"My masters," said Proudhon to his friend Langlois in the year 1848, "that is those who woke fruitful ideas in me, are three: first of all, the Bible, then Adam Smith, and finally Hegel." Proudhon always boasted of being Hegel's pupil, and Karl Marx maintained that it was he who, during his stay in Paris in the year 1844, in debates which often lasted all night long, inoculated Proudhon (to the latter's great disadvantage) with Hegelianism, which he nevertheless could not properly study owing to his ignorance of the German language. A well-known anecdote attributes to Hegel the witty saying that only one scholar understood him and he misunderstood him. We do not know who this scholar was, but it might just as well have been Marx as Proudhon, for that which both of them took from the great philosopher, and applied as and how and when they did, is common to both: namely, the dialectic method applied to the problems of social philosophy.

The similarity between them in this respect is so striking that one might call both these embittered opponents the personal antitheses of the great master, Hegel. As for the rest, Proudhon's inoculation with Hegelianism, which was afterwards continued by K. Grün and Bakunin, must have been very marked and continuous, for we shall constantly be meeting with traces of it as we go on. Powerful as was the influence of Hegel upon Proudhon, the Anarchist was but little affected by the fashionable philosophy of his contemporary and fellow-countryman, A. Comte; which is all the more remarkable since it is Comte's Positivism which, proceeding along the lines of Spencer's philosophy, has in no small degree influenced modern Anarchism, while echoes of the Comtian individualist doctrine are even to be found in the German contemporary of Proudhon, Stirner; echoes which, although numerous, are perhaps unconscious. Proudhon attached himself, as already mentioned, specially to the Hegelian dialectic and to the doctrine of Antitheses. Using this criterion, Proudhon proceeded to the consideration and criticism of social phenomena; and just as beginners and pupils in the difficult art of philosophy, instead of contenting themselves with preliminary questions, attack the very kernel of problems, with all the rashness of ignorance, so Proudhon also attacked, as his first problem, the fundamental social question of property, taking it up for the subject of his much-quoted though much less read work, What is Property? (Qu'est-ce que la Propriété?—First essay in Recherches sur le Principe du Droit et du Gouvernement). Proudhon has been judged and condemned, though, and wrongly, yet almost exclusively, by this one essay, written at the beginning of his literary career. Friends and foes alike have always contented themselves with regarding the celebrated dictum there uttered, Property is Theft, as the Alpha and the Omega of Proudhon's teaching, without reading the book itself. And because it has been thought sufficient to catch up a phrase dragged from all its context, so it has happened that Proudhon to-day, although he is one of the most frequently mentioned authors, is hardly either known or read. Although the question of property forms the corner-stone of all Proudhon's teaching, yet it would be wrong to identify it with his doctrine entirely. And it is no less wrong to represent the first attempt which Proudhon made to solve so great a problem as the whole of his views about property, as unfortunately even serious authors have hitherto done almost without exception, and especially those who make a special study of him, such as Diehl. As a matter of fact, Proudhon has carefully and elaborately set forth his theory of property in several other works which are mixed up for the most part with his other numerous writings, and has left behind a fragment of a book on the theory of property, in which he meant to produce a comprehensive theory of property as the foundation of his whole work. We must, therefore, in order not to anticipate, leave a complete exposition of Proudhon's theory of property to a later portion of this book, hence we will merely glance at the work, What is Property? and also at another study which appeared in 1843 called The Creation of Order in Humanity, which shows the second, or I might say, the political side of Proudhon's train of thought in its first beginnings, and of which Proudhon himself said later, that it satisfied neither him nor the public, and was worse than mediocre, although he had very little to retract in its contents. "This book, a veritable infernal machine, which contains all the implements of creation and destruction," he said in his Confessions, "is badly done, and is far below that which I could have produced if I had taken time to choose and arrange properly my materials. But however full of faults my work may now appear, it was then sufficient for my purpose. Its object was to make me understand myself. Just as contradiction had been useful to me to destroy, so now the processes of development served me to build up. My intellectual education was completed, the Creation of Order had scarcely seen the light, when, with the application of the creative method which followed immediately upon it, I understood that in order to obtain an insight into the revolution of society the first thing must be to construct the whole series of its antitheses, or the system of opposites."

This was done in the book which appeared at Paris in two volumes in 1846, The System of Economic Contradictions, or the Philosophy of Misery, which deserves to be called his masterpiece, both because it contains the philosophic and economic foundations of his theory in a perfectly comprehensive and clear exposition, and because it is impossible to understand Proudhon without a knowledge of these contradictions. In his first work upon property, Proudhon had represented it as something equivalent to theft. But now we have another doctrine proposed: that Property is Liberty. These two propositions were thought by Proudhon to be proved in the same way. "Property considered in the totality of social institutions has, so to speak, two current accounts. One is the thought of the good which it produces, and which flows directly from its nature; the other is the disadvantages which it produces, and the sacrifices which it causes, and which also result directly, just as much as the good, from its nature. In property evil, or the abuse of it, is inseparable from the good, just as in book-keeping by double entry the debtor is inseparable from the creditor side. The one necessarily implies the other. To suppress the abuse of property means to extinguish it, just as much as to strike out an entry on the debtor side means also striking it out on the creditor side of an account." He proceeded in the same way with all "economic categories." Labour, he tells us in the Contradictions more explicitly, is the principle of wealth, the power which creates or abolishes values, or puts them in proportion one to another, and also distributes them. Labour thus in itself, at the same time, is a force that makes for equilibrium and productivity, which one might think should secure mankind against every want. But in order to work, labour must define and determine itself—that is, organise itself. What are, then, the organs of labour, that is, the forms in which human labour produces and fixes values and keeps off want? These forms or categories are: division of labour, machinery, competition, monopoly, the State or centralisation, free exchange, credit, property, and partnership.

However much labour in itself is the source of wealth, yet those means which are invented for the purpose of increasing wealth, become, through their antagonism and through that antithetical character, which, according to Proudhon, lies in the very nature of all social forms, just as many causes of want and pauperism. Labour gains by its division a more than natural fertility, but, at the same time, this divided labour, which debases the workman, sinks, owing to the manner in which this division is carried out, with great rapidity below its own level and only creates an insufficient value. After it has increased consumption by the superfluity of products, it leaves them in the lurch owing to the low rate of pay; instead of keeping off want it actually produces it.

The deficiency caused by the division of labour is said to be filled by machinery, which not only increases and multiplies the productivity of labour, but also compensates for the moral deficiency caused by the division of labour, and supplies a higher unity and synthesis in place of the division of labour. But according to Proudhon this is not the case; with machinery begins the distinction between masters and wage-earners, between capitalists and workmen. Thus mankind, instead of being raised up by machinery from degradation, sinks deeper and deeper. Man loses both his character as a man, and freedom, and becomes only a tool. Prosperity increases for the masters, poverty for the men; the distinction of caste begins, and a terrible struggle becomes manifest, which consists in increasing men in order to be able to do without them. And so the general pressure becomes more and more severe; poverty, already heralded by the division of labour, at last makes its appearance in the world, and henceforth becomes the soul and sinews of society.

As opposed to its aristocratic tendencies, society places freedom or competition. Competition emancipates the workman and produces an incalculable growth in wealth. By competition the productions of labour continually sink in price, or (what comes to the same thing) continually increase in quality: and since the sources of competition, just like mechanical improvements and combinations of the division of labour, are infinite, it may be said that the productive force of competition is unlimited as regards intensity and scope. At last, by competition, the production of wealth gets definitely ahead of the production of men, by which statement Proudhon destroys the dogma of Malthus, which, we may remark, was no more proved than his own. But this competition is also a new source of pauperism, because the lowering of prices which it brings with it only benefits, on the one hand, those who succeed, and, on the other, leaves those who fail without work and without means of subsistence. The necessary consequence, and, at the same time, the natural antithesis of competition is monopoly. It is that form of social possession without which no labour, no production, no exchange, and no wealth would be possible. It is most intimately connected with individualism and freedom, so that without it we can hardly imagine society, and yet it is, quite as much as competition, anti-social and harmful. For monopoly attracts everything to itself—land, labour, and the implements of labour, productions and the distribution thereof—and annihilates them; or it annihilates the natural equilibrium of production and consumption; it causes the labourer to be deceived in the amount of his reward, and it causes progress in prosperity to be changed into a continual progress in poverty. Finally, it inverts all ideas of justice in commerce.

The State, in its economic relations, should, according to Proudhon, eventuate in an equalisation between the patricians and the proletariat; its regulations (such as taxation) should, in the first place, be an antidote against the arrogance and excessive power of monopoly; but even the institution of the State fails in its purpose, since taxes, instead of being paid by those who have wealth, are almost exclusively paid by those who have not; the army, justice, peace, education, hospitals, workhouses, public offices, even religion,—in short, everything which is intended for the advance, emancipation, and the relief of the proletariat being first paid for and supported by the proletariat, and then either turned against it or lost to it altogether.

It would be useless to repeat what Proudhon says about the beneficial, and at the same time fateful, consequences both of free-trade and its opposite. Who does not know the arguments which even to-day are used by politicians and savants in the still undecided controversy for and against it?

In this system of contradiction, then, in this antithesis of society, Proudhon believed he had discovered the law of social progress, while as a matter of fact he had only given a very negative proof (though he certainly would hardly have acknowledged it) that there is not in economics any more than in ethics anything absolute, and that "benefit" and "harm" are relative terms which have nothing in common with the essence of things; and it is just as wrong in the one case to regard the existing social order as the best of all possible worlds, as it is in the other to regard any one economic institution as a social panacea, or to blame one or the other for all the evils of an evil world. Such a confession of faith might easily be considered trivial, and it might even give rise to a supercilious smile if it required nothing less than the doctrine of antithesis taught by Kant and Hegel to be brought in to prove what are obviously matters of fact. But perhaps it is just this superficial smile which is the justification of Proudhon, who had to fight a severe and not always victorious battle for an apparently trivial cause. We do not forget how helplessly the age in which he lived was tossed to and fro in all social questions, from casuistical Agnosticism to arbitrary Dogmatism; from extreme Individualism to Communism, from the standpoint of absolute laisser faire to the uttermost reliance on authority. In placing these two worlds in sharp contrast one to another, Contradictions, with all its acknowledged faults and errors, performed an undeniable service; and this book—against which Karl Marx has written a severe attack—will retain for all time its value as one of the most important and thorough works of social philosophy. In any case, the net result of the lengthy discussion, in view of the purpose which Proudhon had before him, was absolutely nil. Proudhon certainly endeavoured in his dialectic method to find a solution of antitheses, and to come to some positive result; but even this solution, which was to have been the great social remedy, is, when divested of its philosophical garments, such a general and indefinite draft upon the bank of social happiness that it could never be properly paid.

"I have shewn," said Proudhon, at the close of his Contradictions, "how society seeks in formula after formula, institution after institution, that equilibrium which always escapes it, and at every attempt always causes its luxury and its poverty to grow in equal proportion. Since equilibrium has never yet been reached, it only remains to hope something from a complete solution which synthetically unites theories, which gives back to labour its effectiveness and to each of its organs its power. Hitherto pauperism has been so inextricably connected with labour, and want with idleness, and all our accusations against Providence only prove our weakness." This solution of the great problem of our century by the synthetic union of economic and social antithesis, or, as Proudhon calls it in another place, by a scientific, legal, immortal, and inseparable combination, is certainly a beautiful and noble philosophy. It cannot be denied that herewith Proudhon, who, in all his works, raged furiously against Utopians, has none the less created a Utopia of his own, not, indeed, by forcibly urging mankind through an ideal change, but by attempting to mould life into an ideal shape without, like others, appealing to force, or venturing to organise the forces of terror, in order to accomplish his ideal.