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Paper money in Sheikh Ahmad Khatib Al-Minangkabawi’s thought: a comparative and critical commentary

Author

Listed:
  • Sholihin, Muhammad

    (Institut Agama Islam Negeri (IAIN) Curup, Rejang Lebong, Indonesia)

  • Shalihin, Nurus

    (UIN Imam Bonjol Padang, Padang, Indonesia)

  • Putra, Apria

    (Institut Agama Islam Negeri (IAIN) Bukit Tinggi, Bukit Tinggi, Indonesia)

Abstract

Purpose – The article examines Sheikh Ahmad Khatib Al-Minangkabauwi’s initial concept of paper money, which in the early 20th century wrote Risala Raf’u Al-Iltibas. Design/methodology/approach – This paper uses a qualitative approach based on the critical extraction analysis that can reveal a set of concepts related to the thoughts of Sheikh Ahmad Khatib Al-Minangkabauwi on paper money. Findings – Through an attentive reading of Sheikh Ahmad Khatib Al-Minangkabawi, the authors can formulate several significant results: First, Ahmad Khatib Al-Minangkabawi applies two methods in studying critically on paper money, namely, the comparative law method and qiyas. Second, Ahmad Khatib believes that paper money has similarities with dinars and dirhams, namely its nominal value function. It is just that the existence of these values is different. Briefly, there are set law consequences for those who used paper money in economic activities, i.e. payment of zakāt on paper money applies when used as business capital. Research limitations/implications – Sheikh Ahmad Khatib Al-Minangkabawi’s work related to paper money is written heavily from the perspective of fiqh. Briefly, it is challenging to describe legal reasoning from work. As a result, articles are also thicker with fiqh analysis. Practical implications – Sheikh Ahmad Khatib Al-Minangkabawi’s view regarding paper money becomes the foundation for the theory of the value of money in Islam. However, it is rarely disclosed. In this regard, this paper can serve as the foundation of the value for money offered by scholars from Indonesia in the early 20th century. Social implications – Money is not a commodity. Still, it must be positioned as capital to be productive. It finally becomes why trade is compelling and becomes the most practical reason for paying out zakāt. Originality/value – It is not easy finding out articles that attempt to reveal the concept of classical ulemas or clerics from Indonesia relating to paper money. This article manages to identify that, and at the same time, becomes a novelty.

Suggested Citation

  • Sholihin, Muhammad & Shalihin, Nurus & Putra, Apria, 2021. "Paper money in Sheikh Ahmad Khatib Al-Minangkabawi’s thought: a comparative and critical commentary," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 29, pages 67-83.
    • Handle: RePEc:ris:isecst:0201
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    References listed on IDEAS

    as
    1. Sieroń, Arkadiusz, 2019. "Endogenous versus exogenous money: Does the debate really matter?," Research in Economics, Elsevier, vol. 73(4), pages 329-338.
    2. Imtiaz Mohammad Sifat & Azhar Mohamad, 2018. "From metal to paper: validating paper money from Islamic perspective," International Journal of Ethics and Systems, Emerald Group Publishing Limited, vol. 34(1), pages 2-19, February.
    3. A. C. Pigou, 1917. "The Value of Money," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 32(1), pages 38-65.
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    More about this item

    Keywords

    Paper money; Comparative law; Qiyās; Money philosophy; Fiat money; Nominal value;
    All these keywords.

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • N01 - Economic History - - General - - - Development of the Discipline: Historiographical; Sources and Methods
    • Q11 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Aggregate Supply and Demand Analysis; Prices
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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