What Is Property?
Pierre-Joseph Proudhon
[1840 / Part 7 of 16]
CHAPTER IV
(continued)
III. The proprietor who, instead of consuming his income, uses it
as capital, turns it against production, and thereby makes it
impossible for him to exercise his right. For the more he increases
the amount of interest to be paid upon it, the more he is compelled
to diminish wages. Now, the more he diminishes wages, -- that is,
the less he devotes to the maintenance and repair of the machines,
-- the more he diminishes the quantity of labor; and with the
quantity of labor the quantity of product, and with the quantity of
product the very source of his income. This is clearly shown by the
following example: --
Take an estate consisting of arable land, meadows, and vineyards,
containing the dwellings of the owner and the tenant; and worth,
together with the farming implements, one hundred thousand francs,
the rate of increase being three per cent. If, instead of consuming
his revenue, the proprietor uses it, not in enlarging but in
beautifying his estate, can he annually demand of his tenant an
additional ninety francs on account of the three thousand francs
which he has thus added to his capital? Certainly not; for on such
conditions the tenant, though producing no more than before, would
soon be obliged to labor for nothing, -- what do I say? to actually
suffer loss in order to hold his lease.
In fact, revenue can increase only as productive soil increases:
it is useless to build walls of marble, and work with plows of gold.
But, since it is impossible to go on acquiring for ever, to add
estate to estate, to continue one's possessions, as the
Latins said; and since, moreover, the proprietor always has means
wherewith to capitalize, -- it follows that the exercise of his
right finally becomes impossible.
Well, in spite of this impossibility, property capitalizes, and in
capitalizing increases its revenue; and, without stopping to look at
the particular cases which occur in commerce, manufacturing
operations, and banking, I will cite a graver fact, -- one which
directly affects all citizens. I mean the indefinite increase of the
budget.
The taxes increase every year. It would be difficult to tell in
which department of the government the expenses increase; for who
can boast of any knowledge as to the budget? On this point, the
ablest financiers continually disagree. What is to be thought, I
ask, of the science of government, when its professors cannot
understand one another's figures? Whatever be the immediate causes
of this growth of the budget, it is certain that taxation increases
at a rate which causes everybody to despair. Everybody sees it,
everybody acknowledges it; but nobody seems to understand the
primary cause.[1] Now, I say that it cannot be otherwise, -- that it
is necessary and inevitable.
A nation is the tenant of a rich proprietor called the government,
to whom it pays, for the use of the soil, a farm-rent called a tax.
Whenever the government makes war, loses or gains a battle, changes
the outfit of its army, erects a monument, digs a canal, opens a
road, or builds a railway, it borrows money, on which the tax-payers
pay interest; that is, the government, without adding to its
productive capacity, increases its active capital, -- in a word,
capitalizes after the manner of the proprietor of whom I have just
spoken.
[1] "The financial situation of the English
government was shown up in the House of Lords during the session of
January 23. It is not an encouraging one. For several years the
expenses have exceeded the receipts, and the Minister has been able
to re-establish the balance only by loans renewed annually. The
combined deficits of the years 1838 and 1839 amount to forty-seven
million five hundred thousand francs. In 1840, the excess of
expenses over receipts is expected to be twenty-two million five
hundred thousand francs. Attention was called to these figures by
Lord Ripon. Lord Melbourne replied: `The noble earl unhappily was
right in declaring that the public expenses continually increase,
and with him I must say that there is no room for hope that they can
be diminished or met in any way.' " -- National: January
26, 1840.
Now, when a governmental loan is once contracted, and the interest
is once stipulated, the budget cannot be reduced. For, to accomplish
that, either the capitalists must relinquish their interest, which
would involve an abandonment of property; or the government must go
into bankruptcy, which would be a fraudulent denial of the political
principle; or it must pay the debt, which would require another
loan; or it must reduce expenses, which is impossible, since the
loan was contracted for the sole reason that the ordinary receipts
were insufficient; or the money expended by the government must be
reproductive, which requires an increase of productive capacity, --
a condition excluded by our hypothesis; or, finally, the tax-payers
must submit to a new tax in order to pay the debt, -- an impossible
thing. For, if this new tax were levied upon all citizens alike,
half, or even more, of the citizens would be unable to pay it; if
the rich had to bear the whole, it would be a forced contribution,
-- an invasion of property. Long financial experience has shown that
the method of loans, though exceedingly dangerous, is much surer,
more convenient, and less costly than any other method; consequently
the government borrows, -- that is, goes on capitalizing, -- and
increases the budget.
Then, a budget, instead of ever diminishing, must necessarily and
continually increase. It is astonishing that the economists, with
all their learning, have failed to perceive a fact so simple and so
evident. If they have perceived it, why have they neglected to
condemn it?
Historical Comment. -- Much interest is felt at present in
a financial operation which is expected to result in a reduction of
the budget. It is proposed to change the present rate of increase,
five per cent. Laying aside the politico-legal question to deal only
with the financial question, -- is it not true that, when five per
cent. is changed to four per cent., it will then be necessary, for
the same reasons, to change four to three; then three to two, then
two to one, and finally to sweep away increase altogether? But that
would be the advent of equality of conditions and the abolition of
property. Now it seems to me, that an intelligent nation should
voluntarily meet an inevitable revolution half way, instead of
suffering itself to be dragged after the car of inflexible
necessity.
EIGHTH PROPOSITION. Property is impossible, because its power
of Accumulation is infinite, and is exercised only over finite
quantities.
If men, living in equality, should grant to one of their number
the exclusive right of property; and this sole proprietor should
lend one hundred francs to the human race at compound interest,
payable to his descendants twenty-four generations hence, -- at the
end of six hundred years this sum of one hundred francs, at five per
cent., would amount to 107,854,010,777,600 francs; two thousand six
hundred and ninety-six and one-third times the capital of France
(supposing her capital to be 40,000,000,000), or more than twenty
times the value of the terrestrial globe!
Suppose that a man, in the reign of St. Louis, had borrowed one
hundred francs, and had refused, -- he and his heirs after him, --
to return it. Even though it were known that the said heirs were not
the rightful possessors, and that prescription had been interrupted
always at the right moment, -- nevertheless, by our laws, the last
heir would be obliged to return the one hundred francs with
interest, and interest on the interest; which in all would amount,
as we have seen, to nearly one hundred and eight thousand billions.
Every day, fortunes are growing in our midst much more rapidly
than this. The preceding example supposed the interest equal to
one-twentieth of the capital, -- it often equals one-tenth,
one-fifth, one-half of the capital; and sometimes the capital
itself.
The Fourierists -- irreconcilable enemies of equality, whose
partisans they regard as sharks -- intend, by quadrupling
production, to satisfy all the demands of capital, labor, and skill.
But, should production be multiplied by four, ten, or even one
hundred, property would soon absorb, by its power of accumulation
and the effects of its capitalization, both products and capital,
and the land, and even the laborers. Is the phalanstery to be
prohibited from capitalizing and lending at interest? Let it
explain, then, what it means by property.
I will carry these calculations no farther. They are capable of
infinite variation, upon which it would be puerile for me to insist.
I only ask by what standard judges, called upon to decide a suit for
possession, fix the interest? And, developing the question, I ask,
--
Did the legislator, in introducing into the Republic the principle
of property, weigh all the consequences? Did he know the law of the
possible? If he knew it, why is it not in the Code? Why is so much
latitude allowed to the proprietor in accumulating property and
charging interest, -- to the judge in recognizing and fixing the
domain of property, -- to the State in its power to levy new taxes
continually? At what point is the nation justified in repudiating
the budget, the tenant his farm-rent, and the manufacturer the
interest on his capital? How far may the idler take advantage of the
laborer? Where does the right of spoliation begin, and where does it
end? When may the producer say to the proprietor, "I owe you
nothing more"? When is property satisfied? When must it cease
to steal?
If the legislator did know the law of the possible, and
disregarded it, what must be thought of his justice? If he did not
know it, what must be thought of his wisdom? Either wicked or
foolish, how can we recognize his authority?
If our charters and our codes are based upon an absurd hypothesis,
what is taught in the law-schools? What does a judgment of the Court
of Appeal amount to? About what do our Chambers deliberate? What is
politics? What is our definition of a statesman?
What is the meaning of jurisprudence? Should we not rather
say jurisignorance?
If all our institutions are based upon an error in calculation,
does it not follow that these institutions are so many shams? And if
the entire social structure is built upon this absolute
impossibility of property, is it not true that the government under
which we live is a chimera, and our present society a utopia?
NINTH PROPOSITION. Property is impossible, because it is
powerless against Property.
I. By the third corollary of our axiom, interest tells against the
proprietor as well as the stranger. This economical principle is
universally admitted. Nothing simpler at first blush; yet, nothing
more absurd, more contradictory in terms, or more absolutely
impossible.
The manufacturer, it is said, pays himself the rent on his house
and capital. He pays himself; that is, he gets paid by the
public who buy his products. For, suppose the manufacturer, who
seems to make this profit on his property, wishes also to make it on
his merchandise, can he then pay himself one franc for that which
cost him ninety centimes, and make money by the operation? No: such
a transaction would transfer the merchant's money from his right
hand to his left, but without any profit whatever.
Now, that which is true of a single individual trading with
himself is true also of the whole business world. Form a chain of
ten, fifteen, twenty producers; as many as you wish. If the producer
A makes a profit out of the producer B. B's loss must, according to
economical principles, be made up by C, C's by D; and so on through
to Z.
But by whom will Z be paid for the loss caused him by the profit
charged by A in the beginning? By the consumer, replies Say.
Contemptible equivocation! Is this consumer any other, then, than A,
B. C, D, &c., or Z? By whom will Z be paid? If he is paid by A,
no one makes a profit; consequently, there is no property. If, on
the contrary, Z bears the burden himself, he ceases to be a member
of society; since it refuses him the right of property and profit,
which it grants to the other associates.
Since, then, a nation, like universal humanity, is a vast
industrial association which cannot act outside of itself, it is
clear that no man can enrich himself without impoverishing another.
For, in order that the right of property, the right of increase, may
be respected in the case of A, it must be denied to Z; thus we see
how equality of rights, separated from equality of conditions, may
be a truth. The iniquity of political economy in this respect is
flagrant. "When I, a manufacturer, purchase the labor of a
workingman, I do not include his wages in the net product of my
business; on the contrary, I deduct them. But the workingman
includes them in his net product. . . . "(Say: Political
Economy.)
That means that all which the workingman gains is net product;
but that only that part of the manufacturer's gains is net
product, which remains after deducting his wages. But why is the
right of profit confined to the manufacturer? Why is this right,
which is at bottom the right of property itself, denied to the
workingman? In the terms of economical science, the workingman is
capital. Now, all capital, beyond the cost of its maintenance and
repair, must bear interest. This the proprietor takes care to get,
both for his capital and for himself. Why is the workingman
prohibited from charging a like interest for his capital, which is
himself?
Property, then, is inequality of rights; for, if it were not
inequality of rights, it would be equality of goods, -- in other
words, it would not exist. Now, the charter guarantees to all
equality of rights. Then, by the charter, property is impossible.
II. Is A, the proprietor of an estate, entitled by the fact of his
proprietorship to take possession of the field belonging to B. his
neighbor? "No," reply the proprietors; "but what has
that to do with the right of property?" That I shall show you
by a series of similar propositions.
Has C, a hatter, the right to force D, his neighbor and also a
hatter, to close his shop, and cease his business? Not the least in
the world.
But C wishes to make a profit of one franc on every hat, while D
is content with fifty centimes. It is evident that D's moderation is
injurious to C's extravagant claims. Has the latter a right to
prevent D from selling? Certainly not.
Since D is at liberty to sell his hats fifty centimes cheaper than
C if he chooses, C in his turn is free to reduce his price one
franc. Now, D is poor, while C is rich; so that at the end of two or
three years D is ruined by this intolerable competition, and C has
complete control of the market. Can the proprietor D get any redress
from the proprietor C? Can he bring a suit against him to recover
his business and property? No; for D could have done the same thing,
had he been the richer of the two.
On the same ground, the large proprietor A may say to the small
proprietor B: "Sell me your field, otherwise you shall not sell
your wheat," -- and that without doing him the least wrong, or
giving him ground for complaint. So that A can devour B if he likes,
for the very reason that A is stronger than B. Consequently, it is
not the right of property which enables A and C to rob B and D, but
the right of might. By the right of property, neither the two
neighbors A and B, nor the two merchants C and D, could harm each
other. They could neither dispossess nor destroy one another, nor
gain at one another's expense. The power of invasion lies in
superior strength.
But it is superior strength also which enables the manufacturer to
reduce the wages of his employees, and the rich merchant and
well-stocked proprietor to sell their products for what they please.
The manufacturer says to the laborer, "You are as free to go
elsewhere with your services as I am to receive them. I offer you so
much." The merchant says to the customer, "Take it or
leave it; you are master of your money, as I am of my goods. I want
so much." Who will yield? The weaker.
Therefore, without force, property is powerless against property,
since without force it has no power to increase; therefore, without
force, property is null and void.
Historical Comment. -- The struggle between colonial and
native sugars furnishes us a striking example of this impossibility
of property. Leave these two industries to themselves, and the
native manufacturer will be ruined by the colonist. To maintain the
beet-root, the cane must be taxed: to protect the property of the
one, it is necessary to injure the property of the other. The most
remarkable feature of this business is precisely that to which the
least attention is paid; namely, that, in one way or another,
property has to be violated. Impose on each industry a proportional
tax, so as to preserve a balance in the market, and you create a
maximum price, -- you attack property in two ways. On the
one hand, your tax interferes with the liberty of trade; on the
other, it does not recognize equality of proprietors. Indemnify the
beet-root, you violate the property of the tax-payer. Cultivate the
two varieties of sugar at the nation's expense, just as different
varieties of tobacco are cultivated, -- you abolish one species of
property. This last course would be the simpler and better one; but,
to induce the nations to adopt it, requires such a co-operation of
able minds and generous hearts as is at present out of the question.
Competition, sometimes called liberty of trade, -- in a word,
property in exchange, -- will be for a long time the basis of our
commercial legislation; which, from the economical point of view,
embraces all civil laws and all government. Now, what is
competition? A duel in a closed field, where arms are the test of
right.
"Who is the liar, -- the accused or the accuser?" said
our barbarous ancestors. "Let them fight it out," replied
the still more barbarous judge; "the stronger is right."
Which of us two shall sell spices to our neighbor? "Let each
offer them for sale," cries the economist; "the sharper,
or the more cunning, is the more honest man, and the better
merchant."
Such is the exact spirit of the Code Napoleon.
Property is impossible, because it is the Negation of equality.
The development of this proposition will be the résumé
of the preceding ones.
1. It is a principle of economical justice, that products are
bought only by products. Property, being capable of defence only
on the ground that it produces utility, is, since it produces
nothing, for ever condemned.
2. It is an economical law, that labor must be balanced by
product. It is a fact that, with property, production costs more
than it is worth.
3. Another economical law: The capital being given, production
is measured, not by the amount of capital, but by productive
capacity. Property, requiring income to be always proportional
to capital without regard to labor, does not recognize this relation
of equality between effect and cause.
4 and 5. Like the insect which spins its silk, the laborer never
produces for himself alone. Property, demanding a double product and
unable to obtain it, robs the laborer, and kills him.
6. Nature has given to every man but one mind, one heart, one
will. Property, granting to one individual a plurality of votes,
supposes him to have a plurality of minds.
7. All consumption which is not reproductive of utility is
destruction. Property, whether it consumes or hoards or capitalizes,
is productive of inutility, -- the cause of sterility and
death.
8. The satisfaction of a natural right always gives rise to an
equation; in other words, the right to a thing is necessarily
balanced by the possession of the thing. Thus, between the right to
liberty and the condition of a free man there is a balance, an
equation; between the right to be a father and paternity, an
equation; between the right to security and the social guarantee, an
equation. But between the right of increase and the receipt of this
increase there is never an equation; for every new increase carries
with it the right to another, the latter to a third, and so on for
ever. Property, never being able to accomplish its object, is a
right against Nature and against reason.
9. Finally, property is not self-existent. An extraneous cause --
either force or fraud -- is necessary to its life
and action. In other words, property is not equal to property: it is
a negation -- a delusion -- NOTHING.
