Islamic Justice In A Monetary System A Modest Proposal

Abstract

Dr. M. Umer Chapra. Towards a Just Monetary System. Leicester:
The Islamic Foundation. 1985. 292p.
Extensive literature on the institutional aspects of monetary economics includes
pioneering studies by Muhammad Uzair, Muhammad Nejatullah Siddiqi,
Ziauddin Ahmed, Anwar Iqbal Qureshi, Afzalur Rahman, and the
Council of Islamic Ideology in Pakistan among many others. Scores of
research papers have elaborated the functioning of Islamic banking in theory
and practice. A fresh study on Islamic banking in Iran and Pakistan by Zubair
Iqbal and Abbass Mirakhor has been released by the International Monetary
Fund. In the voluminous literature on issues dealing with money and banking
in Islam, Towards Q Just Monetary System is outstanding in many respects.
The study is tightly knit, thoroughly documented, and the ideas are careklly
analyzed. These qualities are lacking in most works on Islamic economics.
Competence in ecnomics and command of Arabic for access to original
sources in Islam is essential for a scholarly integration of shari'ah and modem
economic analysis in order to address ContempOrary economic problems.
There is no doubt that Dr. Umer Chapra, Economic Adviser to the Saudi Arabian
Monetary Agency, has all the necessary background.
Towards a Just Monetary System introduces a perspective on the interestbearing
system before outlining various socio-economic goals and strategies
in chapter one. Islamic views on the nature of riba are discussed in chapter
two supported by a comprehensive appendix based on the Qur'an, Ahadith,
and Fiqh literature on riba. Equity-based financing as an alternative to
interest-based financing is proposed in chapter three, for which necessary
reforms are outlined in chapter four. A vigorous comparison is drawn in
chapter five between interest-bearing and interest-free systems in terms of
allocation of resources, saving and capital formation, stability, economic
growth, and fulfilment of various types of credit needs. Some necessary ...