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Islam & Capitalism

Islam & Capitalism

Throughout history merchants have been interested in one thing: making money. This is no different for Arab merchants. Islam and capitalism are closely related, the only difference is the way money was made and how it was spent. The values and practices of Arab merchants were greatly guided by the belief that the wealth should be distributed to the people to bring everyone’s economic wealth to a higher standard, not to mention follow the teachings of Muhammad. The Story of Ali Colia, Merchant of Bagdad as depicted in the Arabian Nights, clearly illustrates the values and practices of the Arab.
A capitalistic economy is the trading of goods and services between individuals. (Peterson, Powerpoint) It can also be defined as a system in which the main divisions are founded on private ownership and labor. (Peterson, Powerpoint) Arab merchant trade does not fit the first definition capitalism, but not the second. (Peterson, Powerpoint) Arab Merchants would buy and sell on commission. They would obtain money from loans made by investors, or they would have a joint investment with other merchants. (Wikipedia, Islamic Economics in the World) The Islamic economic system is not based on price as the method of distribution of goods, but rather, how to distribute funds and benefits to all citizens. (Peterson,Powerpoint) This made this era the most prosperous time in the history of the Middle East. (Duiker/Spielvogel) Merchants were respected in Islamic culture, something they did not have in Europe, India, or China at that time. (Duiker/Spielvogel) This is when merchant capitalism, or "Islamic capitalism" began, (Wikipedia, Islamic Economics in the World) unlike most economic system the Islamic capitalism does not separate church and states. (Duiker/Spielvogel) Many of the laws of Islamic capitalism follow the principals of Islam. (Duiker/Spielvogel) Some of the laws include when a loan is given; you cannot collect interest on it and all financing...