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STABILITY IN THE VALUE OF MONEY

1.      Economic well being  with Full Employment and High Rate of Growth

The inevitable outcome of the Islamic belief that human beings are the vicegerents of God, is that they must lead a life that befits their status. The Divine Guidance embodied  in Islamic teachings is intented to help them in the realization of this objective. Muslim jurists have unanimously held the view that welfare of the people and relief of their hardships is the basic objective of the Shari’ah. This view would, in the economic field, necessitate economic well-being through satisfaction of all basic human needs, removal of all major sources of hardship and discomfort, and improvement in the quality of life, morally as well as materially. Hence full and efficient employment of human recources would be an indispensable goal of the Islamic system, because it would help realize not only the objective of broad-basedeconomic well-being but also ampart to human beings the dignity demanded by their status as God’s vicegerents. Full and efficient employment of material resurcesin the heavens and the earth are meant for human welfare  and need to be exploited adequately, without excessor wastefulness, for the purpose for which they have been created.

            While a reasonably high rate of economic growth should be the natural outcome of policies leading to full and efficient employment of human and material resources and to broad-based economic well-being, the high rate of growth is by itself not of prime importance. This is because the requirement to attain material prosperity within the frame work of Islamic values requires that it should not be attained thrugh the production of inessential or morally questionable goods and services, should not lead to an excessive and overly rapid use of God given resources at the expense of future generations who are equal owners of these resources, and should not harm present or future generations by degenerating their moral or physical environment. Hence, while full employment and material well-being are essential in an Islamic context, a high rate of growth is only essential to the extent to which it contributes to full employment and broad-based economic well-being. Beyond this, its importance would have to be carefully weighed against all its other implications.

2.      Socio-economic justice and equitable distribution of income and wealth

The goals of socio-economic justice and equitable distribution of income and wealth are an integral part of the moral philosophy of islam and are based o its unflinching commitment to human brotherhood. The capitalist system’s conversion to socio-economicjustice and equitable distribution of income is, on the contrary, not based on a spiritual commitment to human brotherhood; it is rather the outcome of group pressure. Accordingly, the system as a whole, particulary its money.

            It may argued that while the production of a bewildering assortment of conspicuous consumption goods raises the rate of economic growth , it does not contribute to real welfare. In fact it generates social tensicas by accentuating unhealthy competition to keep up with the pace-setting consumption of neighbours. For example, if a comfortable , frequent and efficient public transport service (bus, train, or tube) is provided, it may reduce the production of cars and also reduce spending on the development and marketing of new models of cars. This may lower the rate of economic growth to the extent to which it is not offset by the increased production of public transport vehicles. However, there will be : (i) lower traffic congestion ; (ii) less pollution of air; (iii) reduced consumption and, hence, conservation of fuel, and (iv) lower spending on continued widening of roads, enabling public authorities to economic on spending and reduce deficit financing. Similarly, if women’s ever-changing fashions are discouraged, the unnecessary spending on keeping in fashion would decline. This might lower the growth rate but would also reduce social tessions, and conserve resources for satisfying the essential needs of the majority of the populations.

            and banking arrangement, is not geared to these goals and glaring disparities of income

            and wealth continue to be generated. Nevertheless, because of the influence of socialism

            and political pressures, some of these inequalities are being partly reduced by taxation

            and transfer payment. In contrast to this, Islam tries to uproot the causes of gross inequa-

            lities at their source and also use Zakah, taxation, and transfer payments as additional

            measures to reduce inequalities even further to bring about a distribution of income   

            which is in conformity with its concept of human brotherhood. Hence it is essentiala

            that even the money and banking system and monetary policy are so designed that

            they are finely interwoven into the fabric of Islamic values and contribute positively

            to the reduction of inequalities.