Innovation and origin: Technological development escapes political control. The end is open.
(Islamic Times) – Who has not once thought about the perfect Muslim life. Those who engage in this thought will be inspired by memories of the community in Medina. One ponders over the character traits of the first Muslims, their life in the mosque and the marketplace, their socio-economic institutions. In general, we believe in the idea of a solidary and just society that not only preserves creation but praises it.
This reality seems distant when one considers the Islamic reality in the twenty-first century. Generations of Muslims have grappled with how to live the heritage and tradition anew. Approaches vary between fundamentalists who want to stop the wheel of history, pragmatists who limit their practice to what seems possible, or Muslims who see innovation precisely as an opportunity to get close to the original model again.
The future of Islam in the modern age revolves around the question of technology. For some, technological innovations are temptations of the devil; for others, an opportunity to re-establish the heritage in modernity. The triumph of the smartphone impressively shows that technology cannot simply be pushed out of our everyday lives.
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Innovations have changed the lives of all Muslims
Whether we like it or not, this innovation has radically changed the lives of de facto all Muslims, regardless of their background. This is clear on the pilgrimage, where it accompanies countless pilgrims on their sojourn. The fantasy of a return to the Middle Ages is clearly decoded here by the facticity of technological application.
The fact is: doctrine and our worldview will be decisively determined by the new communication technologies. The consequences of the revolution, the reality of inventions such as blockchain, chatGPT or virtual currencies are changing our present.
The hope remains that this metamorphosis will contribute to improving people’s lives. In addition to the known negative influences of technologies such as social media on our existence, the question that needs to be answered is whether these new possibilities are taking us children of the modern age back to the original model in surprising ways.
Examples of this trend already exist think of the successful crowdfunding that supports the idea of solidarity, or of websites that effectively organise the local distribution of zakat. Even the old institution of guilds, the networks of competence, is experiencing a renaissance with the help of social media offerings.
The lost unity of mosque and marketplace that characterised Muslim civilisation for centuries could be overcome by communities with the establishment of virtual trading places. Is it a utopia that one day we will find spaces next to the prayer room that are home to start-ups or offer us screens that help us enter the global halal economy? Welcome to the 21st century!
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The core question of money
In keeping with the nature of this age, it is the question of money that clearly demonstrates the dispute between the origins of our culture and the influence of innovation. For centuries, the exchange of means of payment in the form of gold and silver currencies was the driving force behind the globalisation of the economy. In the Islamic world, the dinar and the dirham were fixed units of weight of commodities.
The international monetary system displaced the pure substance currencies. The introduction of paper currencies was initially accepted in the business world only because they were backed by the so-called gold standard until 1971.
This practice was ended by the US government, which needed an enormous amount of money to finance the Vietnam War. With the help of Saudi Arabia and the trading of oil in American currency, the “golden” age of petrodollars began.
At the same time, a discussion flared up about the ethics of the new money production, which was not bounded by any logical limit. Political, economic and traditionally also religious doctrines are involved in the dispute over a just monetary order. The provocative slogan that money knows no morals challenged ethical action.
The miraculous multiplication of money is not without consequences and reinforces the division of societies into rich and poor all over the world. And, the economic crisis, around the issues of debt and inflation, reminded Muslims of the foundations of their own economic order.
The choice of means of payment – whether for purchasing, trading or paying zakat – is an elementary question. Only which money is allowed in the states is beyond the decision of the individual in liberal systems. On the international level, there have been movements and alternatives in this field for some years.
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The rich oil states are reorienting themselves
It is paradoxical that Saudi Arabia, of all countries, is questioning the American dollar as its reserve currency. The country’s announcement that it will settle its oil deliveries to the Far East with the Chinese currency probably heralds a turning point.
It is important to understand that the technological revolution we are currently in is challenging the most powerful institutions of the last decades: the existence of banks and the monetary system in general. With the help of blockchain technology, credit institutions are no longer necessary for the intermediation of many transactions, and the monopoly of money production by national states is being challenged by alternative currencies.
Here, not only governments, but powerful, private global players are at the starting line. Completely new, for example, is the phenomenon of tech companies like Facebook or Amazon thinking about introducing their own currencies and thus indirectly offering a credit system.
In recent years, it was mainly Bitcoin that fuelled the vision of a different economy. The virtual currency is organised in a decentralised manner, cannot be manipulated and is not regulated by any central body. The creation of the units is an energy-intensive, mathematically complicated process.
Most importantly, the number of Bitcoins is limited to about 21 million. This limit is thus diametrically opposed to the possibility of printing money endlessly. Over the years, a colourful movement has emerged that therefore extols the advantages of the new currency.
Its opponents point to the turbulent price development of the artificial coins, which, as purely artificial products, have no intrinsic value. Recently, a Muslim variant of the cryptocurrency was created with the “Islamic Coin.” The company is supported by prominent personalities from the United Emirates.
Foto: Jan Chipchase | Lizenz: CC BY-SA 3.0
Paper money is also viewed critically
Scholars dispute whether this alternative is within the bounds of Islamic law, though one hears similar accusations against the use of inflationary paper money. And in the matter of gold, there is criticism of the manipulated prices and the fact that no one knows exactly where the gold reserves are stored. As hardly in any other discussion, the pure doctrine is difficult to formulate under the given circumstances.
What is certain is that the arguments about money in modern mass society are decided not only by the value of the means of payment, but also by its practicability. The simple question of which money is easiest to dispose of with smartphones will be decisive in the future.
Besides the usual paper currencies that we use with our credit cards, it is the crypto and gold currencies that are becoming widespread. There is movement on this issue all over the world.
In 2023, the American state of Arkansas made people sit up and take notice by announcing that gold and silver would once again be legal tender. The gold coins, which are not subject to VAT when purchased, will be a hard alternative to the US dollar. And the gold in this case will not only be a form of investment, but a means of exchange in everyday life; presumably not using physical coins, rather users will receive gold-backed debit cards.
This phenomenon has little to do with a return to the pre-technological past. An open question is whether the Federal Reserve will tolerate the existence of a hard currency that competes domestically with the dollar in perpetuity.
However, the wheel of history turns, it will be exciting to watch where technological innovation leads and how it changes our societies. Politicians have limited power to stop the momentum of change.
Whether one takes note of these facts with optimism or pessimism will determine the spiritual state of the coming generations. It would be amazing if the old Muslim institutions, the marketplaces, the guilds, the trade contracts and real money regain their relevance. This would again provide an occasion to study Islamic economic law more closely.
