Islamic Finance and the New Financial System: An Ethical Approach to Preventing Future Financial Crises

Conclusion

If history has taught us anything about money and financial systems, it is that they never last forever. Every currency in history has died a tragic death either through war or through mismanagement. Every financial system in the world has had a beginning and an ending. Our current financial system will inevitably go the same way as previous financial systems, making way for something new. Since a financial system can last decades or even centuries, we tend to be overconfident about its ability to survive change, and we tend to overlook the mismanagement.

Our current economic model is built on the need for constant growth with unlimited access to resources. We are naïve to believe that this is possible. Our resources have limits, and growth has limits. Every living thing in nature has limits to its growth; otherwise, trees would be reaching the ends of the atmosphere along with humans, animals, and every other living creature. We have become so used to endless growth that we have brushed aside the reality of finance and economics.

We are living in interesting and unusual times—interesting because we are on the verge of entering into a new financial system; unusual because never before in history has the world carried so much debt on its shoulders. I believe we have reached the limits of where our current financial system can take us. Actually, I think we have outlived it by several years. The current financial system, based on debt and fiat money, will surely end—and ...