Capitalism, or the capitalist system, is one of the most significant economic and social systems in today’s world, founded upon private ownership, the free market, and profit motivation.
This system is based on the principle that individuals and companies, without extensive government intervention, are able to produce goods and services and engage in competition.
Over the past centuries, capitalism has become one of the central pillars of the global economy, and extensive debates continue regarding its advantages, disadvantages, social impacts, and future prospects.
Today, capitalism stands as the dominant force in the global economic arena and, through widespread promotion by its proponents, presents itself as the only efficient and acceptable economic system in the world—so much so that few dare to speak openly about its inefficiencies and structural flaws.
With the current pace of globalization, economic relations among countries have received increasing attention. The continuation of this major global transformation requires a secure and stable environment. For a country to ensure public welfare and for its economic system to function properly, adherence to economic ethics is an essential condition.
Human society has generally been entangled in extremes of excess and neglect. Before economics emerged as a modern scientific discipline, economic issues were taught as a branch of moral philosophy; however, over time, economics gradually distanced itself from ethics. Many scholars even sought to completely separate economics from morality and religion—a development that caused significant harm to human society. Gradually, some economists such as Keynes, Robinson, Sraffa, Myrdal, and Schumpeter criticized this separation of economics from ethics.
For this reason, in recent decades a new inclination toward economic ethics has emerged in Europe and the United States, which should be regarded positively. Nevertheless, there is concern that this new tendency may gravitate more toward profit-oriented ethics.
The reason for this is clear: liberal capitalism and communism are unable to provide a correct interpretation of the human being and his true perfection. Islam, by contrast, has from the very beginning integrated its extensive economic teachings with moral values. Given that one of the fundamental crises of contemporary mainstream economics lies in the ethical problems inherent within these economic systems and considering that the foundation of Islamic economics is built upon ethics and religious laws and principles, it becomes a fundamental necessity to critically examine the ethical shortcomings of these two systems from within the framework of Islamic economics.
Keywords: Freedom, Rights, Capitalism, Private Ownership, Personal Interest and Profit.
Introduction
Economic progress has accelerated significantly over the past two centuries. However, because ethical considerations and moral dimensions have been neglected in this rapid economic growth, serious harm has been inflicted upon human social life.
Capitalism, or the capitalist system, is one of the most well-known economic systems in which individuals or private enterprises own capital goods.
The purest form of capitalism is the free market or laissez-faire capitalism, in which individuals are free from all constraints. They independently decide where to invest, what to produce or sell, and at what prices goods and services should be exchanged.
The free market operates without supervision or control.
The market designed and utilized by capitalism differs from those of other economic schools. The defining characteristic of the capitalist market is the production of goods for the sake of economic profit at any cost. In capitalism, profit holds the highest priority, while human needs are assigned secondary importance.
In the capitalist system, governments attempt to create equal competitive conditions for all members of society by eliminating rent-seeking and monopolies, thereby providing equal opportunities for growth. It is then individuals who, by utilizing their skills and participating in fair competition, acquire more or less wealth.
In capitalism, all economic activities—including investment, production, supply, and sale of goods and services—are determined without government intervention and solely through the personal decisions of economic actors. The production of goods and services is primarily aimed at maximizing profit rather than necessarily meeting human needs.
Free enterprises in their various forms have existed in different societies since ancient times; however, the type of free enterprise we recognize today represents a specific form. These businesses go beyond mere freedom of buying and selling; they are fundamentally engaged in the accumulation and utilization of capital—a concept that emerged prominently within the capitalist world.
