Fiat Money Is “Riba,” Which Islam Forbids

2022 ◽  
pp. 36-46
Keyword(s):  
Economic System ◽  
Fiat Money ◽  
Monetary System

This chapter describes another fundamental criticism of the Western economic system – that from Islamic economics. This is included not because the authors are advocating for Islamic economics, but because Islamic economists generally have a clearer understanding of the fundamental dishonesty of the Western monetary system than mainstream Western economists, who almost entirely ignore this glaring flaw at the heart of the Western economic system. Having forbidden interest-bearing loans, like Islam, for its first 1600 years, Christianity relaxed its rules, and thereby lowered its guard against the “money power,” which is now running rampant in what was once “Christendom.” Recent collaboration between Islamic economists and “dissident” Western economists is very promising.

The Islamic Currency

2021 ◽  
Vol 8 (1) ◽  
pp. 177-182
Keyword(s):  
Public Interest ◽  
Historical Data ◽  
Monetary Theory ◽  
Main Argument ◽  
The Public ◽  
Fiat Money ◽  
Monetary System

Abdullah’s book is dedicated to solving the major problems and questions about monetary theory. The title of the book is derived from Ibn Khaldun’s student, Al-Maqrizi, who wrote the book, ‘The Islamic Currency’ in 1415 as an objection to fiat money formed from copper (Abdullah, 2016, p. 33). The book consists of 7 chapters and contains 477 pages of which almost 200 are appendices. There is no doubt that he employs vast historical data and presents them in form of valuable charts and figures. His main argument is that the worst monetary system in the history is the modern fiat standard. It is not preserving the public interest and is fundamentally harmful to an economy (Abdullah, 2016, p.35).

scholarly journals SISTEM MONETER DALAM PERSPEKTIF EKONOMI ISLAM

ALQALAM ◽  
2012 ◽  
Vol 29 (1) ◽  
pp. 141
Author(s):  
ZAINI IBRAHIM
Keyword(s):  
Monetary Policy ◽  
Interest Rate ◽  
Financial Crisis ◽  
Economic System ◽  
Global Financial Crisis ◽  
Market Price ◽  
National Income ◽  
Monetary System ◽  
Goods Market ◽  
The Interest Rate

In many economic literatures, economy is divided into two sectors, real sector which covers seroice market and goods market, and monetary sector which consists of money market and equity market. In a part of economic system, monetary that runs in a country will affect the economic rate. Monetary economy can be applied in a polity, called monetary policy. In a conventional discussion, a monetary policy is run in order to reach the increase of national income, to stabilize market price, and to control the inflation rate. To get the goal of that macro-economy, the interest rate is used, in which it becomes the weakness of conventional monetary system. The use of interest rate, furthermore, has caused the economic crisis, indeed global financial crisis. In term of new economic system needs, Islamic monetary system riflers a solution to overcome financial crisis. The riffered system is asset based transaction, free of interest, avoidance of transactions containing speculation (maisir) and uncertainty (gharar). Moreover, it also uses stable curencies, i.e. dinar and dirham. Keyword: Monetary system, interest rate, fiat monry, dinar, dirham.

scholarly journals DINAR AND DIRHAM; SUSTAINABLE MONEY FOR SUSTAINABLE SOCIETY

ICCD ◽  
2019 ◽  
Vol 2 (1) ◽  
pp. 517-521
Author(s):  
Eko Tama Putra Saratian ◽  
Harefan Arief ◽  
Mochamad Soelton ◽  
Nico Alexander Vizano ◽  
Mugiono Mugiono
Keyword(s):  
Shelf Life ◽  
Community Service ◽  
Gold Standard ◽  
Precious Metals ◽  
Ordinary People ◽  
Sustainable Society ◽  
The Real ◽  
The Public ◽  
Fiat Money ◽  
Monetary System

This is a community service related to the development of economic society through socialization on dinar and dirham as sustainable money. Money in sharia is precious metals such as gold and silver, or commodities such as wheat, barley, dates, and salt, which are the consumed commodities daily as food and have a shelf life. The failure of the current economic and monetary system is caused by the use of fiat money as a medium of exchange that deviates from the gold standard. Ironically, many ordinary people do not understand the real concept of money. In returning the standard of exchange, it is necessary to learn deeply about this subject. For this reason, there is a need for socialization to the wider community to open the way for the return of the dinar and dirham as a true medium of exchange. The results of the activity are expected to increase good understanding of the concept of money and the public can learn to do transaction using dinar and dirham in the future.  

The Good of Finance and the Critique of Financialization

2019 ◽  
pp. 30-53
Author(s):  
Tim Hayward
Keyword(s):  
Distributive Justice ◽  
Economic System ◽  
Financial System ◽  
Economic Productivity ◽  
Monetary System ◽  
System Operating

This chapter considers the valuable social purposes that finance can in principle serve and how the processes referred to as financialization may undermine the good functioning of finance. When that happens, the practices internal to finance develop according to the logic of internal profit-seeking rather than supporting what the activities in the rest of the economy and society more widely are intended to achieve. The financial system operating globally today can be criticized in three major respects: it hampers economic productivity, undermines distributive justice, and drives ecological irresponsibility. Yet although economic productivity may be compromised by financialization, financialization itself might be seen as an adaptation to problems within the economic system. Hence it may be that the problems associated with financialization cannot satisfactorily be tackled (through steps to improve governance of the monetary system) without addressing the problematic tendencies in the productive economy itself.

scholarly journals Léon Walras and Augustin Cournot on the Regulation of Paper Money: Rules vs. Discretion at the End of the 19th Century

2020 ◽  
Vol 7 (1) ◽  
pp. 1-13
Author(s):  
Andrés Álvarez
Keyword(s):  
19Th Century ◽  
Applied Theory ◽  
Rule Following ◽  
Paper Money ◽  
Fiat Money ◽  
Monetary System ◽  
Exchange Form ◽  
The Stability ◽  
The 19Th Century ◽  
Value Of Money

This paper compares Léon Walras’ and Augustin Cournot’s views on monetary regulation. It shows that whereas Cournot believed discretionary monetary regulation to be convenient and acceptable, Walras held that the only acceptable monetary system is based exclusively on the stability of the value of money under a monetary rule following a strict equivalence between metallic reserves and a pure medium of exchange form of money. The paper also advances Cournot understood more clearly than Walras the evolution of the monetary system of their days because Walras was trying to guarantee the coherence of his pure theory with his applied theory, which made him unable to accept the evolution toward a monetary system based on fiat money.

scholarly journals A Critical Engagement with Monetary Interfaces

2014 ◽  
Vol 3 (1) ◽  
pp. 86-94
Author(s):  
Georgios Papadopoulos
Keyword(s):  
Economic System ◽  
Economic Efficiency ◽  
Social Participation ◽  
Economic Condition ◽  
Economic Value ◽  
Theoretical Framework ◽  
Digital Architecture ◽  
Monetary System ◽  
Cultural Effects ◽  
The Individual

The current economic condition of digital participation is described by the proponents of the neoliberal model of economic efficiency as a new economic revolution. Τhe simulated existence of the market in computer networks and graphic interfaces presents itself as the ultimate reality of value at the same time as it tries to make other forms of social valuation subordinate and even unreal. Reflecting on the mystification of the effect of digital interfaces on social participation, the article raises a series of questions for the analysis of the cultural effects of the mediating function of monetary interfaces by reflecting on their economic, technological and aesthetic implications. The critique focuses on the new digital architecture of the monetary system by investigating how money intervenes in information exchanges and signals the creation and transfer of economic value. The ability of payment interfaces to impose, both overtly and covertly new relations of ownership as well as new forms of surveillance, suggests their capacities as technologies of political control of the individual. The aim is a theoretical framework for the analysis of the reorganization of the economic system and its dependence on money. 

scholarly journals SYSTEMS OF CORRUPTION IN UKRAINE: CAUSES AND CONSEQUENCES

2021 ◽  
Author(s):  
Svitlana Piasetska-Ustych ◽  
Keyword(s):  
Economic System ◽  
Negative Impact ◽  
The State ◽  
Market Mechanism ◽  
Economic Consequences ◽  
Economic Relations ◽  
Market Participants ◽  
Monetary System ◽  
The Social ◽  
Systemic Problems

The article considers theoretical and methodological basis of corruption as a systemic problem. Corruption is analyzed as a complex socio-economic phenomenon, its main types are studied, the main approaches in economic theory to the interpretation of the concept of corruption are systematized, the causes of corrupt economic relations are clarified. Specific factors that determine the development of corruption and its consequences in the socio-economic system of society are studied. The study analyzes causes of corruption and shadow economic relations in Ukrainian economy, it shows that the shadow activity of market participants leads to negative socio-economic consequences for the state and society: it destructs competition, distorts the market mechanism, tax and monetary system, has a negative impact on the state of public finances. Shadow processes cause significant deformations of the social sphere. The analysis allows us to conclude that corruption-shadow relations are systemic problems of national economy development, which are not only a threat to national security, but also create a multiplicative negative impact on socio-economic system of society.

Towards a managed monetary system

1946 ◽  
Vol 72 (3) ◽  
pp. 306-336
Author(s):  
W. G. Craig
Keyword(s):  
Economic System ◽  
Monetary System ◽  
The Future

It is now widely recognized that the future must see far-reaching changes in our monetary system, and that these changes must be in the direction of a conscious and planned management, as distinct from leaving the system to be regulated in a more or less automatic manner by factors which reflect and are governed by international conditions; that the monetary system should in fact be made to serve and not govern the requirements of the economic system.This changed view of the function of the monetary system is probably mainly the result of two economic phenomena which were witnessed in the ten years preceding the war.

scholarly journals The impact of monetary systems on income inequity and wealth distribution

2020 ◽  
Vol 15 (6) ◽  
pp. 1161-1183
Author(s):  
Anwar Hasan Abdullah Othman ◽  
Syed Musa Alhabshi ◽  
Salina Kassim ◽  
Adam Abdullah ◽  
Razali Haron
Keyword(s):  
Income Inequality ◽  
Social Welfare ◽  
Gold Standard ◽  
Wealth Distribution ◽  
Wealth Inequality ◽  
Content Type ◽  
Fiat Money ◽  
Monetary System ◽  
Monetary Systems ◽  
Econometric Approach

PurposeThis study uses the autoregressive distributed lag model (ARDL) econometric approach to investigate empirically the effects of cryptocurrencies, the gold standard and traditional fiat money on global income inequality measured based on the Gini coefficient, and various ratios of income inequality distribution such as top 1 per cent, top 10 per cent, top 40 per cent and top 50 per cent.Design/methodology/approachThe study uses the ARDL econometric approach.FindingsThe findings indicated that cryptocurrency and gold standard monetary systems contributed significantly to reducing global inequality of income and wealth distribution. Conversely, the traditional fiat money system contributes positively to global income and wealth inequality while also contributing significantly to their fluctuation.Practical implicationsThis suggests that the fiat monetary system results in the coercive redistribution of income and wealth if governments pursue a social welfare policy. They must resolve this conflict between the current fiat monetary system and social policy by opting for an alternative monetary system such as cryptocurrency or gold standard. These alternative monetary systems offer the promise of resolving the income and wealth inequality associated with the traditional monetary system which are accompanied with the channels of inflation, lack of financial inclusion and debt creation, and to offer a more sustainable financial system.Originality/valueThe study recommends that monetary policy must be revisited to account for its direct effect on income and wealth redistribution to achieve social welfare goals.

scholarly journals The Analysis of Maqashid Syariah on the Use of Fiat Money and Dinar Dirham

2020 ◽  
Vol 3 (2) ◽  
pp. 1216-1226
Author(s):  
Fatimah Zahara
Keyword(s):  
Economic System ◽  
Fiat Money ◽  
Advantages And Disadvantages

Money as a medium of exchange, has at least two forms, namely fiat money and dinar dirham. This paper discusses the use of fiat money and the use of gold and silver as a currency with its advantages and disadvantages. Furthermore, this article also compares the use of fiat money and dinar dirhams as currency. This paper answers the question of whether gold and silver are the only metals accepted as the currency in the economic system, while other currencies are not. The results of this study indicate that, although the hadith is more likely to state that gold and silver as money, it is not limited to gold and silver. By law, 'Illah of thamaniyyah' which is not restricted to gold and silver but money in general, is supported by Ibn Taymiyah's opinion. In addition to that, the principle of ibahah where in muamalah everything is allowed, as long as it is not prohibited by the texts (Al-Quran and Sunnah). Maqashid Al-Shariah allows other forms other than gold and silver to be used as currency, if the conditions are demanding so. Metals other than gold and silver are accepted, as long as it can facilitate sharia activities such as paying zakat and rejecting usury.

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