On Money That Matters

By Prof Tariq Kahn

Someone gave the Prophet (peace and blessings be upon him) honey, he asked Abu Bakr (may Allah be pleased with him) what is was, he said, “Honey, O’ Messenger of Allah.” He asked Umar ibn Khattab (may Allah be pleased with him) , he said, “Honey, O’ Messenger of Allah.” Then he asked Ali ibn Abu Talib (may Allah be pleased with him), who tasted some and said, “Its honey, O’ Messenger of Allah.” The Prophet (peace and blessings be upon be him) said, “The one who tastes, knows.”

MILTON FRIEDMAN: “The interesting thing is that there’s a lot of knowledge in this society, but, as Friedrich Hayek emphasized so strongly, that knowledge is divided. I have some knowledge; you have some knowledge; he has some knowledge. How do we bring these scattered bits of knowledge back together? And how do we make it in the self-interest of individuals to use that knowledge efficiently? The key to that is private property, because if it belongs to me, you know, there’s an obvious fact. Nobody spends somebody else’s money as carefully as he spends his own. Nobody uses somebody else’s resources as carefully as he uses his own. So if you want efficiency and effectiveness, if you want knowledge to be properly utilized, you have to do it through the means of private property.”

Thus was borne the Privatization of Knowledge in its most virulent form, with intellectual property wars that today even threatens the application and implementation of the Deen of Islam. With Friedman’s influence on the privatization of knowledge, knowledge was no longer in the domain of tasting, as tasting, using or implementation, will be withheld and granted only under license. “I did this first, I wrote about the Dinar and Dirham first, So and So was the first to talk about Khalifate, This book is copyrighted etc.etc,,” are the retorts that abound amongst Muslims that claim to act for our salvation, but in fact are part of the creation of a kind of knowledge based slavery, fraught with permissions, license, and monetary control of the business cycles of the Ummah.

As Muslims, we do not agree with Marxists who say that property is theft. Why, in our view, private property is permitted and a key element of Mu’amalat, but there were certain things that was regarded as common, which many natural cultures who still had a sense of fitra, shared. Things such as water, air, fire and earth. Land was a common, to which everyone had a right to pasture, but subject to discretion of those in authority on the basis that it was not “owned but unused”, instead that it was “used or otherwise given up”. The Governance structure, Amir, Sultan, Khalif were in charge of the land but not its owners, as ownership was common to all. So it was with rights to water, fire and of course air. There were other commons too, which fell under the specific qualification of being rendered unto Allah, such that no man had ownership of it. This was termed Awqaf or Waqf property and referred specifically to things in which human beings could exercise property ownership rights. Things such as buildings, tools, utensils, business premises, or a business itself etc. Thus a building could be declared Waqf and rendered specifically as a place of prayer for the Muslims, in which it becomes a Masjid, or a building for housing the sick and infirm, such as a hospice, or a soup kitchen for the poor, or a building to provide education to those who cannot afford and many such saqaqatul jaria activities.

There was yet another. That of the means of payment or money. Now this was a common that did not receive much attention, but is at the centre of so much that went wrong with the human situation in this century. The Nobel Prize-winning economist Milton Friedman is widely regarded as the leader of the Chicago School of monetary economics, which stresses the importance of the quantity of money as an instrument of government policy and as a determinant of business cycles. Thus no control over the “market forces”, but control over the money in circulation as an instrument of control. Central to this doctrine is “dollarization”, or fiat based economy. Note that the English word trade and the French word commerce referred to industry as well as trade and in modern usage create quite some confusion.

“How evil is the man who hoards essential supplies! If God wills it that the prices of merchandise fall, that makes him unhappy. But if the prices rise, that makes him happy.”
HADITH OF AL-BAYHAQI, ON THE AUTHORITY OF MU’ADH IBN JABAL.

Privatization (of common assets), and hence rampant hoarding by unaccountable business, who only report to their shareholders, as an ideology dates from the conservative revolution of Margaret Thatcher in the United Kingdom. Thatcher was closely affiliated with the Institute of Economic Affairs that was a policy think-tank influenced by the two University of Chicago economists Milton Friedman and Friedrich Hayek, and headed by Keith Joseph, (later her Minister of Industry in charge of privatization). The term, privatization, comes to mean specifically the term of ‘denationalization’ during her tenure. She wrote in her memoirs: “Privatization… was fundamental to improving Britain’s economic performance. But for me it was also far more than that: it was one of the central means of reversing the corrosive and corrupting effects of socialism…. Just as nationalization was at the heart of the collectivist programme by which Labour Governments sought to remodel British society, so privatization is at the centre of any programme of reclaiming territory for freedom” So much for the Iron Lady, who left Britons with more plastic in their pocket and not even an iron ring for sadaqat!

Now let us look at money, more specifically commodity based money such as Gold and silver currency. It is a fact that the amount of silver ever mined and available out there is five times lesser than the amount of gold, why is gold so much more expensive than silver? This is the key question. I would say, because of an incredible worldwide misperception. In ancient times, silver was often MORE expensive that gold because of the shortage. At other times when gold was scarce and large silver based currency empires flooded the market, such as the Persians, silver became less valuable than gold. To day on a global scale silver have been less common and very seldom economically mined. The modern misperception is driven by the published price of silver which is artificially low! People everywhere assume that the price doesn’t lie, that all you need to know is seen in the price. It’s a universal human trait to form an opinion of value, after considering the price. That’s because the first thing we see is the price. If gold is 70 times more expensive than silver, then it is normal for a person to think there is 70 times more silver available than gold. No further investigation of the facts is undertaken.

Careful analysis on the other hand, must force us to conclude that the price is very wrong. Again the artificial devaluation of a commodity is a form of Riba. Comparing silver to gold is easy. The price is massively out of line with the facts. Silver should be much higher relative to gold in terms of supply and demand. Look at the facts and decide for yourself.

So how do we approach a bi-metalic currency, based on a romantic notion that Dinars is more valued than Dirhams, which was certainly true in many instances where the two coincided and more silver was available. Classic muslim literature on the subject gives silver a lesser value because it was less attractive and was more available. At other times, gold was dropped and silver used as it was regarded equal to gold or more valuable. This is well recorded in Muslim history and numismatics. I unashamedly and without reservation, support a bi-metalic currency and currency based of intrinsic value commodities. But one “big idea”, is not good enough to survive and successfully bring down to size the banking entities that have held the world to ransom for so long.

Now what would happen if the novel paper fulus, introduced by Vadillo, and company, valued at 1/50th of a silver dirham finds itself in real terms with the true valuation of silver, ie 5 times more scarce and thus valued for instance say five times more than gold dinars. Then the fulus would find itself as a paper currency as more in demand than Gold!

The dinar and dirham must physically circulate, not be kept under central banker liscence. Only then will people KNOW what a dirham and a dinar is. The people do not know this. They have not tasted the trading with this. This was the wisdom we learned from Rasulullah (SAW). This is the maqam which we as Muslims hold high.

Published by

Ali

All you need is love

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s