The Effective Economic Policies vs. The Corruption of The Economic Globalization

When discussing the economy, which forms the foundation of people's livelihoods, effective planning becomes indispensable. Such planning must be rooted in comprehensive and interdisciplinary knowledge, establishing a sound value system, designing a robust institutional framework, and clearly defining economic management processes. It should incorporate strategies that mitigate risks, prevent recessions and inflation, and promote transparency and integrity to combat corruption and inefficiency. By fostering these elements, an economic system can achieve societal well-being, ensuring basic needs are met affordably and accessibly for everyone. Essentials like food, housing, water, and energy must be:?

- Available,?

- Accessible, and?

- Affordable for all.?

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A well-structured economy facilitates cooperative systems that enable shared participation in vital resources like food, water, and energy. Such resources are essential to everyone and should involve contributions from individuals, institutions, and the business sector according to societal needs.??

Ownership plays a critical role in resource management. The transformation of natural resources into wealth often hinges on exclusive ownership. Hence, vital and basic resources should remain communal or publicly owned, structured around cooperative societies to prevent monopolization. This approach preserves resources, promotes economic stability, stabilizes prices, and fosters social harmony. These components ensure societal stability and safeguard against internal unrest and disruptions.?

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Key Elements of Sound Economic Planning?

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Effective economic planning begins by identifying natural and human resources available within a territory. It involves preparing human capital to utilize discovered resources effectively while increasing value through refinement and manufacturing. Additionally, planning requires land classification for residential, agricultural, industrial, and commercial purposes. Strategic connectivity between production hubs, markets, resource sites, and factories is essential. This includes developing robust infrastructure such as land, sea, and air routes, ports, storage areas, and free-trade zones. Policies like reducing taxes, streamlining business registration, and expediting trade processes further incentivize investment and economic growth.?

The government’s role should focus on legislation, regulation, oversight, and enforcing accountability. Engaging directly in commerce can lead to conflicts of interest. As noted by Ibn Khaldoun in “Al-Muqaddimah”, combining governance and trade undermines both the state and its citizens. Similar views were expressed by Al-Mawardi in his guide book “Al-Ahkam Al-Sultaniyyah” and resonate with practices in established democracies. Those opposing this principle may exhibit tendencies toward corruption or tyranny.

However, governments can initiate large-scale projects and delegate them to competent companies via transparent bidding processes or concessions. Public joint-stock companies, for example, can distribute wealth more equitably and serve broader sectors of society.

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Challenges in the Global Economy?

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The current global economy faces numerous structural and procedural flaws, particularly in monetary systems. Examples include:?

- Allowing private entities, rather than governments, to control currency issuance.?

- Central banks granting disproportionate loans relative to commercial bank deposits.?

- Interest rate manipulation for the benefit of banking elites.?

- Misguided policies like hoarding money under the guise of savings instead of promoting spending and investment.?

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Other fundamental flaws include:?

- Dependence on usury, which prioritizes profit over productive or service-based contributions.?

- Practices like selling goods or securities without ownership or adequate collateral.?

Procedural inefficiencies exacerbate these issues, such as:?

- Misallocating funds from quantitative easing into speculative markets like real estate and stocks.?

- Denying small and medium-sized enterprises (SMEs) access to vital short- and medium-term loans.?

- Over-reliance on global rating agencies without scrutinizing their methodologies.?

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Wealth inequality and limited cash flow among middle and working classes further stifle national economies, creating market paralysis.?

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The Globalization Conundrum?

Globalization and technological advancements, such as the Internet, have reshaped international economic theories, diverging significantly from classical models like those of Adam Smith. Today, globalization often serves the wealthy, amplifying disparities as the rich grow richer and the poor remain marginalized. Central banks, with fragmented and poorly coordinated policies, exacerbate economic complexities on a global scale.??

These dynamics enable powerful entities to exploit economic loopholes for profit, often through unethical practices like smuggling money across borders and exploiting small, vulnerable nations. Such behaviors undermine traditional economic systems, leaving societies grappling with the adverse effects of unchecked globalization.

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