Tuesday, 23 June 2015

The importance of Auriti and of the legal definition of money

By Daniele Pace*

Professor Giacinto Auriti was not a monetarist, but a jurist of international law who wrote on money, and this may seem strange to those who would like to understand how run the monetary system and debt.
In reality, however Auriti has made a fundamental contribution to the understanding of money precisely by virtue of the fact that he analysed the monetary field from a legal point of view and not economic, and in this way doing to answer the fundamental questions that monetarists and economic schools were not able to give a definitive answer over the centuries.
This is because it had not understood what was the true nature and function of money, ignoring Aristotle. When we went out, with Auriti, of the strictly economic analysis to join the field of law, the only one able to define in its entirety the essence of money, the definition immediately seemed clear.
The money should be seen as a legal point of view for several reasons. If after centuries did not find answers in economic matters it is because that field is not the most comprehensive and suitable for this response, as the monetary phenomenology is not a case purely economic but also involves the legal, sociological, philosophical and psychological one, observing both behaviour over the centuries, that its origin.
The pure economic matters so far it has managed to define only its operation in the financial markets as a commodity, but could not justify the property and its destructive nature related to issue and debt.

Auriti studied the money for 35 years years, observing the behaviour both in the value that in the symbol, placing a fundamental question that with the repeal of the Bretton Woods showed clearly the legal nature of the money: what gives value to money.
If the practice of fractional reserve banking could not reveal this nature, because masked and always interpreted as a fraud at first, and then as a legal banking practice, the end of Bretton Woods and the subsequent declaration of trustworthy value of money, made clear the need to apply the "circularity of science", thus when you can not explain a phenomenon in the scientific category in which it occurs, should be changed to a different category by applying the scientific principle by analogy [1].
The new definition of value for money, given by the same banking system, as a trustworthy value, that is public confidence in the currency, already requires a reflection, as confidence is certainly not a purely economic matter, but a social and psychological phenomenon to be analysed according to the rules of sociology and psychology.
So if, for the same declaration of the international bankers, the value is based on trust, and currently the financing of the EU members through the sale of government securities, depends on the confidence of financial markets, the monetary part falls in the fields different, mentioned above, and the money must be submitted to their analysis and to a law other than the purely economic and banking one, which also includes compliance with the legal rules that, in the twentieth century, have embraced the demands posed by these matters, contemplating many laws derived from these studies.
The circularity of sciences is already widely applied in those areas where specific legislation has proved ineffective. To cite just one recent example we can mention the new regulations regarding the bullying at work, which certainly do not cover only the problems closely related to the employment law, but are dictated also by social and psychological mechanisms resulting from abuse and harassment also very important findings in health such as depression or social exclusion and how that, when recognized, the law gives big payouts. In the example of bullying we do not have the exclusive use of employment legislation, but the involvement of sociologists, psychologists and doctors, for its definition and preparation, and application of a law that is able to address the problem.
Starting right from this example it is clear that the money and the economy, which are pure social phenomena, must be regulated by the conventional law, having not independent existence.
Similarly, the same principles of circularity should be applied to the problem of money, now more evident than ever, to understand its abnormally operation already proven over the centuries, and especially its definition, given by the same creators of money, of trustworthy value.
Over the centuries, the money had already been shown to have a precise definition of its material value, being once gold, once silver, once wood (in Tally Sticks), once tea (in the east) and many other forms and materials gradually assumed in different societies and eras. With the repeal of Bretton Woods, and the final shape and material that cost nothing, the money has clearly placed the question on the nature of its essence.
The answer provided by the banking system, did more than reiterate the need for a different approach to the monetary system, confirming to the above, the legal, sociological, philosophical and psychological essence, while the economy it can only explain the operation and adjust the issuing.

The importance of the Auriti's works is therefore essential to give a definitive answer to the concept of money in the value. Once we have defined the real essence of money and its value, we can not run into the errors of the past, and the money will go back to being an instrument of society and not its master.
What may seem abstruse in the Auriti's works and an end in itself, actually represents the liberation of humanity from the slavery of money and his addiction. It is the liberation of humanity from the yoke of usurers and the new slavers financial, to achieve a new world, fair, supportive and free of imbalances, where money is no longer a problem and the man will be central and not marginal.

Distinguishing between symbol and value for money, Auriti has identified the fields to define money, thus being able to give legal status to its definition, and therefore assigning the ownership in discovering the source of value, by applying the circularity of sciences has defined both the measure of the value that the value of the measure.
The result is the Popular Ownership of the Currency and its induced value, two fundamental concepts that redefine the money in its purest form.
If the theory can certainly seem complicated due to the hostility that often accompanies the understanding of fields embraced for the definition of money, the practice in real and concrete life results in a disarming simplicity even for its application.
Many, after reading Auriti, fail to see in reality the usefulness of his discovery on the Induced Value and the Ownership of money, not by understanding both the practical and legal effects.
In its practical and legal application, thanks to the juridical basis provided by Auriti, the money created and issued with a debt will be illegal.
The money should instead be legally issued and distributed free of charge without interest to all those who create value through the work, the production and circulation.
The banks will not be able to create money out of nothing and charging it with interests and can carry out only function of deposit and borrowing existing money as it was in their original functions when the goldsmiths guarded the gold of investors for a fee. This will resize the banking system by returning the production and the work of man at the centre of the economy, where money is only the measure of value and the value of the measure.
In the phrase of Auriti: "As each unit of measure is a convention and every convention is a legal case, money is a legal case. Therefore, the raw material to manufacture currency is the same as that used to produce legal case: form and spiritual reality that symbol and Monetary Convention ", [1] there is contained all the cultural revolution that would come from a deep consciousness on the nature of money.
Spirituality and deep consciousness of society are essential to understanding the monetary phenomenon, while the economic mechanisms can only adjust the operation so that it does not create problems of poor service.
The money can not be refused, nor by the State, nor by the banks, to the society as belonging to the same society, and lenders may charge a maximum production costs, now zero, which makes the banking system itself useless.

[1] Giacinto Auriti, The Utopian Country, The Money and the circulation, PDF, pag. 10

Extract from The Utopian Money, page 287, by Daniele Pace*

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