Honesty is the foundation of the Islamic system of economics
By: Syed Nadeem Zaidi
First currency accepted by Muslim was issued by Byzantine Empire, How we can say that a currency issued by Byzantine Empire has anything to do with Shari’ah. It was the need of the time for international trade that is why it was accepted.
World fiat monetary system is not collapsing because it is fiat system. Real reasons behind collapse are following;
1-It is interest based.
2-People who are running the fiat system are corrupt and they are moving the world financial system toward one world currency which they will control. Basically system is created to benefit the few super rich elites of the world.
3-Speculative derivative and stock market which is mainly responsible for the start of current financial crisis in 2008.
In Islamic banking system, we will have completely opposite of that where
1- It will not be interest based system
2-People who will be running the system will be honest people. No matter how great system we have if the people running it are corrupt the system will fail.
3- Speculative and bets are haram in Islam. So we have no problem at all.
In presence of that system there will not be any collapse ever.
Any gold you possess in form of jewelry, ornaments and antiques is also come under zakat rulings. People used to store gold so Zakat can be taken from that source.
This is a technical problem more than an Islamic one, It was good for trade for Muslims and non-Muslim at least better than barter trade that is why Holy Prophet (SAWA) accepted gold bezant and silver dirham accepted it.
The gold values are highly unstable and easily manipulated in the international trade today. You can neither eat; drink neither wear gold nor live in it. It’s the people perception which gives the gold so much value. The most precious commodity in the world is neither nor gold nor silver its honesty which is the foundation of the Islamic system of economics.
Majority of the countries of the world neither have gold mines nor reserves how these countries will implement this gold standard. Since Islam is a religion for all humanity and country so there will be a problem. So There Is Not Enough Gold (Or Silver) In The World To Serve As Money.
Secondly, gold-backed money would put the brakes on the healthy growth of the economy. For example if a country want to make 20 dams or airplane or any scientific discovery in the country should they go on to find or mine the gold and then built the dam.
Gold standard (as in American constitution) is needed only because basic assumption that human beings are corrupt and quote ‘absolute power corrupt absolutely’. But in Islamic system which is working to serve Allah that assumption is not true.
When anything is taken as a standard of measure, it has to be ‘pure’ and simple so that people can easily relate to it. Length, for example, is measured by kilometer”.
In my opinion, all these standards does not require transactions I mean if you measure trillion kilometer or meter, it has nothing to do with actual kilometer or meter There is no give or take.
Every commodity in the world has unstable value in the world whether its metals or any other thing. It depends on many factors like scarcity, supply and demand, natural disasters. So the currency pegged to any of these things will not be stable.
The stability and power of currency come from the government itself which is very powerful entity, like private property will not exist if there is no government, because simply there will be no registration office to register the property. So a legitimate government is needed for that purpose. Same is the case with currency
The honesty of the ruling class and their sincerity to serve Allah is good enough for stable economic system.