Economic System in Islam Compared with Capitalism and Socialism

The Triple Nature of Possession

Capitalism views private possession as a basic need which voluntarily fulfils the community's desires and requirements rather than being in conflict with it. Capitalists consider Nationalisation as exceptional cases of remedies for temporary crisis of the Nationalised economy. It argued that nationalised sectors of economy can be de-nationalised after that crisis has disappeared.

Socialism, on the other hand, claim collective ownership as the fundamental concept in its economic system. Private capitals must be nationalised according to Socialism. But the Socialists were confronted in the field of application with difficulties and were forced to recognise private possession. That attitude was a temporary cure for their economic problems. It is argued that when the difficulties have gone, then the private sectors are re-nationalised again.

Islam recognises three kinds of possessions.

(a) Private Possession

يَا أَيُّهَا الَّذِينَ آمَنُوا لَا تَأْكُلُوا أَمْوَالَكُمْ بَيْنَكُمْ بِالْبَاطِلِ إِلَّا أَنْ تَكُونَ تِجَارَةً عَنْ تَرَاضٍ مِنْكُمْ ۚ وَلَا تَقْتُلُوا أَنْفُسَكُمْ ۚ إِنَّ اللَّهَ كَانَ بِكُمْ رَحِيمًا 

"O ye who believe! Eat not your property among yourselves in vanities: but let there be amongst you traffic and trade by mutual good will." ( Qur'an, 4:29)

فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ ۖ وَإِنْ تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَالِكُمْ لَا تَظْلِمُونَ وَلَا تُظْلَمُونَ 

"But if ye turn back, ye shall have your capital sums: deal not unjustly and ye shall not be dealt with unjustly ?" ( Qur'an, 2:279)

The Prophet (p.b.u.h.a.h.f.) said: "The possession of a Muslim is illegal to his brother except which he willingly offers to him."

(b) Collective Possession

This field covers the national wealth which belongs to all people of the Islamic State, irrespective of their financial status. The bulk of the wealth is expended and utilised in building schools, hospitals, etc. The sources or incomes of this sector of economy are specific and noted. For example, the so-called (Kharaj land) is one source which is a land naturally productive.

Prophet Muhammad (p.b.u.h.a.h.f.) said: "People are to share three .things, fire, water, and grass." All Muslim thinkers throughout the Islamic history accepted the generalisation of this statement to include all natural resources to be under collective ownership. There are many other examples of income to the collective possession, which can be consulted in the Islamic legislation books.

(c) State's Possession

State's possession differs from other kinds of possession not only in the sources of income but in utilisation and fields of expenditure also. There are specific sources of income to this economic sector, like the so-called (Dead land). The evidence of this in the Qur'an is the following verse:

يَسْأَلُونَكَ عَنِ الْأَنْفَالِ ۖ قُلِ الْأَنْفَالُ لِلَّهِ وَالرَّسُولِ ۖ

"They ask you concerning "Anfal" (accessions) say "Anfal" is at the disposal of God and the Apostle. " (Qur'an, 8:1)

The Prophet is mentioned here as a representative of the Islamic Government. The ways in which this wealth is used are many. One of the basic channels is helping poor people to work, by offering small capital or building a factory for their employment.