"And as the sinews of every administration are money, as the budget is made for the country and not the country for the budget, as the taxes must every year be granted freely by the representatives of the people, as this is the original and inalienable right of the people both under a monarchy and a republic, since the country must first sanction the income and expenditure before it can be applied by the Government,—does it not follow that the consequence of this financial initiative, which is formally recognised as belonging to the citizens in all our constitutions, will consist in the fact that the finance minister, or, in a word, the whole fiscal organisation, belongs to the country and not to its ruler; that it depends directly upon those who pay the budget and not upon those who spend it; that there would be infinitely fewer abuses in the administration of public money, fewer extravagances and deficits, if the State had just as little power over public finances as over religion, justice, the army, taxes, public works, and public instruction?
"Supposing the heads of the different branches of administration were grouped together, we should have then a council of ministry or an executive power which would serve just as well as a State Council. Place over this a great 'jury,' legislative body, or national assembly, elected and commissioned directly by the whole of the country, whose duty it is not to nominate the ministers, for these receive their office from the members of their special departments, but to look through accounts, to make laws, to draw up the budget, and to decide the differences between the different administrations after having received the report of the Public Minister or the Minister of the Interior, to which in the future the whole Government will be reduced,—and there you would have a centralisation which would be all the stronger the more its different centres were multiplied. You would have responsibility, which is all the more real because the separation between various powers is more sharply defined; you would have a constitution which at the same time is political and social."
Here we have the picture of the society of the future, as Proudhon imagined it when the principles of democracy and, above all, of universal suffrage have become a reality—the celebrated federative principle of Proudhon, the inheritance of the most talented party of any age, the Girondists, locally developed, and to some extent not without a profound knowledge of politics. It cannot be denied that the federal principle, as Proudhon here explains it, means the integration of social force, which in its differentiation meets us sometimes as a special and sometimes as the common interest, sometimes as Individualism or again as Altruism. According to this, federation is nothing more than the translation into politics of the metaphor (which we formerly used from physics) of the resultants of several component forces; a metaphor which not only suits the genius of Proudhon, but also is frequently found in his language. Proudhon was deeply permeated by the reality of Collectivism, but saw it in the light both of Physics and Physiology, so that the word "resultants" is with him more than a metaphor. In this respect Proudhon far surpassed in insight all the social philosophers of his age, and anticipated the pioneers of modern sociology. But he contradicted himself, and lost his special merits by wishing to make out of a social law an absolute formula; by abandoning the scientific standpoint which he once attained, and falling back again into dogmatism. If we conceive all society in the mechanical manner in which Proudhon did; or if we think (as he did) that we have at least partially discovered the laws of its movement, then all further politics exhaust themselves in an experimental verification of the laws in question. But to anticipate any point of the development which one expects, and to regard it as something absolute, is a process irreconcilable with an exact scientific method. In brief, Proudhon's federalism is a political principle; his Anarchism is a dogma, or at best an hypothesis which cannot even be logically proved from the first-named, for it is not true, as Proudhon maintains, that the idea of agreement excludes that of lordship.
But if Proudhon conceives all society in a mechanical manner, it is to be expected that he would again seek—and find—the same laws that he saw operating in the political constitution also in economic life. This is, as a matter of fact, the case. "Agreement solves every problem"; only agreement in economic life means with him exchange. "Social agreement," he says, "is in its essence like the agreement of exchange." Therefore the corner-stone in his economic system is exchange. But Proudhon transposed into this purely empiric idea a moral element, by presupposing equality and justice as necessary to exchange. Economic freedom, he reasons, is free exchange; but an exchange can only be called free which presupposes the equality of values, or, in other words, equality and justice. This again presupposes a just balance and constitution of values—a mutual balance of all economic and social forces. What, then, is economic freedom? It is equality and justice. And what is the opposite—the hindrance of these principles? It is inequality, injustice, slavery, which means property. This is the reason why Proudhon's doctrine of property stands at the centre of his system, which it by no means exhausts; it is the reason why he always proceeded from this point, and always returned to it again. Here we have clearly the reason for all his numberless and endless mistakes in the province of economics, the weak point of this otherwise great and noble mind. As we already have remarked about the Contradictions, Proudhon did not attack property in itself; he tried to ennoble it and bring it into harmony with the claims of justice and equality by taking away from it what to-day is a jus utendi et abutendi, that is, its rights over the substance of a thing, and the right of devolving it for ever. The ominous statement "Property is Theft" was directed only against this. This kind of property (propriété, dominium) was to be replaced by individual possession (possession individuelle): as to which one must take care to understand the distinction between "property" and "possession" in the legal sense.
Proudhon sought in his first and larger work, which is mainly of a critical nature, to put forward the negative proof that property is impossible, by inverting all the proofs hitherto brought forward in its favour, so that instead of justifying the possession of property they seemed rather to make for freedom. It is, however, quite wrong to regard this dialectic jugglery as the essence of Proudhon's system. A proof, such as that here proposed by Proudhon, is not only quite inadmissible as logic, but it cannot even be said that Proudhon himself (usually so accurate in this respect) turned out here a really good piece of work. On the one hand he attacks the defenders of property, who, after all, are not very difficult to controvert; while, at the same time, his attempt itself does not always succeed. Of course it does not mean very much when he cleverly riddles the old argument for property drawn from divine right or the right of nature; for in any case he was only attacking dead theories. In the attack on really living arguments, as in the case of his theory of labour, he does not succeed.
Property cannot be explained by labour because
(1) The land cannot be appropriated,
(2) Labour leads to equality, and in the sight of justice labour, on the contrary, abolishes property.
The proposition that property, i. e., the right to the substance of the thing appropriated, cannot be created by labour, because the land cannot be appropriated, is at least a petitio principii or tautology. But, leaving that, let us suppose that the land really cannot be appropriated; yet there is always some kind of property which has nothing to do with the land. It will not do always to speak of landed property only, as Proudhon invariably does. Movable property (in weapons, utensils, ornaments, animals, etc.) precedes immovable property, owing to its origin, which was only created in imitation of the other much later, and is entirely property due to work; thus not only property, but not even the origin of the idea of property in men, can be explained from the point of view of social history otherwise than by work.