The economic laws will be found to act on the same principle, whether we take the case of a numerous agglomeration of men or of only two individuals, or even of a single individual condemned by circumstances to live in a state of isolation.

Such an individual, if he could exist for some time in an isolated state, would be at once capitalist, employer, workman, producer, and consumer. The whole economic evolution would be accomplished in him. Observing each of the elements of which that evolution is made up—want, effort, satisfaction—gratuitous utility, and onerous utility—he would be enabled to form an idea of the entire mechanism, even when thus reduced to its greatest simplicity.

One thing is obvious enough, that he could never confound what was gratuitous with what exacted efforts; for that would imply a contradiction in terms. He would know at once when a material or a force was furnished to him by nature without the co-operation of his labour, even when his own labour was assisted by natural agents, and thus rendered more productive.

An isolated individual would never think of applying his own labour to the production of a commodity as long as he could procure it directly from nature. He would not travel a league to fetch water if he had a well at his door. For the same reason, whenever his own labour was called into requisition, he would endeavour to substitute for it, as much as he possibly could, the co-operation of natural agents.

If he constructed a canoe, he would make it of the lightest materials, in order to take advantage of the specific gravity of water. He would furnish it with a sail, that the wind might save him the trouble of rowing, etc. [p197]

In order to obtain in this way the co-operation of natural agent, tools and instruments would be wanted.

And here the isolated individual would begin to calculate. He would ask himself this question: At present I obtain a satisfaction at the expense of a given effort: when I am in possession of the proper tool or instrument, shall I obtain the same satisfaction with less effort, taking into account the labour required for the construction of the instrument itself?

No one will throw away his labour for the mere pleasure of throwing it away. Our supposed Robinson Crusoe, then, will be induced to set about constructing the instrument only if he sees clearly that, when completed, he will obtain an equal satisfaction at a smaller expense of effort, or a greater amount of satisfaction with the same effort.

One circumstance will form a great element in his calculation—the number of commodities in the production of which this instrument will assist while it lasts. He has a primary standard of comparison—the present labours to which he is subjected every time he wishes to procure the satisfaction directly and without assistance. He estimates how much labour the tool or instrument will save him on each occasion; but labour is required to make the tool, and this labour he will in his own mind spread over all the occasions on which such an instrument can be made available. The greater the number of these occasions, the stronger will be his motive for seeking the co-operation of natural agents. It is here—in this spreading of an advance over an aggregate of products—that we discover the principle and foundation of Interest.

When Robin Crusoe has once made up his mind to construct the instrument, he perceives that his willingness to make it, and the advantage it is to bring him, are not enough. Tools are necessary to the manufacture of tools—iron must be hammered with iron—and so you go on, mounting from difficulty to difficulty, till you reach the first difficulty of all, which appears to be insuperable. This shows us the extreme slowness with which Capital must have been formed at the beginning, and what an enormous amount of human labour each satisfaction must originally have cost.

Again, in order to construct the instruments of labour, not only tools, but materials are wanted. If these materials, as for instance stones, are furnished gratuitously by nature, we must still combine them, which costs labour. But the possession of these materials supposes, in almost every case, anterior labour both long and complicated, as in the manufacture of wool, flax, iron, lead, etc.

Nor is this all. Whilst a man is thus working for the exclusive [p198] purpose of facilitating his ulterior labour, he can do nothing to supply his present wants. Now, here we encounter an order of phenomena in which there can be no interruption. Each day the labourer must be fed, clothed, and sheltered. Robinson will perceive, then, that he can undertake nothing for the purpose of procuring the co-operation of natural forces until he has previously accumulated a stock of provisions. He must every day redouble his activity in the chase, and store up a portion of the game he kills, and subject himself to present privations, in order that he may have at his disposal the time requisite for the construction of the instrument he has projected. In such circumstances, it is most probable that all he will accomplish will be the construction of an instrument which is rude and imperfect, and not very well fitted for the purpose he has in view.

Afterwards, he will obtain greater facilities. Reflection and experience will teach him to work better; and the first tool he makes will furnish him with the means of fabricating others, and of accumulating provisions with greater promptitude.

Tools, materials, provisions—these, doubtless, Robinson will denominate his Capital; and he will readily discover that the more considerable his capital becomes, the greater command will he obtain over natural agents—that the more he makes such agents co-operate in his labour, the more will he augment his satisfactions in proportion to his efforts.

Let us now vary the hypothesis, and place ourselves in the midst of the social order. Capital is still composed of instruments of labour, materials, and provisions, without which no enterprise of any magnitude can be undertaken, either in a state of isolation, or in a social state. Those who are possessed of capital have been put in possession of it only by their labour, or by their privations; and they would not have undergone that labour (which has no connexion with present wants), they would not have imposed on themselves those privations, but with the view of obtaining ulterior advantages—with the view, for example, of procuring in larger measure the future co-operation of natural agents. On their part, to give away this capital would be to deprive themselves of the special advantage they have in view; it would be to transfer this advantage to others; it would be to render others a service. We cannot, then, without abandoning the most simple principles of reason and justice, fail to see that the owners of capital have a perfect right to refuse to make this transfer unless in exchange for another service, freely bargained for and voluntarily agreed to. No man in the world, I believe, will dispute [p199] the equity of the mutuality of services, for mutuality of services is, in other words, equity. Will it be said that the transaction cannot be free and voluntary, because the man who is in possession of capital is in a position to lay down the law to the man who has none? But how is a bargain to be made? In what way are we to discover the equivalence of services if it be not in the case of an exchange voluntarily effected on both sides? Do you not perceive, moreover, that the man who borrows capital, being free either to borrow it or not, will refuse to do so unless he sees it to be for his advantage, and that the loan cannot make his situation worse? The question he asks himself is evidently this: Will the employment of this capital afford me advantages which are more than sufficient to make up for the conditions which are demanded of me? Or this: Is the effort which I am now obliged to make, in order to obtain a given satisfaction, greater or less than the sum of the efforts which the loan will entail upon me—first of all, in rendering the services which are demanded of me by the lender, and afterwards in procuring the special satisfaction I have in view with the aid of the capital borrowed? If, taking all things into account, there be no advantage to be got, he will not borrow, he will remain as he is, and what injury is done him? He may be mistaken, you will say. Undoubtedly he may. One may be mistaken in all imaginable transactions. Are we then to abandon our liberty? If you go that length, tell us what we are to substitute for free will and free consent. Constraint? for if we give up liberty, what remains but constraint? No, you say—the judgment of a third party. Granted, on these conditions: First, that the decision of this third party, whatever name you give him, shall not be put in force by constraint. Secondly, that he be infallible, for to substitute one fallible man for another would be to no purpose; and the parties whose judgment I should least distrust in such a matter are the parties who are interested in the result. The third and last condition is, that this arbitrator shall not be paid for his services; for it would be a singular way of manifesting his sympathy for the borrower, first of all to take away from him his liberty, and then to lay on his shoulders an additional burden as the recompense of this philanthropical service. But let us leave the question of right, and return to Political Economy.

A Capital which is composed of materials, provisions, and instruments, presents two aspects—Utility and Value. I must have failed in my exposition of the theory of value, if the reader does not understand that the man who transfers capital is paid only for its value, that is to say, for the service rendered in [p200] creating that capital; in other words, for the pains taken by the cÉdant combined with the pains saved to the recipient. Capital consists of commodities or products. It assumes the name of capital only by reason of its ulterior destination. It is a great mistake to suppose that capital, as such, is a thing having an independent existence. A sack of corn is still a sack of corn, although one man sells it for revenue, and another buys it for capital. Exchange takes place on the invariable principle of value for value, service for service; and the portion of gratuitous utility which enters into the commodity is so much into the bargain. At the same time, the portion which is gratuitous has no value, and value is the only thing regarded in bargains. In this respect, transactions which have reference to capital are in no respect different from others.

This consideration opens up some admirable views with reference to the social order, but which I cannot do more than indicate here. Man, in a state of isolation, is possessed of capital only when he has brought together materials, provisions, and tools. The same thing does not hold true of man in the social state. It is enough for the latter to have rendered services, and to have thus the power of drawing upon society, by means of the mechanism of exchange, for equivalent services. I mean by the mechanism of exchange, money, bills, bank-notes, and even bankers themselves. Whoever has rendered a service, and has not yet received the corresponding satisfaction, is the bearer of a warrant, either possessed of value, as money, or fiduciary, like bank-notes, which warrant gives him the power of receiving back from society, when he will, where he will, and in what form he will, an equivalent service. This impairs neither in principle, nor in effect, nor in an equitable point of view, the great law which I seek to elucidate, that services are exchanged for services. It is still the embryo barter, which has been developed, enlarged, and rendered more complex, but without losing its identity.

The bearer of such a warrant as I have just described may then demand back from society, at pleasure, either an immediate satisfaction, or an object which, in another aspect, may be regarded as capital. The person who lends or transfers has nothing to do with that. He satisfies himself as to the equivalence of the services—that is all.

Again, he may transfer this warrant to another, to use it as he pleases, under the double condition of restitution, and of a service, at a fixed date. If we go to the bottom of the matter, we shall find that in this case the person who lends or transfers capital [p201] deprives himself, in favour of the cessionary or recipient, either of an immediate satisfaction, which he defers for some years, or of an instrument of labour which would have increased his power of production, procured him the co-operation of natural agents, and augmented, to his profit, the proportion of satisfactions to efforts. He strips himself of these advantages, in order to invest another with them. This is undoubtedly to render a service, and in equity this service is entitled to a return. Mere restitution at the year’s end cannot be considered as the remuneration of this special service. Observe that the transaction here is not a sale, where the delivery of the thing sold is immediate, and the return or remuneration is immediate also. What we have to do with here is delay. And this delay is in itself a special service, seeing that it imposes a sacrifice on the person who accords it, and confers an advantage on the person who asks for it. There must, then, be remuneration, or we must give up that supreme law of society, service for service. This remuneration is variously denominated, according to circumstances—hire, rent, yearly income—but its generic name is Interest.51

Every service then is, or may become, a Capital, an admirable phenomenon due to the mechanism of exchange. If workmen are to commence the construction of a railway ten years hence, we could not at the present moment store up in kind the corn which is to feed them, the stuff which is to clothe them, and the barrows and implements of which they will have need during that protracted operation. But we can save up and transmit to them the value of these things. For this purpose it is enough that we render present services to society, and obtain for these services the warrants, in money or credits of which I have spoken, which can be converted into corn or cloth ten years hence. It is not even necessary that we should leave these warrants dormant and unproductive in the interval. There are merchants, bankers, and others in society who, for the use of our services or their results, render us the service of imposing upon themselves these privations in our place.

And it is still more remarkable that we can effect an inverse operation, however impossible at first sight this may appear. We can convert into instruments of labour, into railways, into houses, a capital which as yet has no existence—thus making available at once services which will not be actually rendered till the twentieth century. There are bankers who are ready to make present advances on the faith that workmen and railway travellers of the [p202] third and fourth generation will provide for their payment, and these drafts upon the future are transmitted from hand to hand, without remaining for a moment unproductive. I confess I do not believe that the numerous inventors of artificial societies ever imagined anything at once so simple and so complex, so ingenious and so equitable, as this. They would at once abandon their insipid and stupid utopias if they but knew the fine harmonies of the social mechanism which has been instituted by God. It was a king of Aragon who bethought him what advice he should have given to Providence on the construction of the celestial mechanism, had he been called to the counsels of Omniscience. Newton never conceived so impious a thought.

We thus see that all transmissions of services from one point of time or of space to another repose upon this datum, that to accord delay is to render service; in other words, they repose on the legitimacy of Interest. The man who, in our days, has wished to suppress interest, does not see that he would bring back exchange to its embryo form,—barter, present barter,—without reference either to the future or the past. He does not see that, imagining himself the most advanced, he is in reality the most retrograde of men, since he would reconstruct society on its most primitive model. He desires, he says, mutuality of services. But he begins by taking away the character of services exactly from that kind of services which unite, tie together, and solidarize all places and all times. In spite of the practical audacity of his socialist aphorisms, he has paid an involuntary homage to the present order of things. He has but one reform, which is negative. It consists in suppressing in society the most powerful and marvellous part of its machinery.

I have explained in another place the legitimacy and perpetuity of Interest. I shall content myself at present with reminding the reader—

1st, That the legitimacy of interest rests upon the fact that he who accords delay renders service. Interest, then, is legitimate in virtue of the principle of service for service.

2d, That the perpetuity of interest reposes on this other fact, that he who borrows must pay back all that he has borrowed at a fixed date. When the thing lent, or its value, is restored to its owner, he can lend it anew. When returned to him a second time, he can lend it a third time, and so on to perpetuity. Which of the successive and voluntary borrowers can find fault with this?

But since the legitimacy of interest has been contested so [p203] seriously in our day as to put capital to flight, or force it to conceal itself, I may be permitted to show how utterly foolish and insensate this controversy is.

And, first of all, let me ask, would it not be absurd and unjust either that no remuneration should be given for the use of capital, or that that remuneration should be the same, whether the loan were granted and obtained at one year’s, or two years’, or ten years’ date. If, unhappily, under this doctrine of pretended equality, such a law should find a place in our code, an entire category of human transactions would be suppressed on the instant. We should still have barter, and sales for ready money, but we could no longer have sales on credit, nor loans. The advocates of equality would relieve borrowers from the burden of paying interest; but they would, at the same time, balk them of their loans. At the same rate, we might relieve men from the inconvenient necessity of paying for what they buy. We should only have to prohibit them from purchasing; or, what would come to the same thing, declare prices illegal.

There is levelling enough, in all conscience, in this pretended principle of equality. First of all, it would put a stop to the creation of capital; for who would desire to save when he could reap no advantage from saving? Then it would reduce wages to zero, for where there is no capital (instruments, materials, and provisions), there can be neither future work nor wages. We should very soon arrive at the most perfect of all equalities, the equality of nothingness.

But is there any man so blind as not to see that delay is in itself a circumstance which is onerous, and, consequently, entitled to remuneration? Apart, even, from the consideration of loans, would not every one endeavour to abridge delays? It is the object of our perpetual solicitude. Every employer of workmen lays great stress on the time which must elapse before his returns come in. He sells dearer or cheaper according as his returns are more or less distant. Were he indifferent on that subject, he must forget that capital is power; for if he is alive to that consideration, he must naturally desire that it should perform its work in the shortest possible time, so as to enable him the oftener to engage it in a new operation.

They are but short-sighted Economists who think that we pay interest for capital only when we borrow it. The general rule is, that he who reaps the satisfaction should bear all the charges of production, delay included, whether he renders the service to himself, or has it rendered to him by another. A man in a state of [p204] isolation, who has no bargains or transactions with any one, would consider it an onerous circumstance to be deprived of the use of his weapons for a year. Why, then, should an analogous circumstance not be considered as onerous in society? But if a man submits to it voluntarily for the sake of another who agrees voluntarily to remunerate it, what should render that remuneration illegitimate?

Nothing would be transacted in the world; no enterprise requiring advances would be undertaken; we should neither plant, nor sow, nor labour, were not delay considered as in itself an onerous circumstance, and treated and paid for as such. Universal consent is so unanimous on this point, that no exchange takes place but on this principle. Delays, hindrances, enter into the appreciation of services, and, consequently, into the constitution of value.

Thus, in their crusade against interest, the advocates of equality not only trample under foot the most obvious notions of equity—they ignore not only their own principle of service for service, but also the authority of mankind and universal practice. How can they, in the face of day, exhibit the overweening pride which such a pretension supposes? Is it not, indeed, a very strange and a very sad thing, that these sectaries should adopt not only tacitly, but often in so many words, the motto, that, since the beginning of the world, all men have been mistaken except themselves? Omnes, ego non.

Pardon me for thus insisting on the legitimacy of interest, which is founded on this principle, that, since delay is costly, it must be paid for—to cost and to pay being correlative terms. The fault lies in the spirit of our age. It is quite necessary to defend vital truths, admitted generally by mankind, but attacked and brought into question by a few fanatical innovators. For a writer who aspires to demonstrate the harmony of phenomena in the aggregate, it is a painful thing, you may believe, to be constantly stopped by the necessity of elucidating the most elementary notions. Would Laplace have been able to explain the planetary system in all its simplicity, if, among his readers, there had not existed certain common and received ideas,—if it had been necessary for him, in order to prove that the earth turns upon its axis, to begin by teaching numeration? Such is the hard fate of the Economist of our day. If he neglects the rudiments, he is not understood—if he explains them, the beauty and simplicity of his system is lost sight of in the multiplicity of details.

It is a happy thing for mankind that Interest can be shown to be legitimate. We should otherwise be placed in a miserable [p205] dilemma—we must either perish by remaining just, or make progress by means of injustice.

Every branch of industry is an aggregate of Efforts. But, as regards efforts, there is an important distinction to be made. Some efforts are connected with services which we are presently engaged in rendering; others with an indefinite series of analogous services. Let me explain myself.

The day’s work of the water-carrier must be paid for by those who profit by his labour. But his anterior labour in making his barrow and his water-cask must, as regards remuneration, be spread over an indeterminate number of consumers.

In the same way, ploughing, sowing, harrowing, weeding, cutting down, thrashing, apply only to the present harvest; but clearing, enclosing, draining, building, improving, apply to and facilitate an indefinite number of future harvests.

According to the general law of service for service, those who receive the ultimate satisfaction must recompense the efforts which have been made for them. As regards the first class of efforts, there is no difficulty. They are bargained for and estimated by the man who makes them, and the man who profits by them. But how are those of the second class to be estimated? How is a just proportion of the permanent advances, the general costs, and what the Economists term fixed capital, to be spread over the whole series of satisfactions which they are destined to realize? By what process can we distribute the burden among those to whom the water is furnished down to the time when the barrow shall be worn out, and among all the consumers of corn until the period when the field will produce no more?

I know not how they would resolve this problem in Icarie, or at the PhalanstÈre.52 But I am inclined to think that the gentlemen who manufacture artificial societies, and who are so fertile in arrangements and expedients, and so prompt to compel their adoption by Law (or constraint), could imagine no solution more ingenious than the very natural process which men have adopted since the beginning of the world, and which it is now sought to prohibit them from following. Here is the process—it flows from the law of Interest.

Suppose a thousand francs to be laid out on agricultural improvements, the rate of interest to be five per cent., and the average return fifty hectolitres of corn. In these circumstances, each hectolitre would be burdened with one franc. [p206]

This franc is obviously the legitimate recompense of an actual service, rendered by the proprietor (whom we might term a labourer), as well to the person who shall acquire a hectolitre of corn ten years hence as to the man who buys it to-day. The law of strict justice, then, is observed here.

But if the agricultural improvement, or the barrow and the water-barrel, have only a limited duration, which we can appreciate approximately, a sinking fund must be added to the interest, in order that, when these portions of capital are worn out, the proprietor may be enabled to renew them. Still it is the law of justice which governs the transaction.

We must not suppose, however, that the franc with which each hectolitre is burdened as interest is an invariable quantity. It represents a value, and is subject to the law of values. It rises or falls with the variation of supply and demand,—that is to say, according to the exigencies of the times and the interests of society.

It is generally thought that this species of remuneration has a tendency to rise, if not in the case of manufacturing, at least in the case of agricultural improvements. Supposing this rent to have been equitable at the beginning, it has a tendency, it is said, to degenerate into abuse; because the proprietor, sitting with his hands across, sees it increase year after year, solely in consequence of the increase of population and the enlarged demand for corn.

I allow that this tendency exists, but it is not peculiar to the rent of land,—it is common to all departments of industry. In all, value increases with the density of population, and even the common day-labourer earns more in Paris than he could in Brittany.

And then, as regards the rent of land, the tendency to which we have referred is powerfully counterbalanced by another tendency—that of progress. An amelioration, realized at the present day by improved processes, effected with less manual labour, and at a time when the rate of interest has fallen, saves our paying too dearly for improvements effected in former times. The fixed capital of the landed proprietor, like that of the manufacturer, is deteriorated in the long-run by the invention of instruments of equal value and greater efficiency. This is a magnificent Law, which overturns the melancholy theory of Ricardo; and it will be explained more in detail when we come to the subject of landed property.

Observe, that the problem of the distribution of the services which form the remuneration of permanent improvements can be resolved only by a reference to the law of interest. The capital [p207] itself cannot be spread over a succession of purchasers, for this is rendered impossible by their indeterminate number. The first would pay for the last, which would be unjust. Besides, a time would arrive when the proprietor would become possessed both of the capital laid out in the improvement, and of the improvement itself, which would be equally unfair. Let us acknowledge, then, that the natural mechanism of society is too ingenious to require the substitution of artificial contrivances.

I have presented the phenomenon in its simplest form, in order to render it intelligible; but, in practice, things do not take place quite as I have described them.

The proprietor does not regulate the distribution himself, or determine that each hectolitre shall be charged with one franc, more or less, as in the hypothetical case which I have put. He finds an established order of things, as well with reference to the average price of corn as to the rate of interest. Upon these data he decides how he shall invest his capital. He will devote it to agricultural improvements, if he finds that the average price of corn will return him the ordinary rate of interest. If not, he will devote his capital to a more lucrative branch of industry—a branch of industry which, just because it is more lucrative, presents, happily for society, greater attractions for capital. This movement of capital from one department to another, which is what actually takes place, tends to the same result, and presents us with another Harmony.

The reader will understand that I confine myself to a special instance only for the sake of elucidating a general law, which applies to all trades and professions.

A lawyer, for example, cannot expect, from the first suit of which he happens to have charge, to be reimbursed the expense of his education, of his course of probation, of his establishment in business, which we may suppose to amount to 20,000 francs. Not only would this be unjust—it would be impracticable; for were he to make such a stipulation, his first brief would never make its appearance, and our Cujacius would be obliged to imitate the gentleman who, on taking up house, could get nobody to come to his first ball, and declared that next year he would begin with his second.

The same thing holds with the merchant, the physician, the shipowner, the artist. In every career we encounter these two classes of efforts—the second imperatively requires to be spread over an indeterminate number of consumers, employers, or customers, and it is impossible to imagine such a distribution without reference to the mechanism of interest. [p208]

Great efforts have been made of late to remove the hatred which exists in the popular mind against capital,—infamous, infernal capital, as it is called. It has been exhibited to the masses as a voracious and insatiable monster, more destructive than cholera, more frightful than revolution, exercising on the body politic the action of a vampire, whose power of suction goes on increasing indefinitely. Vires acquirit eundo. The tongue of this blood-sucker is called usury, revenue, hire, rent, interest. A writer, who might have acquired reputation by his great powers, and who has preferred to gain notoriety by his paradoxes, has been pleased to scatter these paradoxes among a people already in the delirium of a revolutionary fever. I, too, have an apparent paradox to submit to the reader; and I beg him to examine it, and see whether it be not in reality a great and consoling truth.

But, first, I must say a word as to the manner in which M. Proudhon and his school explain what they term the illegitimacy of interest.

Capital is an instrument of labour. The use of instruments of labour is to procure us the co-operation of the gratuitous forces of nature. By the steam-engine we avail ourselves of the elasticity of air; by the watch-spring, of the elasticity of steel; by weights or waterfalls, of gravitation; by the voltaic pile, of the rapidity of the electric spark; by the sun’s rays, of the chemical and physical combinations which we call vegetation, etc., etc. Now, by confounding Utility with Value, we suppose that these natural agents possess a value which is inherent in them; and that, consequently, those who appropriate them are paid for their use, inasmuch as value implies payment. We imagine that products are burdened with one item for the services of man, which we admit to be just; and with another item for the services of nature, which we reject as iniquitous. Why, it is asked, should we pay for gravitation, electricity, vegetable life, elasticity, and so forth?

The answer to this question is to be found in the theory of value. Those Socialists who take the name of Égalitaires confound the legitimate value of the instrument, which is the offspring of human labour, with its useful result, which, under deduction of that legitimate value, or of the interest which represents it, is always gratuitous. When I remunerate an agricultural labourer, a miller, a railway company, I give nothing, absolutely nothing, for the phenomena of vegetation, gravitation, or the elasticity of steam. I pay for the human labour required for making the instruments by means of which these forces are constrained to act; or, what suits my purpose better, I pay interest for that labour. I render [p209] service for service, by means of which the useful action of these forces is turned gratuitously to my profit. It is the same thing as in the case of Exchange, or simple barter. The presence of capital does not at all modify this law, for capital is nothing else than an accumulation of values, of services, to which is committed the special duty of procuring the co-operation of nature.

And now for my paradox.

Of all the elements of which the total value of any product is made up, the part which we should pay for most cheerfully is that element which we term the interest of the advances, or capital.

And why? Because that element enables us, by paying for one, to save two. Because, by its very presence, it shows clearly that natural forces have concurred in the final result, without our having had to pay for their co-operation; and the consequence is, that the same general utility is placed at our disposal, while at the same time a certain portion of gratuitous utility has, happily for us, been substituted for onerous utility; and, in short, the price of the product has been reduced. We acquire it with a less proportion of our own labour, and, what happens to society at large, is just what would happen to an isolated individual who should succeed in realizing an ingenious invention.

Suppose the case of a common artisan, who earns four francs a-day. With two francs,—that is to say, with half-a-day’s labour, he purchases a pair of cotton stockings. Were he to try to procure these stockings by his own direct labour, I sincerely believe that his whole life would not suffice for the work. How, then, does it happen that his half-day’s work pays for all the human services which have been rendered to him on this occasion? According to the law of service for service, why is he not forced to give several years’ labour?

For this reason, that the stockings are the result of human services, of which natural agents, by the intervention of Capital, have enormously diminished the proportion. Our artisan, however, pays not only for the actual labour of all those who have concurred in the work, but also the interest of the capital by means of which the co-operation of nature was procured; and it is worthy of remark, that, without this last remuneration, or were it held to be illegitimate, capital would not have been employed to secure the assistance of the natural agents. There would have been in the product only onerous utility; for in that case the commodity would have been the exclusive result of human labour, and our artisan would have been brought back to the point whence he started,—that is to say, he would have been placed in the [p210] dilemma of either dispensing with the stockings, or of paying for them the price of several years’ labour.

If our artisan had learnt to analyze phenomena, he would soon get reconciled to Capital, on seeing how much he is indebted to it. He would be convinced, above all, that the gratuitous nature of the gifts of God has been completely preserved, and that these gifts have been lavished on him with a liberality which he owes not to his own merit, but to the beautiful mechanism of the natural social order. Capital does not consist in the vegetative force which has made cotton germinate and flower, but in the pains taken by the planter. Capital is not the wind which fills the sails of the ship, or the magnetism which acts upon the needle, but the pains taken by the sailmaker and the optician. Capital is not the elasticity of steam which turns the spindles of the mill, but the pains taken by the machine-maker. Vegetation, the power of the winds, magnetism, elasticity,—all these are purely gratuitous; and hence the stockings have so little value. As regards the pains taken by the planter, the sailmaker, the optician, the shipbuilder, the sailor, the manufacturer, the merchant, they are spread—or, rather, so far as capital is concerned, the interest of that capital is spread—over innumerable purchasers of stockings; and this is the reason why the portion of labour given by each of these purchasers is so small.

Modern reformers! when I see you desiring to replace this admirable natural order by an arrangement of your own invention, there are two things (although they are in reality one and the same) which confound me,—namely, your want of faith in Providence, and your faith in yourselves—your ignorance, and your presumption.

It follows from what I have said that the progress of mankind coincides with the rapid creation of Capital; for to say that new capital is formed, is just to say, in other words, that obstacles, formerly onerously combated by labour, are now gratuitously combated by nature; and that, be it observed, not for the profit of the capitalist, but for the profit of the community.

This being so, the paramount interest of all (in an economical point of view, and rightly understood) is to favour the rapid creation of capital. But capital, if I may say so, increases of its own accord under the triple influence of activity, frugality, and security. We can scarcely exercise any direct influence on the activity and frugality of our neighbours, except through the medium of public opinion, by an intelligent communication of our antipathies and our sympathies. But as regards security we can do much, for, [p211] without security, capital, far from being formed and accumulated, conceals itself, takes flight, and perishes; and this shows us how suicidal that popular ardour is which displays itself in disturbing the public tranquillity. Let the working-classes be well assured that the mission of Capital from the beginning has been to set men free from the yoke of ignorance, of want, and of despotism; and that to frighten away Capital is to rivet a triple chain on the energies of the human race.

The vires acquirit eundo may be applied with rigorous exactitude to capital, and its beneficent influence. Capital, when formed, necessarily leaves disposable both labour and the remuneration of that labour. It carries in itself, then, a power of progression. There is in it something which resembles the law of velocities. This progression economical science has omitted hitherto to oppose to the other progression which Malthus has remarked. It is a Harmony which we cannot explain in this place, but must reserve for the chapter on Population.

But I must here put the reader on his guard against a specious objection. If the mission of capital, it may be said, is to cause nature to execute work which has been hitherto executed by human labour, whatever good it may confer upon mankind, it must do injury to the working-classes, especially to those classes who live by wages; for everything which throws hands out of employment, and renders them disposable, renders competition more intense; and this, undoubtedly, is the secret reason of the antipathy of the working-classes to men of capital. If this objection were well founded, we should have a discordant note in the social harmony.

The illusion arises from losing sight of this, that capital, in proportion as its action is extended, sets free and renders disposable a certain amount of human efforts, only by setting free and rendering disposable a corresponding fund of remuneration, so that these two elements meet and compensate one another. The labour is not paralyzed. Replaced in a special department of industry by gratuitous forces, it sets to work upon other obstacles in the general march of progress, and with more certainty, inasmuch as it finds its recompense prepared beforehand.

Recurring to our former illustration, it is easy to see that the price of stockings (like that of books, and all things else) is lowered by the action of capital, only by leaving in the hands of the purchaser a part of the former price. This is too clear for illustration. The workman who now pays two francs for what he paid six francs for formerly, has four francs left at his disposal. Now, it is exactly [p212] in that proportion that human labour has been replaced by natural forces. These forces, then, are a pure and simple acquisition, which alters in no respect the relation of labour to available remuneration. It will be remembered that the answer to this objection was given formerly,53 when, observing upon man in a state of isolation, or reduced once more to the primitive law of barter, I put the reader on his guard against the illusion which it is my object here to dispel.

We may leave capital, then, to take care of itself, to be created and accumulated according to its own proper tendencies, and the wants and desires of men. Do not imagine that, when the common labourer economizes for his old days, when the father of a family sets his son up in business, or provides a dower for his daughter, they are exercising to the detriment of the public that noble attribute of man, Foresight; but it would be so, and private virtues would be in direct antagonism with the general good, were there an incompatibility between Capital and Labour.

Far from mankind being subjected to this contradiction, or, I might rather say, this impossibility (for how can we conceive progressive evil in the aggregate to result from progressive good in individual cases?) we must acknowledge that Providence, in justice and mercy, has assigned a nobler part to Labour than to Capital in the work of progress, and has afforded a stimulant more efficacious, a recompense more liberal, to the man who lives by the sweat of his brow, than to the man who subsists upon the exertions of his forefathers.

In fact, having established that every increase of capital is followed by a necessary increase of general prosperity, I venture to lay down the following principle with reference to the distribution of wealth,—a principle which I believe will be found unassailable:—

“In proportion to the increase of Capital, the absolute share of the total product falling to the capitalist is augmented, and his relative share is diminished; while, on the contrary, the labourer’s share is increased both absolutely and relatively.”

I shall explain this more clearly by figures:—

Suppose the total products of society, at successive epochs, to be represented by the figures 1000, 2000, 3000, 4000, etc.

I maintain that the share falling to the capitalists will descend, successively, from 50 per cent., to 40, 35, 30 per cent., and that the share of the labourers will rise, consequently, from 50 per cent., to 60, 65, 70 per cent.,—so that the absolute share of the [p213] capitalist will be always greater at each period, although his relative share will be smaller.

The division will take place in this way,—

Such is the great, admirable, reassuring, necessary, and inflexible law of Capital. To demonstrate it, appears to me to be the true way to strike with discredit the declamations which have so long been dinned into our ears against the avidity, the tyranny, of the most powerful instrument of civilisation and of equality which has ever proceeded from the human faculties.

The demonstration is twofold. First of all, we must prove that the relative share of the product falling to the capitalist goes on continually diminishing. This is not difficult; for it only amounts to saying that the more abundant capital becomes, the more interest falls. Now, this is a matter of fact, incontestable and uncontested. Not only does science explain it—it is self-evident. Schools the most eccentric admit it. It forms the basis of their theory, for it is from this very fall of interest that they infer the necessary, the inevitable annihilation of what they choose to brand as infernal Capital. Now, say they, inasmuch as this annihilation is necessary, is inevitable, and must take place in a given time; and, moreover, implies the realization of a positive good, it is incumbent on us to hasten it and insure it. I am not concerned to refute these principles, or the deductions drawn from them. It is enough that Economists of all schools, as well as socialists, egalitaires, and others, all admit, in point of fact, that interest falls in proportion as capital becomes more abundant. Whether they admit it or not, indeed, the fact is not the less certain. It rests upon the authority of universal experience, and on the acquiescence, involuntary it may be, of all the capitalists in the world. It is a fact that the interest of capital is lower in Spain than in Mexico, in France than in Spain, in England than in France, in Holland than in England. Now, when interest falls from 20 to 15 per cent., and then to 10, to 8, to 6, to 5, to 4½, to 4, to 3½, to 3 per cent., what does that mean in relation to the question which now engages us? It means that capital, as the recompense of its co-operation in the work of production, in the realization of wealth, is content, or, if you will, is forced to be content, with a smaller and smaller share of the product in proportion as capital increases. Does it constitute one-third of the value of corn, of cloth, of houses, of ships, of [p214] canals? in other words, when these things are sold, does one-third of the price fall to the capitalist, and two-thirds to the labourer? By degrees, the capitalist receives no more than a fourth, a fifth, a sixth. His relative share goes on diminishing, while that of the labourer goes on increasing in the same proportion; and the first part of my demonstration is complete.

It remains for me to prove that the absolute share falling to the capitalist goes on constantly increasing. It is very true that the tendency of interest is to fall. But when, and why? When, and because, the capital becomes more abundant. It is then quite possible that the total product should be increased while the percentage is diminished. A man has a larger income with 200,000 francs at four per cent., than with 100,000 francs at five per cent., although, in the first case, he charges less to the manufacturer for the use of his capital. The same thing holds of a nation, and of the world at large. Now, I maintain that the percentage, in its tendency to fall, neither does nor can follow a progression so rapid that the sum total of interest should be smaller when capital is abundant than when it is scarce. I admit, indeed, that if the capital of mankind be represented by 100 and interest by 5,—this interest will amount to no more than 4 when the capital shall have mounted to 200. Here we see the simultaneousness of the two effects. The less the relative part, the greater the absolute part. But my hypothesis does not admit that the increase of capital from 100 to 200 is sufficient to make interest fall from 5 to 2 per cent., for example; because, if it were so, the capitalist who had an income of 5000 francs with 100,000 francs of capital, would have no greater income than 4000 francs with 200,000 francs of capital. A result so contradictory and impossible, an anomaly so strange, would be met with the simplest and most agreeable of remedies; for then, in order to increase your income, it would only be necessary to consume half your capital. A happy and whimsical age it would be when men could enrich by impoverishing themselves!

We must take care, then, not to lose sight of the combination of these two correlative facts. The increase of capital, and the fall of interest, take place necessarily in such a way that the total product is continually augmented.

And let us remark in passing, that this completely exposes the fallacy of those who imagine that because interest falls, it tends to annihilation. The effect of that would be, that a time would arrive when capital would be so much increased as to yield nothing to its possessors. Keep your mind easy on that score—before [p215] that time comes, capitalists will dissipate the stock in order to ensure the reappearance of interest.

Such is the great law of Capital and Labour in what concerns the distribution of the product of their joint agency. Each of them has a greater and greater absolute share, but the proportional share of the capitalist is continually diminished as compared with that of the labourers.

Cease, then, capitalists and workmen, to regard each other with an eye of envy and distrust. Shut your ears against those absurd declamations which proceed from ignorance and presumption, which, under pretence of insuring future prosperity, blow the flame of present discord. Be assured that your interests are one and identical; that they are indisputably knit together; that they tend together towards the realization of the public good; that the toils of the present generation mingle with the labours of generations which are past; that all who co-operate in the work of production receive their share of the produce; and that the most ingenious and most equitable distribution is effected among you by the wise laws of Providence, and under the empire of freedom, independently altogether of a parasite sentimentalism, which would impose upon you its decrees at the expense of your well-being, your liberty, your security, and your self-respect.

Capital has its root in these attributes of man—Foresight, Intelligence, and Frugality. To set about the creation of capital we must look forward to the future, and sacrifice the present to it—we must exercise a noble empire over ourselves and over our appetites; we must resist the seduction of present enjoyments, the impulses of vanity and the caprices of fashion and of public opinion, always so indulgent to the thoughtless and the prodigal. We must study cause and effect, in order to discover by what processes, by what instruments, nature can be made to co-operate in the work of production. We must be animated by love for our families, and not grudge present sacrifices for the sake of those who are dear to us, and who will reap the fruits after we ourselves have disappeared from the scene. To create capital is to prepare food, clothing, shelter, leisure, instruction, independence, dignity, for future generations. Nothing of all this can be effected without bringing into play motives which are eminently social, and, what is more, converting these virtues into habits.

And yet it is very usual to attribute to capital a sort of fatal efficacy, the effect of which is to introduce egotism, austerity, Machiavelism, into the hearts of those who aspire to possess it. But let us not be misunderstood. There are countries where [p216] labour is of little value, and the little that is earned is shared by the government. In order to snatch from you the fruit of your toil, what is called the State surrounds you with a multitude of trammels. It interferes with all your actions, and mixes itself up in all your concerns. It domineers over your mind and your faith. It disarranges all interests, and places them in an artificial and precarious position. It enervates individual energy and activity, by usurping the direction of all affairs. It makes the responsibility of actions fall upon people with whom it amounts to nothing, so that by degrees all notions of what is just or unjust are effaced. By its diplomacy it embroils the nation in quarrels with all the world, and then the army and navy are brought into play. It warps the popular mind as much as it can upon all economical questions; for it is necessary to make the masses believe that its foolish expenditure, its unjust aggressions, its conquests, its colonies, are for them a source of riches. In such countries it is difficult to create capital by natural means. The great object is to purloin it by force or by fraud from those who have created it. We there see men enriching themselves by war, by places at court, by gambling, by purveying, by stockjobbing, by commercial frauds, by hazardous enterprises, by public contracts, etc. The qualities requisite for thus snatching capital from the hands of those who create it are precisely the opposite of those necessary for its formation. It cannot surprise us, then, that in countries so situated an association is established between these two ideas—capital and egotism; and this association becomes ineradicable when all the moral ideas of the country exhaust themselves on ancient and mediÆval history.

But when we turn our regards, not to this abstraction and abuse of capital, but to its creation by intelligence and activity, foresight and frugality, it is impossible not to perceive that a moral and social virtue is attached to its acquisition.

Nor is there less moral and social virtue in the action of capital than in its formation. Its peculiar effect is to procure us the co-operation of nature, to set us free from all that is most material, muscular, brutal, in the work of production; to render the intelligent principle more and more predominant; to enlarge the domain, I do not say of idleness, but of leisure; to render less imperious the physical wants of our nature, by rendering their satisfaction more easy, and to substitute for them wants and enjoyments of a nature more elevated, more delicate, more refined, more artistic, more spiritual.

Thus, in whatever point of view we place ourselves, whether [p217] we regard Capital in connexion with our wants, which it ennobles; with our efforts, which it facilitates; with our enjoyments, which it purifies; with nature, which it enlists in our service; with morality, which it converts into habit; with sociability, which it develops; with equality, which it promotes; with freedom, in which it lives; with equity, which it realizes by methods the most ingenious—everywhere, always, provided that it is created and acts in the regular order of things, and is not diverted from its natural uses, we recognise in Capital what forms the indubitable note and stamp of all great providential laws,—Harmony. [p218]