An Islamic alternative to Capitalism: A study of Sharī‘ah-compliant Finance with special reference to Muftī Taqī Usmānī

Abstract

Two streams of Muslim scholars from the Indian subcontinent proposed an Islamic alternative to capitalism. The majority of scholars viewed capitalism as just an economic system and attempted to replace it gradually through Islamic reforms. However, a microscopic minority of Muslim scholars conceptualized capitalism as a totalizing, all-encompassing system and lifeworld that is the polar opposite of Islam and believes that the only way to overthrow capitalism is the Islamic revolution. Muhammad Taqī ‘Usmānī is a leading Sharī‘ah expert who belongs to the former group of Muslim scholars. He not only strongly criticized capitalism but also proposed an alternative to the capitalist economy. This paper is divided into three sections, the first section of which deals with ‘Usmānī’s conception of capitalism. The second section of the paper examines the ‘Usmānī’s critique of capitalism to identify the flaws of an interest-based economy. The final section consists of identifying the modes of Islamic finance that ‘Usmānī proposed as an ideal, fair, and workable alternative to capitalism.