in category Other Culture

Does Islam encourage competition like capitalism?

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The book ZerotoOne by Peter Thiel (Paypal co-founder) makes a point we are all intuitively familiar with but have never really seen spelled out - namely, capitalism promotes monopolies rather than competition in order to maximise profits.

He argues that for a company to build profits well into the future, businesses should focus on createing something new to go from 0 to 1 instead of 1 to n.

The rule is to to avoid competition at all cost. Why? Competition eliminates profit.

He then explains how to build a monopoly:
- Develop a zero to one offering for a niche market and then scale up
- The product or service should offer 10x speed, performance or value so that people recognize you
- The key to 'success' is avoiding competition at all costs

He then explains three ways on how to protect a monopoly once you have built it:
- Network effects: Address the value of your offering
- Economies of Scale: Larger volume, lower average cost
- Branding: Lowers distribution costs

Acknowledging the future is uncertain he argues, even a bad plan is better than a good plan.

Islam however encoourages the opposite of monopolistic notions when organising society and economy - namely the rules for Muslims are cooperation and competition in the good in order to succeed in this life and the next.

"Cooperate with one another in goodness and piety..." (Quran 5:2)

The Prophet (saw) said: "People will continue to be blessed so long as they invite each towards good, discourage each other from evil, and cooperate in goodness and piety." (Tahdhibul Ahkam, 6:181)

The Prophet (saw) urged his companions to be competitive when he said: “Should I teach you something with which you can catch up with those who have gone ahead of you and outstrip those who are behind you and none will be better than you except the one who does as you do?’ They said: ‘Yes! O Messenger of Allah!’ He said: ‘You should glorify Allah, exalt him and praise Him 33 times at the end of every prayer.” (Muslim)

Al-Hasan al-Basri sagely advised:

“If someone vies with you in your religion, you must vie with him; and if someone vies with you in this worldly life, then leave it to him.”

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