Front Page Titles (by Subject) CHAPTER VII: Proudhon's Proposed Decrees and the Bank of Exchange - Socialistic Fallacies
The Online Library of Liberty
A project of Liberty Fund, Inc.
Search this Title:
Also in the Library:
CHAPTER VII: Proudhon's Proposed Decrees and the Bank of Exchange - Yves Guyot, Socialistic Fallacies 
Socialistic Fallacies (London: Cope and Fenwick, 1910).
About Liberty Fund:
Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.
The text is in the public domain.
Fair use statement:
This material is put online to further the educational goals of Liberty Fund, Inc. Unless otherwise stated in the Copyright Information section above, this material may be used freely for educational and academic purposes. It may not be used in any way for profit.
Proudhon's Proposed Decrees and the Bank of Exchange
Dissatisfied with the Revolution of 1848—Proposed decrees—The Banque du Peuple—Influence upon the Commune of 1871, and upon the General Confederation of Labour—Colonel Langlois.
Proudhon was frank enough to express his dissatisfaction with the Revolution of 1848, which disquieted more than it pleased the various Socialists who were called upon the put their ideas into practice. Proudhon called upon the State to publish the following decrees.
The Government is to decree that “direct exchange, without specie or interest, is derived from natural law and public utility; the Bank shall add to its functions that of a Bank of Exchange, and fix the rate of discount at one per cent.”
A second decree was to provide that “whereas the law ought to be the same for all, funded stocks paid by the State shall be converted into one per cent. stock until they are finally redeemed.”
By a third decree the interest on mortgages is reduced to one per cent. “The execution of the present decree is entrusted to those citizens who are burdened with mortgages.”
A fifth decree reduces the interest and dividend of limited companies to one per cent. A sixth fixes house rent at the same figure. A seventh reduces rents by twenty-five per cent. calculated upon the average of the twenty last preceding years; the value of the properties assessed to be calculated by taking the rent allowed at x per cent. of the capital; when by the accumulation of annual payments the owner has recovered the value of his estate with a premium of twenty per cent. by way of an indemnity, the property is to revert to the central agricultural society which is charged with the organisation of agriculture. “All land not under cultivation is to revert to the State.” Other decrees effect the reduction of salaries and wages, according to the scale suggested for Government salaries. By the twelfth decree, “After determining the debit of each citizen by the assessment of salaries and wages, his credit is to be determined by an assessment of the price of commodities.”
On January 31st, 1849, Proudhon founded the Banque du Peuple upon the following principles: All raw material is supplied to man gratuitously by nature; in the economic system all production is derived from labour, and correspondingly all capital is unproductive; inasmuch as every combination of credit resolves itself into an exchange, the productiveness of capital and the discount of values cannot and ought not to give rise to any interest. The object of the Bank was to organise credit on a democratic basis: (1) by obtaining for all, at the lowest price and under the best possible conditions, the use of the land, of houses, machinery, instruments of labour, capital, produce and services of every kind; (2) by providing for all an outlet for their production and the application of their labour under the most advantageous conditions. The capital of the Bank was five millions of francs, divided into a million shares of five francs each, but liable to pay interest.1 Unlike ordinary drafts payable to order and in cash, the circulating medium of the Banque du Peuple was a delivery order clothed with a socialistic character and payable at sight by every member or customer in the products or services of his industry or calling. Settlement for purchases and sales between the different customers was to be by the reciprocal exchange of their products and services and was to be effected by means of paper issued by the Bank, styled “Circulation tickets.” (Bon de circulation).
The Bank never commenced business. Proudhon having been prosecuted for two articles published in the “Peuple,” and sentenced to a term of three years' imprisonment, fled to Belgium. He was able to say that, as his Bank was not put into operation, its principle remained valid, but he made no attempt to realise it later, which was disappointing from the experimental point of view. He would then have discovered that the abolition of money would not have contributed to facilitate exchange, and that by refusing to remunerate the giving of credit he would have failed to obtain it. Attempts to establish exchanges of this kind were made for fifteen years, and failed miserably.
Proudhon's inspiration exercised some influence upon the Paris Commune. The manifesto of April 19th, 1871, was composed of more or less heterogeneous extracts from his works. According to M. Bourguin1 there are still some of his disciples among the French Socialists, and something of his ideas is to be found in the working programme of the General Confederation of Labour, which sets up the trade union in opposition to the State, and expects to effect the triumph of the pretensions of each group at the expense of the general interest.
In 1848 Proudhon made a violent attack upon universal suffrage to which the supporters of trade unions plainly oppose the struggle between various organisations, but without losing themselves, as Proudhon did, in digressions for the purpose of justifying their right to adopt this attitude. Proudhon's schemes were caprices rather than ideas. These he tried to co-ordinate, and when he failed he sought to throw the responsibility for his failure upon the intelligence of his fellow citizens.
I once had some conversations with Colonel Langlois, who claimed to be the true disciple of Proudhon, and I have several times heard him say with pride, when speaking of one or other of Proudhon's works., “No one but myself has understood him.”
THE POSTULATES OF GERMAN SOCIALISM
Desjardins, “Proudhon,” i., p. 134.
Bourguin, “Proudhon,” 1901.