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Islam & Capitalism



Many problems are facing by the human

being, economic is the one of them and itssignificance cannot be denied in the life ofhuman being.In the very beginning it was said that

economic problem is due to the scarcity.



Capitalism is an EconomicSystem in which a country’s tradeand industry are controlled by

private owners for prot ratherthen controlled by the state.



What is Capitalism?

Capitalism is a social system based on the

recognition of individual rights including property rights, inwhich all property is privately owned.

Under capitalism the state is separated fromeconomics, production and trade just like the state is

separated from religion .



What is Capitalism?

It is the system of laissez faire. It is the system of political

freedom. It is the economic system based on the principle ofprivate ownership and use of factor of production and individualfreedom in all economic matters.

n economic system in which the means of productionand distribution are privately or corporately owned anddevelopment is proportionate to the accumulation andreinvestment of profits gained in a free market.



What is Capitalism?

Under this system all farms, factories and other means of

production are the property of private individual and firms. They arefree to use them, any way they like, with a view to making profit. The

desire for profit is the sole consideration with the property owner in

the use of their property.

eside free and unfettered use of their property, every!ody

is free to take up any line of production he likes and is free to enter

in and contract with other fellow citi"ens for his profit



!ight of private property

"reedom of enterprise

"reedom of contract

"reedom to use own property



"reedom of choice by the consumer utomatic working #igher efficiency and incentive to hard work $conomic development and prosperity %ptimum utilization of resources



n imbalanced system&istribution of wealth in a fewConcentration of wealth and economic power only'asteful competition#uman welfare ignored

$(ploitationMismanagement



Islam is a Deen which gives guidance for Aqaid, Ibadat, Mu’ashrat,

Akhlaq & Mu’amalat.

The humanitarian goal of achieving the well being of all members of the

human famil cannot be attained b concentrating !rimaril on the

material constituents of well"being and making ma#imi$ation of wealth as

the main ob%ective of conomics.

It is also necessar to raise the s!iritual content of well being and reduceall the sm!toms of anomie, like famil disintegration, heav interest

based debt !aments, conflict and tensions, crime, alcoholism, drug

addiction, and mental illness, all indicating lack of inner ha!!iness and

contentment in the life of individuals.

'hat is Islamic $conomics



'a!italism as well as (ocialism have both failed to lead

mankind to such an overall well"being. It is therefore,

necessar to la down the contours of a new sstem

which could hel! o!timi$e human well"being as !er the

divine guidelines of Allah.

'hat is Islamic $conomics



Islamic Economic System

Islam acce!ts the market forces of su!!l and demand"

)eference of *ol +uran.

In fact Islam gave the conce!t of Market orces -// ears.

Islam acce!ts the right to !rivate !ro!ert and acce!ts the right

to ma#imi$e !rofits. 0ut there are some !rohibitions.



Islamic Economic System- The

prohibitions

-. Divine 1rohibitions2

Islam has !rohibited some economic activities that are not allowed

at an time at an !lace.3 Interest, 4ambling, *oarding etc.5

6. 4ovt. )estrictions2

Islam allows 4ovt. to intervene where it feels a!!ro!riate , butthese restrictions are tem!orar as !er the need of the time.

. Moral 'onsiderations & )estrictions2

7ife in this world is tem!orar and there is an eternal life afterwords. 8ne has to make this worldl life a wa to get thema#imum benefit in the life hereafter.



Factors of Production in

Islamic Economic System

In Islam there are three factors of !roduction

-.7and 6. 7abor . ntre!reneur

ntre!reneur & 'a!ital is a single factor of !roduction.

As interest is *aram hence the risk of !rofit & loss is with theca!ital.

Anone investing ca!ital must also take the risk of theinvestment.



Right to Wealth in Islam

In both 'a!italism & (ocialism the right to wealth is with thosefactors of !roduction onl that have taken !art directl in the!rocess of !roduction.

Islam believes that the original ownershi! of everthing is withAllah and without Allah’s9 no factor of !roduction can !roduceanthing.

ALLAH

Factors of Production

Secondary owners of wealth

Zakat, Ushrirasat, Sad!aa"urbani,#hira$



'a!italism gives unbridled and un"conditional right to !rofit

motive and !rivate ownershi!,

Islam gives a balance view among the two e#tremes b

recogni$ing the right to !rivate ownershi!, market forces and

!rofit motive but under the restrictions of2

-. Divine restrictions 6. 4ovt. restrictions . Moralconsiderations

)ummary of *he Comparison)ummary of *he Comparison



Islam ensures equitable distribution of wealth

through the conce!t of !rimar and secondarownershi!.

All these factors combined have a cumulative effect

of achieving the well being of all members of the

human societ.

)ummary of *he Comparison



ccording to +uaranic verses, every thing in this universebelongs to od almighty.

-'hatever is in the heavens and whatever is in the earthbelongs to llah.- l/0a1arah, 232456.

#e is the real owner of everything-nd llah7s is the kingdom

of the heavens and the earth, and llah has power overevery things.- l/ Imran, 8394:6.

;<=>? @AB DE ;F GH JKL N OP

Islamic #conomics $ystem



Islamic #conomics $ystem

Q #alal R #aram

Q Sustice

Q $1uality

Q Cooperation

Q 0rotherhood

Q kindness



0asic rules of Islam

Concentration on ethics and morality

*he role of government where re1uired

$olution for #conomics %ro!lems



$olution for #conomics %ro!lems

chieving wealth

!ights of ownership

#ow to use that !ightsT

utilization of capital

&istribution of wealth F;V W;XY



'right of private ownership

Z[;\]^_`;; GH]= GHOF OKYZAO]^...... GHO== ;O=OKLo concept of e1uality in economics

llah saysDE G=<F G]= ;]>\ q A >A O>\ GP

ZxL^..< {OE G|< ;]<EA} ;=q ~;=

Teaching of the ur,an 'egarding

#conomics



Teaching of the ur,an 'egarding

#conomics

&istinction between legal and

illegal_`;; GH]= GHOF OKY$(aggeration is not allowed

=E\> • q OE\}



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