Anarchism: A Criticism and History of the Anarchist Theory

by E. V. Zenker

(10) Politics is the science of freedom; the government of men by men, under whatever name it may be concealed, is servitude; the highest consummation of society is found in the union of order and anarchy.

We will only select from this Decalogue of Collectivist Anarchism one dogma, the seventh; because it contains a fundamental error of Proudhon's, which must continually produce other errors. "Products," he says, "are only exchanged for products; but since every bargain presupposes the equality of products, profit is impossible and not right." By this proposition the question of pauperism and everything evil is to be solved, and, in fact, Proudhon even made some attempts to realise the theory contained therein. But that every bargain presupposes the equality of products in any other than the sense determined by supply and demand, is untrue; yet even this equality is not regarded by Proudhon as such. He understands thereby equivalence or the equality of values, which again is determined by the time of labour, and accordingly he makes it a presupposition of a free bargain that only products which represent equal times of labour can be exchanged. Thus a hat which took six hours to make, should be exchanged for a poem which was written in the same time. And if we are startled by the incorrectness of this assumption, what can be said for the converse of this statement, namely, that products of equal value, i. e., such as represent equal times of labour, must be accepted at any time in place of payment, just as money is accepted to-day? Proudhon ascribed the utility of money as a universal medium of exchange to the supposed circumstance that its value was fixed or established, and concluded therefrom that whenever the value of other commodities was determined, they would have the same utility as money; thus, that it would be possible to exchange at any time a watch which represented three days' work for a pair of boots which had been made in the same time. And to complete this economic and logical confusion, Proudhon once again inverts history, and makes the just and free exchange of products and the circulation of values the starting-point for the determination of values, and thereby also the foundation of his realm of justice, freedom, and equality, in which economic forces have free play.

If values circulate themselves, then too they determine themselves, and thus only is there a just bargain; profit is impossible, so too is the accumulation of capital and property. Since all have equal share in production as in consumption, commodities will always be where they are needed, and they will always be needed where they exist; supply and demand will equal one another, value in use and value in exchange will be the same, value is determined, and the circle (which is in any case a vicious circle) is completed. Land, like all the means of labour, is a collective possession. Every one will enjoy the full results of his labour, but no one will be able to heap up riches because profit in any form is impossible. Men will collect through their own free choice in productive groups, which again will be in direct intercourse one with another, and will exchange their products as may be required, without profit. Common interests will be determined by Boards of Experts, who will be chosen by the members of these groups by means of universal suffrage. The total of all these boards, which are completely autonomous, forms the only existing and only possible administration. Governments become superfluous, since the economic life must entirely absorb political life. And since there will be no property and no distinction of rich and poor, there will also be no rule of one man over another, there will be no criminals, judicial and civil power, militarism and bureaucracy become superfluous and disappear of themselves. In spite of anarchy (i. e., no government), or rather because of it, the greatest, the only order will prevail.

In fact, if anything ever deserved the name ideal it is this reform of society sketched by Proudhon, to which he himself has given the name "Mutualism." He did not suspect or notice that he had done nothing more than express the abstract formula of existing relationships, the most general conception of the liberal scheme of economics. Things happen in our own world just as Proudhon wished in his kingdom of the future, only there are a few insignificant factors of friction, extensions of co-efficients, and so on, which he, if he had been familiar with scientific methods, would have added as "corrections" to his universal formula. The present world is related to his as any one triangle is to the triangle absolute. The triangle which is neither obtuse-angled, nor acute-angled, nor right-angled, neither equilateral nor isosceles, nor of unequal sides, whose sides and angles are not confined to any particular measurement, may certainly be a real triangle and contain no contradiction in itself (which is by no means the case in Proudhon's realm of justice), but this triangle cannot be drawn or even imagined. This is the old dispute of nominalists and realists, a piece of scholasticism long since obsolete applied to the problems of modern society, and not even worth refutation, least of all worthy of any man who has once correctly recognised the reality of human society, and made it the guiding motive of his thought.

On two occasions Proudhon seemed to have the alluring opportunity of being able to realise his Utopian visions. The first was in the time of the Revolution. In February, 1849, he founded the People's Bank (Banque du Peuple),[16] which was to take the initiative in free economic organisation, and, according to Proudhon's expectations, would have introduced "free society" if, at the decisive moment, he had not been sent for three years to the prison of Saint Pélagie for a political offence, and the Bank was therefore compelled to liquidate. The second opportunity occurred in the year 1855. Napoleon had asked for opinions as to how the Palais de l'Industrie, in which the Paris Exhibition had been held, could be used after its close as an institution of public utility. Among those to whom this question was addressed we find Proudhon, who answered it with the project of a permanent exhibition,[17] which was to be conducted by a society proceeding from very much the same point of view as the People's Bank. This project was, of course, left unnoticed, and Proudhon became deeply disgusted and discouraged at this new disappointment.

The People's Bank, like its subsequent second edition, the Permanent Exhibition Company, was to be founded (in Proudhon's Hegelian method of expression) upon the identity of the shareholders and their clients. The producers who had a share in the People's Bank were to deliver their products to the bank, which would control and determine the prices of those commodities by assessors, the prices being determined only with reference to the time of labour spent upon them and the necessary expenses of production; profit was forbidden since the bank was not to operate upon its own account. The producer received upon delivery of his goods "exchange bonds," in return for which he then could take from the bank other commodities. As the bank also granted its customers loans without charging interest, money and interest would become unnecessary, trade would gradually be carried on only by means of the bonds of the bank, and thus would be brought about the harmony of social intercourse of which Proudhon dreamed.

The Permanent Exhibition Company was to be a new edition of the People's Bank, perfected and enlarged in every direction. Since the shareholders of this company consisted of producers, and their purpose was above all the sale and interchange of products, so therefore the subscription for the formation of the capital was not to be, as in the case of other companies, merely in money, but was to be nine-tenths in products, which were to be sold by the company, and the receipts of the sale were then to be credited to the shareholders. As the State was to become surety for the interest on these shares, Proudhon thought that these must become actual money, representing rights to dividend, which could only lose their value by the destruction of the company's depot for goods. Against the goods which were deposited with it or the sale of which it undertook, as well as against the bills which were given to it to discount, the company was to issue, together with the cash which it had at disposal, general bonds of exchange (la bons généraux d'échange) which would represent the goods stored in it and realised by it, and should give the claim to an equal value in goods which the holder of the bond could take from the storehouses as he wished. These bonds were to be the circulating money of the company, and were to be accepted by it instead of cash payments in all transactions with goods or with bills. The circulating paper of the company, held by it at par, owing to the fact that it could be exchanged into money or the goods of the company upon presentation, would become the great lever of its operations and the irresistible instrument of its power. The company was to undertake banking and commission business of all kinds, grant credit in money and goods, and support industry, trade, and agriculture.

All objects deposited with this society, including gold and silver, and especially all articles composing its balance, were to be arranged in an exchange tariff, which would be continually changeable, and the object of which was to secure the equivalence of values. "Certainly every rise in the exchange of an article would be balanced by an equivalent fall of exchange in one or more articles, if one regards the existing total sum, one-tenth being allowed in fluctuations either up or down. The differences in time in the balance would be entered in a special balance book which would finally equalise itself from time to time."

That is the project; and its author gives the following example: Since the company carries on no business on its own account, and neither acquires nor possesses products itself, and thus does not lose money on the rise or fall, it is only guided in directing the course of prices by one object, viz., to moderate one by the other, and to create a permanent and a daily compensation; thus, if demand arises for one product while it falls off for one or several others, the company raises the price of the first 4 per cent., and at the same time lowers, according to the quantity of the first, the price of the other in such a way that the compensation is as exact as possible. Because it is difficult to reach this mathematical exactitude, a certain margin is allowed, which again, compensating itself from time to time, never can amount to the assets of the society. If we assume, for the sake of example, that the price of gold has fallen—that is, that gold is freely offered, while silver has risen, that is, is more in demand—the company, since its bills are discounted with its own notes, will give 100 francs of its money for 105 francs of gold, equal to 100 francs in silver; or, to express myself more exactly, for a weight of gold which is only one-twentieth higher than five twenty-five franc pieces, and the weight of silver which is only one-twentieth lower than twenty-five franc pieces. From this compensation no profit accrues to the company; it has only intervened with its own money in order again to re-establish equilibrium.

From this process of compensation carried on by the company, which was to be applied in like manner to all products, raw materials and food stuffs, and so on, Proudhon hoped for that much talked of and much promising fixity of values, since all products would (so to speak) be monetised and made into money, and would maintain the highest degree of circulating power. Branches of the company over all France and a complete public administration were to complete the system, which should have as its object the organisation and centralisation of exchange of products in return for products, according to the formulæ of J. B. Say, with as little money as possible, as few intermediaries as possible, with the least possible expense, and for the exclusive benefit of producers and consumers.