Capital And Interest
My object in this treatise is to examine into the real nature of the
Interest of Capital, for the purpose of proving that it is lawful, and
explaining why it should be perpetual. This may appear singular, and
yet, I confess, I am more afraid of being too plain than too obscure. I
am afraid I may weary the reader by a series of mere truisms. But it is
no easy matter to avoid this danger, when the facts, with which we have
to deal, are known to every one by personal, familiar, and daily
But, then, you will say, What is the use of this treatise? Why explain
what everybody knows?
But, although this problem appears at first sight so very simple, there
is more in it than you might suppose. I shall endeavor to prove this by
an example. Mondor lends an instrument of labor to-day, which will be
entirely destroyed in a week, yet the capital will not produce the less
interest to Mondor or his heirs, through all eternity. Reader, can you
honestly say that you understand the reason of this?
It would be a waste of time to seek any satisfactory explanation from
the writings of economists. They have not thrown much light upon the
reasons of the existence of interest. For this they are not to be
blamed; for at the time they wrote, its lawfulness was not called in
question. Now, however, times are altered; the case is different. Men,
who consider themselves to be in advance of their age, have organized an
active crusade against capital and interest; it is the productiveness of
capital which they are attacking; not certain abuses in the
administration of it, but the principle itself.
A journal has been established to serve as a vehicle for this crusade.
It is conducted by M. Proudhon, and has, it is said, an immense
circulation. The first number of this periodical contains the electoral
manifesto of the people. Here we read, The productiveness of capital,
which is condemned by Christianity under the name of usury, is the true
cause of misery, the true principle of destitution, the eternal obstacle
to the establishment of the Republic.
Another journal, La Ruche Populaire, after having said some excellent
things on labor, adds, But, above all, labor ought to be free; that is,
it ought to be organized in such a manner, that money lenders and
patrons, or masters, should not be paid for this liberty of labor, this
right of labor, which is raised to so high a price by the trafficers of
men. The only thought that I notice here, is that expressed by the
words in italics, which imply a denial of the right to interest. The
remainder of the article explains it.
It is thus that the democratic Socialist, Thore, expresses himself:
The revolution will always have to be recommenced, so long as we occupy
ourselves with consequences only, without having the logic or the
courage to attack the principle itself. This principle is capital, false
property, interest, and usury, which by the old regime, is made to
weigh upon labor.
Ever since the aristocrats invented the incredible fiction, that
capital possesses the power of reproducing itself, the workers have
been at the mercy of the idle.
At the end of a year, will you find an additional crown in a bag of one
hundred shillings? At the end of fourteen years, will your shillings
have doubled in your bag?
Will a work of industry or of skill produce another, at the end of
Let us begin, then, by demolishing this fatal fiction.
I have quoted the above, merely for the sake of establishing the fact,
that many persons consider the productiveness of capital a false, a
fatal, and an iniquitous principle. But quotations are superfluous; it
is well known that the people attribute their sufferings to what they
call the trafficing in man by man. In fact, the phrase tyranny of
capital has become proverbial.
I believe there is not a man in the world, who is aware of the whole
importance of this question:
Is the interest of capital natural, just, and lawful, and as useful to
the payer as to the receiver?
You answer, no; I answer, yes. Then we differ entirely; but it is of the
utmost importance to discover which of us is in the right; otherwise we
shall incur the danger of making a false solution of the question, a
matter of opinion. If the error is on my side, however, the evil would
not be so great. It must be inferred that I know nothing about the true
interests of the masses, or the march of human progress; and that all my
arguments are but as so many grains of sand, by which the car of the
revolution will certainly not be arrested.
But if, on the contrary, MM. Proudhon and Thore are deceiving
themselves, it follows, that they are leading the people astray--that
they are showing them the evil where it does not exist; and thus giving
a false direction to their ideas, to their antipathies, to their
dislikes, and to their attacks. It follows, that the misguided people
are rushing into a horrible and absurd struggle, in which victory would
be more fatal than defeat, since, according to this supposition, the
result would be the realization of universal evils, the destruction of
every means of emancipation, the consummation of its own misery.
This is just what M. Proudhon has acknowledged, with perfect good faith.
The foundation stone, he told me, of my system is the gratuitousness
of credit. If I am mistaken in this, Socialism is a vain dream. I add,
it is a dream, in which the people are tearing themselves to pieces.
Will it, therefore, be a cause for surprise, if, when they awake, they
find themselves mangled and bleeding? Such a danger as this is enough to
justify me fully, if, in the course of the discussion, I allow myself to
be led into some trivialities and some prolixity.