Abstract
This paper overviews the political-economics of FIAT and asset-based money. The paper further highlights the presumably syaria standpoint of the impartial character of money as the fundamental factor that differentiates asset-based money from the FIAT money. It is argued that while it is ideal for asset-based money to make a comeback in the interest of holistic wellbeing (maslahah) of humankind, it is necessary to complement it with an appropriate financial and regulatory system to safeguard its impartiality, i.e. non-tradable, non-interest bearing, and non-debt financing to avoid the recurring pitfalls which are immanent in the conventional financial system. It is hoped this rather concise paper will offer a thought provoking discourse on how syaria principles may present the world a useful ideological construct for a new monetary and financial architecture in light of the global financial crisis. Keywords: Asset-based money; FIAT money; Syaria perspectives of money; money impartiality; money and sustainable development; money and financial crisis.
Highlights
There is increasing agreement among scientists, economists, theologians, politicians, policymakers, and social and development analysts alike, that wellbeing sustainability1 of humankind which necessitates the balanced consideration of economic-material progress, socio-cultural properties, and the resiliency of ecological systems, shall be the crucial driving cause in every national planning agenda and development pursuit across the globe
This paper is prompted by two observations; i) the recurring international financial crises that results in the disarray of economic progress and human resource development, and ii) high economic-material growth over the past four decades accompanied by inflationary pressures and degradation of ecological resiliency, environmental quality, and socio-cultural properties that might impair the ability of economies to sustain the level of socio-economic development and wellbeing of mankind in the future
This paper emphasises the adverse repercussions of the non-neutrality attribute of conventional (FIAT) money in economic processes and suggests that any new international financial architecture necessarily requires money to be neutral or impartial to ensure wellbeing sustainability
Summary
There is increasing agreement among scientists, economists, theologians, politicians, policymakers, and social and development analysts alike, that wellbeing sustainability of humankind which necessitates the balanced consideration of economic-material progress, socio-cultural properties, and the resiliency of ecological systems, shall be the crucial driving cause in every national planning agenda and development pursuit across the globe. This paper is prompted by two observations; i) the recurring international financial crises that results in the disarray of economic progress and human resource development, and ii) high economic-material growth over the past four decades accompanied by inflationary pressures and degradation of ecological resiliency, environmental quality, and socio-cultural properties that might impair the ability of economies to sustain the level of socio-economic development and wellbeing of mankind in the future. Subsequent sections discuss the essence of FIAT and commodity based money. This is followed by a deliberation on the fundamental factors that differentiate the syaria and contemporary held views of money and its implication. The paper ends with an ideological brief on the way forward for the return of commodity-based money, namely gold and silver or a mix of highly regarded assets or commodities
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