Does Islam encourage competition like capitalism?

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.” (Sahih al-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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A brief comparison of Islam vs Capitalism:  1. BASIS: Capitalism: Needs are unlimited, resources are limited. If resources are increased, it will gradually decrease poverty by trickle down effect. Islam: Needs are either basic or luxurious. Basic needs are right of every human. Resources are enough, they just need to be distributed through proper mechanism.    2. OWNERSHIP: Capitalism: Everything can be owned privately if you have enough money.  Islam: Property is either private, public or state owned. Not everything can go into private property.   3. COMPANY STRUCTURE: Capitalism: Separation of owners and management. Owners will profit, liability is limited.  Islam: Rules of partnership must be followed. Owners must be defined and bear the loss along with profit.   4. TAXATION Capitalism: Everyone must pay taxes, regardless of being rich or poor. Islam: Poor does not pay tax. Rather state provides from Bait al-Maal to the poor.   5. AGRICULTURE AND LAND LAWS: Capitalism: One who owns the land, decides whether to cultivate or not. Islam: Land not cultivated for 3 years is taken and given to those who can cultivate.  6. FOREIGN LOANS Capitalism: You need to pay all interest based foreign loans. Islam: only principle amount is returned, interest is not allowed no matter what.  7. PATENT &amp; COPYRIGHT LAWS Capitalism: Technology is captured by few capitalists through patent laws. Islam: Technology can be used &amp; copied by anyone and anyone can develop new technology using idea of old one.   8. DUTIES Capitalism: Importers &amp; exporters must pay duties for their product. Islam: There is no duty, except for the importers of Darul Harb (State that is in war with khilafah) with the tit and tat policy.   9. TRADE PARTNERSHIP Capitalism: Partners in stock exchange are not well defined. Islam: You need to define partners and shares. Business should not be vague.  10. MONOPOLY AND HOARDING Capitalism: Companies can own and store anything and create monopoly. Islam: Monopoly is not allowed in any sector, especially food items.  11. EXCHANGE OF ITEMS Capitalism: Exchange item with countries who grow it better than you. Islam: State must be self sufficient, not dependent. State should continuously work on making things better.   12. MONEY PRINTING Capitalism: Currency is fiat, state is allowed to print money to fulfill requirements, ultimately resulting in inflation. Islam: Currency is gold/silver backed. Hyperinflation is very unusual.
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