This entry’s objective is to provide a comprehensive analysis of the pressures of global competition on capitalist production and the resulting economic and social impacts of the rise of financial capitalism. An examination of the literature reveals that increasing the share of financial capitalism in an economy leads to a growth model that has a negative impact on social welfare. This is due to the fact that it promotes practices and returns that involve less risk for the financial sector than the real sector. In this context, Islamic economics’ view of financial capitalism and the development of financial practices in the Islamic world in the historical process are discussed. Islamic economics/finance prioritizes ethical financial practices, social justice, and welfare by restricting interest and speculative transactions, emphasizing profit and risk sharing. In contrast, modern financial capitalism places greater emphasis on profit maximization and risk transfer. Islamic finance, touted as an alternative model, perpetuates its development by preserving its distinctive structure grounded in ethical principles within the globalizing world economy.