The Philosophy of Poverty by Pierre-Joseph Proudhon (1847)
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.
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 with-out 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, section 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 never-theless 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 disenaged 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.
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. (1)
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. (2)
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. (3)
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. (4)
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 antago-nism 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 decla-mation 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.
1. 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.
2. 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.
3. 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.
4. 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.