Modern crises of money, violence and institutional decay are often framed as failures of regulation or as side effects of complexity. We are told that financialization, speculative markets and social fragmentation are unintended consequences of a fast-moving world. The comforting assumption is that earlier societies lacked the analytical tools to see what was coming. Yet nearly a thousand years ago, thinkers writing amid imperial breakdown described the same dynamics with unsettling clarity.

Imam al-Ghazali, an 11th-century Islamic theologian and moral philosopher, and Abū Naṣr al-Fārābī, a 10th-century political philosopher of statecraft, did not treat money as a neutral technical instrument. They understood it as a moral and political force whose misuse could unravel civilizations. Their warning was not sentimental but institutional: morality is not a private feeling but a public architecture that determines what is rewarded, what is punished and what ordinary people can safely do.

Ghazali wrote in the Seljuq world of the late 11th century, a landscape of fiscal predation, elite luxury and political violence. Administrators monetized offices. Tax extraction became arbitrary. Courts competed for resources while provincial populations lived with insecurity. The assassination of the Seljuq Vizier Nizam al-Mulk in 1092 crystallized the unraveling of Seljuq institutional coherence. Authority fractured, accountability weakened and economic life became governed by fear rather than cooperation. Ghazali’s writing on money, hoarding, corruption and usury is best read as a diagnosis of what happens when power loses moral restraint, and society learns to protect itself by withdrawing from trust.

Money as belief: when a tool becomes an idol

Ghazali’s starting point is deceptively simple: money has no intrinsic value. Gold and silver are not “wealth by nature.” They matter because people collectively accept them as a measure and mediator of exchange. In modern terms, money is a social belief system anchored in institutional trust. When belief holds, money circulates; when belief breaks, money freezes.

From that premise, the danger is straightforward. If money is meant to serve circulation, then hoarding is not merely imprudent — it is civilizationally destructive. When money is held back from circulation, it stops being a tool and becomes a substitute deity: a false guarantor of safety. Hoarded money is socially dead. It feeds no one, builds nothing and heals no wounds. It concentrates power while starving society of liquidity and cooperation.

Ghazali’s severity is analytical. He treats hoarding as moral and social suicide because it reverses money’s purpose. The society that idolizes money overvalues possession and undervalues exchange; it cripples itself by freezing what was meant to flow. Importantly, he does not reduce hoarding to greed. He frames it as fear. People hoard when they do not trust rulers, markets or tomorrow. Corruption at the top produces fear; fear produces hoarding; hoarding produces scarcity; scarcity rationalizes further extraction. The system feeds on itself.

The modern world reenacts this logic in new forms. In the early months of COVID-19, price gouging and panic buying were not anomalies; they were predictable reactions to mistrust. New York City alone reported more than 12,000 price-gouging complaints and issued over 15,200 violations during the first eight months of the pandemic — classic scarcity exploitation under fear.

Legalism, hidden usury and the disappearance of justice

One of Ghazali’s most modern insights is that legality can become a camouflage for injustice. In “cunning” societies, legal compliance replaces morality: “I followed the rules” is treated as innocence, even when the rules are engineered to facilitate extraction. Ghazali rejects this equivalence. Law is a minimum boundary; morality is a substantive standard. If legality is allowed to replace morality, corruption becomes nearly untouchable because it can operate without ever “breaking the law.”

This is why he insists that the written or verbal form of a transaction is less important than its context. Contracts can be signed under economic duress, social pressure or asymmetry of power. Consent recorded on paper can mask coercion produced by hunger, debt or exclusion. In such conditions, legality launders injustice: it converts pressure into “choice” and exploitation into “agreement.”

His critique of usury (riba) takes the same form. Ghazali warns that the most dangerous usury is not the explicit written kind but the hidden one — transactions that mimic lawful trade while reproducing unjust gain. Renaming interest does not defeat it. Whenever money is engineered to generate a guaranteed return without productive risk or genuine exchange, riba returns through disguise.

This argument is difficult to ignore in contemporary Islamic finance. A large share of modern Islamic banking is built around contract engineering that transforms an interest-bearing loan into sequences of sales and markups (for example, commodity murabaha or organized tawarruq). The documentation can be immaculate while the economic substance resembles a fixed-return debt instrument — precisely the substitution Ghazali feared: legality standing in for justice. Economists and legal scholars of Islamic finance have long debated this form-over-substance drift, including Mahmoud El-Gamal’s critique of “interest” avoidance that reproduces interest economics under new labels. Even within the industry, standards bodies debate monetization structures like organized tawarruq, underscoring how easily moral prohibitions can be converted into legal choreography.

A contemporary parallel makes Ghazali’s warning unmistakable. In many global financial systems, risk has been systematically shifted downward while returns are locked in at the top. Complex fee structures, derivatives and debt instruments allow institutions to claim legality while externalizing harm onto borrowers, workers, or states. During crises, these mechanisms intensify. What is framed as “market discipline” becomes, in practice, the monetization of vulnerability. From sovereign debt restructurings that impose austerity on populations to consumer credit systems that profit from permanent precarity, legality functions as insulation rather than accountability. This is exactly the condition Ghazali feared: a society so sophisticated in law that injustice can operate without moral interruption.

Leverage over merit: how trust collapses and violence rises

Al-Farabi supplies a political philosophy that makes Ghazali’s diagnosis even sharper. He classifies societies by what they treat as the highest good. A virtuous polity organizes itself toward human flourishing; an “ignorant” polity mistakes wealth, power or pleasure for happiness. When accumulation becomes the organizing principle, institutions predictably reorganize around it.

In practical terms, this shift from productivity to leverage is now visible across everyday economic life. Housing markets increasingly reward asset holders while millions remain unhoused, with vacant properties treated as investment vehicles rather than shelter. Corporations routinely prioritize stock buybacks and executive compensation even as wages stagnate and mass layoffs proceed, signaling that financial positioning matters more than contribution. Governments facing fiscal pressure often service sovereign debt before funding healthcare or education, transferring risk downward while protecting creditors.

During crises, speculative capital is rescued while losses are socialized, reinforcing the lesson that access to leverage — not labor, skill or merit — is the true path to security. These are not policy accidents but structural signals. In Ghazali’s and Ibn Khaldun’s terms, this is precisely the moment when trust collapses, and legitimacy dissolves.

This logic is echoed with striking clarity in the work of Ibn Khaldun, writing centuries later in his Muqaddimah. Ibn Khaldun argued that states decay not when productivity ends, but when power shifts from facilitating production to extracting from it. As ruling elites lose legitimacy, they rely increasingly on taxation, leverage and coercion rather than trust and shared purpose. Economic life becomes predatory, social solidarity (ʿasabiyyah) erodes and violence emerges as the final instrument of control. What al-Ghazali diagnosed as moral collapse within institutions, Ibn Khaldun traced as a historical cycle: once leverage replaces contribution and fear replaces trust, decline is no longer a possibility but a trajectory.

For Ghazali, this is where trust snaps. Trust is the invisible infrastructure of peace. Once people believe that rules protect power rather than justice, compliance feels like submission, and cooperation feels like exploitation. Social withdrawal accelerates (hoarding, evasion, informal economies) and violence becomes structurally likely — not because people are inherently violent, but because the system no longer offers a nonviolent path to dignity. What appears as “irrational unrest” is often the rational social consequence of a reward system that has stopped honoring contribution.

The contemporary parallels are visible on a scale. The World Health Organization (WHO) estimates that the pandemic was associated with roughly 14.9 million excess deaths in 2020–2021. At the same time, Oxfam argued that the wealth of the world’s richest surged while the incomes of 99% of humanity worsened. War-related shocks reveal the same pattern: world military expenditure rose to $2.718 trillion in 2024, while energy-price volatility enabled record profits for major oil firms in 2022. These are not moral anecdotes; they are institutional signals that volatility is monetizable — and that leverage is rewarded even when it corrodes social trust.

Morality as institutional reality: reforming power, not just rules

Ghazali’s most countermodern proposition is that morality is not sentiment; it is institutional reality. Societies do not become moral because individuals feel compassionate. They become moral when institutions reward justice and restrain power. When morality is reduced to private feeling, it becomes optional. When embedded in governance, finance and law, it becomes unavoidable.

Ghazali therefore rejects the idea that markets can be repaired through clever tricks, technocratic regulation or legal formalism alone. Rules matter, but they fail when incentives reward exploitation. Corruption evolves faster than law: one loophole closes, and another emerges. Meaningful reform must reach those who occupy the system’s key nodes — rulers, judges, tax authorities and financial gatekeepers — because their conduct determines whether money remains a neutral mediator or becomes a weapon.

Ghazali’s warning resonates today: when political power can manipulate money, it corrupts money itself. Prices then reflect domination rather than value, making transparency, public accountability and insulation from elite capture essential.

The practical implication is not utopian. It is the opposite of moral theater. It is the hard work of designing institutions that reduce fear: predictable taxation; enforceable constraints on conflicts of interest; auditability of public finance; penalties for crisis profiteering; and monetary governance that cannot be quietly weaponized for patronage. Ancient rationality did not ask us to feel more moral. It asked us to build morality into the architecture of power itself. We ignored that warning — and now live inside its consequences.

[Patrick Bodovitz edited this article]

The views expressed in this article are the author’s own and do not necessarily reflect Fair Observer’s editorial policy.