Money and It’s Function According to Al-Ghazali’s and Ibn Khaldun’s Thought (Comparative Study)

Abstract

This research is motivated by problems that arise around us, even in the world in general. The author has the hypothesis that the function of money was not in line when money was first created, which causes money to have shifted from its original function. This paper aims to describe and reconstruct the thoughts of Al-Ghazali and Ibn Khaldun about money and its functions. The method used in this research is qualitative by using literary review and comparative studies are taken from several books, journals, and some relevant reading sources. The results of this study state that money according to them is of no intrinsic value, cannot be traded, and only as a medium of exchange. The function of money according to them is to be a unit of calculation and a medium of exchange for non-commodity activities and others as they already have in dinars and dirhams. So in Islam, the activity of hoarding money and misusing the function of money is not justified and is contrary to the main function of money itself. While there are some differences between the two of them, such as Al-Ghazali permitting the use of paper money without any guarantee of gold or silver provided the government states that paper money is an official payment instrument, the government must maintain its value and ensure there is no money trading. While Ibn Khaldun permits the use of paper money on the condition that there are gold reserves or collateral in the bank.