By Daniele Pace
Today I read an article, wrote in fact in 2012, when the Nobel
laureate economist Paul Krugman, answering the question of “what is
the money” placed by Noah Smith, assistant professor of finance at
Stony Brook University, says that the money today is a social
convention, coming in his thinking to Auriti.
As
reported by The New York Times,
the demand for Smith was "the
claim that money is a bubble?",
to which Paul Krugman responded clearly "No,
it is a social convention".
Paul Krugman certainly does not come to the Auriti's definitions but
his approach seems to be very positive because it focuses finally the
core of the problem, which is the process of creating value, while
not naming it and not achieving to grasp the most intimate aspects.
But we can say that Krugman has succeeded in a reflection that one
would never expect from an economist, at the beginning of a process,
which we hope would like to continue, and that inevitably leads, once
finished, at the Popular Ownership of Money and its Induced Value.
Of course that it does not make Krugman either an Auritiano and an
economist nor reliable to put as new idol of the people, but to have
the comfort of some reflections by a Nobel Prize will certainly bring
the debate for the many citizens who today seek to understand the
monetary problem, to points of view not only exclusively economics
that they can finally open a window on a superior approach; that
juridical approach would bring the society over the economy as it is
logical, being this a social phenomenon and therefore with no
autonomous behaviour but to settle with conventional laws.
To place the society, with all of its doctrines at its natural place
above the economy, it is the first step to take if you want to
understand the problem.
Our time instead place the economy above the society, almost in
divine position, thus distorting any attempt of evolution of the
human race, no more Homo Sapiens but Homo Economicus.
This article of Krugman might be illuminating for those who have
never read Auriti, while for the connoisseurs of professor of Teramo
is certainly a small step towards the discovery of fields of
judgement values by economists.
Krugman writes in fact that: "It’s
true that green pieces of paper have no intrinsic value
[...] so
that my willingness to accept green paper from you is based only on
my belief that I can in turn hand that green paper over to someone
else. But there’s nothing to prevent that process of monetary
circulation from going on forever."
Krugman is just confirming the induced value of Professor Auriti in
which the value (purchasing power) comes from the acceptance because
it involves the use (value) in exchange for goods.
Continuing
Krugman says: "It’s
a convention, which works as long as the future is like the past."
bringing the monetary speech in a relationship of phases over time to
assimilate the right to property as a convention: "Obviously,
such conventions can break down — but then so can things like
property rights",
although this step Krugman is not expressed as clearly as in Auriti,
where in fact in the
currency, being
the Convention and then the legal
instrument because legislated, it
reside the right of property
for the citizens.
But
continuing it
understands his small
insight: "In
fact, you could argue that almost every asset in a modern economy
owes its value to social convention; green pieces of paper could
become worthless, but then so could any paper claim, which is, after
all, worth something only because laws say it is",
although the economic formation of Krugman in this passage clearly
refers to the modern currency and economy leads to a reversal of the
role of jurisprudence which should regulate the
existing social behaviour
and not determine them, especially as he himself defines money as a
social convention.
This reversal in fact allowed the ruling elite to impose the private
currency of banks instead to rule a social behaviour, the use of the
monetary instrument, but also of barter in early trade, which had in
the past given the neutrality of the medium of exchange as in the
case of Roman bronze coin.
In
particular, however, we must point out that Krugman has not caught in
the step "green
pieces of paper could become worthless",
as the "loss of value" (worthless)
of money is only in the
symbol but not in the
value of the monetary instrument. By the
law a currency
could certainly goes
out of circulation
and lose value as a symbol representative of a particular currency,
as happened in the past for all coins; but the monetary value, as an
instrument of social convention, it
never loses the value
but it
changes only the
representative symbol. The money not only
never lose value, as saying that it
would lose the same
idea of social convention, but this nature (of
social convention) makes it not privatized
as is the case today with the modern currency.
Even on the role of taxes Krugman falls in an interpretation wrong.
Recalling that he himself defines money as a social convention, we
can recall as rightly stated by Davide Storelli in the 9th episode of his column "The value of money", ie that
citizens do not accept money to pay taxes, but to exchange goods
referred they need.
The taxes also were justified when the currency was in precious metal
and rare to find in nature, to recast and redistribute, but not today
with the Fiat currency / social convention, unlimited and at no cost.
In
further comparison between money and any economic good that creates a
bubble (comparison used to find an explanation between money and
economic goods) Krugman makes a very important statement: “and
once you realize that a social convention is not at all the same
thing as a bubble, several related fallacies fall into place”.
That once you realize that the social convention of the currency is
not a commodity, many of economic dogmas fall, but also moving the
monetary studies from economics to social and legal doctrine.
Finally:
“A
final thought: the notion that there must be a “fundamental”
source for money’s value, although it’s a right-wing trope, bears
a strong family resemblance to the Marxist labour
theory of value. In each case what people are missing is that value
is an emergent property, not an essence: money, and actually
everything, has a market value based on the role it plays in our
economy — full stop.”
In this sentence we can trace another very important statement,
namely that the money has no intrinsic value (essence), but an
"emerging property" that comes from a
social need for trade. An "emerging property"
that is nothing more than the induced value and purchasing power of
alternating phases of time, referred as money circulation by Auriti.
Although Krugman stops at this definition, with the separation of
Auriti between symbol and value certainly that sentence is an
important trace confirming the work of the Italian Professor in the
process of value creation as spiritual mental activity.
In conclusion the article Krugman has certainly no innovative aspect
than to see a Nobel Prize of orthodox economics to mention a
different approach to the problem, the only one able to bring a
permanent solution to the suffering of the people.
Switch from commodity money or currency-financial instrument to
social convention it seems already a giant leap for orthodox
economist and could point the way to many concerned citizens in
understanding.
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