System of Economical Contradictions; Or, The Philosophy of Misery

by P.-J. Proudhon

"You almost always find across your path," says M. Rossi, "some monopoly. There is scarcely a product that can be regarded as the pure and simple result of labor; accordingly the economic law which proportions price to cost of production is never completely realized. It is a formula which is profoundly MODIFIED by the intervention of one or another of the monopolies to which the instruments of production are subordinated.—Course in Political Economy: Volume I., page 143.

M. Rossi holds too high an office to give his language all the precision and exactness which science requires when monopoly is in question. What he so complacently calls a MODIFICATION OF ECONOMIC FORMULAS is but a long and odious violation of the fundamental laws of labor and exchange. It is in consequence of monopoly that in society, net product being figured over and above gross product, the collective laborer must repurchase his own product at a price higher than that which this product costs him,—which is contradictory and impossible; that the natural balance between production and consumption is destroyed; that the laborer is deceived not only in his settlements, but also as to the amount of his wages; that in his case progress in comfort is changed into an incessant progress in misery: it is by monopoly, in short, that all notions of commutative justice are perverted, and that social economy, instead of the positive science that it is, becomes a veritable utopia.

This disguise of political economy under the influence of monopoly is a fact so remarkable in the history of social ideas that we must not neglect to cite a few instances.

Thus, from the standpoint of monopoly, value is no longer that synthetic conception which serves to express the relation of a special object of utility to the sum total of wealth: monopoly estimating things, not in their relation to society, but in their relation to itself, value loses its social character, and is nothing but a vague, arbitrary, egoistic, and essentially variable thing. Starting with this principle, the monopolist extends the term PRODUCT to cover all sorts of servitude, and applies the idea of CAPITAL to all the frivolous and shameful industries which his passions and vices exploit. The charms of a courtesan, says Say, are so much CAPITAL, of which the PRODUCT follows the general LAW of VALUES,—namely, SUPPLY and DEMAND. Most of the works on political economy are full of such applications. But as prostitution and the state of dependence from which it emanates are condemned by morality, M. Rossi will bid us observe the further fact that political economy, after having MODIFIED its formula in consequence of the intervention of monopoly, will have to submit to a new CORRECTIVE, although its conclusions are in themselves irreproachable. For, he says, political economy has nothing in common with morality: it is for us to accept it, to modify or correct its formulas, whenever our welfare, that of society, and the interests of morality call for it. How many things there are between political economy and truth!

Likewise, the theory of net product, so highly social, progressive, and conservative, has been individualized, if I may say so, by monopoly, and the principle which ought to secure society's welfare causes its ruin. The monopolist, always striving for the greatest possible net product, no longer acts as a member of society and in the interest of society; he acts with a view to his exclusive interest, whether this interest be contrary to the social interest or not. This change of perspective is the cause to which M. de Sismondi attributes the depopulation of the Roman Campagna. From the comparative researches which he has made regarding the product of the agro romano when in a state of cultivation and its product when left as pasture-land, he has found that the GROSS product would be twelve times larger in the former case than in the latter; but, as cultivation demands relatively a greater number of hands, he has discovered also that in the former case the NET product would be less. This calculation, which did not escape the proprietors, sufficed to confirm them in the habit of leaving their lands uncultivated, and hence the Roman Campagna is uninhabited.

"All parts of the Roman States," adds M. de Sismondi, "present the same contrast between the memories of their prosperity in the Middle Ages and their present desolation. The town of Ceres, made famous by Renzo da Ceri, who defended by turns Marseilles against Charles V. and Geneva against the Duke of Savoy, is nothing but a solitude. In all the fiefs of the Orsinis and the Colonnes not a soul. From the forests which surround the pretty Lake of Vico the human race has disappeared; and the soldiers with whom the formidable prefect of Vico made Rome tremble so often in the fourteenth century have left no descendants. Castro and Ronciglione are desolated."—Studies in Political Economy.

In fact, society seeks the greatest possible gross product, and consequently the greatest possible population, because with it gross product and net product are identical. Monopoly, on the contrary, aims steadily at the greatest net product, even though able to obtain it only at the price of the extermination of the human race.

Under this same influence of monopoly, interest on capital, perverted in its idea, has become in turn a principle of death to society. As we have explained it, interest on capital is, on the one hand, the form under which the laborer enjoys his net product, while utilizing it in new creations; on the other, this interest is the material bond of solidarity between producers, viewed from the standpoint of the increase of wealth. Under the first aspect, the aggregate interest paid can never exceed the amount of the capital itself; under the second, interest allows, in addition to reimbursement, a premium as a reward of service rendered. In no case does it imply perpetuity.

But monopoly, confounding the idea of capital, which is attributable only to the creations of human industry, with that of the exploitable material which nature has given us, and which belongs to all, and favored moreover in its usurpation by the anarchical condition of a society in which possession can exist only on condition of being exclusive, sovereign, and perpetual,—monopoly has imagined and laid it down as a principle that capital, like land, animals, and plants, had in itself an activity of its own, which relieved the capitalist of the necessity of contributing anything else to exchange and of taking any part in the labors of the workshop. From this false idea of monopoly has come the Greek name of usury, tokos, as much as to say the child or the increase of capital, which caused Aristotle to perpetrate this witticism: COINS BEGET NO CHILDREN. But the metaphor of the usurers has prevailed over the joke of the Stagyrite; usury, like rent, of which it is an imitation, has been declared a perpetual right; and only very lately, by a half-return to the principle, has it reproduced the idea of REDEMPTION.

Such is the meaning of the enigma which has caused so many scandals among theologians and legists, and regarding which the Christian Church has blundered twice,—first, in condemning every sort of interest, and, second, in taking the side of the economists and thus contradicting its old maxims. Usury, or the right of increase, is at once the expression and the condemnation of monopoly; it is the spoliation of labor by organized and legalized capital; of all the economic subversions it is that which most loudly accuses the old society, and whose scandalous persistence would justify an unceremonious and uncompensated dispossession of the entire capitalistic class.