The Online Library of Liberty

A project of Liberty Fund, Inc.

• Introduction.
• Biographical and Critical.
• Author’s Preface to the First French Edition.
• Author’s Preface to the English Edition.
• Book I.: Evolution and Retrogression.
• Chapter I.: Social Retrogression.
• Chapter II.: Socialist Programmes.
• Chapter III.: Character of Political and Intellectual Progress.
• Chapter IV.: Character of Social Progress.
• Chapter V.: The Evolution of Property.
• Chapter VI.: Doctrinal Contradictions of the Socialists.
• Chapter VII.: Practical Self-contradiction of the Socialists.
• Book II.: Socialistic Sophisms.
• Chapter I.: Labour and Wealth.
• Chapter II.: On the Limits of Collectivist Society.
• Chapter III.: The Law of Supply and Demand.
• Chapter IV.: The %u201ciron Law%u201d of Wages.
• Chapter V.: Integral Wages.
• Chapter VI.: To Each According to His Needs.
• Chapter VII.: The Abolition of Wages.
• Chapter VIII.: Machinery.
• Chapter IX.: Excessive Production.
• Chapter X.: Economic Crises.
• Chapter XI.: Cheapness.
• Chapter XII.: The Game of the Gullible.
• Chapter XIII.: Socialistic Methods.
• Chapter XIV.: Facts Compared With Socialist Statements.
• Chapter XV.: Redistribution of Wealth.
• Book III.: Socialistic Legislation.
• Chapter I.: Putting Socialistic Sophisms In Force.
• Chapter II.: The Regulation of Child Labour.
• Chapter III.: Female Labour and the Law.
• Chapter IV.: Compulsory Idleness of Lying-in Women.
• Chapter V.: National Labour and Foreign Workmen.
• Chapter VI.: Trade Syndicates.
• Chapter VII.: Registry Offices.
• Chapter VIII.: Nature of %u201clabour Laws.%u201d
• Book IV.: Socialistic Morality and Respect For the Law.
• Chapter I.: Contempt For the Law.
• Chapter II.: Servile Labour and Free Labour.
• Book V.: Strikes and Social War.
• Chapter I.: Cost and Consequences of Strikes.
• Chapter II.: The Causes of Strikes.
• Chapter III.: During the Strike.
• Chapter IV.: Social War.
• Book VI.: Responsibilities.
• Chapter I.: Parliament and Strikes.
• Chapter II.: Subsidies to Strikers.
• Chapter III.: The Executive, the Judicature, and Strikes.
• Chapter IV.: Liberty and Anarchy.
• Chapter V.: The Socialism of Employers.
• Chapter VI.: Militarism, Protection, and Socialism.
• Conclusion.

CHAPTER XIII.

SOCIALISTIC METHODS.

(I.) Therapeutics of the Doctors of Socialism—Proudhon and the Philosophy of Misery—Scholastic Method—The Gauge of Wealth—(II.) Property is Theft—Ricardo’s Theory—The First Occupant—Where is He?—Where are His Descendants?—The Theory of Final Causes—The Soil Fertile for its Own Ends—United States—Holland and Ricardo’s Law—(III.) Karl Marx and Capital—Surplus Work—The Vampire—Metaphors—The Charlatan—(IV.) Malthus’s Law—In what it consists—Facts—Wealth and Population United States—France—(V.) Economic Orthodoxy of the Socialists—Scholastic Methods.

This rapid review of Socialistic sophisms has shown us the methods to which their authors have recourse. Starting from a phrase or axiom borrowed from an economist, twisting it about to serve the purposes of their own cause, they finally arrive, by a series of scholastic arguments, at the conclusion that the economic life of the world is regulated by “the Iron Law of Wages.” This classic metaphor gives a flourish of trumpets to their assertions which strikes the attention and clings to the memory. Some simpleminded, honest men at once begin to repeat that, if there is one undeniable truth, it is “the Iron Law of Wages,” and the same people demand the repeal of the Law of Supply and Demand.

If Lassalle had taken the trouble to observe facts he would never have launched forth this “iron law;” but, to agitators of his temperament, truth patiently acquired through slow and painful observation means nothing. That which he must have is sounding and pompous phrases, that arrest the crowd and bind it together.

I. In France, Proudhon had recourse to the same methods, so as to give himself the pleasure of forcing ninnies to retrace their steps by shooting petards at their feet. As proof-reader in a printing office, he had had to read the Fathers of the Church, and all his ideas bore the impress of. this. He took as the starting point of his great work Contradictions Économiques (which occupies two large volumes of reasoning, imagery, and eloquence) this question put by J. B. Say: “As the wealth of a nation consists in the value of the things which it possesses, how is it possible that a nation should be wealthier according to the cheapness of the things which it possesses?” Proudhon exclaims: “I challenge all serious economists to tell me why value decreases in proportion as production increases. In technical terms, value in use and value in exchange, are in universe ratio to one another  . . . this contradiction is necessary.” Thus, the more people labour to gain riches, the poorer they grow, and he took as a sub-title for his book: Philosophie de la Misère.

Proudhon took sides with this à priori reasoning: take away exchange, and utility becomes nil. According to this system, Robinson Crusoe’s umbrella must have been useless to him.

Proudhon piled up captious argument upon argument to give himself the pleasure of striking at the economists. If, instead of giving himself up to this exercise, he had taken notice of facts, he would have proved that the wealth of a nation was gauged by the value of its fixed capital, its soil, houses, and implements, and by the abundance of its circulating capital; that the first has a heightened value according as the second is more abundant, and consequently, by virtue of the Law of Supply and Demand, lower in price; because it is the relation between fixed and circulating capitals which constitutes wealth. How then would a purchaser estimate the value of a field, or an implement, if not according to the amount of produce, that is to say, circulating capital, which the implement or field could yield, and which he himself is obliged to give, in the form of money, to acquire it?

While cautious not to follow the lead of the doctors of Socialism in the use of metaphor, I, nevertheless, venture to say that the relation between fixed and circulating capitals, acts exactly like a boat upon water. When the water rises—that is to say, is more abundant—the boat rises. When the water sinks, the boat sinks. When circulating capital abounds, prosperity and wealth follow; when circulating capital is scarce, failure and impoverishment result.

Far from there being a contradiction between increased production and wealth, there is the closest correlation.1

II. Property is theft.—Proudhon exclaimed one day: “Property is theft.” This “contradiction” gave rise to scandal. Ever since, Socialists have repeated the charge under different guises; and in order to prove it, what do they do? They call upon the authority of Ricardo, whom we have already seen invoked by Lassalle in order to establish the “Iron Law of Wages.”

Ricardo’s theory of rent is based upon a piece of ingenuousness. He imagines that man finds himself in the presence of fertile soil, which he only has to occupy for it to bring forth fruits. The first occupier, prudently chose the most fertile land. The second took the less fertile land. The third, land still less fertile; the fourth, the fifth, etc., etc., lands less and less fertile, which demanded more expenditure of labour whilst they yielded less than the land first occupied. Rent is the difference which exists between the product of the most and of the least fertile land.

But who or what was this first proprietor, who only had to choose, in order to secure to his descendants a rent growing ever larger, because, as the generations accumulate, they are obliged to have recourse to the less fertile lands? He is a robber! “Property is theft.”

But where is this first occupier, who is as difficult to find as Rousseau’s first proprietor? And where are his thievish descendants, who ought to have perpetuated themselves somewhere on the earth’s surface, and who ought to enjoy the highest incomes? Ricardo, with his custom of à priori formulas and deductive method, has not put to himself this question. The Socialists, who make a club of this law of his wherewith to attack proprietors, are just as careful not to put the question, any more than they will open their windows to see what is passing before their eyes. Otherwise they would see that, in supposing that fertile soil is fertile for man, they are still dealing with the old theory of final causes, according to which the sun was made to give light to man, and the sea to carry ships. As a matter of fact, the land is fertile for itself; and the more fertile it is, the more it is encumbered with trees, brushwood, and vegetation, of which man must first clear it before he can make it bring him in a harvest. The history of the colonisation of the United States bears witness of this truth. The first colonists, to begin with, founded the colony of Plymouth upon the sterile soil of Massachusetts. They followed the summits of the hills, and to the present day they have not yet been able to bring the fertile lands of Lower Virginia under culture. Nor have they succeeded better with those of North Carolina, of which terrible swamps form a part, because they are driven back by the dangers and expense of its cultivation. Did the Dutchman, who has reclaimed so much of his land from the sea, begin by quietly settling upon the most fertile soil? If so many facts, open to the observation of all, give the lie to Ricardo’s law, the proprietor ceases to be a spoiler. The land is capital of which he hires the use, just as he hires the use of every other kind of capital. He, therefore, possesses the right to the anathemas which the Socialists hurl at all capitalists; but he has not the privileges that they wish to confer upon him through Ricardo.

III. Karl Marx’s process is equally a matter of dialectics. He maintains that articles of merchandise have only one quality, that of being the products of labour. All articles are resolved into an expenditure of human labour; “labour, then, is the substance of value: the gauge of the quantity of value is the quantity of labour, itself gauged by the hours of labour. Capital does not labour, it cannot therefore create value.”

Karl Marx starts from this point to declare that all benefits that accrue to capital come “from surplus work, from work accomplished over and above necessary work.” He describes “capital as greedy for surplus work. . . . ” “The real aim of capitalist production is the production of surplus value or the drainage of extra work. The vampire that sucks the labourer does not let him escape so long as there remains a drop of blood to suck.” What is to be done to prevent this vampire from thus sucking the blood of the working classes? A good law relating to the limitation of the hours of labour. Nothing more easy. But Karl Marx has waded to this conclusion through a mess of subtle and confused analysis made attractive by metaphors that strike his readers, lost amidst the inextricable confusion of his demonstrations. “Capital comes into the world sweating with blood and mire from every pore.” Such is the conclusion arrived at. It is not quite clear how it came about, but inasmuch as Karl Marx has written a big volume to demonstrate it, he has, doubtless, proved his point. Capital “sweats with blood and mire.” That is what his disciples retain in their memories. He adds that “for bourgeois economics, it is not a question of knowing whether this or that fact is true, but whether it is useful or injurious to capital.” With a sweep of his hand he delivers up all those economists, whom he represents as the servants of the Vampire and the Monster, to execration and contempt.1

But these methods of logic and rhetoric, good enough for the simple, the ignorant, and fools, are the opposite of the inductive method by means of which all physical and natural sciences have made their grand discoveries. We know these methods, having seen them used by the plumed charlatan of obscure but energetic language, who promises a universal panacea; and thus we hear them, like echoes from a cheap-jack’s booth, summoning fools to the show.

IV. A certain Socialist, whose name I recognise from time to time when there is dirty work to be done, at a meeting in 1880, threw in my face the epithet—Malthusian!

I must not deny that this had an effect. He knew nothing but the word, and this word was imposing.1 Some other doctors of Socialism make use of the law of Malthus a little more skilfully.

The law of Malthus may be summed up in this formula: population grows in geometric progression, and the means of subsistence in arithmetical progression.

Population—1, 2, 4, 8, 16.  . . . Sustenance—1, 2, 3, 4, 5, etc.

According to these Socialists who make use of the law of Malthus, population always grows more rapidly than wealth,2 the supply of labour will always exceed the demand; and, in consequence, the labourer will always be condemned to poverty.

But Malthus himself saw that, in consequence of preventive and destructive checks, no group of human beings had ever proved its accuracy. This àpriori conception becomes all the more inexact from the fact that the productive capacity of man grows larger, as can be shown by figures.

This is the return in the United States of the respective growth of population and wealth:—

Malthus, however, did not take into account, as a factor of his law, emigration, so powerful in the United States.

In France, the returns for declared inherited capital and population contradict this Law of Malthus in the neatest way:—

And these succession figures are too low, because they do not take into account concealment as to the real value of personal property.

In England, too, where the population increases more rapidly than in France, the population is far from keeping pace with wealth. Malthus’s law is invalidated by general experience, because if it were accurate, there would long since not have been an available spot of earth left on our planet to be disposed of. But Socialists do not forget to appeal to it and “Ricardo’s Law of Rent and the Iron Law of Wages.”

V. Socialists accuse the economists of establishing a church where docile disciples officiate.

Economists, worthy of the name, however, have never paid to the men who are looked upon as the masters and founders of political economy, the abject homage rendered to them by the doctors of Socialism.

It is enough for Turgot, Adam Smith, Malthus, Ricardo, J. B. Say, to have somewhere written something for them to immediately bow down before it, saluting it as infallible, and taking hold of it like a club to hurl at the economists. “It is you,” they say, “who declare that capital is a vampire, and the proprietor a, thief; and from this point we set out and declare to you that it is you yourselves who give us the right to atone for these infamies of which you are the authors!”

We economists have another method with regard to the masters of political economy. We only receive theories they have put forth with the privilege of examination; and believing that economic science should make use of the method of observation, we begin by seeing if they are in conformity with facts. It is of some Socialists that one might say they are orthodox economists; true, it is so as to give themselves the satisfaction of afterwards becoming heretics; but does not this proceeding show how behind the age they are? Are there now orthodox and heretics in matters of science? There are determinists, who endeavour to find the existing connections of cause and effect, and who, when they find themselves face to face with an à priori hypothesis, try first of all to verify it.

Truly the solutions extolled by the Socialists, and the methods which they follow, are well suited to one another, because they are both borrowed from the retrogressive spirit: their method is that which constituted the glory of the disputants of the Middle Ages, and we now only find its rags and tatters in schools. With regard to their solutions, we have already proved that, as an ideal, they only advocate a retrogression towards a state of poverty, barbarism, and oppression common in the early ages of humanity, such as we cannot even conceive of now when we go to see exhibitions of Somalis or Dahomeyans.

[1]I have developed this thesis with figures and diagrams to support them in my Science Économique, book iii., chap. i.

[1]Is there not, on both sides, too much of this sort of thing?I have often had great difficulty in obtaining a fair hearing for those Socialists and “Land Restorationists” from whom I very widely dissent.—Ed.

[1]That this is so is one of the most astonishing instances of perverted feeling with which I am acquainted, and is very discreditable to the perspicacity of the French people.—Ed.

[2]This is a gross misstatement of the Malthusian law, which is that population tends to outrun the actual means of subsistence.—Ed