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

fourteen years?

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.