Meaning of Money in the view of Islam

Islamic banking finance economy

by islamicbankingfinanceeconomy.blogspot.com

 Meaning of Money in the view of Islam

Money is running an economy lubricants have always been a hot topic for discussion. Like an engine without oil, the economy will not work without the money. However, many of us who only understand the meaning of money in the context of its form as banknotes and coins. In fact, the definition of money is anything that can be accepted as a means of payment for goods and services in an economic system. In fact, in ancient times people used stones, animal skins, salt, and shells as money. At the time of the Prophet (SAW), gold coins (dinars) derived from the Roman and silver coins (dirhams) derived from the Persian are the two precious metals are considered as a currency. In the current era, paper money (fiat money) have become a common means of payment used in all countries in the world.At the origin of money has three important functions, namely as a medium of exchange, store of value, and measuring the value of a commodity. However, with interest menyebarluasnya system in today's financial transactions, the function of money has grown into a commodity. The function of money as a commodity is supported by several contemporary financial theories such as the Loanable Funds Theory. In this theory of interest (interest) is considered as the price of the funds available for borrowing (loanable funds), which became one of the variables that affect supply (supply of) and demand (demand for) of loanable funds. Based on the above theory, it can be concluded that the supply of loanable funds will be willing to lend money to borrowers only if the borrower is willing to pay back the loan in an amount greater than the principal. The difference between the amount to be paid the principal borrower and that is called interest. By contract, the price (interest) is to pay the borrower under any circumstances (the borrower's business or loss) to the lender, since the lender has considered selling a commodity called money.Here is very clear that in the current financial system, money has been regarded as a commodity that can be traded. This is in contrast with the view of Islam that does not accept the function of money as a commodity. That's because the money does not qualify as a commodity. According to Sheikh Muhammad Taqi Usmani, Shariah experts in Islamic finance, there are at least three factors that distinguish money to commodities. First, money has no utility instrinsk (intrinsic utility). In contrast to commodities, money can not be eaten, worn, or used directly. Money can only be exchanged for commodities, and commodities that will be eaten, worn or used. In economic terms, the money only has value in exchange as commodities have value in exchange and value in use at once.Secondly, money does not need the quality to determine its value, in terms of paper money Rp 100,000 worn published in 2007 with the money of Rp 100,000 new paper published in 2009 has the same purchasing power. As with other commodities, for example, a car Honda Jazz Honda Jazz 2007 with the output of the output in January 2009 have different prices. This shows the difference in quality between the two car above is reflected in the difference in value and price.Third, money does not require the specification when the enactment of the transaction, while commodities have specific properties when enactment of the transaction. For example, if we want to buy the goods we will choose the things we want as our tastes, such as color, other complementary accessories. That is, if the seller offers the same goods but the color does not suit our taste maybe we will refuse. However, another case with money that is not specific. For example, for the payment of monthly electricity bills amounting to Rp 300,000. we can pay these bills by using three sheets of Rp 100,000 or four sheets of Rp 50,000 to Rp 100,000 plus a single sheet even we could pay the bill with three hundred pieces of Rp 1,000. For the recipient will not be any difference in the value of the third way of payment on top.There is one additional difference between commodity money, especially with fiat money that we use today. Paper money (fiat money) that apply currently has no intrinsic value (intrinsic value). Banknotes became legal tender by law issued a state that declared the validity of the money. This shows that the acceptance of paper money as a means of payment only to the government because of the trust factor that guarantees the validity of the banknote. That is, if the trust is lost or reduced the value of the money will be weakened (terdepresisasi) due to more people off, by selling the currency, rather than to have it. Because obviously, have no intrinsic value.However, it should also be emphasized here that fiat money is money that is valid at the shari'a. The author does not agree with the view that gold is only valid at the shari'a. Indeed, the true gold is the money the best and most stable in value, and if we can re-use gold as a standard of value for money, of course, the world's financial system will be far better. However, claims that only gold or silver are recognized Islam as the money and the gold and silver it is not legitimate, it is an excessive claim. The proof, Caliph Umar never intended to make camel as a currency, but then advised so as not to do it, because later camels will disappear from life. Likewise Imam Malik once said that if people make the animal skin as a currency, he undoubtedly would prohibit the sale and purchase of animal skins but with cash and may not be the toughest. Although today we are excited to return to the gold as the standard value of the currency, we do not need to be exaggerated and extreme by saying that fiat money is forbidden. Proscribe kosher is just as bad in Islam to justify the unlawful. If fiat money forbidden, of course dowry we become invalid, and our marriage is not valid, then our children also are so illegitimate. Is not that logical consequence of the said fiat money haram? Allaah knows best.