Money in Classical Islam: Legal Theory and Economic Practice

The present study examines the conception of money in classical Islamic law specifically the relationship between scholarly discourses on money and actual economic practice. I shall argue that the theoretical concept of money was to some extent a fiction. Muslim jurists conceived of money in terms of a three-tier currency system that involved gold dinars, silver dirhams and copper fulus. The market was much more complex. A wide range of coins of various metallic content, weight and value circulated. In the first part of the study I describe the complexity of Islamic money markets. In the second part, I investigate how scholars reacted to the gap between theory and practice and posit some tentative conclusions about the relationship between Islamic law and practice.