Business Transaction In Hadith

Business Transaction In Hadith

Money occupies quite a central position in Islamic Jurisprudence (fiqh) as man's life depends on it. Apparently money is indispensable for him to obtain all his necessities, satisfy his needs and fulfill his obligations. This is why money has impinged on almost every aspect of the socio-economic history of man. As a result, dealing in money, according to the Islamic concept, has many outcomes ranging from the prohibited (Haram) to the permissible (Halal) which are accompanied by certain rules and conditions.

Many changes have occurred to money throughout the ages, beginning with gold and silver coinage to the birth of the system of paper money, which has been marked by a series of financial crises such as, inflation, depression, devaluation, unstable exchange rates and other `diseases of paper money.' The rights and duties resulting from monetary dealings have also changed. The uncertainty about the value of paper money is the root cause of the diseased modern economy which engenders so many religiously unlawful acts and is one of the causes of interest.

Productive activities are unduly hurt by fluctuations in production costs and commodity prices because they are estimated in terms of money. Economies that look healthy one moment are seriously ill the next. Not, apparently, because of any sudden new development within their borders, but due to a monetary system that encourages currency trade and financial speculation via institutions such as hedge funds, which have been recognized as a major source of destabilization.

It has become a matter of vital importance for every nation to have stability in the value of money. Inflation implies that money is unable to serve as a just and honest unit of account and makes money an inequitable standard of value. The impact of the declining value of money on society and the people by eroding the real value of their wealth undoubtedly does injustice to them as a result of this unjust monetary system.