22. The Future of Capitalism and the Islamic Economy

Nagaoka’s analysis of Islamic Economics provides the reader with the opportunity to contrast a religion-based economic system against a major comparator, Buddhist Economics (Chapter 23), and contemporary (Western-led) Global Economics. The idea of ‘Islamic Economics’ is new, from conceptual roots in 1941, and with massive expansion of the Islamic Banking System from 2002 to 2012. Key features of Islamic Economics are revealed, such as the forbidding of “riba”, unequal exchange, ie: interest free finance—with benefits to be repaid at the end of the venture; and demand for “zakat”, return of a percentage of income (normally 2.5%) to God, via the Mosques and good works. Benefits of zakat will be enjoyed in the afterlife, not now. This is a system therefore that promotes self-centered and profit oriented economic action, is not an anti-capitalist movement, but, as the author argues, still needs some renovation to fit into the “wisdom” of modern capitalism and its practices.