Reply: A thousand pardons, but I, too, pay taxes. If, then, the

protection which you vote yourself results in burdening for me, your

grain with your proportion of the taxes, your insinuating demand aims at

nothing less than the establishment between us of the following

arrangement, thus worded by yourself: "Since the public burdens are

heavy, I, who sell grain, will pay nothing at all; and you, my neighbor,

the buyer, shall pay two parts, to wit, your share and mine." My

neighbor, the grain dealer, you may have power on your side, but not

reason.

--If they say to you: It is, however, very hard for me, a tax payer, to

compete in my own market with foreigners who pay none--

Reply: First, This is not _your_ market, but _our_ market. I who live on

grain, and pay for it, must be counted for something.

Secondly. Few foreigners at this time are free from taxes.

Thirdly. If the tax which you vote repays to you, in roads, canals and

safety, more than it costs you, you are not justified in driving away,

at my expense, the competition of foreigners who do not pay the tax but

who do not have the safety, roads and canals. It is the same as saying:

I want a compensating duty, because I have fine clothes, stronger horses

and better plows than the Russian laborer.

Fourthly. If the tax does not repay what it costs, do not vote it.

Fifthly. If, after you have voted a tax, it is your pleasure to escape

its operation, invent a system which will throw it on foreigners. But

the tariff only throws your proportion on me, when I already have enough

of my own.

--If they say to you: Freedom of commerce is necessary among the

Russians _that they may exchange their products with advantage_ (opinion

of M. Thiers, April, 1847)--

Reply: This freedom is necessary everywhere, and for the same reason.

--If they say to you: Each country has its wants; it is according to

that that _it must act_ (M. Thiers)--

Reply: It is according to that that _it acts of itself_ when no one

hinders it.

--If they say to you: Since we have no sheet iron, its admission must be

allowed (M. Thiers)--

Reply: Thank you, kindly.

--If they say to you: Our merchant marine must have freight; owing to

the lack of return cargoes our vessels cannot compete with foreign

ones--

Reply: When you want to do everything at home, you can have cargoes

neither going nor coming. It is as absurd to wish for a navy under a

prohibitory system as to wish for carts where all transportation is

forbidden.

--If they say to you: Supposing that protection is unjust, everything is

founded on it; there are moneys invested, and rights acquired, and it

cannot be abandoned without suffering--

Reply: Every injustice profits some one (except, perhaps, restriction,

which in the long run profits no one), and to use as an argument the

disturbance which the cessation of the injustice causes to the person

profiting by it, is to say that an injustice, only because it has

existed for a moment, should be eternal.

XVI.

THE RIGHT AND THE LEFT HAND.

[_Report to the King._]

SIRE--When we see these men of the _Libre Echange_ audaciously

disseminating their doctrines, and maintaining that the right of buying

and selling is implied by that of ownership (a piece of insolence that

M. Billault has criticised like a true lawyer), we may be allowed to

entertain serious fears as to the destiny of _national labor_; for what

will Frenchmen do with their arms and intelligences when they are free?

The Ministry which you have honored with your confidence has naturally

paid great attention to so serious a subject, and has sought in its

wisdom for a _protection_ which might be substituted for that which

appears compromised. It proposes to you to forbid your faithful subjects

the use of the right hand.

Sire, do not wrong us so far as to think that we lightly adopted a

measure which, at the first glance, may appear odd. Deep study of the

_protective system_ has revealed to us this syllogism, on which it

entirely rests:

The more one labors, the richer one is.

The more difficulties one has to conquer, the more one labors.

_Ergo_, the more difficulties one has to conquer, the richer one is.

What is _protection_, really, but an ingenious application of this

formal reasoning, which is so compact that it would resist the subtlety

of M. Billault himself?

Let us personify the country. Let us look on it as a collective being,

with thirty million mouths, and, consequently, sixty million arms. This

being makes a clock, which he proposes to exchange in Belgium for ten

quintals of iron. "But," we say to him, "make the iron yourself." "I

cannot," says he; "it would take me too much time, and I could not make

five quintals while I can make one clock." "Utopist!" we reply; "for

this very reason we forbid your making the clock, and order you to make

the iron. Do not you see that we create you labor?"

Sire, it will not have escaped your sagacity, that it is just as if we

said to the country, _Labor with the left hand, and not with the right_.

The creation of obstacles to furnish labor an opportunity to develop

itself, is the principle of the _restriction_ which is dying. It is also

the principle of the _restriction_ which is about to be created. Sire,

to make such regulations is not to innovate, but to preserve.

The efficacy of the measure is incontestable. It is difficult--much more

difficult than one thinks--to do with the left hand what one was

accustomed to do with the right. You will convince yourself of it, Sire,

if you will condescend to try our system on something which is familiar

to you,--like shuffling cards, for instance. We can then flatter

ourselves that we have opened an illimitable career to labor.

When workmen of all kinds are reduced to their left hands, consider,

Sire, the immense number that will be required to meet the present

consumption, supposing it to be invariable, which we always do when we

compare differing systems of production. So prodigious a demand for

manual labor cannot fail to bring about a considerable increase in

wages; and pauperism will disappear from the country as if by

enchantment.

Sire, your paternal heart will rejoice at the thought that the benefits

of this regulation will extend over that interesting portion of the

great family whose fate excites your liveliest solicitude.

What is the destiny of women in France? That sex which is the boldest

and most hardened to fatigue, is, insensibly, driving them from all

fields of labor.

Formerly they found a refuge in the lottery offices. These have been

closed by a pitiless philanthropy; and under what pretext? "To save,"

said they, "the money of the poor." Alas! has a poor man ever obtained

from a piece of money enjoyments as sweet and innocent as those which

the mysterious urn of fortune contained for him? Cut off from all the

sweets of life, how many delicious hours did he introduce into the bosom

of his family when, every two weeks, he put the value of a day's labor

on a _quatern_. Hope had always her place at the domestic hearth. The

garret was peopled with illusions; the wife promised herself that she

would eclipse her neighbors with the splendor of her attire; the son saw

himself drum-major, and the daughter felt herself carried toward the

altar in the arms of her betrothed. To have a beautiful dream is

certainly something.

The lottery was the poetry of the poor, and we have allowed it to escape

them.

The lottery dead, what means have we of providing for our

_proteges_?--tobacco, and the postal service.

Tobacco, certainly; it progresses, thanks to Heaven, and the

distinguished habits which august examples have been enabled to

introduce among our elegant youth.

But the postal service! We will say nothing of that, but make it the

subject of a special report.

Then what is left to your female subjects except tobacco? Nothing,

except embroidery, knitting, and sewing, pitiful resources, which are

more and more restricted by that barbarous science, mechanics.

But as soon as your ordinance has appeared, as soon as the right hands

are cut off or tied up, everything will change face. Twenty, thirty

times more embroiderers, washers and ironers, seamstresses and

shirt-makers, would not meet the consumption (_honi soit qui mal y

pense_) of the kingdom; always assuming that it is invariable, according

to our way of reasoning.

It is true that this supposition might be denied by cold-blooded

theorists, for dresses and shirts would be dearer. But they say the

same thing of the iron which France gets from our mines, compared to the

vintage it could get on our hillsides. This argument can, therefore, be

no more entertained against _left-handedness_ than against _protection_;

for this very dearness is the result and the sign of the excess of

efforts and of labors, which is precisely the basis on which, in one

case, as in the other, we claim to found the prosperity of the working

classes.

Yes, we make a touching picture of the prosperity of the sewing

business. What movement! What activity! What life! Each dress will busy

a hundred fingers instead of ten. No longer will there be an idle young

girl, and we need not, Sire, point out to your perspicacity the moral

results of this great revolution. Not only will there be more women

employed, but each one of them will earn more, for they cannot meet the

demand, and if competition still shows itself, it will no longer be

among the workingwomen who make the dresses, but the beautiful ladies

who wear them.

You see, Sire, that our proposition is not only conformable to the

economic traditions of the government, but it is also essentially moral

and democratic.

To appreciate its effect, let us suppose it realized; let us transport

ourselves in thought into the future; let us imagine the system in

action for twenty years. Idleness is banished from the country; ease

and concord, contentment and morality, have entered all families

together with labor; there is no more misery and no more prostitution.

The left hand being very clumsy at its work, there is a superabundance

of labor, and the pay is satisfactory. Everything is based on this, and,

as a consequence, the workshops are filled. Is it not true, Sire, that

if Utopians were to suddenly demand the freedom of the right hand, they

would spread alarm throughout the country? Is it not true that this

pretended reform would overthrow all existences? Then our system is

good, since it cannot be overthrown without causing great distress.

However, we have a sad presentiment that some day (so great is the

perversity of man) an association will be organized to secure the

liberty of right hands.

It seems to us that we already hear these free-right-handers speak as

follows in the Salle Montesquieu:

"People, you believe yourselves richer because they have taken from you

one hand; you see but the increase of labor which results to you from

it. But look also at the dearness it causes, and the forced decrease in

the consumption of all articles. This measure has not made capital,

which is the source of wages, more abundant. The waters which flow from

this great reservoir are directed into other channels; the quantity is

not increased, and the definite result is, for the nation, as a whole, a

loss of comfort equal to the excess of the production of several

millions of right hands, over several millions of left hands. Then let

us form a league, and, at the expense of some inevitable disturbances,

let us conquer the right of working with both hands."

Happily, Sire, there will be organized an _association for the defense

of left-handed labor_, and the _Sinistrists_ will have no trouble in

reducing to nothing all these generalities and realities, suppositions

and abstractions, reveries and Utopias. They need only to exhume the

_Moniteur Industriel_ of 1846, and they will find, ready-made, arguments

against _free trade_, which destroy so admirably this _liberty of the

right hand_, that all that is required is to substitute one word for

another.

"The Parisian _Free Trade_ League never doubted but that it would have

the assistance of the workingmen. But the workingmen can no longer be

led by the nose. They have their eyes open, and they know political

economy better than our diplomaed professors. _Free trade_, they

replied, will take from us our labor, and labor is our real, great,

sovereign property; _with labor, with much labor, the price of articles

of merchandise is never beyond reach_. But without labor, even if bread

should cost but a penny a pound, the workingman is compelled to die of

hunger. Now, your doctrines, instead of increasing the amount of labor

in France, diminish it; that is to say, you reduce us to misery."

(Number of October 13, 1846.)

"It is true, that when there are too many manufactured articles to sell,

their price falls; but as wages decrease when these articles sink in

value, the result is, that, instead of being able to buy them, we can

buy nothing. Thus, when they are cheapest, the workingman is most

unhappy." (Gauthier de Rumilly, _Moniteur Industriel_ of November 17.)

It would not be ill for the Sinistrists to mingle some threats with

their beautiful theories. This is a sample:

"What! to desire to substitute the labor of the right hand for that of

the left, and thus to cause a forced reduction, if not an annihilation

of wages, the sole resource of almost the entire nation!

"And this at the moment when poor harvests already impose painful

sacrifices on the workingman, disquiet him as to his future, and make

him more accessible to bad counsels and ready to abandon the wise course

of conduct he had hitherto adhered to!"

We are confident, Sire, that thanks to such wise reasonings, if a

struggle takes place, the left hand will come out of it victorious.

Perhaps, also, an association will be formed in order to ascertain

whether the right and the left hand are not both wrong, and if there is

not a third hand between them, in order to conciliate all.

After having described the _Dexterists_ as seduced by the _apparent

liberality of a principle, the correctness of which has not yet been

verified by experience_, and the _Sinistrists_ as encamping in the

positions they have gained, it will say:

"And yet they deny that there is a third course to pursue in the

midst of the conflict; and they do not see that the working classes

have to defend themselves, at the same moment, against those who wish

to change nothing in the present situation, because they find their

advantage in it, and against those who dream of an economic

revolution of which they have calculated neither the extent nor the

significance." (_National_ of October 16.)

We do not desire, however, to hide from your Majesty the fact that our

plan has a vulnerable side. They may say to us: In twenty years all left

hands will be as skilled as right ones are now, and you can no longer

count on _left-handedness_ to increase the national labor.

We reply to this, that, according to learned physicians, the left side

of the body has a natural weakness, which is very reassuring for the

future of labor.

Finally, Sire, consent to sign the law, and a great principle will have

prevailed: _All wealth comes from the intensity of labor._ It will be

easy for us to extend it, and vary its application. We will declare,

for instance, that it shall be allowable to work only with the feet.

This is no more impossible (for there have been instances) than to

extract iron from the mud of the Seine. There have even been men who

wrote with their backs. You see, Sire, that we do not lack means of

increasing national labor. If they do begin to fail us, there remains

the boundless resource of amputation.

If this report, Sire, was not intended for publication, we would call

your attention to the great influence which systems analogous to the one

we submit to you, are capable of giving to men in power. But this is a

subject which we reserve for consideration in private counsel.

XVII.

SUPREMACY BY LABOR.

"As in a time of war, supremacy is attained by superiority in arms, can,

in a time of peace, supremacy be secured by superiority in labor?"

This question is of the greatest interest at a time when no one seems to

doubt that in the field of industry, as on that of battle, _the stronger

crushes the weaker_.

This must result from the discovery of some sad and discouraging analogy

between labor, which exercises itself on things, and violence, which

exercises itself on men; for how could these two things be identical in

their effects, if they were opposed in their nature?

And if it is true that in manufacturing as in war, supremacy is the

necessary result of superiority, why need we occupy ourselves with

progress or social economy, since we are in a world where all has been

so arranged by Providence that one and the same result, oppression,

necessarily flows from the most antagonistic principles?

Referring to the new policy toward which commercial freedom is drawing

England, many persons make this objection, which, I admit, occupies the

sincerest minds. "Is England doing anything more than pursuing the same

end by different means? Does she not constantly aspire to universal

supremacy? Sure of the superiority of her capital and labor, does she

not call in free competition to stifle the industry of the continent,

reign as a sovereign, and conquer the privilege of feeding and clothing

the ruined peoples?"

It would be easy for me to demonstrate that these alarms are chimerical;

that our pretended inferiority is greatly exaggerated; that all our

great branches of industry not only resist foreign competition, but

develop themselves under its influence, and that its infallible effect

is to bring about an increase in general consumption capable of

absorbing both foreign and domestic products.

To-day I desire to attack this objection directly, leaving it all its

power and the advantage of the ground it has chosen. Putting English and

French on one side, I will try to find out in a general way, if, even

though by superiority in one branch of industry, one nation has crushed

out similar industrial pursuits in another one, this nation has made a

step toward supremacy, and that one toward dependence; in other words,

if both do not gain by the operation, and if the conquered do not gain

the most by it.

If we see in any product but a cause of labor, it is certain that the

alarm of the protectionists is well founded. If we consider iron, for

instance, only in connection with the masters of forges, it might be

feared that the competition of a country where iron was a gratuitous

gift of nature, would extinguish the furnaces of another country, where

ore and fuel were scarce.

But is this a complete view of the subject? Are there relations only

between iron and those who make it? Has it none with those who use it?

Is its definite and only destination to be produced? And if it is

useful, not on account of the labor which it causes, but on account of

the qualities which it possesses, and the numerous services for which

its hardness and malleability fit it, does it not follow that

foreigners cannot reduce its price, even so far as to prevent its

production among us, without doing us more good, under the last

statement of the case, than it injures us, under the first?

Please consider well that there are many things which foreigners, owing

to the natural advantages which surround them, hinder us from producing

directly, and in regard to which we are placed, _in reality_, in the

hypothetical position which we examined relative to iron. We produce at

home neither tea, coffee, gold nor silver. Does it follow that our

labor, as a whole, is thereby diminished? No; only to create the

equivalent of these things, to acquire them by way of exchange, we

detach from our general labor a _smaller_ portion than we would require

to produce them ourselves. More remains to us to use for other things.

We are so much the richer and stronger. All that external rivalry can

do, even in cases where it absolutely keeps us from any certain form of

labor, is to encourage our labor, and increase our productive power. Is

that the road to _supremacy_, for foreigners?

If a mine of gold were to be discovered in France, it does not follow

that it would be for our interests to work it. It is even certain that

the enterprise ought to be neglected, if each ounce of gold absorbed

more of our labor than an ounce of gold bought in Mexico with cloth. In

this case, it would be better to keep on seeing our mines in our

manufactories. What is true of gold is true of iron.

The illusion comes from the fact that one thing is not seen. That is,

that foreign superiority prevents national labor, only under some

certain form, and makes it superfluous under this form, but by putting

at our disposal the very result of the labor thus annihilated. If men

lived in diving-bells, under the water, and had to provide themselves

with air by the use of pumps, there would be an immense source of labor.

To destroy this labor, _leaving men in this condition_, would be to do

them a terrible injury. But if labor ceases, because the necessity for

it has gone; because men are placed in another position, where air

reaches their lungs without an effort, then the loss of this labor is

not to be regretted, except in the eyes of those who appreciate in

labor, only the labor itself.

It is exactly this sort of labor which machines, commercial freedom, and

progress of all sorts, gradually annihilate; not useful labor, but labor

which has become superfluous, supernumerary, objectless, and without

result. On the other hand, protection restores it to activity; it

replaces us under the water, so as to give us an opportunity of pumping;

it forces us to ask for gold from the inaccessible national mine, rather

than from our national manufactories. All its effect is summed up in

this phrase--_loss of power_.

It must be understood that I speak here of general effects, and not of

the temporary disturbances occasioned by the transition from a bad to a

good system. A momentary disarrangement necessarily accompanies all

progress. This may be a reason for making the transition a gentle one,

but not for systematically interdicting all progress, and still less for

misunderstanding it.

They represent industry to us as a conflict. This is not true; or is

true only when you confine yourself to considering each branch of

industry in its effects on some similar branch--in isolating both, in

the mind, from the rest of humanity. But there is something else; there

are its effects on consumption, and the general well-being.

This is the reason why it is not allowable to assimilate labor to war as

they do.

In war, _the strongest overwhelms the weakest_.

In labor, _the strongest gives strength to the weakest_. This radically

destroys the analogy.

Though the English are strong and skilled; possess immense invested

capital, and have at their disposal the two great powers of production,

iron and fire, all this is converted into the _cheapness_ of the

product; and who gains by the cheapness of the product?--he who buys it.

It is not in their power to absolutely annihilate any portion of our

labor. All that they can do is to make it superfluous through some

result acquired--to give air at the same time that they suppress the

pump; to increase thus the force at our disposal, and, which is a

remarkable thing, to render their pretended supremacy more impossible,

as their superiority becomes more undeniable.

Thus, by a rigorous and consoling demonstration, we reach this

conclusion: That _labor_ and _violence_, so opposed in their nature,

are, whatever socialists and protectionists may say, no less so in their

effects.

All we required, to do that, was to distinguish between _annihilated_

labor and _economized_ labor.

Having less iron _because_ one works less, or having more iron

_although_ one works less, are things which are more than

different,--they are opposites. The protectionists confound them; we do

not. That is all.

Be convinced of one thing. If the English bring into play much activity,

labor, capital, intelligence, and natural force, it is not for the love

of us. It is to give themselves many comforts in exchange for their

products. They certainly desire to receive at least as much as they

give, and _they make at home the payment for that which they buy

elsewhere_. If then, they inundate us with their products, it is because

they expect to be inundated with ours. In this case, the best way to

have much for ourselves is to be free to choose between these two

methods of production: direct production or indirect production. All

the British Machiavelism cannot lead us to make a bad choice.

Let us then stop assimilating industrial competition with war; a false

assimilation, which is specious only when two rival branches of industry

are isolated, in order to judge of the effects of competition. As soon

as the effect produced on the general well-being is taken into

consideration, the analogy disappears.

In a battle, he who is killed is thoroughly killed, and the army is

weakened just that much. In manufactures, one manufactory succumbs only

so far as the total of national labor replaces what it produced, _with

an excess_. Imagine a state of affairs where for one man, stretched on

the plain, two spring up full of force and vigor. If there is a planet

where such things happen, it must be admitted that war is carried on

there under conditions so different from those which obtain here below,

that it does not even deserve that name.

Now, this is the distinguishing character of what they have so

inappropriately called an _industrial war_.

Let the Belgians and English reduce the price of their iron, if they

can, and keep on reducing it, until they bring it down to nothing. They

may thereby put out one of our furnaces--kill one of our soldiers; but I

defy them to hinder a thousand other industries, more profitable than

the disabled one, immediately, and, as a necessary consequence of this

very cheapness, resuscitating and developing themselves.

Let us decide that supremacy by labor is impossible and contradictory,

since all superiority which manifests itself among a people is converted

into cheapness, and results only in giving force to all others. Let us,

then, banish from political economy all these expressions borrowed from

the vocabulary of battles: _to struggle with equal arms, to conquer, to

crush out, to stifle, to be beaten, invasion, tribute_. What do these

words mean? Squeeze them, and nothing comes out of them. We are

mistaken; there come from them absurd errors and fatal prejudices. These

are the words which stop the blending of peoples, their peaceful,

universal, indissoluble alliance, and the progress of humanity.

PART III.

SPOLIATION AND LAW.[16]

[Footnote 16: On the 27th of April, 1850, after a very curious

discussion, which was reproduced in the _Moniteur_, the General Council

of Agriculture, Manufactures and Commerce issued the following order:

"Political economy shall be taught by the government professors, not

merely from the theoretical point of view of free trade, but also with

special regard to the facts and legislation which control French

industry."

It was in reply to this decree that Bastiat wrote the pamphlet

_Spoliation and Law_, which first appeared in the _Journal des

Economistes_, May 15, 1850.]

_To the Protectionists of the General Council of Manufactures:_

GENTLEMEN--Let us for a few moments interchange moderate and friendly

opinions.

You are not willing that political economy should believe and teach free

trade.

This is as though you were to say, "We are not willing that political

economy should occupy itself with society, exchange, value, law,

justice, property. We recognize only two principles--oppression and

spoliation."

Can you possibly conceive of political economy without society? Or of

society without exchange? Or of exchange without a relative value

between the two articles, or the two services, exchanged? Can you

possibly conceive the idea of _value_, except as the result of the

_free_ consent of the exchangers? Can you conceive of one product being

_worth_ another, if, in the barter, one of the parties is not _free_? Is

it possible for you to conceive of the free consent of two parties

without liberty? Can you possibly conceive that one of the contracting

parties is deprived of his liberty unless he is oppressed by the other?

Can you possibly conceive of an exchange between an oppressor and one

oppressed, unless the equivalence of the services is altered, or unless,

as a consequence, law, justice, and the rights of property have been

violated?

What do you really want? Answer frankly.

You are not willing that trade should be free!

You desire, then, that it shall not be free? You desire, then, that

trade shall be carried on under the influence of oppression? For if it

is not carried on under the influence of oppression, it will be carried

on under the influence of liberty, and that is what you do not desire.

Admit, then, that it is law and justice which embarrass you; that that

which troubles you is property--not your own, to be sure, but

another's. You are altogether unwilling to allow others to freely

dispose of their own property (the essential condition of ownership);

but you well understand how to dispose of your own--and of theirs.

And, accordingly, you ask the political economists to arrange this mass

of absurdities and monstrosities in a definite and well-ordered system;

to establish, in accordance with your practice, the theory of

spoliation.

But they will never do it; for, in their eyes, spoliation is a principle

of hatred and disorder, and the most particularly odious form which it

can assume is _the legal form_.

And here, Mr. Benoit d' Azy, I take you to task. You are moderate,

impartial, and generous. You are willing to sacrifice your interests and

your fortune. This you constantly declare. Recently, in the General

Council, you said: "If the rich had only to abandon their wealth to make

the people rich we should all be ready to do it." [Hear, hear. It is

true.] And yesterday, in the National Assembly, you said: "If I believed

that it was in my power to give to the workingmen all the work they

need, I would give all I possess to realize this blessing.

Unfortunately, it is impossible."

Although it pains you that the sacrifice is so useless that it should

not be made, and you exclaim, with Basile, "Money! money! I detest

it--but I will keep it," assuredly no one will question a generosity so

retentive, however barren. It is a virtue which loves to envelop itself

in a veil of modesty, especially when it is purely latent and negative.

As for you, you will lose no opportunity to proclaim it in the ears of

all France from the tribune of the _Luxembourg_ and the _Palais

Legislatif_.

But no one desires you to abandon your fortune, and I admit that it

would not solve the social problem.

You wish to be generous, but cannot. I only venture to ask that you will

be just. Keep your fortune, but permit me also to keep mine. Respect my

property as I respect yours. Is this too bold a request on my part?

Suppose we lived in a country under a free trade _regime_, where every

one could dispose of his property and his labor at pleasure. Does this

make your hair stand? Reassure yourself, this is only an hypothesis.

One would then be as free as the other. There would, indeed, be a law in

the code, but this law, impartial and just, would not infringe our

liberty, but would guarantee it, and it would take effect only when we

sought to oppress each other. There would be officers of the law,

magistrates and police; but they would only execute the law. Under such

a state of affairs, suppose that you owned an iron foundry, and that I

was a hatter. I should need iron for my business. Naturally I should

seek to solve this problem: "How shall I best procure the iron necessary

for my business with the least possible amount of labor?" Considering my

situation, and my means of knowledge, I should discover that the best

thing for me to do would be to make hats, and sell them to a Belgian who

would give me iron in exchange.

But you, being the owner of an iron foundry, and considering my case,

would say to yourself: "I shall be obliged to _compel_ that fellow to

come to my shop."

You, accordingly, take your sword and pistols, and, arming your numerous

retinue, proceed to the frontier, and, at the moment I am engaged in

making my trade, you cry out to me: "Stop that, or I will blow your

brains out!" "But, my lord, I am in need of iron." "I have it to sell."

"But, sir, you ask too much for it." "I have my reasons for that." "But,

my good sir, I also have my reasons for preferring cheaper iron." "Well,

we shall see who shall decide between your reasons and mine! Soldiers,

advance!"

In short, you forbid the entry of the Belgian iron, and prevent the

export of my hats.

Under the condition of things which we have supposed (that is, under a

_regime_ of liberty), you cannot deny that that would be, on your part,

manifestly an act of oppression and spoliation.

Accordingly, I should resort to the law, the magistrate, and the power

of the government. They would intervene. You would be tried, condemned,

and justly punished.

But this circumstance would suggest to you a bright idea. You would say

to yourself: "I have been very simple to give myself so much trouble.

What! place myself in a position where I must kill some one, or be

killed! degrade myself! put my domestics under arms! incur heavy

expenses! give myself the character of a robber, and render myself

liable to the laws of the country! And all this in order to compel a

miserable hatter to come to my foundry to buy iron at my price! What if

I should make the interest of the law, of the magistrate, of the public

authorities, my interests? What if I could get them to perform the

odious act on the frontier which I was about to do myself?"

Enchanted by this pleasing prospect, you secure a nomination to the

Chambers, and obtain the passage of a law conceived in the following

terms:

SECTION 1. There shall be a tax levied upon everybody (but especially

upon that cursed hat-maker).

SEC. 2. The proceeds of this tax shall be applied to the payment of men

to guard the frontier in the interest of iron-founders.

SEC. 3. It shall be their duty to prevent the exchange of hats or other

articles of merchandise with the Belgians for iron.

SEC. 4. The ministers of the government, the prosecuting attorneys,

jailers, customs officers, and all officials, are entrusted with the

execution of this law.

I admit, sir, that in this form robbery would be far more lucrative,

more agreeable, and less perilous than under the arrangements which you

had at first determined upon. I admit that for you it would offer a very

pleasant prospect. You could most assuredly laugh in your sleeve, for

you would then have saddled all the expenses upon me.

But I affirm that you would have introduced into society a vicious

principle, a principle of immorality, of disorder, of hatred, and of

incessant revolutions; that you would have prepared the way for all the

various schemes of socialism and communism.

You, doubtless, find my hypothesis a very bold one. Well, then, let us

reverse the case. I consent for the sake of the demonstration.

Suppose that I am a laborer and you an iron-founder.

It would be a great advantage to me to buy hatchets cheap, and even to

get them for nothing. And I know that there are hatchets and saws in

your establishment. Accordingly, without any ceremony, I enter your

warehouse and seize everything that I can lay my hands upon.

But, in the exercise of your legitimate right of self-defense, you at

first resist force with force; afterwards, invoking the power of the

law, the magistrate, and the constables, you throw me into prison--and

you do well.

Oh! ho! the thought suggests itself to me that I have been very awkward

in this business. When a person wishes to enjoy the property of other

people, he will, unless he is a fool, act _in accordance_ with the law,

and not _in violation_ of it. Consequently, just as you have made

yourself a protectionist, I will make myself a socialist. Since you have

laid claim to the _right to profit_, I claim the _right to labor_, or to

the instruments of labor.

For the rest, I read my Louis Blanc in prison, and I know by heart this

doctrine: "In order to disenthrall themselves, the common people have

need of tools to work with; it is the function of the government to

provide them." And again: "If one admits that, in order to be really

free, a man requires the ability to exercise and to develop his

faculties, the result is that society owes each of its members

instruction, without which the human mind is incapable of development,

and the instruments of labor, without which human activities have no

field for their exercise. But by what means can society give to each one

of its members the necessary instruction and the necessary instruments

of labor, except by the intervention of the State?" So that if it

becomes necessary to revolutionize the country, I also will force my

way into the halls of legislation. I also will pervert the law, and make

it perform in my behalf and at your expense the very act for which it

just now punished me.

My decree is modeled after yours:

SECTION 1. There shall be taxes levied upon every citizen, and

especially upon iron founders.

SEC. 2. The proceeds of this tax shall be applied to the creation of

armed corps, to which the title of the _fraternal constabulary_ shall be

given.

SEC. 3. It shall be the duty of the _fraternal constabulary_ to make

their way into the warehouses of hatchets, saws, etc., to take

possession of these tools, and to distribute them to such workingmen as

may desire them.

Thanks to this ingenious device, you see, my lord, that I shall no

longer be obliged to bear the risks, the costs, the odium, or the

scruples of robbery. The State will rob for me as it has for you. We

shall both be playing the same game.

It remains to be seen what would be the condition of French society on

the realization of my second hypothesis, or what, at least, is the

condition of it after the almost complete realization of the first

hypothesis. I do not desire to discuss here the economy of the question.

It is generally believed that in advocating free trade we are

exclusively influenced by the desire to allow capital and labor to take

the direction most advantageous to them. This is an error. This

consideration is merely secondary. That which wounds, afflicts, and is

revolting to us in the protective system, is the denial of right, of

justice, of property; it is the fact that the system turns the law

against justice and against property, when it ought to protect them; it

is that it undermines and perverts the very conditions of society. And

to the question in this aspect I invite your most serious consideration.

What is law, or at least what ought it to be? What is its rational and

moral mission? Is it not to hold the balance even between all rights,

all liberties, and all property? Is it not to cause justice to rule

among all? Is it not to prevent and to repress oppression and robbery

wherever they are found?

And are you not shocked at the immense, radical, and deplorable

innovation introduced into the world by compelling the law itself to

commit the very crimes to punish which is its especial mission--by

turning the law in principle and in fact against liberty and property?

You deplore the condition of modern society. You groan over the disorder

which prevails in institutions and ideas. But is it not your system

which has perverted everything, both institutions and ideas?

What! the law is no longer the refuge of the oppressed, but the arm of

the oppressor! The law is no longer a shield, but a sword! The law no

longer holds in her august hands a scale, but false weights and

measures! And you wish to have society well regulated!

Your system has written over the entrance of the legislative halls these

words: "Whoever acquires any influence here can obtain his share of the

legalized pillage."

And what has been the result? All classes of society have become

demoralized by shouting around the gates of the palace: "Give me a share

of the spoils."

After the revolution of February, when universal suffrage was

proclaimed, I had for a moment hoped to have heard this sentiment: "No

more pillage for any one, justice for all." And that would have been the

real solution of the social problem. Such was not the case. The doctrine

of protection had for generations too profoundly corrupted the age,

public sentiments and ideas. No. In making inroads upon the National

Assembly, each class, in accordance with your system, has endeavored to

make the law an instrument of rapine. There have been demanded heavier

imposts, gratuitous credit, the right to employment, the right to

assistance, the guaranty of incomes and of minimum wages, gratuitous

instruction, loans to industry, etc., etc.; in short, every one has

endeavored to live and thrive at the expense of others. And upon what

have these pretensions been based? Upon the authority of your

precedents. What sophisms have been invoked? Those that you have

propagated for two centuries. With you they have talked about

_equalizing the conditions of labor_. With you they have declaimed

against ruinous competition. With you they have ridiculed the _let

alone_ principle, that is to say, _liberty_. With you they have said

that the law should not confine itself to being just, but should come to

the aid of suffering industries, protect the feeble against the strong,

secure profits to individuals at the expense of the community, etc.,

etc. In short, according to the expression of Mr. Charles Dupin,

socialism has come to establish the theory of robbery. It has done what

you have done, and that which you desire the professors of political

economy to do for you.

Your cleverness is in vain, _Messieurs Protectionists_, it is useless to

lower your tone, to boast of your latent generosity, or to deceive your

opponents by sentiment. You cannot prevent logic from being logic.

You cannot prevent Mr. Billault from telling the legislators, "You have

granted favors to one, you must grant them to all."

You cannot prevent Mr. Cremieux from telling the legislators: "You have

enriched the manufacturers, you must enrich the common people."

You cannot prevent Mr. Nadeau from saying to the legislators: "You

cannot refuse to do for the suffering classes that which you have done

for the privileged classes."

You cannot even prevent the leader of your orchestra, Mr. Mimerel, from

saying to the legislators: "I demand twenty-five thousand subsidies for

the workingmen's savings banks;" and supporting his motion in this

manner:

"Is this the first example of the kind that our legislation offers?

Would you establish the system that the State should encourage

everything, open at its expense courses of scientific lectures,

subsidize the fine arts, pension the theatre, give to the classes

already favored by fortune the benefits of superior education, the

most varied amusements, the enjoyment of the arts, and repose for old

age; give all this to those who know nothing of privations, and

compel those who have no share in these benefits to bear their part

of the burden, while refusing them everything, even the necessaries

of life?

"Gentlemen, our French society, our customs, our laws, are so made

that the intervention of the State, however much it may be regretted,

is seen everywhere, and nothing seems to be stable or durable if the

hand of the State is not manifest in it. It is the State that makes

the Sevres porcelain, and the Gobelin tapestry. It is the State that

periodically gives expositions of the works of our artists, and of

the products of our manufacturers; it is the State which recompenses

those who raise its cattle and breed its fish. All this costs a great

deal. It is a tax to which every one is obliged to contribute.

Everybody, do you understand? And what direct benefit do the people

derive from it? Of what direct benefit to the people are your

porcelains and tapestries, and your expositions? This general

principle of resisting what you call a state of enthusiasm we can

understand, although you yesterday voted a bounty for linens; we can

understand it on the condition of consulting the present crisis, and

especially on the condition of your proving your impartiality. If it

is true that, by the means I have indicated, the State thus far seems

to have more directly benefited the well-to-do classes than those who

are poorer, it is necessary that this appearance should be removed.

Shall it be done by closing the manufactories of tapestry and

stopping the exhibitions? Assuredly not; _but by giving the poor a

direct share in this distribution of benefits_."

In this long catalogue of favors granted to some at the expense of all,

one will remark the extreme prudence with which Mr. Mimerel has left the

tariff favors out of sight, although they are the most explicit

manifestations of legal spoliation. All the orators who supported or

opposed him have taken upon themselves the same reserve. It is very

shrewd! Possibly they hope, _by giving the poor a direct participation

in this distribution of benefits_, to save this great iniquity by which

they profit, but of which they do not whisper.

They deceive themselves. Do they suppose that after having realized a

partial spoliation by the establishment of customs duties, other

classes, by the establishment of other institutions, will not attempt to

realize universal spoliation?

I know very well you always have a sophism ready. You say: "The favors

which the law grants us are not given to the _manufacturer_, but to

_manufactures_. The profits which it enables us to receive at the

expense of the consumers are merely a trust placed in our hands. They

enrich us, it is true, but our wealth places us in a position to expend

more, to extend our establishments, and falls like refreshing dew upon

the laboring classes."

Such is your language, and what I most lament is the circumstance that

your miserable sophisms have so perverted public opinion that they are

appealed to in support of all forms of legalized spoliation. The

suffering classes also say. "Let us by act of the Legislature help

ourselves to the goods of others. We shall be in easier circumstances as

the result of it; we shall buy more wheat, more meat, more cloth, and

more iron; and that which we receive from the public taxes will return

in a beneficent shower to the capitalists and landed proprietors."

But, as I have already said, I will not to-day discuss the economical

effects of legal spoliation. Whenever the protectionists desire, they

will find me ready to examine the _sophisms of the ricochets_, which,

indeed, may be invoked in support of all species of robbery and fraud.

We will confine ourselves to the political and moral effects of exchange

legally deprived of liberty.

I have said: The time has come to know what the law is, and what it

ought to be.

If you make the law for all citizens a palladium of liberty and of

property; if it is only the organization of the individual law of

self-defense, you will establish, upon the foundation of justice, a

government rational, simple, economical, comprehended by all, loved by

all, useful to all, supported by all, entrusted with a responsibility

perfectly defined and carefully restricted, and endowed with

imperishable strength. If, on the other hand, in the interests of

individuals or of classes, you make the law an instrument of robbery,

every one will wish to make laws, and to make them to his own advantage.

There will be a riotous crowd at the doors of the legislative halls,

there will be a bitter conflict within; minds will be in anarchy, morals

will be shipwrecked; there will be violence in party organs, heated

elections, accusations, recriminations, jealousies, inextinguishable

hates, the public forces placed at the service of rapacity instead of

repressing it, the ability to distinguish the true from the false

effaced from all minds, as the notion of justice and injustice will be

obliterated from all consciences, the government responsible for

everything and bending under the burden of its responsibilities,

political convulsions, revolutions without end, ruins over which all

forms of socialism and communism attempt to establish themselves; these

are the evils which must necessarily flow from the perversion of law.

Such, consequently, gentlemen, are the evils for which you have prepared

the way by making use of the law to destroy freedom of exchange; that is

to say, to abolish the right of property. Do not declaim against

socialism; you establish it. Do not cry out against communism; you

create it. And now you ask us Economists to make you a theory which will

justify you! _Morbleu!_ make it yourselves.

PART IV.

CAPITAL AND INTEREST.

My object in this treatise is to examine into the real nature of the

Interest of Capital, for the purpose of proving that it is lawful, and

explaining why it should be perpetual. This may appear singular, and

yet, I confess, I am more afraid of being too plain than too obscure. I

am afraid I may weary the reader by a series of mere truisms. But it is

no easy matter to avoid this danger, when the facts, with which we have

to deal, are known to every one by personal, familiar, and daily

experience.

But, then, you will say, "What is the use of this treatise? Why explain

what everybody knows?"

But, although this problem appears at first sight so very simple, there

is more in it than you might suppose. I shall endeavor to prove this by

an example. Mondor lends an instrument of labor to-day, which will be

entirely destroyed in a week, yet the capital will not produce the less

interest to Mondor or his heirs, through all eternity. Reader, can you

honestly say that you understand the reason of this?

It would be a waste of time to seek any satisfactory explanation from

the writings of economists. They have not thrown much light upon the

reasons of the existence of interest. For this they are not to be

blamed; for at the time they wrote, its lawfulness was not called in

question. Now, however, times are altered; the case is different. Men,

who consider themselves to be in advance of their age, have organized an

active crusade against capital and interest; it is the productiveness of

capital which they are attacking; not certain abuses in the

administration of it, but the principle itself.

A journal has been established to serve as a vehicle for this crusade.

It is conducted by M. Proudhon, and has, it is said, an immense

circulation. The first number of this periodical contains the electoral

manifesto of the _people_. Here we read, "The productiveness of capital,

which is condemned by Christianity under the name of usury, is the true

cause of misery, the true principle of destitution, the eternal obstacle

to the establishment of the Republic."

Another journal, _La Ruche Populaire_, after having said some excellent

things on labor, adds, "But, above all, labor ought to be free; that is,

it ought to be organized in such a manner, _that money lenders and

patrons, or masters, should not be paid_ for this liberty of labor, this

right of labor, which is raised to so high a price by the trafficers of

men." The only thought that I notice here, is that expressed by the

words in italics, which imply a denial of the right to interest. The

remainder of the article explains it.

It is thus that the democratic Socialist, Thoré, expresses himself:

"The revolution will always have to be recommenced, so long as we occupy

ourselves with consequences only, without having the logic or the

courage to attack the principle itself. This principle is capital, false

property, interest, and usury, which by the old _regime_, is made to

weigh upon labor.

"Ever since the aristocrats invented the incredible fiction, _that

capital possesses the power of reproducing itself_, the workers have

been at the mercy of the idle.

"At the end of a year, will you find an additional crown in a bag of one

hundred shillings? At the end of fourteen years, will your shillings

have doubled in your bag?

"Will a work of industry or of skill produce another, at the end of

fourteen years?

"Let us begin, then, by demolishing this fatal fiction."

I have quoted the above, merely for the sake of establishing the fact,

that many persons consider the productiveness of capital a false, a

fatal, and an iniquitous principle. But quotations are superfluous; it

is well known that the people attribute their sufferings to what they

call _the trafficing in man by man_. In fact, the phrase _tyranny of

capital_ has become proverbial.

I believe there is not a man in the world, who is aware of the whole

importance of this question:

"Is the interest of capital natural, just, and lawful, and as useful to

the payer as to the receiver?"

You answer, no; I answer, yes. Then we differ entirely; but it is of the

utmost importance to discover which of us is in the right; otherwise we

shall incur the danger of making a false solution of the question, a

matter of opinion. If the error is on my side, however, the evil would

not be so great. It must be inferred that I know nothing about the true

interests of the masses, or the march of human progress; and that all my

arguments are but as so many grains of sand, by which the car of the

revolution will certainly not be arrested.

But if, on the contrary, MM. Proudhon and Thoré are deceiving

themselves, it follows, that they are leading the people astray--that

they are showing them the evil where it does not exist; and thus giving

a false direction to their ideas, to their antipathies, to their

dislikes, and to their attacks. It follows, that the misguided people

are rushing into a horrible and absurd struggle, in which victory would

be more fatal than defeat, since, according to this supposition, the

result would be the realization of universal evils, the destruction of

every means of emancipation, the consummation of its own misery.

This is just what M. Proudhon has acknowledged, with perfect good faith.

"The foundation stone," he told me, "of my system is the _gratuitousness

of credit_. If I am mistaken in this, Socialism is a vain dream." I add,

it is a dream, in which the people are tearing themselves to pieces.

Will it, therefore, be a cause for surprise, if, when they awake, they

find themselves mangled and bleeding? Such a danger as this is enough to

justify me fully, if, in the course of the discussion, I allow myself to

be led into some trivialities and some prolixity.

CAPITAL AND INTEREST.

I address this treatise to the workmen of Paris, more especially to

those who have enrolled themselves under the banner of Socialist

democracy. I proceed to consider these two questions:

1st. Is it consistent with the nature of things, and with justice, that

capital should produce interest?

2nd. Is it consistent with the nature of things, and with justice, that

the interest of capital should be perpetual?

The working men of Paris will certainly acknowledge that a more

important subject could not be discussed.

Since the world began, it has been allowed, at least in part, that

capital ought to produce interest. But latterly it has been affirmed,

that herein lies the very social error which is the cause of pauperism

and inequality. It is, therefore, very essential to know now on what

ground we stand.

For if levying interest from capital is a sin, the workers have a right

to revolt against social order, as it exists; it is in vain to tell them

that they ought to have recourse to legal and pacific means, it would be

a hypocritical recommendation. When on the one side there is a strong

man, poor, and a victim of robbery--on the other, a weak man, but rich,

and a robber--it is singular enough, that we should say to the former,

with a hope of persuading him, "Wait till your oppressor voluntarily

renounces oppression, or till it shall cease of itself." This cannot be;

and those who tell us that capital is, by nature, unproductive, ought to

know that they are provoking a terrible and immediate struggle.

If, on the contrary, the interest of capital is natural, lawful,

consistent with the general good, as favorable to the borrower as to

the lender, the economists who deny it, the tribunes who traffic in this

pretended social wound, are leading the workmen into a senseless and

unjust struggle, which can have no other issue than the misfortune of

all. In fact, they are arming labor against capital. So much the better,

if these two powers are really antagonistic; and may the struggle soon

be ended! But if they are in harmony, the struggle is the greatest evil

which can be inflicted on society. You see, then, workmen, that there is

not a more important question than this: "Is the interest of capital

lawful or not?" In the former case, you must immediately renounce the

struggle to which you are being urged; in the second, you must carry it

on bravely, and to the end.

Productiveness of capital--perpetuity of interest. These are difficult

questions. I must endeavor to make myself clear. And for that purpose I

shall have recourse to example rather than to demonstration; or rather,

I shall place the demonstration in the example. I begin by

acknowledging, that, at first sight, it may appear strange that capital

should pretend to a remuneration; and, above all, to a perpetual

remuneration. You will say, "Here are two men. One of them works from

morning till night, from one year's end to another; and if he consumes

all which he has gained, even by superior energy, he remains poor. When

Christmas comes, he is no forwarder than he was at the beginning of the

year, and has no other prospect but to begin again. The other man does

nothing, either with his hands or his head; or, at least, if he makes

use of them at all, it is only for his own pleasure; it is allowable for

him to do nothing, for he has an income. He does not work, yet he lives

well; he has everything in abundance, delicate dishes, sumptuous

furniture, elegant equipages; nay, he even consumes, daily, things which

the workers have been obliged to produce by the sweat of their brow; for

these things do not make themselves; and, as far as he is concerned, he

has had no hand in their production. It is the workmen who have caused

this corn to grow, polished this furniture, woven these carpets; it is

our wives and daughters who have spun, cut out, sewed, and embroidered

these stuffs. We work, then, for him and ourselves; for him first, and

then for ourselves, if there is anything left. But here is something

more striking still. If the former of these two men, the worker,

consumes within the year any profit which may have been left him in that

year, he is always at the point from which he started, and his destiny

condemns him to move incessantly in a perpetual circle, and a monotony

of exertion. Labor, then, is rewarded only once. But if the other, the

'gentleman,' consumes his yearly income in the year, he has, the year

after, in those which follow, and through all eternity, an income

always equal, inexhaustible, _perpetual_. Capital, then, is remunerated,

not only once or twice, but an indefinite number of times! So that, at

the end of a hundred years, a family, which has placed 20,000 francs, at

five per cent., will have had 100,000 francs; and this will not prevent

it from having 100,000 more, in the following century. In other words,

for 20,000 francs, which represent its labor, it will have levied, in

two centuries, a ten-fold value on the labor of others. In this social

arrangement, is there not a monstrous evil to be reformed? And this is

not all. If it should please this family to curtail its enjoyments a

little--to spend, for example, only 900 francs, instead of 1,000--it

may, without any labor, without any other trouble beyond that of

investing 100 francs a year, increase its capital and its income in such

rapid progression, that it will soon be in a position to consume as much

as a hundred families of industrious workmen. Does not all this go to

prove, that society itself has in its bosom a hideous cancer, which

ought to be eradicated at the risk of some temporary suffering?"

These are, it appears to me, the sad and irritating reflections which

must be excited in your minds by the active and superficial crusade

which is being carried on against capital and interest. On the other

hand, there are moments in which, I am convinced, doubts are awakened

in your minds, and scruples in your conscience. You say to yourselves

sometimes, "But to assert that capital ought not to produce interest, is

to say that he who has created instruments of labor, or materials, or

provisions of any kind, ought to yield them up without compensation. Is

that just? And then, if it is so, who would lend these instruments,

these materials, these provisions? who would take care of them? who even

would create them? Every one would consume his proportion, and the human

race would never advance a step. Capital would be no longer formed,

since there would be no interest in forming it. It will become

exceedingly scarce. A singular step toward gratuitous loans! A singular

means of improving the condition of borrowers, to make it impossible for

them to borrow at any price! What would become of labor itself? for

there will be no money advanced, and not one single kind of labor can be

mentioned, not even the chase, which can be pursued without money in

hand. And, as for ourselves, what would become of us? What! we are not

to be allowed to borrow, in order to work in the prime of life, nor to

lend, that we may enjoy repose in its decline? The law will rob us of

the prospect of laying by a little property, because it will prevent us

from gaining any advantage from it. It will deprive us of all stimulus

to save at the present time, and of all hope of repose for the future.

It is useless to exhaust ourselves with fatigue; we must abandon the

idea of leaving our sons and daughters a little property, since modern

science renders it useless, for we should become trafficers in men if we

were to lend it on interest. Alas! the world which these persons would

open before us as an imaginary good, is still more dreary and desolate

than that which they condemn, for hope, at any rate, is not banished

from the latter." Thus in all respects, and in every point of view, the

question is a serious one. Let us hasten to arrive at a solution.

Our civil code has a chapter entitled, "On the manner of transmitting

property." I do not think it gives a very complete nomenclature on this

point. When a man by his labor has made some useful things--in other

words, when he has created a _value_--it can only pass into the hands of

another by one of the following modes: as a gift, by the right of

inheritance, by exchange, loan, or theft. One word upon each of these,

except the last, although it plays a greater part in the world than we

may think.

A gift, needs no definition. It is essentially voluntary and

spontaneous. It depends exclusively upon the giver, and the receiver

cannot be said to have any right to it. Without a doubt, morality and

religion make it a duty for men, especially the rich, to deprive

themselves voluntarily of that which they possess, in favor of their

less fortunate brethren. But this is an entirely moral obligation. If it

were to be asserted on principle, admitted in practice, or sanctioned by

law, that every man has a right to the property of another, the gift

would have no merit, charity and gratitude would be no longer virtues.

Besides, such a doctrine would suddenly and universally arrest labor and

production, as severe cold congeals water and suspends animation, for

who would work if there was no longer to be any connection between labor

and the satisfying of our wants? Political economy has not treated of

gifts. It has hence been concluded that it disowns them, and that it is

therefore a science devoid of heart. This is a ridiculous accusation.

That science which treats of the laws resulting from the _reciprocity of

services_, had no business to inquire into the consequences of

generosity with respect to him who receives, nor into its effects,

perhaps still more precious, on him who gives; such considerations

belong evidently to the science of morals. We must allow the sciences to

have limits; above all, we must not accuse them of denying or

undervaluing what they look upon as foreign to their department.

The right of inheritance, against which so much has been objected of

late, is one of the forms of gift, and assuredly the most natural of

all. That which a man has produced, he may consume, exchange, or give;

what can be more natural than that he should give it to his children? It

is this power, more than any other, which inspires him with courage to

labor and to save. Do you know why the principle of right of inheritance

is thus called in question? Because it is imagined that the property

thus transmitted is plundered from the masses. This is a fatal error;

political economy demonstrates, in the most peremptory manner, that all

value produced is a creation which does no harm to any person whatever.

For that reason, it may be consumed, and, still more, transmitted,

without hurting any one; but I shall not pursue these reflections, which

do not belong to the subject.

Exchange is the principal department of political economy, because it is

by far the most frequent method of transmitting property, according to

the free and voluntary agreements of the laws and effects of which this

science treats.

Properly speaking, exchange is the reciprocity of services. The parties

say between themselves, "Give me this, and I will give you that;" or,

"Do this for me, and I will do that for you." It is well to remark (for

this will throw a new light on the notion of value), that the second

form is always implied in the first. When it is said, "Do this for me,

and I will do that for you," an exchange of service for service is

proposed. Again, when it is said, "Give me this, and I will give you

that," it is the same as saying, "I yield to you what I have done,

yield to me what you have done." The labor is past, instead of present;

but the exchange is not the less governed by the comparative valuation

of the two services; so that it is quite correct to say, that the

principle of _value_ is in the services rendered and received on account

of the productions exchanged, rather than in productions themselves.

In reality, services are scarcely ever exchanged directly. There is a

medium, which is termed _money_. Paul has completed a coat, for which he

wishes to receive a little bread, a little wine, a little oil, a visit

from a doctor, a ticket for the play, etc. The exchange cannot be

effected in kind; so what does Paul do? He first exchanges his coat for

some money, which is called _sale_; then he exchanges this money again

for the things which he wants, which is called _purchase_; and now,

only, has the reciprocity of services completed its circuit; now, only,

the labor and the compensation are balanced in the same individual,--"I

have done this for society, it has done that for me." In a word, it is

only now that the exchange is actually accomplished. Thus, nothing can

be more correct than this observation of J.B. Say: "Since the

introduction of money, every exchange is resolved into two elements,

_sale_ and _purchase_. It is the reunion of these two elements which

renders the exchange complete."

We must remark, also, that the constant appearance of money in every

exchange has overturned and misled all our ideas; men have ended in

thinking that money was true riches, and that to multiply it was to

multiply services and products. Hence the prohibitory system; hence

paper money; hence the celebrated aphorism, "What one gains the other

loses;" and all the errors which have ruined the earth, and imbrued it

with blood.[17] After much research it has been found, that in order to

make the two services exchanged of equivalent value, and in order to

render the exchange _equitable_, the best means was to allow it to be

free. However plausible, at first sight, the intervention of the State

might be, it was soon perceived that it is always oppressive to one or

other of the contracting parties. When we look into these subjects, we

are always compelled to reason upon this maxim, that _equal value_

results from liberty. We have, in fact, no other means of knowing

whether, at a given moment, two services are of the same value, but that

of examining whether they can be readily and freely exchanged. Allow the

State, which is the same thing as force, to interfere on one side or the

other, and from that moment all the means of appreciation will be

complicated and entangled, instead of becoming clear. It ought to be the

part of the State to prevent, and, above all, to repress artifice and

fraud; that is, to secure liberty, and not to violate it. I have

enlarged a little upon exchange, although loan is my principal object:

my excuse is, that I conceive that there is in a loan an actual

exchange, an actual service rendered by the lender, and which makes the

borrower liable to an equivalent service,--two services, whose

comparative value can only be appreciated, like that of all possible

services, by freedom. Now, if it is so, the perfect lawfulness of what

is called house-rent, farm-rent, interest, will be explained and

justified. Let us consider the case of _loan_.

[Footnote 17: This error will be combated in a pamphlet, entitled

"_Cursed Money_."]

Suppose two men exchange two services or two objects, whose equal value

is beyond all dispute. Suppose, for example, Peter says to Paul, "Give

me ten sixpences, I will give you a five-shilling piece." We cannot

imagine an equal value more unquestionable. When the bargain is made,

neither party has any claim upon the other. The exchanged services are

equal. Thus it follows, that if one of the parties wishes to introduce

into the bargain an additional clause, advantageous to himself, but

unfavorable to the other party, he must agree to a second clause, which

shall re-establish the equilibrium, and the law of justice. It would be

absurd to deny the justice of a second clause of compensation. This

granted, we will suppose that Peter, after having said to Paul, "Give me

ten sixpences, I will give you a crown," adds, "you shall give me the

ten sixpences _now_, and I will give you the crown-piece _in a year_;"

it is very evident that this new proposition alters the claims and

advantages of the bargain; that it alters the proportion of the two

services. Does it not appear plainly enough, in fact, that Peter asks of

Paul a new and an additional service; one of a different kind? Is it not

as if he had said, "Render me the service of allowing me to use for my

profit, for a year, five shillings which belong to you, and which you

might have used for yourself"? And what good reason have you to maintain

that Paul is bound to render this especial service gratuitously; that he

has no right to demand anything more in consequence of this requisition;

that the State ought to interfere to force him to submit? Is it not

incomprehensible that the economist, who preaches such a doctrine to the

people, can reconcile it with his principle of _the reciprocity of

services_? Here I have introduced cash; I have been led to do so by a

desire to place, side by side, two objects of exchange, of a perfect and

indisputable equality of value. I was anxious to be prepared for

objections; but, on the other hand, my demonstration would have been

more striking still, if I had illustrated my principle by an agreement

for exchanging the services or the productions themselves.

Suppose, for example, a house and a vessel of a value so perfectly

equal that their proprietors are disposed to exchange them even-handed,

without excess or abatement. In fact, let the bargain be settled by a

lawyer. At the moment of each taking possession, the ship-owner says to

the citizen, "Very well; the transaction is completed, and nothing can

prove its perfect equity better than our free and voluntary consent. Our

conditions thus fixed, I shall propose to you a little practical

modification. You shall let me have your house to-day, but I shall not

put you in possession of my ship for a year; and the reason I make this

demand of you is, that, during this year of _delay_, I wish to use the

vessel." That we may not be embarrassed by considerations relative to

the deterioration of the thing lent, I will suppose the ship-owner to

add, "I will engage, at the end of the year, to hand over to you the

vessel in the state in which it is to-day." I ask of every candid man, I

ask of M. Proudhon himself, if the citizen has not a right to answer,

"The new clause which you propose entirely alters the proportion or the

equal value of the exchanged services. By it, I shall be deprived, for

the space of a year, both at once of my house and of your vessel. By it,

you will make use of both. If, in the absence of this clause, the

bargain was just, for the same reason the clause is injurious to me. It

stipulates for a loss to me, and a gain to you. You are requiring of me

a new service; I have a right to refuse, or to require of you, as a

compensation, an equivalent service." If the parties are agreed upon

this compensation, the principle of which is incontestable, we can

easily distinguish two transactions in one, two exchanges of service in

one. First, there is the exchange of the house for the vessel; after

this, there is the delay granted by one of the parties, and the

compensation correspondent to this delay yielded by the other. These two

new services take the generic and abstract names of _credit_ and

_interest_. But names do not change the nature of things; and I defy any

one to dare to maintain that there exists here, when all is done, a

service for a service, or a reciprocity of services. To say that one of

these services does not challenge the other, to say that the first ought

to be rendered gratuitously, without injustice, is to say that injustice

consists in the reciprocity of services--that justice consists in one of

the parties giving and not receiving, which is a contradiction in terms.

To give an idea of interest and its mechanism, allow me to make use of

two or three anecdotes. But, first, I must say a few words upon capital.

There are some persons who imagine that capital is money, and this is

precisely the reason why they deny its productiveness; for, as M. Thoré

says, crowns are not endowed with the power of reproducing themselves.

But it is not true that capital and money are the same thing. Before

the discovery of the precious metals, there were capitalists in the

world; and I venture to say that at that time, as now, everybody was a

capitalist, to a certain extent.

What is capital, then? It is composed of three things:

1st. Of the materials upon which men operate, when these materials have

already a value communicated by some human effort, which has bestowed

upon them the principle of remuneration--wool, flax, leather, silk,

wood, etc.

2nd. Instruments which are used for working--tools, machines, ships,

carriages, etc.

3rd. Provisions which are consumed during labor--victuals, stuffs,

houses, etc.

Without these things, the labor of man would be unproductive, and almost

void; yet these very things have required much work, especially at

first. This is the reason that so much value has been attached to the

possession of them, and also that it is perfectly lawful to exchange and

to sell them, to make a profit of them if used, to gain remuneration

from them if lent.

Now for my anecdotes.

THE SACK OF CORN.

Mathurin, in other respects as poor as Job, and obliged to earn his

bread by day-labor, became, nevertheless, by some inheritance, the

owner of a fine piece of uncultivated land. He was exceedingly anxious

to cultivate it. "Alas!" said he, "to make ditches, to raise fences, to

break the soil, to clear away the brambles and stones, to plough it, to

sow it, might bring me a living in a year or two; but certainly not

to-day, or to-morrow. It is impossible to set about farming it, without

previously saving some provisions for my subsistence until the harvest;

and I know, by experience, that preparatory labor is indispensable, in

order to render present labor productive." The good Mathurin was not

content with making these reflections. He resolved to work by the day,

and to save something from his wages to buy a spade and a sack of corn;

without which things, he must give up his fine agricultural projects. He

acted so well, was so active and steady, that he soon saw himself in

possession of the wished-for sack of corn. "I shall take it to the

mill," said he, "and then I shall have enough to live upon till my field

is covered with a rich harvest." Just as he was starting, Jerome came to

borrow his treasure of him. "If you will lend me this sack of corn,"

said Jerome, "you will do me a great service; for I have some very

lucrative work in view, which I cannot possibly undertake, for want of

provisions to live upon until it is finished." "I was in the same case,"

answered Mathurin, "and if I have now secured bread for several months,

it is at the expense of my arms and my stomach. Upon what principle of

justice can it be devoted to the realization of _your_ enterprise

instead of _mine_?"

You may well believe that the bargain was a long one. However, it was

finished at length, and on these conditions:

First. Jerome promised to give back, at the end of the year, a sack of

corn of the same quality, and of the same weight, without missing a

single grain. "This first clause is perfectly just," said he, "for

without it Mathurin would _give_, and not _lend_."

Secondly. He engaged to deliver _five litres_ on _every hectolitre_.

"This clause is no less just than the other," thought he; "for without

it Mathurin would do me a service without compensation; he would inflict

upon himself a privation--he would renounce his cherished enterprise--he

would enable me to accomplish mine--he would cause me to enjoy for a

year the fruits of his savings, and all this gratuitously. Since he

delays the cultivation of his land, since he enables me to realize a

lucrative labor, it is quite natural that I should let him partake, in a

certain proportion, of the profits which I shall gain by the sacrifice

he makes of his own."

On his side, Mathurin, who was something of a scholar, made this

calculation: "Since, by virtue of the first clause, the sack of corn

will return to me at the end of a year," he said to himself, "I shall

be able to lend it again; it will return to me at the end of the second

year; I may lend it again, and so on, to all eternity. However, I cannot

deny that it will have been eaten long ago. It is singular that I should

be perpetually the owner of a sack of corn, although the one I have lent

has been consumed for ever. But this is explained thus: It will be

consumed in the service of Jerome. It will put it into the power of

Jerome to produce a superior value; and, consequently, Jerome will be

able to restore me a sack of corn, or the value of it, without having

suffered the slightest injury; but quite the contrary. And as regards

myself, this value ought to be my property, as long as I do not consume

it myself; if I had used it to clear my land, I should have received it

again in the form of a fine harvest. Instead of that, I lend it, and

shall recover it in the form of repayment.

"From the second clause, I gain another piece of information. At the end

of the year, I shall be in possession of five litres of corn, over the

100 that I have just lent. If, then, I were to continue to work by the

day, and to save a part of my wages, as I have been doing, in the course

of time I should be able to lend two sacks of corn; then three; then

four; and when I should have gained a sufficient number to enable me to

live on these additions of five litres over and above each, I shall be

at liberty to take a little repose in my old age. But how is this? In

this case, shall I not be living at the expense of others? No,

certainly, for it has been proved that in lending I perform a service; I

complete the labor of my borrowers; and only deduct a trifling part of

the excess of production, due to my lendings and savings. It is a

marvellous thing, that a man may thus realize a leisure which injures no

one, and for which he cannot be envied without injustice."

THE HOUSE.

Mondor had a house. In building it, he had extorted nothing from any one

whatever. He owed it to his own personal labor, or, which is the same

thing, to labor justly rewarded. His first care was to make a bargain

with an architect, in virtue of which, by means of a hundred crowns a

year, the latter engaged to keep the house in constant good repair.

Mondor was already congratulating himself on the happy days which he

hoped to spend in this retreat, declared sacred by our Constitution. But

Valerius wished to make it his residence. "How can you think of such a

thing?" said Mondor; "it is I who have built it; it has cost me ten

years of painful labor, and now you would enjoy it!" They agreed to

refer the matter to judges. They chose no profound economists--there

were none such in the country. But they found some just and sensible

men; it all comes to the same thing: political economy, justice, good

sense, are all the same thing. Now here is the decision made by the

judges: If Valerius wishes to occupy Mondor's house for a year, he is

bound to submit to three conditions. The first is, to quit at the end of

the year, and to restore the house in good repair, saving the inevitable

decay resulting from mere duration. The second, to refund to Mondor the

300 francs, which the latter pays annually to the architect to repair

the injuries of time; for these injuries taking place whilst the house

is in the service of Valerius, it is perfectly just that he should bear

the consequences. The third, that he should render to Mondor a service

equivalent to that which he receives. As to this equivalence of

services, it must be freely discussed between Mondor and Valerius.

THE PLANE.

A very long time ago there lived, in a poor village, a joiner, who was a

philosopher, as all my heroes are, in their way. James worked from

morning till night with his two strong arms, but his brain was not idle,

for all that. He was fond of reviewing his actions, their causes, and

their effects. He sometimes said to himself, "With my hatchet, my saw,

and my hammer, I can make only coarse furniture, and can only get the

pay for such. If I only had a _plane_, I should please my customers

more, and they would pay me more. It is quite just; I can only expect

services proportioned to those which I render myself. Yes! I am

resolved, I will make myself a _plane_."

However, just as he was setting to work, James reflected further: "I

work for my customers 300 days in the year. If I give ten to making my

plane, supposing it lasts me a year, only 290 days will remain for me to

make my furniture. Now, in order that I be not the loser in this matter,

I must gain henceforth, with the help of the plane, as much in 290 days,

as I now do in 300. I must even gain more; for unless I do so, it would

not be worth my while to venture upon any innovations." James began to

calculate. He satisfied himself that he should sell his finished

furniture at a price which would amply compensate for the ten days

devoted to the plane; and when no doubt remained on this point, he set

to work. I beg the reader to remark, that the power which exists in the

tool to increase the productiveness of labor, is the basis of the

solution which follows.

At the end of ten days, James had in his possession an admirable plane,

which he valued all the more for having made it himself. He danced for

joy--for, like the girl with her basket of eggs, he reckoned all the

profits which he expected to derive from the ingenious instrument; but

more fortunate than she, he was not reduced to the necessity of saying

good-bye to calf, cow, pig, and eggs, together. He was building his fine

castles in the air, when he was interrupted by his acquaintance William,

a joiner in the neighboring village. William having admired the plane,

was struck with the advantages which might be gained from it. He said to

James:

_W._ You must do me a service.

_J._ What service?

_W._ Lend me the plane for a year.

As might be expected, James at this proposal did not fail to cry out,

"How can you think of such a thing, William? Well, if I do you this

service, what will you do for me in return?"

_W._ Nothing. Don't you know that a loan ought to be gratuitous? Don't

you know that capital is naturally unproductive? Don't you know

fraternity has been proclaimed? If you only do me a service for the sake

of receiving one from me in return, what merit would you have?

_J._ William, my friend, fraternity does not mean that all the

sacrifices are to be on one side; if so, I do not see why they should

not be on yours. Whether a loan should be gratuitous I don't know; but I

do know that if I were to lend you my plane for a year, it would be

giving it to you. To tell you the truth, that is not what I made it for.

_W._ Well, we will say nothing about the modern maxims discovered by

the Socialist gentlemen. I ask you to do me a service; what service do

you ask of me in return?

_J._ First, then, in a year, the plane will be done for, it will be good

for nothing. It is only just, that you should let me have another

exactly like it; or that you should give me money enough to get it

repaired; or that you should supply me the ten days which I must devote

to replacing it.

_W._ This is perfectly just. I submit to these conditions. I engage to

return it, or to let you have one like it, or the value of the same. I

think you must be satisfied with this, and can require nothing further.

_J._ I think otherwise. I made the plane for myself, and not for you. I

expected to gain some advantage from it, by my work being better

finished and better paid, by an improvement in my condition. What reason

is there that I should make the plane, and you should gain the profit? I

might as well ask you to give me your saw and hatchet! What a confusion!

Is it not natural that each should keep what he has made with his own

hands, as well as his hands themselves? To use without recompense the

hands of another, I call slavery; to use without recompense the plane of

another, can this be called fraternity?

_W._ But, then, I have agreed to return it to you at the end of a year,

as well polished and as sharp as it is now.

_J._ We have nothing to do with next year; we are speaking of this year.

I have made the plane for the sake of improving my work and my

condition; if you merely return it to me in a year, it is you who will

gain the profit of it during the whole of that time. I am not bound to

do you such a service without receiving anything from you in return;

therefore, if you wish for my plane, independently of the entire

restoration already bargained for, you must do me a service which we

will now discuss; you must grant me remuneration.

And this was done thus: William granted a remuneration calculated in

such a way that, at the end of the year, James received his plane quite

new, and in addition, a compensation, consisting of a new plank, for the

advantages of which he had deprived himself, and which he had yielded to

his friend.

It was impossible for any one acquainted with the transaction to

discover the slightest trace in it of oppression or injustice.

The singular part of it is, that, at the end of the year, the plane came

into James' possession, and he lent it again; recovered it, and lent it

a third and fourth time. It has passed into the hands of his son, who

still lends it. Poor plane! how many times has it changed, sometimes its

blade, sometimes its handle. It is no longer the same plane, but it has

always the same value, at least for James' posterity. Workmen! let us

examine into these little stories.

I maintain, first of all, that the _sack of corn_ and the _plane_ are

here the type, the model, a faithful representation, the symbol, of all

capital; as the five litres of corn and the plank are the type, the

model, the representation, the symbol, of all interest. This granted,

the following are, it seems to me, a series of consequences, the justice

of which it is impossible to dispute.

1st. If the yielding of a plank by the borrower to the lender is a

natural, equitable, lawful remuneration, the just price of a real

service, we may conclude that, as a general rule, it is in the nature of

capital to produce interest. When this capital, as in the foregoing

examples, takes the form of an _instrument of labor_, it is clear enough

that it ought to bring an advantage to its possessor, to him who has

devoted to it his time, his brains, and his strength. Otherwise, why

should he have made it? No necessity of life can be immediately

satisfied with instruments of labor; no one eats planes or drinks saws,

except, indeed, he be a conjurer. If a man determines to spend his time

in the production of such things, he must have been led to it by the

consideration of the power which these instruments add to his power; of

the time which they save him; of the perfection and rapidity which they

give to his labor; in a word, of the advantages which they procure for

him. Now, these advantages, which have been prepared by labor, by the

sacrifice of time which might have been used in a more immediate manner,

are we bound, as soon as they are ready to be enjoyed, to confer them

gratuitously upon another? Would it be an advance in social order, if

the law decided thus, and citizens should pay officials for causing such

a law to be executed by force? I venture to say, that there is not one

amongst you who would support it. It would be to legalize, to organize,

to systematize injustice itself, for it would be proclaiming that there

are men born to render, and others born to receive, gratuitous services.

Granted, then, that interest is just, natural, and lawful.

2nd. A second consequence, not less remarkable than the former, and, if

possible, still more conclusive, to which I call your attention, is

this: _interest is not injurious to the borrower_. I mean to say, the

obligation in which the borrower finds himself, to pay a remuneration

for the use of capital, cannot do any harm to his condition. Observe, in

fact, that James and William are perfectly free, as regards the

transaction to which the plane gave occasion. The transaction cannot be

accomplished without the consent of the one as well as of the other. The

worst which can happen is, that James may be too exacting; and in this

case, William, refusing the loan, remains as he was before. By the fact

of his agreeing to borrow, he proves that he considers it an advantage

to himself; he proves, that after every calculation, including the

remuneration, whatever it may be, required of him, he still finds it

more profitable to borrow than not to borrow. He only determines to do

so because he has compared the inconveniences with the advantages. He

has calculated that the day on which he returns the plane, accompanied

by the remuneration agreed upon, he will have effected more work, with

the same labor, thanks to this tool. A profit will remain to him,

otherwise he would not have borrowed. The two services of which we are

speaking are exchanged according to the law which governs all exchanges,

the law of supply and demand. The claims of James have a natural and

impassable limit. This is the point in which the remuneration demanded

by him would absorb all the advantage which William might find in making

use of a plane. In this case, the borrowing would not take place.

William would be bound either to make a plane for himself, or to do

without one, which would leave him in his original condition. He

borrows, because he gains by borrowing. I know very well what will be

told me. You will say, William may be deceived, or, perhaps, he may be

governed by necessity, and be obliged to submit to a harsh law.

It may be so. As to errors in calculation, they belong to the infirmity

of our nature, and to argue from this against the transaction in

question, is objecting the possibility of loss in all imaginable

transactions, in every human act. Error is an accidental fact, which is

incessantly remedied by experience. In short, everybody must guard

against it. As far as those hard necessities are concerned, which force

persons to burdensome borrowings, it is clear that these necessities

exist previously to the borrowing. If William is in a situation in which

he cannot possibly do without a plane, and must borrow one at any price,

does this situation result from James having taken the trouble to make

the tool? Does it not exist independently of this circumstance? However

harsh, however severe James may be, he will never render the supposed

condition of William worse than it is. Morally, it is true, the lender

will be to blame; but, in an economical point of view, the loan itself

can never be considered responsible for previous necessities, which it

has not created, and which it relieves, to a certain extent.

But this proves something to which I shall return. The evident interests

of William, representing here the borrowers, there are many Jameses and

planes. In other words, lenders and capitals. It is very evident, that

if William can say to James--"Your demands are exorbitant; there is no

lack of planes in the world;" he will be in a better situation than if

James' plane was the only one to be borrowed. Assuredly, there is no

maxim more true than this--service for service. But let us not forget,

that no service has a fixed and absolute value, compared with others.

The contracting parties are free. Each carries his requisitions to the

farthest possible point; and the most favorable circumstance for these

requisitions is the absence of rivalship. Hence it follows, that if

there is a class of men more interested than any other, in the

formation, multiplication, and abundance of capitals, it is mainly that

of the borrowers. Now, since capitals can only be formed and increased

by the stimulus and the prospect of remuneration, let this class

understand the injury they are inflicting on themselves, when they deny

the lawfulness of interest, when they proclaim that credit should be

gratuitous, when they declaim against the pretended tyranny of capital,

when they discourage saving, thus forcing capitals to become scarce, and

consequently interests to rise.

3rd. The anecdote I have just related enables you to explain this

apparently singular phenomenon, which is termed the duration or

perpetuity of interest. Since, in lending his plane, James has been

able, very lawfully, to make it a condition, that it should be returned

to him, at the end of a year, in the same state in which it was when he

lent it, is it not evident that he may, at the expiration of the term,

lend it again on the same conditions. If he resolves upon the latter

plan, the plane will return to him at the end of every year, and that

without end. James will then be in a condition to lend it without end;

that is, he may derive from it a perpetual interest. It will be said,

that the plane will be worn out. That is true; but it will be worn out

by the hand and for the profit of the borrower. The latter has taken

into account this gradual wear, and taken upon himself, as he ought, the

consequences. He has reckoned that he shall derive from this tool an

advantage, which will allow him to restore it in its original condition,

after having realized a profit from it. As long as James does not use

this capital himself, or for his own advantage--as long as he renounces

the advantages which allow it to be restored to its original

condition--he will have an incontestable right to have it restored, and

that independently of interest.

Observe, besides, that if, as I believe I have shown, James, far from

doing any harm to William, has done him a _service_ in lending him his

plane for a year; for the same reason, he will do no harm to a second, a

third, a fourth borrower, in the subsequent periods. Hence you may

understand, that the interest of a capital is as natural, as lawful, as

useful, in the thousandth year, as in the first. We may go still

further. It may happen, that James lends more than a single plane. It is

possible, that by means of working, of saving, of privations, of order,

of activity, he may come to lend a multitude of planes and saws; that is

to say, to do a multitude of services. I insist upon this point--that if

the first loan has been a social good, it will be the same with all the

others; for they are all similar, and based upon the same principle. It

may happen, then, that the amount of all the remunerations received by

our honest operative, in exchange for services rendered by him, may

suffice to maintain him. In this case, there will be a man in the world

who has a right to live without working. I do not say that he would be

doing right to give himself up to idleness--but I say, that he has a

right to do so; and if he does so, it will be at nobody's expense, but

quite the contrary. If society at all understands the nature of things,

it will acknowledge that this man subsists on services which he receives

certainly (as we all do), but which he lawfully receives in exchange for

other services, which he himself has rendered, that he continues to

render, and which are quite real, inasmuch as they are freely and

voluntarily accepted.

And here we have a glimpse of one of the finest harmonies in the social

world. I allude to _leisure_: not that leisure that the warlike and

tyrannical classes arrange for themselves by the plunder of the workers,

but that leisure which is the lawful and innocent fruit of past activity

and economy. In expressing myself thus, I know that I shall shock many

received ideas. But see! Is not leisure an essential spring in the

social machine? Without it, the world would never have had a Newton, a

Pascal, a Fenelon; mankind would have been ignorant of all arts,

sciences, and of those wonderful inventions, prepared originally by

investigations of mere curiosity; thought would have been inert--man

would have made no progress. On the other hand, if leisure could only be

explained by plunder and oppression--if it were a benefit which could

only be enjoyed unjustly, and at the expense of others, there would be

no middle path between these two evils; either mankind would be reduced

to the necessity of stagnating in a vegetable and stationary life, in

eternal ignorance, from the absence of wheels to its machine--or else it

would have to acquire these wheels at the price of inevitable injustice,

and would necessarily present the sad spectacle, in one form or other,

of the antique classification of human beings into Masters and Slaves. I

defy any one to show me, in this case, any other alternative. We should

be compelled to contemplate the Divine plan which governs society, with

the regret of thinking that it presents a deplorable chasm. The stimulus

of progress would be forgotten, or, which is worse, this stimulus would

be no other than injustice itself. But, no! God has not left such a

chasm in his work of love. We must take care not to disregard his

wisdom and power; for those whose imperfect meditations cannot explain

the lawfulness of leisure, are very much like the astronomer who said,

at a certain point in the heavens there ought to exist a planet which

will be at last discovered, for without it the celestial world is not

harmony, but discord.

Well, I say that, if well understood, the history of my humble plane,

although very modest, is sufficient to raise us to the contemplation of

one of the most consoling, but least understood, of the social

harmonies.

It is not true that we must choose between the denial or the

unlawfulness of leisure; thanks to rent and its natural duration,

leisure may arise from labor and saving. It is a pleasing prospect,

which every one may have in view; a noble recompense, to which each may

aspire. It makes its appearance in the world; it distributes itself

proportionably to the exercise of certain virtues; it opens all the

avenues to intelligence; it ennobles, it raises the morals; it

spiritualizes the soul of humanity, not only without laying any weight

on those of our brethren whose lot in life devotes them to severe labor,

but relieving them gradually from the heaviest and most repugnant part

of this labor. It is enough that capitals should be formed, accumulated,

multiplied; should be lent on conditions less and less burdensome; that

they should descend, penetrate into every social circle, and that, by an

admirable progression, after having liberated the lenders, they should

hasten the liberation of the borrowers themselves. For that end, the

laws and customs ought to be favorable to economy, the source of

capital. It is enough to say, that the first of all these conditions is,

not to alarm, to attack, to deny that which is the stimulus of saving

and the reason of its existence--interest.

As long as we see nothing passing from hand to hand, in the character of

loan, but _provisions_, _materials_, _instruments_, things indispensable

to the productiveness of labor itself, the ideas thus far exhibited will

not find many opponents. Who knows, even, that I may not be reproached

for having made great effort to burst what may be said to be an open

door. But as soon as _cash_ makes its appearance as the subject of the

transaction (and it is this which appears almost always), immediately a

crowd of objections are raised. Money, it will be said, will not

reproduce itself, like your _sack of corn_; it does not assist labor,

like your _plane_; it does not afford an immediate satisfaction, like

your _house_. It is incapable, by its nature, of producing interest, of

multiplying itself, and the remuneration it demands is a positive

extortion.

Who cannot see the sophistry of this? Who does not see that cash is

only a transient form, which men give at the time to other _values_, to

real objects of usefulness, for the sole object of facilitating their

arrangements? In the midst of social complications, the man who is in a

condition to lend, scarcely ever has the exact thing which the borrower

wants. James, it is true, has a plane; but, perhaps, William wants a

saw. They cannot negotiate; the transaction favorable to both cannot

take place, and then what happens? It happens that James first exchanges

his plane for money; he lends the money to William, and William

exchanges the money for a saw. The transaction is no longer a simple

one; it is decomposed into two parts, as I explained above in speaking

of exchange. But, for all that, it has not changed its nature; it still

contains all the elements of a direct loan. James has still got rid of a

tool which was useful to him; William has still received an instrument

which perfects his work and increases his profits; there is still a

service rendered by the lender, which entitles him to receive an

equivalent service from the borrower; this just balance is not the less

established by free mutual bargaining. The very natural obligation to

restore at the end of the term the entire _value_, still constitutes the

principle of the duration of interest.

At the end of a year, says M. Thoré, will you find an additional crown

in a bag of a hundred pounds?

No, certainly, if the borrower puts the bag of one hundred pounds on the

shelf. In such a case, neither the plane, nor the sack of corn, would

reproduce themselves. But it is not for the sake of leaving the money in

the bag, nor the plane on the hook, that they are borrowed. The plane is

borrowed to be used, or the money to procure a plane. And if it is

clearly proved that this tool enables the borrower to obtain profits

which he would not have made without it, if it is proved that the lender

has renounced creating for himself this excess of profits, we may

understand how the stipulation of a part of this excess of profits in

favor of the lender, is equitable and lawful.

Ignorance of the true part which cash plays in human transactions, is

the source of the most fatal errors. I intend devoting an entire

pamphlet to this subject. From what we may infer from the writings of M.

Proudhon, that which has led him to think that gratuitous credit was a

logical and definite consequence of social progress, is the observation

of the phenomenon which shows a decreasing interest, almost in direct

proportion to the rate of civilization. In barbarous times it is, in

fact, cent. per cent., and more. Then it descends to eighty, sixty,

fifty, forty, twenty, ten, eight, five, four, and three per cent. In

Holland, it has even been as low as two per cent. Hence it is concluded,

that "in proportion as society comes to perfection, it will descend to

zero by the time civilization is complete. In other words, that which

characterizes social perfection is the gratuitousness of credit. When,

therefore, we shall have abolished interest, we shall have reached the

last step of progress." This is mere sophistry, and as such false

arguing may contribute to render popular the unjust, dangerous, and

destructive dogma, that credit should be gratuitous, by representing it

as coincident with social perfection, with the reader's permission I

will examine in a few words this new view of the question.

What is _interest_? It is the service rendered, after a free bargain, by

the borrower to the lender, in remuneration for the service he has

received by the loan. By what law is the rate of these remunerative

services established? By the general law which regulates the equivalent

of all services; that is, by the law of supply and demand.

The more easily a thing is procured, the smaller is the service rendered

by yielding it or lending it. The man who gives me a glass of water in

the Pyrenees, does not render me so great a service as he who allows me

one in the desert of Sahara. If there are many planes, sacks of corn, or

houses, in a country, the use of them is obtained, other things being

equal, on more favorable conditions than if they were few; for the

simple reason, that the lender renders in this case a smaller _relative

service_.

It is not surprising, therefore, that the more abundant capitals are,

the lower is the interest.

Is this saying that it will ever reach zero? No; because, I repeat it,

the principle of a remuneration is in the loan. To say that interest

will be annihilated, is to say that there will never be any motive for

saving, for denying ourselves, in order to form new capitals, nor even

to preserve the old ones. In this case, the waste would immediately

bring a void, and interest would directly reappear.

In that, the nature of the services of which we are speaking does not

differ from any other. Thanks to industrial progress, a pair of

stockings, which used to be worth six francs, has successively been

worth only four, three, and two. No one can say to what point this value

will descend; but we can affirm, that it will never reach zero, unless

the stockings finish by producing themselves spontaneously. Why? Because

the principle of remuneration is in labor; because he who works for

another renders a service, and ought to receive a service. If no one

paid for stockings, they would cease to be made; and, with the scarcity,

the price would not fail to reappear.

The sophism which I am now combating has its root in the infinite

divisibility which belongs to _value_, as it does to matter.

It appears, at first, paradoxical, but it is well known to all

mathematicians, that, through all eternity, fractions may be taken from

a weight without the weight ever being annihilated. It is sufficient

that each successive fraction be less than the preceding one, in a

determined and regular proportion.

There are countries where people apply themselves to increasing the size

of horses, or diminishing in sheep the size of the head. It is

impossible to say precisely to what point they will arrive in this. No

one can say that he has seen the largest horse or the smallest sheep's

head that will ever appear in the world. But he may safely say that the

size of horses will never attain to infinity, nor the heads of sheep to

nothing.

In the same way, no one can say to what point the price of stockings nor

the interest of capitals will come down; but we may safely affirm, when

we know the nature of things, that neither the one nor the other will

ever arrive at zero, for labor and capital can no more live without

recompense than a sheep without a head.

The arguments of M. Proudhon reduce themselves, then, to this: since the

most skillful agriculturists are those who have reduced the heads of

sheep to the smallest size, we shall have arrived at the highest

agricultural perfection when sheep have no longer any heads. Therefore,

in order to realize the perfection, let us behead them.

I have now done with this wearisome discussion. Why is it that the

breath of false doctrine has made it needful to examine into the

intimate nature of interest? I must not leave off without remarking upon

a beautiful moral which may be drawn from this law: "The depression of

interest is proportioned to the abundance of capitals." This law being

granted, if there is a class of men to whom it is more important than to

any other that capitals be formed, accumulate, multiply, abound, and

superabound, it is certainly the class which borrows them directly or

indirectly; it is those men who operate upon _materials_, who gain

assistance by _instruments_, who live upon _provisions_, produced and

economized by other men.

Imagine, in a vast and fertile country, a population of a thousand

inhabitants, destitute of all capital thus defined. It will assuredly

perish by the pangs of hunger. Let us suppose a case hardly less cruel.

Let us suppose that ten of these savages are provided with instruments

and provisions sufficient to work and to live themselves until harvest

time, as well as to remunerate the services of eighty laborers. The

inevitable result will be the death of nine hundred human beings. It is

clear, then, that since nine hundred and ninety men, urged by want, will

crowd upon the supports which would only maintain a hundred, the ten

capitalists will be masters of the market. They will obtain labor on

the hardest conditions, for they will put it up to auction, or the

highest bidder. And observe this--if these capitalists entertain such

pious sentiments as would induce them to impose personal privations on

themselves, in order to diminish the sufferings of some of their

brethren, this generosity, which attaches to morality, will be as noble

in its principle as useful in its effects. But if, duped by that false

philosophy which persons wish so inconsiderately to mingle with economic

laws, they take to remunerating labor largely, far from doing good, they

will do harm. They will give double wages, it may be. But then,

forty-five men will be better provided for, whilst forty-five others

will come to augment the number of those who are sinking into the grave.

Upon this supposition, it is not the lowering of wages which is the

mischief, it is the scarcity of capital. Low wages are not the cause,

but the effect of the evil. I may add, that they are to a certain extent

the remedy. It acts in this way; it distributes the burden of suffering

as much as it can, and saves as many lives as a limited quantity of

sustenance permits.

Suppose now, that instead of ten capitalists, there should be a hundred,

two hundred, five hundred--is it not evident that the condition of the

whole population, and, above all, that of the "prolétaires,"[18] will be

more and more improved? Is it not evident that, apart from every

consideration of generosity, they would obtain more work and better pay

for it?--that they themselves will be in a better condition to form

capitals, without being able to fix the limits to this ever-increasing

facility of realizing equality and well-being? Would it not be madness

in them to admit such doctrines, and to act in a way which would drain

the source of wages, and paralyze the activity and stimulus of saving?

Let them learn this lesson, then; doubtless, capitals are good for those

who possess them: who denies it? But they are also useful to those who

have not yet been able to form them; and it is important to those who

have them not, that others should have them.

[Footnote 18: Common people.]

Yes, if the "prolétaires" knew their true interests, they would seek,

with the greatest care, what circumstances are, and what are not

favorable to saving, in order to favor the former and to discourage the

latter. They would sympathize with every measure which tends to the

rapid formation of capitals. They would be enthusiastic promoters of

peace, liberty, order, security, the union of classes and peoples,

economy, moderation in public expenses, simplicity in the machinery of

Government; for it is under the sway of all these circumstances that

saving does its work, brings plenty within the reach of the masses,

invites those persons to become the formers of capital who were

formerly under the necessity of borrowing upon hard conditions. They

would repel with energy the warlike spirit, which diverts from its true

course so large a part of human labor; the monopolizing spirit, which

deranges the equitable distribution of riches, in the way by which

liberty alone can realize it; the multitude of public services, which

attack our purses only to check our liberty; and, in short, those

subversive, hateful, thoughtless doctrines, which alarm capital, prevent

its formation, oblige it to flee, and finally to raise its price, to the

special disadvantage of the workers, who bring it into operation. Well,

and in this respect is not the revolution of February a hard lesson? Is

it not evident, that the insecurity it has thrown into the world of

business, on the one hand; and, on the other, the advancement of the

fatal theories to which I have alluded, and which, from the clubs, have

almost penetrated into the regions of the Legislature, have everywhere

raised the rate of interest? Is it not evident, that from that time the

"prolétaires" have found greater difficulty in procuring those

materials, instruments, and provisions, without which labor is

impossible? Is it not that which has caused stoppages; and do not

stoppages, in their turn, lower wages? Thus there is a deficiency of

labor to the "prolétaires," from the same cause which loads the objects

they consume with an increase of price, in consequence of the rise of

interest. High interest, low wages, means in other words that the same

article preserves its price, but that the part of the capitalist has

invaded, without profiting himself, that of the workman.

A friend of mine, commissioned to make inquiry into Parisian industry,

has assured me that the manufacturers have revealed to him a very

striking fact, which proves, better than any reasoning can, how much

insecurity and uncertainty injure the formation of capital. It was

remarked, that during the most distressing period, the popular expenses

of mere fancy had not diminished. The small theaters, the fighting

lists, the public houses, and tobacco depôts, were as much frequented as

in prosperous times. In the inquiry, the operatives themselves explained

this phenomenon thus: "What is the use of pinching? Who knows what will

happen to us? Who knows that interest will not be abolished? Who knows

but that the State will become a universal and gratuitous lender, and

that it will wish to annihilate all the fruits which we might expect

from our savings?" Well! I say, that if such ideas could prevail during

two single years, it would be enough to turn our beautiful France into a

Turkey--misery would become general and endemic, and, most assuredly,

the poor would be the first upon whom it would fall.

Workmen! They talk to you a great deal upon the _artificial_

organization of labor;--do you know why they do so? Because they are

ignorant of the laws of its _natural_ organization; that is, of the

wonderful organization which results from liberty. You are told, that

liberty gives rise to what is called the radical antagonism of classes;

that it creates, and makes to clash, two opposite interests--that of the

capitalists and that of the "prolétaires." But we ought to begin by

proving that this antagonism exists by a law of nature; and afterwards

it would remain to be shown how far the arrangements of restraint are

superior to those of liberty, for between liberty and restraint I see no

middle path. Again, it would remain to be proved, that restraint would

always operate to your advantage, and to the prejudice of the rich. But,

no; this radical antagonism, this natural opposition of interests, does

not exist. It is only an evil dream of perverted and intoxicated

imaginations. No; a plan so defective has not proceeded from the Divine

Mind. To affirm it, we must begin by denying the existence of God. And

see how, by means of social laws, and because men exchange amongst

themselves their labors, and their productions, see what a harmonious

tie attaches the classes, one to the other! There are the landowners;

what is their interest? That the soil be fertile, and the sun

beneficent: and what is the result? That corn abounds, that it falls in

price, and the advantage turns to the profit of those who have had no

patrimony. There are the manufacturers; what is their constant thought?

To perfect their labor, to increase the power of their machines, to

procure for themselves, upon the best terms, the raw material. And to

what does all this tend? To the abundance and low price of produce; that

is, that all the efforts of the manufacturers, and without their

suspecting it, result in a profit to the public consumer, of which each

of you is one. It is the same with every profession. Well, the

capitalists are not exempt from this law. They are very busy making

schemes, economizing, and turning them to their advantage. This is all

very well; but the more they succeed, the more do they promote the

abundance of capital, and, as a necessary consequence, the reduction of

interest? Now, who is it that profits by the reduction of interest? Is

it not the borrower first, and finally, the consumers of the things

which the capitals contribute to produce?

It is, therefore, certain that the final result of the efforts of each

class, is the common good of all.

You are told that capital tyrannizes over labor. I do not deny that each

one endeavors to draw the greatest possible advantage from his

situation; but, in this sense, he realizes only that which is possible.

Now, it is never more possible for capitals to tyrannize over labor,

than when they are scarce; for then it is they who make the law--it is

they who regulate the rate of sale. Never is this tyranny more

impossible to them, than when they are abundant; for, in that case, it

is labor which has the command.

Away, then, with the jealousies of classes, ill-will, unfounded hatreds,

unjust suspicions. These depraved passions injure those who nourish them

in their hearts. This is no declamatory morality; it is a chain of

causes and effects, which is capable of being rigorously, mathematically

demonstrated. It is not the less sublime, in that it satisfies the

intellect as well as the feelings.

I shall sum up this whole dissertation with these words: Workmen,

laborers, "prolétaires," destitute and suffering classes, will you

improve your condition? You will not succeed by strife, insurrection,

hatred, and error. But there are three things which cannot perfect the

entire community without extending these benefits to yourselves; these

things are--peace, liberty, and security.

End of Project Gutenberg's Sophisms of the Protectionists, by Frederic Bastiat