Thursday, May 2, 2024

Political Economy and Justice, by Léon Walras

Political Economy and Justice, a Critical Examination and Refutation of the Economic Doctrines of P.J. Proudhon, Preceded by an Introduction to the Study of the Social Question. Guillaumin, Paris, 1860.

This is a book written by Léon Walras to refute Proudhon’s “On Justice in the Revolution and in the Church” (1858).

Introduction to the Study of the Social Question

§ 1. The Position of the Social Question

Mr. Baudrillart, professor of political economy at the Collège de France, usually discussing the principles of political economy in relation to morals concerning pauperism, and incidentally the work of women, stated in one of his recent lectures that the average wage for female workers in Paris is 1 franc 63 cents per day. This figure is thus somewhat official. Moreover, the value of an average is known: the full impact of the one just mentioned will only appear if we add that there are, indeed, a very small number of wages that go up, for women, to 3 francs and above; but there are, on the other hand, a quite large number of wages that fall below the average to 1 franc, to 0 fr. 60, and even lower1. “We will follow the presentation of these facts with no comment,” added the professor: “there could be none that could match the eloquence of such numbers.” — And with the problem thus established, he endeavored to indicate both its cause and its remedy. We will mimic this restraint, as worthy of the sensitivity of a man of heart as of the coolness of a philosopher. There are no doctors or surgeons who, seeing diseases or injuries, start to cry and moan; if there are any, they are not the best. Similarly, in the face of society’s wounds, the economist must know how to remain calm, silence his emotions for the success of his studies, and finally leave, once he has explored it in all directions, the field of impressive reality, to rise to the realm of cold abstraction which is also that of science.

For these reasons, we will avoid making an emphatic display of figures which must be deplorable for all, but thankfully! are accusatory for no one. We will merely assert that the average wage of female workers is not higher in the provinces than in Paris; and that the situation of male workers is hardly, all things considered, much more brilliant than that of women2. Let us not forget either that the tax relentlessly pursues and always reaches, no matter how small they are, all wages.

Among the causes of pauperism, at least concerning female workers, Mr. Baudrillart identified primarily the absence of elementary and professional education. I willingly accept the demonstration he gave of this proposition for what it was, that is to say, without reply; and while leaving him all the honor and responsibility, I draw a conclusion that is my own.

If the pitiable meagerness of the wages of female workers stems from these workers lacking both elementary and professional education, the only remedy for this state of affairs would be for them to acquire this dual education they are deprived of. However, it is evident that this remedy is not in their hands; the very meagerness of their wages forbids any education; thus, poverty condemns them, from mother to daughter, to misery.

This concerns the female workers. But is a single fact of this nature not sufficient to open the eyes of philosophers? And could it not be that there are, in society, classes thus doomed to poverty generation after generation, such that it would be impossible to expect the extinction of pauperism from the sole individual initiative of the unfortunate it crushes, without any intervention of science and law, any action of social progress?

Let’s face the facts.—Is there, in our society, any other misery than that which logically results from laziness, unintelligence, or misfortunes of fate? Is there any other wealth than that which legitimately originates, to whatever degree it may be, in labor, in talent, or in success, and proportionally to these causes? Without disorder, while fully safeguarding the natural and sacred rights of property, of the family, could we not come closer to the spirit of social justice expressed poetically by that admirable word of Plato, the principle of all true equality, the formula of all rational democracy: —Do not prevent the sons of slaves from rising to the rank of freemen; do not prevent the sons of kings from falling to the rank of slaves?

This is how the social question is posed. I hope I will be given the justice to admit that I present it in terms sufficiently abstract from any brutal reality, to say the word, in terms sufficiently scientific. I do my best to close all access to the exaggerations of feeling, as to the errors of empiricism, to maintain intact the rights of reason and method. As precisely I pursue above all philosophical certainty, I will be allowed to dwell on the value of these precautions.

In the presence of the deplorable facts established by observation, there have been socialists who conclude, in eloquent terms, from pauperism to annihilation, or, at least, to a complete renewal of society: Rousseau first of all, Rousseau the father of sentimental socialism, Rousseau so sincere and so unreasonable, so pathetic and so dangerous, Rousseau whom one hardly reads, with a warm heart, at twenty, without crying, nor later, with some experience, at twenty-five or thirty, without smiling or shuddering; twenty others after him.—“Unfortunate creatures earn, in a day’s work, sixty cents! No more social state! Or, at least, let the social state be completely reorganized from the ground up!”

These exaggerations are childish. As for the idea of first breaking the social pact to return to the state of nature, it is a fanciful and unrealizable fantasy, because there was no state of nature and there is no social pact. Society does not have a constitutional origin, but a natural one. The first of these two opinions, and the more superficial, was that of the philosophers of the last century who all liked to imagine society as a contract freely consented to by all citizens, and did not fail to refer to this point of view their essays on social morality. The sciences in their infancy have a tendency to be more speculative than experimental. It is rightly reproached today to the theorists of the eighteenth century for having issued a hypothesis so little in accordance with psychological observation as with the history of civilization.

Publicists of our time see in the social state a natural fact; and sociability, according to them, is a characteristic, essential trait of the human species, like freedom.—“Man outside of society,” says Mr. Vacherot, “is an imaginary being, an abstraction. The true man, the real man is the one who lives in society and by society. As far back as historical observation goes, it discovers races, nations, peoples, tribes, never individuals… That being said, the individual does not enter society with perfect knowledge of his rights and interests, like a free person who stipulates right away the guarantee of one and the other, in exchange for the sacrifices to which he commits himself; he enters it as a mere element in a natural whole, according to the word of Bossuet.”

A few years ago, Bastiat had said: — “For man, isolation is death. Well, if outside of society he cannot live, the rigorous conclusion is that his state of nature is the social state3.”

Now, if it is true that society is a natural fact in its origin, does it not follow that it must be so in its developments as well? It is therefore the dream of a crude and proud imagination to say: — “For five thousand years humanity has been on the wrong path; it becomes urgent to place it today in a contrary and better direction.”

Civilization unfolds logically, if not entirely according to the exact laws of Hegelian logic. Progress, in one way or another, is organic. As flawed as our social state may sometimes seem to us, we must accept it without rebellion because it is necessary, and without regrets because it contains within it the indestructible principle of its normal improvement. Ah! certainly, I know: fifteen or eighteen hours of daily labor paid with a salary of 1 fr. 63, is a sad reward for a woman’s courage and virtue! Certainly, it is heartbreaking to think that in some poor artisan bent over a vulgar task, the ease and education could have developed, if not the genius of a Leibnitz or a Bichat, perhaps the administrative or industrial aptitudes of a Turgot or a Jacquart! But what! As meager as the existence of these obscure beings may be, at least they live; and their subsistence, it is to society; it is to society alone that they owe it: isolated, they would perish of starvation. This is what the attentive study of our social organization teaches every wise mind. This organization is therefore not to be destroyed, nor even to be entirely remade: it is simply to be perfected according to the indications of history, political economy, philosophy, and all sciences.

In these data, I do not believe I am greatly mistaken in estimating that today, apart from an indifferent and corrupt rabble, apart from a small number of people in position obstinately satisfied and optimistic nevertheless, everyone, publicists, people of the world and people of the people, and perhaps the power itself more than anyone, agrees to recognize that there exists a question which is not the Eastern question, nor the Roman question, nor the question of the English alliance, a question more important than all that and which touches us much closer: that is the social question. Even in the scholarly world, progress has been made. It is known that the freedom of labor and exchange is still hindered, to the great detriment of production, by a multitude of ridiculous restrictions and prohibitions. It is also known, regarding the distribution of wealth, that neither Mr. Thiers nor Mr. Proudhon have been able to give a theory of personal domain of man over things that imposes itself in science with the authority of evidence, and in practice with the sanction of common sense; and it is admitted that the problem of property is not definitively clarified. One readily admits the injustices of the tax system whose methods are justified only by the reason of necessity; and one is not surprised that, even after the works of Mr. E. de Girardin, the Academy of Moral and Political Sciences has put up for competition the theory of taxation. Everywhere, finally, one is willing to believe that intelligent and honest men, estimable and laborious, can call themselves, within certain limits, socialists, and do not blindly worship these sacramental words: order, property, family, without thereby dreaming of the permanence of the guillotine, nor the equal distribution of goods, nor the community of women.

Whatever the case may be, moreover, and whatever illusion I may have about the number of minds it occupies, for those who claim to solve it and for those who would try to stifle it, the social question exists. Justice is not satisfied; some last vestige of the immorality of the feudal pact soils the purity of our revolutionary contract. Sincere hearts are moved by the apparent effects of evil, curious intelligences search for its origin and scope; -unshakable wills have resolved to stem it at its source. Perhaps some among us are advantaged; for sure, others are frustrated. Too often, no doubt, for lack of knowing the nature and extent of the privilege, some accept it with easy selfishness, others endure it with painful resignation. No matter! A generous compassion, a legitimate anger, an untiring ardor have risen among some men at the breath of new ideas; having seen the Revolution, already the mother of civil equality, give birth to political equality, they sense vaguely that it still conceals in its bowels, like another fertile fruit, the equality of economic conditions; they want to extract it. It is to these men that I address myself.

From my way of presenting things, my reader must necessarily assume both that, in my conviction, the social question has so far been resolved by no one, and that I am undertaking today the extensive and difficult task of resolving it. To this I can only respond with two observations: the first is that the task I undertake is singularly vaster and more painful than one might imagine; the second is that I have no ambition to accomplish it alone.

In an article published a few months ago, Mr. Courcelle Seneuil expresses the opinion that if one wishes to arrive at truly scientific conclusions and fertile in solid solutions on the relationships between political economy and morality, one must, by returning to the original conception of Quesnay, establish with a rigorous method the whole of social science and social art, which includes, besides political economy, morality, law and even politics itself:—“This enterprise,” adds the author, “premature a century ago, has almost ceased to be so, and if it still presents difficulties that will probably delay its execution, we can nevertheless form a fairly clear idea of what the science and art that aim at the whole of man’s free activity living in society4 should be.”

Such ideas are eminently suited to rejoice both friends of political economy and friends of progress. The former, indeed, would not fail to regret that political economy tended to confine itself within the bounds of statistics rather than to rise to the level of a general theory of social activity; they can believe that it is rich enough in detailed observations to lend itself a little to the efforts of overall speculation, mature enough through experience to have little to fear from being perverted by the commerce of philosophy. On the other hand, if there is a hope that should be dear to friends of progress, and generally to all men who know how to maintain themselves, with regard to innovations, outside of exaggerated terrors and chimerical aspirations, it is that of finally seeing socialism, to restore to a word that empiricism has compromised and dishonored its scientific significance, supported on political economy, practical reforms deduced from methodical theories, finally the caprice of thoughtless opinions give way before the empire of reasoned convictions. All these happy results would be the effect of the impetus that could be given to political economy in the direction indicated by Mr. Courcelle Seneuil: it is therefore particularly to be desired that the new tendencies do not delay in manifesting themselves. From the point of view I have placed myself in, regarding the proper object of this study, I add that there is no doubt for me that the realization of the enterprise announced by Mr. Courcelle Seneuil would also be the triumph of justice, that the constitution of social science and the art associated with it implies the solution of the social question.

Let us therefore unite all our efforts to establish and build social science.

§ 2. Establishment of Social Science

The task is to establish with rigorous methodology the science and art concerned with the entirety of man’s free activity in society; this is the problem, and it must be acknowledged that it would be difficult to state it in terms that are both more general and more precise. If it is necessary and sufficient for a science to exist that it covers a vast array of facts of a special character, social science will thrive. This science does not study purely physical facts, those that manifest in the external nature, or those that, while having man as their theater, originate from and develop under the inevitability of natural laws, independent of free will: physiological life, disease, etc. It seems also to claim not to deal with moral facts that relate only to the individual, but with those that interest all individuals at once, namely social facts.

Social science is, in a word, THE THEORY OF SOCIETY. I leave to Mr. Courcelle Seneuil the merit of having highlighted it. As for myself, I hasten, for the needs of my cause, to specify its object, indicate its divisions, and sketch, if you will, its philosophy in terms somewhat more explicit than Mr. Courcelle Seneuil attempted to do. And as, in such enterprises, it is most important to act methodically, I begin by stating that, in my opinion, to constitute social science and social art, it is appropriate to directly tackle the general fact of society, to define its nature, to show its origin, to enumerate its types, to formulate its law, and to observe its effects. I indeed believe that, the fact of society thus scientifically studied in its abstract generality, all social facts, individual and concrete, would be known by that very fact; that is, a social phenomenon occurring in reality could be immediately distinguished, linked to an equally individual and concrete cause, related to a special type, subjected to determined laws, etc., etc.

I. Consequently, let us first say that the fact of society consists in this: the individual destinies of all men are not independent but interdependent. It is not to say, as absolute communism maintains, that each man has no other destiny than that of being an organ of a real, individual, and concrete whole called society. No: human destinies are not so completely interdependent. But it is certain that they are neither completely independent, that each of them is not like a kind of isolated monad, as absolute individualism would declare. “Whatever the case, politics still oscillates today between individualism and communism, exactly as philosophy does between empiricism and idealism, alternately giving too much or too little to one of the two principles whose balance makes the law of any well-organized society5.” Thus, it is precisely the most direct object of social science to state exactly in what respects the destinies of all men are independent and in what respects they are interdependent. Nonetheless, the idea of a certain determinable and definable solidarity of human destinies constitutes the essence of the idea of society.

II. Now, if it is believable that the fact of society could derive its explanation from some higher fact, and if one asks me what that fact is, I respond without hesitation: — Freedom.

If there is a principle that moralists of all times and psychologists of our era have managed to highlight, to uphold against the attacks of all superficial and dangerous philosophy, it is the principle of our psychological freedom, it is this truth that, whereas inanimate beings and animals fatefully and instinctively fulfill their destiny, man, on the contrary, freely pursues the end for which he is in the world.

Now, as two consequences related to the principle of freedom, two facts appear: morality and society.

Man is a free person; that is, a rational being who knows himself and possesses himself, who conceives a purpose, who feels obligated to seek his end and to pursue it voluntarily. Everything he does freely is attributable to him. He is responsible for all his voluntary acts: the merit or demerit is his alone. What man freely does in pursuit of his destiny is good; evil is for man the voluntary abandonment of the pursuit of his end. Thus, it is a truth definitively acquired by science that freedom is the source of all morality; that the individual or general facts, abstract or concrete, that make up the world are divided into two classes: those originating from the fatality of natural forces and never being susceptible to being considered from the perspective of good and evil, and those arising from the free will of man and necessarily bearing the character of morality or immorality. The fact of universal gravitation and the fact of disease are outside morality, because each of them is a fatal fact. For the same reason, it cannot be good or evil that wolves eat lambs or even that wolves eat each other. Conversely, it is not morally indifferent for a man to slaughter his fellow man to devour him, for that is evil; nor for a man to kill an animal and feed on it, for that is good.

But if it is true to say that every man is a free person, it is also true to add that man alone is a free person, and consequently, that everything that is not a man is a thing. The thing is an impersonal being, that is, a being who does not know himself and does not possess himself, who is not responsible for his conduct, nor susceptible to merit or demerit. By reason, things are at the discretion of persons. It is both a right and a duty for them to make these contribute to the pursuit of their end, to the fulfillment of their destiny. That is why we burn the wood of the forests, why we eat both the fruits of the earth and the animals, why we divert rivers from their course. And if it were useful and possible for us to pierce the earth through and through, to dry up the ocean, to bring our planet closer to the sun, that would be permitted if not commanded, by that alone that it is both a right and a duty for us to subordinate the end of things to our end, their blind destiny to our moral destiny. Thus, here is on one side the impersonal nature; here is on one side humanity. Reason subjugates one to the other… From the point where we are in showing the solidarity of all human destinies in the work of their fulfillment, it is but one step; it is up to the theory of society.

III. If every man is a free person, all men, as free persons, are equal in society. Men are unequal in other respects: they are so in terms of the development of their faculties, in terms of merit and demerit. It is conceivable that here, the preliminary and attentive study of the nature and origin of society would first allow defining and determining equality and inequality, then clearly formulating the superior law of social solidarity in such a way and in such terms that this law contains, in its very expression, the reconciling principle of communism and individualism.

This law being finally demonstrated, one could consider social science as engaged on the full path of establishment, and the theory of society if not completely built, at least already established on solid foundations. Let us seek to recognize the number and importance of the operations that would remain to be done.

IV. The law governing the fact of society, considered in its highest generality, must also govern it in its varieties. After the preliminary work we have outlined, social science would thus have to enumerate these varieties and apply the supreme law to each of them. Perhaps this analysis of the various social categories and the determination of the specific laws related to them is the part, if not the highest and most noble, at least the most directly interesting of social theory. Regardless, it is urgent to develop it.

It is fairly easy to see at first glance that society can be considered from a number of different perspectives, such as the civil, political, economic aspects; just as in psychology the human soul, one and indivisible, can be successively considered from the intellectual, emotional, and volitional aspects. Or, if the expressions I have just used seem insufficient to some, or even dangerous to others, because they are not explicit enough, or on the contrary because they would attribute to them a meaning already too specific, I would say that the general fact of society seems to be easily decomposable into a number of specific facts such as those of the family, government, exchange. It would still belong to the theory of society to distinguish and enumerate these categories. What I say here is enough to suggest that perhaps there is not a single and simple theory of society, but a set of social sciences.

Once these categories are defined, how should science behave towards them? This is a serious question and perhaps the newest of all those on which the constitution of social science depends: for it is none other than the question of method concerning the moral sciences; and moral science, especially social morality, having always been more a matter of feeling than of reason, there is everything to do for philosophers who want to approach these problems of Justice scientifically.

The first idea that comes to mind is to examine how the natural sciences proceed and to see if their method could also be suitable for the moral sciences. Now, the natural sciences are of two kinds: the a priori sciences, which, starting from definitions and axioms or identities, are constituted by series of logical deductions, and the experimental sciences, which, from the observation of facts, rise, by induction or by hypothesis, to an increasingly deep knowledge of the laws and relationships.

The theory of society obviously approaches algebra, geometry, and the a priori sciences, as it also pursues the search for a certain rational ideal, independent of all reality. This is especially true for the first part of the science we have already covered. There is nothing to prevent one from likening the principle of freedom, the principle of equality to geometric axioms. Nor will anything prevent, starting from these principles, the obtaining of an inevitable law of society, the Platonic formula translated or expressed in scientific language. But while the applications of mathematical truths are made to numbers and figures that the reason immediately grasps, the law of society must be applied to facts whose understanding is only obtained through the help of experience: these facts are those that make up the various social categories. The theory of society, begun by the a priori method, can therefore only be completed by the method of observation, induction, and, if necessary, hypothesis.

This distinction can be made in less abstract and more intelligible terms. Indeed, on the one hand, it is easy to imagine that one could obtain, by pure reasoning, a superior principle of social solidarity reconciling equality and inequality, individualism and communism, a necessary and universal formula for the coordination of the destinies of free individuals, a formula or principle always applicable whether these free individuals were creatures of this or that kind, lived under this or that latitude, or even existed in this or that region of the universe. But on the other hand, it is impossible to understand that mere theoretical deductions would be sufficient to derive from a general law thus obtained the specific laws of a society of men who would think, feel, decide, and act in the conditions and environment in which we live: for only experience aided by induction and hypothesis initiates us to the knowledge of these conditions and this environment.

It thus seems to me that the theory of society assumes two things. Considered in its theoretical portion, it presupposes the condition that man’s activity be free; and the supreme social law can be based on the simple foundation of the principle of freedom. Considered in its applicative part, which is the building of specific social laws, the theory of society presupposes first the superior social formula, elucidated a priori, and then the experimental knowledge of the physical, physiological, economic conditions, in the midst of which man’s free activity unfolds.

Let us clarify this question with an example.

Among the social species, there is one that is easily distinguished: it is the species of exchange facts. A notable portion of our social life is spent selling certain things, buying others. There are men who sell the use of the soil; there are those who buy the use of personal faculties of workers; one sells and buys a thousand objects of all kinds, of primary and ultimate necessity, of infinitely varied prices. All the facts of this species, all the facts of exchange constitute the object of economic sciences. Let’s try to define the common points, the distinct points, the points of junction between political economy and the theory of society.

Whatever may be the exchanged things, natural or artificial, material or immaterial, durable or ephemeral, they always have, from the particular viewpoint of exchange, two common qualities: they have a certain value and they are appropriated. Thus exchange necessarily implies value and appropriation. But that’s not all: whatever may be the valuable things, precious or vile, they also always have two common qualities: they are useful and they are rare. Thus value necessarily implies utility and rarity. The appropriation of things by individuals is an essentially free act, essentially capable of being considered as a moral fact. It thus becomes the fact of property and falls directly under the jurisdiction of the supreme social law, of the supreme formula of society. The fact of exchange value is quite different. The relationship of utility between us and things is a natural fact in the sense that it depends on nature that our needs be of this or that kind, and that things may or may not satisfy them more or less. The rarity of things is likewise a fatal fact in the sense that it does not depend on us that certain things are found in the world in limited quantity instead of being in indefinite quantity, or reciprocally. It is true that in another sense, it is possible for us to increase, even create the utility of things, to reduce their rarity through work. But this is another point of view than the one we occupy: it is neither the point of view of the true, nor that of the just: it is the point of view of the useful; it is no longer the point of view of science: it is the point of view of art. Placed as we are, we must consider the fact of exchange value as a natural fact that escapes the social formula.

These results, it seems to me, are quite clear. Among economic facts, we find the fact of exchange value and the fact of exchange which are, in their essence, natural facts just like the facts of heat, of disease. These are the primitive and direct objects of political economy, a natural science just as independent of justice as physics or pathology are. We then find the fact of appropriation or property which is a moral fact and whose special theory, as such, falls to a certain extent within the general theory of society. Social science will thus have to behave, with regard to the fact of property, in the way we have outlined; that is to say that the social formula being rationally known, it remains to apply it to the property as observation and experience reveal it to us; that is to say, in other terms, that the purely moral conditions of property being determined by natural law, it remains to state its social conditions.

Thus, according to us, the social conditions of property should be determined. In the same way, the social conditions of government, of the family would be determined. It would be a matter for philosophers who were also historians, scholars, philologists, physiologists, psychologists, etc., etc.

V. Let us quickly conclude this sketch of the entire social science and social art. The most evident effect of society is progress. Faced with impersonal nature which it must subjugate through collective efforts, humanity grasps it with all the powers of its faculties. It knows nature through science. It utilizes it through labor and industrial arts. Society organizes itself day by day, and increasingly approaches the ideal type of a perfect society. Hence, there is an infinite series of progressive facts that are studied in the past and sought to be provoked in the present. Let us leave these concerns, in part, to history, and attribute them, in part, to social art. However, to complete this study, let us also recognize the common limits to social art and political economy, or, if you will, the economic category of social art.

Among the economic facts, we have already noted labor through which we can increase or even create the utility of things, reducing their scarcity. The search for means by which a given society can maximize its well-being constitutes the art of wealth production. This is precisely the economic category of social art. The art of production derives its rules from the theoretical laws of exchange value; it is connected to political economy proper as hygiene is to physiology, and it emerges in the same way. —The determination of the natural laws of exchange value and exchange is subject only to one condition: that it be accurate or true. The determination of the social conditions of property must be moral; in other words, the distribution of social wealth among individuals in society must be fair. What should the production of wealth through labor and industry be? It should be abundant. The true, the just, the useful, these are the three perspectives from which the philosopher must be able to scrupulously refer each of the individual or general, abstract or concrete facts presented to him in the universe. When this work has been done with respect to all social facts, the philosophy of social sciences will have been achieved. I have attempted to do this here only with respect to economic facts. It will be said whether I have succeeded in some aspects.

True or false, my conclusions are simple and clear. I have first recognized and set aside a theory of social wealth, a natural science. Then I distinguished within the overall framework of social science and social art, in the general and complete theory of society, as economic categories, as categories relating to goods, to use the term consecrated by the Civil Code: 1° a theory of property, a moral science to be subjected to the rational law of society to derive the social theory of wealth distribution; 2° a theory of wealth production or the set of rules of social labor.

For now, it suffices to have thus very briefly outlined the complete program of the theory of society considered in its most abstract and difficult aspects, having only indicated with a little more precision the program of the purely economic portion of this theory. As it is, this program must seem quite vast. I say more: I know it is immense. Is this a reason that authorizes or commands abstention? I am far from believing so. To resolutely undertake a long and difficult task, after having first calmly measured it, is not recklessness. To shrink from such labor would be quite something other than modesty.

Regardless, I am not intimidated. However, I have not yet decided to take my part in the efforts and research in the constitution of social science. I merely want to prepare for this work by assessing the value of the attempts that have been made so far by publicists. We will find on one side the socialists: these are men whom noble democratic aspirations have led to the field of social research, whom a keen revolutionary instinct has guided. But enthusiasm does not replace method, nor feeling reason. The efforts of the socialists have been partly betrayed by their scientific insufficiency and inexperience. It must be said right away that it would be unjust not to recognize in them, along with a lot of presumption, the most evident sincerity. On the other side, we will be in the presence of the economists, considerable figures, for the most part, by their science and authority, but sometimes timid and disturbed by the formidable aspects of the social question. We will question both. If some had discovered and highlighted important truths, we would benefit from them. And in the case where, on the contrary, we find among all only utopias and contradictions, we would be able to find in our principles a sure criterion to recognize, to explain these errors, and to learn from these examples.

§ 3. Empirical Socialism

Mr. Louis Blanc seeks to prove: that competition is a system of extermination for the people; — that competition is a cause of ruin for the bourgeoisie. On the other hand, he strives to demonstrate: that the salvation of the countryside lies in the adoption of large-scale farming; — that the decline of agriculture in France can be attributed to the application of small-scale farming and the excessive fragmentation of land; — that it is necessary to establish large-scale farming in France, combining it not with the principle of individualism, but rather with that of association and collective ownership.

As a result, Mr. Louis Blanc proposes the creation of social workshops sponsored by the state, intended to monopolize industry and agriculture in the hands of the state.

That is not all: Mr. Louis Blanc opposes the application of the principle of individual property to literary works. He also states: that the interest of capital, in principle, is not legitimate; but that in a regime of individualism and competition, eliminating the interest of capital is impossible, and that free credit for all, or democratic organization of credit, can only be achieved through association.

And, consequently, Mr. Louis Blanc requests that the Banque de France be replaced with a national state bank6.

I have deliberately summarized Mr. Louis Blanc’s socialist doctrine according to the very titles of the chapters of his work. I have not done so without reason. Indeed, my intention was less to discuss Mr. Louis Blanc’s ideas than to criticize his method, and it was essential to let him, so to speak, summarize his own exposition of his doctrine.

It always seemed to me that, in the path of reforms, one should proceed as follows: 1° note the disadvantages of current practice; 2° seek the source of these disadvantages in the flaws of the theory; 3° replace the faulty theory with a more complete and preferable one; 4° conclude from the new theory to a different and better practice. Mr. Louis Blanc behaves quite differently: he immediately concludes from the disadvantages of current practice to the excellence of an opposite practice, from the disadvantages of competition to the excellence of monopoly. This method is not new. This way of boldly proposing reforms without taking the trouble to support them with any theoretical consideration is known. This method has a name: it is the empirical method. Mr. Louis Blanc would deny what I claim, but it would be easy for me to prove my assertion; and anyone who takes the trouble to examine his doctrine from this particular viewpoint will agree with me, and be convinced that the system of social workshops and the State Bank lacks a scientific basis. In this respect, Mr. Louis Blanc is all the more inexcusable because, although he has always avoided discussing his theories, he has not failed to state them. The author’s ideas are known in this regard:

"Three great principles divide the world and history: authority, individualism, fraternity…

Authority was wielded by Catholicism with a brilliance that astonishes; it prevailed until Luther.

Individualism, inaugurated by Luther, has developed with irresistible force; and, freed from the religious element, it triumphed in France through the publicists of the Constituent Assembly. It governs the present; it is the soul of things.

Fraternity, announced by the thinkers of the Mountain, then disappeared in a storm, and appears to us today still only in the distance of the ideal; but all great hearts call for it, and it already occupies and illuminates the highest sphere of intellects7."

By knowing these ideas, one understands that Mr. Louis Blanc links the practice of competition to the theory of individualism. Furthermore, beyond the specific practice of social workshops and the State Bank, which is only a step towards a general practice, one glimpses without too much difficulty: the state as industrial and agricultural entrepreneur, the state as capitalist, and probably also the state as landowner. This is the most complete, the most absolute communism. The state owns all capital; it distributes the revenues to individuals according to the formula of fraternity: —From each according to his abilities; to each according to his needs. Work as much as you want; eat as much as you can. Indeed, this is quite a theory: it is that of fraternal communism.

What should Mr. Louis Blanc have done then? Having observed the adverse effects of competition, he should have demonstrated their origin within what he calls individualism. Then, and this was surely the essential part of his work, he should have defined, developed, and theoretically demonstrated the system of fraternal communism. And how? By showing us its conformity with the laws of nature and the axioms of morality. Finally, having completed this work, he could have concluded without inconvenience to social workshops and the State Bank.

What would you say to someone who told you this: — “All our woes come from monogamy. Try bigamy as a step towards polygamy, which is, believe me, an excellent regime?” — “It’s possible, you would say, that polygamy is an excellent regime. Demonstrate it by showing that it agrees with physiological and moral laws. Until then, please allow me not to engage in such dangerous experiments.” What we would respond to Mr. Louis Blanc if he had tried to regulate marriage and the family according to his system, we must also respond to his proposals for economic reform. The situation, in both cases, is exactly the same.

Nowhere does Mr. Louis Blanc take the trouble to scientifically explain his fraternal communism; everywhere he strives to affirm the advantages of his social workshops and his State Bank. To affirm is, after all, the forte of empiricists. Mr. Louis Blanc, by a chance that puts him in the forefront and gives him a unique importance among all socialists, had the power; he was able to realize this system which he had contented himself with developing imperfectly. He affirms that, if success did not crown his attempts, the fault was only due to circumstances; he affirms that the system remains on the agenda of the Republic; he affirms that the theory will find in practice a brilliant justification, etc., etc8.

To be frank, I am as far as possible from rallying to fraternal communism, not out of a reluctance of feeling, but as a result of rational deductions. I have some excellent reasons to consider as monstrous this absorption of the individual in the State by absolute communism, this immolation of reality to abstraction. I have some other equally excellent reasons to doubt that the principle of fraternity can be substituted for that of justice, for that of right and duty, when it comes to finding a basis for society, and that Mr. Louis Blanc’s axiom lends itself to the organization of labor. These reasons, I am only too willing to give them. Let Mr. Louis Blanc develop his thesis economically and philosophically, it will be discussed. As for often giving him the opportunity to conduct experiments like the one at Luxembourg, I sincerely hope that no one more than me will be tempted to allow him to do so. Mr. Proudhon is a man who has a strong sense of his personality: hence he has violently fought against communism. — So, you might think, he has vigorously defended the principle of individual property. — Quite the contrary: he has trampled it underfoot. — But, you might say if Mr. Proudhon is neither a partisan of collective property nor of individual property, what can he be? It is somewhat difficult to explain.

It is not from today that I realize how difficult socialist doctrines are, I will not say to explain, but to present. This is understandable. The essence of empiricism being to base itself on no fundamental principle, to never deduce, but always to affirm a_priori, it is quite natural that its lucubrations are contradictory, vague, and resistant to any logical and rational presentation. What does individualism and communism mean to Mr. Proudhon? These are systems; therefore, it suits him to ignore them. At most, you will hear him toss about the commonplaces of equality and inequality. And how then to relate the doctrines of Mr. Proudhon either to one of these systems or to the other, unless by interpreting them, unless by translating them, so to speak, into a scientific and philosophical language?

If at least empiricism were logical, the task of the critic would still be fairly easy. He would only have the trouble of linking, on his own, to rational principles the assertions of the publicists of this unfortunate school. Unfortunately, it is not so. Such an empiricist that you catch, at a certain moment, in flagrant delict of communism, appears a little further on, as strongly impregnated, without his knowledge, of individualism. Then it is absolutely necessary to ignore certain contradictions, to seek as much as possible a general tendency, to accuse this tendency in technical terms, a delicate task which requires as much patience as impartiality.

I will try to interpret Mr. Proudhon’s doctrine in this way. However, if, by chance, the author finds himself misunderstood, he alone should blame for this misadventure.

It was Mr. Proudhon who said: — Property is theft, an absurd statement that shows the author’s profound ignorance of philosophy and natural law: for Mr. Proudhon’s idea consists in this, that the appropriation of things by persons is a phenomenon outside of morality, which can neither be legitimate nor illegitimate, indifferent to justice, at most legalizable by contracts. What pathos! To remove from the jurisdiction of law the most capital act of man’s free will! To want to legalize by contract what would be instinctive and fatal! The deepest laziness in tracing back to principles, the most shameful impotence are indecently unveiled; the most shameless empiricism is displayed with impudence. Nevertheless, Mr. Proudhon accepts individual property as a fact, if not as a right.—But then in what and why does Mr. Proudhon find himself in disagreement with current practice?

Mr. Proudhon is convinced that fundamentally, among all men, needs are equal and means equivalent; hence, the absolute equality of goods and fortunes is in the intention of nature, and should realize itself naturally under a suitable economic regime. The most hostile regime to the realization of nature’s wish, according to Mr. Proudhon, is the regime of economic freedom, the regime of competition and laissez-faire, which follows from the principle that the value of things is determined by the relation of supply to demand in the market. The most favorable regime, according to Mr. Proudhon, would be a regime of taxes and maximums derived from the principle that exchange value is measured by production costs or by the cost price.

Consequently, Mr. Proudhon’s doctrine is summarized in a series of propositions all aiming at the tariffing of various types of wealth, in accordance with their production costs. Mr. Proudhon tariffs the price of labor or wages; he tariffs the price of goods; he tariffs the discount; he tariffs credit; he tariffs rents; he tariffs farm rents, land rent, taxes. Such is the socialism of Mr. Proudhon, neither more nor less. Competition is his bête noire, as it is also that of Mr. Louis Blanc. But while one takes refuge in state monopoly, the other solely invokes the right of the state to tax the value of things in proportion to their cost price. It’s not more difficult than that.

It would perhaps be risky to signal in such a system a tendency, even unconscious, towards communism or individualism. What is easy to show there is the triumph of empiricism.

Isn’t it evident, indeed, that logically Mr. Proudhon’s method should have been outlined in advance? Whether nature’s wish is or is not the absolute equality of goods and fortunes, what does it matter to us to know this now? That needs are equal and means equivalent among all men, what does that matter to us? If it is true that the intentions of nature or Providence are consistent with these principles, these principles will have to be realized by the force of things under a natural economic regime.

So, what is the most natural economic regime, the regime of freedom or the regime of authority? That is the key question. On what is the exchange value measured? On the relation of supply to demand or on the cost price? That is the crux of the problem as Mr. Proudhon himself must pose it.

What then was Mr. Proudhon to do? He had to simply state the first point as a premonition of his faith, and to combine all his efforts to demonstrate the second point as a conviction of experience. What does Mr. Proudhon do instead? He ridiculously clings to his thesis of the absolute equality of goods and fortunes, and neglects as completely as possible to provide the slightest proof in support of his economic principle.

“The days of the year are equal, the years are equal; the revolutions of the moon, variable within certain limits, always return to equality. The legislation of the worlds is egalitarian legislation. Let us descend to our globe: isn’t the amount of rain that falls each year from every country not substantially equal? What could be more variable than temperature? And yet, in winter, in summer, day and night, equality is still its law. Equality governs the Ocean, whose ebb and flow, in their averages, move with the regularity of the pendulum. Consider the animals and plants, each in its species: everywhere you find, under limited variations caused by external influences, the law of equality. Inequality, to put it plainly, does not come from the essence of things, from their intimacy; it comes from the outside. Remove this influence of chance, and everything returns to absolute equality. etc., etc.9” There is much like this indefinitely; and thus Mr. Proudhon thinks to find in universal mechanics the demonstration of the principle of the equality of needs, of the equivalence of means, a principle that remains, as one can see, quite hypothetical.

On the contrary: — “If it is a consequence of Justice that the wage be equal to the product, it is another consequence that, two non-similar products being exchanged, the exchange must be made in proportion to the respective values; that is, to the costs that each product incurs10.” This is the foundation of the system established. All the author’s efforts are reduced to this that is to say, regarding the principle of cost price. However, it unfortunately turns out that this principle so readily accepted is completely erroneous.

After having criticized the two most interesting types of contemporary socialism, I must admit, I do not have the courage to descend to the examination of the doctrines of accessory sects or of second-order individualities: this task would be, moreover, useless. By the leaders of socialism, one can judge the soldiers: good intentions, a lamentable ignorance of philosophy and political economy, the most complete absence of method; in short, a dangerous empiricism, is a faithful summary of the results to be obtained11. Most of the lesser sects abandon the economic regions more or less completely to confine themselves to the realm of sentimental morality. There, little effort is made to elucidate the problem of competition or monopoly, the problem of individual property or collective property; they want to make men gentle, industrious, charitable, to adorn them with all domestic virtues. They do not blame the laws, but the customs: this task is the affair of preachers, not of legislators.

As for the independent individualities of socialism, they are encountered, in countless numbers, sometimes in the realm of morality, sometimes in that of economy, always displaying with regrettable assurance a great ignorance and unexpected resources of empiricism. Shall I speak of the last of these publicists who thus disappointed my expectation? First, he loudly demands that the state be exclusively commercial, the individual exclusively industrial. Perhaps I might be tempted to pay some attention to this entirely administrative proposal, if further on I did not see appearing a system of social credit based on the principle that currency has only a conventional value, that it is appropriate to demonetize metals and to substitute them with paper12. What to say to the inventors of such theories? What to tell them, except that they might well agree to learn the basics of economic science, before drawing applications from it?

I hardly dare express such disdain towards a publicist as popular as Mr. E. de Girardin; and yet, God knows if anyone can reproach themselves for having brought the lax habits and superficial dogmatism of contemporary journalism into science. Nevertheless, after presenting to my readers a communist as complete as Mr. Louis Blanc, I owe them a sample of the purest individualist possible.

Let’s examine Mr. de Girardin’s ideas and work on taxation in particular. First, it is easy to be convinced that if we are to find the solution to the social question in the constitution of social science, the problem of taxation is eminently on the agenda: for it touches both the distribution of wealth by determining the fund of common fortune, the sources of the State’s income, and the production of wealth, by limiting the individual property of land rent, profits, and wages. So how has Mr. de Girardin tried to reconcile the rights of the community with the rights of the individual?

Mr. de Girardin first devotes more than half of his book13 to criticizing the current basis of taxation, which, moreover, is an easy task. Finally, he states:

“As we understand it, tax should be the insurance premium paid by those who possess, to secure themselves against all risks that may disturb their possession or enjoyment14; ...”

And why should tax be an insurance premium? Mr. de Girardin does not say. Yet, his principle is fraught with enormous consequences. Among these consequences, one clearly sees the elimination of all collective initiative in matters not involving the repression of some disorder, and the merging of all ministries, great and small, into one: the Ministry of Security. How does the author establish this definition that makes the state a cheap police contractor, with patent and monopoly? The author demonstrates nothing and immediately moves to his conclusions.

“This premium must be proportional, and with rigorous accuracy15.”

Proportional to what? Not to income, according to Mr. de Girardin, but to capital. And for what reason?

Indeed, this basis is the only one that is immutable, the same for everyone and everywhere.

Everywhere and always 1,000 francs are 1,000 francs, but everywhere and always 1,000 francs do not yield the same rent.

Rent varies, according to the use that has been made of the capital, and according to the country, and according to the time.

Rent is relative, capital is absolute16."

These are very bold, but very gratuitous affirmations. What does this mean: — Rent is relative, capital is absolute? — If it’s about variations, capital undergoes as much as income, according to the country, and according to the time. Everywhere and always 1,000 francs do not yield the same rent, this is true. But everywhere and always 1,000 francs are not 1,000 francs. Who then would need to be taught this?

“As soon as tax is transformed into insurance, it must accept the base; now, the base of insurance is capital17.”

This reason is better than the previous one. It is even irrefutable. However, I return to my first question: — Why must tax be transformed into insurance?

Second conclusion. Not only, according to Mr. de Girardin, should tax be proportional to capital, but also, — essential point! — it should be voluntary. Indeed, :

“Every tax must be abolished18”

Every tax should be transformed into insurance.

Now,

"The essence of tax is that it is compulsory.

“The character of insurance is that it is voluntary19.”

Wonderful! But again, — for the love of God! — why must tax be an insurance premium?

In searching thoroughly I found nothing, absolutely nothing in Mr. de Girardin’s work that could serve as an answer to this question. In terms of fundamental principles, here is all I could discover:

“Society is a vast amphitheater where one is free not to enter; but if one chooses to sit down, the least one owes it, is it not the reimbursement of their share of expenses20?”

I refrain from discussing this philosophy. I nonetheless reserve the right to think that tax cannot have anything in common with insurance; that society is not an amphitheater where one is free not to enter; that tax should be not optional, but obligatory, not voluntary, but compulsory; that, in the end, tax should not be proportional.

There would be an observation to make in favor of Mr. de Girardin’s tax project: it seeks to spare personal abilities and labor, and to weigh with all its weight on land property and artificial capital. I do not judge the systems I present: I only try to make their method appreciated; moreover, the question of taxation is far too vast and significant for me to approach it only superficially; I will say, however, that Mr. de Girardin’s idea seems eminently liberal, and even democratic. What would the author answer, though, if I pointed out that the capitalist will always find a way to make the worker pay the tax? But how could he? By selling the use of his capital at a higher price. Thus this tax, proportional to land or artificial capital, would be better than the current tax, proportional to income; however, it would not be perfectly just.

That said, I borrow from Mr. de Girardin the elements of a judgment on the tax as he understands it. He himself says, somewhat severely:

"If it is not perfectly just, it is absolutely false.

If it is only better, it is worthless21."

§ 4. The Economic School and the Production of Wealth

Let us leave, let us leave the unhealthy regions of empiricism, and run to breathe the healthy air of science. In the face of the social question, we see only a group of men more conscientious, to be sure, than bold, but little inclined to affect the fanaticism and fierce pride of dictators on standby, the turbulence of tribunes, or the complacency of misunderstood statesmen. These are the economists: Mr. Louis Blanc disdains them, Mr. Proudhon insults them; most socialists merely ignore them; and they are scarcely known to the crowd, which is little curious about principles in general, and cares little for applications, even if they are utopian. The economists nevertheless continue their scientific investigations despite these setbacks; and the truths they laboriously reach vindicate them enough by ruining the dubious results advocated by all empiricists.

In speaking thus of the economists, I especially mean to speak of economics. It matters little to me that in the often considerable work of one author or another, there are, alongside vast and profound theories, some gaps. Nor am I deterred if I see, on a crucial issue, one or another professor hesitate or go astray. Above the scholars, there is science itself, which, from its birth to the height of its glory, grows gradually, following its path, persisting in its tendencies. Political economy is not in the last work published under the name of Course or Manual; it is in the sum of truths that have imposed themselves in its name, it is in the tradition faithfully maintained from the day it was founded to the present moment. That is where it is, as proud of its temporary defeats as of its final triumphs. I call economists those men who prefer the honor of rallying to this tradition to the dubious glory of appearing to bring prophetic revelations to the world.

The utility of things that can contribute to satisfying the needs of humans generally makes them in demand; the relative scarcity of these same things allows them to be offered to the general demand only in limited quantity. Hence the value of exchange and exchange teaches us political economy. The value thus has its origin in the limitation in quantity of the utilities that make them rare. It follows from this that it has its measure in the respective circumstances of supply and demand that occur in the market.

When the merchantable objects result from the application of labor to some raw material, the sum of the market value of the raw material, the rent of the instruments of labor, the wages of the workers, constitutes the cost price or the production costs of the objects. The market value of these same objects thus produced is then naturally determined on the market, and may be lower, equal, or higher than the cost price. In the first case, the difference constitutes a loss; in the last, it constitutes a profit, which is added to the profit of the venture capital or to the wage of the entrepreneur’s labor.

The system of freedom of labor or free competition is that which consists in imposing no obstacle either to the demand made with a view to consumption, or to the offer made as a result of production. Especially the freedom of production has always been fervently demanded by adherents to this system whose formula, famous in the history of political economy, is this: — Let do, let pass; meaning: — let produce and let exchange.

The formula of laissez-faire and laissez-passer is not new. We hold it from the physiocrats. The principle of freedom of labor was solemnly proclaimed at the same time as it was applied by Turgot in the edict of 1776. Thus one can say that the system of the freedom of production was born with political economy.

It can also be said that free competition and economic science have grown side by side. Today, in practice, we are moving towards increasingly absolute market freedom; and this path is traced for us by the economists, faithful, at least in this respect, to the first inspirations of the physiocrats. This tendency is characteristic of the school. All renowned economists tirelessly combat, in everything and everywhere, monopolies, privileges, and prohibitions. Freedom is their motto. There are some who defend themselves from wanting to extend their principle to morality, politics, religion; but all support it in terms of production, and all proudly claim the qualification of liberal school that some democrats reject with anger or with contempt, that others, it must be said, claim to dispute.

“If the school of laissez-faire and laissez-passer, says Mr. Vacherot, leads to the consecration of all economic privileges and servitudes, is it not convicted of being as contrary to freedom as to justice? The intentions of this school are excellent: it wants freedom, dignity, the happiness of all, and always flatters itself that free competition will bring about this golden age. But, in the meantime, its opponents reproach it for resigning itself too easily to the current misery, degradation, and servitude of the popular classes,… The liberal school abhors anything that resembles a constraint, an impediment, any subjection; it does not want to hear about the organization of labor; it holds in great distrust the association of workers. Wage labor, which socialism wants to destroy at all costs, is for it the free labor par excellence; and as this state of affairs maintains the misery of the masses, this school does not see that its understanding of freedom only engenders servitude.” — This accusation is cruel: it must be answered: and since we are speaking to a philosopher, we may well be allowed to base our response on the premises we have established.

We have distinguished, in political economy, a science of the nature and causes of the wealth of nations, an art of the means by which a given society can increase its well-being as much as possible. In accordance with this definition, we have derived the theory of labor from the realm of natural facts subject to laws, to bring it into the realm of active facts subject to rules. Should we, in view of the greatest possible increase in wealth, opt for competition or for monopolies and privileges, for prohibitions or for free trade? That is the question posed to us; and it is a question that falls within the art of production.

Let us say first that we are not here from the point of view of justice, but from that of utility. Does this mean that we sacrifice morality to interest? Not at all; but we seek wealth; I do not say the well-being of a few privileged, I say the well-being of all; and we think that justice will have nothing to complain about, for we do not believe in antinomies.

Let us say then that if there is anything assured and indisputable, it is that the rules of art must be founded solely on the laws of science, that the theory of production must emerge entirely from the theory of exchange value, that the principle, whether of competition or of monopoly, can only have a basis in the study and knowledge of the facts on which social wealth is the stage. This method alone is scientific, any other would be empirical. This method alone is certain, any other would lead only to error. If the theory of freedom of labor and competition is incontestably in conformity with natural facts, the practice of this theory is excellent, excellent from the point of view of well-being, excellent from the point of view of justice; and the socialists who attack it have examined it little, or not at all, or badly. Who knows? They may have accused the freedom of production and exchange of a misery and servitude that are the sole fact of privilege and monopoly?

It is a fact that the sum of useful things that we can apply to the satisfaction of our various needs is limited in quantity. This fact is the first that economists establish: they establish it without emotion; impatient and superficial empiricists may have reproached them for not also lamenting it at the same time; but no philosopher can blame them for simply and without puerile regrets stating a fact that condemns us to work and progress.

Be that as it may, this established fact immediately and quite clearly leads to a consequence: that political economy must assign to production the task of increasing the sum of utilities, and the goal of providing as completely as possible for the satisfaction of the needs of men. To create wealth intelligently is the general rule of production. Once this wealth is produced, we will take care of distributing it among the members of society in accordance with the principles of morality; but that is a well-characterized and quite different question. If the distribution must be equitable, production is only required to be: 1° abundant, and 2° proportionate: abundant in such a way that each particular need is amply satisfied, proportionate so that certain needs do not remain completely unmet, while others are overly fulfilled.

If men lived in isolation, there would obviously be no choice but to rely on each of them to individually take care of their needs. However, men possess a social instinct, and furthermore, observation demonstrates that by associating and dividing labor among themselves, they achieve incomparably more fruitful results; this shows how the necessity of natural facts and our interest in utility are in harmony. For two reasons, one of which is a necessity, it is therefore appropriate for the theory of production to start from the fact of society and the principle of division of labor. What remains is to deduce the specific rules of this general principle:—That men in society, by dividing labor, pursue abundant and proportionate wealth production.

As for the first condition, that of abundance, it is certain that the facts of society and division of labor do not complicate its execution at all. For to fulfill this condition, one need only rely, in both the advanced social state and the supposed natural and primitive state, on the private interest of men which commands them to work more as they want to enjoy more; and it only suffices that society, by imposing the division of labor on everyone, assures them, through the equity of the laws of property and distribution, the full benefit of the results of their labor. By this, we see how justice supports well-being.

Let’s move on to the second condition, that of proportion in production. This seems especially of general interest, and its execution appears more difficult to pursue with only the resource of individual interest.

The goal is to ensure that when one or another consumption item becomes relatively scarce, while another is relatively abundant, production shifts from the latter to the former. The first and simplest idea, but, it must be said, the most superficial and the easiest at the same time, is to involve authority. Shoes are abundant, bread is scarce. Quickly! An edict to enlist bakers, going after the shoemakers. This practice, which matches the theory of short-sighted politicians and ignorant reformers of our time, was that of our society in its infancy. Experience has condemned it by demonstrating that authority was incapable not only of foreseeing but also of resolving, when they occurred, the crises of production.

In the absence of authority, shall we turn to brotherhood? It would be little more than jumping from the frying pan into the fire; for it is in such circumstances that fraternal socialism likes to produce, like a deus ex machina, some dictator, some supreme father, or some pontiff.

Rejecting authority in all its forms, shall we invoke political freedom? Experience, which has condemned the intervention of authority in economic matters, has, I am told, also condemned it on many other counts. It is generally considered today as a tutelary principle for adolescent peoples, disastrous for mature peoples. It appears that there is a great number of issues where the action of a somewhat despotic central power is advantageously replaced by the initiative of local majorities. Accordingly, let us submit production issues to the free discussion of the press and public opinion; let us entrust their resolution to the community acting by itself or through its agents.

No; all that would be useless: there is much better. It is not enough, in fact, to prevent any intervention of political authority in economic matters; it is also appropriate to shield production from any kind of administrative action, or rather it is perfectly superfluous to submit it to such. Political difficulties might still be referred to the authority, economic issues would still escape it; here indeed private interest naturally and of itself converges towards the satisfaction of the general interest. And, to put it all in a nutshell, proportion in production is established, as we shall see, on the sole condition that one is willing to simply take the trouble to do nothing. It is indeed true that we are, in dealing with production, at the only harmonic viewpoints of truth and utility, and that we were entirely right to set aside the moral perspective.

The exchange value of useful things originates from their limitation in quantity, it is measured by their relative scarcity, or by the relationship of demand to supply. This is the second fact stated by economic science. Consequently, things that are relatively most demanded and least offered will also be those that have, on the market, the highest value; and conversely, those that are relatively most offered and least demanded will have, on the market, the lowest value. Let shoes be plentiful and bread be scarce, the market price of bread will increase, the market price of shoes will decrease in the ratio of their respective scarcities22. On the other hand, it is certain that, in a society where the principle of division of labor is applied, everyone working with the aim of exchanging their products, the private interest of the worker not only commands them to produce much but also to produce goods that are relatively very much in demand and little offered; for the sale of these items, being done at a very high market price, leaves for the producer, after deducting the cost of their raw materials and the rent of their tools, a considerable portion representing the wage of their labor.

Thus, on one hand, objects acquire a value more or less high or low depending on whether they are lacking or abundant: and on the other hand, the private interest of producers pushes them to produce the objects that have the greatest exchange value. It turns out in the end that they will eagerly produce the objects whose need is felt, and fill the gaps that consumption may suffer and complain about. Their private interest is thus in perfect conformity with the general interest.

The production of shoes will decrease, and it will not decrease beyond appropriate limits, otherwise it would quickly increase. The production of bread will increase, and it will increase in a reasonable manner, otherwise it would soon decrease. What we say here about bread and shoes can be applied to all kinds of consumption items, which results in the providential fatality of natural laws being sufficient to regulate production in terms of the condition of proportion.

From which it follows that with the division of labor being practiced, and the theory of distribution being established in such a way as to fully satisfy the individual rights of property of the worker on the fruit of their labor, the principle of absolute freedom of labor and exchange, or the principle of laissez faire, laissez passer, is the sovereign principle of production, as it is both necessary and sufficient for the existence of abundant and proportionate production of wealth. What do our opponents argue against these reasonings?

“The question is thus: Is competition a means of ensuring work for the poor? But to pose the question in this way is to resolve it23.”

It is to resolve it empirically; for it is to pose it by mutilating it. We are discussing principles; that is to say, we must operate rationally. Now, from the viewpoint of an ideal society, the word poor has no economic meaning: for a man, in such a society, is always rich at least in his personal faculties, which constitute a capital whose labor is the income. There are only the sick, the disabled, the lazy; and all these people are under the jurisdiction of charity, outside of economic rights. Society does not have to assure them of work more particularly than anyone else. The real question is therefore this: — Is competition a means of preventing the worker from fully enjoying the income of his faculties?

“What is competition relative to workers? It is work put up for auction.”

Obviously! that is to say, it is the assimilation of work, the income from a capital, to the other incomes from other capitals. Competition is the determination of the exchange value of work on the market, where the exchange value of land rent, capital rent are also determined; it is the regular uniformity in the setting of wages, leasehold, profit.

“An entrepreneur needs a worker: three present themselves. — How much for your work? — Three francs: I have a wife and children. — Good. And you? — Two and a half francs: I don’t have children, but I have a wife. — Marvelous. And you? — Two francs will suffice: I am alone.— You then have the preference. It’s done: the deal is concluded. What will become of the two excluded proletarians? They will let themselves starve to death, one would hope. But what if they turned to theft? Fear not, we have police. And murderers? We have the executioner. As for the most fortunate of the three, his triumph is only temporary. Let a fourth worker come along, robust enough to fast every other day, the slope of the discount will have descended to the end: a new pariah, a new recruit for the dock, perhaps!”

Yet this is how one sometimes plunges into a question with all the fury of feeling, instead of penetrating it with the calm of reason. In the name of democracy, and in the interest of the social question, I protest against such a method, which can only have the result of obscuring the view of publicists and disturbing the soul of readers. Once again, let us approach science coldly, and above all, let us always stay in regions that are inaccessible to popular passions.

Let us therefore discard this phantasmagorical procession of women and children, of thieves and murderers, of police and executioners; and let us see what economic arguments there might be behind Mr. Louis Blanc’s excesses of empiricism.

The author stages three workers and an entrepreneur. What is an entrepreneur? What are workers? To produce most goods, as we have said, three things are needed: 1) raw materials, 2) work instruments, 3) labor. An entrepreneur is a capitalist who owns the first two of these elements; the workers alone have the third.

That the entrepreneur has a tendency to restrict wages is evident. He will have this tendency for two purposes: both to increase the rent of his capital and to reduce his costs and selling prices and attract customers. It is also evident that it is competition that inspires this tendency, at least for the second reason. But does competition that pushes him to lower wages allow him to lower them indefinitely? That is the question. If superficial passion resolves the problem affirmatively, thorough reasoning resolves it negatively. Impartial science notes a tendency of workers to raise wages, a tendency favored by the competition of entrepreneurs, and capable of balancing the first and maintaining the rate of wages at the normal equilibrium of their natural value. To illuminate this fact, it will suffice for us to complete the painting of the market, and to finish the tableau of which Mr. Louis Blanc has only reproduced half. “A worker seeks an entrepreneur: three present themselves. — How much for my work? — Two francs: I want to lower my costs and selling prices, and increase the profit of my capital. — Good. And you? — Two and a half francs: the products are demanded by consumers; by lowering my selling prices and selling a lot, I will still find a way to realize beautiful profits. — Marvelous. And you? — Three francs: I will lower my selling prices, I will sell a lot, and I will be content with a smaller profit from my capital. — You then have the preference, etc., etc.”

Question reality. You will learn that indeed, by applying the principle of competition, selling prices fall to the benefit of all consumers, workers, and others, business turnover increases, and the profit from capital decreases. It is private interest that drives entrepreneurs to lower wages; it is private interest that drives workers to push for higher wages. It is the competition among workers that supports the entrepreneurs; it is the competition among entrepreneurs that protects the workers. Competition creates balance. And to disturb this balance in the way accused by Mr. Louis Blanc, what would be needed? A coalition of entrepreneurs that the law can suppress or render harmless by not defending workers' coalitions.

“Will it be said that these sad results are exaggerated; that they are only possible, in any case, when employment is insufficient for the arms that want to be employed? I will ask, in turn, whether competition inherently has something to prevent this deadly disproportion?”

Ask, and you will be told that not only does competition inherently have what it takes to prevent the crises you speak of, but that the only system of freedom of labor and production can prevent this deadly disproportion, and this not by chance, but by necessity of nature and logic.

If a certain industry lacks workers, who assures me that, in this immense confusion created by universal competition, another will not be overflowing with them?"

Who assures you? The harmony both fatal and providential of natural laws, and the certainty of principles and deductions, if you would agree to examine them. You would then know that what you please to call immense confusion is immense order.

“Yet, if out of thirty-four million people, there are only twenty individuals reduced to stealing to live, that is enough for the condemnation of the principle.”

Yes, if it is well established that it is the application of the principle that drives these individuals to theft. But also, out of thirty-four million individuals, if there were thirty-three million thieves, that would not be enough for the condemnation of a principle, if the principle is sound, because then it would be impossible for this principle to be considered as being the cause of the disorder. Now the principle of competition is logically based on unassailable facts; on the fact that the sum of useful things is limited in quantity; on another fact that exchange value originates from this limitation and its measure in the comparative circumstances of the sum of needs to the sum of provisions, in the ratio of demand to supply. The principle of competition also rests on the fact of the division of labor. For these reasons, the principle of competition is absolute. If therefore there is in our society misery of the masses, privilege, servitude; if there is disorder, in a word, which I do not deny, it is equally true that the cause of this disorder must be sought in a principle other than that of the freedom of labor and production. And it should perhaps be seen above all in the fact that we are still far from having finished with all the more or less authoritarian regulations, with systems called: mercantile, protective, colonial; with the poor laws, the limitation of labor; with the maximum laws, the laws on usury; with the alterations of currencies, the labor of prisoners, the organization of certain industries in monopoly, etc., etc.

§ 5. The Economist School and the Distribution of Wealth

“A social revolution! Is merely desiring it enough to achieve it?… Ah! You are jealous of the glory of accomplishing a social revolution, well then! You should have been born sixty years earlier and begun your career in 1789… At that time indeed not everyone paid taxes. The nobility bore only a part, the clergy none,...24”

Who speaks thus? It is Mr. Thiers, expressing himself in his “free, vehement, sincere language, as he always has been, as he will always be25.”

“...What is done is no longer to be done… Is there, indeed, somewhere a communal oven or mill to be abolished? Is there any game that cannot be killed when it comes onto your land?… Is there any inequality other than that of the mind, which is not attributable to the law, or that of fortune, which derives from the right of property26?”

Oh! My God, perhaps, Mr. Thiers. And if this inequality exists, we want to uncover it; and if on the contrary it does not exist, we want to be convinced of it. And if the socialists are mistaken, we will show them. Why so much vehemence? — But let’s leave Mr. Thiers to rush to the defense of property: for indeed his natural impetuosity is so great that it is hard to contain him.

How does Mr. Thiers proceed? Believe me, he does not seek the origin and foundation of property in divine right, nor in the right of the strongest, nor in the right of first occupancy. No; but where then does he seek it? In instinct! Thus, from the very first step he takes, there is Mr. Thiers, stuck alongside Mr. Proudhon, in the marshes of empiricism. Both of them together confuse property, which is a right, with appropriation, which is a fact. Property is no longer, for either of them, a moral power, the exclusive prerogative of reasonable and free persons; property is an instinctive fact. But, by this account, are animals also capable of being property owners? — Obviously, according to Mr. Thiers.

“Naturalists, seeing an animal that, like the beaver or the bee, builds dwellings, declare without hesitation that the bee, the beaver are builder animals. With the same foundation, philosophers, who are the naturalists of the human species, might they not say that property is a law of man, that he is made for property, that it is a law of his species! And it is not enough to claim that it is a law of his species, it is that of all living species. Does not the rabbit have its burrow, the beaver its lodge, the bee its hive? Does not the swallow, joy of our climates… etc., etc.27?”

Yes, Mr. Thiers, the rabbit has its burrow; but, must I teach you this? it is possessor and not owner. The beaver has its lodge; but it does not have a property right over it. The bee has its hive; but it is so little an owner that you, without knowing and without knowing why, have the right to take it from her, and that you take it from her. What would you answer the bee if, when you seize both her hive and her honey, she called you a thief or a socialist? Would you know how to tell her that she is just an animal dominated by instinct, and that you are a reasonable and free man? that she is a thing and you are a person? that she has neither rights nor duties, that you have, you, the right and the duty to fulfill your destiny, for the accomplishment of which your freedom makes you responsible? Would you know how? I highly doubt it. But fortunately bees do not read Mr. Thiers; and they are unaware of his subversive and more than demagogic doctrines.

Such is the philosophy of Mr. Thiers; we will have occasion to judge his political economy shortly; the one and the other are equivalent. However, to be fair, it must be recognized that the author, despite his scientific mediocrity, and while uniting to a great poverty of ideas only a quite remarkable flatness of style, manages to constitute an appearance of a theory of property. We have already noted that its basis is entirely empirical; let us also note that this theory, by itself, is anything but philosophical.

Mr. Thiers establishes: — That man has in his personal faculties an unquestionable first property, the origin of all others. (Chapter IV.)

This first property is unquestionable, I agree. The fact, however, is that it has been contested. Mr. Thiers denies it; I affirm it.

"These feet, these arms, these hands are mine, unquestionably mine… If someone touched them, if someone maliciously stepped on one of my feet, I would be irritated, and if I were strong enough I would throw myself on the offender to avenge myself…

This is an unquestionable first property,… for which one might envy me, hate me; but from which no one will ever think to take a part to give to others,...28"

And what was slavery in antiquity? What is still slavery in modern times, if not the legal appropriation of the faculties of certain men by other men? And why then is there not a traitor word, in the book by Mr. Thiers, on the subject of slavery in this oh-so-favorable Chapter IV? Is it weakness of reason, impotence of logic to condemn it? Is it lack of heart, absence of faith to denounce it?

Mr. Thiers also establishes: — That from the exercise of man’s faculties, a second property is born, which has work as its origin, and which society consecrates in the universal interest. (Chapter V.)

And here again a few lines concerning serfdom would not have made a good effect? In a work on property truly scientific, would not the history of the question have marvelously completed the rational elaboration? But these two elements, in Mr. Thiers, are absolutely lacking both.

Mr. Thiers then proceeds, in several chapters, to define very imperfectly the right of property; then he concludes: — That it results from all that precedes, that labor is the true foundation of the right of property. (Chapter XXI.)

Let’s stop here; and let the author thunder in turn against communism and socialism, then finally elaborate on tax. Nothing can be imagined more superficial, more incoherent, more feeble than this second part of the book except the first. But what would it serve us to refute these deductions, if we manage to unveil the complete nullity of the principles?

Having not spared the socialists, I will not spare Mr. Thiers. Indeed, in their empiricism, the socialists are a hundred times more excusable than Mr. Thiers in his.

To err when alone and without a guide one ventures into the darkness of a science sensed but barely glimpsed, that is after all, perhaps honorable. But to promise to demonstrate the obvious, undertake a slow, methodical demonstration of truths hitherto the most recognized29; then to end up only compromising these truths, only obscuring this evidence, that would be infinitely ridiculous if it were not even more dangerous.

The copy of the book: On Property, by M. A. Thiers. that I have before me, is a copy of a popular edition at one franc, published under the auspices of the Central Committee of the Association for the Defense of National Labor. The cover invites the reader with an N.B. to see, on the first page, the circular of the Association. Let us imbue ourselves with the intentions of this circular.

"A book, it is said, that has just appeared, seemed to us eminently suitable to fulfill the goal we pursue, is the one that Mr. Thiers published under the title: On Property. This book, already translated and issued in England to a hundred thousand copies, which Germany and Spain have also hurried to translate, and which Belgium has made into a popular edition, has been considered everywhere as the best response to these systematic attacks directed by different sects against the social order.

The work of Mr. Thiers indeed leaves no paradoxes standing with which one has tried to pervert the common sense of the masses:…

"…It is important that this work receive the greatest publicity, that it spread in schools and in workshops, and that skillfully managed public readings bring down from the instructor to the student, from the foreman to the worker, the excellent doctrines of Mr. Thiers' book. This will be the best way to dispel the harmful impressions that the preachings of Luxembourg might have left, and we will thus strengthen our hard-working populations in the practice of the good and the just."

Since Mr. Thiers poses as a defender of the social order and is accepted as such, it is to him alone that one must attack. And it must be shown how much this conservative Achilles has compromised the Ilium he was charged to defend. Work is the true foundation of the right of property.— So be it! The idea that Mr. Thiers thus strives to express is also mine. I therefore accept this principle, reserving the right to protest once again against the materialistic demonstration, by need, given by the author, reserving also to make a very important observation.

Property rights are a given; however, the exercise of this right is complex. Property can be individual or collective. So why does Mr. Thiers not even hint at this distinction?

Mr. Thiers acknowledges only one form of property, individual property. Mr. Thiers, who envisions and accepts the notion of rabbits being property owners, fails to see or conceive of communities as property owners. Isn’t this a huge and unforgivable oversight? After all, collective property does exist. In fact, certain congregations, hospices, many municipalities, industrial societies, and even the state itself own property. Legally, they are perfectly entitled to: it is as true that congregations, hospices, municipalities, industrial societies, and the state are legal entities as it is true that rabbits are not.

Where does this lead us? I beseech the Central Committee of the Association for the Defense of National Labor, if such a distinguished association still exists, to give this matter serious consideration. Once the family is recognized, it must be endowed. Once the state is recognized, it needs revenue, a fortune. Under the feudal regime, modeled on the family structure, the head of the state owned the state’s fortune: this was still individual property, at least in form. Today, with the feudal system outlawed, the state’s property rights cannot be anything but collective property rights. Therefore, one of two things must happen: affirm the state or deny it; endow the state or ruin it. In the former case, with individual property guaranteed, the share of collective property must be immediately allocated. In the latter case, if one wishes to annihilate the state and strip it of its assets, one must do what Mr. Thiers does.

Mr. Thiers establishes individual property; he carefully avoids any mention of collective property. He raises his voice, bulges his eyes, and brands communism and socialism as bogeymen. Then comes a so-called tax theory that is laughably absurd. What do these sophist tricks mean? And who are we deceiving here? Some simpleton!

Let us hasten to conclude.

Labor is the true foundation of individual property rights, we will say. Very well; now I will immediately tell Mr. Thiers that property only pertains to social wealth, and it pertains to all social wealth. Now, social wealth, the object of property rights, is divided into three types: personal abilities, artificial capital, and land.

The author’s principle evidently includes a renunciation of the property rights of personal abilities.

It also includes a renunciation of the property rights of artificial capital, the fruit of labor and savings.

That leaves the land. If the value of land originates and is measured by the value of labor accumulated on it and capital buried in its midst or gathered on its surface, then economically speaking, land is the offspring of man’s personal abilities; and Mr. Thiers' principle enshrines individual land ownership. But if land has an intrinsic capital value by itself, it remains outside the property principle as Mr. Thiers has established it.

Mr. Thiers and Mr. Proudhon, always inseparable, hand in hand on the grounds of political economy as on moral grounds, say: — “Land is only valuable by virtue of labor and artificial capital.” But all economists, except Bastiat and his followers, respond unanimously: — “Error; land has, by itself, an intrinsic capital value.”

Thus: 1° the principle of property rights, as given by Mr. Thiers, based on instinct, is empirical; 2° It is incomplete, overlooks the community, destroys the state; 3° Even if it were partly correct as a principle of individual property, it does not explain or justify land ownership.

Let us speak no more of it.

Mr. Thiers is not an economist; and it is not with him that one should discuss the economic doctrine on which his theory of property rests. This entire doctrine is contained in this principle stated by Frédéric Bastiat: — “Every man enjoys, free of charge, all the utilities provided or elaborated by nature, on the condition that he takes the trouble to collect them or to provide an equivalent service to those who render him the service of taking this trouble for him30.”

In economic terms, this means: — “There is only social wealth that is produced wealth;” or again; — “Only labor has value and is exchanged.”

So, it is to Bastiat that I must address myself. Here, I admit, I find myself in a certain embarrassment. I am in the presence of a man whose intentions were excellent, whose convictions were sincere, whose efforts were sustained. This man has warm friends and numerous disciples. On the other hand, his philosophy seems petty to me, his science false; everything commands me to say it and show it. Should I attempt to bring this convinced and laborious economist down from his pedestal to level him with the socialists and conservatives? What an ungrateful task! I am not even speaking of the accusations of presumption and recklessness that I cannot avoid attracting: it is an easy duty for me to brave these slight inconveniences if I believe I possess the truth. But is it appropriate to equate with empiricists of all categories a man who has gone to such pains to obscure the light to his own eyes, who has expended so much and such painful effort to erect error into reasoned theory? Honest and unfortunate Bastiat, your ideas have never seduced anyone as much as your candor and courage touch me! But here we are dealing with something more significant than the scientific reputation of a good man; we are dealing with the interests of truth, we are dealing with the glory of those providential harmonies that you have glimpsed and compromised; and nothing can prevent me from fighting these doctrines that you proposed to the frankness and ardor of French youth, calling on them, with all your wishes, for an impartial examination.

We are discussing property. Where does Bastiat seek its origin? Does he see, on one hand, all of humanity with the highest crown of each of its faculties: sympathetic and aesthetic love, reason, freedom? Does he see, on the other hand, impersonal nature? Does he glimpse the moral subordination of the fulfillment of blind and fatal destinies to the fulfillment of clear-sighted and free destinies, the realization of economic progress through labor and property? No; Bastiat bases property, like Mr. Proudhon, like Mr. Thiers, on personal interest. He sees, on one side, needs; on the other side, satisfactions; he notes efforts; he recognizes utility; and this is the barren and limited field on which we must build the theory of the distribution of wealth.

"If we name Utility everything that realizes the satisfaction of needs, then there are two kinds of utilities. Some have been granted to us for free by Providence; others must be, so to speak, purchased through an effort.

Thus, the complete evolution embraces or can embrace these four ideas:

Need

{\displaystyle \left{{\begin{matrix}\\\end{matrix}}\right.}

Free Utility

{\displaystyle \left.{\begin{matrix}\\\end{matrix}}\right}}
Satisfaction31."

Costly Utility

The theory of property will emerge from this small table.

"Property, community, are two ideas correlative to those of costliness and gratuitousness from which they proceed.

What is free is common, because everyone enjoys it and is allowed to enjoy it without conditions.

What is costly is appropriated, because taking pains is the condition of satisfaction, just as satisfaction is the reason for the pains taken32."

Where are we? And what language are we speaking here? Do I have in my hands the work of an economist, a scholar, a philosopher, or the hasty and superficial effusion of some political mediocrity? And how many pages will it take me to point out the errors teeming in these few lines?

What is costly is appropriated, says Bastiat. Indeed, that is true. But also what is appropriated is costly, which is no less true. Thus, it would be inaccurate to state that appropriation proceeds from costliness, or that costliness proceeds from appropriation. What would be accurate to say is that appropriation and costliness both proceed from a previous fact. This fact, which Bastiat completely ignores as much as possible, is the limitation in the quantity of utilities, a limitation that makes things at once valuable and exchangeable, appropriable.

This is a first error. It is of little importance strictly speaking. But what about the confusion Bastiat makes between appropriation and property? Property is not appropriation; it is appropriation legitimized by reason, by justice. By conflating these two so different facts, Bastiat destroys in one word the moral element of property, namely its essential, constitutive element. By stating that property proceeds from costliness, he eliminates the right, tramples on personality, degrades man, with Mr. Thiers, to the rank of brutes. No, despite Mr. Proudhon, despite Mr. Thiers, despite Bastiat, property does not proceed from necessity, from instinct; it proceeds from freedom.

Finally, do you think I have forgotten my mother tongue, to come and tell me that free utility is the domain of the community? I had thought until now that the right of property, simple in principle, is exercised in two modes: under the mode of individual property, and under the mode of collective property or community. I knew well that heirs own furniture and real estate in common before partition; that congregations, that hospices, that municipalities, that certain industrial societies own in common goods of various kinds. I was not unaware that all French own in common roads, canals, public buildings, etc. Today I am being taught that we are owners in community of the atmospheric air, that we can only possess collectively such free wealth. What profound ignorance of the nature and foundation of the right of property!

Property, says Bastiat, is the right to apply one’s own efforts to oneself, or to cede them only in return for the cession of equivalent efforts33.—So this is what property is, for Bastiat! But let’s move on; this is not the moral question that occupies us here, it’s the economic problem. Although it is mutilated, does this principle apply to the entirety of all social wealth? This is what needs clarification.

According to Bastiat,—value is the relationship of two exchanged services34. The invention of this phrase with that of the word services is, according to Bastiat’s students, his most glorious claim to fame. It remains to be seen what the word and the phrase mean.

If there is a gift that the author does not possess, it is that of scientific style; if there is a talent he lacks, it is that of stating his idea once and for all in sufficiently clear and precise terms. To summarize in two lines a few hundred pages, I will say that Bastiat names service the effort made by an individual for the satisfaction of another individual’s need.

Now I ask:—How are services evaluated in exchange? Let’s call our first individual a seller; let’s call the second an buyer. Does the value of the service, as defined, measure on the seller’s effort or on the buyer’s need and the satisfaction of that need? Does the value of the service measure on the seller’s effort? We simply come to the hypothesis of the English school that value is based on labor, measures on production costs and cost price. Observation of facts flatly contradicts this hypothesis, and the idea of English economists is not that of Bastiat. Does the value of the service measure on the buyer’s need and the satisfaction of that need? We fall back into the theory of J.-B. Say who places the origin and measure of value in utility; and the reality of economic phenomena here radically opposes this conclusion which Bastiat has not admitted.

Finally, what does Bastiat answer?—It’s that the value of services is proportional not to the effort made by the seller, but to the effort avoided by the exchange to the buyer.

Simple question. If we are fifteen hundred people listening at the Conservatoire, some paying 10 francs, others paying 6 francs, others finally paying 4 francs, to Beethoven’s Symphony in A, what is the effort that the concert society spares us all? The effort to build a hall arranged in acoustically favorable conditions like the Conservatoire? The effort to write the score of the Symphony in A ourselves? Or the effort to perform it ourselves, as MM. Alard, Franchomme, and others do?

Bastiat’s thesis is untenable. However, it would be worth understanding—Let’s look for an example from the author himself. A wealthy and vain banker wants to have a great singer perform in his salons— "What are the extreme limits between which the transaction will oscillate? The banker will go up to the point where he prefers to forgo the satisfaction than to pay for it; the singer up to the point where she prefers the remuneration offered to not being paid at all. This equilibrium point will determine the Value of this special service, as of all others35."—Excellent! The banker is very wealthy and very vain: he will go up to 10,000 francs; he would rather forgo the satisfaction he seeks than to pay more for it. The singer is short of money: she will accept 200 francs; but she would prefer not to be paid at all rather than to be paid less. The transaction will therefore oscillate between a maximum of 10,000 francs and a minimum of 200 francs? Where will it stop? And what equilibrium point are we talking about?

This point will not be found; the transaction will never take place in the sole data established by Bastiat. If by chance it did take place, it would be outside of all the ordinary circumstances of the exchange.—It is enough, I think, to show that with only the resource of the definition given by Bastiat of his services, any determination of value is impossible.

In this study, I rather aim, as can be recognized, to identify the errors of my opponents than to correct them. In the present case, I can hardly help but complete my critique by filling in the gaps in Bastiat’s theory: it is almost the only way to finish showing them. Here is therefore what Bastiat has not seen and what he has not told. There is not just one singer: there are ten of the same caliber; and there is not just one wealthy and vain banker: there are a hundred other people just as vain, just as wealthy. That said, the service of the artist is worth 500 francs, neither more nor less—because this value is an algebraic function of the variables which are: 1° the number of artists, 2° the number of wealthy dilettantes. And the transaction takes place right away at the rate of 500 francs; because on one hand, if the singer does not want to sing for this price, the banker will find nine other singers willing to agree to it; and because on the other hand, if the banker refuses to give the sum, the singer will find ninety-nine other people who will give it to her.

This is simply the law of supply and demand that Bastiat neglected to mention, because he never studied or understood it. If there were only one singer in the world, she might be paid up to 20,000 francs per session. And if there were an indefinite number of singers, you could have them for nothing. Generally, services are valued according to how much they are in demand and how little they are offered, or in proportion to their relative scarcity in the market. And if services have any value, it is because their number is limited. More generally, value arises from the limitation in the quantity of useful things, and it is measured by their relative scarcity, that is, by the ratio of demand to supply based on each.

In possession of the law of supply and demand, we can see how empty and hollow Bastiat’s theory is.

Bastiat invents the term services and revels in it. — "A host of external circumstances influence value without being the value itself: — The word service takes all these circumstances into account to the appropriate extent36."—That remains to be seen. According to Bastiat, service implies: 1° the effort made by an individual, 2° the satisfaction of another individual’s need, 3° the effort spared the buyer by the seller. Very well; but how are services appraised, valued? Not by the effort made, nor by the satisfaction of the need: these two theories of the cost price and utility are ruined. Is it by the spared effort? This third theory is simply ridiculous: what effort is spared me when I buy a Raphael painting? Again, how is the value of services determined? — By free compassion, finally answers Bastiat.

This fourth theory is none other than Storch’s judgment theory. It is as erroneous as the first three. To judge, one must have the bases of judgment; to compare, one must have the elements of comparison. What are these bases? What are these elements? They cannot be in all cases either the effort made, the utility, or the spared effort. But what then? — All these considerations combined, exclaims Bastiat, and discussed freely between the two parties of the exchange. — Is this really your last resort? It is still insufficient; because: 1° reasoning proves that you have only poor elements of discussion: and 2° experience shows that value does not depend on the freedom of the exchangers, but is imposed, the same for all, on their will.

If I buy a pair of shoes in the market today, regardless of the efforts the shoemaker has made, regardless of my need for shoes, whatever effort I would have to make to manufacture a pair of shoes myself, regardless of my vanity, my opulence, etc., I pay 20 francs for my shoes, like everyone else, if the shoes are worth 20 francs. Why? Because the value of the shoes results from the comparison between the sum of needs and the sum of supplies, from the ratio of demand to supply, from relative scarcity; and outside this precise circumstance, independent of my free will, any determination of value is false or impossible.

Bastiat encountered the theory of scarcity along his path; he made a criticism and a concession. Let’s examine both.

The criticism consists of this: that economists who see in the scarcity of things the origin and measure of their value are under the yoke of materiality. What does this barbarism mean? According to the author, if one argues that the ratio of the number of demands to the number of supplies can give objects their value, one imagines value as material. Then, taking pleasure in lending the most stupid ideas to economists who are not satisfied with the ratio of services, Bastiat dares to assert that, in their opinion, physicists should verify the scarcity between the gravity and impenetrability of bodies, that chemists should rediscover it through analysis… I stop: it is, I think, unnecessary to refute this metaphysics; and I am, I confess, somewhat ashamed to have to note such sad follies in a renowned author.

As for the concession, here it is:—" Scarcity. I admit with Senior that scarcity influences value. But why? Because it makes the service all the more precious.37"

The scarcity, as Bastiat understands it here, is not scientific scarcity; it is the scarcity that the common people oppose to abundance, as they oppose cold to heat without knowing the limits of one and the other, without even implicitly accusing the existence of similar limits. For the physicist, there is neither cold nor hot, only temperatures. In the eyes of the economist, common scarcity is only a lesser abundance, as common abundance is only a lesser scarcity. If Bastiat had truly been a thinker, he would never have settled for this superficial overview. He would have scientifically distinguished, on the one hand, the abundance of useful things that are in the world in unlimited quantities, and on the other hand, the scarcity of things that are only found in limited quantities in the world. Then, in possession of the economic sense of the word scarcity, he would have agreed that scarcity not only makes things in general and services in particular more valuable, but that it makes them valuable, that is, it gives them their value.

Bastiat’s concession is thus an admission of his error.

“Abbé Genovesi said, a hundred years ago, in his course on civil economy, established for him in Naples by Intieri: The only things that have no value are those that do not satisfy our needs, or those that, while satisfying them, are lacking to no one. (Lezioni di economia civile, Part II, Chapter 1)38.” The economic principle of scarcity is entirely contained in these words. This principle was taken up by Senior; it was developed with great philosophical rigor in 1831 by Mr. Auguste Walras who successfully opposed it to Ricardo’s theory of production costs and to J.-B. Say’s theory of utility39. According to this principle, all useful things, natural or artificial, material or immaterial: raw materials, labor, products, that are found around us in limited quantities are valuable and appropriable. Our personal faculties are in this case; that is, the efforts, the pains, the services, as Bastiat says, are found there. But the earth is the same; it has value and it is the object of property, individual or communal.

The economic principle common to Mr. Thiers and Bastiat is thus false, which says that:—Every man enjoys for free all the utilities provided or elaborated by nature. Man enjoys the utilities provided or elaborated by nature for free only if these utilities are in the world in indefinite quantities. Bastiat has endeavored to maintain that in absolute thesis we do not pay for the gifts of God. He proves that if we buy water, we do not pay for the liquid, but for the work of the water carrier. He asserts that we do not pay for daylight, the warmth of the sun. All this is undeniable. But he concludes from this that we cannot buy land and that we can only pay for the services of the men who have cleared it, sown it, etc. In this he is grossly mistaken, due to lack of attention. The land is useful like water, like breathable air, like sunlight and solar heat; it is limited in quantity like the work of personal faculties. It is owned; it is sold and bought. If therefore the theory of property of Mr. Thiers and Bastiat does not justify land ownership, it is because this theory is bad, insufficient, or false.

Frédéric Bastiat is dead: I may allow myself to pass a general judgment on his work and on him, which I refrained from doing in regard to the living. He was a man of good will; but he had the misfortune to practice science without scientific genius. He was one of those men dominated by an overly sensitive disposition who have in their minds two categories of ideas: those they abandon to discussion and do not fear to examine freely themselves, and those to which they have committed by faith and do not think to test. Science is a jealous mistress who suffers no such divisions.

Bastiat had given his intelligence at the same time as his heart to some fixed and defined convictions concerning society, concerning the family, concerning property. His religion and his philosophy did not formally forbid him to doubt and scrutinize them: it was his limited genius that forbade him; the sweeping away of Descartes was beyond his powers. Instead of remaking the theory of property for the theory of value, he wanted to remake the theory of value for the theory of property. He made science a matter of bias for a morality of sentiment.

When one undertakes such work in an environment of fortune or vanity, they deserve the harshest, most merciless rigor of criticism. Bastiat was sincere, and paid for his attempt with his health and his life. Peace be to his memory! Yet, it must be allowed to regret for him that he spent so much effort in pursuing a barren and disastrous task. Above all, it must be allowed to regret for science that he hindered it, and by breaking the great economic tradition, he may have delayed the advent of social science40.

I am not unaware that such a severe judgment on the scientific value and role of the author of the Economic Harmonies may offend some people. At least I will have the satisfaction of thinking that I have left nothing undone to motivate my conclusion. Now it must be admitted that if the principle of scarcity is the fundamental principle of the theory of exchange value or political economy, the tendency of Bastiat and his disciples is just a dissent within the economic school. It was very important to establish this clearly at this time.

The principle of scarcity is formulated as follows: — The exchange value is a natural fact that originates in the limited quantity of utilities and is measured in the comparative circumstances of supply and demand.

And if we define social wealth as the sum of things that are at once: 1° valuable, and 2° appropriable because they are useful and also limited in their quantity, we derive from the principle of scarcity the following consequence: — Social wealth is divided into three types: 1° Land, 2° The personal faculties of men, natural wealth; 3° Artificial capital, produced wealth.

The first of these two propositions, now clearly formulated, allows the immediate formulation of the second. It must be said to the glory of the economic school that although it has long fruitlessly pursued the philosophical analysis of the fact of value and the rational renunciation of the principle of scarcity, it has nevertheless always found in the conscientious, patient, and thorough observation of facts a sufficient resource to establish the exchange value of the land and its use. The physiocrats first; then Adam Smith, David Ricardo, Scrope, Senior, MacCulloch, J.-B. Say; MM. Auguste Walras, Blanqui, Joseph Garnier, Hippolyte Passy, all agreed that the productive fertility of the soil is appropriated, that it is sold and bought or exchanged. Land, natural wealth, a gift from God, is part of social wealth. It is therefore finally about constituting a theory of property that concurs with political economy, and not about mutilating natural facts and disfiguring science to accommodate it to the narrow moral principles of Mr. Thiers.

In this path of sincerity and courage, the economists I just mentioned, all those who, in my opinion, have known how to pass on to one another the best scientific traditions, still precede us.

Mac-Culloch. “What is properly called rent is the sum paid for the use of natural forces and the inherent power of the soil… Rent is therefore always a monopoly.”

Scrope. “The value of the land and the ability to derive rent from it are due to two circumstances: 1° to the appropriation of its natural powers; 2° to the labor applied to its improvement… Under the first aspect rent is a monopoly.”

Senior. “The instruments of production are labor and natural agents. The natural agents having been appropriated, the owners charge for their use in the form of rent, which is not the reward for any sacrifice whatsoever…”

Finally today, a number of publicists are authorized by these precedents:—“The land has revealed, says Mr. Dupont-White, its character of monopoly41.”

It would be pointless to multiply these quotations indefinitely. There are enough to justify a conclusion concerning the position of the economic school regarding the problem of the distribution of social wealth. This school has so far confined itself to scientifically observing, in all impartiality, the economic facts. As for moral facts, it has only approached them very incidentally, always quick in a way to decline its competence, and limiting itself to justifying real estate property very briefly by reasons of prescription, general utility, necessity, etc., etc.42. It is up to us to proceed methodically in addressing this issue; to see if these reasons are sufficient to fill the gaps in the current theory of property; if the empirical propositions of socialists, communism, association, right to work, etc., etc., have any serious foundation; or if rather, by clearly separating the theory of social wealth from the theory of wealth distribution, political economy from morality, and by searching in a genuinely humanitarian philosophy for a broader principle of property, we might not have almost certain chances of simultaneously finding the solution to the social question.

§ 6. Conclusion

This study does not aim to highlight any of the social truths that might be the most novel and fruitful. It solely seeks to invite some minds to the pursuit of these truths by indicating, as much as possible, the general direction they should follow. However, I believe that without exceeding the bounds of my program, and without departing from a critical role to a dogmatic one, I could deduce from the preceding observations a number of important considerations about the method to be maintained in addressing the social question. But perhaps, in these matters, it is better to merely awaken public attention, without overly trying to direct it. Therefore, I confine myself to summarizing in a few propositions the main results that I would be happy to have approached, if not achieved.

I. The solution to the social question depends on the constitution of social science. Practical improvements and enhancements to our current social state: the eradication of pauperism, the tax base, the definitive organization of labor and property imply theoretical knowledge of the normal economic conditions of an ideal society, and more generally, the rational study of all social conditions: civil, political, etc.

II. Contemporary socialism has been justified by the discomfort of a society in the process of organization, but still far from the end of its efforts. Fired up by a hasty ardor from the contemplation of social miseries, reformers have never thought to rise to scientific abstraction. Knowing neither philosophy nor political economy, they have sought from their imagination remedies for the ills moved by their sensibility. With a lot of goodwill, they have done much harm by substituting empiricism for method.

III. Free of empiricism, but lacking in philosophy, the economic school has so far solved only the problem of production. As for the problem of distribution and all questions requiring the simultaneous contribution of political economy and morality, of experience and reason, it is only just beginning to seriously examine them in depth.

Of these three propositions, the first is fundamental. It renews and transforms socialism by making it scientifically empirical. It circumscribes political economy within its natural limits and shows thought the broadest horizons by opening the field of science and art, which deal with the entirety of free human activity in society.

That said, I would no longer have to speak strictly after having drawn attention to such a singularly important point. But perhaps, after seeking inspiration solely from the demands of truth, I am not forbidden to seek, in the form of a peroration, under less severe and more directly gripping circumstances, other reasons for determination and encouragement for the work I undertake.

If it is comforting to think that one day the theory of society will be established; that the knowledge of the good and the just, wrested from the caprice of individual sentiment, will be entrusted to the inflexibility of reason; if it is exhilarating to hope that the great social laws will be established on an evident superior principle, just as the astronomical laws are all based on the principle of universal gravitation, it is surely when one examines the chaos of superficial, contradictory, disordered opinions that this new kind of religion will bring order and light. And to appreciate the urgency there is, nowadays, to constitute the social science, it would perhaps suffice with a quick glance at the confusion of ideas regarding the social question.

Let us question public spirit about this, let us inquire about the disposition of the crowd towards economic progress, we find at the bottom rung of the intellectual and moral ladder, a countless throng of people as devoid of generous aspirations as of original ideas. They are unaware that there is a social question. And how would they know? Indifferent to everything that does not directly relate to the routine of their tasks, ignorant of everything that goes beyond the circle of their routine, a collection of clichés suffices to form a morality suited to their capacities. Any idea that, born yesterday, has only the genius of a thinker as its guarantee is in their view a utopia; any nonsense that is supported by universal practice is in their eyes an axiom. They see right in legality, not out of calculation and cunning, but out of carelessness and foolishness. They have heard that there are philosophers and scientists; they do not know that there is a science and a philosophy. Material progress amazes and confounds them; but they admire only the results without seeking the origins. They will never understand that industrial practice arises from scientific theory, that scientific theory itself springs from the speculations of philosophy, that the locomotive and the electric telegraph are directly descended from Bacon’s Novum Organum. Nor will they ever be persuaded that political and social reforms are the obligatory accompaniment of the development of well-being. They have opinions: some have received them as a dowry from their father-in-law, others have adopted them along with a false title of nobility.

Such are they when their personality is not at stake, when the interests of their fortune, their vanity, their ambition are not directly offended or even jeopardized by the efforts of progress. Suppose them in position, influential, their careless stupidity becomes an aggressive malice; they are less indifferent and more selfish, less ignorant and more skeptical; in sum, always immoral and dangerous. A great narrowness of mind, some baseness in sentiment, this is what characterizes them. It is undoubtedly one of them who, tired of the political agitations of his time, exclaimed angrily: — “Ah! When will all this end?” He was answered: — “Never.” Launched into this current of discontent, bitterness, and hatred, they easily become ferocious, and would willingly, to ensure their tranquility, perpetrate a Saint Bartholomew’s Day massacre of ideologues.

I believe I am only being fair towards the enemies of the social question; but as I do not want to be suspected of partiality; I will be more severe than indulgent towards the friends who compromise it. It is certain, moreover, that there exists a democracy of poor quality, born of empirical socialism, perhaps more harmful and more dangerous for progress than the apathy or systematic hostility of conservatives of all kinds. If there is foolishness and ignorance on one hand, there is ignorance and folly on the other! Which is better? — “All essential substances should be free,” someone told me one day. Who uttered this absurdity? Some ignorant laborer? Not at all, it was a doctor considered to be educated. The agitation of these so-called democrats is less a hasty eagerness than a verbose and sterile turbulence. They proclaim the social question; they claim to seek the balance of all rights and all duties; but in reality, what can they find? Satisfaction, I will not say of their greed, no, but that of their self-esteem. Indeed, the right for them is not legality, but the application of their systems. That principles must first be elaborated; that, to be put into practice, the theory must have been sanctioned by discussion, is what they do not understand. Listen to them: they do not defend ideas, they attack people. They are not concerned, they say, with building; they want to demolish, clear the ground, make room, a phraseology empty of meaning, full of disorder and misery. Some go further, but who, to be more precise, are no less misguided. I pass over their remarks in silence: they are chilling; behind these verbal follies, one glimpses follies in action, struggles, hatreds, revenges, and the five hundred thousand heads that Marat demanded to ensure the people’s salvation. Conservatives call these democrats demagogues; they call the conservatives reactionaries. They explain each other. The conservatives refuse to engage in the social movement; the aforementioned democrats knowingly withdraw from society; they isolate themselves from it by choice. All are equally condemnable; all are equally outside the paths of progress.

Fortunately, there exists, beyond these weaknesses and exaggerations, at a higher level on the ladder of ideas and sentiments, a set of better dispositions and wiser opinions. There is a party of intelligent and especially generous men, enemies of disorder, but by that very fact, friends of progress, fearful of utopias, but won over in advance to all reforms that will present themselves in the name of science, truth, common sense. This party doubtless does not constitute the majority; but if it is not considerable in number, it is so by moral authority: the experience of history proves it. I think that at all times the upper classes of society have generally been corrupted by luxury, I also think that at all times the lower classes have been depraved by poverty. But I also know that there have always been exceptions, and that these exceptions have alone made history and progress. Has it ever been asked how many individuals, in all ages, have experienced the regular development of human faculties? Very few, most likely. How many beings in whose soul nature had deposited the seeds of freedom, reason, love have remained at the level of brutes! How many others have fallen back into it! for failing to have been able to or known how to cultivate these precious seeds! Ah! certainly, to anyone who wants to look closely, humanity appears to be reduced to a very small number of moral individuals willing, thinking, and feeling! It does not matter: this small number of privileged individuals, always growing, has sufficed throughout antiquity to maintain human destiny at the level of a moral destiny. It still suffices: it will always suffice, even at those times of passion subsidence, of moral degradation, where civilization seems concentrated in industrial labor, where sciences and arts are silent, where society, entirely devoted to material interests, desires only inert rest, does not want to remember or foresee, where, as if tired of freedom, men would seem to want to return to instinct.

Who could blame me for stating that we are undergoing a crisis of this nature? Everyone says it: I am merely repeating it. Who would not willingly associate with my hope if I added that, in my conviction, we are not far from coming out of it? The moment is near when, against the development of purely material activity, the spirit will react. For over a hundred years, the sciences have been accumulating facts; soon they will find laws and relationships. The immense amount of materials gathered by the efforts of observation is only waiting, to be organized, for one of those bursts of imagination that grasps a fertile hypothesis, for one of those flashes of genius that from so many confused materials constructs an edifice. Let there appear one of these men in whom are united to the same degree the meticulous patience of the scholar and the impetuosity of the philosopher; let there come a generation of metaphysical scholars, and the sciences will be organized.

Finally, agitated in all directions for thirty years, sensed, denied, affirmed, attacked, defended, the social question is ripe. It will find its solution in the constitution of the social science. Among the ranks of this group of devoted, cautious men, strangers to the successes as well as the reversals of parties, who transmit the traditions of the true, the good, some minds will meet who, being occupied with the same research, will associate with each other for the success of the idea. They will not be heard by the crowd; they will be heard by the men around them. Those will receive the deposit of new truths, and will know how to gradually make them triumph over the apathy of the indifferent, the ill-will of the selfish, and the turbulence of the thoughtless.

Political Economy and Justice

Section I. — Coordination relationships of the laws of Political Economy with the principles of Justice

§ 1.

Reading the economists, says Mr. Proudhon43, soon convinced me of two things of great importance to me:

First, that in the second half of the eighteenth century, a science had been signaled and founded outside of any Christian tradition and any religious suggestion, a science whose object was to determine, independently of established customs, legal hypotheses, prejudices, and routines governing the matter, the natural laws of production, distribution, and consumption of wealth.

I stop Mr. Proudhon here. His definition of Political Economy seems written on the table of contents of a manual: it is not philosophical. More importantly, it is inaccurate and dangerous. And I am all the more keen to refute it, as I can thereby reveal the source of the errors I undertake to point out.

Political economy is a science. What is a science?

In the world, there are two orders of real manifestations of substance: bodies and phenomena, or, if you will, beings and facts. Science is made not of bodies, but of the phenomena of which bodies are the theater. Facts, laws, relationships—these are the objects of science.

Faced with a series of individual facts that resemble and differ from one another, the scientific mind eliminates all the particular qualities of each of these facts, collects the qualities common to all or many, and forms a species. By operating on a certain number of species as it has already operated on a number of individuals, the scientific mind ascends to the genus. And so on.

When one has arrived at the notion of an irreducible genus, one has what is called a general fact. General phenomena or facts are the irreducible abstractions from which individual phenomena or facts are real manifestations. Examples: vegetation, a natural fact; property, a moral fact; civilization, a historical fact.

Every science is the theory of a general fact. There are natural sciences, moral sciences, historical sciences.

The general fact is universal and permanent: it can manifest individually in reality, in all places, at all times. It is one. On all these grounds, it can and should become the object of a science. The science is complete when the following five questions have been posed and solved:

  1. What is the nature of this fact?

  2. Where does this fact come from? In other words: what is its cause?

  3. Into how many main species does it divide?

  4. What are the laws according to which it occurs, either in its highest generality or in its main species?

  5. What are the consequences it entails? Otherwise said: what are its effects?

For each of these five questions, there are methodical procedures that lead to their solutions. Once all these questions are resolved, the science is complete, one possesses the theory of the general fact, and one knows in advance all the beings of the universe, insofar as they partake of this fact and are the theater of its individual and real manifestations. If the science of all general facts is completed, the world is known.

Observation, experimentation, induction, hypothesis…, these are the main methodical procedures that lead to the solution of the questions posed44.

That said, let us try to recognize with precision whether there is a general fact whose theory can and should be the object of Political Economy; and what that fact is.

As soon as one reflects on the role and object of science, one will have easily noticed that there are many different perspectives from which one can approach reality to study it; that is to say, in other more precise terms, that many general facts share the field of reality to manifest individually. Without wasting time in efforts of abstraction and generalization, we can immediately say that one of these general facts is exchange. Let me explain. Viewed from a perfectly characterized point of view, social life presents itself as a series of exchanges, and the world appears as a market where a succession of sales and purchases take place. The fact of exchange manifests itself in that certain things, in very large numbers, are not free, and can only be obtained by those who need them in return and by giving up other things.

This set of non-free utilities capable of participating in the general fact of exchange constitutes social wealth. Generally speaking, one could therefore state that political economy is the theory of social wealth, or the science of the general fact of exchange: it would be Aristotle’s Chrematistics. However, let us not rush to be satisfied: for a judicious analysis will convince us that the general fact of exchange is complex, and that it implies two other simpler general facts: the general fact of exchange value, and the general fact of property.

Indeed, 1o if two things are exchanged for one another, this presupposes that they are equivalent or that they have the same value. These things therefore have their own value, and generally, it is recognized that many things, in very large numbers, indeed have an exchange value of their own.

And 2o for two things to be exchanged for one another, each must be in someone’s possession. To exchange something, just as to use it, one must have apprehended it, hold it apart from oneself, have appropriated it.

Let us conscientiously analyze the two general facts of exchange value and property.

I. Analysis of the General Fact of Exchange Value

To manifest the general fact of exchange value in the reality of things, or in simpler terms, for things to have value and to be exchangeable, they must possess two qualities: 1) utility, 2) scarcity. However, “utility” and “scarcity” must be understood here in a broader and more scientific sense than their common usage.

From the perspective of economic science, an item is useful as soon as it can be used (uti) for anything and is generally demanded. An item is scarce as soon as it does not exist in the world in indefinite quantities and is only offered to the general demand in a limited amount. It is important to note that we are currently only concerned with absolute demand and supply, not actual demand and supply. The actual supply may be lower, equal, or higher than the actual demand. The absolute demand for a useful item, assumed to be scarce, is always higher than the absolute supply.

In this context, value is rigorously and philosophically defined by the use of genus and specific difference: the proximate genus of value is utility; its specific difference is scarcity. Items that have no value and cannot be exchanged are those that are useless, and those that, while being useful, are available in the world in indefinite quantities, such as atmospheric air, solar heat, natural forces, etc.

Thus, exchange value arises from scarcity and utility. Strictly speaking, utility is the condition of value, while scarcity alone causes it. Here is the explanation:

For one fact to be considered the cause of another, it is necessary: 1) that whenever the first fact occurs, the second always occurs infallibly thereafter; 2) that when the first fact occurs with a certain intensity, the second always occurs with a proportional intensity. Thus, the conditions for a causality relationship are perpetual concomitance of the two facts and constant proportionality of one to the other.

Utility alone does not meet these conditions: 1) There are useful items that have no exchange value, such as atmospheric air, sunlight, etc.; 2) There are items that are notably more useful than others yet have lesser value. However, without utility, no value is possible.

Conversely, whenever a useful item, and therefore in demand, is limited in the quantity offered to the market, and therefore scarce, 1) it has an exchange value; 2) it has more value the scarcer it is, that is, the more it is demanded and the less it is offered. The mathematical ratio of demand to supply is the expression of value in its quotient.

From these observations, it is evident that the general fact of exchange value originates from the limitation in quantity of utilities which makes them scarce. However, it is also worth noting that utility can be analyzed in terms of its intensity, as more or less significant; its extension, as more or less widespread or limited; and its direction, as more or less immediate or mediated. From these perspectives, utility influences scarcity and, consequently, the value of things. Nevertheless, it remains established that exchange value originates from the limited quantity of utilities; its measure is in the ratio of absolute demand to supply; both, in a word, depend on the scarcity of useful items.

II. Analysis of the General Fact of Property

First, to consider the fact of property in its essence, it is crucial to distinguish it carefully from the act of appropriation, which is merely its raw element.

Property is not merely appropriation; it is appropriation sanctioned by reason or by law. Appropriation is a simple fact; property is a compound fact. Essentially, to grasp, hold, and appropriate items, one need only extend the hand, and that is all. However, to consider oneself and be regarded as the owner of items, to establish a right of property over items, it is necessary to prove that one has grasped, held, and appropriated them in accordance with justice.

As for the origin of the fact of property, if it must be sought anywhere, it is again in the fact of the limitation in quantity of useful items, which, as we have seen, already gives rise to the fact of exchange value.

Indeed, property implies exclusion, and exclusion is based on the limitation of items. Exchange value implies a sacrifice to be made in exchange, and the sacrifice made is motivated only by the impossibility of obtaining the desired object otherwise. If all the items we could need were naturally unlimited in quantity, there would be no property, no value; without property or value, there would be no exchange. Property, exchange value, and exchange can only be explained by the limitation in the quantity of useful items.

This common origin and simultaneous appearance of the two general facts of exchange value and property are essential to note. However, without detracting from our observation’s importance, we must not attribute more to it than it warrants. After all, exchange implies, and the limitation of utilities explains, only exchange value and appropriation; but not property, that is, legitimate and just appropriation. The question of rights remains intact. Nonetheless, there should and does exist material for a theory of property, starting from the fact of pure and simple appropriation and subjecting it to the principles of justice, just as there should and does exist material for a theory of exchange value independent of justice.

These are the results of a rigorous analysis of the phenomenon of exchange. It remains established that exchange implies the existence of two general facts: value and property. The theory of each of these facts constitutes a science; let us try to assign to each of these sciences that are open to us their character and limits.

The theory of exchange value and the theory of property converge because of the identity of their object. The same useful items that, by the fact of their limitation in quantity, become 1) valuable and exchangeable, 2) appropriable. What constitutes exchange value also constitutes property; what constitutes property also constitutes exchange value.

The theory of exchange value and the theory of property differ because of the respective nature of their viewpoints. One is a natural science, as it is the theory of a natural fact; the other is a moral science, as it is the theory of a moral fact: this must be established.

Mr. Proudhon, who is a great enemy of the absolute, will not dispute, I hope, that the fact of human freedom is indeed the source of all morality. From the fact that man deliberates and resolves freely, it follows: 1) that his actions are attributable to him; 2) that he is responsible for them, and that the ideas of merit and demerit rebound upon him; 3) that man must therefore be concerned with the good or evil for which he is responsible.

Natural facts are thus distinguished from moral facts in that the former originate from the fatality of natural forces, the latter from the free will of man. There is a third category of facts, historical facts, which occur within humanity just as natural facts occur within nature, and which are marked, like natural facts, by a fatal or, if you will, providential character. The natural fact and the historical fact differ otherwise: the former is always identical to itself; the latter is varied and progressive. With this established, it is easy to see:

  1. That the fact of exchange value is a natural and inevitable fact; for, although it occurs partly due to the presence of man on earth, it occurs primarily due to the limitation in quantity of useful things and must be considered as independent of our psychological freedom as are also the facts of gravity, vegetation, etc.;

  2. That the fact of property is a moral and free fact; for, although it occurs partly, as a fact of appropriation, due to the limitation in quantity of useful things, it occurs primarily, as a fact of property, as a moral character of the appropriation, in consideration of the dual quality of morality or immorality with which the appropriation may be endowed or tainted.

Thus, at the threshold of the study of social wealth and behind the phenomenon of exchange, two theories of two distinct general facts, two well-characterized sciences, present themselves to us: the natural science of exchange value, the moral science of property.

We then notice that there is no more political economy for the philosopher than there is mathematics, physics, or medicine for him. These are expressions whose use we must tolerate among laypeople but should never ourselves use, if we claim to have a scientific mind. It is also evident that one does not need to delve far into the metaphysics of facts to realize that, just as there are mathematical sciences (geometry, algebra, etc.), physical sciences (acoustics, thermology, optics, etc.), and medical sciences (anatomy, pathology, etc.), so too are there economic sciences: a theory of exchange value, and a theory of property.

Let’s continue. It happens that, due to human activity, often if not always, a science is complemented by an art. Just as medical pathology is accompanied by therapeutics, so rational mechanics is complemented by the theory of machine construction. Art is the practical application, aimed at the useful, of the results of scientific speculation which seeks the true. Science has laws, art has rules: that says it all. Thus, it is natural to follow the theory of exchange value with a theory of production, and the theory of property, which is none other than that of distribution, with a theory of consumption.

  1. Theory of exchange value, exchange, and production; 2. theory of property, distribution, and consumption, this seems to me a division of economic science that leaves nothing to be desired from the philosophical standpoint; nor do I see any practical criticisms that could be made. It was initiated45; here I merely seek to justify it.

It is not the division adopted by Mr. Joseph Garnier in his Elements of Political Economy; but Mr. Garnier seems to have himself invited discussion on his method when he took care to say46:

“Do not attach more philosophical importance to the divisions we have adopted than they should have.”

Mr. Garnier deserves great credit for this reservation. Nevertheless, I think that, feeling the philosophical inadequacy of his divisions, he should have endeavored to remedy it; and I have no doubt that he would have succeeded.

“The most convenient, the most elementary scientific classifications are not always the most natural… The sections, the divisions are therefore forced, but they aid the mind.”

I beg Mr. Garnier’s pardon; but it seems to me that the forced and not natural sections and divisions are more likely to mislead the mind than to aid it. I have proof of this in what happened to Mr. Garnier himself. — “It can be admitted,” he says, with J.-B. Say, “that there are three major phases in the role of Wealth, to the creation of which everyone contributes, and of which everyone should have a fair share. It is first Produced, then Distributed in society, and finally Consumed, that is, used or employed.”

It is impossible for me to accept this, even with J.-B. Say. First, Mr. Garnier, I assure you that not everyone contributes to the creation of wealth. Believe me, there are people who are perfectly content with the role of consumer without envying that of producer. But that is not all; the error is much more serious.

There are riches to the creation of which no one contributes: these are the natural riches. Among all the things so diverse and numerous that have value, some are given to us by nature without the aid of human labor; others are the fruit of labor, or of the application of our labor to the free gifts of nature. Thus, there is natural wealth and produced wealth. By stating, as Adam Smith, Ricardo, J.-B. Say, and Mr. Garnier have done, in a general way, that wealth is first produced, then distributed, etc., it seems to exclude from the domain of science an entire category of the most important values; for they are precisely the most direct object of the theory of value and the theory of property: I speak of natural riches. Would Mr. Garnier like me to cite him a first example of natural wealth? Here is one: our personal faculties. Does Mr. Garnier want a second? Here is another: the earth.

There is a way out for Mr. Garnier: it would be to disregard natural values, to deny that our personal faculties, that the earth had intrinsic value. But Mr. Garnier cannot resort to this error. His theory of value is ours: he places its origin in the limitation in quantity of utilities, the measure in the relationship of demand to supply. Given these facts, he cannot deny that the earth, that the personal faculties of men are: 1. useful, 2. limited in quantity, that consequently they are demanded and offered under conditions proper to give them value and a precise value. They are thus part of social wealth.

As for Mr. Proudhon, I think he will not hesitate to deny natural values; this is what we will see later, and we will refute him accordingly. At the time of admitting only produced riches, Mr. Proudhon will certainly not be stopped, like Mr. Garnier, by the fortunate inconvenience of having left behind a good theory of value.

Mr. Proudhon is fully convinced that the object of economic science is to determine the natural laws of production, distribution, and consumption of wealth. Distribution especially seems to encapsulate, in Mr. Proudhon’s eyes, the entire science, judging by the particular emphasis he places on the word: distribution. Of the exchange value, not a word. It is evident whether I was right or wrong to strongly reject Mr. Proudhon’s definition of political economy: it is accurate except that production and consumption obey rules, not laws, and that the laws governing distribution are moral laws, not natural ones.

The laws of exchange value are natural laws; the theory of exchange value is a natural science, the foremost of economic sciences. The theory of distribution, a moral science, is the second. I am beginning to believe that perhaps Mr. Proudhon has not grasped the general fact of exchange value, nor its theory; he has passed by political economy without distinguishing its most essential part. This would be quite significant to note.

Another thing of which I remained equally convinced is that in Political Economy, as it had been conceived by its founders, the notion of right had no place…

This is splendid! And now I am certain. It is now beyond doubt for me that Mr. Proudhon has only seen the second of the economic sciences, the moral science, the theory of property or distribution. The first, the natural science, the theory of exchange value, completely eluded him; he did not suspect it. I like to believe that Mr. Proudhon would never be surprised that mathematicians or physicists are not preoccupied with the notion of right. The idea would never occur to him to fill this gap. It is good to be concerned about rights; they should not be invoked at every turn. Newton’s binomial needs neither to be just nor unjust, and the hypothesis of two electricities is not subject to moral rules. Neither is the theory of exchange value, believe me, Mr. Proudhon. It is a natural science, independent of justice.

Mr. Proudhon does not know this science. Indeed, he is unaware of its existence. Mr. Proudhon is like a physician practicing medicine, I will not say without knowing anatomy or pathology, but without even suspecting that there is a science called anatomy, another called pathology. Mr. Proudhon will shortly try to regulate production, distribution, consumption, and he does not know the first thing about the theory of exchange value; he implicitly misunderstands its nature; he does not suspect its existence.

This is what I wanted to demonstrate. Now, let us understand precisely what the theory of exchange value is; let us know the major divisions of this natural science, the first of the economic sciences; let us know which main questions it addresses: we will know which questions Mr. Proudhon ignores.

Here are the divisions and questions concerned47:

I. On the nature and origin of value.

On wealth in general and social wealth in particular. — On utility and exchangeable value.

II. On the measurement of value.

Primary function of precious metals.

III. Theory of exchange and money.

Secondary function of precious metals.

IV and V. On the main species and laws of value.

On capital and income. — Different kinds of capital. — Relationship between the value of capital and the value of income.

Triple element of social wealth: land, personal abilities, artificial capital. — Three types of income. — Specific law of each income.

VI. On the consequences and effects of value.

On industry or production. — On production that transforms and production that multiplies.

Once this program is completed, in a complete course of political economy, one should then tackle the theory of property and distribution.

To return to Mr. Proudhon, allow me this epic figure, clad in my armor and knowing what pieces are missing from his, I will attack him. Convinced that he does not understand the theory of value and believing, for my part, that I know it, I think I am in a position to prove:

  1. That Mr. Proudhon does not truly understand the relationships of coordination or subordination that link economic sciences and morals;

  2. That Mr. Proudhon has only false ideas about the origin of exchange value, and consequently, about exchange, about money;

  3. That Mr. Proudhon does not clearly distinguish a capital from an income; a fortiori, that he is unaware of the relationships between the value of capital and the value of income, and the laws of different incomes.

  4. Finally, because of the complete ignorance in which Mr. Proudhon finds himself regarding the theory of exchange value, his Economic Balances are, for the most part, impracticable utopias.

§ 2.

Another thing I was equally convinced of is that in Political Economy, as it was conceived by its founders, the notion of rights was completely absent. The authors simply aimed to describe the facts of practice as they occurred before their eyes, irrespective of whether these practices were in agreement or disagreement with justice.

You now know Mr. Proudhon’s situation. He is like a judge who, knowing or believing to know that a crime has been committed at a certain place, persists in accusing a man whose alibi is perfectly established. But was the crime even committed?

Political economy, or at least the first and most important of the economic sciences, the theory of value, is a natural science that need not concern itself with the notion of rights; this cannot be said for the theories of property, distribution, and consumption, which are moral sciences. If the founders of political economy dismissed the notion of rights from the theory of value, they were right; but if they also dismissed it from the theories of property and distribution, they were wrong.

Would it be true then, and did they really only aim to describe the facts of practice as they unfolded before their eyes, irrespective of whether these practices agreed with justice? Not at all. Economists have not committed the error Mr. Proudhon so bluntly accuses them of. The founders of the science, the physiocrats, articulated the famous maxim: laissez faire, laissez passer, which was far from a mere exposition of practical fact in the eighteenth century. They developed the theory of the single tax, and this theory was far from an exposition of the financial practices of the eighteenth century.

For instance, ― this observation is from Rossi, ― it is demonstrated, and it is precisely the purpose of political economy to demonstrate, that division of labor is the most powerful method of industry and the most fruitful source of wealth, ― but that it tends at the same time to degrade the worker, thereby creating a class of serfs.

To this I reply:

  1. It is possible that this observation is or is not from Rossi, but since Mr. Proudhon freely accepts it, I hold him accountable;

  2. The proper purpose of political economy is to theorize about exchange value, not necessarily to demonstrate the principle of division of labor;

  3. There are more powerful processes for industry and more fruitful sources of wealth than division of labor;

  4. Division of labor does not degrade the worker.

Immediately generalizing Rossi’s observation, I had no difficulty convincing myself that what he had said about the division of labor, the employment of children in factories, unhealthy industries, could and should be said about competition, interest lending or credit, property, government, in short, about all economic categories and consequently about all social institutions.

I respond:

  1. Property and government are not strictly economic categories. They are indeed moral categories;

  2. Competition, interest lending, or credit are no more culpable than division of labor.

I will defend these objections shortly. For now, I see Mr. Proudhon sliding down a slippery slope, and I do not want to stop him in his tracks. Where could he possibly end up with such premises?

The two phenomena (of wealth increase and worker degradation by division of labor) are as certain as each other, closely linked, so much so that, if industry were to comply with the law of personal respect, it seems it would have to abandon its creations, which would bring society back to poverty…

There it is said. According to Mr. Proudhon, if industry submits to the law of personal respect, if production is scrupulous not to violate justice, we fall into poverty. That is Mr. Proudhon’s opinion. But the issue becomes significantly more complicated; because on the other hand, economists, as Mr. Proudhon himself admits,

...Economists demonstrate that Justice itself is an economic power, that wherever Justice is

violated, be it through slavery, despotism, or lack of security, etc., production is impaired, wealth diminishes, and barbarism ensues.

It is understood then. According to economists, if production violates justice, if industry does not comply with the law of personal respect, we still fall into poverty.

...It follows that political economy, that is, society as a whole, is in contradiction with itself, something Rossi had not noticed, or perhaps had not dared to say.

It is certain that if Rossi had noticed such a disheartening contradiction, he was right to conceal it from us; and Mr. Proudhon would have done well to follow his example.

Faced with this antinomy… what course does the learned and official world take?

Allow me! And what course do you think they should take? You claim, Mr. Proudhon, that unless we violate justice, we remain immersed in poverty. On the other hand, economists, as you yourself say, demonstrate that by violating justice we will only be more surely plunged into deeper misery; hence, according to you, society as a whole would be in contradiction with itself. Not being a learned figure or at all official, I would reply that the alternative is grim, but we must resign ourselves.

Some, extreme disciples of Malthus, bravely stand against Justice. Above all, they demand wealth at any cost, hoping to get their share; they

disregard life, liberty, the intelligence of the masses. Under the pretext that such is the economic law, that so demands the inevitability of things, they sacrifice, without any remorse, humanity to Mammon. This is how the economist school has distinguished itself in its fight against socialism: let that be its crime and its shame before history!

This anger is quite ridiculous! You accuse economists of opting for a depravity that, according to them, would ruin them. You previously reproached the founders of the science for having ignored the notion of rights; that was an unfounded reproach. You accuse their successors of having trampled it; that’s an absurd slander. Modern economists have followed the example of their predecessors: they have applauded the morality of certain regulations, condemned the immorality of others; they have demonstrated that justice is itself an economic power.

Others are frightened by the economic movement and anxiously look back to the times of industrial simplicity, of domestic spinning, and the communal oven: they become retrograde.

Frankly, given your premises, these good people deserve less ridicule and more encouragement. Misery for misery, let justice at least triumph! Let us be poor, but honest!

Here again I believe I am the first to have dared assert, with a full understanding of the phenomenon, that Justice and economy should not limit each other, not make vain concessions, which would only lead to mutual mutilation and achieve nothing, but systematically penetrate each other, the former serving as a constant formula for the latter; that instead of restricting the economic forces whose exaggeration murders us, they should be balanced against each other, based on this little-known

and even less understood principle, that opposites should not destroy each other, but support each other precisely because they are opposites.

For example, this is high-level charlatanism! Mr. Proudhon, interpreting economic science in his own way, discovers that it is completely contradictory with justice, i.e., that it is dark at high noon. On the other hand, economists demonstrate, Mr. Proudhon does not hesitate to acknowledge, that the economy is in perfect accord with morality, otherwise said that it is light at high noon. Then, — based on this little-known and even less understood principle that opposites should not destroy each other but support each other precisely because they are opposites, — Mr. Proudhon goes on, not to limit day by night nor night by day, nor to get from day and night vain concessions that would only lead to mutual mutilation and achieve nothing; but to make them systematically penetrate each other… In short, he is going to show us that it is both day and night at once, at high noon.

This is what I would readily call the application of Justice to political economy, in imitation of Descartes who called his analysis the application of algebra to geometry. In this, says Rossi, consists the New Science, the true Social Science.

As for Mr. Proudhon’s persistence in making Rossi his accomplice, I leave it to the reader to judge.

We are there. The problem is difficult…

I even believe it is perfectly insoluble; that is what we shall see. In the meantime, you might think Mr. Proudhon is greatly entangled in the difficulties he creates for himself. He is not. He remains calm; and he jokes pleasantly.

The problem is difficult, he says, the situation perilous; but admit, Your Grace, that Christian theology would never have found such things.

Certainly not, it would not have found them, and I request permission to congratulate it for that. Christian theology is a work logically based on simple hypotheses. These hypotheses are more or less plausible; and Christian theology itself more or less in agreement with new observations; but it is essentially metaphysical; and it would never have raised such contradictions, such extravagant antinomies, just for the satisfaction of appearing to resolve them. That required the particular genius of Mr. Proudhon.

M. Proudhon is not a metaphysician; nor is he a philosopher in the traditional sense, as he consistently misunderstands the spirit of science and its methodology. He lacks a grasp of general ideas. He excels at highlighting and contrasting specific facts, but struggles to coordinate perspectives or subordinate one to another. His goal is to generate antinomies, and he pursues this at any cost, even if it means contradicting himself a hundred times. Once he achieves an antinomy, it remains unresolved, he claims, and he is satisfied: he then seeks another. He destroys vigorously, passionately; he builds nothing on the ruins he accumulates. As for me, I prefer to adhere to this principle of positivist philosophy: in terms of science, one naturally destroys a lot while constructing a little.

Thus, if we were to believe Mr. Proudhon alone, we would be facing the most fantastical problem. Society as a whole would be in contradiction with itself: nothing less than that! Fortunately, it is only the clouds accumulated in Mr. Proudhon’s mind that collide with each other. A ray of sound philosophy will dispel them.

Mr. Proudhon speaks quite comfortably about applying algebra to Cartesian geometry. I like to think that he is familiar with it; however, since some of my readers may not be as robust mathematicians as Mr. Proudhon, I ask permission to explain in a few words the mechanism of this analysis, which, once understood, will greatly facilitate my explanations.

By applying algebra to geometry, the aim is to rediscover through algebraic calculation the proofs and solutions of geometric theorems and problems. I say rediscover, not discover; here’s why: from the very beginning of the analysis, one must establish an algebraic formula that encapsulates the essence of geometry. To represent the first of geometric types in algebraic form, technically speaking, to obtain the algebraic equation of a straight line (y = ax + b), one relies on the theorem of similar triangles. The specific geometric proof of the theorem of similar triangles implies the general proof of all theorems of plane geometry. That is, the first formula of analysis encompasses the entirety of geometry.

Then, everyone will easily understand that in these data, Cartesian analysis must necessarily return in detail what was given to it all at once from the start. By providing algebraic proofs and solutions for all geometric theorems and problems, the analysis traces back to its source.

In any case, one thing is very certain: if, by chance, the results of the analysis did not agree with those of geometry, it would not be geometry but the algebraic calculation method that should be blamed. And the identity of the results of geometry and analysis only confirms and justifies the excellence of the algebraic calculation method, and not the accuracy of geometric facts, which are rational facts beyond all further confirmation and justification.

To extract all the clarity that this well-chosen example can provide, one must equate political economy, a natural science, with geometry, and morality, which in the conditions we are considering is not a science but rather an art, the art of willing and acting, with the method of algebraic calculation.

That said, let’s follow the analogy.

Let’s first seek a fundamental principle of morality that necessarily contains the essence, not only of economic science but of all natural sciences. For instance, let’s accept this one; I take it very broadly on purpose: That man should freely fulfill his destiny without hindering the free fulfillment of the destiny of his fellows.

Now, I want to know, in a given case, if I can and should hit people around me with a stick. I consult physiology, and it teaches me that stick blows are harmful to health. On the other hand, morality implicitly states that it would hinder the free fulfillment of the destiny of my fellows to make them sick and perhaps kill them. Physiology and morality are therefore perfectly in agreement to forbid me from hitting. But if it were physiologically established that stick blows induce sleep, aid digestion, and cure rheumatism, then morality should encourage me to strike my relatives and friends; otherwise, morality would be wrong.

And so on. If economic science establishes, for example, that war is absurd, economically speaking, because it is nothing but the sterile annihilation of a portion of social wealth, ethics must proscribe war, in principle, as immoral; or ethics would be wrong. And in all cases, the identity of the results of morality and economy can only confirm and justify the excellence of morality and not that of the economy.

Thus, the very ingenious theory of applying algebra to geometry and the two examples cited above, to which a thousand others could be added, demonstrate sufficiently that it is up to morality to subordinate itself to the natural sciences, if not in its principle, at least in its applications, and that any morality that would allow itself to contradict the theorem of the square of the hypotenuse, the laws of refraction, the fact of the circulation of blood, or the results of the theory of value and exchange, would be a ridiculous and obsolete morality. There are like that.

Please, for a moment, Mr. Proudhon, rise above these detailed considerations that excite and mislead you. Know how to embrace with a calm and lucid gaze a broader horizon; and you will see that in the history of humanity, it is the crises of science that determine revolutions in morality. In the incessant procession of vigorous, renewing, progressive intelligences, Thales, Leucippus, Anaxagoras precede Socrates, Zeno, Epicurus, as Galileo, Copernicus, Kepler precede Voltaire, Rousseau, Condorcet.

Isn’t it then the act of clumsy carelessness to set ethics, a logical and healthy ethics, in contradiction with the deductions of the economy. It is said: — “Here are the facts: the division of labor is the most powerful process of industry, and the most fertile source of wealth; but it also tends to stupefy the worker, and consequently to create a class of serfs.”

This assertion is doubly inaccurate. There are more powerful processes for industry and more fertile sources of wealth than the division of labor: the use of machines, for example. A printing press will create a hundred, two hundred, three hundred times more wealth than a thousand, two thousand, three thousand copyists dividing their work would. And the study of production demonstrates that the practice of the principle of division of labor leads directly to the use of machines.

— “While the division of labor is the most powerful process of industry and the most fertile source of wealth, it also tends to stupefy the worker, and consequently to create a class of serfs. Both phenomena are as certain as each other.”

Both phenomena are as uncertain as each other. How so! Here is, for example, a worker who, in a ten-hour day, not dividing his work, makes two playing cards. He lives on his salary, more or less comfortably. We, economists, give him the means, through the principle of division of labor, to make in a ten-hour day six hundred playing cards, or to make his two playing cards in two minutes. And we stupefy him! He has nine hours fifty-eight minutes left to use as he wishes, to make more cards and increase his salary and well-being, to return home, talk with his wife, educate his children, educate himself, become interested in the affairs of society. And we enslave him! — “But, you cry, this does not happen. Work is divided, and the worker does not enrich; the worker is exhausted and he is stupefied.” That is true, and I regret it. But it does not happen because of the division of labor; it happens despite the division of labor, and for other reasons. Seek them out.

Mr. Proudhon has only heavily misused an observation by J.-B. Say, which has always seemed to me of singular impertinence. — “It is a sad testimony to render, said somewhere J.-B. Say, to have spent one’s life making the twelfth part of a pin.” This observation would be valid if one actually spent one’s life making the twelfth part of a pin. Thankfully, no one is compelled to do so! The worker can have leisure moments; after having exercised his arms, he can find opportunities to exercise his intelligence and his heart.

Moreover, let’s go further. If the observation of J.-B. Say were valid, it should reach into its root and follow in all its applications the division of labor, or what is otherwise called the specialization of occupations. If it is a sad testimony to render to have made pinheads all one’s life, it is equally one to have spent one’s life sewing shoes, planing boards, cutting stones, or plowing the soil. It is as unflattering a testimony to render as having spent one’s life recording acts, pleading inheritance or separation of body lawsuits, curing fevers or cutting off legs. It is also a sad testimony to render to have spent one’s life matching rhymes, or reasoning about the value and exchange of capital and income, of rent and tax, as did Mr. J.-B. Say who perhaps never cared much for botany, medicine, history, painting, music, or traveling in Italy.

All this would be stupefying, enslaving. Not at all; what stupefies, what enslaves the worker, is not specialization, it is the excess of specialized work to which he is proper, it is the insufficient salary because it is perpetually nicked, nibbled by tax, it is the misery that cannot be overcome by the excess of work.

The ideal of social order is that the worker, by engaging in the work suited to them, succeeds in earning their living, meeting present needs while setting aside resources for the future, through an eight or ten-hour workday; and then has the leisure to cultivate their mind and engage their heart, either by momentarily forgetting their specialization or by seeking to expand it. We all hear the complaints rising from all social classes about mind-numbing and enslaving work, that is, excessive and poorly paid work. Indeed, ethics and political economy agree, or rather, ethics, supported by sound political economy, strive to achieve the ideal we all aspire to.

As for the famous principle that opposites should balance and not destroy each other, precisely because they are opposites, perhaps we are less incapable of knowing and especially understanding it than Mr. Proudhon likes to assert. For example, in the issue at hand, if it were to be applied, I would say this, which Mr. Proudhon has failed to articulate: — In the current state of affairs, work and idleness destroy, or at least harm each other, with some working too much and others not enough; whereas in a better-ordered society, there would be balance or equilibrium between work and leisure, with everyone having their share of occupation and leisure.

To summarize, from the observations above, one must conclude that Mr. Proudhon’s terrible antinomy collapses dramatically. He stated it as follows:

What is undeniable is that on the same phenomenon economics seems to say yes, Justice no.

This assertion is unacceptable at any price. A political economy that stubbornly says yes, when justice clearly says no, would be a deplorable political economy; let’s be clear, it would not be political economy at all. And conversely, only an unjust justice could find itself in contradiction with geometry, optics, plant or animal physiology, or with true political economy.

Regarding the theory of property, distribution, and consumption, as well as the part of economic sciences that must jointly involve the theory of exchange value, true political economy, and the principles of justice, it indeed results from the application of justice to political economy as Descartes' analysis results from the application of algebra to geometry; that is, justice must be subordinate to political economy. It is not permissible to read, as Mr. Proudhon does, that justice will serve as a constant formula for political economy; on the contrary, it is political economy that must serve as a constant formula for justice. Mr. Proudhon reverses the logical order of ideas; he puts the cart before the horse.

This stems from his lack of a clear understanding of the role of ethics, as well as that of the economy. Mr. Proudhon seems to believe that justice is something immutable, that before him no one had any idea of the principles of justice, that after him, the world can eternally adhere to those he has proclaimed. This is not the case: the art of thinking, the art of willing, the art of feeling progress and transform from century to century, following step by step the development of human faculties. Justice must rest on a fundamental principle that can summarize not only the essence of political economy but also of all the mathematical, physical, physiological, psychological sciences. Ethics benefits from the discoveries of science.

And, with the subordination of moral sciences to natural sciences thus understood, it is not to present ridiculous antinomies that the philosopher should adhere, but rather to make profound, intimate, natural harmonies shine in their logical simplicity.

§ 3.

Either I am deceiving myself, or my readers must be fairly convinced by now that it would be pointless to wait for Mr. Proudhon on the field of true political economy. By this, I mean the first and most important of the economic sciences, the theory of value: he will not show up there. Consequently, we have no choice but to follow him where he wishes to go, to the field of morality. It was essential to establish that the theory of exchange value could not consent to be subordinated to justice. As for the theory of distribution, it cannot refuse to do so; however, this is still subject to discussion. Let’s see then, what are the principles of justice according to which Mr. Proudhon would propose to distribute social wealth.

“We know,” he says, "what Justice is in relation to people: Equal and reciprocal respect. But from this, we do not see what it could become concerning properties, functions, products, and exchanges. How can personal equality, which is the essence of Justice, become real equality? Is it even plausible that the latter can and should be a consequence of the former?… Such is the problem

that poses itself, like a trap, before theologians, philosophers, legal scholars, economists, statesmen, and which all, to this day, have agreed to resolve negatively.

You understand that theologians, philosophers, legal scholars, economists, statesmen, having all agreed to this day to resolve the problem negatively, Mr. Proudhon, who insists on always being alone in his opinion, will not miss such a fine opportunity to stand out. He, today, cuts through the problem affirmatively, and concludes with equality of goods and fortunes. It seems to me that it would be easy to show Mr. Proudhon how this solution is not as original as it appears. But I will not quibble over such a small matter, especially since he is about to put his opponents in contradiction with the laws of universal mechanics, and will tighten the difficulty, shedding light on it through analysis.

The laws of public and domestic economy are, by their objective and inevitable nature, freed from all human arbitrariness; they impose themselves inflexibly on our will. In themselves, these laws are true, useful: the opposite would imply a contradiction.

It is difficult to agree more fully with my point of view than Mr. Proudhon does here. Why must he not know how to consistently maintain this perspective, which is the true one?

They seem harmful, or, to put it better, frustrating, only because of the relationship we maintain with them, which is none other than the eternal opposition between necessity and freedom.

They appear so only to Mr. Proudhon. I protest once more that I have never, for my part, believed that the theorem of similar triangles, Kepler’s laws, or the results of the theory of value could harm or frustrate me.

Every time there is an encounter between the free spirit and the inevitability of nature, the dignity of the self is bruised and diminished; it encounters something that does not respect it, that does not return justice for justice and leaves only the choice between domination and servitude. The self and the non-self do not balance each other out. This is the principle that makes man the steward of nature, if not its slave and victim.

The antinomy reappears. However, we should have suspected, following Mr. Proudhon into the realm of morality, that we would find him there, charging on his big battle horse. The opposition between necessity and freedom is not as profound as Mr. Proudhon makes it. Better said: necessity and freedom oppose each other less than they correct, value, and harmonize with each other. Where would we go, great God! if there were only freedom in this world and no necessity, if the most passionate impulses of man’s will encountered an insurmountable barrier in the inevitability of nature! There could one day be a despot capable of wishing that his people had but one head, to cut it off at a stroke: Such monsters are rare; but are madmen not much less so? And tomorrow perhaps one might be found capable of annihilating the heat of the sun and the light of the day, for the happiness of humanity! What deplorable sophistry! The self, sole depository of freedom, justice, and respect, bruised, diminished in its dignity because the external and fatal nature does not respect it, does not return justice for justice! A force indignant that it is provided a resisting fulcrum! Steam and piston not balancing each other out! And to leave the self with only the choice between domination and servitude vis-à-vis external fatality, to make man the steward of nature if not its slave and victim, was it necessary to ignore and distort the admirable formula of Bacon: Man commands nature only by obeying it?

Having established this, the problem of the accord between Justice and economics is posed in these terms, I return to the example cited earlier about the division of labor:

Given a society where labor is divided, it is asked who will suffer the disadvantages of this division.

In turn, I ask Mr. Proudhon: ― Given a society where labor is divided, and the division of labor having more advantages than disadvantages, or, to put it better, the division of labor having only advantages and no disadvantages, it is asked who will benefit from the advantages of this division.

So much for progress! And it was important to stoke the antinomies just to not illuminate, to not even pose the question. No, the question is not posed; I do not accept it in these terms. And as long as I have a breath of voice left, I will shout to Mr. Proudhon: ― I do not accept that the division of labor stultifies workers. I do not accept that the natural laws: mathematical, physical, astronomical, physiological, economic, are tainted with a harmful or frustrating character. I do not accept that we are placed vis-à-vis nature in the alternative of servitude or domination: we obey it, and we command it together; we only command it by obeying it. This is a dish from your trade that you serve me: it is the dogma of original sin dressed in hypocritical sauce. Take back this dish; I know it, I do not like it, and I am glad of it,…

And since you cannot manage to pose the question of distribution all by yourself, I pose it myself:

Given, on the one hand: 1° natural values; 2° produced values whose sum constitutes, in capital and income, social wealth;

Given, on the other hand, persons in society;

It is asked, by what principles of justice the distribution of wealth, in society, among persons will proceed.

This is the question of the distribution of wealth; and well before Mr. Proudhon took the trouble to obscure it, two opposing solutions had presented themselves:

First solution. This is the solution of Mr. Proudhon and all egalitarians. The principle that must preside over the distribution of social wealth is as follows:― Men are absolutely and naturally equal. Therefore, let social wealth be distributed to them in equal portions. Equality of conditions and positions.

Second solution. This is the solution of the inegalitarians. Men are absolutely and naturally unequal. Let them be distributed social wealth in unequal portions. Inequality of conditions and positions.

These are the two solutions that have long been offered to settle the question of the distribution of wealth, the second supported by all those bound by the habit of an immemorial practice, the first rallying the sympathies of minds more or less intelligently progressive.

Now, allow me to propose a third.

As free and personal beings, all men are equal. Persons oppose things; but every person, as a person, is worth another. This principle serves as the basis for a first form of justice, commutative justice, which has a balance as its attribute.

As they freely fulfill their destiny in a more or less fortunate or meritorious manner, there emerge among men differences in aptitudes, talent, application, perseverance, success that make them unequal; and this inequality is the fact upon which distributive justice is founded, which has a crown as its symbol.

Men are therefore equal and unequal at the same time, equal as persons, unequal as they play a more or less brilliant or obscure, generous or disastrous role in society.

Then, let them all enjoy the same conditions, that is, let them all find at their disposal the same resources and means of action when they begin to fulfill their destiny; let them reach different positions depending on how they have used their resources and means of action, more or less happily or disastrously.

These are the conclusions that emerge from the principle of the two justices. The normal state of society can be better defined than by a comparison borrowed from the race game. Let all competitors start from the same point, none of them taking an advantage at the start. This is the wish of commutative justice. Let the most agile pass first, arrive at the goal before the others; let them receive the prizes intended for the victors. Thus claims distributive justice.

Equality of conditions; inequality of positions, that is then the true social formula; that is the fundamental principle that should preside over the distribution of social wealth among individuals in society. Here, we do not have to derive the practical and rigorous deductions from this principle, nor do we have to formulate a theory of distribution and property. We simply have to defend the principle itself; and this defense is self-evident. Indeed, one can say about the two theories of absolute equality and absolute inequality what Jouffroy so aptly said about philosophical materialism and spiritualism. There is no better refutation of the egalitarian theory than the inegalitarian theory, nor of the inegalitarian theory than the egalitarian theory. Mr. Proudhon perpetually confuses the two forms of justice, or rather, like all egalitarians, he tends to subsume distributive justice under commutative justice. We must also admit that there have indeed been theologians, philosophers, jurists, economists, and statesmen inclined to subsume commutative justice under distributive justice. It is understandable that all these adversarial theorists find themselves, in the presence of each other, in the same position as materialists determined to explain the phenomena of consciousness through the senses, and spiritualists determined to explain the phenomena of the senses through consciousness.

The egalitarians, having noted the primitive and natural equality of personal beings, conclude that there should be absolute equality. The inegalitarians, observing the resulting, eventual inequality of citizens, conclude that there should be absolute inequality. Then, the former cling to equality, while the latter cling to inequality, forgetting that both equality and inequality are equally certain, necessary, and indestructible facts, and overlooking that the moral problem consists of giving each its due, and drawing the line beyond which they should not extend. It is necessary to ensure that inequality does not encroach upon the domain of equality; it is necessary to ensure that equality does not impose itself where inequality should reign. In a word, they must be reconciled, based on this little-known principle of Mr. Proudhon, and — dare I say without a smile? — increasingly misunderstood by him: — that opposites should not destroy each other, but support each other, precisely because they are opposites.

Unfortunately, most people are exclusive. Egalitarian democrats loudly proclaim the equality of personal beings, and they abound in the sense of commutative justice. Inegalitarian aristocrats, in turn, emphasize the rights of merit-based inequality, and they know nothing but distributive justice. Furthermore, it must be added, to be fair to them, that ultimately, both sides end up mutilating all kinds of justice.

At first glance, to return to Mr. Proudhon, it seems, if one is not informed of the confusion, that between him and his opponents, the darkness is as complete as possible. Sections XXII, XXIII, XXIV, XXV, XXVI of his third study tire the attention as they wander through a chaos of confused ideas, errors, and contradictions. Once aware of the issue, it suffices to let them all go, his opponents and him, to see them refute each other very well.

The equality of goods and fortunes, it is said, is not Justice; it is even said to be against Justice.

Certainly, violently induced equality of goods and fortunes is unjust. We might add, for example, that inequality of goods and fortunes, fraudulently favored, is no less unjust. Equality of conditions; inequality of positions: this is the law of the social world. The State for all, and each for themselves.

“It is by breaking equality that society was born,” says Mr. Blanc-Saint-Bonnet; "that is why charity is the last law of the earth…

“You repeat that the Gospel has proclaimed the equality of men: that is false. Equality is a false name for Justice. The Gospel knew so well the inequality that results from our freedom, that it instituted charity for this world, reversibility for the other. Equality is the law of brutes; merit is the law of man.” (On the French Restoration, p. 90 and 124).

It is certain that Mr. Blanc-Saint-Bonnet is perfectly right when he declares that a certain inequality results from our freedom, that merit is the law of man. Lacking knowledge of natural equality and commutative justice, he commits the most grievous insult to the Gospel. Mr. Proudhon, for his part, clearly sees natural equality, but not the law of merit. Each of the two adversaries digs into their exclusive viewpoint: the proponent of equality impertinently denies inequality, the proponent of inequality blasphemes equality.

The year 1789 has struck. All the old legal hypotheses, hitherto accepted as the pure expression of Justice and sanctioned by religion, are reproached by the new legislator: seigneurial rights, hierarchy of

classes, nobility, third estate, villainy, guilds, mastery, privileges of functions, bell towers, provinces, bancocracy, and proletariat.

Mr. Proudhon revels against the inequality of conditions: he is right, we can leave feudalism to him.

In place of this systematic inequality, created by pride and force, the Revolution affirms, as identical propositions, 1. the equality of persons; 2. political and civil equality; 3. the equality of functions, the equivalence of services and products, the identity of values, the balance of powers, the unity of law, the community of jurisdiction; resulting, except for what individual faculties, exercised in complete freedom, may modify. 4. the equality of conditions and fortunes.

  1. The equality of persons, that is very good. 2. Political and civil equality, that is also very good. 3. The equality of functions, the equivalence of services and products, the identity of values, that is much less fortunate. Not all services and products are equivalent, not all values are identical. Did the Revolution ever affirm such an absurdity? This has not been demonstrated to me. In any case, I am unconcerned: the Revolution did not suspect the theory of value.

As for 4. the equality of conditions and fortunes, let us distinguish. The equality of conditions is the ideal of commutative justice, and this ideal, humanity has pursued, pursues, and will always pursue with invincible stubbornness through all the iniquities of slavery, serfdom, and the proletariat. The equality of fortunes is a chimera in contradiction with the wish of nature, which is that each person’s position be a consequence of their genius, their virtues, or their nullity and vices. Moreover, Mr. Proudhon did not fail to contradict himself. This restriction: except for what individual faculties, exercising in complete freedom, may modify, overturns his entire scaffolding, repudiates the equality of fortunes, sanctifies the inequality of positions, and re-establishes all the rights of distributive justice.

I come to the argument of the theorists of, inequality.

Justice, they say, is egalitarian; nature is not.

This is where the laws of universal mechanics intervene. Very unnecessary phantasmagoria! It was only necessary to say:—Justice and nature are both egalitarian and inegalitarian. It is because there are equalities and inequalities in nature that justice must consecrate both equality and inequality; and the task of the philosopher consists in tracing the limit of the domain of equality and inequality, from the point of view of rights.

Economic phenomena belong to objective fate; to attempt to bend them to the conveniences of Justice would be to put nature on the Procrustean bed, to do violence to necessity, a monstrous folly.

Evidently! and it is precisely in order not to put nature on the Procrustean bed, and not to do violence to necessity that it is appropriate to give part to both equality and inequality. The theorists of absolute inequality put nature on the Procrustean bed when they deny the equality of persons and reject the equality of conditions. The absolute egalitarians do violence to necessity when they conceal the inequality of merits and proscribe the inequality of positions. Mr. Jobard the inegalitarian, and Mr. Proudlion the egalitarian equally put nature on the Procrustean bed and equally do violence to necessity when they fiercely insist on allowing reality, in the universal mechanics, to see only inequality, the other only equality in everything, everywhere, and for all. That is insane!

The equality that is meant to be denied is that of similar beings.

Then, why isn’t it enough for you to defend it?

All individuals that make up society are, in principle, of the same essence, the same caliber, the same type, the same model…

Certainly, that is true: this passage is excellent. However, to not let myself be carried away with you to the point of disregarding the rights of distributive justice, I want to reread just as excellent a phrase from Mr. Blanc-Saint-Bonnet:— “Equality is the law of brutes; merit is the law of man.”

The Revolution…, starting from the principle that equality is the law of all nature, assumes that man by essence is equal to man, and that if, in practice, some are left behind, it is because they did not want or know how to make use of their means. It considers the hypothesis of inequality as a gratuitous insult… That is why it declares all men equal in rights and before the law… in order to increasingly realize in society this egalitarian Justice, that all citizens enjoy equal means of development and action.

…This egalitarian justice, that all citizens enjoy equal means of development and action, but that is commutative justice! Wonderful! Equality of conditions! What did you need, to get there, to foolishly invoke the equivalence of products, the identity of values? But that’s not all; and if you simultaneously note that a number of citizens remain behind because they did not want or did not know how to make use of their means, you implicitly sanctify the principle of distributive justice, and the rights of inequality. Inequality of positions! Shake on it: we agree!

I think, however, that you are mistaken if you think that it is not by virtue of this inequality, exaggerated though it may be, that society is sustained, but that it is despite this inequality. It would not be difficult, I believe, to prove a posteriori that the inequality of positions is favorable to the maintenance of society. A priori, it is even easier: if this inequality, exaggerated or not, has its source in a natural fact, as it does, then there is nothing but profit for society to give it its due. I no longer want any antinomies.

There is, however, a remark to be made in favor of Mr. Proudhon, and I make it with pleasure. I think, indeed, that this inequality, in the society as it is today constituted, is exaggerated. The cause of this exaggeration is evident: it lies in the fact that we have not yet conquered the equality of conditions. In the race of social life, the competitors, at the start, are not on an equal footing, which gives some an advance, others a considerable delay. Not all citizens, upon entering life, enjoy equal means of development and action. As the principle of the equality of conditions gradually becomes inscribed in the law, the inequality of positions is indeed seen to diminish. This does not prevent this inequality from being inevitable, favorable to the maintenance of society, and that the philosopher must take it into account.

Another purely historical remark. Mr. Proudhon contrasts the system of absolute equality with the system of absolute inequality, and, without reservation, attributes the former to the Revolution and the latter to the Church. This dual assertion is not accurate.

The system of absolute inequality is less a system of the Church than that of feudal society. Christianity will always have the honor of having loudly proclaimed the principle of equality. By calling men brothers, the Gospel declared them equals: for brotherhood is but the Eastern and figurative expression of equality, two brothers being the most equal thing in the world. That later, forced to take root in sown soil, to organize into civil and political society, Christianity rejected the profoundly just instincts of its beginnings to suffer the inequities of feudalism, becoming Catholicism, I cannot nor wish to conceal; its excuse is that it could do no differently. Regardless, it is not the Church, not Catholicism, and especially not Christianity that should be blamed for overlooking the equality of persons: it is the feudal constitution. The Church was not free to forget the beautiful maxim of Cicero: Una omnes continet definitio, ut nihil sit uni tant simile tam par quam nosmet inter ipsos sumus.

Regarding the Revolution, certainly, I admire it as a great and magnificent surge towards equality. But my admiration does not blind me. The men who led it never clearly distinguished the rights of equality from the rights of inequality. What’s more: once the dogma of equality of conditions was inscribed in all constitutions, they hardly knew how to pursue its realization: they lacked, above all, economic knowledge.

Equality before the law is the revolutionary formula; and, in its generality, it is accurate. But it comes down to the application, and one soon realizes that equality before the law necessarily implies:

Equality before civil law.

Equality before political law.

Equality before economic law.

The task we must pursue is to organize these various types of equality, thus integrating the revolutionary dogma into all parts of the social organism.

This work will be long; Mr. Proudhon can take an active part in it if he wishes; the first thing he has to do, for example, is to completely renounce his theory of absolute equality before what he calls the servitudes of nature, this theory so clear, so rational, so well-founded in fact and in law...which emancipates man from economic fatalism. Firstly, there is no theory clear enough, rational enough to free man from economic fatalism, no more than from the yoke of mathematical, physical, astronomical, physiological necessity. Secondly, the servitude imposed by nature is also a triumph for us, and the universe is not populated with irreconcilable antinomies; it is constituted by a set of harmonious facts limiting each other, indeed, but aiding each other instead of harming, and all contributing to the development of their whole.

Consequently, it would be futile, if not impossible, to free humanity from economic fatalism. It is simply a matter of conquering equality before economic law, that is, distributing social wealth among individuals in society according to the principles of equality of conditions, inequality of positions, the laws of commutative justice, and distributive justice.

I repeat that I am not here to formulate a theory of property and distribution. And yet if it were necessary to explain how one can, in a given case, easily move from a good theory to a sound application, I would say now, subject to a more thorough examination:

Regarding the distribution of social wealth among individuals in society,

Commutative justice, based on the principle of equality of conditions, demands that all individuals possess an equal share of the values that nature has given to all, or if you will, that all individuals collectively own the values that nature has given to all in common.

Distributive justice, supported by the principle of inequality of positions, demands that each individual possess in his own right the values that nature has given only to him or that he has given to himself through the free, persevering, successful development of his faculties.

Section II. — Economic category: — Exchange

§ 1.

Does my reader fully understand where they stand; and do they have an accurate account of the path taken? In case they have lost sight of the overall discussion, I summarize it in a few words. At the beginning of this study, I endeavored to make them distinguish two distinct questions in economic science: 1) the question of exchange value and exchange, 2) the question of property and the distribution of wealth. It was not up to me to follow the logical order of things and address the first question first: Mr. Proudhon insisted on settling the second beforehand. To explain this stubbornness, it should be said that in Mr. Proudhon’s view, the two questions are one and the same, or, even better, that Mr. Proudhon is unaware of the question of exchange value and exchange. Regardless, he resolved the question of distribution with the formula: Equality of conditions and positions; I with another formula: Equality of conditions; inequality of positions. He gave his reasons, I gave mine; let us be judged between. And yet, I want Mr. Proudhon to be tormented by the regret of having almost had in his hands the thread that would have led him to the true solution, without having been able to retain it.

As he begins his chapter on Economic Balances, Mr. Proudhon finds it appropriate to indulge in some recriminations against the theory of divine justice, stating:

It produces this system of privileges, monopolies, concessions… where the prince’s goods are confused with those of the nation, individual property with collective property.

...Individual property with collective property, there lies everything: these few words contain the clearest and most precise idea of the social problem as I have attempted to pose it, and, if remembered, to solve it. But this idea passes like a flash before Mr. Proudhon’s eyes when his thesis is established; then it fades and does not reappear. Had he thought to dwell on this distinction, undoubtedly Mr. Proudhon would have at least sought, if not found, a way to reconcile property and community, equality and inequality, commutative justice and distributive justice. Is it not astonishing that here, for the first time, Mr. Proudhon thinks of pointing out individual and collective property, without yet thinking of dividing it among each? Is it not sad that he spent his life railing against property and communism, without ever paying attention to what individualism and communism might each have that is legitimate and founded?

Now, let us leave the question of distribution and property to come to that of exchange value and exchange. I ask permission to present my ideas first: for those of Mr. Proudhon are so obscure that I need to have the clearest understanding of the problem in order to complement, in a way, my opponent’s theory, to then refute it.

Of exchange. — Exchange, I have already said, consists in this: certain things, in very large number, being not free, can only be obtained by those who desire them from those who hold them in return and by means of the cession of other equivalent things.

This is my definition, and I am eager to show all that it entails.

I. Thus defined, exchange implies appropriation; and we completely set aside, to make a distinct moral theory, the question of the legitimacy or illegitimacy of appropriation.

II. Exchange implies exchange value; and we immediately see that the particular theory of exchange fits into the general theory of exchange value, a natural theory. By methodically elaborating the question of exchange value, one is led to describe its effects and consequences; consequently, to analyze social transactions which all boil down to exchange: enterprises, sales and purchases, circulation, discount, loans and borrowings, rents, interest, wages… The general theory of exchange value and the particular theory of exchange are thus one and the same; and the work of the economist analyzing exchange is analogous, for example, to that of the chemist who would carefully place a mineralogical nomenclature in a general chemistry treatise.

III. But to retain from the general theory of exchange value only what relates more specifically to exchange, and to derive all the benefit from my definition, I will make another fundamental observation. As I have defined it, exchange implies the equivalence of the exchanged objects; that is to say, I do not call exchange the gratuitous obtaining or cession of objects having a certain value, nor the obtaining or cession of objects having a certain value against other non-equivalent objects; that is to say, for me, the equivalence or equality of value between the exchanged objects is, by definition, the essence, the soul, and the law of exchange.

“Thus, by the way, exchange is profoundly distinguished from donation and theft, as well as gambling. In donation, the donor receives nothing in place of what he gives; the donee gives nothing in place of what he receives. The same thing happens in theft between the spoiler and his victim. In gambling, there are only chances exchanged. At the beginning of the game, each player runs the chance of losing and the chance of winning; but when the game is over, only one wins and one loses. The one who has won has given, in exchange for his gain, only the chance he ran of losing as much as he gained; and the one who has lost has received, in return for his loss, only the chance he ran of winning exactly as much as he lost. All this, rejecting the case of cheating, and assuming that the game has been fair on both sides. In proper exchange, each contracting party sells and buys; each contracting party gives and receives. There is, on both sides, an equal sacrifice, and an equal compensation for the sacrifice48.”

This condition of equivalence in exchange is therefore a natural law, just as the theory of exchange value is a natural theory. Exchanges, in all the forms we have listed, operate within society as in a market. People want to buy, people want to sell. There is demand, and there is an offer to exchange. The effective value is established in relation to the effective demand to the effective supply; and exchanges are made on the basis of values, between equivalent objects, as necessarily, as fatally as bases and acids combine in chemical equivalents to form a salt. Exchange is governed by the market situation; in other words, exchange governs itself, independently of any human arbitrariness. Let the police ensure the fairness of transactions as they must ensure that a chemist, with his substances, does not poison his neighbors, nothing better; but ethics has no role here.

The role of justice with respect to exchange is a negative role: all that can be asked of it is to abstain, to respect the freedom of the market, so that the effective offer and demand increasingly approach the absolute offer and demand, and the effective value also increasingly approaches the absolute value. Freedom of exchange! Let there be demand, let there be offer. Let there be production, let there be entry; or, to return to the excellent formula of the physiocrats: — Laissez faire; laissez passer.

In summary, I conclude: 1° that the fact of exchange occurs by definition between equal values, the values being determined by the ratio of the sum of needs to the sum of provisions, in the market; 2° that the fact of exchange thus occurs spontaneously and naturally, like a natural fact that governs itself; 3° that the completely negative role of justice with respect to exchange consists of abstaining and respecting the freedom of the market.

And, consequently, I limit my role as a naturalist economist to attempting to expose, to then analyze, the various manifestations of the fact of exchange: enterprises, sales and purchases, etc., etc.

This way of understanding exchange is not that of Mr. Proudhon. He approaches the question differently: on the contrary, he specifically seeks its origins in morality.

All human morality, he says, in the family, in the city, in the state, in education, in speculation, in the economic constitution, and even in love, depends on this single principle: Equal and reciprocal respect for human dignity, in all relations that involve either persons or interests.

All this is certainly said in very poor terms. Perhaps it is very new; but, for sure, it is very vague. However, it is understood that Mr. Proudhon posits, as a principle of morality, the reciprocal respect for human dignity. How does he move from there to exchange? By concluding from the reciprocity of respect to the reciprocity of service.

The theory of human justice, in which the reciprocity of respect is converted into reciprocity of service, increasingly leads to equality in all things. It alone produces stability in the state, unity in families, education, and well-being for all, according to axiom 5, and nowhere any misery.

Let’s look at axiom 5. Here it is:

  1. Nothing can be balanced by nothing:—principle of equality and stability.

Axiom 5 is enticing, and the prospect of seeing stability in the state, unity in families, etc., even more so, if possible. But what philosophical or moral, theoretical or practical relationship is there from respect to service? And what does it serve us to conclude rather from the reciprocity of respect to the reciprocity of service, than from the reciprocity of service to the reciprocity of respect or any other reciprocity one could imagine? That I truly cannot say.

Why change the terms accepted in science, when moreover they are excellent and besides one only knows how to replace them with others that are vague and poorly defined? This is how the door is opened to sophisms, ambiguities, and endless discussions. Justice is founded on the reciprocity of right and duty. Isn’t that clear enough? Why respect? Why service? Respect does not say enough; service says too much, service is a word that implies a host of things outside of right and duty. Allow me here to bring the question back once again to its true terms.

There are three orders of services, or three different principles of relationships between men: 1) justice or right and duty; 2) association or mutual insurance; 3) charity or dedication. To these three principles correspond three categories of social relationships or services that are quite distinct and should never be confused. The duty that corresponds to a right is the strict and rigorous obligation, it is what one cannot not do. The association or mutual insurance is a perfectly legitimate fact, but free and that cannot be imposed. Charity or dedication is an even freer fact and can be imposed even less; for to impose it is to destroy it, to rob it of the spontaneity that explains and glorifies it.

Justice founded on the reciprocity of right and duty, this is the basis of society, the granite foundation on which the entire social edifice rests; association and charity are its crowning and peak. Association, mutual insurance are principles of relationships as advantageous as they are legitimate and it is good to encourage them. For all the cases that the law has not regulated, for all the contingencies that the association could not or did not foresee, there remains dedication or charity which proceeds neither from a recognized right nor from a previously consented commitment, but from a sympathetic impulse from man to man. Thus all applications contribute to the general good; but nothing should be inverted; each principle must retain its character, its scope, never substituting one for the other.

It is because they were ignorant of justice that the early Christians made charity a duty, something that is essentially repugnant to the nature of charity; it is also through ignorance of right and duty that our modern philanthropists so highly advocate association and mutual insurance. God forbid that I reject association and that I despise dedication; I willingly recognize all the effectiveness of mutual insurance, all the power of charity; but I hold above all, above everything, to justice founded on the reciprocity of right and duty because it leaves nothing to arbitrariness, because it commands imperatively, because association and charity have the right to intervene only when justice has pronounced its last word.

Is that well understood? Well then! I do not care, Mr. Proudhon, for your respect or your subordinate or reciprocal services. I want to always speak the language of philosophy and science, and I ask you once again, but this is the last time:—Can you define clearly, in good terms, the role of justice founded on the reciprocity of right and duty, vis-à-vis exchange? If you cannot, stop trying. And as for that role, here it is.

I happen to have in my hands a certain portion of social wealth; and I propose to exchange it.

First question. Did I have, yes or no, the right to appropriate these values? Am I, yes or no, the legitimate owner? Under what general principles of justice can I be? This is the question of property and distribution.

Second question. If I engage my values in: business, sales and purchases, circulation, discount, loans and borrowings,… which are the varied forms of exchange, according to what general laws governing the exchange value and what specific laws governing exchange, will these phenomena occur? This is the question of the exchange value and exchange.

This is the natural question, where justice founded on the reciprocity of right and duty has nothing to do. The general laws of value are natural laws, the specific law of exchange, the law of equivalence is a natural law. Mr. Proudhon suspects neither this nor the others. He strives to disrupt both divine morality and the French dictionary to conclude that he has the right to exchange his values for equivalent values. He does have the right, indeed, as to fall in the street if he throws himself out the window, or, when he breathes, to breathe through the lung. But Mr. Proudhon is not a man like any other: he needs to conclude from the reciprocity of respect to the reciprocity of breathing; it is only then that he is satisfied.

Do you think I’m joking? You are mistaken. Mr. Proudhon’s political economy, as you will see, is full of deductions of this force. What’s so surprising? He is going to deal with exchange; he has remade, God knows how! the theory of justice, and has neglected nothing but one thing: to learn about the theory of exchange value and exchange.

Workers and Masters.

From time immemorial the class of producers has been divided into two sections, the workers and the masters.

There are no more masters today: there are only workers among the producers. The Revolution has abolished the masterships; it is not necessary to talk about outdated things. There are, it is true, entrepreneurs and workers, but the entrepreneurs are not masters.

Equality of product and salary, this is here the exact translation of the law of reciprocity…

The translation is flawed and can only mislead us. Between the entrepreneur and the worker, there is an exchange of a salary for work. Equivalence of work and salary, that is the exact translation of the law of equality of values in exchange, while also analyzing the specific fact, the fact of exchange.

However, the value of work, like the value of salary, is established by the relationship of supply and demand, in the market. The worker who gives his time and effort for a certain price only does so because he cannot obtain a higher price. The entrepreneur who gives a salary in exchange only agrees to give it because he cannot give a lower one. It is free competition that makes the market situation, which determines all values, and which causes exchanges to occur between equal values. — “It is competition that sets a fair price on goods,” Montesquieu said.

...It is evident, today, that Justice does not preside over the condition of the vast majority of workers, who do not have the freedom of choice, and for whom the salary allotted by companies or entrepreneurs is far from expressing reciprocity.

Can anyone ever have the freedom to choose the price they will get for their thing? Workers and entrepreneurs are placed on the same footing: the law of the market dominates them all as much as the others, and companies can no more lower wages beyond measure than workers could raise them above what the relationship of supply and demand allows.

Mr. Proudhon’s cited example means absolutely nothing. If the worker endures a discount, it is "because competition forces him to, it is because, according to the market situation, his work is not worth a higher salary. But why isn’t his work worth a higher salary? Ah! there you go. And why is my house worth only ten thousand francs when my neighbor’s hotel is worth a million? And why does one doctor earn only a thousand ecus, when another earns fifty thousand?

No, justice, indeed, does not preside today over the condition of the vast majority of workers. Yes, the workers are harmed; the entrepreneurs are also; all workers are. I know this; but a priori and a posteriori, I affirm that exchange is outside the question, which is a question of distribution.

Sellers and Buyers.

If it is a consequence of Justice that wages should equal the product, then another consequence is that when two non-similar products are to be exchanged, the exchange should be based on their respective values…

Tell me, Mr. Proudhon, do you essentially insist that it be a consequence of justice that, when two non-similar products are to be exchanged, the exchange must be made in accordance with their respective values? And, please, in the case that there never was, nor should there ever be justice in the world, on what basis do you think the exchange could well be made, if not on the basis of exchange value? — By specific weight, no doubt, or by temperature? And again, would you not agree to realize that to speak of value is to speak of exchange, and to speak of equivalence in exchange; for, pray tell, how do you define exchange value if not as a property that things have to be exchanged for other equivalent things?

... When two non-similar products are to be exchanged, the exchange must be based on their respective values, that is, the costs each product incurs. By costs of production or cost price, we mean…

Allow me, Mr. Proudhon! In accordance with their respective values, you say, meaning the costs each product incurs. So, the value of products comes from production costs, according to you, and is measured against them? You state this incidentally, without explanations, without developments, without demonstration, and as something as certain, as well-known as it is certain and known that two and two make four?

Has it not occurred to you that production costs might not always regulate the market value? Have you not imagined that one might spend a lot to produce something useless, even harmful, common, and without value, or that one might spend very little to produce something very useful, highly sought after, and whose production might be very profitable until competition reduced its value and lowered its price? Surely, you have also never had occasion to recognize that there is not only produced wealth in the world, but also natural wealth; that it could be that the value of natural wealth and the value of produced wealth had the same origin, the same measure, being of the same nature; which consequently prohibited produced wealth from having its measure and its origin in a fact that was not common to it with natural wealth, such as production costs, for example?

You have never encountered this occasion? — No? Well! that is unfortunate, because from generalization to generalization, you might have arrived perhaps at conceiving in its scientific abstraction the general fact of exchange value; you would have more or less clearly felt the need to study its nature, to seek its cause, to enumerate its types, to describe its laws, to explain its effects, in a word, to constitute its theory; — and you would have had a fine time to make political economy, which, I swear to you, since I have been following you step by step, has not yet happened to you.

Mr. Proudhon takes the trouble to inform us that at the end of 1838, he came to Paris to pursue his studies, and that while leafing through the catalog of the Library of the Institute, he stumbled upon this division: political economy. He set to work. I am far from wanting to insinuate that Mr. Proudhon imposes on us, or to assert that he contented himself with leafing through the catalog. I do not doubt that he read the works of the economists, but what I am sure of and what I assert is that he did not derive from this reading all the desirable fruit. I cannot blame Mr. Proudhon for not having his mind more turned towards generalization and abstraction, towards synthesis rather than analysis: that does not depend on him. But I am entitled to reproach him for a great inattention, and to highlight here how many things the reading of economists has not taught him.

"Social wealth consists of three elements. In other words, there are three key values to consider for the economist; and here I am merely following the opinion of the most eminent and rightfully renowned writers.

These three elements are the land, the faculties of man, and artificial capital or capital proper. The land and the faculties of man constitute our natural social wealth; artificial capitals of all kinds, the fruits of savings and economy, constitute our artificial social wealth. The land gives rise to an income called land rent or soil rent. Human faculties give rise to an income called labor. Proper capitals, artificial capitals give rise to an income called profit49."

The general fact common to the land, human faculties, and artificial capitals, as well as to the three incomes from these three capitals: land rent, wages, profits, is the fact of exchange value. Exploring the nature of social wealth and the origin of exchange value has been the constant goal of political economy, from a philosophical point of view.

It is not given to science to reach the solution of the questions it poses at the first attempt; it is not even always given to it to pose the questions in their scientific clarity from the start. This is quite simple, the objects of the questions only appearing gradually in reality, and nature not taking the trouble to generalize or to abstract. A day comes when, from observation to observation, science is able to resolve, at the same time as to philosophically state, the problems that have long incessantly preoccupied it. Then, one can get an exact account of the slowly made progress, the uncertainties of the start, the clarities of the result, the efforts of the schools. This day has come for economic science; but this day does not enlighten Mr. Proudhon.

In summarizing, from the point of view of the question of exchange value, the works of Quesnay, Dupont de Nemours, Letrosne, and of the school called the physiocrats, one can conclude that of the three elements of social wealth: land, personal faculties, artificial capitals, they neglected two; and that for the physiocrats, all value came from the land. But how to explain their error? By this consideration that they did not understand the role nor the power of savings; and that work seemed to them to be never occupied except in filling an always gaping void, production incessantly rendering us the wealth destroyed by consumption. Thus, all of them, including Turgot, called sterile but not useless all classes other than the agricultural class.

Within an industrial people, in England, economists instead saw labor as the source of all wealth. According to them, not only did “artificial capitals” arise from labor, but in a sense, the land itself, which only had value to them given by labor. The English economists failed to recognize that the land possesses an instrumental value, a capital value, and that the rent or ground rent is its income50. Moreover, this truth has only been fully brought to light in recent years by Mr. Passy51, and the error of the English school is still today that of several economists: that of Mr. Thiers and that of Mr. Proudhon. It must be said that, in this unfortunate path, the second of these two publicists has the advantage of logic over the first. Recognizing no capital value in land, Mr. Proudhon denies its income; he does not give an exact account of his doctrine himself, but this is how one explains that he considers rent as an exaction by the owner. Mr. Thiers, trying to legitimize the income from a capital he does not recognize, has no other resource than to arbitrarily interchange the role of the owner and that of the farmer to represent rent as a worker’s wage.

The physiocrats and the English economists can thus be seen as having successively glimpsed one or the other half of the truth concerning the question of the origin of exchange value. Only it could have been asked of the former: — If all value comes from the land, where does the value of the land come from? And it could just as well be asked of the latter: — If all value comes from labor, where does the value of labor come from?

J.-B. Say endeavored to find a common fact that could explain both the value of the land and the value of labor; and he believed to have found it, with Mac-Culloch, in Utility. This was still a step toward the true truth. The misfortune is that utility is only the condition of value, and it must be combined with the fact of limitation in quantity to finally have, in the fact of scarcity, the cause and the measure of exchange value which constitutes, in the land, personal faculties and artificial capitals, in capitals and revenues, social wealth. In 1838, these results were already obtained in science, and the theory of J.-B. Say was ruined52. Mr. Proudhon could have been convinced of this, and, failing to be informed, he is inexcusable for having stuck, after the works of J.-B. Say, to the theory of Ricardo. Mr. Thiers is no less so.

I abandon the generalities of science, and I return to produced wealth. They obey the general law. The value of products comes from their relative scarcity; their market price is established in the market by the comparison of the sum of needs to the sum of provisions, in the quotient of demand to supply. An industrialist would be ill-advised to try to sell us an item for 12 francs on the pretext that it cost him 12 francs to produce it, if the same item is sold elsewhere for 10 francs; he should aim to produce it for 8 francs under the same conditions: he would attract customers. And thus, the elimination of monopolies, the freedom of industry and commerce, and fairly practiced competition remove all parasitic elements from the market price, bring the value of things down to the most moderate cost price, increase the sum of social wealth, and improve the well-being of consumers, that is, of everyone.

By production costs or cost price we generally understand the expenditure on tools and raw materials, the personal consumption of the producer, plus a premium for the accidents and non-values that litter his career, illnesses, old age, fatherhood, layoffs, etc.

Sure, I’m willing to admit that there are production costs, although Mr. Proudhon only enumerates them very inaccurately. But I do not agree that the cost price determines the market price: the latter obeys only the law of the market. It must be added that if the market price exceeds the cost price, the entrepreneur earns the profit of his capital and the wage of his labor. If it is below, the entrepreneur can close shop and look for a better use of his effort and his money.

Here Mr. Proudhon starts to cry out against any addition to the cost price, against parasitic costs, against intermediaries between producers and consumers; and he launches into a diatribe against commerce whose nature and character he does not know. Agricultural and manufacturing industry is a change of form; commercial industry or commerce is a mere displacement; it is a necessary and costly displacement, and its costs must be added to the cost price. The abuse of commerce is speculation or sterile displacement. Let Mr. Proudhon declaim, if he wishes, against speculation, and let him advise reducing its extent, that is very well. But let him not pretend that here, in Paris, neither the production costs nor the market price of cane sugar or cottons can be the same as in the West Indies and New York; and for the rest, as far as removing all parasitic costs from the cost price, he should rely on competition.

Equality in exchange, thus another principle outside of which there is no Justice. Now this principle, the Church and all of antiquity disregarded it; nowadays conservative economists of privilege strive to smother it under the mystification of their free trade.

If equality in trade were achieved, a new progress, an immense progress would be made towards equality of fortunes… But, persevering in this egalitarian direction, what would soon become of the hierarchy, the system of subordination and authority?

Yes, I ask you: what would become of the system of authority? Do not think that we would finally enjoy economic freedom;—no. But authority would pass into the hands of Mr. Proudhon who would introduce us to the sweetness of equality of fortunes, who would undoubtedly also know how to impose equality of physical strengths, equality of intelligences, equality of temperaments, equality of longevities. What an enchanting dream! and how regrettable it is that the economists conservatives of privilege strive to smother it under the mystification of their free trade!

The rest of this paragraph offers nothing interesting. We must leave aside Mr. Delamarre and his bazaar: it has nothing to do with science. We must also ignore everything that, in Mr. Proudhon, is mere declamation.

§ 2. Circulation and Discount.

Note that all the operations of the economy revolve around two terms: workers—employers, sellers—buyers, creditors—debtors, circulators—discounters, etc.

It is regrettable that Mr. Proudhon cannot bring himself to engage in dignified and serious science, and that he feels obliged, as soon as he approaches a topic, to engage in charlatanism. It is certain that every exchange, being a double sale and a double purchase, assumes the existence of a seller-buyer and a buyer-seller. It would be childish to simply state this, but it is quite ridiculous to inflate the words or distort them to express in barbaric terms a truth as banal as one from Mr. de la Palice, as Mr. Proudhon does. First, exchange is not the economy, and exchange operations are not all the operations of the economy. And then, where did Mr. Proudhon encounter the unknown animal he calls a circulator? Circulation is not a particular form of exchange: it is rather exchange in all its forms, considered from the perspective of the general movement of marketable values going from hand to hand from producer to consumer. The economy merely states that it should be as rapid as possible so that there is no loss of time. On the other hand, discounting is indeed a form of exchange; it is, to tell the truth, just a special case of interest-bearing loans: it is the present-day evaluation of a value that is only payable at a given future time. There is hardly a schoolboy to whom arithmetic has not taught this.

It is a perpetual dualism, systematic, dragging with it an inevitable equation. The economy is by essence, by its principle, by its method, by the law of its oscillations, by its goal, the science of social equilibrium, which means the equality of fortunes.

The economy is the theory of social wealth, that is what it is by its object. To say that by essence, by its principle, by its method, by the law of its oscillations (!), the economy is the science of the equality of fortunes is to utter a monstrous absurdity in terms of a tasteless pitch.

This is as true as mathematics being the science of equations between magnitudes.

You do not know mathematics, Mr. Proudhon; do not pretend to know. Let’s leave aside these braggadocios, and get to the fact at hand.

Everyone knows that the amount of cash circulating in a country is far from representing the importance of the

exchanges that, on a given day, take place in that same country.

Among all the natural sciences, the economy is certainly where observation is the most painful. There is no science where it is easier to see phenomena that do not exist, to not see phenomena that do exist, and to imagine phenomena as happening exactly the opposite of how they happen. The economy, more than any other natural science, thus requires great sincerity of spirit and solidly established fundamental principles in its adherents. These two elements of research are absolutely lacking in Mr. Proudhon, who only makes up for them with very insufficient goodwill.

This insufficiency is betrayed by a persistent fate that never allows Mr. Proudhon to clearly state the questions. He starts by invoking erroneous principles; he then draws improbable deductions; in the end, it always turns out that these sad preliminaries have no direct or indirect relation to the question which is no more approached than it was before. Mustn’t Mr. Proudhon be truly rich in sophisms to lavish them on every occasion with such gratuitous generosity? The twenty lines that I am about to examine are one of the most remarkable examples of Mr. Proudhon’s deplorable impotence in presenting the simplest problems of the economy in their true light. The beginning is rather incoherent, and I must admit I do not clearly grasp Mr. Proudhon’s idea. Let’s try to understand anyway. And first, Mr. Proudhon, what exactly is the meaning and scope of the fact you mention? What is the relationship between the mass of circulating cash and the importance of the exchanges that, on a given day, take place in a country? I honestly do not know, for myself, what the mass of cash circulating in France is; I am also unaware of the importance of the exchanges that take place in France on a given day. How do you know that on a given day, the mass of cash does not represent the importance of the exchanges?

This can be seen by the Bank of France, whose cash reserve, on July 10, 1856, was 232 million, and the obligations were 632.

This is becoming a bad joke. A bank that would have 632 million in obligations and only a cash reserve of 232 million would be in a state easy to define: it would be bankrupt. This was not, let me tell you, the situation of the Bank of France on July 10, 1856: it had 232 million in cash, plus its portfolio containing 400 million in values it had to collect, plus its capital of 90 million. Its obligations represented by 632 million in banknotes were therefore guaranteed by assets amounting to at least the same sum.

This was the situation of the Bank of France on July 10, 1856. Let us not rely on Mr. Proudhon, and let’s find out for ourselves what can be seen from this. What we see is:

1° On a given day, exchanges taking place in trade, a number of these exchanges are not done in cash, against cash, but on credit, against trade bills.

2° On the same day, the Bank of France engages in the following operation. It exchanges a few million banknotes intended to circulate for a few million trade bills intended to stay in portfolio for 45 days, paper against paper, balancing everything very precisely, and with the intention of exchanging again, 45 days later, its few million trade bills for as many millions of banknotes, paper against paper, or, if it cannot recover its banknotes, against cash to cover these notes still in circulation.

I state the facts, I do not yet explain them. However, it is essential to note that, in the 45-day interval, the banknotes have passed from hand to hand for the greatest pleasure and utility of the citizens; and that it is mainly in this fact that lies the whole meaning of the operation described above.

That is what we see from the situation of the Bank of France on July 10, 1856. The second fact, which is a fact of circulation, implies the first, which is a fact of credit. Instead of telling us how the mass of cash circulating in a country is far from representing the importance of the exchanges that, on a given day, take place in that same country, Mr. Proudhon should not have distorted the facts and should have stated, like us, that on a given day, exchanges taking place in commerce, a number of these exchanges were not done in cash against cash, but on credit against trade bills. He would have grasped the problem of credit.

However, wait! Here is where my economist’s position becomes extremely embarrassing: it is that he has no use for credit or circulation; he chases after discount, which escapes him if he distorts the facts in view of his ideas. But, one might say, what is discount?

3° It is a detail entirely episodic grafted onto the second of the phenomena we have stated, that of circulation. The day the Bank of France exchanges its banknotes intended to circulate for trade bills intended to remain in portfolio for 45 days, it levies a discount on the amount of the bills.

What should be the rate of this discount? That is what preoccupies Mr. Proudhon. But this is a question quite different from those of credit and circulation that he addresses. The discount, whether one accepts it or disapproves of it, is the interest on the capital that the Bank puts into circulation, or at least the Bank presents it as such. Is it wrong? Is it right? We will see later; it is not yet time to worry about that. Credit and circulation on one hand, discount on the other, are eminently distinct facts; they do not blend, they barely resemble each other in the eyes of an attentive observer. And I challenge Mr. Proudhon to reach the discount through the path he has taken: I want to confine him to the field of circulation and credit in such a way that he cannot escape from it for a long time.

This is why I am revisiting this topic with him. Together, we note, based on a more thorough examination of the Bank of France as of July 10, 1856, that on a given day, certain exchanges are made not in cash against currency, but on credit against commercial bills. Why is this? How so? For what purpose? Let Mr. Proudhon explain this to us: he will have given us the theory of circulation and credit.

Mr. Proudhon sees in this fact a shortage of currency, undoubtedly regrettable in his view, one of those economic inevitabilities from which his doctrine so effectively liberates us; and initially seeking the sources of this evil, to eradicate them, Mr. Proudhon graciously informs us, regarding this shortage, and by the way, that it cannot but exist since:

...Currency only has value insofar as it forms, as metal, a proportional fraction of the total wealth of the country.

That’s perfect: we will shortly examine the more or less appropriateness of the causal relationship between this principle and the effect, as for the principle itself it is unassailable.

Unassailable at least in essence; for it certainly is not in terms, as we shall see.

First, since the term social wealth is given to the sum of useful things that have exchange value, it is rather ridiculous to state that currency only has value insofar as it forms a fraction of the country’s wealth: on the contrary, it must be said that it is part of the country’s wealth only because it has value.

And why does currency have value? According to us, because it is useful and rare; according to Mr. Proudhon, because it costs to produce. It is indeed urgent to remind Mr. Proudhon himself, who seems to forget: according to him, currency is only worth what it costs to produce; according to him, the gold a miner collects in a day by washing the alluvial sands of California should only pay for the day’s work; according to him, 100 gold francs are not worth 100 francs, they are worth 5 francs, and they should not be exchanged, for example, against 2501kg, but against 12.5kg of bread. Why then is it not so? Surely the value of currency is no more distorted by monopoly and arbitrariness than any other value. Why do 100 gold francs worth what they are worth, and not what 5 francs are worth. I can tell you: it’s because Mr. Proudhon’s theory is fundamentally inaccurate.

Next, I would ask Mr. Proudhon, who professes enthusiasm for mathematics, to explain what the word proportional is doing in his sentence. Does it mean that the total value of the currency is proportional to its amount? Does it mean that the total value of the currency in relation to its quantity is proportional to the total value of the country’s wealth in relation to its quantity? Does it mean that the total value of the currency in relation to the total wealth value is proportional to the quantity of currency relative to the quantity of wealth?

These three assertions, which are one, would have the merit of being equally in contradiction with our theory according to which the value of the currency is explained and appreciated by its rarity, and with Mr. Proudhon’s theory that places the origin and measure of the value of currency in its production costs. Indeed, to state that currency or any other kind of the country’s wealth only has a value proportional to the fraction it forms of the country’s wealth, would also imply that all kinds of the country’s wealth, in the same fraction, in equal quantities, have the same value, which would be absurd since they do not all incur the same production costs, nor are they all equally useful or rare, demanded or offered.

Moreover, how does Mr. Proudhon appreciate the proportional fraction, and the quantity of the currency? — and by what unit? And does his sentence really make any sense? I do not think so, definitely. Yet this is where grand words lead us, thrown around thoughtlessly, without knowing either their meaning or their scope!

In all sincerity, I think that Mr. Proudhon simply wanted to recall that gold and silver had a value as precious metals, before having a value as currency, that their value as currency was nothing other than their value as precious metals, that is to say a natural and not a conventional value; consequently the total value of the currency could only be a fraction of the total value of the country’s wealth.

Children in swaddling clothes know this. This observation is so elementary that it is almost naïve. Nevertheless, it is perfectly accurate. Still, it would have been necessary to know how to state it!

Now, it is a matter of recognizing whether there is really a satisfactory correlation between the two propositions of Mr. Proudhon; if this last observation explains what Mr. Proudhon calls the shortage of currency; if it is true that on a given day, a certain number of exchanges not being made in cash, against currency, but on credit, against commercial bills, this comes from the fact that the total value of the currency is and can only be a fraction of the total value of the country’s wealth.

But this is not the case: the explanation is false, the correlation is imaginary, and the causal relationship between the two facts could only satisfy Mr. Proudhon’s superficial attention.

Suppose that the total value of the currency circulating in a country was only half of the total value of the country’s wealth, it would still be a fraction; yet all exchanges could still be made, not only on a given day but at a given moment, between the country’s wealth, excluding the currency, on one hand, and the currency on the other. Suppose that the total value of the currency was only a third of the total value of the wealth; on a given day, all the wealth, minus the currency, could still be exchanged for currency: it would just require that the same amount of currency be used to make, on the given day, two exchanges a few moments apart. Finally, suppose that the total value of the currency only equaled a tenth of the total value of the wealth, it is still conceivable that in the country, on a given day, all the social wealth could in a sense be exchanged, and that the currency would serve as an intermediary for all the exchanges: this would simply mean that the same amount of currency would have to serve, on the same day, to make nine exchanges; which is not at all impossible. And generally, if one considers that, on the one hand, not all the wealth of a country enters into exchange on a given day; that, on the other hand, the circulation of currency greatly multiplies its services, one will not allow Mr. Proudhon, under any pretext, to assert as cavalierly as he does, without any proof, that if all exchanges are not made on a given day against currency, it comes solely from the fact that the total value of the currency circulating in a country is only a fraction of the total value of the country’s wealth.

To address this shortage (of currency mass),… traders are in the habit, while waiting their turn for reimbursement in cash, of drawing bills of exchange on each other, or alternatively, which is the same thing but in reverse, of subscribing reciprocally to promissory notes, whose circulation serves, until a designated day called the due date, as money.

Precisely, this is what he will need to explain to us: how commercial bills serve as money, how bills of exchange and promissory notes address the shortage of the currency mass. This shortage has not been demonstrated at all; however, I admit that it exists, and I await Mr. Proudhon to explain how commercial effects address it.

A priori, I think this will be very difficult, and I imagine that my opponent here again, following his terrible habit, intends to resolve an antinomy no less insoluble than fantastical. And indeed, let’s be logical. The cause of the evil is known: if there is a shortage of the currency mass, it comes, Mr. Proudhon says, from the fact that the total value of the currency is only a fraction of the total value of the social wealth, or at least is too small a fraction. Sublata causa, tollitus effectus remove the cause and you will have removed the effect.

Therefore, let’s increase the total value of the currency mass.

To do this, first note that it would be pointless to increase the mass itself, either actually or fictitiously by issuing paper: this would only lead to a decrease in the intrinsic value of the currency, and the total value would not change. If there were twice as much gold and silver as there is, it would take twice as much to make the same purchase.

In Mr. Proudhon’s theory on the origin and measure of value, the solution is simple. Increase the production costs of precious metals; subject them to national workshop labor; their value will rise without reducing their quantity; the mass of currency circulating in the country will soon reach a total value equal or superior to the total value of the rest of the country’s wealth. Unfortunately, Mr. Proudhon’s theory is not accurate.

In our value theory, the problem could only be resolved by an increase in the sum of demands; however, for this result to be achieved, it would be necessary to discover some inestimable utility in precious metals, such as a nutritional, hygienic, or therapeutic utility.

All of this seems quite impractical; especially, it seems very unlikely that bills of exchange and promissory notes would be equivalent to such measures. Let’s see how Mr. Proudhon can explain that trade papers compensate for the insufficiency of the total value of the mass of currency!

There! — Mr. Proudhon does not explain it; and I assure you that you hardly know him if you hoped otherwise. Mr. Proudhon forever abandons circulation and credit to undertake discounting. Let us resign ourselves; and consider the theory of discounting!

The banker is the industrialist who, for interest and commission, takes on the task of liquidating all these claims in due time and place; consequently, providing merchants, in exchange for their securities, the advances they need.

This operation is called discounting.

This piece is short, but it is good. It is not because of the advance that the banker retains interest and commission; it is because of the interest and commission, liquidation fees, that he makes an advance. This reasoning is priceless: allow me to make you appreciate its beauty.

You hold a trade paper; but above all, you are in great need of a sum of money. You go to a banker and first propose that he simply take on, for interest and commission, the task of liquidating this claim in due time and place. The industrialist points out that if time does not matter to you, place should not matter either; perhaps it is no farther from your place to your creditor than from your place to him. You insist. The banker agrees to render this slight service for a commission; but he protests that by retaining interest, he would be robbing you as if in a forest. Only then do you suggest that, having hoped for his complaisance, you counted on him making no fuss about advancing you, in exchange for your title, the sum you need. Bilboquet, what do you think? For me, I confess, one thing lacks for my happiness: I would like to know how the banker pays the sum, whether it is in paper or in metal? In the latter case, what an unexpected solution to Mr. Proudhon’s theory on the insufficiency of the mass of currency! But also what a beautiful vicious circle!

After so brilliantly presenting circulation, credit, discounting, in twenty lines, Mr. Proudhon devotes one hundred fifty lines to rectifying the balance sheet of the Bank of France, a few words of which will do justice.

Before that, I want to try to present the problems he has distorted and mutilated in their true light. I cannot always examine all of Mr. Proudhon’s arguments with the same patience and care: the mere idea of such a task makes my hair stand on end. Since I have once undertaken to address one of these absurd expositions phrase by phrase, I want to complete my task by enabling my reader to see the chasm between such reckless ramblings and the scruples of truth. For this, I need only develop and explain the facts that I could ascertain by examining with sincerity, and by restoring to reality against Mr. Proudhon’s falsifications, the situation of the Bank of France on July 10, 1856.

I. Credit Problem. — For what reason, for what purpose, do exchanges take place on a given day in commerce, a certain number of these exchanges not being done in cash against currency, but on credit against trade papers?

It is clear to me from the outset that the fact which so exclusively preoccupied Mr. Proudhon, the absence or presence of currency in exchanges, is of the least importance in this instance.

Every exchange is made, by definition, between two values, and moreover, between two equal values. That one of these values is a precious metal, money, currency, is a particular case in practice but very general in theory. The utility and convenience of currency in exchanges are quite interesting details for the theory of money, but very episodic for the theory of exchange. As long as there is an exchange between two values, between two equal values, that is essential. What does it matter whether one of the exchanged values is a metal rather than land, a house, or labor? In commerce, assuming there was a shortage of currency to serve as an intermediary in exchanges, there would be only one thing to do: dispense with an intermediary; and, if it was not possible to exchange goods for money to then exchange money for goods, it would be necessary to exchange goods for goods, balancing the accounts.

Thus, the absence of currency is by no means the crucial fact in the credit problem as I have presented it. Let us dismiss this fact; what remains is that the exchange is done on credit instead of cash. That is the crucial, characteristic, abnormal fact in the exchange, which must be explained and justified.

The insufficiency of the mass of currency, whether it exists or not, could not be an insurmountable obstacle or even a serious difficulty for exchange; this is certain: goods would be exchanged for goods, values for values. But suppose there is no currency, no goods, nor any value to give in exchange; this circumstance would be more serious and would make purchasing difficult. Understand me: I say no circulating or available value; for it is certain that if the destitution was absolute, the purchase would not only be difficult: it would be impossible. Thus, where the problem of exchange becomes complicated, is when one wants to engage fixed or committed values in exchange. The solution to this difficulty is also the solution to the credit problem. This solution consists of representing fixed and committed values by their property titles, and launching these titles into circulation. The existence of fixed and committed values, attested by circulating and available property titles, justifies the confidence of the seller who accepts them in exchange, and who grants credit until the day predetermined by the buyer when, the capitals being unbound, he can, armed with the property titles, recover his advances. It is therefore with good reason that Mr. Joseph Garnier, following Mr. Cieszkowski, defines credit:— “The transformation of fixed and committed capitals into circulating or unbound capitals.”

Such is the theory of the promissory note, of the bill of exchange. They should be considered as circulating and unbound property titles of fixed and committed values. And that is why, exchanges taking place on a given day, a certain number of these exchanges are made on credit, against trade papers, instead of being made in cash, against currency.

II. Circulation Problem.—The Bank is the instrument for circulating securities; the theory of banknotes is the same as that of commercial paper.

In exchange for their commercial paper, which has a specified due date, the Bank gives merchants banknotes which have an unspecified due date, which are always due and always to be due, which have an immediate or deferred maturity at the discretion of the holders. It is sad that one must teach Mr. Proudhon that neither commercial paper nor banknotes can compensate for any shortage of cash, that they are only titles of ownership and not at all exchangeable values. When I have a 500 franc banknote in my pocket, it means that there are 500 francs in cash in the Bank’s vault that belong to me and that I can go and fetch whenever I fancy. The 500 francs in cash and the banknote do not constitute a wealth of 1000 francs. If the 500 francs actually exist in the Bank’s vault, my note is good; otherwise, it is worthless. I can sign commercial papers for several millions, but if I do not possess a single cent, whether pledged or circulating, fixed or unencumbered, my notes are just scraps of paper. A house located in Paris and the sale contract deposited with a notary do not constitute two exchangeable values; only the contract certifies that the house belongs to Pierre or to Paul who can dispose of it.

If there is not enough cash in the Bank’s vault to guarantee the payment of all the notes, there is at least in its portfolio commercial paper with a determined maturity that are, too, titles of ownership representing the committed cash. The vault and portfolio constitute the active that exactly covers the value of the notes, or the liabilities of the Bank.

The banknote is payable to the bearer; it has a maturity ad libitum. These two properties justify public confidence. Merchants pass the banknote from hand to hand, and it is thus that it can act as money, as long as one is certain that it will be paid.

III. Discounting Problem.—Let’s first assume that in exchange for their securities, the Bank gives merchants cash, the operation is easily analyzed. The Bank makes an advance of a sum of money to the merchants which will only be reimbursed on the maturity date of the securities: it’s a loan. Hence, it retains the interest on the capital lent, nothing simpler. The discount understood in this way remains to be discussed as a loan with interest.

On the other hand, suppose the Bank pays in notes; it is certain that by retaining the discount, it equates simple titles of ownership to cash. Its defense is easy: its notes are always due and always to be due, payable to the bearer; they have all the properties of cash. In this second case as in the first, the discount still appears as a form of interest-bearing loan.

So, what will be the discount rate?—All economists will tell you:—The very rate of money interest, determined by the market situation, 5% for example if the money interest rate is at 5 francs.

And what does Mr. Proudhon say?

Mr. Proudhon assumes that the circulating capital is represented by the issuance of banknotes for 600 million, with an average maturity of the paper received for discounting of 45 days, renewing 9 times a year, and the total amount of operations being 5 billion 400 million.

He proposes a retention of 1/8% or 0.125 francs; the Bank’s revenue, for the year, will be 6,750,000 francs.

That is to say, in final summary, that Mr. Proudhon of his private authority, fixes forever the interest rate of money, and the discount rate at 8, that is 1.125 francs.

To this, I have only one thing to say.

Mr. Proudhon writes works of morality and political economy, supposedly; and he sells them to me at a rate of 5 francs per volume. Today I claim that he should no longer sell them except for 1.125 francs. Mr. Proudhon wants the exchange to be made in reason of the respective values, that is, the costs that each product bears. He told us what he means by production costs: the expense in tools and raw materials, the personal consumption of the producer, plus a premium for the accidents and non-values that dot his career, illnesses, old age, fatherhood, unemployment, etc. He estimates that, because of this cost price, Mr. Proudhon’s works are worth 1.125 francs per volume. Let him prove me wrong. Or if he continues to sell, as in the past, his books at the price attributed by the market situation, I demand that he no longer opposes that the comparison of demand and supply, and the law of the market also govern the interest rate and the discount rate.

I will not go further into the examination of Mr. Proudhon’s practical ideas on discounting; for, indeed, I do not pretend to claim that there is nothing to correct in the balance sheet of the Bank of France. It is certain that the Bank of France enjoys a privilege costly to the public; that everyone should have, as well as this company, the right to discount general trust. This is true. But, on one hand, I think that the issue is not of a difficult solution, since there is only to limit by the competition the interest rates and discount rates inflated by the monopoly; and, on the other hand, I also think that this solution is not the most urgent.

A people’s bank, any bank can give us at a cheaper price the same service that the Bank of France renders, I agree. But there are far more important things to do than to pursue discounted discounting and limited interest; or at least, if these are desirable improvements, they are nothing more than a matter of administration. We, on the other hand, are doing science; and we are looking to see if there might be some radical reforms that need to be prepared, accomplished, in the economic regime of society.

§ 3. Lenders and Borrowers.

The balance of discounting leads directly to that of credit or loan.

It is not the balance of discounting that leads to the balance of lending; it is the balance of lending that leads to the balance of discounting, and these two balances stem from the general theory of credit. Mr. Proudhon himself, despite what he says, could not approach the balance of discounting without touching upon the general theory of credit, and when he rejects the balance of lending after the balance of discounting, my opponent makes a methodological error that is further explained by his scientific shortcomings. But here, we enter a series of new explanations.

The phenomena of exchange as they occur between workers and entrepreneurs, between sellers and buyers, are not essentially different from the phenomena of exchange between lenders and borrowers, between property owners and tenants. However, while the facts are similar, the theories differ deeply in that the explanation of loans and rentals involves a clear notion of a very distinct separation between capital and income, a notion that is not as necessarily assumed by the theory of enterprises and sales. Between the preceding considerations and those that will follow, there is thus a boundary that Mr. Proudhon has never envisioned in his life, and which I must point out.

Sections 2 and 3 of Part I of my work aimed to highlight in the doctrine I refute errors of deduction that were related to a fundamental error concerning the purpose of economics and the relationship of economics with morality. In Sections 1 and 2 of Part II, I have strived to counter utopian applications of a flawed principle on the origin and measure of exchange value. Section 3 will be devoted to exposing errors in Mr. Proudhon stemming from an absolute ignorance of the theory of capital and income.

This theory, Mr. Proudhon does not even suspect, much less does he suspect the entire theory of social wealth. Mr. Proudhon has never thought to distinguish, from the point of view of their role in economics, the tree from its fruit, the cow from its milk, the doctor from his consultation. He is unaware that certain values are capitals, others are incomes. A fortiori, he has never thought that capital could be distinguished from income, income from capital; that one should ultimately seek the character of capital, that of income. Thus, before entering into the examination of his ideas on lending and renting, I am compelled to fill with some quick definitions a huge gap that would leave an entire category of exchange facts without possible explanation.

On capital and income.—As we know, we have found the origin of exchange value in the fact of the limitation in quantity of things that are useful to us. Among things that are useful to us, many are not only limited in quantity but are also limited in duration: they are consumed. Some are consumed slowly, others more rapidly, others instantaneously. It is the fact of limitation in duration that will allow us to distinguish between capital and income.

We must call capital any value that is not consumed or that is consumed only over the long term, or that is consumed more or less rapidly, but not instantaneously, any utility that survives the first service it renders us, a plot of land, a residential house, a lawyer’s talent are capitals.

We must name income any value that is consumed instantaneously, any limited quantity utility that disappears after the first use we make of it. Thus a ration of bread, the pleasure and security of sleeping under a roof for a night, a speech given for the defense of a client: these are incomes.

This definition does not allow us to confuse the supply with capital, which is a precautionary accumulation of incomes.

Such is the rigorous definition of capital and income. The theory that follows encompasses the most important questions of economic science. But in the limited scope of my work, I can at most only add a few complementary developments to the definition itself.

I. There are naturally unconsumable values, utilities that, whatever we do, necessarily survive the services they render. Such as a plot of land. These things can only ever play one role: that of capitals.

There are values that by nature want to be consumed instantly, utilities that necessarily disappear after the first use made of them. Such as a ration of bread. These things can only ever be considered as incomes.

There are also, and in great number, values that are or are not instantly consumable, that survive or disappear after the service or use, depending on the use or service? even that we demand of them. A tree planted in an orchard and which, every year, bears fruit is a capital. The same tree, if cut down to make firewood, is an income. It often depends on us to consider things as capitals or as incomes, and to use them accordingly. It is essential to remember that values are either capitals or incomes depending on the role they play.

II. The nature of capital is to generate income, the nature of income is to be born from capital.

When capital is more or less rapidly consumable, it reproduces, it is maintained, it increases through the intelligent sacrifice of income. As for income, it grows with the growth of capital itself.

But, in general, it can be said that capital is intended to produce and that income is intended to be consumed. Capital forms what is called the productive fund, income forms what is called the consumption fund.

It follows from this: 1° that capitals must not be left idle; 2° that as much as possible, the consumption of capitals must be avoided. These two propositions are, so to speak, self-evident: by leaving capital idle, we deprive ourselves of the income it could provide; by consuming the capital, we dry up the source of income itself.

III. It often happens that by the word: capital, we properly mean cash. If by this we simply want to acknowledge in cash, as an important property, its ability to easily represent all capitals without distinction, the designation is perfectly legitimate. But if this appellation tended to confer on cash the special properties of capital, it would be faulty. The income from cash consists in the convenience of using it as an instrument of exchange; the proper income of the land, the income of a house, the income of a great singing talent, all incomes, whatever they may be, can be compared to that.

In the absence of recognizing in cash particular capital properties, we could fall into the opposite error which would be to overlook its income: that would not be more reasonable.

I have one hundred thousand francs in cash; I exchange them for a plot of land that provides me with income: it is the energy of its natural fertility. My seller in turn exchanges the hundred thousand francs for a house whose income consists in the daily shelter it provides. And so on. After a certain time, consider the work of the different capitals that have entered into exchange. All have provided their income, and the cash has given its own, that is, the advantage that all sellers and buyers have found in using it as an instrument of exchange. This advantage should not be overlooked because it has nothing material, nor generally the income from cash because it precisely arises from the passage of this cash from one hand to another, or, to use the proper word, from circulation.

From all this, it follows that we should not more chase cash from the number of capitals than we should attribute to it a preponderant place among them. We must see in cash neither more nor less than a capital; and above all, we must approach the question of lending or renting from the general standpoint, like any other question. Thus I will do.

Capital can be alienated in two ways: by sale or by donation. The same is true of income, and so it is with all values.

Without alienating the capital, it can still be rented or lent. Conversely, income cannot be rented: it is sold or given, but it is not lent. The difference between capital and income is betrayed here by the difference in the transactions they can give rise to.

I say that capital can be rented or lent. It is understandable that this operation makes sense and has a reason for being: it provides the borrower or tenant with the enjoyment of the income. It is even understandable that it has no other sense or reason for being than those. Moreover, it is understood that lending or renting are distinguished from both sale and donation, since the capital is not alienated.

I also said that income is not susceptible to being rented or lent. Indeed, this could not be done without the income being alienated, since it does not survive the use made of it.

Therefore, only capitals can be rented or lent; and, by doing so, one alienates the income, otherwise said:

The lending or renting of capital is the alienation of the income from that capital.

Depending on whether this alienation of income is a sale or a donation, the lending or renting are said to be: on a costly or gratuitous title. Lending on a costly title is the sale of the income. Lending on a gratuitous title is the donation of the income

These two transactions are as legitimate as each other. One cannot prevent a man from giving his income to oblige him to sell it. One cannot prevent a man from selling his income to oblige him to give it: it would be as well to forbid him the sale of his capital and to impose its donation on him. I will simply note that in defining exchange, I took care to prevent it from being confused with donation. In the examination of the forms of exchange that concern us, we could therefore not admit gratuitous lending; only costly lending can be counted among the facts of exchange.

Costly lending is the sale of the income. I will immediately add that this sale can only obey the conditions of any other sale; that is, the market value of the income is only established by the relationship of demand to supply on the market.

I return to Mr. Proudhon. His ideas are well-known: he only endorses interest-free loans and condemns interest-bearing loans. He recognizes only donation as a legitimate exchange and never the sale of income. Such an opinion, stated thus, is doomed from the start. Nonetheless, I will patiently continue refuting it through the assertions of my opponent. And let no one be surprised at the poverty of arguments he will accumulate. Remember this: Mr. Proudhon lacks understanding of the theory of exchange value, the theory of capital and income, all of political economy; he seeks to regulate exchange in all its forms through moral considerations. Yet even his principles of morality are far from satisfactory! Imagine a professor analyzing curves, explaining the fertilization of plants, or discussing pulmonary tuberculosis from a justice perspective; envision a mathematician, a naturalist, a doctor having to argue against such musings; and you will get some idea of Mr. Proudhon’s situation, and of mine in relation to him.

Mr. Proudhon begins by challenging the Church on the issue of lending.

If there is a question on which the Church, communist by its doctrine, patrician by its hierarchy, pulled in opposite directions by the dual spirit of its constitution, has varied, wandered, and prevaricated, it is undoubtedly this one.

This is true. But if the Church has wandered on the question of lending, it is not precisely because it was communist by its doctrine, patrician by its hierarchy; rather, it was because it did not understand the theory of social wealth. This is a misfortune for which Mr. Proudhon should be quite indulgent: he shares it with the Church.

It is a fact that all of antiquity, pagan and Jewish, agreed to condemn interest-bearing loans, even though such loans were merely a form of the universally accepted rent; despite the fact that commerce greatly benefited from lending and could not do without it; and despite it being impossible, even unjust, to expect the capitalist to advance his funds without profit.

I would add: even though it was nothing other than the sale of income; this is the only thing Mr. Proudhon fails to say, it would spare him from stating the others.

All this has been demonstrated by the casuists of our century as well as by economists; and it is known that I have no difficulty acknowledging the legitimacy of interest, under the conditions of inorganic and individualistic economy in which ancient society lived.

I note, Mr. Proudhon, this condescension.

Since the Church...believed it necessary to retract...it was therefore wrong, it was unjust and senseless…

I do not need to defend the Church against the variations, wanderings, prevarications, and retractions that Mr. Proudhon reproaches it with. Let Mr. Proudhon and the Church settle it among themselves: it’s their business. I am only concerned with Mr. Proudhon’s wanderings.

The Church, you might say, has not changed its maxims; understanding the necessity of the times, it merely adapts its discipline, it practices tolerance…

If the Church does that, I am grateful. It at least understands that morality does not govern science, but obeys it; in particular, it knows how to reform its casuistry in accordance with the discoveries of economics; that is very commendable.

The Church plays a bad hand indeed: it prohibits interest-bearing loans when the world needs them most and when free loans are not possible; it allows them when they can be done without.

And when there is possibility, even necessity, for free loans? That is your opinion? Very well! but you will have to justify it. Now I wait for you there: for in referring immediately to the facts you agreed on earlier with the casuists of our century as well as with the economists, I find that you have prepared many difficulties for yourself.

It will indeed be necessary for you to first explain how the conditions of the economy in which ancient society lived were conditions of inorganic and individualistic economy, which I do not quite understand, and how the conditions of the economy in which modern society lives are conditions of organic and communist economy, which I do not understand at all.

It will be necessary for you to demonstrate how lending is no longer a form of rent, or how rent is no longer universally accepted. I do not know what considerations you plan to develop on this subject; but what I know very well is that the interest on capital is always the price of renting income, and that this sale is universally accepted. It is universally acknowledged that nothing compels me, if I am a landowner, to lend you a very fertile piece of land without receiving a farm rent; if I own a beautiful house, to offer you hospitality without demanding rent; if I have acquired great medical skill, to provide you with consultations without expecting fees. It will finally be necessary to establish that commerce no longer benefits greatly from lending, and that it can do without it. As for me, I think that today more than ever, general labor needs capital and finds great advantages in borrowing it. Farmers have not yet found, as far as I know, a way to sow in the air or to harvest on the ocean. Builders and their engineers need wood and iron to lay their tracks, to erect their locomotives and wagons. Tailors, shoemakers cannot make clothes or shoes without raw materials and tools.

It will finally be necessary for you to make us understand how and why it is now possible, even just, to demand of the capitalist proper that he advance his funds without emoluments, and of the capitalist in general that he give freely and not sell the income from his capital.

Let’s see how you manage all this. Oh! I already know in advance: the examination that I pursue of your doctrines has long taught me how you know to cut through the knot of questions, at the most serious moment, with a sophism. But at the same time I have learned to pose problems slowly, so that finally, when demanding a solution from you, I could not be satisfied with any equivocation.

In 1848 and 1849, I proved, in numerous publications, that, the principle of Justice being the reciprocity of respect…

We will stick, if you permit, to the principle of reciprocity of right and duty.

...The principle of the organization of labor, in a well-constituted society, the reciprocity of service;…

No, we will consider the organization of labor as one aspect of the question of wealth distribution, a question whose solution rests not on the reciprocity of service, but on the principle of equality of conditions, the inequality of positions, and on the distinction between commutative justice and distributive justice.

...The principle of commerce, the reciprocity of exchange;…

We will assert the equality of exchanged values, which goes without saying, by definition, and outside of any intervention of justice.

...The principle of the Bank, the reciprocity of discount,…

I am starting to not understand. Because you discount a commercial paper, must I discount another for you?

...The principle of lending should be the reciprocity of performance,…

Completely unintelligible! Does it mean that if I borrow a horse from you, I must lend you a cab? But what if you have no use for my cab, and if on the other hand I only borrow your horse to hitch it to that same cab? The reciprocity of performance seems a great absurdity.

...All the more so because lending is ultimately just a form of discount…

Pardon! It is the discount that is a form of lending.

...As discount is a form of exchange, and exchange a form of the division of labor itself.

Lending and discount are forms of exchange, obviously, and that is exactly what I base myself on; but exchange is not at all a form of the division of labor: it is a consequence.

Let us organize, I said, according to this principle, real estate credit, personal credit, and all kinds of credit.

That’s it exactly. Organize all this according to the principle of reciprocity of performance: we are watching you.

From then on no more usury, no interest either legal or illegal, just a minimal tax for verification and registration fees, as with discount.

Oh, really! No more interest, legal or illegal: just a minimal tax for verification and registration fees, as with discount. So reciprocity of discount means free discount? Reciprocity of performance means free lending? The gratuitousness of credit constitutes its reciprocity?

The abolition of usury, pursued for so long and so vainly by the Church, accomplishes itself.

As if by magic, at the mere sound of Mr. Proudhon’s voice. What audacity!

Reciprocal lending or free credit is no more difficult to realize than reciprocal discount, reciprocal exchange, reciprocal service, reciprocal respect, justice.

Reciprocal exchange, reciprocal respect, justice, fine! these are merely barbaric expressions of incomplete ideas. As for reciprocal service, reciprocal discount, reciprocal lending, or free credit, they are no more difficult to realize than each other; they are equally impossible.

All that can be distinguished in this mass of nonsense is that Mr. Proudhon first concludes from reciprocity, from respect to reciprocity of service; and then from reciprocity of service, or mutual lending, to free lending.

What a scale of syllogism! The reciprocity of respect is a moral principle; reciprocity of service, whatever this indefinite thing may be, relates to facts of natural order exchange. Thus, there is no possible or impossible, real or imaginary relationship from the major premise to the minor. But from the minor premise to the conclusion, what an unfathomable chasm! From the reciprocity of respect to the reciprocity of service is as far as from Kamchatka to the Cape of Good Hope; that is certain. But if one had to measure the distance separating mutual lending from free lending, it would not be enough to compare it to the distance between the sun and the moon. Judge for yourself!

I am a capitalist; a worker comes to me; this man has nothing but a manual skill: he’s a carpenter, if you will. I have, and I provide him, a workshop, tools of all kinds. He makes furniture and sells it. He has provided his labor, I my capital. You might think that, from the sale price, after deducting the cost of goods sold, labor should receive its wage, capital its profit? Wrong. Let the carpenter withdraw, from the market, a certain price for his goods; let him repay his raw material expenses; let him take the entire surplus as the wage for his labor; let him return nothing to me for the rent and the profit of the capital I lent him, there will be reciprocity!

I realize, moreover, that it is quite naive of me to try to understand anything about the reciprocity of service: service and reciprocity are two words forcefully combined with the sole purpose of skirting the problem of lending to the benefit of morality, failing to solve it through the theory of capital and income and the data of economic science. It’s a despicable trickery that must be dragged into the daylight.

You want to conclude from the reciprocity of respect to free lending. You take, on the one hand, the idea of reciprocity, on the other, the idea of service. If the latter word does not exist in French political economy, you invent it. You couple the two ideas, come what may, and deduce as follows:

“Whoever says reciprocity of respect says reciprocity of service or mutual lending. Whoever says mutual lending or reciprocity of service says free lending. Therefore, whoever says reciprocity of respect says free lending. Free lending, free discounting, free credit, etc., etc. And that’s why your daughter is mute.”

Well now! Mr. Proudhon, what kind of fool do you take me for, me the reader? And you thought it would suffice to dilute this word juggling in your muddle!…

Would you believe that in 1848 and 1849 this theory of free credit did not win its author the sympathies of either the Church or the socialists? The Church was most certainly at fault: Mr. Proudhon took the trouble to defend Catholic tradition. But the socialists are especially inexcusable. Strange thing! They did not embrace Mr. Proudhon! They should have, according to him.

What is, indeed, the reciprocity of credit, if not the partnership of labor substituted for the partnership of capital?

And what, tell me, is the partnership of labor substituted for the partnership of capital? Qui potest capere capiat: let him who can understand. To substitute the partnership of labor for the partnership of capital, wouldn’t that be like offering food to those who are thirsty? If I am a laborer and I lack instruments, what need do I have to be partnered except for instruments or capital? That’s undoubtedly what the socialists must have thought: they are not as foolish as one might say.

But what! The disdain of the Church and the ingratitude of the socialists may well have torn Mr. Proudhon’s heart; they did not shake his convictions. Must they not be robust for him to add:

Let the power, in the absence of the spontaneous action of citizens, give the impetus, and in one day (!), in one hour (!!), all these reforms, all these revolutions can be accomplished?

Equality—or death! We know that.

When one has so solidly demonstrated his thesis, when one has further so substantially summarized it, what remains to be done? To defend it. And if the demonstration is done by sleight of hand, how can the defense be done but by invective? Thus proceeds Mr. Proudhon who, in his genre, is truly complete. Read the following passage; I cite the piece without comment, as a model.

But see the misfortune! this broad application of Justice to the economy, shifting the focus of interests, reversing relationships, changing ideas, leaving nothing to force, nothing to arbitrariness, nothing to chance, raised against it all those who, living off privileges and parasitic functions, refused to leave an abnormal position to which they were accustomed, for another more rational, but which they did not know. It confounded the old school of so-called economists; it caught the elders of the republic off guard, whose education had to be redone; what’s worse, it nullified the recent decisions of the Church on the issue of interest, and through the chain of ideas, killed its dogma.

Too many interests and self-loves were compromised: I was bound, in this first instance, to lose my case.

I must say that, on the contrary, in this first instance, Mr. Proudhon did not quite lose his case.

A man stood up to defend, in the name of individual freedom and general happiness, subordinate labor against reciprocal service, speculative trading against equality in exchange, discounting at 15% against discounting at 1/8%, homicidal usury against free, agricultural and industrial partnership.

Mr. Proudhon here recalls the fierce controversy that arose in 1849 between him and Frédéric Bastiat on the subject of interest-bearing loans. This debate did not shed the slightest light on the question; it led to no conclusion. It was sterile for the simple reason that both contenders were plunged in the same ignorance about the nature of capital and income. Bastiat had but one word to say to triumph over Mr. Proudhon: he should have explained to him that the interest-bearing loan of capital is the sale of the income from that capital. That word, Bastiat never knew how to pronounce; and that’s why he could never overcome his opponent. Thus, it is not in the first instance that Mr. Proudhon lost his case; only he did not win it. Today, with better elements of discussion, with the resources of a more satisfying philosophy of political economy, thanks to more complete theories of exchange value, capital, and income, I think I have done justice to reciprocal service, to discount at 1/8%, and to the so-called free, agricultural and industrial partnership.

In conclusion, Mr. Proudhon once again reproaches the Church for its variations and apostasies. He challenges it to clarify once and for all, to decide either for free lending or for interest-bearing lending. He asks:

…Where does progress lead? Is it to equality, or to inequality? To equality through mutual credit, or to inequality through the anticipation of interest?

The Church will not answer such questions: it is not qualified to do so. But I can answer in its place, and say to Mr. Proudhon: — Your mutual credit is a hollow and empty word to which you have been unable to give any meaning. The interest on capital is the price of the sale of the income. We progress towards both equality and inequality, to equality of conditions, to inequality of positions and fortunes.

I had announced the intention to remain neutral between the Church and Mr. Proudhon. But at any rate, I find it quite odd that Mr. Proudhon should come to resurrect in the 19th century errors that have been combated both by the common sense of several hundreds of generations and by the talent of the most competent minds, and, all in all, by the inevitable force of natural things; then that he should take such a high-handed approach with the Church.

One fact can explain this concordance in error: it is that Mr. Proudhon’s doctrine, like the Catholic doctrine, originates from ignorance of political economy. From this perspective, the Church was certainly more excusable than Mr. Proudhon is today. The theologians of the Middle Ages were not required to have delved into the theory of social wealth; Mr. Proudhon, who does not live in the Middle Ages and who is not a theologian, should know it.

He should, and I have, myself, the right to reproach him severely for so much pride combined with so much weakness. I am among those who had not yet left college, as Mr. Proudhon says,

When the Republic appeared
In the flashes of February.

I am among those to whom Mr. Proudhon asks:

…Do you believe that I deserved the anathema for having said that there is no advantage for trade to pay 4, 5, and 6 francs for a service that we can procure for 90 cents, and even less?

Well, I answer him:

Yes, you deserved it for having concocted such foolishness when you had to establish social order. You deserved it for having proposed only ridiculous utopias begotten by laziness, when you should have provided democracy with the results of ardent work and a loyal science. You deserved the anathema for having had at your feet the podium from which truth should have shone upon the world, and for having made it the stage of a quack and a charlatan.

Section III. — Moral category: — Property

§ 1. Owners and Tenants.

Mr. Proudhon begins here by addressing a personal matter. He once wrote: — Property is theft. This definition is his own, he says; he would not trade it for all the millions of Rothschild. I will not follow Mr. Proudhon in this discussion. I only advise Mr. de Rothschild not to hurry to offer his millions in exchange for this phrase: he would be robbed without any reciprocity. Whoever first said: — Property is theft, has spoken foolishly. Property is appropriation, it is legitimate possession; theft is appropriation, it is illegitimate possession. Thus, the difference between property and theft is as stark as that between white and black. Legal marriage is a union sanctioned by civil formalities; concubinage is a union not sanctioned by these formalities. A legitimate child is one born of legal marriage; a bastard is one born outside of marriage. To say: — A legitimate child is a bastard; to say: — Legal marriage is concubinage; to say: — Property is theft, is to contradict oneself deliberately; or to beat the drum to attract the gullible.

But no. Mr. Proudhon takes his phrase seriously; he believes in it; he returns to it; he promotes it. He commits to demonstrating through rigorous analysis that property is fundamentally the same as theft. Since there is in the famous phrase: — Property is theft, the seed of a theory, it is appropriate to avoid any ambiguity, and to demolish from the outset the childish sophistries that the author seems to want to cruelly exploit later.

No doubt there is, fundamentally, something analogous and even identical in theft and in property: this something is firstly appropriation, then possession of the appropriated thing. But if we call legitimate possession property, if we call illegitimate appropriation theft; if we are from the moral standpoint, from the standpoint of law and justice; and if for us the question of legitimacy or illegitimacy of the appropriation and possession is everything, isn’t it clear that property is the opposite of theft?

There is also an element of analogy, a part of identity in a glass of sugared water and in a solution of arsenic: they are two colorless drinks. Can Mr. Proudhon ever hope to demonstrate to us through rigorous analysis that from a hygienic standpoint a glass of sugared water is fundamentally the same as a solution of arsenic? One is petrified with astonishment at seeing a man of intellect delight in such gymnastics.

Or would it mean that Mr. Proudhon considers appropriation and possession as natural and inevitable facts, having no direct or indirect relationship with right and duty, not at all emanating from justice, incapable in any case of being legitimate or illegitimate depending on the circumstances? Only then could one conceive that property and theft were the same thing for him. Truly, that would be curious! And what Mr. Proudhon, who forcibly introduces the notion of right and duty into the theory of economic facts of the natural order, lacks is just to violently exile this same notion from the theory of economic facts of the moral order! What he lacks, who deals with the value of exchange and exchange from the moral standpoint, from the standpoint of justice, is to deal with property from the natural standpoint, from the standpoint of necessity! — There would be compensation.

Would you believe it? That is actually what happens; as this study will show. For example, the patience I had to muster and the different assumptions I had to pursue before suspecting, before distinctly recognizing this error, is something no one will ever know. One had to guess that Mr. Proudhon was mistaking bladders for lanterns and lanterns for bladders; I know of no more singular scientific aberration. And when I try to understand how it could be that Mr. Proudhon constructed, from such data, any semblance of a theory that satisfied him, truly, my head spins: I think of an artist who insists on painting with a chisel and sculpting with a palette.

I now abstract from this preamble; and I continue my critical examination, stopping to question my opponent at the moment when, leaving his sad preliminaries, he decides to come to the point.

What I was seeking, as early as 1840, in defining property, what I want today, is not destruction,… what I ask for property is a balance.

Let’s be clear, first. Are we establishing the balance of rentals, or are we constituting the theory of property? Despite my searching, I see no explanation from you; so that here I find myself in the situation of master Jacques.

If we are seeking, as I was led to believe upon approaching this paragraph, the balance of rentals to follow the balance of lending, we are doing the work of economists. Just as one lends money, so too can one rent a piece of land, a house. A piece of land, a house are capitals of particular kinds. The rental of these capitals will always generally be the sale of their revenues; but it may be interesting to set the specific, special conditions of each of these sales in accordance with the laws of exchange. For example, to do this, we have no need to inquire into the theory of property, which we managed very well without when we established the balance of lending, the balance of discounting. The conditions of the sale of a revenue, whatever its kind may be, may well depend up to a certain point on the nature of the capital, but never, in any case, on the circumstances of legitimate or illegitimate possession of this capital.

If, on the contrary, as it seems from your way of introducing the subject and expressing yourself, we are elucidating the theory of property, this is a matter for moralists. We leave the theory of capital and revenue and the domain of political economy proper.

Thus, are we pursuing the theory of exchange; or are we abandoning it, without rhyme or reason, to return to the theory of wealth distribution? These two questions differ as much from each other as the duties of a coachman from those of a cook.

What is the balance of property?

Definitely, we are not making the balance of rentals, but the balance of property itself. So be it! Let’s change tack. Let’s leave the theory of exchange, and return to the problem of wealth distribution.

Before answering this question, we need to know what property itself is.

I am ready to tell you if you wish.

Property is legitimate ownership. Ownership involves enjoying a thing, exploiting it for profit, consuming it for personal use, and disposing of it according to one’s will. Ownership is legitimate when it is based on natural appropriation. This is what property is.

And what is the balance of property?

It is the determination of the conditions under which each person’s property rights can be exercised without infringing on the rights of others.

Please, sir, always clearly distinguish between these two issues that you initially separate so distinctly.

First question. — On natural appropriation and legitimate possession. This is the first part of the problem. It deals with the origin and foundation of property. It is a question of natural law.

Second question. — On the conditions under which each person’s property rights can be exercised without infringing on the rights of others. This is the second part of the problem that you undertake to solve, with much ceremony. It is properly the balance of property that you demand loudly and announce with such noise. It is the question of the distribution of wealth. It is a question of economic or social law.

That said, to work! I will let you develop the first question, the question of natural law.

If I inquire into the origin and essence of property from theologians, philosophers, jurists, and economists, I find them divided between five or six theories, each excluding the others and each claiming to be the only orthodox, the only moral one.

Did you really interrogate as many authors as that? What work! But also how familiar the question must be to you!

In 1848, when it was a question of saving society, definitions emerged from all sides: Mr. Thiers had his, which is contested today by Mr. Abbé Mitraud; Mr. Troplong had his; Mr. Cousin, Mr. Passy, Mr. Léon Faucher, as formerly Robespierre, Mirabeau, Lafayette, each had his own.

This enumeration is full of interest. But no doubt you have your own too. Could you share it with us without further delay?

Roman law, feudal law, Germanic law, American law, canon law, Arabic law, Russian law, all were enlisted without being able to agree. Only one thing emerged from this mishmash of definitions: that by virtue of property, which everyone agreed to regard as sacred, and unless another principle came to correct its effects, one had to regard the inequality of conditions and fortunes as the law of mankind.

You mock in the most charming way. I find only that we are wasting precious time. We now know that neither inequality nor equality of conditions and fortunes are the law of mankind. The law of mankind is the equality of conditions and the inequality of fortunes. We will apply this principle to the balance of property when the time comes. But we are far from there yet: we are on its origin.

Certainly, there was a task worthy of the Church’s high mission, and the breaths of that Spirit which never abandons it… What service the Church would have rendered to the world if it had known how to define this principle of social economy, as it has defined its mysteries!

And what service, sir, the Church would have rendered to the world if it had discovered America, demonstrated the law of universal attraction, and operated the electric telegraph! The Church wanted to reserve for you alone a glory equal to that of Christopher Columbus, Newton, and Arago. You have no grace to complain about it.

Strange thing, that after having made war on property for fifteen years, I may be destined to save it from the inept hands that defend it,…

I do not say no; but it seems to me that you are a bit too quick to sing victory. You have not yet said a word about the question, and already you begin to congratulate and praise yourself. Please, get to the point!

Tell me, Monseignor, what you smoke or breathe in tobacco, what you taste in kirsch, what you eat in vinegar, aren’t these poisons, and the most violent of all poisons?… Well! it is the same with certain principles that nature has placed in our souls, and which are essential to the constitution of society: we could not exist without them; but as soon as we extend or concentrate the dose, or alter its economy, we inevitably perish by them… Like bitter almond, reduced by chemical analysis to the purity of its element, becomes prussic acid, so property, reduced to the purity of its notion, is the same as theft.

You return to it. Apparently, you want us to know that you are as good a chemist as you are a distinguished mathematician. It shows; but despite everything I swear I have never encountered an idea that was a bigger piece of nonsense than that one. Tell me: I suppose you were to write a treatise on surgery, would you begin by establishing at length that a surgeon who operates on me and an assassin who pierces my chest both draw blood from me, thus surgery reduced to the purity of its notion is the same as assassination. When you would have turned and returned this beautiful assertion in all directions to satiety, do you really think you would have taught something to serious people?

Property, reduced to the purity of its notion, is legitimate possession. You could not reduce property to a greater purity of notion: by further removing the idea of legitimacy from property, you would have only possession which is not property. Therefore, property, even reduced to the purity of its notion, is the exact opposite of theft which is illegitimate appropriation.

The whole question, for the use of this formidable element, I repeat, is to find the formula, in economists' style the balance:…

Allow me: I maintain my distinction. The question, the question that occupies us, is to research the natural conditions of justice or injustice upon which the legitimacy or illegitimacy of appropriation and possession can be based. For God’s sake! we are not making much progress.

...Something that the last of the clerks understands perfectly, but which exceeds the scope of a religion.

What does that mean? It might well be, much to your displeasure, that the thing also exceeds the genius of a pamphleteer.

The question of natural appropriation and legitimate possession is a question so simple that the last of the clerks understands it perfectly! This unexpected assertion seems so strange to me that I cannot refrain from posing the problem myself. Its seriousness, which is real, will appear in full light; and perhaps the question will make progress.

On the Origin and Foundation of Property

I. Let us first recall that the act of simple appropriation originates and is caused by the limitation in quantity of utilities. One does not appropriate things that are unlimited in quantity and have no value: one does not appropriate breathable air or solar heat. Legitimate possession, possession based on natural appropriation, property, can therefore only be exercised over utilities limited in quantity, over values; it can only concern social wealth.

II. From the fact of freedom results as a fundamental consequence the distinction between persons and things. Persons are beings endowed with free will; things are beings that live only instinctively or even exist unconsciously. Man is free: he is a person. Only man is free: he alone is a person.

From the fact of freedom also stems, through imputability and responsibility, morality. The fulfillment of one’s destiny, which is, in the impersonal being, only instinct or unconscious fate, resolves itself for man into a series of rights and duties.

Thus, 1° every manifestation of man’s free will partakes of the character of morality. It falls immediately under the judgment of justice. It can and must be deemed good or bad. Right and duty are inherent to human personality.

And 2° only man, the only free and personal being, can have rights to assert, duties to fulfill. Right and duty are specific to humanity.

III. Appropriation is a manifestation of man’s free will; it therefore necessarily partakes of the character of morality. It falls, from the moment it occurs, under the judgment of justice. It is for or against right and duty. Possession is legitimate or illegitimate, property or theft.

Property as legitimate possession, a moral power, is a right.

Thus, it is seen that only man, the only free and personal being, can be the subject of the right of property. One must mock Mr. Thiers and his animal proprietors: animals fulfill their destiny under the rule and direction of their instinct; appropriation is for them a necessity, not a right. Possession can never be said, regarding them, to be legitimate or illegitimate, property or theft.

IV. We delve into the crux of the issue. From the fact of freedom, it logically follows that the first object of property, for man, is himself. My body and my soul, adherent and identical to my free, personal, and moral self, belong to me. I appropriate them; and this appropriation that I call natural is the principle of all legitimate possession, of all property.

In general, the man, who can alone be the subject of the right of property, can never be its object. Man belongs to himself. Slavery and serfdom are unjust: they are based on an unnatural appropriation.

V. The remaining objects of the right of property are things. This is where one must analyze the appropriation of things by persons.

This appropriation is natural. It is a right and a duty for man to subordinate the fulfillment of blind destinies to the fulfillment of his free destiny. Especially regarded as a duty, this pursuit is called work. Considered rather as a right, it constitutes the right of natural appropriation, of legitimate possession, of property of man over things. Work and property are two sides of the same idea, as are also right and duty. From this point of view, one might say, if one wishes, that property is based on work. It seems more philosophical to go back further and see the origin and foundation of all natural appropriation, of all legitimate possession, of all property in the fact of appropriation and possession of personal, physical, intellectual, and moral faculties by man himself.

All these facts are to be developed, explained, demonstrated. Thus, one could establish the theory of the origin and foundation of property on unshakeable bases. The question of the exercise of each one’s right of property without prejudice to the rights of others, the question of the distribution of social wealth among persons in society, the balance of property, if you will, would still remain.

If I’m not mistaken, Mr. Proudhon, you have just told us that it is very easy, that the least of clerks would manage it brilliantly. And you yourself, will you not share your thoughts with us? I am still unaware of them.

Is it really so difficult to understand that property, considered in itself, being reduced to a simple psychological phenomenon, a faculty of grasping, appropriating, possessing, dominating, as you please, is by its nature foreign, or, to use a gentler term, indifferent to Justice;…

Ah, Sir, why bother searching for gentle terms? Did I take precautions and worry about the gentleness of terms when I told you that the fact of exchange value was a natural, inevitable fact, where justice had no role? Why don’t you do the same?

It’s because no matter what you do, you can’t convince yourself. Despite everything, you are the first to feel that it is very difficult, that it is impossible to understand that a positive, characteristic, solemn manifestation of the free, personal, and moral self remains, for even a single moment, foreign or merely indifferent to justice, that it cannot and should not be immediately characterized, declared just or unjust depending on the circumstances in which it occurs.

It is impossible to understand that grasping, appropriating, possessing, dominating, as you please, cannot and should not be natural or unnatural; consequently and without delay, the possession is either legitimate or illegitimate, property or theft, either one or the other, but not both at the same time, nor one or the other indifferently.

It is in a word just as impossible to conceive of appropriation, possession, and property as facts of the natural and inevitable order independent of justice, as it is to conceive of exchange value and exchange as facts of the free and moral order subject to justice,

And, therefore, I repeat to you that neither property considered in itself, nor theft considered in itself are reducible to grasping, to appropriating. Their qualities of legitimacy or illegitimacy are their essential, constitutive elements, which you cannot take away from them. May I be permitted to observe that for a man who has questioned so many theologians, philosophers, jurisconsults, economists, you speak a remarkably incorrect language. Property cannot be reduced to being both a psychological phenomenon and a psychological faculty. It is neither: it is a qualified manifestation of human activity; it is especially neither foreign nor indifferent to justice.

...That if it results from the necessity of man, an intelligent and free subject, to dominate nature, blind and fatal, lest he be dominated by it;…

Let’s restore the facts in their sincerity. The intelligent and free man is not in the necessity of dominating blind and fatal nature lest he be dominated. Man is dominated by nature and he dominates it at the same time: he is dominated inevitably, and he dominates freely. It is in this victorious struggle that man’s fulfillment of his destiny is summarized, which is free, which is both a right and a duty, not a necessity.

...If, as a fact or product of our faculties, property is prior to society and to law,…

Let’s correct this assertion again. Property may be prior to society and it really is; but it cannot be prior to law. Property is law; law and property are conflated; they arise together before any social pact. Before any association with men, I have the right to possess, I am a property owner. I have the right to use my arms, my legs, all my personal, physical, intellectual, and moral faculties, to move, to feed myself, to defend and to improve my existence. I have the right to subordinate the blind destinies of fatal nature to my free destiny, through labor and property.

There are two errors in the two lines cited above. Property is not prior to law. Property and law are prior to society.

...However, it only derives its morality from the law, which applies the scales, and outside of which it can always be reproached?

The law that is born with society, the law that applies the scales to society, is the social, economic, political, and civil law. But it is not from social law that property derives its morality. The law that, as soon as appropriation and possession occur, judges them legitimate or illegitimate, declares them property or theft, is the natural law.

It is through Justice that property conditions itself, purges itself, becomes respectable, is determined civilly and by this determination, which it does not hold from its nature becomes an economic and social element.

The justice you speak of, this justice that conditions, purges, makes respectable, determines civilly property, the justice that sanctions property as an economic and social element, is civil, economic, and social justice. To be honest, this social justice only imposes on the right of possession, on each person’s property, the condition of not infringing on the right of possession of the property of others. Prior to this conditioning, to this sanction, property, whatever you may say, is determined naturally as legitimate possession based on a natural appropriation.

As long as property has not received the infusion of law, it remains… a vague fact, contradictory, capable of producing indifferently good and evil, a fact consequently of an ambiguous morality, and which is impossible to distinguish theoretically from acts of grasping that morality disapproves of.

Error, complete error. Before any intervention of social law, of commutative and distributive justice, neither property nor theft are vague, contradictory facts of an ambiguous morality. They are precise, distinct facts of a certain morality, either good or bad: one, as legitimate possession based on a natural appropriation, the other, as illegitimate possession based on an unnatural appropriation.

The principles on which this distinction is based are the principles of natural law prior to the social pact. These principles, you are unaware of. You do not recognize the theory of the origin and foundation of property. After having questioned so many authors, so varied and numerous, you treat this theory, like that of exchange value, as if you do not even suspect its existence.

The error of those who have undertaken to defend property from the attacks to which it was subject has been to not see that property is one thing, and the legitimation by law of property is another;…

And what might be, if you please, the legitimation by law of property? What can be the legitimation, by law, of the right of possession, of legitimate possession?

Your error is not seeing that the conditioning, by social justice, by economic, political, and civil law, of property, natural law, is one thing, an absurdity like the legitimation of property.

...It has been believed, with the Roman theory and spiritualist philosophy, that property, a manifestation of the self, was sacred simply because it expressed the self;…

You want to afford yourself the easy pleasure of refuting nonsense. It would be ridiculous to declare property sacred simply because it expresses the self. What is eminently sensible and scientific is to state that appropriation and possession, simply because they are manifestations of the free, personal, and moral self, cannot remain for a single moment foreign or only indifferent to justice; that, on the contrary, as soon as they occur, it belongs to natural law, prior to society, to declare them natural or unnatural, legitimate or illegitimate, property or theft.

...That it was by right, because it was by need;…

Neither the Roman theory, Mr., nor the spiritualist philosophy, nor I have based the right on need.

I have based the right on personality. These two ideas are connected. One cannot have the idea of a personal, intelligent, and free being without having the idea that he is responsible and moral, that he has rights and duties. One cannot have the idea of right and duty without having the idea of responsibility, accountability, freedom.

Property, legitimate possession based on natural appropriation, is sacred because it expresses the sanctity of the personal self. It is because my soul and body are identical to the self that they belong to me, that I am their owner. This is the most legitimate possession, the most sacred property. As for things, it is still by virtue of my personality that I have rights over them. The impersonal thing, being neither free nor responsible, has neither rights nor duties. Reason puts impersonal beings at the disposal of persons. Therefore, the personality of man is the origin and foundation of man’s property over things.

...That the right was inherent to him, as it is to humanity itself.

Exactly. The right is inherent in property as personality is to humanity itself. You are faced with a terrible dilemma for you.

Either man is a personal, free, moral being with rights and duties. And then morality is inherent in every manifestation of this responsible personality. Appropriation and possession are never indifferent to justice. They are natural or unnatural, legitimate or illegitimate, property or theft. Property is sacred: the right is inherent in it. It is a moral fact.

Or property is a fatal fact. And then, property, theft, possession, it’s all one. Property is completely indifferent to justice from all points, in all cases. Every manifestation of man’s will is foreign to the right, as is every natural fact. Man’s will is but a blind instinct; man himself a brute. Justice and right are words that humanity utters in the delirium of ridiculous pride.

You who claim to find in the very heart of man and in his reason the rule of his will and his conduct, you who base individual and social morality on the sense of his own dignity and that of others, on immanent justice—choose.

But it is clear that it cannot be so, for otherwise the self would have to be deemed just and holy in all its acts, in the satisfaction even of all its needs and whims; for, in a word, this would reduce Justice to selfishness, as the old Roman law did by its unilateral conception of dignity.

The doctrine that bases rights on need was as unnecessary to refute as to cite. This way of tilting at imaginary windmills is childish.

For property to enter society, it must receive the stamp, legalization, sanction.

Now, I say that to sanction, legalize property, to give it the juridical character that alone can make it respectable, can only be done under the condition of a balance; and outside this necessary reciprocity neither the decrees of the prince, nor the consent of the masses, nor the licenses of the Church, nor all the verbiage of the philosophers about the self and the non-self, are of any use.

Well said; but this is another question than the one that occupies us. Let society stamp, legalize and sanction property, so be it! But it cannot found it.

Property exists as a sacred right of possession internally within society. To seek the origin and foundation of this right in the personality of man is a primary problem, a problem of natural law.

You ignore and misunderstand natural law.

Society sanctions the right of property. It balances rights and weighs duties. To seek the conditions under which the property rights of each can be exercised while adhering to the duty to respect the property rights of others is a second problem. Social, economic, civil, and political law is founded. Commutative and distributive justice intervene through the principle of equality of conditions, inequality of positions, and fortunes.

You distort social law by basing it on the principle of absolute equality.

Thus you ignore, misunderstand natural law, and you distort social law. Your justice is mutilated and it is unjust. Your balance is a malfunctioning utensil, and it is false.

Take me back to the exchange!

§ 2. Owners and Tenants (continued).

Let’s cite some facts.

It is known how much rent has increased, mainly in Paris, since the coup d’état.

At last! Here we return to the rent of capital. Let us once again don our economist’s jacket. Leave it to more skilled individuals to solve the problem of the origin and basis of property, the problem of wealth distribution: it is abundantly proven that you will never understand either. Let’s look for the balance in rentals; moreover, for this purpose, the balance of property itself is utterly unnecessary, and undoubtedly here your science will shine brilliantly.

Is it about renting houses, as your introduction suggests? Nothing could be better: here is my opinion on this subject.

A house is a capital. The income from this capital is the daily shelter provided by the house. The rent of the house is the price of this income: it is paid by the tenant who buys the income from the owner who rents out the capital. These are the only data we need to borrow from the theory of property.

Here are now some particular considerations that the theory of capital and income exclusively provides.

A house is a capital subject to consumption circumstances that appear with the certainty of a regular event, considering that all houses, even the most solid, eventually collapse on their inhabitants unless they are demolished in time, or maintained with repairs. A house is also a capital subject to chances of loss or sudden destruction by fire or any other accident. Therefore, the rent price, besides a part representing the use of the land on which the house is built, should be composed as follows:

  1. The net price of the income, the very service of the capital.
  2. A depreciation premium representing the constant sacrifice required to maintain the house, or the lump sum that will eventually be needed for its reconstruction.
  3. An insurance premium against sudden accidents.

These three elements must naturally be included in the composition of rent rates, resulting in these rates being higher than the rental rates of non-consumable capital. As for the precise and natural determination of the rate itself and the price of house income, it is up to the market to provide this in relation to the demand and supply. There can be no other law.

For you, Mr. Proudhon, if I may judge from your past, here is undoubtedly what you are going to tell us:

“I have proven that the principle of justice being the reciprocity of respect, the principle of rent must be the reciprocity of rental. Let’s organize according to this principle, etc., etc. From then on, no more rent, neither legal nor illegal: just a minimal tax for verification and registration fees, etc. etc. In short, free rent. Reciprocal rental or free rent is no more difficult to achieve than reciprocal discount, reciprocal exchange etc., etc.”

Isn’t that so? Hasn’t this method already produced the most astonishing results? What can it gain from complicating itself with the balance of property? A certain veneer of philosophy perhaps; but at the same time, doesn’t it lose something of its elegant simplicity? Believe me: let’s address the issue without borrowing anything from natural or social law.

The scandal has gone so far that one day the Constitutionnel, after a virulent attack on landlords, announced the intention to examine the state’s right to intervene in setting rents, and a brochure appeared six months ago, with the police’s laissez-passer, under the title: Why Landlords in Paris? I do not know what this trial balloon may hide; but I can only be pleased to see the

papers of the empire compete, in terms of terms, with the Representative of the People.

Certainly, this is exceedingly flattering for you; as for me, I would have wished that you had spared me the authority of the Constitutionnel. It was up to that sheet of proverbial nullity to sense your economic ideas, and for you to lend a strong hand to the Constitutionnel in its struggle for protection against freedom. The Constitutionnel and you have excellent reasons to be equally advocates of the most brutal authority in economic matters: neither of you understand anything about exchange. I also have no doubt that you both could be in perfect agreement, you appearing to attack property, and the Constitutionnel appearing to defend it.

I would also have appreciated it if you had not indulged in gossip and trivial news, and spared us all those ridiculous stories of bribes, tips demanded from tenants, landlords thrown out of windows or crushed against walls. I protest, first of all, in general principle, against the introduction of such anecdotes into scientific discussions, whose authenticity is never guaranteed. You are certainly not a man, particularly you, Mr. Proudhon, to deprive yourself of the resources of the imagination when observation would be painful for you or fatal for your doctrines. I admit, however, that the alleged facts happened as you describe them, and I then affirm that some are perfectly explained by the necessity of natural conditions of exchange, and others by the concurrence of exceptional circumstances and the passions of the men who were the actors. But individual passions can complicate, in practice, the exercise of the right of property, but they cannot shake its theory.

A trader hands over his business: naturally, his buyer continues the rent. But the owner: You do not have the right, he says to his former tenant, to assign your lease without my consent; and he demands, as compensation, a bribe of 5,000 fr., plus 100 fr. per year for his porter. And the two contractors had to comply. — Theft.

Was the indicated clause actually in the lease conditions freely stipulated by both parties? — Yes. Then one of two things: either this clause, unfavorable to the tenant, was compensated for him by other advantages, and then the bribe of 5,000 francs for the landlord and that of 100 francs per year for the porter paid for these advantages; or the clause was absurd, the tenant a fool, and the landlord a man of bad faith. In this case, I say with you: — theft. But note that if one had to conclude from vexations imposed by bad-faith men on fools, in matters of commercial transactions, to the insufficiency of the natural laws of diminishing value and exchange, there would be no reason not to conclude similarly to the uselessness of medicine or the impotence of philosophy because fools are maimed by charlatans or duped by utopians.

Another, established on the boulevard, occupied a shop for 4,000 fr. He was reputed to do excellent business; the store was well-known, patronized. At the end of the lease, the landlord raised the rent from 4,000 to 15,000 fr., plus a tip of 40,000 fr. And once again, the businessman had to submit to the law. — Theft.

You, sir, have the double fault of too easily throwing around harsh words and too difficultly analyzing the facts you so cavalierly qualify.

When a business becomes well-known and well-frequented, part of the success undoubtedly comes from the activity of work, and another part from the favorable location of the stores in a beautiful, wealthy, and busy neighborhood. The annual difference of 11,000 francs in the rent and the 40,000 francs you amusingly refer to as a tip compensated, in this case, for the latter part. And, despite the enormity of the figures, nothing proves that they were exaggerated if the business in question, established on the boulevard, was known to be doing excellent business.

When you say, “The industrialist was forced to submit to the law,” you expect far too much of our naivety and far too little of our intelligence. If it happens that a merchant, when his lease is up, prefers to pay 15,000 francs in rent when he previously paid 4,000 francs, and even agrees to give an additional bribe of 40,000 francs, rather than move elsewhere, nothing absolutely forces him to do so—only his interest. He would not continue his business under conditions that would inevitably ruin him or leave him with an insignificant profit. In what way then is he being robbed? You might say his gain is reduced. But I do not see why the landlord should forego his legitimate profit just to increase the merchant’s profit.

Similar facts abound.

This would tend to prove that they are natural and necessary.

A family man rents an apartment, agrees on a price with the landlord: furniture moved in, he arrives with two children. The landlord exclaims: You did not warn me that you had children, you will not enter; you will remove your furniture. And he sets about evicting this family and locking the doors. The father initially tries some representations, gets angry in turn: they argue. The landlord allows himself insults accompanied by physical aggression, so much so that the tenant, in a fit of rage, grabs him by the body, and throws him from a third-floor window; he got off with a few bruises. In another neighborhood, things did not end so well: the landlord, having wanted to grab a tenant for the same reason, was thrown against the wall with such violence that his head broke, and he died on the spot.

Here I will not say as earlier: theft; I say: Brigandage.

Say: theft, or say: brigandage. Even say, if it pleases you: parricide, or say: incest. But do not expect me to descend to discuss such proofs in support of your theories. I have only one thing to say, that your stories are moderately amusing: I have read funnier ones in the Charivari.

If a considerable number of houses have been demolished in Paris; if, at the same time, the population of Paris has significantly increased, if, furthermore, due to the discovery of gold mines in California, by bringing a large number of industrial stocks to market, in short by the creation of numerous artificial capital, the market value of cash has decreased, the rate of rents has necessarily risen. All this confirms the natural theory of exchange value and trade. But all these circumstances occurred concurrently; a temporary and accidental crisis occurred; some oafs insulted and grappled each other. Immediately Mr. Proudhon takes this as a pretext to deny the right of property in principle and in its applications!

However, it is fair to note that not all landlords are like those; some have been cited to me who, since 1848, have not wanted to increase their rents. This moderation is very commendable, but it cannot be the rule, and we have to determine what in property constitutes right and non-right.

What, in the exercise of property, constitutes a right, is to sell the income from one’s capital according to its value, that is, at the price set by the market situation. Landlords who have not wanted to increase their rents since 1848, when special circumstances had reduced these rents, behave towards their tenants as if they were gathering them on the day the term expires to distribute money to them. This moderation, which consists of selling one’s income below its value, is not commendable: it is completely ridiculous. The day I become a landlord, I will believe I am making very bad use of my funds by using them to shower gifts on my tenants, and as long as I remain a simple tenant, I intend not to accept any gifts from my landlord. By buying or selling things at the price attributed by the relationship of supply and demand, I stay in the realm of law; by buying or selling things above or below their value rate, I place myself on the ground of charity, where it may not suit me to go, neither to give it nor to receive it.

Note that in general, the law protects the landlord. Once the lease is expired, he is master to let or to take back his property.

The real misfortune, indeed, that the law allows the owner of capital to sell or not sell his income, depending on whether it suits him or not. Please, Mr. Proudhon, inform yourself a bit about the definition of property rights which, by the way, you have always neglected to give us.

Ancient Roman law… justifies it. The Malthusian school, whether fatalistic and random, supports it: rise and fall, it says; it’s the law of supply and demand. The Church… the Church approves: its silence at least amounts to approval.

Let’s set aside the Church and Roman law. The economic school, whether Malthusian or not, is fatalistic in terms of exchange. I don’t know what is meant by random. The economic school asserts that the exchange value has its origin and measure in the scarcity of useful things; and it proves it. It is fatalistic and relies, for the determination of market values, on the relationship of supply and demand, the law of the market. On the other hand, the economic school is moralistic in terms of property.

All of this is logical, and if, on your side, you assert, without demonstration, that value originates from and is measured by production costs; if you reject the notion of rights from property theory to enthrone it in exchange theory; if you add to these errors and this confusion vulgar declamations against landlords, it is hardly a reason for the economic school to consider changing its mind.

Moreover, I have something better to say: the economic school does not support the increase in rents; it envisions, on the contrary, that rent rates could decrease. The economic school only asserts that if the value of rents is overstated, it must be due to either the market not being free, being governed by monopoly rather than competition, or that the distribution of social wealth is not made, perhaps, entirely in accordance with the principles of justice. In this, the economic school, being Malthusian, fatalistic, stochastic, etc., is absolutely right: one of the two indicated causes contributes to the rent increase along with others that I have mentioned. I spare you from saying which one and how.

Furthermore, you will understand that if it pleases you, the Constitutionnel and you, to blame the exchange for the rise in rents, to see there a pretext to impose the weight of your unintelligent authority, your absurd arbitrariness, to support these utopias not with proofs, but with crude invectives against all and sundry, the economic school has no reason to be perturbed.

What! There are thirty thousand houses in Paris, owned by twelve or fifteen thousand landlords and housing over a million souls; and it is up to these fifteen thousand landlords, against all rhyme and reason, to extort, squeeze, if not outright evict, a million inhabitants!

These exclamations are childish. It is dependent on no one, whether a landowner, worker, or capitalist, to sell the income from their capital at an exorbitant price, just as it is not to keep this capital idle by refusing to sell the income. The interest of the capitalist commands them to lease their capital, and competition forbids them from selling the income at an exorbitant price. The fifteen thousand Parisian landlords can no more collude to extort, squeeze a million inhabitants than they plan to evict this million inhabitants from Paris.

No, this is not possible: the law and tradition do not understand it, the economists have lied, the Church is absurd.

Frankly, these are, in essence and in form, economic theories as they are only elaborated in the taverns of the barriers.

How do we get out of this trap?

Let’s analyze, if you please, and we will soon find an exit.

What is blamed on the landlord?

Is it the act of prehension, I mean the act by which they collect rent?

No, since, as acknowledged earlier, prehension, or the simple act of appropriation, is indifferent to the law;…

Nothing was acknowledged earlier other than the fact that you are entirely ignorant of natural law and that you understand nothing of social law. Do not invoke all your fanciful romantic considerations on the origin and foundation of property which, moreover, are completely superfluous here. If the house, which is a capital, belongs to the landlord, the rent, which is the price of the income from that capital, is due to them, and if normal or exceptional circumstances have raised the market rate of rents, so much the better for them: other circumstances could have lowered it.

Indeed, the price of the lease represents the prehension that the landlord has made of a certain part of the soil, on which they have raised or had raised a building, from which they subsequently divested in favor of the tenant.

This is lamentably stated. The landlord has taken prehension of a certain part of the soil, true. On the apprehended soil, the landlord has raised or had raised a building, very well. But then the landlord has not divested themselves in favor of the tenant either of the soil or the building. The rental of a capital is not the alienation of it; it is the sale of the income from this capital. The landlord has divested themselves in favor of the tenant only of the enjoyment of their land and their house. The price of the lease represents this enjoyment and not the prehension that the landlord has made of part of the soil.

In itself, the price of rent may seem a natural, normal fact, and as such, legalizable.

As natural, normal, and legalizable as the price of selling the income from any kind of capital, obviously. I only implore you to distinguish here the rental of the building from the rental of the soil. We are dealing here, or at least trying to deal with, house rents. You do not have enough, believe me, of all your resources to get out of this question that you have not yet approached; and it is unnecessary to attack two problems at once when you cannot even properly pose one. Let’s return to house rents.

What is blamed and against which public opinion revolts is the magnitude of the prehension, which is found to be exorbitant.

And, if you please, who finds this magnitude of rents exorbitant? The Constitutionnel and you. Which opinion revolts? The opinion of the Constitutionnel and yours. But people whose opinion is also of some weight find, on the contrary, that this magnitude is not exorbitant; they consider it quite natural that the rate of rents rises when houses are relatively few, when there are relatively many bidders, when the value of money decreases. Finally, other people might still think there is indeed some exorbitance in the magnitude of rents; but these people think of demonstrating this exorbitance, and it is not enough for them that it is proven by the antics of the ignorant mob, the bluster of a public paper, or the insolence of a fake socialist. And in all cases, these economists, since we must call them by their name, protest that, if the evil exists, never will arbitrariness, never any tax, never, in a word, authority remedy it.

Where does this exorbitance come from?

It is obviously because there is no compensation between the sum demanded and the service rendered; in other words, that the landlord is an unequal exchanger.

Again, what do you know about it? And if you know it, how do you prove it? Where do you see that there is no compensation between the sum demanded and the service rendered? And when have you even tried to establish that the value of the service has not risen like the sum with which it is paid?

Should we, by chance, prostrate ourselves before the oracles that you render, the Constitutionnel and you? In that case, at least be consistent with yourself. Having proclaimed, by your infallibility, the magnitude of rents as obviously exorbitant, conclude simply and without delay from the reciprocity of respect to free renting; and let’s not talk about it anymore. We will still have the resource to mock the Constitutionnel and you, to recognize no judge, between the inverse claims of the landlord and tenant, other than the situation of the market, if it is free from any kind of protection. We will even have the ability to believe that the rate of rents is overstated, to prove our opinion, to make it prevail, and to remedy the evil to the extent of our powers. But, please, especially avoid complicating the problem of rentals with the whims of your errors concerning the origin and foundation, concerning the balance of property. Your theory of property and distribution is erroneous, your theory of exchange is no less so: from the violent combination of these two sophisticated elements, nothing but a more unhealthy amalgam can result.

The landlord has taken the land:…

Ah! Well, what new hare are you chasing now? We are discussing the rent of houses that we have not yet analyzed or regulated, and here you seem to persist in undertaking to analyze and regulate the rent of lands? The two questions do not merge: the land is a natural, inalienable capital; houses are artificial, consumable capitals. Distinguish the house from the land on which it is built; do not equate the capitalist landlord with the landowner; do not categorize lands and houses together. By chance, are you still at the distinction of civil code between movables and immovables, daring innovator? It would be, truly, rudimentary and antediluvian economics.

But perhaps my complaint surprises you. In that case, I will surprise you even more by justifying it with a series of considerations that you seem to have never suspected, and which it is time to touch upon.

I stated just now that the land is a natural, inalienable capital as opposed to houses which are an artificial, consumable capital. It could be added that land and artificial capital in general are transmissible. Personal skills are a natural, consumable, and intransmissible capital: this last quality being characteristic.

The expressions: natural and artificial, consumable and inconsumable, transmissible and intransmissible define themselves and are immediately understandable. The qualities they express could serve to distinguish a priori the three types of capital, but a much more characteristic difference of these capitals reveals itself a posteriori through the differences in the laws of variation of their value. These are the laws that I will state, regretting very much that the dimensions of my work do not allow me to expose them in detail: for they are most interesting, most novel, and most fruitful in the natural theory of exchange value. Moreover, this detailed exposition can be found in chapter V of the Theory of Social Wealth by my father, which I merely summarize here.

On the laws of variation of the value of capital and the value of income. — I. The first of these laws states the general relationship between the value of the capital and the value of the income from that capital. This law, common to the three types of capital, is stated as follows:

— In a thriving society, the value of capital rises relative to the value of income; in a declining society, the value of income rises relative to the value of capital. In other words, incomes are bought more or less expensively, depending on whether the society is poorer or richer.

II. If we now want to understand the laws of simultaneous increase or decrease in the value of capital and income, let’s consider the three types of capital separately, starting with land.

Land or arable soil, which a prospering or declining society has at its disposal, has a fixed extent: the supply can therefore not increase in any case. On the other hand, the demand for land or its products increases if the society is prospering, and decreases if the society is declining. In the former case, indeed, “there is, Mr. Joseph Garnier says, the greatest need for the products of the land, while each individual has more means to buy them53.” Conversely, if the society is declining, if the population becomes increasingly rare and poor, there is less need for the land and its products as each individual has fewer resources to buy them, fewer artificial value equivalents to offer in exchange.

The conclusion is easy and the law of simultaneous increase or decrease in the value of land capital and the value of land income is evident.

— In a society that is prospering, the total value of the land and the total amount of land income rising, the individual value of lands and their incomes increases.

On the contrary, in a society that is declining, the total value of the land and the total amount of land income decreasing, the individual value of lands and their incomes decreases.

It is essential to note: we must not confuse the amount of income with the rate or percentage. In a society that is prospering, the rate of land income decreases by virtue of Law I, while the amount increases by virtue of Law II, and vice versa in a society that is declining. — The two facts are not contradictory. A territory worth 30 billion yields, at a rate of 5%, 1.5 billion. When the value of the territory rises to 40 billion and the rate of income falls to 4%, the sum of rents rises to 1.6 billion. Finally, if the total value of the territory reaches 50 billion and the rate of income drops to 3.5%, the total amount of rents will produce 1.75 billion, a sum greater than everything it produced before.

III. “The conclusion that presents itself is that, in a progressive society, the condition of the landowner becomes more and more comfortable, increasingly advantageous. Without any effort, without any sacrifice, simply by the effect of the law I have just pointed out, the landowner has the rare advantage of seeing the exchangeable value of the capital he possesses, and the amount of income that this possession assures him, increase54.”

IV. Let’s move on to artificial capital.

The artificial capitals of a society in progress or regression: public buildings, houses, furniture, railways, ships, machinery, instruments of all kinds, livestock, goods, works of art, etc., etc., are the fruit of labor and savings. Now, if society prospers, with the progress of civilization, labor becomes increasingly skilled and productive, saving becomes easier and more attractive; and, in short, experience as well as theory proves that then the supply of artificial capitals tends to rise faster than the demand. The opposite happens if the society declines.

But that’s not all. At the same time that the supply of artificial capitals increases more than the demand, the rate or percentage of income from these capitals decreases by virtue of Law I; — or vice versa. Therefore, for a double reason:

— In a society that is prospering, the total value of artificial capital and the total amount of income from this capital rising, the individual value of artificial capitals and their incomes decreases.

And conversely, in a society that is declining, the total value of artificial capital and the total amount of income from this capital decreasing, the individual value of artificial capitals and their incomes, rises.

V. “The conclusion that presents itself is that the position of a capitalist (I call thus the possessor of an artificial capital) becomes more and more difficult, less and less advantageous, in a progressive society. The income on which he bases his existence, or a part of his existence, decreases for a double reason. It decreases due to the absolute fall in the value of the capital; it decreases due to the fall in the rate of profit. Idleness becomes more and more costly to the capitalist. He is forced to constantly call upon work and economy to maintain his position and keep his income at the level of his needs55.”

VI. Finally, let’s talk about labor.

Every man is born both a producer and a consumer; every man, coming into the world, brings a mouth and two arms; the mouth occupies the arms, the arms nourish the mouth; the mouth and the arms balance each other. From this, it follows that, whether the society is prospering or declining, the supply and demand for labor increase or decrease proportionally, and that the ratio of the latter to the former does not vary. Thus, between the land which has its law and the artificial capital which has its own, personal faculties or, if one may say so, the human capital, are distinguished by a law that is specific to them.

— In a society that is prospering or declining the total value of human capital and the total amount of income from this capital rising or decreasing, the individual value of personal faculties and their income remains stationary.

VII. Conclusion: The position of the worker as a worker is neither easier nor more difficult, neither more advantageous nor more painful whether the society prospers or declines.

Mr. Proudhon is preparing to give us another striking example of his inexperience in disentangling issues, in posing problems. I urge him to meditate on the foregoing considerations: they will make him understand how little reason there is to confuse lands and houses, under the name real estate, in the same economic category.

§3. Owners and Tenants (conclusion).

The landlord has taken the land: granted.

Allow me, Mr. Proudhon. It is you who say so: granted. As for me, I might consider whether the landowner, since it is about lands and their ownership, could or could not have taken the land. I want to know very precisely if this taking was natural or unnatural, whether the possession remains legitimate or illegitimate.

He owns it by conquest, labor, prescription, formal or tacit concession: no one will investigate this.

‘On’, that means Mr. Proudhon. It is you alone who will not investigate. No one will investigate, no doubt because it is easier to beat around the bush, to rail at everything without rhyme or reason, than to delve into the heart of matters and carefully settle the questions. For us, if you please, we will investigate. We will examine whether individual possession of lands is based on conquest, labor, formal or tacit concession, whether it is legitimate, whether it is property; or whether it is illegitimate, whether it is theft; in the latter case, whether there is prescription. We will investigate all this.

The Revolution, it is true, has abolished the right to flotsam, and the most ordinary integrity requires reporting any lost item on the public road to the police commissioner: it doesn’t matter;

In truth, I think it is hard to slap oneself with both hands more gracefully. What! All your verbiage about tobacco, kirsch, vinegar, poisons, bitter almond, prussic acid, apprehension, possession, domination, property, theft was meant to deceive so few that you do not even believe it yourself. Your conviction is the first to resist your verbose sophistry. After having vainly tried, ten times over, to make us accept appropriation as a fatal fact, you come to say that the most common integrity can, in some cases, govern it, and, for example, should command the individual not to seize the land as if it were flotsam. What a retraction!

And when you reach—by what reasons, I do not know—to represent to us as a theft of blatant immorality this possession, which might as well be a sacred property, but which in any case, you had previously depicted as completely foreign, indifferent to justice, when your intellectual conscience protests, and when your moral conscience revolts, you impose silence on both by saying: — it doesn’t matter!

How, it doesn’t matter? It matters essentially, despite your displeasure. And I will permit myself to tell you in turn that, in any case, whether it matters or not, the simplest modesty forbids one to thus vilify oneself, and the most common scientific integrity requires that one not make enormous concessions to laziness at the expense of truth.

…It is agreed that the landowner could seize what was, apparently, occupied by no one.

‘On’, it is always Mr. Proudhon. It is you alone who agree to this. And certainly, there is every reason to believe that if it is agreed that the landowner could seize the land, it is because one would be very embarrassed to explain what the insidious apparently conceals, to say in what way the land was actually occupied by someone, to refuse, in a word, the landowner what is granted to him. I exempt myself from no arduous labor, I grant nothing, and I intend to submit to the jurisdiction of natural and social law, the act by which the landowner took possession of the land. I consider the appropriation a moral fact, arising from justice like any other manifestation of the responsible personality of man. I want to know whether the appropriation of the land by the landowner is natural or unnatural, the possession legitimate or illegitimate, sacred property or blatant theft.

What is asked of him is not to demand afterwards from his property, when he presents it for exchange, more than it is worth,…

Say: was I wrong, just now, to announce that you were going to give us another striking example of your persistence in never addressing the questions that you undertake to resolve? We were supposed, upon reaching §! of section III, to deal with the rental of houses, and here it is about the sale of land properties. Houses are not land capital, and renting a capital is not the same as selling it.

Let there be a house built on a plot of land. One can sell both the house and the land; one can rent both the land and the house. One can sell the house and rent the land… etc. I thought I would only have to deal with you about renting the house. But if you please, however, that we consider its sale, that we do not neglect neither the sale nor the rental of the land, I consent wholeheartedly. Well then! What is the land worth? What is the house worth? What are also the revenues from these capitals: house, land? Here are the questions that present themselves. They are most elementary in the theory of exchange value and exchange. Would you please give me the solution?

Of course, this is easy for you. Indeed, by underlining the word worth, who would immediately swear, God forgive me! that you have taken the trouble to elaborate at length the problem of the value of a fact? Obviously, you have defined the nature to yourself, explained the cause, listed the species, demonstrated the laws, and laid out the effects with tireless patience for mathematical certainty. And, for sure, the question has been illuminated to your eyes in a dazzling day. I do not doubt it; but I find that you should have shared the result of these fortunate labors in terms more explicit than you have done. I regret that your whole theory of exchange value is kept from us in these four lines that I have collected and quoted: — “It is a consequence of justice that, two dissimilar products having to be exchanged, the exchange must be made according to their respective values, that is, the costs each product incurs.” I regret it, and indeed, I complain about it. Be that as it may, the theory, although not developed, is nonetheless complete. Exchange value is based and measured on the cost of production or cost price. I retain this principle without seeking to lift the thick veil with which you believed you had to cover its detailed presentation and rational demonstration to our eyes.

Consequently, what is a house worth? What it cost to build it; that is, generally, the value of a house depends on the inexperience of an architect, the clumsiness of a plaster mixer, or any unfortunate accident; granted.

And what is the land worth? Nothing at all, having cost nothing to produce. That is marvelous; we will explore shortly what, in the same system, the revenues might be worth.

…Such a claim implying double theft, theft to the second power, which society cannot tolerate.

Better and better. That society tolerates simple theft, theft to the first power, we see no problem with, and we consent to it; but double theft, theft to the second power, not at all. This morality satisfies me; this justice delights me.

However, where do you see that there is double theft, and on what grounds do you start shouting about theft to the second degree, in the case where the selling price of a piece of real estate seems exorbitant to you? This is what I would ask you. And what exactly constitutes the first of these two thefts that you denounce at the same time? This needs to be clarified.

You are, if I am not mistaken, simply stating here, in clear terms, the accusation that was previously hinted at insidiously when you spoke of the right of salvage abolished by the Revolution and that common honesty which obliges one to report any lost item found on the public road to the police commissioner. After elaborating at length a theory whereby the act of appropriating land or houses should be considered indifferent, alien to law, you yourself mock this system by clearly declaring this same act of appropriation directly contrary to law, since you brand it with the odious name of theft.

That is very well; and, without a doubt, insults are more estimable than ironic and sly implications; but still, on the whole, an insult proves nothing, and it is necessary to know to what extent you can maintain yours. I point out to the ridicule of all men who have once opened a book of political economy the enormous mistake you make by grouping under the name of immovables, lands and houses alike. I distinguish between the two; I set aside, for a moment, the houses and their owners; and I propose, for now, to show you quite correctly how far from right you, Mr. Proudhon, are to accuse the landowner who has appropriated the land of being a thief.

Firstly, even the most common honesty does not oblige one to report to the police commissioner objects found on the public road if these objects are absolutely worthless. If you find a piece of paper or a pebble on the public road, you are allowed to put them in your pocket without notifying the police commissioner. One is not a thief for appropriating something that is worth nothing at all. The man who breathes atmospheric air, the man who brings sunlight into his room, the man who draws water from the river are not and cannot be thieves. The man who appropriates a plot of land is no more so according to you, since, according to you, the value comes from production costs, the land is worth nothing according to you, just like breathable air, solar light and heat, and river water. Therefore, for you to, with some appearance of reason, call the landowner a thief, you would need to take the trouble to reform your entire theory of exchange value; you would need to agree that it is false in every respect, that not only labor has value, that the land has value in itself; that generally, value is measured not only by production costs, but rather is based and measured, on the contrary, on the scarcity of useful things; you would finally need to have the courage to educate yourself on the basics of this value question, the first of economic questions. First point.

Secondly, the plant or animal being, unaccountable, who appropriates valuable objects is not a thief; and he is not one because he is neither free nor accountable. The fox that eats a chicken in a chicken coop acts neither for nor against the law. The man who appropriates land is in the same situation, according to you, since, according to you, the act of appropriation is for man as for the brute merely a fatal manifestation of his autonomy. So, you would still have to modify here very essentially your way of looking at things. You would have to admit that appropriation is on the part of man a free and intelligent manifestation of a responsible personality, that it is therefore a moral act, subject, from the moment it occurs, to the scrutiny and authority of justice. You would have to completely renounce your fantastical theory of the origin and foundation of property to seek a better one. Second point.

Thirdly, admitting then on one hand that the land has value in itself, and on the other hand that the man, in appropriating it, must immediately answer for this act before the inquisition of law, to establish that individual land ownership deserves to be branded with the odious name of theft or usurpation, you would need to show that the appropriation of the land by man is anti-natural, consequently, the possession illegitimate. Or, if appropriation is recognized as natural, it would be necessary to demonstrate that nevertheless the possession based on it goes against the rights of economic equality and against the principles of commutative justice; therefore, it is still illegitimate. To do this, it would be appropriate, I think, for you to acquire some knowledge of natural law, and to significantly refine your ideas about social law, to abandon, for example, your system of absolute equality of positions and fortunes, of absolute equality before what you are pleased to call the servitudes of nature. Third point.

Finally, all this work done, — and you have not even started it, — and all these problems clarified, — and they are far from being clarified yet, — I would still deny you the right to use the same violence in your language by calling the landowner a thief. For to be a thief it is not enough to be a responsible person and to commit an act of illegitimate appropriation and possession of a valuable and exchangeable thing, one must commit this act knowingly. Assuming, which is not established, that individual land ownership is an usurpation, assuming that the landowner has seized someone else’s property, that he enjoys it at the expense of society, if he is unaware of the harm he does us, his ignorance makes him excusable. Error communis facit jus, says Roman law, which you seem to be so well versed in. Where everyone is mistaken, truth and justice await better days; in the meantime, general opinion makes the law. Fourth point.

So, withdraw your insults. Definitively renounce complicating the question that occupies us, the question of house rents, with your errors and invectives about the origin, the foundation, and the balance of the right of property. Let’s close this parenthesis, and return to the balance of rentals.

What is the income of a house worth? What is the income of a plot of land worth? As for me, I have said for a long time, I rely on the ratio of the sum of needs to the sum of provisions translating into the quotient of effective demand to effective supply, the law of the market. And you? Will you finally consent to inform us about your opinion?

Are we going to tax rents, as we have taxed bread and meat?

Precisely, Sir. Or I am much mistaken, or you are going to tax rents, not as bread and meat were taxed according to the market situation, but as you yourself have already taxed wages, products, discount rates, the interest on money: — by virtue of your transcendent authority.

We know the result of such taxes: it is not brilliant enough to persist in them, much less to generalize them.

One could not say it better. And yet, despite everything, you who protest on page 311 that you will not tax rents, you will tax them, whether you like it or not, on page 312, if you are consistent. You could not do otherwise. The determination of values, based on the cost price, can only be arbitrary. Apart from the natural determination provided by the market, one goes straight to the tax, straight to the maximum.

We must return to the balance, the only way to determine values.

Oh! for God’s sake! let’s return to this balance: we should have returned to it long ago. It would now be evident for a long time that what you call balance, I call more rightly maximum.

Note that any act of appropriation of an unoccupied thing, whether it be land or its products, a work tool, an industrial process, an idea, is primitive, anterior to Justice, and that it only falls under the empire of law, from the moment it enters the sphere of social transactions.

Again! But this theory is in tatters. I ruined it, first; you disparaged it, second. We are not fools, you must believe it: well! you told us, in clear terms, that the land was unoccupied only in appearance. Undoubtedly, the same is true of its products. I defy you to show me a work tool, an industrial process, an idea that has remained unoccupied for a single moment once they were valuable and exchangeable. You will never base the right of property on the seizure of unoccupied things: there is nothing that is not occupied. This theory is also completely useless here as it is everywhere ridiculous.

The seizure, usurpation, conquest, appropriation, whatever you please, thus does not constitute a right; but as everything, in social economy, has its beginning in a previous seizure, it is agreed to recognize as legitimate owner the first who seized the thing: this is what is called, by a pure fiction of the law, the right of first occupant.

Well then! why didn’t you say so right from the start? Why didn’t you admit that you are dealing with fictions, and that you were undertaking the defense of the right of first occupant? By Jove! I would have wasted neither my time nor my effort to attack it against you. I would have sent you straight back to John Rabbit who, two hundred years ago, said:

The first occupant, is it a wiser law?

It is only later, when this first occupant comes into economic relation with his fellows, that property finally falls under the stroke of Justice.

It was absolutely necessary that Mr. Proudhon should return one last time to the field of morals, that he should make one last thrust towards the question of the origin and foundation of property. That was to summarize his doctrine; I summarize it in my turn.

Seize, if you find one, a plot of land that is, in reality or in appearance, unoccupied: this fact is indifferent to the law. On this land build, devoting all your labor, all your savings, a house: this act remains alien to justice. The house, artificial capital that you have created, rises on the soil, natural capital that you have appropriated: you are neither a thief nor a property owner, neither a thief of the land nor a property owner of the house. You are nothing. But offer for exchange, rent or sell land and house, justice intervenes, the right occurs, morality appears. You are a sacred owner!

In other words, property is a fatal fact, exchange value is a free fact. If there were a theory of property, it would be a natural science; the theory of exchange value, a moral science. This is, in the final analysis, the terrible confusion of principles, long announced, now demonstrated, on which Mr. Proudhon’s economic doctrine rests, viewed from a metaphysical standpoint. As for the doctrine itself, in its details, let it be assessed: I believe I have provided the elements for a rational judgment a posteriori as well as the reasons for a condemnation a priori.

I only add that with all this we have not, ultimately, taken a step toward the balance of rentals to follow up on the balance of loans. We have merely declared the amount of rents obviously exorbitant, and that is all. We have said nothing that could prove the harm nor remedy it. But patience! We are getting there. We will finally contemplate this wonderful and fruitful balance from which the full and complete right of property is born.

Now, if we have already found the balance of the worker and the employer, the producer and the consumer, the discounting financier and the circulating merchant, the lender and the borrower,…

But you have found none of these balances, neither that of the worker and the employer, nor that of the producer and the consumer, nor that of the discounting financier and the circulating merchant, nor that of the lender and the borrower.

...Why would we not likewise find the balance, not only from owner to owner, not only from owner to community, but from owner to tenant?

Why? For the reason that has always prevented you from finding the other balances you have all vainly sought, and that you could not discover. Why? Because you are completely ignorant of what social wealth and property are. Why? Because you are strong only in sophisms and invectives with which you cover the most profound ignorance of political economy and of natural and social law.

What do I say? It is indispensable that we find this balance;…

Indeed, it is indispensable, if only to justify the audacity of your claims. But you have not found it and you will not find it, because you do not know how to look for it; because you want to find it where it is not, where it cannot be.

Let’s be silent! And you, reader, pay attention! Here is the infallible balance where right and duty will be weighed. Here is the weight, the number and the measure. Here is the oracle that will sanction property by conditioning exchange. Here is the sovereign balm and the universal panacea. Let us listen!

Thus, let the said owner provide his accounts; let us know what property costs him, in capital, maintenance, supervision, tax, even interest and rent, where rent and interest are paid.

What a potpourri of cost prices! What an olla-podrida of production expenses! Capital, maintenance, supervision, tax, interest, rent! What accounts to make one shudder!

The rental price, equal to a fraction of the total,…

What fraction of the total, if you please?

...Will be considered, according to the convenience of the parties and the nature of the property, either as an annuity counted towards reimbursement, or as equivalent to maintenance and amortization costs, plus a remuneration for guard, service, and risks of the entrepreneur.

What an incoherent pileup of vague grand words! The convenience of the parties, the nature of the property! Annuity counted towards reimbursement, maintenance, amortization, guard, service, and risks!

Such is the principle, I do not say of the fact of property, which by itself has nothing legal, but of the consecration of property by law, and consequently of its balance.

Are you mocking the world? This is a principle: — That the owner provide his accounts; that one knows what property costs him… The rental price, equal to a fraction of the total, will be considered according to the convenience of the parties?... What do you then intend to teach us? That the market price of income is a fraction of the total capital price? We had no doubt of it. That the price of income contains: 1° the service of capital, 2° an amortization premium, 3° an insurance premium? We knew it, by Jove! better than you long ago; and assuming we had ignored it, your terrible jargon would not have taught us.

But these accounts of cost prices and production expenses, how will they be established, and who will establish them? And what guarantee will there be of their sincerity? Assuming they are accurate, by what principles should they determine the market value of the house and its rent?

And then this rent, what fraction will it be of the cost price? half? a quarter? a twentieth? a thirtieth?… Who will tax it? You? Why? when? where? how?

We know nothing; explain yourself; you have said nothing.

I will not elaborate on the execution; a matter of police and accounting, whose mode can vary infinitely.

This is just the time to exclaim:

He speaks very calmly of that which is needless, And runs the great gallop when he is at his task.

He will not elaborate on the execution! The determination of the origin and foundation of property is no longer a problem of natural law: it is a problem of accounting, and the last of the clerks understands it perfectly. The balance of equality and inequality, of common property and individual property, is no longer a question of economic and social law, it’s a matter of police, and the first sergeant of police will settle it. The practical realization of scientific theories is no longer a work of legislation, it’s a matter of police and accounting; four men, and Mr. Proudhon as corporal, will carry out this operation whose mode, note well, can vary infinitely. Arbitrariness, indeed, has no limits.

But that’s enough; — it’s even already too much.

The application of Justice to property has never been made, except by chance and in an irregular manner. Neither Roman law, nor canon law, nor any ancient or modern law, has recognized its exact theory. Hence these innumerable antinomies, which jurisprudence has remained impotent to resolve, and which are the disgrace of the school. The Revolution called for a radical reform; its legal scholars, strangers to the economic science, and who defined Justice as the praetor, have given us the Napoleonic Code.

All this is very well said, but does not advance us much. You inveigh well, but you reform poorly. The legal scholars of the Revolution were strangers to political economy; you are just as much, if not more.

Everything is to be done.

That is quite possible, but what is certain is that you have done nothing. You have struck right and left, at theologians, philosophers, economists, legislators, statesmen; you have taken away nothing nor added anything to their work. You have shaken everything, upset everything, you have demolished nothing, built nothing. Even after your lucubrations, — especially after them, — everything is to be done.

Section IV. — On Land Rent

§ 1. Tax and Land Rent.

Apart from the fiscal series, there exists a taxable subject matter, the most taxable of all, which has never been taxed; whose taxation, even if extended to the complete absorption of the subject matter, would never adversely affect labor, agriculture, industry, commerce, credit, capital, consumption, or wealth; which, without burdening the people, would not prevent anyone from living according to their means, in comfort, even luxury, and from fully enjoying the fruits of their talent and knowledge; a tax that would also represent the very expression of equality.

— Identify this subject matter: you will have truly served humanity.

— Land rent.

It is certain that land rent is a taxable subject matter, perhaps the most taxable of all. It is possible that the taxation of land rent, even to the extent of the total absorption of the subject matter, could have all the benefits listed by Mr. Proudhon. It is incorrect to say that this subject matter exists outside of the fiscal series: land rent has been included in the fiscal series for over sixty years. The Constituent Assembly, in 1790, established a tax of 240 million on land rent then estimated at 1200 million, which today amounts to at least 2 billion or 2.2 billion. It seems to me that 240 million is a sum that would not have escaped my opponent’s notice had he looked for it. Moreover, the inheritance tax does not spare land rent, as far as I know. Mr. Proudhon is free to propose an increase in the land tax, provided he justifies this motion. But what is he saying, that land rent has never been taxed? Does Mr. Proudhon not know what a tax is? Does he not know what land rent is? It is highly likely.

Come on, false philanthropist,… tax the rent from everything you would wish to relieve other taxes from: no one will feel any inconvenience. Agriculture will remain prosperous; commerce will never face obstacles: industry will reach the heights of wealth and glory. No more privileged, no more poor: all men equal before the tax office as before the law of economics…

To demonstrate this proposition is to do at once the theory of rent and of tax, and, having explained their nature, to balance them out.

To do at once the theory of rent and of tax, to explain their nature, to balance them out is a noble endeavor. Demonstrating that the tax should absorb all land rent, and nothing but land rent, is perhaps an equally good venture, at least equally legitimate. But wanting is not enough; one must be able. Is Mr. Proudhon truly capable of accomplishing what he undertakes? I affirm that he is not.

What is land rent? It is the rental of the land or the price of the income from this capital, which we call the earth.

What does it mean to do the theory of land rent? It means to indicate the relationship between the value of the rent and the value of the land. It involves researching the laws of increase or decrease in the value of the rent, the laws of variation in the relationship between the value of the rent and the value of the land, in a society that is prospering or declining.

The theory of land rent is one aspect of the theory of capital and income, which itself is a specific question within the general theory of exchange value, exchange, and production. Mr. Proudhon, who misunderstands the theory of exchange value, who derives value from labor and measures it by the cost price, who denies the land any intrinsic value, Mr. Proudhon, who in his life never suspected the theory of capital and income, to such an extent that the word income is not uttered by him once, and the word capital is never mentioned except in a non-scientific sense, does he have any chance of successfully navigating the theory of rent? Not at all.

What is a tax? It is the State’s revenue, it is the fund for common expenses.

What does it mean to do the theory of tax? It means to list the sources from which funds for common expenses can be drawn by society. It means to pursue, in the philosophical sense of the word, the critique of the different means that the State can employ to create revenue.

The theory of tax is a specific question within the general theory of property, distribution, and consumption of wealth. Mr. Proudhon, who misunderstands natural law, who knows nothing of the origin and foundation of property, who considers appropriation as a fact of the fatal order, Mr. Proudhon, who distorts social law, who incorporates distributive justice into commutative justice by his principle of absolute equality of conditions, positions, and fortunes, who does not suspect that one can and should make room for equality and inequality, reconcile individualism and communism, can he hope to successfully lead the theory of tax? Never.

And if it is abundantly proven that Mr. Proudhon is incapable of doing at once the theory of rent and of tax, how can we hope that he could balance them by proving that the tax can and should consist in the taxation of land rent pushed to the complete absorption of the subject matter?

Economists do not agree on the nature of the rent…

According to Mr. Proudhon alone. But let’s see for ourselves. Opinion of Mr. H. Passy:

« Soil rent (Of the). It is the accepted designation in Political Economy to denote the net product of the land, that is, the portion of the total product which, after deducting the part that covers production charges, remains free and constitutes a surplus. It naturally belongs to the landowners: they collect it themselves when they cultivate their own fields; they receive it from the hands of farmers or sharecroppers when they leave it to others to make it valuable; in all cases, the rent forms part of the property56. »

Opinion of Mr. Joseph Garnier:

« There are five elements to consider in the result of an agricultural production:

1o The part pertaining to the soil, to the instrument-Earth designated as land rent or rent;

2o The part pertaining to the Capital fixed on the soil, not confused with it, that is, visibly detached, such as buildings and separate constructions, part which takes the name of Rent of the engaged capital;

3o The part of the Operational Capital more or less engaged or circulating, which takes the name of Interest specifically;

4o The wages of the workers, including the remuneration of the entrepreneur as a worker;

5o The Profit or benefit of the latter, all exploitation costs, public contribution, and landowner’s lease paid.

... When the landowner does not manage the exploitation himself, he derives from renting it a revenue called Farm rent57. »

Opinion of Mr. Walras:

« The land yields a revenue called land rent or the land rent.

... The debated price, the lump sum price of the land rent or the land rent is called the farm rent58. »

Messrs. Passy, Garnier, Walras seem to be perfectly in agreement on the nature of the rent. For them, it is the price of the land rent, due to the owner.

What must now be said is that these economists, who understand each other so well, do not agree with other economists, clumsy disciples of the English school, who can derive incomplete principles from A. Smith and Ricardo on exchange value, erroneous deductions that neither Smith nor Ricardo themselves drew, regarding rent.

« A distinguished American economist, Mr. Passy says, Mr. Carey has denied that the natural fertility of the soil was among the productive causes of the rent. In his view, rent has no other source than the expenses successively incurred in the interest of its production. »

« This is also the viewpoint under which rent was considered by a man whose loss science greatly regrets. Mr. Bastiat, Mr. Passy says a little further on, fearing the consequences of any doctrine that might seem to authorize the admission that there could be wealth not exclusively the product of human services or efforts, starts from the same idea as Mr. Carey. According to him, rent is and can be nothing other than the interest of the capitals absorbed by the costs of clearing and appropriating the soil to the demands of cultivation59. »

MM. Carey and Bastiat, therefore, agree perfectly among themselves. According to these economists, in the total income of agricultural labor, there can be no part representing the rent of the land instrument, as M. Garnier says, the price of selling the income from the land which is its natural fertility. By giving M. Thiers the honor of considering him an economist, and by applying to his doctrine on property the logic that he has always strived not to include himself, one could join him to MM. Carey and Bastiat. We will see in a moment that M. Proudhon does nothing but also follow, quite clumsily, the thesis of these gentlemen. The physiocrats, on the contrary, J.-B. Say, as well as Smith and Ricardo through a fortunate inconsistency, positively rally to the opposite thesis.

In summary, here is the essence of the debate. Considering the total result of agricultural operations, one school of economists divides it into three parts pertaining to three productive elements:

  1. The land rent or the price of the land rent.
  2. The profit from the artificial capitals engaged in the exploitation.
  3. The wage of the workers.

I am merely simplifying M. Garnier’s enumeration. Another school of economists, rejecting this distribution, admits only the following:

  1. The profit from the capitals.
  2. The wage of the workers.

It could be stated that while the former affirm the land rent, the others deny it. The disagreement is deep; but the point in dispute is precise and defined; the question is clear; the solution interesting. Does land rent exist or not? Let us fully illuminate the discussion by showing what its origin is, what its scope is, what its terms must be.

Admitting the first distribution means recognizing and consecrating three types of income: rent, profits, wages, and thus three types of capital: land, artificial capital, personal abilities, as elements of social wealth. Thus, attributing to the land a capital value as to human abilities, and as to the capital resulting from labor and saving. Finally, it means setting both the origin and the measure of value in the scarcity of useful things.

Rejecting this distribution to admit only the second, means recognizing as an element of wealth only labor; it sees the origin of value in labor, it sets the measure of value in the cost of production. However, there is in this doctrine a principle petition that has long been pointed out and will never be avoided.

“That the value of products is due to the cost of production, I agree. But where do the production costs come from? The idea of value is in the idea of cost. For what are the costs of a product, if not what one has paid, or the value that one has given, to have this product? Thus, it has not been said all, by stating that the value comes from the cost of production. This amounts to saying that the value of products comes from the value of labor. But the value of labor, where does it come from? Why does labor have a value? This is the question that Ricardo did not solve, that he did not even pose, which exists nonetheless, despite his negligence, and will never be resolved except by the help of scarcity. And indeed, if labor has value, it is because it is scarce; and if products are worth something, it is because they represent the value and scarcity of the labor that produced them60.”

If one is convinced by the strength of this argument, if one adopts the most philosophical and only true theory of exchange value, the one that places its origin in the limitation in quantity of useful things, the measure in the comparative circumstances of the sum of needs to the sum of provisions, one would still fear, like the timid Bastiat, the consequences of such a doctrine, one is forced to admit: 1° that the land is useful, 2° that it is limited in quantity; therefore, it is rare, valuable, and exchangeable. The land, the land instrument, being admitted among the capitals that constitute social wealth, the income from this capital must itself be admitted to be offered on the market.

The price of the land rent is the land rent, and this price must be found in the total product of an agricultural operation. This can be said a priori. A posteriori we will demonstrate shortly that it is indeed there. Thus denying the land rent, as the rent of the land, is wanting to only imperfectly record the real facts, and it is also to stubbornly provide only a ridiculous explanation of these poorly examined facts.

...I will, by stating myself what it is, show the cause of this disagreement.

The confidence in the discussion is, within certain limits, legitimate, if it is supported by the strength of the truth; it is laughable, if it is betrayed by weakness and error. M. Proudhon has a tactic of always putting everyone in the same bag, whether philosophers, legal experts, or economists, then to pose, himself, in the isolation of his glorious personality. He says:—“The economic school has lied; ...the economists ramble…” Then he adds:—“I, I will show… I prove…” This arrogance is intolerable to me.

Economists do not agree on the nature of the rent. And what if they don’t? Are doctors agreed on the nature of all diseases? A man engages in the study of economics; concerning certain controversial questions, he aligns himself with the opinion of such and such economist, he combats the opinion of such and such another. If the opinion of some does not satisfy him better than the opinion of others, he forms a particular opinion and supports it against all economists. From the conflict of opinions comes the truth. So do diligent, sincere, and knowledgeable doctors: only quacks claim:—“Medicine is a sham, doctors are ignorant. I cure all diseases…”

I will, by stating myself what it is, show the cause of this disagreement. Here is science and all scholars, without exception, on one side. Here is M. Proudhon, all alone, on the other. And M. Proudhon is about to confound science and pulverize the scholars.

Point. The opinion of M. Proudhon, whatever it may be, will have the value of a good or bad economic opinion, but not the transcendent authority of a prophetic revelation superior to science. This is what I wanted to say to M. Proudhon about the ridiculous attitude he perpetually assumes. This unique, this original, this unexpected, this incomparable opinion of M. Proudhon, moreover, is already known in advance. M. Proudhon, along with Smith and Ricardo, places the origin of value and wealth in labor, its measure in the cost of production. This is where he will start. Thus M. Proudhon with MM. Carey, Bastiat, Thiers, will barely distinguish at most in the result of agricultural production a wage of labor and a profit of capitals. I say at most: for no doubt M. Proudhon who even denies the income from artificial capital, and who preaches in the desert the reciprocity of service and the gratuitousness of credit, will not agree to recognize the profit of capitals engaged in exploitation. He will see only a wage of labor everywhere. This is where M. Proudhon will arrive.

M. Proudhon is an economist like any other, and moreover, he is a more backward economist than any other. His place is at the end of the English school, whose modern French school has already surpassed the head. I therefore add that the few bits of political economy borrowed by M. Proudhon from Ricardo not only do not authorize him to publicly betray the weaknesses of the scholars to make himself believed to be exempt, but will not allow him to show the cause of any disagreement. M. Proudhon will show nothing but his ignorance.

No wealth without labor, even if it is just simple apprehension: everyone agrees on this first principle.

All scholars stumble, says M. Proudhon. I alone walk straight. Watch how I do it. He takes a step and falls flat on his face.

No wealth without labor. Quite the contrary: much wealth without labor. Much primitive wealth first: atmospheric air, solar light and heat, river water, all the forces of nature, the land, our faculties, etc., etc. Much social wealth then, namely those of the primitive wealth which are: 1° valuable and exchangeable; 2° appropriable, because being useful they are also limited in quantity: the land, the personal faculties of men.

Just the simple apprehension. Sophist’s reserve. Simple apprehension is not work: this is not even up for discussion.

Everyone agrees on this first principle. Unfortunate illusion of a candor that could be accused of ignorance. It can be said without too much exaggeration that in political economy today everyone agrees on the opposite principle. However, let’s not exaggerate anything. So, in any case, it is hardly more than the disciples of Adam Smith and Ricardo who agree, as well as they can, to see in labor the source, in the cost of production the measure of all wealth. But the study of political economy would have taught M. Proudhon that it is not only Adam Smith and Ricardo who have tried to find the origin of value. The physiocrats had believed to find it beforehand in the land. Mac Culloch and J.-B. Say saw it later in unity. MM. Walras, for more than twenty-five years, and Joseph Garnier, for a long time also, show it in the scarcity of useful things. These economists enumerate today, both of them, three types of capitals, sources of income, instruments of production, elements of social wealth: the land, human faculties, natural capitals, artificial capital.

No work without expenditure of forces, which expenditure can be reduced to four categories: food, clothing, housing, general expenses, including the subject’s education, retirement pension, unemployment, illnesses, disasters. This second point likewise offers no difficulty.

Another illusion of great economic innocence. This second point offers, in my opinion, two major difficulties:

First difficulty. — It consists in that I fail to understand what is meant by an expenditure of forces which can be reduced to four categories: food, clothing, housing, general expenses… It had to be said: no work without exercise of personal faculties, whose education, maintenance, insurance, amortization expenses are related to four categories, etc.

The principle being thus established in acceptable terms, I make a fundamental observation. Personal faculties are the capital whose work is the income. To state that it is necessary to educate, maintain, etc., etc., personal faculties to exercise them, is to confirm the particular application to these faculties of a general law to all capitals, to the land, to artificial capital as well as to the personal faculties of men.

Artificial capital is created by us. Natural capital is given to us by the munificence of nature. Both, once existing, need to be maintained. Therefore, food, clothing, housing, and general expenses do not produce work per se; they maintain the natural capital from which work is the income. This is the accurate principle; it was essential to reestablish it.

Second difficulty. — Mr. Proudhon’s second point, acceptable with reservations made, doubly contradicts his first point which is unacceptable at any price. Firstly, the capital from which work derives its income is capital that does not come from work; human faculties are a natural wealth. Secondly, to work, indeed, one must eat, clothe oneself, and have shelter… but for merely understanding things, one can very well engage in this activity while fasting, naked, and in a state of vagrancy. This demonstrates well that mere understanding is not work.

Taking any work, the cost of this work will therefore be equal to the average of what an average worker spends to feed, clothe, and house themselves, etc., throughout the duration of the work.

What does this mean? Mr. Proudhon lists the categories of production costs: food, clothing, etc., he gives us the means to mathematically assess the cost price of any work; then he wants afterwards that the cost of this work be equal to the average of what an average worker spends! But this assertion is a monstrous enormity! Taking any work, the cost of this work will be equal to the cost of this work. And that’s it!

I assume, for example, that my father spent about thirty thousand francs to raise me, to educate me up to the age of twenty-four, to buy me out of conscription, etc., etc.: this is something he must know very precisely. My work already costs 4 francs per day, clear and net. I assume that with this, for my food, clothing, housing, etc., etc., I spend another 6 francs, a figure that it only depends on me to verify. The total cost of my work per day is 10 francs without a penny more or less. And if the same calculation, established scrupulously about the son of my neighbor, proves that the cost of his work, to him, is only 5 francs per day, why want that my work and his cost each 7 fr. 50 and not one 10 francs and the other 5 francs? Why want that my work, to me, that his work, to him, that any work, does not cost what it actually costs, but the average of what an average worker spends? I no longer have a height of 1m60, nor my neighbor a height of 1m65: we both have the same height equal to the average height of all men. It was not, eight days ago, 26° Celsius and today 32°: the temperature, on each day of the year, is equal to the average of the temperatures of all the days of the year. Here is, for example, a theory of averages that is a rather insidious way of reading the law of absolute equality in universal mechanics, and of imposing it on us gently.

This assertion by Mr. Proudhon, indeed, is not only utterly ridiculous, it is also extremely dangerous.

Mr. Proudhon obviously states it only to then tax all wages according to this famous average cost. And, the cost of any work being considered equal to the cost of any other work, the wages for both jobs will be equal. The work of a chief justice of the supreme court and the work of a cab driver costing equally the average of what an average worker spends, we grant these two characters the same treatment. Equality of functions, equivalence of services and products, identity of values… equality of positions and fortunes. And we sail full sail towards the theory of § 3 of the section which lights up like a marvelous lighthouse.

Not so, please! and for two good reasons.

First, because taking any work, the cost of this work is equal to the cost of this work, and not to the average cost of works; because the cost of my work remains at 40 francs, that of my neighbor at 5 francs, and they are not both 7 fr. 50.

Second, and this is very important, because I categorically refuse, in all cases, to the costs, cost prices, production expenses of the work, the possibility of determining the value. If I am lazy and foolish, my work which indeed costs 10 francs may not be worth much about 5 francs. And if the neighbor’s son is a smart and hardworking boy, his work which costs 5 francs may well be worth more than 10. In any case, his work and mine will have the value attributed to them in the market by the relationship of demand to supply, the law of scarcity. Production costs, even if they are equal, do neither hot nor cold.

In general, I refuse to admit as elements of determination of values and as scientific figures the figures of production costs. In particular, concerning agricultural work, I will never deal with its average cost or non-average, but only with the wage set on the market.

This established, there can be three cases:

If the product obtained by the work reimburses its expenses, there is compensation: the man is said to live by working, to live from day to day (to make ends meet… This condition, for some time, may seem tolerable; with time, it is insufficient.

If the product, after having reimbursed the work for its advances, gives a surplus, this surplus is said to be profit or benefit; understood from the land and buildings, it takes the name of rent.

If the product does not cover the work expenses, there is a deficit: the worker ruins himself, and, if he persists, he inevitably consumes himself and dies. When work is not reimbursed by the product, it is reimbursed by blood, which cannot lead far.

The which cannot lead far touches on the sublime, and this whole passage can be magnificent in eloquence, but it is deplorably weak from the point of view of the presentation of the facts; and to derive from there the idea of land rent, more effort is required and more of one’s own input than to make a soup from a stone.

I. I persist first in not wanting to admit as an element, in economics, the cost price, nor as a result the production expenses. The cost of a work is at the disposal, at the convenience of the worker who feeds, clothes, houses, etc., as they see fit and as they please. I admit only the value of the work as an element, and as a result: the wage, determined on the market, which pays this value.

There is nothing that can, economically, be called profit, benefit or rent in the sense of the cited text. In political economy, there are only incomes; three kinds according to us: rent for the land, profit for the capitals, salary for the work of personal faculties; according to economists who deny the value of the land, only two kinds: profit and salary; according to Mr. Proudhon who also denies the value of capital, only one kind of income: the salary. For everyone, the wage must be set by the relationship of the demand to the supply of work, and, once determined, must remain the wage, without considerations of reimbursement of advances on one hand, and profit on the other. These considerations are the domain of domestic economy. Let’s therefore remove from Mr. Proudhon’s phrase the words profit and benefit. Let’s also expel the real estate whose presence here makes me blush for the ignorance of my opponent. These initial modifications introduced, and Mr. Proudhon’s definition beginning to clarify, the rent would be considered as the excess of the agricultural product over the agricultural wage.

II. Now, let’s immediately tell Mr. Proudhon that this excess always occurs in the results of agricultural operations. It never happens that the total agricultural product strictly reimburses the value of the work, let alone fails to cover it. It always exceeds it. Let’s get rid of the eventualities that Mr. Proudhon has taken the trouble to foresee in his first and third cases. The wages of agricultural workers, fairly paid at the market rate, there is always an excess of the total agricultural product over this wage.

III. Then, this excess being thus perfectly established, we will deduce from it, whether Mr. Proudhon likes it or not, a portion intended to pay for the service of artificial capitals: buildings, instruments, animals, money, etc., etc., involved in the operation. I think I have sufficiently nullified the various reciprocities of provision and free credits, so that I may demand what I require here. So, having first reimbursed, with Mr. Proudhon, the service of personal faculties' work, I now remunerate, with Messrs. Carey, Bastiat, the service of artificial capital, regardless of what Mr. Proudhon might say who seems not to care about this remuneration.

IV. Finally, I agree with Mr. Proudhon that salary and profit paid, a remaining excess part, we will give this part the name of rent. What I further assert, along with Messrs. Passy, Garnier, Walras, is that this rent pays for the contribution of the soil in the work of agricultural production,

This excess always occurs.—"To affirm that this excess would not be realized without the effort taken to obtain it, is to say little; for that is not contested. What would need to be proven is that, without the contribution lent by the land, it would be possible to collect it, and that there are non-rural or extractive industries that also have the privilege of producing rent. However, this proof is lacking and certainly will never be given…

“In vain would one try to deceive oneself. The land alone produces more than enough to pay the wages, the interest, and the profit of the capitals it requires, and as there is no other kind of application of work that obtains such an excess, one must recognize, in the existence of rent, the result of a cooperative action exercised by the land itself61.”

Such is the a posteriori demonstration that we had announced of the value of the land as capital, of the value of its income; of the existence of rent. Such is also the a posteriori explanation of the nature of rent as the price of this land income, as the price of the rent of the soil.

As for Mr. Proudhon, this argument clearly establishes the situation regarding rent.

If the author at least considered it as the excess of agricultural product over agricultural wage, he would simply be in a double error:

  1. Concerning its measure and determination, since he would inflate the rent by the entire amount of profit from the artificial capital involved in the exploitation.

  2. Concerning its nature, since he would persist in considering the price of land rent and capital rent as a wage of labor.

But Mr. Proudhon does not look for land rent in the excess of the agricultural product over the agricultural wage. He seeks it in the excess of the agricultural product over the costs of agricultural labor: food, clothing, housing, etc., of the workers. And since these costs are a random element that no observation can precisely define, no statistics can even provide an average for, and consequently no theory should consider, it turns out that the rent, as Mr. Proudhon understands it, is not only poorly defined and determined—but completely indefinable and indeterminable.

It was hardly worth taking it so high with all the economists, only to mislead himself in this way. But there is more: Mr. Proudhon will soon insult the school, precisely because it defines and determines what Mr. Proudhon alters, denatures, annihilates.

§2. Tax and Rent (continued)

But, starting from the hypothesis of an average expense and an average worker, we started from an essentially variable hypothesis: the average implies variation to infinity. One can thus conceive that rent, however clear the idea may be, is fundamentally indeterminable: it is impossible to separate it distinctly and with precision from the wage.

Only philosophers of Mr. Proudhon’s kind are capable of having a clear idea of things that are, fundamentally, indeterminable. We, on the other hand, have a clear idea of land rent: we consider it as the price of land rent. At the same time, this land rent is, as defined, perfectly determinable. The land rent determines itself naturally and fatally in the market, by the relationship of the sum of needs that demand the possession or enjoyment of lands to the sum of lands, by the relationship of demand to the supply of land rent. And thus it is very possible to separate distinctly and with precision the land rent, not only from the labor wage, but also from the profit of capital, wage and profit being determined as naturally as land rent in the market, and the precise distinction being made by itself among the three incomes of the three capitals: land, artificial capital, personal faculties.

Mr. Proudhon, who believes neither in the value of the land nor even in the value of artificial capital, who, in every respect, ignores the distinction between the three capitals, the distinction between capital and income, who rejects the law of the market, is, understandably, quite embarrassed to define and to determine his rent, to define and determine his wage, to separate distinctly and with precision his rent from his wage. Whose fault is it?

Mr. Proudhon believes he can define his rent without being able to determine it; he is mistaken: he neither defines it nor determines it. He imagines having a clear idea of rent; he is deluded: he has only a vague idea. It is for him the excess of the agricultural product over the costs of labor. Now, what are the costs of labor? Where does the normal wage end? Where does profit begin?

To attempt to determine his rent thus defined, Mr. Proudhon resorts to the average cost. But, what is the average cost? What is an average worker? How much are the expenses of an average worker? Who will be charged with assessing the average costs of agricultural labor?

Rent is as indeterminable as it is indefinable for Mr. Proudhon. Starting from the hypothesis of an average expense and an average worker, he started from a hypothesis, not essentially variable, but essentially insane, fantastical, and impossible. His theory will never exist. And in practice, where will Mr. Proudhon end up? At the tax, as always, at the transcendental tax. Well! be it; I will never tire of resisting arbitrariness, and protesting against the authoritarian practice of a false, absurd, impotent theory.

Indeed, if labor is more in demand, the product more offered, the rent decreases and tends to extinguish; everything passes to the wage, nothing remains for the rent. If on the contrary there is a demand for products and an offer of labor, the rent is reborn and multiplies; the rentier fattens while the worker languishes.

Did I hear it right? It’s Mr. Proudhon who starts to speak of supply and demand for the first time in his life! It is he who begins to invoke the variations of values on the market, no more no less than a disciple of the economist school, Malthusian, fatalistic, random! And this average cost of labor, this ingenious average cost, what do we do with it then? One must choose: value cannot be measured at the same time on the cost price and on the relationship of demand to the supply. Are production costs now scorned, definitively abandoned? In this case, let’s encourage Mr. Proudhon’s first economic stammerings, by correcting with complacency what they have of inexperienced.

When society prospers, that is, when the population is numerous and rich, when the sum of personal faculties and artificial capitals rises, agricultural products are more in demand. When agricultural products are more in demand, the use of the soil and agricultural labor are also more in demand. But on the one hand, the use of the soil is not more offered; and on the other hand, on the contrary, agricultural labor is more offered, by the fact of the population increase. The land rent rises, and the agricultural wage remains stationary.

When society declines, that is, when the population is rare and poor, when the sum of personal faculties and artificial capital decreases, agricultural products are less in demand. When agricultural products are less in demand, the use of the soil and agricultural labor are also less in demand. But on the one hand, the use of the soil is not less offered, and on the other hand, on the contrary, agricultural labor is, by the fact of the population decrease, less offered at the same time as less demanded. The land rent decreases and the agricultural wage does not vary.

Thus state the laws of value.

If, apart from the progress of society, due to exceptional circumstances, agricultural products are extraordinarily demanded, the use of the soil and agricultural labor are demanded. We see, at the same time, the land rent and the agricultural wage grow.

And likewise, without the society regressing, if, abnormally, agricultural products are offered, the use of the soil and agricultural labor offer themselves. The land rent and the agricultural wage decrease together.

The elevation of land rent and that of the agricultural wage, the lowering of the wage and that of the rent are connected facts, intimately linked, occurring in concert due to the relative demand or supply of agricultural products. The two hypotheses of Mr. Proudhon, one of a labor demanded at the same time as a product offered, the other of an offer of labor at the same time as a demand for products, are inadmissible. They betray, in the author, the most complete lack of observation of facts, and have no excuse other than his great youth in matters of exchange value.

If the hypotheses are inadmissible, their consequences are no less so. Whether the agricultural worker and the landowner, in solidarity, rejoice together at a demand for products that displeases the consumer; or whether the consumer is pleased to see products offered at the expense of the landowner and the worker; whether the agricultural wage and the land rent rise or fall together, they always exist, and can always be distinctly and precisely separated from each other. In all cases, there is in the result of agricultural operations: 1° a wage for the worker, 2° a rent for the landowner, not to mention that there is: 3° a profit for the owner of agricultural capital. It is the consumer of agricultural products who necessarily pays this triple element of their production.

In simpler terms, if by some means the worker reduces his costs or is forced to reduce them, the part regarded as profit will be greater, whether it goes entirely to a master or owner, or whether a part remains in the hands of the worker. If the costs increase, the rent passes into it; there is no surplus, no profit for anyone.

All these suppositions of causes, all these considerations of effects are issued gratuitously, for the greater glory of the author’s theory on rent, and outside of any study of the reality of economic phenomena.

Whether the worker, first, reduces his costs or increases them, once again this concerns him and matters little to us; the existence and the figure of the rent cannot depend on the more or less exaggerated or restricted way in which the worker will find it good to feed, clothe, etc., etc. We only admit to be included in the number of results of agricultural production the wage. We are only concerned with rent and wage; neither the wage nor the rent are determined by any circumstance of production costs.

Now, if the agricultural worker is content or is forced to be content with a lesser wage, the landowner will be content with a lesser rent. Or, if the wage of the worker rises, the rent of the landowner will rise in the same way.

However, it could be conceived that apart from the circumstances indicated above of a demand or an offer of agricultural products more or less considerable, the wage might decrease without the rent or the rent without the wage: this would be, for example, if agricultural workers were competing without the landowners doing the same, or vice versa.

In all possible cases, in all imaginable eventualities, there will always and always be a wage for the worker and a rent for the owner. And never ever will it happen, that a portion of the rent remains in the hands of the worker, nor that a portion of the wage falls into those of the owner.

Even if a single individual were to combine the functions of farmer and landowner, in which case he should receive rent and wage, the wage and the rent would naturally distinguish themselves from each other.

And never ever will it be possible for the rent to annihilate itself, no more than the wage, for the reason that the motives that will always prevent the worker from giving his time and his labor for free will always also prevent the landowner from lending the cultivable soil for free.

In summary, it is only and exclusively from the perspective that Mr. Proudhon has adopted to view rent that it can be conflated with wages. In the reality of facts, this confusion is impossible.

Rent is inherently something highly variable, arbitrary, and uncertain…

Understood in your way, certainly. But assuredly not in ours. Considered as the price for leasing land, rent can be variable; it is neither arbitrary nor uncertain. Ground rent, as it exists and as we explain it, stems from the fact that land, being a useful and limited resource, constitutes an appropriable, valuable, and exchangeable element of social wealth, and because land is a capital, it produces an income that the owner can sell. Rent is indeed variable, as all values are variable, as all temperatures are variable; rent rises or falls in the market; but it is nonetheless a distinct and special fact, like profit, like wages.

...Something of which we have a concept, but that can only be defined by contract, i.e., by a legal act external to the thing itself; as we have seen that property is defined by law.

Almost as much, indeed. Rent is a natural fact, prior to any kind of contract, just as property is a moral fact, a natural right prior to any kind of law. This manner of reconstructing the universe with laws and contracts is comical.

In this definition operated solely by the will of the parties, the figure used to designate the rent may not be accurate; even if it were at a given moment, it would no longer be so immediately after.

Always in your system, assuredly. But it is supremely absurd to entrust definitions to the will of the parties, rather than deriving them from the nature of things. In such cases, it is not even sufficient to state that the rent figure might not be accurate, one must say that it can never be accurate under any circumstances. The determination of rent will always suffer from the flaw of a definition that defines nothing. On the other hand, when rent is defined as the price of leasing land, and its determination is based on the relationship of the total needs to the total provisions, on the law of the market, the figure thus obtained cannot but always be accurate. Rent is variable, yet it can be sold and bought for a certain period at a fixed rate; this is a perfectly natural transaction, and the price of ground rent thus negotiated is always accurate.

By contract, on the other hand, assuming equality of freedom and good faith on both sides, this figure is deemed just; anything beyond or below the average does not affect the right. it is matter.

Matter as much as you like, but precious matter, affecting simultaneously the reality of facts, the truth of theories, and the right. We demand figures that are just, not merely reputed to be just. We deny to contracts, even assuming equality of freedom and good faith on both sides, the supreme property to establish science, and to you the right to substitute nature with the creation of a new world on stamped paper.

It is this inherent variability of rent, which only the will of the two contracting parties can fix by a legal fiction

that makes economists so divergent, most, if not all, striving to give a fixed definition of something that by its nature does not have one, and to subordinate the entire science to such a definition. (See in the Dictionary of Political Economy the opinions of Mr. Ricardo, Carey, Passy, Bastiat.)

We oppose the introduction of law into the theory of exchange, and the introduction of any legal fiction into any kind of natural or moral theory. The variability of rent is not unique to it: it is common with all values. This variability of rent is not an obstacle to its definition, nor to it being determined like all values. It is false, absolutely false, that most economists, not to say all, have tried to subordinate the entire economic science to the definition of ground rent, which, moreover, admits a precise definition and a natural determination. (See in the Dictionary of Political Economy the opinion of Mr. Passy; see in the Elements of Political Economy the opinion of Mr. Joseph Garnier; see in the Theory of Social Wealth the opinion of Mr. Walras; see etc., etc.)

See all that Mr. Proudhon has never seen.

But there is yet another cause of division among economists, which has its principle in the first: it consists in that, rent being by itself indeterminable and not being able to be distinctly distinguished from wages, it is impossible, a priori and by pure theory, to say to whom the rent should be attributed, to the owner or to the worker.

To imagine that pure theory cannot say a priori to whom the ground rent should be attributed, and that doubtless one must rely on practice to distribute it a posteriori, is yet another of those bizarre ideas that Mr. Proudhon monopolizes, and which, with all his audacity for paradox, he will never support. The sale price of any income is due by the tenant to the owner of the capital. This is a rule of pure theory that admits no exception in practice. If one adopts the opinion of economists who see in ground rent the price of leasing land, the rent paid by the consumer of agricultural products is due by the farmer to the landowner. I add that practice a posteriori has always confirmed and still confirms this theory. If one agrees with the conviction of Mr. Proudhon who sees in rent a wage of labor, the rent paid by the consumer of agricultural products should remain in the hands of the farmer, owner of the personal faculties from which his work constitutes the income. Practice does not justify this combination; but if Mr. Proudhon is assured of the excellence of his theory, he has but one goal to pursue, that is to conform practice to it: the only excuse for error is to be logical a priori and a posteriori, up to the absurd inclusively.

Mr. Blanc Saint-Bonnet sees in rent the source of capitals: “Property,” he says, “is the reservoir of capital.”

It is not impossible that Mr. Blanc Saint-Bonnet is advanced enough in political economy to have rejoined the physiocrats. I will certainly not bother to search what exactly Mr. Blanc Saint-Bonnet meant, whose opinions are devoid of any kind of authority. Mr. Proudhon wanted to have the pleasure of striking at an ignoramus more ignorant than he is himself: I do not envy him this satisfaction. But I cannot help telling Mr. Proudhon that it is quite strange that he gives Mr. Blanc Saint-Bonnet the honor of a citation and a refutation from which he carefully abstains vis-à-vis Messrs. Ricardo, Carey, Passy, Bastiat, Garnier, Walras, etc., etc. If anyone has attempted to show what the disagreement of economists on the question of ground rent consists of, it is I alone and not Mr. Proudhon. But no, that is not strange: it is the act of ignorant negligence.

At its core, and considering the fact in its primordiality, rent is the reward of labor; it is its legitimate wage, it belongs to it.

It is its wage… it belongs to it. If it is its wage, indeed it belongs to it; but, conversely, it does not belong to it if it is not its wage. Therefore, what needed to be demonstrated was that ground rent was a wage of agricultural labor. It followed directly that rent belonged to the worker. But what needed to be demonstrated, you contented yourself merely with stating it simply, without any demonstration, and for good reason. You have been answered, and are still answered, that ground rent remains in excess once the work is remunerated, once even the service of artificial capitals is paid, when there is nothing left to pay but the service of the soil, the contribution of the land which theoretically and practically, a priori and a posteriori, is its price. It follows, therefore, that ground rent belongs to the landowner.

It does not occur to the savage, when he has killed a deer and is preparing to eat it with his family, to make two parts of his hunt and say: This is my rent, this is my wage.

The savage is not an economist, he is not a member of the Academy of Moral and Political Sciences. It is therefore unreasonable to expect him to come up with the analysis that Mr. Proudhon speaks of. But even the wildest savage does not doubt that there is a great advantage for him, as for everyone, to hunt deer in game-rich forests rather than on barren mountains. He knows full well that although his personal activity and skill play a part in the outcome of his hunt, he must also attribute part of his success to the munificence of nature which sustains in the forests the deer that he and his family feed on. He also knows that there are not forests everywhere, nor deer for everyone in unlimited quantity, and that he is more favored than others. And the wildest of savages feels this so vividly, and understands it so clearly, that he is not at all keen to see strangers come hunting in the territories that form his domain or the domain of his tribe, and he applies his efforts to reserve the exclusive enjoyment of his forests, an enjoyment that constitutes his ground rent, without him realizing it and without knowing how to make the distinction.

The savage, if he allowed foreigners the right to hunt on his lands, would not do so without demanding that they take the trouble to kill for him some of those deer he needs to survive; and it is then, as he prepares to eat his meal with his family, he could point to the deer he killed himself and say:—this is my wage, and speaking of those killed for him:—this is my rent.

What I say here about the hunter can equally be said of the nomadic shepherd for whom good pastures are, from the perspective of the earth’s contribution, what game-rich forests are for the savage. Undoubtedly, land rent is more clearly defined in the agricultural state than in the pastoral or hunting state; but it is no less true that, whatever the economic system of a society, there is always in the value of the products demanded from the land a portion representing the land’s contribution.

Moreover, we must not forget that the land is not the only good that testifies to the generosity of Providence towards us. It has given us air, wind, river and sea water, sunlight and heat, the forces of gravity, electricity, which are also powerful and considerable production agents. But these latter goods are given to us in abundance, they are unlimited in quantity; therefore they are worthless and cannot be owned. The land, which resembles them in all respects in terms of utility, is profoundly distinct in terms of scarcity, due to the limitation placed upon it. There is not enough for everyone at will; hence, it is appropriable, valuable, and exchangeable. It also constitutes a capital that yields an income; and the income from the land, otherwise known as the productive energy of its natural fertility, is purchased through land rent, of which the lease payment is the negotiated price, the fixed price for a certain time.

Personal faculties are also analogous to all the natural forces of production in terms of utility, and analogous to the land in terms of scarcity. Personal faculties are distributed to us free of charge, and they are limited by the number of men and by death for each of them. That’s why none of us is willing to make our personal faculties available to our peers for free; and why we pay each other for the enjoyment, service, labor, income, under the name of salary.

And if, because of the economic conflict and the exercise of property, the custom has been established among owners and entrepreneurs to reduce the worker’s wage to the bare minimum in order to increase their own rent, one should not imagine for that reason that the rent is given in the nature of things, such that one can easily recognize it, as one recognizes a walnut tree in the middle of a vineyard.

Let’s not endlessly go around in the same circle. Based on the facts that I have opposed to my adversary, and based on the analysis that my masters have given of these facts before me, I respond that one should not imagine, but rather believe, and believe with all one’s might, that rent is given in the nature of things, and that with a clear mind one can easily distinguish it from wages and profits, as one recognizes, with healthy eyes, a walnut tree in the middle of a vineyard, a horse in the middle of a flock of sheep, as one distinguishes a tree from a mineral and a vegetable.

Moreover, it is not true that, thanks to the economic conflict and the exercise of property, the owners and entrepreneurs are free to increase the rent or profit at the expense of wages, if the market where all values are naturally determined remains free of any arbitrariness.

In fact, wage and rent, at the outset, are confused;…

Never. The wage is distinguished from the rent, the rent from the wage; the rent and the wage are also distinguished from the profit of artificial capitals which you never talk about, because you do not know them. Nothing is confused, everything is distinguished, at the origin and in the results, theoretically and practically, a priori and a posteriori.

...And if one had to, a priori, decide to whom the latter, in the case where it exists, should be awarded, the presumption would be in favor of the worker.

Rent always exists in the result of agricultural labor; it exists only there. Remember that. Then, let us not make science by presumption: the geometer does not presume that the three angles of a triangle are equal to two right angles, or that the equilateral triangle is at the same time equiangular. He demonstrates it and he states it. We demonstrate that rent is the price of the land’s contribution, and we state that it is due to the landowner. Demonstrate that it is the wage of labor, you will state that it belongs to the farmer.

Indeed, it is assumed in principle that all work undertaken under good conditions should leave the worker, in addition to a moderate consumption, a surplus, a rent.

I know of nothing in political economy that is a surplus. The surplus of the agricultural product over the wage is not a surplus: it is the sum of the land rent and the profit of capitals which are two incomes, as the wage itself is an income. I know, in political economy, only incomes. I understand that one can estimate the production costs of a job; and I conceive that there can be, in the rate of the wage determined on the market, a surplus over the production costs; but as it depends solely on the worker to reduce his costs, and notably his personal maintenance costs, to increase the amount of the said surplus, this amount and the whole issue of surplus are the domain not of political economy, but of domestic economy.

From the point of view of the worker’s interest, or private morality, or hygiene, he is advised in principle to moderate his consumption, to reduce his personal maintenance expenses, to nourish himself sufficiently without excess, to house himself comfortably without luxury, to dress neatly without extravagance of attire, etc., etc., all of which can provide material for preacher’s sermons, for moralist’s precepts, never for scientific principles of the theory of exchange value.

Therefore, in the principle of economy, no surplus is fundamentally necessary, not only the surplus of agricultural product over wage to the benefit of the worker, but even the surplus of wage over the cost of labor. Mr. Proudhon is the only one who admits this: from his part, it is one of those assumptions that so conveniently replace theorems. Labor is itself an income: it is the income of our personal faculties, the daily application of our physical and moral forces. The price of labor is the wage, and the wage, when paid honestly according to market law, satisfies the rights of the worker and the demands of justice. If the worker has the good sense to save from his wage, he can become a landowner or capitalist, he will earn rent or profits. This depends solely on the will and the degree of wisdom and foresight of individuals: one cannot, on this subject, establish any principle, set any figure. There are very high wages that do not result in any surplus, thanks to the insatiable appetite of workers; there are very modest wages that allow significant savings, thanks to the sobriety of those who earn them.

The reason is that consumption itself is variable; once the primary needs are met, other needs, increasingly refined and expensive, arise, requiring accordingly a substantial provision for others.

Mr. Proudhon increasingly confuses political economy with household economy. Well then! Placing myself on the same ground, I confess that the needs of man indeed become more numerous, more refined, and more costly day by day. As for satisfying them, it is up to him to provide, not to social morals or to economic science. As the worker ages, his work becomes more experienced; this work is rarer, it has more value, it must suffice for the man’s consumption. If this added value is not enough to meet the needs of new desires, if these new needs are too refined, let the worker work more; or if they are altogether costly, and if the worker’s career does not seem definitively and despite everything lucrative enough, let him seek another. This does not concern us in any way in the end.

The surplus of product is therefore entirely in accordance with human dignity, our faculty of foresight, speculation, enterprise; in a word, this surplus is our right.

This is false. These are the poisonous sophistries that mislead the plebeians and deceive their instincts. It is a duty to crush such despicable theories for all sensible men who do not want to see the true interests of the working people, which are also theirs, compromised by madmen. Before responding to Mr. Proudhon, however, and to avoid any possible confusion in the reader’s mind, I declare once more to exclude the surplus of agricultural product over agricultural wage. This surplus is not one: it is the sum of land rent and the profit from capital. I disdain to repeat once more that the worker has no right to it. Now, as for the surplus of wage determined by market law over the cost of labor, which is at the discretion of the worker, I affirm that this surplus cannot be the object of a right.

We live in an era more than any other fertile in confusions of ideas, in inversions of words. All principles are today diverted to the benefit of the most superstitious fears or the most audacious ambitions. Here, according to alleged statesmen who were never philosophers, the landowner appears to us as performing a true priesthood, and property is no longer generally a right, it is a duty. There journalists improvising as tribunes declare that work is no longer a duty but a right; and, according to them, the Republic cannot but provide a few thousand enthusiasts the opportunity to move stones.

The error of Mr. Proudhon has no other origin, and is no other nature; it disturbs no less the harmony of the first truths of morals. The creation of a surplus of wage over production costs, by reducing costs on one hand and improving labor on the other, is for the worker an individual duty, never a social right. By accepting the discussion on the ground of private morals, I admit that this surplus is indeed in accordance with human dignity, our faculty of foresight, speculation, enterprise. I add that its creation depends on the will, experience, talent, moderation, foresight of the worker. How could one claim that society owes a surplus to the unskilled, lazy, wasteful worker? Once social balance is achieved, the worker has nothing more to ask of all this low-level philanthropy. He must expect everything from himself and the harmony of the natural laws of the economy.

The presumed rentier, therefore, I repeat, considering only the brute fact, is the worker.

This thesis is disgracefully abortive. In talking about a surplus in accordance with human dignity, you were talking, after all, only about the surplus of wage over production costs; but at the same time, you hoped to attribute to yourself the surplus of agricultural product over wage. This operation has failed. The creation of a surplus of wage over production costs is a duty at the free disposal of the worker; it falls within the scope of domestic economy and private morals. As for the surplus of the total agricultural result over the wage, political economy demonstrates that it is composed of two elements: the profit from artificial capitals engaged in agricultural exploitation, and the land rent of the exploited land.

In economics, moreover, there is no presumed rentier. Everywhere there are only actual rentiers: the capitalist and the landowner. The landowner has his special income, the capitalist has his; if these incomes are high enough, the capitalist and the landowner can live without working: it is in this sense that they are usually called, among the common people, rentiers. The worker is not a rentier; he has his own income, which is his labor, the price of which is his wage. And it is necessary that each, worker or rentier, arrange to live off his income, without encroaching on the income of others, by creating a surplus of this income over his expenditure, if he pleases, by saving, if possible. The worker, as a worker, can have no right to the land rent.

However, social practice did not want it to be so; and, however much the working class may claim to be wronged today, whatever claims it may have the right to raise, it is not without a serious reason that this fundamental distinction between rent and wage was made. I will point this out clearly.

It is not without a serious reason that this fundamental distinction between rent and wage was made. Of course! I believe it well! This very serious reason is that the distinction is natural, that rent is one thing and wage is quite another, that land rent represents the contribution of the land, and that wage represents the contribution of man in the work of agricultural production.

I will point this out clearly. What condescension! Truly, we did not know how or why to distinguish rent from wage; what were we to become if Mr. Proudhon had not offered to point out this reason to us? Alas! our reason, which is excellent, is also the only good one. And Mr. Proudhon, who for a hundred reasons, cannot account for the contribution of the land in agricultural labor, will distinguish nothing at all, will point out nothing.

For Mr. Proudhon, the land has no value; its income is no better. Rent comes from labor; it is indefinable and indeterminable; it does not distinguish itself from the wage. Very well! then, it merges with it, and it belongs to the worker: any distinction between rent and wage is impossible, useless, disastrous. The profits from capital are also the fruit of labor and the worker’s wage.

What does Mr. Proudhon want to distinguish now? Rent and wage? I will not suffer it. I now forbid Mr. Proudhon to revisit the confusion he has made: if he has hitherto wandered into error, let him remain there.

According to Mr. Proudhon, the working class is today wronged by the entire surplus of the total agricultural product over the wage; the working class has the right to claim, in addition to its wage, the profits of capital invested in the operation and the rent of the land exploited. I will not move from there. I suppose myself a farmer in Mr. Proudhon’s republic: the profession seems to me eminently pleasant and lucrative. Mr. Proudhon assures me that the total agricultural result is the result of my labor; that I have no more to pay for the use of the land than for the service of my tools or the rains from the sky; that the price of the products belongs to me in full. I take him at his word. I oppose any fundamental distinction between my wage and the profit, between my wage and the rent.

But what do they mean, in fact, these late regrets of the author, and this sudden and unexpected conversion! I am there.—It is because Mr. Proudhon, I remember now, began by announcing the intention to establish that land rent should be entirely absorbed by tax. It is that after having wrested the rent from the landowner to attribute it to the worker, he now wants to take it back from the worker to give it to the State.

Follow the chain of reasoning:

It is impossible to distinctly and precisely separate rent from wage (p. 317).

Therefore, fundamentally, rent is the reward of labor; it is its legitimate wage, it belongs to him (p. 319).

As a result, rent is the natural income of the State (p. 324).

Here, for example, is a way of reasoning, or rather of misreasoning, that would be too convenient. Whether rent is or is not the natural income of the State, I do not know and do not want to know at the moment, But what I particularly forbid Mr. Proudhon, is to prove this to us.

Mr. Proudhon told us:—Rent is an eminently arbitrary and uncertain concept, an indefinable and indeterminable concept. Salary and rent are confused. And, in the case where it exists, rent should be adjudged to the worker. And now this fiction, whose definition and determination are impossible, whose very existence is hypothetical, he attributes to the community to cover innumerable charges, execute works, maintain a police, an administration, schools! (p. 323.)

Not so. Fictive or real, the worker has the rent and will keep it, like it or not; or else he will hurry to return it to the landowner. Let us be logically absurd, or retract immediately, and make litter of our theories.

§3. Tax and Rent (conclusion).

For work to be fruitful and leave a rent, many conditions are required, several of which do not depend on the worker and do not result from his free will:

  1. Conditions in the work: choice of tools, method, talent, diligence;
  1. Conditions in the soil and climate;
  1. Conditions in society: demand for products, ease of transport, security of the market, etc.

From this classification, it follows that, while the first and necessary condition for any rent is work, another set of conditions depends on nature, and a third set belongs to society.

Hence, it follows that the rent, assuming it always exists, belongs in part to the worker, who makes it perceptible; to nature, for a second part; and to society, for a third part, which contributes through its institutions, ideas, instruments, markets.

All this, reader, is nothing else, as you undoubtedly perfectly understood on your own, than a completely new and completely unexpected theory of Mr. P.-J. Proudhon on land rent; or, if you prefer, it is a revised and corrected second edition of Mr. P.-J. Proudhon’s first theory of rent.

Earlier, according to Mr. Proudhon, rent was the fruit of labor and should have been its reward; rent was not distinguished from wages and belonged to the worker. Now, according to Mr. Proudhon, rent arises from the triple contribution of labor, nature, and society; it belongs partly to society, partly to nature, and partly to the worker.

But our author is indignant and protests that his work is being misrepresented. What is taken for a new theory is only the regular development of the first theory. — Indeed! Earlier, Mr. Proudhon, with unshakeable assurance, stated this principle on which he wanted to rely: — No wealth without labor; — and now nature creates wealth; and this is the new principle from which we shall start! The difference is minimal and almost imperceptible, truly!

Make no mistake: the theory changes, renews, and truly transforms. There is only one point on which Mr. Proudhon has not wavered: he is not yet very sure of the existence of this rent, of which he will soon have given us two opposing theories.

Mr. Proudhon is surely the only man in France who is of such an inventive mind and a scientific conscience sufficiently independent of human respect to refute himself without more ado. This lack of method taken to impudence—is it not a precious quality in an ignoramus? That in a third theory of land rent, Mr. Proudhon would be willing to further modify his opinion; that he finally consents to recognize nature as the sole author of the rent, dismissing labor to its tasks, and society to wherever, and then we will start to understand each other, he and I, on the question of the nature and origin of the rent. We might also then seek together to whom to attribute this rent. I greatly fear, unfortunately, that Mr. Proudhon has emptied his bag; or, if he has not emptied it, I fear that there is little in it better than what has been drawn from it so far.

Whatever the case, I will now proceed courageously to examine and refute the new theory that is being presented.

For work to be fruitful and leave a rent, many conditions are required, several of which do not depend on the worker, do not result from his free will. It is clear from the outset, by this beginning, that Mr. Proudhon retains the very definition of rent from his first theory: we must protest once again against this definition.

Land rent is always, for the author, the excess of the agricultural product over the costs of agricultural labor.

Firstly, let us still refuse, always refuse, to grant the costs of production the right to intervene in the vital questions of economics. Concerning the role of labor, its results, and its rights, let us give access in science only to wages. Wages are the price negotiated on the market for the income of personal abilities; they are definable and determinable; the costs of production are neither scientifically. In particular, in the theory of land rent, let us substitute for the excess that Mr. Proudhon deals with that of the agricultural product over agricultural wages.

Secondly, from this excess, let’s deduct the price of the income from the material of exploitation also debated in the market, that is, the profit of artificial capitals engaged in agricultural exploitation. Having thus reduced the total result of agricultural production from the wages of workers and the profit of capitalists, we will call rent what remains.

Thirdly, let us definitively reassure Mr. Proudhon about the existence of rent. Whether agricultural labor is fruitful or not, rent always exists in theory and in practice. The natural fertility of the soil produces grass and trees, flowers and fruits, even where agricultural labor has never been exercised. Where the worker has passed, however little he has done, nature has joined him in fertilizing his work. The workers and capitalists paid, there always remains an excess of the total agricultural product over the sum of wages and profits: this excess is the land rent, We attributed, just earlier, with MM. Passy, Garnir, Walras, the creation of this rent to the soil’s contribution in the work of agricultural production, consequently its property to the owner of the soil. Our opinion has not changed. Let’s defend it against the new opinion of Mr. Proudhon who earlier claimed this property for the worker, and who now wants to make nature and society participate in it.

  1. Conditions in the work: choice of tools, method, talent, diligence. These conditions would be, according to Mr. Proudhon, one of the elements of creation of land rent: this is a mistake. The sophism is clever but will remain unsuccessful. At first glance, it seems indeed that choice of tools, method, talent, diligence, are conditions outside normal work. A more thorough examination will make us recognize that this is not the case. All this represents only the work of the cultural entrepreneur, of the owner making value or the farmer, as opposed to the work of the simple laborer. Whether entrepreneur’s work or laborer’s work, it is always work. The experience, the skill of the entrepreneur are the income of his personal abilities: all this is paid by a salary. The work is remunerated, the wages are set aside: the entrepreneur has nothing more to claim. The choice of tools, method, talent, diligence have no part in the creation of the rent. And these conditions in the work, imagined after the fact by Mr. Proudhon, can only raise the figure of wages.

  2. Conditions in the soil and climate. At last! this is a serious element of the creation of land rent. Mr. Proudhon is finally beginning to realize that one does not sow on the sea, that one does not plant in the air, that the earth is an indispensable instrument of all agricultural production. A little more, and perhaps he would consent also to realize that the earth that is useful has value, because it is limited in quantity. But no; Mr. Proudhon is still far from knowing these truths. What does he tell us, indeed, about conditions in the soil and climate, instead of generally speaking of the natural force of productive fertility of the soil, of the cooperative power of the soil in the work of agricultural production? Whether the soil is more or less fertile, it is always fertile, under a harsh climate as under the most favorable climate. In either case, there is rent, as there is wages, as there is profit.

  3. Conditions in society: demand for products, ease of transport, security of the market, etc. For there to be value, exchange, social wealth, there must be society; humanity must not be reduced to a single man or a single family. This condition does not apply exclusively to agriculture, it applies to all works, it equally concerns industry and commerce. We must deny to the demand for products, to the ease of transport, to the security of the market, etc., any direct cooperative action in the creation of rent, since all these conditions have the same influence with respect to wages and profits.

From this classification it follows that, if the first, necessary condition of all rent is work, another series of conditions depends on nature, and a third belongs to society. This classification is flawed. The first condition, the necessary condition, I add the sufficient condition of all land rent, is the land; it is that there be a useful and limited soil, capable of appropriation and exchangeable value, whose owner makes us pay the rent at the price set by the ratio of demand to supply. If the atmosphere were limited like the soil, there would be owners of the air, as there are landowners, and we would pay a rent price for breathing; and if the sun’s rays could also be locked up with the sun itself, we would also pay for their enjoyment and consumption.

It follows from this that the rent, assuming it always exists, belongs in part to the worker who makes it perceptible; to nature, for a second part; and to society, for a third part, which contributes to it through its institutions, its ideas, its instruments, its markets. Rent really exists, it always exists and in all cases: it is therefore not necessary to persist in considering it as a hypothesis, as a fiction, as a concept. That being established, the rent belongs to the owner of the soil. It should not be said that only the worker makes the rent perceptible: one can very well conceive that an uncultivated land could produce some natural fruits whose picking would give rise to income, hence to a rent, to a lease. Where the worker unites his efforts with those of nature, he has no right to the rent: he is paid for his work by his wage.

Nature has no claim on the rent. It is nature that has given us the earth; she has given it to us for free and does not charge us for its use; we know neither her collector nor her treasurer.

Regarding the society that contributes through its existence, its institutions, its laws, and its markets to the development of agriculture, commerce, and industry, and thereby to the development of rent, wages, and profit, it is not entitled to any part of the rent more so than to wages or profit.

In summary, land rent is reduced to a single share that represents the contribution of the soil in the work of agricultural production, and which, therefore, should belong entirely to the landowner. Neither labor, nature, nor society should have any right to it.

The portion of rent due to the worker is therefore paid with the wage, which, in practice, is indistinguishable from it;

In practice, as in theory, rent is distinctly different from wages; and the farmer makes no confusion between the rent he pays to his landlord and the wages he pays to his laborers or earns for himself. Wages compensate labor; rent compensates the contribution of the land. It is the market situation that determines the amount of each; and the law of the market has never attributed and will never attribute a portion of the rent to the worker, nor a portion of the wage to the landowner.

The part due to nature is paid to the landowner, who is presumed the creator and rightful owner of the soil.

Ah! This is different! Nature is represented by the landowner! Nature has given its proxy to the landowner! The landowner is presumed the creator and rightful owner of the soil! This idea is too clever; and Mr. Proudhon, who does not like mysteries, should have spared us this one. Unfortunately, Mr. Proudhon knows neither capital nor income. He does not know that, in principle, the price of an income is due by the tenant to the owner of the capital. Rent is the price of leasing the soil; and it is due by the farmer, tenant of the soil, to the landowner who collects the rent and must collect it entirely. That is what should have been said.

The part due to society arrives partly through taxes, partly through the reduction in the price of goods, resulting from the ease of relationships and the competition of producers.

If any fraction of the rent returns to society through the reduction in the price of goods, this fraction returns before the precise determination of the amount of rent on the market: we therefore do not have to worry about it. We only need to concern ourselves with the rent determined on the market.

From this rent, a portion indeed reaches the state or society through tax; but this portion, the state demands from the landowner as it demands from the worker a portion of his wage, from the capitalist a portion of his profit. All taxes ultimately fall on the income of the taxpayer, whether capitalist, worker, or landowner. This tax, the state can increase or decrease; the state can make its share of rent larger or smaller by increasing or decreasing the property tax. All this abundantly proves that the property tax paid to the state is not the price for the contribution of society in the work of agricultural production, but the landowner’s share in the total of common expenses and societal charges.

The whole question is therefore to regularize this distribution, by making an exact balance of the debit and credit of each party.

The rent belongs entirely to the landowner. There is no distribution to be made where there is only one share. Mr. Proudhon’s only chance now to regularize the distribution of rent is if his inconsistency drives him to throw out his second theory along with his first, and he decides to eliminate from the distribution of land rent the worker and society. But that is exactly the opposite of what he is going to do: he will hasten to obliterate the landowner by retaining only society and the worker as stakeholders in the rent, to whom they have no right, given the problem at hand. So be it! but I am very eager to then see what exact balance he will make of the debit and credit of each party. Exact balance! I hold onto that word; reader, do not forget it either.

First, there is one of these accounts that tends to disappear: it is the second, this legal fiction by which a portion of the rent is assigned to the soil, represented by the tenant or owner.

If Mr. Proudhon were not infatuated with his sad justice to the point of reveling in the deepest ignorance of science; if, once in his life, Mr. Proudhon had thought to worry about the theory of exchange value, he would first have concerned himself with whether the land has value or not, whether it is a capital, and whether rent is the price of income from this capital. Then perhaps he might suspect today that there are laws generally linking the value of income to the value of capital; particularly the amount of land rent to the value of the land. Finally, he would know that in practice land rent does not exist hypothetically, but very really, and, far from tending to disappear, continues to rise in a progressive society, due to the increasing scarcity of soil, due to the multiplicity of uses for which it is demanded. Looking back three or four centuries, the amount of land rent in France might have been around 300 or 400 million; a hundred years ago, it could reach 700 or 800 million. In 1790, when the Constituent Assembly established the property tax, the rent was estimated at 4200 million. No one, except Mr. Proudhon, is unaware that the land rent today reaches, if it does not exceed, 2 billion or 2.2 billion; and everyone, except Mr. Proudhon, can foresee the day when the annual income from the soil of France will be worth 2.5 or 3 billion, if the country continues to prosper, if the population increases, if the various arts develop.

What can Mr. Proudhon possibly mean when he asserts with overwhelming assurance that the portion of rent assigned to the soil, represented by the tenant or owner tends to disappear? This part constitutes the rent entirely, and this part is growing day by day. Isn’t this a very poor political economy on the part of Mr. Proudhon?

Property, we have said, is the act of seizure by which man, prior to any justice, establishes his domain over nature, at the risk of being dominated by it. But by that very act, it implies a contradiction that this act of seizure should become a title of perpetual indebtedness vis-à-vis the worker he substitutes on the soil, since this would attribute to him vis-à-vis the worker a legal action- based on a title that has nothing legal about it, the seizure; since moreover this would factually subordinate the worker to the land, while the owner who renounces exploiting it would obtain over it a metaphysical domain, or, as the jurists say, eminent, which would override the effective action of the worker: which is repugnant. The society authorizes the seizure, in some cases it encourages it, even rewards it; it does not pension it.

This pompous nonsense says nothing or it says too much. If you yourself believe in your theory of the inevitability of property, of the legitimation by the right of seizure, of the conditioning of possession by contracts, leave the landowner in peace once and for all, and do not tear from him what he has appropriated. If you yourself scoff at your sophistries, attack directly and positively individual land ownership; study natural law, prove to us that individual ownership of the soil is unnatural; inquire about social law, establish that individual land ownership harms the worker, goes against equality, that it is usurpatory.

Moreover, no. This attack should have been made elsewhere: it is out of place here. We are on the terrain of political economy and we must not depart from it. The science of wealth can illuminate the question of property, it cannot solve it. We describe natural facts, we do not analyze moral facts. Land rent or the lease of the soil is, whatever you may say, a natural fact. Prove otherwise. Prove also that value comes from production costs, that the land has no value; or concede that land rent exists fatally and necessarily as a distinct income from wages and profit. We will attribute it together to the rightful owner of the soil, whoever he may be, as we attribute wages to the worker and profit to the capitalist. That is all we could want to establish at this moment. Beyond that, you would lead me onto the terrain of morals where I do not want to follow you.

Let us add that following the balance that has been made between the master and the farmer, based on previous solutions,…

Yes, let’s talk about your previous solutions! They are good! They shed a great light on the relationships between the master and the farmer!

...The owner has become a producer sui generis, whose interests and rights are merged, vis-à-vis the rent, with those of the farmer.

No, the interests and rights of the owner can never merge with those of the farmer. The farmer is a worker and may be a capitalist, but he is not an owner. And even if the farmer were the owner of the soil he cultivates, even if he combined the three functions of owner, capitalist, and worker, these three functions would remain distinct and perfectly irreducible, and the cultivator would enjoy three incomes: rent, profit, wage.

Ground rent, the rental value of land, is a sui generis income, similar to profit and wages; and this income, like the other two, should go entirely to the legitimate owner of the capital that generates it and from which it arises.

Hence, two stakeholders remain: the operator and society.

Once the landowner is ousted, it is evident that all that remains is to share his lot. This is the moment to reveal the exact balance that you must show us. I believe now is the time for the tax to appear, the maximum to manifest, and arbitrariness to run rampant.

What will be the share of each at first?

If first, you would mention what the basis for the sharing will be?

And once shared, who will collect for society?

Oh! that matters little. Answer my question instead. Tell me in what ratio do the choice of tools, the method, the talent, the diligence on one hand, and the demand for products, the ease of transport, the security of the market, etc., on the other hand, contribute to the creation of rent, assuming it exists. Tell me how you assess the respective rights of the worker and the state over the ground rent, again assuming it exists. It is not enough to make a division; it must be justified. It is not enough to claim that your balance is accurate: I would like to see the accuracy demonstrated.

Rent being conventionally defined as What exceeds the average operation costs, my opinion is that, this average being known, or as much as possible approximated, the operator should extract, in addition to the reimbursement of his advances, a variable share of the rent, according to circumstances…

According to what circumstances?

...From 25 to 50 p. 0/0 of the rent, and the surplus belongs to society.

Marvelous, indeed! Tax, maximum, arbitrariness, I was expecting you! But where are we going, great God of heaven? Here is a ground rent whose existence is far from proven. Let’s move on. What is certain is that it is perfectly indefinable and indeterminable. No matter: we define it conventionally and determine it approximately. Very well. We turn, in this case, to Mr. Proudhon who, by his omniscience, and in his transcendent wisdom, awards the worker a share of this phantom, this shadow, this semblance of rent, variable, according to mysterious circumstances that only Mr. Proudhon can know and must appreciate, from 28 to 50 p. 0/0. The surplus will belong to the state.

Why this reserve of circumstances impenetrable to the eyes of mere mortals? And while you were busy prophesying the absolute, why not specify more? Why not say 37 1/2 p. 0/0? Do you have some prejudice against the number 37, 1/2? Or, if you feared compromising yourself, why didn’t you say from 5 to 95 p. 0/0, or from 0 to 100 p. 0/0?—Not at all; it is indeed from 25 to 50 p. 0/0.—But still, in which balance, honest maker of exact balances, did you weigh these numbers? You apparently found them one fine morning, while walking; or perhaps they appeared to you in a dream, like the winning numbers in lotteries appear to old women?

—Not at all, said Mr. Proudhon: it’s my opinion.—You cannot imagine, Sir, how delighted I am to know it. But I am forced to tell you that an opinion, even yours, does not make science. Tell me, if your opinion is neither that of Peter, nor that of Paul, nor mine, what shall we do? We will probably fight each other? Admit it, admit instead that in your investigation, the worker and the state, like two bandits, go and wait for the landowner at the corner of a wood to murder him and share his spoils amicably, one taking his watch, the other his purse, and the snuffbox being drawn by lots…

It is not possible to provide an absolute formula for division for an account whose elements can vary infinitely.

It is quite impossible for you, Sir, not to mention ridiculous to want to make the exact balance and provide any kind of formula for sharing the rent as you understand it. How to share exactly, why even share in any manner a mere hypothesis, a fleeting fiction, an elusive concept?

All that matters to say, for now, is that the operator must be served first, according to the principle of wages; and that the social revenue, or tax, should mainly come from the rent.

This is essentially important. But then it would also be quite important to tell us why this matters so much, and to justify your dual assertion.

Why should the operator be served first? Why wouldn’t society come after him? Isn’t society more considerable than the individual? Furthermore, note that the operator receives his wages, in your system, before touching the rent. With his wages, he already has enough to live; his expenses are reimbursed; his share of the rent is something like a surplus for him. But society, if you forbid it from levying taxes on wages, has no other resource than the rent. It seems to me, on the contrary, that society should be served first.

Finally, for the social revenue or tax to be mainly in ground rent, it would be desirable for ground rent to be something real and tangible, not a phantasmagorical specter. Also note that, according to you, the rent could be null, in the first scenario you envisioned, or even negative, in the third. What would the state do in such a case? It would do without revenue, or perhaps even contribute to the mass?

It was the thought of the physiocrats that ground rent should pay, if not the entirety, at least the majority of the tax; this same thought initiated the cadastre.

Mr. Proudhon who says:—"No wealth without labor."—invoking the opinion of the physiocrats strikes me as trying to throw dust in our eyes without knowing what he is talking about. The physiocrats were people who considered ground rent as the sole and unique wealth. They would have said:—"No wealth outside of rent."—They thought that rent fed the state, the landowners, and the working classes, whom they called the wage earners. They imagined that all taxes, of whatever nature and however they might be, cascading from one to another, ultimately fell always on ground rent, on the only wealth that men had at their disposal. That is why they thought that, to constitute public revenue, it was better to address rent directly than to arrive at it through a thousand indirect and thereby more costly paths. That is why they proposed to replace all taxes with a single tax levied on ground rent, which was certainly nothing less for them than an indefinable, indeterminate, and elusive concept.—Mr. Proudhon’s ideas on rent would have seemed singularly strange to the physiocrats whose opinion he so confidently invokes.

There is not only the physiocrats who believed that they found in land rent the natural income of the State. Mr. Proudhon could also have given credit to those socialist reformers mentioned by Mr. Joseph Garnier62, who are opposed to the principle of individual land ownership, but—"who do not conclude to communism, to the expropriation of the land without compensation, and do not propose that the State cultivate, but only that it lease the land itself, to the benefit of the public treasury."—However, Mr. Proudhon would also not be justified in using this doctrine, good or bad, which Mr. Garnier refutes. To say that the State will lease the land itself, to the benefit of the public treasury, is to implicitly state that the State will be the owner of the lands and will collect the rent. Or, in other words, three types of capital being defined as elements of social wealth, it is a process of distributing social wealth among individuals in society, assigning the land to the community, personal faculties and artificial capital to the individual. To prove such a thesis, one certainly must not ignore the theory of value, the theory of capital and income, natural law, or social justice. Mr. Proudhon should not be ranked among the school of economists in question here, nor does he deserve to be accepted as a disciple of the physiocrats.

Nevertheless, it would not seem good to me for the State to absorb each year for its expenses the entirety of the rent, and this for several reasons: first, because it is important to always restrict, as much as possible, the expenses of the State;…

When will Mr. Proudhon finally agree to support his oracles with something other than gratuitous assertions? And why does he think it so important to always restrict the expenses of the State as much as possible? Are not the State’s expenses, those made collectively in the interest of society? While individuals and families only seek to extend the sphere of their enjoyment and well-being, in what does it matter to reduce society to the bare minimum? If it is important to restrict the expenses of the State as much as possible, the ideal of the system would be to reduce them to zero, which takes us back to the infancy of civilization and humanity. — For me, I would rather that the State be as wealthy as it could be without harming the wealth of individuals based on their labor, and that the State spend its income generously in the common interest of all its members.

…Secondly, because this would recognize in the State, now the sole rentier and owner, a transcendent sovereignty, incompatible with the revolutionary notion of Justice, and it is better for public freedom to leave the rent to a certain number of citizens, who exploit or have exploited, rather than deliver it entirely to officials;…

That is to say, instead of recognizing in the State an eminent domain, a transcendent sovereignty, it is better to place this domain and sovereignty on the heads of a certain number of individuals. And this in the interest of public freedom, and perhaps also of economic equality? What philosophy! What politics! Mr. Proudhon does not take into account the fact that, in reality, if citizens own a part of the soil, the State also collects a share of the land rent. There are also municipalities, public establishments, communities that are landowners. And I do not know that collective persons like the State, like the municipalities, like the hospices abuse the eminent domain, the transcendent sovereignty recognized to them, in a way harmful to public freedom; nor that these collective persons could justly be stripped of the lands they own since the domain and sovereignty attached to such possession can rest as well on the heads of individual persons. What a singular idea Mr. Proudhon intends to give us of revolutionary justice?

…Finally, because it is useful to the economic order to preserve this ferment of activity which, within the limits and under the conditions that have just been determined, does not seem susceptible to abuse, and on the contrary, provides the most vigorous counterweight against the encroachments of the treasury.

What conditions? What limits? What have you determined? Plus, without counting the contradictions that escape you at every line, and without qualifying the nonsense with which you cover your ignorance, what are you telling us again?

Preserve all the ferments of activity you like, but make sure that society survives, and that the State does honor to its affairs.

You reject the tax, and you say that public revenue should primarily be found in the rent. But it does not seem good to you that the State absorb all the rent, and you wish for citizens to retain a good part of it, if only to oppose the encroachments of the treasury with a vigorous counterweight. Do you really know what you want? Do you really know what you are saying? What are the encroachments of the treasury, after all? They consist of seizing a portion of our private incomes to form the public income. Well, of private incomes, how many types do you know? I know three for my part: land rent, wage, profit. Everything comes from there: there is not a fourth resource for private or public consumption. What the State demands from the wage, it does not demand from the rent; what it demands from the rent, it does not demand from the wage. If you intend to direct its choice, it will demand more from one the less it demands from the other, and vice versa. Have you even thought to ask yourself where the treasury would find and could retrieve the portion of the land rent that you intend to steal from its encroachments? Have you tried to establish this theory of tax that you had announced and promised to us? No: your conditions and your limits are illusory; your encroachments are ridiculous phantoms; your counterweights have the efficacy of your balances.

Out of the 50 or 75 percent remaining of the rent, a part will therefore be taken for the budget; the other belongs to the owner.

Good! There is the owner back on the surface. We had drowned him a moment ago. He apparently has a tough life. A part for the budget, a part for the owner. Fine! And what part, may I ask, for each of them? The question is quite serious and deserves to be resolved. Where are your figures now? What have you done with your balances?

If one wishes to say, as one might, that the proportion according to which I propose to distribute the rent lacks precision,…

You will give me this justice to admit that I did not wait, to say that, for your permission.

...This is a drawback that I acknowledge all the more willingly as it expresses the fundamental fact upon which the entire theory rests, namely the indefinability of the rent.

To others! What will be said, whether you consent to it or not, with just reason, is that you have neither defined nor determined the rent, but it does not follow that the rent is indefinable and indeterminable. Land rent is the easiest thing in the world to define: it is the price of the soil’s lease. The rent naturally determines itself on the market by the ratio of demand to supply for land leases. The rent belongs entirely to the legitimate owner of the soil. And the portion of rent that falls into the public treasury arrives there by the same means, and is there on the same basis as the portion of wages and profits levied by public contributions. As for the worker, he has theoretically no right to the rent; and practically he does not touch a penny.

But what I will never regard as just is that, while the State grants to patentees of inventions only a fourteen-year enjoyment, it delivers the rent of the soil in perpetuity; it reserves nothing for the tenant; it crushes industry, commerce, labor with taxes, while it prostrates itself before an often parasitic prelibation, which can only invoke in its favor the prejudice of the centuries, the silence of the multitude, and the mythology of worship.

This often parasitic prelibation is none other than individual land ownership. Now we understand why Mr. Proudhon has refrained from giving us the figure or the amount of the rent he attributes to the owner. But what has Mr. Proudhon done to show that in any way the owner could be considered a parasitic prelibator? Nothing, nothing,—and nothing. The landowner emerges from Mr. Proudhon’s hands deeply insulted, but physically and morally unharmed.

This last passage crowns the work. It is infinitely precious and instructive: it is characteristic of Mr. Proudhon’s argumentation, which is a mix of erroneous principles, gratuitous assumptions, tiring contradictions, boasts of false erudition, and tasteless invective. This is insolence of the tribune, if you will; of science, never.

My opinion is that it would be better for the future of democracy and for the triumph of equality if the socialists would kindly refrain from denouncing abuses they neither know how to prove nor correct; that empiricists would not bleed before all eyes, to the applause of ignorance, folly, and greed, the wounds of the social body that their ointments poison and that will rather be healed one day by the assiduous and discreet care of science.

  1. 112,891 Parisian female workers were classified as follows:

    7,108 women, daughters or relatives of employers, whose wages were not recorded;

    4,157 paid weekly, monthly, or yearly;

    101,626 with a wage assessable by workday.

    Among these:

    35,085 are paid by the day;

    65,541 are paid by the piece.

    The average of these wages is 1 fr. 63 per day. A maximum of 20 francs and a minimum of 0 fr. 15 were observed.

    950 workers have a wage lower than 0 fr. 60;

    100,050 have from 0 fr. 60 to 3 francs. Among these wages, those of 0 fr. 75, 1 franc, 1 fr. 25 are the most common;

    626 women have a wage higher than 3 francs.

    Very low wages are always exceptional; they are earned by women working to order, lacking skill, and often giving only little time to the work. Thus the minimum of 0 fr. 15 mentioned results from the declaration of two elderly and disabled women, supported by charity, and sewing occasionally canvas trousers for the troops.↩

  2. Here are the numbers. The average wage of workers in Paris is 3 fr. 80 per day. Maximum: 35 francs. Minimum: 0 fr. 50.

    27,453 men have a wage less than 3 francs;

    157,216 have from 3 francs to 5 francs;

    10,393 earn more than 5 francs.

    Not included in these figures:

    16,803 young boys under sixteen years old;

    7,851 young girls.

    These figures and those mentioned above are borrowed from the Statistics of Industry in Paris in 1847.↩

  3. F. Bastiat, Economic Harmonies, Exchange.↩

  4. Journal des Économistes, September 1859.↩

  5. ÉT. VACHEROT, Metaphysics and Science, vol. II, p. 679.↩

  6. Louis Blanc, Organization of Labor.↩

  7. Louis Blanc, History of the French Revolution, pp. 9 and 10. More metaphysics than Mr. Louis Blanc has at his disposal would be needed to attempt, with some chance of success, the adventure of these great historical hypotheses. Those who speak the language of philosophy and who are aware of the efforts of the German school to explain the history of societies and religions will be somewhat surprised to see these three words juxtaposed in their order: authority, individualism, fraternity, and to learn that the world begins with Catholicism. Authority, as far as I know, did not prevail in the democratic republic of Athens. Here is one of the finest periods of civilization to erase from the history of humanity because it does not fit into the system of communist philosophy.↩

  8. Louis Blanc, Organization of Labor, p. 121.↩

  9. P.-J. Proudhon, De la Justice dans la Révolution et dans l’Église, Vol. I, p. 274.↩

  10. Ibid p. 285.↩

  11. Perhaps I should have discussed further the system presented by Mr. Considérant in his Theory of the Right of Property and the Right to Work. Seeing land property as a privilege, Mr. Considérant claims the right to work as compensation. To judge this idea, a word will suffice. The organization of property must obey the moral lots of the science of distribution; the organization of work can only depend on the rules of utility of production, which is the object of an art, and has nothing to do with justice. The theory of property and the theory of work are thus two different theories both by their character and by their scope. That said, if there are, as Mr. Considérant believes, imperfections in the current mode of distribution of social wealth, they must be reformed, and not conclude from these imperfections to compensations in terms of industrial regime. This last method has no philosophical sense; the results are empirical.↩

  12. R. Venisse, De l’Économie sociale dans l’Échange et le Crédit.↩

  13. LES 52, by Émile de Girardin. XIII, Socialism and Taxation.↩

  14. Ibid, p. 120.↩

  15. Ibid, p. 120.↩

  16. Ibid, p. 129.↩

  17. Socialism and Taxation, p. 130.↩

  18. Ibid, p. 127.↩

  19. Ibid, p. 128.↩

  20. Ibid, p. 134.↩

  21. Socialism and Taxation, p. 124.↩

  22. “The value of wheat doubles at the moment when the deliverable quantity is reduced by a fifth, and triples when this quantity is reduced by a quarter.” (H. Passt, Value. Dictionary of Political Economy, Vol. II, p. 811.) The ratio we are talking about is therefore not simple; it is nonetheless mathematical.↩

  23. Louis Blanc, Organization of Work, p. 26.↩

  24. M. A. Thiers, On Property, p. 11.↩

  25. Ibid, p.6.↩

  26. Ibid, p.13.↩

  27. On Property, p. 27.↩

  28. On Property, pp. 31, 33.↩

  29. On Property, p. 3.↩

  30. F. Bastiat, Economic Harmonies. Property, Community.↩

  31. Economic Harmonies, Needs, Efforts, Satisfactions.↩

  32. Idem. Property, Community.↩

  33. Economic Harmonies, Property, Community.↩

  34. Economic Harmonies, On Value.↩

  35. Economic Harmonies, On Value.↩

  36. Harmonies économiques, On Value.↩

  37. Harmonies économiques, On Value.↩

  38. Joseph Garnier, Elements of Political Economy, 3rd ed. p. 58.↩

  39. Mr. Auguste Walras, On the Nature of Wealth and the Origin of Value.↩

  40. It should be noted that from another viewpoint, that of the constitution of social science, Bastiat is worthy of serious praise. He was a brilliant pamphleteer in the service of free trade. Moreover, the grace of his wit and the literary charms of his style significantly contributed to popularizing political economy.↩

  41. Mr. Dupont-White, The Individual and the State, 2nd ed. p. 56.↩

  42. In the works of entirely contemporary publicists, I mean those who enjoy a certain reputation and some authority, one finds something other than the reckless boldness of the socialists or the exaggerated reserve of the scholars. Among these philosophical economists, I must first mention Mr. Baudrillart, author of Studies in Moral Philosophy and Political Economy and a recent book: On the Relationships between Morality and Political Economy. Mr. Baudrillart bases the right of property on personality; and generally, he brings a depth, sincerity, and even an uncommon boldness to the study of the most serious problems of social justice. The discussion of such ideas, which are both scientific and advanced, is beyond the scope of this Introduction, and Mr. Baudrillart’s attempts remain to be examined as the first ones made towards the methodical constitution of the theory of society.↩

  43. From justice in the revolution and the church, New Principles of Practical Philosophy, by P.-J. Proudhon. Third study, chapters v and vi.↩

  44. It is easy to understand that a theory of science in general is indispensable for establishing the theory of social science, the theory of political economy, or the theory of any other specific science. In the absence of an experimental and rational philosophy of science, which truly does not yet exist, it is undoubtedly permissible to sketch some features in a given case. No doubt also, one has the right to hope that the reader will prefer to judge by its applications rather than in its principle a theory quite incomplete and in which it was necessary to put more simplicity than metaphysical rigor.↩

  45. M. Walras, Theory of Social Wealth or Summary of the Fundamental Principles of Political Economy.↩

  46. Joseph Garnier, Elements of Political Economy. — Note 1. On the General Divisions of the Science.↩

  47. Mr. Walras, Theory of Social Wealth.↩

  48. Mr. Walras, On Social Wealth↩

  49. M. Walras, Theory of Social Wealth.↩

  50. It was Smith and Ricardo who placed the origin of value in labor. However, they did not conclude from this principle the denial of the land’s value. By a fortunate inconsistency, Smith and Ricardo recognized that land rent paid for the use of the productive faculties of the land. It is Messrs. Carey and F. Bastiat who, more logical but less well inspired, deduced from the incomplete principle of the English school regarding the origin of value, erroneous consequences concerning the land’s value. (See F. Bastiat, Economic Harmonies.)↩

  51. Dictionary of Political Economy.↩

  52. Mr. Auguste Walras, On the Nature of Wealth and the Origin of Value. 1831.↩

  53. Joseph Garnier, Elements of Political Economy,↩

  54. Mr. Walras, Theory of Social Wealth, p. 77.↩

  55. Mr. Walras, Theory of Social Wealth, p. 79.↩

  56. H. Passy, Dictionary of Political Economy. Vol. II, p. 508.↩

  57. Joseph Garnier, Elements of Political Economy, pages 406 and 414.↩

  58. Mr. Walras, Theory of Social Wealth, p. 71.↩

  59. H. Passy, Dictionary of Political Economy, Vol. II, p. 510.↩

  60. M. Walras, De la nature de la richesse et de l’origine de la valeur, p. 185.↩

  61. H. Passy, Dictionary of Political Economy. Vol. II, p. 513.↩

  62. Joseph Garnier, Elements of Political Economy, p. 114.↩

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