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.