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 labour and saving. It is a pleasing prospect, which every one may have in view; a n.o.ble 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 enn.o.bles, 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 labour, but relieving them gradually from the heaviest and most repugnant part of this labour. It is enough that capitals should be formed, acc.u.mulated, multiplied; 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 all to be favourable to economy, the source of capital. It is enough to say, that the first of all these conditions is, not 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 pa.s.sing from hand to hand, in the character of loan, but _provisions_, _materials_, _instruments_, things indispensable to the productiveness of labour itself, the ideas thus far exhibited will not find many opponents. Who knows, even, that I may not be reproached for having made a 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 it self, like your _sack of corn_; it does not a.s.sist labour, 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 the sophistry 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 object 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 wants a saw. They cannot negotiate; the transaction favourable 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 ent.i.tles 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 const.i.tutes the principle of the duration of interest.

At the end of a year, says M. Th.o.r.e, 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 of leaving the money in the bag, 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 favour 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 devoting 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, is the observation of the phenomenon which shows a decreasing interest, almost in direct proportion to the rate of civilisation. In barbarous times it is, in fact, cent, per cent., and more. Then it descends to eighty, sixty, fifty, forty, twenty, ten, eight, five, four, and three per cent.

In Holland, it has even been as low as two per cent. Hence it is concluded, that "in proportion as society comes to perfection, it will descend to zero by the time civilisation is complete. In other words, that which characterises 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. The man who gives me a gla.s.s of water in the Pyrenees, does not render me so great a service as he who allows me one in the desert of Sahara. 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 favourable conditions than if they were few; for the simple reason, that the lender renders in this case a smaller _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 a 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, in order to form new 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, three, and two. 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 labour; 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.

The sophism which I am now combating has its root in the infinite divisibility 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 weight without the weight ever being annihilated. 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 or the smallest sheep's head 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 will ever arrive at zero, for labour and 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 skilful agriculturists are those who have reduced the heads of sheep to the smallest size, we shall have arrived at the highest agricultural perfection when sheep have no longer any heads. Therefore, in order to realise the perfection, let us behead them.

I have now done with this wearisome 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 off 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 cla.s.s of men to whom it is more important than to any other that capitals be formed, acc.u.mulate, multiply, abound, and superabound, it is certainly the cla.s.s which borrows them directly or indirectly; it is those men who operate upon _materials_, who gain a.s.sistance by _instruments_, who live upon _provisions_, produced and economised by other men.

Imagine, in a vast and fertile country, a population of a thousand inhabitants, dest.i.tute of all capital thus defined. It will a.s.suredly 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 eighty labourers. The inevitable result will be the death of nine hundred 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 labour 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 n.o.ble in its principle as useful in its effects. But if, duped by that false philosophy which persons wish so inconsiderately to mingle with economic laws, they take to remunerating labour largely, far from doing good, they will do harm. They will give double wages, it may be. But then, forty-five men will be better provided for, whilst forty-five others will come to augment the number of those who are sinking into the grave.

Upon this supposition, 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 quant.i.ty of sustenance permits.

Suppose now, that instead of ten capitalists, there should be a hundred, two hundred, five hundred,--is it not evident that the condition of the whole population, and, above all, that of the "proletaires,"[3] will be more and more improved? Is it not evident that, apart from every consideration of generosity, they would obtain more work and better pay for it?--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 realising 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 paralyse the activity and stimulus of saving?

Let them learn this lesson, then; doubtless, capitals 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 circ.u.mstances are, and what are not favourable to saving, in order to favour the former and to discourage the latter. They would sympathise with every measure which tends to the rapid formation of capitals. They would be enthusiastic promoters of peace, liberty, order, security, the union of cla.s.ses and peoples, economy, moderation in public expenses, simplicity in the machinery of government; for it is under the sway of all these circ.u.mstances that saving does its work, brings plenty within the reach of the ma.s.ses, 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 warlike spirit, which diverts from its true course so large a part of human labour; the monopolising spirit, which deranges the equitable distribution of riches, in the way by which liberty alone can realise it; the mult.i.tude 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 especial 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 that time the "proletaires" have found greater difficulty in procuring those materials, instruments, and provisions, without which labour 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 labour 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 a.s.sured me that the manufacturers have revealed to him a very striking fact, which proves, better than any reasoning can, how much insecurity and uncertainty injure the formation of capital. It was remarked, that during the most distressing period, the popular expenses of mere fancy had not diminished. The small theatres, the fighting lists, the public-houses, and 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 a.s.suredly, the poor would be the first upon whom it would fall.

Workmen! they talk to you a great deal upon the _artificial_ organisation of labour;--do you know why they do so? Because they are ignorant of the laws of its _natural_ organisation; that is, of the wonderful organisation which results from liberty. You are told, that liberty gives rise to what is called the radical antagonism of cla.s.ses; that it creates, and makes to clash, two 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 how far 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 G.o.d. And see how, by means of social laws, and because men exchange amongst themselves their labours and their productions, see what a harmonious tie attaches the cla.s.ses 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 corn abounds, 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 labour, to increase the power of their machines, to procure for themselves, upon the best terms, the raw material. And to what does all this tend? To the abundance and the 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, economising, 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 cla.s.s is the common good of all.

You are told that capital tyrannises over labour. I do not deny that each one endeavours to draw the greatest possible advantage from his situation; but, in this sense, he realises only that which is possible.

Now, it is never more possible for capitals to tyrannise over labour, than 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 labour which has the command.

Away, then, with the jealousies of cla.s.ses, ill-will, unfounded hatreds, unjust suspicions. These depraved pa.s.sions 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, labourers, "proletaires," dest.i.tute and suffering cla.s.ses, 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.

That Which Is Seen, and That Which Is Not Seen

In the department of economy, an act, a habit, an inst.i.tution, a law, gives birth not only to an effect, but to a series of effects. Of these effects, the first only is immediate; it manifests itself simultaneously with its cause--_it is seen_. The others unfold in succession--_they are not seen_: it is well for us if they are _foreseen_. Between a good and a bad economist this const.i.tutes the whole difference--the one takes account of the _visible_ effect; the other takes account both of the effects which are _seen_ and also of those which it is necessary to _foresee_. Now this difference is enormous, for it almost always happens that when the immediate consequence is favourable, the ultimate consequences are fatal, _and the converse_. Hence it follows that the bad economist pursues a small present good, which will be followed by a great evil to come, while the true economist pursues a great good to come, at the risk of a small present evil.

In fact, it is the same in the science of health, arts, and in that of morals. If often happens, that the sweeter the first fruit of a habit is, the more bitter are the consequences. Take, for example, debauchery, idleness, prodigality. When, therefore, a man, absorbed in the effect which _is seen_, has not yet learned to discern those which are not seen, he gives way to fatal habits, not only by inclination, but by calculation.

This explains the fatally grievous condition of mankind. Ignorance surrounds its cradle: then its actions are determined by their first consequences, the only ones which, in its first stage, it can see. It is only in the long run that it learns to take account of the others. It has to learn this lesson from two very different masters--experience and foresight. Experience teaches effectually, but brutally. It makes us acquainted with all the effects of an action, by causing us to feel them; and we cannot fail to finish by knowing that fire burns, if we have burned ourselves. For this rough teacher, I should like, if possible, to subst.i.tute a more gentle one. I mean Foresight. For this purpose I shall examine the consequences of certain economical phenomena, by placing in opposition to each other those _which are seen_, and those _which are not seen_.

I.--The Broken Window.

Have you ever witnessed the anger of the good shopkeeper, James B., when his careless son happened to break a pane of gla.s.s? If you have been present at such a scene, you will most a.s.suredly bear witness to the fact, that every one of the spectators, were there even thirty of them, by common consent apparently, offered the unfortunate owner this invariable consolation--"It is an ill wind that blows n.o.body good.

Everybody must live, and what would become of the glaziers if panes of gla.s.s were never broken?"

Now, this form of condolence contains an entire theory, which it will be well to show up in this simple case, seeing that it is precisely the same as that which, unhappily, regulates the greater part of our economical inst.i.tutions.

Suppose it cost six francs to repair the damage, and you say that the accident brings six francs to the glazier's trade--that it encourages that trade to the amount of six francs--I grant it; I have not a word to say against it; you reason justly. The glazier comes, performs his task, receives his six francs, rubs his hands, and, in his heart, blesses the careless child. All this is _that which is seen_.

But if, on the other hand, you come to the conclusion, as is too often the case, that it is a good thing to break windows, that it causes money to circulate, and that the encouragement of industry in general will be the result of it, you will oblige me to call out, "Stop there! your theory is confined to that _which is seen_; it takes no account of that _which is not seen_."

_It is not seen_ that as our shopkeeper has spent six francs upon one thing, he cannot spend them upon another. _It is not seen_ that if he had not had a window to replace, he would, perhaps, have replaced his old shoes, or added another book to his library. In short, he would have employed his six francs in some way which this accident has prevented.

Let us take a view of industry in general, as affected by this circ.u.mstance. The window being broken, the glazier's trade is encouraged to the amount of six francs: _this is that which is seen_.

If the window had not been broken, the shoemaker's trade (or some other) would have been encouraged to the amount of six francs: this is _that which is not seen_.

And if _that which is not seen_ is taken into consideration, because it is a negative fact, as well as that which is seen, because it is a positive fact, it will be understood that neither industry _in general_, nor the sum total of _national labour_, is affected, whether windows are broken or not.

Now let us consider James B. himself. In the former supposition, that of the window being broken, he spends six francs, and has neither more nor less than he had before, the enjoyment of a window.

In the second, where we suppose the window not to have been broken, he would have spent six francs in shoes, and would have had at the same time the enjoyment of a pair o shoes and of a window.