Q&A: The Difference Between Value and Price? By Sheikh Ata' Abu Rashta
Question: What came in the economic system about the value and the price is
not clear and in particular the issue of recording the dowry (mahr)
in terms of value and price. Please explain this in some detail,
may Allah bless you?
Answer: The value is
the amount of benefit present within the commodity, which is fixed at all times and places.
So the benefit of a jug is estimated, in itself as an object, by the materials
it is made of, its suitability for carrying water, whether for drinking or
ablution.
These uses are never detached of it today or tomorrow, whether its price increased or declined. If it is estimated by the benefit of another commodity, the benefit of the other commodity should be equal to the benefit of the jug at the moment of estimation. If the value of the jug was estimated by the value of a chair as an example, then it is necessary that the internal benefit of the jug is equal to the internal benefit of the chair, in terms of its constituents (components), its use (function).....etc. This estimation by value does not differ from time to time, or from a place to a place. If for example, the benefit of the jug for a man is equal to the benefit of half a chair, this value remains the same every time, because it is estimated by the physical components of the commodity and its uses, which are fixed in it no matter whether the price increased or decreased.
These uses are never detached of it today or tomorrow, whether its price increased or declined. If it is estimated by the benefit of another commodity, the benefit of the other commodity should be equal to the benefit of the jug at the moment of estimation. If the value of the jug was estimated by the value of a chair as an example, then it is necessary that the internal benefit of the jug is equal to the internal benefit of the chair, in terms of its constituents (components), its use (function).....etc. This estimation by value does not differ from time to time, or from a place to a place. If for example, the benefit of the jug for a man is equal to the benefit of half a chair, this value remains the same every time, because it is estimated by the physical components of the commodity and its uses, which are fixed in it no matter whether the price increased or decreased.
If the price of
the jug has increased, this does not mean that its components have increased,
or its uses have increased, for its value is constant (fixed) though its price increased
or decreased? This applies to the wardrobe, its components as well as its uses
are fixed (constant) whether the price increased or decreased.
Similarly, if
the value of the wardrobe was estimated by the value of
another commodity, by gold for example, and it was found that the
benefit of the wardrobe is equal to twice the benefit of a piece of gold, this value remains
constant because it is estimated by the components of the substance of the
wardrobe and the components of the substance of gold, and man's
benefitting of the wardrobe and his benefitting of gold. Therefore,
the value of the wardrobe remains equal to half the value of
the golden piece, whether the price of the wardrobe or the price of
the golden piece increased or decreased. This is because the value depends
on the physical components of the commodity and man's benefitting of
it in terms of its uses.
As regards
the estimation of the commodity by the price, this is not necessarily
equal to the physical components of the commodity and its benefit to
man as a human being; rather such estimation by price is controlled
by supply and demand.
The important
observation in the subject is that the estimation of the commodity by the price does
not consider the physical benefit of the commodity. It might rather estimate
the price of wheat by paper currency regardless of the benefit of the
physical substance of the wheat, which is great, while the benefit of the
physical substance of the banknote is almost nothing more than the type of
paper, drawings on it and its technical production. This is because
the price is related to the supply and demand. So a
wrongdoer might sell a bag of wheat to buy a bottle of wine, despite the wide
gap between the benefit of the physical substance of the wheat bag and the
benefit of the physical substance of the bottle.
However, when
the value is estimated it is assessed by an equal benefit present in
both sides. Therefore, we do not say the value of wheat bag is equal to
twenty paper dinars, because the physical benefit present in the substance of
wheat in the bag is equal to thousands of the physical benefit present in the
substance of the twenty paper dinars.
Value is
estimated by the physical benefit present in the commodity; therefore the value of
a bag of wheat is estimated by such and such golden dinars or such and such
commodity that has equal benefit.
Thus, while price is
estimated by any commodity no matter how much benefit exists in it, the value of
a commodity cannot be estimated by another commodity unless both commodities
have equal inherent benefit.
And I
think you have now got the answer to the issue of the wardrobe automatically.
Perhaps you
thought the statement in the book (if a man marries a woman and made
her dowry a certain specified wardrobe, and it was stated that its value is
fifty Dinars..) You thought that the fifty dinars are paper money. This is not
the case, because the value does not change in terms of the benefit of its
substance, so the dinars here are golden dinars.
In this case,
she is entitled to have a wardrobe whose value is fifty Dinars in
gold, at every time and place. If the wardrobe was damaged then she
is entitled to have fifty Dinars in gold. If what was mentioned is a wardrobe
whose value is fifty Jordanian Dinars, for example, then the term of value in
this context is redundant; and what is intended is the price.
For your
information, this distinction is not explained in the books of fiqh as it is in
ours, and the value is often used to mean price.
The reason
for highlighting this in our studies is (the deformation) of the value by
the capitalists and considering it nominal (relative), where it rises and falls
according to the greed, oppression and exploitation. So, we highlighted
this and explained it thoroughly. Therefore, if a wardrobe was stated
in the contract of marriage, whose value is such and such, and a
lawsuit case was submitted to judiciary, then the relevant parties should be
asked if they are aware of this meaning, or they understand the value as price.
Ignorance (of this difference) in this case is excused, because many people of
their like do not know such difference. So, if they heard (the value of
an item is twenty Dinars), they thought its price is twenty. I think
the difference between the two cases is now clear:
1 - If he
recorded its value as fifty Dinars (i.e. a currency that has inherent
benefit, and it is invalid to register it as paper money ...),
then fulfillment of this record is according to the text of the contract: returning
back the wardrobe which he robbed, based on the hadiths:
«على اليد ما أخذت حتى تؤديه» رواه ابن ماجه وأحمد والدارمي.
«The hand (person) is obliged of that which he took until he
returns it back",
As narrated by Ibn Majah, Ahmad and Al-Darimi.
«وإذا أخذ أحدكم عصا أخيه فليرْدُدْها عليه» رواه أحمد
«If any one
of you took the stick (staff) of his brother, he should return it back to
him", As narrated by Ahmad.
If, however,
it was damaged he should pay its value, which is fifty Dinars worth of
gold, and nothing else. This is because the value does not
change with time, place or supply or demand.. Therefore, the value is
not a price by which one can buy a wardrobe.
2 - If he
recorded its price as fifty Dinars (where he can here register it as
paper, gold, etc... because the price is not related to the inherent
benefit of the substance of currency), then fulfillment of this is according to
the contract text:
It is
returning back the wardrobe, which he robbed based on the previous hadiths. If
it was however damaged he would pay the recorded price or buy a
wardrobe by this price.
Thus, he
would have fulfilled the contract text.
As for your
offshoot question that says: (if we assume that the husband made a part
the wife dowry jewels instead of the wardrobe and he recorded the value as
fifty dinars ...), in this case it is not valid to register the value in
paper; he has rather either register it in the contract: dowry is jewels whose value is
fifty Dinars of gold, and in this case he returns to her the jewels, and if
it perished he returns to her fifty dinars of gold, because the value is
fixed, which is estimated by the benefit present in the commodity substance in
relation to man as a human being.
Or otherwise
he registers to her jewels whose price is fifty dinars of paper or
gold or whatever else.
In this case,
he returns to her the jewels; and if not possible he would buy her
jewels worth of fifty dinars, which is the recorded price, or he pays her the
recorded price, i.e. fifty dinars. If the State has reduced its paper
currency by a percentage it declared after the contract, then this percentage
is taken into account at time of demand. (Islamic Revival)
