Riba and Hadith of Six Commodities

OCS-00214 March 18, 2011
Riba and Hadith of Six Commodities

Qazi Irfan, Islamabad (Pakistan) author@hazariba.com
Abstract
Islamic legal maxim it is undeniable that rules of law vary with change in time is moderately scientific in construct admitting the evolution process of human knowledge, concepts and practices. Although this broad-spectrum saying already existing among the provisions of Islamic Jurisprudence, however more often than not, the Islamic legalists offer unjust attitudinal resistance for such a change even be considered let alone be happened and ignore the reality of humans fallibility. The mortal beings of any period who might be extraordinarily intelligent and perceptive and who can anticipate or influence the progression of knowledge for several hundred years next to them, despite that they still face their own limitations, naturally imposed on them by the era they live in. The earlier Islamic scholars were aware of this possibility owing to their towering caliber and accordingly produced this broad rule for the real world. It is an essential part of our belief that divine and prophetic sayings hold relevance for all times which implies it is only human interpretation and analysis of holy sources that may transform in the course of evolution. This discourse attempts to comprehend the wisdom of subject hadith in context of evolved knowledge and transformed concepts primarily by the economic intellect of today and investigate the law derived from it. A much sought coherence in monetary matters within Islamic laws is the quest and driving force of the endeavor.
Keywords
Riba, Hadith, Contract of Sarf, Forex, Loan, Qard, Endoview, Exoview

JEL Classifications
D63, E42, K19, P19, Z10
Electronic copy available at: http://ssrn.com/abstract=1790222
Riba and Hadith of Six Commodities Page 2
Introduction
Philosophy of the science of hadith is based on two key rudiments; the authenticity establishing process for the chain of transmission (sanad) and the text (matn) of hadith itself. The great Muslim scholars who instituted this discipline were extremely precautious in their tasks that is visible in their research attitude; all their efforts were directed to discover and report the exact message of Prophet (SAW) because they also believed that the prophetic wisdom rests in the exactness of prophetic messages which indisputably is one of the two primary sources of Islamic Law. Then we believe Islam is the religion of nature (fitrah)1, nature is harmonious and since eternal harmony exists in primary sources, thus the interpretation (or law) based on these sources shall also conform to nature. Nature (fitrah) has major common factor in all humans while piety (taqwa) is entirely individualistic, therefore by desirable quality of logic rationalism has preference over pietism, and those who favour pietism by ignoring rational attitude indeed act against the nature and thus religion, and consequently cant practice piety by themselves in effect. The cautious attitude anchored in taqwa that we see in earlier scholars is not because of rejecting rationalism but only because of the absence of corresponding rationality. For instance in early Fiqh, it is assumed that every loan (qard) has a benefit attached to it2 although without quantifying what a benefit is? There may not be an economic or monetary benefit out of loan (qard) to the borrower except a mental peace alone, shall any noneconomic and non-monetary bonus be also included in the benefit arising from delay i.e., the excess through nasiah or nasa (delay)3 which is the primary argument in defining riba-al-nasiah. There is no underlying principle or concept behind this piety based thinking emerging by reason of stern divine and prophetic rulings on Riba. It might be true, every loan can provide some kind of advantage to the borrower but is there any rationale that every benefit due to delay is Riba? The corresponding rationality is absolutely missing here; even today we have no comprehensible concept as what is benefit, what is profit, what is riba, so on and so forth. The later
Quran 30:30 (Al-Room) Which goes to the borrower along with loan and whether the borrower makes use of it or not but is available to him. 3 Article 3.1 Riba in Excess in The Concept of Riba and Islamic Banking by I.A.K. Nyazee
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Electronic copy available at: http://ssrn.com/abstract=1790222
efforts of characterizing riba-al-nasiah as riba al-Quran could not bring any real change in the previous concept of riba-al-nasiah4 and this labeling is also without any corresponding rationality for the concept of loan (qard) it is based on. The reality of life is such that if we dont know what is truth which might be a straightforward yes or no to a question, it takes an unending debate to find that simple answer. A similar fact in the evolution of knowledge says if concepts are missing or derailed then intellectual journey in exploring subjects is never satisfying. The intellectual expedition on Riba is continuing without a resolve so far, the concept of loan (qard) produced in this discourse is quite imperfect rather defective seriously which is evident from present law-violating state of affairs across common muslims and their practices i.e., fixed term loans are not permissible even without stipulated excess as per existing Islamic Law (the contract of sarf), but muslims in general, neither do they comprehend nor comply this unrealistic stance and defy it on daily basis extending mutual and social cooperation to each other by transacting fixed term loans without any stipulated excess in the principal amount they lend, in doing so - there is no feeling of committing any sin. This is how the nature (fitrah) demonstrates and takes its course. One may argue or place a question here who is wrong, people or the law? But then who will decide this - law or the people? The answer is simple law and people can decide but it must conform to the nature (fitrah) being the scrutiny criterion (Quran 30:30). For the people or for the law, there is no substantial argument (dalil) to support this law except the law itself. The source of this law is the subject hadith of six commodities that we intend to pursue here and might observe what went wrong in deriving the law from it.
Ahadith of Six Commodities
Out of several reliable collections of ahadith, here the reference for specific evidences is obtained from Sahih Muslim i.e., two famous ahadith of six commodities with dissimilar asnad (sing. sanad) varying a little in concluding sections, employed here for perusal.
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Today, riba-al-nasiah is a benefit (excess) towards lender only which is a change of stance from earlier Fiqh but is not reflected in unchanged stances on qard-hasan and the contract of sarf
The Arabic versions5 mention the sanad of hadith. 1. Narrated by Ubadah b. Samit, Hadith #1569, Vol 2, Muslim
Referenced English Translation6 : Ubida b. al-Simit (Allah be pleased with him) reported Allah's Messenger (may peace be upon him) as saying: Gold is to be paid for by gold, silver by silver, wheat by wheat, barley by barley, dates by dates, and salt by salt, like for like and equal for equal, payment being made hand to hand. If these classes differ, then sell as you wish if payment is made hand to hand. Improved English Translation: Ubadah b. al-Samit (Allah be pleased with him) reported Allah's Messenger (may peace be upon him) as saying: gold in exchange of gold7, and silver in exchange of silver, and wheat in exchange of wheat, and barley in exchange of barley, and dates in exchange of dates, and salt in exchange of salt; like for like, equal for equal, be exchanged hand to hand. If the genus differs then sell as you wish if exchange is made hand to hand. 2. Narrated by Abu Saeed Khudri, Hadith #1570, Vol 2, Muslim
Sahih_Muslim_Vol2.pdf, Arabic to Urdu compilation of Sahih Muslim by Moulana Aziz-ur Rahman Online Reference - Muslim :: Book 10 : Hadith 3853, web link <http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3854&number=3853> 7 The translation of gold for gold or gold in exchange of gold for the Arabic expression of ( ) is more appropriate instead of the translation used in online reference that is gold is to be paid for by gold.
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Referenced English Translation8 : Abu Sa'id al-Khudri (Allah be pleased with him) reported Allah's Messenger (may peace be upon him) as saying: Gold is to be paid for by gold, silver by silver, wheat by wheat, barley by barley, dates by dates, salt by salt, like by like, payment being made hand to hand. He who made an addition to it, or asked for an addition, in fact dealt in usury. The receiver and the giver are equally guilty. Improved English Translation: Abu Saeed al-Khudri (Allah be pleased with him) reported Allah's Messenger (may peace be upon him) as saying: gold in exchange of gold, and silver in exchange of silver, and wheat in exchange of wheat, and barley in exchange of barley, and dates in exchange of dates, and salt in exchange of salt; like for like, be exchanged hand to hand, he who paid extra or asked extra, in fact dealt in usury. The receiver and the giver are equally guilty.
Understanding the Two Ahadith
Let us first list out fine points of hadith texts chronologically: 1. Sahih Muslim hadith # 1569 says:
a) A commodity in exchange of the same commodity (six commodities stated gold, silver, wheat, barley, dates and salt) b) Like for like c) Equal for equal d) Hand to hand e) If the genus differs then sell as you wish if exchange is made hand to hand
2. Sahih Muslim hadith # 1570 says:

a) A commodity in exchange of the same commodity (six commodities stated gold, silver, wheat, barley, dates and salt) b) Like for like c) Hand to hand
Online Reference - Muslim :: Book 10 : Hadith 3854, web link <http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3854&number=3854>
d) He who paid extra or asked extra, in fact dealt in usury. e) The receiver and the giver are equally guilty.
The above fine points embrace the philosophy of set transactions and given conditions in entirety, to comprehend the intact span of affairs narrated in these evidences, we may start addressing each subtlety in sequence and explore its substance, certainly without compromising internal consistency of ahadith. Since my primary sphere of investigation is the concept level of subject, accordingly I shall first see content above its legal stature, although that will eventually help to imply the law but that is only after convincing coherence established at concept level particularly for the subject ahadith and generally for overall Islamic beliefs but excluding the law argued with here. As expected, one has to observe some rules or norms while delving into such a caring task, employing control is required, for such reason I have laid down few simple rules of interpretation at my own presumably being enough to serve the purpose and concerns given that the rules are belief based and I believe all muslims share this belief. Rules for interpretation :
1. 2. To remain within the text of hadith to find rationale and message, this is because in our belief each hadith has a definite message A hadith is internally consistent for its definite message, once this internal consistency is established and available; it offers external consistency to other divine and prophetic messages. Belief again9. To explain ahadith here, one shall offer only contextual, natural and commonsensical argument without ambiguity of sense The primary sources i.e., Quran and Sunnah/Ahadith provide relative foundational harmony for rule #3.
3. 4.
Naturally, few queries come to mind instantaneously for each fine point pulled out of the text (matn) of hadith; these logical questions are also listed before the explanation begins for each section.
It is a demand of belief for Muslims that consistency of a prophetic message with other prophetic and divine messages is deemed certain, however since the reliability of ahadith depend on its sanad subjected to strict passing criterion in granting any hadith the status of sahih or else, thus if any inconsistency in sahih ahadith is apparently detectable, then either the ahadith might be researched again (however have no idea as how), or the disparity shall be resolved according to nature (fitrah) or the inconsistent subject matter shall be left open for coming times and generations to resolve.
1. The Six Commodities

Text (matn) section of hadith : gold in exchange of gold, and silver in exchange of silver, and wheat in exchange of wheat, and barley in exchange of barley, and dates in exchange of dates, and salt in exchange of salt Related queries : 1. 2. 3. Why only six commodities? Shall we restrict to six commodities or can we add more to the list by analogy (qiyas) of commodities? Can we extend the application of ahadith to other objects? What is the commonality in given six commodities?
A hadith - the saying of Prophet (SAW) certainly had some situation or a reason of its origination, the message might had been uttered in one tone or another or through some particular sentiments, but those sensitivities are not available to us, we have the text (matn) only that we can explore as per rules defined above, conjecture or guess about text is least wanted. For instance, the flow of select text (rhythmic stream of phrases) with coordinating conjunction and (wa) before every commodity gives a narrative impression of advancing continuity and it looks that this flow is not truncated but shortened, yet there is no way to claim a position here by this guess, the sole judgment probability for the tendency of tone was ended with the very first listener of hadith, now it is impossible that a definite verbalization of such continuity be detected resolutely from the text alone by later recipients of the message despite this advancing continuity style of the text, it will merely be a guess to include other commodities in the list on this basis. Likewise it also is a little advanced guess if we make group of stated commodities like food and metal and extend the list by analogy of genus, its characteristics or utility since we dont see any clue in ahadith for such deduction and if we had then the issue were not existing. The alternate fact is, there is no point in the figure of six; the list might have been more if Prophet (SAW) had said or less if so had he said. There is rigid stance witnessed in the chronicles on this aspect of ahadith arguing to confine to six stated commodities only, however a majority of Islamic scholars of mainstream schools of thought believe there must be other commodities included to the list, both
stances relate to respective implications of riba al fadl10. For the rigid faction, there might be other reasons of inflexibility but one is sure that they had no certain method to remove their restriction. On the other hand the majority faction holding the view to expand the list, employed speculative analogy technique for the purpose. The analogical deduction methodology with a variety of criterions they engaged to find the effective cause (illa), could not result in building consensus (on illa), consequently all schools are stuck to their own positions hitherto, the essential reason of their differing positions is rooted in the speculative nature of criterion each has applied, and there is no convincing reason why one speculative position should surrender to another speculative position? If you are neutral and not biased towards any school then it can well be noticed from dissimilar position of four main fiqhs11; speculation (guess) may not be wrong in whole but probably its a partial truth or half-done fact, thus for an effective cause (illa) criterion a total agreement would be a demand from them almost out of question, this never happened as well history validates. It is neither denied here nor it should be, to expand the commodity (object) list but with guess methods because applying speculative treatment may not hold the internal consistency of hadith and will distort its definite message consequently. Thus answer to the first query on this part of hadith text is no addition to commodity list is suitable by conjecture or analogical reason or organic parallel, the argument (dalil) for this position is straightforward i.e., subject ahadith neither restrict to add more commodities nor offer any definite provision for commodity-similarity option to employ, and neither do we find such an analogical option as well (to consider) from other ahadith at least in my knowledge. The question here is how shall we include more commodities if not by commodity analogy? We shall find some way to do it from contextual evidence only and since we believe each hadith contain a definite message; hence firstly we must discover the underlying principle of its definite message and then apply that rationale to
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A type of Riba having at least two different concepts changed in the process of Fiqh development. The analogy (qiyas) method was employed by various fiqhs (Islamic schools of thoughts) to find a common efficient cause (illa) in six commodities also known as ribawi items. Hanafi school include (weight, volume), Shafi school (medium of exchange, eatables), Maliki school (eatables, preserveable), Hanbali school (weight, volume, and edibles).
extend the commodity list so that it offers external consistency to objects not mentioned in hadith. Practically, this methodology is quite deviating from earlier scholarship. Given that both ahadith are guiding deeds for Muslims by unfolding some lawful and unlawful transactions with conditions where few commodities are just objects to explain those dealings, thus in my view, the contextual emphasize is not formed on commodities per se i.e., like on gold (al dhahab) but the transaction of the same that is gold in exchange of gold (al dhahab bi dhahab)12, this is a definite foreground feature internally consistent by recurrence in selected evidences i.e., all six occurrences in ahadith where commodities are different but validate this stability. This format of transaction that is internally consistent, in conformity with given conditions will provide a transaction-conditions-similarity option that should be the natural place for other objects practically. Thus answer to the second query on this part of the text is yes, we may extend the application of ahadith to other commodities only if those objects fall in line with the rationale of transactions. Indeed, this is one divergent approach from analogical deduction utilizing commodity attributes (weight, volume, edibles etc.) that we see in various fiqhs where no unanimity was achieved just because of the speculative nature of criterion. Let us briefly reaffirm the difference of understanding; commodity as such, like gold (al dhahab), is not the focus (subject) of hadith but the transaction of the same commodity i.e., gold in exchange of gold (al dhahab bi dhahab); accordingly thus, we are not attempting here to find any kind of commonality in given six commodities by way of extra-contextual guess methods to extend the list. Owing to this distinctive approach here, we are shifting objective focus from commodity-similarity to functional-similarity13 i.e., not to include more commodities on the basis of their attributes of similarity but to employ transaction rationale which implies that any object satisfying this internally defined criterion of ahadith will come under the effective domain of these ahadith. This resolve of
This exchange format applies if true (homogeneously) to one set of conditions or else if not true (heterogeneously, only in hadith #1569) to the other (a subset of first set of conditions). 13 Of stipulated transactions only since we have not taken commodities as the subject & accordingly not attempting their functional properties common in all like Exchangeability and Fungibility.
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functional-similarity will allow us to include things which are not commodities such as paper money14. The concept of paper money was not available to earlier scholars otherwise they definitely had not used the weight and volume type criteria15 since they could not ignore the fact of using paper money as money for its obvious relation to riba and the contract of sarf, this has already been realized by modern-day scholarship16 and they approve the reality of using paper money as money though not by given criterion (as dalil) however by the authority they assume. Now given that paper money is approved and ruled by the contract of sarf thus to assimilate present form of money, naturally we need at least one higher level in the hierarchy of classification (in or) above genus allowing us to insert both commodities and non-commodities as objects under the effective domain of ahadith. Let us designate this distinct category as family of genus or genus family, i.e., all members of this category are potential objects for the said types of transactions described within these ahadith; summing up, in this genus family, exchange of its member genus (homo or hetero) is the subject and genus itself is the object of topical ahadith. For this part of the text (matn), the abridged position is: Instead of commodities, we have adapted the subject of ahadith to be the transactions (homogeneous or heterogeneous exchange) of few selected genus each possibly having its own species. Since the subject is modified, accordingly we shall see the possibility of expansion in the list of objects by means of transactions rationale (that we have to find), so the commodities-similarity has become irrelevant and we intend to replace it with functional-similarity where all probable objects conforming to this option are grouped in a genus family to generalize the list in one labeled category. The argument (dalil) for our viewpoint lies in natural appearance of the evidence as seen by our contemporary economic intellect, there is no explicit restriction to alter the subject or adding objects (for adding at least, majority of scholars agreed on this view).
Paper (fiat) money irks many Islamic minds, but the reality of matter is - so far no sound rejection is legalized from Shariah by contemporary authorities on religion rather they accept it in practice. 15 Although Shafi School include medium of exchange in criteria but that seems had emerged from the mentioning of gold and silver in the list and not from functional-similarity sought here. 16 Nyazee says The truth is that if the strict legal position of Islamic Law is adopted, all transactions in paper currency will become invalid. ref article 7.3-The Hukm of Modern Currency in his The Concept of Riba and Islamic Banking
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2. Diktat Like for Like

Text (matn) section of hadith : like for like (mithalan bi mithal) Related queries : 1. 2. Is it a condition or just a reiteration of homogeneity? Like for like stands for what likeness?
Homogeneity in six commodities of exchange is already featured repeatedly for six times in previously selected text of hadith where this part of the text (matn) relates17, yet the possibility of reiteration of homogeneity can not be ruled out, equally it may be true as a condition too. We need to apply commonsensical reason here to distinguish this. By considering next condition explicated in hadith after this instruction no one can believe Prophet (SAW) could had ordained say for example to transact gold of 22 carat with gold of 18 carat in equal for equal no sane, normal, rational thinker can deduce the demand of such an anomalous transaction by ignoring qualities of gold; suitably around we have a noble evidence in this connection too, relating to Bilal (RA) where this disparity of quality in a commodity is dealt with18 and does not illustrate any sense of transacting dissimilar qualities in equal measures. If we believe like for like command as reiterating homogeneity only, that will imply, we shall ignore qualities or varieties in commodities which is quite irrational and illogical deduction, therefore answering the first query the set phrase unquestionably is a condition beyond doubt or at the most a reiteration of homogeneity plus a condition. What exactly this condition implies? Until this time, we only have a reason or distinction suggested in arguments that speaks about the qualities in commodities. It is true as well and accepted that like for like shall include same quality or same variety or same species19 (organically) within a genus or commodity, but this is not enough to interpret entire spectrum of the diktat because it means the intrinsic quality alone whereas people employ other decisive
Irrespective of stance if we take it as a condition or a reiteration (re-emphasize on homogeneity) Muslim hadith #1589, where Bilal (RA) was directed to first sell the inferior quality dates and then buy the superior quality from its proceeds 19 In the hierarchy of modern scientific classification system, species are the sub category of genus which in turn is a sub category of a family and so on.
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factors in their intended exchanges as well. The inquisitive minds with current intellect also may not be satisfied if we fail to explain it further because it is possible that though genus is same and the species is same, even then the next condition of equal for equal may not hold economic justice in exchange transaction of formal equality sought in tradition but hadith is not flawed for sure, it is only our inadequacies that produce such inconsistencies. We are required to investigate this by our contemporary intelligence. The condition of like for like is a broad-spectrum expression on place that may not be translated today simply or entirely to imply only different qualities within a genus, neither the subject ahadith are saying that explicitly, it has more significance than projected. The species quality element deduced previously from this decree, in my view, is just because previous explorers of ahadith surmised stated six commodities as being the subject of the tradition and the connected law was formed before the economic awareness of valuation was integrated in to knowledge, accordingly it needs a revisit of the subject as suggested throughout this discourse. An example here may help to elaborate the point, let us think of a commodity (say mango) brought in market from a particular tree by two different methods of transportation i.e., by sea and by air, the commodity/genus is same, the quality/species is identical yet these are sold at distinct prices in same market or you can say the exchange-value for each is different despite same genus/species. The above case in point is quoted from a real evidence of practice in my first hand knowledge, the reason for the difference in prices is the mode of transportation that affects the freshness and life of commodity thus valued differently in market. This implies mango quality may also be ascertained in terms of its freshness and life, and of course these are not intrinsic features of the commodity but simply the variable factors of valuation though genus and species are same; likewise there are non-perishable types of commodities exhibiting non-intrinsic reasons that forms the basis for different exchange-values despite being identical in kind and quality. The economic thinking now is more complex and factorized then past simple trade practices of essential commodities, value addition is a subject for example, where identical commodities may produce articles of trade with varied exchange-values, not ignorable at all.
The natural human requirement of valuation20 is ubiquitous that is an accepted truth; several obvious factors structure the basis of valuation and may vary for each case; acceptability of valuation factors in people is also ever present; when people do exchanges, they have many concerns and a consolidated view of all aspects resulting in exchange describe their value judgment. Can value judgment of genus be restricted to its intrinsic quality only? Even if so, how to translate it in terms of value i.e., what is its intrinsic value21? There is no method to define unknown value contained in genus as such but by the perception of people, social standards, customs etc., then why these appraisal means shall be ignored when some unknown value is added to the genus, there is no corresponding rationality for this exception. We need to think above mere intrinsic quality feature in order to imply a universal sense of the diktat. The valuation (value judgment of whole set of values) is a prerequisite of exchange, rightly thus like for like in its broad sense shall signify an overall value judgment when it is transformed in to law. The contract of Sarf, unfortunately, fails to translate this value judgment when it neglects craftsmanship and sadly does not offer any rationale at all to hold this position. How one can justify that if an artisan who spent one whole month in making necklace of 22k gold that weighs 10 grams, be ordered to exchange his artifact with a coin of 10 grams in 22k gold? Shall we deduce that making gold artifacts is prohibited indirectly? How the usurpation of skills, labour and efforts can be justified that is consumed in making necklace from gold? Absolutely, there is no corresponding rationality for the law that says craftsmanship has no value; the law formation had missed something definitely; there is no contextual evidence in its source neither it offers any harmony with nature, it suggests ignoring what is required to be honoured and rewarded. Its undesirable that commodity be given more import then the human beings, in our age and intellect, such is not the purpose expected of Sunnah, people are important not material. This denial facet of law surely has its origin in treating commodities as subject of ahadith and the deficiency in economic acquaintance of transaction beyond their qualities.
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Assessment of value or precisely the assessment of exchange-value Some value within the genus itself, independent of individuals perception, thus unknown practically, intrinsic quality is however different, understandable for its organic or utility features.
For the second query on likeness, if we restrict the significance of the diktat holding just the same genus and its species or the same commodity and its quality, then other possible causes influencing exchange-values of objects shall be ignored in the exchange, yet again, this will be unnatural, irrational and illogical deduction. The current economic intelligence asks to integrate valuation by all applicable means available to exchange-event taking place. It is the only way to ensure economic justice from exchange-events. This approach is not new to Islamic thinking, is it not required in Islam to disclose all pertinent details including faults of the article of trade, of course for the same purpose of economic justice. It is undeniable that knowledge has evolved with time, now offers more aspects to be considered in contracts, e.g. the fineness of gold22; similarly valuation is an indispensable factor required in transactions. For our times, we may conclude that like for like or likeness shall stand for the same quality or the same species in the absence of other valuation factors or by integrating economic aspect of valuation let us say it means homo-exchange-values (i.e., exchange-values of objects having homogeneous kinds and identical species) at the same place of transaction23. For this part of the text (matn), the abridged position is: We bring in valuation (i.e., judgment/measure of value) replacing simple intrinsic qualities of commodities, that is - we detached the ever present concern of value from objects and connected it to exchange transaction (our perception about the subject of ahadith) that is inclusive of objects qualities. The argument (dalil) for this change lies in the natural valuation requirement of people which coheres with the broad sense of the diktat and our contemporary economic intelligence as well. The prior cited tradition <Bilal (RA)> is a proof of enforced valuation though that was a case of unlike species but cant be neglected for identical species for the reason that economic justice by itself results from exchange transaction.
22The
etymology of carat <http://www.etymonline.com/index.php?search=carat&searchmode=term> tells us that qualities of gold were learned some where in mid of fifteenth century, before that the fineness of gold was not an issue but only its forms & weight were the aspects of gold contracts. 23Intrinsic quality of same genus/species may not vary on different places at one given time, but their valuation factors affecting exchange-values might be different on different places, therefore to consider exchange-values as likeness, the same place of transaction shall be a condition
3. Diktat Equal for Equal24

Text (matn) section of hadith : Equal for equal (sawan bi sawa) Related queries : 1. 2. 3. Equal for equal stands for what equivalence? Why such equivalence is sought? Is there some obscured purpose or metaphorical meanings of such unequivocal equality despite its least appeal?
The sequence or the placement of each expression (diktat) in both ahadith is highly technical, this decree relates to previous two parts as discussed above, reinforcing the former sense and generating a directed view of the definite message. When genus is same and species or qualities are also same then equality can be achieved by any standard of measurement suitable for the genus involved in the exchange. Indisputably, the equivalence sought in tradition requires some standard unit of measurement in any case. The equal for equal is an open or general expression that cant be translated exclusively in any one form of measurement, like in numbers, the quantitative methods or volumetric units or else; the obvious inclusive purpose of this diktat can not be justified by one or the other specific methods of measurement and since subject is exchange of commodities, appropriately an all-purpose economic turn of phrase is required to express the broad meaning of equal for equal, in our context, say it is equal homo-exchange-values no matter whatever the method or the unit of measurement is. It is frequently observed that people question about the sense of equivalence required here - why one would engage in a futile and pointless operation of equal homo-exchange-values concurrently. Indeed, it makes half of the query and whenever I meet this half, instantly strive to articulate the other half i.e., but why one would engage in business of unequal homo-exchange-values at once? If we merge the two to make a query in full then it compels the mind to think as why shall people assume simultaneous exchanges of homogeneous equals in the first place i.e., what are the possible
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Hadith # 1569 only
causes here? There is no perceptible economic reason either for equal or unequal concurrent exchange of homo-exchange-values; both queries are genuine if we see it by economic intellect, yet the possibility of other causes is predictable. The fundamental cause of exchange-event lies in the circumstances of participants25, that include economic or otherwise; no exchange-event will ever take place without its own reason, cause, motive, purpose or the basis of activity which may be identical or different for each participant. The intended purpose of participant would be served through the object(s) of exchange26 that acts as a carrier of gain or benefit to one, both or all involved in the operation, although loss is also transported through the object(s) of exchange but it never being the purpose in its own for any rational economic entity. In a mutual exchange comprising same genus and same species, or homo-exchange-values, cause of need or necessity (dharurah) is certain for one participant (more exactly the sole triggering cause for such an exchange-event to occur), while the other reason with second participant may be service or the motive of benefit (faidah) if he is not having a matching need to agree with the former need, especially the motive of benefit in such an exchange cant initiate the event but is a counter purpose to redeem the cause of need. In case of equal exchange (of homo-exchange-values), economic gain is non-existent and there is no reason for exchange-event to take place except need i.e., only need-to-need or need-to-service correlation of causes is effectual here. To all good intents and purposes of human interactions, both forms of relationships are time-honored, say for instance if one needs to exchange a higher denomination of currency to its lower units, I think it must have been in practice from the time when money was invented and its various denominations are existing simply because people seek and need this facility to fulfill their commitments on daily basis. It is vitally imperative27 aspect although seems insignificant, even if this alone is the purpose of equivalence sought in hadith, it is more than enough to appreciate the diktat because different value units in any money/currency systems are irresistible. Here correlations of causes have social significance in a socio-economic milieu.
In my earlier article titled Murabaha Financing VS Lending on Interest, Pg.35 Ibid, Pg.37 27 It is not difficult to comprehend if one can imagine living without the option of unit systems.
25 26
On the contrary, in unequal exchange (of homo-exchange-values) an economic gain is definitely available because of the inequality in exchange-values and since exchange-event will occur only due to the need of one partaker hence only need-to-benefit correlation of causes is effective here which implies that the difference in two exchange-values will settle towards one participant at the cost of the other (in need). In both cases, the triggering cause of exchange-event is need, to meet this if the one in need has an option to select need-to-need or need-to-service type relationship, rationally he will never opt for need-to-benefit link unless he is not forced to. Absolutely there is no reason to justify the last disadvantaged option, and current economic thinking also realize this Standard economic intuition of revealed preference implies that when two parties freely enter into a contract then neither should be worse off 28. It cant only be a matter of worse-off degree but principle; even negligible worse-off shall be unacceptable, and no one shall force or be forced to lose. The need-to-benefit correlation uses force for its realization, this compulsion has two origins, the circumstances of the person and the non-availability of first two choices. People must have access to first options as privileges by the governments. If we try out an experiment of nature for these options by offering all three to any economic entity, everyone will pick one of the first two choices29 logically since no one would want to share-out even minimal of his exchange-value just for nothing. In this perspective, answer to the second query is even though people may not desire to get engaged in simultaneous exchange of homo-exchange-values but only because of an inevitable need30 and it is not justifiable by any reason (in economics or ethics) that such need be treated as an opportunity to take advantage of, rather on the contrary by the high merits of prophetic wisdom, the dictum suggests the need must be handled with equality simply because advantage does not exist actually and there is no understandable justification for this act of benefit, its the demand of nature (fitrah).
Roberts, Michael J. and Key, Nigel (2005) "Losing Under Contract: Transaction-Cost Externalities and Spot Market Disintegration," Journal of Agricultural & Food Industrial Organization: Vol. 3 : Iss. 2,s 29 Every one of us can apply this to oneself rationally as an experiment, consequently either he will confirm this proposition or else he might present some argument to differ with. 30 A need shall be considered inevitable if there is no motive of benefit but still need exists.
28
If truth be told, the last query is really challenging, i.e., what is the purpose in stressing on transacting equal homo-exchange-values as no appeal or economic cause exists in equal or even unequal concurrent exchanges? The prophetic messages are not without a purpose as well that we believe; funny dealings like for example, someone swapping ten dinars with someone elses ten dinars in tandem is not harmful affair at all neither it shall invite serious insistence of order. No economic cause; no need to tackle the fun, the purpose definitely is non-economic and this conclusion is not by syllogistic reasoning (qiyas) but a binary complementary truth of this or that (yes or no) nature i.e., an exchange activity is either economic or non-economic in its totality. In this perspective, let us conclude that the purpose or substance of message makes a case of social function or common behaviour. Here equivalence is the purpose for which a process of valuation is essential but no rights for this process are granted to exchange participants in this part of ahadith then how such equivalence will be established? The only possibility of equivalence here is when valuation is preset. The social assigned-exchange-value schemes are predetermined methods of valuation which are communally beneficial for all and non-negotiable inherently just because their units inherit values by assignment of social accord and no one has any right to alter those norms mutually or by force but only through another social contract. This is true for other standards of units too e.g. scientific. In this background, the focal concept of equal-for-equal command seems to be the endorsement of social support and enforcement of social norms (standards) of valuation. For this part of the text (matn), the abridged position is: The straight and clearly identifiable non-economic purpose of the message here is to respect the valuation standards prevalent in society; until this point, its the rationale of transaction described in the first part of traditions. The argument we built earlier is that valuation is related to transaction and we can not disregard any factor influencing exchange-values. The realization of equality in exchange-values as instructed has no economic sense or demand so the purpose is societal and relates to assigned exchange-value schemes defined by society i.e., the valuation standard or simply the medium of exchange.
4. Diktat If the Genus Differ.31 Differ.

Text (matn) section of hadith : If the genus differs then sell as you wish if exchange is made hand to hand Related queries : 1. 2. 3. The condition if the genus differs applies to discrete genus exchange only or also to hybrid genus exchange? What is the significance of if the genus differs? What does it imply then sell as you wish?
We will not discuss hand to hand part of this diktat here but in the next section because that also applies to previous fine points and may be discussed in its overall perspective collectively. In the simplest formats of exchange the genus are either identical or discrete i.e., it is either homogeneous or heterogeneous type of exchange and no third format is probable; the hybrid exchange is possible when minimum two objects are there on one side of the equation at least e.g., if gold is transacted with gold plus silver. In such a case, the previously explained conditions shall apply to homo-exchange-values on two sides of the equation and residual exchange-values shall be transacted as per recent order, so there appears no trouble even if hybrid type of exchange situation is faced, the hadith regulates precise rules for both simple and hybrid formats. In this context, we dont need to repeat the homogeneous factor of hybrid but to explore the discrete format only, this in fact is the outward appearance of exchange here i.e., heterogeneous. A discrete form means gold in exchange of silver, wheat, barley, dates or salt, silver in exchange of any of other five or one in exchange of any one from other members of genus family, these are explicit meanings of if the genus differs, whereas its implied demand is compelling more than expected i.e., implicitly, it says the identification of objects is must simply because no distinction in genus can be established unless objects are not identified. This implied condition has principal significance internally consistent
31In
hadith #1569, although the sequential order of this diktat comes after hand to hand command but since hand to hand also applies to earlier conditions, therefore order of this diktat is raised here in the order list of explanation.
from start of tradition to its conclusion, will discuss its place when discussing hand to hand in next part, though here we may stay around minimal deduction that objects must be identified in heterogeneous exchange. In principle, if heterogeneity cant be established for unidentified things, so should be the homogeneity that is objects must also be identified in case of homogeneous exchange. Considerately in above stance, we have a general rule from the tradition asking that for stated transactions, objects must be identified for exchange (homo or hetero). The previous conditions of like for like and equal for equal are not applied in case of differing objects; however it still upholds the hand to hand condition, we may quickly go over the reasons for the exclusion of previous two conditions in case of heterogeneous exchange; here we may recall, the heterogeneity or homogeneity is wanted only in commodities that are stated in traditions or in the extended list that we theorized as a genus family. Obviously, it looks natural once genus are distinctive, the order of like for like is not practicable because organic distinctiveness existing in genus by nature, is the basis of such classification and this categorization is explicitly recognized in hadith32, so when this distinction is established at the root then there is no question of likeness condition; accordingly the prophetic message maintains its internal consistency by this omission. If you think back to the valuation feature we introduced while discussing like for like diktat, what about its relevance and application when likeness is not sought here? Does this mean the theory of adding valuation characteristic is proven wrong? Not really, valuation is an issue of transaction and not particular to commodity; it is applicable to genus or commodity but also to other elements and dynamics of transaction e.g. skills and labour of an artisan used in making an object of exchange, the treatment of commodities causing some value addition like when rice, wheat, citrus fruits and other items are refined resulting in their higher exchange-values. These are the factors of valuation applicable to any object of exchange and present regardless of genus likenesses wanted or not, hence the introduced valuation premise is not redundant.
32The
explicit sense when the tradition says if the genus differs
In the very next part of the current diktat, the rights of valuation are assigned to the participants in exchange when the tradition says sell as you wish, the valuation aspect is offered even when genus are different. Therefore, there is no extra-contextual reason theorized (as per our set rules) in new added feature of valuation. Remember, such freedom was not given in earlier exchange form we concluded and hence proves our logical judgment there. Next, we need to see what privileges the participant may have in this assigned authority of valuation? A simple logic shall get us its answer i.e., prophetic messages are non-contradictory that we believe, therefore whatsoever is established for earlier part of the tradition can not be overruled by this authority given here. It is already expected that the focal concept of equal for equal was the enforcement of valuation standards defined by society; thus anything that is left after fulfilling first obligations may comprise the privileges of the participants. Other than logic, the meaning of sell as you wish shall imply the individual or personal valuation rights. If society declares that one dinar equals ten dirhams, no individual has the right to assert his own valuation; conversely if such exchange relation is not set by the social order then people are naturally free to use their own valuation perception. Moderately thus, we may conclude that for exchange of heterogeneous objects in genus family; the rights of valuation are to participants if not defined by the social order. This diktat actually brings forth another angle of deliberations i.e., the reality of exchange types and their handling conditions, if we organize a diagram to depict all fundamental types of exchanges for the genus family, the count is four since we have identical or discrete genus; two for genus and other two for species; the types of exchanges as declared in subject ahadith are intra-species and inter-genus, other types of transactions possible in genus family but not declared explicitly are inter-species and intra-genus. The last one i.e., intra-genus will essentially have either intra-species or inter-species form only, therefore just three types are actually possible, two are discussed in the first hadith but the third type i.e., inter-species is not talked about here. If a prophetic evidence for this type is also included in our efforts, it will complete the entire spectrum of elementary exchange transactions, illustrated below.
Genus Family
Gold Silver Wheat Barley Dates Salt Others
Genus
(Objects of Exchange)
Homogenous
(Intra-Genus Exchange)
Heterogeneous
(Inter-Genus Exchange)
Identical Species
(Intra-Species)
Discrete Species
(Inter-Species)
Homogeneous Homo-Species
In hadith # 1569 & 1570
Homogeneous Hetero-Species
In hadith # 1589
Heterogeneous Either Species

In hadith # 1569
Entire Spectrum of Elementary Exchange Transactions
In this context, let us include the tradition cited above relating to Bilal (RA) describing inter-species exchange type: Narrated by Abd Said, Hadith #1589, Vol 2, Muslim33
33
Ibid. P.1007 vol. 2, Arabic to Urdu compilation of Sahih Muslim by Moulana Aziz-ur Rahman
Referenced English Translation34 : Abd Sa'id reported: Bilal (Allah be pleased with him) came with fine quality of dates. Allah's Messenger (may peace be upon him) said to him: From where (you have brought them)? Bilal said: We had inferior quality of dates and I exchanged two sa's (of inferior quality) with one sa (of fine quality) as food for Allah's Apostle (may peace be upon him), whereupon Allah's Messenger (may peace be upon him) said: Woe! it is in fact usury; therefore, don't do that. But when you intend to buy dates (of superior quality), sell (the inferior quality) in a separate bargain and then buy (the superior quality). And in the hadith transmitted by Ibn Sahl there is no mention of" whereupon". Brief Inference in our context: The external consistency available from above tradition reveals if species of genus are distinctive (i.e., intra-genus and inter-species exchange), almost certainly their exchange-values or valuation aspects shall be different because of respective uniqueness, and thus a value judgment is required to settle the transaction justly. The rights of this assessment are not assigned to the participants, individually or mutually, rather a mediator is placed in between to assert neutral and fair exchange relation between unlike objects. The prime reason for this via route is the absence of proportional value judgment in terms of exchanged objects, in relation to each other. Even if exchange-values are assigned to these objects by the social order, the relation between assigned-exchange-values is required to be defined for the purpose of economic justice. This approach is well summed up in calling it as marking to market35 procedure. The point in the mention of entire spectrum of such transactions is that the feature of valuation is not neglected in traditions, the set conditions for different exchange types have corresponding facts in human intuition and throughout the spectrum of transactions the purpose appears is economic justice, where the contractual aspects are intelligently handled by imposed conditions.
Online Reference - Muslim :: Book 10 : Hadith 3871, web link <http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3871&number=3871> 35 El-Gamal, Mahmoud A. Web link <http://www.ruf.rice.edu/~elgamal/files/riba.pdf>
34
4. Diktat Be Exchanged Hand To Hand

Text (matn) section of hadith : be exchanged hand to hand (yadan bi yadin) Related queries : 1. 2. 3. What is the rational significance of hand to hand condition? What is the functional equivalent of hand-to-hand? Does this hand-to-hand directive apply universally prohibiting any time involving transaction of all fitting objects under the ambit of subject ahadith e.g. silver, gold and money in loan contracts?
The contract of sarf laid emphasis on recent condition more than it does on any other conditions stipulated in ahadith accentuating its legal significance. The influence or importance of the decree can also be envisioned from a tradition of Umar (RA), From your hand to his hand. If he asks you to wait behind the wall (of a room), do not wait for him, and if he jumps from the roof, then, jump with him.36 Certainly, hand-to-hand condition has its distinctive connotation understood differently within piety and liberal reasoning, such as exchange at once or in a reasonable session or the technical possession of modern age etc., all such positions are legal forms to enforce the diktat, which in any case is required to execute the command, however as usual these legal opinions do not offer a clue for the obscured purpose of the command i.e., why it is that hand-to-hand is given so much substance or what is the reason in enforcing the condition of simultaneity? In a roundabout way, what happens if some delay is encountered? What does delay do? Where to find the justification of disapproving the delay i.e., in the intention, in commodities, in exchange or else? A logical resolve of these queries will form rational significance of the diktat internally consistent with definite message of ahadith that in fact is more important than any legal position, to be more precise, it is actually required to form an accurate legal position. The issue of simultaneous exchange has remained a challenging task for earlier scholars as well compelling great thinking minds to assume and go for extra-contextual justification in search of its
36
Ibid. Article 7.2.1 - Quoting Al-Sarakhsi
underlying principle that prophetic message might have destined. The enormity of challenge and its stress on thinking minds can be assessed from the requirement of justifying a credit sale, say of wheat or salt against gold or dinar, in a situation when the hadith demands that even if commodities differ, the exchange has to be simultaneous. The credit sales were practiced in those days, and there was no comprehensible reason or objection that such credit sales should have been prohibited, it was neither making a sense to them nor some one in this age would agree to. That was a real paradoxical situation, it is thus they landed in grave syndrome of estimation methods37 that is in the times of Prophet (SAW), the estimation of gold and silver were by weight and estimation of other four commodities were by measure, so they derived a feeble legal position in the diversity of estimation methods to allow the sale of four items on credit against gold/silver or dinar/dirhams. Since, six commodities were assumed as the subject, so they also looked legal substance there, but such is not an argument, its a legal position because no corresponding rationality is on offer to understand the reasons in employing this technique, what makes the difference if methods of estimations are not the same? Some methods are replaced, now wheat, barley, dates, salt are sold by weight instead of measure so the previous position has already lost its basic differentiation if there was any, and insisting on this reason of legality would be a double jeopardy. The other truth is, despite having challenges on intellectual front to solve contemporary issues which are pending because existing interpretation or law is not sufficient to handle those challenges of transformed intellect; the modern scholarship is hardly willing to address concepts of existing laws. By the high merits of Islamic thinking, it is not piety that arguments are not noticed but ignored just to uphold a position which does not offer an argument; this in fact reflects rigidity and incapability of modern intelligentsia and indicates elemental reason of decline. Is it not an uphill task that we have no financial or monetary policy? Despite interest-free fixed-term loans are illegal by law but rampant, is it not an issue? People are not for law; law is for people, if people are changed in their intellect, then man made law may be changed if not suited.
37
Ibid. Article 5.3 The sub-principles in Sunnah
In this age of widespread economic thoughts and deliberations, who can defend the contract of sarf for its two problems at least, firstly, how to justify neglecting value addition in an artifact that consumed skills and labour while hadith does not order like this? Secondly, why people shall not undertake fixed term interest free loans, is it not just an implication of derived rules which have no second evidence in primary sources except the derivative? Where are the corresponding rationalities answering the law positions realistically to satisfy the nature and the common-sense? Though, these are not new queries, and as far as my limited knowledge is concerned, whenever such types of queries are raised, these are treated by authority and not by reason or if by any reason that is not convincing. Such are the tribulations emerged because of the delusion on Riba, an exact concept of which is still undecided. The only ray of hope is in attitude to improve by logic and reason, ready to absorb evolved knowledge and experience, and seeking improvement in harmony with nature and human instinct. We can surely move forward if we show such acceptability, this discourse with its line of argument is an effort by reason to resolve issues we are facing i.e., for the interpretation, there is nothing wrong rather an enhanced thinking conforming to our contemporary age that if we grasp the exchange (homo or hetero) being the subject in place of commodity, to apply economic thinking of valuation in transaction instead of just restricting to quality of commodity, and seeking equivalence in complying standards of valuation as a replacement for equal weights or equal measures. All such modifications do not imply that the earlier thinking is rejected in any way, it is not. We are here to say all this just because of those great minds who taught us as how to think and handle issues, all credit goes to them for their efforts providing us a foundation to improve as they expected. The approach is to translate the sense using current intelligence and philosophy that is acceptable to eternal divine and prophetic wisdom, with the intention of rectifying practical obsolescence of existing laws. This exactly was the approach of those great minds who gave the law first as all of them utilized the knowledge and practices then in use, it was the natural way and still is; argument (dalil) matters only and that comes from the intellect which reflects the state of human acumen in any age.
The simultaneity38 is a property associated to events, in our case to exchange-events; it is also one of the reasons in switching the subject from commodities to exchange-transaction, commodities cant hold this condition of being in the state of simultaneousness, only events can do. The diktat demands to associate the condition (i.e., property) of simultaneity as an order for exchange-events to happen at the same time in one reference frame. In its literal sense simultaneity will be exact when the difference of time in exchange-events is zero, that is almost impossible for humans but only by chance, so a natural demand arises for the approximation of this property to define a time window that may be considered suitable as a reference frame for simultaneity; its not a new approach rather every one had faced this issue to settle in justifying the diktat, for instance the earlier mentioned sense of exchange at once or in a reasonable session or the technical possession of modern age, all do refer to this approach, that is to approximate the reference frame where the lone factor of time is employed as an independent variable to decide its practicability. The use of time factor is suitable for practices, correlates to legal implementation of the decree; however it does not help in finding the corresponding rationality of aimed simultaneousness which is our principal query here, for that very reason, we have to find and include another independent variable in defining the reference frame of simultaneity. In fact, this lacking is a cause of differing positions on the matter since no other criterion or parameters are available to define the extent, size or limits of the time window. The lively theme of interpretation is revolving around the concept of valuation which we estimate as an indispensable factor for all exchange-transactions, and since simultaneity is directly related to these events as well, hence next independent variable that we are searching for, has its highest probability in valuation. As established, we have a basket of few mediums of exchanges, here for the purpose of simplicity, let us reconsider the basket as containing various currencies comprising present and past ones, this will not change our argument or the sense we are projecting.
38
In its extensive definition, simultaneity is the property of two events happening at the same time in at least one reference frame. <http://simultaneity.askdefine.com/>
From the period of metal-based to localized forms and now paper money, the legal assignment of value to its units has never been permanent i.e., the individual currency units in any scheme never had an endless or constant relation between its assigned-value and corporeal composition, that is, exchange worth of a currency is changed by changing its internal formation. We need referring to this common observable fact frequently, so for the purpose of simplifying the practice, let us coin a new term here representing internal variation in exchange worth of currency as Endoview Endoview. In the era of metal based monies, endoview in functional monies were occurring when coins were minted and re-minted by varying its weight or by adding impurities for any good or bad reasons, despite endoview, most of the times the coins were carrying same face-values or assigned-values that existed before the alteration occurred in their corporal makeup. Then it is also a historical fact that in bi-metallic money regimes the exchange-rate say between dinar and dirhams was always varying and never had a constant relation between them. In earlier context, that was the Exoview Exoview Exoview experience of money (the external variation in exchange worth of currency). Today, fiat currencies are devalued or revalued as the regimes want it to do (endoview trend), again for any good or bad reasons, not of concern here, and these regimes define exchange relation for currencies of other origins (exoview practice). Whatever the represented forms of money are, its worth is set by assignment only and the authority who does this, do also have the rights to effect endoview and exoview aspects of the currencies it manages, regardless of the use of this prerogative by authorities who might be claiming any reason(s) justified or unjustified that is not of concern here, the fact remains, the endoview and exoview actions are ever present and people accept them as an obligation and readjust their judgments and dealings accordingly because of their inescapable relationship with society and governments. The only difference in present and past practices is the frequency of exercising the prerogative by authorities i.e., say for instance, endoview in coins was not frequent but in years and decades, and exoview mostly set by markets was also less frequent then today when we see these privileges are being exercised time and again between each dawn and dusk by the authorities and the markets.
The endoview strategies like re-minting, revaluation, devaluation or else, are put into effect across the board in financial jurisdiction served by any functional money therefore no relative erosion of exchange-value is expected in terms of currency itself owing to the reason that the reworked units of money are assigned their previous face-values i.e., a dinar remained a dinar and a rupee remains a rupee, one may call this implementation by any name like tax or whatever, the matter of fact is, these practices have been used in the pretext of monetary and economic management primarily and since applied evenhandedly to all therefore mostly acceptable. It is up to the integrity and sensibility of governments to use this tool in the interest of the public but people in any case have to respect the valuation standards defined or re-defined. In an absolute single currency jurisdiction, the endoview application will not affect any exchange-value relation whatsoever implying that no exoview incident of currency may occur, nevertheless, if we perceive the entire state of affairs of endoview phenomenon in multi-currency setting or its subsequent effects, we may realize that this privilege must only be available to socially responsible governing bodies working for public-centric policies. An endoview occurrence in one currency is an essential cause for an exoview incidence if and only if there are other currencies also functioning in the same jurisdiction; exoview have other possible causes as well e.g. demand and supply circumstances of working monies in the territory etc. Irrespective of its cause, if exoview is happened even in one currency only, it has the potential to affect every other exchange-value relation inside the jurisdiction. The purpose of stretching above arguments to extreme situations of absolute single currency and then multi-currency environments is to draw a parallel of two obvious situations as portrayed within noble evidence, though there is a lot more in between these limits. The logical implications of exoview occurrence are serious thus if a real concern of people is pursued, it is the exoview occurrences. If exoview is the concern of people then its frequency is the most relevant independent variable to define the reference frame of simultaneity simply implying that the commanded simultaneous transactions must be concluded before next transient phase, that is before any transformation occurs in exchange-value of any of the currency (objects) that are being exchanged (homo or hetero).
The time interval (i.e., T=1/Exoview Frequency) set by frequency is the maximum allowable extent of time window not to be violated in order to maintain the legality of hand-to-hand diktat, indicating any position is a valid position within the realm of time window. This inference in fact corresponds to common human nature i.e., if the intention of people is to settle the matter in equivalence with immediate effect, then leniency of time period that does not inflict loss is acceptable to them if they dont possess other reason(s) of urgency. Moreover in particular, this deduction also coheres with our basic theme of valuation applicable to all fundamental forms of transactions stated in cited ahadith where prophetic messages revealing explicit common purpose of ensuring the deliverance of precise equal exchange-values to the participants. If delay in the settlement of involved objects occurs beyond this time window, it will cause inequality on delivery by external reasons of exoview incident. In this context of arguments, answer to the first query is, the rational significance of hand-to-hand diktat is to protect the participants (in transaction) from (economic) externalities39. The answer to second query can also be offered from previously stated arguments i.e., the functional equivalent of hand-to-hand diktat is the function of exchange complying its rationale import must be completed within defined time window by any practical customary technique. The remaining query is relatively sensitive since it addresses an issue of daily life practice which is against the law but not against the nature so to find the narrow line causing the breakage of law is a touchy bit naturally. Nevertheless, if we observe the set rules of interpretation and attempt to find its answer from thematic notion of valuation, it shall work positively. As argued previously that valuation is an indispensable factor required in transactions, shall it mean if valuation is not possible or proper then the transaction will not occur? I think, it is not so, the valuation is a prerequisite for the purpose of delivering exact equivalent of exchange-values in a mutual affair, this reciprocal event in short is a contractual matter to be governed by the norms of society and the perception of people, however, an impossibility
39
In economics, the externality may be defined as an indirect effect on the participants (in our case) of exchange transaction that is caused by outside economic agents not involved in the transaction.
or inadequacy of valuation that is the uncertainty of valuation may not stop people from entering into transactions because of human instincts (fitrah) purporting either good or bad reasons for their involvement, for instance, good reasons like helping some one at the cost of uncertainty, bad reasons are obvious too since uncertainty of valuation is the only reason that actually tempts people to speculate and gamble. Thus any transaction having an uncertainty of valuation becomes a simple matter of intention, another Islamic legal maxim - matters are determined according to intentions40 based on a famous hadith, has special significance here, asking to differentiate between two intents, that is - how the spheres of relevant intentions are to be defined in principle? Let us rewrite the uncertainty of valuation implies impossibility or inadequacy of valuation, this feature may be present, for some reasons in concurrent exchanges, however its an integral aspect of every future transaction; we have several noble evidences from primary sources helpful in comprehending the issue from subjects of Riba, Qard, Dayn, Salam etc., or legal handling of issues by great Fiqh scholars setting rules for contracts like Modarabah, Musharakah, Bai Salam etc. though we may disagree with derivative outcomes on the subject in some respects that might be basic or otherwise, for instance, the noble prophetic tradition on Salam is a pertinent case to study the uncertainty of valuation where in my humble opinion the relevant prophetic evidence is a rule in effect rather than an exception (rukhsah) as considered in Fiqh, nevertheless that is not a matter under discussion here. The uncertainty of valuation in its absolute continuum can be divided in two complementary parts of gharar and risk in my perception i.e., gharar is an uncertainty of valuation rationally unacceptable, and risk is the one acceptable; the rationality speaks of itself as originating from belief, intellect, knowledge, experience etc., and must be the principle of division in affair with uncertainty of valuation for its acceptability (as risk) and unacceptability (as gharar). This perspective is consistent with what is prohibited like speculation, gambling, selling or buying of unborn calf in its mothers womb or the catch of the diver or the birds in the sky and what is permitted e.g. investing, selling and buying with advance or deferred payments etc., not any such matters escape of this attitude towards uncertainty of valuation.
40
Article #1 <http://www.islamic-world.net/economics/99_sharia_maxims.htm>
If intention matters in uncertainty of valuation, will it not matter when certainty of valuation (exact exchange-values) is sought in subject traditions? It sounds like a foolish question and that it is, since no transaction can take place without having an intention and already quoted the undisputed maxim above, but the reason in raising this question is to highlight the fact that there are two hemispheres of valuation where intentions have to be different. The subject ahadith are not referring to both intentions as well that is very much clear and there is no contextual evidence for such deduction rather the certainty of valuation is assured by all ways possible which implies that any transaction having uncertainty of valuation can not be covered within the realm of these traditions. The tradition of Umar (RA) cited earlier and all Prophetic traditions of similar context verify without omission that the intention of all such matters is to settle in equivalence (certainty of valuation) of two exchange-values, Prophet (SAW) clearly prohibited41 selling of gold with gold or silver with silver if anyone of the two is absent, then in another tradition42 with similar context as of subject ahadith the selling of silver with gold is prohibited with deferment. What else could be the reason for these prohibitions if the uncertainty of valuation at settlement is not? A credit price (say of a camel) agreed (say) in dinars is payable by equivalent dirhams at the time of payment, similarly, a qard hasan obtained in one currency can be settled in another currency with equivalent of the first, these are established provisions allowed in Fiqh which are very much explicable. Since the exchange-values in these cases are defined and will be delivered exactly without any disparity i.e., an exact liability is discharged just in another form of prevalent currency which is acceptable by any standard. What else could be the reason for these provisions if the certainty of valuation at settlement is not? The purpose of above deliberations is to emphasize that primary decisive human factors in a transaction are intentions, valuation and rationality, all the rest are relative subjects in reference to
Hadith # 1560 Vol.2 - Arabic to Urdu compilation of Sahih Muslim by Moulana Aziz-ur Rahman Online Reference - Muslim :: Book 10 : Hadith 3845, web link <http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3845&number=3845> 42 Ibid - Hadith # 1578
41
these essentials, i.e., gold, silver, dinar, and dirhams or concurrent and delayed settlement, all are correlated issues to be seen in the context of these fundamentals. A consolidated summary of above scheme of thoughts may be portrayed as below:
" "
FORCED
% $ & $
GHARAR
% $ & $
This is an all-inclusive conceptual premise for a transaction. The resulting domains of permissible and impermissible are definitely subject to some conditions that might be explicit or implied while some objects are required for the purpose of fulfilling those terms of domain. We have discussed explicit conditions so far and now let us include briefly the implied condition that we showed earlier while discussing if the genus differs... diktat, i.e., objects must be identified for exchange (homo or hetero). The idea of identification relates to the argument of valuation not reliant on ownership or possession which was subsequent feature made primary through inadequate conception of hand to hand order; the identification notion primarily encompasses the previous diktats as well as the current one and signifies that it is not always necessary to own or possess things of trade (e.g. agency idea) but the rights of trade (ownership included) where existence and specifications of the article of trade are the real conditions for a thing to be identified.
"
"
NATURAL
% $ #
RISK
Equality
Inequality
Acceptable
'
!
Unacceptable
The legal sense of two concepts is poles apart, identification will not conflict with any thoughts of primary sources because it also includes ownership and possession logic when required but it has far reaching legal implications if compared to unnecessary legal justifications we see in contracts based on prevalent laws. This is a definite improvement from simple ownership to identification of objects that perfectly coheres with the projected scheme however no further discussion is sought at this moment. By now, we have concluded that the subject ahadith encompassing certainty of valuation domain only. A loan transaction by nature, either specifying fixed time period or open time frame, is a case of uncertainty of valuation where intention matters and one may not have two intents for one transaction. Let us first understand, briefly, the case of loan from Fiqh; loan (qard) is a sale of currency with currency with some delay since every sale (or exchange) of same or unlike counter-values in Islamic Jurisprudence is called a bay. The format of bay which involves only dayn i.e., dayn bi dayn shapes the contract of sarf and given that Fiqh sets rules therefore the contract of sarf speaks about the principles for the exchange of currency and there is no explicit mentioning of loan as such in this contract but when it articulates the counter-values must be delivered and taken possession of within the session of the contract. In other words, a condition for delay can not be stipulated43, enforced by a second rule of options saying No option (khiyar) can be stipulated in this contract. The reason is that an option delays the transfer of ownership and this violates the first condition of spot delivery and possession, implies that loans are not permissible with or without stipulated excess as the condition of simultaneity can not be observed due to delay. These rules presumes that the goal of participants shall only be to exchange the objects; any reason or rationality is rejected in very absolute44 way since the rules do not judge why one may intend to transact these objects which is like you do exchange but do not
Article 4.4.1.3 The Contract of Sarf in The Concept of Riba and Islamic Banking by IAK Nyazee, yet in another write-up from him the clauses of contract are rephrased but not conflicting. Since I regard Nyazee as one of the most knowledgeable jurist of modern times and rate him very high for his legal (Fiqh) insight on Riba therefore most of my references on Riba are from his work. 44 Possibly because a concurrent exchange of similar objects was considered meaningless or trivial thus indirect conclusion is reached that it is only delay that actually is the substance of prohibition but this may only be an assumption not a reason or absolute conclusion or valid argument.
43
know why; Nyazee portrays this deadlock situation excellently by saying45 The tradition of Ubadah (God be pleased with him) is not saying that you undertake the transactions mentioned; it is saying that if you undertake such transactions, then, here are the rules you must follow, this exactly reflects the connotation of sarf rules outlawing loans, simply saying regardless of any intention (like he says: if you undertake), implying matters can also be determined devoid of intentions, but this is a serious inconsistency vis--vis the hadith (inamal aamalo bin neyaat) and the legal maxim quoted earlier about intentions, therefore we must try to understand this inconsistency which is different from legal inconsistency. A legal inconsistency means a conflict of deduced rules with a primary evidence46, in the methodology of Fuqaha, if this happens to be the case then it is corrected by offering exemption (rukhsah) to the evidence i.e., an exemption is to undo the reparation that is caused by the paradox of rules since primary evidence can not be ignored in any case, it is thus exemption granted for Qard as Qard Hasan which otherwise can not be allowed as per rules deduced, still justification for this exemption is required even by guess or strange theorization. It is imperative to comprehend that correcting methodology (rukhsah) is applied only to deduced rules for its divergence with the primary evidence and this technique by itself signifies the possibility of a judgment oversight at conceptual or theorization level. If such an omission exists at that level then it had to be transmitted onward without resolve for the reason that we can not expect from great scholars that they could have left it unresolved if had realized. The inconsistent matter of intention that we noticed here above, is of that sort i.e., conceptual. It has already been differentiated in our approach where the origin of this conceptual disagreement again is the same i.e., the issue of subject commodity or transaction. There are other conceptual challenges as well relating to Riba and at least five of them are quite critical in nature that we can argue with reasonably for their philosophical outlook but it is not desired here since those are not related to the subject ahadith and I have to finish this discourse too, accordingly it will be adequate to confine to one more conceptual argument in our context of loan, that isnt a matter of difference with Fiqh rules on loan but the conception.
45 46
Article 4.8, Page # 71 The Prohibition of Riba, Elaborated by Nyazee (2009), emphasis added. For its understanding and terminology used in Fiqh.
But shall we or can we try to tackle the conceptual discrepancies using our current intellect where the intention (if it really matters to legalism) is not criticism but to recover the coherence lost in the process of theorization? I think we can rather we should, simply because the original ideas of primary sources are not restricted to any age while removing inconsistencies is actually obligatory to uphold the supremacy of primary wisdom. I dont see any reason that forbids undertaking such efforts of reversing a theorization mismatch; the only requirement is to establish that there exists a conceptual problem. Legal positions, deduced rules or principles are secondary to concepts and become invalid if a real problem in their concepts is identified. Let us try one such case of concept. In the early Fiqh or you can say the original concept of riba al nasiah as quoted or defined by Nyazee, conveys, riba al nasiah, means Riba arising out of delay; excess from the benefits of delay; the benefit of Riba al-nasiah goes to the borrower47, these perceptions tell the whole hypothesis about the branch of Riba quite shocking rather distasteful and very disagreeable. First of all, its not defined what a benefit is? Though we all know it is an advantage of some kinds not just one kind. The concept of riba al nasiah is not identifying any particular kind of benefit but all benefits with only distinction that the cause of such benefits is delay and this effect (of the cause) is certain without doubt because the statement is absolute in nature giving no option to consider otherwise. There is nothing as well in other essentials of a loan transaction i.e., intention, money itself, and the transfer of ownership of money from lender to borrower, that gives a clue of the kind of benefit that the borrower will enjoy. If Riba is an evil, which it is, then some evilness is must to identify emerging by this act of loan where we see no means to detect the same from the dynamics of the transaction. It is not enough to say that benefit is Riba, if some benefit goes towards the borrower, so what? There is no corresponding rationality observed or common for this definition of riba al nasiah. This may be the reason that later scholars disowned the early Fiqh concept and replaced it with their own labeling of riba al-Quran, their reasons of rejecting and then renovating the concept are not known, at least to me. The rukhsah justification given for qard hasan due to uncorroborated riba al nasiah concept is also not convincing as well, that is the benefit toward
47
Page # 53, 52, and 56 The Prohibition of Riba, Elaborated by Nyazee (2009).
borrower is considered as gifted or donated to him by the lender and since a gift can not be reclaimed therefore period may not be fixed, hence qard hasan (open time frame loan) is permitted while a loan with fixed time frame is not permitted, here the stipulation of time period is considered as a call for the redemption of the loan. If Riba is an evil then how its evilness will be removed by gifting or donating? Conversely, if this act of gifting or donating the evil is acceptable or rational then Riba will lose its meaning in effect and no defense line would work then. In fact, these concepts and logic are not consistent with other concepts of loan and charity that are enlightened in other traditions of Prophet (SAW), for instance, qard given twice is like sadaqah (of the same amount) given once; then in another tradition, Prophet (SAW) said, sadaqah will be rewarded by ten times its amount, while qard will have a reward of eighteen times. The above cited prophetic evidences clearly indicate that the act of qard (loan) is superior than the act of sadaqah (charity); economic intellect can understand this better than a mere legal mind; loans are given to active or potential economic agents (as implied from their promise to return), means they produce value wanted by all to consume, while in case of sadaqah (though is a good act too), the probability of its recipient for getting involved in producing is less than becoming a mere consumption engine of value produced by others, accordingly prophetic wisdom screening economic logic of the acts. Does it make sense to attract or convince legal minds? Then, if we inquire the economic justification of a fixed term loan contract, that is commonsensical too; firstly, when a lender gets a promise of payment for his money within a given time frame the common human nature (fitrah) indicates that a fixing of period will increases the probability of loan commitments in the society and this will mean more economic activities in the economy; secondly, both lender and borrower can plan better for their other activities related to money and become more rational and responsible. A lot can be said on the positive economic sense of loans science, but the absolute negativity attached to loans (via riba al nasiah) is neither final nor convincing; justification of rukhsah is hypothetical and not convincing too; both old Fiqh concepts are inconsistent with the optimistic perceptions of above prophetic evidences.
The sole reason for the exclusion of qard (loan) and the innovation of qard hasan is the initial idea of uncorroborated riba al nasiah which has its Sunnah evidence in subject ahadith chiefly the hand to hand diktat. Though, succeeding scholars disowned the early concept of riba al nasiah and tailored its sense from concealed to stipulated kind of excess however they did not questioned its manifestation in the contract of sarf which is based on concealed benefit. In other words, if riba al nasiah is the stipulated excess then no stipulation of excess in a loan contract will mean no Riba in it, and the fixed term reason of rejection will not be relevant then. The stipulated excess defining feature for riba al nasiah is identical to the original Fiqh definition for riba al fadl (excess through estimation or qadr48), no substitute concept is offered for new legal position of riba al fadl but categories of Riba are retained at the cost of rationality, why then people will not be confused? The situation is - the contract of sarf is based on early theorization of Riba, which was modified later on, however no subsequent amendment in the contract of sarf done to reflect that change this inconsistency exist as of today. If current economic intelligence is employed, we may resort these issues harmoniously, our belief suggests - it was only the absence of corresponding rationality in theorization process conducted by great Fiqh founders which forced them to take the piety thinking route of banning the doubtful because of the severe commands in primary sources, a proof for this argument is the adjustment done by following scholars, however for reasons, they also could not do full reparation task. The matter is serious; people want to believe in law but not unbelievable law, it is imperative to recognize that people dont know and dont believe these positions even exist. I dont remember exactly but it is long time since I am inquiring the people from varied walks of life asking them to respond - if they conduct fixed term loans, that is not allowed in Islamic law, and the responses usually received are of kind you must be wrong; it can not be like this; dont say silly things about Islamic law; its not engineers task to ponder on Islamic law; even very learned people who have quite reasonable knowledge of religion, do not believe this. One thing is common in all responses that no one is willing to believe if the implications of rules described in the contract of sarf are banning fixed term loans.
48
3.1.1 Excess through qadr (estimation) in The Concept of Riba and Islamic Banking by Nyazee
There must be some philosophical base for any legal viewpoint or a legal system; we believe valuation as the philosophical matter of transactions that we find in all noble traditions persistently, we learned this by transformed economic intellect of this age which is different from the simple concept of equivalence of previous age, certainly the reason of this update have its roots in our changing of the subject from commodity to transaction. A transaction must have an intention that shall be accounted for in a judgment, while valuation has two exclusive spheres of certainty and uncertainty and since the purpose of subject evidences falls in one of the two, therefore the other is irrelevant. Hence, the answer to third query is hand to hand cant be applied universally to both spheres of transactions intentions and does not cover a loan that is a case of uncertainty of valuation. For above two parts of the text (matn), the abridged positions are: The condition of simultaneity (hand to hand) is quite challenging, its rational significance seems to protect the transacting parties from (economic) externalities. Until now, there was no reason or clear mechanism in Islamic jurisprudence to define a legally valid time window for this condition, we introduced exoview fact as its reason and its frequency as a mechanism to defined the same. In previous diktat if the genus differs it is comprehended that an up to date valuation (i.e., exchange relation) is necessary due to exoview effects in a multi-currency setting. Since, we changed the subject of ahadith to transaction which is an intended act, therefore its required to identify the intention applicable to these traditions, evidently it is the equivalence or the certainty of valuation; then we argued, the uncertainty of valuation can not be covered in the textual provision of subject ahadith. We also argued that primary decisive human factors in a transaction are intentions, valuation and rationality, while all the rest are relative subjects in reference to these essentials hence the previous conception on commodities becomes irrelevant in our theorization process. We discussed the uncorroborated concept of riba al nasiah as available in early Fiqh to demonstrate next that there exist no corresponding rationality for the concept which was although modified by later scholarship but its manifestation in the contract of sarf was not adjusted. There is no solid reasoning to prohibit fixed term in a loan contract and people in general dont know/believe such binding of Islamic law.
5. Diktat He who paid extra.49

Text (matn) section of hadith : He who paid extra or asked extra, in fact dealt in usury. Related queries : 1. 2. 3. How to define which extra? Extra, even if agreed mutually, will it be Riba? Is Riba here intrinsically different from Riba in a loan?
The matter of excess or extra though apparently looking simple is full of twists and turns; what is extra or excess that forms Riba is a continued convoluted subject from start and since the injunction is stringent in nature thus piety rules here as well, consequently we notice stances lacking convincing rationalization for excess that may be Riba, for instance, the earlier Fiqh case of riba al nasiah where the idea of concealed excess caused by delay was employed to define this branch of Riba. The idea of stipulated excess was a bit practical the one that can be estimated by some way and this is used to define riba al fadl in early Fiqh and riba al nasiah in subsequent times. The unified early Fiqh definition of Riba speaks about extra as excess in the exchange of two counter-values, where excess is indeterminate since it is not yet identified what value is? All of these descriptions of excess are not clear-cut to represent Riba; the concealed one is almost vague, no detectable concept exist about this excess; then stipulated excess is not always Riba since excess is stipulated in valid contracts like Murabaha financing in modern banking which is approved by current scholarship; then excess is sometimes conditional too, like in Modarabah, and all of these cited cases in point relate to money for money forms of transactions. There is no issue in saying that Riba is excess, collectively agreed by all in history, but the issue is what sort of excess since all kinds of excesses cant be Riba, therefore we need to attach a property or attribute to excess that shall indicate or distinguish it is Riba. The earlier attachments of concealed and stipulated descriptions to Riba are not distinguishing factors for very unfortunate reasons of having no backing concepts and also dont possess the faculty
49In
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to do the required demarcation they seem to be employed for. The concealed one comes from hypothetical supposition which is rejected by succeeding scholars perhaps for its unconvincing and hard to believe argument. The prevalent stipulated description is also lacking in its sense and practical implementation, to clearly delineate between a Riba and no-Riba transaction, thus at times we see risk brought-in for the purpose of demarcation but that does not suit everywhere such as in Murabaha financing and risk itself is another undecided parameter because every loan/debt affair has some element of risk and then you need to define which risk, why this risk and not that risk. It is undeniable to say that the issue of which excess is resolved or does not exist and if someone is not willing to recognize this as an issue or no more an issue, then this mind-set becomes an issue bigger than the actual issue. The notions of concealed or stipulation are not inferred directly from subject hadith since the tradition only saying extra, but by external reasoning or evidence of practices such as increasing of loan principal or debt liability, though these are definitely Riba yet stipulation is not suitable as an argument which limits the span of prohibition to those practices only from where the idea borrowed and consequently new practices are excluded of embargo, this is actually happening in our times. Would it not be better to beg the prophetic traditions again with our current intellect and existing practices so that we may deduce a fresh reason to employ as an attribute to excess, since ultimately, contextual inference is more convincing and accurate than an extra-contextual hypothesis? It is possible for us today as we find a corresponding rationality for this attribute now in our age from current practices that was not available previously; it is evident and clear that we may realize. Let us revert again to our central philosophy where transaction is adapted as the subject of prophetic traditions and valuation to be the indispensable factor to determine right and wrong illustrated in noble evidences. Although, we have already discussed the possible correlations of causes for mentioned transactions when equal for equal diktat was deliberated, however, here it is required to move further with that understanding to discover the attribute but more important is to relate it with current practices falling under prohibition.
The tradition says he who paid extra or asked extra, here paying or asking, obviously are the acts of exchange participants; extra cant be anything good or bad in itself but the act of extra can be; or we can say an extra or excess or benefit is bad or illegal if acquired through an act which is bad or illegal, therefore let us try to find out the important attribute for excess within acts as seen by our way of thinking i.e., an act that is not acceptable by nature; the act that is not acceptable in our theme of valuation too. It may not be a difficult task since we can identify some commonsensical rules of valuation in an affair of exchange and then relating them to all possible exchange formats for the purpose. Commonsensical Rules for Valuation :
1. 2. 3. 4. Defining exchange-relation among exchange-values is the prime purpose and requirement of a valuation process. In the presence of an exchange-relation, valuation is automatic and none of the participants get the rights of valuation. In the absence of exchange-relation, an internal or external reference or yardstick is mandatory to determine the relationship. When exchange-relation is to be determined, both participants get the rights of valuation.
As a matter of fact, the exchange-value of an item is pre-assigned or not pre-assigned i.e., negotiable or non-negotiable, this sounds analogous to Fiqh terms of dayn and ayn, anyhow, if we use these exclusive exchange-value provisions in all possible combinations for entire spectrum of elementary exchange transactions that we portrayed earlier under the diktat if the genus differ..., this will give us a simple view of all exchange conditions as below:
Exchange-Value : Exchange-Value
(NN for Non-Negotiable & N for Negotiable)
Exchange Class 1. 2. 3. Intra-Species (Intra-S) Inter-Species (Inter-S) Inter-Genus (Inter-G)
NN : NN NN : NN NN : NN NN : N NN : N
N: N N: N N: N
Let us first speak about each exchange condition of valuation and then we will draw a chart of possible situations of exchange.
Commonsensical Exchange Conditions of Valuation :

In a mutual transaction, if the exchange-values are: 1. 2. 3. 4 5. Intra-S and both are non-negotiable valuation is automatic since the exchange-relation exists and valuation rights are to none. Impossible condition as species are identical, both must be same. Intra-S and both are negotiable valuation is automatic since the exchange-relation exists and valuation rights are to none. Inter-S and both are non-negotiable an external reference is mandatory and valuation rights are to none. Inter-S when one is negotiable and the other non-negotiable - the non-negotiable becomes the internal reference and the rights of valuations are to both. Inter-S and both are negotiable an external reference is mandatory and valuation rights are to none. Inter-G and both are non-negotiable an external reference is mandatory and valuation rights are to none. Inter-G when one is negotiable and the other non-negotiable - the non-negotiable becomes the internal reference and the rights of valuations are to both. Inter-G and both are negotiable internal or external reference is not-mandatory (optional) and valuation rights are to both.
6. 7. 8.
9.
Above conditions illustrate five possible exchange situations (S): Possible Exchange Situations
(NN for Non-Negotiable, N for Negotiable)
Exchange Class
1. Intra-Species (Intra-S) 2. Inter-Species (Inter-S) 3. Inter-Genus (Inter-G)
NN : NN 1: YES-S1 4: YES-S2 7: YES-S2
NN : N 2:Impossible 5: YES-S3 8: YES-S3
N: N 3:Unlikely 6: YES-S4 9: YES-S5
This idea of totality is available from noble evidences of prophetic wisdom and the entire certainty of valuation sphere is sorted out in related ahadith handling each possible exchange situation with natural and commonsensical justification. All situations (S) in red color signify that no valuation rights are to participants and all situations (S) in green color signify valuation rights are available to participants, we may see acts in this perspective.
Before taking up the matter of acts and exclusive privileges, let us first talk about the one unusual situation (#3) marked Unlikely, it means two identical negotiable exchange-values (e.g. 1 kilo dates in exchange of exactly the same kind of dates weighing 1 kilo), its actually the only exchange-form conceived in previous insight of subject evidence (the sole or key source of riba al fadl concept). It was thus assumed from this inference that since this is a needless exchange therefore the purpose might be to ban the loans50, in our current economic understanding, this argument has no appeal. The rights and no-rights of valuation correspond to freedom and prohibition of acts naturally, no confusing state of affairs here. If people get the rights of valuation in a mutual affair then there is no possibility of Riba in it like in situation S3 (trade) and S5 (barter) or no likelihood of illegality, however when people dont enjoy the privileges of valuation and need to follow an internal or external reference for the purpose of valuation to define equivalence in an exchange where certainty of valuation is intended, then an extra or excess causing inequality is only because of disrespecting and exploiting the situation by force, explicit or implied; previously we argued logically - there is no understandable justification (natural or economic) for an economic agent to agree on this inequality, such justification was a real concern of great Fiqh scholars as well e.g., all excess over what is justified by the counter-value51, and on Riba issue, several similar statements in Islamic jurisprudence are notable though lacking precision in definition. The situations (S1, S2, S4), marked red, not offering negotiability of exchange-values, are eloquent framework of situations stated in various ahadith of Riba where excess is not workable but only by an act of force. Let us recall, the concept here is, extra does not exist actually. Any act of extra here is irrational and unwarranted. We have several expressive lexicon describing this unacceptable act causing excess or inequality, such as contrived or unjustified or unnatural, however forced as an attribute suits the most i.e., a forced increase or forced extra or forced excess goes well with the situation and matching with the negativity in a mutual affair of exchange. This also summarizes the answer to first query.
50 51
It may be dubbed as a case thrown the baby out with the tub water. Ibn al-Arabi on Riba-al-fadl as reported in famous judgment on Riba by SCP.
The next two queries can be discussed briefly since related points are already made here above; however as argued earlier we may realize the corresponding rationality of the prohibition in this age and time that was not available previously, so firstly let us serve it briefly though it will require another effort to go in its details. The prophetic traditions cover the whole realm of exchange forms that we have shown above; nothing escapes of these situations in a mutual exchange. Some of these situations were not even dealt with in Fiqh because of some reasons including that of the subject (commodity), consequently several existing practices may not be addressed by accessible ideas in the Fiqh; unfortunately, current scholarship is inducing further incoherence by handling issues in careless ways, for instance, the case of forex transactions the modern scholarship suggests a ridiculous idea to consider one of the currencies as commodity and as usual offering no supporting concept or basis/argument (dalil) for this proposal. How and why? The answer is total silence; perhaps this is better to keep silent rather than offering incongruous arguments. In the famous judgment on the case of Riba with the supreme court of Pakistan, in conclusion, while describing Riba-al-Sunnah, says A transaction of money for money of the same denomination where the quantity on both sides is not equal, either in a spot transaction or in a transaction based on deferred payment52, let us see this statement of judgment in our perspective. There are several issues with this statement, like it has nothing to do with the intention of the participants in exchange, it applies to all money for money transactions and no differentiating factor is included to cohere with pure money for money transactions like Modarabah and Murabaha financing etc., however at this moment we may focus the one which, in our perception, forms the underlying reason of Riba prohibition in Sunnah. In above cited statement, the transaction of money for money of same denomination is addressed but what if the denominations are not the same, that is if rupee is transacted with rupee, that is included in the meaning of the statement but it does not include if
52
SCP Judgment on Riba Justice Muhammad Taqi Usmani Part - Conclusion article 242(i) repeated in the Order of the Court
rupee transacted with dollar, riyal etc. (i.e. second denomination, value unit, is different) whereas the two ahadith we discussed here above cover both types of exchanges. In hadith of six commodities, one form is stated, while from the second hadith of dates relating to Bilal (RA) the second form is evident, both evidences speaks of Riba and both involve dates as the object of exchange. The reason of such neglect is that second evidence is not considered to define Riba from Sunnah and naturally the definition covers the type that is obtainable in the former evidence only, this is the methodological problem in effect. The neglected evidence says if the qualities of dates are different, means the species are different, implies the exchange-values are not the same whether negotiable or non-negotiable, i.e., whether money or not-money then an external reference is required to attain the certainty of valuation. All fiat monies today are same genus and since their exchange-values are different so they are just different species of money similar to the species of dates. Yet, if impractical minds do not agree with this argument (i.e., all fiat monies are the species of the same genre) even then the noble evidences are not lacking, it is said in another hadith53 that gold for silver must be equal and hand to hand otherwise Riba, same turn of phrases, same verdict of Riba though genus are different. In our deliberated context of valuation, either exchange is Inter-Species or Inter-Genus, both involve Riba in given situations that perfectly cohere with quoted evidences, this type (i.e., when denominations are different) has to be accommodated in any definition of Riba derived from Sunnah and when this kind of transaction is included in Riba, then equivalence of two different currencies will have to be defined as well that cant be just quantitative but as suggested in neglected evidence that is, through the process of valuation by asserting the exact exchange-relation between two currencies. Simple quantitative equivalence in case of same denomination is true, however for different currencies the equivalence has to have some reference but not several references that we unfortunately see in foreign currency business these days i.e., there are three exchange-rates (official, bid, ask) for each pair of currency where the official rate is never applied hence equivalence in exchange
53
http://www.searchtruth.com/book_display.php?book=34&translator=1&start=105&number=344
is never achieved as per the demand of hadith. These bid and ask rates just correspond to who paid extra or asked extra mention in prophetic tradition but neglected in the definition of Riba derived from Sunnah. Who is not aware of the terrible fallouts/effects of this artificial and speculative forex business which has surpassed the real economic activities by manifolds? If some one is still not able to recognize the prophetic wisdom of prohibition then devil might had touched him to madness. The front end mechanics of bid and ask rates is the building block of forex, greed and speculation are the implicit driving forces of this activity, the extra is forced Riba, this practice was not existing previously therefore we cant hold them responsible for its omission but in this age and time, there is no excuse for us to neglect the prophetic evidence unambiguously describing the current phenomenon of forex inequality. If current Islamic Banking scholars have no argument to negate above explanation, then they must come up with brave heart and mind to denounce all foreign currencies business that is based on different buy and sell rates, Riba from these practices is hurting the mankind more than the Riba incorporated in loans, even if it is not more yet it is prohibited Riba, keeping silence is a burden of guilt. The next are answers to other two queries, in brief: A mutual agreement for an extra in a concurrent exchange seems impossible and impracticable, why some one will want to do that? There is no understandable reason detected hitherto, however if it be possible voluntarily i.e., without explicit or implied compulsion, even then it may not become a reason of forming the law because it is not the common nature (fitrah) of people. The answer to next query is - no such provision in law is possible allowing extra even if agreed mutually. A forced increase or excess in a contract of loan is Riba; stipulated excess is also forced because it does not exists ex-ante and shall not be stipulated in a contract, and any such agreement is false implying an explicit or implied existence of compulsion. There is no difference in Riba discussed here and Riba in a loan transaction. The Fiqh types of riba exist because of disjointed concepts in early thinking, in our understanding, there are no types of Riba and that we have shown through coherent concepts.
6. Diktat The receiver and .54

Text (matn) section of hadith : The receiver and the giver are equally guilty.
In the philosophy of Islam which revolves around nature, divine and prophetic commands define what is right and what is wrong, what one can do and what he should not, the whole fabric of any belief system is woven around such moral and ethical standards; a violation of these principled judgments is the guilt of actions by the followers of the doctrine; in human nature, guilt is a negativity realized by its actor while acting against his nature or belief. In subject tradition, the demarcation of right and wrong is explicit, conforming to the nature and economic intellect that we noted; a moral judgment is given as expected.
Conclusion
No such statement from any Fiqh scholar ever made, claiming he has completed the interpretation of divine and prophetic text and no further thinking is required. Still, the holy text is an object of philosophical and scientific investigation, definitely the intellect is enhanced and investigation techniques are improved, thus results may be different and better, the law may be modified accordingly. It is undeniable that rules of law vary with the passage of time. Riba (interest, usury) is an economic matter; an exchange-event is fundamental to this branch of social science and the focal point of deliberations. The noble prophetic traditions have addressed all possible forms of exchange-events while revealing the wisdom of prohibition of Riba to imply economic justice. The law formation in Fiqh concentrates particularly on post-transaction piece of justice and speaks less on the wisdom where the reason of prohibition is. The contemporary and evolved human intellect is able to see the noble evidences through a different and better perspective which offers a coherent view of wisdom and justice.
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Riba and Hadith of Six Commodities

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OCS-00214 March 18, 2011

Riba and Hadith of Six Commodities

Riba, Hadith, Contract of Sarf, Forex, Loan, Qard, Endoview, Exoview

D63, E42, K19, P19, Z10

Electronic copy available at: http://ssrn.com/abstract=1790222

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Electronic copy available at: http://ssrn.com/abstract=1790222

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2. Sahih Muslim hadith # 1570 says:

Online Reference - Muslim :: Book 10 : Hadith 3854, web link <http://www.searchtruth.com/book_display.php?book=010&translator=2&start=3854&number=3854>

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1. The Six Commodities

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2. Diktat Like for Like

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3. Diktat Equal for Equal24

Hadith # 1569 only

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4. Diktat If the Genus Differ.31 Differ.

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explicit sense when the tradition says if the genus differs

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Heterogeneous Either Species

Entire Spectrum of Elementary Exchange Transactions

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4. Diktat Be Exchanged Hand To Hand

Ibid. Article 7.2.1 - Quoting Al-Sarakhsi

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Ibid. Article 5.3 The sub-principles in Sunnah

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5. Diktat He who paid extra.49

hadith #1570 only

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Exchange Class 1. 2. 3. Intra-Species (Intra-S) Inter-Species (Inter-S) Inter-Genus (Inter-G)