As for the Socialist economic system, with Communism being a part of it, it contradicts Capitalism. Most of the Socialist ideas appeared in the Nineteenth century. The Socialists fought fiercely against the opinions of the liberal school of thought i.e. they fought the Capitalist economic system. The powerful emergence of Socialism was due to the iniquity which the society suffered under Capitalism and owing to its many fallacies and inadequacies. By reviewing the Socialist schools of thought, it appears that they agree on three issues, which distinguish them from other economic schools of thought.

1. Achievement of a type of actual equality.

2. Abolition of private property either completely or partially.

3. The organisation of production and distribution of the commodities and services by means of all of the people.

However, despite their agreement over these three issues, they have fundamental differences over many points, the most important of which are:

Firstly: The Socialist schools of thought differ in the form of the eventual equality they aim to achieve. One group advocates arithmetic equality which means equality in every thing of benefit, thus each person is given an identical amount. Another group suggests common equality, which means observing the ability of everyone when distributing work and looking at the needs of every individual when distributing products. Equality in their view is established when the following principle is applied: “From each according to his strength i.e. his ability (meaning by this the work which He performs), and to each according to his need (meaning the distribution of production).” A third group adopts equality in the means of production, since the resources are not sufficient to meet the needs of all individuals, the basis of distribution becomes: “From each according to his strength i.e. his ability, and to each according to his work.” So equality is achieved when each person is facilitated of the means of production the same as others.

Secondly: The Socialist schools of thought differ in the quantity of private property which is to be abolished. One group adopts the abolition of private property completely, which is Communism. Another suggests the abolition of private property related to the means of production which is called capital i.e. factories, railways, mines and the like. Thus they prohibit the possession of any commodity which is used for production. Hence, one cannot own a house for the purpose of leasing it, nor a factory, nor a piece of land, but they may keep certain types of property for the purpose of consuming them. It is allowed for them to own everything they consume, so for example they can own a house to live in, and what the land and factories produce but not the land/factory itself. This is called Socialism of Capital. Another group does not advocate the abolition of private property except that which is relevant to agricultural land, these are the Agrarian Socialists (Agrarian Reformers). Yet another group says that every case in which public interest invites the transforming of a private property to public property, has to be studied. They call for restricted ownership of private property in many areas by putting laws for the maximum limit of interest and rent, a minimum limit for wages, and strive to give workers a share in the capital. This is called State Socialism.

Thirdly: The Socialist schools of thought differ in respect of the means they adopt to implement their objectives. Thus, revolutionary Socialism (Revolutionary Syndicalism) depends upon liberating the labour force by what it calls direct action i.e. the efforts of the labour force themselves, such as disruptive strikes, sabotage of machinery, and propagating the ideas of a General Strike amongst workers. They work to mobilise them around this idea, until the time comes when they are able to implement a General Strike, thus paralysing economic activity, which would eventually result in the demolition of the present economic system. As for the Marxist Socialists, they believe in the natural law of evolution in society and believe that this alone is sufficient to destroy the current system, which will then be replaced by another system built on Socialism.

As for the advocates of State (Government) Socialism, their means to implement their thoughts is through legislation. So, by issuing canons they warrant the preservation of public interests and improvement in the conditions of the labour force. Additionally, by levying taxes, particularly phased-in taxes on capital and inheritance, they suggest that they will close the gap between private properties.

Fourthly: The Socialist schools of thought differ with respect to the structure which is needed to administer the projects in the Socialist system. For example the Capital Socialists want to assign the organisation of production and distribution to the government (State), while the Syndicalists want to confer management to organised groups of labour, headed by their chiefs (Guild Socialism).

The most famous and influential among Socialist theories are those of the German, Karl Marx. His theories have dominated the Socialist world, and upon them the Communist Party and the Union of Soviet Socialist Republics (USSR) in Russia were established. His theories continue to have a great impact until today.

One of the best known theories of Karl Marx is the theory of value, which He took from the thinkers of Capitalism, and upon which He attacked Capitalism. Adam Smith, who is considered the leader of the Liberal School of Thought in England and is viewed as the person who put the basis of the political economy i.e. the Capitalist economic system, defined value by saying: ‘The value of any commodity depends on the magnitude (quantity) of effort spent in its production.’ So the value of the commodity whose production needs two hours is worth twice the value of the commodity whose production needs only one hour. Ricardo who came after Adam Smith, explained his theory of work, when He defined value, saying: ‘What determines the value of the commodity is not only the quantity of work spent directly in its production, but also the work spent in the past, in producing the tools and machines used in the production process as well.’ This means that Ricardo believed that the value of the commodity depends on the expenses incurred during production. He referred these expenses to one element, which is the work.

After this, Karl Marx used Ricardo’s theory of value in Capitalism as a weapon to attack the concept of private property and Capitalism as a whole. He said that the only source of value is the work spent in a commodity’s production, and that the Capitalist financier buys the energy of a worker with a wage that does not exceed the limit necessary to keep Him alive and able to continue working. The financier then exploits the energy of the worker by making Him produce commodities, whose value greatly exceed that which is paid to the worker. Karl Marx called the difference between what the worker produces and what He is actually paid, the ‘surplus value’. He determined that this value represents what the landlords and the business people usurp from the worker’s rights, in the name of revenue, profit or rate of return on capital, a matter which He did not acknowledge as valid.

Karl Marx was of the opinion that the Socialist schools which came before Him had envisioned the success of their ideas to be dependent upon the inherent nature of the human being in his love for justice and support for the oppressed. These schools used to adopt new methods which they believed in, for their application upon society, and they presented these ideas to the governors, business people, and the enlightened people, urging them to implement their ideas. Karl Marx however, did not build his school of thought on this idea nor did He follow this approach. He built his school of thought on the basis of a philosophical doctrine known as the Theory of Historical Evolution, which is referred to as the Dialectic Theory. He conceived the establishment of the new system in society through the functional operation of the economic laws, and as a result of the law of evolution in society, without the intervention of a manager, a lawmaker, or a reformer. Karl Marx called this type of Socialism ‘Scientific Socialism’, to differentiate it from the Socialist methods that came before it and which were called ‘Utopian Socialism’. The Socialist theory of Karl Marx is summarised as follows:

The system of the society in any age is a result of the economic situation. The transformations which affect this system all come as a result of a class struggle to improve their material situation. History tells us that this struggle ends with the victory of the class which is greater in number and worse in condition, over the wealthier class which is fewer in number. He called this the law of social evolution. It applies to the future as well as the past. So, in previous ages this struggle existed between the freemen and the slaves, then between the nobles and the subjects, then later on between the nobles and the serfs (peasants), and between the leaders and chiefs in the order of sects. This struggle always ended with the victory of the oppressed class, which was greater in number, over the oppressor class, which was smaller in number. But after its victory the oppressed class turned to become a conservative oppressor class. Since the French revolution this struggle existed between the middle class (Bourgeoisie) and the working class. The first class became the masters of the economic projects, the owners of the capital, and became conservative. Facing it was the working class which owned nothing of the capital, but was much greater in number. Consequently, this situation led to a conflict of interest between the two classes, the origin of which was based on economic reasons. The production fashion today, does not conform to the system of ownership. Production no longer remains individualistic i.e. being performed by the person alone, as it was in past ages, but rather has become associative i.e. conducted by individuals together. At the same time however, the system of ownership has not changed. So individual ownership continues and is still the basis of the system in current society. As a result of this the working class, which participates in production, does not have a share in the ownership of the capital, and remains under the mercy of the Capitalists (the owners of the capital), who do not by themselves participate in production. The Capitalists exploit the labour force, paying it only subsistence wages, and the workers are compelled to accept it since they have nothing but their efforts to sustain themselves. The difference between the value of the product and the labour wage, which Marx calls the surplus value, constitutes the profit which the Capitalist monopolises, while justice assumes it should be the share of the workers.

So the conflict would continue between these two classes until the system of ownership conforms with the system of production i.e. when ownership becomes Socialist or collective. This struggle will end with the victory of the working class according to the law of evolution in society, since it is the oppressed class and is greater in number.

Regarding the manner in which the working class will succeed, and the reasons for its success, this is based on the law of evolution in society. The current system of economic life bears within itself the seeds of the forthcoming community, and this current system will vanish due to the effects of the economic laws to which it is subjected. There was a time when the middle class conquered the nobles and played an important role in economic life, since it became the owner of the capital. However, as the argument goes, its role has ended, and the time has come for it to relinquish its position to the working class.What obliges it to do so is the law of concentration and process of free competition. By the effect of the law of concentration the number of Capitalists (owners of the capital) diminishes, and the number of the working class increases. Through the effects of free competition, production surpasses every limit, and the quantity of production exceeds that which the consumers of the working class can buy with their low level of wage. This leads to a crisis causing some of the owners to lose their capital and enter the labour market. As the system progresses the intensity of crises increases, the gap between their occurrences closes, and the number of Capitalists decreases gradually. Then it is not long before a crisis greater than all the preceding crises occurs, of such major proportions that it demolishes the pillars of the Capitalist economic system, with the system of Socialism to be then established upon the Capitalist ruins. Marx conceived the emergence of Communism to be the last stage in the historical evolution, because it demolishes private property, and hence no more reason exists for the conflict of the classes in society, due to the absence of differences between them.

Karl Marx illustrated that the law of concentration was a part of the Capitalist economy. In summary, there is a migration of work and capital from some projects to others, so that some increase while others decrease. All these are scenarios which show the occurrence of concentration in production. If one investigated the number of projects in one branch of industrial production, such as chocolate factories for example, one would find that the number of projects had diminished gradually, over time, while the average number of the production work force increased in every project. This is an evidence that concentration occurred in this branch of production, since the greater sized production replaces the smaller production. So if the number of factories were for example, ten, they will in time become four or five large factories, and the rest will disappear.

Marx’s determination of free competition meant the principle of the freedom to work, which means that every person has the right to produce whatever He likes in the way He likes.

The economic crises, according to Marx, apply to every sudden disturbance that affects the economic equilibrium. The specific crisis includes all the kinds of crises which befall a particular branch of production, due to the imbalance between production and consumption. This incident occurs either due to overproduction or underproduction, or due to over-consumption or under-consumption.

As for the recurrent (periodic) major crisis, it appears in the form of violent convulsions which shake the pillars of the whole economic system, and becomes the point of separation between the period of economic boom and the period of economic depression. The periods of boom vary between three to five years in length, as do the periods of depression. Recurrent, major crises have special characteristics which distinguish them. These characteristics fall under three main qualities, which are: Firstly, the quality of generalisation. This means that in one country, the crisis hits all aspects of economic prosperity, or at least most of them. This general crisis appears at first in one country where it dominates, and then spreads to other leading industrial countries which were linked together by some permanent relations. The second quality is that it is recurrent. This means that the crisis occurs in repetitive and cyclical periods. The period which separates between one crisis and another fluctuates between seven and eleven years. Its occurrence is not over a fixed time although it is recurrent. The third quality is that of excessive production, such that the owners of the large projects face great difficulty in disposing of their products, so the supply exceeds demand for many products leading to the crisis.

Karl Marx considered that these major crises force some people to lose their capital, so the number of owners diminishes and the number of workers increases. These occurrences are what will lead finally to the major crisis in the society which demolishes the old system.

This is a summary of Socialism including Communism as one of its forms. From this summary it appears that the Socialist schools of thought including the Communists, strive to achieve real equality amongst the individuals; either equality in benefits, equality in the means of production, or absolute equality. Any kind of such equality is impossible to achieve, and it is nothing but a hypothetical assumption. It is impractical and therefore impossible. This is because equality in itself is unreal, and thus impractical. People by the very nature with which they were created vary in their physical and mental capabilities, and they vary in the satisfaction of their needs. So equality amongst them cannot be achieved. Even if one distributed equal shares of commodities and services among the people by force, it would be impossible for them to be equal in using this wealth in production or utilisation. And it would be impossible for them to be equal in terms of the quantity they need to satisfy their respective needs. Therefore, equality between them is a speculative and hypothetical concern.

Moreover, equality by itself amongst people, while they are different in strength/power, is considered far from the justice which the Socialists claim they try to achieve. The disparity between people in terms of ownership, and in the means of production, is inevitable and quite normal. Every attempt at achieving equality is destined for failure as it contradicts with the natural disparity existent amongst human beings.

Regarding the complete abolition of private property, this contradicts with man’s nature, because ownership is a manifestation of the survival instinct, which is definitely existent in man. Being natural in him, a part of him, and a manifestation of his natural energy, it is impossible to be eliminated since it is instinctive. Anything that is instinctive in man cannot be eliminated from Him as long as He is alive. Any attempt to abolish private property is nothing but a suppression of the human beings natural instincts, and can only lead to anxiety. Therefore, it is natural to organise this instinct rather than trying to eliminate it.

With regard to the partial abolition of ownership, it has to be studied. If what is meant by this is to put a ceiling on the magnitude of commodities that can be owned, then this would be a limitation in quantity, which is wrong, since it limits the activity of man, obstructs his efforts, and reduces his production. By preventing people from owning that which exceeds a certain level, this effectively stops them at that limit, interrupting the individuals from their activities, and thereby depriving the community from benefitting from the activities of these individuals.

However, if ownership of commodities and services is restricted to a certain manner without restriction in the quantity owned, this would be acceptable, as it does not obstruct the activity of man. This approach organises the ownership of property among individuals, and encourages them to expend more effort and increase activity.

If the partial abolition of ownership means that the individual is prevented from owning certain properties, whilst other properties can be owned without any limit over the quantity, this has to be examined. If the beneficial nature of these properties cannot be enjoyed by the individual alone, except by depriving the public of that property, then it is natural to prevent the individual from owning that property individually; such as public roads, town squares, rivers, seas, and the like. The restriction is decided by the nature of the property. There is, therefore, nothing wrong in banning the individual ownership of those properties which are of associative benefit, because this ownership was determined by the nature of the property itself.

If the nature of the property does not require prohibition of individual ownership, further analysis should still be conducted; if the property can be included under the first type i.e. properties whose individual ownership would deprive the community, such as water and mineral resources, then there is nothing wrong in banning their individual ownership. The issue which makes this type of property included under the first type is that by its nature if it was owned individually it would deprive the community of it. However, if owning the property does not deprive the community of it, then there should be no restriction on its ownership. To do so would unfairly limit ownership for no reason. This would be like limiting the ownership by quantity which will only result in restricting man’s activities, interrupting his efforts, reducing his production, and stopping Him from work when He reaches the set limit of ownership.

The partial abolition of ownership in Socialism is a limitation of ownership by quantity, rather than by the ways and means of ownership. It prevents ownership of some properties, which by their nature and by the nature of their origin should be individually owned. Socialism either limits ownership in magnitude, such as limiting ownership of land up to a certain area, or it limits ownership of certain properties such as the means of production. Many of these properties, by their nature, could be owned by individuals. Ownership restrictions of this type of property restricts activity whether the restriction was pre-specified by the law, such as preventing inheritance, ownership of mines, railways, or factories; or if it were left to the State to decide, on a case by case basis, to prevent possession wherever public interest requires it to do so. All this is restriction of the activity of individuals, for these properties by their very nature can be owned by individuals.

The organisation of production and distribution through people cannot (and should not) be achieved by inciting disturbances and anxiety amongst people, or by inciting hatred between them. This can only lead to anarchy, rather than organisation. Furthermore, the organisation of production in the community cannot be achieved naturally by making the working class feel the oppression of business people, since the business people could be smart and ingenious enough to satisfy the needs of the labour force, as is the case with the factory workers in the United States. So the working class do not feel the oppression in terms of having the fruits of their efforts exploited. In this way the evolution which would better organise production and distribution would not occur. This organisation should come through proper laws and solutions which are built on a definite basis that deals with the real nature of the problems. Socialism relies on organising the production and distribution, whether by inciting tension and disturbances amongst the working class, or by the natural law of evolution in society, or through manmade (Wadh’iya) legislation and canons that do not emanate from a definite basis or creed. Therefore this organisation is false from its basis.

This outlines the fallacies of Socialism. With regard specifically to the Socialism of Karl Marx, its fallacy appears in three aspects:

Firstly: His opinion on the theory of value is erroneous and disagrees with reality. The opinion, stating that the only source for the value of the commodity is the work spent in its production, disagrees with reality since the spent work is only one but not the only source of its value. There are other elements, besides the work, that enter in the value of the commodity. There is the raw material upon which the work was carried out, or the demand for the benefit of the commodity as well. The raw material could contain a benefit that exceeds the work spent in its procurement such as in hunting for example. The benefit of the commodity could have no demand in the market, and be forbidden for export, such as wine for Muslims. So putting work as the only source of value is incorrect, and does not conform to the reality of the commodity as it is.

Secondly: His opinion states that the social order existing at any time, is a product of the economic situation, and that the various transformations which befall this system are all due to one reason, which is the struggle of the classes for the objective of improving their material situation. This opinion is erroneous, baseless, and built upon a doubtful and hypothetical assumption. The reason for its error and disagreement with reality is obvious from historical events and the current situation.We see that the transformation of Russia into Socialism did not occur due to a materialistic evolution, nor due to a class struggle that led to the change of the system. Rather, a group took over through a bloody revolution, and started to apply its thoughts upon the people, and changed the system. The same happened in Socialist China. The application of Socialism in East Germany rather than West Germany, and Eastern Europe rather than Western Europe did not occur as a result of any class struggle. Rather it occurred through the conquering of these countries by a Socialist State which imposed its system upon the conquered nations. The same occurred with the Capitalist states, with the Islamic State, and with any other system. Furthermore, the countries which this law predicted would change their system through class struggle, namely Germany, England, and the United states, are all Capitalist countries where the owners of capital and workers are many. They were not Czarist Russia or China, which were agricultural rather than industrial, and where the number of owners of capital and workers were much fewer in comparison to the West. Despite the overwhelming presence of the two classes in Western Europe and the United states, they were not converted to Socialism, and they all still apply Capitalism till this day. The presence of these two classes (i.e.capital owners and workers) did not have any effect on their system. This alone is enough to refute this theory from its basis.

The third appearance of error in Karl Marx’s theory appears in what He said about the law of social evolution, that the system of economic life is destined for extinction by the effect of the economic laws which control it, and that the middle class which won the battle against the class of the nobles i.e. the owners of the capital will ultimately evacuate their place for the labour class, due to the law of concentration. The theory of Karl Marx concerning concentration of production, on which He builds the increase in the number of the workers and the decrease in the number of the owners of capital, is false. This theory is false because there is a limit which concentration of production cannot overstep. So it arrives at a certain limit and stops and thus will no longer be a catalyst in the evolution imagined by Marx. Moreover, concentration of production does not exist at all in one of the main branches of production, namely agriculture. How then can the law of evolution occur in society? Besides, Karl Marx asserts that concentration of production is followed by concentration of wealth (resources), which results in a reduction in the number of financiers, and an increase in the number of workers, who own nothing. This view is erroneous, since the concentration of production could result in an increase in the number of capital owners, and could result in the working class becoming capital holders. The major projects, which are conducted by the large Corporations, usually have shareholders from the working class, which is an example that refutes this theory. Moreover, many of the working class in the factories have high salaries, such as engineers, chemists and managers, thus being able to save a great part of their salaries, and becoming investors themselves, without the need to establish independent projects. Therefore, what Karl Marx propounded about workers and evolution does not apply to them.

This is but a brief examination of the principles upon which the Capitalist and Socialist, from which came the Communist, economic systems are established. From this examination the fallacies present in these principles are apparent. This is on the one hand; on the other hand, both systems are contradictory to the Islamic method in addressing the problems and contradictory to Islam itself.

As to their contradiction to the Islamic method of solving the problems, one finds that the Islamic method in solving the economic problem is the very same method Islam uses in solving any of the other human problems. The common approach of Islam is to study the reality of the economic problem, understand it, and then deduce a solution for the problem from the Shari’ah texts after studying these texts, and to ensure that they apply to that particular problem. This is different from the Capitalist and Socialist method. In Capitalism, the situation which resulted from the problems, is used as a source for the solutions (pragmatism). In Socialism the solutions are taken from hypothetical assumptions which are imagined to be existent in the problem, and the solutions are put according to these assumptions. Each of these two methods is different to the method of Islam, so it is not allowed for a Muslim to adopt them.

The contradiction of the Capitalist and Socialist, and from it the Communist, economies to Islam is that Islam adopts its solutions as divine rules (Ahkam Shari’ah) derived from the legislative sources while the Capitalist and Socialist economic solutions are not divine rules, but are from a system of Kufr. Judging on things according to them means ruling with other than what Allah has revealed, which is not allowed for any Muslim to adopt in any way. Their adoption is an open sin (Fisq) if their adopter does not believe in them. But if He believed that they are the proper rules and that Islamic rules do not suit the modern age and do not offer solutions to the current economic problems, then this is kufr, may Allah (swt) protect us from it.

Thoughts, in any nation, are the greatest fortune the nation gains in her life if the nation is newly born; and they are the greatest gift that any generation can receive from the preceding generation, provided the nation is deep-rooted in the enlightened thought.

With regard to material wealth, scientific discoveries, industrial inventions and the like, all of these are of much lower importance than thoughts. In fact, to gain such matters depends on the thoughts, and preservation of these matters depends on the thoughts as well.

If the material wealth of a nation is destroyed, it is possible for it to be restored quickly as long as the nation preserves its intellectual wealth. However, if the intellectual wealth collapses and the nation retains only its materialistic wealth, this wealth will soon shrink and the nation will fall down into poverty. Most of the scientific achievements which the nation once made can be regained, provided it does not lose its way of thinking. Whereas, if it lost the productive way of thinking, it would soon regress and lose its discoveries and inventions. Therefore, it is necessary to take care of the thoughts first. Based upon these thoughts, and according to the productive way of thinking, material wealth is gained, and the achievement of scientific discoveries, industrial inventions and the like is sought.

What is meant by thoughts is the existence, within the nation, of the process of thinking in it’s life affairs, such that the majority of its individuals use the information that they have when facing events, so as to judge on them. This means that they have thoughts which they contrive to use in life, and by using these thoughts frequently and successfully, a productive way of thinking results. Today, the Islamic Ummah is lacking in thoughts, so it is naturally deprived of the productive way of thinking. The present generation did not receive from its preceding generation any ideas, be they Islamic or non-Islamic and naturally; it did not receive a productive way of thinking. Nor did it attain by itself any thoughts or a productive way of thinking. As a result, it is natural for this generation to be seen in poverty, despite the abundance of material resources in its lands. Likewise, it is natural to have no scientific discoveries and industrial inventions even though it studies the theories of these discoveries and inventions and is aware of them. This is because it is impossible to rush to gain them in a productive way, unless it possesses a productive way of thinking i.e. unless it has thoughts and it is creative in using their thoughts in life. Therefore, it is inevitable for the Muslims to establish for themselves thoughts and a productive way of thinking. Thereafter, they will be able to proceed, based on that, to acquire material wealth, make scientific discoveries, and industrial inventions. Unless they do this, they will not proceed a single step; rather they will continue to go around in a vicious circle, exhausting their mental and physical efforts, only to end up exactly where they began.

The present generation of Muslims has not even adopted a basic thought which contradicts their ideology of Islam, which we aim to establish amongst them. If it had done so, it would have been able to fully comprehend the Islamic ideology given to it, because this comprehension would have resulted from a clash between the Islamic ideology and the one carried by this generation, making the Ummah realise the correctness of the Islamic ideology. Rather, the current Islamic generation is empty of any thought and of any productive way of thinking. Instead, it inherited the Islamic thoughts as an academic philosophy, in the same way that the Greeks inherited the philosophies of Aristotle and Plato. It also inherited Islam as rituals and religious dogma, in the same way the Christians inherited Christianity. At the same time, it became fascinated with Capitalism after witnessing its successes, and not through comprehending the validity of its thoughts; and from its submission to its rules, and not from comprehending how these solutions emanate from the Capitalist viewpoint of life. Therefore, the Ummah is devoid of the Capitalist thoughts intellectually, although it lives according to the Capitalist way of life. The Ummah also became devoid of the Islamic thoughts in practice, although it conducts some of its rituals and studies its thoughts.

The tendency of this generation towards the Capitalist ideas went far beyond just reconciling Islam with the Capitalist laws and solutions. It has now reached such an extent that there is a feeling of Islam being incapable of solving contemporary problems of life, and there is an urge to take Western laws as they are, without even reconciling them with Islam. The Ummah came to see no harm in giving up Islamic rules and adopting others, in order to progress with the civilised world, and catch up with the Capitalist and Socialist nations, considering them as progressed peoples. As for those who adhere to Islam, they have the same tendency towards the Capitalist thoughts, but they still try to reconcile them with Islam. However, those who try to reconcile Islam with other thoughts have no influence in life, nor do they have any presence in society, i.e. in the actual relationships that go on between the people.

Therefore, the delivery of the Islamic thoughts and rules which solve problems of life, collides with minds, empty of thought and a way of thinking. Instead it clashes with inclinations, from all the people, towards the Capitalist and Socialist thoughts, and with the way of life currently governed by Capitalism. So unless the given thought is strong enough to cause a shake-up in the hearts and minds, it will be impossible to move the people, nor even attract their attention to it. This thought has to push the dull shallow minds to think deeply, and it has to shake off the deviated inclinations and the sick tastes, so as to establish the sound inclination towards the Islamic thoughts and rules.

Consequently, it is necessary for the carrier of the Islamic Da’wah to expose the foundation upon which the Capitalist solutions are established, illustrate their falsehood and destroy them intellectually. He has to address the various new issues of life and show the Islamic solutions to these issues as divine rules which must be followed, because they are rules derived from the Qur’an and Sunnah, or from what these two evidences have directed to, and not from the perspective of whether or not they are suitable for this time. That means they have to be taken based on the Aqeedah and not based on their perceived benefit. So each rule has to be given along with the divine evidence from which it was derived, or by explaining the divine reason (Illah) which the rule or the text brought.

The thoughts related to the ruling system and economics are the thoughts which most fascinated the Muslims, and made them suffer the severest tribulations in their lives. The Muslims generally admired these thoughts, and the West tries to practically apply these thoughts, and persists in its endeavours to implement them. Although the Ummah is theoretically governed by democracy on purpose by the infidel colonialists, in order to protect the Western system and colonisation, she is governed practically by the Capitalist economic system in all the economic aspects of life. Therefore, the Islamic economic thoughts are those which will have the greatest influence in the economic life of the Islamic world, so much so that they will turn it upside down and they will be most opposed by the agents of the infidel colonialist, and those who are fascinated by the West, namely those who are pleased to live in the darkness, the defeatists and the rulers.

Therefore, it is necessary to give a clear picture of the Capitalist economic system, which classifies the basic thoughts upon which the political economy in the West is established, so that those who have become fascinated with the Western economic system can come to see the corruption of this system and its contradiction with Islam. They will then examine the Islamic economic thoughts which address the problems of economic life in the correct manner, and present them as a unique way of life which contradicts the Capitalist life in both its general principles and in its details.

The Capitalist Economic System

If we examine the Capitalist economic system we find that, in their view, it deals with man’s needs and the means of satisfying those needs. It only addresses the materialistic side of man’s life and it is established on three principles:

1. There is a relative scarcity of commodities and services in relation to needs. This means the insufficiency of commodities and services to meet the ever-increasing needs of man. This is the society’s economic problem from their viewpoint.

2. The value of a product which is the basis of most economic research and study.

3. The price, and its role in production, consumption, and distribution. The price is the cornerstone of the Capitalist economic system.

With regard to the relative scarcity of commodities and services, this situation exists because the commodities and services are the means which are used to satisfy man’s needs. They say man has needs that require satisfaction, so there must exist the means to satisfy them. These needs are purely materialistic; they are either tangible, such as the need for food and clothing, or they are needs which are sensed by man but are intangible, such as the need for the services of, for example, doctors and teachers. As for the moral needs such as pride and honour, or spiritual needs such as the sanctification of the Creator, they are not recognised economically, and are therefore disregarded and have no place in economic studies.

The means of satisfaction are called commodities and services. Commodities are the means of satisfying the tangible needs, whereas services are the means of satisfying the intangible needs. What makes commodities and services satisfy the needs, in their viewpoint, is the benefit in these commodities and services. This benefit is an attribute which renders the thing desirable for satisfying a need. Since the need means the economic desire, then the economically beneficial thing is everything desired, whether it is essential or not, and even if some consider it beneficial and others consider it harmful. It is considered economically beneficial as long as there is someone who finds it desirable. This makes them consider things as beneficial from an economic viewpoint even if the public opinion considers them of no benefit, or harmful. Thus wine and hashish are beneficial things to the economists since there are people who want them.

The economist looks upon the means of satisfaction, that is, the commodities and services, from the viewpoint that they satisfy a need, without taking any other factor into consideration. Thus, He looks at the needs and the benefits as they are, not as they should be i.e. He looks at benefit as satisfying a need, without taking anything else into consideration. So He would look at wine in its capacity of having an economic value because it satisfies the needs of some people, and He perceives the wine maker as a person who provides a service, considering this service as having an economic value, because it satisfies the need of some individuals.

This is the nature of needs in Capitalism and the nature of the means of satisfying these needs. Hence, the economist does not care about the nature of society, but cares about the economic material resources (economic commodities), since they satisfy a need. Therefore, the function of the economist is to supply commodities and services i.e. to provide the means of satisfying man’s needs, irrespective of any other consideration. Accordingly, the economist strives to make available the means of satisfaction. Since the commodities and services, which are the means of satisfaction are limited, they are not sufficient to meet all of man’s needs, because these needs in their view are unlimited and constantly growing. This is because there are basic needs which man as a human must satisfy, and there are needs which increase in number as man proceeds to a higher level of urbanisation. These needs multiply and increase and they all need complete satisfaction, a situation which cannot be fulfilled no matter how much commodities and services increase. From here the basis of the economic problem emerged, which is an overabundance of needs and the shortage of the means of their satisfaction i.e. the lack of commodities and services to completely satisfy all of man’s needs.

From this perspective, the society faces an economic problem, which is the relative shortage of commodities and services. The inevitable result of this shortage is that some needs are either partially satisfied or not satisfied at all. Since this is the situation, it is necessary that the members of society agree on rules that decide which needs have to be satisfied and which needs are to be deprived. In other words, it is necessary to set a rule that decides the manner of distributing the limited resources over the unlimited needs. So the problem to address in their view is the needs and resources and not the man. Thus, the problem is to make available the resources so as to satisfy the needs, but not necessarily the needs of every individual. Therefore, it is necessary that the rules which are laid down, be rules which guarantee the achievement of the highest possible level of production, so as to achieve the highest supply of resources i.e. to supply the goods and services to the nation as a whole, but not necessarily to each individual. Therefore, the problem of distributing the goods and services is closely connected to the problem of production, and the objective of economic studies and research is to increase the goods and services which are consumed by the society. It is not surprising therefore, that the study of the factors which affect the size of the national production (GDP and GNP) takes precedence over all economic studies. Because the study of increasing the national production is one of the most important studies to solve the economic problem, that is the scarcity of the commodities and services in relation to the needs. For they believe that poverty and deprivation cannot be solved except by increasing production. Therefore, solving the economic problem facing society is only by increasing production.

The value of the product means its degree of importance, whether relative to a particular person or relative to another thing. In the first case, it is called ‘the value of the benefit’. In the second case, it is called the ‘value of exchange’. The value of the benefit of a thing can be summarised as: the value of benefit of any unit of a thing is evaluated by its marginal benefit i.e. by the benefit of the unit that satisfies the weakest need. They called this ‘The Theory of Marginal Utility’. This means that the benefit is not evaluated according to the viewpoint of the producer alone i.e. evaluated by the costs of its production, since this would mean consideration of supply without demand. Nor is it evaluated from the viewpoint of the consumer alone i.e. evaluated by its benefit and desirability, as well as looking at its relative shortage, because this would mean the consideration of demand without supply. In fact, they claim that benefit should be observed from the viewpoint of supply and demand together. Thus the benefit of a thing is assessed at the last point that satisfies the need i.e. at the minimum point of satisfaction. Therefore, the value of a loaf of bread is assessed at the minimum point of hunger not at its maximum, and at a time when there is an availability of bread in the market, not at a time when there is a shortage.

As for the value of exchange, it is an attribute which makes a thing suitable for exchange. The strength of exchange of a thing is measured relative to another, so the value of exchange of wheat relative to corn is estimated by the units of corn which should be conceded to obtain a unit of wheat. They refer to the value of the benefit using the term ‘benefit’ only, and refer to the value of exchange using the term ‘value’ only.

Exchange occurs between two commodities or services which are similar or close in their values. Hence, the study of value was necessary for economists; because it is the basis of exchange, and it is a utility which can be measured; it is a scale with which the commodities and services are measured and by which actions are judged as productive or not.

Production, in their view, is creating a benefit or increasing it, which is accomplished by work. So, to identify works as being productive or not, and to know which are of greater productivity, there must be an accurate scale for the various products and services. This scale is the societal value of the various products and services. In other words, it is the collective evaluation of the work spent and the service provided. Such an evaluation became necessary, because in the modern time, production for the purpose of exchange has replaced production for consumption. The situation now arises whereby virtually every person exchanges his production with other people’s production. The exchange is achieved by the existence of compensation for the commodity or service, so there must be an estimation of the value of the commodity in order that it can be exchanged. Hence, knowledge of the value in terms of what it is, is an essential factor in production and consumption i.e. an essential factor towards satisfying man’s needs, by using these means.

In modern history, this value of exchange has been identified by one of its values, and this type of value has become predominant. In developed communities, the values of commodities are not related to each other but are related to a certain commodity called money. The exchange ratio of a commodity or a service with money is called its price. The price therefore, is the amount of exchange of a commodity or a service relative to money. Hence, the difference between the value of exchange and the price is that the value of exchange is the ratio of an exchange of one thing with another, whether that thing is money, commodities, or services; while the price is the exchange value of a thing with money. This means that it is possible that the prices of all goods rise at any one time, and all fall at any one time, whilst it is impossible that the exchange values of all commodities relative to each other rise or drop at any one time. It is also possible for prices of commodities to change without resulting in a change in their value of exchange. Therefore, the price of a commodity is one of its values; in other words it is the value of a commodity relative to money only. Since the price is one of the values, it is natural for price to be taken as a scale for deciding whether a thing is beneficial or not, and the degree of benefit of that thing. Therefore, the commodity or the service is considered as productive or beneficial if the society evaluates this particular commodity or service by a particular price. The degree of benefit of this commodity or service is measured by the price which the majority of the consumers agree to pay for possessing or utilising it, whether this commodity is an agricultural or industrial product, and whether the service is that of a trader, transportation company, doctor, or engineer.

As for the role which the price plays in production, consumption, and distribution, it is the price mechanism that decides which of the producers will enter the production race and which will be excluded. In the same manner, price decides which of the consumers will satisfy their needs and which consumers will not be able to do so. The production cost of a commodity is the principal factor which governs its supply in the market, while the benefit of the commodity is the principal factor which governs the demand in the market for it, and both are measured by the price. Therefore, the study of supply and demand is the fundamental issue in the Capitalist economy.What is meant by the supply is the supply of the market, and what is meant by demand is the demand of the market. As demand cannot be defined without mentioning the price, supply too cannot be evaluated without the price. However, demand changes inversely proportional to the change in price i.e. if price increases, demand decreases, and if price decreases then demand increases. This is contrary to supply which changes directly proportional to the price i.e. the level of supply increases as the price increases and it drops as price decreases. In both cases, price has the greatest effect upon supply and demand, that is, it has the greatest effect upon production and consumption.

The price mechanism in the view of the Capitalists is the ideal method of distribution of commodities and services amongst individuals in society, since the benefits are the result of the efforts which man expends. So, unless the compensation is equal to the effort, then, no doubt, the level of production will drop. Therefore, the ideal method to distribute commodities and services in a society is that which guarantees the highest possible level of production. This method is the price method which is also called the price system or the price mechanism. They consider that the price mechanism produces economic equilibrium automatically, since it gives the consumers the choice to decide for themselves the distribution of the resources owned by the society over the various economic activities, through the consumers demand for some commodities and their turning away from others. Hence they spend their income by buying what they need or what they like. Thus, the consumer who dislikes wine will abstain from buying it and spends his income on other things. If the number of consumers who dislike wine increased, or if all came to dislike it, then the production of wine becomes unprofitable due to decreasing demand. Thus, production of wine would stop naturally, and the same rule applies to other commodities and services. The consumers themselves define the level and kind of production by being left free to decide what to buy and what to leave. Via the price itself, the distribution of commodities and services occurs whether or not the price is available to the producers, and whether or not they give it to the producers.

The price mechanism is the incentive for production, it is the regulator of distribution, and the link between the producer and the consumer i.e. it is the means which achieves equilibrium between production and consumption. The price mechanism is the incentive for production, because the principal motive for man to undertake any productive effort or sacrifice is his material reward. The Capitalist economists exclude the possibility that man expends effort for a moral or spiritual motive. The moral motive, when they do recognise it, is attributed to a materialist compensation. They consider that man expends his efforts to satisfy his materialistic needs and wishes only. This satisfaction is either through the consumption of commodities which He produces directly, or through receiving a monetary reward that enables Him to obtain the commodities and services produced by others. Since man depends in satisfying most of his needs, if not all of them, on exchanging his efforts with others, then the satisfaction of needs is focused on obtaining a monetary reward for his efforts. This monetary reward allows Him to obtain commodities and services, and accordingly He is not focused on obtaining the commodities which He produces. Therefore, the monetary reward, which is the price, is the motive for man to produce. Hence, the price is the means which motivates the producers to offer their efforts. Thus the price is the incentive for production.

The price is the means which regulates distribution, because man likes to satisfy all of his needs completely and He strives to obtain the commodities and services which satisfy these needs. Had every human being been left free to satisfy his needs He would not stop short of possessing and consuming whatever commodity He likes. Since every man strives for this same aim, everybody has to stop in satisfying his needs at the limit at which He can afford to exchange his efforts with others efforts, that is at the limit of the monetary compensation which He receives for expending his effort i.e. at the limit of the price. Therefore, the price is the constraint which acts naturally to restrict man in his possession and consumption to a level which is proportional to his income. So the existence of the price makes man think, evaluate, and differentiate between his competing needs which require satisfaction, and He takes what He finds necessary, and leaves what He finds of less importance. Thus, the price forces the individual to settle for partial satisfaction of some of his needs, so as to be able to satisfy the other needs which He considers no less important.

So, the price is the tool which regulates the distribution of utilities required by individuals. The price also regulates the distribution of limited utilities amongst the consumers who demand these utilities. The disparity in income of the consumers makes the consumption of each individual confined to that which his income allows. This makes some commodities confined to only those who can afford them, while the consumption of other commodities would become common amongst people who can afford the lower prices. Therefore, the price will become the regulator in distributing utilities amongst consumers by setting a high price for some commodities and services and a low price for others, and also by the suitability of the price to some consumers more than others.

The price achieves equilibrium between production and consumption, and it is the link between the producer and the consumer, because the producer who fulfils the desires of the consumers is rewarded through profits. On the other hand, the producer whose products are not accepted by the consumers, would end up with losses. The method through which the producer can detect the desires of the consumers is the price. If the consumers demand any particular commodity its price will increase, and the production of that commodity will increase, in fulfilment of the consumer’s desires. If consumers turn away from buying a particular commodity, its price will drop in the market, and so production of this commodity will decrease. So, the resources assigned to production increase as the price increases, and decrease as the price decreases. In this way the price is the tool which achieves equilibrium between production and consumption, and it is the link between the producer and the consumer, and this process occurs automatically. Therefore, the price is the basis on which the economy is established in the view of the Capitalists, and it is the cornerstone of the economy to them.

This is a summary of the economic system in Capitalism, which is called the political economy. By studying it thoroughly, the falsehood of the Capitalist economic system can be shown from many aspects:

1. Mixing the Needs and the Means of Satisfaction

Economy in Capitalism means to address man’s needs and the means of their satisfaction. Hence the production of commodities and services, which are the means of satisfying the needs, together with the distribution of these commodities and services are considered in their view, one subject. The needs and the means of their satisfaction are considered to be interrelated such that they are one subject, inseparable from each other, as if one of them is included within the other. So, the distribution of commodities and services is included in the subject of the production of these commodities and services. Thereupon, they look at the economy from one angle which includes the economic commodities and the method of their possession, without separation between them and without differentiating one of them from the other. Thus, they hold one view towards the economic science and the economic system without differentiating between them. However, there is a difference between the economic system and economic science.