Economics, if defined in layman terms, is the distribution of resources or wealth. However simple it may seem, the distribution of wealth has caused serious problems to men of all ages. The system for distribution got modified and developed with the progress of human civilization. From bartering of goods to gold-backed coins to paper currency, man has come a long way, and with time, concocted systems, philosophies and institutions to run the economic system effectively and efficiently. The two dominant philosophies for economic system emerged in the course of the past few centuries, i.e. Capitalism and Communism.
The Capitalistic economic model, though practised by peoples since the time immemorial, was enhanced and set as a universal standard by the emergence of the United States on the world stage. The concepts of liberty, individualism and minimally regulated free-market economy was hailed by the United States so much so that they have almost, now, become global standards.
In the confrontation with this model, was the rise of the Communist Soviet Union, inspired by the teachings of Karl Marx, from the ashes of the Russian Revolution. The Communist philosophy underpinned the powers of the state, state-owned resources and seizure of private property.
Both the philosophies of Capitalism and Communism, however, have their flaws. While the former tends to create inequalities, the latter makes state authoritarian. These difficulties in the economic system of the contemporary world can be overcome if the economic system given by Islam is revived and implemented.
The Islamic economic system–provided 1400 years ago–espoused the good values of Capitalism and Communism, thereby taking the middle position between the two extremes. Though Islam believes in free-economy and the rights of people to private property, it in no way endorses the exploitation of masses and the concentration of wealth in the hands of few. Similarly, Islam teaches equality but does not enforce the equality of income since it recognizes the difference among individuals. Islam firmly believes in the circulation of wealth.
Hence, the economic system propounded by Islam is the panacea for all contemporary evils. Therefore, by adopting the Islamic economic system, not only can we get rid of usury, excessive concentration of wealth and exploitation of many by few–as observed in Capitalist economies, but can also create a realistic system of social justice instead of a utopian one–as envisaged by Communist philosophy.