Ibn Taymiyyah on Money Debasement and Inflation
Summary
TLDRThe video discusses Ibn Taymiyyah's views on monetary policy, emphasizing the role of money as a medium of exchange and a measure of value. It critiques governments' overproduction of money, comparing historical practices to modern inflation and quantitative easing. Ibn Taymiyyah argues that governments should avoid profiting from money creation and maintain its intrinsic value. The video reflects on the ethical principles of money serving public welfare and reducing economic instability. These insights aim to restore integrity in monetary systems, especially from an Islamic economic perspective.
Takeaways
- 🪙 Ibn Taymiyyah emphasized that the essential function of money is to measure the value of goods and act as a medium of exchange.
- 💡 Money should not be treated as a commodity for profit, and trading in money diverts it from its true purpose.
- 📏 Ibn Taymiyyah believed that the primary role of money is to maintain its value and be trusted, especially to prevent inflation.
- ⚖️ He argued that the government should mint coins based on the just value of people’s transactions to prevent exploitation and erosion of value.
- 💰 Ibn Taymiyyah warned against overproduction of money, which can lead to inflation and devalue the currency, much like modern-day quantitative easing.
- 🔗 The intrinsic value of coins should match their purchasing power, ensuring no one can profit by manipulating or debasing the currency.
- 🛑 He advised governments not to profit from creating money and to prioritize public welfare over commercial gains.
- 👩⚖️ Money, like a judge, should serve the public without commercial incentives, similar to Imam Al-Ghazali’s perspective on money’s role in society.
- 💼 The state should pay workers from the public treasury, ensuring money serves the people rather than creating profit for the government.
- 📉 Erosion of currency value and uncontrolled money expansion are key causes of economic instability, and governments must regulate currency to prevent this.
Q & A
What are the primary functions of money according to the video?
-Money serves several functions: it is a medium of exchange, a measure of value, a store of value, and a standard for deferred payment. Ibn Taymiyyah emphasizes the first two functions—medium of exchange and measure of value—as the most important.
How does Ibn Taymiyyah view the role of money in an economy?
-Ibn Taymiyyah believes that money's primary role is to serve as a medium of exchange and measure the value of goods. He argues that money should not be traded for profit, as this diverts it from its essential function.
What is Ibn Taymiyyah's stance on trading in money?
-Ibn Taymiyyah is opposed to trading in money because it distracts money from its intended role. He believes money should only be exchanged directly and simultaneously, without delay, as per the rules of riba (interest).
What concerns did Ibn Taymiyyah have regarding the debasement of currency?
-Ibn Taymiyyah was distressed by the debasement of currency in Egypt, particularly under the Mamluk Sultans. He was concerned that the overproduction of copper coins led to a decrease in their value, which he saw as unjust and damaging to the economy.
How does Ibn Taymiyyah's perspective on currency relate to modern inflation?
-Ibn Taymiyyah's concerns about the debasement of currency are similar to modern concerns about inflation. He believed that overproduction of currency erodes its value, just as inflation does today.
What advice did Ibn Taymiyyah give to rulers about minting coins?
-Ibn Taymiyyah advised rulers to mint coins in proportion to the actual transactions in the economy and to ensure that the intrinsic value of coins matches their purchasing power. He also warned against rulers profiting from the production of money.
How does Ibn Taymiyyah believe money should be viewed by the government?
-Ibn Taymiyyah believes that the government should view money as a tool to serve the public good. It should not be a source of profit for the government, and its value should be preserved to avoid economic injustice.
What is the significance of Imam Ghazali's view on money in this context?
-Imam Ghazali's view, which is echoed by Ibn Taymiyyah, is that money is not an end in itself but a means for acquiring goods. He likens money to a judge, whose role should not be incentivized by profit, but rather, serve the public interest.
What did Ibn Taymiyyah mean by reducing incentives for governments to profit from money?
-Ibn Taymiyyah argued that governments should avoid creating money for profit, as this erodes its value and leads to economic instability. He believed that the role of money is to serve people, not to be a tool for government revenue.
What can be learned from Ibn Taymiyyah's approach to monetary policy?
-Ibn Taymiyyah’s approach teaches that money should maintain its value and not be overproduced. His perspective encourages governments to ensure that currency serves the public good, without being manipulated for profit, which can lead to inflation and economic instability.
Outlines
💰 Understanding Ibn Taymiyyah's Perspective on Money
The video introduces the ideas of Ibn Taymiyyah regarding money, focusing on its essential functions and the role of the state in monetary policies. Ibn Taymiyyah highlights two key roles of money: a medium of exchange and a measure of value. He critiques trading money as it diverts money from its primary function. The video emphasizes that money should maintain its value and avoid overproduction to prevent inflation, drawing parallels to modern quantitative easing. Ibn Taymiyyah also stressed the importance of not profiting from money creation, advising rulers to mint coins without the goal of personal gain, as public welfare should be the priority.
📉 The Impact of Money Overproduction and Currency Erosion
In this section, the video discusses how overproduction of money and currency debasement lead to the erosion of monetary value, causing economic instability. Ibn Taymiyyah argues that the government has a responsibility to prevent this, as unchecked currency expansion harms the economy and the people. He warns that when rulers prioritize profit from money creation, it results in inflation and the devaluation of existing currency. This creates injustice, as it erodes wealth through false means. The video concludes by stressing that money must serve the public and retain its value, rather than be used for personal or governmental gain.
Mindmap
Keywords
💡Ibn Taymiyyah
💡Medium of Exchange
💡Measure of Value
💡Riba
💡Debasement
💡Inflation
💡Quantitative Easing
💡Copper Currency (Fulu)
💡Public Welfare
💡Economic Injustice
Highlights
IB Tamia's perspective on money and its functions
Money's essential function as a measure of value and medium of exchange
The rule of riba and the Prophet's guidance on equal and immediate exchange
Importance of money maintaining its value to serve as a good medium of exchange
IB Tamia's concern over coinage erosion under Mamluk Sultans
Opposition to overproduction of currency leading to inflation
Government's role in minting coins at just value without injustice
Proportionate supply of copper currency to transactions for price stability
Alignment of metal coins' intrinsic value with their purchasing power
Advising rulers not to profit from minting coins
Money's purpose to serve the public without commercial incentives
IB Tamia's advice to rulers on minting coins for real value and public welfare
The concept of money as a public service rather than a profit-making venture
IB Tamia's warning against government's pursuit of profit from money creation
The responsibility of the state in controlling currency expansion and value erosion
The impact of overproduction and profiteering on the value of money
Lessons from IB Tamia on preserving the value of money and its service to people
The importance of not commercializing money for profit, especially by the government
Reflections on restoring integrity in economic systems based on IB Tamia's ideas
Transcripts
asalam alikum and welcome back to the
channel today we are talking about IB
Tamia and his stake on money in fact we
are looking at some of the principles
that might help us to reimagine what the
monetary policies and role of State
should be when it comes to printing or
creating money so let's get into
it this work is based on fascinating
book and which is basically a PhD
dissertation and uh I will put some
details in the description so when we
are talking the money money in reality
has several function and most of you are
familiar if you study this at University
that money is thought as medium of
exchange something that measures the
value it's a store of value and it's a
standard for deferred payment even Tamia
consider these first two being medium of
exchange and measure of value as its
most important functions in fact he's
saying that essential function of money
is to measure the value of goods and to
be paid in exchange for different
quantities of goods and even his student
iben Kim would say something similar to
what we've seen Imam gazali saying in
the previous video which is that money
and coins are not meant for themselves
but they are meant to be used for
acquiring Goods they are basically
medium of of exchange so since the main
function of the money is to be medium of
exchange even Tamia considered that
trading in money diverts money from
what's supposed to be doing and if money
must be changed then it must be
completely simultaneously and without
delay this goes back to the rules of
riba and the prophet Salli wasam for
example saying gold for gold and so on
must be in equal amounts and on the spot
it's a rule that we should all
understand by now if we are watching uh
this channel now in particular in order
for money to be the good medium of
exchange and standard of other Goods the
Third component of money keeping its
value something that can be trusted is
of particular importance especially
today with inflation and everything and
this is where we can take a lesson Ian
Tamia was very distressed by what he saw
around himself when it comes to the
basement of the coinage in Egypt under
different mamuk Sultan so he would ask
Sultans to check erosion of value of
money which we would talk today
something like inflation and so on he
would oppose this debate basement in the
currency that came as a result of over
production of money just like today you
have this quantitative easing and ways
that governments would print the money
and so in a similar way Su sometimes on
those times would take these flu or
copper coins and they would over produce
them and so even Tam is saying that
Authority or government in reality
should mean the coins other than gold
and silver according to the just value
of people transactions without any
injust ice to them so think about this
idea that there is some injustice when
you Min the coins other than gold and
silver that is interfering with the
value of money so he would say that the
volume of Fu which is the copper
currency should be in proportion of
transactions that just price are ensures
so we are talking about really hitting
the supply and demand of money so it
doesn't really cause inflation right and
then he's saying that intrinsic value of
coins or this metal coins should match
their purchasing power in the market so
that no one including ruler could profit
by either melting the coins or selling
the metal or by converting metal into
coins at putting them in circulation
what is he trying to say he's saying
basically to the government don't get
into business of making money don't
profit from making money don't make
money from making money and he advised
ruler that when they mean coins it
should be of real value without aiming
at any profit while keeping in view
Public Welfare so what is the purpose of
money then it's to perform this function
and it's to Serve the People it should
be in all of our interest it shouldn't
be commercial transaction that in
incentivizes something this money making
and over Supply which will result in in
the basement it should be kept as almost
not for-profit activity as Imam gazali
when he talks about money he says money
is a judge well who pays for the judge
to judge is it commercial incentive
should it be for-profit judge or is
something that the government or all
people pay we have answer in the second
advice that Tamia gives to Sultan which
is that to pay the salary of the workers
from public treasury B Mal so in order
for us even as a citizen of the country
to make sure that money Serv Ser US
public good that doesn't incentiv over
production and so on we need to pay it
this what IB Tamia says is really about
reducing incentives for government to
find a profitable ways easy way to earn
something because when they do that it
creates the Injustice he's talking about
because it reduces the bases erods value
of all the other money in the
circulation so this trading in money
that I Tam is talking about according to
him opens the doors of Injustice for the
people and devouring their wealth by
false pretenses and this is what Sultans
of those days used to do regarding the
monetary policy here according to bamia
state is responsible for controlling
currency expansion and for checking
erosion of the value of the money so
this control of how much money we have
and erosion of the value are both causes
of economic instability and they are the
ways to corrupt currency of Muslims so
therefore according to bamia the
basement of coins or money is the main
problem for its erosion in terms of the
value or we could call it inflation
government should work to ensure that
this supply of money is there with its
real value intact not eroded and
government should not be in the business
of creating money from money making
profit from making money so what we
learned from IB Tamia is quite profound
lesson for all of us and for our
governments which is to preserve the
value of money not to commercialize it
for profit by anyone especially by
government and money needs to serve
people it needs to keep its value it
shouldn't be overproduced in order to
erod the value that is already shared by
all of us I hope you take some values
from these uh brilliant um ideas from
mamia and that as we are constructing
our economic system we will reflect on
some of these and restore Integrity in
it thank you for spending time to watch
this video if you would like to learn
more about finance and economy from
Islamic perspective head to our new
platform Muslim Money Matters where we
go in much greater details regarding the
content until next time my name is Ali
Chan Salam alikum
o
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