[FROM AUGUSTE BLANQUI'S "CAPITAL AND LABOR."]
All the old economists neglected the question of the legitimacy of usury. This question is recent, dating in the public minds scarcely farther than 1848.
Bastiat seized upon it and made it the text of his discussions with Proudhon, the socialistic champion of the period. The arguments of his fellow-writers, whatever their form, do not differ from his own. On this question of interest, then, may be refuted, in Bastiat's person, all political economy.
For the rest, the form of the fable that he devises to demonstrate the legitimacy of usury has been employed also by others. They use it with assurance, - one might say, with presumption. They seem to believe themselves irrefutable, and treat their adversaries after the manner of grand lords towards the common people. Bastiat notably assumes an air of overweening conceit thoroughly ridiculous. He seems to fear, in his argument, lest some one may accuse him of storming gates already open, so Jove-alike is his style.
James first exchanges his plane for money. He lends the money to William and William exchanges the money for a saw. The transaction is divided into two factors. But thereby its nature is not changed. It none the less contains all the elements of a direct loan.
There lies the sophistry and the delusion. The money ceases to be what it should be, a simple instrument of exchange. It abandons this beneficent role to assume a harmful one. Form a friend it becomes an enemy; from a benefit, a scourge. From an auxiliary it becomes an obstacle; from an aid, a barrier. This metamorphosis is effected during its passage through the hands of James, who uses the coin that he holds to fleece his neighbor. For he does not exchange it at par for a product of equal value, as was done for him in the substitution of the coin for his product. For he obtains at the end of a year either a portion of William's product equal in value to his own with a bonus in addition, or his money increase by one-twentieth. His duty was to buy with his coin a product equal in value to that which he had sold for the coin. He has wickedly retained the money which he should have restored to circulation by the complementary operation of the exchange, - namely, the barter of the coin for a product of equal value to the first. If he did not wish to proceed immediately to this barter, it was free to him to choose his hour, provided he should ultimately fulfill the fair and just condition of exchange, - an equality of the tow values exchanged through the mediation of coin.
As for the pretended service of the lain, service deserving reward, that is a sham. If James had needed his tool, he would have used it. Apparently he did not remain idle during the year that William has possession of his plane. If he lent his plane, he did so because he could get along without it. To say that he has made a sacrifice, that he has deprived himself of a useful object for the benefit of his neighbor, is pure hypocrisy. He labored during the year of the loan, and received the price of his product. He has no claim on the product of William. Whether William used the plane or not, it is sufficient for him to return it to James in the condition that he received it. He owes him nothing further.
"But why should I lend," says James, "if nothing is to come back to me" for the service that I render? "I will refuse, then."
Refuse if you like. But you cannot escape the dilemma. Either you need your plane, or you do not. If it is detrimental to your interests to part with it, keep it and use it. If you can dispense with it, if without loss to yourself, you can do something else, to demand, as reward for a service that costs you nothing, one-twentieth of the price of your plane, besides a new plane, is simply a swindle.
Bastiat seized upon it and made it the text of his discussions with Proudhon, the socialistic champion of the period. The arguments of his fellow-writers, whatever their form, do not differ from his own. On this question of interest, then, may be refuted, in Bastiat's person, all political economy.
For the rest, the form of the fable that he devises to demonstrate the legitimacy of usury has been employed also by others. They use it with assurance, - one might say, with presumption. They seem to believe themselves irrefutable, and treat their adversaries after the manner of grand lords towards the common people. Bastiat notably assumes an air of overweening conceit thoroughly ridiculous. He seems to fear, in his argument, lest some one may accuse him of storming gates already open, so Jove-alike is his style.
James first exchanges his plane for money. He lends the money to William and William exchanges the money for a saw. The transaction is divided into two factors. But thereby its nature is not changed. It none the less contains all the elements of a direct loan.
There lies the sophistry and the delusion. The money ceases to be what it should be, a simple instrument of exchange. It abandons this beneficent role to assume a harmful one. Form a friend it becomes an enemy; from a benefit, a scourge. From an auxiliary it becomes an obstacle; from an aid, a barrier. This metamorphosis is effected during its passage through the hands of James, who uses the coin that he holds to fleece his neighbor. For he does not exchange it at par for a product of equal value, as was done for him in the substitution of the coin for his product. For he obtains at the end of a year either a portion of William's product equal in value to his own with a bonus in addition, or his money increase by one-twentieth. His duty was to buy with his coin a product equal in value to that which he had sold for the coin. He has wickedly retained the money which he should have restored to circulation by the complementary operation of the exchange, - namely, the barter of the coin for a product of equal value to the first. If he did not wish to proceed immediately to this barter, it was free to him to choose his hour, provided he should ultimately fulfill the fair and just condition of exchange, - an equality of the tow values exchanged through the mediation of coin.
As for the pretended service of the lain, service deserving reward, that is a sham. If James had needed his tool, he would have used it. Apparently he did not remain idle during the year that William has possession of his plane. If he lent his plane, he did so because he could get along without it. To say that he has made a sacrifice, that he has deprived himself of a useful object for the benefit of his neighbor, is pure hypocrisy. He labored during the year of the loan, and received the price of his product. He has no claim on the product of William. Whether William used the plane or not, it is sufficient for him to return it to James in the condition that he received it. He owes him nothing further.
"But why should I lend," says James, "if nothing is to come back to me" for the service that I render? "I will refuse, then."
Refuse if you like. But you cannot escape the dilemma. Either you need your plane, or you do not. If it is detrimental to your interests to part with it, keep it and use it. If you can dispense with it, if without loss to yourself, you can do something else, to demand, as reward for a service that costs you nothing, one-twentieth of the price of your plane, besides a new plane, is simply a swindle.
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