Before we decide what the government ought to be based upon; we need to agree what the ROLE of government ought to be.
Coming from India/Pakistan, we have this notion of a %u201CCradle to Grave welfare state%u201D. Hence our expectations from our governments are enormous (Often not met). This expectation of a welfare state leads to the following,
Higher Taxes Lack of Accountability/Transparency Corruption/Favoritism Appeasement Policies (Reservations) Regulations
What is the extreme case of %u201CBig Government%u201D?
It is Socialism/Communism. We can all agree that a communist state is not based on Islamic principles and is not a reflection of the first Islamic State in Medina.
Now lets look at the professional life of the prophet. If we believe that he led his life by the commandments of Allah, he must have led his professional life by the same standards. Agree?
Prophet Muhammad was a successful merchant for the greater part of his life and one that has cherished trade from its very beginning. Hence it is valid to say that a pious businessman founded Islam or is the leader of the Muslims (Hope you get the idea). Hence the idea that Islam is incompatible with a free market economy, or, capitalism is untrue. Islam can in fact be very compatible with a capitalist economy supplemented by a set of moral values that emphasize the care for the poor and the needy.
