After the failure of the capitalist system to solve economic problems and social issues, this economic theory emerged, and its founders claimed to address the people’s problems and challenge the capitalist system.
The founder of this theory was a German named Karl Marx (1818-1883), which is why this theory is also known as “Marxism.” He considered wealth and “materialism” as the most important human needs and regarded the economic system and the accumulation of wealth as the “social soul,” with religion, civilization, the philosophy of life, and the fine arts being its results and fruits. He said, “In every era and at every stage of history, there has been a specific method of production and industry that determines social relations. However, after a while, these social relations are no longer in line with the methods of production, and some people strive to form new organizations to shape these relations. These efforts in history are recognized as revolutions and uprisings, but real historians do not understand their reality.
This economic theory contradicts the capitalist economic theory and has always criticized its principles and laws.
The principles of socialism
1- Social ownership:
The socialist system, in its effort to contrast with the capitalist system, has established its first principle: the social ownership of the means of production. According to this principle, all factors of production, such as land, factories, agricultural tools, and more, are not owned by individuals but are held in national ownership and managed under government supervision. Only personal and individual possessions can be in private ownership.
As a result of this theory, not only factories and land but also commercial stores are not privately owned by individuals. Therefore, those working in factories and stores are government-salaried employees, and all the income they generate is deposited into the state treasury. Salaries and wages are distributed to employees by the government according to its planning.
2- Government planning:
As part of the process of collective ownership of individuals’ property and economic resources, the socialist theory considers even the planning and program for income generation and wealth accumulation to be under the control of the government. The essence of this principle is that all economic policies and decision-making are in the hands of the government, and they are carried out according to a specific plan.
In this plan, all economic necessities and the number of economic factors is gathered, and it is determined how much capital and labor will be allocated for the production of what kind of goods and services, and how much wage or compensation will be considered for workers in each sector.
3- Preference of social interests over individual interests:
According to this principle and law, social interests have priority over individual and personal interests, and people should not seek personal interests and earn personal income.
4- Equal Division of income.
The fourth principle of the socialist system is “equal distribution” of income and wealth derived from production and trade, and there shouldn’t be a significant disparity among individuals when dividing wealth. However, this was only a claim and was never realized in practice.
Criticism of the socialist system
The socialist system, like the capitalist system, went astray and was far from its principles in practice. The disadvantages and problems of the socialist system are summarized in the following:
1- The loss and compensation of the nation in case of the government’s mistake:
When all commercial planning and income-generating methods are entrusted to the government, if government officials make mistakes in planning and programming, all individuals will suffer the consequences. Such errors are possible because they are not infallible, and they may make mistakes in their planning and programming, and these mistakes can come at the cost of everyone.
2- Deprivation of personal and political freedoms in order to achieve generalization of property:
Because to implement the socialist system and its economic ideas and theories, the presence of a strong and authoritative government is required, and individuals will not work without such authority. In the presence of such a government, individual and political freedoms are compromised. Therefore, it can be said that the socialist and communal economic system will fundamentally deprive individuals of their personal and political freedoms.
3- Disappearing the spirit of individual effort due to the lack of personal agency:
As the socialist system is based on social interests and personal interests are neglected within it, individuals will feel a lack of incentive for individual effort and hard work. In this context, they may not demonstrate serious commitment and diligence.
Muftee Muhammad Taqi Osmani, an Islamic economist and jurist, writes in his critique of the socialist theory: “In a socialist system, where personal interests are generally eliminated, it has a negative impact on the enthusiasm and activities of the people. When a person sees that their income remains the same regardless of whether they put in more effort, strive harder, or display laziness and lethargy, the motivation to improve and excel in their activities diminishes.”
These two economic ideologies have never been able to solve the economic problems of nations. Instead, they have, in their own ways, contributed to the global spread of poverty and the lack of growth in poor nations. Unfortunately, even now, economic colonization by Western countries, facilitated by the capitalist system, continues to prevail worldwide, and most Islamic countries are entangled in this economic theory and its consequences.
Dr. Awaz Muhammad Awaz, an Egyptian writer and scholar, states: “The fifth and final type of colonization is economic colonization, where capitalist entities, using this guise, seek to reap the benefits and gains of nations, using it as a field for collecting wealth and making use of it. Many writers believe that this utilitarian coloration dominates the movement of the new colonialism.”
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