Is Islam a Socialistic or Capitalistic System?

07 July, 2017
Q As-salamu Alaykum. I am from Indonesia, and often I participate in debates about Islam, whether it is Left-wing or Right-wing, especially with reference to the political situation in my country. In order to attract Muslim followers, both the Socialist and the Nationalist parties here describe themselves as Islamic parties. I would like to know just this: Is there any evidence in Islam that it is neither Left-wing nor Right-wing, that Islam is neither Western nor Eastern, that Islam is neither socialistic nor capitalistic, though I know that there are such verses that relate to socialism or liberalism in the Quran. Thank you and may Allah bless all of us! Wa-salam.


Salam Dear Faisal,

Thank you very much for your question and for contacting Ask About Islam.

In answer to your question, I would like to state the position of Islam with regard to the Left wing and the Right wing in general.

However, it is up to you to study the policies and activities of the political parties in your country in light of the general principles laid out here. You must decide which party is closer to Islam than others.

Islam is the comprehensive, perfect way of life decreed for mankind by Allah Almighty.

In Islam, we find principles and formulations aimed at shaping the individual–as well as the collective life of mankind–within the parameters of the divine guidance contained in the Quran and the Sunnah.

As Islam encompasses all areas of human life, both politics and economics come under its purview.

Two Extremes, and a Third Option

The two socio-economic systems predominant in today’s world are democratic capitalism and democratic socialism.

The hallmarks of the former are private ownership and free markets, while those of the latter are collective ownership and state control.

We find that both these systems suffer from inherent and systemic flaws that have made their practitioners leave their ideals. They then hastily adopt measures that undermine the very foundation of those systems.

Capitalism favors the rich and approves and contributes to widening the gap between the haves and the have-nots in society. Islam recognizes the differences among people owing to their natural inborn talent, education, capacity for work, and so on, and makes allowances for these.

But socialism would ignore these differences among people and impose its concept of “equality” on society. That is why the Khmer Rouge in Cambodia (the radical Communists who controlled Cambodia for four nightmarish years from 1975 to 1979), for instance, compelled engineers and doctors to work on farms, with disastrous consequences.

But a truly Islamic society recognizes these differences and gives freedom to people by providing equal opportunities for all members of the society to develop and utilize their talents.

Islam as the Perfect Social System

Despite the fact that there are many countries who claim to be “Islamic”, a true Islamic political system does not exist now anywhere on earth. However, we must remember that it once flourished, producing dramatic results.

It was Islam in its pristine purity that succeeded in transforming a primitive desert people into the most civilized nation of their time.

The boundaries of the Islamic Empire then stretched between China in the East and the Atlantic Ocean in the West. It was deviations from true Islam that caused the failure of the Islamic Empire.

Islam means submission and subordination of all our interests and concerns to the One God, and the foundation of the true Islamic state is the principle of the oneness of God.

All humans, being the creations of the One God, are equal. Islam views man as a part of nature, which is destined to obey certain rules.

So-called “natural laws” are the laws of God; and as nature obeys God’s physical laws, nature is called “Muslim” (that is, submitting peacefully to God’s laws). All the planets that float around the sun obey the unalterable laws of God, and so they are Muslim (submitting peacefully to God).

Man is distinguished from other creatures of God by virtue of his reasoning power and free will.

Social Justice as a Focus in Islamic Society

One major thrust of the Islamic system is its effort to attain social justice. This should be obvious to anyone who has a cursory knowledge of the Quran. For example, Allah says what means:

O you who believe! Be maintainers of justice, bearers of witness of Allah’s sake, though it may be against your own selves or [your] parents or near relatives; if he be rich or poor, Allah is nearer to them both in compassion; therefore do not follow [your] low desires, lest you deviate; and if you swerve or turn aside, then surely Allah is aware of what you do. (Quran 4:135)

Allah also says what means:

O you who believe! Be upright for Allah, bearers of witness with justice, and let not hatred of a people incite you not to act equitably; act equitably, that is nearer to piety, and be careful of [your duty to] Allah; surely Allah is Aware of what you do. (Quran 5:8)

So a truly Islamic state would strive for social justice by all the means at its disposal in order to lessen the material differences among the people has top priority for it.

The Chief Cause of Social Inequality

The chief cause of economic problems, according to the capitalists, is the scarcity of natural resources; whereas according to the socialists, it is the exploitation of the workers by the capitalists. Islam differs from both as it realizes that the reason for the economic problems is man himself. The Quran says what means:

Islam differs from both as it realizes that the reason for the economic problems is man himself. The Quran says what means:

He has also subjected for you the sun and the moon, both constantly orbiting, and has subjected the day and night for you. And He has granted you all that you asked Him for. If you tried to count Allah’s blessings, you would never be able to number them. Indeed humankind is truly unfair, totally ungrateful. (Quran 14:33-34)

This means that unjust and ungrateful people disregard God’s laws that provide the principles of equality and social justice; thereby he creates discord between groups and wastes the resources and scatters destruction.

Thus, from the Islamic point of view, it is man himself who is the root of all problems; so if man is taught to check his pride, his meanness and his greed, there will be peace on earth, as well as progress and prosperity.

Islam: The Solution

For the above reason, the first endeavor of Islam is to develop in its adherents a commitment to honor God’s laws in nature, both in individual life as well as in social life.

In brief, the political or economic system of Islam is an inseparable part of a complete code for the whole of human life. Therefore, it is pointless to isolate one area of human endeavor from the total Islamic system to analyze it.

In other words, the economics or politics of Islam is a part and parcel of its morality and spirituality, which are reflected in Muslim life. The advantage Islam has over man-made systems is that Islam binds man to God. As someone has explained, Islam starts from the depths of the human conscience and proceeds in its endeavor to secure a happy life for all.

And Allah knows best. I hope this answer is informative and clarifies matters to you. Thank you again for your question and please keep in touch.


This is from AboutIslam’s archives and was published earlier

Satisfy your curiosity and check out these other helpful links:

Islam and Social Justice (Part 1)


Western and Islamic Ethics: Different or Similar?


Social Responsibility in Islam (Series)


Rights of Workers in Islam


Zakah and the Economic System in Islam