Money value: Decline in value of money

Q390 :Muslim scholars may be busy discussing such matters like inflation, prayer in space, fasting in polar areas, but individual Muslims like us have ready guidance in the Qur'an, the Sunnah and the life of the Prophet (peace be upon him) and the life of his companions. In my view, the question of inflation is amply answered in Surah 104 which discourages saving large amounts of money in cash. The larger part of savings must be invested in any one of the available methods for investment such as property, shares, gold, business, etc. The best form of investment, however, is that which seeks the returns for that investment in the hereafter. This investment means giving away to charity, schools, hospitals, looking after the needy people, etc. Perhaps I should point out that small savings for immediate future are not affected by inflation. It is when people keep large amounts of cash for a long time that they find the value of their cash dwindling. This form of saving, however, is not favored by anyone. Hence, the whole question is perhaps hypothetical in nature, rather than of practical economics.

A390 : The question is not one of declaring or even believing in the fact that Islam provides a complete code of living which is meant to bring happiness to mankind in this life as well as in the life to come. This is the most essential belief of every Muslim. When we adopt the faith of Islam, declaring that we believe in the Oneness of God, we actually recognize that all sovereignty and the authority to legislate belongs to Him alone. The second part of the declaration of faith, which states: "I declare that Muhammad (peace be upon him) is God's messenger", implies a recognition that the Prophet Muhammad (peace be upon him) is the means through which we learn the system and the code God wants us to implement in this life. What we need to understand is that there are certain areas in which all human beings are alike, and these cannot change from one generation to another. The most important of these is the relationship between the human being and his Lord. Hence, the fundamental beliefs and the actions that express faith, which we include under the heading "worship", have the same applicability to all human beings. We pray in the same manner and in the same frequency as all generations before us and all generations to follow us. All Muslims, from the time of the Prophet (peace be upon him) till the end of human life, are required to fast in the month of Ramadan, and do the pilgrimage to the Sacred House in Makkah at least once in their lifetime [if they fulfill certain pre-conditions]. But relations between human beings and the ways they deal with one another are subject to change in accordance with different cultures, standard of development, racial characteristics, nature of communities, etc. Business dealings change considerably from one community to another. Hence, Islam does not apply to these areas a very strict code. It lays down certain principles which are designed to ensure justice and fairness in human dealings. These principles provide a framework within which every community may adopt rules and regulations that it believes to serve the interests of the individual and society as a whole. Needless to say, these rules and regulations may vary from one community to another and from one generation to the next. Everyone knows that the Muslims went through a period of decline before most areas in the Muslim world were subjected to colonial rule. When Muslim countries regained their independence, they inherited the political and economical systems imposed on them by the colonial powers. Moreover, the periods of decline and imperialism affected Islamic learning. There were long periods during which Muslim scholars were happy to reiterate rulings they had learned although they were given by leading scholars who lived several centuries earlier. What we need to understand is that those leading scholars were giving rulings on problems faced by their contemporaries. These may be similar to ones faced by later generations but there may be other problems which need new rulings. These should have been provided by the process of "Ijtihad", or scholarly judgment. It is unfortunate that most scholars in the period of decline felt only too happy to reiterate what was said by earlier scholars. Hence, we have this gap in scholarly work that impedes the proper tackling of peoples problems by religious scholars. This is why we often find ourselves without ready answers to problems such as inflation, the decline in money value, the protection of savings, etc. My reader suggests that there is sufficient guidance for everyone in the main sources of religious knowledge, namely the Qur'an & Sunnah. This is true but in facing practical problems, lay man needs to have advice by scholars. Unfortunately, this is not readily available. The layman is right to demand it, and the scholars should work on such problems without delay. I cannot agree with my reader on the point which he makes about Islam not approving savings. Everyone is well advised to save for his future and the future of his family. He is also encouraged to try to invest his savings. When my reader says that Surah 104 does not encourage savings in cash, he overlooks an important point. If a Muslim pays out the zakah on his savings regularly, there is nothing wrong with putting aside any amount that is in excess of one's present needs. The surah condemns a person who gives so much importance to [amassing of] wealth to the extent that he is practically enslaved by the love of money. This is not the attitude of a true Muslim who only saves after having done his duty by his family and his community. He will have paid out all dues on his wealth. It is true that the best investment is that which seeks God's pleasure. If we invest by paying to charity and helping others, then we are certain to receive a reward that is far in excess of what we pay; [Allah has, in the Qur'an, repeatedly impressed upon the importance and rewards of giving in alms and charity]. Moreover, Allah will ensure that we will have a reward in this life as well. But that does not mean that everyone of us should pay out in alms and charity every Riyal he has over his day-to-day needs. There is nothing wrong in trying to improve one's situation or improving the standard of living one provides for one's family. [I would quote verse 29 of Surah "Al Isr'a" or 'Children of Israel" which may be rendered in translation as: "And let not your hand be chained to your neck nor open it with a complete opening, lest you sit down rebuked, denuded."] Nor do I find myself in agreement with my reader concerning the drop in money value over a period of, say a few years. This is certainly a very important question. If you were to compare what 100 Riyal could buy 20 years ago with the purchasing power of today, you will find the gap hardly believable. While this is not a short period, it is not very large either. A person who has been saving a small amount every month [for contingencies or say to buy a piece of land or any other purchase of sizable value], without investing his savings is bound to find that the real value of his savings has dropped considerably. Hence it is a matter of concern to every one of us that we should have an Islamic solution which ensures that what we have today will retain its value one, two or five years from now.

Our Dialogue ( Source : Arab News - Jeddah )