Refutation of the Capitalist Western Thought by Hizb Ut Tahrir

The Capitalist economic system is a system based on the freedom of ownership of the means of production. Thereby in Capitalism, each individual or group seeks to achieve self-interest, satisfaction or profit. Capitalism is centered on the following main pillars:

1) Private property or individual freedom to possess 2) Self-interest or profit which is considered as the primary motive for economic activity 3) Competitive market by freedom to enter and exit the market 4) A market mechanism based on supply and demand, with price being a balancing tool 5) A limited role of a state in the economic markets.

Economists today call the economic system that is prevalent around the world, followed by most of the Western nations, by the term ‘mixed economy.’ It means that it is an economy that combines the free market in part and state intervention in the market in part. Thus it gives the individuals and companies engaged free rein in the economy with respect to usage of capital, investment and production. In the mixed economy this is accompanied by the intervention of the state in certain areas and situations, to provide social welfare or to prevent monopoly, in order to maintain balance. For instance, pricing in capitalism is regarding as the invisible hand that moves the market. However, the state may intervene in some of the goods, like tobacco, by imposing taxes, to discourage its consumption. What distinguishes the economies of states that follow the ‘mixed economy’ is the extent of the state intervention within economic affairs.

Thus, the American economic model, for instance, differs to some extent from that of the German, French, Japanese and Swedish models. This is despite all of them inherently following the same system, regardless of their capitalism being called state capitalism, welfare capitalism, market capitalism, managed capitalism, modern capitalism, or others. So the variation does not negate them from being capitalism. Mainland Europe in general tends to exert oversight and control over financial markets, whilst the United States and the United Kingdom limit such state intervention. This, however, does not mean that mainland Europe is not capitalist.

Thus, the Western economy as a whole is a capitalist economy. It is not within our scope to discuss the difference in its types, although we discuss the difference in the model, within the single framework of capitalism. Moreover, the state intervention in itself is the measure by which to describe the economic system as a mixed economy. So state intervention is the direct result of the Capitalism. This is because the partial reformations witnessed by the capitalist economic theories, particularly in the first half of the twentieth century CE, through Keynesian theory, were to preserve the continuity of the capitalist system. State intervention in some nations to streamline economic behavior, accelerate growth and enact some laws related to social security, unemployment and healthcare, were due to the emergence of strong labor movements influenced by socialist thought, who demanded their rights. This was also the consequence of multiple economic crises including the 1929 crisis. Capitalism was put to test and doubts were cast over its validity. There were monetary reviews, reformations and partial adjustments to save Capitalism itself, to ensure its continuity. Despite that, state intervention has itself become the subject of criticism, after the crystallization of a new vision, called neo-liberalism at the end of twentieth century CE. Keynes’s revisions were reviewed and criticized, calling for curbing of state intervention and liberation of the capitalist economy from all constraints, in accordance with the original capitalist principles.

In any case, we chose to build our critique against the philosophy of capitalist economy based on the foundations and principles upon which it is built. We see the economic system of the Western nations as a whole as a capitalist economy, regardless of the differences between them. This is because we see shared foundations and principles within each economy. These extend to the view of the economy itself in terms of its essence and objective, the view of the economic problems and the definitions of values, goods and services. These foundations and principles are the same throughout the West. There is no difference within them nor have they changed.

As for the corruption within this capitalist economic system, one must consider the following points: