Editorial

Citation

Alam Choudhury, M. (2009), "Editorial", Humanomics, Vol. 25 No. 4. https://doi.org/10.1108/h.2009.12425daa.001

Editorial

Article Type: Editorial From: Humanomics, Volume 25, Issue 4.

Money, monetary policy and monetary transmission are central issues in the realization of economic growth and social ordering. Money matters thus address critical social questions. The proper functioning and transmission of monetary aggregates into the economy require firstly the nature of money to be real money. This is money whose quantity is determined by its matching with the real economy demand for ethical goods and services. Besides, it is money backed by assets. An example of such a valued asset is gold. Secondly, the real money must be fully coordinated in linkage with the economy and social questions. Thirdly, there ought to be proper monetary supervision and banking and institutional organization to realize the first two kinds of monetary objectives.

The failure in doing these functions of money has today marked the unbalance between economic stabilization and monetary predictions in relation to the economy in the European Union. The same problem has bedeviled the capital market stability around the world: The American economy over-supplied the US dollar in excess of its absorption levels in the American and world economies. Besides, the credit crunch, despite its many other factors, ranging from human excessiveness to borrow in disproportionate amounts for building unduly large assets that cannot be paid for, to the American Government's repeated bailout to save large ailing companies rather than allowing for market corrections and adjustments to occur, have caused an over-supply of money. The adverse social consequence was felt on the re-igniting of inflationary price level worldwide and the rising long-term cost on the taxpayers. This is a sign showing that Government deficit is positively related to the supply of money and ignition of inflation. But furthermore, the ethical question of property rights is adversely affected.

The future health of social and economic entities, such as microenterprises and the stock market stability, is adversely affected. One thereby finds that money, finance, economy and society are coterminous domains of human responses that create the deepening effects on human experience.

In the financial sector, ethical questions may be misplaced by wrong emphasis on instruments. This is the result in Islamic economics and finance. It has been introduced by gurus who in the heat of showing large financial gains in the name of compliance with the Islamic Law, really made large ethical blunders. Malaysia is a sure sign of this. Her temporary and suddenly acquired wealth in so-called Islamic capital market, which is embedded in mainstream capital market around the world does not auger well for any advanced optimism regarding Islamic change. In fact, every such development has proven to be a ploy of hidden mainstream animal passion to acquire and accumulate wealth. The distributive element is lacking. The incidence of poverty remains abounds; or it is addressed simply by government intervention, not by self-governing consciousness. Thereby, the cost of poverty alleviation remains high. The programs on poverty alleviation remain unrealized, side-lined and a burden on the market process. Contrarily, complementarities are needed between the economic and social sectors with the moral and ethical inner content of human consciousness.

In such a case, economics, finance, society and science get embedded in the moral law and its derived domain of ethics. This is the starting of functional ontology of ethical formalism. It plays its substantive role both in mind and matter. Economics and finance becomes a deeply ethical study while not neglecting its analytical rigor that is led by the functional ontology.

Masudul Alam Choudhury