A History of Economic Doctrines / from the time of the physiocrats to the present day

by Charles Gide; Charles Rist

Interest will be paid on the capital employed in founding the industry, such interest being guaranteed against taxation. But we must not conclude that Blanc favoured this condition because he believed in the legitimacy of interest, as Fourier did. He was too pronounced a disciple of the Saint-Simonians ever to admit that it was legitimate. The time will come, he thinks, when it will no longer be necessary, but he gives no hint as to how to get rid of it. For the present at any rate it must be paid, were it only to enable the transition to be made. “We need not with savage impatience destroy everything that has been founded upon the abuses which as a whole we are so anxious to remove.” The interest paid, along with the wages, will form a part of the cost of production. The capitalists, however, will have no share in the net profit unless they have directly contributed to it.

It seems that the only difference between the social workshop and the present factory is its somewhat more democratic organisation, and the fact that the workers themselves seize all the profit (i.e. over and above net interest), instead of leaving it, as was hitherto the case, to the entrepreneur.

But this social workshop, as we have said, is a mere cell out of which a new society is expected to form. The amusing feature is this, that the new society can only come into being through the activity of competition—competition purged of all its more abominable features, that is to say. “The arm of competition must be strengthened in order to get rid of competition.” That ought not to be a very difficult task, for the “social workshop as compared with the ordinary private factory will effect greater economies and have a better system of organisation, for every worker without exception will be interested in honestly performing his duty as quickly as possible.” On every side will private enterprise find itself threatened by the new system. Capital and workers will gravitate towards the social workshop with its greater advantages. Nor will the movement cease until one vast association has been formed representing all the social shops in the same industry. Every important industry will be grouped round some central factory, and “the different shops will be of the nature of supplementary establishments.” To crown the edifice, the different industries will be grouped together, and, instead of competing with one another, will materially help and support each other, especially during a time of crisis, so that the understanding existing between them will achieve a still more remarkable success in preventing crises altogether.

Thus by merely giving it greater freedom the competitive régime will gradually disappear, to make way for the associative régime, and as the social workshops realise these wonderful ideals the evils of competition will disappear, and moral and social life will be cleansed of its present evils.

The remarkable feature of the whole scheme is that hardly anything new is needed to effect this vast change. Just a little additional pressure on the part of Government, some capital to set up the workshops, and a few additional regulations to guide it in its operations, that is all.

This is really a very important point in Louis Blanc’s doctrine, which clearly differentiates it both from Owen’s and Fourier’s. They appeared to think that the State was not necessary at all: private initiative seemed quite sufficient. It was hoped that society would renew itself spontaneously without any extraneous aid, and this is still the working creed of the co-operative movement. Wherever the co-operative movement has flourished the result has been entirely due to the efforts of its members. But Louis Blanc’s attention was centred on the highly trained artisan, and the problem was to find capital to employ him. Were they to rely upon their own savings, they would never make a beginning.[558] Moreover, somebody must start the thing, and power is wanted for this. That power will be organised force, which will be employed, however, not so much as an ally, but rather as a “starter.” Intervention will necessarily be only temporary. Once the scheme is started its own momentum will keep it going. The State, so to speak, “will just give it a push: gravity and the laws of mechanics will suffice for the rest.” That is just where the ingenuity of the whole system comes in, and as a matter of fact the majority of the producing co-operative societies now at work owe their existence to the financial aid and administrative ability of public bodies, without which they could hardly keep going.

Louis Blanc, accordingly, is one of the first socialists to take care to place the burden of reform upon the shoulders of the State. Rodbertus and Lassalle make an exactly analogous appeal to the State, and for this reason the French writer deserves a place among the pioneers of State Socialism.

This appeal of the socialists is beautifully naïve. On the one hand they invite the adherence of Government to a proposal that is frankly revolutionary, in which case it is asked to compass its own destruction—naturally not a very attractive prospect. On the other hand the project seems harmless enough, and the support which the Government is asked to extend further emphasises the modest nature of the undertaking. State socialism cannot escape the horns of this dilemma by proclaiming itself frankly conservative, as it has done in Germany.

Louis Blanc, like Lassalle after him, was much concerned with immediate results, and he failed to notice this objection. He paid considerable attention to another line of criticism, however, and one that he considered much more dangerous. He sought a way of escape by using an argument which was afterwards frequently employed by the State Socialists, as we shall see by and by.