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Capitalism and the Islamic Economic System

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Book cover Ideal Islamic Economy

Part of the book series: Political Economy of Islam ((PEoI))

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Abstract

We begin by asking if capitalism defines an Islamic economy because there is the impression that the Islamic economic system shares a number of features with capitalism and from a historical perspective capitalism borrowed a number of its vital economic institutions from Islam beginning in the eleventh century. Capitalism has institutions that do not exist in Islam or are prohibited, such as unlimited accumulation of private property and wealth, interest rate mechanism, consumerism with its wastefulness, extravagant and opulent consumption, mal-distribution of income, massive poverty, repeated financial crisis, growing financial, economic exclusion and all the adverse impact of environmental degradation. It is difficult to see how this form of “modern” capitalism could be compatible with any theocentric or even humanistic system of thought. Regardless of how many characteristics an Islamic economy may share with capitalism, there is no reasonable basis to support the assertion that capitalism defines an Islamic economy.

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  1. INCEIF, Kuala Lumpur, Malaysia

    Abbas Mirakhor

  2. George Washington University, Washington, USA

    Hossein Askari

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  1. Abbas Mirakhor
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Mirakhor, A., Askari, H. (2017). Capitalism and the Islamic Economic System. In: Ideal Islamic Economy. Political Economy of Islam. Palgrave Macmillan, New York. https://doi.org/10.1057/978-1-137-53727-0_2

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