Analysis of the Legal and Economic Aspects of Money

There is an inherent connection between money and various dimensions of human social life. This is a connection that is inextricably bound up with various fields of study. In light of this multiple and multidimensional nature of money, a deeper understanding of its nature requires knowledge gained from scientists of various sciences. There are two fields of study that are closely related to money, as it is a fluid and current phenomenon in human social life. The impact of money on the economic life of individuals, on the one hand, and its connection with a large portion of their legal obligations, on the other, make it unquestionable that one must study both of these sciences in order to attain a comprehensive understanding of money. The nature of money is thus analyzed both from a jurist's perspective and from an economist's perspective. This paper examines first the legal status of money and its role in the economy, then its economic functions, and finally its legal characteristics. Considering that economists, with a functional perspective, are only interested in identifying the uses for this medium of exchange, this article reviews three well-known economic functions of money from a new and critical perspective. This paper also provides an explanation and a better identification of the legal characteristics of money, which have been neglected by jurists despite having a significant impact on better understanding the concept of money. This is contrary to the fact that the examination of the specific legal characteristics of negotiable documents, which are less important and less applicable than money, is a well-known and common topic in commercial law. In order to meet the goals of the present paper, the present work has been divided into three main sections. First, a thorough examination of money is provided in order to gain a better understanding of the phenomenon. In the second section, we will examine the economic functions of money, and in the third and final section, we will discuss its legal characteristics. Analytical-descriptive methodology and library resources are used to write this paper in a comparative manner. Accordingly, while economic sources have been used to analyse and identify the economic functions of money, recourse has also been had to the common law system, particularly the common law of England, for the formulation of its legal attributes. The most significant finding of this article is the emphasis on the multifaceted nature of money and the need to have a broad perspective on it. For the legal characteristics of money to be identified, its economic functions must be identified, and in order to achieve the economic functions of money, the legal concept of money must be thoroughly examined. Thus, since the most important function of customary law is to organize existing customary and practical practices to understand these characteristics, one must gain a general understanding of the economic functions of money as its practical reality, so that the legal characteristics of money can be revised to serve such functions. In contrast, recognizing the nature and legal status of money is also essential to understand the practical functions of money. A key finding of the present study is the importance of understanding this hierarchy, which can lay the groundwork for future legal research on money. Another significant point is that this study undertakes, for the first time, the identification of the legal attributes of money in its absolute sense, independently of its incorporation into any debt or obligation. In other words, the authors have sought to examine these attributes as the inherent legal characteristics of money itself, whereas previous scholarship had addressed only certain aspects; such as whether money is fungible (mithlī) or non-fungible (qīmī), and even then, only with the aim of determining whether a debtor, in discharging their obligation, must deliver the same money (numerical value) or its equivalent purchasing power. Apart from the fact that jurists have invented concepts such as mithlī or qīmī for another purpose (compensation for damages) and cannot be used with the same meaning regarding money; also, apart from the fact that money itself is a price, it cannot have a price. Fundamentally, the answer to such questions must be sought within the framework of the rules governing the monetary obligations, not in the sphere of the legal attributes of money qua money. Conflating these two separate matters not only fails to advance the depth of legal understanding in this field, but also leads to further complexity of legal discourse concerning money. The authors of this paper aim to provide an answer to the following question: What is the nature of money? As part of their analyses of this multifaceted institution, researchers have attempted to reinstate the concept of debt as well as analyze the other elements comprising this institution, including the debtor's Zemma (a fictional repository for monetary obligations), the role of custom, and finally the element of non-collectibility, as a basis and substructure for subsequent discussions describing its economic functions and legal characteristics. In addition to providing a legal basis for its theory by considering money as a credit, this view, regarding the economic power of the debtor of this establishment, and respecting public acceptance as a factor that gives objectivity to this abstract concept, has not neglected the role and position of other sciences, including economics, in the analysis of this complex human phenomenon. Another conclusion reached in this article is that the legal attributes of money must be examined in an abstract sense, separate from the fact that it may be the subject of any debt or obligation. Conversely, such attributes cannot be discerned without a priori understanding of the economic functions of money. In other words, the function of modern law is to identify existing customary practices, to amend them where necessary, and thereafter to refine them into legal rules. In the case of money, its economic functions are precisely its customary functions. Accordingly, once the economic functions of money have been identified, its legal attributes will be understood in a manner consistent therewith. For instance, the attribute of abstraction in money wholly serves its economic function as a medium of exchange. Since money, as an instrument of exchange, is in constant circulation, the law recognises this function through the attribute referred to as its abstract nature. Consequently, whenever a person, acting in good faith and within the framework of an economic exchange, acquires money in pursuit of this function, the law will afford them protection; even against a prior owner from whom the money had been stolen.