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Capital and Interest - Frédéric Bastiat · The Communist Manifesto

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  Speaker 1: Capital and Interest by Frederic Bastiat. This is a LibriVox recording.
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  Speaker 1: All LibriVox recordings are in the public domain. For more
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  Speaker 1: information or to volunteer, please visit LibriVox dot org. Read
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  Speaker 1: by Michel Frye Baton Rouge, Louisiana, and presented to LibriVox
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  Speaker 1: for our thirteenth anniversary. Capital and Interest, Part one introduction.
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  Speaker 1: My object in this treatise is to examine into the
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  Speaker 1: real nature of the interest of capital, for the purpose
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  Speaker 1: of proving that it is lawful and explaining why it
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  Speaker 1: should be perpetual. This may appear singular, and yet I
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  Speaker 1: confess I am more afraid of being too plain than
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  Speaker 1: too obscure. I am afraid I may weary the reader
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  Speaker 1: by a series of mere truisms. But it is no
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  Speaker 1: easy matter to avoid this danger when the facts with
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  Speaker 1: which we have to deal are known to everyone by personal,
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  Speaker 1: familiar and daily experience. But then you will say, what
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  Speaker 1: is the use of this treatise? Why explain what everybody knows?
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  Speaker 1: But although this problem appears at first sight so very simple,
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  Speaker 1: there is more in it than you might suppose. I
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  Speaker 1: shall endeavor to prove this by an example. Mondor lends
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  Speaker 1: an instrument of labor to day, which will be entirely
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  Speaker 1: destroyed in a week. Yet the capital will not produce
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  Speaker 1: the less interest to mindor or his heirs through all eternity. Reader,
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  Speaker 1: can you honestly say that you understand the reason of this?
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  Speaker 1: It would be a waste of time to seek any
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  Speaker 1: satisfactory explanation from the writings of economists. They have not
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  Speaker 1: thrown much light upon the reasons of the existence of interest.
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  Speaker 1: For this they are not to be blamed, for at
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  Speaker 1: the time they wrote, its lawfulness was not called into question. Now, however,
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  Speaker 1: times are altered, the case is different. Men who consider
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  Speaker 1: themselves to be in advance of their age have organized
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  Speaker 1: an active crusade against capital and interest. It is the
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  Speaker 1: productiveness of capital which they are attacking, not certain abuses
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  Speaker 1: in the administration of it, but the principle itself. A
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  Speaker 1: journal has been established to serve as a vehicle for
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  Speaker 1: this crusade. It is conducted by monsieur prudence, and has,
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  Speaker 1: it is said, an immense circulation. The first number of
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  Speaker 1: this periodical contains the electoral manifesto of the people. Here
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  Speaker 1: we read quote the productiveness of capital, which is condemned
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  Speaker 1: by Christianity under the name of usury is the true
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  Speaker 1: cause of misery, the true principle of destitution, the eternal
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  Speaker 1: obstacle to the establishment of the republic. End Another journal
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  Speaker 1: LaRouche Populaire, after having said some excellent things on labor,
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  Speaker 1: adds quote, but above all labor ought to be free,
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  Speaker 1: that is, it ought to be organized in such a
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  Speaker 1: manner that money lenders and patrons or masters should not
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  Speaker 1: be paid for this liberty of labor, this right of labor,
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  Speaker 1: which is raised to so high a price by the
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  Speaker 1: traffickers of men. End quote. The only thought that I
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  Speaker 1: notice here is that expressed by the words in italics,
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  Speaker 1: that money lenders and patrons or masters should not be paid,
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  Speaker 1: which imply a denial of the right to interest. The
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  Speaker 1: remainder of the article explains it. It is thus that
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  Speaker 1: the democratic socialist Theray expresses himself, quote, the revolution will
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  Speaker 1: always have to be recommenced so long as we occupy
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  Speaker 1: ourselves with consequences, only without having the logic or the
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  Speaker 1: courage to attack the principle itself. This principle is false property,
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  Speaker 1: interest and usury, which by the old regime is made
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  Speaker 1: to weigh upon labor. Ever since the aristocrats invented the
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  Speaker 1: incredible fiction that capital possesses the power of reproducing itself,
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  Speaker 1: the workers have been at the mercy of the idol.
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  Speaker 1: At the end of a year, Will you find an
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  Speaker 1: additional crown in a bag of one hundred shillings? At
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  Speaker 1: the end of fourteen years, will your shillings have doubled
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  Speaker 1: in your bag? Will a work of industry or of
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  Speaker 1: skill produce another at the end of fourteen years? Let
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  Speaker 1: us begin, then, by demolishing this fatal fiction. End quote.
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  Speaker 1: I have quoted the above merely for the sake of
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  Speaker 1: establishing the fact that many persons consider the productiveness of
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  Speaker 1: capital a false, a fatal, and an iniquitous principle. But
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  Speaker 1: quotations are superfluous. It is well known that the people
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  Speaker 1: attribute their sufferings to what they call the trafficking in
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  Speaker 1: man by man. In fact, the phrase tyranny of capital
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  Speaker 1: has become proverbial. I believe there is not a man
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  Speaker 1: in the world who is aware of the whole importance
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  Speaker 1: of this question. Is the interest of capital natural, just
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  Speaker 1: and lawful, and as useful to the pair as to
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  Speaker 1: the receiver? You answer no, I answer yes. Then we
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  Speaker 1: differ entirely. But it is of the utmost importance to
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  Speaker 1: discover which of us is in the right, Otherwise we
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  Speaker 1: shall incur the danger of making a false solution of
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  Speaker 1: the question a matter of opinion. If the error is
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  Speaker 1: on my side, however, the evil would not be so great.
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  Speaker 1: It must be inferred that I know nothing about the
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  Speaker 1: true interests of the masses or the march of human progress,
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  Speaker 1: and that all my arguments are but as so many
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  Speaker 1: grains of sand, by which the car of the revolution
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  Speaker 1: will certainly not be arrested. But if from the contrary
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  Speaker 1: Monsieur's Prudon and Thorat are deceiving themselves, it follows that
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  Speaker 1: they are leading the people astray, that they are showing
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  Speaker 1: them the evil where it does not exist, and thus
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  Speaker 1: giving a false direction to their ideas, to their antipathies,
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  Speaker 1: to their dislikes, and to their attacks. It follows that
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  Speaker 1: the misguided people are rushing into a horrible and absurd
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  Speaker 1: struggle in which victory would be more fatal than defeat,
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  Speaker 1: since according to this supposition, the result would be the
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  Speaker 1: realization of universal evils, the destruction of every means of emancipation,
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  Speaker 1: the consummation of its own misery. This is just what
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  Speaker 1: Monsieur Pruden has acknowledged, with perfect good faith. He told
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  Speaker 1: me quote, the foundation stone of my system is the
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  Speaker 1: gratuitousness of credit. If I am mistaken in this, socially
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  Speaker 1: is a vain dream, end I add, it is a
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  Speaker 1: dream in which the people are tearing themselves to pieces.
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  Speaker 1: Will it therefore be a cause for surprise if when
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  Speaker 1: they awake they find themselves mangled and bleeding. Such a
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  Speaker 1: danger as this is enough to justify me fully, if
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  Speaker 1: in the course of the discussion, I allow myself to
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  Speaker 1: be led into some trivialities and some prolixity. End of
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  Speaker 1: Part one introduction, Section two of Capital and Interest by
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  Speaker 1: Frederic Bastiat read for you by Michel Frye Batonrouge, Louisiana.
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  Speaker 1: This LibriVox recording is in the public domain. Part two
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  Speaker 1: of Capital and Interest entitled Capital and Interest. I address
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  Speaker 1: this treatise to the workmen of Paris, more especially to
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  Speaker 1: those who have enrolled themselves under the banner of socialist democracy.
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  Speaker 1: I proceed to consider these two questions. First, is it
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  Speaker 1: consistent with the nature of things and with justice that
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  Speaker 1: capital should produce interest? Second, is it consistent with the
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  Speaker 1: nature of things and with justice, that the interests of
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  Speaker 1: capital should be perpetual. The workingmen of Paris will certainly
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  Speaker 1: acknowledge that a more important subject could not be discussed.
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  Speaker 1: Since the world began, it has been allowed, at least
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  Speaker 1: in part, that capital ought to produce interest. But latterly
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  Speaker 1: it has been affirmed that herein lies the very social
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  Speaker 1: error which is the cause of pauperism and inequality. It
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  Speaker 1: is therefore very essential to know now on what ground
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  Speaker 1: we stand for. If levying interest from capital is a sin,
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  Speaker 1: the workers have a right to revolt against social order
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  Speaker 1: as it exists. It is in vain to tell them
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  Speaker 1: that they ought to have recourse to legal and pacific means.
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  Speaker 1: It would be a hypocritical recommendation, when on the one
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  Speaker 1: side there is a strong man, poor and a victim
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  Speaker 1: of robbery, on the other hand, a weak man but
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  Speaker 1: rich and a robber. It is singular enough that we
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  Speaker 1: should say to the former, with the hope of persuading him,
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  Speaker 1: wait till your oppressor voluntarily renounces oppression, or till it
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  Speaker 1: shall cease of itself. This cannot be. And those who
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  Speaker 1: tell us that capital is by nature unproductive ought to
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  Speaker 1: know that they are provoking a terrible and immediate struggle. If,
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  Speaker 1: on the contrary, the interest of capital is natural, lawful,
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  Speaker 1: consistent with the general good, as favorable to the borrower
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  Speaker 1: as to the lender, the economists who deny it, the
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  Speaker 1: tribunes who traffic in this pretended social wound, are leading
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  Speaker 1: the workmen into a senseless and unjust struggle which can
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  Speaker 1: have no other issue than the misf fortune of all.
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  Speaker 1: In fact, they are army labor against capital. So much
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  Speaker 1: the better if these two powers are really antagonistic, and
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  Speaker 1: may the struggle soon be ended. But if they are
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  Speaker 1: in harmony, the struggle is the greatest evil which can
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  Speaker 1: be inflicted on society. You see, then, workmen, that there
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  Speaker 1: is not a more important question than this, is the
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  Speaker 1: interest of capital lawful or not? In the former case,
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  Speaker 1: you must immediately renounce the struggle to which you are
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  Speaker 1: being urged. In the second, you must carry it on
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  Speaker 1: bravely and to the end productiveness of capital, perpetuity of interest.
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  Speaker 1: These are difficult questions. I must endeavor to make myself clear,
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  Speaker 1: and for that purpose I shall have recourse to example
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  Speaker 1: rather than to demonstration. Or rather I shall place the
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  Speaker 1: demonstration In the example, I begin by acknowledging that, at
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  Speaker 1: first sight, it may appear strange that capital should pretend
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  Speaker 1: to a remuneration, and above all, to a perpetual remuneration.
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  Speaker 1: You will say, here are two men. One of them
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  Speaker 1: works from morning till night, from one year's end to another.
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  Speaker 1: And if he consumes all which he has gained, even
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  Speaker 1: by superior energy, he remains poor. When Christmas comes, he
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  Speaker 1: is no forwarder than he was at the beginning of
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  Speaker 1: the year. He has no other prospect but to begin again.
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  Speaker 1: The other man does nothing, either with his hands or
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  Speaker 1: his head, or at least if he makes use of
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  Speaker 1: them at all, it is only for his own pleasure.
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  Speaker 1: It is allowable for him to do nothing, for he
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  Speaker 1: has an income. He does not work. Yet he lives well.
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  Speaker 1: He has everything in abundance, delicate dishes, sumptuous furniture, elegant equipages. Nay,
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  Speaker 1: he even consumes daily things which the workers have been
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  Speaker 1: obliged to produce by the sweat of their brow. For
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  Speaker 1: these things do not make themselves, and as far as
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  Speaker 1: he is concerned, he has had no hand in their production.
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  Speaker 1: It is the workmen who have caused this corn to grow.
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  Speaker 1: Polished this furniture, woven these carpets. It is to our
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  Speaker 1: wives and daughters who have spun, cut out, sewed, and
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  Speaker 1: embroidered these stuffs. We work then for him and for ourselves.
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  Speaker 1: For him first, and then for ourselves if there is
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  Speaker 1: anything left. But here is something more striking still. If
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  Speaker 1: the former of these two men, the worker, consumes within
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  Speaker 1: the year any profit which may have been left him
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  Speaker 1: in that year, he is always at the point from
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  Speaker 1: which he started, and his destiny condemns him to move
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  Speaker 1: incessantly in a perpetual circle and a monotony of exertion.
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  Speaker 1: Labor then is rewarded only once. But if the other,
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  Speaker 1: the gentleman, consumes his yearly income in the year he
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  Speaker 1: has the year after, and in those which follows, and
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  Speaker 1: through all eternity an income always equal inexhaustible perpetual capital,
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  Speaker 1: then is remunerated not only once or twice, but an
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  Speaker 1: indefinite number of times, so that at the end of
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  Speaker 1: one hundred years, which has placed twenty thousand francs at
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  Speaker 1: five percent, will have had one hundred thousand francs, and
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  Speaker 1: this will not prevent it from having one hundred thousand more.
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  Speaker 1: In the following century. In other words, for twenty thousand francs,
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  Speaker 1: which represents its labor, it will have levied in two
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  Speaker 1: centuries a tenfold value on the labor of others. In
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  Speaker 1: this social arrangement, is there not a monstrous evil to
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  Speaker 1: be reformed? And this is not all If it should
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  Speaker 1: please this family to curtail its enjoyments a little to spend,
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  Speaker 1: for example, only nine hundred francs instead of a thousand,
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  Speaker 1: it may, without any labor, without any other trouble beyond
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  Speaker 1: that of investing one hundred francs a year, increase its
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  Speaker 1: capital and its income in such rapid progression that it
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  Speaker 1: will soon be in a position to consume as much
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  Speaker 1: as a hundred families of industrious workmen. Does not all
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  Speaker 1: this go to prove that society itself has in its
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  Speaker 1: bosom of hideous cancer which ought to be eradicated at
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  Speaker 1: the risk of some temporary suffering. These are, it appears
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  Speaker 1: to me, the sad and irritating reflections which must be
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  Speaker 1: excited in your minds by the act of in superficial
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  Speaker 1: crusade which is being carried on against capital and interest.
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  Speaker 1: On the other hand, there are moments in which I
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  Speaker 1: am convinced doubts are awakened in your minds, and scruples
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  Speaker 1: in your conscience, you say to yourselves sometimes, But to
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  Speaker 1: assert that capital ought not to produce interest is to
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  Speaker 1: say that he who has created instruments of labor, or
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  Speaker 1: materials or provisions of any kind ought to yield them
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  Speaker 1: up without compensation. Is that just? And then if it
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  Speaker 1: is so, who would lend these instruments, these materials, these provisions,
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  Speaker 1: Who would take care of them? Who even would create them?
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  Speaker 1: Every one would consume his proportion, and the human race
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  Speaker 1: would never advance a step. Capital would be no longer formed,
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  Speaker 1: since there would be no interest in forming it. It
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  Speaker 1: would become exceedingly scarce. A singular step towards gratuitous loans,
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  Speaker 1: a singular means of improving the condition of borrowers, to
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  Speaker 1: make it impossible for them to borrow at any price.
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  Speaker 1: What would become of labor itself? For there will be
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  Speaker 1: no money advanced, Not even one single kind of labor
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  Speaker 1: can be mentioned, not even the chase, which can be
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  Speaker 1: pursued without money in hand. And as for ourselves, what
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  Speaker 1: would become of us? What we are not to be
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  Speaker 1: allowed to borrow in order to work in the prime
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  Speaker 1: of life, nor to lend that we may enjoy repose.
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  Speaker 1: In its decline, the law will rob us of the
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  Speaker 1: prospect of laying by a little property, because it will
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  Speaker 1: prevent us from gaining any advantage from it. It will
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  Speaker 1: deprive us of all stimulus to save at the present time,
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  Speaker 1: and of all hope of repose for the future. It
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  Speaker 1: is useless to exhaust ourselves with fatigue. We must abandon
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  Speaker 1: the idea of leaving our sons and daughters a little property,
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  Speaker 1: since modern science renders it useless, for we should become
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  Speaker 1: traffickers in men if we were to lend it on interest. Alas,
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  Speaker 1: the world which these persons would open before us as
• 16:35
  Speaker 1: an imaginary good is still more dreary and desolate than
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  Speaker 1: that which they condemn. For hope, at any rate, is
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  Speaker 1: not banished from the latter. Thus, in all respects, and
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  Speaker 1: in every point of view, the question is a serious one.
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  Speaker 1: Let us hasten to arrive at a solution. Our Civil
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  Speaker 1: Code has a chapter entitled on the Manner of Transmitting Property.
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  Speaker 1: I do not think it gives a very complete nomenclature
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  Speaker 1: on this point. When a man by his labor has
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  Speaker 1: made some useful thing. In other words, when he has
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  Speaker 1: created a value, it can only pass into the hands
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  Speaker 1: of another by one of the following modes, as a gift,
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  Speaker 1: by the right of inheritance, by exchange, loan, or theft.
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  Speaker 1: One word upon each of these, except the last. Although
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  Speaker 1: it plays a greater part in the world than we
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  Speaker 1: may think, a gift needs no definition. It is essentially
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  Speaker 1: voluntary and spontaneous. It depends exclusively upon the giver, and
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  Speaker 1: the receiver cannot be said to have any right to
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  Speaker 1: it without a doubt. Morality and religion make it a
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  Speaker 1: duty for men, especially the rich, to deprive themselves voluntarily
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  Speaker 1: of that which they possess in favor of their less
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  Speaker 1: fortunate brethren. But this is entirely a moral obligation. If
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  Speaker 1: it were to be asserted on principle admitted in practice
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  Speaker 1: are sanctioned by law, that every man has a right
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  Speaker 1: to the property of another, the gift would have no merit.
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  Speaker 1: Charity and gratitude would be no longer virtues. Besides, such
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  Speaker 1: a doctrine would suddenly and universally arrest labor and production,
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  Speaker 1: as severe cold congeals water and suspends animation. For who
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  Speaker 1: would work if there was no longer to be any
• 18:25
  Speaker 1: connection between labor and the satisfying of our wants. Political
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  Speaker 1: economy has not treated of gifts. It has hence been
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  Speaker 1: concluded that it disowns them, and that it is therefore
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  Speaker 1: a science devoid of heart. This is a ridiculous accusation
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  Speaker 1: that science, which treats of the laws resulting from the
• 18:46
  Speaker 1: reciprocity of services, had no business to inquire into the
• 18:50
  Speaker 1: consequences of generosity with respect to him who receives, nor
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  Speaker 1: into its effects, perhaps still more precious on him who gives.
• 18:59
  Speaker 1: Such considerations belong evidently to the science of morals. We
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  Speaker 1: must allow the sciences to have limits. Above all, we
• 19:08
  Speaker 1: must not accuse them of denying or undervaluing what they
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  Speaker 1: look upon as foreign to their department. The right of inheritance,
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  Speaker 1: against which so much has been objected of late, is
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  Speaker 1: one of the forms of gift, and assuredly the most
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  Speaker 1: natural of all that which a man has produced. He
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  Speaker 1: may consume, exchange, or give. What can be more natural
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  Speaker 1: than that he should give it to his children. It
• 19:36
  Speaker 1: is this power, more than any other, which inspires him
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  Speaker 1: with courage to labor and to save. Do you know
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  Speaker 1: why the principle of right of inheritance is thus called
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  Speaker 1: in question, because it is imagined that the property thus
• 19:50
  Speaker 1: transmitted is plundered from the masses. This is a fatal error.
• 19:56
  Speaker 1: Political economy demonstrates in the most peremptory manner that all
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  Speaker 1: value produced is a creation which does no harm to
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  Speaker 1: any person whatever. For that reason, it may be consumed,
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  Speaker 1: and still more transmitted without hurting any one. But I
• 20:12
  Speaker 1: shall not pursue these reflections which do not belong to
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  Speaker 1: the subject. Exchange is the principal department of political economy
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  Speaker 1: because it is by far the most frequent method of
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  Speaker 1: transmitting property according to the free and voluntary agreements of
• 20:29
  Speaker 1: the laws and effects of which this science treats properly speaking,
• 20:34
  Speaker 1: exchange is the reciprocity of services. The parties say between themselves,
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  Speaker 1: give me this, and I will give you that, or
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  Speaker 1: do this for me and I will do that for you.
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  Speaker 1: It is well to remark, for this will throw a
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  Speaker 1: new light on the notion of value that the second
• 20:52
  Speaker 1: form is always implied in the first. When it is
• 20:56
  Speaker 1: said do this for me, and I will do that
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  Speaker 1: for you. An exchange of service for service is proposed
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  Speaker 1: again when it is said give me this, and I
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  Speaker 1: will give you that. It is the same as saying
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  Speaker 1: I yield to you what I have done, yield to
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  Speaker 1: me what you have done. The labor is passed instead
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  Speaker 1: of present, but the exchange is not the less governed
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  Speaker 1: by the comparative valuation of the two services, so that
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  Speaker 1: it is quite correct to say that the principle of
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  Speaker 1: value is in the services rendered and received on account
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  Speaker 1: of the productions exchanged, rather than in the productions themselves.
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  Speaker 1: In reality, services are scarcely ever exchanged directly. There is
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  Speaker 1: a medium which is termed money. Paul has completed a
• 21:45
  Speaker 1: coat for which he wishes to receive a little bread,
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  Speaker 1: a little wine, a little oil, a visit from the doctor,
• 21:51
  Speaker 1: a ticket for the play, et cetera. The exchange cannot
• 21:55
  Speaker 1: be affected in kind. So what does Paul do. He
• 21:59
  Speaker 1: first exchanged his coat for some money, which is called sale.
• 22:04
  Speaker 1: Then he exchanges this money again for the things which
• 22:07
  Speaker 1: he wants, which is called purchase. And now only has
• 22:11
  Speaker 1: the reciprocity of services completed its circuit. Now only the
• 22:16
  Speaker 1: labor and the compensation are balanced. In the same individual.
• 22:21
  Speaker 1: I have done this for society, it has done that
• 22:23
  Speaker 1: for me in a word, It is only now that
• 22:27
  Speaker 1: the exchange is actually accomplished. Thus, nothing can be more
• 22:31
  Speaker 1: correct than this observation of JB. Say Quote. Since the
• 22:35
  Speaker 1: introduction of money, every exchange is resolved into two elements,
• 22:40
  Speaker 1: sale and purchase. It is the reunion of these two
• 22:44
  Speaker 1: elements which renders the exchange complete. We must remark also
• 22:50
  Speaker 1: that the constant appearance of money in every exchange has
• 22:53
  Speaker 1: overturned and missed all our ideas. Men have ended in
• 22:58
  Speaker 1: thinking that money was true rich, and that to multiply
• 23:01
  Speaker 1: it was to multiply services and products. Hence the prohibitory system,
• 23:07
  Speaker 1: hence paper money, hence the celebrated aphorism what one gains
• 23:11
  Speaker 1: the other loses, and all the errors which have ruined
• 23:14
  Speaker 1: the earth and imbrooded with blood. After much research, it
• 23:18
  Speaker 1: has been found that in order to make the two
• 23:21
  Speaker 1: services exchanged of equivalent value, and in order to render
• 23:25
  Speaker 1: the exchange equitable, the best means was to allow it
• 23:28
  Speaker 1: to be free. However plausible at first sight, the intervention
• 23:33
  Speaker 1: of a state might be, it was soon perceived that
• 23:36
  Speaker 1: it is always oppressive to one or other of the
• 23:39
  Speaker 1: contracting parties. When we look into these subjects, we are
• 23:43
  Speaker 1: always compelled to reason upon this maxim that equal value
• 23:47
  Speaker 1: results from liberty. We have, in fact no other means
• 23:51
  Speaker 1: of knowing whether, at a given moment two services are
• 23:54
  Speaker 1: of the same value, but that of examining whether they
• 23:57
  Speaker 1: can be readily and freely exchanged. Allow the state, which
• 24:02
  Speaker 1: is the same thing as forced to interfere on one
• 24:05
  Speaker 1: side or the other, and from that moment all the
• 24:08
  Speaker 1: means of appreciation will be complicated and entangled, instead of
• 24:12
  Speaker 1: becoming clear. It ought to be the part of the
• 24:15
  Speaker 1: state to prevent and above all, to repress artifice and fraud,
• 24:20
  Speaker 1: that is, to secure liberty, and not to violate it.
• 24:24
  Speaker 1: I have enlarged a little upon exchange. Although loan is
• 24:28
  Speaker 1: my principal object, my excuse is that I conceive that
• 24:32
  Speaker 1: there is in a loan an actual exchange, an actual
• 24:35
  Speaker 1: service rendered by the lender, and which makes the borrower
• 24:39
  Speaker 1: liable to an equivalent services, two services whose comparative value
• 24:44
  Speaker 1: can only be appreciated like that of all possible services,
• 24:48
  Speaker 1: by freedom. Now, if it is so, the perfect lawfulness
• 24:52
  Speaker 1: of what is called house rent farm rent interest will
• 24:56
  Speaker 1: be explained and justified. Next, let us consider the case
• 25:01
  Speaker 1: of loan end of Section two Capital and Interest. Section
• 25:15
  Speaker 1: three of Capital and Interest by Frederic Bastiat. What is
• 25:20
  Speaker 1: alone and what is capital? This LibriVox recording is in
• 25:26
  Speaker 1: the public domain. Read by Michel Frye Batmuge, Louisiana. What
• 25:32
  Speaker 1: is alone? Suppose to men exchange two services or two
• 25:38
  Speaker 1: objects whose equal value is beyond all dispute. Suppose, for example,
• 25:43
  Speaker 1: Peter says to Paul give me ten sixpences, I will
• 25:47
  Speaker 1: give you a five shilling piece. Historical note, each of
• 25:51
  Speaker 1: these is equal to one crown. We cannot imagine an
• 25:56
  Speaker 1: equal value more unquestionable when the bargain is made that
• 26:00
  Speaker 1: neither party has any claim upon the other, the exchanged
• 26:03
  Speaker 1: services are equal. Thus, it follows that if one of
• 26:07
  Speaker 1: the party's wishes to introduce into the bargain an additional
• 26:10
  Speaker 1: clause advantageous to himself but unfavorable to the other party,
• 26:15
  Speaker 1: he must agree to a second clause, which shall re
• 26:18
  Speaker 1: establish the equilibrium and the law of justice. It would
• 26:22
  Speaker 1: be absurd to deny the justice of a second clause
• 26:25
  Speaker 1: of compensation. This granted, We will suppose that Peter, after
• 26:30
  Speaker 1: having said to Paul give me ten sixpences, I will
• 26:34
  Speaker 1: give you a crown, adds you shall give me the
• 26:37
  Speaker 1: ten sixpences now, and I will give you the crown
• 26:40
  Speaker 1: piece in a year. It is very evident that this
• 26:43
  Speaker 1: new proposition alters the claims and advantages of the bargain,
• 26:48
  Speaker 1: that it alters the proportion of the two services. Does
• 26:52
  Speaker 1: it not appear plainly enough, in fact, that Peter asks
• 26:55
  Speaker 1: of Paul a new and an additional service, one of
• 26:58
  Speaker 1: a different kind. Is it not as if he had said,
• 27:02
  Speaker 1: render me the service of allowing me to use for
• 27:04
  Speaker 1: my profit for a year five shillings which belong to you,
• 27:08
  Speaker 1: and which you might have used for yourself. And what
• 27:12
  Speaker 1: good reason have you to maintain that Paul is bound
• 27:15
  Speaker 1: to render this especial service gratuitously, that he has no
• 27:19
  Speaker 1: right to demand anything more in consequence of this requisition
• 27:24
  Speaker 1: that the state ought to interfere to force him to submit.
• 27:28
  Speaker 1: Is it not incomprehensible that the economist who preaches such
• 27:32
  Speaker 1: a doctrine to the people can reconcile it with his
• 27:35
  Speaker 1: principle or the reciprocity of services. Here I have introduced cash.
• 27:41
  Speaker 1: I have been led to do so by a desire
• 27:43
  Speaker 1: to place side by side two objects of exchange of
• 27:46
  Speaker 1: a perfect and indisputable equality of value. I was anxious
• 27:51
  Speaker 1: to be prepared for objections. But on the other hand,
• 27:54
  Speaker 1: my demonstration would have been more striking still if I
• 27:58
  Speaker 1: had illustrated my principle by any agreement for exchanging the
• 28:01
  Speaker 1: services or the productions themselves. Suppose, for example, a house
• 28:07
  Speaker 1: and a vessel of a value so perfectly equal that
• 28:10
  Speaker 1: their proprietors are disposed to exchange them even handed, without
• 28:15
  Speaker 1: excess or abatement. In fact, let the bargain be settled
• 28:20
  Speaker 1: by a lawyer. At the moment of each taking possession,
• 28:23
  Speaker 1: the ship owner says to the citizen, very well, the
• 28:26
  Speaker 1: transaction is completed, and nothing can prove its perfect equity
• 28:30
  Speaker 1: better than our free and voluntary consent. Our conditions thus fixed,
• 28:35
  Speaker 1: I shall propose to you a little practical modification. You
• 28:39
  Speaker 1: shall let me have your house to day, but I
• 28:42
  Speaker 1: shall not put you in possession of my ship for
• 28:45
  Speaker 1: a year. And the reason I make this demand of
• 28:48
  Speaker 1: you is that during this year of delay I wish
• 28:51
  Speaker 1: to use the vessel, that we may not be embarrassed
• 28:55
  Speaker 1: by considerations relative to the deterioration of the thing lent.
• 28:59
  Speaker 1: I will suppose, the shipowner to add, I will engage
• 29:03
  Speaker 1: at the end of the year to hand over to
• 29:05
  Speaker 1: you the vessel in the state in which it is
• 29:07
  Speaker 1: to day. I ask of every candid man, I ask
• 29:11
  Speaker 1: of Monsieur Pruden himself if the citizen has not a
• 29:15
  Speaker 1: right to answer. The new clause which you propose entirely
• 29:19
  Speaker 1: alters the proportion or the equal value of the exchanged services.
• 29:24
  Speaker 1: By it, I shall be deprived for the space of
• 29:26
  Speaker 1: a year both at once of my house and of
• 29:29
  Speaker 1: your vessel. By it, you will make use of both
• 29:34
  Speaker 1: if in the absence of this clause the bargain was just.
• 29:37
  Speaker 1: For the same reason, the clause is injurious to me.
• 29:41
  Speaker 1: It stipulates for a loss to me and a gain
• 29:44
  Speaker 1: to you, you are requiring of me a new service.
• 29:48
  Speaker 1: I have the right to refuse or to require of you,
• 29:51
  Speaker 1: as a compensation an equivalent service, if the parties are
• 29:56
  Speaker 1: agreed upon this compensation, the principle of which is incantestine.
• 30:00
  Speaker 1: We can easily distinguish two transactions in one two exchanges
• 30:04
  Speaker 1: of service. In one. First, there is the exchange of
• 30:08
  Speaker 1: the house for the vessel. After this there is the
• 30:11
  Speaker 1: delay granted by one of the parties, and the compensation
• 30:15
  Speaker 1: correspondent to this delay yielded by the other. These two
• 30:20
  Speaker 1: new services take the generic and abstract names of credit
• 30:25
  Speaker 1: and interest. But names do not change the nature of things,
• 30:29
  Speaker 1: and I defy any one to dare to maintain that
• 30:32
  Speaker 1: there exists here when all is done, a service for
• 30:35
  Speaker 1: a service, or a reciprocity of services. To say that
• 30:39
  Speaker 1: one of these services does not challenge the other. To
• 30:43
  Speaker 1: say that the first ought to be rendered gratuitously without
• 30:46
  Speaker 1: injustice is to say that injustice consists in the reciprocity
• 30:50
  Speaker 1: of services, that justice consists in one of the parties
• 30:54
  Speaker 1: giving and not receiving, which is a contradiction in terms.
• 31:00
  Speaker 1: To give an idea of interest and its mechanism, allow
• 31:03
  Speaker 1: me to make use of two or three anecdotes in
• 31:06
  Speaker 1: section four. But first I must say a few words
• 31:10
  Speaker 1: upon capital. There are some persons who imagine that capital
• 31:16
  Speaker 1: is money, and this is precisely the reason why they
• 31:19
  Speaker 1: deny its productiveness. For as Monsieur Thorat says, crowns are
• 31:25
  Speaker 1: not endowed with the power of reproducing themselves. But it
• 31:29
  Speaker 1: is not true that capital and money are the same thing.
• 31:33
  Speaker 1: Before the discovery of the precious metals, there were capitalists
• 31:37
  Speaker 1: in the world. And I venture to say that, at
• 31:39
  Speaker 1: that time, as now, everybody was a capitalist to a
• 31:43
  Speaker 1: certain extent. What is capital? Then? It is composed of
• 31:48
  Speaker 1: three things. First, of the materials upon which men operate,
• 31:53
  Speaker 1: when these materials have already a value communicated by some
• 31:57
  Speaker 1: human effort, which has bestowed upon them the principle of
• 32:00
  Speaker 1: remuneration wool, flex, leather, silk, wood, et cetera. Second, instruments
• 32:09
  Speaker 1: which are used for working tools, machines, ships, carriages, et cetera. Third,
• 32:16
  Speaker 1: provisions which are consumed during labor, victuals, stuffs, houses, et cetera.
• 32:24
  Speaker 1: Without these things, the labor of man would be unproductive
• 32:27
  Speaker 1: and almost void. Yet these very things have required much work,
• 32:32
  Speaker 1: especially at first. This is the reason that so much
• 32:35
  Speaker 1: value has been attached to the possession of them, and
• 32:38
  Speaker 1: also that it is perfectly lawful to exchange and to
• 32:42
  Speaker 1: sell them to make a profit of them, if used
• 32:45
  Speaker 1: to gain remuneration from them, if lent. End of section three.
• 32:52
  Speaker 1: What is alone and what is capital? Section four of
• 33:03
  Speaker 1: Capital and Interest by Frederic Bastiat read by Michel Frye Batonrouge, Louisiana.
• 33:10
  Speaker 1: This LibriVox recording is in the public domain. Section four
• 33:16
  Speaker 1: the anecdotes, the sack of corn, the house, and the plain. Now,
• 33:22
  Speaker 1: for my anecdotes, we begin with the sack of corn. Mathurin,
• 33:28
  Speaker 1: in other respects as poor as job, and obliged to
• 33:31
  Speaker 1: earn his bread by day labor, became, nevertheless, by some inheritance,
• 33:36
  Speaker 1: the owner of a fine piece of uncultivated land. He
• 33:40
  Speaker 1: was exceedingly anxious to cultivate it. Alas said he to
• 33:44
  Speaker 1: make ditches, to raise fences, to break the soil, to
• 33:48
  Speaker 1: clear away the brambles and stones, to plow it, to
• 33:52
  Speaker 1: sew it might bring me a living in a year
• 33:54
  Speaker 1: or two, but certainly not to day or tomorrow. It
• 33:58
  Speaker 1: is impossible to set about farming it without previously saving
• 34:02
  Speaker 1: some provisions for my subsistence until the harvest. And I
• 34:06
  Speaker 1: know by experience that preparatory labor is indispensable in order
• 34:10
  Speaker 1: to render present labor productive. The good Mathurin was not
• 34:15
  Speaker 1: content with making these reflections. He resolved to work by
• 34:19
  Speaker 1: the day, and to save something from his wages to
• 34:22
  Speaker 1: buy a spade and a sack of corn, without which
• 34:25
  Speaker 1: things he must give up his fine agricultural projects. He
• 34:29
  Speaker 1: acted so well, and was so active and steady, that
• 34:33
  Speaker 1: he soon saw himself in possession of the wished for
• 34:36
  Speaker 1: sack of corn. I shall take it to the mill,
• 34:39
  Speaker 1: said he, and then I shall have enough to live
• 34:41
  Speaker 1: upon till my field is covered with a rich harvest.
• 34:46
  Speaker 1: Just as he was starting, Jerome came to borrow his
• 34:49
  Speaker 1: treasure of him. If you will lend me this sack
• 34:53
  Speaker 1: of corn, said Jerome, you will do me a great service,
• 34:56
  Speaker 1: for I have some very lucrative work in view, which
• 34:59
  Speaker 1: I cannot possibly undertake for want of provisions to live
• 35:03
  Speaker 1: upon until it is finished. I was in the same case,
• 35:07
  Speaker 1: answered Mathurin. And if I have now secured bread for
• 35:11
  Speaker 1: several months, it is at the expense of my arms
• 35:13
  Speaker 1: and my stomach. Upon what principle of justice can it
• 35:17
  Speaker 1: be devoted to the realization of your enterprise instead of mine.
• 35:22
  Speaker 1: You may well believe that the bargain was a long one. However,
• 35:26
  Speaker 1: it was finished at length, and on these conditions. First,
• 35:32
  Speaker 1: Jerome promised to give back at the end of the
• 35:34
  Speaker 1: year a sack of corn of the same quality and
• 35:37
  Speaker 1: of the same weight, one hundred liders, without missing a
• 35:40
  Speaker 1: single grain. The first clause is perfectly just, said he,
• 35:45
  Speaker 1: for without it, Mathurin would give and not end. Secondly,
• 35:50
  Speaker 1: he engaged to deliver five leaders on every hundred liters
• 35:54
  Speaker 1: sack that he produced. This cause is no less just
• 35:58
  Speaker 1: than the other thought he for without it, Mathurin would
• 36:01
  Speaker 1: do me a service without compensation. He would inflict upon
• 36:04
  Speaker 1: himself a privation. He would renounce his cherished enterprise. He
• 36:09
  Speaker 1: would enable me to accomplish mine. He would cause me
• 36:12
  Speaker 1: to enjoy for a year the fruits of his savings,
• 36:15
  Speaker 1: and all this gratuitously. Since he delays the cultivation of
• 36:20
  Speaker 1: his land, since he enables me to realize a lucrative labor,
• 36:25
  Speaker 1: it is quite natural that I should let him partake
• 36:27
  Speaker 1: in a certain proportion of the profits which I shall
• 36:30
  Speaker 1: gain by the sacrifice he makes of his own on
• 36:35
  Speaker 1: his side. Mathurin, who was something of a scholar, made
• 36:39
  Speaker 1: this calculation. Since Bavirtue of the first clause, the sack
• 36:44
  Speaker 1: of corn will return to me at the end of
• 36:46
  Speaker 1: a year, he said to himself, I shall be able
• 36:49
  Speaker 1: to lend it again. It will return to me at
• 36:52
  Speaker 1: the end of the second year. I may lend it again,
• 36:55
  Speaker 1: and so on to all eternity. However, I cannot deny
• 37:00
  Speaker 1: that it will have been eaten long ago. It is
• 37:03
  Speaker 1: singular that I should be perpetually the owner of a
• 37:06
  Speaker 1: sack of corn, although the one I have lent has
• 37:09
  Speaker 1: been consumed forever. But this is explained. Thus it will
• 37:14
  Speaker 1: be consumed in the service of Jerome. It will put
• 37:18
  Speaker 1: it into the power of Jerome to produce a superior value,
• 37:22
  Speaker 1: And consequently Jerome will be able to restore me a
• 37:25
  Speaker 1: sack of corn or the value of it, without having
• 37:28
  Speaker 1: suffered the slightest injury. But quite the contrary, and as
• 37:32
  Speaker 1: regards myself, this value ought to be my property as
• 37:36
  Speaker 1: long as I do not consume it myself. If I
• 37:39
  Speaker 1: had used it to clear my land, I should have
• 37:42
  Speaker 1: received it again in the form of a fine harvest.
• 37:46
  Speaker 1: Instead of that, I lend it, and I shall recover
• 37:49
  Speaker 1: it in the form of repayment. From the second clause,
• 37:53
  Speaker 1: I gain another piece of information. At the end of
• 37:56
  Speaker 1: the year, I shall be in possession of five liters
• 37:59
  Speaker 1: of corn over the one hundred that I have just lent.
• 38:03
  Speaker 1: If then I were to continue to work by the
• 38:06
  Speaker 1: day and to save part of my wages, as I
• 38:09
  Speaker 1: have been doing in the course of time, I should
• 38:12
  Speaker 1: be able to lend two sacks of corn, then three,
• 38:16
  Speaker 1: then four, and when I should have gained a sufficient
• 38:19
  Speaker 1: number to enable me to live on these editions of
• 38:22
  Speaker 1: five leaders over and above each, I shall be at
• 38:26
  Speaker 1: liberty to take a little repose in my old age.
• 38:30
  Speaker 1: But how is this? In this case? Shall I not
• 38:33
  Speaker 1: be living at the expense of others? No, certainly, For
• 38:38
  Speaker 1: it has been proved that in lending I perform a service,
• 38:41
  Speaker 1: I complete the labor of my borrowers, and only deduct
• 38:45
  Speaker 1: a trifling part of the excess of production due to
• 38:48
  Speaker 1: my lendings and savings. It is a marvelous thing that
• 38:52
  Speaker 1: a man may thus realize a leisure which injures no one,
• 38:56
  Speaker 1: and for which he cannot be envied without injustice. Here
• 39:02
  Speaker 1: is my second anecdote. The house. Mondor had a house.
• 39:08
  Speaker 1: In building it, he had exhorted nothing from anyone whatever.
• 39:13
  Speaker 1: He owed it to his own personal labour, or, which
• 39:16
  Speaker 1: is the same thing, to labour justly rewarded. His first
• 39:21
  Speaker 1: care was to make a bargain with an architect, in
• 39:23
  Speaker 1: virtue of which, by means of one hundred crowns a year,
• 39:27
  Speaker 1: the latter engaged to keep the house in constant good repair.
• 39:31
  Speaker 1: Mondor was already congratulating himself on the happy days which
• 39:35
  Speaker 1: he hoped to spend in this retreat, declared sacred by
• 39:38
  Speaker 1: our constitution. But Valerius wished to make it his residence.
• 39:45
  Speaker 1: How can you think of such a thing, said Mondor
• 39:48
  Speaker 1: to Valerius. It is I who have built it. It
• 39:51
  Speaker 1: has cost me ten years of painful labour, and now
• 39:55
  Speaker 1: you would enjoy it. They agreed to refer the matter
• 39:59
  Speaker 1: to judges. They chose no profound economists, there were none
• 40:03
  Speaker 1: such in the country. But they found some just and
• 40:07
  Speaker 1: sensible men. It all comes to the same thing. Political economy, justice,
• 40:12
  Speaker 1: good sense are all the same thing. Now Here is
• 40:17
  Speaker 1: the decision made by the judges. If Valerius wishes to
• 40:21
  Speaker 1: occupy Mondor's house for a year, he is bound to
• 40:25
  Speaker 1: submit to three conditions. The first is to quit at
• 40:29
  Speaker 1: the end of the year, and to restore the house
• 40:31
  Speaker 1: in good repair, saving the inevitable decay resulting from mere duration.
• 40:38
  Speaker 1: The second to refund to Mondor the three hundred francs
• 40:41
  Speaker 1: which the latter pays annually to the architect to repair
• 40:45
  Speaker 1: the injuries of time. For these injuries taking place whilst
• 40:48
  Speaker 1: the house is in the service of Valarius, it is
• 40:51
  Speaker 1: perfectly just that he should bear the consequences. The third
• 40:55
  Speaker 1: that he should render to Mondor a service equivalent to
• 40:59
  Speaker 1: that which he receives. As to this equivalence of services,
• 41:04
  Speaker 1: it must be freely discussed between Mondor and Valerius. Here
• 41:09
  Speaker 1: is my third anecdote, the plane. A very long time ago,
• 41:15
  Speaker 1: there lived in a poorer village a joiner who was
• 41:18
  Speaker 1: a philosopher. As all my heroes are in their way,
• 41:23
  Speaker 1: James worked from morning till night with his two strong arms,
• 41:26
  Speaker 1: but his brain was not idle. For all that he
• 41:30
  Speaker 1: was fond of reviewing his actions, their causes, and their effects.
• 41:34
  Speaker 1: He sometimes said to himself, with my hatchet, mysaw, and
• 41:39
  Speaker 1: my hammer, I can make only coarse furniture, and can
• 41:42
  Speaker 1: only get the pay for such. If I only had
• 41:46
  Speaker 1: a plane, I should please my customers more, and they
• 41:49
  Speaker 1: would pay me more. It is quite just. I can
• 41:53
  Speaker 1: only expect services proportioned to those which I render myself. Yes,
• 41:58
  Speaker 1: I am resolved, I will make myself a plane. However,
• 42:03
  Speaker 1: just as he was setting to work, James reflected further,
• 42:07
  Speaker 1: I work for my customers three hundred days in the year.
• 42:11
  Speaker 1: If I give ten to make my plane, supposing it
• 42:14
  Speaker 1: lasts me a year, only two hundred and ninety days
• 42:17
  Speaker 1: will remain for me to make my furniture now. In
• 42:22
  Speaker 1: order that I not be the loser in this matter,
• 42:25
  Speaker 1: I must gain henceforth, with the help of the plane,
• 42:28
  Speaker 1: as much in two hundred and ninety days as I
• 42:31
  Speaker 1: now do in three hundred. I must even gain more,
• 42:35
  Speaker 1: for unless I do so, it would not be worth
• 42:37
  Speaker 1: my wild adventure. Upon any innovations, James began to calculate.
• 42:43
  Speaker 1: He satisfied himself that he should sell his finished furniture
• 42:47
  Speaker 1: at a price which would amply compensate for the ten
• 42:50
  Speaker 1: days devoted to the plane, And when no doubt remained
• 42:53
  Speaker 1: on this point, he set to work. I beg the
• 42:57
  Speaker 1: reader to remark that the power which exists in the
• 42:59
  Speaker 1: two the whool to increase the productiveness of labor is
• 43:03
  Speaker 1: the basis of the solution which follows. At the end
• 43:08
  Speaker 1: of ten days, James had in his possession an admirable plane,
• 43:12
  Speaker 1: which he valued all the more for having made it himself.
• 43:16
  Speaker 1: He danced for joy, for like the girl with her
• 43:19
  Speaker 1: basket of eggs, he reckoned all the profits which he
• 43:22
  Speaker 1: expected to derive from this ingenious instrument. But more fortunate
• 43:27
  Speaker 1: than she, he was not reduced to the necessity of
• 43:30
  Speaker 1: saying goodbye to calf, cow, pig and eggs together. He
• 43:35
  Speaker 1: was building his fine castles in the air when he
• 43:38
  Speaker 1: was interrupted by his acquaintance, William, a joiner in the
• 43:42
  Speaker 1: neighboring village. William, having admired the plane, was struck with
• 43:47
  Speaker 1: the advantages which might be gained from it. He said
• 43:50
  Speaker 1: to James, you must do me a service. What service?
• 43:54
  Speaker 1: Lend me your plane for a year, as might be expected. James,
• 43:59
  Speaker 1: at this proposal, did not fail to cry out, how
• 44:02
  Speaker 1: can you think of such a thing? William? Well, if
• 44:05
  Speaker 1: I do you this service, what will you do for
• 44:07
  Speaker 1: me in return? Nothing, said William. Don't you know that
• 44:11
  Speaker 1: alone ought to be gratuitous? Don't you know that capital
• 44:15
  Speaker 1: is naturally unproductive? Don't you know fraternity has been proclaimed.
• 44:21
  Speaker 1: If you only do me a service for the sake
• 44:23
  Speaker 1: of receiving one from me in return, what merit would
• 44:26
  Speaker 1: you have? William, my friend? Fraternity does not mean that
• 44:32
  Speaker 1: all the sacrifices are to be on one side. If so,
• 44:35
  Speaker 1: I do not see why they should not be on yours.
• 44:38
  Speaker 1: Whether alone should be gratuitous, I don't know, but I
• 44:42
  Speaker 1: do know that if I were to lend you my
• 44:44
  Speaker 1: plan for a year, it would be giving it to you.
• 44:47
  Speaker 1: To tell you the truth, that was not what I
• 44:49
  Speaker 1: made it for. William replies, well, we will say nothing
• 44:54
  Speaker 1: about the modern maxims discovered by the socialists. Gentlemen, I
• 44:58
  Speaker 1: ask you to do me a service, What service do
• 45:00
  Speaker 1: you ask me in return? Said James. First, then in
• 45:05
  Speaker 1: a year the plane will be done for. It will
• 45:07
  Speaker 1: be good for nothing. It is only just that you
• 45:10
  Speaker 1: should let me have another exactly like it, or that
• 45:13
  Speaker 1: you should give me money enough to get it repaired,
• 45:16
  Speaker 1: or that you should supply me the ten days which
• 45:18
  Speaker 1: I must devote to replacing it. William replied, this is
• 45:23
  Speaker 1: perfectly just. I submit to these conditions I engage to
• 45:27
  Speaker 1: return it, or to let you have one like it,
• 45:30
  Speaker 1: or the value of the same. I think you must
• 45:32
  Speaker 1: be satisfied with this, and can require nothing further, James says,
• 45:37
  Speaker 1: I think otherwise. I made the plane for myself and
• 45:40
  Speaker 1: not for you. I expected to gain some advantage from it,
• 45:44
  Speaker 1: by my work being better finished and better paid, by
• 45:48
  Speaker 1: an improvement in my condition. What reason is there that
• 45:52
  Speaker 1: I should make a plane and you should gain the profit.
• 45:55
  Speaker 1: I might as well ask you to give me your
• 45:57
  Speaker 1: saw and hatchet. What a confusion? Is it not natural
• 46:01
  Speaker 1: that each should keep what he has made with his
• 46:03
  Speaker 1: own hands, as well as his hands themselves, to use
• 46:08
  Speaker 1: without recompense the hands of another, I call slavery. To
• 46:12
  Speaker 1: use without recompense the plane of another. Can this be
• 46:16
  Speaker 1: called fraternity? William responds, But then I have agreed to
• 46:20
  Speaker 1: return it to you at the end of a year,
• 46:22
  Speaker 1: as well polished and as sharp as it is now.
• 46:26
  Speaker 1: James replies, We have nothing to do with next year.
• 46:30
  Speaker 1: We are speaking of this year. I have made the
• 46:33
  Speaker 1: plane for the sake of improving my work, and the
• 46:35
  Speaker 1: condition if you merely return it to me in a year,
• 46:39
  Speaker 1: it is you who will gain the profit of it
• 46:42
  Speaker 1: during the whole of that time. I am not bound
• 46:45
  Speaker 1: to do you such a service without receiving anything from
• 46:48
  Speaker 1: you in return. Therefore, if you wish for my plane,
• 46:52
  Speaker 1: independently of the entire restoration already bargained for, you must
• 46:57
  Speaker 1: do me a service which we will now discuss. You
• 47:00
  Speaker 1: must grant me remuneration. And this was done. Thus William
• 47:06
  Speaker 1: granted a remuneration calculated in such a way that at
• 47:10
  Speaker 1: the end of the year James received his plane quite
• 47:14
  Speaker 1: new and in addition a compensation consisting of a new
• 47:18
  Speaker 1: plank for the advantages of which he had deprived himself
• 47:22
  Speaker 1: and which he had yielded to his friend. It was
• 47:26
  Speaker 1: impossible for anyone acquainted with the transaction to discover the
• 47:30
  Speaker 1: slightest trace in it of oppression or injustice. The singular
• 47:35
  Speaker 1: part of it is that at the end of the
• 47:38
  Speaker 1: year the plane came into James's possession, and he lent
• 47:41
  Speaker 1: it again, recovered it, and lent it a third and
• 47:45
  Speaker 1: fourth time. It has passed into the hands of his son,
• 47:49
  Speaker 1: who still lends it. Poor plane. How many times has
• 47:52
  Speaker 1: it changed, sometimes its blade, sometimes its handle. It is
• 47:58
  Speaker 1: no longer the same plane, but it has always the
• 48:01
  Speaker 1: same value, at least for James's posterity. Workmen, let us
• 48:05
  Speaker 1: examine into these little stories and of section four the
• 48:10
  Speaker 1: anecdotes Section five of Capital and Interest by Frederic Bastiat
• 48:22
  Speaker 1: read by Michel Frye Baton Rouge, Louisiana. This LibriVox recording
• 48:28
  Speaker 1: is in the public domain. Session five the anecdotes examined.
• 48:35
  Speaker 1: I maintain first of all that the sack of corn
• 48:39
  Speaker 1: and the plane are here, the type, the model a
• 48:42
  Speaker 1: faithful representation the symbol of all capital, as the five
• 48:48
  Speaker 1: leaders of corn and the plank are the type, the model,
• 48:51
  Speaker 1: the representation, the symbol of all interest. This granted, the
• 48:57
  Speaker 1: following are, it seems to me a series of consequences,
• 49:01
  Speaker 1: the justice of which it is impossible to dispute. First,
• 49:06
  Speaker 1: if the yielding of a plank by the borrower to
• 49:09
  Speaker 1: the lender is a natural, equitable, lawful remuneration, the just
• 49:14
  Speaker 1: price of a real service, we may conclude that, as
• 49:17
  Speaker 1: a general rule, it is in the nature of capital
• 49:20
  Speaker 1: to produce interest. When this capital, as in the foregoing examples,
• 49:26
  Speaker 1: takes the form of an instrument of labor, it is
• 49:29
  Speaker 1: clear enough that it ought to bring an advantage to
• 49:32
  Speaker 1: its possessor, to him who has devoted to it his time,
• 49:36
  Speaker 1: his brains, and his strength. Otherwise, why should he have
• 49:39
  Speaker 1: made it. No necessity of life can be immediately satisfied
• 49:44
  Speaker 1: with instruments of labor. No one eats planes or drinks saws,
• 49:49
  Speaker 1: except indeed he be a conjurer. If a man determines
• 49:53
  Speaker 1: to spend his time in the production of such things,
• 49:56
  Speaker 1: he must have been led to it by the consideration
• 49:59
  Speaker 1: of the power which these instruments add to his power
• 50:03
  Speaker 1: of the time which they save him of the profession
• 50:06
  Speaker 1: and rapidity which they give to his labor, in a word,
• 50:10
  Speaker 1: of the advantages which they procure for him. Now, these
• 50:15
  Speaker 1: advantages which have been prepared by labor, by the sacrifice
• 50:19
  Speaker 1: of time, which might have been used in a more
• 50:21
  Speaker 1: immediate manner, are we bound, as soon as they are
• 50:24
  Speaker 1: ready to be enjoyed, to confer them gratuitously upon another.
• 50:30
  Speaker 1: Would it be an advance in social order if the
• 50:33
  Speaker 1: law decided thus, and citizens should pay officials for causing
• 50:37
  Speaker 1: such a law to be executed by force? I venture
• 50:41
  Speaker 1: to say that there is not one amongst you who
• 50:44
  Speaker 1: would support it. It would be to legalize, to organize,
• 50:48
  Speaker 1: to systematize injustice itself, for it would be proclaiming that
• 50:53
  Speaker 1: there are men born to render and others born to
• 50:57
  Speaker 1: receive gratuitous services. Granted, then that interest is just natural
• 51:03
  Speaker 1: and lawful. Second, a consequence not less remarkable than the former,
• 51:09
  Speaker 1: and if possible, still more conclusive, to which I call
• 51:13
  Speaker 1: your attention, is this interest is not injurious to the borrower.
• 51:19
  Speaker 1: I mean to say, the obligation in which the borrower
• 51:22
  Speaker 1: finds himself to pay a remuneration for the use of
• 51:25
  Speaker 1: capital cannot do any harm to his condition. Observe in
• 51:30
  Speaker 1: fact that James and William are perfectly free. As regards
• 51:34
  Speaker 1: the transaction to which the plane gave occasion. The transaction
• 51:38
  Speaker 1: cannot be accomplished without the consent of the one as
• 51:41
  Speaker 1: well as of the other. The worst which can happen
• 51:45
  Speaker 1: is that James may be too exacting, and in this case, William,
• 51:50
  Speaker 1: refusing the loan, remains as he was before. By the
• 51:55
  Speaker 1: fact of his agreeing to borrow, he proves that he
• 51:58
  Speaker 1: considers it an advantage to himself. He proves that after
• 52:01
  Speaker 1: every calculation, including the remuneration, whatever it may be required
• 52:06
  Speaker 1: of him, he still finds it more profitable to borrow
• 52:09
  Speaker 1: than not to borrow. He only determines to do so
• 52:12
  Speaker 1: because he has compared the inconveniences with the advantages. He
• 52:17
  Speaker 1: has calculated that the day on which he returns the plane,
• 52:20
  Speaker 1: accompanied by the remuneration agreed upon, he will have effected
• 52:25
  Speaker 1: more work with the same labor. Thanks to this tool,
• 52:29
  Speaker 1: a profit will remain to him. Otherwise he would not
• 52:32
  Speaker 1: have borrowed. The two services of which we are speaking
• 52:36
  Speaker 1: are exchanged according to the law which governs all exchanges,
• 52:40
  Speaker 1: the law of supply and demand. The claims of James
• 52:44
  Speaker 1: have a natural and impassable limit. This is the point
• 52:48
  Speaker 1: in which the remuneration demanded by him would absorb all
• 52:51
  Speaker 1: the advantage which William might find in making use of
• 52:55
  Speaker 1: the plane. In this case, the borrowing would not take place.
• 53:00
  Speaker 1: William would be bound either to make a plan for
• 53:03
  Speaker 1: himself or to do without one, which would leave him
• 53:06
  Speaker 1: in his original condition. He borrows because he gains by borrowing.
• 53:12
  Speaker 1: I know very well what will be told me. You
• 53:15
  Speaker 1: will say, William may be deceived, or perhaps he may
• 53:18
  Speaker 1: be governed by necessity and be obliged to submit to
• 53:21
  Speaker 1: a harsh law. It may be so as to errors
• 53:26
  Speaker 1: in calculation, they belong to the infirmity of our nature.
• 53:29
  Speaker 1: And to argue from this against the transaction in question
• 53:33
  Speaker 1: is objecting the possibility of loss in all imaginable transactions.
• 53:38
  Speaker 1: In every human act, error is an accidental fact which
• 53:43
  Speaker 1: is incessantly remedied by experience. In short, everybody must guard
• 53:48
  Speaker 1: against it. As far as those hard necessities are concerned
• 53:52
  Speaker 1: which force persons to burden some borrowings, it is clear
• 53:56
  Speaker 1: that these necessities exist previously to the borrowing. If William
• 54:01
  Speaker 1: is in a situation in which he cannot possibly do
• 54:04
  Speaker 1: without a plane and must borrow one at any price.
• 54:08
  Speaker 1: Does this situation result from James having taken the trouble
• 54:11
  Speaker 1: to make the two? Does it not exist independently of
• 54:15
  Speaker 1: this circumstance. However harsh, however severe, James may be, he
• 54:20
  Speaker 1: will never render the supposed condition of William worse than
• 54:24
  Speaker 1: it is Morally. It is true the lender will be
• 54:27
  Speaker 1: to blame, but in an economical point of view, the
• 54:31
  Speaker 1: loan itself can never be considered responsible for previous necessities
• 54:36
  Speaker 1: which it has not created, and which it relieves to
• 54:38
  Speaker 1: a certain extent. But this proves something to which I
• 54:43
  Speaker 1: shall return the evident interests of William. Representing here the borrowers,
• 54:49
  Speaker 1: there are many James's and planes, in other words, lenders
• 54:53
  Speaker 1: and capitals. It is very evident that if William can
• 54:57
  Speaker 1: say to James, your demands are exerbitted, there is no
• 55:00
  Speaker 1: lack of planes in the world, he will be in
• 55:03
  Speaker 1: a better situation than if James's plane was the only
• 55:06
  Speaker 1: one to be borrowed. Assuredly, there is no maxim more
• 55:10
  Speaker 1: true than this service for service. But let us not
• 55:15
  Speaker 1: forget that no service has a fixed and absolute value
• 55:18
  Speaker 1: compared with others. The contracting parties are free. Each carries
• 55:24
  Speaker 1: his requisitions to the farthest possible point, and the most
• 55:27
  Speaker 1: favorable circumstances for these requisitions is the absence of rivalship. Hence,
• 55:34
  Speaker 1: it follows that if there is a class of men
• 55:36
  Speaker 1: more interested than any other in the formation, multiplication, and
• 55:40
  Speaker 1: abundance of capitals, it is mainly that of the borrowers. Now,
• 55:45
  Speaker 1: since capitals can only be formed and increased by the
• 55:49
  Speaker 1: stimulus and the prospect of remuneration, let this class understand
• 55:53
  Speaker 1: the injury they are inflicting on themselves when they deny
• 55:57
  Speaker 1: the lawfulness of interest, when they proclaim that credit should
• 56:01
  Speaker 1: be gratuitous, when they declaim against the pretended tyranny of capital,
• 56:06
  Speaker 1: when they discourage saving, thus forcing capitals to become scarce
• 56:11
  Speaker 1: and consequently interests to rise. Third, the anecdote I have
• 56:17
  Speaker 1: just related enables you to explain this apparently singular phenomenon,
• 56:21
  Speaker 1: which is termed the duration or perpetuity of interest. Since,
• 56:26
  Speaker 1: in lending his plane, James has been able very lawfully
• 56:30
  Speaker 1: to make it a condition that it should be returned
• 56:32
  Speaker 1: to him at the end of a year. In the
• 56:35
  Speaker 1: same stay in which it was when he lent it.
• 56:38
  Speaker 1: Is it not evident that he may, at the expiration
• 56:40
  Speaker 1: of the term, lend it again on the same conditions.
• 56:45
  Speaker 1: If he resolves upon the latter plan, the plane will
• 56:48
  Speaker 1: return to him at the end of every year, and
• 56:50
  Speaker 1: that without end, James will then be in a condition
• 56:54
  Speaker 1: to lend it without end, that is, he may derive
• 56:58
  Speaker 1: from it a perpetual interest. It will be said that
• 57:01
  Speaker 1: the plane will be worn out. That is true, but
• 57:05
  Speaker 1: it will be worn out by the hand and for
• 57:07
  Speaker 1: the profit of the borrower. The latter has taken into
• 57:11
  Speaker 1: account this gradual wear, and taken upon himself as he
• 57:14
  Speaker 1: ought the consequences. He has reckoned that he shall derive
• 57:19
  Speaker 1: from this tool an advantage which will allow him to
• 57:22
  Speaker 1: restore it in its original condition, after having realized a
• 57:26
  Speaker 1: profit from it. As long as James does not use
• 57:29
  Speaker 1: this capital himself or for his own advantage, as long
• 57:33
  Speaker 1: as he renounces the advantages which allow it to be
• 57:36
  Speaker 1: restored to its original condition, he will have an incontestable
• 57:40
  Speaker 1: right to have it restored, And that, independently of interest observe.
• 57:46
  Speaker 1: Besides that, if as I believe I have shown, James,
• 57:50
  Speaker 1: far from doing any harm to William has done him
• 57:53
  Speaker 1: a service in lending him his plane for a year.
• 57:57
  Speaker 1: For the same reason, he will do no harm to
• 57:59
  Speaker 1: a second, a third, a fourth borrower in the subsequent periods. Hence,
• 58:05
  Speaker 1: you may understand that the interest of a capital is
• 58:08
  Speaker 1: as natural, as lawful, as useful in the thousandth year
• 58:12
  Speaker 1: as in the first. We may go still further. It
• 58:17
  Speaker 1: may happen that James lends more than a single plane.
• 58:21
  Speaker 1: It is possible that by means of working, of saving,
• 58:24
  Speaker 1: of privations, of order of activity, he may come to
• 58:29
  Speaker 1: lend a multitude of planes and saws, that is to say,
• 58:33
  Speaker 1: to do a multitude of services. I insist upon this
• 58:37
  Speaker 1: point that if the first loan has been a social good,
• 58:41
  Speaker 1: it will be the same with all the others, for
• 58:43
  Speaker 1: they are all similar and based upon the same principle.
• 58:47
  Speaker 1: It may happen, then, that the amount of all the
• 58:49
  Speaker 1: remunerations received by our honest operative in exchange for services
• 58:54
  Speaker 1: rendered by him may suffice to maintain him. In this case,
• 58:59
  Speaker 1: there will be a man in the world who has
• 59:01
  Speaker 1: a right to live without working. I do not say
• 59:04
  Speaker 1: that he would be doing right to give himself up
• 59:07
  Speaker 1: to idleness, But I say that he has a right
• 59:10
  Speaker 1: to do so, and if he does so, it will
• 59:12
  Speaker 1: be at nobody's expense. But quite the contrary, if society
• 59:17
  Speaker 1: at all understands the nature of things, it will acknowledge
• 59:21
  Speaker 1: that this man subsists on services which he receives, certainly
• 59:25
  Speaker 1: as we all do, but which he lawfully receives in
• 59:28
  Speaker 1: exchange for other services which he himself has rendered, that
• 59:32
  Speaker 1: he continues to render, and which are quite real inasmuch
• 59:36
  Speaker 1: as they are freely and voluntarily accepted. End of Session five.
• 59:42
  Speaker 1: The anecdotes examined Session six of Capital and Interest by
• 59:54
  Speaker 1: Frederic Bastiat read by Michel Frye Batonrouge, Louisiana. This LibriVox
• 1:00:00
  Speaker 1: recording is in the public domain Capital and Interest, Session
• 1:00:05
  Speaker 1: six on leisure, and here we have a glimpse of
• 1:00:10
  Speaker 1: one of the finest harmonies in the social world. I
• 1:00:14
  Speaker 1: allude to leisure, not that leisure that the warlike and
• 1:00:18
  Speaker 1: tyrannical classes arranged for themselves by the plunder of the workers,
• 1:00:23
  Speaker 1: but that leisure which is the lawful and innocent fruit
• 1:00:26
  Speaker 1: of past activity and economy. In expressing myself thus, I
• 1:00:32
  Speaker 1: know that I shall shock many received ideas. But see
• 1:00:36
  Speaker 1: is not leisure an essential spring in the social machine.
• 1:00:40
  Speaker 1: Without it, the world would never have had a Newton,
• 1:00:43
  Speaker 1: a Pascal, a Fenelon. Mankind would have been ignorant of
• 1:00:48
  Speaker 1: all arts sciences, and of those wonderful inventions prepared originally
• 1:00:53
  Speaker 1: by investigations of mere curiosity thought would have been inert.
• 1:00:58
  Speaker 1: Man would have made no progress. On the other hand,
• 1:01:02
  Speaker 1: if leisure could only be explained by plunder and oppression,
• 1:01:05
  Speaker 1: if it were a benefit which could only be enjoyed
• 1:01:08
  Speaker 1: unjustly and at the expense of others, there would be
• 1:01:11
  Speaker 1: no middle path between these two evils. Either mankind would
• 1:01:15
  Speaker 1: be reduced to the necessity of stagnating in a vegetable
• 1:01:19
  Speaker 1: and stationary life in eternal ignorance from the absence of
• 1:01:23
  Speaker 1: wheels to its machine, or else it would have to
• 1:01:27
  Speaker 1: acquire these wheels at a price of inevitable injustice, and
• 1:01:31
  Speaker 1: would necessarily present the sad spectacle in one form or
• 1:01:34
  Speaker 1: other of the antique classification of human beings in two
• 1:01:38
  Speaker 1: masters and slaves. I defy any one to show me,
• 1:01:42
  Speaker 1: in this case any other alternative. We should be compelled
• 1:01:47
  Speaker 1: to contemplate the divine plan which governs society. With the
• 1:01:51
  Speaker 1: regret of thinking that it presents a deplorable chasm, the
• 1:01:56
  Speaker 1: stimulus of progress would be forgotten, or, which is worse,
• 1:02:00
  Speaker 1: this stimulus would be no other than injustice itself. But no,
• 1:02:05
  Speaker 1: God has not left such a chasm in his work
• 1:02:07
  Speaker 1: of love. We must take care not to disregard his
• 1:02:10
  Speaker 1: wisdom and power. For those whose imperfect meditations cannot explain
• 1:02:16
  Speaker 1: the lawfulness of leisure are very much like the astronomer
• 1:02:20
  Speaker 1: who said, at a certain point in the heavens there
• 1:02:23
  Speaker 1: ought to exist a planet which will be at last discovered,
• 1:02:27
  Speaker 1: For without it, the celestial world is not harmony but discord. Well,
• 1:02:32
  Speaker 1: I say that, if well understood the history of my
• 1:02:36
  Speaker 1: humble plane, although very modest, is sufficient to raise us
• 1:02:40
  Speaker 1: to the contemplation of one of the most consoling, but
• 1:02:44
  Speaker 1: least understood, of the social harmonies. It is not true
• 1:02:48
  Speaker 1: that we must choose between the denial or the unlawfulness
• 1:02:52
  Speaker 1: of leisure. Thanks to rent and its natural duration, leisure
• 1:02:56
  Speaker 1: may arise from labor and saving. It is a pleasing
• 1:03:01
  Speaker 1: prospect which every one may have in view, a noble
• 1:03:05
  Speaker 1: recompense to which each may aspire. It makes its appearance
• 1:03:09
  Speaker 1: in the world. It distributes itself proportionately to the exercise
• 1:03:13
  Speaker 1: of certain virtues. It opens all the avenues to intelligence,
• 1:03:18
  Speaker 1: It ignobles, it raises the morals, It spiritualizes the soul
• 1:03:22
  Speaker 1: of humanity, not only without laying any weight on those
• 1:03:26
  Speaker 1: of our brethren whose lot in life devotes them to
• 1:03:29
  Speaker 1: severe labor, but relieving them gradually from the heaviest and
• 1:03:33
  Speaker 1: most repugnant part of this labor. It is enough that
• 1:03:38
  Speaker 1: capitals should be formed, accumulated, multiplied, should be lent on
• 1:03:43
  Speaker 1: conditions less and less burdensome, that they should descend penetrate
• 1:03:48
  Speaker 1: into every social circle, and that, by an admirable progression,
• 1:03:52
  Speaker 1: after having liberated the lenders, they should hasten the liberation
• 1:03:56
  Speaker 1: of the borrowers themselves. For that is the laws and
• 1:04:01
  Speaker 1: customs ought to be favorable to economy, the source of capital.
• 1:04:06
  Speaker 1: It is enough to say that the first of all
• 1:04:09
  Speaker 1: these conditions is not to alarm, to attack, to deny
• 1:04:13
  Speaker 1: that which is the stimulus of saving and the reason
• 1:04:16
  Speaker 1: of its existence. Interest. As long as we see nothing
• 1:04:22
  Speaker 1: passing from hand to hand in the character of loan,
• 1:04:26
  Speaker 1: but provisions, materials, instruments, things indispensable to the productiveness of
• 1:04:31
  Speaker 1: labor itself, the ideas thus far exhibited would not find
• 1:04:35
  Speaker 1: many opponents. Who knows even that I may not be
• 1:04:38
  Speaker 1: reproached for having made a great effort to burst what
• 1:04:41
  Speaker 1: may be said to be an open door. But as
• 1:04:48
  Speaker 1: soon as cash makes its appearance as the subject of
• 1:04:51
  Speaker 1: the transaction, and it is this which appears almost always immediately,
• 1:04:56
  Speaker 1: a crowd of objections are raised. Money will be said,
• 1:05:00
  Speaker 1: will not reproduce itself like your sack of corn. It
• 1:05:04
  Speaker 1: does not assist labor, like your plane. It does not
• 1:05:08
  Speaker 1: afford an immediate satisfaction like your house. It is incapable
• 1:05:13
  Speaker 1: by its nature of producing interest, of multiplying itself, and
• 1:05:17
  Speaker 1: the remuneration it demands is a positive extortion. Who cannot
• 1:05:23
  Speaker 1: see the sophistry of this? Who does not see that
• 1:05:26
  Speaker 1: cash is only a transient form which men give at
• 1:05:29
  Speaker 1: the time to other values, to real objects of usefulness,
• 1:05:34
  Speaker 1: for the sole object of facilitating their arrangements in the
• 1:05:38
  Speaker 1: midst of social complications. The man who is in a
• 1:05:41
  Speaker 1: condition to lend scarcely ever has the exact thing which
• 1:05:45
  Speaker 1: the borrower wants. James, it is true, has a plane,
• 1:05:49
  Speaker 1: but perhaps William wants a saw. They cannot negotiate the
• 1:05:54
  Speaker 1: transaction favorable to both cannot take place, And then what happens.
• 1:06:00
  Speaker 1: It happens that James first exchanges his plane for money,
• 1:06:06
  Speaker 1: He lends the money to William, and William exchanges the
• 1:06:09
  Speaker 1: money for usaw. The transaction is no longer a simple one.
• 1:06:14
  Speaker 1: It is decomposed into two parts, as I explained above
• 1:06:17
  Speaker 1: in speaking of exchange. But for all that it has
• 1:06:21
  Speaker 1: not changed its nature, it still contains all the elements
• 1:06:25
  Speaker 1: of a direct loan. James has still got rid of
• 1:06:29
  Speaker 1: a tool which was useful to him. William has still
• 1:06:32
  Speaker 1: received an instrument which perfects his work and increases his profits.
• 1:06:36
  Speaker 1: There is still a service rendered by the lender which
• 1:06:39
  Speaker 1: entitles him to receive an equivalent service from the borrower.
• 1:06:43
  Speaker 1: This just balance is not the less established by free
• 1:06:47
  Speaker 1: mutual bargaining, the very natural obligation to restore at the
• 1:06:51
  Speaker 1: end of the term. The entire value still constitutes the
• 1:06:55
  Speaker 1: principle of the duration of interest. At the end of
• 1:06:59
  Speaker 1: a year, year, says Monsieur d'oray, will you find an
• 1:07:02
  Speaker 1: additional crown in a bag of one hundred pounds? No, certainly,
• 1:07:08
  Speaker 1: if the borrower puts the bag of one hundred pounds
• 1:07:11
  Speaker 1: on the shelf. In such a case, neither the plane
• 1:07:14
  Speaker 1: nor the sack of corn would reproduce themselves. But it
• 1:07:18
  Speaker 1: is not for the sake of leaving the money in
• 1:07:20
  Speaker 1: the bag nor the plane on the hook, that they
• 1:07:23
  Speaker 1: are borrowed. The plane is borrowed to be used, or
• 1:07:27
  Speaker 1: the money to procure a plane. And if it is
• 1:07:30
  Speaker 1: clearly proved that this tool enables the borrower to obtain
• 1:07:33
  Speaker 1: profits which he would not have made without it, if
• 1:07:37
  Speaker 1: it is proved that the lender has renounced creating for
• 1:07:39
  Speaker 1: himself the success of profits, we may understand how the
• 1:07:43
  Speaker 1: stipulation of a part of the success of profits in
• 1:07:46
  Speaker 1: favor of the lender is equitable and lawful. End of
• 1:07:53
  Speaker 1: Session six Leisure, Session seven of Capital and Interest by
• 1:08:05
  Speaker 1: Frederic Bastiat read by Michel Frye van Rouge, Louisiana. This
• 1:08:10
  Speaker 1: LibriVox recording is in the public domain. Session seven. What
• 1:08:16
  Speaker 1: is money, what is credit? And what is interest? Ignorance
• 1:08:22
  Speaker 1: of the true part which cash plays in human transactions
• 1:08:25
  Speaker 1: is the source of the most fatal errors. I intended
• 1:08:29
  Speaker 1: devoting an entire pamphlet to this subject, entitled Cursed Money,
• 1:08:34
  Speaker 1: subsequently referred to as what is money? And paid for
• 1:08:39
  Speaker 1: money from what we may infer from the writings of
• 1:08:43
  Speaker 1: Monsieur Prudence, that which has led him to think that
• 1:08:47
  Speaker 1: gratuitous credit was a logical and definite consequence of social
• 1:08:51
  Speaker 1: progress is the observation of the phenomenon which shows a
• 1:08:55
  Speaker 1: decreasing interest almost in direct proportion to the rate of civilisms.
• 1:09:01
  Speaker 1: In barbarous times it is in fact scent percent, and
• 1:09:06
  Speaker 1: more then it descends to eighty sixty, fifty, forty, twenty ten, eight, five,
• 1:09:13
  Speaker 1: four and three percent. In Holland it has even been
• 1:09:17
  Speaker 1: shown as low as two percent. Hence, Prudent concludes that
• 1:09:22
  Speaker 1: quote in proportion as society comes to perfection, it will
• 1:09:26
  Speaker 1: descend to zero by the time civilization is complete. In
• 1:09:30
  Speaker 1: other words, that which characterizes social perfection is the gratuitousness
• 1:09:36
  Speaker 1: of credit. When therefore we shall have abolished interest, we
• 1:09:40
  Speaker 1: shall have reached the last step of progress. End quote.
• 1:09:46
  Speaker 1: This is mere sophistry, and as such, false arguing may
• 1:09:50
  Speaker 1: contribute to render popular the unjust, dangerous, and destructive dogma
• 1:09:55
  Speaker 1: that credit should be gratuitous by representing it as a
• 1:09:59
  Speaker 1: coincidence with social profession. With the reader's permission, I will
• 1:10:03
  Speaker 1: examine in a few words this new view of the question,
• 1:10:07
  Speaker 1: what is interest? It is the service rendered after a
• 1:10:13
  Speaker 1: free bargain by the borrower to the lender, in remuneration
• 1:10:17
  Speaker 1: for the service he has received by the loan. By
• 1:10:21
  Speaker 1: what law is the rate of these remunerative services established
• 1:10:26
  Speaker 1: by the general law which regulates the equivalent of all services,
• 1:10:30
  Speaker 1: that is, by the law of supply and demand. The
• 1:10:34
  Speaker 1: more easily a thing is procured, the smaller is the
• 1:10:37
  Speaker 1: service rendered by yielding it or lending it. The man
• 1:10:40
  Speaker 1: who gives me a glass of water in the Pyrenees
• 1:10:43
  Speaker 1: does not render me so great a service as he
• 1:10:46
  Speaker 1: who allows me one in the desert of Sahara. If
• 1:10:50
  Speaker 1: there are many plains, sacks of corn, or houses in
• 1:10:53
  Speaker 1: the country, the use of them is obtained other things
• 1:10:56
  Speaker 1: being equal, on more favorable conditions than if they were few,
• 1:11:01
  Speaker 1: for the simple reason that the lender renders in this
• 1:11:04
  Speaker 1: case a smaller relative service. It is not surprising, therefore,
• 1:11:10
  Speaker 1: that the more abundant capitals are, the lower is the interest.
• 1:11:16
  Speaker 1: Is this saying that it will ever reach zero? No,
• 1:11:19
  Speaker 1: because I repeat it. The principle of a remuneration is
• 1:11:23
  Speaker 1: in the loan. To say that interest will be annihilated
• 1:11:27
  Speaker 1: is to say that there will never be any motive
• 1:11:29
  Speaker 1: for saving, for denying ourselves in order to form new capitals,
• 1:11:34
  Speaker 1: nor even to preserve the old ones. In this case,
• 1:11:38
  Speaker 1: the waste would immediately bring a void, and interest would
• 1:11:42
  Speaker 1: directly reappear. In that the nature of the services of
• 1:11:46
  Speaker 1: which we are speaking does not differ from any other.
• 1:11:50
  Speaker 1: Thanks to industrial progress, a pair of stockings which used
• 1:11:53
  Speaker 1: to be worth six francs has successively been worth only four,
• 1:11:57
  Speaker 1: three and two. No one can say to what point
• 1:12:01
  Speaker 1: this value will descend, but we can affirm that it
• 1:12:04
  Speaker 1: will never reach zero unless the stockings finish by producing
• 1:12:08
  Speaker 1: themselves spontaneously. Why because the principle of remuneration is in labour,
• 1:12:15
  Speaker 1: because he who works for another renders a service and
• 1:12:19
  Speaker 1: ought to receive a service. If no one paid for stockings,
• 1:12:23
  Speaker 1: they would cease to be made, and with the scarcity,
• 1:12:27
  Speaker 1: the price would not fail to reappear. The sophism which
• 1:12:32
  Speaker 1: I am now combating has its own route in the
• 1:12:35
  Speaker 1: infinite divisibility, which belongs to value as it does to matter.
• 1:12:41
  Speaker 1: It appears at first paradoxical, but it is well known
• 1:12:44
  Speaker 1: to all mathematicians that through all eternity, fractions may be
• 1:12:49
  Speaker 1: taken from a weight, without the weight ever being annihilated.
• 1:12:53
  Speaker 1: It is sufficient that each successive fraction be less than
• 1:12:56
  Speaker 1: the preceding one in a determined and regular proportion. There
• 1:13:01
  Speaker 1: are countries where people apply themselves to increasing the size
• 1:13:04
  Speaker 1: of horses or diminishing in sheep the size of the head.
• 1:13:08
  Speaker 1: It is impossible to say precisely to what point they
• 1:13:11
  Speaker 1: will arrive. In this no one can say that he
• 1:13:15
  Speaker 1: has seen the largest horse or the smallest sheep's head
• 1:13:18
  Speaker 1: that will ever appear in the world. But he may
• 1:13:21
  Speaker 1: safely say that the size of horses will never attain
• 1:13:24
  Speaker 1: to infinity, nor the heads of sheep to nothing. In
• 1:13:28
  Speaker 1: the same way, no one can say to what point
• 1:13:31
  Speaker 1: the price of stockings nor the interests of capitals will
• 1:13:34
  Speaker 1: come down. But we may safely affirm, when we know
• 1:13:38
  Speaker 1: the nature of things, that neither the one nor the
• 1:13:41
  Speaker 1: other will ever arrive at zero. For labor and capital
• 1:13:45
  Speaker 1: can no more live without recompense than a sheep without
• 1:13:48
  Speaker 1: a head. The arguments of monsieur prudent reduce themselves, then,
• 1:13:54
  Speaker 1: to this, Since the most skillful agriculturists are those who
• 1:13:58
  Speaker 1: have reduced the heads of shep deep to the smallest size.
• 1:14:02
  Speaker 1: We shall have arrived at the highest agricultural perfecsion when
• 1:14:05
  Speaker 1: sheep have no longer any heads. Therefore, in order to
• 1:14:09
  Speaker 1: realize the perfection, let us behead them. I have now
• 1:14:13
  Speaker 1: done with this wearisome discussion. Why is it that the
• 1:14:17
  Speaker 1: breath of false doctrine has made it needful to examine
• 1:14:21
  Speaker 1: into the intimate nature of interest? I must not leave
• 1:14:25
  Speaker 1: off without remarking upon the beautiful moral which may be
• 1:14:28
  Speaker 1: drawn from this law. The depression of interest is proportioned
• 1:14:32
  Speaker 1: to the abundance of capitals, this law being granted. If
• 1:14:37
  Speaker 1: there is a class of men to whom it is
• 1:14:39
  Speaker 1: more important than to any other that capitals be formed, accumulate, multiply, abound,
• 1:14:45
  Speaker 1: and superabound, it is certainly the class which borrows them
• 1:14:49
  Speaker 1: directly or indirectly. It is those men who operate upon materials,
• 1:14:54
  Speaker 1: who gain assistance by instruments, who live upon provisions produced
• 1:14:59
  Speaker 1: and economy by other men. Imagine in a vast fertile
• 1:15:04
  Speaker 1: country a population of a thousand inhabitants, destitute of all
• 1:15:08
  Speaker 1: capital thus defined, it will assuredly perish by the pangs
• 1:15:13
  Speaker 1: of hunger. Let us suppose a case hardly less cruel.
• 1:15:17
  Speaker 1: Let us suppose that ten of these thousand savages are
• 1:15:20
  Speaker 1: provided with instruments and provisions sufficient to work and to
• 1:15:24
  Speaker 1: live themselves until harvest time, as well as to remunerate
• 1:15:28
  Speaker 1: the services of ninety laborers. The inevitable result will be
• 1:15:33
  Speaker 1: the death of nine hundred human beings. It is clear, then, that,
• 1:15:38
  Speaker 1: since nine hundred and ninety men urged by want will
• 1:15:41
  Speaker 1: crowd upon the supports which would only maintain one hundred,
• 1:15:45
  Speaker 1: the ten capitalists will be masters of the market. They
• 1:15:48
  Speaker 1: will obtain labour on the hardest conditions, for they will
• 1:15:52
  Speaker 1: put it up to auction for the highest bidder, and
• 1:15:55
  Speaker 1: observe this. If these capitalists entertain such pious sense as
• 1:16:00
  Speaker 1: would induce them to impose personal privations on themselves in
• 1:16:04
  Speaker 1: order to diminish the sufferings of some of their brethren,
• 1:16:08
  Speaker 1: this generosity, which attaches to morality, will be as noble
• 1:16:12
  Speaker 1: in its principle as useful in its effects. But if
• 1:16:16
  Speaker 1: duped by that false philosophy which persons wish so inconsiderately
• 1:16:21
  Speaker 1: to mingle with economic laws, they take to remunerating labor, largely,
• 1:16:26
  Speaker 1: far from doing good, they will do harm. They will
• 1:16:30
  Speaker 1: give double wages it may be, But then forty five
• 1:16:33
  Speaker 1: men will be better provided for, whilst forty five others
• 1:16:36
  Speaker 1: would come to augment the number of those who are
• 1:16:39
  Speaker 1: sinking into the grave. Upon this supposition, it is not
• 1:16:43
  Speaker 1: the lowering of wages which is the mischief. It is
• 1:16:47
  Speaker 1: the scarcity of capital. Low wages are not the cause
• 1:16:52
  Speaker 1: but the effect of the evil. I may add that
• 1:16:55
  Speaker 1: they are, to a certain extent, the remedy. It acts
• 1:16:59
  Speaker 1: in this way, it distributes the burden of suffering as
• 1:17:02
  Speaker 1: much as it can, and it saves as many lives
• 1:17:05
  Speaker 1: as a limited quantity of sustenance permits. Suppose now that
• 1:17:10
  Speaker 1: instead of ten capitalists there should be a hundred two hundred,
• 1:17:15
  Speaker 1: five hundred. Is it not evident that the condition of
• 1:17:18
  Speaker 1: the whole population, and above all that of the proletaires
• 1:17:22
  Speaker 1: the common people, will be more and more improved. Is
• 1:17:27
  Speaker 1: it not evident that, apart from every consideration of generosity,
• 1:17:31
  Speaker 1: they would obtain more work and better pay for it,
• 1:17:35
  Speaker 1: that they themselves will be in a better condition to
• 1:17:37
  Speaker 1: form capitals without being able to fix the limits of
• 1:17:41
  Speaker 1: this ever increasing facility of realizing equality and well being,
• 1:17:47
  Speaker 1: would it not be madness in them to admit such doctrines,
• 1:17:51
  Speaker 1: and to act in a way which would drain the
• 1:17:53
  Speaker 1: source of wages and paralyze the activity and stimulus of saving.
• 1:17:58
  Speaker 1: Let them learn this lesson, then, doubtless capitals are good
• 1:18:02
  Speaker 1: for those who possess them who denies it, But they
• 1:18:05
  Speaker 1: are also useful to those who have not yet been
• 1:18:08
  Speaker 1: able to form them. And it is important to those
• 1:18:11
  Speaker 1: who have them not that others should have them. Yes,
• 1:18:16
  Speaker 1: if the proletaires knew their true interests, they would seek
• 1:18:19
  Speaker 1: with the greatest care what circumstances are and what are
• 1:18:23
  Speaker 1: not favorable to saving, in order to favor the former
• 1:18:27
  Speaker 1: and discourage the latter. They would sympathize with every measure
• 1:18:31
  Speaker 1: which tends to the rapid formation of capitals. They would
• 1:18:35
  Speaker 1: be enthusiastic promoters of peace, liberty, order, security, the union
• 1:18:40
  Speaker 1: of classes and peoples, economy, moderation in public expenses, simplicity
• 1:18:46
  Speaker 1: in the machinery of government. For it is under the
• 1:18:49
  Speaker 1: sway of all these circumstances that saving does its work,
• 1:18:53
  Speaker 1: brings plenty within the reach of the masses, invites those
• 1:18:57
  Speaker 1: persons to become the formers of capital who are formerly
• 1:19:01
  Speaker 1: under the necessity of borrowing upon hard conditions. They would
• 1:19:06
  Speaker 1: repel with energy, the warlike spirit which diverts from its
• 1:19:10
  Speaker 1: true course so large a part of human labor, The
• 1:19:14
  Speaker 1: monopolizing spirit which deranges the equitable distribution of riches in
• 1:19:19
  Speaker 1: the way by which liberty alone can realize it, the
• 1:19:23
  Speaker 1: multitude of public services which attack our purses only to
• 1:19:27
  Speaker 1: check our liberty. And in short, those subversive, hateful, thoughtless
• 1:19:32
  Speaker 1: doctrines which alarm capital, prevent its formation, oblige it to flee,
• 1:19:38
  Speaker 1: and finally to raise its price to the especial disadvantage
• 1:19:42
  Speaker 1: of the workers who bring it into operation. Well, And
• 1:19:47
  Speaker 1: in this respect is not the Revolution of February a
• 1:19:50
  Speaker 1: hard lesson? Is it not evident that the insecurity it
• 1:19:54
  Speaker 1: has thrown into the world of business, on the one hand,
• 1:19:57
  Speaker 1: and on the other, the advanced man of the fatal
• 1:20:01
  Speaker 1: theories to which I have alluded, and which from the
• 1:20:04
  Speaker 1: clubs have almost penetrated into the regions of the legislature,
• 1:20:08
  Speaker 1: have everywhere raised the rate of interest. Is it not
• 1:20:13
  Speaker 1: evident that from that time the proletaires have found greater
• 1:20:17
  Speaker 1: difficulty in procuring those materials, instruments, and provisions without which
• 1:20:22
  Speaker 1: labor is impossible. Is it not that which has caused
• 1:20:26
  Speaker 1: stoppages and do not stoppages in their turn lower wages.
• 1:20:32
  Speaker 1: Thus there is a deficiency of labor to the proletaires
• 1:20:36
  Speaker 1: from the same cause, which loads the objects they consume
• 1:20:40
  Speaker 1: with an increase of price in consequence of the rise
• 1:20:44
  Speaker 1: of interest. High interest low wages means, in other words,
• 1:20:50
  Speaker 1: that the same article preserves its price, but that the
• 1:20:53
  Speaker 1: part of the capitalist has invaded without profiting himself that
• 1:20:58
  Speaker 1: of the workmen. A friend of mine, commissioned to make
• 1:21:02
  Speaker 1: inquiry into Parisian industry, has assured me that the manufacturers
• 1:21:07
  Speaker 1: have revealed to him a very striking fact which proves
• 1:21:11
  Speaker 1: better than any reasoning can, how much insecurity and uncertainty
• 1:21:16
  Speaker 1: injure the formation of capital. It was remarked that during
• 1:21:20
  Speaker 1: the most distressing period, the popular expenses of mere fancy
• 1:21:24
  Speaker 1: had not diminished. The small theaters, the fighting lists, the
• 1:21:29
  Speaker 1: public houses, and tobacco depots were as much frequented as
• 1:21:34
  Speaker 1: in prosperous times. In the inquiry, the operatives themselves explained
• 1:21:39
  Speaker 1: this phenomenon. Thus, what is the use of pinching? Who
• 1:21:43
  Speaker 1: knows what will happen to us? Who knows that interest
• 1:21:46
  Speaker 1: will not be abolished? Who knows but that the state
• 1:21:49
  Speaker 1: will become a universal and gratuitous lender, and that it
• 1:21:52
  Speaker 1: will wish to annihilate all the fruits which we might
• 1:21:55
  Speaker 1: expect from our savings. Well, I say that if such
• 1:21:59
  Speaker 1: ideas could prove during two single years, it would be
• 1:22:02
  Speaker 1: enough to turn our beautiful France into a Turkey. Misery
• 1:22:06
  Speaker 1: would become general and endemic, and most assuredly, the poor
• 1:22:10
  Speaker 1: would be the first upon whom it would fall. Workmen,
• 1:22:15
  Speaker 1: they talk to you a great deal upon the artificial
• 1:22:17
  Speaker 1: organization of labor. Do you know why they do so?
• 1:22:22
  Speaker 1: Because they are ignorant of the laws of its natural organization,
• 1:22:26
  Speaker 1: that is, of the wonderful organization which results from liberty.
• 1:22:31
  Speaker 1: You are told that liberty gives rise to what is
• 1:22:33
  Speaker 1: called the radical antagonism of classes, that it creates and
• 1:22:38
  Speaker 1: makes to clash two opposite interests, that of the capitalists
• 1:22:42
  Speaker 1: and that of the proletaires. But we ought to begin
• 1:22:46
  Speaker 1: by proving that this antagonism exists by a law of nature,
• 1:22:50
  Speaker 1: and afterwards it would remain to be shown how far
• 1:22:53
  Speaker 1: the arrangements of restraint are superior to those of liberty.
• 1:22:57
  Speaker 1: For between liberty and restraint I see no path. Again,
• 1:23:02
  Speaker 1: it would remain to be proved that restraint would always
• 1:23:05
  Speaker 1: operate to your advantage and to the prejudice of the rich.
• 1:23:09
  Speaker 1: But no, this radical antagonism, this natural opposition of interests,
• 1:23:15
  Speaker 1: does not exist. It is only an evil dream of
• 1:23:19
  Speaker 1: perverted and intoxicated imaginings. No a plan so defective has
• 1:23:24
  Speaker 1: not proceeded from the divine mind. To affirm it, we
• 1:23:29
  Speaker 1: must begin by denying the existence of God. And see
• 1:23:33
  Speaker 1: how by means of social laws, and because men exchange
• 1:23:36
  Speaker 1: amongst themselves their labors and their productions, see what a
• 1:23:40
  Speaker 1: harmonious tie attaches the classes one to the other. There
• 1:23:45
  Speaker 1: are the landowners. What is their interest that the soil
• 1:23:49
  Speaker 1: be fertile and the sun beneficent? And what is the
• 1:23:52
  Speaker 1: result that corn abounds, that it falls in price, and
• 1:23:57
  Speaker 1: the advantage turns to the profit of those who have
• 1:23:59
  Speaker 1: had no patrimony. There are the manufacturers. What is their
• 1:24:04
  Speaker 1: constant thought to perfect their labor, to increase the power
• 1:24:08
  Speaker 1: of their machines, to procure for themselves upon the best
• 1:24:12
  Speaker 1: terms the raw material? And to what does all this
• 1:24:16
  Speaker 1: tend to the abundance and the low price of produce?
• 1:24:20
  Speaker 1: That is that all the efforts of the manufacturers, and
• 1:24:24
  Speaker 1: without their suspecting it result in a profit to the
• 1:24:27
  Speaker 1: public consumer, of which each of you is one. It
• 1:24:32
  Speaker 1: is the same with every profession. Well, the capitalists are
• 1:24:36
  Speaker 1: not exempt from this law. They are very busy making schemes,
• 1:24:40
  Speaker 1: economizing and turning them to their advantage. This is all
• 1:24:45
  Speaker 1: very well, But the more they succeed, the more do
• 1:24:48
  Speaker 1: they promote the abundance of capital, and, as a necessary consequence,
• 1:24:52
  Speaker 1: the reduction of interest. Now who is it that profits
• 1:24:56
  Speaker 1: by the reduction of interest? Is it not the borrower? First?
• 1:25:00
  Speaker 1: And finally the consumers of the things which capitals contribute
• 1:25:03
  Speaker 1: to produce. It is therefore certain that the final result
• 1:25:08
  Speaker 1: of the efforts of each class is the common good
• 1:25:11
  Speaker 1: of all. You are told that capital tyrannizes over labor.
• 1:25:16
  Speaker 1: I do not deny that each one endeavors to draw
• 1:25:19
  Speaker 1: the greatest possible advantage from his situation. But in this
• 1:25:22
  Speaker 1: sense he realizes only that which is possible. Now, it
• 1:25:27
  Speaker 1: is never more possible for capitals to tyrannize over labor
• 1:25:30
  Speaker 1: than when they are scarce, For then it is they
• 1:25:33
  Speaker 1: who make the law, it is they who regulate the
• 1:25:36
  Speaker 1: rate of sale. Never is this tyranny more impossible to
• 1:25:40
  Speaker 1: them than when they are abundant, for in that case
• 1:25:44
  Speaker 1: it is labor which has the command. Away. Then, with
• 1:25:48
  Speaker 1: the jealousies of classes, ill will, unfounded, hatred's unjust suspicions.
• 1:25:54
  Speaker 1: These depraved passions injure those who nourish them in their hearts.
• 1:25:59
  Speaker 1: There is no declamatory morality. It is a chain of
• 1:26:02
  Speaker 1: causes and effects which is capable of being rigorously mathematically demonstrated.
• 1:26:08
  Speaker 1: It is not the less sublime, and that it satisfies
• 1:26:11
  Speaker 1: the intellect as well as the feelings. I shall sum
• 1:26:14
  Speaker 1: up this whole dissertation with these words, workmen, laborers, proletaires,
• 1:26:20
  Speaker 1: destitute and suffering classes, will you improve your condition? You
• 1:26:25
  Speaker 1: will not succeed by strife, insurrection, hatred and error. But
• 1:26:30
  Speaker 1: there are three things which cannot perfect the entire community
• 1:26:34
  Speaker 1: without extending these benefits to yourselves. These things are peace,
• 1:26:40
  Speaker 1: liberty and security. This ends capital and interest by Frederic Bastia,
• 1:26:48
  Speaker 1: read for you by Michel Frye matin Rouge, Louisiana. Thank
• 1:26:53
  Speaker 1: you for listening.