❖ Comparative Review of Capitalism, Market, and the Islamic Financial System ❖
✍ By: Muhammad Yunus Qadri
Capital is that which seeks growth for the sake of growth, founded upon the principle of freedom, whereas wealth, in contrast, is subject to moral constraints such as lawful and unlawful, permissible and forbidden. Capital is driven by worldly greed and envy, while Western concepts of freedom give capital a central role—without which freedom is considered impossible.
A market is a space where seekers of capital congregate in pursuit of freedom. It is intrinsically linked with capitalism, exerting dominance over society and reshaping its values accordingly.
① Market Dominance
The market dominates the entire society, restructuring its social values in line with capitalism. Qualities like love, brotherhood, and selflessness are replaced by greed, avarice, and self-interest.
② Every Desire is Equal and Justified
In the market system, all desires are deemed valid—be they virtuous or sinful. Practically, only those desires are given significance which contribute to capital growth.
③ Abolition of Private Ownership
Privatization does not imply empowerment of individual ownership; rather, ownership becomes institutionalized under corporations, turning individuals into mere servants of capital.
④ Every Person Becomes a Laborer
Under capitalism, every individual is reduced to a wage worker, and the employer-employee relationship is essentially a form of subjugation to capital.
⑤ Supremacy of Interest and Speculation
In the financial market, interest (ribā) and speculative trade (sattā) prevail. Money and stock become primary commodities, shifting the economy’s focus from production to financial profits.
⑥ Valuation Based on Interest and Speculation
Under capitalism, the value of a commodity is determined by its price, which itself is subject to interest rates and speculation within the financial markets.
① Fordism (1933–1980):
This was the early phase of capitalism, during which, to counter socialism, capitalism adopted worker collectivism and national integration.
② Post-Fordism (Post-1980):
This phase marked complete liberation of capital. States became subservient to capitalism, and worker collectivism was dismantled.
In the post-Fordist era, worker collectivism disintegrated, and labor was redefined as "human capital". The laborer was absorbed into the capital structure, working individually on wages.
Historical experiences show that capitalism contains the seeds of its own destruction. The servitude to capital leads humanity toward moral and societal decline. Therefore, it is imperative to promote Islamic principles in trade and finance—establishing marketplaces free from interest and speculation, and rooted in ḥalāl commerce.
✍ By: Muhammad Yunus Qadri
◈ The Difference Between Capital and Wealth
Capital is that which seeks growth for the sake of growth, founded upon the principle of freedom, whereas wealth, in contrast, is subject to moral constraints such as lawful and unlawful, permissible and forbidden. Capital is driven by worldly greed and envy, while Western concepts of freedom give capital a central role—without which freedom is considered impossible.
✔ Capital vs. Wealth:
- Capital: Represents the unrestrained desire for increase. It grows without distinguishing between ḥalāl and ḥarām.
- Wealth: Is acquired as a result of tangible means or capital. If earned through illegitimate or interest-based channels, it is ḥarām; if through lawful means, it is ḥalāl.
◈ What is the Market?
A market is a space where seekers of capital congregate in pursuit of freedom. It is intrinsically linked with capitalism, exerting dominance over society and reshaping its values accordingly.
◈ Difference Between Market and Bazaar
- Bazaar: Existed prior to capitalism, operating under cultural, moral, and religious norms.
- Market: Emerged with capitalism, imposing its own rules upon society. Although bazaars may exist in Islamic societies, the concept of an Islamic market is fundamentally flawed, as its principles are rooted in capitalist ideology.
◈ Characteristics of the Market
① Market Dominance
The market dominates the entire society, restructuring its social values in line with capitalism. Qualities like love, brotherhood, and selflessness are replaced by greed, avarice, and self-interest.
② Every Desire is Equal and Justified
In the market system, all desires are deemed valid—be they virtuous or sinful. Practically, only those desires are given significance which contribute to capital growth.
③ Abolition of Private Ownership
Privatization does not imply empowerment of individual ownership; rather, ownership becomes institutionalized under corporations, turning individuals into mere servants of capital.
④ Every Person Becomes a Laborer
Under capitalism, every individual is reduced to a wage worker, and the employer-employee relationship is essentially a form of subjugation to capital.
⑤ Supremacy of Interest and Speculation
In the financial market, interest (ribā) and speculative trade (sattā) prevail. Money and stock become primary commodities, shifting the economy’s focus from production to financial profits.
⑥ Valuation Based on Interest and Speculation
Under capitalism, the value of a commodity is determined by its price, which itself is subject to interest rates and speculation within the financial markets.
◈ Two Phases of the Market
① Fordism (1933–1980):
This was the early phase of capitalism, during which, to counter socialism, capitalism adopted worker collectivism and national integration.
② Post-Fordism (Post-1980):
This phase marked complete liberation of capital. States became subservient to capitalism, and worker collectivism was dismantled.
◈ End of Worker Collectivism
In the post-Fordist era, worker collectivism disintegrated, and labor was redefined as "human capital". The laborer was absorbed into the capital structure, working individually on wages.
◈ Consequences and the Need for an Islamic Alternative
Historical experiences show that capitalism contains the seeds of its own destruction. The servitude to capital leads humanity toward moral and societal decline. Therefore, it is imperative to promote Islamic principles in trade and finance—establishing marketplaces free from interest and speculation, and rooted in ḥalāl commerce.
