for real, whether it's for profit, equal treatment of people or otherwise. By definition, they seem nice. Well, if they were to mean what they say, Islam wouldn't have a problem with most of those 'movements'. Unfortunately, it's not so.

So my best advice is not to compare those various movement to ask if Islam is against it. Rather you should see how much Islamic those movements or models are.

Islam covered all those aspects and did so in the best way. Here's what Islam addressed (in short).

  • Successful Personal life
  • Successful family life
  • Superb local government
  • Very secure social structure
  • Preserved the rights of people
  • Allowed blessed profit-making schemes and shun riba systems
  • Successful military system
  • Fantastic retirement system (no home for the aged)
  • Care without insurance
  • Charity without payback
  • Loans without interest
  • Mortgage without interest
  • True equal opportunity for everyone
  • A system of respecting people of knowledge and older people
  • Protection for kids, women and everyone
  • AND success in the hereafter

Truly, there's no other system in the world (Marxist, Communist, Democratic, Capitalist, or other) that can match against the Islamic system.

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  • Theoretically Islamic law may picture such a society but it is not clear what you exactly mean by "Successful Personal life, Successful family life, Superb local government, Successful military system, etc." and I don't think we can cite real examples of a society which realized these goals except in Medina under Prophet (as) but even that community was a work in progress and short-lived. – infatuated Mar 11 at 12:21
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Capitalism can't be understood in vacuum and divorced from its historical context. Capitalism is the economic model of governments that are usually but not always shaped on the political model of Liberalism. And implicit in the philosophical foundations of both Capitalism and Liberalism are the precepts of European Enlightenment:

  • religion can't be a reliable guide for running governments, societies and even individual life, because its doctrines can't be supported rationally and they are also subject to conflicting interpretations that led to the insanity of European Wars of Religion. (We muslims also had sectarian wars of our own, didn't we, even if with lesser intensity and destruction?)
  • hence man guides his life by secular reason and science;
  • valid science is exclusive to that which is based on sense observation and empirical research, therefore a scientific world-view is also devoid of any metaphysical foundations or postulates;
  • because there can be no longer leaders who rule legitimately by religious virtue, their legitimacy must derive from public consent.

These shape the broad consensus of all capitalist and liberal thinkers as well as the socialists and marxists in the opposite ideological camp, and indeed all modern secular thinkers. There would be absolutely no room for religion, any religion, in modern social and political theory or any other area of inquiry, unless there is widely accepted "scientific" evidence in support of a particular religious doctrine or practice. The remaining differences would stem from conflict among secular social and political ideologies such as those between Conservatives, Liberals and Socialists, with Conservatives despite preserving some attachment to their sectarian religions progressively retreating from their earlier positions in the face of the greater advances of liberal and socialist forces.

The emergence of this worldview also went hand in hand with the emergence of the bourgeoisie and the colonial campaigns of their allied European governments for intruding into wealth of other nations, slavery, exploitation, wars, conquests and imperialism that have persisted one way or another to this day. Industrialism has been also a part and parcel of capitalist growth and earnestly desired today by all rival ideologies.

But apart from industry and market, institutions that existed in simpler forms for millennia, and advances in medicine, it is really hard to imagine how everything else with the European civilization may find justification from religion in general and Islam in particular.

Under the culture of worldliness that grew out of the Renaissance and the Enlightenment and became the full-fledged nihilism of post-modernity, under whatever political or economic model you place out there, the general direction of society would inevitably run against all aims of religion. Under free market you get greed, over-consumption, waste, extravagance, undeclared hedonism, imperialism and the rule of the rich, and under a socialist or welfare system, you get depression, repression, recession, tax-evasions, freeloaders, etc, and under both the destruction of the ecosystem and over-exploitation of nature are inevitable because with a man without God, metaphysics and spirituality and proud of his technological powers, there can be no restrain from ambition and greed which pass behind pretty economic concepts such as "growth" and "industrialization" and generate excesses and corruptions that affect all aspects of life.

It is interesting that some of these ills and vices were sometimes openly approved by modern thinkers: John Locke who railed at injustices of kings such as Charles I, didn't apparently feel any scruples for slave trade in which he himself was invested! Adam Smith thought it was normal that businessmen act out of greed or not care about charity. John Stewart Mill thought Western Imperialism/Colonialism was cool for "uncivilized" nations. Many modern economists have talked about perceived benefits of greed.

Hopefully all Muslims can agree that Islam can't be said to endorse the above civilizational mess and absurdity.

So that's why I think without an enlightened religion and spirituality, man is doomed one way or another. However, it is not to say that Muslims who today inherit or actively partake in their legacy of colonialism and have been largely alienated from the deeper layers of religious wisdom due to the literalism, sectarianism and depression of the prevalent petrodollar brand of Islam -- have any sound and viable alternative. Muslims first need to face the truth of the failure of their own religious community after Islam and causes of its original sectarian divisions and its failures today, then work to obtain knowledge of the esoteric foundations of their faith which I believe are vital for an enlightened and genuine understanding of religion, until they be able to introduce their religion as a sound and true intellectual system, give spiritual life to their mostly ritualistic and legalistic religiosity until we are able to move towards laying foundations of an alternative civilization. But, yeah, all that, we can assume, remains mostly a dream in the foreseeable future but to have a real vision is better than staying in confusion... wa llahu l-musta'an...

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Capitalism is compatible with Islam.

Capitalism is about private trade and private production. Islam does not forbid that but what Islam forbids is the passionate desire to earn money and disregarding the poor.

Businesses are established to earn profit. The Prophets earned profit.

Capitalism can lead to evil where the rich disregard the poor and milk the pockets of the Middle and lower classes.

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Didn't the people of the prophets time privately own their own businesses, and buy and sell stuff for a profit? Isn't that capitalism?

No. That is not capitalism - that is trade or business; and this is approved of; for example, we have this hadith:

as narrated Ibn `Abbas:

`Ukaz, Majanna and Dhul-Majaz were marketplaces in the Pre-Islamic period of ignorance. When Islam came, Muslims felt that marketing there might be a sin. So, the Divine Inspiration came: "There is no harm for you to seek the bounty of your Lord (in the seasons of Hajj)."

Al-Bukhari, book of Sales & Trade.

Capitalism is a philosophical position that values everything by economic value; it is in this sense that Capitalism is not compatible with Islam. Islam approves of business, because it approves of making a living, it does not approve of capitalism per se. Although Capitalism was non-existent during the prophets time we do have the following hadith in al-Bukhari:

As narrated Ibn `Umar:

The Prophet (ﷺ) wore a gold ring and then the people followed him and wore gold rings too. Then the Prophet said, "I had this golden ring made for myself. He then threw it away and said, "I shall never put it on." Thereupon the people also threw their rings away.

Al-Bukhari, Holding Fast to the Qu'ran and Sunnah.

Moreover, there is:

Ibn Abbas reported: The Messenger of Allah, peace and blessings be upon him, said, “Three deeds are destructive vices: greed that is obeyed, whims that are followed, and everyone impressed by their own opinion.”

Source: Ḥilyat al-Awliyā’ 3976 Grade: Hasan li ghayrihi (fair due to external evidence) according to al-Albani

Which speaks for itself ...

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  • What relevance does the last quoted Hadith have here? – El Flea Mar 10 at 9:20
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    @El flea: The display and flaunting of wealth is frowned upon. – Mozibur Ullah Mar 10 at 9:22

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