NCPA - National Center for Policy Analysis

Islam and Free Market Capitalism

September 19, 2001

Contrary to popular belief, the hatred of capitalism behind the terrorist World Trade Center bombing does not come from Islam. Indeed, one could argue that Islam is the most pro-business of all the world's major religions.

The Prophet Muhammad was a businessman who engaged in extensive commerce before devoting himself exclusively to religious affairs in the year 611. Even afterwards, Muhammad often made comments and took actions that demonstrated his support for business and the free market.

  • For example, he forbade the imposition of price controls, saying that prices were in God's hands and that he wished to meet God without having to answer for some injustice that he might commit in this respect.
  • Taxes were collected directly from individuals, instead of businesses -- he forbade the imposition of special taxes on markets, calling the market "a charitable endowment."
  • The Koran, Islam's holy book, is filled with passages that can be interpreted as favoring commerce -- for example, it says, "O you who believe! Squander not your wealth among yourselves in vanity, except it be a trade by mutual consent....And who does that through aggression and injustice, We shall cast him into Fire."

For this reason, scholars have long looked upon Islam as fundamentally pro-capitalism. As Maxime Rodinson wrote in "Islam and Capitalism" (1966): "Economic activity, the search for profit, trade, and consequently, production for the market, are looked upon with no less favor by Muslim tradition than by the Koran itself."

This is one reason why the Muslim world was the most vibrant on earth during the latter part of the Middle Ages.

Source: Bruce Bartlett, senior fellow, National Center for Policy Analysis, September 19, 2001.

 

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