Properties of Money in Islamic and Conventional Settings and the Effect on Society

UAE Laws and Islamic Finance

Early Morning Firenze

Thoughts from Iraj Toutounchian’s Islamic Money & Banking, Integrating Money in Capital Theory

…if benevolence were to lead each person to regard her fellow’s concerns as her own, there would be no free riders or parasites to be restrained by the visible hand of cooperation.  All would seek naturally to coordinate their actions for the common good, without putting forward opposed claims to the fruits of their endeavours, which justice must resolve.  (Brosio and Hochman 1999, Volume 1: 114).

‘In my view, the most important properties of money in an Islamic Setting are the following:

(1) Centrally produced and managed (by central bank);

(2) Indivisibility (further elaboration needed);

(3) Velocity of circulation (greater than one);

(4) Externality (of becoming actual capital);

(5) Non-excludability.’

In the case of fiat paper money in capitalism, its being considered durable, with no depreciation, but interest bearing seems to have raised…

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