Islamic State's Currency Is So 7th Century
Islamic State announced last week that it planned to start minting its own coin, including a gold dinar, a silver dirham, and a copper “feloos” for small change.
The jihadist group and its leader, the self-proclaimed “caliph” Abu Bakr al-Baghdadi, almost certainly consider the establishment of a mint an essential building block for their larger goal of restoring an ancient Islamic empire.
The roots of the project go back to the dawn of Islam as a religion. Under the leadership of Prophet Mohammed, Islam became the de facto faith of most of what is now Saudi Arabia. After his death, in 632, a succession of powerful political and military leaders known as caliphs conquered much of the Middle East and parts of North Africa. The first was Abu Bakr, whose name the leader of Islamic State has adopted.
Abu Bakr and his successors -– the so-called Rashidun caliphs -- gave the growing Islamic Empire a functioning government. Today, Islamic State, which has imposed its bloody rule over swathes of Iraq and Syria, makes deliberate appeals to this history. The announcement of the new coinage came from the group's treasury, or dīwān al-māl, a term that resurrects an institution founded by the second Rashidun caliph, Umar I (634-644), to collect taxes, record revenues and administer the caliphate’s finances.
Umar I’s dīwān al-māl oversaw the collection of a statutory tax known as the zakat, which was used to help the poor and the needy; it also implemented the distribution of regular cash stipends to the faithful known as atā. The caliph soon realized, however, that it was impractical to try to run these programs -- never mind a state -- using the debased coins of conquered enemies. He tried minting some of his own, but failed.
Enter Abd al-Malik, who ruled from 685 to 705. He was the most famous of the Umayyad caliphs who succeeded the Rashidun leaders, and he moved the capital from Medina to what is now Damascus. There, he built a state apparatus capable of administering a vast territory that stretched from Spain to modern-day Pakistan.
By the time Abd al-Malik became caliph, the Islamic Empire had absorbed two very different kinds of territories, which used different currencies. The lands to the west had formerly been under Byzantine control and tended to use gold coins known as solidi, which were minted in Constantinople. In the territories to the east, the coinage was silver coins known as drachm, which were minted in the former Sasanian Empire, in what is now Iran.
After some early, aborted experiments at creating a uniquely Islamic coinage, Abd al-Malik opted for what is known today as a bimetallic system, setting up a currency that spoke to both the West and the East: a gold “dinar” weighing 20 Arabic carats, or 4.25 grams, and a new silver “dirham” of 2.97 grams. The choice of 4.25 grams reflected the Islamic standard of weight known as the mithqal.
In keeping with informal Islamic law, the coins couldn't be struck with representations of human or animal figures. Instead, they carried epigraphs aimed at the faithful such as “There Is No God but Allah and Mohammed Is the Messenger of Allah.” Some coins also had images of palm trees and other suitable symbols. The first gold and silver coins appeared between 696 and 698.
Abd al-Malik was making an unequivocal statement about the rising power of the Umayyads by displacing the monetary systems of the empires that had been defeated in battle. According to the historian Andrew Ehrenkreutz, “before the rising silhouettes of Muslim minarets began to dominate Mediterranean horizons, Islamic dinars had proclaimed the end of economic submissiveness of the Near East and the beginning of its drive in quest of ‘international’ monetary supremacy.”
Islamic State's pronouncements on the subject of monetary reform channel Abd al-Malik. The new coins, the group said, would be outside “the tyrannical monetary system that was imposed on the Muslims and was a reason for their enslavement and impoverishment.”
And Islamic State intends to issue both gold and silver coins at the weights established by their forbearer. Even the design of the coins is evocative of the Umayyad dinar and dirham, containing comparable inscriptions as well as symbols (but no human or animal figures).
These days, the dream of setting up an alternate monetary system isn't limited to Islamic State; state-hating libertarians have long yearned for a return to gold and silver as the basis of monetary value. But as any goldbug can tell you, competing against state-issued paper money is challenging, and the jihadis are certain to discover that the path to freedom from the “satanic usury-based global economic system” is a far more difficult proposition than in the days of the caliphs of the Islamic Empire.
In any case, the 21st century Abu Bakr and the other Islamic State leaders have a very selective interest in the past. Their desire to bring back the ancient caliphate doesn't extend to the larger legacy of Islam of this early period, ranging from Umar I’s tolerant attitude toward the Jews of Jerusalem to a cosmopolitan curiosity about the science and culture of the West.
Islamic State can only claim beheadings, kidnappings, slavery and terror. Minting a few coins won’t change that.
This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.
To contact the author on this story:
Stephen Mihm at firstname.lastname@example.org
To contact the editor on this story:
Max Berley at email@example.com