ECR Party

Islam, Capitalism and Democracy

By Guy Sorman

Of all the great religions, Islam is the only one that is not a priori hostile to enterprise, to commerce or to the profit motive. According to the Koran, Mohammed married Khadija, who belonged to a great trading family of Mecca, and both Mohammed and Khadija actively participated in the organization of caravans, the equivalent of today’s international trade. After Mohammed was revealed as Prophet, at no time did he deny his entrepreneurial past; on the contrary, to attain riches by trade is seen in the Koran as a blessing, on the condition that the wealthy give back to the community a voluntary tax called the Zakat, an early form of solidarity and philanthropy administered by religious foundations.

In this Islam directly opposes Christian revelation and Christ’s exaltation of poverty. On the basis of these religious premises, should not popular capitalism logically have been born in the Arab and Muslim world? That fact is, it was born there. In the West, when we consider the origins of the Muslim world, we think of the Arabs mainly as conquering warriors, which they were as well, beginning with Mohammed. But their Empire had barely been constituted, from India to Spain, when Muslims simultaneously created the first form of economic globalization, as the organizers and masters of trade relations between China and Europe. This commercial empire was not the work of the caliphate, but the product of the labor of individual entrepreneurs.

This first globalization, which lasted about four centuries, was interrupted by the military counteroffensive of the Christian kingdoms. Beginning in our 12th century, Muslims ceased to dominate international trade because communication had become dangerous and because other entrepreneurs, based in Genoa in particular, surpassed the entrepreneurial spirit of the Arabic Muslims. The Genoans had invented the joint stock company, which allowed them to expand their financial resources and to undertake great capitalist adventures, while the Arabic Muslims, giving priority to blood ties and tribal allegiances, condemned themselves to remaining modest entrepreneurs.

The Muslim world’s relatively slow economic growth, which then facilitated Western colonization, is thus not intrinsic to Islam but rooted in pre-Islamic tribal culture. To escape from poverty, it makes sense, in our day, for Muslims to return to the spirit of enterprise of their origins and to overcome their tribal affiliations. And this is possible; for it to happen it is necessary to replace the tribe by the rule of law and to allow Muslim peoples to engage in enterprise without excessive restraints. There is no shortage of examples to support our hypothesis. In Turkey, when the AKP (Justice and Development) party came to power, it brought back the popular spirit of enterprise that till then had been crushed by socialist-leaning governments, under which only the state and the political clients of the government, who kept the rents and the monopolies for themselves, were able to pursue profits. As soon as this socialism of cronies and rascals was dismantled, a true capitalism of the people burst forth, particularly in Anatolia, the most conservative and Muslim region of Turkey. These new entrepreneurs, who came to be known as the Tigers of Anatolia, today constitute the engine of Turkish growth, omnipresent in the global economy, in competition with the Tigers of Asia. The inverse demonstration is found in Egypt, where the state and its bureaucracy continue to crush the spirit of enterprise of ordinary Egyptians. An investigation by the economist Hernando DeSoto showed that, in order to open a simple bakery in Cairo, about six years of administrative procedures were necessary, as corruption impeded approval at every stage in the process. It will not make sense to speak of an Arab Spring until it is possible, without obstacles, to open a bakery in Cairo, and this is true for the whole Arab-Muslim world.

A people’s capitalism is obviously the economic solution for the Muslims, especially since this has its roots deep in Islam. Still, the path to this solution is a narrow one as long as this popular capitalism is caught between, on the one hand, Muslim fundamentalists, who want to prohibit everything in the name of their personal interpretation of the Koran and, on the other, the authoritarian tendency of rulers in areas where democracy is still fragile.

There are a thousand possible readings of the Koran, and I will here add nothing to its interpretation except to observe, as of course others have before me, that Mohammed was an entrepreneur and that, having become his people’s guide, he decided nothing without consulting a popular assembly: the democratic spirit, no less than the spirit of enterprise, is very much at the heart of Islam for those who adhere to it.


This article is the first in a series prepared for the Conservative and Reformists Summit (CRS) taking place in Antalya this weekend. CRS is the flagship project of the AECR that aims to strengthen the moderate Centre-Right in emerging democracies in North Africa and the Middle East.

Guy Sorman is an economist at the University of Paris and author of many books on classic liberalism including: The American Heart, In Praise of Giving, 2014. He is also publisher of France Amerique ( based in New York ) and Founder of Action against Hunger.