Money, Bank Credit, and Economic Cycles - The Ludwig von Mises ...

26 Money, Bank Credit, and Economic CyclesRoman classical jurists deserve the credit for first discovering,interpreting, and perfecting the most important juridicalinstitutions that make life in society possible, and as wewill see, they had already recognized the irregular depositcontract, understood the essential principles governing it, andoutlined its content and essence as explained earlier in thischapter. The irregular deposit contract is not an intellectual,abstract creation. It is a logical outcome of human nature asexpressed in multiple acts of social interaction and cooperation,and it manifests itself in a set of principles which cannotbe violated without grave consequences to the network ofhuman relationships. The great importance of law in this evolutionarysense, distilled and rid of its logical flaws throughthe science of legal experts, lies in the guidance it providespeople in their daily lives; though in most cases, due to itsabstract nature, people may not be able to identify or understandthe complete specific function of each juridical institution.Only recently in the historical evolution of humanthought has it been possible to understand the laws of socialprocesses and gain a meager grasp on the role of the differentjuridical institutions in society, and the contributions ofeconomics have been mostly responsible for these realizations.One of our most important objectives is to carry out aneconomic analysis of social consequences resulting from theviolation of the universal legal principles regulating the monetaryirregular-deposit contract. In chapter 4 we will begin thistheoretical economic analysis of a juridical institution (themonetary bank-deposit contract).The knowledge we have today of universal legal principlesas they were discovered by Roman jurists comes to usthrough the work of the emperor Justinian, who in the years528–533 A.D. made an enormous effort to compile the maincontributions of classical Roman jurists and recorded them inthree books (the Institutiones, the Digest, and the Codex Constitutionum,later completed by a fourth book, the Novellae),which, since the edition of Dionysius Gottfried, 31 are knownas the Corpus Juris Civilis. The Institutiones is an essential work31 Corpus Juris Civilis (Geneva: Dionysius Gottfried, 1583).