  Islamic and capitalist economies have several differences, the most
fundamental being that the Islamic economy is characterized by the prohibition
of interest (riba) and speculation (gharar) and the enforcement of
Shariah-compliant profit-loss sharing (mudaraba, murabaha, salam, etc.) and
wealth redistribution (waqf, sadaqah, and zakat). In this study, I apply new
econophysics models of wealth exchange and redistribution to quantitatively
compare these characteristics to those of capitalism and evaluate wealth
distribution and disparity using a simulation. Specifically, regarding
exchange, I propose a loan interest model representing finance capitalism and
riba and a joint venture model representing shareholder capitalism and
mudaraba; regarding redistribution, I create a transfer model representing
inheritance tax and waqf. As exchanges are repeated from an initial uniform
distribution of wealth, wealth distribution approaches a power-law distribution
more quickly for the loan interest than the joint venture model; and the Gini
index, representing disparity, rapidly increases. The joint venture model's
Gini index increases more slowly, but eventually, the wealth distribution in
both models becomes a delta distribution, and the Gini index gradually
approaches 1. Next, when both models are combined with the transfer model to
redistribute wealth in every given period, the loan interest model has a larger
Gini index than the joint venture model, but both converge to a Gini index of
less than 1. These results quantitatively reveal that in the Islamic economy,
disparity is restrained by prohibiting riba and promoting reciprocal exchange
in mudaraba and redistribution through waqf. Comparing Islamic and capitalist
economies provides insights into the benefits of economically embracing the
ethical practice of mutual aid and suggests guidelines for an alternative to
capitalism.
