 Section 18 of Sophisms of the Protectionists. This is a LibriVox recording. All LibriVox recordings are in the public domain. For more information or to volunteer, please visit LibriVox.org. Sophisms of the Protectionists by Frédéric Bastia, translated by Horace White. Section 18. Part 3. Spoilation and Law. To the Protectionists of the General Council of Manufacturers. Gentlemen, let us for a few moments interchange moderate and friendly opinions. You are not willing that political economy should believe and teach free trade. This is as though you were to say, we are not willing that political economy should occupy itself with society, exchange, value, law, justice, property. We recognize only two principles, oppression and spoilation. Can you possibly conceive of political economy without society or of society without exchange? Or of exchange without a relative value between two articles? Or the two services exchanged? Can you possibly conceive the idea of value except as the result of the free consent of the exchangers? Can you conceive of one product being worth another if in the barter one of the parties is not free? Is it possible for you to conceive of the free consent of two parties without liberty? Can you possibly conceive that one of the contracting parties is deprived of his liberty unless he is oppressed by the other? Can you possibly conceive of an exchange between an oppressor and one oppressed unless the equivalence of the services is altered or unless, as a consequence, law, justice, and the rights of property have been violated? What do you really want? Answer frankly. You are not willing that trade should be free. You desire then that it shall not be free? You desire then that trade shall be carried on under the influence of oppression. Or if it is not carried on under the influence of oppression, it will be carried on under the influence of liberty, and that is what you do not desire. Admit then that it is law and justice which embarrass you, that that which troubles you is property, not your own to be sure, but another's. You are altogether unwilling to allow others to freely dispose of their own property, the essential condition of ownership, but you well understand how to dispose of your own and of theirs. And accordingly you ask the political economists to arrange this mass of absurdities and monstrosities in a definite and well-ordered system, to establish, in accordance with your practice, the theory of spoilation. But they will never do it, for in their eyes, spoilation is a principle of hatred and disorder, and the most particularly odious form which it can assume is the legal form. And here, Mr. Bonwa Diazzi, I take you to task. You are moderate, impartial and generous. You are willing to sacrifice your interests and your fortune. This you constantly declare. Recently in the general council, you said, if the rich had only to abandon their wealth to make the people rich, we should all be ready to do it. Here, here it is true. And yesterday in the National Assembly, you said, if I believed that it was in my power to give to the workingmen all the work they need, I would give all I possess to realize this blessing. Unfortunately, it is impossible. Although it pains you that the sacrifice is so useless that it should not be made, and you exclaim with basal, money, money, I detest it, but I will keep it. Surely no one will question a generosity so retentive, however barren. It is a virtue which loves to envelop itself in a veil of modesty, especially when it is purely latent and negative. As for you, you will lose no opportunity to proclaim it in the ears of all France, from the Tribune of the Luxembourg to the Palais Legislative. But no one desires you to abandon your fortune, and I admit that it would not solve the social problem. You wish to be generous, but cannot. I only venture to ask that you will be just. Keep your fortune, but permit me also to keep mine. Respect my property as I respect yours. Is this too bold a request on my part? Suppose we lived in a country under a free trade regime where everyone could dispose of his property and his labor at pleasure. Does this make your hair stand? Reassure yourself. This is only in hypothesis. One would then be as free as the other. There would indeed be a law in the Code, but this law, impartial and just, would not infringe our liberty, but would guarantee it, and it would take effect only when we sought to oppress each other. There would be officers of the law, magistrates and police, but they would only execute the law. Under such a state of affairs, suppose that you owned an iron foundry, and that I was a hatter. I should need iron for my business. Naturally, I should seek to solve this problem. How shall I best procure the iron necessary for my business with the least possible amounts of labor? Considering my situation and my means of knowledge, I should discover that the best thing for me to do would be to make hats, and sell them to a Belgian who would give me iron in exchange. But you, being the owner of an iron foundry, and considering my case, would say to yourself, I shall be obliged to compel that fellow to come to my shop. You, accordingly, take your sword and pistols, and, arming your numerous retinue, proceed to the frontier, and, at the moment I am engaged in making my trade, you cry out to me, Stop that, or I will blow your brains out. But, my lord, I am in need of iron. I have it to sell. But, sir, you ask too much for it. I have my reasons for that. But, my good sir, I also have my reasons for preferring cheaper iron. Well, we shall see who shall decide between your reasons and mine. Soldiers, advance. In short, you forbid the entry of Belgian iron, and prevent the export of my hats. Under the condition of things which we have supposed, that is, under a regime of liberty, you cannot deny that that would be, on your part, manifestly an act of oppression and spoilation. Accordingly, I should resort to the law, the magistrate, and the power of the government. They would intervene. You would be tried, condemned, and justly punished. But this circumstance would suggest to you a bright idea. You would say to yourself, I have been very simple to give myself so much trouble. What, place myself in a position where I must kill someone, or be killed, degrade myself, put my domestics under arms, incur heavy expenses, give myself the character of a robber, and render myself liable to the laws of the country. And all this in order to compel a miserable hatter to come to my foundry, to buy iron at my price. What if I should make the interest of the law, of the magistrate, of the public authorities, my interests? What if I could get them to perform the odious act on the frontier which I was about to do myself? Enchanted by this pleasing prospect, you secure a nomination to the chambers, and obtain the passage of a law conceived in the following terms. Section 1 There shall be a tax levied upon everybody, but especially upon that cursed hatmaker. Section 2 The proceeds of this tax shall be applied to the payment of men to guard the frontier in the interest of iron founders. Section 3 It shall be their duty to prevent the exchange of hats or other articles of merchandise with the Belgians for iron. Section 4 The ministers of the government, the prosecuting attorneys, jailers, custom officers, and all officials, are entrusted with the execution of this law. I admit, sir, that in this form robbery would be far more lucrative, more agreeable, and less perilous than under the arrangements which you had at first determined upon. You could most assuredly laugh in your sleeve, for you would then have a saddled all the expenses upon me. But I affirm that you would have introduced into society a vicious principle, a principle of immorality, of disorder, of hatred, and of incessant revolutions, that you would have prepared the way for all the various schemes of socialism and communism. You, doubtless, find my hypothesis a very bold one. Well, then, let us reverse the case. I consent for the sake of the demonstration. Suppose that I am a laborer, and you an iron founder. It would be a great advantage to me to buy hatchets cheap, and even to get them for nothing. And I know that there are hatchets and stalls in your establishments. Accordingly, without any ceremony, I enter your warehouse, and seize everything that I can lay my hands upon. But in the exercise of your legitimate right of self-defense, you at first resist force with force. Afterwards, invoking the power of the law, the magistrate, and the constables, you throw me into prison. And you do well. Oh-ho! the thought suggests itself to me that I have been very awkward in this business. When a person wishes to enjoy the property of other people, he will, unless he is a fool, act in accordance with the law, and not in violation of it. Consequently, just as you have made yourself a protectionist, I will make myself a socialist. Since you have laid claim to the right to profit, I claim the right to labor, or to the instruments of labor. For the rest, I read my Louis Blanc in prison. And I know by heart this doctrine. In order to disenthrall themselves, the common people have need of tools to work with. It is the function of the government to provide them. And again, if one admits that, in order to be really free, a man requires the ability to exercise and to develop his faculties, the result is that society owes each of its members instruction, without which the human mind is incapable of development, and the instruments of labor, without which human activities have no field for their exercise. But by what means can society give to each one of its members the necessary instruction and the necessary instruments of labor, except by the intervention of the state? So that, if it becomes necessary to revolutionize the country, I also will force my way into the halls of legislation. I also will pervert the law, and make it perform in my behalf, and at your expense, the very act for which it just now punished me. My decree is molded after yours. Section 1. There shall be taxes levied upon every citizen, and especially upon iron founders. Section 2. The proceeds of this tax shall be applied to the creation of armed corps, to which the title of the Fraternal Constabulary shall be given. Section 3. It shall be the duty of the Fraternal Constabulary to make their way into the warehouses of hatchets, saws, etc., to take possession of these tools, and to distribute them to such working men as may desire them. Thanks to this ingenious device, you see my lord that I shall no longer be obliged to bear the risks, the costs, the odium, or the scruples of robbery. The state will rob for me as it has for you. We shall both be playing the same game. It remains to be seen what would be the condition of French society on the realization of my second hypothesis, or what at least is the condition of it after the almost complete realization of the first hypothesis. I do not desire to discuss here the economy of the question. It is generally believed that in advocating free trade we are exclusively influenced by the desire to allow capital and labor to take the direction most advantageous to them. This is an error. This consideration is merely secondary. That which wounds, afflicts, and is revolting to us in the protective system is the denial of right, of justice, of property. It is the fact that the system turns the law against justice and against property when it ought to protect them. It is that it undermines and perverts the very conditions of society. And to the question in this aspect I invite your most serious consideration. What is law, or at least what audit to be? What is its rational and moral mission? Is it not to hold the balance even between all rights, all liberties, and all property? Is it not to cause justice to rule among all? Is it not to prevent and to repress oppression and robbery wherever they are found? And are you not shocked at the immense, radical, and deplorable innovation introduced into the world by compelling the law itself to commit the very crimes to punish which is its special mission by turning the law in principle and in fact against liberty and property? You deplore the condition of modern society. You groan over the disorder which prevails in institutions and ideas. But is it not your system which has perverted everything, both institutions and ideas? What? The law is no longer the refuge of the oppressed, but the arm of the oppressor. The law is no longer a shield, but a sword. The law no longer holds in her august hands a scale, but false weights and measures. And you wish to have society well regulated. Your system has written over the entrance of the legislative halls these words. Whoever acquires any influence here can obtain his share of the legalized pillage. And what has been the result? All classes of society have become demoralized by shouting around the gates of the palace. Give me a share of the spoils. After the revolution of February, when universal suffrage was proclaimed, I had for a moment hoped to have heard this sentiment. No more pillage for anyone, just as for all. And that would have been the real solution of the social problem. Such was not the case. The doctrine of protection had for generations too profoundly corrupted the age, public sentiments, and ideas. No. In making inroads upon the National Assembly, each class, in accordance with your system, has endeavored to make the law an instrument of repine. There have been demanded heavier imposts, gratuitous credit, the right to employment, the right to assistance, the guarantee of incomes and of minimum wages, gratuitous instruction, loans to industry, etc., etc. In short, everyone has endeavored to live and thrive at the expense of others. And upon what have these pretensions been based? Upon the authority of your precedents. What sofisms have been invoked? Those that you have propagated for two centuries. With you have they talked about equalizing the conditions of labor. With you they have declined against ruinous competition. With you they have ridiculed the let alone principle. That is to say, liberty. With you they have said that the law should not confine itself to being just, but should come to the aid of suffering industries, protect the feeble against the strong, secure profits to individuals at the expense of the community, etc., etc. In short, according to the expression of Mr. Charles Dupin, socialism has come to establish the theory of robbery. It has done what you have done, and that which you desire the professors of political economy to do for you. Your cleverness is in vain, Miss yours protectionists. It is useless to lower your tone, to boast of your latent generosity, or to deceive your opponents by sentiment. You cannot prevent logic from being logic. You cannot prevent Mr. Ballot from telling the legislators, you have granted favors to one, you must grant them to all. You cannot prevent Mr. Cremue from telling the legislators, you have enriched the manufacturers, you must enrich the common people. You cannot prevent Mr. Nadeau from saying to the legislators, you cannot refuse to do for the suffering classes, that which you have done for the privileged classes. You cannot even prevent the leader of your orchestra, Mr. Mimeral, from saying to the legislators, I demand 25,000 subsidies for the workmen's savings banks, and supporting his motion in this manner. Is this the first example of the kind that our legislation offers? Would you establish the system that the state should encourage everything? Open, at its expense, courses of scientific lectures. Subsidize the fine arts, pension the theater, give to the classes already favored by fortune the benefits of superior education, the most varied amusements, the enjoyment of the arts and repose for old age. Give all this to those who know nothing of privations, and compel those who have no share in these benefits to bear their part of the burden, while refusing them everything, even the necessaries of life. Gentlemen, our French society, our customs, our laws are so made that the intervention of the state, however much it may be regretted, is seen everywhere, and nothing seems to be stable or durable if the hand of the state is not manifest in it. It is the state that makes the severs porcelain, and the goblin tapestry. It is the state that periodically gives expositions of the works of our artists, and of the products of our manufacturers. It is the state which recompenses those who raise its cattle and breed its fish. All this costs a great deal. It is a tax to which every one is obliged to contribute. Everybody, do you understand? And what direct benefit do the people derive from it? Of what direct benefit, to the people, are your porcelains and tapestries, and your expositions? This general principle of resisting what you call a state of enthusiasm, we can understand. Although you yesterday voted a bounty for linens, we can understand it on the condition of consulting the present crisis, and especially on the condition of your proving your impartiality. If it is true that, by the means I have indicated, the state thus far seems to have more directly benefited the well-to-do classes, than those who are poorer, it is necessary that this appearance should be removed. Shall it be done by closing the manufacturers of tapestry and stopping the exhibitions? Assuredly not, but by giving the poor a direct share in this distribution of benefits. In this long catalogue of favors granted to some at the expense of all, one will remark the extreme prudence with which Mr. Mimeral has left the tariff favors out of sight, although they are the most explicit manifestations of legal spoilation. All the orators who supported or opposed him have taken upon themselves the same reserve. It is very shrewd, possibly they hope, by giving the poor a direct participation in this distribution of benefits, to save this great iniquity by which they profit, but of which they do not whisper. They deceive themselves. Do they suppose that after having realized a partial spoilation by the establishment of custom duties, other classes, by the establishment of other institutions, will not attempt to realize universal spoilation? I know very well you always have a softism ready. You say, the favors which the law grants us are not given to the manufacturer, but to the manufacturers. The profits which it enables us to receive at the expense of the consumers are merely a trust placed in our hands. They enrich us, it is true, but our wealth places us in a position to expend more, to extend our establishments, and falls like refreshing dew upon the laboring classes. Such is your language, and what I most lament is the circumstance that your miserable softisms have so perverted public opinion that they are appealed to in support of all forms of legalized spoilation. The suffering classes also say, let us, by act of the legislature, help ourselves to the goods of others. We shall be in easier circumstances as the result of it. We shall buy more wheat, more meat, more cloth, and more iron. And that which we receive from the public taxes will return in a beneficent shower to the capitalists and landed proprietors. But, as I have already said, I will not today discuss the economical effects of legal spoilation. Whenever the protectionists desire, they will find me ready to examine the softisms of the ricochets, which indeed may be invoked in support of all species of robbery and fraud. We will confine ourselves to the political and moral effects of exchange legally deprived of liberty. I have said, the time has come to know what the law is, and what it ought to be. If you make the law for all citizens a palladium of liberty and of property, if it is only the organization of the individual law of self-defense, you will establish, upon the foundation of justice, a government rational, simple, economical, comprehended by all, loved by all, useful to all, supported by all, entrusted with a responsibility perfectly defined and carefully restricted, and endowed with imperishable strength. If, on the other hand, in the interests of individuals or of classes, you make the law an instrument of robbery, everyone will wish to make laws, and to make them to his own advantage. There will be a riotous crowd at the doors of the legislative halls. There will be a bitter conflict within. Mines will be an anarchy. Morals will be shipwrecked. There will be violence in party organs, heated elections, accusations, recriminations, jealousies, and extinguishable hates. The public forces placed at the service of rapacity instead of repressing it. The ability to distinguish the true from the false effaced from all minds, as the notion of justice and injustice will be obliterated from all consciences. The government responsible for everything and bending under the burden of its responsibilities. Political convulsions. Revolutions without end. Ruins over which all forms of socialism and communism attempt to establish themselves. These are the evils which must necessarily flow from the perversion of law. Such consequently, gentlemen, are the evils for which you have prepared the way by making use of the law to destroy freedom of exchange. That is to say, to abolish the right of property. Do not declaim against socialism. You establish it. Do not cry out against communism. You create it. And now you ask us economists to make you a theory which will justify you. More blue. Make it yourselves. Please visit LibriVox.org My object in this treatise is to examine into the real nature of the interest of capital. For the purpose of proving that it is lawful and explaining why it should be perpetual. This may appear singular, and yet I confess I am more afraid of being too plain than to obscure. I am afraid I may weary the reader by a series of mere truisms. But it is no easy matter to avoid this danger when the facts with which we have to deal are known to everyone by personal, familiar, and daily experience. But then you will say, what is the use of this treatise? Why explain what everybody knows? But although this problem appears at first sight so very simple, there is more in it than you might suppose. I shall endeavor to prove this by an example. Mander lends an instrument of labor today, which will be entirely destroyed in a week. Yet the capital will not produce the less interest to Mander, or his heirs, through all eternity. Reader, can you honestly say that you understand the reason of this? It would be a waste of time to seek any satisfactory explanation from the writings of economists. They have not thrown much light upon the reasons of the existence of interest. For this they are not to be blamed, for at the time they wrote its lawfulness was not called in question. Now however times are altered, the case is different. Men who consider themselves to be in advance of their age have organized an active crusade against capital and interest. It is the productiveness of capital which they are attacking, not certain abuses in the administration of it, but the principle itself. A journal has been established to serve as a vehicle for this crusade. It is conducted by M. Prouton, and has, it is said, an immense circulation. The first number of this periodical contains the electoral manifesto of the people. Here we read, the productiveness of capital which is condemned by Christianity under the name of usury is the true cause of misery, the true principle of destitution, the eternal obstacle to the establishment of the republic. Another journal, La Rouge Populaire, after having said some excellent things on labour, adds, But above all labour ought to be free, that is it ought to be organized in such a manner that money lenders and patrons or masters should not be paid for this liberty of labour, this right of labour, which is raised to so high a price by the traffickers of men. The only thought that I notice here is that expressed by the words in italics, which imply a denial of the right to interest. The remainder of the article explains it. It is thus that the democratic socialist, Thore, expresses himself. The revolution will always have to be recommended, so long as we occupy ourselves with consequences only, without having the logic or the courage to attack the principle itself. This principle is capital, false property, interest and usury, which by the old regime is made to weigh upon labour. Ever since the aristocrats invented the incredible fiction, that capital possesses the power of reproducing itself, the workers have been at the mercy of the idol. At the end of a year, will you find an additional crown in a bag of one hundred shillings? At the end of fourteen years, will your shillings have doubled in your bag? Will a work of industry or of skill produce another at the end of fourteen years? Let us begin then by demolishing this fatal fiction. I have quoted the above merely for the sake of establishing the fact that many persons consider the productiveness of capital a false, a fatal, and an iniquitous principle. But quotations are superfluous. It is well known that the people attribute their sufferings to what they call the trafficking in man by man. In fact, the phrase tyranny of capital has become proverbial. I believe there is not a man in the world who is aware of the whole importance of this question. Is the interest of capital natural, just, and lawful, and as useful to the payer as to the receiver? You answer no, I answer yes. Then we differ entirely. But it is of the utmost importance to discover which of us is in the right, otherwise we shall incur the danger of making a false solution of the question, a matter of opinion. If the error is on my side, however, the evil would not be so great. It must be inferred that I know nothing about the true interests of the masses, or the march of human progress, and that all my arguments are but as so many grains of sand by which the car of the revolution will certainly not be arrested. But if, on the contrary, M. M. Proudhon and Thorey are deceiving themselves, it follows that they are leading the people astray, that they are showing them the evil where it does not exist, and thus giving a false direction to their ideas, to their antipathies, to their dislikes, and to their attacks. It follows that the misguided people are rushing into a horrible and absurd struggle, in which victory would be more fatal than defeat. Since, according to this supposition, the result would be the realization of universal evils, the destruction of every means of emancipation, the consummation of its own misery. This is just what M. Proudhon has acknowledged, with perfect good faith. The foundation stone, he told me, of my system is the gratuitousness of credit. If I am mistaken in this, socialism is a vain dream. I add, it is a dream, in which the people are tearing themselves to pieces. Will it, therefore, be a cause for surprise, if, when they awake, they find themselves mangled in bleeding? Such a danger as this is enough to justify me fully, if, in the course of the discussion, I allow myself to be led into some trivialities and some prolixity. Capital and Interest I address this treatise to the workmen of Paris, more especially to those who have enrolled themselves under the banner of Socialist Democracy. I proceed to consider these two questions. First, is it consistent with the nature of things and with justice, that capital should produce interest? Second, is it consistent with the nature of things and with justice, that the interest of capital should be perpetual? The working men of Paris will certainly acknowledge that a more important subject could not be discussed. Since the world began, it has been allowed, at least in part, that capital ought to produce interest. But laterally it has been affirmed that herein lies the very social error, which is the cause of poprism and inequality. It is therefore very essential to know now on what ground we stand. For if levying interest from capital is a sin, the workers have a right to revolt against social order as it exists. It is in vain to tell them that they ought to have recourse to legal and pacific means. Thirdly, a hypocritical recommendation. When on the one side there is a strong man, poor and a victim of robbery, on the other a weak man, but rich, and a robber, it is singular enough, that we should say to the former, with a hope of persuading him, wait till your oppressor voluntarily renounces oppression, or till it shall cease of itself. This cannot be, and those who tell us that capital is, by nature, unproductive, ought to know that they are provoking a terrible and immediate struggle. If, on the contrary, the interest of capital is natural, lawful, consistent with the general good, as favorable to the borrower as to the lender, the economists who deny it, the tribunes who traffic in this pretended social wound, are leading the workmen into a senseless and unjust struggle, which can have no other issue than the misfortune of all. In fact, they are arming labor against capital. So much the better if these two powers are really antagonistic, and may the struggle soon be ended. But if they are in harmony, the struggle is the greatest evil which can be inflicted on society. You see then, workmen, that there is not a more important question than this. Is the interest of capital lawful or not? In the former case, you must immediately renounce the struggle to which you are being urged. In the second, you must carry it on bravely, and to the end. Productiveness of capital, perpetuity of interest. These are difficult questions. I must endeavor to make myself clear, and for that purpose I shall have recourse to example, rather than to demonstration. Or rather, I shall place the demonstration in the example. I begin by acknowledging that at first sight, it may appear strange that capital should pretend to a remuneration, and above all to a perpetual remuneration. You will say, here are two men, one of them works from morning till night, from one year's end to another, and if he consumes all which he has gained, even by superior energy, he remains poor. When Christmas comes, he is no forwarder than he was at the beginning of the year, and has no other prospect but to begin again. The other man does nothing, either with his hands or his head, or at least, if he makes use of them at all, it is only for his own pleasure. It is allowable for him to do nothing, for he has an income. He does not work, yet he lives well. He has everything in abundance, delicate dishes, sumptuous furniture, elegant equipages. Nay, he even consumes, daily, things which the workers have been obliged to produce, by the sweat of their brow. For these things do not make themselves. And as far as he is concerned, he has had no hand in their production. It is the workmen who have caused this corn to grow, polished this furniture, woven these carpets. It is our wives and daughters who have spun, cut out, sewed, and embroidered these stuffs. We work then for him and for ourselves, for him first and then for ourselves, if there is anything left. But here is something more striking still. If the former of these two men, the worker, consumes within the year any profit which may have been left him in that year, he is always at the point from which he started, and his destiny condemns him to move incessantly in a perpetual circle and a monotony of exertion. Labor then is rewarded only once. But if the other, the gentleman, consumes his yearly income in the year, he has, the year after, in those which follow and through all eternity, an income always equal, inexhaustible, perpetual. Capital then is remunerated, not only once or twice, but an indefinite number of times, so that at the end of a hundred years, a family which has placed twenty thousand francs at five percent, will have had one hundred thousand francs, and this will not prevent it from having a hundred thousand more in the following century. In other words, for twenty thousand francs, which represent its labor, it will have levied, in two centuries, a tenfold value on the labor of others. In this social arrangement, is there not a monstrous evil to be reformed? And this is not all. If it should please this family to curtail its enjoyment a little, to spend, for example, only nine hundred francs instead of a thousand, it may, without any labor, without any other trouble beyond that of investing a hundred francs a year, increase its capital and its income in such rapid progression that it will soon be in a position to consume as much as a hundred families of industrious workmen. Does not all this go to prove that society itself has in its bosom a hideous cancer, which ought to be eradicated at the risk of some temporary suffering? These are, it appears to me, the sad and irritating reflections which must be excited in your minds by the active and superficial crusade which is being carried on against capital and interest. On the other hand, there are moments in which, I am convinced, doubts are awakened in your minds and scruples in your conscience. You say to yourself sometimes, but to assert that capital ought not to produce interest, is to say that he who has created instruments of labor or materials or provisions of any kind ought to yield them up without compensation. Is that just? And then if it is so, who would lend these instruments, these materials, these provisions, who would take care of them, who even would create them, everyone would consume his proportion, and the human race would never advance a step. Capital would be no longer formed, since there would be no interest in forming it. It will become exceedingly scarce. A singular step toward gratuitous loans. A singular means of improving the condition of borrowers, to make it impossible for them to borrow at any price. What would become of labor itself? For there will be no money advanced, and not one single kind of labor can be mentioned, and not even the chase, which can be purchased without money in hand. As for ourselves, what would become of us? What, we are not to be allowed to borrow in order to work in the prime of life, in order to lend, that we may enjoy repose in its decline? The law will rob us of the prospect of laying by a little property, because it will prevent us from gaining any advantage from it. It will deprive us of all stimulus to save at the present time, and of all hope of repose for the future. It is useless to exhaust ourselves with fatigue. We must abandon the idea of leaving our sons and daughters a little property, since modern science renders it useless. For we should become traffickers in men if we were to lend it on interest. Alas, the world which these persons would open before us as an imaginary good is still more dreary and desolate than that which they condemn, for hope at any rate, is not banished from the latter. Thus in all respects, and in every point of view, the question is a serious one. Let us hasten to arrive at a solution. Our civil code has a chapter entitled On the Manor of Transmitting Property. I do not think it gives a very complete nomenclature on this point. When a man by his labor has made some useful things, in other words, when he has created a value, it can only pass into the hands of another by one of the following modes. As a gift, by the right of inheritance, by exchange, loan, or theft. One word upon each of these, except the last, although it plays a greater part in the world than we may think. A gift needs no definition. It is essentially voluntary and spontaneous. It depends exclusively upon the giver, and the receiver cannot be said to have any right to it. Without a doubt, morality and religion make it a duty for men, especially the rich, to deprive themselves voluntarily of that which they possess in favor of their less fortunate brethren. But this is an entirely moral obligation. If it were to be asserted on principle, admitted in practice, or sanctioned by law, that every man has a right to the property of another, the gift would have no merit. Charity and gratitude would be no longer virtues. Besides, such a doctrine would suddenly and universally arrest labor and production, as severe coal congeals water and suspends animation. For who would work if there was no longer to be any connection between labor and the satisfying of our wants? Political economy has not treated of gifts. It has hence been concluded that it disowns them, and that it is therefore a science devoid of heart. This is a ridiculous accusation. That science which treats of the laws resulting from the reciprocity of services had no business to inquire into the consequences of the necessity with respect to him who receives, nor into its effects, perhaps still more precious, on him who gives. Such considerations belong evidently to the science of morals. We must allow the sciences to have limits. Above all, we must not accuse them of denying or undervaluing what they look on as foreign to their department. The right of inheritance against which so much has been objected of late, is one of the forms of gift, and assuredly the most natural of all. That which a man has produced, he may consume, exchange, or give. What can be more natural than that he should give it to his children? It is this power, more than any other, which inspires him with courage to labor and to save. Do you know why the principle of right of inheritance is thus called in question? Because it is imagined that the property transmitted is plundered from the masses. This is a fatal error. Political economy demonstrates, in the most preemptory manner, that all value produced is a creation which does no harm to any person whatever. For that reason it may be consumed and still more transmitted without hurting anyone. But I shall not pursue these reflections, which do not belong to this object. Exchange is the principal department of political economy, because it is by far the most frequent method of transmitting property, according to the free and voluntary agreements of the laws and effects of which this science treats. Properly speaking, exchange is the reciprocity of services. The parties say between themselves, give me this and I will give you that, or do this for me and I will do that for you. It is well to remark, for this will throw a new light on the notion of value, that the second form is always implied in the first. When it is said, do this for me and I will do that for you, an exchange of service for service is proposed. Again, when it is said, give me this and I will give you that, it is the same as saying, I yield to you what I have done, yield to me what you have done, the labor is passed, instead of present, but the exchange is not the less governed by the comparative valuation of the two services, so that it is quite correct to say that the principle of value is in the services rendered and received on accounts of the productions exchanged, rather than in productions themselves. In reality, services are scarcely ever exchanged directly, there is a medium which is termed money. Paul has completed a coat for which he wishes to receive a little bread, a little wine, a little oil, a visit from a doctor, a ticket for the play, etc. The exchange cannot be affected in kind. So what does Paul do? He first exchanges his coat for some money, which is called sale. Then he exchanges this money again for the things which he wants. Which is called purchase. And now only has the reciprocity of services completed its circuit. Now only the labor and the compensation are balanced in the same individual. I have done this for society, it has done that for me. In a word, it is only now that the exchange is actually accomplished. Thus nothing can be more correct than this observation of J.B. Sey. Since the introduction of money every exchange is resolved into two elements, sale and purchase. It is the reunion of these two elements which renders the exchange complete. We must remark also that the constant appearance of money in every exchange has overturned and misled all our ideas. Men have ended in thinking that money was true riches and that to multiply it was to multiply services and products. Hence the prohibitory system, hence paper money, hence the celebrated aphorism, what one gains the other loses, and all the errors which have ruined the earth and imbrewed it with blood. After much research it has been found that in order to make the two services exchanged of equivalent value and in order to render the exchange profitable, the best means was to allow it to be free. However plausible at first sight the intervention of the state might be it was soon perceived that it is always oppressive to one or other of the contracting parties. When we look into these subjects we are always compelled to reason upon this maxim that equal value results from liberty. We have in fact the means of knowing whether at a given moment two services are of the same value but that of examining whether they can be readily and freely exchanged. Allow the state, which is the same thing as force, to interfere on one side or the other and from that moment all means of appreciation will be complicated and entangled instead of becoming clear. It ought to be the part of the state that is present and above all to repress artifice and fraud. That is to secure liberty and not to violate it. I have enlarged a little upon exchange although loan is my principal object my excuse is that I conceive that there is in loan an actual exchange an actual service rendered by the lender and which makes the borrower liable to an equivalent service. Two services whose comparative value can only be appreciated like that of all possible services by freedom. Now if it is so the perfect lawfulness of what is called house rent, farm rent, interest will be explained and justified. Let us consider the case of loan. Suppose two men exchange two services or two objects whose equal value is beyond all dispute. Suppose for example Peter says to Paul give me ten six pence and I will give you a five shilling piece. We cannot imagine an equal value more unquestionable. When the bargain is made neither party has any claim upon the other. The exchanged services are equal and thus it follows that if one of the parties wishes to introduce into the bargain an additional clause advantageous to himself but unfavorable to the other party he must agree to a second clause which shall re-establish the equilibrium and the law of justice. It would be absurd to deny the justice of a second clause of compensation. This granted we will suppose that Peter after having said to Paul give me ten six pence I will give you a crown adds you shall give me the ten six pence now a crown piece in a year. It is very evident that this new proposition alters the claims and advantages of the bargain that it alters the proportion of the two services. Does it not appear plainly enough in fact that Peter asks of Paul a new and an additional service one of a different kind is it not as if he had said render me the service of allowing me to use for my profit for a year five showings which belong to you and which you might have used yourself and what good reason have you to maintain that Paul is bound to render this a special service gratuitously that he has no right to demand anything more in consequence of this requisition that the state ought to interfere to force him to submit is it not incomprehensible that the economist who preaches such a doctrine is the principle of the reciprocity of services here I have introduced cash I have been led to do so by a desire to place side by side two objects of exchange of a perfect and indisputable equality of value I was anxious to be prepared for objections but on the other hand my demonstration would have been more striking still if I had illustrated my principle by an agreement of the principles suppose for example a house and a vessel of a value so perfectly equal that their proprietors are disposed to exchange them even handed without excess or abatement in fact let the bargain be settled by a lawyer at the moment of each taking possession the ship owner says to the citizen very well the transaction is completed and nothing can prove its perfect equity for free and voluntary consent our conditions thus fixed I shall propose to you a little practical modification you shall let me have your house today but I shall not put you in possession of my ship for a year and the reason I make this demand of you is that during this year of delay I wish to use the vessel that we may not be embarrassed by considerations relative to the deterioration of the thing lent I will engage at the end of the year to hand over to you the vessel in the state in which it is today I ask of every candid man I ask of him proud and himself if that citizen has not a right to answer the new clause which you propose entirely alters the proportion for the equal value of the exchange to services by it I shall be deprived for the space of a year both at once of my house and of your vessel by it you will make use of both if in the absence of this clause the bargain was just for the same reason the clause is injurious to me it stipulates for a loss to me and a gain to you you are requiring of me a new service I have a right to refuse or to require of you as a compensation and equivalent service if the parties are agreed upon this compensation the principle of which is incontestable we can easily distinguish two transactions in one two exchanges of service in one first there is the exchange of the house for the vessel after this there is the delay granted by one of the parties and the compensation correspondent to this delay yielded by the other these two new services generic and abstract names of credit and interest but names do not change the nature of things and I defy anyone to dare to maintain that there exists here when all was done a service for a service or a reciprocity of services to say that one of these services does not challenge the other to say that the first ought to be rendered gratuitously without injustice is to say that injustice consists in the reciprocity of services that justice consists in one of the parties giving and not receiving which is a contradiction in terms to give an idea of interest and its mechanism allow me to make use of two or three anecdotes but first I must say a few words upon capital there are some persons who imagine that capital is money and this is precisely the reason why they deny its productiveness for as M. Thuray says crowns are not endowed with the power of reproducing themselves but it is not true that capital and money are the same thing before the discovery of the precious metals there were capitalists in the world and I venture to say that at that time as now everybody was a capitalist to a certain extent what is capital then it is composed of three things first of the materials upon which men operate when these materials have already a value communicated by some human effort which has bestowed upon them the principle of remuneration wool, flax, leather, silk, wood, etc second instruments which are used for working tools, machines, ships, carriages, etc third provisions which are consumed during labor vitals, stuffs, houses, etc without these things the labor of man would be unproductive and almost void yet these very things have required much work especially at first this is the reason that so much value has been attached to the possession of them and also that it is perfectly lawful to exchange and to sell them to make a profit of them if used to gain remuneration from them if lent now for my anecdotes end of section 19 recording by Katie Riley May 2010 section 20 of Sophisms of the Protectionists this is a LibriVox recording all LibriVox recordings are in the public domain for more information or to volunteer please visit LibriVox.org Sophisms of the Protectionists by Frédéric Bastia translated by Horace White section 20 The Sack of Corn Matherin, in other respects as porous Job and obliged to earn his bread by day labor became, nevertheless, by some inheritance the owner of a fine piece of uncultivated land he was exceedingly anxious to cultivate it alas, said he, to make ditches, to raise fences to break the soil to clear away the brambles and stones to plow it, to sow it might bring me a living in a year or two but certainly not today or tomorrow it is impossible to set about farming it without previously saving some provisions for my subsistence until the harvest and I know by experience that preparatory labor is indispensable in order to render present labor productive the good Matherin was not content with making these reflections he resolved to work by the day and to save something from his wages to buy a spade and a sack of corn without which things he must give up his fine agricultural projects he acted so well was so active and steady that he soon saw himself in possession of the wished-for sack of corn I shall take it to the mill, said he and then I shall have enough to live upon till my field is covered with a rich harvest and just as he was starting Jerome came to borrow his treasure of him if you will lend me the sack of corn, said Jerome you will do me a great service for I have some very lucrative work in view which I cannot possibly undertake for want of provisions to live upon until it is finished I was in the same case, answered Matherin and if I have now secured bread for several months it is at the expense of my arms and my stomach upon what principle of justice can it be devoted to the realization of your enterprise instead of mine you may well believe that the barken was a long one however it was finished at length and on these conditions first Jerome promised to give back at the end of the year a sack of corn of the same quality and of the same weight without missing a single grain this first clause is perfectly just said he for without it Matherin would give and not lend secondly he engaged to deliver five liters on every hectoliter this clause is no less just than the other thought he Matherin would do me a service without compensation he would inflict upon himself a privation he would renounce his cherished enterprise he would enable me to accomplish mine he would cause me to enjoy for a year the fruits of his savings and all this gratuitously since he delays the cultivation of his land since he enables me to realize a lucrative labor it is quite natural that I should let him partake in a certain proportion of the profits which I shall gain by the sacrifice he makes of his own on his side Matherin who was something of a scholar made this calculation since by virtue of the first clause the sack of corn will return to me at the end of a year he said to himself I shall be able to lend it again it will return to me at the end of the second year I may lend it again and so on to all eternity however I cannot deny that it will have been eaten long ago it is singular that I should be perpetually the owner of a sack of corn although the one I have lent has been consumed forever but this is explained thus it will be consumed in the service of Jerome it will be put into the power of Jerome to produce a superior value and consequently Jerome will be able to restore me a sack of corn or the value of it without having suffered the slightest injury but quite the contrary and as regards myself this value ought to be my property as long as I do not consume it myself if I had used it to clear my land I should have received it again in the form of a fine harvest instead of that I lend it and shall recover it in the form of repayment from the second clause I gain another piece of information at the end of the year I shall be in possession of five litres of corn over the hundred that I have just lent if then I were to continue my work by the day and to save a part of my wages as I have been doing in the course of time I should be able to lend two sacks of corn then three then four and when I should have gained a sufficient number to enable me to live on these additions of five litres over and above each I shall be at liberty to take a little repose in my old age but how is this in this case shall I not be living at the expense of others no certainly for it has been proved that in lending I perform a service I complete the labour of my borrowers and only deduct a trifling part of the excess of production due to my lending and savings it is a marvellous thing that a man may thus realise a leisure and that he may not be in danger and for which he cannot be envied without injustice the house Monder had a house in building it he had extorted nothing from anyone whatever he owed it to his own personal labour or which is the same thing to labour justly rewarded his first care was to make a bargain with an architect in virtue of which in the means of a hundred crowns a year the latter engaged to keep the house in constant good repair Monder was already congratulating himself on the happy days which he hoped to spend in this retreat declared sacred by our constitution but Valerius wished to make it his residence how can you think of such a thing said Monder it is I who have built it it has cost me ten years of painful labour and now you would enjoy it they agreed to refer the matter to judges they chose no profound economists there were none such in the country but they found some just and sensible men it all comes to the same thing political economy justice good sense are all the same thing now here is the decision made by the judges if Valerius wishes to occupy Monder's house for a year he is bound to submit to three conditions the first is the end of the year and to restore the house in good repair saving the inevitable decay resulting from mere duration the second to refund to Monder the 300 francs which the latter pays annually to the architect to repair the injuries of time for these injuries taking place whilst the house is in the service of Valerius it is perfectly just that he should bear the consequences the third that he should render to Monder a service equivalent to that which he receives as to this equivalence of services it must be freely discussed between Monder and Valerius the plane a very long time ago there lived in a poor village a joiner who was a philosopher as all my heroes are in their way James worked from morning till night with his two strong arms the plane was not idle for all that he was fond of reviewing his actions their causes and their effects he sometimes said to himself with my hatchet my saw and my hammer I can make only coarse furniture and can only get the pay for such if I only had a plane I should please my customers more and they would pay me more it is quite just I can only expect services proportioned to those which I render myself yes I am resolved I will make myself a plane however just as he was setting to work James reflected further I work for my customers 300 days in the year if I give 10 to making my plane supposing it lasts me a year only 290 days will remain for me to make my furniture now in order that I be not the loser in this matter I must gain henceforth with the help of the plane as much in 290 days as I now do in 300 I must even gain more for unless I do so it would not be worth my while to venture upon any innovations James began to calculate he satisfied himself that he should sell his finished furniture at a price which would amply compensate for the 10 days devoted to the plane and when no doubt remained on this point he set to work I beg the reader to remark that the power which exists in the tool to increase the productiveness of labour is the basis of the solution which follows at the end of 10 days James had in his possession an admirable plane which he valued all the more than himself he danced for joy for like the girl with her basket of eggs he reckoned all the profits which he expected to derive from the ingenious instrument but more fortunate than she he was not reduced to the necessity of saying goodbye to calf, cow, pig and eggs together he was building his fine castles in the air when he was interrupted by his acquaintance William a joiner in the neighbouring village William, having admired the plane was struck with the advantages which might be gained from it he said to James W you must do me a service J what service W lend me the plane for a year as might be expected James at this proposal did not fail to cry out how can you think of such a thing William well if I do you this service what will you do for me in return W nothing don't you know that a loan ought to be gratuitous don't you know that capital is naturally unproductive don't you know fraternity has been proclaimed if you only do me a service for the sake of receiving one for me in return what merit would you have J William my friend fraternity does not mean that all the sacrifices are to be on one side if so I do not see why they should not be on yours whether a loan should be gratuitous I don't know but I do know that if I were to lend you my plane for a year it would be giving it to you to tell you the truth that is not what I made it for W well we will say nothing about the modern maxims discovered by the socialist gentlemen I ask you to do me a service what service do you ask of me in return J first then in a year the plane will be done for it will be good for nothing it is only just that you should let me have another exactly like it or that you should give me money enough to get it repaired or that you should supply me the ten days to vote to replacing it W this is perfectly just I submit to these conditions I engage to return it or to let you have one like it or the value of the same I think you must be satisfied with this and can require nothing further J I think otherwise I made the plane for myself and not for you I expected to gain some advantage from it by my work being better finished and better paid by an improvement in my condition what reason is there that I should make the plane and you should gain the profit I might as well ask you to give me your saw and hatch it what a confusion is it not natural that each should keep what he has made with his own hands as well as his hands themselves to use without recompense the hands of another I call slavery to use without recompense the plane of another this be called fraternity W but then I have agreed to return it to you at the end of a year as well polished and as sharp as it is now J we have nothing to do with next year we are speaking of this year I have made the plane for the sake of improving my work and my condition if you merely return it to me in a year it is you who will gain the profit of it for the whole of that time I am not bound to do you such a service without receiving anything from you in return therefore if you wish for my plane independently of the entire restoration already bargained for you must do me a service which we will now discuss you must grant me remuneration and this was done William granted a remuneration calculated in such a way that at the end of the year James received his plane quite new and in addition a compensation consisting of a new plank for the advantages of which he had deprived himself and which he had yielded to his friend it was impossible for anyone acquainted with the transaction to discover the slightest trace in its of oppression or injustice the singular part of it is that at the end of the year the plane came into James possession and he lent it again recovered it and lent it a third and fourth time it has passed into the hands of his son who still lends it poor plane how many times has it changed sometimes it's blade sometimes it's handle it is no longer the same plane but it has always the same value at least for James posterity workmen let us examine into these little stories I maintain first of all that the sack of corn and the plane are here the type the model a faithful representation the symbol of all capital as the five liters of corn and the plank are the type the model the representation the symbol of all interest this granted the following are it seems to me a series of consequences the justice of which it is impossible to dispute first if the yielding of a plank by the borrower to the lender is a natural equitable lawful remuneration the just price of a real service we may conclude that has a general rule it is in the nature of capital to produce interest when this capital as in the foregoing examples takes the form of an instrument of labor it is clear enough that it ought to bring an advantage to its possessor to him who has devoted to it his time his brains and his strength otherwise why should he have made it no necessity of life can be immediately satisfied with instruments of labor no one eats planes or drinks souls except indeed he be a conjurer if a man determines to spend his time he must have been led to it by the consideration of the power which these instruments add to his power of the time which they save him of the perfection and rapidity which they give to his labor in a word to the advantages which they procure for him now these advantages which have been prepared by labor by the sacrifice of time which might have been used in a more immediate manner would it be an advance in social order if the law decided thus and citizens should pay officials for causing such a law to be executed in force I venture to say that there is not one amongst you who would support it it would be to legalize to organize to systematize injustice itself for it would be proclaimed by labor and injustice itself for it would be proclaiming that there are men born to render and others born to receive gratuitous services granted then that interest is just natural and lawful second a second consequence not less remarkable than the former and if possible still more conclusive to which I call your attention is this interest is not injurious to the borrower I mean to say the obligation in which the borrower finds himself to pay a remuneration for the use of capital cannot do any harm to his condition observe in fact that James and William are perfectly free as regards the transaction to which the plane gave occasion the transaction cannot be accomplished without the consent of the one as well as of the other the worst which can happen is that James may be to exacting and in this case William refusing the loan remains as he was before by the fact of his agreeing to borrow he proves that he considers it an advantage to himself he proves that after every calculation including the remuneration whatever it may be required of him he still finds it more profitable to borrow than not to borrow he only determines to do so because he has compared the inconveniences with the advantages he has calculated that the day on which he returns the plane accompanied by the remuneration agreed upon he will have affected more work with the same labor thanks to this tool he will remain to him otherwise he would not have borrowed the two services of which we are speaking are exchanged according to the law which governs all exchanges the law of supply and demand the claims of James have a natural and impassable limit this is the point in which the remuneration demanded by him would absorb all the advantage which William might find in making use of a plane in this case he would not take place William would be bound either to make a plane for himself or to do without one which would leave him in his original condition he borrows because he gains by borrowing I know very well what will be told me you will say William may be deceived or perhaps he may be governed by necessity and be obliged to submit to a harsh law it may be so as to errors in calculation they belong to the infirmity of our nature and to argue from this against the transaction in question is objecting the possibility of loss in all imaginable transactions in every human act error is an accidental fact which is incessantly remedied by experience in short everybody must guard against it as far as those hard necessities which force persons to burden some borrowings it is clear that these necessities exist previously to the borrowing if William is in a situation in which he cannot possibly do without a plane and must borrow one at any price does this situation result from James having taken the trouble to make the tool does it not exist independently of this circumstance however harsh however severe James may be he will never render the supposed condition of William worse than it is morally it is true the lender will be to blame but in an economical point of view the loan itself can never be considered responsible for previous necessities which it has not created and which it relieves to a certain extent but this proves something to which I shall return the evident interests of William are presenting here the borrowers there are many James's and planes in other words lenders and capitals it is very evident that if William can say to James your demands are exorbitant there is no lack of planes in the world he will be in a better situation than if James's plane was the only one to be borrowed assuredly there is no maxim more true than this service for service but let us not forget that no service has a fixed and absolute value compared with others the contracting parties are free each carries his requisitions to the farthest possible point and the more favorable circumstance for these requisitions is the absence of rival ship hence it follows that if there is a class of men in any other in the formation, multiplication and abundance of capitals it is mainly that of the borrowers now since capitals can only be formed and increased by the stimulus and the prospect of remuneration let this class understand the injury they are inflicting on themselves when they deny the lawfulness of interest when they proclaim that credit should be gratuitous when they declaim against the pretended tyranny of capital when they discourage saving thus forcing capitals to become scarce and consequently interests to rise third the anecdote I have just related enables you to explain this apparently singular phenomenon which is termed the duration or perpetuity of interest since in lending his plane James has been able very lawfully to make it a condition to lend it to him at the end of a year in the same state in which it was when he lent it is it not evident that he may at the expiration of the term lend it again on the same conditions if he resolves upon the latter plan the plane will return to him at the end of every year and that without end James will then be in a condition to lend it without end that is the interest it will be said that the plane will be worn out that is true but it will be worn out by the hand and for the profit of the borrower the latter has taken into account this gradual wear and taken upon himself as he ought the consequences he has reckoned that he shall derive from this tool an advantage of his condition after having realized a profit from it as long as James does not use this capital himself or for his own advantage as long as he renounces the advantages which allow it to be restored to its original condition he will have an incontestable right to have it restored and that independently of interest observed besides that if as I believe I have shown James to William has done him a service in lending him his plane for a year for the same reason he will do no harm to a second a third a fourth borrower in the subsequent periods hence you may understand that the interest of a capital is as natural as lawful as useful in the thousandth year as in the first single plane it is possible that by means of working of saving of provisions of order of activity he may come to lend a multitude of planes and stalls that is to say to do a multitude of services I insist upon this point that if the first loan has been a social good it will be the same with all the others for they are all similar it may happen then that the amount of all the remunerations received by our honest operative in exchange for services rendered by him may suffice to maintain him in this case there will be a man in the world who has a right to live without working I do not say that he would be doing right to give himself up to idleness but I say that he has a right to do so and if he does so that nobody's expense but quite the contrary if society at all understands the nature of things it will acknowledge that this man subsists on services which he receives certainly as we all do but which he lawfully receives in exchange for other services which he himself has rendered that he continues to render and which are quite real in as much as they are freely and voluntarily accepted section 20 recording by Katie Riley May 2010 section 21 of Sophisms of the Protectionists this is a LibriVox recording all LibriVox recordings are in the public domain for more information or to volunteer please visit LibriVox.org Sophisms of the Protectionists by Frédéric Bastia translated by Horace White section 21 and here we have a glimpse of one of the finest harmonies in the social world I allude to leisure not that leisure that the war-lagon tyrannical classes arrange for themselves by the plunder of the workers but that leisure which is the lawful and innocent fruit of past activity and economy in expressing myself thus I know that I shall shock many received ideas but see is not leisure an essential spring in the social machine without it the world would never have had a Newton a Pascal a Fenlin mankind would have been ignorant of all arts, sciences and of those wonderful inventions prepared originally by investigations of mere curiosity thought would have been inert on the other hand if leisure could only be explained by plunder and oppression if it were a benefit which could only be enjoyed unjustly and at the expense of others there would be no middle path between these two evils either mankind would be reduced to the necessity of stagnating in a vegetable and stationary life in eternal ignorance from the absence of wheels to its machine else it would have to acquire these wheels at the price of inevitable injustice and would necessarily present the sad spectacle in one form or another of the antique classification of human beings into masters and slaves I defy anyone to show me in this case any other alternative we should be compelled to contemplate the divine plan which governs society of thinking that it presents a deplorable chasm the stimulus of progress would be forgotten or which is worse this stimulus would be no other than injustice itself but no God has not left such a chasm in his work of love we must take care not to disregard his wisdom and power for those whose imperfect meditations cannot explain the lawfulness of leisure are very much like the astronomer who said at a certain point in the heavens there ought to exist a planet which will be at last discovered for without it the celestial world is not harmony but discord well I say that if well understood the history of my humble plane although very modest is sufficient to raise us to the contemplation of one of the most consoling it is not true that we must choose between the denial or the unlawfulness of leisure thanks to rent and its natural duration leisure may arise from labor and saving it is a pleasing prospect which everyone may have in view a noble recompense to which each may aspire it makes its appearance in the world it distributes itself proportionably to the exercise of certain virtues it opens all the avenues to intelligence it ennobles it raises the morals it spiritualizes the soul of humanity not only without laying any weight on those of our brethren whose lot in life devotes them to severe labor but relieving them gradually from the heaviest and most repugnant part of this labor it is enough that capitals should be lent on conditions less and less burdensome that they should descend penetrate into every social circle and that by an admirable progression after having liberated the lenders they should hasten the liberation of the borrowers themselves for that end the laws and customs ought to be favorable to economy the source of capital it is enough to say that the first of all these conditions is to alarm to attack to deny that which is the stimulus of saving and the reason of its existence interest as long as we see nothing passing from hand to hand in the character of loan but provisions materials instruments things indispensable to the productiveness of labor itself the idea thus far exhibited will not find many opponents who knows even that I may not be reproached for having made great effort to burst what may be said to be an open door but as soon as cash makes its appearance as the subject of the transaction and it is this which appears almost always immediately a crowd of objections are raised money it will be said will not reproduce itself like your sack of corn it does not assist labor like your plane it does not afford an immediate satisfaction like your house it is incapable by its nature of producing interest of multiplying itself and the remuneration it demands is a positive extortion who cannot see this office tree of this who does not see that cash is only a transient form which men give at the time to other values to real objects of usefulness for the sole objects of facilitating their arrangements in the midst of social complications the man who is in a condition to lend scarcely ever has the exact thing which the borrower wants James it is true has a plane but perhaps William once saw they cannot negotiate the transaction favorable to both cannot take place and then what happens it happens that James first exchanges his plane for money he lends the money to William and William exchanges the money for a saw the transaction is no longer a simple one it is decomposed into two parts as I explained above in speaking of exchange but for all that it has not changed its nature it still contains all the elements of a direct loan James has still got rid of a tool which was useful to him William has still received an instrument which perfects his work and increases his profits there is still a service rendered by the lender which entitles him to receive an equivalent service from the borrower this just balance is not the less established by free mutual bargaining the very natural obligation to restore at the end of the term the entire value still constitutes the principle of the duration of interest at the end of a year says M. Thoray will you find an additional crown in a bag of a hundred pounds no certainly if the borrower puts the bag of one hundred pounds on the shelf in such a case neither the plane nor the sack of corn would reproduce themselves but it is not for the sake nor the plane on the hook that they are borrowed the plane is borrowed to be used or the money to procure a plane and if it is clearly proved that this tool enables the borrower to obtain profits which he would not have made without it if it is proved that the lender has renounced creating for himself this excess of profits we may understand how the stipulation of a part of this excess of profits in favor of the lender is equitable and lawful ignorance of the true part which cash plays in human transactions is the source of the most fatal errors I intend to voting an entire pamphlet to this subject from what we may infer from the writings of M. Proudhon that which has led him to think that gratuitous credit was a logical and definite consequence of social progress of the phenomenon which shows a decreasing interest almost indirect proportion to the rate of civilization in barbarous times it is in fact 100% and more then it descends to 80, 60, 50 40, 20 10, 8 5, 4 and 3% in Holland it has even been 10% hence it is concluded that in proportion as society comes to perfection it will descend to zero by the time civilization is complete in other words that which characterizes social perfection is the gratuitousness of credit when therefore we shall have abolished interest we shall have reached the last step of progress this is mere sophistry and as such false arguing may contribute to render popular the unjust dangerous and destructive dogma that credit should be gratuitous by representing it as coincident with social perfection with the reader's permission I will examine in a few words this new view of the question what is interest it is the service rendered after a free bargain by the borrower to the lender in remuneration for the service he has received by the loan by what law is the rate of these remunerative services established by the general law which regulates the equivalent of all services that is by the law of supply and demand the more easily a thing is procured the smaller is the service rendered by yielding it or lending it if there are many planes sacks of corn or houses in a country the use of them is obtained other things being equal on more favorable conditions than if they were few for the simple reason that the lender renders in this case a smaller relative service for the simple reason that the lender renders in this case a relative service it is not surprising therefore that the more abundant capitals are the lower is the interest is this saying that it will ever reach zero no because I repeat it the principle of remuneration is in the loan to say that interest will be annihilated is to say that there will never be any motive for saving for denying ourselves no capitals nor even to preserve the old ones in this case the waste would immediately bring a void and interest would directly reappear in that the nature of the services of which we are speaking does not differ from any other thanks to industrial progress a pair of stockings which used to be worth six francs has successively been worth only four no one can say to what point this value will descend but we can affirm that it will never reach zero unless the stockings finish by producing themselves spontaneously why? because the principle of remuneration is in the labor because he who works for another renders a service and ought to receive a service if no one paid for stockings they would cease to be made and with the scarcity the price would not fail to reappear this softism which I am now combating has its roots in the infinite visibility which belongs to value as it does to matter it appears at first paradoxical but it is well known to all mathematicians that through all eternity fractions may be taken from a stock it is sufficient that each successive fraction be less than the preceding one in a determined and regular proportion there are countries where people apply themselves to increasing the size of horses or diminishing in sheep the size of the head it is impossible to say precisely to what point they will arrive in this no one can say that he has seen the largest horse event that will ever appear in the world but he may safely say that the size of horses will never attain to infinity nor the heads of sheep to nothing in the same way no one can say to what point the price of stockings nor the interest of capitals will come down but we may safely affirm when we know the nature of things that neither the one nor the other nor the capital can no more live without recompense than a sheep without a head the arguments of M. Proudhon reduce themselves then to this since the most skillful agriculturalists are those who have reduced the heads of sheep to the smallest size we shall have arrived at the highest agricultural perfection when sheep no longer have any heads therefore in order to realize let us behead them I have now done with this worrisome discussion why is it that the breath of false doctrine has made it needful to examine into the intimate nature of interest I must not leave all without remarking upon a beautiful moral which may be drawn from this law the depression of interest is proportioned to the abundance of capitals this law being granted if there is a class of men to whom it is more important than to any other that capitals be formed accumulate, multiply abound and superabound it is certainly the class which borrows them directly or indirectly it is those men who operate upon materials who gain assistance by instruments who live upon provisions produced and economized by other men a vast and fertile country a population of a thousand inhabitants destitute of all capital thus defined it will assuredly perish by the pangs of hunger let us suppose a case hardly less cruel let us suppose that ten of these savages are provided with instruments and provisions sufficient to work and to live themselves until harvest time as well as to remunerate the services of 80 laborers the inevitable result will be the death of 900 human beings it is clear then that since 990 men urged by want will crowd upon the supports which would only maintain a hundred the ten capitalists will be masters of the market they will obtain labor on the hardest conditions for they will put it up to auction or the highest bidder and observe this if these capitalists entertain such pious sentiments as would induce them to impose personal privations on themselves in order to diminish the sufferings of some of their brethren this generosity which attaches to morality will be as noble in its principle as useful in its effects they will give duped by that false philosophy which persons wish so inconsiderately to mingle with economic laws they take to remunerating labor largely far from doing good they will do harm they will give double wages it may be but then 45 men will be better provided for whilst 45 others will come to argument the number of those it is not the lowering of wages which is the mischief it is the scarcity of capital low wages are not the cause but the effect of the evil I may add that they are to a certain extent the remedy it acts in this way it distributes the burden of suffering as much as it can and saves as many lives as a limited quantity of citizens permits suppose now that instead of ten capitalists there should be a hundred 200 500 is it not evident that the condition of the whole population and above all that of the proletaires will be more and more improved is it not evident that apart from every consideration of generosity they would obtain more work and that they themselves will be in a better condition to form capitals without being able to fix the limits to this ever increasing facility of realizing equality and well-being would it not be madness in them to admit such doctrines and to act in a way which would drain the source of wages and paralyze the activity and stimulus of saving let them learn this lesson then doubtless they are good for those who possess them who denies it but they are also useful to those who have not yet been able to form them and it is important to those who have them not that others should have them yes if the proletaires knew their true interests they would seek with the greatest care what circumstances are and what are not favorable to saving the latter they would sympathize with every measure which tends to the rapid formation of capitals they would be enthusiastic promoters of peace liberty order security the union of classes and peoples economy moderation in public expenses simplicity in the machinery of government for it is under this way of all these circumstances invites those persons to become the formers of capital who were formerly under the necessity of borrowing upon hard conditions they would repel with energy the war like spirit which diverts from its true course so large a part of human labor the monopolizing spirit which deranges the equitable distribution of riches in the way by which liberty alone can realize it the multitude of public services which attack our purses only to check our liberty and in short those subversive, hateful thoughtless doctrines which alarm capital prevent its formation oblige it to flee and finally to raise its price to the special disadvantage of the workers who bring it into operation well and in this respect is not the revolution of February a hard lesson? is it not evident that the insecurity it has thrown into the world of business on the one hand and on the other the advancement of the fatal theories to which I have alluded and which from the clubs have almost penetrated into the regions of the legislature have everywhere raised the rate of interest is it not evident that from the time the proletaires in procuring those materials instruments and provisions without which labor is impossible is it not that which has caused stoppages and do not stoppages in their turn lower wages thus there is a deficiency of labor to the proletaires from the same cause which loads the objects they consume with an increase of price in consequence of the rise of interest high interest low wages means in other words that the same article preserves its price but that the part of the capitalist has invaded without profiting himself that of the workmen a friend of mine commissioned to make inquiry into Parisian industry has assured me that the manufacturers have revealed to him a very striking fact that the market is better than any reasoning can how much insecurity and uncertainty enter the formation of capital it was remarked that during the most distressing period the popular expenses of mere fancy had not diminished the small theaters the fighting lists the public houses the tobacco depots were as much frequented as in prosperous times in the inquiry the operatives themselves explained this phenomenon thus what is the use of pinching who knows what will happen to us who knows that interest will not be abolished who knows but that the state will become a universal and gratuitous lender and that it will wish to annihilate all the fruits which we might expect from our savings well I say that if such ideas could prevail during two single years it would be enough to turn our beautiful France into a turkey misery would become general and endemic and most assuredly the poor would be the first upon whom it would fall workmen they talk to you a great deal upon the artificial organization of labor do you know why they do so because they are ignorance of the laws of its natural organization that is a powerful organization which results from liberty you are told that liberty gives rise to what is called the radical antagonism of classes that it creates and makes to clash to opposite interests that of the capitalists and that of the proletaires but we ought to begin by proving that this antagonism exists by a law of nature and afterwards it would remain to be shown that the arrangements of restraint are superior to those of liberty for between liberty and restraint I see no middle path again it would remain to be proved that restraint would always operate to your advantage and to the prejudice of the rich but no this radical antagonism this natural opposition of interests does not exist it is only an evil dream of perverted and intoxicated imaginations no a plan so defective has not proceeded from the divine mind to affirm it we must begin by denying the existence of God and see how by means of social laws and because men exchange amongst themselves their labors and their productions see what a harmonious tie attaches the classes one to the other there are the landowners what is their interest that the soil be fertile and the sun beneficent and what is the result that corner bounds that it falls in price and the advantage turns to the profit of those who have had no patrimony there are the manufacturers what is their constant thought to perfect their labor to increase the power of their machines to procure for themselves on the best terms the raw material and to what does all this tend to the abundance and low price of produce that is that all the efforts of the manufacturers and without their suspecting it result in a profit to the public consumer of which each of you is one it is the same with every profession well the capitalists are not exempt from this law they are very busy making schemes economizing and turning them to their advantage this is all very well but the more they succeed the more do they promote the abundance of capital and as a necessary consequence the reduction of interest now who is it that profits by the reduction of interest is it not the borrower first and finally the consumers of the things which the capitals contribute to produce it is therefore certain that the final result of the efforts of each class is the common good of all you are told that capital tyrannizes over labor I do not deny that each one endeavors to draw the greatest possible advantage from his situation but in this case he realizes only that which is possible now it is never more possible for capitals to tyrannize over labor then when they are scarce for then it is they who make the law it is they who regulate the rate of sale never is this tyranny more impossible to them than when they are abundant for in that case it is labor which has the command away then with the jealousies of classes ill-will unfounded hatreds unjust suspicions these depraved passions injure those who nourish them in their hearts this is no declamatory morality it is a chain of causes and effects which is capable of being rigorously mathematically demonstrated it is not the less sublime in that it satisfies the intellect as well as the feelings I shall sum up this whole dissertation with these words workmen destitute and suffering classes will you improve your condition you will not succeed by strife insurrection hatred and error but there are three things which cannot perfect the entire community without extending these benefits to yourselves these things are peace liberty and security end of section 21 recording by Katie Riley May 2010 end of Sophisms of the Protectionists by Frédéric Bastia translated by Horace White