M. de Sismondi, in his "Studies of Social Economy," observes somewhere that, when a banker delivers to a merchant bank-notes in exchange for his values, far from giving credit to the merchant, he receives it, on the contrary, from him.

"This credit," adds M. de Sismondi, "is in truth so short that the merchant scarcely takes the trouble to inquire whether the banker is worthy, especially as the former asks credit instead of granting it."

So, according to M. de Sismondi, in the issue of bank paper, the functions of the merchant and the banker are inverted: the first is the creditor, and the second is the credited.

Something similar takes place between the monopolist and wage-receiver.

In fact, the workers, like the merchant at the bank, ask to have their labor discounted; in right, the contractor ought to furnish them bonds and security. I will explain myself.

In any exploitation, no matter of what sort, the contractor cannot legitimately claim, in addition to his own personal labor, anything but the IDEA: as for the EXECUTION, the result of the cooperation of numerous laborers, that is an effect of collective power, with which the authors, as free in their action as the chief, can produce nothing which should go to him gratuitously. Now, the question is to ascertain whether the amount of individual wages paid by the contractor is equivalent to the collective effect of which I speak: for, were it otherwise, Say's axiom, EVERY PRODUCT IS WORTH WHAT IT COSTS, would be violated.

"The capitalist," they say, "has paid the laborers their daily wages at a rate agreed upon; consequently he owes them nothing." To be accurate, it must be said that he has paid as many times one day's wage as he has employed laborers,—which is not at all the same thing. For he has paid nothing for that immense power which results from the union of laborers and the convergence and harmony of their efforts; that saving of expense, secured by their formation into a workshop; that multiplication of product, foreseen, it is true, by the capitalist, but realized by free forces. Two hundred grenadiers, working under the direction of an engineer, stood the obelisk upon its base in a few hours; do you think that one man could have accomplished the same task in two hundred days? Nevertheless, on the books of the capitalist, the amount of wages is the same in both cases, because he allots to himself the benefit of the collective power. Now, of two things one: either this is usurpation on his part, or it is error.—What is Property: Chapter III.

To properly exploit the mule-jenny, engineers, builders, clerks, brigades of workingmen and workingwomen of all sorts, have been needed. In the name of their liberty, of their security, of their future, and of the future of their children, these workmen, on engaging to work in the mill, had to make reserves; where are the letters of credit which they have delivered to the employers?

Where are the guarantees which they have received? What! millions of men have sold their arms and parted with their liberty without knowing the import of the contract; they have engaged themselves upon the promise of continuous work and adequate reward; they have executed with their hands what the thought of the employers had conceived; they have become, by this collaboration, associates in the enterprise: and when monopoly, unable or unwilling to make further exchanges, suspends its manufacture and leaves these millions of laborers without bread, they are told to be RESIGNED! By the new processes they have lost nine days of their labor out of ten; and for reward they are pointed to the LASH OF NECESSITY flourished over them! Then, if they refuse to work for lower wages, they are shown that they punish themselves. If they accept the rate offered them, they lose THAT NOBLE PRIDE, that taste for DECENT CONVENIENCES which constitute the happiness and dignity of the workingman and entitle him to the sympathies of the rich. If they combine to secure an increase of wages, they are thrown into prison! Whereas they ought to prosecute their exploiters in the courts, on them the courts will avenge the violations of liberty of commerce! Victims of monopoly, they will suffer the penalty due to the monopolists! O justice of men, stupid courtesan, how long, under your goddess's tinsel, will you drink the blood of the slaughtered proletaire?

Monopoly has invaded everything,—land, labor, and the instruments of labor, products and the distribution of pro ducts.

Political economy itself has not been able to avoid admitting it.

"You almost always find across your path," says M. Rossi, "some monopoly. There is scarcely a product that can be regarded as the pure and simple result of labor; accordingly the economic law which proportions price to cost of production is never completely realized. It is a formula which is profoundly MODIFIED by the intervention of one or another of the monopolies to which the instruments of production are subordinated.—Course in Political Economy: Volume I., page 143.

M. Rossi holds too high an office to give his language all the precision and exactness which science requires when monopoly is in question. What he so complacently calls a MODIFICATION OF ECONOMIC FORMULAS is but a long and odious violation of the fundamental laws of labor and exchange. It is in consequence of monopoly that in society, net product being figured over and above gross product, the collective laborer must repurchase his own product at a price higher than that which this product costs him,—which is contradictory and impossible; that the natural balance between production and consumption is destroyed; that the laborer is deceived not only in his settlements, but also as to the amount of his wages; that in his case progress in comfort is changed into an incessant progress in misery: it is by monopoly, in short, that all notions of commutative justice are perverted, and that social economy, instead of the positive science that it is, becomes a veritable utopia.

This disguise of political economy under the influence of monopoly is a fact so remarkable in the history of social ideas that we must not neglect to cite a few instances.

Thus, from the standpoint of monopoly, value is no longer that synthetic conception which serves to express the relation of a special object of utility to the sum total of wealth: monopoly estimating things, not in their relation to society, but in their relation to itself, value loses its social character, and is nothing but a vague, arbitrary, egoistic, and essentially variable thing. Starting with this principle, the monopolist extends the term PRODUCT to cover all sorts of servitude, and applies the idea of CAPITAL to all the frivolous and shameful industries which his passions and vices exploit. The charms of a courtesan, says Say, are so much CAPITAL, of which the PRODUCT follows the general LAW of VALUES,—namely, SUPPLY and DEMAND. Most of the works on political economy are full of such applications. But as prostitution and the state of dependence from which it emanates are condemned by morality, M. Rossi will bid us observe the further fact that political economy, after having MODIFIED its formula in consequence of the intervention of monopoly, will have to submit to a new CORRECTIVE, although its conclusions are in themselves irreproachable. For, he says, political economy has nothing in common with morality: it is for us to accept it, to modify or correct its formulas, whenever our welfare, that of society, and the interests of morality call for it. How many things there are between political economy and truth!

Likewise, the theory of net product, so highly social, progressive, and conservative, has been individualized, if I may say so, by monopoly, and the principle which ought to secure society's welfare causes its ruin. The monopolist, always striving for the greatest possible net product, no longer acts as a member of society and in the interest of society; he acts with a view to his exclusive interest, whether this interest be contrary to the social interest or not. This change of perspective is the cause to which M. de Sismondi attributes the depopulation of the Roman Campagna. From the comparative researches which he has made regarding the product of the agro romano when in a state of cultivation and its product when left as pasture-land, he has found that the GROSS product would be twelve times larger in the former case than in the latter; but, as cultivation demands relatively a greater number of hands, he has discovered also that in the former case the NET product would be less. This calculation, which did not escape the proprietors, sufficed to confirm them in the habit of leaving their lands uncultivated, and hence the Roman Campagna is uninhabited.

"All parts of the Roman States," adds M. de Sismondi, "present the same contrast between the memories of their prosperity in the Middle Ages and their present desolation. The town of Ceres, made famous by Renzo da Ceri, who defended by turns Marseilles against Charles V. and Geneva against the Duke of Savoy, is nothing but a solitude. In all the fiefs of the Orsinis and the Colonnes not a soul. From the forests which surround the pretty Lake of Vico the human race has disappeared; and the soldiers with whom the formidable prefect of Vico made Rome tremble so often in the fourteenth century have left no descendants. Castro and Ronciglione are desolated."—Studies in Political Economy.

In fact, society seeks the greatest possible gross product, and consequently the greatest possible population, because with it gross product and net product are identical. Monopoly, on the contrary, aims steadily at the greatest net product, even though able to obtain it only at the price of the extermination of the human race.

Under this same influence of monopoly, interest on capital, perverted in its idea, has become in turn a principle of death to society. As we have explained it, interest on capital is, on the one hand, the form under which the laborer enjoys his net product, while utilizing it in new creations; on the other, this interest is the material bond of solidarity between producers, viewed from the standpoint of the increase of wealth. Under the first aspect, the aggregate interest paid can never exceed the amount of the capital itself; under the second, interest allows, in addition to reimbursement, a premium as a reward of service rendered. In no case does it imply perpetuity.

But monopoly, confounding the idea of capital, which is attributable only to the creations of human industry, with that of the exploitable material which nature has given us, and which belongs to all, and favored moreover in its usurpation by the anarchical condition of a society in which possession can exist only on condition of being exclusive, sovereign, and perpetual,—monopoly has imagined and laid it down as a principle that capital, like land, animals, and plants, had in itself an activity of its own, which relieved the capitalist of the necessity of contributing anything else to exchange and of taking any part in the labors of the workshop. From this false idea of monopoly has come the Greek name of usury, tokos, as much as to say the child or the increase of capital, which caused Aristotle to perpetrate this witticism: COINS BEGET NO CHILDREN. But the metaphor of the usurers has prevailed over the joke of the Stagyrite; usury, like rent, of which it is an imitation, has been declared a perpetual right; and only very lately, by a half-return to the principle, has it reproduced the idea of REDEMPTION.

Such is the meaning of the enigma which has caused so many scandals among theologians and legists, and regarding which the Christian Church has blundered twice,—first, in condemning every sort of interest, and, second, in taking the side of the economists and thus contradicting its old maxims. Usury, or the right of increase, is at once the expression and the condemnation of monopoly; it is the spoliation of labor by organized and legalized capital; of all the economic subversions it is that which most loudly accuses the old society, and whose scandalous persistence would justify an unceremonious and uncompensated dispossession of the entire capitalistic class.

Finally, monopoly, by a sort of instinct of self-preservation, has perverted even the idea of association, as something that might infringe upon it, or, to speak more accurately, has not permitted its birth.

Who could hope today to define what association among men should be? The law distinguishes two species and four varieties of civil societies, and as many commercial societies, from the simple partnership to the joint-stock company. I have read the most respectable commentaries that have been written upon all these forms of association, and I declare that I have found in them but one application of the routine practices of monopoly between two or more partners who unite their capital and their efforts against everything that produces and consumes, that invents and exchanges, that lives and dies. The sine qua non of all these societies is capital, whose presence alone constitutes them and gives them a basis; their object is monopoly,—that is, the exclusion of all other laborers and capitalists, and consequently the negation of social universality so far as persons are concerned.

Thus, according to the definition of the statute, a commercial society which should lay down as a principle the right of any stranger to become a member upon his simple request, and to straightway enjoy the rights and prerogatives of associates and even managers, would no longer be a society; the courts would officially pronounce its dissolution, its nonexistence. So, again, articles of association in which the contracting parties should stipulate no contribution of capital, but, while reserving to each the express right to compete with all, should confine themselves to a reciprocal guarantee of labor and wages, saying nothing of the branch of exploitation, or of capital, or of interest, or of profit and loss,—such articles would seem contradictory in their tenor, as destitute of purpose as of reason, and would be annulled by the judge on the complaint of the first rebellious associate. Covenants thus drawn up could give rise to no judicial action; people calling themselves the associates of everybody would be considered associates of nobody; treatises contemplating guarantee and competition between associates at the same time, without any mention of social capital and without any designation of purpose, would pass for a work of transcendental charlatanism, whose author could readily be sent to a madhouse, provided the magistrates would consent to regard him as only a lunatic.

And yet it is proved, by the most authentic testimony which history and social economy furnish, that humanity has been thrown naked and without capital upon the earth which it cultivates; consequently that it has created and is daily creating all the wealth that exists; that monopoly is only a relative view serving to designate the grade of the laborer, with certain conditions of enjoyment; and that all progress consists, while indefinitely multiplying products, in determining their proportionality,—that is, in organizing labor and comfort by division, machinery, the workshop, education, and competition. On the other hand, it is evident that all the tendencies of humanity, both in its politics and in its civil laws, are towards universalization,—that is, towards a complete transformation of the idea of society as determined by our statutes.

Whence I conclude that articles of association which should regulate, no longer the contribution of the associates,—since each associate, according to the economic theory, is supposed to possess absolutely nothing upon his entrance into society,—but the conditions of labor and exchange, and which should allow access to all who might present themselves,—I conclude, I say, that such articles of association would contain nothing that was not rational and scientific, since they would be the very expression of progress, the organic formula of labor, and since they would reveal, so to speak, humanity to itself by giving it the rudiment of its constitution.

Now, who, among the jurisconsults and economists, has ever approached even within a thousand leagues of this magnificent and yet so simple idea?

"I do not think," says M. Troplong, "that the spirit of association is called to greater destinies than those which it has accomplished in the past and up to the present time. . . ; and I confess that I have made no attempt to realize such hopes, which I believe exaggerated. . . . There are well-defined limits which association should not overstep. No! association is not called upon in France to govern everything. The spontaneous impulse of the individual mind is also a living force in our nation and a cause of its originality. . . .

"The idea of association is not new. . . . Even among the Romans we see the commercial society appear with all its paraphernalia of monopolies, corners, collusions, combinations, piracy, and venality. . . . The joint-stock company realizes the civil, commercial, and maritime law of the Middle Ages: at that epoch it was the most active instrument of labor organized in society. . . . From the middle of the fourteenth century we see societies form by stock subscriptions; and up to the time of Law's discomfiture, we see their number continually increase. . . . What! we marvel at the mines, factories, patents, and newspapers owned by stock companies! But two centuries ago such companies owned islands, kingdoms, almost an entire hemisphere. We proclaim it a miracle that hundreds of stock subscribers should group themselves around an enterprise; but as long ago as the fourteenth century the entire city of Florence was in similar silent partnership with a few merchants, who pushed the genius of enterprise as far as possible. Then, if our speculations are bad, if we have been rash, imprudent, or credulous, we torment the legislator with our cavilling complaints; we call upon him for prohibitions and nullifications. In our mania for regulating everything, EVEN THAT WHICH IS ALREADY CODIFIED; for enchaining everything by texts reviewed, corrected, and added to; for administering everything, even the chances and reverses of commerce,—we cry out, in the midst of so many existing laws: 'There is still something to do!'"

M. Troplong believes in Providence, but surely he is not its man.

He will not discover the formula of association clamored for today by minds disgusted with all the protocols of combination and rapine of which M. Troplong unrolls the picture in his commentary. M. Troplong gets impatient, and rightly, with those who wish to enchain everything in texts of laws; and he himself pretends to enchain the future in a series of fifty articles, in which the wisest mind could not discover a spark of economic science or a shadow of philosophy. IN OUR MANIA, he cries, FOR REGULATING EVERYTHING, EVEN THAT WHICH IS ALREADY CODIFIED! . . . . I know nothing more delicious than this stroke, which paints at once the jurisconsult and the economist. After the Code Napoleon, take away the ladder! . . .

"Fortunately," M. Troplong continues, "all the projects of change so noisily brought to light in 1837 and 1838 are forgotten today.

The conflict of propositions and the anarchy of reformatory opinions have led to negative results. At the same time that the reaction against speculators was effected, the common sense of the public did justice to the numerous official plans of organization, much inferior in wisdom to the existing law, much less in harmony with the usages of commerce, much less liberal, after 1830, than the conceptions of the imperial Council of State! Now order is restored in everything, and the commercial code has preserved its integrity, its excellent integrity. When commerce needs it, it finds, by the side of partnership, temporary partnership, and the joint-stock company, the free silent partnership, tempered only by the prudence of the silent partners and by the provisions of the penal code regarding swindling."—Troplong: Civil and Commercial Societies: Preface.

What a philosophy is that which rejoices in the miscarriage of reformatory endeavors, and which counts its triumphs by the NEGATIVE RESULTS of the spirit of inquiry! We cannot now enter upon a more fundamental criticism of the civil and commercial societies, which have furnished M. Troplong material for two volumes. We will reserve this subject for the time when, the theory of economic contradictions being finished, we shall have found in their general equation the programme of association, which we shall then publish in contrast with the practice and conceptions of our predecessors.

A word only as to silent partnership.

One might think at first blush that this form of joint-stock company, by its expansive power and by the facility for change which it offers, could be generalized in such a way as to take in an entire nation in all its commercial and industrial relations. But the most superficial examination of the constitution of this society demonstrates very quickly that the sort of enlargement of which it is susceptible, in the matter of the number of stockholders, has nothing in common with the extension of the social bond.

In the first place, like all other commercial societies, it is necessarily limited to a single branch of exploitation: in this respect it is exclusive of all industries foreign to that peculiarly its own. If it were otherwise, it would have changed its nature; it would be a new form of society, whose statutes would regulate, no longer the profits especially, but the distribution of labor and the conditions of exchange; it would be exactly such an association as M. Troplong denies and as the jurisprudence of monopoly excludes.

As for the personal composition of the company, it naturally divides itself into two categories,—the managers and the stockholders. The managers, very few in number, are chosen from the promoters, organizers, and patrons of the enterprise: in truth, they are the only associates. The stockholders, compared with this little government, which administers the society with full power, are a people of taxpayers who, strangers to each other, without influence and without responsibility, have nothing to do with the affair beyond their investments. They are lenders at a premium, not associates.

One can see from this how all the industries of the kingdom could be carried on by such companies, and each citizen, thanks to the facility for multiplying his shares, be interested in all or most of these companies without thereby improving his condition: it might happen even that it would be more and more compromised. For, once more, the stockholder is the beast of burden, the exploitable material of the company: not for him is this society formed. In order that association may be real, he who participates in it must do so, not as a gambler, but as an active factor; he must have a deliberative voice in the council; his name must be expressed or implied in the title of the society; everything regarding him, in short, should be regulated in accordance with equality. But these conditions are precisely those of the organization of labor, which is not taken into consideration by the code; they form the ULTERIOR object of political economy, and consequently are not to be taken for granted, but to be created, and, as such, are radically incompatible with monopoly.[20]

[20] Possibly these paragraphs will not be clear to all without the explanation that the form of association discussed in them, called in French the commandite, is a joint-stock company to which the shareholders simply lend their capital, without acquiring a share in the management or incurring responsibility for the results thereof.— Translator.



Socialism, in spite of its high-sounding name, has so far been no more fortunate than monopoly in the definition of society: we may even assert that, in all its plans of organization, it has steadily shown itself in this respect a plagiarist of political economy. M. Blanc, whom I have already quoted in discussing competition, and whom we have seen by turns as a partisan of the hierarchical principle, an officious defender of inequality, preaching communism, denying with a stroke of the pen the law of contradiction because he cannot conceive it, aiming above all at power as the final sanction of his system,—M. Blanc offers us again the curious example of a socialist copying political economy without suspecting it, and turning continually in the vicious circle of proprietary routine. M. Blanc really denies the sway of capital; he even denies that capital is equal to labor in production, in which he is in accord with healthy economic theories. But he can not or does not know how to dispense with capital; he takes capital for his point of departure; he appeals to the State for its silent partnership: that is, he gets down on his knees before the capitalists and recognizes the sovereignty of monopoly. Hence the singular contortions of his dialectics. I beg the reader's pardon for these eternal personalities: but since socialism, as well as political economy, is personified in a certain number of writers, I cannot do otherwise than quote its authors.

"Has or has not capital," said "La Phalange," "in so far as it is a faculty in production, the legitimacy of the other productive faculties? If it is illegitimate, its pretensions to a share of the product are illegitimate; it must be excluded; it has no interest to receive: if, on the contrary, it is legitimate, it cannot be legitimately excluded from participation in the profits, in the increase which it has helped to create."

The question could not be stated more clearly. M. Blanc holds, on the contrary, that it is stated in a VERY CONFUSED manner, which means that it embarrasses him greatly, and that he is much worried to find its meaning.

In the first place, he supposes that he is asked "whether it is equitable to allow the capitalist a share of the profits of production EQUAL TO THE LABORER'S." To which M. Blanc answers unhesitatingly that that would be unjust. Then follows an outburst of eloquence to establish this injustice.

Now, the phalansterian does not ask whether the share of the capitalist should or should not be EQUAL TO THE LABORER'S; he wishes to know simply WHETHER HE IS TO HAVE A SHARE. And to this M. Blanc makes no reply.

Is it meant, continues M. Blanc, that capital is INDISPENSABLE to production, like labor itself? Here M. Blanc distinguishes: he grants that capital is indispensable, AS labor is, but not TO THE EXTENT THAT labor is.

Once again, the phalansterian does not dispute as to quantity, but as to right.

Is it meant—it is still M. Blanc who interrogates—that all capitalists are not idlers? M. Blanc, generous to capitalists who work, asks why so large a share should be given to those who do not work? A flow of eloquence as to the IMPERSONAL services of the capitalist and the PERSONAL services of the laborer, terminated by an appeal to Providence.

For the third time, you are asked whether the participation of capital in profits is legitimate, since you admit that it is indispensable in production.

At last M. Blanc, who has understood all the time, decides to reply that, if he allows interest to capital, he does so only as a transitional measure and to ease the descent of the capitalists. For the rest, his project leading inevitably to the absorption of private capital in association, it would be folly and an abandonment of principle to do more. M. Blanc, if he had studied his subject, would have needed to say but a single phrase: "I deny capital."

Thus M. Blanc,—and under his name I include the whole of socialism,— after having, by a first contradiction of the title of his book, "ORGANIZATION OF LABOR," declared that capital was INDISPENSABLE in production, and consequently that it should be organized and participate in profits like labor, by a second contradiction rejects capital from organization and refuses to recognize it: by a third contradiction he who laughs at decorations and titles of nobility distributes civic crowns, rewards, and distinctions to such litterateurs inventors, and artists as shall have deserved well of the country; he allows them salaries according to their grades and dignities; all of which is the restoration of capital as really, though not with the same mathematical precision, as interest and net product: by a fourth contradiction M. Blanc establishes this new aristocracy on the principle of equality,— that is, he pretends to vote masterships to equal and free associates, privileges of idleness to laborers, spoliation in short to the despoiled: by a fifth contradiction he rests this equalitarian aristocracy on the basis of a POWER ENDOWED WITH GREAT FORCE,—that is, on despotism, another form of monopoly: by a sixth contradiction, after having, by his encouragements to labor and the arts, tried to proportion reward to service, like monopoly, and wages to capacity, like monopoly, he sets himself to eulogize life in common, labor and consumption in common, which does not prevent him from wishing to withdraw from the effects of common indifference, by means of national encouragements taken out of the common product, the grave and serious writers whom common readers do not care for: by a seventh contradiction. . . . but let us stop at seven, for we should not have finished at seventy-seven.

It is said that M. Blanc, who is now preparing a history of the French Revolution, has begun to seriously study political economy. The first fruit of this study will be, I do not doubt, a repudiation of his pamphlet on "Organization of Labor," and consequently a change in all his ideas of authority and government. At this price the "History of the French Revolution," by M. Blanc, will be a truly useful and original work.

All the socialistic sects, without exception, are possessed by the same prejudice; all, unconsciously, inspired by the economic contradiction, have to confess their powerlessness in presence of the necessity of capital; all are waiting, for the realization of their ideas, to hold power and money in their hands. The utopias of socialism in the matter of association make more prominent than ever the truth which we announced at the beginning: THERE IS NOTHING IN SOCIALISM WHICH IS NOT FOUND IN POLITICAL ECONOMY; and this perpetual plagiarism is the irrevocable condemnation of both. Nowhere is to be seen the dawn of that mother-idea, which springs with so much eclat from the generation of the economic categories,—that the superior formula of association has nothing to do with capital, a matter for individual accounts, but must bear solely upon equilibrium of production, the conditions of exchange, the gradual reduction of cost, the one and only source of the increase of wealth. Instead of determining the relations of industry to industry, of laborer to laborer, of province to province, and of people to people, the socialists dream only of providing themselves with capital, always conceiving the problem of the solidarity of laborers as if it were a question of founding some new institution of monopoly. The world, humanity, capital, industry, business machinery, exist; it is a matter now simply of finding their philosophy,—in other words, of organizing them: and the socialists are in search of capital! Always outside of reality, is it astonishing that they miss it?

Thus M. Blanc asks for State aid and the establishment of national workshops; thus Fourier asked for six million francs, and his followers are still engaged today in collecting that sum; thus the communists place their hope in a revolution which shall give them authority and the treasury, and exhaust themselves in waiting for useless subscriptions. Capital and power, secondary organs in society, are always the gods whom socialism adores: if capital and power did not exist, it would invent them. Through its anxieties about power and capital, socialism has completely overlooked the meaning of its own protests: much more, it has not seen that, in involving itself, as it has done, in the economic routine, it has deprived itself of the very right to protest. It accuses society of antagonism, and through the same antagonism it goes in pursuit of reform. It asks capital for the poor laborers, as if the misery of laborers did not come from the competition of capitalists as well as from the factitious opposition of labor and capital; as if the question were not today precisely what it was before the creation of capital,—that is, still and always a question of equilibrium; as if, in short,—let us repeat it incessantly, let us repeat it to satiety,—the question were henceforth of something other than a synthesis of all the principles brought to light by civilization, and as if, provided this synthesis, the idea which leads the world, were known, there would be any need of the intervention of capital and the State to make them evident.

Socialism, in deserting criticism to devote itself to declamation and utopia and in mingling with political and religious intrigues, has betrayed its mission and misunderstood the character of the century. The revolution of 1830 demoralized us; socialism is making us effeminate. Like political economy, whose contradictions it simply sifts again, socialism is powerless to satisfy the movement of minds: it is henceforth, in those whom it subjugates, only a new prejudice to destroy, and, in those who propagate it, a charlatanism to unmask, the more dangerous because almost always sincere.

CHAPTER VII.

FIFTH PERIOD.—POLICE, OR TAXATION.

In positing its principles humanity, as if in obedience to a sovereign order, never goes backward. Like the traveller who by oblique windings rises from the depth of the valley to the mountain-top, it follows intrepidly its zigzag road, and marches to its goal with confident step, without repentance and without pause. Arriving at the angle of monopoly, the social genius casts backward a melancholy glance, and, in a moment of profound reflection, says to itself:

"Monopoly has stripped the poor hireling of everything,—bread, clothing, home, education, liberty, and security. I will lay a tax upon the monopolist; at this price I will save him his privilege.

"Land and mines, woods and waters, the original domain of man, are forbidden to the proletaire. I will intervene in their exploitation, I will have my share of the products, and land monopoly shall be respected.

"Industry has fallen into feudalism, but I am the suzerain. The lords shall pay me tribute, and they shall keep the profit of their capital.

"Commerce levies usurious profits on the consumer. I will strew its road with toll-gates, I will stamp its checks and indorse its invoices, and it shall pass.

"Capital has overcome labor by intelligence. I will open schools, and the laborer, made intelligent himself, shall become a capitalist in his turn.

"Products lack circulation, and social life is cramped. I will build roads, bridges, canals, marts, theatres, and temples, and thus furnish at one stroke work, wealth, and a market.

"The rich man lives in plenty, while the workman weeps in famine. I will establish taxes on bread, wine, meat, salt, and honey, on articles of necessity and on objects of value, and these shall supply alms for my poor.

"And I will set guards over the waters, the woods, the fields, the mines, and the roads; I will send collectors to gather the taxes and teachers to instruct the children; I will have an army to put down refractory subjects, courts to judge them, prisons to punish them, and priests to curse them. All these offices shall be given to the proletariat and paid by the monopolists.

"Such is my certain and efficacious will."

We have to prove that society could neither think better nor act worse: this will be the subject of a review which, I hope, will throw new light upon the social problem.

Every measure of general police, every administrative and commercial regulation, like every law of taxation, is at bottom but one of the innumerable articles of this ancient bargain, ever violated and ever renewed, between the patriciate and the proletariat. That the parties or their representatives knew nothing of it, or even that they frequently viewed their political constitutions from another standpoint, is of little consequence to us: not to the man, legislator, or prince do we look for the meaning of his acts, but to the acts themselves.

% 1.—Synthetic idea of the tax.—Point of departure and development of this idea.

In order to render that which is to follow more intelligible, I will explain, inverting, as it were, the method which we have followed hitherto, the superior theory of the tax; then I will give its genesis; finally I will show the contradiction and results. The synthetic idea of the tax, as well as its original conception, would furnish material for the most extensive developments. I shall confine myself to a simple announcement of the propositions, with a summary indication of the proofs.

The tax, in its essence and positive destiny, is the form of distribution among that species of functionaries which Adam Smith has designated by the word UNPRODUCTIVE, although he admits as much as any one the utility and even the necessity of their labor in society. By this adjective, UNPRODUCTIVE, Adam Smith, whose genius dimly foresaw everything and left us to do everything, meant that the product of these laborers is NEGATIVE, which is a very different thing from null, and that consequently distribution so far as they are concerned follows a method other than exchange.

Let us consider, in fact, what takes place, from the point of view of distribution, in the four great divisions of collective labor,— EXTRACTION,[21] MANUFACTURES, COMMERCE, AGRICULTURE. Each producer brings to market a real product whose quantity can be measured, whose quality can be estimated, whose price can be debated, and, finally, whose value can be discounted, either in other services or merchandise, or else in money. In all these industries distribution, therefore, is nothing but the mutual exchange of products according to the law of proportionality of values.

[21] Hunting, fishing, mining,—in short, the gathering of all natural products.—Translator.



Nothing like this takes place with the functionaries called PUBLIC. These obtain their right to subsistence, not by the production of real utilities, but by the very state of unproductivity in which, by no fault of their own, they are kept. For them the law of proportionality is inverted: while social wealth is formed and increased in the direct ratio of the quantity, variety, and proportion of the effective products furnished by the four great industrial categories, the development of this same wealth, the perfecting of social order, suppose, on the contrary, so far as the personnel of police is concerned, a progressive and indefinite reduction. State functionaries, therefore, are very truly unproductive. On this point J. B. Say agreed with A. Smith, and all that he has written on this subject in correction of his master, and which has been stupidly included among his titles to glory, arises entirely, it is easy to see, from a misunderstanding. In a word, the wages of the government's employees constitute a social DEFICIT; they must be carried to the account of LOSSES, which it must be the object of industrial organization to continually diminish: in this view what other adjective could be used to describe the men of power than that of Adam Smith?

Here, then, is a category of services which, furnishing no real products, cannot be rewarded in the ordinary way; services which do not fall under the law of exchange, which cannot become the object of private speculation, competition, joint-stock association, or any sort of commerce, but which, theoretically regarded as performed gratuitously by all, but entrusted, by virtue of the law of division of labor, to a small number of special men who devote themselves exclusively to them, must consequently be paid for. History confirms this general datum. The human mind, which tries all solutions of every problem, has tried accordingly to submit public functions to exchange; for a long time French magistrates, like notaries, etc., lived solely by their fees. But experience has proved that this method of distribution applied to unproductive laborers was too expensive and subject to too many disadvantages, and it became necessary to abandon it.

The organization of the unproductive services contributes to the general welfare in several ways: first, by relieving producers of public cares, in which all must participate, and to which, consequently, all are more or less slaves; secondly, by establishing in society an artificial centralization, the image and prelude of the future solidarity of industries; and, finally, by furnishing a first attempt at balance and discipline.

So we admit, with J. B. Say, the usefulness of magistrates and the other agents of public authority; but we hold that this usefulness is wholly negative, and we insist, therefore, on describing these functionaries by the adjective unproductive which A. Smith applied to them, not to bring them into discredit, but because they really cannot be classed in the category of producers. "Taxation," very well says an economist of Say's school, M. J. Garnier,—"taxation is a PRIVATION which we should try to reduce to the furthest point of compatibility with the needs of society." If the writer whom I quote has reflected upon the meaning of his words, he has seen that the word PRIVATION which he uses is synonymous with NON-PRODUCTION, and that consequently those for whose benefit taxes are collected are very truly UNPRODUCTIVE laborers.

I insist upon this definition, which seems to me the less questionable from the fact that, however much they may dispute over the word, all agree upon the thing, because it contains the germ of the greatest revolution yet to be accomplished in the world,—I mean the subordination of the unproductive functions to the productive functions, in a word, the effective submission, always asked and never obtained, of authority to the citizens.

It is a consequence of the development of the economical contradictions that order in society first shows itself inverted; that that which should be above is placed below, that which should be in relief seems sunken, and that which should receive the light is thrown into the shadow. Thus power, which, in its essence, is, like capital, the auxiliary and subordinate of labor, becomes, through the antagonism of society, the spy, judge, and tyrant of the productive functions; power, whose original inferiority lays upon it the duty of obedience, is prince and sovereign.

In all ages the laboring classes have pursued against the office-holding class the solution of this antinomy, of which economic science alone can give the key. The oscillations—that is, the political agitations which result from this struggle of labor against power—now lead to a depression of the central force, which compromises the very existence of society; now, exaggerating this same force beyond measure, give birth to despotism. Then, the privileges of command, the infinite joy which it gives to ambition and pride, making the unproductive functions an object of universal lust, a new leaven of discord penetrates society, which, divided already in one direction into capitalists and wage-workers, and in another into producers and non-producers, is again divided as regards power into monarchists and democrats. The conflicts between royalty and the republic would furnish us most marvellous and interesting material for our episodes. The confines of this work do not permit us so long an excursion; and after having pointed out this new branch in the vast network of human aberrations, we shall confine ourselves exclusively, in dealing with taxation, to the economic question.

Such, then, in succinctest statement, is the synthetic theory of the tax,—that is, if I may venture to use the familiar comparison, of this fifth wheel of the coach of humanity, which makes so much noise, and which, in governmental parlance, is styled the State. The State, the police, or their means of existence, the tax, is, I repeat, the official name of the class designated in political economy as nonproducers,—in short, as the domestics of society.

But public reason does not attain at a single bound this simple idea, which for centuries had to remain in the state of a transcendental conception. Before civilization can mount to such a height, it must pass through frightful tempests and innumerable revolutions, in each of which, one might say, it renews its strength in a bath of blood. And when at last production, represented by capital, seems on the point of thoroughly subordinating the unproductive organ, the State, then society rises in indignation, labor weeps at the prospect of its immediate freedom, democracy shudders at the abasement of power, justice cries out as if scandalized, and all the oracles of the departing gods exclaim with terror that the abomination of desolation is in the holy places and that the end of the world has come. So true is it that humanity never desires what it seeks, and that the slightest progress cannot be realized without spreading panic among the peoples.

What, then, in this evolution, is the point of departure of society, and by what circuitous route does it reach political reform,—that is, economy in its expenditures, equality in the assessment of its taxes, and the subordination of power to industry? That is what we are about to state in a few words, reserving developments for the sequel.

The original idea of the tax is that of REDEMPTION.

As, by the law of Moses, each first-born was supposed to belong to Jehovah, and had to be redeemed by an offering, so the tax everywhere presents itself in the form of a tithe or royal prerogative by which the proprietor annually redeems from the sovereign the profit of exploitation which he is supposed to hold only by his pleasure. This theory of the tax, moreover, is but one of the special articles of what is called the social contract.

Ancients and moderns all agree, in terms more or less explicit, in regarding the juridical status of societies as a reaction of weakness against strength. This idea is uppermost in all the works of Plato, notably in the "Gorgias," where he maintains, with more subtlety than logic, the cause of the laws against that of violence,—that is, legislative absolutism against aristocratic and military absolutism. In this knotty dispute, in which the weight of evidence is equal on both sides, Plato simply expresses the sentiment of entire antiquity. Long before him, Moses, in making a distribution of lands, declaring patrimony inalienable, and ordering a general and uncompensated cancellation of all mortgages every fiftieth year, had opposed a barrier to the invasions of force. The whole Bible is a hymn to JUSTICE,—that is, in the Hebrew style, to charity, to kindness to the weak on the part of the strong, to voluntary renunciation of the privilege of power. Solon, beginning his legislative mission by a general abolition of debts, and creating rights and reserves,—that is, barriers to prevent their return,—was no less reactionary. Lycurgus went farther; he forbade individual possession, and tried to absorb the man in the State, annihilating liberty the better to preserve equilibrium. Hobbes, deriving, and with great reason, legislation from the state of war, arrived by another road at the establishment of equality upon an exception,—despotism. His book, so much calumniated, is only a development of this famous antithesis. The charter of 1830, consecrating the insurrection made in '89 by the plebeians against the nobility, and decreeing the abstract equality of persons before the law, in spite of the real inequality of powers and talents which is the veritable basis of the social system now in force, is also but a protest of society in favor of the poor against the rich, of the small against the great. All the laws of the human race regarding sale, purchase, hire, property, loans, mortgages, prescription, inheritance, donation, wills, wives' dowries, minority, guardianship, etc., etc., are real barriers erected by judicial absolutism against the absolutism of force. Respect for contracts, fidelity to promises, the religion of the oath, are fictions, osselets,[22] as the famous Lysander aptly said, with which society deceives the strong and brings them under the yoke.

[22] Little bones taken from the joints of animals and serving as playthings for children.—Translator.



The tax belongs to that great family of preventive, coercive, repressive, and vindictive institutions which A. Smith designated by the generic term police, and which is, as I have said, in its original conception, only the reaction of weakness against strength. This follows, independently of abundant historical testimony which we will put aside to confine ourselves exclusively to economic proof, from the distinction naturally arising between taxes.

All taxes are divisible into two great categories: (1) taxes of assessment, or of privilege: these are the oldest taxes; (2) taxes of consumption, or of quotite,[23] whose tendency is, by absorbing the former, to make public burdens weigh equally upon all.

[23] A tax whose total product is not fixed in advance, but depends upon the quantity of things or persons upon whom it happens to fall.— Translator.



The first sort of taxes—including in France the tax on land, the tax on doors and windows, the poll-tax, the tax on personal property, the tax on tenants, license-fees, the tax on transfers of property, the tax on officials' fees, road-taxes, and brevets—is the share which the sovereign reserves for himself out of all the monopolies which he concedes or tolerates; it is, as we have said, the indemnity of the poor, the permit granted to property. Such was the form and spirit of the tax in all the old monarchies: feudalism was its beau ideal. Under that regime the tax was only a TRIBUTE paid by the holder to the universal proprietor or sleeping-partner (commanditaire), the king.

When later, by the development of public right, royalty, the patriarchal form of sovereignty, begins to get impregnated by the democratic spirit, the tax becomes a quota which each voter owes to the COMMONWEALTH, and which, instead of falling into the hand of the prince, is received into the State treasury. In this evolution the principle of the tax remains intact; as yet there is no transformation of the institution; the real sovereign simply succeeds the figurative sovereign. Whether the tax enters into the peculium of the prince or serves to liquidate a common debt, it is in either case only a claim of society against privilege; otherwise, it is impossible to say why the tax is levied in the ratio of fortunes.

Let all contribute to the public expenses: nothing more just. But why should the rich pay more than the poor? That is just, they say, because they possess more. I confess that such justice is beyond my comprehension. . . . One of two things is true: either the proportional tax guarantees a privilege to the larger tax-payers, or else it is a wrong. Because, if property is a natural right, as the Declaration of '93 declares, all that belongs to me by virtue of this right is as sacred as my person; it is my blood, my life, myself: whoever touches it offends the apple of my eye. My income of one hundred thousand francs is as inviolable a the grisette's daily wage of seventy-five centimes; her attic is no more sacred than my suite of apartments. The tax is not levied in proportion to physical strength, size, or skill: no more should it be levied in proportion to property.—What is Property: Chapter II.

These observations are the more just because the principle which it was their purpose to oppose to that of proportional assessment has had its period of application. The proportional tax is much later in history than liege-homage, which consisted in a simple officious demonstration without real payment.

The second sort of taxes includes in general all those designated, by a sort of antiphrasis, by the term INDIRECT, such as taxes on liquor, salt, and tobacco, customs duties, and, in short, all the taxes which DIRECTLY affect the only thing which should be taxed,—product. The principle of this tax, whose name is an actual misnomer, is unquestionably better founded in theory and more equitable in tendency than the preceding: accordingly, in spite of the opinion of the mass, always deceived as to that which serves it as well as to that which is prejudicial to it, I do not hesitate to say that this tax is the only normal one, barring its assessment and collection, with which it is not my purpose now to deal.

For, if it is true, as we have just explained, that the real nature of the tax is to pay, according to a particular form of wages, for certain services which elude the usual form of exchange, it follows that all producers, enjoying these services equally as far as personal use is concerned, should contribute to their payment in equal portions. The share for each, therefore, would be a fraction of his exchangeable product, or, in other words, an amount taken from the values delivered by him for purposes of consumption. But, under the monopoly system, and with collection upon land, the treasury strikes the product before it has entered into exchange, even before it is produced,—a circumstance which results in throwing back the amount of the tax into the cost of production, and consequently puts the burden upon the consumer and lifts it from monopoly.

Whatever the significance of the tax of assessment or the tax of quotite, one thing is sure, and this is the thing which it is especially important for us to know,—namely, that, in making the tax proportional, it was the intention of the sovereign to make citizens contribute to the public expenses, no longer, according to the old feudal principle, by means of a poll-tax, which would involve the idea of an assessment figured in the ratio of the number of persons taxed, and not in the ratio of their possessions, but so much per franc of capital, which supposes that capital has its source in an authority superior to the capitalists. Everybody, spontaneously and with one accord, considers such an assessment just; everybody, therefore, spontaneously and with one accord, looks upon the tax as a resumption on the part of society, a sort of redemption exacted from monopoly. This is especially striking in England, where, by a special law, the proprietors of the soil and the manufacturers pay, in proportion to their incomes, a tax of forty million dollars, which is called the poor-rate.

In short, the practical and avowed object of the tax is to effect upon the rich, for the benefit of the people, a proportional resumption of their capital.

Now, analysis and the facts demonstrate:

That the tax of assessment, the tax upon monopoly, instead of being paid by those who possess, is paid almost entirely by those who do not possess;

That the tax of quotite, separating the producer from the consumer, falls solely upon the latter, thereby taking from the capitalist no more than he would have to pay if fortunes were absolutely equal;

Finally, that the army, the courts, the police, the schools, the hospitals, the almshouses, the houses of refuge and correction, public functions, religion itself, all that society creates for the protection, emancipation, and relief of the proletaire, paid for in the first place and sustained by the proletaire, is then turned against the proletaire or wasted as far as he is concerned; so that the proletariat, which at first labored only for the class that devours it,—that of the capitalists,—must labor also for the class that flogs it,—that of the nonproducers.

These facts are henceforth so well known, and the economists—I owe them this justice—have shown them so clearly, that I shall abstain from correcting their demonstrations, which, for the rest, are no longer contradicted by anybody. What I propose to bring to light, and what the economists do not seem to have sufficiently understood, is that the condition in which the laborer is placed by this new phase of social economy is susceptible of no amelioration; that, unless industrial organization, and therefore political reform, should bring about an equality of fortunes, evil is inherent in police institutions as in the idea of charity which gave them birth; in short, that the STATE, whatever form it affects, aristocratic or theocratic, monarchical or republican, until it shall have become the obedient and submissive organ of a society of equals, will be for the people an inevitable hell,—I had almost said a deserved damnation.

% 2.—Antinomy of the tax.

I sometimes hear the champions of the statu quo maintain that for the present we enjoy liberty enough, and that, in spite of the declamation against the existing order, we are below the level of our institutions. So far at least as taxation is concerned, I am quite of the opinion of these optimists.

According to the theory that we have just seen, the tax is the reaction of society against monopoly. Upon this point opinions are unanimous: citizens and legislators, economists, journalists, and ballad-writers, rendering, each in their own tongue, the social thought, vie with each other in proclaiming that the tax should fall upon the rich, strike the superfluous and articles of luxury, and leave those of prime necessity free. In short, they have made the tax a sort of privilege for the privileged: a bad idea, since it involved a recognition of the legitimacy of privilege, which in no case, whatever shape it may take, is good for anything. The people had to be punished for this egoistic inconsistency: Providence did not fail in its duty.

From the moment, then, of the conception of the tax as a counter-claim, it had to be fixed proportionally to means, whether it struck capital or affected income more especially. Now, I will point out that the levying of the tax at so much a franc being precisely that which should be adopted in a country where all fortunes were equal, saving the differences in the cost of assessment and collection, the treasury is the most liberal feature of our society, and that on this point our morals are really behind our institutions. But as with the wicked the best things cannot fail to be detestable, we shall see the equalitarian tax crush the people precisely because the people are not up to it.

I will suppose that the gross income in France, for each family of four persons, is 1,000 francs: this is a little above the estimate of M. Chevalier, who places it at only 63 centimes a day for each individual, or 919 francs 80 centimes for each household. The tax being today more than a thousand millions, or about an eighth of the total income, each family, earning 1,000 francs a year, is taxed 125 francs.

Accordingly, an income of 2,000 francs pays 250 francs; an income of 3,000 francs, 375; an income of 4,000 francs, 500, etc. The proportion is strict and mathematically irreproachable; the treasury, by arithmetic, is sure of losing nothing.

But on the side of the taxpayers the affair totally changes its aspect. The tax, which, in the intention of the legislator, was to have been proportioned to fortune, is, on the contrary, progressive in the ratio of poverty, so that, the poorer the citizen is, the more he pays. This I shall try to make plain by a few figures.

According to the proportional tax, there is due to the treasury: for an income of 1,000 2,000 3,000 4,000 5,000 6,000 francs, etc. a tax of 125 250 375 500 625 750

According to this series, then, the tax seems to increase proportionally to income.

But when it is remembered that each annual income is made up of 365 units, each of which represents the daily income of the taxpayer, the tax will no longer be found proportional; it will be found equal. In fact, if the State levies a tax of 125 francs on an income of 1,000 francs, it is as if it took from the taxed family 45 days' subsistence; likewise the assessments of 250, 375, 500, 625, and 750 francs, corresponding to incomes of 2,000, 3,000, 4,000, 5,000, and 6,000 francs, constitute in each case a tax of 45 days' pay upon each of those who enjoy these incomes.

I say now that this equality of taxation is a monstrous inequality, and that it is a strange illusion to imagine that, because the daily income is larger, the tax of which it is the base is higher. Let us change our point of view from that of personal to that of collective income.

As an effect of monopoly social wealth abandoning the laboring class to go to the capitalistic class, the object of taxation has been to moderate this displacement and react against usurpation by enforcing a proportional replevin upon each privileged person. But proportional to what? To the excess which the privileged person has received undoubtedly, and not to the fraction of the social capital which his income represents. Now, the object of taxation is missed and the law turned into derision when the treasury, instead of taking its eighth where this eighth exists, asks it precisely of those to whom it should be restored. A final calculation will make this evident.

Setting the daily income of each person in France at 68 centimes, the father of a family who, whether as wages or as income from his capital, receives 1,000 francs a year receives four shares of the national income; he who receives 2,000 francs has eight shares; he who receives 4,000 francs has sixteen, etc. Hence it follows that the workman who, on an income of 1,000 francs, pays 125 francs into the treasury renders to public order half a share, or an eighth of his income and his family's subsistence; whereas the capitalist who, on an income of 6,000 francs, pays only 750 francs realizes a profit of 17 shares out of the collective income, or, in other words, gains by the tax 425 per cent.

Let us reproduce the same truth in another form.

The voters of France number about 200,000. I do not know the total amount of taxes paid by these 200,000 voters, but I do not believe that I am very far from the truth in supposing an average of 300 francs each, or a total of 60,000,000 for the 200,000 voters, to which we will add twenty-five per cent. to represent their share of indirect taxes, making in all 75,000,000, or 75 francs for each person (supposing the family of each voter to consist of five persons), which the electoral class pays to the State. The appropriations, according to the "Annuaire Economique" for 1845, being 1,106,000,000, there remains 1,031,000,000, which makes the tax paid by each non-voting citizen 31 francs 30 centimes,—two-fifths of the tax paid by the wealthy class. Now, for this proportion to be equitable, the average welfare of the non-voting class would have to be two-fifths of the average welfare of the voting class: but such is not the truth, as it falls short of this by more than three-fourths.

But this disproportion will seem still more shocking when it is remembered that the calculation which we have just made concerning the electoral class is altogether wrong, altogether in favor of the voters.

In fact, the only taxes which are levied for the enjoyment of the right of suffrage are: (1) the land tax; (2) the tax on polls and personal property; (3) the tax on doors and windows; (4) license-fees. Now, with the exception of the tax on polls and personal property, which varies little, the three other taxes are thrown back on the consumers; and it is the same with all the indirect taxes, for which the holders of capital are reimbursed by the consumers, with the exception, however, of the taxes on property transfers, which fall directly on the proprietor and amount in all to 150,000,000. Now, if we estimate that in this last amount the property of voters figures as one-sixth, which is placing it high, the portion of direct taxes (409,000,000) being 12 francs for each person, and that of indirect taxes (547,000,000) 16 francs, the average tax paid by each voter having a household of five will reach a total of 265 francs, while that paid by the laborer, who has only his arms to support himself, his wife, and two children, will be 112 francs. In more general terms, the average tax upon each person belonging to the upper classes will be 53 francs; upon each belonging to the lower, 28. Whereupon I renew my question: Is the welfare of those below the voting standard half as great as that of those above it?

It is with the tax as with periodical publications, which really cost more the less frequently they appear. A daily journal costs forty francs, a weekly ten francs, a monthly four. Supposing other things to be equal, the subscription prices of these journals are to each other as the numbers forty, seventy, and one hundred and twenty, the price rising with the infrequency of publication. Now, this exactly represents the increase of the tax: it is a subscription paid by each citizen in exchange for the right to labor and to live. He who uses this right in the smallest proportion pays much; he who uses it a little more pays less; he who uses it a great deal pays little.

The economists are generally in agreement about all this. They have attacked the proportional tax, not only in its principle, but in its application; they have pointed out its anomalies, almost all of which arise from the fact that the relation of capital to income, or of cultivated surface to rent, is never fixed.

Given a levy of one-tenth on the income from lands, and lands of different qualities producing, the first eight francs' worth of grain, the second six francs' worth, the third five francs' worth, the tax will call for one-eighth of the income from the most fertile land, one-sixth from that a little less fertile, and, finally, one-fifth from that less fertile still.[24] Will not the tax thus established be just the reverse of what it should be? Instead of land, we may suppose other instruments of production, and compare capitals of the same value, or amounts of labor of the same order, applied to branches of industry differing in productivity: the conclusion will be the same. There is injustice in requiring the same poll-tax of ten francs from the laborer who earns one thousand francs and from the artist or physician who has an income of sixty thousand.—J. Garnier: Principles of Political Economy.

[24] This sentence, as it stands, is unintelligible, and probably is not correctly quoted by Proudhon. At any rate, one of Garnier's works contains a similar passage, which begins thus: "Given a levy of one on the area of the land, and lands of different qualities producing, the first eight, the second six, the third five, the tax will call for one- eighth," etc. This is perfectly clear, and the circumstances supposed are aptly illustrative of Proudhon's point. I should unhesitatingly pronounce it the correct version, except for the fact that Proudhon, in the succeeding paragraph, interprets Garnier as supposing income to be assessed instead of capital.—Translator.



These reflections are very sound, although they apply only to collection or assessment, and do not touch the principle of the tax itself. For, in supposing the assessment to be made upon income instead of upon capital, the fact always remains that the tax, which should be proportional to fortunes, is borne by the consumer.

The economists have taken a resolve; they have squarely recognized the iniquity of the proportional tax.

"The tax," says Say, "can never be levied upon the necessary." This author, it is true, does not tell us what we are to understand by the necessary, but we can supply the omission. The necessary is what each individual gets out of the total product of the country, after deducting what must be taken for taxes. Thus, making the estimate in round numbers, the production of France being eight thousand millions and the tax one thousand millions, the necessary in the case of each individual amounts to fifty-six and a half centimes a day. Whatever is in excess of this income is alone susceptible of being taxed, according to J. B. Say; whatever falls short of it must be regarded by the treasury as inviolable.

The same author expresses this idea in other words when he says: "The proportional tax is not equitable." Adam Smith had already said before him: "It is not unreasonable that the rich man should contribute to the public expenses, not only in proportion to his income, but something more." "I will go further," adds Say; "I will not fear to say that the progressive tax is the only equitable tax." And M. J. Garnier, the latest abridger of the economists, says: "Reforms should tend to establish a progressional equality, if I may use the phrase, much more just, much more equitable, than the pretended equality of taxation, which is only a monstrous inequality."

So, according to general opinion and the testimony of the economists, two things are acknowledged: one, that in its principle the tax is a reaction against monopoly and directed against the rich; the other, that in practice this same tax is false to its object; that, in striking the poor by preference, it commits an injustice; and that the constant effort of the legislator must be to distribute its burden in a more equitable fashion.

I needed to establish this double fact solidly before passing to other considerations: now commences my criticism.

The economists, with that simplicity of honest folk which they have inherited from their elders and which even today is all that stands to their credit, have taken no pains to see that the progressional theory of the tax, which they point out to governments as the ne plus ultra of a wise and liberal administration, was contradictory in its terms and pregnant with a legion of impossibilities. They have attributed the oppression of the treasury by turns to the barbarism of the time, the ignorance of princes, the prejudices of caste, the avarice of collectors, everything, in short, which, in their opinion, preventing the progression of the tax, stood in the way of the sincere practice of equality in the distribution of public burdens; they have not for a moment suspected that what they asked under the name of progressive taxation was the overturn of all economic ideas.

Thus they have not seen, for instance, that the tax was progressive from the very fact that it was proportional, the only difference being that the progression was in the wrong direction, the percentage being, as we have said, not directly, but inversely proportional to fortunes. If the economists had had a clear idea of this overturn, invariable in all countries where taxation exists, so singular a phenomenon would not have failed to draw their attention; they would have sought its causes, and would have ended by discovering that what they took for an accident of civilization, an effect of the inextricable difficulties of human government, was the product of the contradiction inherent in all political economy.

The progressive tax, whether applied to capital or to income, is the very negation of monopoly, of that monopoly which is met everywhere, according to M. Rossi, across the path of social economy; which is the true stimulant of industry, the hope of economy, the preserver and parent of all wealth; of which we have been able to say, in short, that society cannot exist without it, but that, except for it, there would be no society. Let the tax become suddenly what it unquestionably must sometime be,—namely, the proportional (or progressional, which is the same thing) contribution of each producer to the public expenses, and straightway rent and profit are confiscated everywhere for the benefit of the State; labor is stripped of the fruits of its toil; each individual being reduced to the proper allowance of fifty-six and a half centimes, poverty becomes general; the compact formed between labor and capital is dissolved, and society, deprived of its rudder, drifts back to its original state.

It will be said, perhaps, that it is easy to prevent the absolute annihilation of the profits of capital by stopping the progression at any moment.

Eclecticism, the golden mean, compromise with heaven or with morality: is it always to be the same philosophy, then? True science is repugnant to such arrangements. All invested capital must return to the producer in the form of interest; all labor must leave a surplus, all wages be equal to product. Under the protection of these laws society continually realizes, by the greatest variety of production, the highest possible degree of welfare. These laws are absolute; to violate them is to wound, to mutilate society. Capital, accordingly, which, after all, is nothing but accumulated labor, is inviolable. But, on the other hand, the tendency to equality is no less imperative; it is manifested at each economic phase with increasing energy and an invincible authority. Therefore you must satisfy labor and justice at once; you must give to the former guarantees more and more real, and secure the latter without concession or ambiguity.

Instead of that, you know nothing but the continual substitution of the good pleasure of the prince for your theories, the arrest of the course of economic law by arbitrary power, and, under the pretext of equity, the deception of the wage worker and the monopolist alike! Your liberty is but a half-liberty, your justice but a half-justice, and all your wisdom consists in those middle terms whose iniquity is always twofold, since they justify the pretensions of neither one party nor the other! No, such cannot be the science which you have promised us, and which, by unveiling for us the secrets of the production and consumption of wealth, must unequivocally solve the social antinomies. Your semi- liberal doctrine is the code of despotism, and shows that you are powerless to advance as well as ashamed to retreat.

If society, pledged by its economic antecedents, can never retrace its steps; if, until the arrival of the universal equation, monopoly must be maintained in its possession,—no change is possible in the laying of taxes: only there is a contradiction here, which, like every other, must be pushed till exhausted. Have, then, the courage of your opinions,— respect for wealth, and no pity for the poor, whom the God of monopoly has condemned. The less the hireling has wherewith to live, the more he must pay: qui minus habet, etiam quod habet auferetur ab eo. This is necessary, this is inevitable; in it lies the safety of society.

Let us try, nevertheless, to reverse the progression of the tax, and so arrange it that the capitalist, instead of the laborer, will pay the larger share.

I observe, in the first place, that with the usual method of collection, such a reversal is impracticable.

In fact, if the tax falls on exploitable capital, this tax, in its entirety, is included among the costs of production, and then of two things one: either the product, in spite of the increase in its selling value, will be bought by the consumer, and consequently the producer will be relieved of the tax; or else this same product will be thought too dear, and in that case the tax, as J. B. Say has very well said, acts like a tithe levied on seed,—it prevents production. Thus it is that too high a tax on the transfer of titles arrests the circulation of real property, and renders estates less productive by keeping them from changing hands.

If, on the contrary, the tax falls on product, it is nothing but a tax of quotite, which each pays in the ratio of his consumption, while the capitalist, whom it is purposed to strike, escapes.

Moreover, the supposition of a progressive tax based either on product or on capital is perfectly absurd. How can we imagine the same product paying a duty of ten per cent. at the store of one dealer and a duty of but five at another's? How are estates already encumbered with mortgages and which change owners every day, how is a capital formed by joint investment or by the fortune of a single individual, to be distinguished upon the official register, and taxed, not in the ratio of their value or rent, but in the ratio of the fortune or presumed profits of the proprietor?

There remains, then, a last resource,—to tax the net income of each tax-payer, whatever his method of getting it. For instance, an income of one thousand francs would pay ten per cent.; an income of two thousand francs, twenty per cent.; an income of three thousand francs, thirty per cent., etc. We will set aside the thousand difficulties and annoyances that must be met in ascertaining these incomes, and suppose the operation as easy as you like. Well! that is exactly the system which I charge with hypocrisy, contradiction, and injustice.

I say in the first place that this system is hypocritical, because, instead of taking from the rich that entire portion of their income in excess of the average national product per family, which is inadmissible, it does not, as is imagined, reverse the order of progression in the direction of wealth; at most it changes the rate of progression. Thus the present progression of the tax, for fortunes yielding incomes of a thousand francs and UNDER, being as that of the numbers 10, 11, 12, 13, etc., and, for fortunes yielding incomes of a thousand francs and OVER, as that of the numbers 10, 9, 8, 7, 6, etc.,— the tax always increasing with poverty and decreasing with wealth,—if we should confine ourselves to lifting the indirect tax which falls especially on the poorer class and imposing a corresponding tax upon the incomes of the richer class, the progression thereafter, it is true, would be, for the first, only as that of the numbers 10, 10.25, 10.50, 10.75, 11, 11.25, etc., and, for the second, as 10, 9.75, 9.50, 9.25, 9, 8.75, etc. But this progression, although less rapid on both sides, would still take the same direction nevertheless, would still be a reversal of justice; and it is for this reason that the so-called progressive tax, capable at most of giving the philanthropist something to babble about, is of no scientific value. It changes nothing in fiscal jurisprudence; as the proverb says, it is always the poor man who carries the pouch, always the rich man who is the object of the solicitude of power.

I add that this system is contradictory.

In fact, ONE CANNOT BOTH GIVE AND KEEP, say the jurisconsults. Instead, then, of consecrating monopolies from which the holders are to derive no privilege save that of straightway losing, with the income, all the enjoyment thereof, why not decree the agrarian law at once? Why provide in the constitution that each shall freely enjoy the fruit of his labor and industry, when, by the fact or the tendency of the tax, this permission is granted only to the extent of a dividend of fifty-six and a half centimes a day,—a thing, it is true, which the law could not have foreseen, but which would necessarily result from progression? The legislator, in confirming us in our monopolies, intended to favor production, to feed the sacred fire of industry: now, what interest shall we have to produce, if, though not yet associated, we are not to produce for ourselves alone? After we have been declared free, how can we be made subject to conditions of sale, hire, and exchange which annul our liberty?

A man possesses government securities which bring him an income of twenty thousand francs. The tax, under the new system of progression, will take fifty per cent. of this from him. At this rate it is more advantageous to him to withdraw his capital and consume the principal instead of the income. Then let him be repaid. What! repaid! The State cannot be obliged to repay; and, if it consents to redeem, it will do so in proportion to the net income. Therefore a bond for twenty thousand francs will be worth not more than ten thousand to the bondholder, because of the tax, if he wishes to get it redeemed by the State: unless he divides it into twenty lots, in which case it will return him double the amount. Likewise an estate which rents for fifty thousand francs, the tax taking two-thirds of the income, will lose two- thirds of its value. But let the proprietor divide this estate into a hundred lots and sell it at auction, and then, the terror of the treasury no longer deterring purchasers, he can get back his entire capital. So that, with the progressive tax, real estate no longer follows the law of supply and demand and is not valued according to the real income which it yields, but according to the condition of the owner. The consequence will be that large capitals will depreciate in value, and mediocrity be brought to the front; land-owners will hasten to sell, because it will be better for them to consume their property than to get an insufficient rent from it; capitalists will recall their investments, or will invest only at usurious rates; all exploitation on a large scale will be prohibited, every visible fortune proceeded against, and all accumulation of capital in excess of the figure of the necessary proscribed. Wealth, driven back, will retire within itself and never emerge except by stealth; and labor, like a man attached to a corpse, will embrace misery in an endless union. Does it not well become the economists who devise such reforms to laugh at the reformers?

After having demonstrated the contradiction and delusion of the progressive tax, must I prove its injustice also? The progressive tax, as understood by the economists and, in their wake, by certain radicals, is impracticable, I said just now, if it falls on capital and product: consequently I have supposed it to fall on incomes. But who does not see that this purely theoretical distinction between capital, product, and income falls so far as the treasury is concerned, and that the same impossibilities which we have pointed out reappear here with all their fatal character?

A manufacturer discovers a process by means of which, saving twenty per cent. of his cost of production, he secures an income of twenty-five thousand francs. The treasury calls on him for fifteen thousand. He is obliged, therefore, to raise his prices, since, by the fact of the tax, his process, instead of saving twenty per cent., saves only eight per cent. Is not this as if the treasury prevented cheapness? Thus, in trying to reach the rich, the progressive tax always reaches the consumer; and it is impossible for it not to reach him without suppressing production altogether: what a mistake!

It is a law of social economy that all invested capital must return continually to the capitalist in the form of interest. With the progressive tax this law is radically violated, since, by the effect of progression, interest on capital is so reduced that industries are established only at a loss of a part or the whole of the capital. To make it otherwise, interest on capital would have to increase progressively in the same ratio as the tax itself, which is absurd. Therefore the progressive tax stops the creation of capital; furthermore it hinders its circulation. Whoever, in fact, should want to buy a plant for any enterprise or a piece of land for cultivation would have to consider, under the system of progressive taxation, not the real value of such plant or land, but rather the tax which it would bring upon him; so that, if the real income were four per cent., and, by the effect of the tax or the condition of the buyer, must go down to three, the purchase could not be effected. After having run counter to all interests and thrown the market into confusion by its categories, the progressive tax arrests the development of wealth and reduces venal value below real value; it contracts, it petrifies society. What tyranny! What derision!

The progressive tax resolves itself, then, whatever may be done, into a denial of justice, prohibition of production, confiscation. It is unlimited and unbridled absolutism, given to power over everything which, by labor, by economy, by improvements, contributes to public wealth.

But what is the use of wandering about in chimerical hypotheses when the truth is at hand. It is not the fault of the proportional principle if the tax falls with such shocking inequality upon the various classes of society; the fault is in our prejudices and our morals. The tax, as far as is possible in human operations, proceeds with equity, precision. Social economy commands it to apply to product; it applies to product. If product escapes it, it strikes capital: what more natural! The tax, in advance of civilization, supposes the equality of laborers and capitalists: the inflexible expression of necessity, it seems to invite us to make ourselves equals by education and labor, and, by balancing our functions and associating our interests, to put ourselves in accord with it. The tax refuses to distinguish between one man and another: and we blame its mathematical severity for the differences in our fortunes! We ask equality itself to comply with our injustice! Was I not right in saying at the outset that, relatively to the tax, we are behind our institutions?

Accordingly we always see the legislator stopping, in his fiscal laws, before the subversive consequences of the progressive tax, and consecrating the necessity, the immutability of the proportional tax. For equality in well-being cannot result from the violation of capital: the antinomy must be methodically solved, under penalty, for society, of falling back into chaos. Eternal justice does not accommodate itself to all the whims of men: like a woman, whom one may outrage, but whom one does not marry without a solemn alienation of one's self, it demands on our part, with the abandonment of our egoism, the recognition of all its rights, which are those of science.

The tax, whose final purpose, as we have shown, is the reward of the non-producers, but whose original idea was a restoration of the laborer,—the tax, under the system of monopoly, reduces itself therefore to a pure and simple protest, a sort of extra-judicial act, the whole effect of which is to aggravate the situation of the wage-worker by disturbing the monopolist in his possession. As for the idea of changing the proportional tax into a progressive tax, or, to speak more accurately, of reversing the order in which the tax progresses, that is a blunder the entire responsibility for which belongs to the economists.

But henceforth menace hovers over privilege. With the power of modifying the proportionality of the tax, government has under its hand an expeditious and sure means of dispossessing the holders of capital when it will; and it is a frightful thing to see everywhere that great institution, the basis of society, the object of so many controversies, of so many laws, of so many cajoleries, and of so many crimes, PROPERTY, suspended at the end of a thread over the yawning mouth of the proletariat.

% 3.—Disastrous and inevitable consequences of the tax. (Provisions, sumptuary laws, rural and industrial police, patents, trade-marks, etc.)

M. Chevalier addressed to himself, in July, 1843, on the subject of the tax, the following questions:

(1) Is it asked of all or by preference of a part of the nation? (2) Does the tax resemble a levy on polls, or is it exactly proportioned to the fortunes of the tax-payers? (3) Is agriculture more or less burdened than manufactures or commerce? (4) Is real estate more or less spared than personal property? (5) Is he who produces more favored than he who consumes? (6) Have our taxation laws the character of sumptuary laws?

To these various questions M. Chevalier makes the reply which I am about to quote, and which sums up all of the most philosophical considerations upon the subject which I have met:

(a) The tax affects the universality, applies to the mass, takes the nation as a whole; nevertheless, as the poor are the most numerous, it taxes them willingly, certain of collecting more. (b) By the nature of things the tax sometimes takes the form of a levy on polls, as in the case of the salt tax. (c, d, e) The treasury addresses itself to labor as well as to consumption, because in France everybody labors, to real more than to personal property, and to agriculture more than to manufactures. (f) By the same reasoning, our laws partake little of the character of sumptuary laws.

What, professor! is that all that science has taught you? THE TAX APPLIES TO THE MASS, you say; IT TAKES THE NATION AS A WHOLE. Alas! we know it only too well; but it is this which is iniquitous, and which we ask you to explain. The government, when engaged in the assessment and distribution of the tax, could not have believed, did not believe, that all fortunes were equal; consequently it could not have wished, did not wish, the sums paid to be equal. Why, then, is the practice of the government always the opposite of its theory? Your opinion, if you please, on this difficult matter? Explain; justify or condemn the exchequer; take whatever course you will, provided you take some course and say something. Remember that your readers are men, and that they cannot excuse in a doctor, speaking ex cathedra, such propositions as this: AS THE POOR ARE THE MOST NUMEROUS, IT TAXES THEM WILLINGLY, CERTAIN OF COLLECTING MORE. No, Monsieur: NUMBERS do not regulate the tax; the tax knows perfectly well that millions of poor added to millions of poor do not make one voter. You render the treasury odious by making it absurd, and I maintain that it is neither the one nor the other. The poor man pays more than the rich because Providence, to whom misery is odious like vice, has so ordered things that the miserable must always be the most ground down. The iniquity of the tax is the celestial scourge which drives us towards equality. God! if a professor of political economy, who was formerly an apostle, could but understand this revelation!

BY THE NATURE OF THINGS, says m. Chevalier, THE TAX SOMETIMES TAKES THE FORM OF A LEVY ON POLLS. Well, in what case is it just that the tax should take the form of a levy on polls? Is it always, or never? What is the principle of the tax? What is its object? Speak, answer.

And what instruction, pray, can we derive from the remark, scarcely worthy of quotation, that THE TREASURY ADDRESSES ITSELF TO LABOR AS WELL AS TO CONSUMPTION, TO REAL MORE THAN TO PERSONAL PROPERTY, TO AGRICULTURE MORE THAN TO MANUFACTURES? Of what consequence to science is this interminable recital of crude facts, if your analysis never extracts a single idea from them?

All the deductions made from consumption by taxation, rent, interest on capital, etc., enter into the general expense account and figure in the selling price, so that nearly always the consumer pays the tax: that we know. And as the goods most consumed are also those which yield the most revenue, it necessarily follows that the poorest people are the most heavily burdened: this consequence, like the first, is inevitable. Once more, then, of what importance to us are your fiscal distinctions? Whatever the classification of taxable material, as it is impossible to tax capital beyond its income, the capitalist will be always favored, while the proletaire will suffer iniquity, oppression. The trouble is not in the distribution of taxes; it is in the distribution of goods. M. Chevalier cannot be ignorant of this: why, then, does not M. Chevalier, whose word would carry more weight than that of a writer suspected of not loving the existing order, say as much?

From 1806 to 1811 (this observation, as well as the following, is M. Chevalier's) the annual consumption of wine in Paris was one hundred and forty quarts for each individual; now it is not more than eighty-three. Abolish the tax of seven or eight cents a quart collected from the retailer, and the consumption of wine will soon rise from eighty-three quarts to one hundred and seventy-five; and the wine industry, which does not know what to do with its products, will have a market. Thanks to the duties laid upon the importation of cattle, the consumption of meat by the people has diminished in a ratio similar to that of the falling-off in the consumption of wine; and the economists have recognized with fright that the French workman does less work than the English workman, because he is not as well fed.

Out of sympathy for the laboring classes M. Chevalier would like our manufacturers to feel the goad of foreign competition a little. A reduction of the tax on woollens to the extent of twenty cents on each pair of pantaloons would leave six million dollars in the pockets of the consumers,—half enough to pay the salt tax. Four cents less in the price of a shirt would effect a saving probably sufficient to keep a force of twenty thousand men under arms.

In the last fifteen years the consumption of sugar has risen from one hundred and sixteen million pounds to two hundred and sixty million, which gives at present an average of seven pounds and three-quarters for each individual. This progress demonstrates that sugar must be classed henceforth with bread, wine, meat, wool, cotton, wood, and coal, among the articles of prime necessity. To the poor man sugar is a whole medicine-chest: would it be too much to raise the average individual consumption of this article from seven pounds and three-quarters to fifteen pounds? Abolish the tax, which is about four dollars and a half on a hundred pounds, and your consumption will double.