The Bastiat-Proudhon Debate
on Interest (1849-1850)

Letter 7

[Letter 6 by Tucker’s numbering]

Proudhon to Bastiat,
17 December 1849

[Translation (as “USURY’S ORIGIN. – Proudhon Writes the History of Interest. – DERIVATION OF THE WORD. – The Logical Results of the Theory of Increase. – USURY BASED ON NECESSITY AND FORCE. – The Tendency of the Principle Illustrated by Two Striking Tables, – Showing How It Leads to Cruelty and Murder. – Each of Bastiat’s Arguments Met Triumphantly by the Logic of Equity. – INTEREST AND PRINCIPAL. – LETTER SIX. – PROUDHON TO BASTIAT. – [TRANSLATED FOR THE IRISH WORLD BY BENJ. R. TUCKER.]”) by Benjamin R. Tucker, in The Irish World and American Industrial Liberator, 30 August 1879.]

PARIS, Dec. 17, 1849.

DOI-IV-7.1 Sir, we do not advance in our discussion, and the fault lies entirely with you. By your persistent refusal to place yourself upon the ground to which I summon you, and your determination to draw me upon yours, you deny me that right to an examination which belongs to every innovater; [sic] you fail in the duty which the appearance of new ideas imposes on all economists, the natural defenders of tradition and established customs; in fact, you violate ordinary charity by compelling me to attack what I recognized, in a certain sense, as irreproachable and legitimate.
DOI-IV-7.2 You have chosen: let your desire be gratified. Allow me first to recapitulate our controversy. In your first letter, you tried to show, by theory and by numerous examples, that a loan is a service, and that since every service has a value, it is entitled to reward; whence you immediately inferred, as against me, that gratuity of Credit is a chimera, and, consequently, that Socialism is a protest as devoid of principles as of motives.
DOI-IV-7.3 So it is of little consequence whether you solicited the privilege of expressing yourself in “La Voix du Peuple,” or whether I offered you the publicity of its columns: the real fact is, as each of your letters shows, that you have had no other object in view than the refutation, by indirect method, of the theory of gratuitous Credit.
DOI-IV-7.4 I then replied, as was my duty, without entering into an examination of your theory of Interest, that, if you wished to combat Socialism [productively] and seriously, you would have to attack it in its essence and doctrines; that Socialism, without absolutely denying the legitimacy of Interest when looked at in a certain way and from a certain historical epoch, affirmed the possibility, in the present state of social economy, of organizing, by the co-operation of laborers, a system of lending without reward, thereby

Guaranteeing Credit and Labor to All.

I said, finally, that you must give your attention to that, if you wished the discussion to reach a definitive end.
DOI-IV-7.5 In your second letter you peremptorily refused to follow this programme, asserting that, [given] my confession that Interest was essentially neither a crime nor an offense, it was impossible for you to admit that Loans could be effected without Interest; that it was inconceivable that any thing could be true and false at the same time; and, in brief, that until the wickedness of Interest should be proved to you, you should [regard] the theory of Gratuitous Credit as out of the question. All this was seasoned with [many] witticisms upon the law of contradiction, which you do not understand, and flanked with illustrations, very appropriate, I confess, for explaining the action of Interest, but proving absolutely nothing against Gratuity.
DOI-IV-7.6 In my reply I think I proved, following your own method, that nothing is commoner, in society, than to see an institution, a custom, at [first] liberal and legitimate, become, as time [passes], an obstacle to liberty and a violation of justice; that this became the case with lending at Interest on the day when it was shown that Credit may be given to all without reward; that from that time forth to refuse to examine the possibility of Gratuitous Credit was to deny Justice, offend public faith, and defy the proletariat. I then renewed my demands, and said to you: – Either you must examine the various propositions of Socialism, or I shall declare that Interest on Money, Ground Rent, and Rent of Houses and Capital is spoliation, and that Property thus constituted is robbery.
DOI-IV-7.7 Incidentally I briefly indicated the causes which, in my opinion, change the morality of Interest, and pointed out the means of abolishing it.
DOI-IV-7.8 It certainly seemed that, in order to justify your theory, branded henceforth as robbery and theft, you could no longer avoid an examination of the new doctrine which assumed to [abolish] Interest. That, I venture to say, was what all our readers expected. In hesitating to [criticize] Interest, I gave evidence of my desire for harmony and my love of peace. It was [distasteful] to me to

Question the Honesty of Capitalists

and cast suspicion upon proprietors. Especially did I desire to abridge a wearisome discussion, and to hasten to a definitive conclusion. True or false, I said to you, legitimate or illegitimate, moral or immoral, I accept Usury, I approve it, I even applaud it; I will renounce all the dreams of Socialism, and become a Christian, if you will show me that the loaning of Capital, like the circulation of values, cannot, in any case, be gratuitous. This course is, as they say, a straightforward one, and was intended to cut short many discussions which are quite futile in a journal, and, allow me to say, very dangerous at the present time.
DOI-IV-7.9 Is it possible, yes or no, to abolish Interest on Money, Rent of Land and Houses, the Product of Capital, by simplifying Taxation, on the one hand, and, on the other, by organizing a Bank of Circulation and Credit in the name and on the account of the people? This, in my opinion, is the way in which the question before us should be stated. Love of Humanity, Truth, and Harmony is a law to us both. What has the nation been doing since February, [That is, the revolution of February 1848. – RTL] what has the Constituent Assembly been doing, what is the Legislature doing to-day, if not seeking means to improve the condition of the laborer without alarming legitimate interests and invalidating the right of the proprietors? Let us see, then, if the Gratuity of Credit might, perchance, be one of these means.
DOI-IV-7.10 Such were my words; I ventured to believe that they would be understood. Instead of [replying] to them, as I hoped, you retrench yourself behind your old evasion. To this question [of mine]: To prove that the Gratuity of Credit is a possible, easy, and practical thing – is that not to prove that that Interest on Credit is henceforth an [injurious] and illegitimate thing? you reply, reversing the phrase: “To prove that Interest has been, legitimate, just, useful, beneficent, indestructible – is that not to prove that Gratuity of Credit is an illusion?” You [reason] precisely as the stage-lines did in regard to rail-ways.
DOI-IV-7.11 See them, indeed,

Parading Their Grievances

[before] the public, which is forsaking them for their competitors: – Are not the wagon and the malbrouck useful, legitimate, beneficent, and indestructible institutions? Do we not, in transporting your persons and products, render you a service? Has not this service a value? Ought not every value to be paid for? In transporting products at twenty-five centimes per ton and kilometre, though the locomotive does the same work, it is true, for ten centimes, are we robbers? Is not Commerce perpetually and universally extended by wagons, beasts of burden, and navigation by sail or oar? Of what importance, then, to us are steam, and atmospheric pressure, and electricity? To prove the reality and legitimacy of the four-wheeled vehicle, – is that not to prove that the invention of railways is a chimera?
DOI-IV-7.12 This, sir, is where your argument leads to. Your last letter, like the preceding ones, from beginning to end means nothing else. To preserve for Capital the interest, which I refuse it, [you reply] by the previous question; you oppose to my novel idea your old routine; you protest against railroads and steam-engines. I should [be sorry] to say anything to wound you; but truly, sir, it seems to me that I should be justified, at this moment, in stopping here and turning my back upon you.
DOI-IV-7.13 But I will not do it: I wish to give you satisfaction to the last, by showing you how, to use your own words, the remuneration of Capital passes from legitimacy to illegitimacy, and how Gratuity of Credit is the final result of the practice of Usury. This discussion, in itself, is not an unimportant one; I will try to make it a peaceful one.
DOI-IV-7.14 The reason why Interest of Capital, excusable and even just in the infancy of social economy, becomes, as industrial institutions develop, real spoliation and robbery, is because it has no other principle, no other raison d’etre, than those of necessity and force. Necessity explains the unreasonableness of the lender; force causes the resignation of the borrower. But, in proportion as in human relationships, necessity gives way to liberty, and

Force is Succeeded by Right,

the Capitalist loses his excuse, and the laborer’s claim against the proprietor becomes good.
DOI-IV-7.15 In the beginning the land is undivided; each family lives by hunting, fishing, gathering or grazing; industry is entirely domestic, and agriculture, so to speak, nomadic. There is no commerce, neither is there property.
DOI-IV-7.16 Later, tribes consolidating, the formation of nations commences; castes appears, the child of war and patriarchism. Property establishes itself little by little; but, by heroic law, the master, though he does not cultivate his land himself, make use of his slaves for that purpose, as at a later period the nobleman does his serfs. Farm-rent does not yet exist; revenue, which indicates this relation, is unknown.
DOI-IV-7.17 At this period Commerce consists mainly in barter. If Gold and Silver appear in transactions, it is rather as Merchandise than as a Circulating Medium and Unit of Value: they are weighed, not counted. Exchange, the consequent Profit, lending at Interest, sleeping-partnership, all the operations of a well-developed Commerce which are performed by means of Money, are unknown. These primitive customs are retained for a long time in agricultural districts. My mother, a simple peasant, told me that, previous to ’89, she was employed in the winter at spinning hemp, receiving, as wages for six weeks’ work, besides her board, a pair of wooden shoes and a loaf of rye bread.
DOI-IV-7.18 We must look to Foreign Commerce to find the origin of lending at Interest. The contrat a la grosse, [i.e., bottomry. – RTL] a variety, or rather a separate part, of the contrat de pacotille, [While pacotille nowadays means shoddy goods, it originally meant assorted merchandise destined for export to distant markets. – RTL] was its original form, just as the farm-lease or cattle-lease was the counterpart of sleeping-partnership.
DOI-IV-7.19 What is the contrat de pacotille? A contract by which a manufacturer and ship-master agree to put into a common fund, for purposes of Foreign Commerce, the former a certain quantity of merchandise which he undertakes to procure, the latter his labor as a navigator, the Profit resulting from the sale to be divided equally between them, or according to a proportion to be agreed upon, and the risks and damages to be charged to the firm.
DOI-IV-7.20 Is the profit thus anticipated, however large it may be, legitimate?
DOI-IV-7.21 We cannot call it in question.
DOI-IV-7.22 Profit, at this early period of commercial relations, represents only the uncertainty which prevails among exchanging parties concerning the value of their respective products; it is an advantage which exists more in the imagination than in reality, and which is not uncommonly claimed with equal reason by both parties to a transaction. How many pounds of tin is an ounce of gold worth? What is the relation between the price of Tyrian purple and that of sable fur? No one knows; no one can tell. The Phenecian who, for a pack of furs, gives ten palms of his cloth, congratulates himself upon his bargain; so also, on his side, does the Northern hunter, proud of his red cloak. And such is still the practice of Europeans in dealing with Australian savages, who are happy to give a pig for an axe, a hen for a nail or a piece of glass.
DOI-IV-7.23 The incommensurability of values, such is the original source of commercial profits. Gold and Silver then enter into traffic, first as merchandise, and then, soon after, by virtue of the facility with which they can be exchanged, as terms of comparison, as money. In both cases the Gold and Silver bear profit in exchange, in the first place by the very fact of exchange, next for the risk incurred. Insurance appears here as the twin brother of the contrat a la grosse; the premium stipulated for the first being the correlative of and identical with the share of the profit agreed upon in the second.
DOI-IV-7.24 This share of the profit, which expresses the participation of the Capitalist or manufacturer who invests his products or his Capital (the same thing) in commerce, has received the Latin name of inter-esse, that is, participation, Interest. [From inter, “between” or “among,” and esse, “to be,” hence “to be among,” “to take part in” “to share in.” – RTL]
DOI-IV-7.25 At this time, then, and under the conditions which I have just stated, who could brand Interest as fraudulent? Interest is the alea, [Literally, chance or a game of chance. – RTL] the gain obtained in operations of chance; it is the speculative profit of commerce, a profit which is irreproachable until the comparison of values furnishes the correlative ideas of dearness, cheapness, proportion, PRICE.

The Same Analogy, the Same Identity,

which Political Economy has always and rightly pointed out between Interest on money and Rent of Land, exists at the beginning of commercial relations between this same Interest and commercial profit: at bottom, exchange is the common form, the starting-point of all these transactions.
DOI-IV-7.26 You see, sir, that the energy with which I oppose Capital does not prevent me from doing justice to the original good faith of its operations. I never trifle with the truth. I told you that there was a true, honest, legitimate side to Lending at Interest; I have just shown it in a way which seems to me a better one than yours, in that it sacrifices nothing to selfishness and detracts nothing from charity. It was the impossibility of appraising commodities with any degree of exactness that made Interest legitimate in the beginning, just as, later, it is the passion for the precious metals which sustains it. Lending at Interest must have had a positive and necessary basis in order to develop and spread as it has; if not, we must condemn, with the theologians, all humanity, which, for my part, I profess to consider infallible and holy.
DOI-IV-7.27 But who does not see already that the merchant’s profit ought to decrease as fast as the risks incurred and the arbitrary method of estimating values disappear, so that finally it may be only the just price of the service rendered by him, the wages of his labor? Who does not see with equal clearness that Interest ought to disappear with the risks which Capital runs and the privation which Capital endures: so that if repayment is guaranteed by the debtor, and the labor of the creditor is zero, Interest must become zero?
DOI-IV-7.28 Another cause which should not be omitted here, indicating as it does the period of transition or of separation between inter-esse, the share of the profit belonging to the Capitalist in the contrat a la grosse, and Usury, properly speaking – another cause, I say, and a quite accidental one, contributed singularly in popularizing the illusion of the productivity of Capital, and consequently the taking of Interest. This cause, with business men, was found in

The Exigencies of Bookkeeping,

the necessity of hastening return or repayment. What more effective stimulous, I ask you, could be imagined for the indolent and backward debtor than this aggravation (fœnus)[,] this perpetual procreation (tokos)[,] of the Principal? What sterner Sheriff than this serpent of Usury, as the Hebrews call it! Usury, say the ancient rabbis, is called a serpent (neschek) because the Creditor BITES his debtor by claiming more than he originally gave. And it is this policeman’s club, this commercial weapon hurled by the creditor at his debtor’s throat, that they have tried to establish as a principle of commutative justice, a law of social economy! He who now can fail to see the spirit and the object of this truly devilish invention of the mercantile genius never can have stepped inside if a commercial establishment.
DOI-IV-7.29 Now let us trace the progress of the institution, for we are approaching the point where the neschek, tokos, fœnus, Usury in fact, distinguishing itself from the speculative profit, or inter-esse, of the exporter, becomes an institution; and first let us see how the custom became universal. We will then endeavor to determine the causes which must lead to its abolition.
DOI-IV-7.30 We have just seen that it was among maritime nations, acting as brokers and middlemen for others, and dealing principally in costly goods and the precious metals, that mercantile speculation, and with it the practice of inter-esse or the contrat a la grosse, first sprang up. Thence Usury in all its forms spread, like a pestilence, through agricultural countries.
DOI-IV-7.31 The operation of inter-esse, unexceptionable in itself, afforded a justifying precedent; the method of the fœnus, – the gradual aggravation of Capital, – which might be called the method of coercion and security, furnished the means; the advantage gained by Gold and Silver over other merchandise, the privilege, awarded them by universal consent, of representing wealth and serving as

A Measure of Value for All Other Products,

furnished the opportunity. When Gold became the king of exchange, the symbol of power, the key to happiness, every one desired Gold; and, as all could not be supplied, it could be had only by paying a premium; its use became a subject of price. Like the flute-player and the prostitute, it was loaned by the day, the week, or the year. It was in consequence of the invention of money that every thing else was esteemed vile in comparison with Gold, and that real wealth, like the poor man’s savings consisted of coins. Capitalistic exploitation, despised by the ancients, who certainly were better informed on this subject than we, for they saw it in its origin, was thus established: it was reserved for our century to supply it with defenders and advocates.
DOI-IV-7.32 As long as Usury, representing only the premium of insurance or the share of the profit in the contrat a la grosse, was confined to maritime speculation and affected only the foreigner, it appeared harmless in the eyes of Legislators. It was only when it began to be practised between fellow-citizens and compatriots that divine and human law thundered against their anathemas against it. Thou shalt not place thy Money at Interest with thy brother, said the law of Moses, but by all means with the stranger: Non fœnerabis proximo tuo, sed alieno. [“Lend not to your neighbour, but to the stranger.” Proudhon is slightly misquoting the Vulgate: Non fœnerabis fratri tuo ad usuram pecuniam, nec fruges, nec quamlibet aliam rem; sed alieno, “Lend not money at interest to your brother, nor food nor anything else; but to the stranger,” Deuteronomy 23:19-20. – RTL] In other words: Between nations Commercial Profit and the increase of Capital express only a relation between values of opinion, values which consequently balance each other; between citizens, Product having to exchange for Product and labor for labor, and the loaning of Money being only an anticipation of this exchange, Interest establishes a distinction which destroys commercial equality, enriches one at the expense of another, and, in the long run, brings ruin upon Society.
DOI-IV-7.33 It was on this principle too that this same Moses declared [Leviticus 25:10-29. – RTL] that all debts should be cancelled and

Uncollectable Every Fiftieth Year:

that is, fifty years’ Interest, or fifty annuities at two per cent, supposing the loan to have been contracted during the year following the jubilee, would cancel the principal.
DOI-IV-7.34 It was for this reason that Solon, called by his fellow-citizens to the Presidency of the Republic, and charged with quieting the disturbances which were agitating the city, began by repudiating all debts, – that is, by abolishing Usury. [6th-century BCE Athenian legislator Solon reformed the laws relating to debt (e.g., abolishing debt slavery) and cancelled existing debts, but does not appear to have intended a prohibition on future lending at interest. But perhaps Proudhon is thinking that Solon must have been committed to repeating the cancellation should the same problems recur; that this would then amount to a less regularised version of the Mosaic jubilee; and that the Mosaic jubilee represents in turn a less regularised version of Proudhon’s own approach.– RTL] Gratuity of Credit was his only solution of the revolutionary problem of his time, the sine qua non of a democratic and social Republic.
DOI-IV-7.35 This, too, was why Lycurgus, whose mind was little versed in questions of Credit and Finance, carrying his fears to an extreme, banished from Lacedæmonia both commerce and money, finding no remedy for the enslavement of citizens and the exploitation of man by man except this Icarian solution. [Lycurgus: legendary founder of the Spartan constitution. Icarian: a reference to Étienne Cabet’s 1840 novel of communal utopia, Voyage to Icaria; Molinari in his Soirées has his socialist character mock Cabet’s Icaria for advocating the revival of the ancient practice of painting statues. – RTL]
DOI-IV-7.36 But all these efforts of the ancient moralists and law-givers, badly planned and worse executed, proved of no avail. The tide of Usury, ever hastened on by extravagance and war, and soon by the analogy drawn from property itself, swept over them. On the one hand, the mutual hostility of nations, preserving the dangers of circulation, continually furnished new pretexts for Usury; on the other, the mutual hostility of nations, preserving the dangers of circulation, continually furnished new pretexts for Usury; on the other, the selfishness of the ruling classes stifled the principles of the organization of equality. In Tyre, Carthage, Athens, Rome, everywhere, in ancient as well as modern times, it was the freemen, the patricians, and the bourgeois who took Usury under their protection, and, by means of Capital, exploited the plebeians and the freedmen.
DOI-IV-7.37 Then Christianity appeared, and, after four centuries of war, began the abolition of slavery. To this era must be credited the grand generalization of lending at interest under the form of the farm-lease and rent.
DOI-IV-7.38 I said before that in ancient times the Landed Proprietor, when neither he nor his family farmed his land, as was the case among the Romans in the early days of the Republic, cultivated it through his slaves: such was the general practice of Patrician families. Then

Slavery and the Soil

were chained together; the farmer was called adscrpitus glebæ [Error for adscriptus glebæ, “attached to the soil.” – RTL], joined to the land; property in men and things was undivided. The price of a farm depended (1) upon its area and quality of its soil, (2) upon the quantity of stock, and (3) upon the number of slaves.
DOI-IV-7.39 When the Emancipation of the Slave was proclaimed, the proprietor lost the man and kept the land; just as to-day, in freeing the blacks, we leave the master his property in land and stock. Nevertheless, from the standpoint of ancient law as well as of natural and Christian right, man, born to labor, cannot dispense with the implements of Labor; the principle [HC wrongly has “principles.” – RTL] of Emancipation involved an agrarian law which guarantees them to him and protects him in their use: otherwise, this pretended Emancipation was only an act of hateful cruelty, an infamous deception, and if, as Moses said, interest, or the yearly income from Capital, reimburses Capital, might it not be said that Servitude reimburses Property? The theologians and the law-givers of the time did not understand this, and by an irreconcilable contradiction, which still exists, they continued to rail at Usury, but gave absolution to Rent.
DOI-IV-7.40 The result was that the emancipated slave, and, a few centuries later, the enfranchised serf, without means of existence, was obliged to become a tenant and pay tribute. The master grew still richer. I will furnish you, he says, with land; you shall furnish the labor; and we will divide the products. It was a reproduction on the farm of the ways and customs of business. I will lend you ten talents, said the moneyed man to the workingman; you shall use them; and then either we will divide the profits, or else, as long as you keep my money, you shall pay me a twentieth; or, if you prefer, at the expiration of the loan, you shall return double the amount originally received. From this sprang Ground-Rent, unknown to the Russians and the Arabs.

The Exploitation of Man by Man,

thanks to this transformation, passed into the form of law: Usury, condemned in the form of lending at interest, tolerated in the contrat a la grosse, was extolled in the form of Farm-Rent. From that moment commercial and industrial progress served to make it only more and more customary. This was necessary in order to exhibit all the varieties of Slavery and Robbery, and to establish the true law of Human Liberty.
DOI-IV-7.41 Once engaged in this practice of inter-esse, so strangely understood, so improperly applied, Society began to revolve in the circle of its miseries. Then it was that inequality of conditions seemed a law of civilization, and evil a necessity of our nature.
DOI-IV-7.42 Two ways, however, seemed open to laborers to free themselves from exploitation by the Capitalist: one was, as we said above, the gradual balancing of values and consequently a decrease in the price of Capital; the other was the reciprocity of Interest.
DOI-IV-7.43 But it is evident that the income from Capital, represented mainly by money, cannot be totally destroyed by decreasing it; for, as you well say, sir, if my Capital brought me nothing, instead of lending it I should keep it, and the laborer, in consequence of having refused to pay the tithe, would be out of work. As for the reciprocity of Usury, it is certainly possible between Contractor and Contractor, Capitalist and Capitalist, Proprietor and Proprietor; but between Proprietor, Capitalist, or Contractor, and the common Laborer, it is utterly impossible. It is impossible, I say, as long as in commerce Interest on Capital is added to the workingman’s wages as a part of the price of merchandise, for the workingman to repurchase what he has himself produced. To live by working is a principle which, as long as interest exists, involves a contradiction.
DOI-IV-7.44 Society once driven into this corner, the absurdity of the capitalistic theory is shown by the absurdity of its consequences; the inherent iniquity of Interest results from its homicidal effects, and while

Property Begins and Ends in Rent and Usury,

its affinity with robbery will be established. Can it exist under other conditions? For my own part, I say no: but this is an inquiry entirely foreign to the question now under discussion, and I will not enter upon it.
DOI-IV-7.45 Look now at the situation of both Capitalist and Laborer, resulting from the invention of Money, the power of Specie, and the established similarity between the lending of Money and the renting of Land and Houses.
DOI-IV-7.46 The first, – for it is necessary to justify him, even in your eyes, – controlled by the prejudice in favor of money, cannot gratuitously dispossess himself of his Capital in favor of the Laborer. Not that such dispossession is a sacrifice, for, in his hands, Capital is unproductive; not that he incurs any risk of loss, for, by taking a Mortgage as security, he is sure of repayment; not that this loaning costs him the slightest trouble, unless you consider as such counting the money and verifying the security; but because, by dispossessing himself for ever so short a time of his money, – of this money which, by its prerogative, is, as has been so justly said, power, – the Capitalist lessens his strength and his safety.
DOI-IV-7.47 This would be otherwise, if Gold and Silver were only ordinary merchandise; if the possession of coin was regarded as no more desirable than the possession of wheat, wine, oil, or leather; if the simple ability to labor gave a man the same security as the possession of money. While this monopoly of circulation and exchange exists, Usury is necessary to the Capitalist. His motives, in the light of justice, are not reprehensible: when his money leaves his own vault, his safety goes with it.
DOI-IV-7.48 Now, this necessity, which is laid upon the Capitalist by an involuntary and widespread prejudice, is, as respects the Laborer, the most shameful of robberies, as well as the most hateful of tyrannies, the tyranny of force.
DOI-IV-7.49 What are, indeed, the theoretical and practical consequences to the working-class, to this

Vital, Productive, and Moral Portion of Society,

of Lending at Interest and its counterpart, Farm-Rent? I today confine myself to the enumeration of some of them, to which I call your attention, and which hereafter, if agreeable to you, shall be the subject of our discussion.
DOI-IV-7.50 And first, it is the principle of Interest, or of net product, that enables an individual really and legitimately to live without working: that is the conclusion of your last letter but one, and such, in fact, is the condition to which every one to-day aspires.
DOI-IV-7.51 Again: If the principle of net product is true of the individual, it must be true also of the nation; for example, the Capital of France, both real and personal, being valued at one hundred and thirty-two billions, [“Billions” here translates “milliards” (which BRT usually translates as “thousand millions”), not the French word “billions,” which means “trillions” in (American) English. – RTL] which yields, at five per cent, an annual income of sixty-six hundred millions, at least half of the French nation might, if it pleased, live without working; in England, where the amount of accumulated Capital is much larger than in France, and the population much smaller, the entire nation, from Queen Victoria down to the lowest hanger-on of the son of Liverpool, might live on the product of its Capital, promenading with cane in hand, or groaning in public meetings. Which leads to this conclusion, evidently an absurd one, that, thanks to its Capital, such a nation has more income than its Labor can produce.
DOI-IV-7.52 Again: The total amount of wages paid annually in France being in the neighborhood of six thousand millions, and the total amount of revenue yielded by Capital being also six thousand millions, making the market value of the annual product of the nation twelve thousand millions, the producers, who are also consumers, can and must pay, with the six thousand millions of wages allowed them, the twelve thousand millions which commerce demands of them as the price of its merchandise, and without which the Capitalists would find themselves minus an income.
DOI-IV-7.53 Again: Interest being perpetual in its nature, and never being regarded, as Moses wished, as

A Repayment of the Original Capital,

and further, it being possible to place each year’s income at Interest in its turn, thus forming a new loan, and consequently giving rise to a new income, the smallest amount of Capital may, in time, yield sums so enormous as to exceed in value a mass of gold as large as the globe on which we live. Price demonstrated this in his theory of liquidation. [Probably a reference to the 1771 work Appeal to the Public on the Subject of the National Debt by liberal Welsh philosopher Richard Price (1723-1791). – RTL]
DOI-IV-7.54 Again: The productivity of Capital being the immediate and sole cause of the inequality of wealth, and the continual accumulation of Capital in a few hands, it must be admitted, in spite of the progress of knowledge, in spite of Christian revelation and the extension of public liberty, that society is naturally and necessarily divided into two classes – a class of exploiting capitalists and a class of exploited laborers.
DOI-IV-7.55 Again: the aforesaid class of Capitalists, having all tools and products at its absolute disposal through lending capital at Interest, has the right, when, [Comma sic. – RTL] it sees fit, to bring Labor and Circulation to a stand-still, as was done two years ago, at the risk of people’s lives; to change the natural course of things, as is the case in the Papal States, where the arable land has been used, from time immemorial, for the convenience of proprietors, as common pasture land, and where the people live upon the charity and curiosity of foreigners; to say to a body of citizens: There are too many of you on the earth; at the banquet of life there is no place for you, as did the Countess of Strafford, when she expelled from her estate seventeen thousand peasants at once, and as the French Government did last year, when it transported to Algeria four thousand families of useless mouths.
DOI-IV-7.56 I now ask you the following question: If the partiality for gold and the fatality of the institution of money excuses and justifies the Capitalist, does it not also establish for the laborer

This System of brute Force,

only distinguishable from ancient slavery by its subtler and more villainous hypocrisy?
DOI-IV-7.57 FORCE, sir – that is the first and last word of a Society organized upon the principle of Interest, and which, for three thousand years, struggled against Interest. You establish this yourself, without reserve or scruple, when you admit, with me, that the Capitalist does not deprive himself, and with J. B. Say, that his function is to do nothing; and when you put into his mouth this insolent language, which every human conscience condemns: –
“I impose nothing on you in spite of yourself. If you do not admit that a loan is a service, abstain from borrowing, as I do from lending. But if Society offers you these advantages without reward, deal directly with it, for its terms are much easier; and as for organizing the circulation of capital, as you call upon me to do, if you mean thereby that you should have the use of my capital gratis through the mediation of Society, I have just the same objection to this indirect method of procedure that induced me to refuse you a direct and gratuitous loan.”
DOI-IV-7.59 Have a care, sir; the people are only too ready to believe that it is solely for love of its privileges that the Capitalist class, now dominant, opposes the organization of Credit which they clamor for; and the day when the ill-will of that class shall be positively proven, its last excuse will vanish in the people’s eyes, and their vengeance will know no bounds.
DOI-IV-7.60 Do you wish to know what frightful demoralization you are creating among laborers, with your theory of Capital, which is no other, as I have just told you, than the theory of the right of FORCE? I only need to repeat your own arguments. You seem fond of apologies: [BRT elsewhere translates this term as “apologues.” – RTL] let me then, to illustrate my thought, submit to you a few.
DOI-IV-7.61 A millionaire falls into the river. A proletaire is just passing by; the Capitalist calls to him; and the following dialogue ensues: –
Millionaire. – Save me, or I die.
Proletaire. – I am at your service, but I desire a million for my trouble.
Millionaire. – A million for extending your hand to your drowning brother! What does it cost you? An hour’s delay. I, to be generous, will give you in return a quarter of a day.
Proletaire. – Tell me, in pulling you out do I not render you a service?
Millionaire. – Yes.
Proletaire. – Is not every service entitled to a reward?
Millionaire. – Yes.
Proletaire. – Am I not free?
Millionaire. – Yes.
Proletaire. – Then I ask a million; it is my lowest price. I do not force you; I impose nothing on you in spite of yourself; I do not prevent you from shouting, boat ahoy! and appealing to some one else. If yonder fisherman, a league away, wishes to do you this favor without reward, appeal to him; his terms are easier.
Millionaire. – Wretch! You take advantage of my situation. Religion, morality, humanity!
Proletaire. – Those have to do with my conscience only. But my time is short; decide quickly. Live a Proletaire, or die a Millionaire: which do you prefer?
DOI-IV-7.74 Undoubtedly, sir, you will tell me that Religion, Morality, and Humanity, which command us to help our fellow-being in distress, have nothing in common with Interest. I agree with you there, and that is precisely why I condemn Interest. But what reply will you make to the following illustration? [The story which follows is expanded from an example in Proudhon’s 1840 What Is Property? II.2. – RTL]
DOI-IV-7.75 An English missionary, going to convert the heathen, is shipwrecked on the way, and approaches the island of ______ in a canoe, with his wife and four children. Robinson, the owner of this island by right of first occupancy, by right of conquest, by right of labor, aiming his musket at the shipwrecked party, prevents the missionary from

Trespassing Upon His Property.

But as Robinson is human and has a Christian soul, he kindly directs this unfortunate family to a neighboring rock, alone in the midst of the water, where they can dry and rest themselves, undisturbed by the ocean.
DOI-IV-7.76 The rock being barren, the shipwrecked missionary begs Robinson to lend him his spade and a small bag of seed.
DOI-IV-7.77 I consent, says Robinson, but on one condition, – namely, that you give me ninety-nine bushels of wheat out every [Sic, for “out of every.” – RTL] hundred that you harvest.
Missionary. [Throughout this dialogue Proudhon calls him “The Castaway.” – RTL] – That is outrageous! I will give you back what you lend me, and do as much for you some other time.
Robinson. – Is there a grain of wheat on your rock?
Missionary. – No.
Robinson. – In furnishing you the means to cultivate your island and to live by your Labor, do I render you a service?
Missionary. – Yes.
Robinson. – Is every service entitled to a reward?
Missionary. – Yes.
Robinson. – Well, the reward that I demand is ninety-nine per cent. That is my price.
Missionary. – Let us compromise: I will return the bag of wheat and the spade, with five per cent Interest in addition. That is the legal rate.
Robinson. – Yes, it is the legal rate when there is competition and plenty of merchandise: just as the legal price of bread is thirty centimes per kilogramme when there is no scarcity.
Missionary. – Ninety-nine per cent of my crop! Why, that is robbery, plunder!
Robinson. – Do I use force? Do I compel you to take my spade and my wheat? Are we not free, both of us?
Missionary. – I cannot help myself: I shall die in the attempt; but my wife, my children! – I agree to everything; I sign. Lend me, to boot, your saw and axe, that I may build me a hut.
Robinson. – Indeed! I need my axe and saw. It cost me a week’s labor to make them. I will lend them to you, however, but on condition that you shall give me
Ninety-Nine Planks Out of Every Hundred that You Make.

Missionary. – Zounds! I will return your axe and saw, and will make you a present of five of my planks, in consideration of your trouble.
Robinson. – Very well, then. I keep my saw and axe. I do not compel you. I am free.
Missionary. – But you do not believe, then, in God! You are an exploiter of humanity, a Malthusian, a Jew!
Robinson. – Religion, my brother, teaches us that “man has a noble destiny, not confined to the narrow sphere of industrial production. What is this destiny? This is not the place to answer that question. But whatever it be, I can tell you that we cannot attain to it, if, bent under the yoke of inexorable and perpetual Labor, we have no leisure for the development of our organs, our affections, our intelligence, our sense of the beautiful, and all the purest and loftiest portions of our nature. . . . . What is, then, the power which will give us this beneficent leisure, the image and foretaste of eternal felicity? It is Capital.” I have worked in the past; I have saved for the express purpose of lending to you; some day you will do as I do.
Missionary. – Hypocrite!
Robinson. – You insult me: farewell! You can cut the tree with your teeth, and saw your planks with finger-nails.
Missionary. – I yield to force. But, at least, give me a few herbs for my poor daughter who is sick. That will cost you no trouble: I will gather them myself on your property.
Robinson. – Stop! my property is sacred. I forbid you from trespassing upon it; if you do, I shall use my rifle. However, I am a clever fellow; I give you permission to gather some herbs; but you must give me your other daughter, who seems to be pretty. . . . . .
Missionary. – Villain! you dare to use such language to a father!
Robinson. – Do I not render a service to you all, yourself and your daughters, in saving your lives by my medicine, yes or no?
Missionary. – Certainly; but the price that you set! . . .
Robinson. – Do I take your daughter by force? Is she not free? Are you not free yourself? . . . And besides, will she not be happy to share my leisure? Will she not receive her share of the revenue that you pay me? In making her my companion do I not become her benefactor?

Go To, You Are An Ingrate!

Missionary. – Stay, proprietor! I would rather see my daughter dead than dishonored. But I sacrifice her to save the other. I ask only one more thing, – namely that you lend me your fishing-tackle; for we cannot live upon the wheat that you allow us. One of my sons, by fishing, will help to supply the deficiency.
Robinson. – All right; I will render you this service also. I will do more: I will relieve you of your other son, and hold myself responsible for his support and education. I must teach him how to fire a gun, handle a sabre, and live as I do, without working! For, as I distrust you all, and as you could very easily decline to pay me, his assistance, should occasion require it, will be very convenient. Rascals, who pretend that people should lend to you without Interest! Unbelievers, who do not favor the exploitation of man by man!
DOI-IV-7.106 One day Robinson, becoming heated while hunting, takes cold and falls sick. His mistress, disgusted with him and holding intimate relations with his young companion, says to him: I will nurse and cure you, but on one condition, – that you shall give me all your property. Otherwise, I leave you.
Robinson. – You whom I have so dearly loved, for whom I have sacrificed honor, conscience, humanity, would you leave me on this bed of pain?
Servant. – But I never loved you, and therefore am not indebted to you. If you have supported me, I in return have given you my person. We are quits. Am I not free? And am I obliged, after having served as your mistress, to serve as your sick-nurse also?
Robinson. – My child, my dear child, pray calm yourself. Be good, be sweet, be kind; I will make my will in your favor.
Servant. – A donation outright, or I leave you.
Robinson. – You murder me! God and men abandon me. A curse upon the universe! Let the lightnings destroy me, and hell swallow me up!
DOI-IV-7.112 He dies in despair.

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