Ulasannya lagi.......(Dr Ahmad Kameel Mydin Meera)
2. The Maqāsid al-Sharī’ah

"Al-Ghazzāli states that the very objective of Sharī’ah is to promote the welfare of the
people, which encompasses the safeguarding of faith, life, intellect, posterity and wealth.
Anything that protects or promotes these is considered as serving the maslahah and hence
desirable13. Similarly, Ibn al-Qayyim al-Jawziyyah states that the basis of the Sharī’ah is
wisdom and welfare of the people in this world and the hereafter; and welfare is said to
lie in justice, mercy, well-being and wisdom14. Abu Ishaq al-Shatibi too contends that
the Sharī’ah aims at the welfare of the people in this life and in the life hereafter by
protecting its objectives or maqāsid which can be classified as follows15: 1. Daruriyyah
(Necessities), 2. Hajiyyah (Requirements) and 3. Tahsiniyyah (Beautification).
Daruriyyah are objectives which are must and basic for the establishment of
people’s welfare in this world and the hereafter; the ignoring of which can cause fasad to
prevail. Daruriyyah basically relates to the protection of the following five crucial
matters as stated by al-Ghazzāli: 1. Faith (Dīn), 2. Life (Nafs), 3. Posterity (Nasl), 4.Property (Māl) and 5. Reason (‘Aql). These are necessary or daruriyyah for the
establishment of welfare in this world, as well as in the hereafter. In other words, these
are daruriyyah for the establishment of Islam itself on earth. The renowned Muslim
economist, M. Umer Chapra states16:

The maqāsid al- Sharī’ah is everything that is needed to realize
falah and hayat tayyibah; and faith is the most important ingredient
for human well-being. It puts human relations on a proper
foundation, enabling human beings to interact with each other in a
balanced and mutually caring manner to help ensure the well-being
of all. It also provides a moral filter for allocation and distribution
of resources in accordance with the dictates of brotherhood and
socio-economic justice, and a motivating system that brings biting
power to the goals of need-fulfillment and equitable distribution of
income and wealth. Without injecting the dimension of faith into
all human decisions, ….it may not be possible to realize efficiency
and equity in the allocation and distribution of resources, to
minimize macroeconomic imbalances and economic instability, or
to overcome crime, strife, tensions and the different symptoms of
anomie.

Hajiyyah are Sharī’ah provisions that remove hardship and thereby facilitate life while
tahsiniyyah are provisions that bring comfort and beauty to life. Unlike these two,
daruriyyah is essential; and Shātibi puts it that daruriyyah is fundamental to hajiyyah and
tahsiniyyah. Deficiency in daruriyyah brings deficiency to hajiyyah and tahsiniyyah, but
not vice versa17.
The next section discusses the socio-economic effects of the seigniorage of fiat
money, and how it negates the attainment of the daruriyyah category of the maqāsid al-

Sharī’ah.

3. Seigniorage of Fiat Money and the Continuous Growth of Money Supply

and Debt
"Seigniorage is the gain to the one who issues fiat money. It’s the benefit one derives
from the first use of fiat money. In today’s interest-based fiat money system, the bankers
create money through multiple credit creation and lend this out at interest. Money
created through this fractional reserve banking system and the interest charges thereupon
are basically also seigniorage. Most governments get the benefit of seigniorage from the
issuance of their respective national currencies (paper notes and coins) but the
seigniorage of credit money and interest charges go to the bank.
In this regard, three main features of the current monetary system, that have been
much criticized by Muslim scholars, and pertinent to our discussion are: 1. Fiat money –
which includes paper money and bank money (demand deposits including electronic
money). 2. Interest. 3. Fractional reserve banking. These three features are fundamental
to the process of money creation by the banking sector19. The banking sector gives birth
to most money, by means of the fractional reserve system, i.e. through multiple credit
creation. Money is created for the first time by the bank when it extends loans. Hence
money in most part takes the form of accounting entries or computer electronic records.
This simple accounting entry that carries with it purchasing power created out of nothing
is the seigniorage of fiat money. An important fact to note is that all this new money is
introduced into the economy predominantly as loans20. It is important to note here that
the Islamic banks, operating within the fractional reserve banking system, also do create
money in this form, but focuses on the use of this newly created money according to
Sharī’ah principles."

Karya yang dipetik dari Dr.Ahmad Kameel Mydin Meera-

Seigniorage of Fiat Money and the Maqāsid al-Sharī’ah:

The Unattainableness of the Maqāsid

"The history of money in Islam started with the use of the Roman Byzantine gold
coins, i.e. denarius or known as the dinar among the Arabs and the Persian silver coins,
i.e drachma or known as the dirham. The Arabs did not mint their own coin during the
times the Holy Prophet Muhammad (peace be upon him) preached the message of Islam.
The Prophet (peace be upon him) brought about sweeping social transformations and
changes that included business matters, but nonetheless, the Prophet (peace be upon him)
accepted the Roman denarius and the Persian drachma as the monetary units for
Muslims, i.e. as the Sharī’ah money2. Prominent Muslim scholars of the past, like al-
Ghazzāli, Ibn Taymiyyah, Qudama Ibn Jaafar, Ibn Khaldūn and al-Maqrīzī have asserted
that Allah SWT had created the two metals, gold and silver, as a medium of exchange
and a measure for all things3. Gold played the role of money throughout the Muslim
history albeit some ‘hiccups’ with the copper fulūs4 and with fiat money towards the end
era of the Ottoman caliphate. Nonetheless, gold continued to be part of the international
monetary system in one way or another until the breakdown of Bretton Woods in 1971.
Today all national currencies are fiat5, whereby it is neither backed by nor redeemable for
gold, i.e. without any intrinsic value.
Thirty years of global fiat monetary system has now brought the world to a unique
position. Many countries have faced monetary crises concurrently in this short period
and even a dollar crisis seems imminent6. It has been highly inflationary, with ever
widening disparity in the distribution of income and wealth; and has witnessed numerous
global economic crises and social misery. This paper argues why fiat money is
importantly at the root of all those problems. It also argues why the creation of fiat
money is truly a profound and devastating riba, and importantly why it is impossible to
achieve the objectives or maqāsid al-Sharī’ah in an interest-based fiat monetary systemadditional purchasing power10 to A, obtained without assuming any risk11. This
additional ‘free’ purchasing power is riba. Note that in this case the riba is materialized
only after one year when B pays back $1,100 to A. Nevertheless, a fact that often goes
unnoticed is the fact that creation of fiat money indeed enthrones the creator with
immediate purchasing power without assuming any risk! Today most money is nothing
but electronic records that provide millions and billions of purchasing power to the first
users of this electronic money12. Wouldn’t this then constitute a greater riba?
With this in background, the next section discusses the maqāsid al-Sharī’ah and
the socio-economic effects of fiat money, and thereafter reasons why it is impossible to
attain the maqāsid al- Sharī’ah in a fiat monetary environment."


Sambungannya....
"The global monetary system, undoubtedly, has gone though tremendous evolution
- from the use of primitive monies like cowry shells, salt and leather, to precious metals
like gold and silver, to fiat money like paper currencies and electronic money. After
Bretton Woods, the world has been under a floating exchange rate system with non of the
international currencies being backed by gold. History has shown that the kind and the
characteristics of money define the nature and characteristics of relationships that exist in
the economy that affect socio-economic factors7. Today, peoples’ life has been reduced
to a life of materialism, characterized by constant pursuit of wealth, competition, lack of
compassion, poverty, falling traditional values, crime, less time for family and leisure etc.
Needless to say, riba is strongly condemned in Islam; and riba has a lot to do with
the monetary system. Why Islam places so much emphasis on abstinence from riba? 8
This paper intends to show the devastating effects of riba on socio-economic factors.
Importantly, it argues why, the creation of fiat money itself, to be precise, its seigniorage,
is profound riba9, that indeed negates the attainment of maqāsid al-Sharī’ah, which in
turn prevents the real-life implementation of Sharī’ah, including the establishment of
Islamic economics, banking and finance.
Muslim scholars have defined riba well and hence we do not intend to repeat it
here. Nonetheless, the nature of riba – its new shapes and dimensions in current times -
is pertinent to our discussion. One feature of riba is where extra purchasing power is
created without taking on any risk. So when A lends out, say $1,000 to B at 10 percent
interest per annum, for example, the extra $100 that B has to pay as interest provides"