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**xanaxist** · 10-18-2011, 08:14 PM

I think we have discussed this issue before when I was talking with our old br. celt. islam, laughinglion etc.. about the fiat money and the shar'i concept of thaman urfi.

essentially can one of your post in bullet form why should the current currency not be counted as viable shar'i means of transaction. That will save me some time.

Assume no interest is involved (that is, the currency is just issued by the government and given a fixed value in relation to a commodity such as gold), but that it does not represent any real assets owned by the government. Also assume that everyone agrees to use this fiat currency as a medium of exchange.

Some possible objections are:

1. Whoever issues the currency could potentially issue the currency in an amount exceeding the total amount of gold in existence. Because the issuer doesn't bother to back up the currency with actual gold, there is no way of knowing if and when that happens. If it does happen, it's the equivalent of fraud, whether intentional or unintentional.

2. The assignment of a value in grams of gold to the currency is completely arbitrary.

3. Too much power in the hands of the issuer of currency. The value of a medium of exchange should be dictated by the market only. For example, according to simple supply and demand, if the abundance of commodity x increases in relation to commodity y, if you were to trade with someone, you would need to give them more x's for the same amount of y's. On the other hand, if someone can simply create money (let's say commodity y is our fiat currency), then the value of x in terms of y becomes artificially increased. Whoever controls the currency can wreak havoc on the markets. For those who own the means of production, that doesn't really matter. However, for a worker receiving a fixed wage, it means that his wages have decreased while prices have increased. It's oppression.

I can't think of anything else. Basically, the real issue is in the creation of imaginary assets. Isn't that wrong? Even if we assume that the little scraps of paper are what hold value, it becomes un-useable as currency because paper is abundant, so it has no intrinsic value. And the cost of printing money is negligible. Those who have the equipment can create wealth from nothing and cheat others. Even if no interest is involved, it's still fraud.

10-18-2011, 08:14 PM	#20
xanaxist Join Date Oct 2005 Posts 489 Senior Member	I think we have discussed this issue before when I was talking with our old br. celt. islam, laughinglion etc.. about the fiat money and the shar'i concept of thaman urfi. essentially can one of your post in bullet form why should the current currency not be counted as viable shar'i means of transaction. That will save me some time. Assume no interest is involved (that is, the currency is just issued by the government and given a fixed value in relation to a commodity such as gold), but that it does not represent any real assets owned by the government. Also assume that everyone agrees to use this fiat currency as a medium of exchange. Some possible objections are: 1. Whoever issues the currency could potentially issue the currency in an amount exceeding the total amount of gold in existence. Because the issuer doesn't bother to back up the currency with actual gold, there is no way of knowing if and when that happens. If it does happen, it's the equivalent of fraud, whether intentional or unintentional. 2. The assignment of a value in grams of gold to the currency is completely arbitrary. 3. Too much power in the hands of the issuer of currency. The value of a medium of exchange should be dictated by the market only. For example, according to simple supply and demand, if the abundance of commodity x increases in relation to commodity y, if you were to trade with someone, you would need to give them more x's for the same amount of y's. On the other hand, if someone can simply create money (let's say commodity y is our fiat currency), then the value of x in terms of y becomes artificially increased. Whoever controls the currency can wreak havoc on the markets. For those who own the means of production, that doesn't really matter. However, for a worker receiving a fixed wage, it means that his wages have decreased while prices have increased. It's oppression. I can't think of anything else. Basically, the real issue is in the creation of imaginary assets. Isn't that wrong? Even if we assume that the little scraps of paper are what hold value, it becomes un-useable as currency because paper is abundant, so it has no intrinsic value. And the cost of printing money is negligible. Those who have the equipment can create wealth from nothing and cheat others. Even if no interest is involved, it's still fraud.
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