System of Economical Contradictions; or, the Philosophy of Misery Part 23

I observe, then, that social life manifests itself in a double fas.h.i.+on,--PRESERVATION and DEVELOPMENT.

Development is effected by the free play of individual energies; the ma.s.s is by its nature barren, pa.s.sive, and hostile to everything new. It is, if I may venture to use the comparison, the womb, sterile by itself, but to which come to deposit themselves the germs created by private activity, which, in hermaphroditic society, really performs the function of the male organ.

But society preserves itself only so far as it avoids solidarity with private speculations and leaves every innovation absolutely to the risk and peril of individuals. It would take but a few pages to contain the list of useful inventions. The enterprises that have been carried to a successful issue may be numbered; no figure would express the mult.i.tude of false ideas and imprudent ventures which every day are hatched in human brains. There is not an inventor, not a workman, who, for one sane and correct conception, has not given birth to thousands of chimeras; not an intelligence which, for one spark of reason, does not emit whirlwinds of smoke. If it were possible to divide all the products of the human reason into two parts, putting on one side those that are useful, and on the other those on which strength, thought, capital, and time have been spent in error, we should be startled by the discovery that the excess of the latter over the former is perhaps a billion per cent. What would become of society, if it had to discharge these liabilities and settle all these bankruptcies? What, in turn, would become of the responsibility and dignity of the laborer, if, secured by the social guarantee, he could, without personal risk, abandon himself to all the caprices of a delirious imagination and trifle at every moment with the existence of humanity?

Wherefore I conclude that what has been practised from the beginning will be practised to the end, and that, on this point, as on every other, if our aim is reconciliation, it is absurd to think that anything that exists can be abolished. For, the world of ideas being infinite, like nature, and men, today as ever, being subject to speculation,--that is, to error,--individuals have a constant stimulus to speculate and society a constant reason to be suspicious and cautious, wherefore monopoly never lacks material.

To avoid this dilemma what is proposed? Compensation? In the first place, compensation is impossible: all values being monopolized, where would society get the means to indemnify the monopolists? What would be its mortgage? On the other hand, compensation would be utterly useless: after all the monopolies had been compensated, it would remain to organize industry.

Where is the system? Upon what is opinion settled? What problems have been solved? If the organization is to be of the hierarchical type, we reenter the system of monopoly; if of the democratic, we return to the point of departure, for the compensated industries will fall into the public domain,--that is, into compet.i.tion,--and gradually will become monopolies again; if, finally, of the communistic, we shall simply have pa.s.sed from one impossibility to another, for, as we shall demonstrate at the proper time, communism, like compet.i.tion and monopoly, is antinomical, impossible.

In order not to involve the social wealth in an unlimited and consequently disastrous solidarity, will they content themselves with imposing rules upon the spirit of invention and enterprise?

Will they establish a censors.h.i.+p to distinguish between men of genius and fools? That is to suppose that society knows in advance precisely that which is to be discovered. To submit the projects of schemers to an advance examination is an a priori prohibition of all movement. For, once more, relatively to the end which he has in view, there is a moment when each manufacturer represents in his own person society itself, sees better and farther than all other men combined, and frequently without being able to explain himself or make himself understood. When Copernicus, Kepler, and Galileo, Newton's predecessors, came to the point of saying to Christian society, then represented by the Church: "The Bible is mistaken; the earth revolves, and the sun is stationary," they were right against society, which, on the strength of its senses and traditions, contradicted them. Could society then have accepted solidarity with the Copernican system? So little could it do it that this system openly denied its faith, and that, pending the accord of reason and revelation, Galileo, one of the responsible inventors, underwent torture in proof of the new idea. We are more tolerant, I presume; but this very toleration proves that, while according greater liberty to genius, we do not mean to be less discreet than our ancestors. Patents rain, but WITHOUT GOVERNMENTAL GUARANTEE. Property t.i.tles are placed in the keeping of citizens, but neither the property list nor the charter guarantee their value: it is for labor to make them valuable. And as for the scientific and other missions which the government sometimes takes a notion to entrust to penniless explorers, they are so much extra robbery and corruption.

In fact, society can guarantee to no one the capital necessary for the testing of an idea by experiment; in right, it cannot claim the results of an enterprise to which it has not subscribed: therefore monopoly is indestructible. For the rest, solidarity would be of no service: for, as each can claim for his whims the solidarity of all and would have the same right to obtain the government's signature in blank, we should soon arrive at the universal reign of caprice,--that is, purely and simply at the statu quo.

Some socialists, very unhappily inspired--I say it with all the force of my conscience--by evangelical abstractions, believe that they have solved the difficulty by these fine maxims: "Inequality of capacities proves the inequality of duties"; "You have received more from nature, give more to your brothers," and other high-sounding and touching phrases, which never fail of their effect on empty heads, but which nevertheless are as simple as anything that it is possible to imagine. The practical formula deduced from these marvellous adages is that each laborer owes all his time to society, and that society should give back to him in exchange all that is necessary to the satisfaction of his wants in proportion to the resources at its disposal.

May my communistic friends forgive me! I should be less severe upon their ideas if I were not irreversibly convinced, in my reason and in my heart, that communism, republicanism, and all the social, political, and religious utopias which disdain facts and criticism, are the greatest obstacle which progress has now to conquer. Why will they never understand that fraternity can be established only by justice; that justice alone, the condition, means, and law of liberty and fraternity, must be the object of our study; and that its determination and formula must be pursued without relaxation, even to the minutest details? Why do writers familiar with economic language forget that superiority of talents is synonymous with superiority of wants, and that, instead of expecting more from vigorous than from ordinary personalities, society should constantly look out that they do not receive more than they render, when it is already so hard for the ma.s.s of mankind to render all that it receives?

Turn which way you will, you must always come back to the cash book, to the account of receipts and expenditures, the sole guarantee against large consumers as well as against small producers. The workman continually lives IN ADVANCE of his production; his tendency is always to get CREDIT, contract DEBTS and go into BANKRUPTCY; it is perpetually necessary to remind him of Say's aphorism: PRODUCTS ARE BOUGHT ONLY WITH PRODUCTS.

To suppose that the laborer of great capacity will content himself, in favor of the weak, with half his wages, furnish his services gratuitously, and produce, as the people say, FOR THE KING OF PRUSSIA--that is, for that abstraction called society, the sovereign, or my brothers,--is to base society on a sentiment, I do not say beyond the reach of man, but one which, erected systematically into a principle, is only a false virtue, a dangerous hypocrisy. Charity is recommended to us as a reparation of the infirmities which afflict our fellows by accident, and, viewing it in this light, I can see that charity may be organized; I can see that, growing out of solidarity itself, it may become simply justice. But charity taken as an instrument of equality and the law of equilibrium would be the dissolution of society. Equality among men is produced by the rigorous and inflexible law of labor, the proportionality of values, the sincerity of exchanges, and the equivalence of functions,--in short, by the mathematical solution of all antagonisms.

That is why charity, the prime virtue of the Christian, the legitimate hope of the socialist, the object of all the efforts of the economist, is a social vice the moment it is made a principle of const.i.tution and a law; that is why certain economists have been able to say that legal charity had caused more evil in society than proprietary usurpation. Man, like the society of which he is a part, has a perpetual account current with himself; all that he consumes he must produce. Such is the general rule, which no one can escape without being, ipso facto struck with dishonor or suspected of fraud. Singular idea, truly,--that of decreeing, under pretext of fraternity, the relative inferiority of the majority of men! After this beautiful declaration nothing will be left but to draw its consequences; and soon, thanks to fraternity, aristocracy will be restored.

Double the normal wages of the workman, and you invite him to idleness, humiliate his dignity, and demoralize his conscience; take away from him the legitimate price of his efforts, and you either excite his anger or exalt his pride. In either case you damage his fraternal feelings. On the contrary, make enjoyment conditional upon labor, the only way provided by nature to a.s.sociate men and make them good and happy, and you go back under the law of economic distribution, PRODUCTS ARE BOUGHT WITH PRODUCTS. Communism, as I have often complained, is the very denial of society in its foundation, which is the progressive equivalence of functions and capacities. The communists, toward whom all socialism tends, do not believe in equality by nature and education; they supply it by sovereign decrees which they cannot carry out, whatever they may do. Instead of seeking justice in the harmony of facts, they take it from their feelings, calling justice everything that seems to them to be love of one's neighbor, and incessantly confounding matters of reason with those of sentiment.

Why then continually interject fraternity, charity, sacrifice, and G.o.d into the discussion of economic questions? May it not be that the utopists find it easier to expatiate upon these grand words than to seriously study social manifestations?

Fraternity! Brothers as much as you please, provided I am the big brother and you the little; provided society, our common mother, honors my primogeniture and my services by doubling my portion. You will provide for my wants, you say, in proportion to your resources. I intend, on the contrary, that such provision shall be in proportion to my labor; if not, I cease to labor.

Charity! I deny charity; it is mysticism. In vain do you talk to me of fraternity and love: I remain convinced that you love me but little, and I feel very sure that I do not love you. Your friends.h.i.+p is but a feint, and, if you love me, it is from self-interest. I ask all that my products cost me, and only what they cost me: why do you refuse me?

Sacrifice! I deny sacrifice; it is mysticism. Talk to me of DEBT and CREDIT, the only criterion in my eyes of the just and the unjust, of good and evil in society. To each according to his works, first; and if, on occasion, I am impelled to aid you, I will do it with a good grace; but I will not be constrained.

To constrain me to sacrifice is to a.s.sa.s.sinate me.

G.o.d! I know no G.o.d; mysticism again. Begin by striking this word from your remarks, if you wish me to listen to you; for three thousand years of experience have taught me that whoever talks to me of G.o.d has designs on my liberty or on my purse. How much do you owe me? How much do I owe you? That is my religion and my G.o.d.

Monopoly owes its existence both to nature and to man: it has its source at once in the profoundest depths of our conscience and in the external fact of our individualization. Just as in our body and our mind everything has its specialty and property, so our labor presents itself with a proper and specific character, which const.i.tutes its quality and value. And as labor cannot manifest itself without material or an object for its exercise, the person necessarily attracting the thing, monopoly is established from subject to object as infallibly as duration is const.i.tuted from past to future. Bees, ants, and other animals living in society seem endowed individually only with automatism; with them soul and instinct are almost exclusively collective. That is why, among such animals, there can be no room for privilege and monopoly; why, even in their most volitional operations, they neither consult nor deliberate. But, humanity being individualized in its plurality, man becomes inevitably a monopolist, since, if not a monopolist, he is nothing; and the social problem is to find out, not how to abolish, but how to reconcile, all monopolies.

The most remarkable and the most immediate effects of monopoly are:

1. In the political order, the cla.s.sification of humanity into families, tribes, cities, nations, States: this is the elementary division of humanity into groups and sub-groups of laborers, distinguished by race, language, customs, and climate. It was by monopoly that the human race took possession of the globe, as it will be by a.s.sociation that it will become complete sovereign thereof.

Political and civil law, as conceived by all legislators without exception and as formulated by jurists, born of this patriotic and national organization of societies, forms, in the series of social contradictions, a first and vast branch, the study of which by itself alone would demand four times more time than we can give it in discussing the question of industrial economy propounded by the Academy.

2. In the economic order, monopoly contributes to the increase of comfort, in the first place by adding to the general wealth through the perfecting of methods, and then by CAPITALIZING,--that is, by consolidating the conquests of labor obtained by division, machinery, and compet.i.tion. From this effect of monopoly has resulted the economic fiction by which the capitalist is considered a producer and capital an agent of production; then, as a consequence of this fiction, the theory of NET PRODUCT and GROSS PRODUCT.

On this point we have a few considerations to present. First let us quote J. B. Say:

The value produced is the GROSS product: after the costs of production have been deducted, this value is the NET product.

Considering a nation as a whole, it has no net product; for, as products have no value beyond the costs of production, when these costs are cut off, the entire value of the product is cut off.

National production, annual production, should always therefore be understood as gross production.

The annual revenue is the gross revenue.

The term net production is applicable only when considering the interests of one producer in opposition to those of other producers. The manager of an enterprise gets his PROFIT from the value PRODUCED after deducting the value CONSUMED. But what to him is value consumed, such as the purchase of a productive service, is so much income to the performer of the service.--Treatise on Political Economy: a.n.a.lytical Table.

These definitions are irreproachable. Unhappily J. B. Say did not see their full bearing, and could not have foreseen that one day his immediate successor at the College of France would attack them. M. Rossi has pretended to refute the proposition of J. B.

Say that TO A NATION NET PRODUCT IS THE SAME THING AS GROSS PRODUCT by this consideration,--that nations, no more than individuals of enterprise, can produce without advances, and that, if J. B. Say's formula were true, it would follow that the axiom, Ex nihilo nihil fit, is not true

Now, that is precisely what happens. Humanity, in imitation of G.o.d, produces everything from nothing, de nihilo hilum just as it is itself a product of nothing, just as its thought comes out of the void; and M. Rossi would not have made such a mistake, if, like the physiocrats, he had not confounded the products of the INDUSTRIAL KINGDOM with those of the animal, vegetable, and mineral kingdoms. Political economy begins with labor; it is developed by labor; and all that does not come from labor, falling into the domain of pure utility,--that is, into the category of things submitted to man's action, but not yet rendered exchangeable by labor,--remains radically foreign to political economy. Monopoly itself, wholly established as it is by a pure act of collective will, does not change these relations at all, since, according to history, and according to the written law, and according to economic theory, monopoly exists, or is reputed to exist, only after labor's appearance.

Say's doctrine, therefore, is una.s.sailable. Relatively to the man of enterprise, whose specialty always supposes other manufacturers cooperating with him, profit is what remains of the value produced after deducting the values consumed, among which must be included the salary of the man of enterprise,--in other words, his wages. Relatively to society, which contains all possible specialties, net product is identical with gross product.

But there is a point the explanation of which I have vainly sought in Say and in the other economists,--to wit, how the reality and legitimacy of net product is established. For it is plain that, in order to cause the disappearance of net product, it would suffice to increase the wages of the workmen and the price of the values consumed, the selling-price remaining the same. So that, there being nothing seemingly to distinguish net product from a sum withheld in paying wages or, what amounts to the same thing, from an a.s.sessment laid upon the consumer in advance, net product has every appearance of an extortion effected by force and without the least show of right.

This difficulty has been solved in advance in our theory of the proportionality of values.

According to this theory, every exploiter of a machine, of an idea, or of capital should be considered as a man who increases with equal outlay the amount of a certain kind of products, and consequently increases the social wealth by economizing time.

The principle of the legitimacy of the net product lies, then, in the processes previously in use: if the new device succeeds, there will be a surplus of values, and consequently a profit,--that is, net product; if the enterprise rests on a false basis, there will be a deficit in the gross product, and in the long run failure and bankruptcy. Even in the case--and it is the most frequent-- where there is no innovation on the part of the man of enterprise, the rule of net product remains applicable, for the success of an industry depends upon the way in which it is carried on. Now, it being in accordance with the nature of monopoly that the risk and peril of every enterprise should be taken by the initiator, it follows that the net product belongs to him by the most sacred t.i.tle recognized among men,-- labor and intelligence.

It is useless to recall the fact that the net product is often exaggerated, either by fraudulently secured reductions of wages or in some other way. These are abuses which proceed, not from the principle, but from human cupidity, and which remain outside the domain of the theory. For the rest, I have shown, in discussing the const.i.tution of value (Chapter II., % 2): 1, how the net product can never exceed the difference resulting from inequality of the means of production; 2, how the profit which society reaps from each new invention is incomparably greater than that of its originator. As these points have been exhausted once for all, I will not go over them again; I will simply remark that, by industrial progress, the net product of the ingenious tends steadily to decrease, while, on the other hand, their comfort increases, as the concentric layers which make up the trunk of a tree become thinner as the tree grows and as they are farther removed from the centre.

By the side of net product, the natural reward of the laborer, I have pointed out as one of the happiest effects of monopoly the CAPITALIZATION of values, from which is born another sort of profit,--namely, INTEREST, or the hire of capital. As for RENT, although it is often confounded with interest, and although, in ordinary language, it is included with profit and interest under the common expression REVENUE, it is a different thing from interest; it is a consequence, not of monopoly, but of property; it depends on a special theory., of which we will speak in its place.

What, then, is this reality, known to all peoples, and nevertheless still so badly defined, which is called interest or the price of a loan, and which gives rise to the fiction of the productivity of capital?

Everybody knows that a contractor, when he calculates his costs of production, generally divides them into three cla.s.ses: 1, the values consumed and services paid for; 2, his personal salary; 3, recovery of his capital with interest. From this last cla.s.s of costs is born the distinction between contractor and capitalist, although these two t.i.tles always express but one faculty, monopoly.

Thus an industrial enterprise which yields only interest on capital and nothing for net product, is an insignificant enterprise, which results only in a transformation of values without adding anything to wealth,-- an enterprise, in short, which has no further reason for existence and is immediately abandoned. Why is it, then, that this interest on capital is not regarded as a sufficient supplement of net product? Why is it not itself the net product?

Here again the philosophy of the economists is wanting. To defend usury they have pretended that capital was productive, and they have changed a metaphor into a reality. The anti-proprietary socialists have had no difficulty in overturning their sophistry; and through this controversy the theory of capital has fallen into such disfavor that today, in the minds of the people, CAPITALIST and IDLER are synonymous terms.

Certainly it is not my intention to retract what I myself have maintained after so many others, or to rehabilitate a cla.s.s of citizens which so strangely misconceives its duties: but the interests of science and of the proletariat itself oblige me to complete my first a.s.sertions and maintain true principles.

1. All production is effected with a view to consumption,--that is, to enjoyment. In society the correlative terms production and consumption, like net product and gross product, designate identically the same thing. If, then, after the laborer has realized a net product, instead of using it to increase his comfort, he should confine himself to his wages and steadily apply his surplus to new production, as so many people do who earn only to buy, production would increase indefinitely, while comfort and, reasoning from the standpoint of society, population would remain unchanged. Now, interest on capital which has been invested in an industrial enterprise and which has been gradually formed by the acc.u.mulation of net product, is a sort of compromise between the necessity of increasing production, on the one hand, and, on the other, that of increasing comfort; it is a method of reproducing and consuming the net product at the same time. That is why certain industrial societies pay their stockholders a dividend even before the enterprise has yielded anything. Life is short, success comes slowly; on the one hand labor commands, on the other man wishes to enjoy. To meet all these exigencies the net product shall be devoted to production, but meantime (inter-ea, inter-esse)--that is, while waiting for the new product--the capitalist shall enjoy.

Thus, as the amount of net product marks the progress of wealth, interest on capital, without which net product would be useless and would not even exist, marks the progress of comfort.

Whatever the form of government which may be established among men; whether they live in monopoly or in communism; whether each laborer keeps his account by credit and debit, or has his labor and pleasure parcelled out to him by the community,--the law which we have just disengaged will always be fulfilled. Our interest accounts do nothing else than bear witness to it.

2. Values created by net product are cla.s.sed as savings and capitalized in the most highly exchangeable form, the form which is freest and least susceptible of depreciation,--in a word, the form of specie, the only const.i.tuted value. Now, if capital leaves this state of freedom and ENGAGES ITSELF,--that is, takes the form of machines, buildings, etc.,--it will still be susceptible of exchange, but much more exposed than before to the oscillations of supply and demand. Once engaged, it cannot be DISENGAGED without difficulty; and the sole resource of its owner will be exploitation. Exploitation alone is capable of maintaining engaged capital at its nominal value; it may increase it, it may diminish it. Capital thus transformed is as if it had been risked in a maritime enterprise: the interest is the insurance premium paid on the capital. And this premium will be greater or less according to the scarcity or abundance of capital.

Later a distinction will also be established between the insurance premium and interest on capital, and new facts will result from this subdivision: thus the history of humanity is simply a perpetual distinction of the mind's concepts.

3. Not only does interest on capital cause the laborer to enjoy the fruit of his toil and insure his savings, but--and this is the most marvellous effect of interest--while rewarding the producer, it obliges him to labor incessantly and never stop.

If a contractor is his own capitalist, it may happen that he will content himself with a profit equal to the interest on his investment: but in that case it is certain that his industry is no longer making progress and consequently is suffering. This we see when the capitalist is distinct from the contractor: for then, after the interest is paid, the manufacturer's profit is absolutely nothing; his industry becomes a perpetual peril to him, from which it is important that he should free himself as soon as possible. For as society's comfort must develop in an indefinite progression, so the law of the producer is that he should continually realize a surplus: otherwise his existence is precarious, monotonous, fatiguing. The interest due to the capitalist by the producer therefore is like the lash of the planter cracking over the head of the sleeping slave; it is the voice of progress crying: "On, on! Toil, toil!" Man's destiny pushes him to happiness: that is why it denies him rest.