The biggest evil of Capitalism is that the wealth of the nation is amassed in the hands of a limited few and the rest of the nation becomes a prey to want and poverty. It was on account of this iniquity that Communism gained its roots. lt is based on the principle that no one really is the rightful owner of what he earns and the real master of the national wealth is the State which must distribute it according to the needs of the members of the community.

When we devote our mind to both these systems we are bound to come to the conclusion that both these systems belong to the Opposite extremes. If Capitalism is responsible for the wretchedness and distress of a great number of the people living under it and due return is given to the real producer of wealth, Communism also completely ignores the labor and effort put in by the real producer of wealth. Under this system the person who has put in the labor to produce is totally deprived of its possession. The result is that the true zeal to work with earnestness dies out. Communism also fails to define human needs with the state determining such needs.

The history of Capitalism tells us that the capitalist countries tend to rob the others so that they may get more and more rich. They openly trample over the rights of the others and usurp the rights of others as if it was their right to do so. They not only rapaciously grabbed the rights of the individuals but also seized the wealth of other peoples and nations. As opposed to this the Communist nations not only ravished and pounced upon the wealth and properties of individuals but also put them to torture and took away their lives mercilessly. But Islam does not at all favor tyranny and injustice. Islam neither allows the poor to be suppressed nor lets the rights of the rich to be swept away. Both the poor and the rich are God’s creation. He, therefore, provides protection to them both and guides them to progress and prosperity.

Islam, unlike Communism and Capitalism, gives due regard to labor and upholds its dignity and approves the right of ownership so that zeal and enthusiasm, for hard work and best results, is not lost. For this very reason it has provided such a wise code of law as the Zakāt so that wealth is not accumulated into the hands of a few men. It must keep in circulation and should never be allowed to stagnate. Under the Zakāt rules, one-fortieth of one’s savings and stock-in-trade must be paid after every twelve months. This is a great incentive for the man in business to see that he is earning and increasing his wealth otherwise the annual payments will ultimately eat up all his capital.

Moreover, when capital is employed in trade or industry it naturally provides work for labor and it keeps on circulating among different classes of people. The businessman tries to pay the Zakāt from profits and not from his capital and the farmer will try to work harder and produce more so that he is able to keep his head above water. That is the reason why Islam has imposed Zakāt on things which have the quality of increasing. Islam has laid the condition to pay the Zakāt once after every year so that one could take the best advantage of his possessions. The companions of the Holy Prophet, peace be on them, were fully aware of this point and engaged themselves in trade and business. During his Caliphate, Hazrat Umar had given special instructions to those who held in trust the property and wealth of the orphans, always to make investments so that their inherited wealth may not be eaten up by Zakāt by the time they became of age and took over their properties.

It has, therefore, become quite evident that Zakāt gives an incentive to work hard and produce more wealth. Expert economists have often said that nations which do not employ themselves in business and trade and produce more wealth are bound to become bankrupt if their capital lies stagnant and unused. But the Holy Prophet, on whom be peace, had given this warning some fourteen hundred years ago in the following words of the Holy Quran:

‘And those who hoard up gold and silver and spend it not in the way of Allah-give to them tidings of a painful punishment.’ (9:34)

In this verse ‘painful punishment’ does not only mean punishment in the world to come. Nay, along with that punishment, withholding wealth and capital from circulation and hoarding money is bound to lead the nation to a certain economic disaster. Therefore, all those who hoard money and keep the national wealth idle, are guilty of bringing down their nation to ruin and degradation and they themselves begin to decay and ultimately totter to their fall.

The system of Zakāt provides to the wealthy a great incentive to earn more and more in order to save it being eaten up by annual payments. In this way a good businesman not only increases his own wealth but also provides work for others. But it is a great pity that very many people do not realize this fact and try to evade paying Zakāt. They wrongly fear that this might cause a great loss. They do not understand that God enforced this law to induce men to make more wealth and become richer and richer.

There is an assurance from God Almighty for those who pay the Zakāt that their wealth will not decrease, it shall, on the contrary, continue to increase. Therefore, those who pay it reap the benefit. God Almighty says:

‘Whatever you pay as interest that it may increase the wealth of the people, it does not increase in the sight of Allah; but whatever you give in Zakāt seeking the favor of Allah – it is these who will increase their wealth manifold.’ (30:40)