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PREFACE↩

Society, said the economists of the eighteenth century, is organized according to natural laws; these laws have Justice and Utility as their essence. When they are disregarded, society suffers; when they are fully respected, society enjoys the maximum amount of abundance, and justice prevails in human relations.

Are these providential laws respected or ignored today? Do the sufferings of the masses originate from the economic laws governing society, or from the obstacles placed in the way of their beneficial action? This is the question that recent events have raised.

To this question, socialist schools sometimes respond by denying that the economic world, like the physical world, is governed by natural laws; at other times, they assert that these laws are imperfect or flawed, and that the ills of [2] society stem from their imperfections or vices.

The more cautious conclude that these laws must be modified; the more audacious believe that it is necessary to wipe the slate clean of an organization they consider fundamentally bad and replace it with a new one.

The foundation upon which the entire structure of society rests is property; thus, socialists strive either to alter or to destroy the principle of property.

Conservatives defend property, but they defend it poorly.

Here is why.

Conservatives are naturally inclined to maintain the status quo; they believe that the world functions well as it is, and they are alarmed at the mere thought of changing anything. Consequently, they avoid probing deeply into society, fearing they may encounter suffering that would necessitate some kind of reform of existing institutions.

On the other hand, they do not like theories and have little faith in principles. It is only reluctantly that they engage in discussions about property; one might say they fear shedding light on this sacred principle. Like those [3] ignorant and barbaric Christians of old who persecuted heretics instead of refuting them, they invoke the law rather than science to vanquish the aberrations of socialism.

It seemed to me that the socialist heresy required a different kind of refutation and that property needed a different kind of defense.

Recognizing, along with all economists, property as the foundation of the natural organization of society, I sought to determine whether the harm denounced by socialists—harms that no one, unless they are blind or are acting in bad faith, can deny—indeed originates from property.

The result of my studies and research was that society's sufferings, far from being rooted in the principle of property, in fact stem from direct or indirect violations of this principle.

From this, I concluded that the solution to improving the condition of the working classes lies in the full and unreserved emancipation of property.

How the principle of property serves as the foundation of society’s natural organization; how this principle has been continually restricted or disregarded; what harms arise from the deep wounds that [4] have been inflicted upon it; and finally, how the emancipation of property will restore to society its natural organization—one that is inherently just and beneficial—such is the essence of these conversations.

The thesis I undertake to defend is not new; all economists have defended property, and political economy is nothing other than the demonstration of the natural laws that have property as their foundation. Quesnay, Turgot, Adam Smith, Malthus, Ricardo, J.-B. Say devoted their lives to observing and demonstrating these laws; their disciples—Messrs. Mac Culloch, Senior, Wilson, Dunoyer, Michel Chevalier, Bastiat, Joseph Garnier, etc.—pursue this same task with enthusiasm. I have merely followed the path they have laid out.

Some may think that I have gone too far, and that, by striving to adhere strictly to the path of principles, I have failed to avoid the abyss of pipe dreams and utopias; but no matter! I have the profound conviction that economic truth is hidden beneath these apparent pipe dreams and utopias; I have the profound conviction that only the complete, absolute emancipation of property can save society, by realizing all the noble and generous hopes of the friends of justice and humanity.

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FIRST SOIRÉE↩

THE SPEAKERS: A Conservative.—A Socialist.—An Economist.

SUMMARY: The social problem stated.—That society is governed by natural, immutable, and absolute laws.—That property is the foundation of society’s natural organization.—Definition of property.—A list of the current violations of the principle of property.

THE CONSERVATIVE.

Let us debate among ourselves, without passion, the formidable problems that have arisen in recent times. You (the socialist), who wage relentless war against existing institutions, and you (the economist), who defend them with some reservations—what is it that you truly want?

THE SOCIALIST.

We want to rebuild society.

THE ECONOMIST.

We want to reform it.

THE CONSERVATIVE.

Oh, my good friends, you are dreamers, and I would ask for nothing [6] better, if it were possible. But you are chasing pipe dreams.

THE SOCIALIST.

Ah! What, then? To wish that the reign of force and fraud may finally give way to that of justice; to wish that the poor may cease to be exploited by the rich; to wish that each person may be rewarded according to his work—is this, then, to pursue a pipe dream?

THE CONSERVATIVE.

This ideal, which all utopians have sought since the beginning of the world, can unfortunately never be realized on earth. It is not given to men to attain it!

THE SOCIALIST.

I believe quite the opposite. Until now, we have lived within a flawed and corrupt social organization. Why should we not be allowed to change it? If society is poorly structured, as M. Louis Blanc said, can we not remake it? Are the laws upon which this society—gangrenous to the core—rests truly eternal, immutable? Must we, who have endured them until now, be condemned to endure them forever?

THE CONSERVATIVE.

God has willed it so.

THE ECONOMIST.

Beware of invoking God's name in vain. Are you certain that society's ills truly stem from the laws upon which it is built?

THE SOCIALIST.

Where else would they come from?

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THE ECONOMIST.

Could it not be that these harms originate from violations of society's fundamental laws?

THE SOCIALIST.

A fine notion—that such laws even exist!

THE ECONOMIST.

There are economic laws that govern society, just as there are physical laws that govern the material world.

These laws have Utility and Justice as their essence. This means that by observing them absolutely, one can be certain of acting both usefully and justly, for oneself and for others.

THE CONSERVATIVE.

Are you not exaggerating a little? Are there truly, in economic and moral sciences, principles that are absolutely applicable to all times and all places? I must confess, I have never believed in absolute principles.

THE ECONOMIST.

Then what principles do you believe in?

THE CONSERVATIVE.

My God! Like all men who have closely observed the workings of this world, I believe that the laws of justice and the rules of utility are essentially mutable and variable. I believe, therefore, that no universal and absolute system can be founded upon these laws. Joseph de Maistre used to say: "Everywhere I have seen men, but nowhere have I seen Man." Well, I believe one may say similarly that there are societies, each with its own particular laws suited to its [8] nature, but that there is no single Society governed by universal laws.

THE SOCIALIST.

Of course, since we intend to establish precisely that unitary and universal society.

THE CONSERVATIVE.

I also believe, with M. de Maistre, that laws arise from circumstances and have nothing fixed about them… Don't you know that a law considered just in one nation is often regarded as unjust in another? Theft was permitted under certain conditions in Lacedemon; polygamy is allowed in the East, where even castration is tolerated. Would you, for this reason, say that the Lacedemonians were shameless thieves or that Asians are despicable debaucherers? No! If you consider matters with a sound mind, you will say that the Lacedemonians, in permitting theft, obeyed the particular necessities of their situation, and that Asians, in allowing polygamy and tolerating castration, are influenced by their climate. Reread Montesquieu! You will conclude that moral law does not manifest itself in the same way in all places and times. You will conclude that justice is not absolute. "Truth on this side of the Pyrenees, error on the other," said Pascal. Reread Pascal!

What is true of justice is no less true of utility. You speak of the laws of utility as if they were universal and permanent. What a profound error! Don't you know that economic laws have varied and still vary infinitely, just as moral laws do?... Will you object that nations fail to recognize their [9] true interests by adopting diverse and changing economic legislation? But then you would be contradicting the experience of centuries. Is it not well established, for instance, that England owed its wealth to the protectionist system? Was it not Cromwell’s famous Navigation Act that marked the beginning of its maritime and colonial greatness? And yet, England has just abandoned this system of economic tutelage. Why? Because it has ceased to serve its interests, because it would now bring about its ruin after having secured its wealth. A century ago, free trade would have been disastrous for England; today, it gives new impetus to British industry and commerce. Such have been the changes in circumstances!

There is nothing but change and diversity in the realms of Justice and Utility. To believe, as you seem to do, in the existence of absolute principles is to go regrettably astray, to misunderstand the very conditions of society’s existence.

THE ECONOMIST.

So, then, you believe that there are no absolute principles, neither in morality nor in political economy; you believe that everything is mutable, variable, diverse in the sphere of justice as well as in that of utility; you believe that Justice and Utility depend on place, time, and circumstance. Well, the socialists are of the same opinion as you. What do they say? That new laws are needed for new times. That the hour has come to change the old moral and economic laws that govern human societies.

THE CONSERVATIVE.

What crime and folly!

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THE SOCIALIST.

Why? You have governed the world until now—why should we not govern it in our turn? Is your nature superior to ours? Can you really claim that no one is more fit than you to govern men? We appeal to the universal opinion of mankind! Ask the miserable wretches who languish in the depths of your societies whether they are satisfied with the lot your legislators have left them! Ask them whether they believe they have received a just share of the earth’s wealth! Your laws… Ah! If you had not made them in the egotistical interest of one class, would that class alone have prospered? Why, then, should we be deemed to be criminals for establishing laws that benefit all equally?

You accuse us of attacking the eternal and immutable principles upon which society rests—religion, family, property. But by your own admission, there are no eternal and immutable principles.

Property! But in the eyes of your own jurists, what is property? A purely human institution, an institution that men have founded, decreed, and that they therefore have the right to abolish. Have they not, moreover, constantly modified it? Does modern property resemble Egyptian or Roman property, or even medieval property? Once, the appropriation and exploitation of man by man was permitted; today, you no longer admit it—at least not legally. In most ancient societies, ownership of the land was reserved to the State; you have made land ownership accessible to all. [11] On the other hand, you have refused to fully recognize certain forms of property: you have denied the inventor absolute ownership of his creation, the writer absolute ownership of his book. You have also understood that society must be protected against the excesses of individual property, and you have enacted laws of expropriation for public utility.

Well, then! What are we doing? We are merely limiting property a little further; we are subjecting it to greater constraints, to heavier burdens in the public interest. Are we therefore so guilty? Is it not you who have laid out the path we are following?

As for the family, you admit that it could have been legitimately organized differently in other times and places than it is today among us. Why, then, should it be forbidden for us to modify it once more? Everything man has made, can man not also undo?

Now concerning religion, have your legislators not always handled it as they saw fit? Did they not begin by authorizing the Catholic religion to the exclusion of all others? Did they not end by permitting all faiths and even subsidizing some? If they have been able to regulate religious expression, why should it be forbidden for us to regulate it in turn?

Property, family, religion—malleable wax, shaped by so many successive legislators—why should we not imprint our mark upon them as well? Why should we refrain from touching things that others have so often altered? Why should we respect these relics that even their guardians [12] have not hesitated to profane?

THE ECONOMIST.

The lesson is well deserved. You, conservatives, who admit that there are no absolute, preexisting, and eternal principle—neither in morality nor in political economy— and no principle which is equally applicable at all times and in all places, see where your doctrines lead. They have been turned against you. After hearing your moral philosophers and your jurists deny the existence of the eternal laws of justice and utility, only to replace them with I know not what temporary expedients, some bold and passionate minds, now wish to replace your ideas with their own and govern the world next, and to do so differently from you. And if you are right, O conservatives, when you state that no fixed and absolute rule governs the moral and material order of human affairs, how can these "re-organizers" of society be condemned? The human mind is not infallible. Your legislators may have erred. Why should it not be given to other legislators to do better?

When Fourier, drunk with pride, cried out: "All legislators have been mistaken until me, and their books are only fit to be burned," could he not, according to your own reasoning, have been right? If the laws of Justice and Utility come from men, and if it is within men’s power to modify them according to time, place, and circumstance, was Fourier not justified in saying, after consulting history—this long martyrology of people—that the ancient social legislations were conceived within a false system, and that a new social order must be organized? By asserting that no absolute and superhuman principle governs societies, have you not opened [13] the floodgates to the torrents of utopia? Have you not authorized any man to remake these societies, which you claim to have built? Is socialism not a mere consequence of your own doctrines?

THE CONSERVATIVE.

What can we do about it? Believe me, we are well aware of the weakness in our armor. That is why we have never completely denied socialism. What do we most often say to the socialists? We tell them: "Between you and us, it is only a question of time. You are wrong today, but perhaps you will be right in three hundred years. Wait!"

THE SOCIALIST.

And if we do not want to wait?

THE CONSERVATIVE.

Then, too bad for you! Since, without making any judgment on the future of your theories, we consider them immoral and subversive in the present, we will fight them relentlessly. We will cut them down as the scythe removes the weeds… For your attacks on the present institutions of religion, family, and property, we will send you to prison and the penal colonies.

THE SOCIALIST.

All the better. We rely heavily on persecution to advance our doctrines. The most glorious platform one can give an idea is a scaffold or a stake. Fine us, imprison us, deport us… we could not ask for more. If you could reestablish the Inquisition against socialists, we would be certain of our cause’s triumph.

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THE CONSERVATIVE.

We can still do without that extreme remedy. We possess the majority of the votes and control the coercive force of the government.

THE SOCIALIST.

Until the majority of the votes and control the government's coercive force shift to our side.

THE CONSERVATIVE.

Oh! I am well aware that the danger is immense, but we will resist to the end.

THE ECONOMIST.

And you will lose the fight. Conservatives, you are powerless to preserve society.

THE CONSERVATIVE.

That is quite the definitive verdict.

THE ECONOMIST.

Let us see if it is unfounded. If you do not believe in absolute principles, then you must, must you not, consider nations as artificial aggregates, successively constituted and refined by human hands? These aggregates may have similar principles and interests, but they may also have opposing principles and interests. What is just for one may not be just for another. What is useful to one may be harmful to another. But what is the necessary result of this antagonism of principles and interests? War. If it is true that the world is not governed by universal and permanent laws, if it is true that each nation has its own principles and interests—interests and principles that are essentially variable according to the circumstances and [15] time—then is not war part of the natural order of things?

THE CONSERVATIVE.

It is certain that we have never dreamed of perpetual peace like that good Abbé de Saint-Pierre. Besides, Joseph de Maistre perfectly demonstrated that war is indestructible and necessary.

THE ECONOMIST.

So you admit—and indeed, you cannot help but admit—that the world is eternally destined for war?

THE CONSERVATIVE.

War was in the past, it is in the present—why should it cease to exist in the future?

THE ECONOMIST.

Yes, but in the past, the vast majority of populations consisted of slaves or serfs. And slaves and serfs did not read newspapers, did not frequent political clubs, and did not know what socialism was. Look at the serfs of Russia! Are they not a dough that despotism kneads as it pleases? Does it not make of them, at will, either laboring beasts or cannon fodder?

THE CONSERVATIVE.

It is obvious that serfdom had its merits.

THE ECONOMIST.

Unfortunately, there is no longer any way to reestablish it among us. You no longer have slaves or serfs. Instead, you have multitudes in need, whom you cannot prevent from freely communicating their thoughts, whom you are, on the contrary, urged every day to grant [16] greater access to the realm of general knowledge. Will you stop these multitudes—now sovereign—from drinking at the poisoned fountain of socialist writings? Will you prevent them from listening to the dreamers who tell them that a society where the masses work hard to earn little, while above them men live who earn much by working little, is a corrupt society that must be changed? No! No matter how much you prohibit socialist doctrines, you will not prevent them from emerging and spreading. The press will defy your prohibitions.

THE CONSERVATIVE.

Ah! The press, that great poisoner of minds!

THE ECONOMIST.

You may muzzle it, you may suppress it, but you will never succeed in destroying it. It is a hydra with millions of heads that would defy even the arm of Hercules.

THE CONSERVATIVE.

If only we had a good absolute monarchy…

THE ECONOMIST.

The press would kill absolute monarchy just as it has killed constitutional monarchy, and in its absence, books, pamphlets, and conversation would suffice.

And today, to speak only of the press, this powerful siege engine is no longer directed merely against the government; it is directed against society itself.

THE SOCIALIST.

Yes, in recent years, the press has advanced—thank God!

THE ECONOMIST.

It once incited revolutions to change [17] the form of government; today, it incites them to change the form of society. Why should it not succeed in this aim as it succeeded in the other? Ah! If nations were fully secure from external conflicts, perhaps it would always be possible to suppress the violent and anarchic factions within it. But, as you yourself admit, external war is inevitable, for principles and interests are ever-changing and diverse, and no one can guarantee that war, harmful to some nations today, may not serve them tomorrow. Now, if you rely only on the coercive force of the government to subdue socialism, how will you contain it when you are obliged to turn that very coercive force—your supreme justification—against an enemy from without? If war is inevitable, is not the rise of revolutionary socialism inevitable as well?

THE CONSERVATIVE.

Alas! I greatly fear it. That is why I have always thought that society is marching rapidly toward its own ruin. We are like the Greeks of the Byzantine Empire, and the barbarians are at our gates.

THE ECONOMIST.

So this is where you have arrived? You despair of civilization’s destiny, and you watch as barbarism rises, waiting for the final hour when it will breach your last defenses. You call yourselves the Greeks of the Byzantine Empire… Well! If that is so, then let the barbarians enter. Better yet, go forth to meet them and humbly hand them the keys to the sacred city. Perhaps you will succeed in appeasing their fury. But [18] beware of provoking their wrath further by prolonging your resistance in vain. Does history not tell us that Constantinople was sacked, and that the Bosphorus carried blood and corpses for four days? O Greeks of the new Byzantine Empire, fear the fate of your ancestors, and, for mercy’s sake, spare us the agony of futile resistance and the horrors of a city taken by storm. Hurry and surrender Byzantium—if Byzantium cannot be saved.

THE SOCIALIST.

So you admit that the future belongs to us?

THE ECONOMIST.

God forbid! But I do think that your adversaries are wrong to resist you if they despair of defeating you, and I understand how, having no attachment to any fixed and immutable principle, they have lost faith in their own victory. As conservatives, they are powerless to conserve society—that is all I sought to prove. Now, I will tell you, you other organizers, that you would be equally powerless to organize it. You may take Byzantium and sack it, but you will not know how to govern it.

THE SOCIALIST.

How do you know? Do we not have ten different organization for your one?

THE ECONOMIST.

You have just put your finger on the wound. Tell me, to which socialist sect do you belong? Are you a Saint-Simonian?

THE SOCIALIST.

No, Saint-Simonism is outdated. At its origin, it was more of an aspiration than a formula… And the disciples ruined the aspiration without finding the formula.

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THE ECONOMIST.

A Phalansterian?

THE SOCIALIST.

It is appealing. But Fourierism’s morality is quite questionable.

THE ECONOMIST.

A Cabetist?

THE SOCIALIST.

Cabet is an ingenious but incomplete thinker. He understands nothing, for example, about art. Imagine that in Icaria, they paint statues! The wax figures of Curtius—that is the ideal of Icarian art. Barbaric!

THE ECONOMIST.

A Proudhonian?

THE SOCIALIST.

Proudhon—ah! What a great destroyer! How well he demolishes things! But so far, he has only managed to establish his exchange bank. And that is not enough.

THE ECONOMIST.

Neither a Saint-Simonian, nor a Fourierist, nor a Cabetist, nor a Proudhonian. Well, then, what are you?

THE SOCIALIST.

I am a socialist.

THE ECONOMIST.

But still! To what variety of socialism do you belong?

THE SOCIALIST.

To my own. I am convinced that the great problem of the organization of labour has not yet been solved. The ground has been cleared, the foundations laid, but the edifice has not been built. Why should I not seek, like [20] others, to construct it? Am I not inspired by pure love for Humanity? Have I not studied Science and reflected long on the Problem? And I believe I can clearly state that… no! Not yet… there are still certain points that are not fully elucidated (pointing to his forehead), but the Idea is there… and you will see, later.

THE ECONOMIST.

In other words, you too are searching for your own organization of labor. You are an independent socialist. You have your own particular Bible. In fact, why not? Why should you not, like others, receive the spirit of the Lord? But likewise, why should others not receive it just as well as you? That makes for quite a number of organizations of labour.

THE SOCIALIST.

So much the better! The people will be able to choose.

THE ECONOMIST.

Ah! By majority vote. But what will the minority do?

THE SOCIALIST.

It will submit.

THE ECONOMIST.

And if it resists? But let’s assume that it submits, willingly or by force. Let’s assume that the organization adopted by majority vote is implemented. What will happen if someone—you, me, or another—discovers a superior organization?

THE SOCIALIST.

That is unlikely.

THE ECONOMIST.

On the contrary, it is very likely. Do you not believe in the doctrine of indefinite progress?

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THE SOCIALIST.

Certainly. I believe that Humanity will continue to progress until it ceases to exist.

THE ECONOMIST.

And what is the primary driver of human progress? If we are to believe your teachers, it is society that makes the man. When social organization is poor, man remains stagnant or regresses; when social organization is good, man develops and advances…

THE SOCIALIST.

What could be truer?

THE ECONOMIST.

Then, is there anything more desirable in the world than improving social organization? But if that is the case, what should be the constant preoccupation of the friends of humanity? Should it not be to invent and refine ever more perfect organizations?

THE SOCIALIST.

Yes, of course. What harm do you see in that?

THE ECONOMIST.

I see in it a state of permanent anarchy. A new organization is implemented and begins to function, more or less well, because it is not perfect…

THE SOCIALIST.

Why not?

THE ECONOMIST.

Does not the doctrine of indefinite progress exclude the idea of perfection? Besides, I have just listed half a dozen organizations, and you have not been satisfied with any of them.

[22]

THE SOCIALIST.

That proves nothing against those that will come later. For instance, I am firmly convinced that my system…

THE ECONOMIST.

Fourier believed his system to be perfect, and yet you do not accept Fourier’s system. Likewise, there will be those who do not accept yours. So, whether good or bad, an organization is put into effect. The majority is satisfied with it, but the minority is not. From this arises conflict, a struggle. And note well that the future organization has an immense advantage over the present one—it has not yet been tested for its flaws. In all likelihood, it will end up prevailing… until it is, in turn, replaced by a third. But do you believe that a society can change its organization daily without peril? Consider the dreadful crisis into which we were thrown by a mere change of government. What would happen if it were a matter of changing society itself?

THE CONSERVATIVE.

One shudders at the mere thought. What an appalling disaster! Ah! The spirit of innovation—the spirit of innovation!

THE ECONOMIST.

No matter what you do, you will never suppress it. The spirit of innovation exists…

THE CONSERVATIVE.

To the misfortune of the world.

THE ECONOMIST.

Not at all. Without the spirit of innovation, men would still be feeding on acorns or [23] grazing like cattle. Without the spirit of innovation, you would be a coarse savage, sheltering in the foliage, instead of a respectable landowner with a house in the city and a house in the countryside, comfortably fed, clothed, and housed.

THE CONSERVATIVE.

Why has the spirit of innovation not remained within proper limits?

THE SOCIALIST.

You egotist!

THE ECONOMIST.

The spirit of innovation knows no limits. The spirit of innovation within man will perish only with man. The spirit of innovation will perpetually modify everything that men have established, and if, as you assert, the laws governing societies are of human origin, then the spirit of innovation will not stop before they do. It will modify, change, and overthrow them for as long as humanity inhabits the earth. The world is doomed to incessant revolutions, to eternal upheavals, unless…

THE CONSERVATIVE.

Unless what …?

THE ECONOMIST.

Well, unless there exist absolute principles; unless the laws governing the moral and economic world are preordained, just as those governing the physical world. If this were so, if societies were organized by the hand of Providence, should we not pity the pygmy swollen with pride who would attempt to substitute his own work for that of the Creator? Would it not be just as puerile [24] to try to alter the foundations upon which society rests as to attempt to shift the earth from its orbit?

THE SOCIALIST.

Without a doubt. But do these providential laws exist? And, even supposing they do, do they truly have Justice and Utility as their essential characteristics?

THE CONSERVATIVE.

That is a grave impiety. If God Himself has organized societies, if He has made the laws that govern them, it is evident that these laws are inherently just and useful, and that human suffering arises from failing to observe them.

THE ECONOMIST.

Bravo. But in turn, you must admit that these laws are universal and immutable?

THE SOCIALIST.

Ah! Why don't you give an answer? Don't you know that nature operates only by universal and immutable laws? And, I ask you, could it operate otherwise? If natural laws were partial, would they not constantly be in conflict with one another? If they were variable, would they not plunge the world into perpetual disruption? I can no more conceive of a natural law that is not universal and immutable than you can conceive of a law emanating from the Divine that does not have Justice and Utility as its essence. Only, I doubt that God has concerned Himself with the organization of human societies. And do you know why I doubt it? Because your societies are appallingly organized; because human history has been, until now, nothing but the [25] regrettable and hideous chronicle of crime and poverty. To attribute the organization of these wretched and vile societies to God Himself—would that not be making Him responsible for evil? Would it not justify the accusations of those who denounce Him as unjust and inhumane?

THE ECONOMIST.

Let me say this! The existence of these providential laws does not necessarily imply that humanity must prosper. Men are not lifeless bodies, devoid of will, like those celestial spheres that move in eternal order under the impulse of physical laws. Men are active and free beings; they may choose to observe or to disregard the laws that God has given them. Only, when they do not observe them, they become both criminal and destitute.

THE SOCIALIST.

If that were the case, they would always observe them.

THE ECONOMIST.

Yes, if they knew them; and if, knowing them, they understood that failing to observe these laws would inevitably harm them—but that is precisely what they do not know.

THE SOCIALIST.

So you claim that all the misfortunes of humanity stem from the failure to observe the moral and economic laws that govern societies?

THE ECONOMIST.

I say that if humanity had always observed these laws, the sum of its suffering would have always been as minimal as possible. Is that enough for you?

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THE SOCIALIST.

Certainly. But in truth, I would be very curious to know what these miraculous laws are.

THE ECONOMIST.

The fundamental law upon which the entire social organization rests, and from which all other economic laws derive, is property.

THE SOCIALIST.

Property! Come now! But it is precisely from property that all of humanity’s suffering originates.

THE ECONOMIST.

I claim the opposite. I argue that the poverty and injustices from which humanity has continually suffered do not come from property; I argue that they result from violations—whether individual or collective, temporary or permanent, legal or illegal—of the principle of property. I argue that if property had been religiously respected since the beginning of the world, humanity would have constantly enjoyed the maximum well-being possible at each stage of the advancement of the arts and sciences, as well as absolute justice.

THE SOCIALIST.

That is quite a series of assertions. And you are, presumably, in a position to prove what you claim.

THE ECONOMIST.

Presumably.

THE SOCIALIST.

Well then, prove it!

THE ECONOMIST.

I ask for nothing better.

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THE CONSERVATIVE.

First of all, I beg you, please define property.

THE ECONOMIST.

I will do better—I will begin by defining man, at least from an economic point of view.

Man is a composite of physical, moral, and intellectual forces. These various forces must be constantly maintained and replenished through the assimilation of similar forces. When they are not replenished, they perish. This is as true for intellectual and moral forces as it is for physical forces.

Man is therefore compelled to perpetually assimilate new forces. How is he made aware of this necessity? Through pain. Every loss of a force is accompanied by pain. Every assimilation of a force, every consumption, on the other hand, is accompanied by pleasure. Driven by this dual incentive, man continuously strives to maintain or increase the sum of physical, moral, and intellectual forces that constitute his being. This is the reason for his activity.

When this activity is exercised—when man actswith the aim of restoring or increasing his forces—it is said that he works. If the elements from which man draws all the potential things he might assimilate were always within his reach and naturally prepared for consumption, his labor would be minimal. But that is not [28] the case. Nature has not done everything for man; it has left him much to do. While it generously provides the raw materials for everything necessary for his consumption, it compels him to fashion them into a multitude of forms in order to render them consumable.

The preparation of things necessary for consumption is called production.

How is production accomplished? Through the action of man's forcesor facultiesupon the elements provided by nature.

Before consuming, man must therefore produce. Since all production requires an expenditure of energy, it entails an effort, a hardship. This hardship, this suffering, is endured in order to obtain pleasure, or, what amounts to the same thing, to avoid a greater suffering. This pleasure is obtained, and this suffering is avoided, through consumption. To produce and to consume, to suffer and to enjoy—such is the entirety of human life.

THE CONSERVATIVE.

What are you daring to say? In your view, is pleasure the sole purpose that man should pursue on earth?

THE ECONOMIST.

Do not forget that we are speaking here of moral and intellectual pleasures as well as physical pleasures. Do not forget that man is a physical, moral, and intellectual being. Whether he develops or degrades himself in these three aspects is the only question. If he neglects his moral and intellectual needs to satisfy only his physical appetites, he will degrade himself morally and [29] intellectually. If he neglects his physical needs to increase his intellectual and moral satisfactions, he will degrade himself physically. In either case, he will suffer on one side while excessively indulging in another. Wisdom consists in maintaining a balance among the faculties one possesses, or in achieving that balance where it does not exist. But political economy does not concern itself—at least not directly—with this internal regulation of human faculties. Political economy examines only the general laws of the production and consumption of wealth. The way in which each individual ought to distribute the restorative forces of his being falls within the realm of morality.

To suffer as little as possible—physically, morally, and intellectually—and to enjoy as much as possible in all three aspects—this is, ultimately, the great driving force of human life, the pivot around which all existence revolves. This driving force, this pivot, is called *self-interest".

THE SOCIALIST.

You consider self-interest as the sole driving force of human actions, and you define self-interest as avoiding hardship and attaining pleasure. But is there not in man a nobler motive to which one might appeal? Instead of being driven by the base lure of personal satisfaction, could he not be inspired by the higher stimulus of love for humanity? Instead of yielding to self-interest, could he not obey the call of devotion to others?

[30]

THE ECONOMIST.

Devotion to others is merely one of the constituent parts of self-interest.

THE CONSERVATIVE.

What do you mean? Do you forget that devotion to others implies sacrifice and that sacrifice implies suffering?

THE ECONOMIST.

Yes, sacrifice and suffering on one side, but satisfaction and pleasure on the other. When one devotes oneself to another person, one most often condemns oneself, at least materially, to deprivation, but in exchange, one experiences moral satisfaction. If the hardship outweighs the satisfaction, one does not devote oneself to others.

THE CONSERVATIVE.

And the martyrs?

THE ECONOMIST.

Even the martyrs provide testimony in support of what I claim. Their moral sentiment of religion surpassed their physical instinct for self-preservation. In exchange for their physical suffering, they experienced more intense moral pleasures. When one is not endowed with religious sentiment to a high degree, one does not voluntarily expose oneself to martyrdom. Why? Because when moral satisfaction is weak, it is deemed too dearly bought with physical suffering.

THE CONSERVATIVE.

But if that is so, then men in whom physical appetites predominate will always sacrifice their higher needs for the satisfaction of their [31] lower ones. Such men would have an interest in wallowing in filth…

THE ECONOMIST.

That would be true if human existence were confined to this earth. If that were the case, individuals in whom physical appetites predominate would have no reason to restrain them. But man is not, or does not believe himself to be, a creature for a single day. He has faith in a future existence, and he strives to perfect himself to ascend to a better world rather than descend into a worse one. If he deprives himself of certain pleasures here below, it is with the aim of acquiring superior pleasures in another life.

If he has no faith in these future pleasures, or if he believes them to be inferior to the present pleasures that religion and morality command him to sacrifice to attain them, he will not consent to that sacrifice.

But whether satisfaction is present or future, whether it is found in this world or another, it remains the ultimate goal that man pursues, the constant and immutable driving force of his actions.

THE SOCIALIST.

So broadly defined, one might indeed accept self-interest as the sole driving force of human actions.

THE ECONOMIST.

Under the impulse of his self-interest, wherever he places it, man acts, works. It is the role of religion and morality to teach him where to place it well…

Man constantly strives to reduce the sum of his hardships and to increase the sum of his pleasures. How can he achieve this dual result? By [32] obtaining more things suitable for consumption in exchange for less labor, or, in other words, by improving his work.

How can man improve his work? How can he obtain the maximum enjoyment in exchange for the minimum effort?

By properly directing the forces at his disposal. By performing the tasks best suited to his faculties and by executing his work as well as possible.

Now, experience demonstrates that this result can only be achieved through the most complete division of labor.

Men are therefore naturally interestedin dividing their labor. But the division of labor implies the bringing together of individuals, society, and exchanges.

If men were to remain isolated, if they were to meet all their needs individually, they would expend a maximumof effort to obtain a minimumof satisfaction.

However, this interest that men have in uniting to reduce their labor and increase their pleasures might not have been sufficient to bring them together if they had not first been drawn to one another by the natural impulse of certain needs that cannot be satisfied in isolation, and secondly by the necessity of defending—what? Their properties.

THE CONSERVATIVE.

What? Does property exist in a state of nature? According to jurists, it is society that creates it.

[33]

THE ECONOMIST.

If society creates it, then society can also abolish it, and the socialists who demand its abolition are not such great criminals. But society has not created property; rather, it is property that has created society.

What is property?

Property arises from a natural instinct with which the entire human species is endowed. This instinct reveals to man, before any reasoning on his part, that he is master of his own person and that he may make use of as he wishes all the potential things that constitute his being, whether they are a part of him or whether he has split them off from his body.

THE SOCIALIST.

Split them off? What do you mean?

THE ECONOMIST.

Man is obliged to produce if he wishes to consume. In producing, he expends, he splits off from himself a certain portion of his physical, moral, and intellectual forces. Products contain the forces expended by those who created them. But he does not stop owning these forces that he splits off from himself, under the necessity of labor. Human conscience is not mistaken in this, and it condemns indiscriminately any attack on internal propertyas well as external property. [1]

When man is denied the right to own [34] the portion of his forces that he separates from himself through labor, when others are granted the right to use it, what happens? Since this separation, this expenditure of forces, entails suffering, man ceases to work unless he is forced to do so.

To abolish man’s right to property over the products of his labor is to prevent the creation of these products.

To seize a portion of these products is likewise to discourage their production; it is to slow man’s activity by weakening the motive that drives him to act.

Similarly, to infringe upon internal property—to compel an active and free being to undertake work he would not have undertaken on his own, or to forbid him [35] from engaging in certain fields of labor, thus diverting his faculties from their natural purpose—is to diminish man’s productive power.

Any infringement upon either internal or external property, whether separated or not separated, is contrary to both Utility and Justice.

How then has it happened that property has always been subject to voiolations?

Since all labor entails an expenditure of energy, and all expenditure of energy entails suffering, some men have sought to escape this suffering while still enjoying the benefits it produces. They have, consequently, made it their practice to seize the fruits of other men’s labor, either by [36] stripping them of their external possessions or by reducing them to slavery. They then established formal societies to protect themselves and the fruits of their pillaging against their slaves or against other kidnappers. Such is the origin of most societies.

But this unjustified usurpation by the strong over the property of the weak has been progressively challenged. From the very origins of society, an incessant struggle has been waged between oppressors and the oppressed, between plunderers and the plundered; from the very origins of society, humanity has ceaselessly sought the emancipation of property. History is filled with this great struggle! On one side, you see the oppressors defending the privileges they have [37] granted themselves over the property of others; on the other, the oppressed demanding the abolition of these unjust and despicable privileges.

The struggle continues still, and it will only cease when property is fully emancipated.

THE CONSERVATIVE.

But there are no longer any privileges!

THE SOCIALIST.

But property has far too many liberties!

THE ECONOMIST.

Property is hardly more free today than it was before 1789. Perhaps it is even less so. There is, however, one difference: before 1789, the restrictions placed on the right of property benefited a select few; today, they often benefit no one, yet they remain just as harmful to all.

THE CONSERVATIVE.

But where do you see these harmful restrictions?

THE ECONOMIST.

I will listthe principal ones…

THE SOCIALIST.

One more observation. I readily admit that property is supremely just and useful in a state of nature. A man lives and works alone. It is perfectly just that he alone should enjoy the fruits of his labor. It is no less useful that this man should be assured of keeping his property. But can this system of individual property be maintained justly and usefully in a state of society?

[38]

I am willing to concede that Justice and Utility demand that each person, in society as in isolation, should retain full property over his own person and over that portion of his energies that he separates from himself through labor. But could individuals truly enjoy this dual property if society were not organized in such a way as to guarantee it to them? If this necessary organization did not exist—if, by some mechanism, society did not ensure that each person received the equivalent of his labor—would not the weak be at the mercy of the strong? Would not the property of some be perpetually encroached upon by the property of others? And if one were to make the mistake of fully emancipating property before society had been equipped with this distributive mechanism, would we not see even greater encroachments by the strong upon the property of the weak? Would not the complete emancipation of property worsen the problem rather than correct it?

THE ECONOMIST.

If your objection were valid, if it were truly necessary to construct a mechanism to distribute to each person the equivalent of his labor, then socialism would have every reason to exist, and I would be a socialist like you. But the mechanism you seek to establish artificiallyalready exists naturally, and it functions. Society is already organized. The problem that you attribute to a lack of organization actually stems from the obstacles imposed on the free operation of that organization.

THE SOCIALIST.

You dare to claim that by allowing all men to freely dispose of their property within the [39] social environment in which we live, things would naturally arrange themselves in such a way as to make each person’s labor as productive as possible, and the distribution of the fruits of labor entirely just?

THE ECONOMIST.

I dare to claim that.

THE SOCIALIST.

You believe that it would become unnecessary to organize, if not production, at least distribution, exchange, and to clear the way for circulation of goods…

THE ECONOMIST.

I am certain of it. Let the owners act freely, let property circulate freely, and everything will arrange itself in the best possible way.

But property owners have never been allowed to act freely; property has never been allowed to circulate freely.

Judge for yourself.

Does it concern man’s right to property over himself—the right he possesses to use his faculties freely, as long as he does not cause harm to the property of others? In our current society, the highest functions and the most lucrative professions are not free. One cannot freely practice as a notary, a priest, a judge, a bailiff, a stockbroker, a broker, a doctor, a lawyer, or a professor. One cannot freely be a printer, a butcher, a baker, or a funeral director. One cannot freely establish a commercial association, a bank, an insurance company, or a major transport enterprise. One cannot freely construct a road, establish a charitable institution, sell tobacco, gunpowder, or saltpeter, transport [40] letters, mint currency, or even negotiate with other workers to set the price of labor. Man’s property over himself—his internal property—is restricted on all sides.

Nor is his property over the fruits of his labor—his external property—any less constrained. Literary or artistic property, as well as the property of inventions, is only recognized and guaranteed for a short period. Material property is generally recognized in perpetuity, but it is subject to a multitude of restrictions and obligations. Gifts, inheritance, and lending are not free. Exchange is heavily burdened by transfer taxes, registration fees, stamp duties, local taxes, customs duties, and by privileges granted to intermediaries in certain markets. Sometimes, exchange is even completely prohibited outside specific limits. Finally, the law of expropriation for public utility constantly threatens the small portion of property that has escaped other restrictions.

THE CONSERVATIVE.

All the restrictions you have just listed were established in the interest of society.

THE ECONOMIST.

That may be so, but those who established them were unfortunate in their approach, for all these restrictions, to varying degrees—some with considerable force—are sources of injustice and harm to society.

THE CONSERVATIVE.

So, by abolishing them, we would enjoy a true paradise on earth.

[41]

THE ECONOMIST.

I do not say that. I say that society would find itself in the best possible condition, given the current level of advancement in the arts and sciences.

THE SOCIALIST.

And you going to prove this?

THE ECONOMIST.

Yes.

THE CONSERVATIVE AND THE SOCIALIST.

What a utopian!

[42]

SECOND SOIRÉE↩

SUMMARY: Violations of external property.—Literary and artistic property.—Counterfeiting.—Property of inventions.

THE SOCIALIST.

You have undertaken to prove to us that the harms socialism attributes to property actually arise from violations of property. Are you prepared to begin demonstrating this paradox?

THE ECONOMIST.

Ah! Would to God that you taught such paradoxes!… I have distinguished between internal property and external property. The first consists in the right that every man possesses to freely dispose of his physical, moral, and intellectual faculties, as well as of the body that serves both as their container and their tool. The second resides in the right that man retains over the portion of his faculties that he has chosen to separate from himself and apply to external objects.

THE SOCIALIST.

Where does our right of property over external objects begin, and where does it end?

THE ECONOMIST.

It begins the moment we apply a portion of our forces, our faculties, to things that nature has placed at our disposal free of charge, [43] the moment we complete nature’s work by giving these things a new form, the moment we add to their natural value an artificial value. It ends the moment this artificial value perishes.

THE CONSERVATIVE.

What do you mean by value?

THE ECONOMIST.

I mean by value the property that things have, or that is given to them, to satisfy human needs.

Man therefore owns his own being and the things, natural or artificial, which depend upon it, namely his faculties, his body, and his works.

Man’s works, which are the objects of external property, are of two kinds: material and immaterial.

The law recognizes material property in perpetuity, that is, for as long as the object of the property lasts. In contrast, it limits the duration of immaterial property to a relatively short period. Yet both have the same origin.

THE CONSERVATIVE.

What? You equate the property of an invention or a piece of music with the property of a house or a plot of land?

THE ECONOMIST.

Absolutely. Do they not both originate from labor? The moment effort is expended and value is created, whether the effort comes from nerves or muscles, whether the value is applied to a [44] tangible or intangible object, a new property is created. What does it matter in what form it manifests?

If it is a piece of land brought under cultivation, it is primarily physical force that has been expended. If it is a piece of music, it is intellectual faculties, aided by certain physical or moral faculties, that have been employed. But unless one wishes to place the faculties of the mind beneath physical strength, or to claim that man owns his own mind by a less legitimate right than his physical strength, how can one establish a distinction between these two kinds of property?

THE CONSERVATIVE.

So, you would want the inventor of a machine, the author of a book, or a composer of music to remain the absolute masters of their works; to be able to give, bequeath, and sell them in perpetuity. You would even want to grant them the right to destroy them. You would have wanted the heirs of Bossuet, Pascal, or Molière to have had the power to deprive humanity of the immortal works of these great geniuses. This is, in truth, a wild exaggeration!

THE SOCIALIST.

Bravo!

THE ECONOMIST.

Applaud, it is only fair. Do you realize what doctrine you have just defended, Mr. Conservative?

THE CONSERVATIVE.

Well, I believe it is the doctrine of common sense.

[45]

THE ECONOMIST.

Not at all! It is the doctrine of communism.

THE CONSERVATIVE.

You jest. I have merely defended the rights of society over the products of the mind, that is all!

THE ECONOMIST.

The communists do nothing different. Only, they are more consistent than you. They defend the rights of society over everything—over material products as well as immaterial ones. They say to workers: "Complete your daily task, work according to your abilities, but instead of claiming for yourself the products of your labor, the values you have created, hand them over to the general association of citizens, to the community, which will take charge of distributing the fruits of everyone’s labor fairly. You will have your share!" Is this not, indeed, the language of the communists?

THE CONSERVATIVE.

Yes, that is indeed the language of this senseless sect, which robs the worker of the legitimate fruit of his labor in order to give him an arbitrary share of the labor of all.

THE ECONOMIST.

Truly, you speak wisely. So you do not admit that the worker should be deprived of all or part of the fruit of his labor, to be placed into the hands of the community?

THE CONSERVATIVE.

That would be theft!

THE ECONOMIST.

Well then, this theft, society commits it every day to [46] the detriment of writers, artists, and inventors.

You are familiar with the law governing literary property in France. While the ownership of material goods—lands, houses, furniture—is indefinite, literary property is limited to the twenty years following the author's death. The Constituent Assembly had originally granted only ten years.

Before the Revolution, the legislation was, in some respects, much more just…

THE CONSERVATIVE.

Before the Revolution, you say?

THE ECONOMIST.

Yes. You know that at that time, all rights—including the right of working as well as the right to own things —emanated from the king. Thus, authors could obtain, for themselves and their heirs, the exclusive right to exploit their books, provided they made the request. This privilege had no fixed limit; unfortunately, it was revocable at will. Furthermore, it was subject to tiresome restrictions in practice. When an author transferred his work to a bookseller, the exclusive right of exploitation was lost upon the author’s death. Only the heirs could retain this exclusive right.

THE SOCIALIST.

So then, the heirs of Molière, La Fontaine, and Racine were able to exclusively exploit the works of their illustrious ancestors until 1789?

THE ECONOMIST.

Yes. For example, there exists a decree of the council dated September 14, 1761, which extended to the grandsons of [47] La Fontaine the privilege granted to their ancestor, seventy years after his death. Had the Constituent Assembly fully understood its mission, it would have recognized and guaranteed this property right—free from the constraints of privilege—that even the Ancien Régime had sanctioned while simultaneously oppressing it. Unfortunately, communist ideas had already begun to take root in French society at that time. As a living embodiment of the philosophical and economic doctrines of the eighteenth century, the Constituent Assembly contained disciples of Rousseau and Morelly just as it did disciples of Quesnay and Turgot. Thus, it hesitated to fully recognize intellectual property. It mutilated this legitimate right to lower the cost of works of the mind.

THE CONSERVATIVE.

Was this not a noble goal? Suppose that the literary property of Pascal, Molière, and La Fontaine had not been extinguished for the benefit of the community—would we not be obliged to pay more for the works of these illustrious geniuses? And can the interests of a few be weighed against the interests of all?

THE ECONOMIST.

"When the savages of Louisiana want fruit," says Montesquieu, "they cut the tree at its base and pick the fruit. That is despotic government." Had the author of The Spirit of the Lawslived in our time, he would have added: "That is communism." By limiting literary property, what do you do? You reduce its market value. I write a book and offer to sell it to a bookseller. If he is guaranteed perpetual ownership of this book, he will obviously be able to pay me—and will [48] pay me—a higher price than if this property were to expire twenty years after my death.

THE CONSERVATIVE.

Oh! But in practice, this has little importance. How many books still have value twenty years after their author's death?

THE ECONOMIST.

You have just handed me another argument against you. There are two kinds of books—those that do not last and those that do. Your law limiting literary property leaves the value of the former intact while diminishing that of the latter.

For example: a man of genius writes a book destined to endure through the ages. He takes it to his bookseller. Can the bookseller pay significantly more for this immortal work than for an average book, destined for oblivion after a fleeting success? No! Because while the work itself does not perish, the ownership of the work does—or, which amounts to the same thing, it becomes public property. After a certain number of years, the legal holder is dispossessed. Your law protects mediocrity, but it penalizes genius.

And what is the result? The number of lasting works decreases, while the number of ephemeral ones increases. "Time," says Aeschylus, "respects only that which it has built." With few exceptions, the masterpieces we have inherited from the past were the result of long and arduous labor. Descartes devoted the greater part of his life to composing his Meditations.Pascal copied his Provincial Lettersup to thirteen times before sending them to print. Adam Smith spent thirty years observing the economic phenomena of society [49] before writing his immortal Wealth of Nations.But when a man of genius does not have financial security, can he afford to sow for so long without reaping? Pressed by the urgencies of life, is he not forced to release the harvest of his mind while it is still green?

Much is said against facile literature, but how could we have anything else? How could writers avoid throwing something together when the value of meticulously refined works is reduced to that of hastily composed ones? You may urge writers to sacrifice their interests for the sake of art, but they will not listen to you—and most often, they will be right. Do they not also have familial duties to fulfill, children to raise, parents to support, debts to pay, a position to maintain? Can they neglect these natural and sacred duties for the love of art?

So, they improvise and rush toward the branches of literature where improvisation is easiest. In science, the same cause produces the same deplorable results. Observation no longer dominates modern science—hypothesis does. Why? Because it is quicker to construct a hypothesis than to observe a law. Because books are more easily written with hypotheses than with observations. To this, add that hypotheses are often more striking. A paradox surprises more than a truth. It wins success much more quickly. It also loses it quickly, of course. But in the meantime, the peddler of paradoxes makes a fortune, while the [50] patient seeker of truth struggles against poverty. Is it any wonder, then, that paradox abounds, while true science becomes increasingly rare?

THE CONSERVATIVE.

You neglect to mention that the government takes it upon itself to reward those who distinguish themselves in the fields of science and literature. Society provides honors and prizes for true scholars and true writers.

THE ECONOMIST.

Yes—and that is not the least absurd aspect of this absurd system. Consider this! You devalue the property of true scholars and true writers in the supposed interest of posterity. But some instinct of natural justice warns you that you are committing an injustice. So, you levy a tax upon society and allocate its revenue to compensate those whom the law has wronged. You establish a budget for the arts and literature. Suppose the funds from this budget were always justly distributed, that they went directly to those affected by the law (and you know how questionable that assumption is)—would this compensation be any less tainted with injustice? Is it fair to compel taxpayers to pay a tax for the benefit of future consumers of books? Is this not communism of the worst kind—posthumous communism?

THE CONSERVATIVE.

Where do you see this communism?

THE ECONOMIST.

In a communist society, what does the government do? It seizes the product of each person's labor to distribute it free of charge to all. Well, what does the government do [51] when it limits literary property? It takes a portion of the value of the scholar’s and writer’s property to distribute it free of charge to posterity; then, it compels taxpayers to give up a portion of their property free of charge to scholars and writers.

The latter lose in this communist arrangement because the portion of property taken from them is usually greater than the compensation they receive.

The taxpayers lose even more because they receive nothing in return for the compensation they are forced to pay.

At the very least, do book consumers gain anything?

Currentconsumers gain nothing, since authors temporarily retain absolute property rights over their works.

Futureconsumers may, of course, purchase old works at a lower price; however, they also have fewer works available to them. Moreover, books that endure through the ages suffer, under the regime of limited property, all the disadvantages associated with communism. Once they fall into the public domain, they cease to receive the attentive and careful preservation that a private owner gives to his property. Even the best editions abound with alterations and errors.

Should I speak of the indirect damages resulting from the limitation of literary property? Should I speak of counterfeiting?

THE CONSERVATIVE.

What connection do you see between counterfeiting and the legal limitation of literary property?

[52]

THE ECONOMIST.

What is counterfeiting, if not a limitation of literary property in space, just as your law is a limitation in time? Is there, in reality, any difference between these two kinds of violations of property? I will go further. It is the limitation in time that has given rise to the limitation in space.

When material property was considered merely a privilege granted at the sovereign’s discretion, this privilege expired at the borders of each state. The property of foreigners was subject to the right of aubaine(escheat).

Once material property was universally recognized as an inalienable and sacred right, the right of aubaineceased to be applied to it.

Only intellectual property has remained subject to this barbaric rule. But in all fairness, can we complain? If we respect intellectual property less than material property, can we require foreigners to respect it more than we do?

THE SOCIALIST.

Very well! But you take no account of the moral benefits of counterfeiting. It is thanks to counterfeiting that French ideas spread abroad; our writers and scholars may suffer losses, but civilization gains. What does the interest of a few hundred individuals matter in comparison with the great interests of humanity?

THE ECONOMIST.

You are using, in favor of foreign consumers, the same argument you used earlier [53] in favor of future consumers. To refute it, I will consider the issue from the perspective of general consumption.

France is perhaps the country in the world where literary production is most active and abundant; yet books here are very expensive. A two-volume novel costs 15 francs in France, while in Belgium, the same two volumes cost only 1 franc 50 centimes. Should this price difference be attributed solely to author royalties? Not at all! By the admission of those directly concerned, it is primarily due to the small market available to the French bookseller. If counterfeiting were abolished, the two volumes that sell for 15 francs in France would likely drop to 5 francs in the general market—perhaps even lower. In this case, the foreign consumer would pay 3 francs 50 centimes more than under the counterfeiting regime; in contrast, the French consumer would pay 10 francs less. From the perspective of general consumption, would there not be an obvious advantage?

A few years ago, in the Chamber of Deputies, I heard Mr. Chaix-d’Est-Ange defend counterfeiting on the grounds of spreading knowledge. "It is thanks to counterfeiting," he said, "that French ideas penetrate abroad." "That may be so," one could have replied to the illustrious lawyer, "but in return, it is counterfeiting that prevents French ideas from penetrating within France."

Foreign consumers would pay slightly more for our books if counterfeiting ceased to exist—and even that is uncertain! But we would provide them with better books, and [54] in greater numbers. Would they not gain just as much as we would?

THE CONSERVATIVE.

Well! I believe you are right, and I feel quite inclined to join the cause of literary property.

THE ECONOMIST.

I could have expanded further on the growth and stability that the full recognition of literary property would bring not only to the industry of writers but also to that of booksellers… But since my case is won, I will not insist further.

If you grant me literary property, you must also grant me artistic property.

THE CONSERVATIVE.

What exactly is artistic property?

THE ECONOMIST.

If it concerns a painting, a statue, or a monument, artistic property consists of the right to dispose of it as with any other material property, as well as the exclusive right to reproduce it through drawings, engravings, etc. If it concerns a model or a design, artistic property likewise resides in the exclusive right of reproduction. Naturally, this property can be transferred or sold like any other.

THE CONSERVATIVE.

I see no issue with that. However, an exception should be made for industrial models and designs. Artists, designers, or [55] modelers would become excessively demanding if they were granted absolute ownership of their works.

THE ECONOMIST.

Ah! Ah! I’ve caught you again, Mr. Conservative-Communist! Well then, let me tell you that, due to an oversight by the regulatory legislators of the Empire, this particular type of property alone escaped limitation. This fortunate omission has, unsurprisingly, borne excellent fruit. Our industrial models and designs are today without rivals in the world.

This is easily explained. On the one hand, industrialists who purchase models and designs from artists, being assured of perpetual ownership, can afford to pay the highest possible price for them. On the other hand, artists, confident that they will receive adequate compensation, devote the necessary time and effort to improving their works.

THE SOCIALIST.

But do you also know what happened? I challenge you to guess. These industrialists, who are such fierce guardians of property, one day decided that they were paying too much for their models and designs. The issue was brought before their chambers of commerce and trade councils. Unanimously, they concluded that the problem lay in the perpetual nature of this property. Consequently, they petitioned the government to impose a limitation on it. The government promptly complied with the request of these high barons of industry. The Minister of Agriculture and Commerce hastily drafted a bill reducing the ownership duration of models and designs [56] to three, five, ten, or fifteen years. The bill was presented before Parliament and debated in the Chamber of Peers…

THE CONSERVATIVE.

And was it passed?

THE SOCIALIST.

No! The February Revolution removed it from the agenda. But rest assured, the discussion will resume, and the law will eventually pass. Meanwhile, these conservatives, who unhesitatingly infringe upon the property rights of artists—these conservatives who do not hesitate to practice communism when it benefits them—are the same ones who hunt down communists as if they were wild beasts.

THE ECONOMIST.

If the industrialists you mention had properly considered their true interests—if they had possessed even a basic understanding of political economy—they would have realized that by harming the artists, they could not help but harm themselves as well. When the law limits the property rights of models and designs, these works of art will certainly sell for a lower price. But will they retain the same level of quality? Won’t elite artists turn away from this field of work if their creations can no longer command adequate payment?

THE CONSERVATIVE.

It seems to me that they will still be paid sufficiently.

THE ECONOMIST.

If houses could only be owned for three years, wouldn’t their market value decline?

[57]

THE SOCIALIST.

Certainly. No one would pay a high price for a house that could be taken away after three years.

THE CONSERVATIVE.

Under such a system, no one would build anything but shacks.

THE ECONOMIST.

Well then, if the law similarly reduces the market value of models and designs, only shoddy models and designs will be produced.

But then, will our fabrics and bronzes—whose design or model often determines their value—still be able to compete with foreign goods? By limiting the property rights of artists, won’t industrialists have cut down the tree to get the fruit?

THE CONSERVATIVE.

That’s true.

THE ECONOMIST.

You see where the limitation of property leads. Things become communal, yes—but they are poorly produced, or they are no longer produced at all.

If you accept the unlimited ownership of artistic works, you must also accept the unlimited ownership of inventions.

THE CONSERVATIVE.

Unlimited ownership of inventions! But that would be the death of industry, which is already mercilessly ransomed by inventors.

THE ECONOMIST.

And yet, inventions are the fruit of intellectual labor, just like literary and [58] artistic works. If the latter give rise to an unlimited, absolute property right, why should the former—originating from the same source—give rise only to a limited and conditional right?

THE CONSERVATIVE.

Isn’t the interest of society at stake here? I can understand granting unlimited and absolute property rights to writers and artists. That is of little consequence. The world could, in a pinch, do without artists and writers.

THE SOCIALIST.

Oh, dear!

THE CONSERVATIVE.

But we could not do without inventors. It is inventors who provide agriculture and industry with tools and processes.

THE ECONOMIST.

And yet, the issue is not to suppress inventors or to reduce their numbers. On the contrary, it is to multiply them by ensuring they receive the compensation they deserve for their work.

THE CONSERVATIVE.

I am willing to consider it, but by decreeing the perpetual ownership of inventions, would you not be placing agriculture and industry under the yoke of a small number of inventors forever? Would you not be subjecting the most essential branches of production to demanding, intractable, and despicable monopolies? Suppose, for example, that the inventor of the plow had retained ownership of his invention, and that this ownership had been passed down intact to this day—what would have happened?

[59]

THE ECONOMIST.

What would have happened is that we would have today more numerous and more improved agricultural tools.

THE CONSERVATIVE.

That is pure delusion!

THE ECONOMIST.

Let us discuss this. You are familiar with the current legislation governing inventions. Inventors are guaranteed ownership of their works for five, ten, or fifteen years, on the condition that they pay the state 500 francs in the first case, 1,000 in the second, and 1,500 in the third. Now, it may very well happen that an invention does not yield the results its creator had anticipated. In that case, he finds himself punished, fined for having invented something.

THE CONSERVATIVE.

I never claimed that the current law was perfect. It can be reformed. But granting perpetual ownership of an invention to its creator—this is madness!

THE ECONOMIST.

In whose interest do you seek to strip the inventor of part of his property? Is it in the interest of present consumers? No, because you grant the inventor ownership for five, ten, or fifteen years. During that time, he naturally extracts every possible advantage from a property that will soon be taken from him; he exploits his monopoly to the fullest. Thus, it is solely in the interest of posterity that you strip inventors of their rights.

THE CONSERVATIVE.

It is in the interest of progress, of civilization. [60] Besides, how could one possibly disentangle and define the rights of inventors? All inventions are interconnected in some way.

THE ECONOMIST.

Just like all material properties. That does not prevent each individual from ultimately maintaining the integrity of their own.

THE CONSERVATIVE.

Yes, but it would be much more difficult in the realm of invention. Wouldn’t recognizing the property rights of inventors lead to an endless number of lawsuits?

THE ECONOMIST.

Is abolishing property really such a strange way of protecting it from legal disputes? Besides, the difficulty you raise presents itself every day, and every day it is resolved. Since inventions are already granted protection for five, ten, or fifteen years, disputes arise just as they would if protection were perpetual. These disputes are judged, and that is the end of it. Your objection collapses in the face of reality. I repeat: it is in the interest of posterity that you wish to limit the property rights of inventors.

THE CONSERVATIVE.

Certainly.

THE ECONOMIST.

In the western regions of the United States, vast tracts of virgin land are gradually being cleared by daring emigrants. When these pioneers of civilization find a site that suits them, they stop their wagons, pitch their tents, and, first with the axe [61] and then with the plow, they clear and cultivate the land. They give value to a land that previously had none. Well then, would you find it just if the community appropriated that value after five, ten, or fifteen years, instead of allowing the worker to pass it on to his descendants?

THE CONSERVATIVE.

Good heavens! That would be communism—it would be barbarism! Who would undertake to clear land under such conditions? But is there any real analogy between the work of the pioneer and that of the inventor? Is intelligence not a common resource that belongs to all of humanity? Can anyone lay exclusive claim to its fruits? Does the inventor not, after all, benefit greatly from the discoveries of his predecessors and the accumulated knowledge of society? If he did not invent, would not another, drawing from these common discoveries and shared knowledge, invent in his place?

THE SOCIALIST.

That same objection applies to the pioneer as much as to the inventor. Should society not say to the first occupant of the land: "You are about to cultivate soil that has remained unproductive until now—very well, I consent. But do not forget that this land is the work of God, not yours. Do not forget that its fruits belong to all and that the land itself belongs to no one! Therefore, you may enjoy this portion of land for a few years, but then you must return it faithfully to humanity, which holds it from God. And if you refuse to willingly make this rightful restitution, I will [62] use force to enforce the Right of All over the Selfishness of One…" And if the landowner resists? If he objects that he alone, through his sweat and labor, has created the value that they seek to take from him? "Oh, rebellious and unnatural owner," they might say, "could you have created this value without the tools and knowledge that society has provided you? Answer me!"

THE ECONOMIST.

And undoubtedly, the owner would reply: "Society has provided me with tools and knowledge, that is true, but I have paid for them. My ancestors and I have acquired, through our labor, all that we possess. Society therefore has no right over the fruits of my current labor. And if, abusing its power, it robs me of my property to place it in common use or distribute it to those who did not create it, it commits the most unjust and odious form of plunder."

THE CONSERVATIVE.

Well said! Let’s see you counter that argument, gentlemen communists!

THE SOCIALIST.

Refute it yourself. If society acknowledges that it has no right over the property of land clearers, even though they exploit lands that were once communal and make use of previous discoveries and knowledge, then it obviously cannot claim any right over the property of inventors.

THE CONSERVATIVE.

That depends on the demands of the general interest. If the [63] community were to seize a piece of land five, ten, or fifteen years after it had been cleared…

THE ECONOMIST.

… And if it forced the land clearer to pay five hundred, a thousand, or fifteen hundred francs before he even knew whether the land would be fertile or not…

THE SOCIALIST.

… And regardless of the extent of the land cleared.

THE CONSERVATIVE.

It is certain that land clearing would become exceedingly rare and that the community itself would suffer as a result.

THE ECONOMIST.

The same applies to inventions. Fewer inventions are made under a regime of limited property than would be made under a regime of unlimited property. Now, since civilization advances only through successive inventions, posterity—whose interests you have invoked—would undoubtedly benefit from the recognition of inventors’ property rights, just as it has benefited from the recognition of land ownership.

THE CONSERVATIVE.

You may be right in the case of most inventions. But there are some that are so essential that they cannot remain private for long. I mentioned the plow. Wouldn’t it be a terrible misfortune if only a single individual had the right to manufacture and sell plows? If the ownership of this indispensable agricultural tool had never entered the public domain?

THE SOCIALIST.

Indeed, that would be disastrous.

[64]

THE ECONOMIST.

Let us examine together how things would have unfolded had the inventor of the plow retained ownership of his invention instead of being deprived of it. But first, here is my answer: No! Society did not serve its true interest when it failed to recognize the inventor’s right to the plow—when it appropriated this property, which was the product of an individual’s labor, and rendered it communal. No! It hindered agricultural progress instead of facilitating it, and in plundering the inventor, it plundered itself.

THE CONSERVATIVE.

This is a paradox!

THE ECONOMIST.

Let’s see. What is a plow, and what is its purpose?

A plow is an tool moved by draft animals—horses or oxen—under human direction, and it serves to break open the soil. Before the invention of the plow, what was used to cultivate the land? The spade. Here, then, we have two distinct tools that can accomplish the same task—two tools that compete with each other. This competition is, of course, highly unequal, since the plow is infinitely preferable to the spade. Rather than revert to this less efficient tool, most farmers would resign themselves to paying a significant premium to the owners of the plow’s property rights. But still, the fields would not remain uncultivated. People would continue to use the spade until the owners of the plow, [65] realizing that they were not indispensable, became more reasonable.

But what would result from such a situation, where society was at the mercy of the excessive demands of those who owned essential tools? There would be a tremendous incentive to increase the number of such tools and to create even better ones. In a moment when the price of plows, for instance, was artificially high, wouldn’t the person who invented a tool as efficient or more efficient achieve a fortune? And if this new inventor sought to raise the price of his tool in turn, wouldn’t he be held in check—first, by the continued existence of the two older tools, which people could always revert to; and second, by the fear of spurring further competition by making the discovery of an even better tool more attractive?

You see, then, that monopoly would never be a serious threat, because there would always be two counteracting forces: on one side, the existing, effective competition of older, less efficient tools; and on the other, the potential, imminent competition of newer, superior ones.

THE CONSERVATIVE.

But isn’t the domain of invention finite?

THE ECONOMIST.

The plains of human intelligence are even more vast than the plains of the earth. In what field of production can one claim that there are no more improvements to be made, no more discoveries left to find? Do not fear that the path of invention will close; humanity will exhaust its strength [66] long before it reaches the end of that road.

Do you truly believe, for example, that no better agricultural tools can be invented than the ones we currently use? Compared to the machines employed in manufacturing, isn’t the plow a primitive tool? The plow is a device powered by living animals. But hasn’t the manufacturing industry made its immense progress over the last half-century by replacing living power with an inanimate force—steam?

Why should this economic substitution of an inanimate power for an animate one not take place in agriculture as well? Why should a steam-powered vehicle not replace the plow, just as the mule-jennyreplaced the spinning wheel, just as the steam mill replaced the grindstone driven by a blindfolded horse, just as the plow itself, drawn by beasts of burden, replaced the spade, which relied solely on human strength?

If, from the beginning, the property rights of inventors had been recognized and respected to the same degree as material property, is it not at least probable that this beneficial progress would already have taken place? Is it not likely that steam power would have already transformed and multiplied agricultural production just as it has transformed and multiplied industrial production? Would this not be an immense benefit to all of humanity?

From all this, I conclude that society, from its very origins, had the greatest interest in recognizing and respecting [67] the property rights of inventors—even when it came to the plow.

THE CONSERVATIVE.

So you believe that the more extensively the property rights of invention are recognized and protected, the more inventions will be made?

THE ECONOMIST.

Certainly, I believe so. It was not until the eighteenth century that the property rights of inventions began to be recognized. Compare, then, the discoveries made over a given period before and after that time.

THE CONSERVATIVE.

That argument works against your theories since the property rights of inventions are not unlimited.

THE ECONOMIST.

If the ownership of a wheat field, after having long been communal, were suddenly recognized and guaranteed to an individual for five, ten, or fifteen years, would the resulting increase in wheat production prove anything against the idea of unlimited property rights?

THE CONSERVATIVE.

No, certainly not... But aren’t some discoveries made almost by themselves? There are certain discoveries that seem to be "in the air."

THE ECONOMIST.

Just as there are harvests hidden beneath the earth. The only task is to bring them forth. But be assured that "chance" will not take care of that. "How did you discover the law of gravitation?" Newton was once asked. "By thinking about it constantly," the genius replied. Watt, Jacquard, [68] and Fulton would likely have given the same answer to a similar question. Chance invents nothing; it does no more to prepare the ground of the mind than it does for that of material things. Let us set aside chance.

It is said that if a discovery were not made today, it would be made tomorrow. But can this hypothesis not just as easily be applied to land clearing as to new combinations of ideas and inventions? If the Backwoodsmenwho are emigrating westward today were to stay at home, could we not assume that other Backwoodsmenwould settle on the same virgin lands within five, ten, or fifteen years? Then why not limit the property rights of the first settlers? Why? Because if such a limitation existed, no one would venture into the wilderness—neither today nor tomorrow. Likewise, believe me, no one would strive to grasp the discoveries "in the air" if no one had an interest in doing so.

THE CONSERVATIVE.

You forget that glory, and an even nobler desire to serve humanity, are just as powerful motivators for inventors as self-interest.

THE ECONOMIST.

Glory and the desire to serve humanity are part of self-interest; they are not distinct from it, as I have already demonstrated to you. But these lofty motives are not sufficient. Like writers and artists, inventors are subject to human needs. Like them, they must eat, clothe themselves, and find shelter. More often than not, they must also provide for a family. If you offer them no other incentive than glory and the satisfaction [69] of having served humanity, most will be forced to abandon the pursuit of invention. Only the wealthy will be able to invent, write, sculpt, and paint. But since the wealthy are not typically the most diligent workers, civilization will hardly advance.

THE SOCIALIST.

Come now, Mr. Conservative, admit in good faith that you have been defeated. If you accept the perpetuity of material property, you cannot help but accept the perpetuity of intellectual property. The same right and the same necessities exist in both cases (assuming, of course, that we recognize this right and these necessities). So, accept the recognition of the property rights of inventions just as you have acknowledged the others.

THE CONSERVATIVE.

All of this may be true in theory, but, in all honesty, in practice, I prefer to stick with the status quo.

THE SOCIALIST.

That is, if we allow it! [2]

[70]

THIRD SOIRÉE↩

SUMMARY: Continuation of the infringements on external property.—Law of expropriation for public utility.—Mining legislation.—Public domain, state, departmental, and municipal properties.—Forests.—Roads.—Canals.—Rivers.—Mineral waters.

THE ECONOMIST.

We have seen that the property rights of intellectual works are greatly mistreated under the current system. Material property is more favored in that it is recognized and guaranteed in perpetuity. However, this recognition and guarantee are not absolute. A property owner may be dispossessed of his property under the law of expropriation for public utility.

THE CONSERVATIVE.

What! You want to abolish this law of tutelage without which no public utility project would be possible?

THE ECONOMIST.

What do you mean by a public utility project?

THE CONSERVATIVE.

A public utility project is... a project [71] useful to everyone, such as a railway, for example.

THE ECONOMIST.

Ah! And is a farm that produces food for everyone not also a public utility project? Is the need to eat not at least as universal and necessary as the need to travel?

THE CONSERVATIVE.

Certainly, but a farm is a rather limited private enterprise.

THE ECONOMIST.

Not always. In England, there are immense farms; in the colonies, there are plantations owned by large and powerful companies. Besides, what does it matter? The usefulness of a project is not always proportional to the space it occupies, and the law does not consider whether a so-called "public utility" project belongs to an association or an individual.

THE CONSERVATIVE.

One cannot compare a farm or plantation to a railway. A railway project is subject to certain natural constraints; even a slight deviation in the route can lead to a considerable increase in costs. Who would bear this cost? The public. So, I ask you, should the public interest, the interest of society, be sacrificed to the obstinacy or greed of a landowner?

[72]

THE SOCIALIST.

Ah! Mr. Conservative, those are words that reconcile me to you. You are an honorable man. Shake hands!

THE ECONOMIST.

In Sologne, there are vast stretches of exceedingly poor land. The destitute peasants who cultivate them receive only a meager return for their most laborious efforts. Yet, alongside their wretched huts rise magnificent châteaux, surrounded by immense lawns where wheat would flourish beautifully. If the peasants of Sologne demanded the expropriation of these fertile lands to convert them into wheat fields, would public interest not require that their request be granted?

THE CONSERVATIVE.

You go too far. If the law of expropriation for public utility were used to convert ornamental lawns and parks into wheat fields, what would become of the security of property? Who would want to beautify a lawn, plant a park, or adorn a château?

THE SOCIALIST.

One does not expropriate without providing compensation.

THE CONSERVATIVE.

But compensation is not always sufficient. There are things that no amount of compensation can pay for. Can one put a price on the roof that has sheltered generations, on the hearth around which they have lived, on the great trees that have witnessed their births and deaths? Is there not something sacred in these ancient homes, where the traditions of [73] ancestors live on, where the very soul of the family seems to breathe? Is it not a true moral outrage to expel a family forever from its ancestral land?

THE ECONOMIST.

Except, is it not true, when it comes to building a railway?

THE CONSERVATIVE.

It all depends on the degree of utility of the project.

THE SOCIALIST.

Ah! is there anything more useful than an enterprise dedicated to the sustenance of the people? As for me, I fervently hope that the law of expropriation for public utility will soon be extended. The Convention cultivated potatoes in the Tuileries gardens. A sublime example! May our legislative assemblies keep it ever before their eyes!

How many thousands of hectares remain unproductive around the pleasure estates of the lords of the land? How many mouths could be fed, how much work could be distributed, if these fertile lands were given to workers ready to cultivate them? Ah! rich aristocrats, one day we shall plant potatoes in your sumptuous gardens; we shall sow turnips and carrots in place of your dahlias and Bengal roses! You shall be expropriated for public utility!

THE CONSERVATIVE.

Fortunately, the expropriation juries will not support such barbaric projects.

THE SOCIALIST.

Why not? If public utility demands that your [74] châteaux with their lawns and ornamental parks be replaced by potato fields, why would the juries refuse expropriation? If they grant it when farmland is converted into railways, will they not, all the more, grant it when luxury parks are transformed into farmland?

Will you object by citing the current composition of the expropriation juries? I am well aware that they are made up of large landowners. But that jury, like all others, will not escape the law of universal suffrage. Small landowners and workers will be included, and then, well… the great landowners will have to dance to a different tune.

THE CONSERVATIVE.

That is an utterly subversive statement!

THE ECONOMIST.

What can I say? The application of a law that you yourselves established for the sake of Social Utility is merely being broadened and generalized. Your work is simply being completed. Can you truly complain?

THE CONSERVATIVE.

I am well aware that expropriation for public utility has its dangers, especially since that cursed revolution... But is it not indispensable? Aren’t private interests perpetually at odds with the public interest?

Moreover, does this law not contain an implicit recognition of property? If the State did not respect property rights, would it have troubled itself to request an expropriation law from the legislative chambers? Wouldn't simple ordinances have sufficed? [75] Doesn't the law of expropriation for public utility contain an implicit acknowledgment of property?

THE ECONOMIST.

Yes, just as rape implicitly acknowledges virginity.

THE CONSERVATIVE.

And what about compensation?

THE ECONOMIST.

Do you believe that any compensation could make up for rape? Now, if I refuse to yield my property to you, and you, using your superior strength, seize it from me, is that not an act of violation? Compensation will not erase the assault on my rights.—But, you object, public interest may require the sacrifice of certain private interests, and we must account for that necessity.—What! You, a conservative, are telling me this? You are the one pointing out the conflict between public and private interests? Be careful—you are making the case for socialism!

THE SOCIALIST.

Indeed. Suum cuique(to each his own) . We were the first to denounce this regrettable antagonism between public and private interests.

THE CONSERVATIVE.

Yes, but how do you resolve it?

THE SOCIALIST.

It’s quite simple. We eliminate private interests. We absorb each person’s wealth into the domain of All. We apply, on a grand [76] scale, the law of expropriation for public utility.

THE ECONOMIST.

And if there truly is a conflict between the interest of each and the interest of all, then you are acting most wisely, and your opponent is wrong not to follow you all the way!

THE SOCIALIST.

You are being ironic! Do you really believe that private interests naturally align with the public interest?

THE ECONOMIST.

If I were not convinced of it, I would have long since become a socialist. I would, like you, wage an eternal war against private interests; I would demand complete association, community ownership—who knows what else? I would not, for any price, uphold a social order where no one prospers except at the expense of another. But, thanks to God, society is not made that way! Naturally, all interests align. Naturally, the interest of each coincides with the interest of all. Why then create laws that place one at the mercy of the other? Either these laws are useless, or, as the socialists claim, society must be entirely remade.

THE CONSERVATIVE.

You argue as if all men were capable of correctly understanding their own interests. But that is false. Men frequently misunderstand their interests.

THE ECONOMIST.

I am well aware that men are not infallible, but I also know that each person is the best judge of his own interest.

[77]

THE CONSERVATIVE.

You may be right in theory, but in practice, some people are so stubborn and foolish.

THE ECONOMIST.

Not so stubborn and not so foolish—at least when it comes to their own interests. However, I will concede that such people might obstruct some useful enterprises. But do you not think that the current law causes more harm than they could? Does it not jeopardize the security of property in the present and threaten it in the future?

THE CONSERVATIVE.

It is certain that socialism could make quite deplorable use of the law of expropriation for public utility.

THE ECONOMIST.

And you conservatives, who established this law, would you have any right to oppose its application? Is it not a dangerous weapon you have forged for your enemies? By declaring that any given majority has the right to lay hands on an individual’s property whenever public interest demands it, have you not already provided socialism with both a justification and a legal means of execution?

THE CONSERVATIVE.

Alas! But who could have foreseen this infernal revolution?

THE ECONOMIST.

When one sets out to make laws, one must foresee everything.

Beside this law, which threatens property at its [78] very root, our legal code contains others that infringe upon specific types of property—for example, mining legislation. Just like intellectual works, mines are placed outside the scope of common law.

THE CONSERVATIVE.

Is it not a special kind of property, and should it not, therefore, be governed by special laws?

THE SOCIALIST.

What is the current legislation regarding mines?

THE ECONOMIST.

French mining legislation has undergone many changes over the past century. Under the old regime, mines were considered part of the royal domain. The king granted concessions to whomever he pleased—whether to the discoverer, the landowner, or any other individual— in exchange for an annual royalty of one-tenth of the extracted resources. When the Revolution freed both property and labor, one might have hoped that this benefit would extend to the ownership of mines; unfortunately, this was not the case. The legislature refused to grant the subsoil the same charter of emancipation.

Three opinions emerged regarding this kind of ownership. Some held that subsoil property was directly connected to surface ownership; others argued that it belonged to the community; and still others believed it should belong to the discoverers. This last system was the only one that was just and aligned with the (principles of natural) rights—wherein landowners could demand only compensation for the portions of their land necessary for mineral extraction, and the government, [79] in turn, could require nothing more than a tax to cover the protection afforded to mining operations.

THE SOCIALIST.

So, according to you, mining property should be classified in the same category as intellectual property?

THE ECONOMIST.

Precisely. Let’s say you are a gold prospector. After much effort, you discover a vein of this precious metal. You have the right to exploit that vein alone, since you were the one who discovered it.

THE SOCIALIST.

By that logic, the entire continent of America should have belonged to Christopher Columbus, since he discovered it.

THE ECONOMIST.

You forget that America was, for the most part, already inhabited when Columbus arrived. In any case, it is an established principle in international law that an uninhabited land belongs to its first discoverer.

THE SOCIALIST.

But if, after discovering it, he chooses not to exploit it, does his right to ownership disappear? How do you explain the death of a property right?

THE ECONOMIST.

Property rights do not die. One ceases to own something only by renouncing ownership. If I discover a mine, I will either exploit it myself or transfer it to someone who will. The same applies to land: I will cultivate it or sell it.

[80]

THE SOCIALIST.

And if you keep it without exploiting it?

THE ECONOMIST.

That would be my right, but it would not be in my interest. Everything has a cost to maintain—one must pay for the security of property. If I do not wish to exploit the land or the mine I discovered, and if no one wants to buy it from me, I will soon give up keeping it because it will cause me a loss rather than a profit. You see, then, that there is no harm in allowing the discoverer full control over the object of his discovery.

THE CONSERVATIVE.

That a mine’s discoverer should have a right to it seems fairly legitimate to me. It is only just that his labor in finding it should be rewarded. But doesn’t society, as well as the owners of the surface land, also have some claim over the subsoil? Society protects miners and provides them with the means to conduct mining operations. As for landowners, do they not have a claim to the subsoil simply by virtue of owning the land? Where do we draw the line between these two types of property?

THE SOCIALIST.

Yes, where is the boundary?

THE ECONOMIST.

Neither society nor landowners can claim any right over the subsoil. I have already proven, in the case of inventions, that society has no claim over the fruits of individual labor. There is no need to revisit that argument. As for [81] landowners, Mirabeau put an end to their claims over subsoil ownership quite effectively:

"The idea of being master of a torrent or a river that flows beneath the land we farm seems to me as absurd as wanting to prevent the passage of a balloon through the air that likewise, assuredly, lies above a private property."

And why is this absurd? Because land ownership is based solely on the value added to the surface through labor, whereas landowners have contributed nothing to the subsoil—just as they have contributed nothing to the atmosphere above. Always look for who has worked or is currently working, and you will know who owns or should own it.

THE CONSERVATIVE.

But is it possible to discover and exploit a mine without the cooperation of the surface landowners?

THE ECONOMIST.

Here is how things happen in practice. Permission is sought from landowners to explore the ground, with the promise of either compensation or a share in the mine to offset any damages. Once the mine is discovered, the shares are allocated, and exploitation begins. If mining operations happen to damage surface property, landowners clearly have the right to oppose the operation or demand additional compensation. They usually prefer compensation, as the opening of a mine provides a new market for their products and directly or indirectly increases their revenue. Thus, what appear to be conflicting interests naturally align.

[82]

Unfortunately, the National Assembly—and even Mirabeau himself—failed to recognize that mining property could be left free without any inconvenience. They declared that mines were the property of the nation. In doing so, they created of form of "underground" communism. The law of 1791 granted the government the power to manage mineral property and limited mining concessions to fifty years. The government was also given the power to revoke these concessions if mines were not properly maintained or if their operations were temporarily suspended.

The most harmful aspect of this law was, without a doubt, its limitation on the duration of concessions. Mining operations require vast amounts of capital and preparatory work that sometimes takes years to complete. Above all, entrepreneurs needed long-term security. By restricting their tenure, the law forced them to limit their investments as well. This created an almost insurmountable obstacle to the expansion of the mining industry.

The government’s authority to revoke concessions under certain conditions also had serious drawbacks. It is not easy to determine whether a mine is being exploited properly or poorly. Opinions can differ on the best method of extraction. For instance, critics of free mining operations argued that miners would exhaust the richest veins first while neglecting others. But was this not the most rational approach? Was it not natural to begin with the most productive parts [83] of an operation? If miners had started by working the less profitable veins, would they not have doomed their fledgling enterprises to failure? It was also impossible to judge with certainty whether an operator was justified in temporarily halting part or all of a mining operation. His personal interest—to keep the mine continuously active—was a sufficient guarantee. Unless demand had declined, in which case a temporary or total suspension of mining would be self-explanatory, what possible reason could he have to interrupt his work?

THE CONSERVATIVE.

That bad law has been reformed.

THE ECONOMIST.

It has been reformed very incompletely. The law of April 21, 1810, which replaced it, maintained the government's right to grant and revoke mining concessions. The only change was that concessions were no longer limited to fifty years. However, in other respects, the situation of subsoil property owners was worsened. The law of 1810 forbids them from selling their mines in parcels or dividing them without prior government authorization. It also subjects mining operations to the supervision of a specially created administration. Additionally, it reserves the so-called rights of surface owners and entrusts the Council of State with determining the amount of compensation they should receive. As a result, mining operations are heavily regulated and burdened.

What has been the outcome of this law? It has been to [84] reduce mineral production to a minimum. Who would want to become a mine discoverer today? Who would want to devote themselves to seeking out new metal deposits? Before even being able to benefit from their discovery, they must spend years petitioning for a concession— a concession of a property that they created through their own labor. And once they obtain it, they are subjected to the anxious oversight and incompetent direction of the mining administration. Tell me, what would happen to our agriculture if farmers could not turn over a spadeful of earth without the approval of an official from the Ministry of Agriculture? If they could not sell even the smallest plot of their land without government authorization? If, finally, the administration reserved the right to revoke their property at will? Would this not be the death of agriculture? Would capital not flee such an industry, oppressed under bureaucratic whims?

Well, capital has fled from mining operations. Special privileges had to be granted to attract it back. Foreign competition had to be suppressed, thereby establishing a vast domestic monopoly, just to convince capitalists to invest in an industry enslaved to administrative approval. The burden placed on mining property had to be shifted, in part, onto the consumers of mineral products. Is this not barbaric?

Now, let us suppose that in 1789 the unjustified royal prerogative of granting mining property [85] had simply been abolished. Suppose that this property had been freely allocated and guaranteed to those who created it through their labor—would the production of mines not have expanded to its fullest potential, without requiring any special protections? Would this stream of employment, which now trickles out only in meager flows, not have surged forth abundantly?

THE CONSERVATIVE.

Yes, property is indeed a marvelous thing. How fervently people work when they are certain they will always own the fruit of their labor, free to use it, consume it, give it away, lend it, sell it—without interference, hindrance, or harassment. Property is the true California gold rush. Long live property!

THE SOCIALIST.

Long live labor!

THE ECONOMIST.

Labor and property are inseparable since labor creates property, and property stimulates labor. So, long live labor and property!

The government hampers production not only by restricting individual property but also by claiming certain properties for itself. Alongside private property, as you know, there exists public or communal property. The state, the departments, and the municipalities own vast assets—fields, meadows, forests, canals, roads, buildings, and more. Do these various properties, which are managed in the name of society, [86] not constitute a form of outright communism?

THE CONSERVATIVE.

Yes, to some extent. But could things really be arranged differently? Doesn’t the government necessarily need to own some property? The government is established to provide services to society…

THE ECONOMIST.

What services?

THE CONSERVATIVE.

The government must… govern.

THE SOCIALIST.

Good lord! But what do you mean by "govern"? Isn’t it simply managing and harmonizing interests?

THE ECONOMIST.

Interests do not need to be managed or harmonized; they align and regulate themselves perfectly well without interference.

THE SOCIALIST.

If that is the case, what should the government do?

THE ECONOMIST.

It should ensure each person the free exercise of their activities, the security of their person, and the protection of their property. To perform this specialized function, to provide this specific service to society, the government must possess some resources. But anything beyond that is unnecessary.

THE CONSERVATIVE.

But what if the government provides additional services to society—if it funds education, pays for religious institutions, contributes [87] to the transport of people and goods by land and water, manufactures tobacco, porcelain, carpets, gunpowder, saltpeter…?

THE ECONOMIST.

In other words, if the government engages in communism! Well, the government should not be communist! Like any business, the government should focus on a single function, or it will fail in all. The primary function of every government is the production of security. It should stick to that.

THE CONSERVATIVE.

That is quite a strict application of the principle of division of labor. You would therefore have public property abolished, the state selling off most of its assets, and every aspect of society specialized?

THE ECONOMIST.

I would wish it, in the interest of expanding production. A recent investigation was conducted in England on the management of public properties. Nothing could be more instructive than the information gathered in this inquiry. The public domain in England consists of former crown estates that have become national properties. These estates are vast and magnificent. In private hands, they would yield considerable revenue; in the hands of the state, they produce almost nothing.

Allow me to cite just one example.

The main assets of the domain consist of the four forests of New-Forest, Walham, Whittlewood, and Whychwood. These forests are entrusted to guardians who [88] administer them. They are the Dukes of Cambridge and Grafton, Lord Mornington, and Lord Churchill. The guardians receive no apparent salary, but they are granted a substantial compensation in kind—game, wood, etc. The annual revenue of New-Forest averages 56,000 to 57,000 pounds sterling, or nearly 1,500,000 francs. Of this revenue, the treasury has never received more than 1,000 pounds, and from 1841 to 1847, the maintenance of the forest cost the state over 2,000 pounds.

THE CONSERVATIVE.

That is a blatant abuse! But do not forget that these things happen in aristocratic England!

THE ECONOMIST.

Plenty of similar abuses occur in our democratic France. It has long been acknowledged in France, as in England, that the management of state-owned assets is dreadful.

THE CONSERVATIVE.

That is unfortunately true. However, there are properties that must obviously remain in the hands of the state—roads, for example.

THE ECONOMIST.

In England, roads are owned by private individuals, and nowhere are they better maintained.

THE CONSERVATIVE.

And what about toll gates? Travel is not free in England—it is free in France.

THE ECONOMIST.

On the contrary! Travel is much freer in Great Britain [89] because the network of roads is far denser. And do you know why? Quite simply, because the government allowed private individuals to build roads without interfering in road construction itself.

THE CONSERVATIVE.

But again, the tolls?

THE ECONOMIST.

Ah! Do you believe that in France, roads are built and maintained free of charge? Do you think the public does not pay for their construction and upkeep, just as in England? The difference is this: In England, road construction and maintenance costs are covered by those who use them; in France, they are covered by all taxpayers, including the goatherds of the Pyrenees and the peasants of the Landes, who do not tread a national road twice a year. In England, the cost of roads is directly borne by the consumers of transportation through tolls; in France, it is paid indirectly by the entire community through taxes—most of which are unjust and tiresome. Which system is preferable?

THE CONSERVATIVE.

And what about canals? Should they not remain part of the public domain?

THE ECONOMIST.

No more than roads. In which countries are canals the most numerous, best built, and best maintained? Is it in those where they are state-owned? No! It is in England and the [90] United States, where they were built and are operated by private associations.

THE SOCIALIST.

Would not roads and canals, if privately owned, become oppressive monopolies?

THE ECONOMIST.

You forget that they compete with one another. I will demonstrate to you later that in any enterprise subject to the laws of free competition, prices must necessarily fall to the level of the real costs of production or operation, and that the owners of a canal or road cannot receive anything beyond just compensation for their capital and labor. This is an economic law as certain and precise as a physical law.

Most natural waterways, which require maintenance and certain works for exploitation, could also be privately owned to great advantage. You are well aware of the endless disputes caused by the communal status of rivers today. Dams lead to countless lawsuits, and irrigation is hindered everywhere. Things would be different if each river basin had its own private owners, whom landowners could turn to in case of damage, and who would be responsible for providing weirs and establishing irrigation channels where needed.

The state also owns most of the mineral springs. As a result, they are very poorly managed, despite the abundance of administrators and inspectors. Furthermore, on the pretext that artificial mineral waters are used as medicines, their [91] production has been placed under government supervision. More administrators, more inspectors!

THE CONSERVATIVE.

Ah! Administration is our great plague.

THE ECONOMIST.

There is only one cure for this plague: less administration.

[92]

FOURTH SOIRÉE↩

SUMMARY: Right to make a will.—Legislation governing inheritance.—The right to inheritance.—Its moral consequences.—Its material consequences.—Comparison of French agriculture with British agriculture.—Entailed estates and their usefulness.—Natural organization of farmland under a free property regime.

THE ECONOMIST.

Those who have arrogated to themselves the right to limit property have not failed to restrict its free disposal as well. Donations, wills, loans, and exchanges have all been subjected to numerous constraints.

The donation of certain properties is encumbered with cumbersome and costly formalities. Wills are even more restricted. Instead of leaving the head of the family free to dispose of his assets, the law requires him to bequeath them in almost equal shares to his legitimate children. If one of the children feels disadvantaged in the division, he has the right to have the will annulled. [3]

[93]

THE CONSERVATIVE.

So you are attacking this law that protects both family and property?

THE ECONOMIST.

I am attacking this law that destroys both family and property. It is in the name of a right superior to that of fathers that society has regulated inheritance, is it not? But then why should it not exercise this superior right to claim tomorrow the property over which it has disposed yesterday? If society has been able to say to the father: "You shall not dispose of your assets according to your will, but according to mine," can it not just as well say to him: "It now suits me that you dispose of your property in my favor"? Is not the abolition of inheritance, that is to say, the suppression of individual property, already contained within a law that attributes to society the sovereign right to determine inheritance?

Is not the annihilation of paternal authority, that is to say, the [94] destruction of the family, likewise contained in a law that withdraws from the father the free disposal of his assets in order to grant children an actual right to inheritance?

THE CONSERVATIVE.

A right to inheritance, you say?

THE ECONOMIST.

To tell children: "You have the right to demand from your father nearly equal shares of inheritance, regardless of your conduct, regardless of your feelings towards him; you have the right to challenge his will if you feel disadvantaged in the division"—is this not establishing a right to inheritance? Is this not granting the child a claim over his father's property? Is this not allowing him to regard and demand as a debt what he once viewed and received as a gift? Where nature made a son, does your law not make a creditor?

THE CONSERVATIVE.

But is it nothing to compel the father to divide his inheritance fairly [95] among his children? Without the law regulating inheritance, would children not constantly be defrauded of their rightful shares through fraud or coercion? Has the law not prevented all fraud, settled all disputes?

THE ECONOMIST.

At the cost of breaking family bonds and rendering paternal authority meaningless. If the right to bequeath were free, a father might indeed dispose poorly of his wealth. But is he not always restrained by those powerful checks that no law made by man could ever replace—paternal love and a sense of justice? If these two sentiments are silent within him, do you believe your law will make them speak? Do you believe the father will not find some indirect means of disposing of his wealth to the detriment of his children? If these sentiments are strong, what need is there for your law? And then, you establish the principle that equal division is the ideal of fairness, but are you certain that this brutal equality is always just? Are you certain that a father cannot favor one of his children without plunddering the others? Even if a son has a virtual right to his father’s property...

THE CONSERVATIVE.

What! The son would have no right to his paternal inheritance? But if that were the case, he could be entirely disinherited in the absence of a will.

THE ECONOMIST.

That conclusion is false. The children's right in such a case is based on the likelihoodof inheritance. The estate should pass to them not because they have a virtual right [96] over it, but because their father would probablyhave left it to them.

In giving birth to a child, the father contracts a moral obligation to nourish and prepare him to live by his labor—nothing more, nothing less. If he chooses to leave his child something beyond that, it is an act of his own wishes.

But even accepting your so-called right to inheritance, do you believe that a wicked son has the same right to his father’s estate as a virtuous son? Do you believe that a father is, from a natural justice standpoint, obligated to leave a share of his wealth to the miserable wretch who has brought despair and shame to his family? Do you not think he is, on the contrary, obligated to deprive this degraded being of the means to fuel his destructive passions? Could the exercise of the right to disinherit not sometimes be both just and necessary?

But to your legislators, the father is a creature devoid of both a sense of justice and paternal affection. He is a savage beast, constantly lying in wait to devour his offspring. The law must intervene to protect them; society must bind the hands and feet of this heartless barbarian called a father, lest he sacrifice his innocent family to his vile appetites.

These miserable legislators failed to see that their law could only serve to weaken both respect for authority and the sentiment of family. Does respect for authority still exist in France?

THE CONSERVATIVE.

Ah! You have just touched on the most regrettable wound [97] of our time. The present generation has lost all respect for authority; yes, that is all too true. What admirable articles L’Unionhas published on this subject! Respect for authority—who will restore it to us? The son no longer respects his father. Adults respect nothing, not even God. Respect for authority—that is the anchor of salvation for our society, tossed amidst the revolutionary storm like a ship that...

THE SOCIALIST.

Ah! For heaven’s sake, stop, we have read the articles in L’Union.

THE ECONOMIST.

You shattered this anchor of salvation with your own hands the day you infringed upon the sacred rights of fathers; the day you gave the son a claim over his father’s property; the day when, by stripping the father of the formidable weapon of disinheritance, you delivered him to the mercy of his children’s rebellions.

THE CONSERVATIVE.

And the reform school?

THE ECONOMIST.

Yes, you gave him that in exchange. But unless he has lost all human feeling, can a father truly bring himself to place his son on the road to the penal colony? Better to endure rebellion than to bring infamy upon oneself and one’s family.

I know well that the father can defy your law and, in practice, disinherit his rebellious son if he cannot do so legally; but he is forced to act in the shadows, avoiding the greedy and jealous eyes of his creditor. He no longer exercises the legitimate right [98] to dispose of his property; instead, he commits an immoral offense against his son’s legal right to it. His actions are no longer those of a property owner freely disposing of a domain; they are those of a debtor furtively alienating a mortgaged asset. What would have reinforced paternal authority if the right to inheritance did not exist can now only serve to degrade it.

I will not even mention the hatreds that arise within families when a father chooses to favor one of his children. In countries where the right to inheritance does not exist—such as the United States, for example—the other children bow respectfully before this sovereign act of paternal will, and they do not conceive any resentment against the child their father has favored. But in countries where the right to inheritance is recognized, such an act instead becomes a profound source of family discord. Indeed, this act, so simple and often so well justified by circumstances—the weakness or incapacity of the favored child, the care he has given the father—is, from the perspective of your law, true plunder, a theft. Like a new harpy, your law has corrupted family sentiments by interfering with them! And you wonder why the disorder you have sown in the family has spread to society?

THE CONSERVATIVE.

But even if the moral consequences of the law on equal inheritance leave something to be desired, has this law not had admirable economic results? Everyone has become a property owner. Every peasant, having [99] his own small plot of land to cultivate, has been shielded from need.

THE ECONOMIST.

Are you so sure of that? For my part, I hold that no law has had a more disastrous effect on the condition of the working classes, whether in manufacturing or agriculture.

THE CONSERVATIVE.

Would you prefer, by chance, the right of primogeniture and entailed estates?

THE ECONOMIST.

It is another kind of abuse—another infringement on property rights—but, in truth, I believe I would prefer them.

THE SOCIALIST.

It is certain that land fragmentation is the plague of our agriculture, and that association is our only lifeline.

THE ECONOMIST.

I agree with you.

THE CONSERVATIVE.

What? You prefer the feudal system of primogeniture and entailed estates over equal inheritance, and yet you advocate for association? That is a manifest contradiction.

THE ECONOMIST.

I do not think so. What are the essential conditions of all economical production? Stability and security in ownership on one hand; the concentration of sufficient productive forces on the other. Now, the current system provides neither stability nor sufficient concentration of productive forces.

[100]

THE CONSERVATIVE.

I agree with you that lease terms are too short and that our inheritance law has made the undivided possession of agricultural holdings particularly precarious; I also concede that farmers lack capital. But what can be done? Agricultural credit schemes have been discussed, and for my part, I am somewhat inclined toward them, though finding a good system is difficult.

THE ECONOMIST.

No agricultural credit scheme, however excellent, would remedy the problem. Under the current property system, the proliferation of credit institutions would hardly lower interest rates in our rural areas. It would be different if our farmland is as solidly established as they are in England.

THE SOCIALIST.

You dare to hold up England as a model for us? Ah! Certainly, the condition of our rural laborers is wretched, but is it not a thousand times better than that of English peasants? Are not English laborers exploited by an aristocracy that devours their substance, like the vulture devoured Prometheus’s liver? Is not England the country where the most tragic scenes of human exploitation play out? Is not England the great prostitute of capital? England! Ah! Do not speak to me of England!

THE ECONOMIST.

Yet the condition of the English peasant, exploited [101] by the aristocracy, is infinitely superior to that of the independent peasant proprietors of France.

THE CONSERVATIVE.

Come now!

THE ECONOMIST.

I see on your bookshelf two works by Messrs. Mounier and Rubichon, Agriculture in France and Englandand The Role of the Nobility in Modern Societies, which will provide irrefutable evidence to support my argument.

THE CONSERVATIVE.

I humbly admit that I have not read them.

THE ECONOMIST.

You were wrong. You would have found all the necessary insights to settle the question at hand. It is a summary of the extensive inquiries published by order of the English Parliament on the state of agriculture and the condition of farmers. I am flipping through it at random. Here is an excerpt from the most recent inquiry (1846).

The chairman addresses Mr. Robert Baker, a farmer in the county of Essex, who cultivates a farm of 230 hectares.

Q.What is the general diet of agricultural laborers?

A.They eat meat and potatoes; but if flour is cheap, they do not consume potatoes. This year (1846) they are eating the finest white bread.

Mr. Robert Hyde-Gregg, who has been one of Great Britain’s largest manufacturers for twenty years, [102] provides the following information about the condition of factory workers.

Q.When you say that a lot of potatoes are consumed in manufacturing districts, do you mean that, as in Ireland, potatoes form the staple of the people's diet, or are they eaten with meat?

A.Generally, dinner consists of potatoes and pork, while breakfast and supper consist of tea and bread.

Q.Do the workers usually have pork?

A.I can say that they all eat meat for dinner.

Q.Since you have been observing, has there been a significant change in the diet of manufacturing workers? Have they replaced oat flour with wheat flour?

A.Certainly, that change has taken place. I remember that in all workers’ houses, oat cakes were once seen hanging from the ceiling; now, nothing of the sort is to be found.

Q.So the population today has improved its diet with regard to bread, since it now consumes wheat flour instead of oat flour?

A.Yes, completely.

Now, here is a testimony regarding the condition of workers in France and England.

Mr. Joseph Cramp, an expert in land valuation in the county of Kent and a farmer for forty-four years, has traveled to France and studied the state of its agriculture. He is questioned about the condition of agricultural laborers in Normandy.

Q.Based on your observations of the condition of laborers in [103] Normandy, do you think they are better clothed and better fed than the laborers in the Isle of Thanet, where you live?

A.No. I visited their homes and saw them at their meals, which are such that I hope never to see an Englishman sitting at such a poor table.

Q.The laborers in the Isle of Thanet eat the finest white bread, do they not?

A.Always.

Q.And in Normandy, do agricultural laborers not eat it?

A.No. They ate bread that was nearly the color of this inkwell.

Q.How many hectoliters of wheat are harvested per hectare in the Isle of Thanet?

A.About twenty-nine hectoliters.

Q.Having lived and farmed in the Isle of Thanet for so long, can you say whether the condition of the working classes has improved or worsened since you first knew the region?

A.It has improved.

Q.In every respect?

A.Yes.

Q.So you think the workers are better dressed and better educated?

A.Better fed, better dressed, and better educated.

You see that the condition of England’s agricultural populations is infinitely superior to that of our own. How can this fact be explained? These populations do not own the land. The soil of Great Britain [104] belongs to thirty-five or thirty-six thousand landlords, most of them descended from the old conquerors.

THE SOCIALIST.

Yes, the soil of England belongs to the aristocracy, and the English people pay this proud and idle caste two or three billion every year just for the right to cultivate the land.

THE ECONOMIST.

That is indeed quite expensive. This is why the English have begun to trim down the portion going to their landlords by abolishing the Corn Laws. However, you will see that even at this excessively high price, the English have found real advantages in keeping their aristocracy, whereas we made the mistake of hastily abolishing ours.

THE SOCIALIST.

Oh, dear!

THE ECONOMIST.

Let me finish. How have the English managed to extract far more and better food from their land than we do from ours? By improving their agriculture. By making their farmland undergo a series of progressive transformations.

THE CONSERVATIVE.

What transformations?

THE ECONOMIST.

The landowners of Great Britain have gradually replaced small farms, which were supported by insufficient capital, with large farms supported [105] by considerable capital. It is thanks to this economic substitution of the "agricultural factory" for the small workshop that progress has been achieved. I find the following information in the inquiry reproduced by Messrs. Mounier and Rubichon regarding the distribution of the population in Great Britain:

Families engaged in agriculture: 961,134
Families employed in industry, commerce, etc.: 2,453,041

These 961,134 families engaged in agriculture provide 1,055,982 effective workers who cultivate 13,849,320 hectares of land and produce an output of 4,000,500,000 francs.

In France, in 1840, agriculture yielded a total output of only 3,523,861,000 francs, despite being practiced by a population of eighteen million individuals, providing five to six million effective workers. This means that the labor of a French agricultural worker is four to five times less productive than that of an English agricultural worker. Now you must understand why our populations are worse fed than those of Great Britain.

THE SOCIALIST.

You fail to take into account the enormous tribute that English farmers pay to the aristocracy.

THE ECONOMIST.

If, as statistics attest, the agricultural populations of England are better nourished than ours, despite the tribute they pay to the aristocracy, is that not indisputable proof that by producing more, they also receive more?

[106]

THE CONSERVATIVE.

That is clear.

THE ECONOMIST.

And if it is true that the maintenance of the aristocracy is what has allowed British agriculture to make its immense and rapid progress; if it is true that the presence of the aristocracy ensures that an agricultural worker produces and earns more in England than in France, then was England not right to preserve its aristocracy?

THE CONSERVATIVE.

But at least the French peasant owns the land.

THE ECONOMIST.

Is it better to earn ten on one's own land or to earn twenty on land belonging to another?

THE CONSERVATIVE.

It is better to earn twenty, no matter where.

THE SOCIALIST.

Very well! But is there truly an essential connection between these two things: the maintenance of the aristocracy and the progress of British agriculture? Is it not likely that British agriculture would have progressed even more if England had rid itself of its aristocracy, just as we rid ourselves of ours? Has French agriculture not progressed since '89?

THE ECONOMIST.

I do not think so. MM. Mounier and Rubichon resolutely state that instead of progressing, it has regressed. A field that yielded 10 before 1789, they say, now yields only 4; perhaps they exaggerate the [107] problem. But here is an undeniable fact: if the quantity of food produced with the same amount of labor has not decreased, the quality of the overall mass of food has declined. The consumption of meat has notably decreased. Even in Paris, the hub where France's productive forces converge, people eat less meat than in 1789. According to Lavoisier, the average meat consumption in Paris (including poultry and game) was then 81.50 kg per capita; in 1838, it was only 62.30 kg. The decline has been no less noticeable in the rest of the country. According to old documents cited by the imperial statistics, the average meat consumption per inhabitant in France (excluding processed meats) was, in 1789, 13.13 kg; in 1830, it had fallen to 12.36 kg, and by 1840, to 11.29 kg. In contrast, the consumption of an inferior meat, pork, has increased. The current consumption is 8.65 kg per capita.

Ultimately, meat consumption in France amounts to only 20 kg per capita.

In the United States, the average is 122 kg.

In England, 68 kg.

In Germany, 55 kg.

Furthermore, it is likely that our consumption will continue to decline if our agricultural system remains unchanged, as the price of meat is progressively rising.

Dividing France into nine regions, the price of meat increased from 1824 to 1840 by: [4]

[108]

In the first region, northwest by 11 p. %
In the second, north by 22%
In the third, northeast by 28%
In the fourth, west by 17%
In the fifth, center by 19%
In the sixth, east by 1%
In the seventh, southwest by 23%
In the eighth, south by 30%
In the ninth, southeast by 38% [5]

Now, you know that the rise in meat consumption is the most reliable indicator of a nation's prosperity.

[109]

THE SOCIALIST.

I agree with you on this point, but once again, show us clearly the connection that, according to you, exists between the decline of our agriculture and our law of equal inheritance. How has one led to the other?

THE ECONOMIST.

I forgot to mention one more factor: our soil is naturally more fertile than British soil… Now, I will answer your question. England owes the stability of its farm land to the preservation of its aristocracy and to the laws that ensure, at least partially, the freedom of inheritance.

THE CONSERVATIVE.

The freedom of inheritance, you say? But what about entails and primogeniture?

THE ECONOMIST.

They are perfectly free in the sense that no law obliges a father to establish them. It is custom that [109] determines this practice, and this custom is based on economic necessities.

Here is how entails function:

At the time of his eldest son’s marriage, most often, or at any other time he sees fit, a landowner bequeaths his property to his eldest grandson or, in the absence of male children, to his eldest granddaughter. If, at the moment of the entailment, the owner has a living son and grandson, he can extend the entail further, designating his great-grandson or great-granddaughter. However, his recognized right extends only to the first generation yet to be born. In Scotland, this right has no limits. A landowner can entail his property in perpetuity.

Once the entailment is executed, the owner and his living heirs lose the free disposal of the land—they become mere usufructuaries. They can neither mortgage nor sell it, in whole or in part. An entailed estate cannot be seized or confiscated. It is regarded as a sacred bequest that no one is permitted to divert from its intended purpose.

At the age of twenty-one, the heir in whose favor the entail was made may dissolve it; however, it is commonly dissolved only to be renewed, with certain clauses adjusted according to the family’s present circumstances. Thus, properties pass intact and undivided from generation to generation.

Now, let us consider the purpose of entailments.

They provide farmland with what ours lack—stability. In France, everything is temporary; in England, everything is perpetual. Our farmland [110] is constantly at risk of being broken up through inheritance; British farmland faces no such danger.

THE CONSERVATIVE.

Is this risk really as significant as you claim? Whether the land is more or less divided matters little, so long as it is well cultivated.

THE ECONOMIST.

Consult the farmers, and they will all tell you that fields must have a certain size to be cultivated with maximum efficiency. This is easy to understand. One can only use advanced methods and improved tools on a large farm. In England, ordinary farms span three hundred and fifty to four hundred hectares. These farms are supported by substantial capital. In France, the number of such large enterprises is extremely limited.

THE CONSERVATIVE.

Why is that?

THE ECONOMIST.

The person who establishes a farm does not know whether it will be fragmented or destroyed upon his death. He cannot take any measures to preserve it from being broken up. Has the law not restricted his right to bequeath as he pleases? He is therefore hardly encouraged to invest significant capital in agriculture. Is the tenant farmer any more encouraged? In France, leases are very short-term; a twenty-one-year lease is an exceptional case. I need not explain to you why leases are so short—you already understand! When ownership itself is uncertain in the long run, it is impossible to establish long-term leases. But when a farmer [111] occupies land for only three, six, or nine years, he invests as little capital as possible; he economizes on fertilizers, does not build fences, and does not renew his equipment. At the same time, he exhausts the soil as much as possible.

In England, the stabilitythat the entail system has provided to farmland has also fostered the stability of tenancies and long-term leases. Thus, farmers, secure in the knowledge that they will reap the rewards of their labor, generally invest their savings in enriching the land.

THE SOCIALIST.

Yet, in England as in France, the farmer is subjected to the tyranny of landlords.

THE ECONOMIST.

Yes, but this tyranny is quite mild. In England, there are tenant farmers who have held the same farm, from father to son, from time immemorial. Most have no formal lease, so deep is the trust between them and the landowners. Rarely is this trust betrayed; rarely does a landowner decide to evict a tenant whose family has been tied to the land for centuries. However, as in all places, different tenancy agreements exist in England. In the north, the system of "three-life leases" is commonly practiced: the tenant designates himself and two of his children, and the lease remains valid until the death of the last of the three. The average duration of such leases is estimated at fifty-four years. When one of the designated children dies, the tenant is usually granted permission to substitute another name [112] for the deceased, thereby extending the lease’s duration.

When a lease has a fixed term, its length is generally determined by the length of the crop rotation cycle. For six- and nine-year rotations, leases typically last nineteen years. However, it is rare for a lease not to be renewed.

The significant fluctuations in grain prices in recent years have led to a new type of lease—the "floating lease," which varies annually according to the price of cereals. For example, a farm may be leased at the value of one thousand quarters of wheat. If, in 1845, wheat is priced at 56 shillings per quarter, the farmer will pay £2,800 in rent; if, in 1846, the price rises to 60 shillings, he will pay £3,000. These adjustments are based on the average grain prices in the county.

One can understand why farmers confidently invest their capital in such secure enterprises. One can also understand why capitalists readily lend to them. Large tenant farmers generally borrow at 4%, sometimes even at 3%. Indeed, there is almost no risk in placing capital in land. Farms are not at risk of losing value due to fragmentation or forced sale to exit co-ownership. Since both tenant farmers and landowners are established, so to ay, in perpetuity, they offer the highest level of security to lenders. Hence the low agricultural interest rates and the significant number of banks that have been established to serve as intermediaries between capitalists and entrepreneurs in the agriculture industry , whether landowners or tenant farmers.

[113]

The English people, constantly portrayed to you as being deprived of ownership of the land of Great Britain, in reality, possesses much more wealth i nlandthan the French people themselves. While they do not invest their capital in purchasing land, they place it upon the land itself, thereby increasing its productive power.

In France, on the contrary, people buy land, but they invest little capital in it. This could not be otherwise. One does not willingly lend to a small farmer whose livelihood is only half-secured for a few years; even lending to a small landowner is uncertain, as his modest plot of land could, from one day to the next, be divided again among several heirs. Add to this the costly formalities, the delays, and the insecurity of mortgage loans, and you will understand why the interest rates for agricultural credit are so high.

[114]

THE CONSERVATIVE.

Yes, usury.

THE ECONOMIST.

Usury, perhaps! But examine what constitutes the ten or fifteen percent that our farmers pay to moneylenders, weigh the risks of loss and the incidental costs, and you will see that this usury has nothing illegitimate about it. You will realize that, given the extent and intensity of agricultural risks, the interest on loans to agriculture is no higher than the interest on ordinary loans. And since the much-vaunted agricultural banks will not eliminate these risks, they will contribute only marginally to lowering agricultural interest rates.

THE CONSERVATIVE.

What then should be done to restore to our farms the security they have lost? Should we reinstate entailments?

THE ECONOMIST.

God forbid! Above all, we must restore to landowners the right to dispose freely of their properties. By doing so, we will slow the process of fragmentation and provide farms with some of the much-needed stability they currently lack. Capital will then flow more readily into agriculture, and at a lower cost. If at the same time, we relieve the land of the heavy taxes that burden it, improve our mortgage system, and free industrial and agricultural associations from the constraints imposed by imperial legislation, we will soon witness a true revolution in our agriculture. Numerous companies will form to cultivate the land, just as they have been formed to operate railways, mines, and other industries. These associations, having an interest in long-term stability, will make farms nearly permanent. Divided into shares, land ownership will be exchanged and redistributed without disrupting cultivation in the slightest. Agriculture will thus be organized in the most economically efficient manner possible.

THE SOCIALIST.

Yes, association applied to agriculture will put an end to our troubles.

THE ECONOMIST.

Perhaps we do not mean "association" in the same [115] way. In any case, I believe that the future of our agriculture and industry lies in the perpetual joint-stock company.Outside of this form of farming—both flexible and stable—I see no way to continually match labor efforts with the resistance of nature. However, while waiting for such a system to be established, we have been too hasty in dismantling the old institutions. By hastily abolishing entailments and then hindering the formation of agricultural associations, we have subjected agriculture to all the poverty caused by fragmentation. Conducted in ever-smaller workshops, production has regressed instead of progressing. The labor of the agricultural worker has become less and less productive. While the English worker, aided by the advanced machinery of large-scale agriculture, produces five, the French worker produces only one or one and a half, and the majority of that meager yield is taken by capitalists who risk their money in our impoverished agricultural operations.

This is the true explanation of the poverty which is gnawing away French countryside. This is why we are threatened with a new Jacquerie. Do not blame socialism for it—blame the misguided legislators who, by decreeing inheritance equality with one hand while obstructing the formation of industrial companies with the other and burdening farms with taxes, have sown the seeds of this disaster. They are the true culprits!

Perhaps we will manage to avoid the catastrophes that such grievous mistakes have prepared, but we must act quickly. With each passing day, the problem worsens; with each passing day, France’s situation draws closer to that of [116] Ireland. And yet, our peasants do not have the patience of the Irish...

THE CONSERVATIVE.

Ah! We live in truly distressing times. The countryside is rotten to its core.

THE ECONOMIST.

And who is to blame, if not the legislators who undermined the stability of property and the sanctity of the family? Socialist preachers may attack these two sacred institutions all they like, but they will never inflict as much harm upon them as you yourselves have done by enshrining the right to inheritancein your legal codes.

[117]

FIFTH SOIRÉE↩

SUMMARY: The right to lend.—Legislation governing interest-bearing loans.—Definition of capital.—Motivations that drive men to accumulate capital.—On credit.—On interest.—The components of interest.—Labor.—Deprivation.—Risk.—How these components may be reduced.—That they cannot be reduced by law.—Disastrous effects of legislation limiting interest rates.

THE CONSERVATIVE.

That cursed usurer! Lending money to a reckless young fool who squanders his inheritance in advance with the young ladies from the Opéra, and at what rate, good heavens?

THE ECONOMIST.

Who are you railing against?

THE CONSERVATIVE.

Against a damned usurer who took it upon himself to lend a large sum of money to one of my sons.

THE ECONOMIST.

At what rate?

THE CONSERVATIVE.

At two percent per month—twenty-four percent per year, no more, no less!

THE ECONOMIST.

That is not too expensive. Consider that you are still [118] in the prime of life, robust and in good health. Consider also that the law formally prohibits usury. The legal interest rate is five percent in civil matters and six percent in commercial matters.

THE CONSERVATIVE.

Yes! And precisely because the legal interest rate is five and six percent, no one should lend at twenty-four.

THE ECONOMIST.

Yet loans are still made. And to tell you the whole truth, I am quite certain that the law itself has something to do with that rate of twenty-four percent.

THE CONSERVATIVE.

How so? But doesn’t the law allow me to prosecute this vile usurer...?

THE SOCIALIST.

This vampire of capital...

THE ECONOMIST.

Who lends above the legal rate. Precisely! That is the very reason. Here is what will happen: You will take legal action against the usurer from whom your son has dared to discount his inheritance rights. The usurer will be forced to defend himself. The case will be tried, and he will win it due to lack of sufficient evidence. However, the trial will still have cost him money. Moreover, his reputation will have suffered another stain. These are all risks he would not be exposed to if there were no laws limiting interest rates. And naturally, a lender must cover his risks.

THE CONSERVATIVE.

Yes, but twenty-four percent?

[119]

THE ECONOMIST.

Considering how scarce capital is today, how risky investments are—especially when the borrower is a regular at Breda-Street—how much regulatory policies have inflated the cost of lawsuits, one may ultimately find that twenty-four percent is not too high a price to pay.

THE CONSERVATIVE.

You must be joking. If that were true, why would the legislature have limited the legal interest rate to five and six percent?

THE ECONOMIST.

Because that legislature was full of poor economists.

THE CONSERVATIVE.

So you would have usury legalized?

THE SOCIALIST.

You would have labor abandoned, without mercy, to the tyranny of capital?

THE ECONOMIST.

On the contrary, I want interest rates to be as low as possible at all times; and that is precisely why I beg the legislature to leave the matter alone.

THE CONSERVATIVE.

But if no limits are set on the greed of usurers, where will the exploitation of families end?

THE SOCIALIST.

And if the law does not curtail the power of capitalists, where will the exploitation of workers end?

[120]

THE ECONOMIST.

Oh, enough already!

THE CONSERVATIVE.

Justify, then, this anarchic and immoral doctrine of laissez-faire.

THE SOCIALIST.

Yes, justify this bancocratic and Malthusian doctrine of laissez-faire.

THE ECONOMIST.

How delightful to hear you both in agreement... Tell me, then, oh most worthy and excellent Conservative, did you not applaud the famous proposal of Mr. Proudhon regarding the gradual abolition of interest?

THE CONSERVATIVE.

Me?! I denounced it with all the indignation I could muster.

THE ECONOMIST.

You were wrong. You have shown yourself to be supremely illogical in denouncing it. What did Mr. Proudhon want? He wanted to bring interest down to zero through government action.

THE CONSERVATIVE.

That revolting utopian!

THE ECONOMIST.

Yet this utopian merely followed in the footsteps of your own legislators. Only, instead of stopping at your legal limit of five to six percent, he demanded that the limit be lowered to zero.

THE CONSERVATIVE.

Is there no difference, then, between these two limits? Surely, one may tell people: You shall not lend above five or six percent.That is a reasonable, honest [121] rate! But forcing them to lend for nothing—is that not outright plunder, sheer... Ah! those socialist brigands!

THE ECONOMIST.

I am sorry to tell you this, but you are the ones who gave birth to those brigands. Socialism is nothing but a radical, yet perfectly logical, exaggeration of your own laws and regulations. You decided, in the interest of society, that the law should govern the inheritance of a father’s estate; socialism decides, in the interest of society, that the law shall allocate a father’s inheritance to the community. You decided that various industries should be operated or subsidized by the state; socialism decides that all industries should be operated or subsidized by the state. You decided that interest should be capped at five or six percent; socialism decides that interest should be reduced to zero.

If you had the right to limit the rate of interest—that is, to partially abolish interest—then socialism, it seems to me, has just as much right to abolish it completely.

THE SOCIALIST.

That is indisputable. Even our adversaries admit we have the right, and we use it to its fullest extent. In what way, then, are we to be blamed?

It is understandable that conservatives would show restraint toward capital—they live off it. Nevertheless, even they have felt the necessity of setting limits to capitalist exploitation, and they have protected themselves against the most cunning or the most avaricious among them. Capitalists have outlawed high-interest lending, [122] branding it with the name of usury. But now it is our turn. Recognizing the inadequacy of this law, we have sought to uproot the problem entirely, and we have said: Let the legal interest rate be lowered from five or six percent to zero.And yet you object! But if capitalists were within their rights to demand the suppression of large-scale usury, why would we be committing a crime in demanding the suppression of small-scale usury? In what way is one more legitimate than the other?

THE ECONOMIST.

Your demands are perfectly logical. However, you would no more succeed in reducing interest rates to zero than the legislators of the imperial regime succeeded in lowering them to a maximum of five or six percent. Like them, you would only succeed in driving them even higher.

THE SOCIALIST.

How do you know that?

THE ECONOMIST.

I could cite the history of all maximum price laws and prove, with documentary evidence, that whenever governments have tried to limit the price of things—whether for labor, capital, or goods—they have invariably driven them up. But I prefer to show you why this increase occurs. I would rather explain how it happens that interest rates fluctuate—sometimes at ten, fifteen, twenty, even thirty percent, and at other times at five, four, three, two percent, or even lower—and why no law, however well intended, can make them fall.

Do you know what determines the price of things?

THE SOCIALIST.

You economists commonly say [123] that prices are determined by the cost of production.

THE CONSERVATIVE.

And what makes up the cost of production?

THE SOCIALIST.

According to economists, the cost of production consist of the amount of labor required to produce a good and bring it to market.

THE CONSERVATIVE.

Yes, but does the price at which goods sell always exactly correspond to the amount of labor they required, or to their the cost of production?

THE SOCIALIST.

No, not always. The cost of production determines what Adam Smith rather aptly called the natural priceof things. However, the same Adam Smith observed that the price at which goods actually sell—the market price—does not always match the natural price.

THE ECONOMIST.

Yes, but Adam Smith also noted that the natural price serves as the central point around which the market price constantly fluctuates and toward which it is inevitably drawn.

THE CONSERVATIVE.

Why is that?

THE ECONOMIST.

When the price of a good rises above its cost of production, those who produce or sell it make an exceptional profit. The lure of this extraordinary [124] profit attracts competition, and as competition increases, the price falls.

THE CONSERVATIVE.

At what limit does it stop?

THE ECONOMIST.

At the limit of the cost of production. Sometimes it even falls below that limit. But in such cases, since production ceases to yield a sufficient profit, it naturally slows down, the market supply diminishes, and prices rise again. Thanks to this economic law of gravitation, prices always, inevitably, tend to return to their natural level—that is, to precisely reflect the amount of labor the commodity has required. I will have occasion to return to this law, which is truly the keystone of the economic structure.

Let me continue. Interest is composed of its costs of production. The current rate of interest constantly gravitates around these costs of production.

THE SOCIALIST.

And what, pray, constitutes the the cost of production of interest?

THE ECONOMIST.

They consist of labor and risks of loss or damage, from which must be deducted...

THE CONSERVATIVE.

Deducted what?

THE ECONOMIST.

Labor and risks of loss or damage.

THE CONSERVATIVE.

That is not very clear.

[125]

THE ECONOMIST.

It will soon become clearer. First of all, what is it that one lends?

THE CONSERVATIVE.

Why, one lends things that have value.

THE ECONOMIST.

To have value, as you know, means to be suited to satisfying one or another of man’s needs. How do things acquire this property? Sometimes they possess it naturally; at other times, labor gives it to them.

The value that nature bestows on things is free of charge. Nature works for nothing. Only man charges for his labor—or rather, he exchanges his labor for the labor of others. Things are exchanged in proportion to their cost of production—that is, in proportion to the amount of labor they contain. These quantities of labor form the basis of their exchange value. The more one possesses things that contain useful labor, the richer one is; indeed, one is better able to meet one’s needs, either by consuming these things or by exchanging them for other consumable goods. If one does not wish to consume them immediately, one may also keep them or lend them.

These things that contain useful labor are called capital.

Capital accumulates through saving.

Two motives drive man to save.

The first derives from man’s very nature. The period of active labor rarely extends beyond two-thirds of human life. In childhood and old age, [126] man consumes without producing. He is therefore obliged to set aside a portion of his daily labor in order to raise his family and provide for his own livelihood in his old age. This is the first motive that compels man to refrain from immediately consuming all the fruit of his labor—to accumulate capital.

There is another motive as well.

In theory, man can produce without capital...

THE CONSERVATIVE.

Where has that ever been seen?

THE ECONOMIST.

Do you think the first men were born with a bow and arrows, a hatchet, and a plane at their sides? In theory, one can produce without capital, but one cannot produce much. To create many useful things with minimal effort, one needs numerous and sophisticated tools; some things also require a great deal of time to produce. Now, a producer cannot sustain himself during this time unless he possesses a sufficient supply of food—unless he has a certain capital at his disposal. Thus, one has an interest in saving labor, to accumulate capital, in order to increase production while reducing effort—in order to make labor more fruitful.

THE CONSERVATIVE.

That makes sense.

THE ECONOMIST.

But this second motive for accumulating capital is far less universal than the first. It applies [127] only to entrepreneurs in a particular industry and those who aspire to become entrepreneurs.

THE CONSERVATIVE.

That is to say, it applies to everyone.

THE ECONOMIST.

Not at all! There are many factory workers who have no intention of becoming manufacturers, many farm laborers who have no ambition to run a farm, many bank clerks who do not aspire to establish a bank. And as industry develops on an ever-larger scale, their numbers will only increase.

In the current state of things, entrepreneurs involved in production are already in the minority. If these entrepreneurs were limited to their own personal savings—to the capital they themselves could accumulate—it would be utterly insufficient.

THE CONSERVATIVE.

Without a doubt. If every entrepreneur involved in production—whether a manufacturer, a farmer, or a merchant—were limited to his own resources; if he had at his disposal only his own capital, production would be constantly hindered by a lack of sufficient funds.

THE SOCIALIST.

Meanwhile, a considerable amount of inactive capital would remain in the hands of non-entrepreneurs.

THE ECONOMIST.

This difficulty has been overcome through credit.

THE SOCIALIST.

You mean it should have been overcome. Unfortunately, society has not yet learned how to organize credit.

[128]

THE ECONOMIST.

Credit has organized itself from the very beginning of the world. The day when, for the first time, one man lent another the product of his labor, credit was invented. Since that day, it has continued to develop. Intermediaries have emerged between capitalists and entrepreneurs. These capital merchants—bankers or financial officials—have multiplied endlessly. Stock exchanges have been established, where capital is bought and sold wholesale and retail.

THE SOCIALIST.

Ah, stock exchanges... those vile dens where the pimps of capital come to negotiate their sordid deals! When will these temples of usury finally be shut down?

THE ECONOMIST.

Then shut down the market at Les Hallesas well, for theft occurs there too… The lending of capital has thus been organized on an immense scale, and it is destined to expand even further once it ceases to be directly and indirectly hindered.

Capital is accumulated in all forms. But in what form is it most readily accumulated? In the form of durable, non-bulky, and easily exchangeable objects. Certain objects possess these qualities to a greater extent than all others—I am speaking of precious metals. The rent of precious metals has therefore become the regulator of all rents. When one lends capital in a less durable and more easily depreciable form, one charges the borrower for this difference in durability and depreciation. One rents furniture or a house [129] at a higher rate than a sum of money of the same value.

When capital is lent in the form of precious metals, the price of the loan is called interest; when the loan takes another form—land, houses, furniture, etc.—the price is called rent.

Interest, then, is the sum one pays for the use of a certain quantity of accumulated labor in its most durable, least cumbersome, and most easily exchangeable form.

Sometimes this usage is more or less expensive; sometimes it is free of charge; and sometimes capitalists even pay a premium to those to whom they entrust their capital.

THE CONSERVATIVE.

Are you joking? Where have lenders ever paid interest to their borrowers? That would be the world turned upside down!

THE ECONOMIST.

Do you know the conditions under which the first deposit banks, established in Amsterdam, Hamburg, and Genoa, received capital? In Amsterdam, capitalists first paid a fee of 10 florins to open an account; then they paid an annual custody fee of one percent. Additionally, since coins at that time suffered significant depreciation, the bank charged a more or less substantial agio(premium) on the deposited sum. In Amsterdam, the agiowas commonly five percent. And yet, despite these harsh conditions, capitalists preferred to entrust their capital to the bank rather than keep it themselves or lend it directly to those in need.

[130]

THE SOCIALIST.

So interest was negative at that time.

THE ECONOMIST.

Precisely. Now, since at all times a man who has accumulated capital must devote a certain level of oversight and assume certain risks in keeping it himself—since it may sometimes be less trouble and less risk to lend it out—interest can at any time fall to zero or even below zero.

But you also understand that if this negative part of the cost of interest were to rise too high; if capital conservation were subject to significant risks due to a lack of security or excessive taxation; if lending offered insufficient security as well, capital accumulation would halt. People would stop saving capital if they lost the certainty of being able to consume it themselves, at least in large part. Man would begin to live from day to day, without concern for his old age or his family’s future, and without any thought of improving or expanding his industry. Civilization would rapidly regress under such a regime.

The weaker the negative component of interest, the stronger the incentive to save capital.

Let us now examine the positivecomponent of interest.

This part represents labor, damages, and risks.

If you exert a certain amount of effort, if you suffer certain damages, and if you take certain risks [131] in keeping your capital, you are generally obliged to take even greater effort, suffer more damages, and assume greater risks in lending it.

Under what circumstances, are you—the capitalist— willing to lend capital? It is when you do not currently need it yourself. You are willing to lend it until the time comes when you do. Two borrowers—two men who need capital at this moment—approach you. With whom will you do business? You will choose, will you not, the one who presents the best material and moral guarantees—the wealthiest and most trustworthy, that is, the one most likely to repay you. Unless, of course, his competitor offers you a higher sum, in which case you will weigh the difference between their risks and their offers, and then decide. If you choose the second borrower, it is because the additional amount he offers seems to balance, and slightly exceed, the difference in material and moral guarantees.

Thus, interest serves to cover risks.

[132]

You lend your capital for a fixed period; but can you be absolutely certain that you will not need it during that time? Could an unforeseen accident not arise that forces you to resort to your savings? And does it not often happen that one lends capital that one actually needs oneself? In the first case, the damage is only potential; in the second, it is real. But whether potential or real, should it not be compensated?

Interest, therefore, serves to compensate for damages.

You keep your capital in a safe, in a barn, or elsewhere. If you lend it, you will have to exert a certain amount of effort, perform a certain amount of labor—moving it, formalizing the loan, and monitoring the use of the lent capital. This labor must be remunerated.

Interest, therefore, serves to pay for labor.

A premium to cover risk, compensation to cover damage, a wage to remunerate labor—these are the positive elements of the cost of production of interest.

These three elements appear, to varying degrees, in all interest-bearing loans.

THE SOCIALIST.

They could be eliminated by organizing credit.

THE ECONOMIST.

Let’s see! Are we talking about risk? No matter what you do, whether you are a banker, an intermediary, or simply a capitalist saving his earnings, you will always assume risks when lending.

Unless:

1.) You are dealing with people of absolute integrity and perfect intelligence.

2.) You are lending to people whose industry is in no way exposed—directly or indirectly—to any unforeseen catastrophe.

Until these conditions are met, you will always assume risks, and you will have to be paid a premium to cover them.

THE SOCIALIST.

I admit it; but if industry were less [133] uncertain, this premium could be significantly reduced.

THE ECONOMIST.

Yes, significantly. So instead of founding banks of exchange, study the real causes that make industry uncertain. Also, study the causes that undermine the morality or reduce the skill of the people.

THE CONSERVATIVE.

This is an interesting perspective. So, interest rates could be lower in a country with a high level of morality and practical business acumen than in a country where these qualities are scarce?

THE ECONOMIST.

Rather, say they mustbe lower. Would you not be more willing to lend to an honest man than to one who was a bit of a scoundrel?

THE CONSERVATIVE.

That goes without saying.

THE ECONOMIST.

Well, what you do, everyone else does as well. The interest rate rises as morality declines; it rises further as business skills deteriorate or become misguided. Take note of these economic principles and learn to apply them when necessary.

The risks that undeniably form the largest part of the cost of production of interest can be significantly reduced, but I doubt they can ever be eliminated entirely.

[134]

THE SOCIALIST.

If I remember correctly, one of the leaders of the Saint-Simonian school, M. Bazard, thought quite the opposite.

THE ECONOMIST.

You are mistaken. Here is what M. Bazard wrote in his preface to the French translation of The Defense of Usuryby Jeremy Bentham: [6]

"One may conclude that interest, as it represents the rent of work tools, tends to disappear completely, and that among its current components, the insurance premium is the only one that should remain. And even that would diminish over time due to the progress of industrial organization, covering only those risks that exceed human foresight and prudence."

Along with M. Bazard, I doubt that the risks of lending will ever disappear completely; for I do not believe that we will ever succeed in eliminating all natural or other accidents that threaten loaned capital. Those who employ capital—those who expose it to destruction—will therefore always have to pay an insurance premium to cover this risk.

THE SOCIALIST.

However, there is mutual insurance …

THE ECONOMIST.

No mutual insurance system can prevent an existing risk from falling on someone. You lend capital to a farmer whose farm buildings might [135] be destroyed by fire, whose crops might be ravaged by hail, weevils, or who knows what else. Consequently, you assume various risks. These risks must be covered, otherwise, you will not lend.

THE SOCIALIST.

But if the farmer is insured against fire, hail, and weevils?

THE ECONOMIST.

He will still have to pay an annual premium on the capital you lent him to improve his equipment or expand his crops; only, instead of paying it to you, he will pay it to insurers. He will pay them less because insurance is their specialty and not yours; but he will still pay it. The components of the interest he disburses annually to use your capital will be separated, but they will still exist.

THE CONSERVATIVE.

And what about rent? Do you believe, like M. Bazard, that it could disappear?

THE ECONOMIST.

Rent, as defined by M. Bazard, is the portion of the cost of production of interest that represents compensation for damage and remuneration for labor.

Is it possible to part with capital without experiencing any loss due to its absence? Yes, if one is certain of not needing it until the time of repayment or if one can recover or liquidate it without loss. Will these two circumstances ever arise in a regular, normal, and [136] permanent way? Will there come a time when all capital used in production can be repaid or liquidated at the lender's discretion without any loss?

THE CONSERVATIVE.

A pipe dream!

THE ECONOMIST.

I would not be so categorical. It must be noted that all capital employed or even employable in production does not constitute all the available capital of society. Generally, only capital that is not currently needed is lent. Well, it may happen that only such capital will be lent. In that case, there would no longer be any actual loss in lending. Could potential loss be eliminated in the same way? Will the flow of capital eventually operate so perfectly that withdrawals of capital from production are always compensated by new inflows? That, I cannot say, but it is possible. If the production and circulation of capital were not hindered by countless obstacles, we would soon have a clear answer on this matter.

What remains is the wage that remunerates the labor of lending—the effort the lender exerts in lending. This labor is real, and like all real labor, it deserves compensation.

Since the invention and multiplication of banks, this labor has been either displaced or divided. A capitalist who deposits his money in a bank exerts only a minimal effort. In contrast, the bank that lends this money to an entrepreneur involved in some industry performs a real service and incurs significant costs. This service must be compensated, and these costs must be covered. Who should [137] pay them? Obviously, the person using the capital, who will, in turn, pass them on to the consumer of the goods produced with this capital.

Could these costs ever disappear? No! While they may be reduced by increasing the number of intermediaries specializing in capital lending, they can never be completely eliminated. A bank must always pay for its premises, its employees, and other expenses. At least one component of the cost of production of interest is therefore indestructible.

THE CONSERVATIVE.

Ah! That is fortunate.

THE ECONOMIST.

Why so? Is not society, which consumes the products of labor, interested in purchasing them at the lowest possible price? Interest on capital represents a significant portion of the price of all goods. If it did not exist or were lower, these goods would be obtained in exchange for a smaller amount of labor since they would contain less of it.

The general prosperity of the population increases as interest rates fall; it would reach its maximum if interest were naturallyto drop to zero.

THE SOCIALIST.

I fully understand this breakdown of the costs of producing interest; I see that interest consists of real componentsthat must be covered, otherwise... otherwise...

THE ECONOMIST.

...capitalists would not lend their capital, or if they were forced to lend, they would stop [138] accumulating it, they would stop saving. Now, since capital—except perhaps precious metals and a few other commodities—is essentially perishable, the current capital of society—fields of wheat, pastures, vineyards, houses, furniture, tools, supplies—would disappear in a few years if no effort were made to maintain and replenish them through labor and saving.

THE SOCIALIST.

You have expressed my thought exactly. I also see that these different cost components naturally tend to decrease. But does the market interest rate always accurately reflect the components or the costs of the production of interest?

THE ECONOMIST.

Capital is like any other commodity. When more capital is offered than is demanded, the market interest rate falls. However, it can never fall much below the cost of production because people would rather keep their capital than lend it at a loss. It can rise above this level when demand for capital is greater than supply. But if the imbalance becomes too great, capital, attracted by the increasing premiums offered for it, will soon flood the market, restoring equilibrium. The market rate will then once again align with the natural rate.

This equilibrium establishes itself naturally unless artificial obstacles prevent it. I will discuss these obstacles when we examine banking. But to [139] permanently and consistently lower interest rates, the focus must be on reducing the cost of the production of interest. And these costs cannot be abolished—whether partially or entirely—through legislation.

THE CONSERVATIVE.

At last, we are back to the legal interest rate!

THE ECONOMIST.

One cannot say to a capitalist: “You shall not lend your capital at an interest rate above a maximum of five or six percent,” any more than one can say to a merchant: “You shall not sell your sugar at a price higher than eight sous per pound.” If, at eight sous, the merchant cannot recover the costs of producing sugar and compensate his own labor, he will stop selling sugar. Similarly, if, with a maximum interest rate of five or six percent, the capitalist cannot cover the risks of the loan, the damage resulting from the deprivation of his capital, and the effort involved in lending, he will stop lending.

THE CONSERVATIVE.

And yet, they do not stop. My usurer...

THE ECONOMIST.

Or, if he continues to lend, will he not be forced to add to the interest the premium for the additional risks he incurs by violating the law? That is precisely what your usurer has done. Without the law limiting the interest rate, he might have demanded only twenty percent—or even less.

THE CONSERVATIVE.

What! You believe that the costs of producing the interest on the capital loaned to my son truly amount to twenty percent?

[140]

THE ECONOMIST.

I do. There are significant risks in lending to young frequenters of Breda-Street. These charming discounters of their inheritance rights do not, admit it, offer very strong moral guarantees.

THE SOCIALIST.

Still, all things considered, the law prohibiting usury cannot have had very disastrous effects. It is so easily circumvented.

THE ECONOMIST.

Disabuse yourself of that notion! Many people find themselves in a situation where they cannot borrow unless they pay a high interest rate. Now, since the law has forbidden so-called usurious loans, those who religiously respect the existing law, whether it is good or bad, refrain from lending to these needy individuals. These borrowers are left with no choice but to turn to certain individuals who have no such scruples and who, taking advantage of their small numbers and the intensity of their clients’ needs, raise interest rates even higher.

The law limiting interest rates, as you see, establishes a true monopoly for the benefit of the least scrupulous lenders and to the detriment of the most desperate borrowers. It is thanks to this absurd law that shady lenders or usurers bleed dry workers and small merchants who borrow on a weekly basis, traders who have suffered losses, and so many others.

Do you now understand why political economy stands up, in the name of the public interest, to oppose this [141] limitation on the right to lend, and why it takes up the defense of usury?

THE SOCIALIST.

Yes, I understand. I see that the law does not prevent usury; on the contrary, I see that it makes it even harsher. I see that if this restrictive law were abolished, the most desperate borrowers would have one less premium to pay to lenders.

THE ECONOMIST.

That would be an immense benefit for the most impoverished classes of society. Let us therefore demand the abolition of legal interest rates—this will be the best way to defeat usurers and put an end to usury.

[142]

SIXTH SOIRÉE↩

SUMMARY: The right to exchange.—On the exchange of labor.—Laws regulating unions.—Articles 414 and 415 of the Penal Code.—Union of Parisian carpenters in 1845.—Demonstration of the law that makes the price of things gravitate toward the sum of their cost of production.—Its application to labor.—That the worker can sometimes dictate terms to the employer.—Example of the English Antilles.—Natural organization of labor sales.

THE ECONOMIST.

Exchange is even more obstructed than lending. The exchange of labor is hindered by passport and work permit regulations, as well as by laws against unions; the exchange of real estate properties is subjected to costly and unjustified formalities; the exchange of goods is burdened internally by various indirect taxes, particularly city tolls, and externally by customs duties. These various infringements on the property of exchangers uniformly result in reducing production and disrupting the just distribution of wealth.

Let us first consider the obstacles to the free exchange of labor.

THE SOCIALIST.

Should we not, beforehand, finish examining what concerns external property?

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THE ECONOMIST.

Labor can be considered an external property. The entrepreneur who buys labor does not buy the worker’s faculties or strengths; he buys the portion of those forces that the worker has separated from himself by working. The exchange is truly concluded or completed only after the worker, having separated from himself a part of his physical, moral, and intellectual forces, has received in exchange products (most often precious metals) that also contain a certain amount of labor. It is, therefore, an exchange of two external properties.

Any exchange can only be just if it is perfectly free. Are not two men who engage in an exchange the best judges of their own interest? Can a third party legitimately intervene to force one of the two contracting parties to give more or receive less than he would have given or received if the exchange had been free? If either party believes that the thing offered to him is too expensive, he simply does not buy it.

THE SOCIALIST.

And what if he is forced to buy it in order to survive? If a worker, driven by hunger, is obliged to sell a considerable amount of his labor in exchange for a meager wage?

THE ECONOMIST.

That objection will oblige us to take quite a long detour.

THE SOCIALIST.

But admit that it is a strong one... it truly contains the essence of socialism. Socialists have [144] recognized and observed that there is and cannot be equality in the current mode of labor exchange; that the employer is naturally stronger than the worker; that he can, therefore, always dictate the terms to him—and that he does. Having firmly established this obvious inequality, they have sought means to eliminate it. They have found two: state intervention between the seller and buyer of labor, and association, which eliminates the sale of labor altogether.

THE ECONOMIST.

Are you quite sure that the inequality you speak of exists?

THE SOCIALIST.

Am I sure? Even the great masters of political economy have acknowledged this inequality. If I had Adam Smith’s works at hand...

THE CONSERVATIVE.

They are right here in my library.

THE ECONOMIST.

Here is the page.

THE SOCIALIST.

Please pay attention:

"What determines everywhere the ordinary wage of labor," says Adam Smith, "is the contract made between the master and the worker, whose interests are entirely opposed. The workers want to earn as much as possible, while the masters want to pay as little as possible. Both are inclined to combine—one side to raise, the other to lower the price of labor.

"It is not difficult to foresee which side will usually have the advantage and which party will be forced to submit to the conditions [145] imposed upon them. Since the masters are fewer in number, it is much easier for them to come to an agreement. Moreover, the law either permits them to do so or at least does not prohibit them, whereas it expressly forbids workers from doing the same. We have no parliamentary acts against combinations to lower wages, but we have several against those that seek to raise them. Additionally, in such disputes, the masters can hold out much longer. A landowner, a farmer, a manufacturer, or a merchant can usually live for a year or two on the funds they have saved without employing a single worker. Most workers, however, could not survive a week, very few could last a month, and almost none could endure a year without working. In the long run, the master cannot do without the worker any more than the worker can do without the master, but the urgency is not as immediate for the master."

Listen further:

"It is rarely, they say, that one hears of a combination among masters, while one often hears of those formed by workers. But whoever imagines, on that basis, that masters do not collude knows as little about the world as they do about the subject at hand. There exists everywhere a tacit but constant agreement among masters to ensure that the current price of labor does not rise. To deviate from this tacit agreement is considered an act of betrayal and is a sort of disgrace for a master among his peers and equals. It is true that one rarely hears of such collusion because it is customary and is, so to speak, the natural state of things, which does not attract attention.

"Masters also sometimes conspire [146] to lower the wage of labor below its current rate. This project is carried out in the greatest secrecy until the moment of execution; and if workers yield without resistance—as sometimes happens, even though they feel the full severity of the blow—the public never hears of it. However, they often mount a defensive coalition, and in certain cases, they do not wait to be provoked; they form a conspiracy of their own accord to force the masters to raise wages. Their usual justifications for doing so are either the high cost of living or the excessive profits that the masters make from their labor. But whether these combinations are offensive or defensive, they always create a great commotion. To force a prompt resolution, the workers never fail to fill the world with their outcries, and sometimes they resort to violence and acts of defiance that are entirely unforgivable; they are desperate men, who see themselves facing the choice between starvation and immediate success through intimidation. The masters, for their part, cry out just as loudly and continuously invoke the civil magistrate and the strict enforcement of laws that have been so severely enacted against conspiracies by servants, workers, and laborers. Consequently, the workers almost never gain any advantage from violence and these tumultuous associations, which generally result only in the punishment and ruin of their leaders—both because the civil magistrate intervenes and because most workers, [147] compelled by necessity, are forced to submit in order to have bread."

Isn’t this, in truth, an eloquent condemnation of your system of free competition, written by the very hand of the master of economic science? In wage disputes, the employer is stronger than the worker—Adam Smith himself acknowledges it! After this admission from the master, what should his disciples have done? If they had truly been driven by a love of justice and humanity, should they not have sought ways to establish equality in the relations between employers and workers? Have they fulfilled this duty? … What have they proposed in place of wage labor, that final transformation of servitude, as M. de Chateaubriand so rightly called it? What have they proposed in place of that unjust and savage laissez-faire, which builds the prosperity of the master upon the ruin of the worker? What have they proposed, I ask you?

THE ECONOMIST.

Nothing.

THE SOCIALIST.

Indeed, they have said that they could do nothing against the natural laws that govern society; they have shamefully admitted their impotence in aiding the workers. But this duty of justice and humanity that they have ignored, we socialists have fulfilled. By substituting association for wage labor, we have put an end to the exploitation of man by man and to the tyranny of capital.

THE ECONOMIST.

I...

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THE CONSERVATIVE.

Allow me first to make a simple observation. In the passage from Adam Smith that has just been cited, there is mention of laws that unequally repress unions of employers and those of workers. Thank God, we have nothing of the sort in France. Our laws are equal for all. There are no longer any inequalities on French soil!

THE ECONOMIST.

You are mistaken. French law, on the contrary, has established a glaring inequality between the employer and the worker. I need only read Articles 414 and 415 of the Penal Code to prove it to you.

"Art. 414. Any union among those who employ workers, aimed at unjustly and unfairly lowering wages, followed by an attempt or commencement of execution, shall be punished with imprisonment from six days to one month, and a fine of two hundred to three thousand francs.

Art. 415. Any union by workers to simultaneously cease work, to prohibit work in a workshop, to prevent others from going there or staying there before or after certain hours, and, in general, to suspend, prevent, or inflate the cost of labor, if there has been an attempt or commencement of execution, shall be punished with imprisonment of no less than one month and no more than three months.—The leaders or instigators shall be punished with imprisonment of two to five years."

You see, employers can only be prosecuted if there is an unjust and unfair attempt on their part to lower wages; workers, on the other hand, are prosecuted [149] for the mere attempt to form a union. Moreover, the penalties are monstrously unequal.

THE CONSERVATIVE.

Did the National Assembly not reform these two articles?

THE SOCIALIST.

They might have reformed them if not for the opposition of an economist. In the meantime, they remain in effect, and God knows what disastrous influence they have on the price of labor. Remember the union of Parisian carpenters in 1845. The workers unionised to obtain an increase of 1 franc on their wage, which was 4 francs. The employers unionised to resist them.

THE CONSERVATIVE.

That fact was never established.

THE SOCIALIST.

On the contrary, the fact was perfectly established. At that time, when associations were strictly prohibited, the master carpenters had obtained authorization to form a Chamber of Syndics for the improvement of their industry; but in this chamber of improvement, wages were discussed more than anything else.

THE CONSERVATIVE.

How do you know?

THE SOCIALIST.

The trial debates clearly established it. The workers’ delegates approached the president of the Chamber of Syndics to request the wage increase. The president refused them after a long deliberation by the assembly. However, the employers were not [150] prosecuted, and indeed, they could not be. They had indeed unionized, but not to "unjustly and unfairly" lower wages; they had unionised to prevent wages from rising.

THE ECONOMIST.

Which amounts to exactly the same thing.

THE SOCIALIST.

But the legislators of the imperial regime had not seen it that way. The employers were thus acquitted. The leaders of the workers' union, however, were sentenced—some to five years, others to three years in prison.

THE ECONOMIST.

Yes, it was one of the most deplorable convictions ever recorded in judicial history.

THE CONSERVATIVE.

If I am not mistaken, the union led to specific acts of violence. Some of the unionised workers mistreated fellow workers who had refused to join the union. But perhaps your laissez-faire system allows for such methods?

THE ECONOMIST.

Far less than yours does. When we say unlimited freedom, we mean equal freedom for everyone, equal respect for the rights of all and of each person. Now, when a worker intimidates or uses violence to prevent another worker from working, he infringes upon a right, he violates a property, he is a tyrant, a plunderer, and should be strictly punished as such. The workers who committed such offenses in the carpenters' case were in no way excusable, and it was right [151] to convict them. But not all of them had committed this offense. The leaders of the union had neither engaged in nor ordered any violence. However, they were punished more severely than the others.

THE CONSERVATIVE.

The law will be reformed.

THE ECONOMIST.

As long as it exists, it will remain an unjust law.

THE CONSERVATIVE.

What? Even if it no longer establishes any difference between employers and workers?

THE ECONOMIST.

Yes. What does Adam Smith say? That employers can come to an understanding much more easily than workers, and that the law is much more difficult to enforce against them. Now, if the law affects four workers' unions for every one employers' union, is that a just law?

In practice, the influence of this law is disastrous for workers. Employers, knowing that the law is difficultto enforce against them while it easily targets workers, are encouraged to make and uphold excessive demands in setting wages. Any law against unions, no matter how equally it is framed, thus constitutes an intervention of society in favor of the employer. England eventually came to recognize this and abolished the law on unions, which had provoked the rightful objections of Adam Smith.

THE CONSERVATIVE.

But let’s be clear! Are unions legitimate or not? Do they constitute a fraudulent agreement or a lawful one? That is the question! Now, on this [152] question, the opinion of our great assemblies has never been in doubt. The members of our first Constituent Assembly and even the Convention itself were unanimous in preventing any union, any agreement between employers or workers. The Convention member Chapelier wrote in one of his reports this famous phrase: "It is absolutely necessary to prevent entrepreneurs and workers from gathering to deliberate on their so-called common interests." What do you think of that?

THE ECONOMIST.

I think that even the most subtle criminal lawyer could not find any offense in the act of two or more men agreeing to seek a higher price for their merchandise; I think that by enacting laws to suppress this so-called offense, an unjust and harmful attack is made on the property rights of industrialists and workers.

I say even more. By prohibiting unions, one prevents an agreement that is often indispensable.

THE SOCIALIST.

Have economists not always regarded unions as harmful or at least unnecessary?

THE ECONOMIST.

That depends on the circumstances and the way unions are run. But to show you clearly in what circumstances a union can be useful, and how it must be conducted to produce good results, I must return to the heart of the debate. You have asserted that [153] under the wage system, justice is impossible; that since the employer is naturally stronger than the worker, he must also naturally oppress him.

THE CONSERVATIVE.

That conclusion is not logically necessary. There are philanthropic sentiments that temper the excesses of self-interest.

THE ECONOMIST.

Not at all. I accept the conclusion as rigorous and I believe it to be so. Philanthropy has no place in business, and rightly so, because it would not belong there. We will return to this later...

So you believe that the employer can always impose his conditions on the worker, and thus that wage labor excludes justice.

THE SOCIALIST.

I share Adam Smith's opinion.

THE ECONOMIST.

Adam Smith said that the employer can oppress the worker more easily than the worker can oppress the employer; he did not say that the employer is necessarily always in a position to impose his will on the worker.

THE SOCIALIST.

He recognized a natural inequality that favors the employer.

THE ECONOMIST.

Yes, but this inequality may not always exist. There may be situations where the worker is stronger than the employer.

THE SOCIALIST.

If there is a union among workers?

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THE ECONOMIST.

No, even without a union. I will give you an example in a moment. Now, if the inequality does not always occur, could it not be possible that it never occurs at all?

THE SOCIALIST.

Ah! You are going to bring up the organization of labor.

THE ECONOMIST.

God forbid!

On my way here, I passed by Fossin's shop. There were some very beautiful diamond sets in the display window. Across the street, an orange vendor was selling her goods. She had oranges of two or three different qualities, and in one corner of her stall, a bundle of moldy oranges that she was offering at a very low price.

THE CONSERVATIVE.

What kind of riddle is this?

THE ECONOMIST.

Observe carefully, I beg you, the difference between the two industries. Fossin sells diamonds, that is to say, a commodity that is essentially durable. Whether a buyer comes or not, the diamond merchant can wait without fearing that his merchandise will suffer the slightest deterioration. But if the orange seller fails to dispose of her stock, she will soon have not a single sound orange left. She will be forced to throw her merchandise onto the compost heap.

That, certainly, is a notable difference between the two industries. Fossin can wait a long time for buyers without fearing that his merchandise will spoil; the orange seller [155] cannot. Does this mean that the orange seller is more exposed than Fossin to being dictated to by her buyers?

THE SOCIALIST.

That depends! If the orange seller does not take care to match the quantity of her merchandise exactly to the number of her buyers, she will be forced to lower her prices or lose part of her oranges.

THE CONSERVATIVE.

She will indeed do very bad business.

THE ECONOMIST.

That is why every orange seller who knows her trade carefully avoids carrying more merchandise than she can sell at a profitable price.

THE CONSERVATIVE.

What do you mean by a profitable price?

THE ECONOMIST.

I mean the price that covers the cost of production of the goods, including the seller’s natural profit.

THE SOCIALIST.

You are not solving the difficulty. In a year when the orange harvest is overly abundant, what will be done with the surplus if the sellers do not demand more than usual? Must the excess oranges be left to rot?

THE ECONOMIST.

If more oranges are harvested, more will be offered, and the price will fall. As the price drops, demand will increase, and the surplus harvest will thus find buyers.

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THE SOCIALIST.

In what proportion will the price fall?

THE ECONOMIST.

From all the observations gathered so far, we can clearly state that:

When supply exceeds demand in an arithmetic progression, the price falls in a geometric progression, and likewise, when demand exceeds supply in an arithmetic progression, the price rises in a geometric progression.

You will soon see the beneficial results of this economic law.

THE SOCIALIST.

If such a law exists, should it not, on the contrary, have essentially harmful effects? Suppose, for example, that an orange grove owner usually harvests five hundred thousand oranges per year and sells them at two centimes each. That gives him a sum of ten thousand francs with which he pays his workers, covers his management labor, and, in short, meets his cost of production. Then comes an abundant year. Instead of five hundred thousand oranges, he harvests a million. Consequently, he offers twice as many oranges to the market. By virtue of your economic law, the price falls from two centimes to half a centime, and the unfortunate owner, a victim of abundance, receives only five thousand francs for one million oranges, whereas the previous year, he had received ten thousand francs for half that quantity.

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THE CONSERVATIVE.

It is certain that an overabundance of goods is sometimes harmful. Just ask our farmers whether they prefer a year of abundance or an average year, a year when wheat is at twenty-two francs or a year when it falls to ten francs.

THE ECONOMIST.

These are economic phenomena that the law just formulated can alone explain. But it does not at all follow from this law that doubling a harvest must lead to a three-quarters drop in price, for demand always increases, more or less, as the price falls. Let us return to the example of the orange grove owner. At two centimes per piece, he covered the cost of production of five hundred thousand oranges. If the harvest doubles, the cost of production will not increase in the same proportion. Nevertheless, they will increase. More labor is required to harvest a million oranges than to harvest five hundred thousand. Moreover, owners will be obliged to pay this labor at a higher rate because wages always rise when the demand for labor increases. The cost of production will thus rise by perhaps half. They will increase from ten thousand to fifteen thousand francs. To cover this latter sum, which represents his cost of production, the owner will have to sell his orange harvest at one and a half centimes per piece.

The question is whether, just as he succeeded in selling five hundred thousand oranges by offering them at two centimes, he will succeed in selling one million by offering them at one and a half centimes; the question is whether [158] a drop of half a centime will suffice to double demand.

If this drop does not suffice, our owner will be forced to lower his price even further, under penalty of keeping part of his merchandise. But then he will suffer losses. If he sells only nine hundred thousand oranges at one and a half centimes, he will not cover his costs; if he sells one million at one and a quarter centime, he will cover them even less.

Only experience can serve as a guide in this case. A certain price drop does not increase consumption of all goods equally. A halving of the price of sugar, for example, may double its consumption. A halving of the price of oats or buckwheat may only slightly increase demand for these two commodities. In a year when the harvest has exceeded usual expectations, it is thus a difficult question whether it is better to increase supply in proportion to the increased harvest or whether it is better to withhold part of the goods to maintain the price.

THE SOCIALIST.

And if the commodity is not of a nature to be preserved, one might therefore find it advantageous to let it go to waste.

THE ECONOMIST.

Yes, or what amounts to the same thing economically, to distribute it free of charge to people who would not have bought it at any price. But there are very few commodities that cannot be preserved in one form or another.

If you still have any doubts about the existence of the economic law I have just pointed out, examine what has recently happened in the wheat trade. In 1847, our wheat harvest was deficient; instead of [159] harvesting sixty million hectoliters of wheat, only about fifty million were harvested. You know the commercial result of this harvest deficit. From its usual price of twenty or twenty-two francs, wheat rose to forty or fifty francs. The following year, on the contrary, the harvest was abundant; eight to ten million hectoliters more than usual were collected. From forty or fifty francs, the price then gradually fell to fifteen francs and, in certain localities, as low as ten francs. In the first of these two years, a decrease of one-quarter in supply quickly led to a doubling of the price; in the second, an increase of one-quarter in supply caused the price to successively drop to half its usual rate.

The same law governs the prices of all commodities. However, when observing it, one must always take into account the increase in demand that results from a decrease in price, and vice versa.

THE SOCIALIST.

If a slight decrease in supply can cause such a considerable increase in price, I now understand a fact that had previously remained very obscure to me. At the end of the last century, famine reigned in Marseille. The price of wheat had risen very high... but not high enough for certain merchants, who sought to increase it further. They conceived the idea of throwing part of their stock into the sea. This ingenious idea earned them substantial profits. But a child witnessed their impious and criminal act. His young soul was filled with deep [160] indignation. He wondered what kind of society this was, where it was profitable for some to starve others, and he declared an undying war against a civilization that engendered such revolting excesses. He dedicated his life to devising a new form of organization... That child, that reformer—you know him, it was Fourier.

THE ECONOMIST.

The anecdote may be true, for this event has occurred frequently during times of famine, as well as in years of abundance; but, in my eyes, it proves only one thing: that Fourier was a very poor observer.

THE SOCIALIST.

Goodness gracious!

THE ECONOMIST.

Fourier saw the effect, but he did not see the cause. At that time, wheat purchases from abroad were hindered both by the difficulty of transportation and by customs laws. Thus, wheat holders within the country enjoyed a true monopoly. To make this monopoly even more profitable, they put only a portion of their stock on the market. If the law had not interfered in their affairs, they would have stored the rest, as wheat is one of the longest-lasting commodities. Unfortunately, there were, at that time, laws against hoarding. These laws prohibited merchants from storing beyond a certain quantity of foodstuffs.

Faced with the choice of either placing all their wheat on the market or destroying part of it, the merchants often found it more advantageous to [161] take the latter course. It was barbaric, it was despicable, if you like; but whose fault was it?

Under a regime of full economic freedom, nothing of the sort could happen. Under this regime, the price of all things naturally tends to fall to the lowest possible rate. Precisely because a small difference between supply and demand levels causes a significant fluctuation in prices, equilibrium must necessarily establish itself. As soon as the supply of a commodity does not meet demand, the price rises so quickly that bringing in additional stock soon becomes highly profitable. Now, since men are naturally drawn to any venture that promises them a profit, competitors rush in to fill the deficit.

As soon as the deficit is covered and equilibrium restored, shipments cease on their own; because as supplies increase, prices tend to decline progressively, and exporters would soon find themselves at a loss.

If, therefore, producers or merchants are always allowed the full freedom to take their commodities wherever they are needed, supplies will always match as closely as possible the needs of consumption. But if, on the contrary, restrictions are imposed on the freedom of trade, if merchants are hindered in the free exercise of their industry, equilibrium will take longer to establish itself, and in the meantime, producers who control the market will be able to reap enormous profits at the expense of unfortunate consumers.

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Let us further note that these profits increase in proportion to how indispensable the commodity is. Suppose a company obtains the monopoly of orange sales in a country. If this company exploits its monopoly by cutting the supply of oranges in half, hoping to quadruple the price, it may well be disappointed. Since oranges are not a necessity, as the reduction in supply raises the price, demand will decrease accordingly. As the gap between supply and demand will remain relatively small, the market price of oranges will not rise much above its natural price.

It would be quite different if a company managed to monopolize the production or sale of cereals. Since wheat is a staple food, a halving of supply—and the resulting progressive rise in price—would cause only a slight reduction in demand. A supply cut that might barely raise the price of oranges could easily double or triple the price of wheat.

When a commodity is of absolute necessity, like wheat, demand only decreases with the extinction of part of the population or the exhaustion of their means.

Finally, under certain circumstances, a commodity whose price would not normally rise significantly may suddenly acquire an extraordinary value. Take, for example, an orange seller transported into the midst of a caravan crossing the desert. In the first days, [163] she must sell her goods at a moderate price, lest she sell nothing at all. But then, water begins to run scarce: at once, the demand for oranges doubles, triples, quadruples. The price rises progressively as demand grows. Soon, it exceeds the means of the poorer travelers and reaches those of the wealthiest; in a matter of hours, the value of a single orange could rise to a million. If the seller, suffering from thirst herself, reduces her supply as her own need becomes more pressing, a moment arrives when the price of oranges surpasses all available resources among her fellow travelers—even if they are nabobs.

By carefully observing this economic law, you will come to understand a multitude of phenomena that may have previously escaped your notice. You will understand precisely why producers have always sought to obtain exclusive privileges or monopolies for selling their goods in certain areas; why they are especially eager for monopolies on essential goods; and finally, why these monopolies have always been a source of terror for the people.

Now, let us return to my orange seller and Fossin.

THE CONSERVATIVE.

At last!

THE ECONOMIST.

Thanks to the particular nature of his merchandise, which is durable, Fossin can, without too much inconvenience, increase [164] his stock of precious stones beyond the immediate needs of the market. Nothing forces him to offer the surplus immediately. The orange seller, however, is in a very different situation. If she has bought more oranges than she can sell at a profitable price, she does not have the option of indefinitely holding the surplus in reserve, as oranges are prone to spoil. But by offering her entire stock, she risks lowering the price of oranges to the point where she loses even more than the value of the excess. What will she do then? Will she destroy the surplus she has imprudently acquired? No! She will sell it outside her usual market, or she will wait until some of her oranges are slightly spoiled to sell them to a specific category of buyers, in such a way as not to compete with the rest of her stock. This explains the presence of those small piles of half-spoiled oranges at the corner of the vendor’s stall.

THE CONSERVATIVE.

What does that matter to us?

THE ECONOMIST.

You will see. These piles are all the larger when the vendors understand their trade poorly or when the consumption of oranges experiences strong fluctuations. But they would not clutter the stalls if the orange sellers knew exactly how to match their purchases to their sales, or if consumption never experienced sudden variations. If things worked this way, the orange sellers could, like Fossin, always adjust [165] their supply to demand without suffering any loss; they would no longer sell part of their merchandise at a loss for fear that the surplus would spoil, nor would they wait for the surplus to spoil in order to dispose of it at a low price.

THE CONSERVATIVE.

Certainly!

THE ECONOMIST.

Well then, if you closely examine the situation of workers in relation to entrepreneurs in a particular industry, you will find it perfectly analogous to that of orange sellers in relation to their buyers.

Similarly, if you examine the situation of entrepreneurs in relation to workers, you will find it absolutely similar to that of Fossin in relation to his clientele.

Labor, in fact, is an essentially perishable commodity, in the sense that a worker, deprived of resources, is at risk of perishing in a short time if he does not find a buyer for his labor. Thus, the price of labor can drop excessively low when the supply of labor is abundant and the demand is weak.

Fortunately, charity intervenes by removing from the market some of the workers who are offering their labor in vain, providing them with free food. If charity is insufficient, the price of labor continues to fall until a portion of the surplus labor perishes. Then equilibrium begins to reestablish itself.

The entrepreneur who offerswages to workers [166] is not usually forced to act so urgently. When labor is scarce in the market, he can hold back a portion of his wages in reserve and, like Fossin, adjust his offer to the demand.

However, there are exceptions to this rule. Sometimes, entrepreneurs are forced to sell their wages at a low price, to pay high wages in exchange for small amounts of labor, or, to use the common expression, to accept the conditions set by the workers. This happens when they urgently need more labor than is available in the market.

This occurred particularly in the English Antilles at the time of emancipation. Under slavery, workers were bound to plantations, and planters had an approximately sufficient supply of labor to cultivate their lands. But when slavery was abolished, many former slaves began working for themselves. The number of those who continued to work on the sugarcane plantations became insufficient. At that very moment, the economic law of supply and demand exerted its influence on labor prices. In Jamaica, where a slave’s daily labor cost barely 1 franc, the same amount of free labor successively rose to 3, 5, 10, and even up to 15 and 16 francs. [7] Most of the compensation paid to the planters was spent on this. But soon, as a large number of planters abandoned their plantations due to their inability to pay these exorbitant wages, demand [167] decreased; on the other hand, the lure of high wages attracted workers from all over, even from China, increasing the supply. Thanks to this dual movement, which constantly and irresistibly brought supply and demand closer together, wages fell, and today, the price of labor in the English Antilles has settled at approximately its natural level.

THE SOCIALIST.

What do you mean by the natural level of wages?

THE ECONOMIST.

I mean the amount necessary to cover the cost of production of labor. I will explain this in more detail in a future discussion.

Ultimately, you see that entrepreneurs are no more able to escape the law of supply and demand than workers themselves. When equilibrium is disrupted against them, when the balance of labor favors the workers, they can usually—though not always—hold back a portion of their wages and thus prevent labor prices from rising too high; they can imitate jewelers who keep their gems and precious stones rather than selling them below a profitable price. But in the end, a moment comes when, under threat of bankruptcy or being forced to abandon their industry, they must put their wages on the market.

When equilibrium is disrupted against the workers, when the balance of labor favors the entrepreneurs, workers are usually forced to sell their labor no matter what, unless charity comes to their aid or they manage, in one way or [168] another, to remove surplus labor from the market. Their situation is then worse than that of entrepreneurs lacking labor because, like orange sellers, they are dealing with a highly perishable commodity, quick to deteriorate or be lost.

But if, understanding the nature of their commodity, they were prudent enough never to flood the market, to always match their supply to demand, could they not also, like orange sellers who know their trade, always sell their merchandise at a profitable price?

THE SOCIALIST.

Is it really possible to always match the supply of labor to the demand? Are workers in control of preventing crises from disrupting industry? Can they easily transport an excess of labor from one place to another, as one moves bales of merchandise? Must not this equilibrium, which would allow workers to sell their labor at a profitable price, be constantly broken against them by the very nature of things? And then, must not the price of labor, like that of any perishable commodity, fall in a terrifying manner?

THE ECONOMIST.

The obstacles that you attribute to the nature of things are, more often than not, artificial. Study industrial crises more closely, and you will see that they almost always originate from laws that hinder production or the circulation of wealth across different parts of the globe. Examine more carefully why workers [169] struggle so much to match their supply to the demand, and you will find that this is due mainly, on the one hand, to institutions of state charity that encourage them to multiply without restraint; and, on the other hand, to obstacles placed on the free agreement among workers and on the free movement of labor—economic laws on unions, on apprenticeships, on workbooks, on passports, as well as civil laws that deny foreigners equal rights with nationals. However small the impact of these artificial obstacles on the movement of supply and demand may seem, it becomes considerable—enormous—on price, since an arithmetic progression on one side generates a geometric progression on the other.

I have already demonstrated to you that the laws against unions necessarilyand inevitablytip the balance in favor of the employer in the wage debate. Without these harmful laws, workers would also have opportunities that they currently lack to always promptly adjust the supply of labor to the demand. Here’s how.

Let me return to the example of the orange seller: she sells, let us say, a hundred oranges per day. One day, the demand drops by half—only fifty are requested. If she insists on selling a hundred that day, she will have to lower her prices significantly and will suffer a noticeable loss. It would be to her advantage to remove the excess fifty oranges from the market, even if that means they rot by the end of the day.

Well! The situation is absolutely the same for workers who sell their labor.

[170]

THE CONSERVATIVE.

I can accept that, but who will agree to play the role of the oranges meant to rot in storage?

THE ECONOMIST.

Individually, no one! But if workers are intelligent and if the law does not prevent them from organizing, do you know what they will do? Instead of letting wages fall progressively as demand declines, they will withdraw from the market the surplus labor that is causing this drop.

THE CONSERVATIVE.

But, once again, who will agree to be withdrawn from the market?

THE ECONOMIST.

No one, of course, unless the organised workers compensates those who step aside; but there will be competition to leave the market if compensation is granted to the withdrawn workers equal to the wages they earned while working.

THE CONSERVATIVE.

Do you really believe that employed workers would find this arrangement beneficial?

THE ECONOMIST.

I do. Let’s take an example. One hundred workers receive a wage of 4 francs per day. Demand decreases by one-tenth. If our hundred workers continue offering their labor, by how much will wages drop? They will not fall by just one-tenth but by nearly one-fifth (it would be exactly one-fifth if the price drop did not slightly increase demand), reducing wages to 3 francs 20 centimes. The total wage sum will fall from 400 francs to 320 francs. But if the united workers[171] withdraw the ten surplus laborers from the market, granting them an compensation equal to their wages, amounting to 40 francs, then instead of receiving only 320 francs (100 × 3 francs 20 centimes), they will receive 360 francs (90 × 4 francs). Instead of losing 80 francs, they will lose only 40 francs.

You see that unions can be useful and are even occasionally necessary due to the nature of the commodity that the worker brings to market. Therefore, forbidding them is an act of true plunder against the mass of workers.

If workers' unionswere allowed, and if, at the same time, the laws on workbooks and passports did not hinder workers’ movements, you would see the movement of labor rapidly expand on an immense scale. Adam Smith, analyzing the causes of excessively low wages in certain locations, said: “Despite all that has been said about the fickleness and inconstancy of human nature, experience clearly shows that, of all types of baggage, man is the hardest to transport.”But communication systems today are far more advanced than they were in Adam Smith’s time. With railways, aided by electric telegraphs, one can quickly and inexpensively transport a large number of workers from a place where labor is abundant to a place where it is scarce.

You understand, however, that this trade in labor cannot reach its full potential as long as the law continues to hinder it.

THE SOCIALIST.

The government should even guide workers [172] in their search, pointing out the places where labor is abundant and those where it is scarce.

THE ECONOMIST.

Leave it to private industry; it will serve the workers far better than the government could. Grant full freedom of movement and association to workers, and they will naturally seek out the places where labor is most advantageously exchanged; active and intelligent intermediaries will assist them at the lowest possible cost (provided, of course, that no one decides to limit the number of these intermediaries and regulate their industry). The supply and demand of labor, which naturally gravitate toward one another, will then balance without obstacles.

Let the workers act freely, let labor circulate—this is the whole solution to the problem of wages. [8]

[177]

SEVENTH SOIRÉE↩

SUMMARY: Right to exchange, continued.—International trade.—The protectionist system.—Its purpose.—Aphorisms of M. de Bourrienne.—Origin of the protectionist system.—Mercantile system.—Arguments in favor of protection.—Depletion of currency.—Independence from foreign countries.—Increase in domestic production.—That the protectionist system has reduced overall production.—That it has made production precarious and distribution inequitable.

THE ECONOMIST.

The free exchange of goods is even more restricted than the free exchange of labor. The trade of real estate is subject to tiresome and costly formalities, while the trade of movable goods is burdened or entirely obstructed by various indirect taxes, notably by local tolls and customs duties.

Allow me to set aside for the moment the restrictive laws that serve primarily as a source of taxation and to focus on those that have been established mainly as obstacles.

I am speaking of customs duties.

THE CONSERVATIVE.

But were customs duties not established for tax purposes?

[178]

THE ECONOMIST.

Sometimes, but rarely. Most often, customs duties were created solely to obstruct trade.

THE SOCIALIST.

That is the protectionist system.

THE ECONOMIST.

Indeed, the protectionist system prevails in all civilized countries, except perhaps in England and the United States, where customs duties tend to become purely fiscal.

Everywhere, fiscal customs duties—those intended solely to fill the public treasury—are fiercely opposed by advocates of the protectionist system. These advocates want the interest of the Treasury to be set aside in customs policy and for the focus to be exclusively on what they call the interests of industry.

THE CONSERVATIVE.

Are these two interests really contradictory?

THE ECONOMIST.

From the perspective of the protectionist system, yes. In 1822, M. de Bourrienne, author of the report on the law on the importation of foreign iron, clearly pointed out and fully accepted this opposition:

"A country," he said, "where customs duties serve only a fiscal purpose, would be marching rapidly toward decline; if the interest of the Treasury were to prevail over the general interest, it would provide only a temporary benefit, which would be dearly paid for one day.

A country may enjoy great prosperity and have little customs revenue; it may also have large customs receipts and yet be in a state of distress and [179] decline; perhaps one could even prove that the latter is a consequence of the former.

Customs duties are not a tax; they are a form of encouragement for agriculture, commerce, and industry; and the laws that establish them must be, at times, political, always protective, and never fiscal.

Since customs duties should not serve the interests of the Treasury, the tax resulting from them is only incidental.

One proof that the tax aspect of customs duties is secondary is that export duties are almost nonexistent. Moreover, when the legislator imposes import duties on certain goods, his goal is that these goods enter the country as little as possible, if at all. The increase or decrease in revenue should never be a concern.

... If the law you are considering results in a decrease in customs revenue, you should rejoice. It will be proof that you have achieved your goal of slowing down dangerous imports and favoring useful exports."

The goal M. de Bourrienne spoke of has been perfectly achieved in France. Our tariff system is fundamentally protectionist. Our customs laws have been designed to prevent, as much as possible, foreign goods from entering France. Now, goods that do not enter do not pay duties, as was wittily demonstrated by the author of Economic Sophisms, M. Bastiat. A protectionist tariff must be as unproductive as possible to fulfill its intended purpose.

A fiscal tariff, on the other hand, must be as productive as possible.

[180]

THE CONSERVATIVE.

But if a protectionist tariff harms Treasury interests in one way, does it not serve them even more by protecting national industry from foreign competition? Protection bridges the natural gap between the cost of production of certain goods domestically and the prices of their equivalents abroad.

THE ECONOMIST.

That is the doctrine of M. de Bourrienne. We shall soon see whether it actually achieves its goal. But first, I must point out that customs duties were established over the past three centuries neither to fill the Treasury’s coffers nor to equalize the cost of production of domestic and foreign goods.

For a long time, it was a widely held belief that wealth resided solely in gold and silver. Each country, therefore, sought ways to attract foreign gold and, once acquired, to prevent it from leaving. To achieve this, policies were devised to encourage the export of national goods and to hinder the import of foreign goods. In the eyes of the system’s theorists, the trade imbalance would inevitably be paid for in gold or silver. The greater this imbalance, the richer the nation would become.

When exports exceeded imports (or at least when people believed they did), it was said that the country had a favorable balance of trade.

This system was called the mercantile system.

[181]

THE CONSERVATIVE.

You are taking a very lofty approach to the matter. Know then that the enlightened supporters of the protectionist system today, like you, repudiate the illusions of the balance of trade. You will never see, in England, the defenders of protection relying on the balance of trade. If we confused the protectionist system with the mercantile system, would we make a distinction between similar and non-similar products? If our goal were to attract precious metals into the country and prevent them from leaving, would we not indiscriminately prohibit all foreign goods in order to receive only gold and silver in exchange?—We content ourselves, as you know, with waging war only against similar products, and even then, not all of them! We willingly admit products that are inferior to our own.

THE ECONOMIST.

The generosity is not great, admit it. I did not say that the mercantile system was identical to the protectionist system, I said that it was its starting point. The first step was to hinder the importation of foreign goods in order to import more gold and silver. Later, it was thought that this goal could be achieved even more quickly if the development of export industries was encouraged. Consequently, such industries were favored through prohibitions and subsidies. The same methods were used to establish new industries in the country.

THE CONSERVATIVE.

That is correct.

[182]

THE ECONOMIST.

The aim was to free the nation from the tribute it paid to foreign countries for the products of these industries. It was Colbert who developed and perfected the mercantile system in this way.

THE CONSERVATIVE.

The great Colbert! The restorer of French industry!

THE ECONOMIST.

I would rather call him the destroyer of French industry.

You see then that the mercantile system gave rise to protectionism. Most often, in truth, the theory of the balance of trade was invoked only as a pretext. If protection impoverished the masses, it enriched certain industrialists...

THE SOCIALIST.

That makes sense. If the price of goods increases geometrically when supply decreases arithmetically, the industrialists who secured the exclusion of their foreign competitors’ products must have made considerable profits.

THE ECONOMIST.

Indeed, they did. That is why most of our great industrial fortunes date from the establishment of major protective tariffs.

THE CONSERVATIVE.

According to you, then, our industrialists owe their fortunes solely to the protection of the law. Their labor apparently deserved no compensation.

[183]

THE SOCIALIST.

Their labor deserved the compensation it naturally received before protective tariffs were established. No one is attacking that legitimate profit; what is being attacked is the gain obtained unfairly, fraudulently, thanks to protective tariffs.

THE CONSERVATIVE.

Fraudulently!

THE ECONOMIST.

The word is too harsh. [9] No doubt, the industrialists who invoked the theory of the balance of trade were, in reality, quite indifferent to the overall outcomes of this theory. They were primarily concerned with the particular advantages they could derive from it...

THE CONSERVATIVE.

How do you know that?

[184]

THE ECONOMIST.

I leave it for you to judge. Would you ever think of soliciting a law that did not favor your own particular interest?

THE CONSERVATIVE.

No, of course not. But I would not solicit a law that favored my own interest at the expense of the general interest, either.

THE ECONOMIST.

I am convinced of that. That is why I reject the word fraudulently. The industrialists of the past sought protective tariffs in order to increase their profits; but was the mercantile system, in advocating protection, not putting them in line with their own consciences?

THE SOCIALIST.

If the mercantile system was false, was the mass of the nation any less plundered by it?

THE ECONOMIST.

My dear sir! How many people would be plundered if the theories of socialism were put into practice? And yet, there are some very honest people among the socialists.

THE SOCIALIST.

I do not accept this comparison. The industrialists who invoked the sophisms of the mercantile system were concerned solely with their private interests; to them, the general interest was merely a pretext or an empty formula. We, on the other hand, have only the general interest in mind.

THE ECONOMIST.

If that is the case, if only the interest of humanity drives you [185] to demand measures whose application would be disastrous for humanity, then you are indeed more excusable than the industrialists in question. But would you really dare to claim that you are not moved in any way by vanity, pride, ambition, or hatred? Are all your apostles equally meek and humble of heart?

The industrialists who sought to establish protective tariffs relied on the mercantile system. If that system is abandoned, does it not follow that they were in the wrong?

THE CONSERVATIVE.

Let us be clear. I do indeed condemn the mercantile system. I do not believe in the balance of trade; it is an outdated economic fallacy. But does it necessarily follow that industrialists were wrong to request protective tariffs?

THE ECONOMIST.

The conclusion seems logical to me. If these industrialists, beggars for protection, had had good arguments to present, why would they have resorted to a bad one?

THE SOCIALIST.

That is true!

THE CONSERVATIVE.

Gently now. I do not accept the mercantile system in all its exaggerations, but does it not contain some truths as well? Money is not the entirety of wealth, certainly, but is it not an important part of wealth? Does a nation not expose itself to dreadful catastrophes when it allows itself to be drained of its money supply? The protectionist system [186] shields it from such disastrous events by preventing excessive imports of foreign goods.

According to you, protectionism serves only to allow domestic industrialists to sell at high profits what they previously sold at small profits. But you have forgotten to mention that protection, by locating new industries in the country, strengthens national independence and provides fruitful employment to capital and labor that were previously inactive; you have forgotten to mention that protection increases a nation's power and wealth.

THE ECONOMIST.

You have just presented the three main arguments of the protectionist system. Allow me to set the first one aside for now; I will return to it when we discuss currency. As for the argument about dependence on foreign nations, it has been debunked a hundred times over. And you yourself, if you reject the theory of the balance of trade, if you admit that goods are purchased with goods, must you not also admit that between two nations trading together, dependence is mutual?

THE CONSERVATIVE.

One must consider the nature of the goods exchanged. Is it wise, for example, to depend on a foreign country for a staple necessity?

THE ECONOMIST.

You will agree that England is a nation known for its prudence. Yet England has voluntarily exposed itself to dependence on Russia and the United States—its two great rivals—for its [187] wheat supply. Evidently, it did not consider the argument of dependence on foreign nations to be very strong. I believe there is no need to dwell on this point. [10]

I now move on to your third argument, which has much more merit and is much harder to refute. You argue that the protectionist system, by fostering the establishment of certain industries, has increased the employment of capital and labor and thus developed national wealth.

THE CONSERVATIVE.

That seems indisputable to me, and since you like examples, let me give you one. England used to import its cotton fabrics from India. One day, it decided to prohibit Indian cottons. What happened? The market, suddenly deprived of its usual supply, saw the production and sale of [188] domestic cotton goods yield large profits. Capital and labor rushed into this industry. England, which had previously produced barely a few thousand yards of cotton fabric, began manufacturing billions. Instead of just a few hundred weavers and spinners working from home, it had thousands of workers filling vast factories. Its wealth and power suddenly expanded enormously. Will you still dare to claim, after this, that the prohibition of Indian yarn and cotton goods was not beneficial to England?

THE SOCIALIST.

But on the other hand, the Indians, who lost the English market, were ruined. Millions of people found themselves unemployed on the banks of the Indus and the Ganges. While the manufacturers of Manchester were laying the foundations of their colossal fortunes, while workers, drawn by unusually high wages, flocked to this new metropolis of the cotton industry, the workshops of India fell into [189] ruin, and the Indian workers were devastated by poverty and famine.

THE ECONOMIST.

The fact is true. With the closure of their export market, Indian weavers and spinners were forced to turn to other industries. Unfortunately, these industries were already sufficiently supplied with labor. Wages in India therefore dropped below the cost of sustaining the workers—that is, below the amount necessary for them to survive and reproduce. Wages fell... until poverty, famine, and epidemics, their inseparable companions, did their work. Only then did the balance between the supply and demand for labor begin to be restored, and wages to rise again.

THE SOCIALIST.

Thus, the prosperity of English manufacturers was built upon the corpses of Indian workers.

THE CONSERVATIVE.

What would you have me say? The profit of one is the damage of another,said Montaigne.

THE SOCIALIST.

If the protectionist system cannot be established without this grim procession of ruin and poverty, then it is an immoral and despicable system. I reject it.

THE CONSERVATIVE.

My dear sir! If Providence had made all of humanity into a single nation, a system that degraded some members of this vast nation in order to elevate others, that ruined the Indians to enrich the English, could indeed be called [190] immoral and despicable. But Providence did not place just one people upon the earth; it scattered nations like grains of wheat, saying to them: Grow and prosper!Now, that the interests of these various nations may be diverse or even opposed is unfortunate, but what can be done? Each nation must naturally strive to increase its power and wealth. The protectionist system is one of the most effective and reliable means to achieve this dual goal. And so, the protectionist system is used! Undoubtedly, it is regrettable to deprive foreign workers of their means of subsistence. But must not the interest of National Laborcome before all else? If a simple legislative measure is enough to provide work and bread to domestic workers, is the legislator not obliged to adopt this measure without concerning himself with whether the inhabitants of the Ganges or the Indus will suffer? Should not each nation first take care of its own poor before thinking of those abroad? And if this principle is universally followed, if each nation adopts the laws that best serve its particular interests, will everything not ultimately turn out for the best? Will not all people enjoy as much prosperity as they are capable of? … You see, then, that the protectionist system is only immoral and despicable when examined superficially. You see that statesmen would be very wrong to lend their hands to your misguided cosmopolitanism.

THE ECONOMIST.

Mr. Huskisson once said in the English Parliament these remarkable words: "The protectionist system [191] is an invention whose patent is beginning to expire; it has already lost much of its value, since all nations have adopted it." I need only explain these words, spoken by one of the greatest advocates of free trade in England, to refute your objections.

What happened, in fact, when England had stripped the weavers of Surat, Madras, and Bombay of their industry for the benefit of the manufacturers and workers of Manchester? What happened was that all other nations, seduced by this apparent advantage, wanted in turn to seize industries from abroad. France, which previously produced only a portion of the cotton, wool, iron, pottery, etc., necessary for its consumption, wanted to produce all the cotton, all the wool, all the iron, all the pottery it could consume. Germany and Russia did the same. Even the smallest countries—Belgium, Holland, Denmark—sought to snatch industries away from foreign competitors. In short, the rush toward protectionism became universal.

And what was the result? You know it well! The kidnappers of industries soon found themselves kidnapped in turn. England, which had taken the cotton industry from India, lost, along with part of that very industry, several of its own branches of production. France, which had, following England’s example, seized multiple foreign industries, saw a part of its own industries taken from it. Germany, in particular, protected itself in retaliation against French silks, fashion goods, and wines. … When you deprived your neighbor [192] of part of his market, he deprived you of part of yours. It was universal pillaging.

At the time when the pillaging of industries was at its height, a very witty pamphlet was published in England. On its frontispiece was an illustration of a monkey cage. Half a dozen monkeys, each in separate compartments, had their daily portion of food in front of them. But instead of peacefully eating the share generously provided by their keeper, each of these mischievous creatures was trying to steal from its neighbor—without realizing that the others were doing the same to them. Each exerted great effort to snatch away the food of others while neglecting the food right before them, and in the chaos, a large quantity of food was wasted.

THE CONSERVATIVE.

But surely, in such a struggle, would not the strongest prevail? Could they not seize the shares of others while keeping their own?

THE ECONOMIST.

Among monkeys, perhaps; but not among nations. No nation is powerful enough to say to the others: I will protect myself against your industries, but I forbid you from protecting yourselves against mine; I will take away a part of your market, but I forbid you from touching mine.If any nation were to speak in this way, all the others would unite to ban it from trading, and the coalition would undoubtedly be the stronger force.

THE SOCIALIST.

So, in the end, no one truly benefits from these mutual depredations, and the pillagers [193] gain even less as the pillaging becomes more widespread.

THE ECONOMIST.

Precisely.

THE CONSERVATIVE.

But once the protectionist system has been adopted by one nation, are not all the others obliged to adopt it as well? Should they allow their industries to be pillaged without resorting to retaliation?

THE ECONOMIST.

That is a question which should be debated.

But first, I want to completely demonstrate to you that the protectionist system has harmed the overall development of production.

Let us examine how things were before the protectionist system was established. Each nation procured from its neighbors part of the goods it needed for consumption, while providing other goods in exchange.

What goods did it provide, and what goods did it receive?

It provided those things that the nature of its soil and the particular talents of its producers allowed it to produce with the least effort; it received those things that it could not produce without expending more effort.

Is this not precisely how international trade functioned before the advent of the protectionist system?

THE SOCIALIST.

That is the natural course of things.

[194]

THE ECONOMIST.

What did the protectionist system do? Did it increase the total sum of production? No more than the pillaging monkeys in the English pamphlet increased the amount of their provisions by stealing from each other. Judge for yourself.

England took the cotton industry from India; if England produced that much more, India produced that much less. France took part of the linen industry from England; if France produced that much more, England produced that much less. Germany took part of the silk industry from France; if Germany produced that much more, France produced that much less... The protectionist system, therefore, did not and could not have resulted in an overall increase in production.

I now assert that this system not only failed to increase general production but actually reduced it.

Here is how:

Why did England protect itself against cotton fabrics from India, silks from France, and woolen cloths from Belgium? Because these foreign goods were taking over part of its market. Why were they taking over? Because they were, all quality differences accounted for, cheaper than their English equivalents. If they had not been cheaper, they would not have entered England in the first place.

Given this, what was the immediate effect of the law that barred these goods from the English market? It created an artificial shortage in the [195] domestic supply. The greater the shortage, the higher the price of domestic goods naturally rose.

Before the introduction of the protectionist system, the annual consumption of woolen cloth in England was, let us say, twenty million ells, of which foreign suppliers provided half.

THE SOCIALIST.

How could England supply the remainder if foreign cloths were cheaper than its own?

THE ECONOMIST.

There are many varieties of the same commodity. For example, there are numerous qualities of woolen cloth. England manufactures some of these qualities at a lower price than Belgium; Belgium produces others at a lower price than England.

Let me continue. Foreign cloths are now prohibited in England. With supply reduced by half, how much will the price increase? It will rise geometrically. If it was 15 francs per ell, it might climb to 60 francs.

But when the price of a commodity suddenly increases, what happens? Unless that commodity is of absolute necessity—in which case demand does not significantly decline—the price rise leads to a more or less considerable reduction in consumption, depending on the nature of the product. If the demand for woolen cloth was twenty million ells at 15 francs, it will hardly be four or five million ells at 60 francs. When the price falls again, demand will rise once more. These fluctuations will continue almost indefinitely. However, after running through [196] extreme variations, they will gradually stabilize around a central point, which is the total cost of production of cloth in England.

You already know why prices cannot remain for long above or below the cost of production for any given commodity.

But the cost of production of English cloth is higher than that of foreign cloth. It must be, otherwise protection would be entirely unnecessary. When one can sell at a lower price than one’s competitors, there is no need for protection to drive them out of the market—they retreat on their own. If the cost of production of foreign cloth is 15 francs, the cost of English cloth will be, let us assume, 18 francs. This is the level toward which the price of cloth in England will now gravitate. But at a price of 18 francs, less cloth is consumed than at 15 francs. If twenty million ells were consumed when imports were freely allowed, only sixteen or seventeen million will be consumed after prohibition.

THE CONSERVATIVE.

So be it! But will the increase in domestic production, which will have risen from ten million ells to seventeen million, not compensate for, and even surpass, this slight reduction in consumption?

THE ECONOMIST.

That is not the question at this moment. The question is whether the protectionist system increases or decreases total production. Well, if the production of English cloth has increased by seven million, foreign cloth production has fallen by [197] ten million—so we have, I believe, a net decrease of three million in total production.

THE CONSERVATIVE.

Yes, but this decrease is only temporary. The expansion of an industry in a country always leads to improvements in manufacturing techniques. Where the cost of production were 18 francs, they quickly fall to 17, 16, 15 francs, or even lower. Consumption then returns to its former level before the prohibition and may even surpass it.

THE ECONOMIST.

In the meantime, I note that there has been a price increase, a corresponding decline in consumption, and consequently a decrease in overall production. I note that the protectionist system has had, and necessarily must have, the immediate effect of reducing general production. This is now an established fact in our discussion.

I further claim that this reduction in overall production is not merely accidental or temporary—I claim that it is permanent, or at least that it lasts as long as the protection does.

Why did English manufacturers not produce the full twenty million ells of cloth consumed in their country? Because foreign producers could supply half of these twenty million ells at a lower cost, with fewer resources.

Why is there a difference in the cost of production of the same commodity between one country and another? It stems from the natural differences in climate, soil, and the skill of the people. Now, does a customs law eliminate these natural differences? By decreeing [198] that Belgian or French cloth shall no longer enter England, does it give English producers the ability to manufacture these particular types of cloth as cheaply and as well? Does the law somehow endow the climate, the water, the soil, or even the workers themselves with the specific qualities or aptitudes necessary for this particular type of production? … But if the customs law has not wrought this miraculous transformation, will the varieties of cloth that England previously imported from France and Belgium not now be produced more expensively and with lower quality by the English?

THE CONSERVATIVE.

Often, these differences are barely noticeable. The progress resulting from the sudden development of an industry on national soil is enough to compensate for them, and even more.

THE ECONOMIST.

Let’s see how things work in practice.

The national market is suddenly closed to a certain category of foreign products. Germany, for example, imposes a prohibitive duty on bronze and iron ware from Paris. Consequently, German bronze manufacturers and iron ware makers begin producing items they had not previously engaged in. Before they complete their apprenticeship in this new trade, they make countless errors and provide consumers with imperfect and expensive products. Years go by before they reach the level of the foreign industry—if they ever do.

Now, let us suppose that the prohibition had not [199] been established; would the iron ware and bronze industries in Paris have remained stagnant?

What has been the impact of Germany’s customs law on these two Parisian industries? By depriving them of part of their market, this law has caused them to regress, or at least it has slowed their progress. You know, in fact, how industrial progress works. It advances through the division of labor. The more labor is divided, the more products are improved and multiplied.

Now, under what circumstances can the division of labor be maximized? Is it not when the market is as extensive as possible?

When a market suddenly closes, when the extent of commerce is reduced, very few manufacturers completely stop working, but most of them cut back on production. By reducing their production, they can no longer divide labor as much; they are forced to use less efficient methods.

Thus, the progress of the iron ware and bronze industries has slowed in France. Has it accelerated in Germany enough to compensate for this loss in overall production? Let’s see. Several years have passed before German iron ware and bronze manufacturers have reached the level their French rivals were at when the prohibition was introduced. During that time, the French industry would have continued to progress. Naturally more advantaged than its rival, would it not have advanced even further, to the great benefit of general consumption?

Do you want one final piece of proof?

The protectionist system has been in effect universally [200] for half a century. Surely, the industries that have been boosted by tariffs must have had time to equal and surpass their old rivals. Have they surpassed them? Have they even caught up? Are they able to withstand foreign competition? Ask them, and you will see what their answer is.

THE SOCIALIST.

Oh! They will tell you unanimously, just as they did in 1834, that they need protection now more than ever.

THE ECONOMIST.

Which means they still cannot produce as cheaply and as well as their rivals, despite half a century of protection.

By artificially displacing numerous industries in contradiction to natural economic forces, the protectionist system has inevitably increased the cost of production for all goods, or, which amounts to the same thing, has delayed the natural reduction of these costs.

Now, it is a law of nature that the market price of goods always tends to equal their the cost of production, and it is another law of nature that consumption decreases as prices rise.

That the protectionist system has increased the cost of production, I believe I have mathematically proven to you. That this increase in costs leads to higher prices, which in turn results in reduced consumption, and therefore reduced production, is equally well established. I am thus justified in concluding that the protectionist system has diminished the overall wealth of the world.

[201]

THE CONSERVATIVE.

I must admit, this demonstration seems difficult to refute. But after all, while general wealth may have decreased, the wealth of particular countries may have increased. If this possibility is granted, haven’t the favored countries been right to adopt the protectionist system?

THE ECONOMIST.

But the possibility you mention is hardly admissible—let’s be honest. If adopting the protectionist system has necessarily resulted in a reduction, a loss in the overall wealth of nations, then this general loss must also have resulted in particular losses. If everyone has lost, it is hard to believe that some have gained.

England, which you have in mind, has undoubtedly taken many industries from abroad, but foreign nations have taken many industries from England as well. Had England not adopted the protectionist system, perhaps it would have produced less wheat, cotton textiles, and silk, but it would have produced more iron, steel, tin, machinery, etc. Its share of the general wealth might have been relatively smaller, but since the total wealth would have been greater, its actual share would have been larger.

But the protectionist system has not only reduced the abundance of wealth—it has also made production inherently unstable and distribution inherently unjust.

If this system were applied everywhere in a complete and stable manner—if an impassable barrier permanently separated each nation from its neighbors—it might perhaps avoid market disruptions [202] since markets would always remain the same. But the protectionist system is nowhere applied in a stable and complete manner, nor can it be. All nations have external trade relations, and they cannot do without them.

Now, these essential trade relations are constantly disrupted by changes in the customs policies of the forty or fifty nations that have tariffs. Sometimes a duty is raised, sometimes a duty is lowered; sometimes a subsidy is introduced, sometimes a subsidy is removed. What is the result of these constant changes in tariffs? A reduction in employment in one place, an increase in employment in another. Every law that closes or restricts a market deprives hundreds or thousands of workers of their livelihoods, while elsewhere it builds colossal fortunes... And such laws have numbered in the thousands since the introduction of the protectionist system.

Subjected to these constant disruptions, industry becomes fundamentally unstable. A large capital investment is made to establish a woolen or silk mill. Hundreds of workers earn their livelihoods there. Suddenly, an increase in a foreign tariff closes the market. The workers must be dismissed, and the equipment must be left to rust or sold for scrap. But the damage does not stop there. When a factory shuts down, all the industries that supplied it are affected in turn. These industries, now in decline, spread the contagion of economic distress. What began as an isolated disruption ripples outward, affecting the entire [203] industrial world. People suffer the consequences, and more often than not, they do not even know where the initial blow came from.

If a tariff is lowered, since total production increases, there is a net gain. But if a tariff is raised, there is a net loss. This loss manifests as a reduction in both profits and wages. The capitalist loses his capital, the worker loses his job—one is inevitably doomed to ruin, the other to starvation.

THE SOCIALIST.

It is dreadful.

THE ECONOMIST.

While producing these results on one side, the law, on the other, rapidly enriches, as if by a roll of the dice, the industrialists who have become masters of the market. However, their prosperity is often short-lived. Capital and labor flock toward the protected industries—often even to excess. More disruptions, more ruin!

Under this system, industry is nothing more than a game of chance, where some grow rich while others are ruined at the whims of fortune; where the hardworking entrepreneur, once a mere worker, suddenly sees the fruits of an entire life of labor and savings dissipate, while elsewhere, wealthy capitalists see their fortunes double or triple.

But humanity is never wounded without consequences. A long cry of bitterness, of anger, eventually reaches the ears of the few privileged people under this system. Unfortunately, those who voiced this cry and those who echoed it failed to perceive the true cause of the suffering. M. de Sismondi, [204] who was the first to eloquently express this universal lament, did not trace it back to the true source of so many disastrous disruptions. His socialist successors did even worse: they attributed the suffering to apparent causes, which were, in fact, the exact opposite of the real causes; they blamed private property for the harm that arose precisely from the restrictions imposed on its free exercise and use.

THE SOCIALIST.

Yes, this system must have caused great suffering, and perhaps we have not given it enough consideration.

THE CONSERVATIVE.

I admit, we might have been better off without it. But since it has been adopted, isn’t it best to preserve it? Let’s not forget that most of our industries have grown under the shelter of protection. Would it not be reckless to take it away from them?

THE ECONOMIST.

If the protectionist system is bad, we must obviously abandon it. England has already set an example by returning to free trade. Let us follow suit! [11]

THE SOCIALIST.

And what would you replace protective tariffs with?

[205]

THE CONSERVATIVE.

With fiscal tariffs, of course?

THE SOCIALIST.

From the perspective of the stability ofproduction, fiscal tariffs are hardly preferable to the others. They are modified just as frequently. Moreover, a fiscal tariff is always somewhat protective.

THE ECONOMIST.

I am well aware of that. This is why I would only accept a fiscal tariff as a necessary compromise. It is less harmful than a protective tariff, but it is still harmful. We must aim for the complete elimination of all tariffs, for the full freedom of trade, for absolute respect for the right to exchange, if we wish to give production its greatest possible productivity and stability.

Take note, however, that this goal will not be fully achieved until customs duties are entirely abolished. As long as a single customs barrier remains, it will continue to cause disruptions and ruin throughout the entire sphere of production.

Nevertheless, if the major industrial nations renounce these outdated instruments of economic warfare, the improvement will already be substantial.

THE SOCIALIST.

So many reforms to undertake!

THE ECONOMIST.

Yes, so many true reforms!

[206]

EIGHTH SOIRÉE↩

SUMMARY: Violations of internal property.—Industries monopolized or subsidized by the State.—Coinage.—Nature and use of money.—Why a country cannot be depleted of currency.—Means of communication.—Poorly and expensively managed by the State.—Transportation of letters.—Postmasters.—That government intervention in production is always necessarily harmful.—Subsidies and privileges of theaters.—Public libraries.—Subsidy of religious services.—Monopoly of education.—Its disastrous consequences.

THE ECONOMIST.

It is not only external property that is violated; man’s property over himself, over his faculties, over his abilities—his internal property—is also infringed upon.

Internal property is violated when a man is forbidden from using his faculties as he sees fit; when he is told:

"You shall not practice this or that industry," or, "If you do practice it, you shall be subject to certain restrictions, required to observe certain regulations." The natural right you possess to employ your abilities in the most useful way for yourself and your loved ones—this right shall be diminished or regulated. By virtue of what authority? By virtue of the superior right of society. But what if I do not use my [207] faculties in any harmful way? Society is convinced that you cannot freely engage in certain industries without harming it. But what if society is mistaken? What if, by freely applying my faculties to any branch of production, I do not cause it any harm?—Well, too bad for you! Society cannot be wrong.

However, in making such an error, does society not inflict harm upon itself? Do regulations that hinder the producer’s activity not have the inevitable and certain effect of reducing production by increasing the price of goods? If an industry is regulated, burdened with restrictions, while others remain free, will people not prefer to enter the latter? Or, if one resigns oneself to practicing the regulated industry, will they not pass onto consumers part of the burden of these harassments and regulations?

Let us set aside those regimes where all industries are regulated, or those where no worker can freely dispose of his faculties, where labor is still enslaved. Thankfully, such monstrosities are becoming rare. Let us focus instead on those hybrid regimes where some industries are free, others are regulated, and others still are monopolized by the State.

Such is the deplorable system that currently prevails in France.

THE CONSERVATIVE.

You claim that the government harms society by regulating certain branches of production and by engaging in certain industries itself?

[208]

THE ECONOMIST.

I do.

All regulation, as well as all monopoly, results in a direct or indirect increase in the price of goods, thereby reducing production.

The government produces more expensively and more poorly than private individuals; first, because in engaging in multiple industries, it ignores—if not in detail, at least in its general direction—the economic principle of the division of labor; second, because in directly or indirectly monopolizing an industry, it disregards the economic principle of free competition.

THE CONSERVATIVE.

So then, the government coins money, builds roads and railways, and provides education at higher cost and lower quality than private enterprise?

THE ECONOMIST.

Without a doubt.

THE CONSERVATIVE.

Even money?

THE ECONOMIST.

Money, like any other commodity.

THE CONSERVATIVE.

Isn't coining money an attribute of sovereignty?

THE ECONOMIST.

No more than manufacturing nails or gaiter buttons. Why would the production of money be [209] an attribute of sovereignty? What is money? It is an instrument by which the exchange of values is conducted...

THE SOCIALIST.

There are direct exchanges. Many exchanges also take place using paper.

THE ECONOMIST.

There are very few direct exchanges, and there will be even fewer as the division of labor expands further. A man who spends his life making the tenth part of a pin could not directly exchange this product for the things he needs. He is obliged to first trade it for an intermediary commodity that can always be easily exchanged for all things. This intermediary commodity must be durable, easily divisible, and transportable. Various metals—gold, silver, copper—possess these qualities to different degrees. This is why they have been made into instruments of exchange, into money.

As for paper, it can also serve as money, but only on the condition that it represents a real, pre-existing value, concretely embodied in an existing and available object that can serve as currency.

THE CONSERVATIVE.

This is precisely what the proponents of paper money fail to understand.

THE ECONOMIST.

But you yourself seem not to have a very accurate idea of money when you say that producing this medium of exchange is an attribute of sovereignty. A piece of gold or silver does not have value simply because a sovereign [210] has stamped it with his image—it has value because it contains a certain quantity of labor. Whether it is produced and stamped by a government or by a private individual makes little difference. I am mistaken! Private individuals would produce it better and at a lower cost; they would also be more attentive to supplying the market with the assortment of coins required by the needs of circulation. Furthermore, if, from the beginning, money had been produced by private individuals, counterfeiting would have been much rarer.

THE SOCIALIST.

How can you know that?

THE ECONOMIST.

Since counterfeiting was formerly committed by the very people who had the exclusive right to suppress all kinds of pillaging and fraud, they necessarily remained unpunished. Moreover, the public had no way to avoid them, since sovereigns also claimed the exclusive right to mint money.

If coinage had remained free, private individuals would have undertaken it just as they undertake any industry that can yield a profit.

THE CONSERVATIVE.

Can coinage yield a profit?

THE ECONOMIST.

Like any other form of manufacturing. In France, the government charges three francs for minting a kilogram of silver and nine francs for a kilogram of gold. This roughly covers the costs of [211] the production of money. In England, minting is free of charge.

THE CONSERVATIVE.

Ah! Then find me a private individual willing to work for gratis!

THE ECONOMIST.

Beware of these words: gratis, gratuitous, gratuity. Nothing that requires labor is free of charge; only the method of payment varies. In France, consumers of money pay directly for its production; in England, taxpayers cover these costs indirectly through taxes.

Which of these two methods of paying for labor is the most economical and the most just? Obviously, the first. In France, the annual cost of minting money amounts to a certain sum—let’s say one million francs. Private individuals who convert bullion into currency pay this sum directly. If minting were free of charge, as it is in England, the cost would be borne by taxpayers. However, tax collection is not free of charge; in France, it amounts to at least thirteen percent of the principal. If our minting were free of charge, it would not cost one million, but one million one hundred thirty thousand francs.

So there is the economy of things being "free" for you!.

Now, to turn to the justice of production which is free of charge: Who should pay for a commodity? The consumer, correct? Then who should, consequently, bear [212] the cost of minting money? Those who use it.

THE CONSERVATIVE.

But everyone uses it.

THE ECONOMIST.

With this difference: some individuals, the wealthiest, use it extensively, while others, the poorest, use it very little. When minting is paid for directly, it is paid for by consumers of money in proportion to their usage. When it is paid for indirectly—when it is free of charge—it is paid for by everyone, by small consumers as well as large ones, sometimes by some more than others, depending on how taxes are assessed. Is that justice?

If the government mints money free of charge, the cost of production of currency reaches its maximum. If it charges directly for minting, it still produces at a higher cost than private industry would because minting is not its specialty.

If coinage had remained free, it would likely have been carried out by large jewelry manufacturers. Under such a system, consumers could refuse counterfeit money and impose severe punishment on forgers, making coounterfeiting exceedingly rare.

THE SOCIALIST.

But by colluding to keep the supply of money below demand, wouldn’t your free coiners [213] have made enormous profits at the public’s expense?

THE ECONOMIST.

No. First, because in the worst case, bullion could be used instead of coins. Second, because free competition quickly dismantles even the strongest cartels. When the balance between supply and demand is disrupted, prices rise to the point that competitors enter the market. Then we see production occur outside of the cartel until the market price falls back to the level of the costs of production.

THE SOCIALIST.

Ah! It’s always the same law.

THE ECONOMIST.

Always. And this law also explains why a country can never truly be depleted of currency. When the needs of circulation exceed the available supply of money, the price of metals rises progressively. Bullion exports cease, and instead, importing bullion becomes profitable until equilibrium is restored.

THE SOCIALIST.

That refutes one of the main arguments of protectionists.

One more objection: If the manufacture of money were free, would it be possible to achieve a uniform currency? Wouldn’t each mint produce its own distinct coins? No one would be able to keep track.

THE ECONOMIST.

There are thousands of manufacturers of calico, yet [214] only a few standard varieties of calico exist. In Manchester, twenty or thirty manufacturers weave pieces of the same quality and dimensions. The same would happen with money; only the coins that the public found convenient and useful would be minted. If all nations wished to use the same currency, uniform currency would naturally emerge. But if they preferred different coins and measures suited to their habits and needs, why, I ask you, should anyone impose a uniform currency upon them?

THE SOCIALIST.

You might well be right. I can somewhat understand allowing the manufacture of money to be handled by private industry. Manufacturers can, indeed, compete in such a way as to make it impossible to establish a monopoly. But is it the same for all industries that the government has taken over? Do not means of communication, for example, constitute natural monopolies?

THE ECONOMIST.

There are no natural monopolies. How could the builders and operators of communication routes achieve monopoly profits? By raising transportation prices above the cost of production. But as soon as the market price exceeds the cost of production, competition is irresistibly drawn in...

THE SOCIALIST.

So, would people construct two or three parallel roads from one point to another?

[215]

THE ECONOMIST.

That would not be necessary. The competition among communication routes, particularly advanced routes such as railways and canals, operates over a considerable area. Suppose, for instance, that the railway from Le Havre to Strasbourg raises its transportation fees—at once, the transit of passengers and goods to central Europe will shift in favor of Antwerp or Amsterdam. For intermediate points, there is competition from canals, rivers, roughly parallel routes, or ordinary roads. This competition becomes even more active when an attempt to create a monopoly is made—provided, of course, that competition remains free.

Under this condition, the market price of transportation could never long exceed its cost of production.

Now, I think you will agree that private individuals build and operate roads more efficiently and cheaply than governments do. Compare the roads of England with those of France.

THE SOCIALIST.

That fact is indisputable. But isn’t it essential that travel remains free and free of charge?

THE ECONOMIST.

Haven’t we already examined the illusion of “free” services? Have you forgotten that no commodity—whether money, education, or transportation—can be provided free of charge by the government unless it is paid for by taxpayers? Have you forgotten that in such cases, the cost of the commodity includes not only the ordinary cost of production but also the expenses [216] of tax collection? If our roads were not “free,” they would be paid for by those who use them, in proportion to their usage, and they would be cheaper.

What is true for major communication routes is equally true for minor ones. These small-scale governments called municipalities and departments construct roads at their own expense, subject, of course, to the approval of the central government. Approved by the majority of municipal or departmental councils, these roads are built and maintained at the cost of all taxpayers. Under the monarchy, when only wealthy taxpayers had a voice in municipal, departmental, and state councils, poor peasants were forced to contribute a large share to projects decreed... for whose benefit? I leave it to you to consider. The old regime’s forced labor system (les corvées) reappeared, disguised under the benign title of “labor contributions.”

The only way to put an end to these scandalous injustices is to leave both major and minor communication routes, as well as all forms of transportation, to private industry.

THE CONSERVATIVE.

Without exception—even the transport of letters?

THE ECONOMIST.

Without exception, even the transport of letters.

THE SOCIALIST.

Come now!

THE ECONOMIST.

The postal service has not always been under [217] government control. Before the Revolution of 1789, letter transportation was farmed out to private companies. In 1788, this lease brought twelve million francs to the state. But, as you can imagine, postal rates were very high. The major leaseholders knew how to distribute bribes to the administrators responsible for negotiating and setting rates. They flourished under this system, but the public paid dearly for their prosperity.

What should have been done to remedy the blatant abuses of this leasing system? Simply put, the postal service should have been left to free competition. Under this new regime, the price of letter transportation would have quickly fallen to the lowest possible level. Instead, the postal service was placed under state control. The public gained nothing—on the contrary! The cost of mailing letters remained high, and delivery became far less reliable. You are surely aware that breaches of trust and thefts have increased alarmingly in the postal service.

THE CONSERVATIVE.

That is all too true.

THE ECONOMIST.

For a long time, the government also seized for itself the right to violate the confidentiality of correspondence. It has not been long since the infamous “black cabinet” was supposedly abolished, and some claim it still exists. The worst part is that one cannot escape these risks and indignities. Private individuals are strictly forbidden from transporting letters. The clandestine transport of correspondence is subject to severe penalties.

[218]

THE SOCIALIST.

What barbarity!

THE ECONOMIST.

These are the advantages of communism... If the transportation of letters were free, you could hold the transporters accountable for any violation of your correspondence and for thefts committed to your detriment. With the government’s communist monopoly, none of this is possible. You are at the mercy of the administration.

THE SOCIALIST.

At least we were finally granted postal reform.

THE ECONOMIST.

Yes, but postal reform only eliminated one abuse to replace it with another. In England, for several years, it caused a considerable deficit in revenue; the postage rate had been lowered so much that half the cost of letter transportation fell on the taxpayers. It was a case of a partial gratuity. Now, isn’t it only fair that the costs of all correspondence be covered by the correspondents themselves? Why should an illiterate poor farmer, who neither writes nor receives letters in his lifetime, have to contribute to paying for Mr. Turcaret’s heavy missives or Mr. Lovelace’s love notes to his neighbor? Is there a form of communism more unjust and despicable than this?

Shall I speak of the privileges of the postal service for horse relays? In the past, the postmasters established by Louis XI enjoyed a monopoly on passenger transport. Gradually, they were forced to share this monopoly with [219] the royalmail services and, eventually, to allow room for free enterprise. But, following their persistent complaints, new transport entrepreneurs were required to pay relay masters—whose horses they did not even use—a compensation of twenty-five centimes per post and per horse harnessed (law of 15 Ventôse, Year XIII). This compensation eventually reached a sum of six million per year. However, the advent of railroads greatly reduced this windfall. Hence, the loud protests of the postmasters. They even sought to compel railway companies to subsidize them as well. The companies resisted. The matter remains unresolved.

It must be said, in defense of the postmasters, that regulations dating back to the reign of Louis XI still require them to maintain horse relays in locations where such relays are entirely unnecessary. But is it not absurd to pay off an industry that no longer operates at the expense of one that does? Is it not both absurd and grotesque to force entrepreneurs in the stagecoach business to pay rent for the idle horses of the postmasters?

THE SOCIALIST.

It is indeed absurd and grotesque. But if the government, the departments, and the municipalities were to completely withdraw from involvement in the transportation industry, from road, canal, bridge, and street construction—if they ceased to establish communications between different parts of the country and to ensure that existing communications were maintained—would private individuals truly take on this indispensable task?

[220]

THE ECONOMIST.

Do you believe that a stone thrown into the air will eventually fall?

THE SOCIALIST.

That is a law of physics!

THE ECONOMIST.

Well, it is by the same physical law that all useful things—roads, bridges, canals, bread, meat, etc.—are produced as soon as society needs them. When a useful thing is in demand, the production of this thing naturally tends to occur with an intensity of movement equalto that of a falling stone.

When a useful thing is demanded but not yet produced, its ideal price—the price people would pay for it if it were available—rises in geometric progression as demand increases in arithmetic progression. [12] A point is eventually reached where this price rises high enough to overcome all surrounding obstacles, and production takes place.

That being the case, the government cannot interfere in any area of production without harming society.

If it produces something useful only after private individuals would have done so, it harms society by depriving it of that thing in the meantime.

If it produces it at the same time that private individuals would have, its intervention is still harmful because it produces at a higher cost than private individuals.

[221]

Finally, if it produces something earlier than necessary, society is no less harmed... You protest, but I will prove it to you.

With what is production carried out? With present labor and past labor, or capital. How does an individual who wishes to start a new industry obtain labor and capital? By seeking out workers and capital where these resources are least in demand, where, consequently, they are cheapest.

When a new product is less in demand than existing products, when producing it would not yet cover its costs, private individuals carefully refrain from producing it. They only begin production when they are certain they will at least cover their costs.

Where, then, does the government—when it preempts private individuals—find the labor and capital it needs? It draws them from the same places where private individuals would have sourced them: from society. But by initiating production before costs can yet be covered, or before the natural profits of this new enterprise are on par with those of existing industries, does the government not divert capital and labor from more useful employment? Does it not impoverish society instead of enriching it?

For example, the government undertook certain canal projects that cross uninhabited wastelands too early. The labor and capital it devoted to constructing these canals—still unfinished after a quarter of a century—would certainly have been better employed elsewhere. Conversely, it started too late and with too few [222] telegraph lines, of which it has reserved either the monopoly or the concession. We have only two or three electric telegraph lines, and even these are exclusively for the use of the government and railway companies. In the United States, where this industry is free, electric telegraphs have multiplied infinitely and serve everyone.

THE SOCIALIST.

I accept these observations for purely material industries; but you will surely have to admit, I think, that the government must be somewhat concerned with the intellectual and moral development of society. Does it not have the right—what am I saying?—the duty to impart a beneficial direction to the arts and letters, to education, and to intervene in religious services? Can it abandon these noble branches of production to all the winds of private speculation?

THE ECONOMIST.

Certainly, it would have this right and be bound to fulfill this duty if its intervention in this area of production were not always and necessarily as harmful as in the other.

Are we speaking of the fine arts? The government provides pensions to some writers and subsidies to certain theaters. I believe I have already proven to you that writers could easily do without the meager subsidy they receive if their property rights were fully recognized and respected.

The subsidies granted to theaters are among the most glaring and scandalous abuses of our time.

[223]

THE CONSERVATIVE.

It has been proven many times that the Théâtre-Français and the Opéra could not survive without subsidies. Would you, by any chance, prefer to see the Théâtre-Français and the Opéra disappear?

THE ECONOMIST.

First, notice the profound injustice concealed within this system of subsidies. The State spends more than two million francs annually to sustain two or three theaters in Paris. These theaters are precisely those frequented by the wealthiest portion of the Parisian bourgeoisie. Who pays these two million francs? All taxpayers, from the poor Breton peasant, who has never entered and never will enter a theater in his life, to the wealthy regular of the Opera’s orchestra section. Is this justice? Is it fair to force a poor laborer, who spends his life bent over the handle of his plow, to contribute to the leisure activities of the wealthy bourgeois of Paris?

THE SOCIALIST.

That is exploitation!

THE CONSERVATIVE.

But, once again, would you really prefer that there be neither an Opera nor a Théâtre-Français? And what about our national glory?

THE ECONOMIST.

When Louis XIV crushed the people with taxes to build his cold and pathetic palace of Versailles; when he reduced the wretched inhabitants of the countryside to living on herbs in order to sustain the lavish expenditures of his court, did he not also invoke the glory of France? Glory! What do you mean by it?

[224]

THE CONSERVATIVE.

In the great achievements of a nation.

THE ECONOMIST.

Nothing is greater, nothing is more splendid than justice. The century in which people cease to plunder the many for the benefit of the few, in which justice becomes the sovereign law of societies, will be the greatest of all centuries.

But I do not believe that subsidies are necessary for theaters; on the contrary, I am convinced that they are harmful to them. The subsidized theaters are those that manage their affairs the worst. Why? I will explain.

First, note that a portion of their subsidies is taken from them in various ways. A subsidized theater is required to grant admission free of charge to ministers, influential members of the Chamber of Deputies, and a host of administrative officials, both high and low. The subsidy, therefore, primarily serves to provide entertainment free of charge to a crowd of people...

THE SOCIALIST.

Who are certainly in a position to pay for their tickets.

THE ECONOMIST.

Far more, indeed, than those who pay for them. Secondly, the subsidies serve to enrich the least scrupulous directors. A theater incurs a fifty-thousand-franc deficit, the director requests one hundred and fifty thousand francs in subsidies. He is granted them. He covers the deficit, sells his privilege, and retires to enjoy the income that the State has provided him.

Subsidized theaters are perpetually [225] in deficit. Is this despite the subsidy or because of it? You be the judge.

A free enterprise, one that must cover all its expenses itself, makes extraordinary efforts to achieve this goal. It improves the quality of its product, reduces its price, and invents new methods daily to attract customers. For it, this is a matter of life or death. A privileged and subsidized enterprise does not make these efforts. Assured of survival, (even) if its audience completely abandons it, even if its annual deficit equals its total expenses, it naturally takes a complacent attitude toward the public. If Tortoni received a government subsidy for selling its ice creams, would it continue to put as much effort into running its business? Would its ice creams not eventually become dreadful, like certain plays at a certain theater, and would not the public, who appreciate good ice cream, desert the establishment en masse? That is what a subsidy for the "national ice cream industry" would have accomplished!

But there is something worse than subsidies: privileges. The theater industry is not free in France. Not just anyone is allowed to open a theater, nor even any establishment resembling one. Recently, when lyrical cafésbegan to gain popularity, the privileged theaters took alarm. The directors collectively petitioned for the suppression of this rival industry. The minister refused to comply with the directors' request but did prohibit lyrical cafés from: 1) performing plays; [226] 2) dressing their singers in costumes. Is this decree not worthy of the Middle Ages?

THE CONSERVATIVE.

I must admit, it is ludicrous.

THE ECONOMIST.

This happened in the year 1849 and among the most intellectual people on earth. However, the theater directors are not entirely to blame! They are merely obeying the necessities created by privilege.

The system of privilege is inherently precarious. All privileges are temporary. Now, the first condition for any economic production is secure and unlimited ownership. Every industry has general expenses that require a long period to be recovered. Such are the costs of construction, improvement, or embellishment of premises. If these costs are spread over a long period of operation, they become almost negligible. But if they are concentrated within a short period, they significantly increase the total expenditure. Under a system of temporary tenure, as little of these expenses as possible is incurred. Few venues are more poorly constructed and maintained than the theaters of Paris. Nevertheless, the costs of embellishment still weigh heavily on the budgets of theater directors.

Moreover, theaters, like every industry, have their good and bad seasons. In free industries, less work is done in the bad season than in the good, to avoid working at a loss. Theaters, however, are required to operate in all seasons, whether they make [227] a profit or not. This is an explicit condition of their privileges.

THE SOCIALIST.

What an inconceivable absurdity!

THE ECONOMIST.

Thus, their cost of production increase by the total amount they are forced to lose during the bad season. Add to this an exorbitant tax in favor of charitable institutions, and you will understand the excessive price of theater tickets. [13] You will also understand why theater directors so relentlessly pursue their competition.

If the theater industry were free, the costs of construction and maintenance could be spread over an indefinite period. Production could also always be adjusted to match consumption demand. There would be a high volume of performances during the good season and fewer during the bad. The cost of production would then drop to the lowest possible level, and competition would naturally ensure that ticket prices align with those costs. Lower prices would increase consumption and, therefore, production. There would be more theaters, more actors, and more playwrights.

THE CONSERVATIVE.

Wouldn't art be degraded by becoming too widespread?

[228]

THE ECONOMIST.

On the contrary, I am convinced that it would improve and expand. Whenever production grows, it also refines itself. People complain today that dramatic art is declining. Trust in freedom to elevate and invigorate it.

What is true for theaters is equally true for libraries, museums, exhibitions, and academies.

THE SOCIALIST.

What! You would have the state stop freely opening its libraries to the public?

THE ECONOMIST.

I believe public libraries should be closed in the interest of spreading knowledge.

THE CONSERVATIVE.

Ah! That paradox is too extreme. I protest to the bitter end!

THE ECONOMIST.

Protest if you must, but listen. The state owns a certain number of libraries. The government opens some of them to the public free of charge. Not all of them, mind you. Some libraries exist only as a pretext for employing librarians. The management costs of public libraries, including building maintenance, amount to more than a million francs annually. This means that all taxpayers are taxed so that certain individuals can study or read free of charge at the National Library, the Mazarine Library, and elsewhere. If libraries were run by private businesses, the first saving [229] would be the elimination of the tax collection costs. Book consumers would pay an amount lower than what is currently extracted from the nation.

THE CONSERVATIVE.

Yes, but they would have to pay something, whereas now they pay nothing. And isn't it a dreadful economy that seeks to economize at the expense of science?

THE ECONOMIST.

Indeed, it is a dreadful economy. But examine carefully how that million francs, donated annually by taxpayers to book readers, is spent. Compare private institutions in France, and if you find a single one as poorly managed as the National Library, for instance—one where resources are as poorly utilized and the public as poorly served—I will concede defeat.

THE SOCIALIST.

The management of the National Library is deplorably organized; that is certain. There is not a single industrial establishment in France that does not conduct an inventory every year; yet, the Library has still not completed its own. Begun an eternity ago, its catalog remains unfinished. But couldn’t this great national institution simply be better managed?

THE ECONOMIST.

I do not think so. As long as it remains enclosed within the vast communism of the State, the National Library cannot be well managed.

In reality, then, the communist management of public libraries [230] has resulted in depriving the public of the vast majority of science’s treasures. Put this capital in the hands of private industry, and you will see the difference. You will see how quickly and easily scientific knowledge, currently so slow and difficult to access, will become available. No longer will people waste long hours—often entire days—waiting in vain for a book or manuscript; they will be served immediately. Private industry does not make people wait.

Would science suffer from this?

THE CONSERVATIVE.

Isn’t a middle ground possible? Couldn’t public libraries coexist alongside libraries operated by private industry?

THE ECONOMIST.

That is the hybrid system that currently exists. On one hand, you have public libraries, where innumerable resources remain almost entirely unproductive; on the other, you have expensive and poorly stocked private reading rooms.

If publiclibraries did not exist, private reading rooms would expand significantly; all the riches of science and literature would be usefullyaccumulated there; each category of knowledge would soon have its own specialized library, where nothing would be lacking for researchers; where scientific and literary wealth would be made available to the public as soon as it was produced. Free competition would simultaneously compel these establishments to lower their prices to the lowest possible rate.

[231]

THE SOCIALIST.

No matter what! Poor students and struggling scholars would suffer under such a system.

THE ECONOMIST.

Library or reading room expenses make up the smallest portion of educational costs. As for poor scholars, they generally work for publishers who reimburse them for their research expenses. Today, part of these costs falls upon taxpayers. Would it not be more just for them to be borne exclusively by book buyers? After all, they would lose nothing in the process, since books would become more substantial if research were made easier.

Thus, I was not playing with making paradoxes when I said that public libraries should be closed in the interest of spreading knowledge. Public libraries are a form of communism; and whether in science or industry, communism is barbarism.

This detestable communism is also found in the domain of education and religion.

THE CONSERVATIVE.

Attack the university as much as you like, but please, leave religion alone. Religion is our last anchor of salvation.

THE ECONOMIST.

It is precisely in the interest of religion that the state should cease subsidizing places of worship.

Is it just that a man who practices none of the religions recognized by the State should still be forced to pay for their clergy? Is it just that someone should be made to pay for something [232] they do not use? Doesn’t all religious morality condemn such an abuse, such an act of plunder? And yet, this plunder, this abuse, is committed every day in France for the benefit of the recognized religions. Too bad for taxpayers who practice religions that the state does not recognize! [14]

Do you believe that such a flagrant injustice benefits religion?

Do you believe that religious services would not be better administered if the state did not subsidize them? Do you think that religious services would not be distributed with more intelligence and zeal if the state stopped guaranteeing clergy a salary no matter what? In any case, experience has already spoken on this matter. Nowhere are religious services better organized than in the United States, where religions receive no public subsidies. Many enlightened clergymen are convinced that the same system would produce the same results in France.

THE SOCIALIST.

That is an experiment worth trying.

THE ECONOMIST.

The current education system is even more flawed than the religious system. The nation annually allocates seventeen million francs to an institution that provides education in the name of the state and holds authority over its private competitors.

Under the old regime, education, [233] like all other industries, was in the hands of certain privileged corporations. The Revolution abolished these privileges. Unfortunately, the Constituent Assembly and the Convention hastened to decree the establishment of public schools, funded by the state, departments, or municipalities. Napoleon expanded and exacerbated this communist idea by founding the University.

Grafted onto the traditions of the old regime and nurtured under the jealous watch of despotism, the University of the nineteenth century continued to teach as if it were the fifteenth or sixteenth. It taught ancient languages the same way they were taught centuries earlier, without realizing that what was useful in the sixteenth century might no longer be relevant in the nineteenth.

THE CONSERVATIVE.

Why not?

THE ECONOMIST.

I understand why ancient languages were widely taught during the Renaissance. People, having just emerged from the darkness of the Middle Ages, had barely begun to cultivate science and literature. To acquire knowledge, ideas, and imagery, they had to turn to the vast treasure trove of antiquity, whose riches had just been unearthed. The essential tool for accessing these riches was language. One could not learn what the ancients knew without understanding Greek and Latin.

In the nineteenth century, the situation is different. Every idea, every piece of knowledge from antiquity has been translated into modern languages. One can learn everything the ancients knew without knowing [234] ancient languages. Modern languages serve as a universal key that unlocks both the past and the present. Ancient languages now resemble those venerable machines displayed in the Museum of Arts and Crafts—respected, but no longer used in factories.

I am aware that some claim ancient languages must be learned to properly master modern ones. But if that were true, would we not have to learn half a dozen old languages just to master French, since our language is composed of so many different elements? A lifetime would not be enough! Moreover, how many college pedants can write Latin fluently yet fail to spell correctly in French? Voltaire certainly knew less Latin than Jesuit Patouillet or Father Nonotte. Dead languages are tools that needlessly clutter the mind and often dull it.

THE CONSERVATIVE.

What do you mean?

THE ECONOMIST.

I mean that by teaching Greek and Latin to children, we prematurely instill in them the ideas, sentiments, and passions of two people who were certainly very civilized for their time but who, today, would be considered true barbarians. This is especially true from a moral standpoint. By subjecting modern children to a Greek and Latin regimen, we transfer into their souls the prejudices and vices of a barely developed civilization instead of imparting [235] the knowledge and moral values of an advanced one; we turn them into little barbarians, fairly immoral ones at that…

If education had enjoyed the benefits of freedom instead of passing from the detestable regime of privilege to the even more detestable regime of communist monopoly, it would have long since discarded the outdated machinery of dead languages, just as industries under free competition have rid themselves of obsolete machines. Children would be taught what is actually useful to them; they would no longer be burdened with what is either unnecessary or harmful. Latin and Greek would be relegated to the minds of those museum-like men we call polyglots.

THE CONSERVATIVE.

I agree with you that significant reforms are needed in the University system. For example, it was outrageous to force rival institutions of the University to pay it an annual fee; it was hardly less so to prevent these establishments from opening without special authorization and to subject them to inspection by University officials. But wouldn’t it be beneficial to maintain state and municipal institutions alongside now fully independent private institutions? Wouldn’t this healthy competition greatly advance education?

THE ECONOMIST.

This system would be hardly better than the current one. Here’s why:

State and municipal educational institutions do not cover their own costs and are not [236] required to do so. The public treasury and municipal funds step in to cover their deficits. Taxpayers, both those who have children and those who do not, bear part of the cost of this communist education. Now, I ask you, can private industry compete on fair terms with institutions that are half-free? This half-free system, in truth, often turns out to be quite costly, either because of the poor quality of the education or because of the overall high expenses. But don’t state and municipal institutions always have the option to lower their prices indefinitely? Hasn’t there even been talk of making education completely free of charge? That would, in reality, make it as expensive as possible, while at the same time making all competition impossible. If the state undertook to supply cloth at half price or free of charge, who would still consider manufacturing cloth? Would the free cloth industry ever develop significantly when faced with a competitor that gives away its goods?

The liberty of education will remain a mere illusion until the state, the departments, and the municipalities completely and absolutely cease interfering in public education.

THE SOCIALIST.

Couldn’t state and municipal institutions cover their own costs just as well as private industry?

THE ECONOMIST.

Let them try! Abolish the public education budget, force [237] University and municipal institutions to cover all their expenses, and then tell me what happens.

THE CONSERVATIVE.

At the very least, you will agree that the state must retain oversight of educational institutions?

THE ECONOMIST.

I see no objection to that. But I believe state oversight would soon become unnecessary under a true regime of liberty.

What prevents educational institutions from improving in both quality and cost today is the precarious existence imposed on them by the unfair competition of the University. Freedom would give them stability. Education would then be organized on a vast scale, just as any industry with a secure future is organized and developed. Interested in making known the improvements they have implemented, school directors would open their doors to the public. Parents would be able to judge for themselves the quality of the intellectual, moral, and material nourishment provided to their children. Would this oversight not be as effective as that of the University inspectors?

THE SOCIALIST.

This marketing of public educationappeals to me somewhat; but once again, do you really believe that private industry could meet all educational needs?

THE ECONOMIST.

Trust in the law of supply and demand. As soon as a genuine need for education arises, [238] there will be an interest in fulfilling it. Under such a system, the production of education, which has been restricted by regulatory barriers, would soon expand to its necessary proportions. Education would become both better and more affordable, thereby reaching more people. Finally, it would be distributed justly. The poor would no longer have to subsidize the education of the wealthy, and the unmarried would no longer be taxed for the benefit of those with families. There would be greater educational access and a fairer distribution. What more could you ask for?

[239]

NINTH SOIRÉE↩

SUMMARY: Further attacks on internal property—The right of association—Legislation governing commercial companies in France—The joint-stock company and its advantages—The monopoly of banks—Functions of banks—Results of government intervention in banking affairs—High cost of discounting—Legal bankruptcies—Other privileged or regulated industries—Baking—Butchery—Printing—Notaries—Stockbrokers and office holders—Prostitution—Funeral services—Cemeteries—The legal profession—Medicine—Teaching—Article 3 of the law of July 7-9, 1833.

THE SOCIALIST.

Until now, I had believed that the Revolution of 1789 had completely freed labor and that we lived under a regime of absolute laissez-faire. I am beginning to realize my mistake.

THE ECONOMIST.

Not only has labor not been completely freed, but in certain branches of production, we have actually regressed beyond that of the era of privileged companies. Instead of making privileged industries free, some have been turned into state monopolies. Now, a state monopoly occurs in the infancy of any society. In place of [240] medieval institutions, what has been substituted? The institutions of ancient Egypt. That has not prevented the retention of privileged industries, for our economic system is a strange patchwork of monopolized, privileged, and free industries.

THE CONSERVATIVE.

Where, then, do you see privileged industries? According to M. Thiers, weren’t all privileges abolished on the famous night of August 4th?

THE ECONOMIST.

According to M. Thiers, yes; according to the truth, no. There still exists in France a multitude of privileged or regulated industries. In the forefront, we must place banks. Then come baking, butchery, printing, theaters, insurance, the trade of public property, medicine, the legal profession, ministerial offices, prostitution, and several others that I may be forgetting.

Let us also add that association, the indispensable vehicle of industrial progress, is not free in France.

THE CONSERVATIVE.

Ah! This time I catch you in a blatant inaccuracy. I know my Constitution.

ARTICLE 8.Citizens have the right to associate, to assemble peacefully and unarmed, to petition, to express their thoughts through the press or otherwise.

The exercise of these rights is limited only by the rights or freedoms of others and public security.

[241]

You see, then, that the right of association exists in France. Perhaps it even there is too much of it?

THE ECONOMIST.

Political associations are free in France... more or less. But it is not the same for commercial associations. Association, as you know, takes almost an infinite number of forms. Yet, French law recognizes only three types of associations: the general partnership, the limited partnership, and the joint-stock company. With a few cumbersome formalities, the first two are free; but the third, which is the most advanced, the one best suited for large industrial enterprises, is subject to prior authorization.

THE CONSERVATIVE.

Well then! One simply requests authorization, and after due consideration, the government grants it if warranted.

THE ECONOMIST.

Yes, if warranted. And you fail to mention that authorization often takes six months, a year, even two years to arrive—meaning, too late. You know enough about industry to understand that a six-month delay is enough to doom most enterprises.

Socialists complain about how slowly associations establish themselves in France. They fail to see that the Commercial Code has taken care of that, by strictly imprisoning the right of association. A strange blindness!

A general partnership does not allow for large capital accumulations, especially in a country where fortunes are very fragmented; the limited partnership, as it is currently regulated, places shareholders [242] at the mercy of a managing partner, and you know what that leads to … The joint-stock company alone allows for immense aggregations of capital in small amounts and ensures the best possible management.

THE CONSERVATIVE.

This is not proven.

THE ECONOMIST.

Break down an entrepreneur involved in some industry and what do you find? A capitalist and a director of work, a man who receives interest for his capital and a salary for his work. Break down the joint-stock company and what do you find? Workers who provide labor and receive wages, capitalists who provide funds and receive interest. What is united in the entrepreneur involved in some industry is separated in the joint-stock company. This separation is a further step in the division of labor; it is progress.

I will prove it to you by highlighting some of the advantages specific to joint-stock companies.

The first of all is their ability to undertake production on a vast scale; they can always match the power of effort to that of resistance, thereby reducing the cost of production to a minimum.

The second advantage of joint-stock companies lies in their superior administration. An entrepreneur involved in some industry is accountable only to himself. A company director is accountable to the shareholders. He is required to report on his actions and justify them. This obligation, inherent in the very nature of a joint-stock company, [243] compels the director to always act with intelligence and integrity. If he did not run the enterprise wisely, the shareholders would certainly dismiss him; if he engaged in fraudulent dealings, would he dare to publicly account for them before an assembly of shareholders? Under the current accounting system, he would not be able to keep any of his operations secret.

Under the joint-stock company system, industrial enterprises would necessarily be managed with intelligence and integrity. Industry would necessarily be led by the most capable and honest individuals.

Industrial fraud would disappear under this system. In which industries are frauds most frequent? In the most fragmented and precarious industries. When one cannot count on the future or build a lasting commercial existence, one seeks, by any means possible, to make a lot of money in a short time. One waters down the quality of products. One sells as good, merchandise that one knows to be bad. But when one has, instead, an unlimited period of existence stretched out before them, and when one manages a significant capital, one has an interest in building a good reputation in order to retain customers. One then provides quality products and conducts business with honesty.

In industries that are large-scale and stable, there is more integritythan in small and precarious industries. Observe and compare the various branches of production in France, England, [244] Holland, etc., and you will be convinced of the complete accuracy of this fact. Industrial counterfeiting and fraud do not originate from industrial freedom; on the contrary, they stem from obstacles to the free and full development of industry.

The third and perhaps greatest advantage of joint-stock companies is that they make the situation of each industry public; they provide daily indications of the prosperity or distress of various branches of production.

THE CONSERVATIVE.

How so?

THE ECONOMIST.

When an industry succeeds in selling its products at an exactly profitable price, it is said to be at par; when the cost of production are not covered, the industry is at a loss; when the cost of production are exceeded, it is making a profit. Under the regime of production by individuals, it is very difficult to accurately know are the different industrial conditions under which they operate and to determine when it is useful to invest capital in an industry and when it is not. One often risks inflating an already overabundant sector of production while other sectors cry out in vain for capital and labor. These mistakes become impossible under the joint-stock company system. Since every company has an interest in publishing the price of its shares to facilitate their trading, one is informed, day by day, of the situation of different branches of production. By glancing at the stock exchange listings, one can tell which industry is at a loss, which industry is [245] profitable, and which is at par. One knows precisely where to invest capital to achieve the highest profits. If, for example, the share price of blast furnaces is higher than that of zinc oxide mines, capital will be directed toward the iron industry rather than the zinc industry. This will increase iron production. What will be the result? The market price of iron will drop until it exactly matches the cost of production: as stock prices then return to par, investments in this sector will cease for fear of no longer covering costs.

Thanks to this public pricing of industrial stocks, production self-regulates in an almost mathematical manner. There is no longer the risk of producing too much of one thing and too little of another, of letting certain prices rise excessively while others fall disproportionately. A constant source of disruption disappears from the field of production.

Finally, note the particularly democratic nature of joint-stock companies. The entrepreneur involved in some industry is an absolute and irresponsible monarch; the joint-stock company, governed by shareholders and administered by a responsible director and committee, is a republic. After being monarchical, production becomes republican. This proves to you, once again, that monarchy is fading away.

THE SOCIALIST.

Society is fragmenting into a multitude of small republics, each with a specific and economically limited purpose. That is a remarkable transformation.

[246]

THE ECONOMIST.

And one that is not sufficiently acknowledged. Unfortunately, the barbaric legislation of the Imperial Code obstructs this salutary transformation…

THE CONSERVATIVE.

But isn’t the transformation you speak of naturally limited to certain industries? Wouldn’t there be serious drawbacks if the joint-stock company system were applied to farming, for example?

THE ECONOMIST.

What drawbacks? The joint-stock company would solve both the issue of land ownership distribution and the economic concentration of farmland. It would allow agricultural work to be carried out on a vast scale and farms to become perpetual while dividing land ownership into infinitely small shares—into stock certificates of a thousand francs, five hundred francs, or even vouchers of one hundred, fifty, or ten francs. From the perspective of agricultural efficiency, this change would have immeasurable consequences. What disadvantages do you see in it? Would a joint-stock company not have an interest in cultivating the land as well as possible? If it cultivated poorly, would it not be forced to dissolve after consuming its capital, leaving the field either to other associations or to individual proprietors? If you see no issue with land being owned in perpetuity by a single individual, why would you object to it being owned by a collective of individuals? Does the solitary owner [247] not persist just as well as an association of owners?

THE SOCIALIST.

That is quite true. I honestly cannot understand why the joint-stock company has not yet been applied to farming.

THE ECONOMIST.

Why is agriculture in France, as elsewhere, the most burdened industry? Why is the joint-stock company so strictly regulated?

THE CONSERVATIVE.

Perhaps the prior authorization required for establishing a joint-stock company is unnecessary, but admit that the government cannot forgo rigorous oversight of such associations.

THE ECONOMIST.

It would be far more necessary to monitor individual enterprises. Joint-stock companies publish reports of their operations; they function in broad daylight, whereas individual enterprises keep their operations secret…

Do you know what the government's oversight of joint-stock companies is actually for? First, it lulls shareholders into a false sense of security, leading them to blindly trust government supervision. Second, it hampers industrial operations. Finally, it provides comfortable positions for government appointees.

THE SOCIALIST.

Ah! There’s the real purpose!

[248]

THE ECONOMIST.

The imperial, royal, or national commissioners attached to insurance companies, railroads, and others are no more or less useless or unjustified than those infamous supervisors of pig slaughtering or wood stacking who flourished under the old regime.

Now you are fully informed, I believe, about the usefulness of the restrictions placed on the right of association. [15]

[249]

Beyond these restrictions that apply generally to industrial and commercial associations, there are others that apply specifically to various associations, notably those engaged in banking commerce.

Our public banks are still subject to the regime of privilege.

[250]

THE CONSERVATIVE.

I warn you, I will oppose you to the utmost on this topic. I am not a supporter of free banking, and I never will be. I cannot conceive that the government would allow anyone to print paper money, to issue assignats, and to freely inject them into circulation. Moreover, [251] this grand utopia of free banking has already been realized…

THE ECONOMIST.

Where?

THE CONSERVATIVE.

In the United States, and we know what it produced. It resulted in a general bankruptcy. May God preserve us from a [252] similar calamity! Better a little less freedom and a little more security.

THE ECONOMIST.

There is only one problem: your information is entirely false. Banks are free in the [253] United States only in six particular states—Rhode Island, Massachusetts, Connecticut, New Hampshire, Maine, and Vermont—and these six states are precisely the only ones that remained untouched by the general bankruptcy.

If you doubt it, I urge you to read the remarkable works of Mr. Carey and Mr. Coquelin on banking. [16] You will learn that the free banks of America have caused fewer financial disasters than the privileged banks of Europe.

THE CONSERVATIVE.

And yet, I have often heard the exact opposite claimed.

THE ECONOMIST.

By people as well-informed as you, by minds steeped in the prejudices of the regulatory regime, who never fail, a priori, without any real investigation, to attribute industrial disorders to laissez-faire.

THE CONSERVATIVE.

At least admit that it would be an extreme recklessness to allow anyone to print paper money.

THE ECONOMIST.

Really, have you thought this through? Does everyone—not just you, me, and this gentleman—not already print paper money? Do we not all, every day, give our creditors promises to pay a certain [254] amount in cash at a future date?—We would give them notes payable in other goods, in products of our industry, for example, if they were willing to accept such notes. Unfortunately, they are not. Why? Because they can always exchange cash for all sorts of goods, whereas other commodities are not as easily tradable. What would my shoemaker do, for example, with a newspaper article that I promised to deliver in three months in exchange for a pair of boots? No doubt, in the end, I pay for my boots with newspaper articles, since I am a journalist, but I must first succeed in selling my articles. If I gave my shoemaker a promissory note payable in newspaper columns instead of one payable in cash, it would be up to him to sell those columns, and who knows if he would succeed! That is why he only accepts notes payable in sound money.

What happens to these notes until they mature? Most of them circulate. If they did not exist, they would have to be replaced by sums of gold and silver. So, I, as a private individual issuing these notes, am effectively printing money. Can I print this paper money indefinitely? I have the right to do so; I can issue millions of promises to pay, I can fill a whole room with them. But the question is not about issuing them—it is about exchanging them for real values, for tangible goods like cash, clothing, boots, furniture, etc. Now, will I be able to endlessly exchange my promissory notes for such real assets? Certainly not! [255] I will hardly be able to exchange more than the amount people assume I can repay. Before accepting my notes, people will inquire about my financial standing, my means of livelihood, my intelligence, my honesty, and my health. Based on all these factors, they will judge whether my promise to pay is valid or not. There are clever individuals who manage to issue more notes than they can actually cover; conversely, there are inept ones who fail to issue even as many as they could. But, in general, each person’s credit is in proportion to their abilities.

THE SOCIALIST.

Yet, that seems like a very difficult assessment to make.

THE ECONOMIST.

Which is why it requires extraordinary discernment. Bankers acquire and refine this discernment through long experience. Those who do not possess it go bankrupt. If the government were to engage in banking, as it does in so many other activities, you would quickly see the capital of this omnipresent banker disappear… Fortunately, the government has not yet become the universal banker. That is why it is hardly possible to issue more notes into circulation than can actually be repaid.

What difference is there between a banknote and a private promissory note? None, except that the former is payable on demand, while the latter is payable at a fixed term. Both must be backed by real values in order to be accepted. People only accept your promissory note if they assume it will be honored at maturity; they only accept a banknote if they [256] are certain they can always redeem it in cash.

When banknotes are not redeemable in cash—that is, in a commodity that is always east to exchangeand be put into circulation—when they are redeemable in land or houses, for example, they undergo depreciation exactly in proportion to the difficulty of exchanging that land or those houses for a commodity which can readily be put into circulation. When they are redeemable neither on demand nor at a fixed term in any real asset—whether cash, land, houses, furniture, etc.—they lose all value; they become mere scraps of paper.

THE CONSERVATIVE.

Then why do people accept banknotes instead of demanding cash?

THE ECONOMIST.

Because they are more convenient instruments of circulation, easier to transport, and less costly—that’s all!

THE CONSERVATIVE.

But once again, isn’t the government right to intervene to prevent banks from issuing more notes than they can redeem?

THE ECONOMIST.

Then it should also intervene to prevent individuals from issuing more promissory notes than they can pay. Why doesn’t it do so? First, because it is impossible; second, because it is unnecessary. I don’t need to prove to you that it is impossible, but I will prove in a few words that it is unnecessary. Your [257] private issuances are not limited by your own will; they are limited by the will of others. When people judge that you have exceeded your ability to pay, they refuse to accept your promissory notes, and your issuance is thereby halted. No government could assess as accurately as the interested parties themselves the moment when an individual exceeds his means of payment. Government intervention to regulate private credit, even if it were possible, would therefore be entirely unnecessary.

What is true for individuals issuing promissory notes is equally true for banks issuing notes payable on demand.

What is the function of banks, or at least their principal function? It is to discount bills. It is to provide, in exchange for a value that will be realized in the future, a value that is already realized or immediately realizable, and can readily be put into circulation. It is to buy promissory notes payable in the future in exchange for cash or banknotes representing cash.

If a bank uses only cash for discounting, those who sell it promissory notes payable in the future take no risk, unless the money is counterfeit. But holders of promissory notes payable in the future are not foolish enough to trade them for counterfeit money.

If the bank, instead of giving cash in exchange for these promissory notes payable in the future, issues its own notes payable on demand, then the situation is different, I admit. It may happen that the bank, tempted by the [258] profits from discounting, issues a large number of notes without ensuring that it will always be able to redeem them under all circumstances.

But just as a bank does not accept private promissory notes unless it has sufficient confidence in their repayment, individuals do not accept banknotes unless they are certain they can always, under all circumstances, redeem them.

If individuals judge that a bank is not capable of redeeming its notes, they refuse to accept them and demand cash. Or they accept them, but only after deducting the risk of non-payment.

How can the public know whether a bank is able to redeem its notes payable on demand?

Since people will not accept banknotes unless they are fully assured of this, banks have an interest in making their financial situation public. They therefore publish a report of their operations every month or every week.

In these reports, the public can see the total amount of notes issued, the amount of cash reserves, the various securities in the bank's portfolio, and compare liabilities with assets to determine whether they can continue to accept the bank’s notes and at what rate.

THE CONSERVATIVE.

And if the bank presents a false picture of its situation?

THE ECONOMIST.

In other words, if it commits fraud. In that case, the [259] holders of banknotes can, or should be able to, have the bank's directors punished as forgers, counterfeiters, and seek reimbursement from the responsible shareholders for the amount stolen from them.

Moreover, the public, guided by self-interest, is prudent enough to deal only with banks whose directors and administrators offer sufficient moral guarantees.

You see, then, that just as the government does not need to intervene to prevent individuals from duping banks, it does not need to intervene to prevent banks from duping individuals.

Experience fully supports this theory. The free banks of Massachusetts, Vermont, etc., as I have told you, have caused far fewer financial disasters than the privileged banks of Europe.

If government intervention is unnecessary for regulating banknote issuance, then what purpose does it serve?

I will briefly explain to you what it does.

Government intervention in matters of credit always ultimately amounts to this: granting a bank the exclusive privilege of issuing notes payable on demand. When a bank is granted this privilege, it can easily eliminate all competition. Other businesses, being unable to discount except with cash or notes payable at a future date, are unable to compete with the privileged bank.

First, because notes payable on demand [260] are more effective instruments of circulation than cash or promissory notes.

Second, because paper money can be provided at a lower cost than cash. Here’s why.

Certainly, banknotes must always be backed by real values and those that can be put into circulation. A bank must always be able to redeem them in cash. But here is what happens: when a bank is well-established, it is rarely required to redeem a large number of its notes at any given time. It can therefore afford not to keep on hand a sum of cash equal to the total amount of its notes in circulation. As long as it is able to obtain this cash when necessary—should all its notes be presented for redemption—it is sufficient for the bank to have a substantial quantity of sound assets that can be easily converted into cash. That is all that is needed; nothing more can reasonably be demanded. But these sound assets—railway shares, insurance company stocks, government bonds—are less expensive than cash by the amount of interest they generate.

The less cash a bank is required to hold in reserve, the cheaper it can issue notes payable on demand, and the lower it can set the discount rate. Normally, banks do not keep more than a third of their issued notes covered by cash reserves. However, the required cash reserve depends entirely on circumstances. A bank must hold a greater or lesser proportion of cash depending [261] on the likelihood of monetary crises, and depending on how easily its other reserve assets can be converted into cash. It is a matter of judgment. A bank is quickly warned by a drop in its discounting activity when it falls below the necessary reserve limit, because the public will soon buy fewer of its banknotes if confidence in their redemption decreases.

A bank that has the exclusive right to issue notes payable on demand thus enjoys a double advantage: it can provide a superior instrument of circulation to those who need money, and it can offer this improved instrument at a lower cost than its competitors can offer an inferior instrument—namely, cash. As a result, it easily eliminates all competition.

But if the privileged bank succeeds in becoming the sole master of the market, won’t it then dictate terms to those who need money? Won’t it make them pay more for its banknotes than they would under a system of free competition?

THE SOCIALIST.

That seems inevitable to me. It is the law of monopoly.

THE ECONOMIST.

The shareholders of the privileged bank will benefit from the difference. It is true that they will be obliged to share the profits of their lucrative monopoly with others.

When a bank obtains, in a large country, the exclusive privilege of issuing notes payable on demand, and all competition is eliminated by this privilege, it sees its clientele grow immensely. Soon, [262] it can no longer keep up with the demand: it then hands over part of its business, and thus part of its profits, to a number of bankers. It no longer accepts notes unless they are guaranteed by three signatures, and it surrounds the process of discounting with such formalities and difficulties that those who need banknotes are forced to go through the intermediary of bankers who have accounts with the bank. [17]

This greatly simplifies the operations of the privileged bank. Instead of dealing with thousands of individuals, it now deals only with a small number of bankers, whose transactions it can easily monitor; but these privileged intermediaries naturally charge dearly for their services. Thanks to their small number, they can dictate terms to the public. Thus, under the protection of the privileged bank, a true financial aristocracy is formed, sharing in the profits of the privilege.

However, these profits cannot exceed certain limits. When the bank and its intermediaries raise the discount rate too high, the public turns to bankers who discount with cash or with promissory notes payable at a future date. Unfortunately, the ruthless competition from the privileged institution greatly reduces the number [263] of these alternative bankers, leaving them in a precarious position, so that the price of discounting remains consistently high.

During times of crisis, the privilege of banks has an even more disastrous effect.

I have told you that a bank must always be in a position to redeem its notes in cash. What happens when it is unable to redeem them all? The banknotes that cannot be redeemed in cash depreciate. Who bears the cost of this depreciation? The holders of the banknotes; they suffer a genuine bankruptcy.

Well, do you know what the privilege is used for? It serves to authorize banks to commit this kind of bankruptcy with impunity and legally. The Bank of France and the Bank of England have, on various occasions, been authorized to suspend cash payments. The Bank of England was given this authorization in 1797, for example. Holders of its notes lost up to thirty percent during the suspension period. The Bank of France enjoyed the same benefit in 1848.

THE CONSERVATIVE.

Its banknotes lost very little value.

THE ECONOMIST.

The amount of the loss is irrelevant. Even if they had only lost one-thousandth of a percent for a single day, the holders would still have been the victims of a bankruptcy.

Had these two banks not been privileged, their shareholders would have been obliged to pay, down to the last penny, all the banknotes presented for redemption. In that case, the holders of the notes would have lost nothing; however, the shareholders would have had to [264] make considerable sacrifices to meet all the bank’s commitments. But this is a risk faced by all capitalists whose funds are engaged in production... except, of course, for those who have the privilege of shifting their losses onto the public.

THE SOCIALIST.

I now understand why the shareholders of the Bank of France received their usual dividends in 1848, while all industrial and commercial enterprises were suffering losses.

THE ECONOMIST.

Let us be fair, however. The shareholders of privileged banks should be blamed far less than the governments that distribute these privileges. In France, as in England, the privilege of the bank was granted in exchange for a fee. In return for this favor, the government took control of all or part of the capital deposited by the shareholders. Unable to return it to them during times of crisis, the government resolved the problem by authorizing the bank to suspend cash payments. Since it could not meet its obligations to the bank, it authorized the bank to default on its obligations to the public. [18]

[265]

In the past, when governments found themselves unable to pay their debts, they debased their currencies by adding copper or lead, or by reducing the weight of coins. Today, they use a different method: they borrow large sums from institutions to which they grant the exclusive right to manufacture paper money. Deprived of its natural and necessary backing, this money depreciates in times of crisis. The government then intervenes to force the public to bear the loss in value.

[266]

What is the difference between these two methods?

Under a system of free competition, none of these plunderous schemes would be possible.

Under such a system, banks would have to maintain sufficient capital to meet their obligations, or else the public would refuse to accept their notes. In times of crisis, they alone would bear the losses naturally caused by the contraction in circulation; they would no longer be allowed to shift the burden onto the public.

Under this system as well, competition among banks [267] would quickly bring the currently inflated discount rate down to the lowest possible level.

Finally, under this system, banknotes, representing real values rather than irrecoverable debts, adjusting to the public’s needs rather than the convenience of privileged institutions, would multiply significantly. Almost the entire circulation would be carried out economically in paper rather than expensively in cash.

THE SOCIALIST.

You have seriously shaken my convictions, I must admit. What! This financial feudalism, which I attributed to free competition, arose because of monopoly. What! The high cost of discounting and the disastrous disruptions of our monetary circulation come from political privilege, not from liberty.

[268]

THE ECONOMIST.

Precisely. You socialists have been mistaken about banks as you have about everything else. You believed that banks were subject to a regime of laissez-faire, and you attributed to freedom the abuses and harms that actually stem from privilege. That has been, in all matters, your great and deplorable error.

THE SOCIALIST.

In fact, that may well be true.

THE ECONOMIST.

If we had enough time to review all the other privileged or regulated industries—baking, butchery, printing, notary services, brokerage, the sale of public securities, the legal profession, medicine, prostitution, etc.—you would see that, in all cases, privilege and regulation have produced the same disastrous results: on one hand, a reduction and deterioration of production; on the other, disruption and injustice in distribution.

The number of bakers has been limited in the main population centers. But it soon became clear that this restriction left consumers at the mercy of the bakers, so a price ceiling for bread was established. They tried to correct one regulation with another. Did they succeed? The manipulations that take place daily at the flour market prove otherwise. Speculators collude with bakers to artificially raise the price of flour; the ceiling price is set above the actual market price of grain, and the perpetrators of these immoral maneuvers pocket the difference.

[269]

There are a few cities in France where baking has remained free, such as Lunel, and nowhere does one eat better-quality bread at a lower price.

You are well aware of how profitable the privilege of stockbrokers has been for the small number of those granted it; you also know how the privilege of notaries has raised the cost of civil acts while reducing the security of deposits. In no free industry are bankruptcies as frequent or as scandalous as in the notary profession.

The privilege of printers has resulted in increased printing costs by creating actual printer licenses. In Paris, these licenses cost no less than twenty-five thousand francs. Printing workers, as well as bakery assistants, butchers' assistants, and notary clerks, find themselves stuck for life in the lowest ranks of their industry; unless they own enough capital to buy a license or a service charge, they cannot become entrepreneurs or industry directors. Another injustice!

THE CONSERVATIVE.

You also mentioned prostitution. Isn’t limiting the number of brothels necessary for public morality?

THE ECONOMIST.

The only result of restrictions on the number of brothels is to increase the profits of the the women who run them and their silent partners in these establishments while lowering the earnings of the unfortunate women who trade their beauty and youth. Considerable fortunes have been made from this [270] vile exploitation… The monopoly of brothels is further reinforced by police regulations that forbid prostitutes from staying in boarding houses. Those who cannot afford to buy furniture are forced to submit to the mercy of the entrepreneurs in the prostitution business or to engage in freelance prostitution.

THE SOCIALIST.

Do you not think that prostitution will one day disappear?

THE ECONOMIST.

I do not know. In any case, it will not disappear through regulations; on the contrary, they will only make it more dangerous!

Under a regime where property is fully respected and, consequently, where poverty is reduced to a minimum, prostitution would significantly decrease, for poverty is its greatest and tireless supplier. Under such a system, only voluntary prostitution would remain. That being the case, I think it is better for prostitution to be specialised, in accordance with the principle of the division of labor, rather than universalized. I would prefer a few women prostituting themselves extensively rather than many women prostituting themselves a little.

You would hardly guess where else privilege and communism have found a place to live together : in the coffins where our sorrowful remains are laid to rest, in the cemeteries where human dust is buried. Funeral services and cemeteries are either privileged or communal. One cannot freely bury a dead person, nor freely open a cemetery.

In Paris, funeral services are [271] leased to a private enterprise. The cost of the contract is truly excessive; the fee amounts to about three-quarters of the person's estimated revenue. And this fee is not paid to the municipality but to the churches recognized by the state. Too bad for the dead who belong to unrecognized religions! The proceeds of this funeral tax go toward covering the minor expenses of parishes, paying renowned preachers, financing the lavish decorations for the Month of Mary, etc. Whether heretics or orthodox believers, the dead do not protest much!

Thus consigned to a privileged administration and burdened with exorbitant taxes, the funeral service is inevitably costly and inefficient. It costs eight to ten times more than it would under a regime of liberty, and its inadequacy is regularly exposed during times of extraordinarily high mortality.

Under this system, the modest inheritance of a worker disappears in burial costs, unless the deceased’s children resign themselves to accepting the charity of a pauper’s funeral. Is there a more monstrous inequality?

Cemeteries, those vast inns of death, belong to the municipalities. It is not permitted to compete with them by opening an independent cemetery. As a result, the reserved plots are exorbitantly expensive. Six square feet in Père Lachaise Cemetery cost more than an acre of land elsewhere. Only the rich can kneel at the tomb of their ancestors; the poor are left to bow before the mass grave, where generations of the destitute are piled together like sheaves in a [272] haystack. The most savage hordes would shudder at this communism of the grave; we, however, have grown accustomed to it… or rather, we endure it, just as we endure so many other abuses that wound us… Have you ever noticed, in our cemeteries, women from the lower classes searching with their eyes for the spot where their father, husband, or child was buried? They had planted a small cross there with a white-painted inscription. But the cross has disappeared beneath a new layer of coffins. Tired of a fruitless search, they walk away heavy-hearted, carrying with them the funeral wreath they had bought with their meager weekly wages…

THE CONSERVATIVE.

Let us leave this sad subject. In your list of privileged industries, you mentioned the legal profession, medicine, and teaching. Yet, anyone is free to become a doctor, a lawyer, or a professor.

THE ECONOMIST.

Yes, undoubtedly, but these professions are tightly regulated. Now, any regulation that obstructs access to a profession or industry, or that complicates its practice, inevitably contributes to increasing its costs.

THE CONSERVATIVE.

What! You would want people to be able to practice medicine, plead in court, and teach freely... But what would become of us, good Lord?

THE ECONOMIST.

What would become of us? We would be healed more quickly and at a lower cost; our lawsuits would be [273] less expensive, and our children would receive a more substantial education, that’s all! Trust in the law of supply and demand under a regime of free competition. If teaching became free, would those running educational institutions stop seeking good professors? Would professors not have an interest, therefore, in being able to offer solid and extensive knowledge? Would their salaries not be in proportion to their merit? If the practice of medicine were freed from the regulations that hinder it, would the sick not continue to seek out the best doctors? How much of the study currently imposed on doctors and lawyers is useless in practice? How much of this study takes the place of essential knowledge? Tell me, what use do lawyers and doctors have for Latin and Greek?

THE CONSERVATIVE.

Wanting lawyers and doctors to stop learning Latin and Greek—really, that’s too much!

THE ECONOMIST.

The costs of this Latin and Greek are covered in part by taxpayers, who fund university institutions, and in part by the clients of lawyers and doctors. Yet I fail to see what a lawyer and a doctor, who have to interpret French laws and heal French patients, could possibly do with Latin and Greek. All Roman laws have been translated, just like Hippocrates and Galen.

THE CONSERVATIVE.

And what about medical nomenclature?

[274]

THE ECONOMIST.

Do you really believe that a disease named in French cannot be treated just as easily as the same disease named in Latin or Greek? When will justice finally be done against this ridiculous charlatanism of labels and formulas, which Molière so mercilessly mocked?

But it would take volumes to list this army of privileges and regulations that obstruct access to the most useful professions and hinder the execution of this most necessary work. [19]

I will conclude by citing one last provision from that monument of barbarism called the French Code.

There is a common complaint that major public utility projects have scarcely developped in France. Do you want to know why? Read this article from the law of July 7–9, 1833:

"Art. 3. All major public works, royal roads, [275] docks, undertaken by the State or by private companies, with or without tolls, with or without subsidies from the Treasury, with or without the alienation of public domain, may only be carried out by virtue of a law, which shall not be enacted until after an administrative inquiry. A decree shall suffice to authorize the execution of roads, canals, and branch railways of less than twenty thousand meters in length, bridges, and all other works of lesser importance. This decree must also be preceded by an inquiry."

Now, you know how long it takes to conduct an administrative inquiry, how long it takes to debate a law or issue a decree. And yet, you wonder why the spirit of enterprise does not develop in France! You should be complaining about the unfortunate ones you have garroted cannot walk!

[276]

TENTH SOIRÉE↩

SUMMARY: On state charity and its influence on population.—Malthus’ law.—Defense of Malthus.—On population in Ireland.—Means of ending Ireland’s poverty.—Why state charity provokes an artificial increase in population.—Its moral influence on the working classes.—How state charity discourages private charity.—On the quality of the population.—Means of improving the population.—Crossbreeding of races.—Marriages.—Well-matched unions.—Ill-matched unions.—Their influence on the race.—Under what conditions, under what system, would the population most easily maintain its standard of living.

THE ECONOMIST.

Today, I will speak to you about the disruptions and disasters caused by state charity, by the institutions of benevolence organized and maintained at the expense of the government, the departments, and the municipalities. These institutions, whose costs are imposed on all taxpayers indiscriminately, constitute one of the most harmful infringements on property. From the perspective of population...

THE SOCIALIST.

At last! Ecce iterum Crispinus.(Here is Crispinus again) Here comes the Malthusian again. You are going, I wager, to call for the suppression of charitable institutions in the interest of the [277] poor; but you will not be listened to, I warn you. The constitution of 1848 has imposed on society the duty of public assistance.

THE CONSERVATIVE.

And society will know how to fulfill this duty.

THE ECONOMIST.

So much the worse! How can a government assist the poor? By giving them money or aid in kind. Where can it get this money or aid? From the pockets of the taxpayers. Thus, it is led to resort to the Poor Tax, that is, the most dreadful weapon of war ever directed against the destitute.

THE SOCIALIST.

You Malthusian! You Malthusian! You Malthusian!

THE ECONOMIST.

Indeed, that is an insult which I will take as an honor. I am a Malthusian when it comes to population, just as I am a Newtonian when it comes to gravitation, or a Smithian when it comes to the division of labor.

THE SOCIALIST.

We are about to quarrel, then. I was beginning, I must confess, to be swayed by your doctrines. I was catching myself blessing property and admiring its fertile results... but, truly, it would be impossible for me to admire Malthus, and even less to bless him. What! You dare to justify this blasphemer who dared to say, “that a man arriving without means of subsistence on land already occupied is bound to withdraw”? This heartless economist [278] who defended infanticide, plague, and famine? You might as well defend Attila or Mandrin.

THE CONSERVATIVE.

You must at least acknowledge that we detest Malthus as much as you do. Le Constitutionnelrecently showed very little respect for this deplorable fetish of English political economy.

THE ECONOMIST.

Have you read Malthus?

THE CONSERVATIVE.

I have read the passages cited by Le Constitutionnel.

THE SOCIALIST.

And I, the passages cited by M. Proudhon.

THE ECONOMIST.

They are the same, or rather, it is the same passage, for only that one is ever quoted. Besides, however barbaric that passage may seem, it is nonetheless the expression of truth.

THE CONSERVATIVE.

Abomination!

THE SOCIALIST.

Infamy!

THE ECONOMIST.

And a truth that is essentially humane, as I will prove to you.

Tell me, do you believe that the earth can provide all the raw materials necessary to sustain an unlimited number of men?

THE SOCIALIST.

No, of course not. The earth can only sustain a limited number of inhabitants. Fourier estimated this number at [279] three to five billion. But today, the earth scarcely holds a billion inhabitants.

THE ECONOMIST.

You admit a limit, and indeed, it would be absurd to claim that the earth could nourish two, three, four, or five hundred billion people.

Do you believe that the reproductive power of the human species is limited?

THE SOCIALIST.

I cannot say.

THE ECONOMIST.

Observe everything that lives or grows, and you will notice that nature has lavished seeds and sprouts. Every species of plant scatters a thousand times more seeds than the earth can fertilize. Animal species, likewise, are provided with an abundance of seeds.

Could things have been arranged differently? If animals and plants had only a limited reproductive power, would not the slightest catastrophe be enough to annihilate their species? Could the organizer of all things have failed to equip them with an almost unlimited reproductive power?

However, plant and animal species never exceed certain limits, either because not all seeds are fertilized or because a portion of those that have been fertilized perish. It is thanks to the non-fertilization of seeds or the early destruction of fertilized ones that they remain in proportion to the amount of nourishment nature provides them.

Why should man be exempt from this law that governs all plant and animal species?

[280]

Suppose that his reproductive power had been limited, suppose that every union could produce only two individuals—would humanity have, I do not say multiplied, but even simply maintained itself? Instead of spreading to populate the earth, would not the different races of men have successively died out due to disease, wars, accidents, etc.? Was it not necessary for man, like animals and plants, to be endowed with an overabundant reproductive power?

If man, like other animal and plant species, possesses an excessive reproductive power, what should he do? Should he multiply indiscriminately like them, leaving nature to handle the destruction of the surplus? Should he reproduce without any more concern than an animal or a plant for the fate of his offspring? No! Endowed with reason and foresight, man is bound to act in concert with Providence to keep his species within just limits; he is bound not to bring into the world beings doomed in advance to destruction.

THE SOCIALIST.

Doomed to destruction...

THE ECONOMIST.

Consider this. If man were to fully exercise his reproductive power, as he is all too inclined to do, if the number of people were one day to exceed the limits of the available food supply, what would become of those born beyond this limit? What happens to plants that multiply beyond the soil’s capacity to nourish them?

[281]

THE CONSERVATIVE.

They perish.

THE ECONOMIST.

And nothing can save them?

THE SOCIALIST.

One can increase the productive capacity of the land.

THE ECONOMIST.

Up to a certain limit. But once that limit is reached, suppose the plants continue to multiply and exceed it—what must happen then?

THE SOCIALIST.

Then, obviously, the surplus must perish.

THE ECONOMIST.

And nothing can save it?

THE SOCIALIST.

Nothing can save it.

THE ECONOMIST.

Well then, what happens to plants also happens to men when the limit of their means of subsistence is exceeded. This is the law that Malthus recognized and established; this is the explanation of that infamous passage that you and yours denounce as a crime: "A man who arrives in a world already occupied, etc." And how did Malthus recognize this law? By observing the facts! By noting that in all countries where the population has exceeded the means of subsistence, the surplus has perished from famine, disease, infanticide, etc., and that destruction has never ceased to perform its grim duty until the population was brought back to its necessary balance.

[282]

THE SOCIALIST.

To its necessary balance... So you believe that the countries where Malthus observed his law could not have sustained their excess population; you believe that our beautiful France, where destitution decimates generations of the poor, could not nourish those who die prematurely?

THE ECONOMIST.

I am convinced that France could sustain more inhabitants and sustain them better if the multitude of economic abuses I have pointed out to you had ceased to exist. But until enlightenment about these abuses spreads, until they disappear, it is wise not to exceed the current means of subsistence. Let us therefore actively demand the reforms that must expand the limits of subsistence, while at the same time recommending, with Malthus, prudence, abstention, moral restraint. Later, when the complete emancipation of property has made production more abundant and distribution more just, abstention will become less stringent, though it will never cease to be necessary. [20]

THE SOCIALIST.

This abstention, this moral restraint—does it not conceal a great immorality?

THE ECONOMIST.

What immorality? Malthus believed that bringing into the world beings inevitably destined to perish was a true crime. Consequently, he advised [283] against creating them. What do you see as immoral in this advice?

THE SOCIALIST.

Nothing! But you well know that complete abstention is not practicable in real life, and God knows what immoral compromise you have imagined.

THE ECONOMIST.

We have imagined nothing at all, I assure you. The compromise you speak of was practiced long before Malthus concerned himself with the law of population. Political economy has never recommended it; it has spoken only of moral restraint... As for determining whether this compromise is immoral or not, that is not our concern as economists. For that, you should consult the Academy of Moral and Political Sciences (Department of Morals).

THE SOCIALIST.

I certainly will.

THE CONSERVATIVE.

I understand that the population may exceed the limits of the means of subsistence, but is it really easy to determine that limit? Can one say, for example, that the population exceeds the level of subsistence in Ireland?

THE ECONOMIST.

Yes, and the proof is that a portion of the Irish population dies every year from hunger and poverty.

THE SOCIALIST.

While the rich and powerful aristocracy that exploits Ireland leads a splendid existence in London and Paris.

[284]

THE ECONOMIST.

If you closely examined the causes of this monstrous inequality, you would once again find them in violations of property. For centuries, confiscation was the order of the day in Ireland. Not only did the victorious Saxons confiscate the lands of the Irish people, but they also destroyed its industry by burdening it with lethal restrictions. These barbarities eventually ended, but the social state they established remained and even worsened, to the great detriment of England.

THE SOCIALIST.

Say rather to its benefit.

THE ECONOMIST.

No, for Irish poverty is today maintained and even increased—on one hand by the extraordinary taxes that England imposes upon itself to feed Ireland’s poor, and on the other by the regular taxes it levies to protect the persons and properties of the Irish aristocracy.

THE SOCIALIST.

What! You would have England let Ireland’s poor perish without aid?

THE CONSERVATIVE.

What! You would have England allow the Irish landlords to be murdered and their properties pillaged?

THE ECONOMIST.

I would have England say to the aristocratic landowners of Ireland: You possess the largest share of Irish capital and Irish land—well then, defend your own properties. I will no longer dedicate a single man or a single shilling to this service. I no longer wish [285] to continue sustaining the poor whom you have allowed to multiply unchecked on the land of Ireland. If Ireland’s destitute peasants unite to burn your castles and divide your lands among themselves, then too bad for you! I will no longer concern myself with Ireland.

Ireland itself would ask for nothing better, as you know. “For mercy’s sake,” said old O’Connell to the members of the British Parliament, “take your hands off us. Abandon us to our fate. Allow us to govern ourselves!”

If England granted this long-standing wish of the great champions of Irish independence, what would happen to Ireland? Do you think the aristocracy would simply abandon its rich estates to the mercy of the starving hordes of white-boys? No, certainly not! It would hasten to leave its splendid residences in London’s West End and Paris’s Faubourg Saint-Honoré to go and defend its threatened properties. Then it would understand the necessity of healing Ireland’s grievous wounds. It would invest its capital in developing and improving agriculture; it would begin creating food for those it has reduced to the last extremities of poverty. If it did not take this course—if it continued to spend its revenues idly abroad while famine did its work in Ireland—how long would it succeed in preserving its lands and capital without external support? Would it not soon be dispossessed of its estates by the legions of destitute people who cover the land of Ireland?

THE SOCIALIST.

If England withdrew the support of its land [286] and sea forces, that would certainly change the situation dramatically; nothing is more certain. But wouldn’t the Irish be better off simply confiscating outright the property of this heartless aristocracy?

THE ECONOMIST.

That would be enforcing in all its rigor the principle of "an eye for an eye". I do not know to what extent it is just or moral to make one generation bear the punishment for the crimes of past generations; I do not know whether the descendants of the victims of Drogheda and Wexford have the right to make today’s Irish landlords atone for the crimes of the bandits in the pay of Henry VIII, Elizabeth, and Cromwell. But, if we consider the question purely from the standpoint of utility, the Irish would be wrong to confiscate their aristocracy’s property. What would they do with these lands? They would be forced to divide them among a countless multitude of peasants, who would finish exhausting the soil, being unable to invest sufficient capital in its cultivation.

By respecting the aristocracy’s property, on the other hand, they would allow this wealthy, powerful, and educated class to guide the transformation of agriculture and thus contribute in no small measure to eradicating Ireland’s poverty. The poor of Ireland would be the first to benefit.

But as long as English taxpayers continue to provide security for the landlords and food for Ireland’s poor, you may be certain that the landlords will continue to spend their incomes idly abroad, while the poor will continue to multiply in the midst of appalling poverty; you may be certain that Ireland’s situation will go from bad to worse.

[287]

THE SOCIALIST.

That English taxpayers should cease financing the government of Ireland seems perfectly just to me; but wouldn’t it be inhumane to abandon Ireland’s poor to their fate?

THE ECONOMIST.

The Irish landlords must be left to deal with them. Left to themselves, the Irish aristocracy would impose the harshest sacrifices upon themselves to relieve their poor. It would be in their interest to do so, for charity, after all, costs less than repression. However, they would measure their aid precisely according to the actual needs of the population. As economic development increases employment opportunities, they would gradually reduce their handouts. On the day when employment is sufficient to sustain the entire population, they would end their regular distributions of relief. No artificial cause would then contribute to the unchecked growth of Ireland’s population.

THE SOCIALIST.

So you believe that state charity provokes an artificial, abnormal growth of the population?

THE ECONOMIST.

This is a fact that has been clearly established through investigations into the Poor Law tax in England. And this fact is easily explained. What role do so-called charitable institutions play? They distribute food free of charge to the poor. If these institutions are established by law, if they provide a guaranteed source of income, if they constitute a patrimony for the poor, there will always be people to consume [288] this income, to enjoy this patrimony; and the more numerous, wealthy, and accessible these charitable institutions are, the more people there will be to partake of them.

You will then see the powerful force that drives a man to work in order to feed himself and his family begin to slacken. If the parish or the municipality grants the worker a wage supplement, he will shorten his workday or reduce his effort accordingly; if nurseries or asylums for children are established, he will father more children; if hospices are founded, if pensions for the elderly are created, he will cease to worry about the fate of his parents and his own old age; if, finally, hospitals for the poor and sick are opened, he will stop saving for times of illness. Soon you will see this man, whom you have relieved of the obligation to fulfill most of his duties toward his family and himself, abandon himself, like a brute, to his basest instincts. The more charitable institutions you open, the more taverns and brothels will spring up...

Ah! benign philanthropists, almsgiving socialists, you take it upon yourselves to provide for the needs of the poor as a shepherd provides for his flock; you substitute your responsibility for individual responsibility, and you believe that the worker will still remain diligent and prudent! You believe he will continue to work for his children when you have organized in your nurseries the economical rearing of this human cattle; you believe he will not cease to support his old father when you have opened your free hospices at his expense; you believe he will persist in saving for [289] hard times when you have placed at his disposal your charitable offices and hospitals. Disabuse yourselves! By erasing responsibility, you will have destroyed foresight. Where nature had placed men, your philanthropic communism will soon leave nothing but brutes.

And these brutes you will have created, these brutes devoid of all moral drive, will multiply to such an extent that you will become powerless to feed them. Then you will cry out in distress, blaming the evil inclinations of human nature and the doctrines that encourage them. You will hurl anathemas against sensualism, denounce the corrupting influences of the daily press, and who knows what else? You poor fools!

THE CONSERVATIVE.

The abuse of charitable institutions can, of course, cause serious disorders in the economy of society; but is it really possible to do without them entirely? Can one allow a crowd of miserable wretches to perish without aid?

THE ECONOMIST.

Who is telling you to let them perish without aid? Let private charity do its work, and it will assist them far better than your official institutions! It will help them without breaking the bonds of family, without separating the mother from her child, without taking the elderly away from their sons, without depriving a sick husband of the care of his wife and daughters. Private charity is given with the heart, and it respects the ties of the heart.

THE CONSERVATIVE.

State charity does not prevent private charity.

[290]

THE ECONOMIST.

You are mistaken. State charity dries up or discourages private charity. The budget for state charity in France amounts to about one hundred million francs. This sum is taken from the income of all taxpayers. But private charity does not draw from another source. When the budget for public charity increases, the budget for private charity necessarily decreases. And the reduction in one exceeds the increase in the other. When society takes on the responsibility of supporting the poor, is one not naturally inclined to send the poor to society? One has paid a contribution to the charity office, so one directs the poor to the charity office. This is how the heart closes to charity!

But an even more effective means has been employed to uproot from souls this most noble and generous sentiment that the Creator has placed in them. If the wealthy have not been outright forbidden to give alms, the poor have been forbidden to ask for them. French law considers begging a crime and punishes the beggar as if he were a thief. Begging is strictly prohibited in most of our departments. Now, if a poor man commits a crime by receiving alms, does the wealthy man not become his accomplice by giving them? Charity has been made criminal by law. How, then, do you expect this noble virtue to remain alive when you spare no effort to wither and destroy it?

THE SOCIALIST.

It may be, indeed, that charity imposed by the state has reduced voluntary charity. But according to your own [291] doctrines, is that a bad thing? If charity provokes the artificial growth of the population, and if, consequently, it creates more suffering than it can alleviate, should we not wish to reduce it to the minimum, or even suppress it altogether?

THE ECONOMIST.

I told you that state charity necessarily provokes the artificial growth of the population; I did not say the same about private charity. Let us not confuse the two! No matter how extensive private charity may be, it is always precarious; it does not provide a stable and regular outlet for a certain portion of the population; moreover, it does not alter any of the moral impulses of the human soul.

A man who receives aid from a charity office or who enters a hospital, where he is coldly received and where he sometimes even serves as an experimental subject, does not and cannot feel any gratitude for the service rendered to him. To whom would his gratitude be directed? To the administration? To the taxpayers? But the administration is represented by cold accountants, and the taxpayers pay their taxes reluctantly. The man whom society aids cannot believe himself morally indebted to this cold abstraction. On the contrary, he tends to think that society is merely settling a debt toward him and criticises it for not settling it better.

A man whose suffering is relieved by an active and considerate act of charity, however, almost always remembers this kindness. In receiving aid, he incurs a moral obligation. Now, whether rich or poor, [292] a man does not like to contract obligations he cannot repay, whether morally or materially. One accepts a benefit with gratitude, but no one consents to live off charity. One would rather endure the harshest sacrifices, take on the most arduous and unpleasant tasks, rather than remain forever dependent on one’s benefactor. One would die of shame before increasing one’s burden of debt through reckless improvidence. Instead of breaking the moral strength of the human soul, private charity strengthens and sometimes even develops it. It elevates man rather than degrading him.

Private charity, therefore, cannot stimulate population growth. It would rather contribute to slowing it down.

Nor can it, like state charity, become a dangerous source of division and resentment. Multiply so-called philanthropic institutions in France, continue to manage charity as a government agency, complete your work by forbidding almsgiving to the donor as you have already forbidden it to the recipient, and you will see the result!

On one side, you will have an immense horde of men who receive, as a debt, the begrudging and stingy alms of the state. These men will bitterly criticize the wealthy classes for being too sparing with their charity in the face of poverty that this very charity has continually worsened.

On the other side, you will have taxpayers crushed under the weight of taxes, who will be careful not to add a voluntary alms to an imposed one.

[293]

In this situation, will public peace be possible for long? Can a society so divided, a society in which no moral bond will any longer connect the poor and the rich, survive without conflict? England nearly perished, submerged by the poverty provoked by the Poor Law tax. Let us beware of following the same path! Let us practice individual charity, and cease to engage in communal philanthropy!...

THE SOCIALIST.

Yes, I clearly see the difference between the two forms of charity; but should not private charity be guided, organized?...

THE ECONOMIST.

Let it be! It is active and resourceful enough to distribute its aid in the most useful manner. Its instinct serves it better than your decrees could.

THE SOCIALIST.

I agree with you that free charity is preferable to state charity. I even concede that the latter results in an increase in poverty. But ultimately, suppose the population has grown to the point of exceeding the available jobs in production and the budget of private charity—what should be done then? Should we let the surplus population perish?

THE ECONOMIST.

We must encourage private charity to redouble its efforts, and above all, avoid engaging in state charity, for the inevitable consequences of the latter are to diminish [294] the total budget for poverty relief while increasing the number of the poor, thus worsening the problem rather than alleviating it.

But I say that under a regime in which everyone’s property is fully respected, under a regime where the economic laws governing society are no longer disregarded and violated, this surplus population would not arise.

THE SOCIALIST.

Prove it!

THE ECONOMIST.

Allow me first to say a few words about the causes that degrade the quality of the population, that reduce the number of able-bodied workers while increasing the number of invalids, idiots, cretins, blind, and deaf-mutes whom charity must support.

THE CONSERVATIVE.

Ah! This is an aspect of the question that is not without interest.

THE ECONOMIST.

And one that has been too greatly neglected.

Man is a composite of great potentiality and diverse forces. These potentialities or forces—instincts, sentiments, intelligence—exist in different proportions among individuals. The most complete man is the one whose faculties possess the greatest energy; the most perfect man is the one whose faculties are both the most energetic and the best balanced.

THE CONSERVATIVE.

I see roughly where you are going with this; but [295] do you really think that one can influence the reproduction of men as one does that of animals?

THE ECONOMIST.

The English have managed to perfect their breeds of sheep and cattle in an almost miraculous way; they literally manufacture sheep of a certain size, weight, and even color. How have they achieved these results? By crossbreeding certain races and selecting, among those races, the individuals that produce the most beneficial pairings.

Is it not likely that the laws governing the reproduction of animal species also govern that of humans? Observe that the many races or varieties of humanity are endowed with very different faculties. Among inferior races, moral and intellectual faculties exist only in an embryonic state. Some races have particularly developed faculties, while the rest of their organization is backward or stunted. The Chinese, for example, possess a highly developed sense of color; on the other hand, they are almost entirely devoid of the instinct for struggle, or combativeness. The Native American Indians of North America, in contrast, are distinguished by their instincts of combativeness and cunning, as well as their keen perception of sound. [21] The distinctive faculties of races are transmitted with little modification when the races do not mix. The Chinese have always been colorists; they have never been distinguished for their bravery. The Native Americans [296] have never ceased to be brave, cunning, and to speak melodious and harmonious dialects.

THE CONSERVATIVE.

This would lead us to establish breeding farms for the improvement of the human race.

THE ECONOMIST.

Not at all. This would lead us to remove the artificial barriers that prevent the different varieties of the human species from coming together.

THE SOCIALIST.

But should these unions not be directed, organized?

THE ECONOMIST.

Such unions direct and organize themselves quite well on their own. The various forces centered in the human brain seem to obey the same law of gravitation that governs matter. The most energetic faculties attract the weaker faculties of the same kind. It is, for example, a common observation that the gentlest and least assertive personalities are irresistibly drawn to the most dominant and combative characters. Great forces attract small ones, and the result is an average that moves closer to the ideal balance of human organization.

This balance tends to establish itself naturally, spontaneously, through the manifestation of individual sympathies or affinities. And since the entire physical organization depends on the arrangement of physical, moral, and intellectual faculties, the body perfects itself just as much as the soul.

If you accept this theory, you must also accept [297] that within the immense diversity of species and individuals, there must exist two beings who are drawn to each other with the greatest intensity, and whose union produces, consequently, the most useful average. Between these two beings, the union is necessary and eternal. This union is called marriage.

THE CONSERVATIVE.

Ah! So you are a supporter of marriage.

THE ECONOMIST.

I believe that marriage is a natural institution. Unfortunately, here is what has happened: as a result of the immense moral and material disruptions that society has undergone, a multitude of men have ceased to form purely sympathetic unions. Racial prejudices or financial interests have been consulted rather than natural affinities in the great matter of marriage. Hence, ill-matched unions, and, following these unions, the degeneration of individuals and races. Since ill-matched unions tend to dissolve, legislators have proclaimed the indissolubility of marriage and decreed severe penalties against adultery. But nature has not ceased to act despite the law. Bad marriages have nonetheless dissolved in fact.

When a union is mismatched, when two incompatible beings come together, the product of this monstrous coupling can only be a true monstrosity.

Everyone knows that the superior races that have governed Europe since the fall of the Roman Empire have, for the most part, degenerated. Why? Because natural affinities rarely determined their [298] unions. Royal families in particular allied themselves almost exclusively for political interests. Hence, they have degenerated more rapidly and more completely than others. What would have become of the Bourbon race in France after the imbecile Louis XIII if it had not been reinvigorated with the noble blood of the Buckinghams? What has become of the Bourbons of Spain and Sicily, the Hapsburgs, and the offspring of the House of Hanover? What families have produced so many cretins, idiots, monomaniacs, and scrofulous individuals?

Examine, from this point of view, the history of the French nobility. In the Middle Ages, purely material considerations seem to have exercised only a weak influence on aristocratic unions. History and literature of the time bear witness to this. Thus, the race remained healthy and vigorous. Later, marriages became mere associations of lands and names. Alliances were negotiated between families instead of being arranged between the true interested parties. People married without knowing each other. What was the result? That legitimate unions became purely fictitious, and that adulteries multiplied to the point of becoming the norm. A vile promiscuity eventually invaded the French nobility and turned it gangrenous to the very marrow of its bones.

The same abuses are re-emerging today. The huge fortunes brought about by monopolies and privileges tend to join together, despite natural compatibility. Civil law, by establishing the right of inheritance, has further contributed to transforming marriages into mere matters of financial interest; finally, the instability that threatens all livelihoods under the current economic system has [299] led people to eagerly seek out these sordid pairings that are commonly referred to as "good marriages."

The imperfect and flawed beings that emerge from mismatched unions or clandestine relationships, unable either to manage property or earn a living, become a burden on their families or public charity. In Sparta, they were drowned in the Eurotas. Our customs are milder. We allow these human semblances, fruits of greed or libertinage, to vegetate. But if it would be a crime to destroy them, is it not an even greater crime to bring them into existence?

If you dispense with the laws and prejudices that hinder the beneficial mixing of races or that encourage sordid financial pairings at the expense of sympathetic unions, you will significantly improve the quality of the population, thereby relieving charity of a significant portion of its burden.

Once everything is restored to its natural order, a surplus population would never again be a concern.

I call surplus that which exceeds both the available jobs in production and the ordinary resources of charity.

THE SOCIALIST.

So you think that there will always be a need to rely on charity?

THE ECONOMIST.

I do not know. That will depend entirely on the enlightenment and foresight of individuals. Let us suppose a society where property is fully respected, where employment opportunities [300] have been maximized, and where the publicity of labor transactions allows everyone to know at all times whether there is a surplus of labor supply or a surplus of labor demand—then it is evident that, in such a society, the useful proportion of the population would be easily maintained.

When the supply of labor exceeds demand, as I have told you, the price of labor falls so rapidly that workers, like all other merchants, have an interest in withdrawing part of their stock from the market. If they do not withdraw it, if at the same time charity does not act sufficiently to assist those cast out from the workshop onto the street, the current price of labor may fall well below the cost of production...

THE SOCIALIST.

What do you mean by the cost of production of labor?

THE ECONOMIST.

I mean the necessary costs for labor to be produced and perpetuated. These costs vary essentially according to the nature of the labor. A man who employs only his physical strength may, in extreme cases, consume only purely material things; a man who engages his moral and intellectual faculties cannot preserve and perpetuate them unless he nurtures them just as he does his physical strength. The cost of production of labor is higher the more it requires the active contribution of numerous faculties. The cost of production of labor, to sum up, is proportional to the breadth and intensity of the effort required.

If the remuneration for a type of labor ceases to cover its cost of production, workers [301] will immediately shift towards branches of production that require less effort for the same wage. The price of labor will then rise again in the abandoned industry, and equilibrium will soon be restored. This is how the vast scale of wages is naturally formed, ranging from the remuneration of a monarch to that of the humblest manual laborer. Unfortunately, privileges and monopolies often disrupt this natural harmony by establishing very high wages in favor of certain professions or industries. Only freedom ensures a just distribution of wages.

As workers increasingly engage their intellectual and moral faculties in their labor, the cost of production of labor rises. Moreover, in all branches of production, technological progress results in making labor less physical and more intellectual. Thus, as progress develops, we also see the cost of production of labor increase. At the same time, the increase in production, a result of progress, allows these rising costs to be better covered. In a barbaric age, purely physical labor requires little and obtains even less; in a civilized age, labor, having become intellectual, requires much and can obtain more.

But this is only on the condition that the number of workers does not exceed the number of available jobs; otherwise, the market price of labor will inevitably fall below the cost of production.

THE SOCIALIST.

Unless the workers withdraw the surplus from the market.

[302]

THE ECONOMIST.

Which they would not fail to do under a regime of complete freedom. This surplus would be supported by the employed workers, with the assistance of voluntary charity. In such a situation, would the population not naturally tend to contract? As the contributions from workers and the alms of charity were spread over an increasing number of heads, would not the growing difficulty of securing places for one’s children lead to having fewer of them? Moral restraint would then come into play, and the natural balance of the population would be restored effortlessly. An opposite phenomenon would occur if labor became scarce for the available jobs. Fully assured that they could feed and place all their children, parents would raise more of them. Marriages would become more numerous and more fertile until the balance between population and the means of subsistence was once again reestablished.

This is how the problem of population would be resolved under a regime of full economic freedom. In reality, it is always resolved in this way, ultimately. But in the meantime, how much suffering is caused—sometimes by the sudden and artificial contractions of labor, sometimes by the inadequacy of state charity or the encouragement it provides to population growth! These sufferings would be, if not completely eliminated under a system where both the number of available jobs and the contributions of voluntary charity were maximized, at least reduced to the lowest possible proportion.

[303]

ELEVENTH SOIRÉE↩

SUMMARY: On government and its function. [22]—Monopoly governments and communist governments.—On the liberty of government.—On divine right.—That divine right is identical to the right to a job.—Flaws of monopoly governments.—War as the inevitable consequence of this system.—On the sovereignty of the people.—How sovereignty is lost.—How it is regained.—Liberal solution.—Communist solution.—Communist governments.—Their flaws.—Centralization and decentralization.—On the administration of justice.—Its former organization.—Its current organization.—Insufficiency of the jury.—How the administration of security and justice could be made free.—Advantages of free governments.—What should be understood by nationality.

THE CONSERVATIVE.

In your system of absolute property and full economic freedom, what then is the function of government?

[304]

THE ECONOMIST.

The function of government consists solely in ensuring the preservation of each person’s property.

THE SOCIALIST.

Ah, it’s J.-B. Say’s nightwatchman state.

Now it’s my turn to ask you a question:

Today, in the world, there are two kinds of governments: some claim their origin from a so-called divine right...

THE CONSERVATIVE.

So-called! So-called! That remains to be seen.

THE SOCIALIST.

The others originate from the sovereignty of the people. Which do you prefer?

THE ECONOMIST.

I want neither one nor the other. The first are monopoly governments, the second are communist governments. In the name of the principle of property, in the name of my right to provide for my own security or to purchase it from whomever I choose, I demand free governments.

[305]

THE CONSERVATIVE.

What do you mean?

THE ECONOMIST.

I mean governments whose services I may accept or refuse at will, according to my individual choice.

THE CONSERVATIVE.

Are you serious?

THE ECONOMIST.

You will see soon enough. You are a supporter of divine right, aren’t you?

THE CONSERVATIVE.

Since we have been living in a republic, I tend to lean that way, I admit.

THE ECONOMIST.

And you believe yourself to be an opponent of the right to a job?

THE CONSERVATIVE.

Do I believe it? I am certain of it. I swear...

THE ECONOMIST.

Swear nothing, for you are an avowed supporter of the right to a job.

THE CONSERVATIVE.

But once again, I...

THE ECONOMIST.

You are a supporter of divine right. Yet the principle of divine right is absolutely identical to the principle of the right to a job.

What is divine right? It is the right possessed by certain families to govern the people. Who conferred this right upon them? God himself. Read instead [306] Considerations on Franceand the pamphlet The Generating Principle of Political Constitutionsby Mr. Joseph de Maistre:

"Man cannot create a sovereign," says Mr. de Maistre. "At most, he can serve as an tool to dispossess a sovereign and hand over his states to another prince already reigning. Otherwise, there has never existed a sovereign family whose plebeian origins can be traced. If such a phenomenon were to appear, it would mark a new epoch in the world.

… It is written: 'It is I who make sovereigns.' This is not merely a phrase from the Church, a metaphor of a preacher; it is the literal, simple, and palpable truth. It is a law of the political world. God makes kings, literally. He prepares royal lineages, nurturing them in a cloud that veils their origins. Then they appear, crowned with glory and honor, and take their place." [23]

This means that God has invested certain families with the right to govern men and that no one can deprive them of the exercise of this right.

Now, if you recognize that certain families have the exclusive right to practice this particular kind of industry called government, if you also believe, as most theorists of divine right do, that the people are obligated to provide either subjects to govern or endowments as compensation for unemployment to members of these families—and this for all time—are you truly justified in rejecting the [307] right to a job? Between this unjustified claim that society must provide workers with suitable employment or adequate compensation, and this other unjustified claim that society must provide royal families with a type of work appropriate to their faculties and dignity—the job of governing—or a stipend as a minimum livelihood, where is the difference?

THE SOCIALIST.

Truly, there is none.

THE CONSERVATIVE.

What does it matter! If the recognition of divine right is essential to the maintenance of society.

THE ECONOMIST.

Could the socialists not respond to you that the recognition of the right to a job is no less necessary for the maintenance of society? If you admit the right to a job for some, should you not admit it for all? Is the right to a job anything other than an extension of divine right?

You say that the recognition of divine right is indispensable to the maintenance of society. How is it, then, that all people aspire to rid themselves of divine right monarchies? How is it that the old monopoly governments are either ruined or on the verge of ruin?

THE CONSERVATIVE.

The people are seized with madness.

THE ECONOMIST.

That is a rather widespread madness! But believe me, the people have good reasons for wanting to rid themselves of [308] their old rulers. The monopoly of government is no better than any other monopoly. One does not govern well, and above all, one does not govern inexpensively, when one has no competition to fear, when the governed are deprived of the right to freely choose their rulers. Grant an exclusive supplier the right to provide groceries to a neighborhood, forbid the residents of this neighborhood from purchasing goods from nearby grocers, or even from supplying themselves independently, and you will see what dreadful products the privileged grocer will end up selling, and at what price! You will see how he will grow rich at the expense of the unfortunate consumers, what royal pomp he will display for the greater glory of the neighborhood... Well! What is true for the most minor services is no less true for the highest services. The monopoly of a government is no better than that of a grocery store. The production of securityinevitably becomes both costly and poor when organized as a monopoly.

It is in the monopoly of security that the principal cause of wars that have, until now, ravaged humanity resides.

THE CONSERVATIVE.

How so?

THE ECONOMIST.

What is the natural tendency of every producer, whether privileged or not? It is to expand their clientele to increase their profits. Now, under a monopoly regime, what means can the producers of security use to increase their clientele?

[309]

Since, under this regime, the people do not count, since they are considered the legitimate domain of the anointed of the Lord, no one can invoke their will to acquire the right to administer them. Sovereigns are therefore compelled to resort to the following methods to increase the number of their subjects: 1.) Purchasing kingdoms or provinces at a price. 2.) Marrying heiresses who bring dominions as dowries or will inherit them later. 3.) Conquering by force the domains of their neighbors. The first cause of war!

On the other hand, people sometimes rebel against their legitimate sovereigns, as has recently happened in Italy and Hungary. The anointed of the Lord are naturally obliged to bring back into obedience these rebellious herds. To this end, they form a Holy Alliance and carry out great massacres among their subjects who revolted until their rebellion is quelled. But if the rebels have contact with other people, those nations may enter the conflict, and the conflagration becomes widespread. The second cause of war!

I do not need to add that the consumers of security, who are what is at stake in the war, also pay for its costs.

Such are the advantages of monopoly governments.

THE SOCIALIST.

So you prefer governments derived from the sovereignty of the people. You place democratic republics above monarchies and aristocracies. Very well!

THE ECONOMIST.

Let us make a distinction, please. I prefer governments [310] that derive from the sovereignty of the people. But the republics you call democratic are not at all the true expression of the sovereignty of the people. These governments are extended monopolies, a form of communism. Now, the sovereignty of the people is incompatible with both monopoly and communism.

THE SOCIALIST.

What then, in your eyes, is the sovereignty of the people?

THE ECONOMIST.

It is the right that every man possesses to freely dispose of his person and his property, to govern himself.

If the sovereign man has the right to dispose, as master, of his person and his property, he naturally also has the right to defend them. He possesses the right of free defense.

But can each person exercise this right in isolation? Can each man be his own policeman and his own soldier?

No! No more than the same man can be his own farmer, his own baker, his own tailor, his own grocer, his own doctor, his own priest.

It is an economic law that man cannot fruitfully exercise multiple trades at once. Thus, from the very origin of societies, all industries have specialized, and different members of society have turned to the occupations for which their natural aptitudes suited them. They make a living by exchanging the products of their specialized trades for the various objects necessary for satisfying their needs.

A man living in isolation enjoys his full [311] sovereignty without contest. Only, this sovereign, being forced to perform for himself all the trades that supply the necessities of life, finds himself in a very impoverished state.

When a man lives in society, he can either retain his sovereignty or lose it.

How does he lose his sovereignty?

He loses it when he ceases, in a total or partial, direct or indirect manner, to be able to dispose of his person and his property.

Man remains fully sovereign only under a regime of complete liberty. Every monopoly, every privilege is an infringement upon his sovereignty.

Under the old regime, since no one had the right to freely dispose of his person and his property, since no one had the right to freely engage in any industry, sovereignty was strictly limited.

Under the current regime, sovereignty has not ceased to be infringed upon by a multitude of monopolies and privileges that restrict the free activity of individuals. Man has not yet fully regained his sovereignty.

How can he recover it?

Two schools stand in opposition, offering completely different solutions to this problem: the liberal school and the communist school.

The liberal school says: Destroy monopolies and privileges, restore to man his natural right to freely engage in any industry, and he will fully enjoy his sovereignty.

The communist school, on the contrary, says: Beware of granting everyone the right to freely produce [312] everything. That would lead to oppression and anarchy! Grant this right to the community, to the exclusion of individuals. Let all unite to organize every industry collectively. Let the state be the sole producer and the sole distributor of wealth.

What is at the core of this doctrine? It has often been said: slavery. It is the absorption and annihilation of individual will within the common will. It is the destruction of individual sovereignty.

At the forefront of the industries organized in commonis that which aims to protect and defend the property of persons and things against all aggression.

How were the communities in which this industry is exercised—the nation and the commune—formed?

Most nations were gradually assembled through alliances between the owners of slaves or serfs and through their conquests. France, for example, is a product of successive alliances and conquests. Through marriages, force, or fraud, the sovereigns of the Île-de-France gradually extended their authority over different parts of the former Gaul. The twenty monopoly governments that occupied what is now France gave way to a single monopoly government. The kings of Provence, the dukes of Aquitaine, Brittany, Burgundy, Lorraine, the counts of Flanders, etc., were replaced by the king of France.

The king of France was responsible for both internal and external defense. However, he [313] did not alone direct internal defense or policing.

Each feudal lord originally policed his own domain; each commune, having won its freedom either by force or by purchasing it from its lord, policed its recognized district.

Both communes and feudal lords contributed, to some extent, to the general defense.

It can be said that the king of France had the monopoly of general defense, while the feudal lords and the burghers of the communes held the monopoly of local defense.

In some communes, policing was under the direction of an administration elected by the city’s burghers, as was the case in the principal communes of Flanders. Elsewhere, policing had become a corporation, like baking, butchery, shoemaking—in short, like all other industries.

In England, this latter form of the production of security has persisted to the present day. Until recently, the police in the City of London remained in the hands of a privileged corporation. And curiously enough, this corporation refused to cooperate with the police of other districts, such that the City became a veritable refuge for criminals. This anomaly disappeared only with the reforms of Sir Robert Peel. [24]

What did the French Revolution do? It stripped the king of France of his monopoly of general defense, but it did not destroy this monopoly; it transferred it into the hands [314] of the nation, now organized as one immense commune.

The small communes into which the territory of the former Kingdom of France had been divided continued to exist. Their number was even significantly increased. The government of the large commune retained the monopoly of general defense, while the governments of the small communes exercised, under the supervision of the central authority, the monopoly of local defense.

But it did not stop there. Other industries were also organized within the general commune and the local communes, notably education, religious worship, transportation, etc., and various taxes were levied on citizens to cover the costs of these industries managed in common.

Later, socialists, who have never been good observers, failed to notice that the industries organized within the general or local communes operated more expensively and less efficiently than those left free. They therefore demanded the collective organization of all branches of production. They wanted the general commune and the local communes not only to police, build schools, construct roads, fund religious institutions, open libraries, subsidize theaters, maintain stud farms, manufacture tobacco, carpets, porcelain, etc., but also to produce everything.

Public common sense revolted against this misguided utopia, but it went no further. It was well understood that producing everything collectively would be ruinous. But [315] it was not understood that producing certain things collectively was already ruinous. Partial communismcontinued, even as the socialists who clamored for complete communismwere despised.

However, conservatives—who support partial communism while opposing complete communism—are now divided on an important issue.

Some want partial communism to continue to be exercised primarily within the general commune; they defend centralization.

Others, on the contrary, demand greater authority for the smaller communes. They want these communes to be able to establish various industries, found schools, build roads, construct churches, subsidize theaters, etc., without needing authorization from the central government. They call for decentralization.

Experience has demonstrated the flaws of centralization. Experience has proven that industries managed within the larger commune—the State—produce goods at a higher cost and of lower quality than free industry.

But does that mean that decentralization is any better? Does it mean that it would be more useful to emancipate the local communes, or in other words, to allow them freely to establish schools and charitable institutions, build theaters, subsidize religious institutions, or even operate other industries?

To cover the expenses of the services they take on, what do the communes need? They need capital. Where can they obtain this capital? From [316] the pockets of private individuals, nowhere else. Consequently, they are obliged to levy various taxes on the inhabitants of the commune.

These taxes generally consist today of additional centimes added to the contributions paid to the State. However, certain communes have also obtained authorization to establish a small customs duty around their borders under the name of "octroi." This customs duty, which affects most industries that remain free, naturally increases the commune’s resources significantly. Thus, authorizations to establish an octroiare frequently requested from the central government. The latter rarely grants them, and in this, it acts wisely; however, it often allows communes to impose extraordinary levies, in other words, it permits the majority of the commune’s administrators to establish an extraordinary tax that all inhabitants are obliged to pay.

If the communes were emancipated, if, in each locality, the majority of inhabitants had the right to establish as many industries as they wished and to force the minority to contribute to the expenses of these industries organized in common; if the majority were authorized to establish freely any kind of local taxes, you would soon see in France as many small, distinct, and separate states as there are communes. You would see, gradually emerging to cover local taxes, forty-four thousand internal customs barriers under the name of octrois; in short, you would witness the reconstitution of the Middle Ages.

Under this regime, the liberty of labor and trade [317] would be attacked both by the monopolies that the communes would grant themselves over certain branches of production, and by the taxes they would levy on the other branches to support industries operated in common. The property of all would be at the mercy of majorities.

In communes where socialist opinion predominates, what would happen to property, I ask you? Not only would the majority levy taxes to cover expenses for police, roads, religious services, charitable institutions, schools, etc., but they would also levy taxes to establish communal workshops, communal stores, communal shops, etc. Would the non-socialist minority not be obliged to pay these local taxes?

Under such a system, what then becomes of the sovereignty of the people? Does it not disappear under the tyranny of the majority?

Even more directly than centralization, decentralization leads to complete communism—that is to say, to the complete destruction of sovereignty.

What, then, must be done to restore to men the sovereignty that monopoly has deprived them of in the past, and that communism, this extended monopoly, threatens to deprive them of in the future?

It is simply necessary to make free the various industries that were once monopolized and that today are exercised in common. It is necessary to leave to the free activity of individuals the industries still operated or regulated by the State or the commune.

Then, man, possessing—as before the establishment of societies—the right to freely apply, without [318] hindrance or burden of any kind, his faculties to all types of labor, will once again fully enjoy his sovereignty.

THE CONSERVATIVE.

You have reviewed the various industries that are still monopolized, privileged, or regulated, and you have proven to us, with more or less success, that these industries should be left free for the common benefit. So be it! I do not wish to revisit an exhausted subject. But is it possible to remove from the state and the communes the responsibility for general defense and local defense?

THE SOCIALIST.

And what about the administration of justice?

THE CONSERVATIVE.

Yes, and the administration of justice. Is it possible for these industries, to use your language, to be exercised in any way other than collectively, within the nation and the commune?

THE ECONOMIST.

I might be tempted to overlook these two forms of communism if you would frankly concede all the others to me; if you reduced the State to being nothing more than a policeman, a soldier, and a judge. However, no! … for the communism of security is the keystone of the old edifice of servitude. Moreover, I see no reason to grant you that one any more than the others.

One of two things must be true:

Either communism is better than liberty, and in that case, all industries must be organized collectively, within the state or the commune.

[319]

Or liberty is preferable to communism, and in that case, all industries still organized in common must be made free, including justice and policing, as well as education, religious institutions, transportation, tobacco manufacturing, etc.

THE SOCIALIST.

That is logical.

THE CONSERVATIVE.

But is it possible?

THE ECONOMIST.

Let’s see! Are we talking about justice? Under the old regime, the administration of justice was not organized and salaried in common; it was organized as a monopoly and paid for by those who made use of it.

For several centuries, there was no industry more independent. Like all other branches of material or immaterial production, it formed a privileged corporation. The members of this corporation could pass down their positions or masterships to their children, or they could sell them. Enjoying these positions in perpetuity, judges were known for their independence and integrity.

Unfortunately, this system had, on the other hand, all the defects inherent to monopoly. Monopolized justice was very expensive.

THE SOCIALIST.

And God knows how many complaints and protests were provoked by the épices("spices" or legal fees). Witness these little verses, which were scribbled on the door of the Palace of Justice after a fire:

[320]

One fine day, Lady Justice
Set her palace all aflame
For having eaten too much spice

Should justice not be essentially free of charge? Now, doesn't a gratuity necessarily entail organization in common?

THE ECONOMIST.

People complained that justice consumed too many épices(fees and bribes) not that it consumed them at all. If justice had not been constituted as a monopoly; if, consequently, judges had only been able to demand the legitimate remuneration of their industry, there would have been no complaints about the épices.

In certain countries where litigants had the right to choose their judges, the vices of monopoly were significantly mitigated. The competition that then developed between the different courts improved justice and made it less expensive. Adam Smith attributes to this cause the progress of the administration of justice in England. The passage is interesting, and I hope it will dispel your doubts:

"The court fees appear to have originally been the main revenue of the different courts of justice in England. Each court tried to attract as many cases as it could and was only too willing to take up cases that did not properly fall under its jurisdiction. The King’s Bench, established solely for criminal cases, began handling civil suits on the pretext that the defendant, by failing to provide justice, had committed some form of misconduct or malfeasance. [321] The Court of Exchequer, tasked with collecting royal dues and enforcing their payment, also took on debt cases, the plaintiff arguing that if he was not paid, he would not be able to pay the king. With these fictions, it was often up to the parties to choose which tribunal would hear their case, and each court strove to attract as many cases as possible by demonstrating diligence and impartiality in handling lawsuits. The admirable current constitution of the courts of justice in England was perhaps originally, in great part, the fruit of this emulation among the various judges, each striving to apply the most prompt and effective remedy that the law allowed to all sorts of injustices." [25]

THE SOCIALIST.

But, once again, isn't something free of charge, a gratuity, preferable?

THE ECONOMIST.

Have you not yet rid yourself of the illusion of a gratuity? Do I need to prove to you that justice which is free of charge is actually more expensive than the other, by the entire amount of the tax levied to maintain free courts and pay free judges? Do I need to show you that having justice free of charge is necessarily unjust, since not everyone uses justice equally, and not everyone is equally litigious? Besides, justice is far from free under the current system, as you well know.

[322]

THE CONSERVATIVE.

Lawsuits are ruinous. However, can we really complain about the current administration of justice? Is the organization of our courts not impeccable?

THE SOCIALIST.

Oh dear! Impeccable? An Englishman whom I once accompanied to the Court of Assizes left the session utterly outraged. He could not conceive how a civilized people could allow a King’s or Republic’s Prosecutor to engage in rhetoric while demanding a death sentence. This eloquence, in service of the executioner, horrified him. In England, they simply present the accusation; they do not make it impassioned.

THE ECONOMIST.

Add to that the proverbial delays of our courts, the suffering of the unfortunate who wait months, sometimes years, for their judgment, while the investigation could be completed in a few days; the enormous costs and losses these delays entail, and you will be convinced that the administration of justice in France has hardly progressed.

THE SOCIALIST.

Let’s not exaggerate, however. Today, thanks to heaven, we have the institution of the jury.

THE ECONOMIST.

Indeed, not only are taxpayers forced to pay for the costs of justice, but they are also compelled to serve as judges. This is pure communism: Ab uno disce omnes("From one thing, learn about everything"). For my part, I do not believe that [323] the jury is any better suited for judging than the National Guard—another communist institution!—is for waging war.

THE SOCIALIST.

Why not?

THE ECONOMIST.

Because one only excels in one's trade, in one's specialty, and being a juror is not a juror’s specialty.

THE CONSERVATIVE.

That is why they merely determine the offense and evaluate the circumstances under which it was committed.

THE ECONOMIST.

That is to say, they carry out the most difficult, the most delicate function of the judge. It is this extremely sensitive function, requiring the soundest judgment, the greatest experience, and the most calm, impartial mind, that we entrust to the random selection of a lottery. It is absolutely as if we drew lots every year to determine which citizens would be tasked with making boots or writing tragedies for the community.

THE CONSERVATIVE.

That comparison is exaggerated.

THE ECONOMIST.

In my opinion, it is more difficult to render a good judgment than to make a well-crafted pair of boots or to skillfully compose a few hundred Alexandrine verses. A perfectly enlightened and impartial judge is rarer than a skilled shoemaker or a poet capable of writing for the Théâtre-Français.

In criminal cases, the jury's incompetence is revealed [324] every day. But, alas! little attention is paid to errors committed in the Court of Assizes. What am I saying? It is almost considered a crime to criticize a rendered verdict. In political cases, does the jury not tend to rule according to the color of its opinion—white or red—rather than according to justice? Would not a man condemned by a white jury be acquitted by a red jury, and vice versa?

THE SOCIALIST.

Alas!

THE ECONOMIST.

Already, minorities are growing weary of being judged by juries belonging to majorities. Let's wait and see how that turns out …

Now, let’s consider the industry that provides internal and external defense. Do you believe it is significantly better than that of justice? Do our police, and especially our army, not cost us dearly in relation to the real services they provide us?

And is there truly no disadvantage in allowing this industry of public defense to be in the hands of a majority?

Let us examine this.

In a system where the majority determines tax policy and directs public funds, must taxation not weigh more or less heavily on certain parts of society depending on which influences predominate? Under the monarchy, when the majority was purely fictitious—when the upper class claimed for itself the right to govern the country to the exclusion of the rest of the nation—was taxation not levied primarily on the consumption of the [325] lower classes, on salt, wine, meat, etc.? Certainly, the bourgeoisie paid its share of these taxes, but as its consumption was infinitely broader than that of the lower classes, its revenue was ultimately much less affected. As the lower class, through education, gains more influence in the state, you will see the emergence of an opposing trend. You will see progressive taxation—today directed against the lower class—turned against the upper class. The latter will resist with all its might, rightly crying out against plunder and theft. But if the communal institution of universal suffrage is maintained, if a violent seizure of power does not once again place the government of society exclusively in the hands of the wealthy, the will of the majority will prevail, and progressive taxation will be established. A portion of the property of the rich will then be legally confiscated to lighten the burden on the poor, just as a portion of the property of the poor was for too long confiscated to lighten the burden on the rich.

But there is worse still.

Not only can the majority in a communal government determine taxation at will, but it can also allocate these taxes as it sees fit, without regard for the will of the minority.

In certain countries, the government of the majority uses a portion of public funds to protect properties that are inherently illegitimate and immoral. In the [326] United States, for example, the government guarantees to Southern planters the ownership of their slaves. However, in the United States, there are abolitionists who rightly consider slavery to be theft. No matter! The communal mechanism compels them to contribute financially to maintaining this kind of theft. If the slaves ever attempted to free themselves from their unjust and despicable yoke, the abolitionists would be forced to take up arms to defend the planters’ property. Such is the law of majorities!

Elsewhere, the majority, driven by political intrigues or religious fanaticism, may declare war on a foreign people. The minority may abhor and denounce this war, yet it is still required to contribute its blood and money to it. Such is again the law of majorities!

And what is the result? That the majority and minority are in perpetual conflict, and that war sometimes descends from the parliamentary arena into the streets.

Today, it is the red minority that rises in insurrection. If this minority were to become the majority, and if, exercising its majority rights, it reshaped the constitution to its liking—if it decreed progressive taxes, forced loans, and paper money—who assures you that the white minority would not rise in insurrection tomorrow?

There is no lasting security in this system. And do you know why? Because it constantly threatens property, because it places the persons and goods of all at the mercy of a majority—whether blind or enlightened, moral or immoral.

If the communal system were applied [327] as narrowly as in the United States instead of being extended, as in France, to a multitude of matters, the causes of discord between the majority and the minority would be fewer, and the drawbacks of this system would be less severe. Nevertheless, they would not entirely disappear. The right recognized in the majority to tyrannize over the will of the minority could still, under certain circumstances, lead to civil war.

THE CONSERVATIVE.

But, once again, how could the industry that provides for the security of persons and property possibly function if it were made free? Your logic leads you to fantasies worthy of Charenton.

THE ECONOMIST.

Come now, let’s not get upset. Suppose that, after thoroughly recognizing that the partial communism of the state and the municipality is decidedly harmful, we leave all branches of production free—except for justice and public defense. Up to this point, no objections. But then comes a radical economist, a dreamer, who says: Why, after having emancipated the various uses of property, do you not also emancipate those that ensure the maintenance of property? Would these industries not, like the others, be exercised more justly and more effectively if they were made free? You claim that this is impractical. Why? On the one hand, are there not, within society, men who are naturally suited—some to adjudicate disputes between property owners and assess crimes against property, others [328] to defend the property of persons and things against the aggressions of violence and fraud? Are there not men whose natural aptitudes make them particularly suited to be judges, policemen, and soldiers?

On the other hand, do not all property owners, without exception, need security and justice? Are they not all, consequently, willing to make sacrifices to fulfill this urgent need—especially if they are incapable of fulfilling it themselves or if doing so would cost them too much time and money?

Now, if there are men on one side who are suited to providing a need of society, and on the other side, men willing to make sacrifices to satisfy this need, is it not enough to let both parties act freelyfor the demanded service—whether material or immaterial—to be produced and the need to be met?

Does this economic phenomenon not occur inevitably, just as surely as the physical phenomenon of falling bodies?

Am I not therefore justified in saying that if a society renounced providing public security, this particular industry would still be exercised? And am I not further justified in saying that under a regime of freedom, it would be conducted better than it ever could be under a system of communal control?

THE CONSERVATIVE.

In what manner?

THE ECONOMIST.

That is not the concern of economists. Political economy [329] can state that: if such a need exists, it will be satisfied, and it will be satisfied better under a regime of complete freedom than under any other. To this rule, there is no exception! But how this industry will be organized, what its technical methods will be—this political economy cannot say.

Thus, I can state that if the need for food is visible in society, that need will be satisfied, and it will be done so all the better as each person remains free to produce food or to buy it from whomever they choose.

I can also assure you that things will proceed in exactly the same manner if, instead of food, it is a matter of security.

I therefore claim that if a community were to declare that, after a certain period—one year, for instance—it would cease to pay judges, soldiers, and police officers, at the end of the year, that community would nonetheless have courts and governments ready to function. And I add that if, under this new regime, each individual retained the right to freely exercise these two industries and to freely purchase their services, security would be produced in the most economical and efficient way possible.

THE CONSERVATIVE.

I will always reply that this is inconceivable.

THE ECONOMIST.

At the time when the regulatory regime held industry captive within the confines of communes, and when each corporation exclusively controlled the [330] communal market, people claimed that society was in peril every time a bold innovator attempted to challenge that monopoly. If someone had then declared that, instead of the feeble and stagnant industries of the corporations, freedom would one day establish immense factories producing cheaper and more perfect goods, that dreamer would have been dismissed out of hand. The conservatives of the time would have sworn by all that is holy that such a thing was inconceivable.

THE SOCIALIST.

But tell me! How can one imagine that each individual has the right to become their own government, or to choose their own government, or even to go without one entirely? How would things unfold in France if, after having made all other industries free, the French citizens were to announce by mutual agreement that, in one year, they would cease to support the government of the community?

THE ECONOMIST.

I can only make conjectures in this regard. However, here is roughly how things would likely proceed. Since the need for security remains great in our society, there would be profit in establishing enterprises in the business of government. There would be a guarantee of covering their costs. How would these enterprises be founded? Isolated individuals would be no more sufficient for this task than they are for constructing railroads, docks, etc. Large companies would therefore be formed to produce security; they would acquire the necessary equipment and workforce. As soon as they were ready to operate, [331] these property insurance companieswould look for a clientele. Each person would subscribe to the company that inspired the most confidence and whose terms seemed the most favorable.

THE CONSERVATIVE.

We would line up to subscribe, would we? Surely, we would stand in line!

THE ECONOMIST.

Since this industry would be free, as many companies as could be usefullyestablished would arise. If there were too few, and consequently, the price of security was too high, it would be profitable to create new ones; if there were too many, the surplus companies would soon dissolve. The price of security would thus always be adjusted to the level of the cost of production.

THE CONSERVATIVE.

How would these free companies coordinate to provide for general security?

THE ECONOMIST.

They would come to an agreement as today’s monopolistic and communal governments do—because they would have an interest in doing so. Indeed, the more they cooperated in setting up shared facilitated for apprehending thieves and murderers, the more they would reduce their costs.

By the very nature of their industry, property insurance companies could not exceed certain boundaries: they would lose money by maintaining a police force in areas where they had only a small clientele. However, within their jurisdictions, they could [332] neither oppress nor exploit their clients—under penalty of seeing competition emerge immediately.

THE SOCIALIST.

And if the existing company wanted to prevent competition from establishing itself?

THE ECONOMIST.

In other words, if it infringed on the propertyof its competitors and on the sovereignty of all... Oh! In that case, all those whose property and independence were threatened by the monopolists would rise up to punish them.

THE SOCIALIST.

And if all the companies colluded to form a monopoly? If they created a Holy Alliance to impose themselves upon the nations, and if, strengthened by this coalition, they mercilessly exploited the unfortunate consumers of security—if they siphoned off, through heavy taxation, the best portion of the fruits of the people's labor?

THE ECONOMIST.

If, in short, they repeated what the old aristocracies have done up to the present day... Well then, the people would follow Béranger’s advice:

"People, form a Holy Alliance
And join hands."

They would unite in turn, and since they possess means of communication that their ancestors did not, since they are a hundred times more numerous than their old rulers, the Holy Alliance of the aristocracies would soon be annihilated. No one would be tempted then, I assure you, to establish a monopoly.

[333]

THE CONSERVATIVE.

How would one repel a foreign invasion under this regime?

THE ECONOMIST.

What would be the interest of the companies? It would be to repel the invaders, for they would be the first victims of the invasion. They would therefore cooperate to repel them and would ask their insured clients for an additional premium to protect them from this new danger. If the insured preferred to take the risk of invasion, they would refuse this additional premium; otherwise, they would pay it, thereby enabling the companies to counter the threat of invasion.

But just as war is inevitable under a regime of monopoly, peace is inevitable under a regime of free government.

Under this system, governments have nothing to gain from war; on the contrary, they have everything to lose. What interest would they have in waging war? Would it be to increase their clientele? But since consumers of security would be free to have themselves governed as they see fit, they would evade the conquerors. If the latter sought to impose their domination after destroying the existing government, the oppressed would immediately call for the help of all people....

Wars between company and company would occur only if the shareholders were willing to advance the costs. However, since war could no longer bring anyone an increase in clientele—since consumers would no longer allow themselves to be conquered—the [334] costs of war would evidently no longer be covered. Who, then, would still be willing to finance them?

I conclude from this that war would be physically impossibleunder this regime because no war can be waged without an advance of funds.

THE CONSERVATIVE.

What conditions would a property insurance company impose on its clients?

THE ECONOMIST.

These conditions would be of several kinds.

To be able to guarantee full security to the insured for their persons and property, it would be necessary:

1. That the insurance companies establish certain penalties against offenders of persons and property, and that the insured agree to submit to these penalties should they themselves commit offenses against persons and property.
2. That they impose certain restrictions on the insured to facilitate the detection of criminals.
3. That they regularly collect, to cover their costs, a certain premium, variable according to the situation of the insured, their particular occupations, and the extent, nature, and value of the properties to be protected.

If the stipulated conditions suited the consumers of security, the contract would be concluded; otherwise, the consumers would turn to other companies or provide for their own security.

Follow this hypothesis through all its details, and you will be convinced, I believe, of the possibility of [335] transforming monopolistic or communist governments into free governments.

THE CONSERVATIVE.

I still see many difficulties. And the debt, who would pay it?

THE ECONOMIST.

Do you think that by selling all current communal properties—roads, canals, rivers, forests, buildings used for all communal administrations, and equipment for all communal services—one would not easily succeed in paying off the capital of the debt? This capital does not exceed six billion. The value of communal properties in France is certainly well beyond that.

THE SOCIALIST.

Would this system not lead to the destruction of all nationality? If several property insurance companies were established in a country, wouldn't national unity be destroyed?

THE ECONOMIST.

First, national unity would have to exist in order for it to be destroyed. But I cannot see national unity in these shapeless agglomerations of people that violence has formed and that violence alone most often maintains.

Next, one is wrong to confuse two things that are naturally quite distinct: the nation and the government. A nation exists when the individuals who compose it share the same customs, the same language, the same civilization; when they form a distinct and original variety of the human species. Whether this nation [336] has two governments or only one matters very little—unless, of course, each government erects an artificial barrier around the regions under its domination and maintains constant hostilities with its neighbors. In this latter case, the instinct of nationality will react against this barbaric fragmentation and against this artificial antagonism imposed upon the same people, and the disunited fractions of this people will continually tend to reunite.

Now, governments have, until today, divided people in order to keep them more easily in obedience; "divide and rule" has always been the fundamental maxim of their policy. People of the same race, to whom a common language offers an easy means of communication, have energetically reacted against the practice of this maxim; at all times, they have endeavored to break down the artificial barriers that separated them. When they finally succeeded, they wished to have only one government so as not to be divided again. But note well that they have never asked this government to separate them from other people... The instinct of nationalities is therefore not egotistical, as has so often been claimed; on the contrary, it is essentially sympathetic. If the diversity of governments ceased to entail the separation and fragmentation of people, you would see the same nationality willingly accepting several governments. A single government is no more necessary to constitute the unity of a people than a single bank, a single educational institution, a single religion, or a single grocery store, etc.

[337]

THE SOCIALIST.

Truly, here is a very strange solution to the problem of government!

THE ECONOMIST.

It is the only solution which conforms to the nature of things.

[338]

TWELFTH AND FINAL SOIRÉE↩

SUMMARY: Rent—Its nature and origin.—Summary and conclusion.

THE ECONOMIST.

Our discussions are coming to an end. Would you like me to present a résumé of our work, as they say in the Assembly?

THE SOCIALIST.

I have one clarification to ask of you first.

You told us that the cost of production of all things consist of wages for labor and interest on capital; you added that the market price of goods naturally and irresistibly tends to align with their cost of production. But you have not said a word about rent.

THE ECONOMIST.

Rent is not part of the cost of production of goods.

THE SOCIALIST.

What are you saying? Will you deny that thousands of individuals live not on wages or interest, but on rent?

THE ECONOMIST.

I will not deny it.

[339]

THE SOCIALIST.

Well then, where does this rent come from if not from the price of goods? If the farmer did not have to pay rent to his landlord, would he not be able to sell his wheat at a lower price? Is he not forced to include rent in the cost of production of wheat?

THE ECONOMIST.

He does not sell his wheat at a higher price because he pays rent; he pays rent because he sells his wheat at a higher price. Rent does not act as a cause in price formation; it is merely a result.

THE SOCIALIST.

Cause or result, does it exist any less, and is it any less unjust? What! Here is a man who, by inheritance, possesses vast stretches of land on which neither he nor his ancestors have ever worked. This land belongs to him because it once fell into the hands of one of his ancestors, a leader of the barbarian hordes who invaded and ravaged the country. Since that time, the lord of the land has forced the peasant to hand over a third or even half of the fruits of his harsh labor as rent. Thousands of men have lived and still live by levying this tribute on the labor of their fellow men. Is this just?

Should governments not put an end to such a monstrous abuse, either by seizing the land to return it to the workers, or by imposing obligations on landowners that would absorb the value of rent? All income originates from labor—except this one. Is it not time for this exception to cease? Did not J.-B. Say himself acknowledge that [340] income derived from rent was the least respectable of all? Abolish rent for me, and I will concede property to you.

THE ECONOMIST.

Grant me property, and I guarantee you that rent will disappear on its own.

THE SOCIALIST.

Rent disappearing on its own? That would be quite something!

THE ECONOMIST.

Rent is not, as you seem to believe, a fruit of property. Rent is, on the contrary, the product of the various infringements on property since the origin of societies.

In investigating the origins of rent, Ricardo recognized that it is not part of the cost of production. This means that if products were never sold above their cost of production—above the amount of labor they required—there would be no rent.

If rent is not part of the cost of production, then what is it?

It is the difference between the market price of goods(the price at which they are sold) and their cost of production.

THE SOCIALIST.

What does it matter, once again, whether rent is included in the cost of production, if it is included in the market price and is therefore paid?

THE ECONOMIST.

It matters enormously. Since the cost of production [341] consist of the amount of labor necessary to create a product, they cannot be avoided. Everything that exceeds them, however, can be.

THE SOCIALIST.

I am beginning to understand.

THE CONSERVATIVE.

And I fear I understand too much.

THE ECONOMIST.

Do not be afraid. If rent is not included in the cost of production, it follows:

1. That it represents neither any labor performed nor any compensation for losses suffered or to be suffered.
2. That it is the result of artificial circumstances, which must disappear along with the causes that have produced them.

What are these causes? What causes raise and maintain the market price of goods above their cost of production, or cause it to fall below them, in contradiction to the natural law that constantly acts to bring market prices in line with the cost of production?

That is how the question must be posed.

THE SOCIALIST.

If the economic law that brings the market price in line with the cost of production is identical to the physical law that governs the fall of bodies and maintains the equilibrium of liquid surfaces, I cannot understand how its action could be disrupted by artificial causes.

THE ECONOMIST.

You do not consider the dams and terrain obstacles that disturb the natural course of water.

[342]

THE SOCIALIST.

Yes, but the level always reestablishes itself.

THE ECONOMIST.

You are mistaken. Artificial levels are established. The natural level only reappears after the dam is broken. Now, since everyone has sought to direct the waters to their own side without considering their neighbors, the field of production has been crossed by a multitude of barriers. Some have received more water than they needed, while others have been left dry.

These economic barriers are called monopolies and privileges.

Now let us see how monopolies and privileges operate to produce rent.

If an industry is subject to the law of free competition, it cannot for long sell its products above or below its cost of production; therefore, it will generate no rent. Those who engage in it will receive only the legitimate remuneration for their labor and the necessary compensation for the use of their capital.

If, on the contrary, certain industrialists are granted the exclusive privilege to sell their goods within a specific district, these industrialists can collude to ensure that the supply of this commodity is always lower than the demand. By this means, they will succeed in raising the market price above the cost of production. The difference will constitute their rent.

On the other hand, when a commodity has been produced in excessive quantity relative to the number of [343] consumers who can reimburse its cost of production, the market price falls below these costs, and the difference again constitutes a rent. Only this rent, instead of being paid by the consumer, is paid by the producer. It is evident that such rent can only be accidental.

Only the production of the most essential goods can give rise to a significant rent.

If the supply of luxury goods is artificially reduced, prices will rise, but demand will decrease. Prices will then quickly fall, and rent along with them.

But it is not the same for essential goods.

Let us suppose we are dealing with wheat. If supply is lower than demand, the market price of wheat can rise almost indefinitely. Let us examine how this happens and how land rent arises.

A tribe lives in the midst of a vast expanse of land. Small in number, it is content to cultivate only the best lands, those that yield a considerable product in exchange for little labor. The population of this tribe begins to grow. If it cannot expand further, either due to a lack of security outside or to internal obstacles preventing its natural expansion, what will happen?

If it is not allowed to import from elsewhere—that is, from regions where good land is sufficient or even exceeds what is needed to feed the population—the amount of food which it lacks will force it to pay [344] a price for wheat above its cost of production. This is when land rent emerges.

But as soon as the price of wheat rises, people will be encouraged to cultivate cereals on second-quality lands, or rather, lands less suited to this specific type of farming. Since wheat production costs more on these lands than on those of first quality, their owners will receive a lower rent. It may even happen that the additional supply of wheat on the market will cause the market price to fall to the level of the cost of production for the newly cultivated lands, or even below. In the first case, the owners of these lands will merely cover their cost of production and receive no rent; in the second case, the cost of production will not even be covered, and rent will drop below zero—leading to the abandonment of lands cultivated beyond necessity.

If, on the contrary, the newly cultivated lands are still insufficient to meet the shortfall in demand, the market price of wheat will continue to generate rent, and even poorer lands will be devoted to wheat cultivation. This movement will continue until the market price ceases to exceed the cost of production of cereals on the most recently cultivated lands.

Thus, in certain countries where population has grown excessively without being able to expand, and where at the same time imported foodstuffs are restricted, one can see nearly barren lands yielding meager wheat harvests, while the best lands generate enormous rents.

[345]

THE SOCIALIST.

Do you believe that if no artificial obstacles had hindered the natural expansion of populations, if no institution or prejudice had stimulated excessive population growth, and if the movement of food had always been free, land rent would never have existed?

THE ECONOMIST.

I am convinced of it. In that case, here is what would have happened. The different people of the world would have applied to each type of land the form of cultivation best suited to it, and they would have made a living by exchanging their surplus natural productions for goods produced under similar conditions by other people. As long as the demand for these diverse goods, cultivated in their specific environments, did not exceed supply, there would have been no rent. Under this natural mode of exploitation, the land would have yielded its maximum production, and population would have always been able to be proportion to the available means of subsistence.

THE SOCIALIST.

That would be true if the various materials contained in the earth—which labor transforms into consumable products—were naturally proportional in quantity to the different needs of man; if wheat-growing lands were in their extent proportional to the global consumption of wheat; if olive and rapeseed lands matched the general consumption of oil; if metal and coal deposits were aligned with the general consumption of metals and coal. But does this harmony between our [346] various needs and the amount of resources available to meet them naturally exist? Are not certain goods found in insufficient quantities compared to demand, and are we not consequently forced to pay for them above their cost of production? Do the lands that contain these materials in their raw state, or the individuals endowed with the skills necessary to produce them, not enjoy a kind of natural monopoly, in the sense that they must inevitably generate or obtain rent?

THE ECONOMIST.

There are no natural monopolies. Providence has precisely proportioned to our diverse needs the diverse resources it has placed at our disposal. But if we have used our free will and our strength to destroy or waste part of these resources instead of making full use of them; if we have spent centuries fighting over scraps of territory instead of freely spreading out over the vast spaces open before us; if, by confining ourselves within narrow boundaries, we have directly or indirectly encouraged the excessive multiplication of our species; if we have rejected goods from places where they were most advantageously produced in order to produce them ourselves in defiance of nature; if, in our ignorance, we have thus distorted the essential order that the Creator wisely established—then is it the fault of Providence?

If, to speak only of France, our institutions of state charity have encouraged the abnormal growth [347] of the population; if, at the same time, our customs laws have restricted the entry of foreign cereals, so that it became profitable to cut down magnificent olive groves to replace them with meager wheat fields—is that the fault of Providence?

If our mining laws, by halting the development of our mineral production, while our customs laws prevented the importation of foreign mineral products, have created an artificial shortage of iron, lead, copper, tin, etc.—is that the fault of Providence?

If a deplorable monopoly, by diverting education from its natural course, has rendered a great number of men unfit for various useful occupations while pushing them excessively into others—is that the fault of Providence?

If, finally, as a result of the perversion caused by monopolies and privileges in the essential order of society, certain individuals have gained the ability to satisfy their most unbridled desires while the masses could barely meet their basic needs, if the natural order of consumption has been disrupted—some goods being relatively over-demanded while others were neglected—is that the fault of Providence?

THE SOCIALIST.

No! You are right—it is the fault of man!

THE ECONOMIST.

But let these causes of disruption disappear, and you will soon see the natural order of societies reestablish itself, just as the natural course of water reappears after the destruction of a dam. You will see production [348] concentrate in the locations where it can be carried out most advantageously, and consumption return to its normal proportions. Consequently, you will see the fluctuations between market price and natural price diminish more and more, becoming almost imperceptible and eventually disappearing altogether—taking rent away with them. Production will then take place with maximum abundance, and distribution will occur in accordance with the laws of justice.

This will appear even more evident to you when I summarize the doctrine I have set forth in these discussions.

THE CONSERVATIVE AND THE SOCIALIST.

Please do us the favor of giving us this summary.

THE ECONOMIST.

Gladly.

We have taken man as our starting point. Under the influence of his physical, moral, and intellectual needs, man is driven to produce. To this end, he employs his physical, moral, and intellectual faculties. The effort he imposes on his faculties to produce is called labor. Each effort requires a corresponding restoration; otherwise, strength is lost, faculties deteriorate, and the human being declines instead of maintaining himself or progressing.

Since every effort involves a degree of suffering and every restoration or consumption provides a degree of enjoyment, man naturally seeks, under the impulse of self-interest, to [349] exert less effort while obtaining more goods suitable for his consumption.

This result is achieved through the division of labor.

The division of labor implies exchanges, relationships, and society.

Here arises a serious problem.

In a state of nature (assuming such a state ever existed), man’s efforts have minimal power, but the individual who performs them retains their full benefit. He consumes everything he produces.

In the state of society, man’s efforts gain maximum power thanks to the division of labor, but can the results of his efforts always be entirely preserved for each producer? Does the state of society provide the same level of justice in this regard as the state of nature? How, for example, can a man who spends his life manufacturing the tenth part of a pin obtain compensation as precisely in proportion to his efforts as the isolated savage who, after killing a deer, consumes alone the product of his labor?

How? By means of property.

What is property? It is the natural right to freely dispose of one’s faculties and the product of one’s labor.

How do production and distribution of wealth operate under the regime of property?

Man produces all the things he needs through his labor, acting upon the raw materials [350] provided by nature. His labor is of two kinds:

When a man exerts effort for production, this effort is simply called labor. When the effort is completed and results in a product, this product takes the name of capital. All capital consists of accumulated labor.

Now, all production requires the cooperation of these two factors: current labor and accumulated labor.

It is between these two factors of production that the product is shared.

How is it shared? In proportion to the cost of production of each, that is to say, in proportion to the sacrifices undertaken or the efforts made by the owner of current labor, or worker, and the owner of accumulated labor, or capitalist.

What do the costs of production borne by the capitalist consist of?

They consist of the work performed by the capitalist in applying his capital to a productive enterprise, the deprivation he imposes on himself, and the risks he takes by engaging his capital in production.

This work, this deprivation, and these risks constitute the elements of interest.

What do the costs of production borne by the worker consist of?

They consist of the sum of efforts the worker expends in exercising his faculties. These efforts take various forms—physical, moral, or intellectual—depending on the nature of the work. To be carried out without impairing the worker’s productive faculties, they require a certain [351] amount of sustenance, which varies according to the nature of the work.

This sustenance necessary for carrying out the work constitutes the elements of wages.

The sum of interest and wages makes up the cost of production of all types of products.

Here is an example:

What does the cost of production of a piece of calico consist of?

They consist, first:

In the wages of the workers, foremen, and entrepreneurs of of the weaving business.

In the interest on the capital invested by the weaving entrepreneur—this capital consists of buildings, machines, raw materials, and cash intended for paying workers. The capitalist who has committed these resources receives interest to compensate for his work as a lender or shareholder, his deprivation, and his risks of deterioration or loss.

First interest and first wage.

Before being woven, the cotton was spun. To spin it, capital and labor were also required—work by entrepreneurs, foremen, and spinning workers; capital in the form of buildings, machines, fuel, raw materials, and cash.

Second interest and second wage.

Before being spun, the cotton was transported. To transport it, the services of merchants, brokers, porters, shipowners, and transport entrepreneurs were required—work of merchants, brokers, [352] porters, shipowners, sailors, and carriers; capital in the form of warehouses, offices, carts, ships, provisions for the crew, wagons, and cash.

Third interest and third wage.

Before being transported, the cotton was cultivated. To cultivate it, capital and labor were again required—work of plantation managers, foremen, and laborers; capital in the form of cultivated land, buildings, seeds, machines, and cash. (If the workers are free, they are commonly paid in cash; if they are slaves, they are paid, without free negotiation, in food, clothing, and housing; in both cases, the price of cotton must cover their wages along with those of the entrepreneur and foremen, as well as the interest on the capital advanced to workers before the crop yield is realized.)

Fourth interest and fourth wage.

Add to this the wages of merchants who make the calico available to consumers and sell it in retail shops according to their needs, along with the interest on the capital invested by these essential intermediaries, and you have the total the cost of production of calico.

Suppose a plantation produced a thousand bales of cotton and that these thousand bales were used to manufacture twenty-five thousand pieces of calico, each fifty ells in length. Suppose further that these twenty-five thousand pieces of calico were sold unbleached at the rate of 30 centimes per ell, you would have a total of... 375,000 francs.

[353]

This sum of 375,000 francs would be distributed among all those who contributed to the production of the calico, from the slave and the planter to the retailer and his shop assistant.

But by what law was the distribution of this value of 375,000 francs carried out among all those who contributed to its formation? What law determined the fair interest of capitalists and the fair wages of workers, as well as the fair price of the product that provided this interest and these wages?

This law, which is the true regulator of the economic world, I have expressed as follows:

When supply exceeds demand in arithmetic progression, the price falls in geometric progression, and likewise, when demand exceeds supply in arithmetic progression, the price rises in geometric progression.

Under the influence of this law, acting in a free environment, no one can sell an interest, a wage, or a product above or below the amount necessary to bring this interest, this wage, or this product to market—that is, above or below the sum of efforts and sacrifices they have actually cost.

For, by virtue of this law, the market price of all things—interests, wages, and products—is constantly and irresistibly brought back to the level of their cost of production.

How?

Being both a producer and a consumer, man is constantly obliged, in a society where the division of labor has made separate most acts of production, [354] to offerwhat he produces in order to demand, in exchange, the things he needs.

When one demands something, one considers only the extent and intensity of the need for it; one does not concern oneself with what it may have cost to produce. It can therefore happen that one imposes upon oneself sacrifices and efforts far greater than what the item actually cost to produce. Experience shows that this occurs when a large number of individuals need a commodity, while few individuals produce it—when a commodity is in high demand but short supply. In such a case, experience further attests that even a slight disproportion between demand and supply generates a rapid movement in price. As the disproportion grows in arithmetic progression, the movement of price increases and accelerates in geometric progression.

But as the price rises higher, it also acts more forcefully to restore the balance between supply and demand.

When the price at which something is sold greatly exceeds the sum of efforts and sacrifices it cost to produce, immediately a multitude of men engaged in less profitable productions, or whose capital, skills, and labor are temporarily idle, are encouraged to produce this commodity. The encouragement is all the stronger as the price is higher, as the gap between demand and supply is larger. Under the influence of this stimulus, more or fewer competitors emerge to increase production and better satisfy demand.

[355]

However, the increase in production will have a limit. What will this limit be?

If the price rises in geometric progression when demand exceeds supply, it falls in geometric progression when supply exceeds demand. If, therefore, driven by the lure of profit, producers increase supply, a moment will come when the market price of the commodity falls to the level of its cost of production. If they continue to bring increasingly larger quantities of this commodity to market, and if demand does not increase at the same rate as supply, the market price will progressively fall below the cost of production.

But as this disproportion widens in this direction, and as producers cover their costs less and less, they have a greater incentive to shift toward other branches of production. As the price falls further, it acts more forcefully to slow the movement of supply until this slowdown brings it back to the level of the cost of production.

Thus, the market price of all things—labor, capital, and products—gravitates constantly and irresistibly toward the limit of their cost of production, that is, toward the sum of real efforts and sacrifices they have cost to be produced. [26]

[356]

But if the price of all these things is constantly and irresistibly brought back to the limit of their cost of production—to the sum of real efforts and sacrifices they have cost—each person must inevitably receive, in the state of society as in the state of nature, the just remuneration for his efforts and sacrifices.

With this difference: that the isolated man, producing everything himself, is forced to expend great effort to obtain a small number of satisfactions, whereas the man in society, benefiting from the division of labor, can obtain many satisfactions in exchange for a small number of efforts. These satisfactions will be all the greater, these [357] efforts all the smaller, the more progress has developed the division of labor, thereby reducing the cost of production of things.

Unfortunately, while many efforts have been made to develop production economically, many obstacles have also been raised, through ignorance or human perversity, to hinder this development, as well as to disrupt the natural and just distribution of wealth.

It is in a free environment, where each person's property rights over their faculties and the results of [358] their labor are fully respected, that production develops to its maximum, and that the distribution of wealth is irresistibly proportioned to the efforts and sacrifices made by each.

Now, since the beginning of the world, the strongest or most cunning men have attacked the internal or external property of others in order to consume, in their place, a portion of the fruits of production. Hence slavery, monopolies, and privileges.

While destroying the just distribution of wealth, slavery, monopolies, and privileges also slowed production—either by reducing the producers' incentive to produce or by diverting them from the type of production they could most usefully undertake. Oppression gave birth to poverty.

For long centuries, humanity groaned in the chains of servitude. But from time to time, dark cries of distress and anger echoed among the oppressed and exploited masses. The slaves rose against their masters, demanding freedom.

Liberty! That was the cry of the captives of Egypt, of Spartacus’s slaves, of the peasants of the Middle Ages, and later, of the bourgeois oppressed by the nobility and religious corporations, of the workers oppressed by guilds and trade associations. Liberty! That was the cry of hope for all those whose property had been confiscated by monopoly or privilege. Liberty! That was the ardent aspiration of all those whose natural rights were crushed under force.

[359]

A day came when the oppressed were strong enough to rid themselves of their oppressors. It was the late eighteenth century. The main industries that supplied the needs of all had never ceased to be organized into closed, privileged corporations. The nobility, which provided for internal and external defense—a corporation; the parlements, which administered justice—a corporation; the clergy, which provided religious services—a corporation; the university and religious orders, which provided education—a corporation; the bakery, the butchery, etc.—corporations. These different estates were, for the most part, independent of one another, but all were subordinate to the armed body that materially guaranteed each one’s privileges.

Unfortunately, when the time seemed ripe to overthrow this regime of injustice, no one knew what to replace it with. Those who had some knowledge of the natural laws governing society advocated laissez-faire. Those who did not believe in the existence of these natural laws, on the contrary, opposed laissez-faire with all their might and demanded the substitution of a new organization in place of the old one. At the head of the laissez-faire supporters was Turgot; at the head of the organizers or neo-regulators was Necker.

These two opposing tendencies, not to mention the reactionary tendency, divided the French Revolution. The liberal element dominated the Constituent Assembly, but it was not pure. Even the liberals did not yet have enough faith in liberty to entrust it [360] entirely with the direction of human affairs. Most material industries were freed from the chains of privilege, but the immaterial industries, foremost among them the defense of property and justice, were organized according to communist theories. Less enlightened than the Constituent Assembly, the Convention showed itself even more communist. Compare the two Declarations of the Rights of Man from 1791 and 1793, and you will have the proof.

Finally, Napoleon, who combined the passions of a Jacobin with the prejudices of a reactionary, without any mixture of liberalism, tried to reconcile the communism of the Convention with the monopolies and privileges of the old regime. He organized communal education, subsidized communal religious services, established a corps of bridges and roads to create a vast network of communal communication routes, decreed conscription, that is, a communal army; moreover, he centralized France as a large commune, and it was not his fault if he did not organize all industries within this centralized commune on the model of the University and the tobacco administration. [27] If war had not prevented him, as he himself declares in his Memoirs, he would certainly have accomplished these great things. On the other hand, he resurrected within this organized France most of the privileges and restrictions of the old regime; he reconstituted the endowed nobility, reinstated the privileges of the butcher, the baker, [361] printing, theaters, and banks, restricted the free disposal of labor through the legislation on apprenticeships, work permits, and labor unions, limited the right to lend through the 1807 law, the right to bequeath through the Civil Code, the right to trade through the continental blockade and the multitude of his decrees and regulations regarding customs; in short, under the influence of two inspirations coming from opposite directions but equally regulatory, he recreated the old network of constraints that had once oppressed property.

We have lived under this deplorable regime until today, further aggravated by the Restoration (the reinstatement of the sale of public offices in 1816, the raising of customs barriers in 1822), but far from attributing to it the injustices and poverty of present-day society, it is property and liberty that have been blamed. The socialist theorists, failing to recognize the natural organization of society, refusing to see the disastrous consequences of restoring the privileges of the old regime and establishing revolutionary or imperialist communism, claimed that the old society was flawed at its very foundation—property—and they strove to organize a new society on a different basis. This led them to utopias, some simply absurd, others immoral and revolting. Moreover, we have seen them in action.

Fortunately, the conservatives raised a barrier against the rapid invasion of socialism; but, having no more precise knowledge of the natural organization of society than their adversaries, they could only defeat them in the streets. Defenders of the status quobecause [362] it profited them, without concern for anything else, the conservatives opposed socialist innovations just as they had, in previous years, opposed the property rsights-based innovations of those advocating freedom of education and freedom of commerce.

It is between these two types of adversaries of property—some wanting to increase the number of restrictions and burdens already weighing on property, others wanting to preserve purely and simply those that exist—that the current debate is situated. On one side appear M. Thiers and the former Rue de Poitiers committee; on the other, MM. Louis Blanc, Pierre Leroux, Cabet, Considérant, Proudhon. The spirit of Necker can be found in both camps. But I no longer see Turgot.

THE SOCIALIST.

If society is naturally organized, and if it is enough to remove the obstacles to the free functioning of its organization—that is, the infringements on property—to raise production to the maximum level allowed by the current state of advancement in the arts and sciences and to make the distribution of wealth fully just, then it is certainly quite unnecessary to seek artificial organizations any further. There is nothing to do but to restore society to pure property.

THE CONSERVATIVE.

But how many changes must be made to achieve that? The thought is terrifying!

THE ECONOMIST.

No! For all the reforms that need to be carried out, being based on justice and utility, could not offend any [363] legitimate interest or cause any harm to society.

THE SOCIALIST.

Besides, in one direction or another, either for property or against it, reforms are bound to happen. Two systems are confronting each other: communism and property. We must move toward one or the other. The semi-proprietary, semi-communist system under which we live cannot last.

THE ECONOMIST.

It has already brought us deplorable catastrophes, and perhaps it has more in store for us.

THE CONSERVATIVE.

Alas!

THE ECONOMIST.

We must therefore escape it. And we can only do so through the door of communism or through the door of property:

You must choose!