The market capitalism and the economic system of Islam. Similarities Essay

The market capitalism and the economic system of Islam. Similarities and differences - Essay Example Under the market capitalism, the price mechanism remains largely functional to maintain the reins of the market capitalism. The price mechanism is used as a signalling system distributing resources between the different market participants and users. Under the market capitalism, the workers are free to enter and are free to exist and they are at their will to earn and expand their earnings as they wish to. Market capitalism largely also relies on the political authority to develop, provide and regulate the market rules and regulations so that they encompass all related societal costs and benefits. Both systems share that an individual is entitled to keep private property, the provision of social security and economic freedom. However, it is a strikingly interesting that the economic system of Islam only allows the use or control of private property and at the same time strongly discourages applying the concept of ownership. Under the economic system of Islam and Islamic finance which have gained roots in the global finance recently (Asutay 3), the right of ownership is the exclusive prerogative of Almighty Allah and humans are only allowed to establish and exercise the control o f the private property. The economic system of Islam also suggests the state or government is responsible to provide social security to the masses and develop such employment policies so that the masses can easily access to the basic human needs. The market capitalism differs with the economic system of Islam when it comes to the distribution of wealth among the masses. The market capitalism does not believe in fair and equitable distribution of wealth. An individual has unrestricted and unlimited authority to earn and amass money and at the same time claim its full ownership as well. The economic system of Islam differs on this aspect with the market capitalism and opines that the individual is not allowed to keep unlimited wealth as it creates imbalance in the society and the practice s such as hoarding, profiteering, exploitation largely appears. The market capitalism also give right to an individual to keep to exercise the right of the exclusive ownership which is totally against the concept promoted and supported by the economic system of Islam. In the following parts of this paper, first the definition and framework of market capitalism is provided. In which, the basic definition and different aspects of the market capitalism are discussed. Subsequent to that, emergence of market capitalism is highlighted. In this part, the history and evolution of market capitalism is provided. After that, similarities between the economic system of Islam and the market capitalism are provided. Before the conclusion part, difference between the economic system of Islam and the market capitalism are elaborated. Market Capitalism Market capitalism is a system of governance for economic affairs emerged in different setting and continues to evolve over time (Scott 2). The Macmil lan Dictionary of Modern Economics defines it as an economic system in which, property including capital assets, is owned and controlled by the private persons. Under the market capitalism, the price mechanism is utilized as a signalling system allocating resources between the different uses. The extent to which the price mechanism as its fundamental coordinating device instead of command and control, provides that capitalist systems are not similar from one another based on the limit and nature of the governmental interventions and the presence