Tom Hodgkinson: When the dirham was invented 1,400 years ago, it was pegged to the price of a chicken. Its buying power is the same today



What is money? It is a means of exchange. You buy a book from me for £10 and I use the £10 to buy food. It kind of works. The problem is that national currencies do not keep their value. If I bury a £1 coin in the back garden and dig it up in 100 years' time, it will be worthless.

Money also loses its value as wages rise. Today, my annual income is roughly the same as it was in 1994. But the price of oil, beer and most other useful commodities has shot up, so my spending power is greatly diminished.

The clever, rich people invest in oil, property and suchlike so their money remains safe. They convert their useless, constantly devaluing sterling notes into an asset that grows rather than diminishes in value. We could probably all do well to follow their lead, and avoid savings altogether in favour of buying stuff we like and which may also keep its value: art, jewellery, wine, land.

At the anti-capitalist end of the political spectrum, we witness noble experiments to escape the grip of the state-controlled money system, such as the Local Exchange Trading System, whereby you do a bit of gardening for your neighbour and she does some book-keeping for you. Barter is the word.

Then there are the local currencies such as the Brixton pound and the Totnes pound, which aim to keep money circulating in local communities rather than being sucked out of it by the big chains, which transfer the profits made from local trade to their shareholders.

But there is another way, and it is being pioneered by a group of British Sufi Muslims. They say we should use silver and gold coins in everyday transactions. Silver and gold do suffer fluctuations in price, but over long periods they remain stable.

Following a visit from Adnan Ashfaq of the Dinar Exchange to our retail establishment last week, I proudly stuck a sign to the front door: we accept silver dirhams. Adnan explained that a three-gram silver dirham is worth about £4. When the dirham was invented, around 1,400 years ago, the amount of silver it contained was pegged to the price of a chicken. Its buying power is the same today.

The gold dinar, 4.25 grams of gold, is worth around £180, which was the cost of a sheep, and still is. So over 1,400 years, the currency has not devalued. A gold sovereign, the British version of the dirham, today is worth around £210. It would make sense, then, to transfer your sterling, government money into silver and gold. Silver and gold also have the advantage of not rusting. Unlike my £1 coins or £20 notes, I could bury my silver and gold coins in the garden, dig them up in 100 years' time and they would be as good as new.

It also makes sense to use silver and gold for everyday transactions. I paid all my Idler contributors a gold sovereign each for their contribution to the magazine. Gold and silver coins are also a truly international currency: I could use them to buy stuff all over the world or sell them at a jeweller in exchange for local currency.

Locally, I could exchange my silver dirham for a pint in the local pub. Or I could use a mixture of currencies: sterling and silver. I could pay my mechanic with it, provided he was philosophically attuned to the idea.

Gold and silver coins have a romance about them that adds to the lustre. I am reading Daniel Defoe's Robinson Crusoe (1719) to my young son right now. It really does talk about pieces of eight (the piece of eight, or "peso de ocho", was an eighth of a silver dollar and weighed 3.44 grams, just slightly heavier than the silver dirham).

In the old days, before the establishment of the Bank of England in 1694 in order to make a loan of £1,200,000 to the government, real money was the norm, and London's streets teemed with a variety of currencies. Why should that not happen again? If I want to accept silver dirhams in my shop, then I am free to do so.

OK, it's true that our only silver transaction so far has been from Adnan himself, who paid four silver dirhams for £16 worth of books. But, as the sages used to say, a journey of 1,000 miles starts with one small step.

Tom Hodgkinson is editor of 'The Idler'

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Trust Accountant - Kent

NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...

Geography Teacher

£85 - £120 per day: Randstad Education Cheshire: randstad education are curre...

Teaching Assistant

Negotiable: Randstad Education Group: You must:- Speak English as a first lang...

SEN Teaching Assistant

£17000 - £18000 per annum: Randstad Education Group: If you are a committed Te...

Day In a Page

Read Next

i Editor's Letter: There's a crackle in the Brum air

Oliver Duff Oliver Duff
Obama has admitted that his administration underestimated the threat posed by Isis  

Syrian air-strikes: Does the US have the foggiest idea who their enemy is?

Kim Sengupta
Isis is an hour from Baghdad, the Iraq army has little chance against it, and air strikes won't help

Isis an hour away from Baghdad -

and with no sign of Iraq army being able to make a successful counter-attack
Turner Prize 2014 is frustratingly timid

Turner Prize 2014 is frustratingly timid

The exhibition nods to rich and potentially brilliant ideas, but steps back
Last chance to see: Half the world’s animals have disappeared over the last 40 years

Last chance to see...

The Earth’s animal wildlife population has halved in 40 years
So here's why teenagers are always grumpy - and it's not what you think

Truth behind teens' grumpiness

Early school hours mess with their biological clocks
Why can no one stop hackers putting celebrities' private photos online?

Hacked photos: the third wave

Why can no one stop hackers putting celebrities' private photos online?
Royal Ballet star dubbed 'Charlize Theron in pointe shoes' takes on Manon

Homegrown ballerina is on the rise

Royal Ballet star Melissa Hamilton is about to tackle the role of Manon
Education, eduction, education? Our growing fascination with what really goes on in school

Education, education, education

TV documentaries filmed in classrooms are now a genre in their own right
It’s reasonable to negotiate with the likes of Isis, so why don’t we do it and save lives?

It’s perfectly reasonable to negotiate with villains like Isis

So why don’t we do it and save some lives?
This man just ran a marathon in under 2 hours 3 minutes. Is a 2-hour race in sight?

Is a sub-2-hour race now within sight?

Dennis Kimetto breaks marathon record
We shall not be moved, say Stratford's single parents fighting eviction

Inside the E15 'occupation'

We shall not be moved, say Stratford single parents
Air strikes alone will fail to stop Isis

Air strikes alone will fail to stop Isis

Talks between all touched by the crisis in Syria and Iraq can achieve as much as the Tornadoes, says Patrick Cockburn
Nadhim Zahawi: From a refugee on welfare to the heart of No 10

Nadhim Zahawi: From a refugee on welfare to the heart of No 10

The Tory MP speaks for the first time about the devastating effect of his father's bankruptcy
Witches: A history of misogyny

Witches: A history of misogyny

The sexist abuse that haunts modern life is nothing new: women have been 'trolled' in art for 500 years
Shona Rhimes interview: Meet the most powerful woman in US television

Meet the most powerful woman in US television

Writer and producer of shows like Grey's Anatomy, Shonda Rhimes now has her own evening of primetime TV – but she’s taking it in her stride
'Before They Pass Away': Endangered communities photographed 'like Kate Moss'

Endangered communities photographed 'like Kate Moss'

Jimmy Nelson travelled the world to photograph 35 threatened tribes in an unashamedly glamorous style