An analytical study of al-Ghazali’s thought on money and interest

MPRA Paper from University Library of Munich, Germany

Abstract: The present paper concentrates to study an important aspect of al-Ghazali economic thought, money and interest, and with rigorous analysis it attempts to explore its relevance and application in the modern period. Al-Ghazali recognizes money as one of the most important inventions in conduct of the economic affairs. He offers a rather sophisticated discourse as to the evolution of money and its various functions. He explains how money overcomes the problems of barter system such as lack of a common denominator, indivisibility of good and the problem of double coincidence of wants. These ideas of al-Ghazali are almost identical to those found in contemporary texts. He condemns those who hoard money or convert them into other objects. He discusses the harmful effect of counterfeiting and currency debasement. However, he allows for the possibility of representative or token money.

Keywords: Nature and Functions of money; Difficulties of barter exchange; Interest (riba); Riba’l-fadl and Riba’l-nasi'ah; Counterfeiting and debasement of money (search for similar items in EconPapers)
JEL-codes: B11 E40 (search for similar items in EconPapers)
Date: 2001, Revised 2001
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