Capitalism

Capitalism is defined as the dominant economic and social system in the modern world. It is based on private property, a free market economy, the pursuit of profit, and competition. The essence of capitalism is a system that promotes the accumulation and increase of capital. The origin of this concept is based on the Latin word “caput,” which means “head” or “number of cattle.” Capitalism is considered a system in which capital determines economic, social, and political relations. The basic element of capitalism is capital, which means accumulated labor and wealth. However, capitalism involves not only the increase of wealth, but also the accumulation of goods. Capitalism is therefore defined as a regime of unlimited capital accumulation, and capitalists are people who adopt the growth of their capital as a way of life. The history of capitalism dates back to the 1500s in Western Europe and gradually spread throughout the world. This system is particularly identified with industrial capitalism and gained momentum with the Industrial Revolution. Capitalism is a system that requires institutions. Institutions such as private property, the free market system, corporations, and debt–credit relations form the basis of capitalism. The functioning of capitalism has not only economic but also social and cultural dimensions. The rationalization process of capitalism affects people’s attitudes and lifestyles. Capitalism excludes the way of thinking and beliefs beyond the physical, romantic, and mystical thoughts in people’s minds. This means that capitalism is a system that represents the modern world view. Islamic economics, on the other hand, tries to offer an alternative economic system to capitalism. Islamic economics aims to establish an economic order based on the teachings of Islam. This system emphasizes moral values and social justice while recognizing private property. However, it is debatable whether Islamic economics is a serious opposition to capitalism, as there are similarities and differences between Islamic economics and capitalism.