Hoarding versus Circulation of Wealth from the Perspective of Maqasid Al-Shari’ah
International Journal of Islamic and Middle Eastern Finance and Management, Vol. 7 No. 1, 2014 pp. 6-21
16 Pages Posted: 20 May 2014 Last revised: 31 May 2014
Date Written: 2014
Purpose - The purpose of the paper is to explore the issue of hoarding and dishoarding in modern context, especially as it relates to circulation of wealth, an important economic objective from Islamic viewpoint.
Design/Methodology/Approach - This paper presents a survey of scholarly positions on the issue of hoarding and circulation of wealth from Islamic perspectives and analyzes how these positions affect the shaping of financial and economic dimensions of life in our contemporary time. The paper draws on the primary sources, the Qur’an and hadith, and examines the positions of the classical and contemporary scholars, especially in the context of the growing interest in finance, financial system and economy from Islamic perspective.
Findings - The paper identifies the fact that the notion of hoarding (kanz) needs significantly revised understanding as money as a concept and tool has evolved substantively in modern times. It also examines variant positions regarding the concept of hoarding and finds more merit in favor of the position that paying zakat is not enough to be exempted from the Qur'anic implications about hoarding. It also identifies and examines securitisation, such as sukuk, as an important tools for better circulation of wealth.
Research Limitations/Implications - With the advent of Islamic finance in modern times, sukuk has emerged as one of the most popular capital market instruments. Such instruments can be more relevant for development and shared prosperity, where the notion of hoarding (kanz) is properly understood and the gravity of entrenched propensity to hoarding (kanz) is recognised.
Practical Implications - Capital market and its instruments, such as sukuk, can be very useful tool for prevention of hoarding and facilitating circulation of wealth. However, greater awareness about the ways and means by which hoarding exists widely in modern times is essential to enable Islamic finance to serve the people and the humanity from Islamic viewpoint.
Originality/Value - Hoarding and dishoarding are not widely explored topic in contemporary literature on Islamic economics and finance. This paper makes a valuable contribution in its attempt to bring the problem of hoarding and the challenge toward greater circulation of wealth to highlight.
Keywords: Hoarding, Concentration of Wealth, Sukuk, Islamic banking, Islamic finance, circulation of wealth, kanz, dishoarding
JEL Classification: D31, N30, P40
Suggested Citation: Suggested Citation