CRITIQUE OF CAPITALISM AND SOCIALISM FROM AN ISLAMIC ECONOMIC PERSPECTIVE: SOLUTIONS FOR ECONOMIC JUSTICE

Abstract

Capitalism and socialism have long been the dominant economic systems, each with its own strengths and weaknesses in addressing global economic and social challenges. Capitalism is often criticized for exacerbating wealth inequality, encouraging exploitative practices, and failing to ensure long-term societal stability. Meanwhile, socialism struggles with inefficiency, corruption, and a lack of innovation due to centralized control of resources. This article explores Islamic economics as an alternative system that balances economic efficiency with social justice, rooted in Sharia principles. By prohibiting interest (riba), speculative practices (gharar), and promoting wealth redistribution through zakat, waqf, and sadaqah, Islamic economics provides a framework for equitable resource distribution and social welfare. The research compares these economic systems and highlights how Islamic economics offers sustainable solutions to achieve global economic justice. Through a qualitative literature review, the study examines the impact of wealth distribution mechanisms and the ethical principles of Islamic economics, demonstrating its potential to reduce inequality and improve societal welfare, providing an alternative to the failures of both capitalism and socialism.