Classic Audiobook Collection - Capital and Interest by Frederic Bastiat ~ Full Audiobook [business]

Episode Date: October 11, 2023

Capital and Interest by Frederic Bastiat audiobook. Genre: business Frédéric Bastiat was an early 19th century French economist/statesman whose common sense essays tried to battle the rise of socialist ideology after the French revolution, where provisional governments were rivaling each other for power. Of central concern was who should control the money. How is wealth created? How should it be divided amongst the people? What services should government provide? Same questions we are asking now. This essay addresses the popular fallacy of the day that Capital should be available to all gratuitiously, without necessity of paying back loans, and looking upon any form of interest as Usury. Bastiat argued that capital is created by savings, and savings are what makes borrowing possible so the common man can get ahead and prosper, and lending is only worth the risk if the lender profits by it, via interest. He demonstrated the law of supply and demand, that, in essence, interest decreases as availability of capital increases. His basic premises is that without a leisure class (people who have money to spare over earning daily bread), there would be nothing to borrow, so that neither the common man nor society can prosper. For ad-free listening try our premium subscription Chapters (Approximate) (00:00:00) Chapter 1 (00:07:35) Chapter 2 (00:25:13) Chapter 3 (00:33:01) Chapter 4 (00:48:17) Chapter 5 (00:59:49) Chapter 6 (01:08:00) Chapter 7 Learn more about your ad choices. Visit megaphone.fm/adchoices

capital and interest part one introduction my object in this treatise is to examine into the real nature of the interest of capital for the purpose of proving that it is lawful and explaining why it should be perpetual this may appear singular and yet i confess i am more afraid of being too plain than too obscure i am afraid i may weary the reader by a series of mere truisms but it is no easy matter to avoid this danger when the facts with which we have to deal are known to every one by personal familiar and daily experience but then you will say what is the use of this treatise why explain what everybody knows but although this problem appears at first sight so very simple there is more in it than you might suppose i shall endeavour to prove this by an example mandor lends an instrument of labor to-day which will be entirely destroyed in a week yet the capital will not produce the less interest to mandor or his heirs through all eternity reader can you honestly say that you understand the reason of this it would be a waste of time to seek any satisfactory explanation from the writings of economists they have not thrown much light upon the reasons of the existence of interest for this they are not to be blamed for at the time they wrote its lawfulness was not called into question now however times are altered the case is different men who consider themselves to be in advance of their age have organized an active crusade against capital and interest it is the productiveness of capital which they are attacking not certain abuses in the administration of it but the principle itself a journal has been established to serve as a vehicle for this crusade it is conducted by monsieur prudence

and has it is said an immense circulation the first number of this periodical contains the electoral manifesto of the people here we read quote the productiveness of capital which is condemned by Christianity under the name of usury, is the true cause of misery, the true principle of destitution, the eternal obstacle to the establishment of the Republic, end quote. Another journal, La Rouge Popular, after having said some excellent things on labor,

adds, quote, but above all, labor ought to be free, that is, it ought to be organized in such a manner that money-lenders and pay or masters should not be paid for this liberty of labor, this right of labor, which is raised to so high a price by the traffickers of men. The only thought that I notice here is that expressed by the words in italics that moneylenders and patrons or masters should not be paid, which imply a denial of the right to interest. The remainder of the article explains it. it is thus that the democratic socialist thore expresses himself the revolution will always have to be recommenced so long as we occupy ourselves with consequences only without having the logic or the courage to attack the principle itself

this principle is capital false property interest and usury which by the old regime is made to weigh upon labor ever since the aristocrats invented the incredible fiction that capital possesses the power of reproducing itself the workers have been at the mercy of the idol at the end of a year will you find an additional crown in a bag of one hundred shillings at the end of fourteen years will your shillings have doubled in your bag will a work of industry or of skill produce another at the end of fourteen years let us begin then by demolishing this fatal fiction, end quote. I have quoted the above merely for the sake of establishing the fact that many persons consider the productiveness of capital a false, a fatal, and an inequitous principle. But quotations are superfluous.

It is well known that the people attribute their sufferings to what they call the trafficking in man by man. In fact, the phrase tyranny of capital has become proverbial. I believe there is not a man in the world who is aware of the whole importance of this question. Is the interest of capital natural, just and lawful, and as useful to the payer as to the receiver? You answer no, I answer yes. Then we differ entirely, but it is of the utmost importance to discover which of us is in the right. otherwise we shall incur the danger of making a false solution of the question a matter of opinion if the error is on my side however the evil would not be so great it must be inferred that i know nothing about the true interests of the masses or the march of human progress and that all my arguments are but as so many grains of sand by which the car of the revolution will certainly not be arrested

But if, on the contrary, Monsieur's Proudon and Thorei are deceiving themselves, it follows that they are leading the people astray, that they are showing them the evil where it does not exist, and thus giving a false direction to their ideas, to their antipathies, to their dislikes, and to their attacks. It follows that the misguided people are rushing into a horrible and absurd struggle in which victory would be more fatal than defeat, since, according to this supposition, the result would be the realization of universal evils, the destruction of every means of emancipation, the consummation of its own misery. This is just what Monsieur Proudon has acknowledged, with perfect good faith. He told me, quote,

The foundation stone of my system is the gratuitousness of credit. If I, i am mistaken in this socialism is a vain dream end quote i add it is a dream in which the people are tearing themselves to pieces will it therefore be a cause for surprise if when they awake they find themselves mangled and bleeding such a danger as this is enough to justify me fully if in the course of the discussion i allow myself to be led into some trivialities and some prolixity End of Part 1, Introduction. Section 2 of Capital and Interest by Frederick Bastia. Read for you by Michelle Fry, Baton Rouge, Louisiana. This Librevox recording is in the public domain. Part 2 of Capital and Interest, entitled Capital and Interest.

I address this treatise to the workmen of Paris, more especially to those who have enrolled themselves under the banner of socialist democracy. I proceed to consider these two questions. First, is it consistent with the nature of things and with justice that capital should produce interest? Second, is it consistent with the nature of things and with justice that the interest of capital should be perpetual? The working men of Paris will certainly acknowledge that a more important subject could not be discussed. Since the world began, it has been allowed, at least in part, that capital ought to produce interest, but latterly it has been affirmed that herein lies the very social error, which is the cause of pauperism and inequality. It is therefore very essential to

know now on what ground we stand. For if levying interest from capital is a sin, the workers have a right to revolt against social order as it exists. It is in vain to tell them that they ought to have recourse to legal and pacific means. It would be a hypocritical recommendation. When on the one side there is a strong man, poor and a victim of robbery, on the other hand, a weak man, but rich and a robber, it is singular enough that we should say to the former with a hope of persuading him, wait till your oppressor voluntarily renounces oppression or till it shall cease of itself. This cannot be, and those who tell us that capital is by nature unproductive, ought to know that they are provoking a terrible and immediate struggle.

If, on the contrary, the interest of capital is natural, lawful, consistent with the general good, as favorable to the borrower as to the lender, the economists who deny it, the tribunes who traffic in this pretended, social wound are leading the workmen into a senseless and unjust struggle which can have no other issue than the misfortune of all. In fact, they are arming labor against capital. So much the better if these two powers are really antagonistic and may the struggle soon be ended. But if they are in harmony, the struggle is the greatest evil which can be inflicted on society. You see then, workman that there is not a more important question than this. Is the interest of capital lawful or not?

In the former case, you must immediately renounce the struggle to which you are being urged. In the second, you must carry it on bravely and to the end. Productiveness of capital, perpetuity of interest. These are difficult questions. I must endeavor to make myself clear, and for that purpose I shall have recourse to example rather than to demonstration. Or rather I shall place the demonstration in the example. I begin by acknowledging that at first sight, it may appear strange that capital should pretend to a remuneration

and above all to a perpetual remuneration. You will say, here are two men, one of them works from morning till night, from one year's end to another, and if he consumes all which he has gained, even by superior energy, he remains poor. When Christmas comes, he is no forwarder than he was at the beginning of the year. He has no other prospect but to begin again.

The other man does nothing, either with his hands or his head, or at least if he makes use of them at all, it is only for his own pleasure. It is allowable for him to do nothing, for he has an income. He does not work, yet he lives well. he has everything in abundance delicate dishes sumptuous furniture elegant equipages nay he even consumes daily things which the workers have been obliged to produce by the sweat of their brow for these things do not make themselves and as far as he is concerned he has had no hand in their production it is the workmen who have caused this corn to grow polished this furniture woven these carpets it is to our wives and daughters who have spun out sewed and embroidered these stuffs we work then for him and for ourselves for him first and then for ourselves if there is anything left but here is something more striking still if the former of these two men the worker consumes within the year any profit which may have been left him in that year he is always at the point from which he started and his destiny condemns him to move incessantly in a perpetual circle and a monotony of exertion.

Labour, then, is rewarded only once. But if the other, the gentleman, consumes his yearly income in the year, he has, the year after, and in those which follows, and through all eternity, an income always equal, inexhaustible, perpetual.

Capital, then, is remunerated, not only once or twice, but an indefinite number of times, so that, at the end of a hundred years, which has placed 20,000 francs at 5% will have had 100,000 francs, and this will not prevent it from having 100,000 more in the following century.

In other words, for 20,000 francs, which represents its labor, it will have levied in two centuries a tenfold value on the labor of others. In this social arrangement, is there not a monstrous evil to be reformed? And this is not all. if it should please this family to curtail its enjoyments a little to spend for example only nine hundred francs instead of a thousand it may without any labor without any other trouble beyond that of investing one hundred francs a year

increase its capital and its income in such rapid progression that it will soon be in a position to consume as much as a hundred families of industrious workmen does not all this go to prove that society itself has in its bosom a hidey cancer, which ought to be eradicated at the risk of some temporary suffering? These are, it appears to me, the sad and irritating reflections which must be excited in your minds by the act of superficial crusade which is being carried on against capital and interest. On the other hand, there are moments in which I am convinced doubts are awakened in your minds and scruples in your conscience. You say to yourselves sometimes, but to assert that capital ought not to produce interest is to say that he who has created instruments of labor or materials or provisions of any kind ought to yield them up without compensation is that just and then if it is so who would lend these instruments these materials these provisions who would take care of them who even would create them

every one would consume his proportion and the human race would never advance a step capital would be no longer formed since there would be no interest in forming it it would become exceedingly scarce a singular step towards gratuitous loans a singular means of improving the condition of borrowers to make it impossible for them to borrow at any price what would become of labor itself for there will be no money advanced not even one single single kind of labor can be mentioned not even the chase which can be pursued without money in hand and as for ourselves what would become of us what we are not to be allowed to borrow in order to work in the prime of life nor to lend that we may enjoy repose in its decline the law will rob us of the prospect of laying by a little property because it will prevent us from gaining any advantage from it it will deprive us of all stimulus to save at the present time and of all hope of repose for the future it is useless to exhaust ourselves with fatigue we must abandon the idea of leaving our sons and daughters a little property since modern science renders it useless for we should become traffickers in men if we were to lend it on interest alas the world which these persons would open before us as an imaginary good is still more dreary and desolate than that which they condemn for hope at any rate is not banished from the latter. Thus, in all respects and in every point of view, the question is a serious one. Let us hasten to arrive at a solution. Our civil code has a chapter entitled On the Manor of Transmitting Property. I do not think it gives a very complete

nomenclature on this point. When a man by his labor has made some useful thing, in other words when he has created a value, it can only pass into the hands of another by one of the following modes, as a gift, by the right of inheritance, by exchange, loan, or theft. One word upon each of these except the last, although it plays a greater part in the world than we may think,

a gift needs no definition. It is essentially voluntary and spontaneous. It depends exclusively upon the, the giver and the receiver cannot be said to have any right to it without a doubt morality and religion make it a duty for men especially the rich to deprive themselves voluntarily of that which they possess in favour of their less fortunate brethren but this is entirely a moral obligation if it were to be asserted on principle admitted in practice or sanctioned by law that every man has a right to the property of another the gift would have no merit, charity and gratitude would be no longer virtues. Besides, such a doctrine would suddenly and universally arrest labor and production as severe cold congeals water and suspends animation. For who would work if there was no longer to be any

connection between labor and the satisfying of our wants? Political economy has not treated of gifts. It has hence been concluded that it disowns them, and that, it is therefore a science devoid of heart this is a ridiculous accusation that science which treats of the laws resulting from the reciprocity of services had no business to inquire into the consequences of generosity with respect to him who receives nor into its effects perhaps still more precious on him who gives such considerations belong evidently to the science of morals we must allow the sciences to have limits above all we must not accuse them of denying or undervaluing what they look upon as foreign to their department the right of inheritance against which so much has been objected of late is one of the forms of gift and assuredly the most natural of all that which a man has produced he may consume exchange or give what can be more natural than that he should give it to his children. It is this power more than any other which inspires him with courage to labor and to save. Do you know why the principle of right of inheritance is thus called in question? Because it is

imagined that the property thus transmitted is plundered from the masses. This is a fatal error. Political economy demonstrates in the most preemptory manner that all value produced is a creation which does no harm to any person whatever. For that reason it may be consumed and still more transmitted without hurting anyone. But I shall not pursue these reflections which do not belong to the subject. Exchange is the principal department of political economy because it is by far the most frequent method of transmitting property according to the free and voluntary agreements of the laws and effects of which this science treats.

properly speaking exchange is the reciprocity of services the parties say between themselves give me this and i will give you that or do this for me and i will do that for you it is well to remark for this will throw a new light on the notion of value that the second form is always implied in the first when it is said do this for me and i will do that for you an exchange of service for service is proposed again when it is said give me this and i will give you that it is the same as saying i yield to you what i have done yield to me what you have done the labor is past instead of present but the exchange is not the less governed by the comparative valuation of the two services so that it is quite correct to say that the principle of value is in the services rendered and received on account of the productions exchanged rather than in the productions themselves in reality services are scarcely ever exchanged directly there is a medium which is termed money paul has completed a coat for which he wishes to receive a little bread a little wine a little oil a visit from the doctor a ticket for the play etc the exchange cannot be effected in kind so what does paul do he first exchanges his coat for some money which is called sale then he exchange cannot be effected in kind so what does paul do he first exchanges his coat for some money which is called sale then he exchange this money again for the things which he wants, which is called purchase, and now only has the reciprocity of services completed its circuit. Now only the labor and the compensation are balanced in the same individual.

I have done this for society. It has done that for me. In a word, it is only now that the exchange is actually accomplished. Thus, nothing can be more correct than this observation of J.B. Say, quote, since the introduction of money, every exchange is resolved into two elements, sale and a purchase. It is the reunion of these two elements which renders the exchange complete. We must remark also that the constant appearance of money in every exchange has overturned and missed all our ideas. Men have ended in thinking that money was true riches and that to multiply it was to multiply services and product.

hence the prohibitory system hence paper money hence the celebrated aphorism what one gains the other loses and all the errors which have ruined the earth and imbrute it with blood after much research it has been found that in order to make the two services exchanged of equivalent value and in order to render the exchange equitable the best means was to allow it to be free however plausible at first sight the intervention of the state state might be, it was soon perceived that it is always oppressive to one or other of the contracting parties. When we look into these subjects, we are always compelled to reason upon this maxim that equal value results from liberty. We have, in fact, no other means of knowing whether at a given moment two services are of the same value, but that of examining whether they can be readily and freely exchanged. Allow the state, which is the same thing as force, to interfere on one side or the other, and from that moment all the means of appreciation will be

complicated and entangled instead of becoming clear. It ought to be the part of the state to prevent, and above all, to repress artifice and fraud, that is, to secure liberty and not to violate it. I have enlarged a little upon exchange, although loan is my principal object. My excuse is that I conceive that there is in a loan an actual exchange, an actual service rendered by the lender, and which makes the borrower liable to an equivalent services. Two services, whose comparative value can only be appreciated, like that of all possible services, by freedom. Now, if it is so, the perfect lawfulness of what is called house rent, farm rent, interest, will be explained and justified. Next, let us consider the case of loan.

End of Section 2, Capital and Interest. Section 3 of Capital and Interest by Frederick Bostia. What is a loan and What is Capital? This Liber Vox recording is in the public domain. Read by Michelle Frye, Baton Rouge, Louisiana. What is a loan? suppose two men exchange two services or two objects whose equal value is beyond all dispute suppose for example peter says to paul give me ten sixpences i will give you a five shilling piece historical note each of these is equal to one crown we cannot imagine an equal value more unquestionable when the bargain is made neither party has any claim upon the other the exchanged

services are equal. Thus it follows that if one of the party's wishes to introduce into the bargain an additional clause advantageous to himself but unfavorable to the other party, he must agree to a second clause which shall re-establish the equilibrium and the law of justice. It would be absurd to deny the justice of a second clause of compensation. This granted we will suppose that Peter, after having said to Paul, give me ten-sixpences, I will give you a crown, adds, You shall give me the ten six pences now, and I will give you the crown piece in a year.

It is very evident that this new proposition alters the claims and advantages of the bargain, that it alters the proportion of the two services. Does it not appear plainly enough, in fact, that Peter asks of Paul a new and an additional service, one of a different kind? Is it not as if he had said, render me the service of allowing me to use for my profit for a year five shillings which belong to you

and which you might have used for yourself and what good reason have you to maintain that paul is bound to render this especial service gratuitously that he has no right to demand anything more in consequence of this requisition that the state ought to interfere to force him to submit Is it not incomprehensible that the economist, who preaches such a doctrine to the people, can reconcile it with his principle of the reciprocity of services? Here I have introduced cash. I have been led to do so by a desire to place side by side two objects of exchange of a perfect and indisputable equality of value.

I was anxious to be prepared for objections, but, on the other hand, my demonstration would have been more striking, if I had illustrated my principle by an agreement for exchanging the services or the productions themselves. Suppose, for example, a house and a vessel of a value so perfectly equal that their proprietors are disposed to exchange them even-handed, without excess or abatement. In fact, let the bargain be settled by a lawyer. At the moment of each taking possession, the ship-owner says to the citizen, very well the transaction is completed and nothing can prove its perfect equity better than our free and voluntary consent our conditions thus fixed i shall propose to you a little practical modification you shall let me have your house to-day but i shall not put you in possession of my ship for a year and the reason i make this demand of you is that during this year of delay i wish to use the vessel

that we may not be embarrassed by considerations relative to the deterioration of the thing lent i will suppose the ship-owner to add i will engage at the end of the year to hand over to you the vessel in the state in which it is to-day i ask of every candid man i ask of monsieur prudence himself if the citizen has not a right to answer the new clause which you propose entirely alters the proportion or the equal value of the exchanged services. By it, I shall be deprived for the space of a year, both at once of my house and of your vessel. By it, you will make use of both. If, in the absence of this clause the bargain was just, for the same reason the clause is injurious to me. It stipulates for a loss to me and a gain to you. You are requiring of me a new service. I have the right to refuse, or to require of you as a compensation and equivalent service. If the parties are agreed upon this compensation, the principle of which is incontestable, we can easily distinguish two transactions in one, two exchanges of

service in one. First, there is the exchange of the house for the vessel. After this, there is the delay granted by one of the parties, and the compensation correspondent to this delay yielded by the other. these two new services take the generic and abstract names of credit and interest but names do not change the nature of things and i defy any one to dare to maintain that there exists here when all is done a service for a service or a reciprocity of services to say that one of these services does not challenge the other to say that the first ought to be rendered gratuitously without injustice is to say that injustice consists in the reciprocity of services that justice consists in one of the parties giving and not receiving which is a contradiction in terms to give an idea of interest and its mechanism allow me to make use of two or three anecdotes in section four but first i must say a few words upon capital there are some persons who imagine that capital is money and this is precisely the reason why they deny its productiveness for as monsieur thoray says crowns are not endowed with the power of reproducing themselves but it is not true that capital and money are the same thing before the discovery of the precious metals there were capitalists in the world and i venture to say that at that time as now everybody was a capitalized to a certain extent. What is capital then? It is composed of three things. First, of the materials

upon which men operate, when these materials have already a value communicated by some human effort, which has bestowed upon them the principle of remuneration, wool, flax, leather, silk, wood, etc. Second, instruments which are used for working, tools, machines, and, and, and, and, tools, machines, ships, carriages, etc. Third, provisions which are consumed during labor, victuals, stuffs, houses, etc. Without these things, the labor of man would be unproductive and almost void.

Yet these very things have required much work, especially at first. This is the reason that so much value has been attached to the possession of them, and also that it is perfectly lawful to exchange and to sell them, to make a profit of them if used, to gain remuneration from them if lent. End of Section 3. What is a loan and what is capital? Section 4 of Capital and Interest by Frederick Bustia.

Read by Michelle Frye, Baton Rouge, Louisiana. This Libre Vox recording is in the public domain. Section 4, The Ante Dene Duties. the sack of corn, the house, and the plain. Now for my anecdotes, we begin with the sack of corn. Mathuron, in other respects as poor as Job, and obliged to earn his bread by day labor, became, nevertheless, by some inheritance, the owner of a fine piece of uncultivated land. He was exceedingly anxious to cultivate it.

Alas, said he, to make ditches, to raise fences, to break, the soil, to clear away the brambles and stones, to plow it, to sew it, might bring me a living in a year or two, but certainly not today or tomorrow. It is impossible to set about farming it without previously saving some provisions for my subsistence until the harvest, and I know by experience that preparatory labor is indispensable in order to render present labor productive. The good Mathurin was not content with making these reflections, He resolved to work by the day and to save something from his wages to buy a spade and a sack of corn, without which things he must give up his fine agricultural projects.

He acted so well and was so active and steady that he soon saw himself in possession of the wished-for sack of corn. I shall take it to the mill, said he, and then I shall have enough to live upon till my field is covered with a rich harvest. just as he was starting Jerome came to borrow his treasure of him. If you will lend me this sack of corn, said Jerome, you will do me a great service, for I have some very lucrative work in view, which I cannot possibly undertake, for want of provisions to live upon until it is finished.

I was in the same case, answered Mathurin, and if I have now secured bread for several months, it is at the expense of my arms and my stomach, upon what principle of justice can it be devoted to the realization of your enterprise instead of mine you may well believe that the bargain was a long one however it was finished at length and on these conditions first jerome promised to give back at the end of the year a sack of corn of the same quality and of the same weight one hundred liters without missing a single grain the first clause is perfectly just said he, for without it Mathurin would give and not lend. Secondly, he engaged to deliver five liters on every hundred-liter sack that he produced. This cause is no less just than the other, thought he, for without it Mathurin would do me a

service without compensation. He would inflict upon himself a privation. He would renounce his cherished enterprise. He would enable me to accomplish mine. He would cause me to enjoy for a year the fruits of his savings, and all this gratuitously. Since he delays the cultivation of his land, since he enables me to realize a lucrative labor, it is quite natural that I should let him partake in a certain proportion of the profits which I shall gain by the sacrifice he makes of his own. On his side, Mathurin, who was something of a scholar, made this calculation. Since by virtue of the first clause, the sack of corn will return to me at the end of a year, he said to himself, I shall be able to lend it again. It will return to me at the end of the second year. I may lend it again, and so on to all eternity. However, I cannot deny that it will have been eaten long ago. It is singular that I should be perpetually the owner of a sack of corn, although the one I have lent has been consumed forever. but this is explained thus it will be consumed in the service of jerome it will put it into the power of jerome to produce a superior value and consequently jerome will be able to restore me a sack of corn or the value of it without having suffered the slightest injury but quite the contrary and as regards myself this value ought to be my property as long as i do not consume it myself if i had used it

to clear my land, I should have received it again in the form of a fine harvest. Instead of that, I lend it, and I shall recover it in the form of repayment. From the second clause I gain another piece of information. At the end of the year, I shall be in possession of five liters of corn over the 100 that I have just lent. If then I were to continue to work by the day and to save part of my wages, as I have been doing, in the course of time i should be able to lend two sacks of corn then three then four and when i should have gained a sufficient number to enable me to live on these additions of five liters over and above each i shall be at liberty to take a little repose in my old age but how is this in this case shall i not be living at the expense of others no certainly for it has been proved that in lending i prefer

form a service. I complete the labor of my borrowers, and only deduct a trifling part of the excess of production due to my lending and savings. It is a marvelous thing that a man may thus realize a leisure which injures no one, and for which he cannot be envied without injustice. Here is my second anecdote. The House. Mondor had a house. In building it, he had exorreuxed. In building it, nothing from anyone whatever he owed it to his own personal labor or which is the same thing to labor justly rewarded his first care was to make a bargain with an architect in virtue of which by means of a hundred crowns a year the latter engaged to keep the house in constant good repair mondor was already congratulating himself on the happy days which he hoped to spend in this retreat declared sacred by our constitution but valerius wished to make it his residence how can you think of such a thing said mondor to valerius it is i who have built it it has cost me ten years of painful labor and now you would enjoy it they agreed to refer the matter to judges they chose no profound economists, there were none such in the country, but they found some just and

sensible men, it all comes to the same thing, political economy, justice, good sense, are all the same thing. Now here is the decision made by the judges. If Valerius wishes to occupy Mondore's house for a year, he is bound to submit to three conditions. The first is to quit at the end of the year, and to restore the house in good repair, saving the inevitable decay resulting from mere duration. The second, to refund to Mondore the 300 francs, which the latter pays annually to the architect to repair the injuries of time. For these injuries taking place, whilst the house is in the service of Valerius,

it is perfectly just that he should bear the consequences. The third, that he should render to Mondore a service equivalent, to that which he receives. As to this equivalence of services, it must be freely discussed between Mondore and Valerius. Here is my third anecdote. The Plain. A very long time ago there lived in a poor village, a joiner who was a philosopher, as all my heroes are in their way. James worked from morning till night with his two strong arms, but his brain was not idle for all that. He was fine to reviewing his actions, their causes, and their effects. He sometimes said to himself,

With my hatchet, my saw, and my hammer, I can make only coarse furniture, and can only get the pay for such. If I only had a plane, I should please my customers more, and they would pay me more. It is quite just, I can only expect services proportioned to those which I render myself. Yes, I am resolved. I will make myself a plane. However, just as he was setting to work, James reflected further.

I work for my customers 300 days in the year. If I give 10 to make my plane, supposing it lasts me a year, only 290 days will remain for me to make my furniture. Hmm. Now, in order that I not be the loser in this matter, I must gain henceforth, with the help of the plane, as much in two hundred and ninety days as I now do in three hundred. I must even gain more, for unless I do so, it would not be worth my wild adventure upon any innovations. James began to calculate. He satisfied himself that he should sell his finished furniture

at a price which would amply compensate for the ten days devoted to the plane, and when no doubt remained on this point, he set to work. I beg the reader to remark that the person, power which exists in the tool to increase the productiveness of labor is the basis of the solution which follows. At the end of ten days, James had in his possession an admirable plane, which he valued all the more for having made it himself. He danced for joy, for, like the girl with her basket of eggs, he reckoned all the profits which he expected to derive from this

ingenious instrument. But more fortunate than she, he was not reduced to the necessity of saying goodbye to calf, cow, pig, and eggs together. He was building his fine castles in the air when he was interrupted by his acquaintance, William, a joiner in the neighboring village. William, having admired the plain, was struck with the advantages which might be gained from it. He said to James, you must do me a service what service lend me your plane for a year as might be expected james at this proposal did not fail to cry out how can you think of such a thing william well if i do you this service what will you do for me in return nothing said william don't you know that a loan ought to be gratuitous don't you know that capital is naturally unproductive don't you know fraternity has been proclaimed if you only do me a service for the sake of receiving one from me in return what merit would you have william my friend fraternity does not mean that all the sacrifices are to be on one side if so i do not see why they should not be on yours whether a loan should be gratuitous i don't know but i do know that if i were to lend you my plan for a year it would be giving it to you to tell you the truth that was not what i made it for

william replies well we will say nothing about the modern maxims discovered by the socialist gentlemen i ask you to do me a service what service do you ask me in return said james first then in a year the plane will be done for it will be good for nothing for you will be good for nothing for you will be good for it is only just that you should let me have another exactly like it or that you should give me money enough to get it repaired or that you should supply me the ten days which i must devote to replacing it william replied this is perfectly just i submit to these conditions i engage to return it or to let you have one like it or the value of the same i think you must be satisfied with this and can require nothing further james says i think otherwise i made the plane for myself and not for you i expected to gain some advantage from it by my work being better finished and better paid by an improvement in my condition what reason is there that i should make a plane and you should gain the profit i might as well ask you to give me your saw and hatch it what a confusion is it not natural that each should keep what he has made with his own hands as well as his hands themselves to use without recompense the hands of another i call slavery to use without recompense the plain of another can this be called fraternity william responds but then i have agreed to return it to you at the end of a year as well polished and as sharp as it is now james replies we have nothing to do with next year we are speaking of this year i have made the plain for the sake of improving my work and the condition if you merely return it to me in a year it is you who will gain the profit of it during the whole of that time i am not bound to do you such a service without receiving you to receive you to you

anything from you in return therefore if you wish for my plane independently of the entire restoration already bargained for you must do me a service which we will now discuss you must grant me remuneration and this was done thus william granted a remuneration calculated in such a way that at the end of the year james received his plane quite new and in addition a compensation consistent of a new plank for the advantages of which he had deprived himself and which he had yielded to his friend it was impossible for anyone acquainted with the transaction to discover the slightest trace in it of oppression or injustice the singular part of it is that at the end of the year the plane came into james's possession and he lent it again recovered it and lent it a third and fourth time it has passed into the hands of his son who still lends it poor plane how many times has it changed sometimes its blade sometimes its handle it is no longer the same plane but it has always the same value at least for james's posterity workmen let us examine into these little stories end of section four the anecdotes section five of capital and interest by frederick bastiae read by michel fry baton rouge louisiana this lebervox recording is in the public domain section five the anecdotes examined i maintain first of all that the sack of corn and the plain are here the type the model, a faithful representation, the symbol of all capital. As the five liters of corn and the plank are the type, the model, the representation, the symbol of all interest.

This granted the following are, it seems to me, a series of consequences, the justice of which it is impossible to dispute. first, if the yielding of a plank by the borrower to the lender is a natural, equitable, lawful remuneration, the just price of a real service, we may conclude that as a general rule, it is in the nature of capital to produce interest. When this capital, as in the foregoing examples, takes the form of an instrument of labor, it is clear enough that it ought to bring an advantage to its possessor, to him who has devoted, to it his time, his brains, and his strength. Otherwise, why should he have made it? No necessity of life can be immediately satisfied with instruments of labor. No one eats planes or drinks saws, except indeed he be a conjurer. If a man determines to spend his time in the production of such things,

he must have been led to it by the consideration of the power which these instruments add to his power, of the time which they save him, of the profession and rapidity which they give to his labor, in a word, of the advantages which they procure for him. Now, these advantages which have been prepared by labor, by the sacrifice of time which might have been used in a more immediate manner, are we bound as soon as they are ready to be enjoyed to confer them gratuitously upon another? Would it be an advance in social order? if the law decided thus and citizens should pay officials for causing such a law to be executed by force i venture to say that there is not one amongst you who would support it it would be to legalize to organize to systematize injustice itself for it would be proclaiming that there are men born to render and others born to receive gratuitous services granted then that interest is

just natural and lawful. Second, a consequence, not less remarkable than the former, and, if possible, still more conclusive, to which I call your attention, is this. Interest is not injurious to the borrower. I mean to say the obligation in which the borrower finds himself to pay a remuneration for the use of capital cannot do any harm to his condition. Observe, in fact, that James and William are perfectly free as regards the transaction to which the plain gave occasion. The transaction cannot be accomplished without the consent of the one as well as of the other. The worst which can happen is that James may be too exacting, and in this case, William,

refusing the loan, remains as he was before. By the fact of his agreeing to borrow, he proves that he considers it an advantage to himself, he proves that after every calculation, including the remuneration, whatever it may be, required of him, he still finds it more profitable to borrow than not to borrow. He only determines to do so because he has compared the inconveniences with the advantages. He has calculated that the day on which he returns the plane, accompanied by the remuneration agreed upon, he will have effected more work with the same labor thanks to this tool.

A profit will remain to him, otherwise he would not. have borrowed. The two services of which we are speaking are exchanged according to the law which governs all exchanges, the law of supply and demand. The claims of James have a natural and impassable limit. This is the point in which the remuneration demanded by him would absorb all the advantage which William might find in making use of the plane. In this case, the borrowing would not take place. William would be bound either to make a plane for himself or to do without one, which would leave him in his original condition. He borrows because he gains by borrowing. I know very well what will be told me.

You will say William may be deceived, or perhaps he may be governed by necessity, and be obliged to submit to a harsh law. It may be so. As to errors in calculation, they belong to the infirmity of our nature, and to argue from this against the transaction in question is objecting the possibility of loss in all imaginable transactions in every human act. Error is an accidental fact, which is incessantly remedied by experience. In short, everybody must guard against it.

As far as those hard necessities are concerned, which force persons to burden some borrowings, it is clear that these necessities exist previously to the borrowing. If William is in a situation in which he cannot possibly do without a plane and must borrow one at any price, does this situation result from James having taken the trouble to make the tool? Does it not exist independently of this circumstance? However harsh, however severe James may be, he will never render the supposed condition of William worse than it is. Morally, it is true, the lender will be to blame, but in an economical, point of view, the loan itself can never be considered responsible for previous necessities,

which it has not created, and which it relieves to a certain extent. But this proves something to which I shall return. The evident interests of William, representing here the borrowers, there are many James's and Plains, in other words, lenders and capitals. It is very evident that if William can say to James, your demands are exorbitant. There is no lack of planes in the world. He will be in a better situation than if James's plane was the only one to be borrowed. Assuredly, there is no maximum more true than this, service for service. But let us not forget that no service has a fixed and absolute value compared with others. The contracting parties are free. Each carries his requisitions to the

farthest possible point, and the most favorable circumstances for these requisitions is the absence of rivalship. Hence it follows that if there is a class of men more interested than any other in the formation, multiplication, and abundance of capitals, it is mainly that of the borrowers. Now, since capitals can only be formed and increased by the stimulus and the prospect of remuneration, let this class understand the injury they are inflicting on themselves when they deny the lawfulness of interest, when they proclaim that credit should be gratuitous, when they declaim against the pretended tyranny of capital, when they discourage saving, thus forcing capitals to become scarce, and consequently, interests to rise. Third, the anecdote I have just related enables you to explain this apparently

singular phenomenon, which is termed the duration or perpetrator. of interest. Since in lending his plane, James has been able very lawfully to make it a condition that it should be returned to him at the end of a year in the same state in which it was when he lent it, is it not evident that he may, at the expiration of the term, lend it again on the same conditions? If he resolves upon the latter plan, the plane will return to him at the end of every year, and that without end. James will then be, in a condition to lend it without end that is he may derive from it a perpetual interest it will be said that the plain will be worn out that is true but it will be worn out by the hand and for the profit of the borrower the latter has taken into account this gradual wear and taken upon himself as he ought the consequences he has reckoned that he shall derive from this tool an advantage which will allow him to restore it in its original

condition after having realized a profit from it. As long as James does not use this capital himself, or for his own advantage, as long as he renounces the advantages which allow it to be restored to its original condition, he will have an incontestable right to have it restored, and that independently of interest. Observe besides that if, as I believe I have shown, james far from doing any harm to william has done him a service in lending him his plane for a year for the same reason he will do no harm to a second a third a fourth borrower in the subsequent periods hence you may understand that the interest of a capital is as natural as lawful as useful in the thousandth year as in the first we may go still further it may happen that james lends more than a single single plane. It is possible that by means of working, of saving, of privations, of order, of activity, he may come to lend a multitude of planes and saws, that is to say, to do a multitude of services.

I insist upon this point that if the first loan has been a social good, it will be the same with all the others, for they are all similar, and based upon the same principle. it may happen then that the amount of all the remunerations received by our honest operative in exchange for services rendered by him may suffice to maintain him in this case there will be a man in the world who has a right to live without working i do not say that he would be doing right to give himself up to idleness but i say that he has a right to do so and if he does so it will be at nobody's expense but quite the contrary If society at all understands the nature of things, it will acknowledge that this man subsists on services which he receives certainly, as we all do, but which he lawfully receives in exchange for other services, which he himself has rendered, that he continues to render, and which are quite real inasmuch as they are freely and voluntarily accepted. End of session five, the anecdotes examined.

Section 6 of Capital and Interest by Frederick Bastia Read by Michelle Frye, Baton Rouge, Louisiana. This Libravox recording is in the public domain. Capital and Interest, Section 6, on leisure. And here we have a glimpse of one of the finest harmonies in the social world. I allude to leisure. Not that leisure that the warlike and tyrannical classes are raised, for themselves by the plunder of the workers, but that leisure which is the lawful and innocent

fruit of past activity and economy. In expressing myself thus, I know that I shall shock many received ideas. But see, is not leisure an essential spring in the social machine? Without it, the world would never have had a Newton, a Pascal, a phenolin. Mankind would have been ignorant of all arts, sciences, and of those wonderful inventions prepared originally by investigations of mere curiosity, thought would have been inert, man would have made no progress. On the other hand, if leisure could only be explained by plunder and oppression, if it were a benefit which could only be enjoyed unjustly and at the expense of others, there would be no middle path between these two evils. Either mankind would be reduced to the necessity of stagnating in a vegetable and stationary life,

in eternal ignorance from the absence of wheels to its machine, or else who would have to acquire these wheels at a price of inevitable injustice and would necessarily present the sad spectacle in one form or other of the antique classification of human beings in two masters and slaves. I defy anyone to show me in this case, any other alternative, we should be compelled to contemplate the divine plan which governs society with the regret of thinking that it presents a deplorable chasm the stimulus of progress would be forgotten or which is worse

this stimulus would be no other than injustice itself but no god has not left such a chasm in his work of love we must take care not to disregard his wisdom and power for those whose imperfect meditations cannot explain the lawfulness of leisure are very much like the astronomer who said at a certain point in the heavens there ought to exist a planet which will be at last discovered for without it the celestial world is not harmony but discord well i say that if well understood the history of my humble plain although very modest is sufficient to raise us to the contemplation of one of one of the the most consoling but least understood of the social harmonies. It is not true that we must choose between the denial or the unlawfulness of leisure. Thanks to rent and its natural duration, leisure may arise from labor and saving. It is a pleasing prospect which everyone may have in view, a noble recompense to which each may

aspire. It makes its appearance in the world. It distributes itself proportionately to the exercise of certain virtues. It opens all the avenues to intelligence. It ennobles. It raises the morals. It spiritualizes the soul of humanity. Not only without laying any weight on those of our brethren whose lot in life devotes them to severe labor, but relieving them gradually from the heaviest and most repugnant part of this labor. It is enough that capitals should be formed, accumulated, multiplied, should be lent on conditions less and less burdensome, that they should descend, penetrate into every social circle, and that by an admirable progression, after having liberated the lenders, they should hasten the liberation of the borrowers themselves. For that end, the laws and

customs ought to be favorable to economy, the source of capital. It is enough to say that the first of all these conditions is not to alarm, to attack, to deny that which is the stimulus of saving and the reason of its existence. Interest. As long as we see nothing passing from hand to hand in the character of loan, but provisions, materials, instruments, things indispensable to the productiveness of labor itself, the ideas thus far exhibited would not find many opponents. Who knows even that I may not be reproached for having made a great effort to burst what may be said to be an open door? But, as soon as cash makes its appearance as the subject of the transaction, and it is this which appears almost always, immediately a crowd of objections are raised.

money it will be said will not reproduce itself like your sack of corn it does not assist labor like your plane it does not afford an immediate satisfaction like your house it is incapable by its nature of producing interest of multiplying itself and the remuneration it demands is a positive extortion who cannot see the sophistry of this who does not see that cash is only a transient form which men give at the time to other values, to real objects of usefulness, for the sole object of facilitating their arrangements. In the midst of social complications, the man who isn't a condition to lend scarcely ever has the exact thing which the borrower wants. James, it is true, has a plane, but perhaps William wants a saw. They cannot negotiate the transaction favorable to both cannot take place. And then what happens? It happens that James first exchanges his plane for money.

He lends the money to William, and William exchanges the money for a saw. The transaction is no longer a simple one. It is decomposed into two parts, as I explained above in speaking of exchange. But for all that, it has not changed its nature. It still contains all the elements of a direct loan. James has still got rid of a tool which was useful to him. William has still received an instrument which perfects his work and increases his profits. There is still a service rendered by the lender,

which entitles him to receive an equivalent service from the borrower. This just balance is not the less established by free mutual bargaining. The very natural obligation to restore at the end of the term the entire value still constitutes the principle of the duration of interest. At the end of a year, says Monsieur Thore, will you find an additional crown in a bag of a hundred pounds? No, certainly, if the borrower puts the bag of 100 pounds on the shelf. In such a case, neither the plane nor the sack of corn would reproduce themselves.

But it is not for the sake of leaving the money in the bag, nor the plane on the hook that they are borrowed. The plane is borrowed to be used, or the money to procure a plane. And if it is clearly proved that this tool enables the borrower to obtain profits, which he would not have made without it, if it is proved that the lender has renounced creating for himself the success of profits, we may understand how the stipulation of a part of the success of profits

in favor of the lender is equitable and lawful. End of Section 6. Leisure. Section 7 of Capital and Interest by Frederick Bostia, read by Michelle Frye, Baton Rouge, Louisiana. This Libre box recording is in the public domain. Section 7, What is money, what is credit, and what is interest? Ignorance of the true part which cash plays in human transactions is the source of the most fatal errors i intend devoting an entire pamphlet to this subject entitled cursed money subsequently referred to as what is money and hateful money from what we may infer from the writings of m prudence that which has led him to think that gratuitous credit was a logical and definite consequence of social progress is the observation of the phenomenon which shows a decreasing interest

almost in direct proportion to the rate of civilization. In barbarous times, it is, in fact, cent, percent, and more. Then it descends to 80, 60, 50, 40, 20, 10, 8, 5, 4, and 3 percent. In Holland, it has even been shown as low as 2 percent. Hence, Proudon concludes that, quote, In proportion as society comes to perfection, it will descend to zero by the time civilization is complete. In other words, that which characterizes social perfection is the gratuitousness of credit.

When, therefore, we shall have abolished interest, we shall have reached the last step of progress. End quote. This is mere sophistry, and as such false arguing may contribute to render popular the unjust, dangerous, and destructive dogma that credit should be gratuitous by representing it as a coincident with social profession. With the reader's permission, I will examine in a few words this new view of the question. What is interest? It is the service rendered after a free bargain by the borrower to the lender in remuneration for the service he is received by the loan. By what law is the rate of these remunerative services?

established by the general law which regulates the equivalent of all services that is by the law of supply and demand the more easily a thing is procured the smaller is the service rendered by yielding it or lending it the man who gives me a glass of water in the pyrenees does not render me so great a service as he who allows me one in the desert of sahara if there are many plains sacks of corn or houses in a country the use of them is obtained, other things being equal, on more favorable conditions than if they were few, for the simple reason that the lender renders in this case a smaller relative service. It is not surprising, therefore, that the more abundant capitals are, the lower is the interest. Is this saying that it will ever reach zero? No, because I repeat it, the principle of a remuneration is in the loan. to say that interest will be annihilated is to say that there will never be any motive for saving for denying ourselves in order to form new capitals nor even to preserve the old ones in this case the waste would immediately bring a void and interest would directly reappear in that the nature of the services of which we are speaking does not differ from any other thanks to industrial progress a pair of stockings which used to be worth

six francs has successively been worth only four three and two no one can say to what point this value will descend but we can affirm that it will never reach zero unless the stockings finish by producing themselves spontaneously why because the principle of remuneration is in labor because he who works for another renders a service and ought to receive a service if no one paid for stockings they would cease to be made, and with the scarcity the price would not fail to reappear. The sophism which I am now combating has its own root in the infinite divisibility which belongs to value as it does to matter. It appears at first paradoxical, but it is well known to all mathematicians that through all eternity fractions may be taken from a weight without the

weight ever being annihilated. It is sufficient. that each successive fraction be less than the preceding one in a determined and regular proportion. There are countries where people apply themselves to increasing the size of horses or diminishing in sheep the size of the head. It is impossible to say precisely to what point they will arrive in this.

No one can say that he has seen the largest horse or the smallest sheep's head that will ever appear in the world. But he may safely say that the size of horses will never attained to infinity, nor the heads of sheep to nothing. In the same way, no one can say to what point the price of stockings, nor the interest of capitals, will come down, but we may safely affirm when we know the nature of things that neither the one nor the other will ever arrive at

zero, for labor and capital can no more live without recompense than a sheep without a head. the arguments of monsieur prudence reduced themselves then to this since the most skilful agriculturalists are those who have reduced the heads of sheep to the smallest size we shall have arrived at the highest agricultural profession when sheep have no longer any heads therefore in order to realize the perfection let us behead them i have now done with the soarysome discussion why is it that the breath of false doctrine has made it needful to examine into the intimate nature of interest I must not leave off without remarking upon the beautiful moral which may be drawn from this law. The depression of interest is proportioned to the abundance of capitals. This law being granted, if there is a class of men to whom it is more important than to any other, that capitals be formed, accumulate, multiply, abound, and superabound, it is certainly the class which borrows them, directly or indirectly.

It is those men who operate upon men. materials, who gain assistance by instruments, who live upon provisions, produced and economized by other men. Imagine in a vast fertile country, a population of a thousand inhabitants destitute of all capital thus defined. It will assuredly perish by the pangs of hunger. Let us suppose a case hardly less cruel. Let us suppose that ten of these thousand savages are provided with instruments and provisions sufficient to work. and to live themselves until harvest time, as well as to remunerate the services of 90 laborers. The inevitable result will be the death of 900 human beings.

It is clear, then, that since 990 men, urged by want, will crowd upon the supports which would only maintain 100, the 10 capitalists will be masters of the market. They will obtain labor on the hardest conditions, for they will put it up to auction, the highest bidder. And observe this, if these capitalists entertain such pious sentiments as would induce them to impose personal privations on themselves in order to diminish the sufferings of some of their brethren, this generosity, which attaches to morality, will be as noble in its principle as useful in its effects. But if, duped by that false philosophy, which persons wish so inconsiderately to mingle with economic laws they take to remunerating labor largely far from doing good they will do harm

they will give double wages it may be but then 45 men will be better provided for whilst 45 others would come to augment the number of those who are sinking into the grave upon this supposition it is not the lowering of wages which is the mischief, it is the scarcity of capital. Low wages are not the cause, but the effect of the evil. I may add that they are to a certain extent the remedy. It acts in this way. It distributes the burden of suffering as much as it can, and it saves as many lives as a limited quantity of sustenance permits.

Suppose now that instead of ten capitalists, there should be 100, 200, 500, is it not evident that the condition of the whole population and above all that of the proletaires the common people will be more and more improved is it not evident that apart from every consideration of generosity they would obtain more work and better pay for it that they themselves will be in a better condition to form capitals without being able to fix the limits of this ever-increasing facility of realizing equality and well-being would it not be madness in them to admit such doctrines and to act in a way which would drain the source of wages and paralyze the activity and stimulus of saving let them learn this lesson then doubtless capitals are good for those who possess them who denies it but they are also useful to those who have not yet been able to form them and it is important to those who have them not that others should have them yes if the proletaires knew their true interests they would seek with the greatest care what circumstances are and what are not favorable to saving in order to favor the former and discourage the latter they would sympathize with every measure which tends to the rapid formation of capitals they would be enthusiastic promoters of peace liberty order security the union of classes and peoples economy moderation in public expenses, simplicity in the machinery of government, for it is under the sway of all these circumstances that saving does its work, brings plenty within the reach of the masses,

invites those persons to become the formers of capital who are formerly under the necessity of borrowing upon hard conditions. They would repel with energy the warlike spirit, which diverts from its true course, so large a part of human labor. The monopolizing spirit which deranges the equitable distribution of riches in the way by which liberty alone can realize it the multitude of public services which attack our purses only to check our liberty and in short those subversive hateful thoughtless doctrines which alarm capital prevent its formation oblige it to flee and finally to raise its price to the especial disadvantage of the workers who bring it into a Well, and in this respect, is not the Revolution of February a hard lesson? Is it not evident

that the insecurity it has thrown into the world of business on the one hand, and on the other the advancement of the fatal theories to which I have alluded, and which from the clubs have almost penetrated into the regions of the legislature, have everywhere raised the rate of interest? Is it not evident that from that time the proletaires have found greater difficulty in procuring those materials, instruments, and provisions without which labor is impossible? Is it not that which has caused stoppages and do not stoppages in their turn lower wages? Thus there is a deficiency of labor to the proletaires from the same cause which loads the objects they consume with an increase of price, in consequence of the rise of interest.

High interest, low wages, means, in other words, that the same article preserves its price, but that the part of the capitalist has invaded, without profiting himself, that of the workmen. A friend of mine commissioned to make inquiry into Parisian industry has assured me that the manufacturers have revealed to him a very striking fact which proves better than any reasoning can, how much insecurity and uncertainty injure the formation of capital. It was remarked that during the most distressing period, the popular expenses of mere fancy had not diminished. The small theaters, the fighting lists, the public houses, and tobacco depots were as much frequented as in prosperous times.

the inquiry the operatives themselves explained this phenomenon thus what is the use of pinching who knows what will happen to us who knows that interest will not be abolished who knows but that the state will become a universal and gratuitous lender and that it will wish to annihilate all the fruits which we might expect from our savings well i say that if such ideas could prevail during two single years it would be enough to turn our beautiful france into a turkey misery would become general and endemic and most assuredly the poor would be the first upon whom it would fall workmen they talk to you a great deal upon the artificial organization of labor do you know why they do so because they are ignorant of the laws of its natural organization that is of the wonderful organization which results from liberty you are told that liberty gives rise to what is called the radical antagonism of classes that it creates and makes to clash two opposite interests that of the capitalists and that of the proletaire but we ought to begin by proving that this antagonism exists by a law of nature, and afterwards it would remain to be shown how far the arrangements of restraint are superior to those of liberty. For between liberty and restraint, I see no middle path. Again, it would remain to be proved that restraint would always operate to your advantage

and to the prejudice of the rich. But no, this radical antagonism, this natural opposites, of interests does not exist. It is only an evil dream of perverted and intoxicated imaginings. No. A plan so defective has not proceeded from the divine mind. To affirm it, we must begin by denying the existence of God, and see how by means of social laws, and because men exchange amongst themselves their labors and their productions, see what a harmonious tie attaches the classes one to the other. There are the landowners. What is their interest? That the soil be fertile and the sun beneficent. And what is the result? That corn abounds, that it falls in price. And the advantage

turns to the profit of those who have had no patrimony. There are the manufacturers. What is their constant thought? To perfect their labor, to increase the power of their machines, to procure for themselves upon the best terms the raw material. And to what does all this tend? To the abundance and the low price of produce, that is, that all the efforts of the manufacturers, and without their suspecting it, result in a profit to the public consumer,

of which each of you is one. It is the same with every profession. Well, the capitalists are not exempt from this law. They are very busy making skills, schemes, economizing, and turning them to their advantage. This is all very well. But the more they succeed, the more do they promote the abundance of capital, and as a necessary consequence, the reduction of interest. Now who is it that profits by the reduction of interest? Is it not the borrower first, and finally the consumers of the things which capitals contribute

to produce? It is therefore certain that the final result of the efforts of each class is the common good of all. You are told that capital tyrannizes over labor. I do not deny that each one endeavors to draw the greatest possible advantage from his situation, but in this sense he realizes only that which is possible. Now, it is never more possible for capitals to tyrannize over labor than when they are scarce, for then it is they who make the law. It is they who regulate the rate of sale.

never is this tyranny more impossible to them than when they are abundant for in that case it is labor which has the command away then with the jealousies of classes ill-will unfounded hatreds unjust suspicions these depraved passions injure those who nourish them in their hearts there is no declamatory morality it is a chain of causes and effects which is capable of being rigorously mathematically demonstrated It is not the less sublime and that it satisfies the intellect as well as the feelings. I shall sum up this whole dissertation with these words. Workmen, laborers, proletaires, destitute, and suffering classes, will you improve your condition? You will not succeed by strife, insurrection, hatred, and error. But there are three things which cannot perfect the entire community without extending these benefits to yourselves. These things are peace, liberty, and security. This ends Capital and Interest by Frederick Bastia.

Thank you for listening.