Challenging Global Capitalism and Socialism: Circular Causation in Social-Commercial Finance Integration

Abstract

The global economic system experiences recurring crises because the destructive separation of monetary and real sectors reduces money to a speculative commodity. This study deconstructs these structural vulnerabilities using the mesoscience paradigm and an abstracto-empirical design to formulate a resilient alternative financial architecture. By applying circular causation modeling, this research maps the endogenous integration of Micro-Money, Finance, and the Real Economy (MFQ). Conceptual analysis reveals that eliminating interest rates allows micro-money to organically stimulate the real sector. Systemic stability is achieved when financial institutions adopt a portfolio-focused strategy in the real sector, mitigating procyclicality and preventing credit bubbles. Furthermore, organically integrating commercial finance with social philanthropy breaks the distributive deadlock of welfare capitalism, promoting distributive justice and sustainable grassroots economic growth. To operationalize these findings, central banks and Islamic financial institutions must restructure regulatory frameworks to support unified ecosystems and pivot toward portfolio governance strategies directly integrated with real-sector empowerment.