Freedom, justice and peace possible only with correct wealth measurement with a unit of wealth as currency

Abstract

PurposeThe purpose of this paper is to study the process of price determination by the market in the existing variable fiat money regime and its consequences.Design/methodology/approachScientific knowledge pertaining to units and measurement has been applied to study the issue of wealth measurement and to arrive at the consequences of monetary manipulation. As regards Shariah perspective it may be described as guided application of science to the issue of currency and wealth measurement to analyze and solve economic problems.FindingsManipulation of currency that is manipulation of quantity of what determines purchasing power of money does not allow market to determine just prices implying lack of justice in exchange. Profitability of economic activities no longer relates to their utility for the economy implying gross inefficiency in profit driven investment. Market fails to maintain economic balances. These amount to extreme losses. It has led to massive economic uncertainty, instability, disparity, corruption and conflicts. Economic growth, justice and peace become unattainable. It is a serious crime as currency being unit of wealth is the most important unit and it is strictly prohibited in Shariah. Unless corrected for monetary manipulation financial modes recommended by Shariah seem to be unjust and impractical.Research limitations/implicationsApplication of scientific approach and scientific knowledge to economic issues especially the issue of wealth measurement needs higher emphasis, efforts and resources.Practical implicationsGovernments ought to be persuaded not to manipulate money. Right solution is to link currency with a standard basket of national products with sufficient weight for gold and silver having most stable purchasing power. Unless accounting is corrected for monetary manipulation preferred Islamic modes of finance seem to be unjust and impractical. Where currency is manipulated Shariah/justice requires accounting for dues, capital, profit and loss to be corrected for this manipulation and in present scenario relative change in Consumer Price Index and Whole Sale Price Index may be used as a measure of currency manipulation.Originality/valueMonetary manipulation has been clearly defined and extreme severity of the problems it creates has been established. It is most important for researchers, academics, government functionaries, social workers and all those who are concerned with economic growth, justice and welfare.