CHAPTER VI.

FOURTH PERIOD.--MONOPOLY.

Monopoly, the exclusive commerce, exploitation, or enjoyment of a

thing.

Monopoly is the natural opposite of competition. This simple

observation suffices, as we have remarked, to overthrow the

utopias based upon the idea of abolishing competition, as if its

contrary were association and fraternity. Competition is the

vital force which animates the collective being: to destroy it,

if such a supposition were possible, would be to kill society.

But, the moment we admit competition as a necessity, it implies

the idea of monopoly, since monopoly is, as it were, the seat of

each competing individuality. Accordingly the economists have

demonstrated--and M. Rossi has formally admitted it--that

monopoly is the form of social possession, outside of which there

is no labor, no product, no exchange, no wealth. Every landed

possession is a monopoly; every industrial utopia tends to

establish itself as a monopoly; and the same must be said of

other functions not included in these two categories.

Monopoly in itself, then, does not carry the idea of injustice;

in fact, there is something in it which, pertaining to society as

well as to man, legitimates it: that is the POSITIVE side of the

principle which we are about to examine.

But monopoly, like competition, becomes anti-social and

disastrous: how does this happen? By ABUSE, reply the

economists. And it is to defining and repressing the abuses of

monopoly that the magistrates apply themselves; it is in

denouncing them that the new school of economists glories.

We shall show that the so-called abuses of monopoly are only the

effects of the development, in a NEGATIVE sense, of legal

monopoly; that they cannot be separated from their principle

without ruining this principle; consequently, that they are

inaccessible to the law, and that all repression in this

direction is arbitrary and unjust. So that monopoly, the

constitutive principle of society and the condition of wealth, is

at the same time and in the same degree a principle of spoliation

and pauperism; that, the more good it is made to produce, the

more evil is received from it; that without it progress comes to

a standstill, and that with it labor becomes stationary and

civilization disappears.

% 1.--Necessity of monopoly.

Thus monopoly is the inevitable end of competition, which

engenders it by a continual denial of itself: this generation of

monopoly is already its justification. For, since competition is

inherent in society as motion is in living beings, monopoly which

comes in its train, which is its object and its end, and without

which competition would not have been accepted,--monopoly is and

will remain legitimate as long as competition, as long as

mechanical processes and industrial combinations, as long, in

fact, as the division of labor and the constitution of values

shall be necessities and laws.

Therefore by the single fact of its logical generation monopoly

is justified. Nevertheless this justification would seem of

little force and would end only in a more energetic rejection of

competition than ever, if monopoly could not in turn posit itself

by itself and as a principle.

In the preceding chapters we have seen that division of labor is

the specification of the workman considered especially as

intelligence; that the creation of machinery and the organization

of the workshop express his liberty; and that, by competition,

man, or intelligent liberty, enters into action. Now, monopoly

is the expression of victorious liberty, the prize of the

struggle, the glorification of genius; it is the strongest

stimulant of all the steps in progress taken since the beginning

of the world: so true is this that, as we said just now, society,

which cannot exist with it, would not have been formed without

it.

Where, then, does monopoly get this singular virtue, which the

etymology of the word and the vulgar aspect of the thing would

never lead us to suspect?

Monopoly is at bottom simply the autocracy of man over himself:

it is the dictatorial right accorded by nature to every producer

of using his faculties as he pleases, of giving free play to his

thought in whatever direction it prefers, of speculating, in such

specialty as he may please to choose, with all the power of his

resources, of disposing sovereignly of the instruments which he

has created and of the capital accumulated by his economy for any

enterprise the risks of which he may see fit to accept on the

express condition of enjoying alone the fruits of his discovery

and the profits of his venture.

This right belongs so thoroughly to the essence of liberty that

to deny it is to mutilate man in his body, in his soul, and in

the exercise of his faculties, and society, which progresses only

by the free initiative of individuals, soon lacking explorers,

finds itself arrested in its onward march.

It is time to give body to all these ideas by the testimony of

facts.

I know a commune where from time immemorial there had been no

roads either for the clearing of lands or for communication with

the outside world. During three-fourths of the year all

importation or exportation of goods was prevented; a barrier of

mud and marsh served as a protection at once against any invasion

from without and any excursion of the inhabitants of the holy and

sacred community. Six horses, in the finest weather, scarcely

sufficed to move a load that any jade could easily have taken

over a good road. The mayor resolved, in spite of the council,

to build a road through the town. For a long time he was

derided, cursed, execrated. They had got along well enough

without a road up to the time of his administration: why need he

spend the money of the commune and waste the time of farmers in

road-duty, cartage, and compulsory service? It was to satisfy

his pride that Monsieur the Mayor desired, at the expense of the

poor farmers, to open such a fine avenue for his city friends who

would come to visit him! In spite of everything the road was

made and the peasants applauded! What a difference! they said:

it used to take eight horses to carry thirty sacks to market, and

we were gone three days; now we start in the morning with two

horses, and are back at night. But in all these remarks nothing

further was heard of the mayor. The event having justified him,

they spoke of him no more: most of them, in fact, as I found out,

felt a spite against him.

This mayor acted after the manner of Aristides. Suppose that,

wearied by the absurd clamor, he had from the beginning proposed

to his constituents to build the road at his expense, provided

they would pay him toll for fifty years, each, however,

remaining free to travel through the fields, as in the past: in

what respect would this transaction have been fraudulent?

That is the history of society and monopolists.

Everybody is not in a position to make a present to his

fellow-citizens of a road or a machine: generally the inventor,

after exhausting his health and substance, expects reward. Deny

then, while still scoffing at them, to Arkwright, Watt, and

Jacquard the privilege of their discoveries; they will shut

themselves up in order to work, and possibly will carry their

secret to the grave. Deny to the settler possession of the soil

which he clears, and no one will clear it.

But, they say, is that true right, social right, fraternal right?

That which is excusable on emerging from primitive communism, an

effect of necessity, is only a temporary expedient which must

disappear in face of a fuller understanding of the rights and

duties of man and society.

I recoil from no hypothesis: let us see, let us investigate. It

is already a great point that the opponents confess that, during

the first period of civilization, things could not have gone

otherwise. It remains to ascertain whether the institutions of

this period are really, as has been said, only temporary, or

whether they are the result of laws immanent in society and

eternal. Now, the thesis which I maintain at this moment is the

more difficult because in direct opposition to the general

tendency, and because I must directly overturn it myself by its

contradiction.

I pray, then, that I may be told how it is possible to make

appeal to the principles of sociability, fraternity, and

solidarity, when society itself rejects every solidary and

fraternal transaction? At the beginning of each industry, at the

first gleam of a discovery, the man who invents is isolated;

society abandons him and remains in the background. To put

it better, this man, relatively to the idea which he has

conceived and the realization of which he pursues, becomes in

himself alone entire society. He has no longer any associates,

no longer any collaborators, no longer any sureties; everybody

shuns him: on him alone falls the responsibility; to him alone,

then, the advantages of the speculation.

But, it is insisted, this is blindness on the part of society, an

abandonment of its most sacred rights and interests, of the

welfare of future generations; and the speculator, better

informed or more fortunate, cannot fairly profit by the monopoly

which universal ignorance gives into his hands.

I maintain that this conduct on the part of society is, as far as

the present is concerned, an act of high prudence; and, as for

the future, I shall prove that it does not lose thereby. I have

already shown in the second chapter, by the solution of the

antinomy of value, that the advantage of every useful discovery

is incomparably less to the inventor, whatever he may do, than to

society; I have carried the demonstration of this point even to

mathematical accuracy. Later I shall show further that, in

addition to the profit assured it by every discovery, society

exercises over the privileges which it concedes, whether

temporarily or perpetually, claims of several kinds, which

largely palliate the excess of certain private fortunes, and the

effect of which is a prompt restoration of equilibrium. But let

us not anticipate.

I observe, then, that social life manifests itself in a double

fashion,--PRESERVATION and DEVELOPMENT.

Development is effected by the free play of individual energies;

the mass is by its nature barren, passive, and hostile to

everything new. It is, if I may venture to use the comparison,

the womb, sterile by itself, but to which come to deposit

themselves the germs created by private activity, which, in

hermaphroditic society, really performs the function of the male

organ.

But society preserves itself only so far as it avoids solidarity

with private speculations and leaves every innovation absolutely

to the risk and peril of individuals. It would take but a few

pages to contain the list of useful inventions. The enterprises

that have been carried to a successful issue may be numbered; no

figure would express the multitude of false ideas and imprudent

ventures which every day are hatched in human brains. There is

not an inventor, not a workman, who, for one sane and correct

conception, has not given birth to thousands of chimeras; not an

intelligence which, for one spark of reason, does not emit

whirlwinds of smoke. If it were possible to divide all the

products of the human reason into two parts, putting on one side

those that are useful, and on the other those on which strength,

thought, capital, and time have been spent in error, we should be

startled by the discovery that the excess of the latter over the

former is perhaps a billion per cent. What would become of

society, if it had to discharge these liabilities and settle all

these bankruptcies? What, in turn, would become of the

responsibility and dignity of the laborer, if, secured by the

social guarantee, he could, without personal risk, abandon

himself to all the caprices of a delirious imagination and trifle

at every moment with the existence of humanity?

Wherefore I conclude that what has been practised from the

beginning will be practised to the end, and that, on this point,

as on every other, if our aim is reconciliation, it is absurd to

think that anything that exists can be abolished. For, the world

of ideas being infinite, like nature, and men, today as ever,

being subject to speculation,--that is, to error,--individuals

have a constant stimulus to speculate and society a constant

reason to be suspicious and cautious, wherefore monopoly never

lacks material.

To avoid this dilemma what is proposed? Compensation? In the

first place, compensation is impossible: all values being

monopolized, where would society get the means to indemnify the

monopolists? What would be its mortgage? On the other hand,

compensation would be utterly useless: after all the monopolies

had been compensated, it would remain to organize industry.

Where is the system? Upon what is opinion settled? What

problems have been solved? If the organization is to be of the

hierarchical type, we reenter the system of monopoly; if of the

democratic, we return to the point of departure, for the

compensated industries will fall into the public domain,--that

is, into competition,--and gradually will become monopolies

again; if, finally, of the communistic, we shall simply have

passed from one impossibility to another, for, as we shall

demonstrate at the proper time, communism, like competition and

monopoly, is antinomical, impossible.

In order not to involve the social wealth in an unlimited and

consequently disastrous solidarity, will they content themselves

with imposing rules upon the spirit of invention and enterprise?

Will they establish a censorship to distinguish between men of

genius and fools? That is to suppose that society knows in

advance precisely that which is to be discovered. To submit the

projects of schemers to an advance examination is an a priori

prohibition of all movement. For, once more, relatively to the

end which he has in view, there is a moment when each

manufacturer represents in his own person society itself, sees

better and farther than all other men combined, and frequently

without being able to explain himself or make himself

understood. When Copernicus, Kepler, and Galileo, Newton's

predecessors, came to the point of saying to Christian society,

then represented by the Church: "The Bible is mistaken; the

earth revolves, and the sun is stationary," they were right

against society, which, on the strength of its senses and

traditions, contradicted them. Could society then have accepted

solidarity with the Copernican system? So little could it do it

that this system openly denied its faith, and that, pending the

accord of reason and revelation, Galileo, one of the responsible

inventors, underwent torture in proof of the new idea. We are

more tolerant, I presume; but this very toleration proves that,

while according greater liberty to genius, we do not mean to be

less discreet than our ancestors. Patents rain, but WITHOUT

GOVERNMENTAL GUARANTEE. Property titles are placed in the

keeping of citizens, but neither the property list nor the

charter guarantee their value: it is for labor to make them

valuable. And as for the scientific and other missions which the

government sometimes takes a notion to entrust to penniless

explorers, they are so much extra robbery and corruption.

In fact, society can guarantee to no one the capital necessary

for the testing of an idea by experiment; in right, it cannot

claim the results of an enterprise to which it has not

subscribed: therefore monopoly is indestructible. For the rest,

solidarity would be of no service: for, as each can claim for his

whims the solidarity of all and would have the same right to

obtain the government's signature in blank, we should soon arrive

at the universal reign of caprice,--that is, purely and simply at

the statu quo.

Some socialists, very unhappily inspired--I say it with all the

force of my conscience--by evangelical abstractions, believe

that they have solved the difficulty by these fine maxims:

"Inequality of capacities proves the inequality of duties"; "You

have received more from nature, give more to your brothers," and

other high-sounding and touching phrases, which never fail of

their effect on empty heads, but which nevertheless are as simple

as anything that it is possible to imagine. The practical

formula deduced from these marvellous adages is that each laborer

owes all his time to society, and that society should give back

to him in exchange all that is necessary to the satisfaction of

his wants in proportion to the resources at its disposal.

May my communistic friends forgive me! I should be less severe

upon their ideas if I were not irreversibly convinced, in my

reason and in my heart, that communism, republicanism, and all

the social, political, and religious utopias which disdain facts

and criticism, are the greatest obstacle which progress has now

to conquer. Why will they never understand that fraternity can

be established only by justice; that justice alone, the

condition, means, and law of liberty and fraternity, must be the

object of our study; and that its determination and formula must

be pursued without relaxation, even to the minutest details? Why

do writers familiar with economic language forget that

superiority of talents is synonymous with superiority of wants,

and that, instead of expecting more from vigorous than from

ordinary personalities, society should constantly look out that

they do not receive more than they render, when it is already so

hard for the mass of mankind to render all that it receives?

Turn which way you will, you must always come back to the cash

book, to the account of receipts and expenditures, the sole

guarantee against large consumers as well as against small

producers. The workman continually lives IN ADVANCE of his

production; his tendency is always to get CREDIT, contract DEBTS

and go into BANKRUPTCY; it is perpetually necessary to remind him

of Say's aphorism: PRODUCTS ARE BOUGHT ONLY WITH PRODUCTS.

To suppose that the laborer of great capacity will content

himself, in favor of the weak, with half his wages, furnish his

services gratuitously, and produce, as the people say, FOR THE

KING OF PRUSSIA--that is, for that abstraction called society,

the sovereign, or my brothers,--is to base society on a

sentiment, I do not say beyond the reach of man, but one which,

erected systematically into a principle, is only a false virtue,

a dangerous hypocrisy. Charity is recommended to us as a

reparation of the infirmities which afflict our fellows by

accident, and, viewing it in this light, I can see that charity

may be organized; I can see that, growing out of solidarity

itself, it may become simply justice. But charity taken as an

instrument of equality and the law of equilibrium would be the

dissolution of society. Equality among men is produced by the

rigorous and inflexible law of labor, the proportionality of

values, the sincerity of exchanges, and the equivalence of

functions,--in short, by the mathematical solution of all

antagonisms.

That is why charity, the prime virtue of the Christian, the

legitimate hope of the socialist, the object of all the efforts

of the economist, is a social vice the moment it is made a

principle of constitution and a law; that is why certain

economists have been able to say that legal charity had caused

more evil in society than proprietary usurpation. Man, like the

society of which he is a part, has a perpetual account current

with himself; all that he consumes he must produce. Such is the

general rule, which no one can escape without being, ipso facto

struck with dishonor or suspected of fraud. Singular idea,

truly,--that of decreeing, under pretext of fraternity, the

relative inferiority of the majority of men! After this

beautiful declaration nothing will be left but to draw its

consequences; and soon, thanks to fraternity, aristocracy will be

restored.

Double the normal wages of the workman, and you invite him to

idleness, humiliate his dignity, and demoralize his conscience;

take away from him the legitimate price of his efforts, and you

either excite his anger or exalt his pride. In either case you

damage his fraternal feelings. On the contrary, make enjoyment

conditional upon labor, the only way provided by nature to

associate men and make them good and happy, and you go back under

the law of economic distribution, PRODUCTS ARE BOUGHT WITH

PRODUCTS. Communism, as I have often complained, is the very

denial of society in its foundation, which is the progressive

equivalence of functions and capacities. The communists, toward

whom all socialism tends, do not believe in equality by nature

and education; they supply it by sovereign decrees which they

cannot carry out, whatever they may do. Instead of seeking

justice in the harmony of facts, they take it from their

feelings, calling justice everything that seems to them to be

love of one's neighbor, and incessantly confounding matters of

reason with those of sentiment.

Why then continually interject fraternity, charity, sacrifice,

and God into the discussion of economic questions? May it not be

that the utopists find it easier to expatiate upon these grand

words than to seriously study social manifestations?

Fraternity! Brothers as much as you please, provided I am the

big brother and you the little; provided society, our common

mother, honors my primogeniture and my services by doubling my

portion. You will provide for my wants, you say, in proportion

to your resources. I intend, on the contrary, that such

provision shall be in proportion to my labor; if not, I cease to

labor.

Charity! I deny charity; it is mysticism. In vain do you talk

to me of fraternity and love: I remain convinced that you love me

but little, and I feel very sure that I do not love you. Your

friendship is but a feint, and, if you love me, it is from

self-interest. I ask all that my products cost me, and only what

they cost me: why do you refuse me?

Sacrifice! I deny sacrifice; it is mysticism. Talk to me of

DEBT and CREDIT, the only criterion in my eyes of the just and

the unjust, of good and evil in society. To each according to

his works, first; and if, on occasion, I am impelled to aid you,

I will do it with a good grace; but I will not be constrained.

To constrain me to sacrifice is to assassinate me.

God! I know no God; mysticism again. Begin by striking this

word from your remarks, if you wish me to listen to you; for

three thousand years of experience have taught me that whoever

talks to me of God has designs on my liberty or on my purse. How

much do you owe me? How much do I owe you? That is my religion

and my God.

Monopoly owes its existence both to nature and to man: it has its

source at once in the profoundest depths of our conscience and in

the external fact of our individualization. Just as in our body

and our mind everything has its specialty and property, so our

labor presents itself with a proper and specific character, which

constitutes its quality and value. And as labor cannot manifest

itself without material or an object for its exercise, the person

necessarily attracting the thing, monopoly is established from

subject to object as infallibly as duration is constituted from

past to future. Bees, ants, and other animals living in society

seem endowed individually only with automatism; with them soul

and instinct are almost exclusively collective. That is why,

among such animals, there can be no room for privilege and

monopoly; why, even in their most volitional operations, they

neither consult nor deliberate. But, humanity being

individualized in its plurality, man becomes inevitably a

monopolist, since, if not a monopolist, he is nothing; and the

social problem is to find out, not how to abolish, but how to

reconcile, all monopolies.

The most remarkable and the most immediate effects of monopoly

are:

1. In the political order, the classification of humanity into

families, tribes, cities, nations, States: this is the elementary

division of humanity into groups and sub-groups of laborers,

distinguished by race, language, customs, and climate. It was by

monopoly that the human race took possession of the globe, as it

will be by association that it will become complete sovereign

thereof.

Political and civil law, as conceived by all legislators without

exception and as formulated by jurists, born of this patriotic

and national organization of societies, forms, in the series of

social contradictions, a first and vast branch, the study of

which by itself alone would demand four times more time than we

can give it in discussing the question of industrial economy

propounded by the Academy.

2. In the economic order, monopoly contributes to the increase of

comfort, in the first place by adding to the general wealth

through the perfecting of methods, and then by

CAPITALIZING,--that is, by consolidating the conquests of labor

obtained by division, machinery, and competition. From this

effect of monopoly has resulted the economic fiction by which the

capitalist is considered a producer and capital an agent of

production; then, as a consequence of this fiction, the theory of

NET PRODUCT and GROSS PRODUCT.

On this point we have a few considerations to present. First let

us quote J. B. Say:

The value produced is the GROSS product: after the costs of

production have been deducted, this value is the NET product.

Considering a nation as a whole, it has no net product; for, as

products have no value beyond the costs of production, when these

costs are cut off, the entire value of the product is cut off.

National production, annual production, should always therefore

be understood as gross production.

The annual revenue is the gross revenue.

The term net production is applicable only when considering the

interests of one producer in opposition to those of other

producers. The manager of an enterprise gets his PROFIT from

the value PRODUCED after deducting the value CONSUMED. But

what to him is value consumed, such as the purchase of a

productive service, is so much income to the performer of the

service.--Treatise on Political Economy: Analytical Table.

These definitions are irreproachable. Unhappily J. B. Say did

not see their full bearing, and could not have foreseen that one

day his immediate successor at the College of France would attack

them. M. Rossi has pretended to refute the proposition of J. B.

Say that TO A NATION NET PRODUCT IS THE SAME THING AS GROSS

PRODUCT by this consideration,--that nations, no more than

individuals of enterprise, can produce without advances, and

that, if J. B. Say's formula were true, it would follow that the

axiom, Ex nihilo nihil fit, is not true

Now, that is precisely what happens. Humanity, in imitation of

God, produces everything from nothing, de nihilo hilum just as it

is itself a product of nothing, just as its thought comes out of

the void; and M. Rossi would not have made such a mistake, if,

like the physiocrats, he had not confounded the products of the

INDUSTRIAL KINGDOM with those of the animal, vegetable, and

mineral kingdoms. Political economy begins with labor; it is

developed by labor; and all that does not come from labor,

falling into the domain of pure utility,--that is, into the

category of things submitted to man's action, but not yet

rendered exchangeable by labor,--remains radically foreign to

political economy. Monopoly itself, wholly established as it is

by a pure act of collective will, does not change these relations

at all, since, according to history, and according to the written

law, and according to economic theory, monopoly exists, or is

reputed to exist, only after labor's appearance.

Say's doctrine, therefore, is unassailable. Relatively to the

man of enterprise, whose specialty always supposes other

manufacturers cooperating with him, profit is what remains of the

value produced after deducting the values consumed, among which

must be included the salary of the man of enterprise,--in other

words, his wages. Relatively to society, which contains all

possible specialties, net product is identical with gross

product.

But there is a point the explanation of which I have vainly

sought in Say and in the other economists,--to wit, how the

reality and legitimacy of net product is established. For it is

plain that, in order to cause the disappearance of net product,

it would suffice to increase the wages of the workmen and the

price of the values consumed, the selling-price remaining the

same. So that, there being nothing seemingly to distinguish net

product from a sum withheld in paying wages or, what amounts to

the same thing, from an assessment laid upon the consumer in

advance, net product has every appearance of an extortion

effected by force and without the least show of right.

This difficulty has been solved in advance in our theory of the

proportionality of values.

According to this theory, every exploiter of a machine, of an

idea, or of capital should be considered as a man who increases

with equal outlay the amount of a certain kind of products, and

consequently increases the social wealth by economizing time.

The principle of the legitimacy of the net product lies, then, in

the processes previously in use: if the new device succeeds,

there will be a surplus of values, and consequently a

profit,--that is, net product; if the enterprise rests on a false

basis, there will be a deficit in the gross product, and in the

long run failure and bankruptcy. Even in the case--and it is the

most frequent-- where there is no innovation on the part of the

man of enterprise, the rule of net product remains applicable,

for the success of an industry depends upon the way in which it

is carried on. Now, it being in accordance with the nature of

monopoly that the risk and peril of every enterprise should be

taken by the initiator, it follows that the net product belongs

to him by the most sacred title recognized among men,-- labor and

intelligence.

It is useless to recall the fact that the net product is often

exaggerated, either by fraudulently secured reductions of wages

or in some other way. These are abuses which proceed, not from

the principle, but from human cupidity, and which remain outside

the domain of the theory. For the rest, I have shown, in

discussing the constitution of value (Chapter II., % 2): 1, how

the net product can never exceed the difference resulting from

inequality of the means of production; 2, how the profit which

society reaps from each new invention is incomparably greater

than that of its originator. As these points have been exhausted

once for all, I will not go over them again; I will simply

remark that, by industrial progress, the net product of the

ingenious tends steadily to decrease, while, on the other hand,

their comfort increases, as the concentric layers which make up

the trunk of a tree become thinner as the tree grows and as they

are farther removed from the centre.

By the side of net product, the natural reward of the laborer, I

have pointed out as one of the happiest effects of monopoly the

CAPITALIZATION of values, from which is born another sort of

profit,--namely, INTEREST, or the hire of capital. As for

RENT, although it is often confounded with interest, and

although, in ordinary language, it is included with profit and

interest under the common expression REVENUE, it is a different

thing from interest; it is a consequence, not of monopoly, but of

property; it depends on a special theory., of which we will speak

in its place.

What, then, is this reality, known to all peoples, and

nevertheless still so badly defined, which is called interest or

the price of a loan, and which gives rise to the fiction of the

productivity of capital?

Everybody knows that a contractor, when he calculates his costs

of production, generally divides them into three classes: 1, the

values consumed and services paid for; 2, his personal salary; 3,

recovery of his capital with interest. From this last class of

costs is born the distinction between contractor and capitalist,

although these two titles always express but one faculty,

monopoly.

Thus an industrial enterprise which yields only interest on

capital and nothing for net product, is an insignificant

enterprise, which results only in a transformation of values

without adding anything to wealth,-- an enterprise, in short,

which has no further reason for existence and is immediately

abandoned. Why is it, then, that this interest on capital

is not regarded as a sufficient supplement of net product? Why

is it not itself the net product?

Here again the philosophy of the economists is wanting. To

defend usury they have pretended that capital was productive, and

they have changed a metaphor into a reality. The

anti-proprietary socialists have had no difficulty in overturning

their sophistry; and through this controversy the theory of

capital has fallen into such disfavor that today, in the minds of

the people, CAPITALIST and IDLER are synonymous terms.

Certainly it is not my intention to retract what I myself have

maintained after so many others, or to rehabilitate a class of

citizens which so strangely misconceives its duties: but the

interests of science and of the proletariat itself oblige me to

complete my first assertions and maintain true principles.

1. All production is effected with a view to consumption,--that

is, to enjoyment. In society the correlative terms production

and consumption, like net product and gross product, designate

identically the same thing. If, then, after the laborer has

realized a net product, instead of using it to increase his

comfort, he should confine himself to his wages and steadily

apply his surplus to new production, as so many people do who

earn only to buy, production would increase indefinitely, while

comfort and, reasoning from the standpoint of society, population

would remain unchanged. Now, interest on capital which has been

invested in an industrial enterprise and which has been gradually

formed by the accumulation of net product, is a sort of

compromise between the necessity of increasing production, on the

one hand, and, on the other, that of increasing comfort; it is a

method of reproducing and consuming the net product at the same

time. That is why certain industrial societies pay their

stockholders a dividend even before the enterprise has yielded

anything. Life is short, success comes slowly; on the one hand

labor commands, on the other man wishes to enjoy. To meet all

these exigencies the net product shall be devoted to production,

but meantime (inter-ea, inter-esse)--that is, while waiting for

the new product--the capitalist shall enjoy.

Thus, as the amount of net product marks the progress of wealth,

interest on capital, without which net product would be useless

and would not even exist, marks the progress of comfort.

Whatever the form of government which may be established among

men; whether they live in monopoly or in communism; whether each

laborer keeps his account by credit and debit, or has his labor

and pleasure parcelled out to him by the community,--the law

which we have just disengaged will always be fulfilled. Our

interest accounts do nothing else than bear witness to it.

2. Values created by net product are classed as savings and

capitalized in the most highly exchangeable form, the form which

is freest and least susceptible of depreciation,--in a word, the

form of specie, the only constituted value. Now, if capital

leaves this state of freedom and ENGAGES ITSELF,--that is, takes

the form of machines, buildings, etc.,--it will still be

susceptible of exchange, but much more exposed than before to the

oscillations of supply and demand. Once engaged, it cannot be

DISENGAGED without difficulty; and the sole resource of its owner

will be exploitation. Exploitation alone is capable of

maintaining engaged capital at its nominal value; it may increase

it, it may diminish it. Capital thus transformed is as if it had

been risked in a maritime enterprise: the interest is the

insurance premium paid on the capital. And this premium will be

greater or less according to the scarcity or abundance of

capital.

Later a distinction will also be established between the

insurance premium and interest on capital, and new facts will

result from this subdivision: thus the history of humanity is

simply a perpetual distinction of the mind's concepts.

3. Not only does interest on capital cause the laborer to enjoy

the fruit of his toil and insure his savings, but--and this is

the most marvellous effect of interest--while rewarding the

producer, it obliges him to labor incessantly and never stop.

If a contractor is his own capitalist, it may happen that he will

content himself with a profit equal to the interest on his

investment: but in that case it is certain that his industry is

no longer making progress and consequently is suffering. This we

see when the capitalist is distinct from the contractor: for

then, after the interest is paid, the manufacturer's profit is

absolutely nothing; his industry becomes a perpetual peril to

him, from which it is important that he should free himself as

soon as possible. For as society's comfort must develop in an

indefinite progression, so the law of the producer is that he

should continually realize a surplus: otherwise his existence is

precarious, monotonous, fatiguing. The interest due to the

capitalist by the producer therefore is like the lash of the

planter cracking over the head of the sleeping slave; it is the

voice of progress crying: "On, on! Toil, toil!" Man's destiny

pushes him to happiness: that is why it denies him rest.

4. Finally, interest on money is the condition of capital's

circulation and the chief agent of industrial solidarity. This

aspect has been seized by all the economists, and we shall give

it special treatment when we come to deal with credit.

I have proved, and better, I imagine, than it has ever been

proved before:

That monopoly is necessary, since it is the antagonism of

competition;

That it is essential to society, since without it society would

never have emerged from the primeval forests and without it would

rapidly go backwards;

Finally, that it is the crown of the producer, when, whether by

net product or by interest on the capital which he devotes to

production, it brings to the monopolist that increase of comfort

which his foresight and his efforts deserve.

Shall we, then, with the economists, glorify monopoly, and

consecrate it to the benefit of well-secured conservatives? I am

willing, provided they in turn will admit my claims in what is to

follow, as I have admitted theirs in what has preceded.

% 2.--The disasters in labor and the perversion of ideas caused

by monopoly.

Like competition, monopoly implies a contradiction in its name

and its definition. In fact, since consumption and production

are identical things in society, and since selling is synonymous

with buying, whoever says privilege of sale or exploitation

necessarily says privilege of consumption and purchase: which

ends in the denial of both. Hence a prohibition of consumption

as well as of production laid by monopoly upon the

wage-receivers. Competition was civil war, monopoly is the

massacre of the prisoners.

These various propositions are supported by all sorts of

evidence,-- physical, algebraic, and metaphysical. What I shall

add will be only the amplified exposition: their simple

announcement demonstrates them.

Every society considered in its economic relations naturally

divides itself into capitalists and laborers, employers and wage-

receivers, distributed upon a scale whose degrees mark the income

of each, whether this income be composed of wages, profit,

interest, rent, or dividends.

From this hierarchical distribution of persons and incomes it

follows that Say's principle just referred to: IN A NATION THE

NET PRODUCT IS EQUAL TO THE GROSS PRODUCT, is no longer true,

since, in consequence of monopoly, the SELLING PRICE is much

higher than the COST PRICE. Now, as it is the cost price

nevertheless which must pay the selling price, since a nation

really has no market but itself, it follows that exchange, and

consequently circulation and life, are impossible.

In France, twenty millions of laborers, engaged in all the

branches of science, art, and industry, produce everything which

is useful to man. Their aggregate annual wages amount, it is

estimated, to twenty thousand millions; but, in consequence of

the profit (net product and interest) accruing to monopolists,

twenty-five thousand millions must be paid for their products.

Now, as the nation has no other buyers than its wage- receivers

and wage-payers, and as the latter do not pay for the former, and

as the selling-price of merchandise is the same for all, it is

clear that, to make circulation possible, the laborer would have

to pay five for that for which he has received but four.--What is

Property: Chapter IV.[17]

[17] A comparison of this passage, as given here, with the

English translation of "What is Property" will show a marked

variation in the language. This is explained by the fact that

the author, in reproducing the passage, modified it considerably.

The same is true of another quotation from the same work which

will be found a few pages farther on.--Translator.

This, then, is the reason why wealth and poverty are correlative,

inseparable, not only in idea, but in fact; this is the reason

why they exist concurrently; this is what justifies the

pretension of the wage- receiver that the rich man possesses no

more than the poor man, except that of which the latter has been

defrauded. After the monopolist has drawn up his account of

cost, profit, and interest, the wage-paid consumer draws up his;

and he finds that, though promised wages stated in the contract

as one hundred, he has really been given but seventy- five.

Monopoly, therefore, puts the wage-receivers into bankruptcy, and

it is strictly true that it lives upon the spoils.

Six years ago I brought out this frightful contradiction: why has

it not been thundered through the press? Why have no teachers of

renown warned public opinion? Why have not those who demand

political rights for the workingman proclaimed that he is robbed?

Why have the economists kept silent? Why?

Our revolutionary democracy is so noisy only because it fears

revolutions: but, by ignoring the danger which it dares not look

in the face, it succeeds only in increasing it. "We resemble,"

says M. Blanqui, "firemen who increase the quantity of steam at

the same time that they place weights on the safety-valve."

Victims of monopoly, console yourselves! If your tormentors will

not listen, it is because Providence has resolved to strike them:

Non audierunt, says the Bible, quia Deus volebat occidere eos.

Sale being unable to fulfil the conditions of monopoly,

merchandise accumulates; labor has produced in a year what its

wages will not allow it to consume in less than fifteen months:

hence it must remain idle one-fourth of the year. But, if it

remains idle, it earns nothing: how will it ever buy? And if the

monopolist cannot get rid of his products, how will his

enterprise endure? Logical impossibility multiplies around the

workshop; the facts which translate it are everywhere.

"The hosiers of England," says Eugene Buret, "had come to the

point where they did not eat oftener than every other day.

This state of things lasted eighteen months." And he cites a

multitude of similar cases.

But the distressing feature in the spectacle of monopoly's

effects is the sight of the unfortunate workingmen blaming each

other for their misery and imagining that by uniting and

supporting each other they will prevent the reduction of wages.

"The Irish," says an observer, "have given a disastrous lesson to

the working classes of Great Britain. . . . . They have

taught our laborers the fatal secret of confining their needs to

the maintenance of animal life alone, and of contenting

themselves, like savages, with the minimum of the means of

subsistence sufficient to prolong life. . . . . Instructed by

this fatal example, yielding partly to necessity, the working

classes have lost that laudable pride which led them to furnish

their houses properly and to multiply about them the decent

conveniences which contribute to happiness."

I have never read anything more afflicting and more stupid. And

what would you have these workingmen do? The Irish came: should

they have been massacred? Wages were reduced: should death have

been accepted in their stead? Necessity commanded, as you say

yourselves. Then followed the interminable hours, disease,

deformity, degradation, debasement, and all the signs of

industrial slavery: all these calamities are born of monopoly and

its sad predecessors,--competition, machinery, and the division

of labor: and you blame the Irish!

At other times the workingmen blame their luck, and exhort

themselves to patience: this is the counterpart of the thanks

which they address to Providence, when labor is abundant and

wages are sufficient.

I find in an article published by M. Leon Faucher, in the

"Journal des Economistes" (September, 1845), that the English

workingmen lost some time ago the habit of combining, which

is surely a progressive step on which they are only to be

congratulated, but that this improvement in the morale of the

workingmen is due especially to their economic instruction.

"It is not upon the manufacturers," cried a spinner at the

meeting in Bolton, "that wages depend. In periods of depression

the employers, so to speak, are only the lash with which

necessity is armed; and whether they will or no, they have to

strike. The regulative principle is the relation of supply to

demand; and the employers have not this power. . . . Let us act

prudently, then; let us learn to be resigned to bad luck and to

make the most of good luck: by seconding the progress of our

industry, we shall be useful not only to ourselves, but to the

entire country." [Applause.]

Very good: well-trained, model workmen, these! What men these

spinners must be that they should submit without complaint to the

LASH OF NECESSITY, because the regulative principle of wages is

SUPPLY AND DEMAND! M. Leon Faucher adds with a charming

simplicity:

English workingmen are fearless reasoners. Give them a FALSE

PRINCIPLE, and they will push it mathematically to absurdity,

without stopping or getting frightened, as if they were marching

to the triumph of the truth.

For my part, I hope that, in spite of all the efforts of economic

propagandism, French workingmen will never become reasoners of

such power. SUPPLY AND DEMAND, as well as the LASH OF NECESSITY,

has no longer any hold upon their minds. This was the one misery

that England lacked: it will not cross the channel.

By the combined effect of division, machinery, net product, and

interest, monopoly extends its conquests in an increasing

progression; its developments embrace agriculture as well as

commerce and industry, and all sorts of products. Everybody

knows the phrase of Pliny upon the landed monopoly which

determined the fall of Italy, latifundia perdidere Italiam.

It is this same monopoly which still impoverishes and renders

uninhabitable the Roman Campagna and which forms the vicious

circle in which England moves convulsively; it is this monopoly

which, established by violence after a war of races, produces all

the evils of Ireland, and causes so many trials to O'Connell,

powerless, with all his eloquence, to lead his repealers through

this labyrinth. Grand sentiments and rhetoric are the worst

remedy for social evils: it would be easier for O'Connell to

transport Ireland and the Irish from the North Sea to the

Australian Ocean than to overthrow with the breath of his

harangues the monopoly which holds them in its grasp. General

communions and sermons will do no more: if the religious

sentiment still alone maintains the morale of the Irish people,

it is high time that a little of that profane science, so much

disdained by the Church, should come to the aid of the lambs

which its crook no longer protects.

The invasion of commerce and industry by monopoly is too well

known to make it necessary that I should gather proofs: moreover,

of what use is it to argue so much when results speak so loudly?

E. Buret's description of the misery of the working-classes has

something fantastic about it, which oppresses and frightens you.

There are scenes in which the imagination refuses to believe, in

spite of certificates and official reports. Couples all naked,

hidden in the back of an unfurnished alcove, with their naked

children; entire populations which no longer go to church on

Sunday, because they are naked; bodies kept a week before they

are buried, because the deceased has left neither a shroud in

which to lay him out nor the wherewithal to pay for the coffin

and the undertaker (and the bishop enjoys an income of from four

to five hundred thousand francs); families heaped up over sewers,

living in rooms occupied by pigs, and beginning to rot while

yet alive, or dwelling in holes, like Albinoes; octogenarians

sleeping naked on bare boards; and the virgin and the prostitute

expiring in the same nudity: everywhere despair, consumption,

hunger, hunger! . . And this people, which expiates the crimes

of its masters, does not rebel! No, by the flames of Nemesis!

when a people has no vengeance left, there is no longer any

Providence for it.

Exterminations en masse by monopoly have not yet found their

poets. Our rhymers, strangers to the things of this world,

without bowels for the proletaire, continue to breathe to the

moon their melancholy DELIGHTS. What a subject for

MEDITATIONS, nevertheless, is the miseries engendered by

monopoly!

It is Walter Scott who says:

Formerly, though many years since, each villager had his cow and

his pig, and his yard around his house. Where a single farmer

cultivates today, thirty small farmers lived formerly; so that

for one individual, himself alone richer, it is true, than the

thirty farmers of old times, there are now twenty-nine wretched

day-laborers, without employment for their minds and arms, and

whose number is too large by half. The only useful function

which they fulfil is to pay, WHEN THEY CAN, a rent of sixty

shillings a year for the huts in which they dwell.[18]

[18] This extract from Scott, as well as that from a

parliamentary report cited a few paragraphs later, is here

translated from the French, and presumably differs in form

somewhat, therefore, from the original English.--Translator.

A modern ballad, quoted by E. Buret, sings the solitude of

monopoly:

Le rouet est silencieux dans la vallee:

C'en est fait des sentiments de famille.

Sur un peu de fumee le vieil aieul

Etend ses mains pales; et le foyer vide

Est aussi desole que son coeur.[19]

[19] The spinning-wheel is silent in the valley: family feelings

are at an end. Over a little smoke the aged grandsire spreads

his pale hands; and the empty hearth is as desolate as his

heart.--Translator.

The reports made to parliament rival the novelist and the poet:

The inhabitants of Glensheil, in the neighborhood of the valley

of Dundee, were formerly distinguished from all their neighbors

by the superiority of their physical qualities. The men were of

high stature, robust, active, and courageous; the women comely

and graceful. Both sexes possessed an extraordinary taste for

poetry and music. Now, alas! a long experience of poverty,

prolonged privation of sufficient food and suitable clothing,

have profoundly deteriorated this race, once so remarkably fine.

This is a notable instance of the inevitable degradation pointed

out by us in the two chapters on division of labor and machinery.

And our litterateurs busy themselves with the pretty things of

the past, as if the present were not adequate to their genius!

The first among them to venture on these infernal paths has

created a scandal in the coterie! Cowardly parasites, vile

venders of prose and verse, all worthy of the wages of Marsyas!

Oh! if your punishment were to last as long as my contempt, you

would be forced to believe in the eternity of hell.

Monopoly, which just now seemed to us so well founded in justice,

is the more unjust because it not only makes wages illusory, but

deceives the workman in the very valuation of his wages by

assuming in relation to him a false title, a false capacity.

M. de Sismondi, in his "Studies of Social Economy," observes

somewhere that, when a banker delivers to a merchant bank-notes

in exchange for his values, far from giving credit to the

merchant, he receives it, on the contrary, from him.

"This credit," adds M. de Sismondi, "is in truth so short that

the merchant scarcely takes the trouble to inquire whether the

banker is worthy, especially as the former asks credit instead of

granting it."

So, according to M. de Sismondi, in the issue of bank paper, the

functions of the merchant and the banker are inverted: the first

is the creditor, and the second is the credited.

Something similar takes place between the monopolist and

wage-receiver.

In fact, the workers, like the merchant at the bank, ask to have

their labor discounted; in right, the contractor ought to furnish

them bonds and security. I will explain myself.

In any exploitation, no matter of what sort, the contractor

cannot legitimately claim, in addition to his own personal labor,

anything but the IDEA: as for the EXECUTION, the result of the

cooperation of numerous laborers, that is an effect of collective

power, with which the authors, as free in their action as the

chief, can produce nothing which should go to him gratuitously.

Now, the question is to ascertain whether the amount of

individual wages paid by the contractor is equivalent to the

collective effect of which I speak: for, were it otherwise, Say's

axiom, EVERY PRODUCT IS WORTH WHAT IT COSTS, would be violated.

"The capitalist," they say, "has paid the laborers their daily

wages at a rate agreed upon; consequently he owes them nothing."

To be accurate, it must be said that he has paid as many times

one day's wage as he has employed laborers,--which is not at all

the same thing. For he has paid nothing for that immense power

which results from the union of laborers and the convergence and

harmony of their efforts; that saving of expense, secured by

their formation into a workshop; that multiplication of product,

foreseen, it is true, by the capitalist, but realized by free

forces. Two hundred grenadiers, working under the direction of

an engineer, stood the obelisk upon its base in a few hours; do

you think that one man could have accomplished the same task in

two hundred days? Nevertheless, on the books of the capitalist,

the amount of wages is the same in both cases, because he allots

to himself the benefit of the collective power. Now, of two

things one: either this is usurpation on his part, or it is

error.--What is Property: Chapter III.

To properly exploit the mule-jenny, engineers, builders, clerks,

brigades of workingmen and workingwomen of all sorts, have been

needed. In the name of their liberty, of their security, of

their future, and of the future of their children, these workmen,

on engaging to work in the mill, had to make reserves; where are

the letters of credit which they have delivered to the employers?

Where are the guarantees which they have received? What!

millions of men have sold their arms and parted with their

liberty without knowing the import of the contract; they have

engaged themselves upon the promise of continuous work and

adequate reward; they have executed with their hands what the

thought of the employers had conceived; they have become, by this

collaboration, associates in the enterprise: and when monopoly,

unable or unwilling to make further exchanges, suspends its

manufacture and leaves these millions of laborers without bread,

they are told to be RESIGNED! By the new processes they have

lost nine days of their labor out of ten; and for reward they are

pointed to the LASH OF NECESSITY flourished over them! Then, if

they refuse to work for lower wages, they are shown that they

punish themselves. If they accept the rate offered them, they

lose THAT NOBLE PRIDE, that taste for DECENT CONVENIENCES which

constitute the happiness and dignity of the workingman and

entitle him to the sympathies of the rich. If they combine to

secure an increase of wages, they are thrown into prison!

Whereas they ought to prosecute their exploiters in the courts,

on them the courts will avenge the violations of liberty of

commerce! Victims of monopoly, they will suffer the penalty due

to the monopolists! O justice of men, stupid courtesan, how

long, under your goddess's tinsel, will you drink the blood of

the slaughtered proletaire?

Monopoly has invaded everything,--land, labor, and the

instruments of labor, products and the distribution of pro ducts.

Political economy itself has not been able to avoid admitting it.

"You almost always find across your path," says M. Rossi, "some

monopoly. There is scarcely a product that can be regarded as

the pure and simple result of labor; accordingly the economic law

which proportions price to cost of production is never completely

realized. It is a formula which is profoundly MODIFIED by the

intervention of one or another of the monopolies to which the

instruments of production are subordinated.--Course in Political

Economy: Volume I., page 143.

M. Rossi holds too high an office to give his language all the

precision and exactness which science requires when monopoly is

in question. What he so complacently calls a MODIFICATION OF

ECONOMIC FORMULAS is but a long and odious violation of the

fundamental laws of labor and exchange. It is in consequence of

monopoly that in society, net product being figured over and

above gross product, the collective laborer must repurchase his

own product at a price higher than that which this product costs

him,--which is contradictory and impossible; that the natural

balance between production and consumption is destroyed; that the

laborer is deceived not only in his settlements, but also as to

the amount of his wages; that in his case progress in comfort is

changed into an incessant progress in misery: it is by monopoly,

in short, that all notions of commutative justice are perverted,

and that social economy, instead of the positive science that it

is, becomes a veritable utopia.

This disguise of political economy under the influence of

monopoly is a fact so remarkable in the history of social ideas

that we must not neglect to cite a few instances.

Thus, from the standpoint of monopoly, value is no longer that

synthetic conception which serves to express the relation of

a special object of utility to the sum total of wealth: monopoly

estimating things, not in their relation to society, but in their

relation to itself, value loses its social character, and is

nothing but a vague, arbitrary, egoistic, and essentially

variable thing. Starting with this principle, the monopolist

extends the term PRODUCT to cover all sorts of servitude, and

applies the idea of CAPITAL to all the frivolous and shameful

industries which his passions and vices exploit. The charms of a

courtesan, says Say, are so much CAPITAL, of which the PRODUCT

follows the general LAW of VALUES,--namely, SUPPLY and

DEMAND. Most of the works on political economy are full of such

applications. But as prostitution and the state of dependence

from which it emanates are condemned by morality, M. Rossi will

bid us observe the further fact that political economy, after

having MODIFIED its formula in consequence of the intervention

of monopoly, will have to submit to a new CORRECTIVE, although

its conclusions are in themselves irreproachable. For, he says,

political economy has nothing in common with morality: it is for

us to accept it, to modify or correct its formulas, whenever our

welfare, that of society, and the interests of morality call for

it. How many things there are between political economy and

truth!

Likewise, the theory of net product, so highly social,

progressive, and conservative, has been individualized, if I may

say so, by monopoly, and the principle which ought to secure

society's welfare causes its ruin. The monopolist, always

striving for the greatest possible net product, no longer acts as

a member of society and in the interest of society; he acts with

a view to his exclusive interest, whether this interest be

contrary to the social interest or not. This change of

perspective is the cause to which M. de Sismondi attributes the

depopulation of the Roman Campagna. From the comparative

researches which he has made regarding the product of the agro

romano when in a state of cultivation and its product when left

as pasture-land, he has found that the GROSS product would be

twelve times larger in the former case than in the latter; but,

as cultivation demands relatively a greater number of hands, he

has discovered also that in the former case the NET product

would be less. This calculation, which did not escape the

proprietors, sufficed to confirm them in the habit of leaving

their lands uncultivated, and hence the Roman Campagna is

uninhabited.

"All parts of the Roman States," adds M. de Sismondi, "present

the same contrast between the memories of their prosperity in the

Middle Ages and their present desolation. The town of Ceres,

made famous by Renzo da Ceri, who defended by turns Marseilles

against Charles V. and Geneva against the Duke of Savoy, is

nothing but a solitude. In all the fiefs of the Orsinis and the

Colonnes not a soul. From the forests which surround the pretty

Lake of Vico the human race has disappeared; and the soldiers

with whom the formidable prefect of Vico made Rome tremble so

often in the fourteenth century have left no descendants. Castro

and Ronciglione are desolated."--Studies in Political Economy.

In fact, society seeks the greatest possible gross product, and

consequently the greatest possible population, because with it

gross product and net product are identical. Monopoly, on the

contrary, aims steadily at the greatest net product, even though

able to obtain it only at the price of the extermination of the

human race.

Under this same influence of monopoly, interest on capital,

perverted in its idea, has become in turn a principle of death to

society. As we have explained it, interest on capital is, on the

one hand, the form under which the laborer enjoys his net

product, while utilizing it in new creations; on the other, this

interest is the material bond of solidarity between producers,

viewed from the standpoint of the increase of wealth. Under

the first aspect, the aggregate interest paid can never exceed

the amount of the capital itself; under the second, interest

allows, in addition to reimbursement, a premium as a reward of

service rendered. In no case does it imply perpetuity.

But monopoly, confounding the idea of capital, which is

attributable only to the creations of human industry, with that

of the exploitable material which nature has given us, and which

belongs to all, and favored moreover in its usurpation by the

anarchical condition of a society in which possession can exist

only on condition of being exclusive, sovereign, and

perpetual,--monopoly has imagined and laid it down as a principle

that capital, like land, animals, and plants, had in itself an

activity of its own, which relieved the capitalist of the

necessity of contributing anything else to exchange and of taking

any part in the labors of the workshop. From this false idea of

monopoly has come the Greek name of usury, tokos, as much as to

say the child or the increase of capital, which caused Aristotle

to perpetrate this witticism: COINS BEGET NO CHILDREN. But the

metaphor of the usurers has prevailed over the joke of the

Stagyrite; usury, like rent, of which it is an imitation, has

been declared a perpetual right; and only very lately, by a

half-return to the principle, has it reproduced the idea of

REDEMPTION.

Such is the meaning of the enigma which has caused so many

scandals among theologians and legists, and regarding which the

Christian Church has blundered twice,--first, in condemning every

sort of interest, and, second, in taking the side of the

economists and thus contradicting its old maxims. Usury, or the

right of increase, is at once the expression and the condemnation

of monopoly; it is the spoliation of labor by organized and

legalized capital; of all the economic subversions it is

that which most loudly accuses the old society, and whose

scandalous persistence would justify an unceremonious and

uncompensated dispossession of the entire capitalistic class.

Finally, monopoly, by a sort of instinct of self-preservation,

has perverted even the idea of association, as something that

might infringe upon it, or, to speak more accurately, has not

permitted its birth.

Who could hope today to define what association among men should

be? The law distinguishes two species and four varieties of

civil societies, and as many commercial societies, from the

simple partnership to the joint-stock company. I have read the

most respectable commentaries that have been written upon all

these forms of association, and I declare that I have found in

them but one application of the routine practices of monopoly

between two or more partners who unite their capital and their

efforts against everything that produces and consumes, that

invents and exchanges, that lives and dies. The sine qua non of

all these societies is capital, whose presence alone constitutes

them and gives them a basis; their object is monopoly,--that is,

the exclusion of all other laborers and capitalists, and

consequently the negation of social universality so far as

persons are concerned.

Thus, according to the definition of the statute, a commercial

society which should lay down as a principle the right of any

stranger to become a member upon his simple request, and to

straightway enjoy the rights and prerogatives of associates and

even managers, would no longer be a society; the courts would

officially pronounce its dissolution, its nonexistence. So,

again, articles of association in which the contracting parties

should stipulate no contribution of capital, but, while

reserving to each the express right to compete with all, should

confine themselves to a reciprocal guarantee of labor and wages,

saying nothing of the branch of exploitation, or of capital, or

of interest, or of profit and loss,--such articles would seem

contradictory in their tenor, as destitute of purpose as of

reason, and would be annulled by the judge on the complaint of

the first rebellious associate. Covenants thus drawn up could

give rise to no judicial action; people calling themselves the

associates of everybody would be considered associates of nobody;

treatises contemplating guarantee and competition between

associates at the same time, without any mention of social

capital and without any designation of purpose, would pass for a

work of transcendental charlatanism, whose author could readily

be sent to a madhouse, provided the magistrates would consent to

regard him as only a lunatic.

And yet it is proved, by the most authentic testimony which

history and social economy furnish, that humanity has been thrown

naked and without capital upon the earth which it cultivates;

consequently that it has created and is daily creating all the

wealth that exists; that monopoly is only a relative view serving

to designate the grade of the laborer, with certain conditions of

enjoyment; and that all progress consists, while indefinitely

multiplying products, in determining their proportionality,--that

is, in organizing labor and comfort by division, machinery, the

workshop, education, and competition. On the other hand, it is

evident that all the tendencies of humanity, both in its politics

and in its civil laws, are towards universalization,--that is,

towards a complete transformation of the idea of society as

determined by our statutes.

Whence I conclude that articles of association which should

regulate, no longer the contribution of the associates,--since

each associate, according to the economic theory, is supposed to

possess absolutely nothing upon his entrance into society,--but

the conditions of labor and exchange, and which should allow

access to all who might present themselves,--I conclude, I say,

that such articles of association would contain nothing that was

not rational and scientific, since they would be the very

expression of progress, the organic formula of labor, and since

they would reveal, so to speak, humanity to itself by giving it

the rudiment of its constitution.

Now, who, among the jurisconsults and economists, has ever

approached even within a thousand leagues of this magnificent and

yet so simple idea?

"I do not think," says M. Troplong, "that the spirit of

association is called to greater destinies than those which it

has accomplished in the past and up to the present time. . . ;

and I confess that I have made no attempt to realize such hopes,

which I believe exaggerated. . . . There are well-defined limits

which association should not overstep. No! association is not

called upon in France to govern everything. The spontaneous

impulse of the individual mind is also a living force in our

nation and a cause of its originality. . . .

"The idea of association is not new. . . . Even among the Romans

we see the commercial society appear with all its paraphernalia

of monopolies, corners, collusions, combinations, piracy, and

venality. . . . The joint-stock company realizes the civil,

commercial, and maritime law of the Middle Ages: at that epoch it

was the most active instrument of labor organized in society. . .

. From the middle of the fourteenth century we see societies

form by stock subscriptions; and up to the time of Law's

discomfiture, we see their number continually increase. . . .

What! we marvel at the mines, factories, patents, and newspapers

owned by stock companies! But two centuries ago such companies

owned islands, kingdoms, almost an entire hemisphere. We

proclaim it a miracle that hundreds of stock subscribers should

group themselves around an enterprise; but as long ago as the

fourteenth century the entire city of Florence was in similar

silent partnership with a few merchants, who pushed the genius of

enterprise as far as possible. Then, if our speculations

are bad, if we have been rash, imprudent, or credulous, we

torment the legislator with our cavilling complaints; we call

upon him for prohibitions and nullifications. In our mania for

regulating everything, EVEN THAT WHICH IS ALREADY CODIFIED; for

enchaining everything by texts reviewed, corrected, and added to;

for administering everything, even the chances and reverses of

commerce,--we cry out, in the midst of so many existing laws:

`There is still something to do!'"

M. Troplong believes in Providence, but surely he is not its man.

He will not discover the formula of association clamored for

today by minds disgusted with all the protocols of combination

and rapine of which M. Troplong unrolls the picture in his

commentary. M. Troplong gets impatient, and rightly, with those

who wish to enchain everything in texts of laws; and he himself

pretends to enchain the future in a series of fifty articles, in

which the wisest mind could not discover a spark of economic

science or a shadow of philosophy. IN OUR MANIA, he cries, FOR

REGULATING EVERYTHING, EVEN THAT WHICH IS ALREADY CODIFIED! . . .

. I know nothing more delicious than this stroke, which paints

at once the jurisconsult and the economist. After the Code

Napoleon, take away the ladder! . . .

"Fortunately," M. Troplong continues, "all the projects of change

so noisily brought to light in 1837 and 1838 are forgotten today.

The conflict of propositions and the anarchy of reformatory

opinions have led to negative results. At the same time that the

reaction against speculators was effected, the common sense of

the public did justice to the numerous official plans of

organization, much inferior in wisdom to the existing law, much

less in harmony with the usages of commerce, much less liberal,

after 1830, than the conceptions of the imperial Council of

State! Now order is restored in everything, and the commercial

code has preserved its integrity, its excellent integrity. When

commerce needs it, it finds, by the side of partnership,

temporary partnership, and the joint-stock company, the free

silent partnership, tempered only by the prudence of the silent

partners and by the provisions of the penal code regarding

swindling."--Troplong: Civil and Commercial Societies: Preface.

What a philosophy is that which rejoices in the miscarriage of

reformatory endeavors, and which counts its triumphs by the

NEGATIVE RESULTS of the spirit of inquiry! We cannot now enter

upon a more fundamental criticism of the civil and commercial

societies, which have furnished M. Troplong material for two

volumes. We will reserve this subject for the time when, the

theory of economic contradictions being finished, we shall have

found in their general equation the programme of association,

which we shall then publish in contrast with the practice and

conceptions of our predecessors.

A word only as to silent partnership.

One might think at first blush that this form of joint-stock

company, by its expansive power and by the facility for change

which it offers, could be generalized in such a way as to take in

an entire nation in all its commercial and industrial relations.

But the most superficial examination of the constitution of this

society demonstrates very quickly that the sort of enlargement of

which it is susceptible, in the matter of the number of

stockholders, has nothing in common with the extension of the

social bond.

In the first place, like all other commercial societies, it is

necessarily limited to a single branch of exploitation: in this

respect it is exclusive of all industries foreign to that

peculiarly its own. If it were otherwise, it would have changed

its nature; it would be a new form of society, whose statutes

would regulate, no longer the profits especially, but the

distribution of labor and the conditions of exchange; it would be

exactly such an association as M. Troplong denies and as the

jurisprudence of monopoly excludes.

As for the personal composition of the company, it naturally

divides itself into two categories,--the managers and the

stockholders. The managers, very few in number, are chosen

from the promoters, organizers, and patrons of the enterprise: in

truth, they are the only associates. The stockholders, compared

with this little government, which administers the society with

full power, are a people of taxpayers who, strangers to each

other, without influence and without responsibility, have nothing

to do with the affair beyond their investments. They are lenders

at a premium, not associates.

One can see from this how all the industries of the kingdom could

be carried on by such companies, and each citizen, thanks to the

facility for multiplying his shares, be interested in all or most

of these companies without thereby improving his condition: it

might happen even that it would be more and more compromised.

For, once more, the stockholder is the beast of burden, the

exploitable material of the company: not for him is this society

formed. In order that association may be real, he who

participates in it must do so, not as a gambler, but as an active

factor; he must have a deliberative voice in the council; his

name must be expressed or implied in the title of the society;

everything regarding him, in short, should be regulated in

accordance with equality. But these conditions are precisely

those of the organization of labor, which is not taken into

consideration by the code; they form the ULTERIOR object of

political economy, and consequently are not to be taken for

granted, but to be created, and, as such, are radically

incompatible with monopoly.[20]

[20] Possibly these paragraphs will not be clear to all without

the explanation that the form of association discussed in them,

called in French the commandite, is a joint-stock company to

which the shareholders simply lend their capital, without

acquiring a share in the management or incurring responsibility

for the results thereof.-- Translator.

Socialism, in spite of its high-sounding name, has so far been no

more fortunate than monopoly in the definition of society:

we may even assert that, in all its plans of organization, it has

steadily shown itself in this respect a plagiarist of political

economy. M. Blanc, whom I have already quoted in discussing

competition, and whom we have seen by turns as a partisan of the

hierarchical principle, an officious defender of inequality,

preaching communism, denying with a stroke of the pen the law of

contradiction because he cannot conceive it, aiming above all at

power as the final sanction of his system,--M. Blanc offers us

again the curious example of a socialist copying political

economy without suspecting it, and turning continually in the

vicious circle of proprietary routine. M. Blanc really denies

the sway of capital; he even denies that capital is equal to

labor in production, in which he is in accord with healthy

economic theories. But he can not or does not know how to

dispense with capital; he takes capital for his point of

departure; he appeals to the State for its silent partnership:

that is, he gets down on his knees before the capitalists and

recognizes the sovereignty of monopoly. Hence the singular

contortions of his dialectics. I beg the reader's pardon for

these eternal personalities: but since socialism, as well as

political economy, is personified in a certain number of writers,

I cannot do otherwise than quote its authors.

"Has or has not capital," said "La Phalange," "in so far as it is

a faculty in production, the legitimacy of the other productive

faculties? If it is illegitimate, its pretensions to a share of

the product are illegitimate; it must be excluded; it has no

interest to receive: if, on the contrary, it is legitimate, it

cannot be legitimately excluded from participation in the

profits, in the increase which it has helped to create."

The question could not be stated more clearly. M. Blanc holds,

on the contrary, that it is stated in a VERY CONFUSED manner,

which means that it embarrasses him greatly, and that he is much

worried to find its meaning.

In the first place, he supposes that he is asked "whether it is

equitable to allow the capitalist a share of the profits of

production EQUAL TO THE LABORER'S." To which M. Blanc answers

unhesitatingly that that would be unjust. Then follows an

outburst of eloquence to establish this injustice.

Now, the phalansterian does not ask whether the share of the

capitalist should or should not be EQUAL TO THE LABORER'S; he

wishes to know simply WHETHER HE IS TO HAVE A SHARE. And to this

M. Blanc makes no reply.

Is it meant, continues M. Blanc, that capital is INDISPENSABLE

to production, like labor itself? Here M. Blanc distinguishes:

he grants that capital is indispensable, AS labor is, but not

TO THE EXTENT THAT labor is.

Once again, the phalansterian does not dispute as to quantity,

but as to right.

Is it meant--it is still M. Blanc who interrogates--that all

capitalists are not idlers? M. Blanc, generous to capitalists

who work, asks why so large a share should be given to those who

do not work? A flow of eloquence as to the IMPERSONAL services

of the capitalist and the PERSONAL services of the laborer,

terminated by an appeal to Providence.

For the third time, you are asked whether the participation of

capital in profits is legitimate, since you admit that it is

indispensable in production.

At last M. Blanc, who has understood all the time, decides to

reply that, if he allows interest to capital, he does so only as

a transitional measure and to ease the descent of the

capitalists. For the rest, his project leading inevitably to the

absorption of private capital in association, it would be folly

and an abandonment of principle to do more. M. Blanc, if he had

studied his subject, would have needed to say but a single

phrase: "I deny capital."

Thus M. Blanc,--and under his name I include the whole of

socialism,-- after having, by a first contradiction of the title

of his book, "ORGANIZATION OF LABOR," declared that capital was

INDISPENSABLE in production, and consequently that it should be

organized and participate in profits like labor, by a second

contradiction rejects capital from organization and refuses to

recognize it: by a third contradiction he who laughs at

decorations and titles of nobility distributes civic crowns,

rewards, and distinctions to such litterateurs inventors, and

artists as shall have deserved well of the country; he allows

them salaries according to their grades and dignities; all of

which is the restoration of capital as really, though not with

the same mathematical precision, as interest and net product: by

a fourth contradiction M. Blanc establishes this new aristocracy

on the principle of equality,-- that is, he pretends to vote

masterships to equal and free associates, privileges of idleness

to laborers, spoliation in short to the despoiled: by a fifth

contradiction he rests this equalitarian aristocracy on the basis

of a POWER ENDOWED WITH GREAT FORCE,--that is, on despotism,

another form of monopoly: by a sixth contradiction, after having,

by his encouragements to labor and the arts, tried to proportion

reward to service, like monopoly, and wages to capacity, like

monopoly, he sets himself to eulogize life in common, labor and

consumption in common, which does not prevent him from wishing to

withdraw from the effects of common indifference, by means of

national encouragements taken out of the common product, the

grave and serious writers whom common readers do not care for: by

a seventh contradiction. . . . but let us stop at seven, for we

should not have finished at seventy-seven.

It is said that M. Blanc, who is now preparing a history of the

French Revolution, has begun to seriously study political

economy. The first fruit of this study will be, I do not

doubt, a repudiation of his pamphlet on "Organization of Labor,"

and consequently a change in all his ideas of authority and

government. At this price the "History of the French

Revolution," by M. Blanc, will be a truly useful and original

work.

All the socialistic sects, without exception, are possessed by

the same prejudice; all, unconsciously, inspired by the economic

contradiction, have to confess their powerlessness in presence of

the necessity of capital; all are waiting, for the realization of

their ideas, to hold power and money in their hands. The utopias

of socialism in the matter of association make more prominent

than ever the truth which we announced at the beginning: THERE

IS NOTHING IN SOCIALISM WHICH IS NOT FOUND IN POLITICAL ECONOMY;

and this perpetual plagiarism is the irrevocable condemnation of

both. Nowhere is to be seen the dawn of that mother-idea, which

springs with so much eclat from the generation of the economic

categories,--that the superior formula of association has nothing

to do with capital, a matter for individual accounts, but must

bear solely upon equilibrium of production, the conditions of

exchange, the gradual reduction of cost, the one and only source

of the increase of wealth. Instead of determining the relations

of industry to industry, of laborer to laborer, of province to

province, and of people to people, the socialists dream only of

providing themselves with capital, always conceiving the problem

of the solidarity of laborers as if it were a question of

founding some new institution of monopoly. The world, humanity,

capital, industry, business machinery, exist; it is a matter now

simply of finding their philosophy,--in other words, of

organizing them: and the socialists are in search of capital!

Always outside of reality, is it astonishing that they miss it?

Thus M. Blanc asks for State aid and the establishment of

national workshops; thus Fourier asked for six million francs,

and his followers are still engaged today in collecting that sum;

thus the communists place their hope in a revolution which shall

give them authority and the treasury, and exhaust themselves in

waiting for useless subscriptions. Capital and power, secondary

organs in society, are always the gods whom socialism adores: if

capital and power did not exist, it would invent them. Through

its anxieties about power and capital, socialism has completely

overlooked the meaning of its own protests: much more, it has not

seen that, in involving itself, as it has done, in the economic

routine, it has deprived itself of the very right to protest. It

accuses society of antagonism, and through the same antagonism it

goes in pursuit of reform. It asks capital for the poor

laborers, as if the misery of laborers did not come from the

competition of capitalists as well as from the factitious

opposition of labor and capital; as if the question were not

today precisely what it was before the creation of capital,--that

is, still and always a question of equilibrium; as if, in

short,--let us repeat it incessantly, let us repeat it to

satiety,--the question were henceforth of something other than a

synthesis of all the principles brought to light by civilization,

and as if, provided this synthesis, the idea which leads the

world, were known, there would be any need of the intervention of

capital and the State to make them evident.

Socialism, in deserting criticism to devote itself to declamation

and utopia and in mingling with political and religious

intrigues, has betrayed its mission and misunderstood the

character of the century. The revolution of 1830 demoralized us;

socialism is making us effeminate. Like political economy, whose

contradictions it simply sifts again, socialism is powerless

to satisfy the movement of minds: it is henceforth, in those whom

it subjugates, only a new prejudice to destroy, and, in those who

propagate it, a charlatanism to unmask, the more dangerous

because almost always sincere.