Problems Of Capitalism: An Islamic Viewpoint

Among the many false gods of modern times, perhaps the most important is capital or money. Its worshippers believe that being rich is synonymous with being successful in life, and that wealth will eradicate all their problems. Little do they know that this ideology, called ‘Capitalism,’ which places money over everything, brings more misery to their lives. As Allah SWT says in the Qur’an:

“O believers! Do not let your wealth or your children divert you from the remembrance of Allah. For whoever does so, it is they who are the true losers” (63:9).

This admonition reminds believers that children and possessions are allurements that can lead to disobedience and distract them from the remembrance of Allah, and those who succumb to these temptations are the ones who are truly at a loss.

Capitalism is an economic system that involves making money from money, often disregarding all values, ethical standards, and spiritual principles. Its sole focus is on gaining profit by any means necessary. I believe that ‘greediness’ is the essence of Capitalism, and there is no end to greed. Greed seems to be a central characteristic encompassing various other negative traits like selfishness, hunger for power and status, and a lack of sympathy for others. Capitalism is credited with bringing globalization, westernization, modern technologies, and access to beneficial information. However, among its many flaws—such as oppression against the poor, climate change, and injustice—one of the deepest crises it facilitated was the rise of fascism and World War II. Despite heavy criticism from economists and sociologists, and the development of various counter-ideologies, none have been powerful enough to stand against Capitalism. Marxists criticized Capitalism, believing it alienates and isolates humans from mainstream society. But even if Karl Marx’s ideal state, where the proletariat has the upper hand, were to come into existence, there is no assurance that it would promote egalitarianism in society. Human nature tends to prioritize self-interest over others, so these ideologies are unlikely to free us from oppression. This selfishness among humans is quantified by Allah SWT in the Qur’an:

“People are ever inclined towards selfishness” (4:128).

Essentially, humans have the tendency and capacity to act in a self-driven manner, putting their desires and demands above those of others.

In this world, it seems that those who have money often spend it unjustly, displaying a lifestyle that awes others. Thorstein Veblen, an American economist and sociologist, described something similar in his Theory of Conspicuous Consumption, where people display wealth and a luxurious lifestyle to gain status, power, and reputation. Once surplus production is achieved, acquiring more property and increasing social status becomes indispensable. He even noted that the upper class changes its behavior and etiquette to maintain this status. From this, I deduce that the upper class purposely tries to widen the gap between rich and poor. In Islam, displaying wealth is permissible with proper intentions.

Malik ibn Nadlah reported that the Prophet, peace and blessings be upon him, said, “If Allah has given you wealth, let the traces of his blessings and generosity be seen upon you” (Sunan Abī Dāwūd 4063).

Displaying luxury is permissible so that those in need may approach you, but in today’s world, it often has the opposite effect. People are intimidated by those who appear wealthy and may insult or belittle them, feeling a sense of superiority. Islam discourages the love for worldly possessions, especially money, which can become so deeply ingrained in humans that they believe it will make them immortal. As Allah SWT mentions in the Qur’an:

“Who collects wealth and continuously counts it. He thinks that his wealth will make him immortal” (104:2-3).

We should remember that we must depart this world empty-handed, leaving our wealth, status, reputation, and loved ones behind.

One of the most well-known capitalists, Bill Gates, authored the book How to Avoid a Climate Disaster. Yet, he owns four private jets and plans to start an artificial meat industry. A 2021 report from the European Federation for Transport and Environment found that private jets are five to 14 times more polluting per passenger than commercial flights and 50 times more polluting than trains. Some of you might recall the verse,

“When they are told, ‘Do not spread corruption in the land,’ they reply, ‘We are only peace-makers!’” (2:11).

In John Ronson’s The Psychopath Test, he mentioned that CEOs of big companies and politicians are often psychopaths. Capitalists or CEOs are involved in actions that are often inhumane and anti-social. They manipulate the masses by pretending to be philanthropists and ordinary human beings, perhaps to create likeability, yet we often idealize them. Companies like Amazon, Zara, and H&M have made headlines for exploiting their workers by not providing enough wages, overburdening them, and forcing them to work in deplorable conditions. We criticize these capitalists, yet we may practice something similar in our households by underpaying, delaying wages, and mistreating our house helpers. Western ideologies are inculcating hedonism into our minds, making us more self-centered.

“You shall not attain righteousness until you spend out of what you love (in the way of Allah). Allah knows whatever you spend” (3:92).

We have been commanded at various places in the Qur’an and Hadith to be generous and kind, especially to our workers and helpers, and to share our wealth, but we often cut down on their wages and prioritize our own needs.

So, what should be followed? Who can give a better social order than the Creator? The One who is all-knowing, for whom every human is equal, and who does not favor one over another. Islam offers a socio-economic system that promotes social justice, equality, and abstains from any form of exploitation, unlike Capitalism.

How does Islam offer a better economic system? In Islam, the state manages and monitors private ownership, the types of goods produced, and the profits generated. It does not allow a handful of powerful people to overtake natural resources. Islam permits earning only through lawful (Halal) means, prohibiting businesses or practices that are profitable but unethical. There is a clear distinction in Islam between Halal and Haram means of livelihood. Islam disapproves of extravagant or miserly behavior, advocating for money to be spent wisely and consciously. Justice is ensured through various obligatory and non-obligatory measures, such as inheritance rights, charity, and discouraging the hoarding of wealth. Islam discourages the accumulation of wealth. If a certain amount of wealth has been retained for a year, a Muslim must pay 2.5% Zakat on it. This system ensures that as Muslims grow wealthier, the poor also benefit, balancing the unequal distribution of wealth. If Muslims worldwide followed this obligation, Zakat could significantly reduce and even eliminate poverty.

Islam places solidarity among Muslims above money and materialism, providing guiding principles for financial dealings. For instance, it prohibits charging interest when lending money, regardless of the borrower’s religion. Charging interest is unethical because it benefits from someone else’s misery, and deep down, the lender might not want the borrower to escape their financial problems. Islam forbids interest (Riba), gambling, and any other Haram way of making money. Riba is one of the major sins in Islam, mentioned multiple times in the Qur’an. According to Surah Al ‘Imran:

“O believers, take not doubled and redoubled interest and fear God so that you may prosper” (3:130).

Allah SWT advises avoiding Riba to prosper, but humans often seek illegitimate, unethical, and Haram ways to flourish. The Prophet (peace and blessings be upon him) said:

“A time will come upon the people when they will not care as to how they get their money, whether legally or illegally” (Bukhari).

Even if one achieves prosperity through Haram means, life will eventually end, and they will have to answer for their wrongdoings.

Islam advocates moderation and balance in everything. Money is a necessity of life, not its purpose. Ideologies that follow an individualistic approach can create societal conflict, while Islam ensures the sustenance of every person through cooperation. We must remind ourselves that this life is temporary, and we are being tested. But we complicate our present and future by following non-believers down into the lizard’s hole. We do not need to seek solutions in any other ideology or concept. Islam provides a holistic approach sufficient for living a serene life.