A Summary of Proudhon's "What is Property" - Ch. 4

That Property is Impossible

Intro: Thoughts on Chapter 4

My notes on chapter 3 can be read here. What is Property can be read here.

In this chapter, Proudhon moves on from attacking the defenses of property offered in chapters 2 and 3 into attacking the idea of property itself. Or as Proudhon put it at the end of chapter 3, he has so far examined property as a power of “exclusion,” examining the justifications where the proprietor claims they are the rightful and absolute owners of a thing, and now considers it as a power of “invasion,” especially seen in what he is calling the “right of increase.”

The idea that property is “impossible” sounds fairly confusing from the start, but is more easily understood when read in the context of the opening. The defenders of property denounce equality as “impossible” because, if wealth were distributed equally today, it would be unequal tomorrow. Likewise, they complain that, if there were no property, then no one would work.

Clearly then we are not dealing with “impossible” in the strict logical sense of the term then. If something were absolutely impossible, it could not happen even today. There is no logical contradiction implied by people not working. Instead, “impossible” here must mean something like unsustainable, destructive, unworkable, or having some other extreme negative consequence. This is also clear when we contrast this to Proudhon’s claims like “property is impossible, because it is homicide.” Homicide of course happens, and is therefore “possible” in that sense, but would be “impossible” by this alternative meaning. It is, as Proudhon put it, “untrue, useless, unjust.” By unraveling this mystery of property, he hopes to kill it, just like Oedipus killed the Sphinx by solving her riddle.

Proudhon’s goal then is to demonstrate this impossibility largely by focusing on property’s “droit d’aubaine”. This is translated as the “right of increase” by Benjamin Tucker, or most literally as a “windfall right,” but Shawn Wilbur has also made an interesting case for understanding it as a “right of escheat.” Think of it as a right of exploitation, covering the various methods proprietors use to enrich themselves off the labor of others without offering any equivalent in return. If we are framing this especially framed as value of “unclaimed” property being transferred to the head of a social body, as with escheat taken by the state for unclaimed property or ownership of land reverting to a feudal lord. The proprietor exercises a similar claim over value created by the workers, especially thanks to the power of collective force, taking this surplus that has been left in limbo as their own. That this kind of hierarchy is worked into the very nature of property also helps to explain anarchism’s fundamental anti-capitalism.

This right of increase is an essential feature of property, but is not necessarily always exercised. In several places Proudhon considers property owners who use their property themselves rather than using it as a method of increase. However, because of this lost opportunity cost, Proudhon emphasizes how this mean the right of increase is oppressing the proprietor themselves too.

This is almost the reverse of the “abstinence” theory of capital accumulation. By that view, the capitalist is justified to compensation for having “robbed” themselves of the pleasure of using their property. But here, the capitalist feels more robbed by using the property themselves and losing their source of income. As Marx would later describe this argument later in Capital:

All the conditions for carrying on the labour process are suddenly converted into so many acts of abstinence on the part of the capitalist. If the corn is not all eaten, but part of it also sown — abstinence of the capitalist. If the wine gets time to mature — abstinence of the capitalist. The capitalist robs his own self, whenever he “lends (!) the instruments of production to the labourer,” that is, whenever by incorporating labour-power with them, he uses them to extract surplus-value out of that labour-power, instead of eating them up, steam-engines, cotton, railways, manure, horses, and all; or as the vulgar economist childishly puts it, instead of dissipating “their value” in luxuries and other articles of consumption. How the capitalists as a class are to perform that feat, is a secret that vulgar economy has hitherto obstinately refused to divulge.

The poor proprietor is robbed, no matter what they do!

Pointing to the absurdities that follow from the right of increase, and wants to mathematically prove its impossibility. These proofs can be difficult to follow at times though, not only from some of the strangeness of the language, but the use of the math. There is at least one error, possibly two, although thankfully neither seem particularly detrimental to his case. The most obvious issue, pointed out by the translator Benjamin Tucker, is in Proudhon’s “shoemaking society” example where, when trying to describe equivalent exchange, Proudhon has twenty tanned hides trade for thirty raw hides. Previously he established that tanned hides were meant to have double the value of raw hides though, so this should have been 15, not 20. To bring in comparisons to Marx again, mistakes like this can be seen from time to time like in chapter 3 of Capital when he accidentally wrote that there was an “inverse” relation when he meant to say a “direct” relation in one line.

The only section that gives me serious pause with Proudhon comes in his third proposition where he claims that:

The maximum income of a proprietor is equal to the square root of the product of one laborer (some number being agreed upon to express this product).

Now this point also does not seem particularly important for Proudhon’s case. He had assumed earlier the legitimacy of the right of increase, the very thing he is supposed to be debunking, and is determining what sort of just limits might exist for it. This point is granted then, only to then be quickly dismissed. Still, how exactly Proudhon got a “square root” here remains a mystery to me. It seems to me like the proper formula should be “The maximum income of a working-proprietor is equal to the product of one laborer (some number being agreed upon to express this product) times the rate of increase.” Proudhon’s own examples don’t seem to work as a square root. He has represented the worker as producing “1,” the square root of which is also “1,” not the 0.1 or 0.09 that Proudhon was suggesting.

My best guess is that, since he was working in decimals, he might have been thinking of this as a relation of 100 to 10, and then generalized this formula, perhaps not giving it much thought since he dismisses this “rule” only a few lines later.

It feels perhaps misleading to highlight these mistakes so early in my own summary, given that, as I said, neither really touch on the substance of Proudhon’s argument and were meant as kind of illustrative examples. Both could have been easily cut without changing much else. But as my purpose here is to provide a kind of plain-language summary of Proudhon’s argument, trying to account for errors like this took up a disproportionate amount of my time.

Going over the actual points, all ten propositions have a common theme made explicit in the final one: they destroy equality.

In the first proposition, this is seen in its destruction of economic justice, with the proprietor demanding something for nothing. The proprietor does not live by their own labor, but by selling the permission to use their property to the actual laborer. As John Stuart Mill would elsewhere put it, “Landlords grow rich in their sleep without working, risking or economizing.” Various excuses are given for the proprietor here, pointing to different features of the land like its changing quality, but at no point does this seem to justify payment to the proprietor specifically, especially after arguments based on occupancy and labor were destroyed in the previous chapters.

The second proposition shifts the view from justice to one of economic law, showing the inherently destructive and chaotic nature of property. To economize properly speaking, waste and destruction must be avoided. But as Proudhon argues, these are inherent features of property since the cost of labor must be balanced out by its returns. To illustrate this, Proudhon constructs a simplified thought experiment of some society made up of 1000 families, 100 of which are chosen to act as proprietors, which he will return to throughout the chapter.

In the second proposition, the major point is that, because people need to work while getting nothing in return (as established in the first proposition), they must be working without reward. They are engaged in surplus labor to fund what inevitably turns into the wasteful luxuries of the rich, who use this system to try to avoid working all together.

This idea is continued in the third proposition. Proudhon attempts to grant the legitimacy of the right of increase for a time, determining what it’s just limits would be. His major point is that, if it were justified at all, the proprietor should only be getting a fraction of what they would have produced themselves on that property, but have lost that opportunity because they gave it up. They should receive, at maximum, only a fraction of what an individual person (or perhaps an individual family) could produce there. Yet this is not what proprietors do, trying to exploit people as much as possible to live extremely luxurious lives off the labor of others. Proudhon destroys this argument (and some of the questionable math involved) by pointing out that any such legitimate claim to increase would need to be based on the right of occupancy, which would be equal in all. The tenant’s own right of occupancy would cancel out the proprietor’s.

Proposition 4 continues this logic. Because the proprietor tries to exploit people as much as possible, they inevitably push their victims into economic ruin. Because they do not receive the product of their own labor, they are pushed more and more into debt. To make this argument, Proudhon seems to be making some unstated assumptions, where because of the increase taken the worker must borrow to survive. This should probably be best understood in the context of the previous point, where the proprietor does not respect any limit but tries to extract as much value as possible. Perhaps some idea of the so-called “iron law of wages” is in play here too, but there is not enough detail to really say. He may just be saying that this is the logical conclusion to property, unless it is actively opposed. Nothing about that necessarily implies things must turn out this way. On the contrary, his whole point is that it is “impossible.”

Proposition 5 likewise builds on the previous one. Since the proprietor is killing people through starvation, people are forced to compete with one another. They try to push this burden onto others, trying to make their own books balance, but the whole system is rigged so that some must fail. This breaks down the social order. Proudhon even presents a general outline of crisis theory this leads to as there are shifts between production and taking on debt, and the inevitable crunch as it fails.

After this, the propositions become notably shorter.

Proposition 6 describes property as tyranny, showing the way it gives the proprietors a disproportionate say in how the country is run. Much more could be said on this beyond Proudhon’s short treatment.

Proposition 7 emphasizes how it is impossible for the proprietor to escape these outcomes because their consumption is not reproductive. The proprietor demands something for nothing, as seen in the first proposition. Because of this, when they use the something they get, nothing is produced in return. The waste is inevitable.

Proposition 8 is an especially popular argument today, emphasizing the way capitalism/property demands infinite growth with finite resources. This point is made very simply here with the way compound interest is meant to endlessly increase. It brings to mind for me an episode of Futurama. Philip J. Fry, a man from the year 2000, was frozen for 1000 years. At some point after waking up in the far distant future, he goes to his bank to check on his previous account balance of a mere $0.93. Having benefited from 1000 years of compound interest at 2.25% though, his actual balance turns out to be $4.3 billion. Proudhon has taken this same point, but turned it into a sign of property’s absurdity, and the need to at the very least limit (and therefore attack) property.

Proposition 9 also emphasizes the results of this competition, as proprietors of all industries are trying to run others out of business. The tendency is toward monopoly, and the strong have the advantage. Proudhon interestingly frames this as a contradiction of property, since through mere strength one is able to force the other to lose their property. Even if by legal means, we still have some element of force being used. Property therefore loses to other property.

Proposition 10 summarizes all the previous ones by emphasizing the same root issue: they all contradict equality. Proudhon described his method previously as showing how all the justifications for property relied on equality, and therefore necessarily undermined it. Here that same line of attack is being used more offensively, showing how a lack of equality leads to chaos and contradiction.

Summary of Chapter IV: That Property is Impossible

Intro

Having run out of defenses for property, the proprietors instead go on the offensive and denounce equality of conditions as impossible. If we were to distribute wealth equally today, it would be unequal tomorrow. They usually follow this by claiming that, if all men were equal, then no one would work. Therefore equality is impossible because, if it were established, it would revert straight back into inequality.

We are here to prove the reverse. It is actually property which is “impossible.” To prove its impossibility in this sense of the term, we will show how it is self-contradictory and unsustainable, necessarily resulting in waste or destruction, inevitably leading us back to equality. The victory of equality is likewise assured.

We shall see finally that equality is constantly being realized without our knowledge, even at the very moment when we are pronouncing it incapable of realization; that the time draws near when, without any effort or even wish of ours, we shall have it universally established; that with it, in it, and by it, the natural and true political order must make itself manifest.

The goal here is to prove this position with mathematic certainty. Those acting in bad faith would deny even the proofs of mathematics if the occasion needed it. We see this in action as people leap to the defense of property. Our argument should be air tight then.

By proving property impossible, we will also prove that it is unjust.

In proving the impossibility of property, I complete the proof of its injustice. In fact, —

That which is just must be useful;

That which is useful must be true;

That which is true must be possible;

Therefore, every thing which is impossible is untrue, useless, unjust. Then, — a priori, — we may judge of the justice of any thing by its possibility; so that if the thing were absolutely impossible, it would be absolutely unjust.

Property is physically and mathematically impossible.

Demonstrations

Axiom - Property is the Right of Increase claimed by the Proprietor over any thing which he has stamped as his own.

To show that property is impossible, we can focus on one of its essential characteristics: droit d’aubaine (Note: Translated as the “right of increase” or “right of escheat.”)

This has been expressed as an axiom for the following reasons:

1. It is not a definition of property. (Property contains other features too like the right of sale, to alter, consume, destroy, use and abuse, etc.)

2. It is a universally recognized feature of property.

3. It is an obvious feature of property.

4. It is a necessary condition (although not sufficient) for property.

The right of increase has different names for its different forms:

1. By land —> fermage [Farm-Rent]

2. By homes or furniture —> loyer [House-Rent]

3. By life-investments —> rente [Revenue, Rent, or Annuity]

4. By money —> Interest

5. By exchange —> Advantage, gain, or profit (not to be confused with wages as the legitimate price of labor)

The right of increase is a source of income. It is a kind of royal prerogative demanding people pay homage, due to the proprietor on account of their “metaphysical occupancy” of the property. Their seal is upon it, and that is enough to prevent others from occupying it without their permission.

This permission may be sold. This is in reality an extortion, but this action is laundered through property and turned into a legitimate source of income.

The proprietor may sell access to their property, turning it into a source of profit for them.

Thus, by the right of increase the proprietor reaps but does not toil; gathers but does not plant; consumes but does not produce, enjoys but does not labor.

This supernatural power of increase is conferred upon the proprietor by an ancient three-stage ritual.

Firstly, the property is consecrated, informing everyone else that to use the article they must make an appropriate sacrifice to the proprietor.

Secondly, the property becomes anathema, prohibiting all from touching the article without this permission, even in the proprietor’s absence. To violate this is to be made sacrilegious.

Thirdly, the property is dedicated, allowing use only by its god or patron saint: the proprietor. Only they may inhabit it, and the article is viewed as the very person of the proprietor, who is ever present within their sanctuary.

By this, property is the right of increase, i.e. the power to produce without labor. Is this not the power of God, to produce something from nothing?

But perhaps the better religious comparison is to the mark of the beast. Whoever uncovers the meaning of 666 will know his complete identity. Or if you solve the riddle of the Sphinx, you will kill it. So too will we kill property by unraveling the mystery of the right of increase.

It requires something more than courage to subdue this monster. It was written that it should not die until a proletaire, armed with a magic wand, had fought with it.

Corollaries

There are three important corollaries that follow from this axiom:

1. The amount of increase is proportional to the thing increased.

2. The increase paid to the proprietor by the occupant is a dead loss to the latter.

3. The right of increase oppresses the proprietor as well as the stranger.

To the first point, because of this proportion we can calculate information from other points of data.

Consider these examples. A house is valued at $1,000,000, and then is leased at 5% interest. Therefore its revenue is $50,000 because $1,000,000 x .05 = $50,000.

Likewise, we can determine that if a piece of land at 2.5% interest yields a revenue of $30,000, then the land must be worth $1,200,000 because $30,000 / .025 = $1,200,000.

It is important to remember that different forms of increase may need to be paid in different time periods (e.g. daily, weekly, annually, etc.). This increase then is proportional not only to the thing increased then, but also according to the time it increases.

To the second point is demonstrated by the nature of increase itself. If the proprietor needed to give up some equal value for this increase, then it would not be increasing. The proprietor pulls this off because the only thing they are selling is their permission. The increase they are paid is a permanent gain for the proprietor, and a dead loss for the occupant.

The third point should be understood as a kind of opportunity cost the proprietor pays any time they actually use their own property. They can no longer turn it into a source of profit, and therefore feel this as a loss. You can see this attitude actually reflected in their own accounting. By using their own property, they eat it up and erode it.

Proposition 1: Property is Impossible, Because It Demands Something For Nothing

Economists keep debating the origin of farm-rent, as if someone can find a legitimate origin for extortion.

J.B. Say

J.B. Say argues that the farmer is a “wheat manufacturer” who must pay for the tools they use, which if they are not proprietors would include the “large tool” of the field itself. However, he claims that this is no issue because the farmer is reimbursed for this by the person who purchases their wheat, and ultimately by the consumer of the final product.

But “reimbursements” aside, why are we paying for this in the first place? On what basis is the proprietor charging the tenant-farmer? We’ll return to this later.

Ricardo, MacCulloch, and Mill

David Ricardo (1772-1823), J.R. MacCulloch (1789-1864), and James Mill (1773-1836) all argue that farm-rent is the “excess of the product of the most fertile land over that of lands of an inferior quality.” Farm-rent is only charged from the people on the better land when population increases force people off the better quality land onto the inferior.

This makes no sense. How does a difference in quality give proprietors a right to the land?

The more you think about it, the less sense it makes. Suppose there are two pieces of land of equal area, A and B. Plot A has superior quality and can support 10,000 people, while B can only support 9,000 people. As the population grows over 10,000, people need to start cultivating B. According to this theory, that means that the proprietors can start charging the people who live on A farm-rent proportional to the difference between A and B (10 to 9).

How exactly are the people living on A meant to pay for this? The only reason B is being cultivated now is because the use of A has been maximized. They only have just enough land to keep themselves alive.

If we had instead said that this population occasioned farm-rent, we’d have a better answer based on equality. All have an equal right to the best land, so the people forced to cultivate the worse land are now owed compensation. This would be a bad system, but at least it would make more sense than what these guys have proposed. Instead they have no argument in favor of property, nor could their system ever work since it is self-defeating.

Malthus

Thomas Malthus (1766-1834) finds the origin of farm-rent in the land’s power to produce more than enough to satisfy the people who cultivate it. But why would successful labor entitle the idle proprietors’ to the fruit of that labor?

Malthus needs to be careful about how he defines cultivators here though. If he only means the tenants on the land, then yes, they produce more food than they personally need, just like tailors make more clothes than they wear or carpenters make more furniture than they use. But as we’ve seen, all of these different industries depend on and sustain each other. The labor of each really does involve the labor of all then, and in this way, everyone cultivates the land.

If farm-rent were really based on commerce like Malthus supposed, there must be some kind of equivalent exchange. This clearly contradicts the right of increase though.

Buchanan

David Buchanan (1779-1848), a commentator on Adam Smith, is more straightforward, saying farm-rent is a mere monopoly created by civil law. But monopoly and justice have nothing in common! The law is meant to uphold justice, so to claim we can justify monopoly (an injustice) based on the law (justice) is a contradiction in terms.

J.B. Say (Again)

J.B. Say rejected Buchanan’s answer, defending his original argument that the proprietor is contributing to production through their tool: the soil. The land modifies material in a chemical process, allowing things to grow. As it contributes, it (the land?) can also demand payment in exchange.

But clearly this analogy doesn’t hold. Unlike a blacksmith or carpenter, who actually makes the tools they sell, the proprietor does not make the land. The analogy doesn’t work. We can see here a clear outcome of that old ritual, where the land and the proprietor have been mystically united.

Say is put on the backfoot, and retreats to yet another argument. He admits that the proprietor’s job is “easy,” but claims if we did not have property, one farmer would fight with another over possession of the land. What logic! How does the proprietor do this, exactly? By claiming ownership for themselves and then robbing both farmers! This solution is no solution at all. Instead of farmers fighting with each other, they now fight with the proprietor. As we saw in Chapter 2, possession is sufficient for settling these matters anyway.

There is also another flaw that has been worked in here. It is true to say that land is an “instrument of production.” But it is a mistake to therefore call it a “productive instrument.” This would imply that land, by itself, is productive. In reality, production requires a combination of land, labor, and capital. No one of them is productive on their own. It is only through their cooperation that they are productive.

This is also based on a flawed premise: Land is not productive on its own. Nor is capital or even labor. Separately these things can do nothing. They are only productive when they are brought together. The proprietor demanding farm-rent because of the productive contribution of their land is demanding payment for something this property doesn’t actually have.

Some may still try to object that blacksmiths or other manufacturers are entitled to payment when they contribute tools. If they are to be compensated for the contribution of their tools, why not the landowner for contributing the land?

But of course when manufacturers supply tools, they are paid once, either at the time of purchase or split between several payments. After they have been paid for, the tools don’t belong to them anymore. The proprietor by contrast demands to be paid endlessly, but never gives up their tool. “Eternally he is paid for it, eternally he keeps it.” The charge of rent is not even there simply for repair or maintenance. They make sure to place that burden on the borrower.

If we really wanted to compare the landowner to these other manufacturers, they would at least need to do the same: surrendering in whole or in part their claim on their tool, in which case they would no longer be a proprietor.

Since there is no exchange of equivalents, we can see that farm-rent really is a right of increase. It is an extortion and a fraud. The economists say products are only purchased with other products. But as we’ve seen, the land is no produced by the landlord, nor are they being paid for its productivity.

As fraud it can be no right. But property can exist only as a right. Therefore property is impossible.

Corollaries:

1. Property is not “the right to enjoy the fruit of one’s labor.” Instead, it is “the right to enjoy and dispose at will of another’s goods, — the fruit of another’s industry and labor.”

2. Every possessor who lends something for more than the cost of repair is guilty of extortion. Therefore all rent is an act of property, and therefore of robbery.

Historical comment: The taxes which victorious nations place on conquered nations is a genuine case of farm-rent. The feudal rights of old nobility abolished by the French “Revolution” of 1789 were property too. To defend property today is to condemn the Revolution.

Proposition 2: Property is Impossible, Because Wherever It Exists Production Costs More Than It Is Worth

Proposition 1 was a legislative argument, claiming the proprietor had a right because they were contributing to production. It failed because we discovered they are not. Instead, they are merely selling their permission, making it identical to extortion and violent threats.

Proposition 2 is an economic argument, demonstrating how property, originating from violence, results in destruction.

J.B. Say says that “production is exchange on a large scale.” But he also adds that this exchange is only productive of the value of the product balances out the value of the services. If the producer gives more than they receive, then it is unproductive and wasteful.

It follows that the production of anything useless must also be valueless. There is no point putting our time and resources towards something that no one wants. Any “product” that is unfit for consumption is not a product at all. It is illegitimate.

Likewise, legitimate consumption must also be reproductive. To avoid a dead loss, our consumption must only destroy what we can recreate. A healthy economy then will find a balance between production and consumption.

The 1,000 Family Society

Let’s analyze this with an example, which we will utilize throughout this chapter. Suppose there are 1000 families in a given territory, representing the entire human race. We can assume these people only grow wheat for simplicity.

Let’s say that among these 1000 families, 100 are chosen who everyone else must give 10% of the wheat they grow to. These will be the proprietors charging farm-rent in this scenario.

It is clear here then that the right of increase is working basically like a tax. Except taxes are supposed to be justified on the grounds that they are funding some kind of public service or good. The people get nothing in return for this “tax.”

But it is also useless for the 100 proprietors. By our assumption, they are continuing to farm the land themselves, and harvested enough by their own efforts to keep themselves fed. In a society that produced only wheat, they can’t even trade away the wheat they received for something else.

Therefore, in this society, 10% of production has been made inconsumable, and 10% of labor is going unpaid. Production costs more than it is worth.

Now let’s drop some of these simplifying assumptions. This society now produces not only wheat, but all kinds of goods. There are wine-growers, shoemakers, tailors, carpenters, blacksmiths, teachers, mayors, priests, etc.

However, this society still owes 10% of what they make to the 100 proprietors. Whether this tax is placed on everyone or the wheat-farmers alone makes little difference, since they would need to raise the price of wheat to make up for this and therefore place the burden on everyone.

This is still an economic waste. For every “1” they produce, they only get back “0.9.” The laborer’s production costs more than it’s worth. It is also still a waste for the proprietor. Having produced all they need from their own labor, they are now stuck with an excess of everything that they cannot consume or trade away.

But this of course assumes that the proprietor still acted like a laborer. If we drop this assumption, we see the truth of the matter even more clearly. The proprietor stops producing, content to live a life of leisure and luxury entirely off the labor of others.

Since they have stopped producing, production falls by 10%. Society is now only producing “0.9” so it seems to equal consumption, bringing things back into balance. But as we can see, this is false. As we established before, legitimate consumption is reproductive. We have merely switched out a scenario where 100 are producing without consumption for one where 100 are consuming without producing.

This waste is therefore an inherent feature of property. The proprietor cannot cease to destroy without ceasing to be a proprietor.

But this is only barely scratching the surface. If the only issue were that proprietors were sluggards, the problem would not be so bad. Society must always support some idle people, like the sick or impaired, so what is a few more? But property brings with it a whole host of more problems, extending its corruption out. Its impossibility thickens.

Proposition 3: Property is Impossible, Because, With a Given Capital, Production is Proportional to Labor, Not to Property

We can continue the the story of the 1000 families here.

Let’s represent the normal production of a single family as “1p.” Following our previous example, a society of 1000 working families will therefore produce 1000p. If they are charged a farm-rent of 10%, they must pay 100p to the proprietors. If there are 100 proprietors, they will each receive 1p in farm-rent on top of the 0.9 they receive as a laborer.

However, we also saw that because of property, the 100 proprietors in this society gave up labor. We no longer have 1000 families producing 1000p then, but 900 families producing 900p. At a farm-rent of 10%, only 90p will be paid to the 100 proprietors. Either 10 of them must go unpaid, or each must accept receiving only 0.9p.

Originally, the laboring proprietor received 1.9p. Because of this they said “My farm-rent of 1p is enough to live on. I therefore be content to give up working and live on it alone.” But they made an error, because 0.1p of that farm-rent had come from their own labor!

The proprietor is made poorer for the very reason they hope to enjoy. By exercising their right, they lose it.

The less laborers there are, the more pronounced this effect is. If there were only 500 working families, then the proprietors would only receive 50p to be divided among themselves. If there were only 100, then they would receive 10p.

We can therefore posit the following axiom:

Increase [L’aubaine] must diminish as the number of idlers augments.

Realizing this brings us to another surprising conclusion.

Following this logic, if there were only one laborer in the entire community, the total 10% farm-rent of all society would be merely 0.1p, no matter how much land has been appropriated or what its value is.

Therefore:

[W]ith a given landed capital, production is proportional to labor, not to property.

What then is the maximum increase of property?

First let’s examine the idea of a farm-lease itself. It is a contract where the proprietor yields land to the tenant, and in return gets a portion of the yield of that land.

In any kind of equivalent exchange, someone should only receive in proportion to what they give. It follows that, if farm-rent is a legitimate equal exchange, the amount they are paid in farm-rent should be proportionate to the land they give up.

Now suppose that the strength of the tenants increased tenfold due to an increased size for the family. Would the proprietor be justified in charging ten times as much in farm-rent? Of course not! It is not a poll-tax. He is giving up no more land than before. Why should the price of the loan change according to the strength of the borrower, rather than the contribution of the lender?

Any just claim to farm-rent must therefore be based on the proprietor’s production, not the tenant. We can put this as another law:

Increase is measured by a fraction of the proprietor’s production.

Now what is the proprietor’s production?

In our supposition, the productive capacity of any laborer is 1p. The proprietor here is no exception. At a rate of increase of 10% then, the maximum increase they could demand could only be 0.1p.

However, as we have seen, the proprietor withdrawing from labor decreases even this amount. By our example, it would reduce to 0.09p. This led us to our last formula:

The maximum income of a proprietor is equal to the square root of the product of one laborer (some number being agreed upon to express this product). The diminution which this income suffers, if the proprietor is idle, is equal to a fraction whose numerator is 1, and whose denominator is the number which expresses the product.

(Note: I have been unable to determine how Proudhon deduced this formula. My best guess is that it is something meant to be specific to this situation, but only if he were imagining how 10 is the square root of 100. Ultimately it is a moot point since even this formula is rejected. If I had to recreate one generally true, if I understand his reasoning correctly, it would be equal to the product of one laborer times the rate of increase.)

Suppose the average worker makes $1000 and the rate of increase is 10%. The maximum income of an idle proprietor then would be $90. If France has 1 million proprietors, instead of paying them the $1000 million we are paying to them annually, they should get $90 million only. Thus we reduce the weight upon the working class by $910 million!

But we can go further. Within the limits of justice, the right of increase is merely the right of occupancy. Since all have an equal right of occupancy, it follows that all have an equal right to be proprietors.

If, then, the laborer is obliged by the right of property to pay a rent to the proprietor, the proprietor is obliged by the same right to pay the same amount of rent to the laborer; and, since their rights balance each other, the difference between them is zero.

In summary, the right of increase could only possibly be justified within these very narrow limits. But even within these limits, it is destroyed by the right of occupancy. If there is no right of increase, then there can be no right of property. Therefore property is impossible.

Proposition 4: Property is Impossible, Because it is Homicide

So far we have been looking at property as if it were trying to reasonably conform to justice, and therefore could not exceed some fraction of what the proprietor is capable of producing. But why should we expect reason from a right of robbery? The proprietor does not limit themselves this way, and instead tries to charge people as much as possible. They charge, not according to their own productive strength, but the strength of the worker. Through this, although they could only ever produce “one,” they charge “one million.”

The proprietor does not even accept the burden of their own idleness. They throw this constantly on the workers, the producers.

J.B. Say cried out against taxes, denouncing that some people act like they can be raised endlessly until people have no way to feed themselves anymore. But the same objection is equally true when applied to farm-rent.

The Peasant Family

Suppose there was a peasant family of six people (a father, a mother, two sons, and two daughters) barely getting by. They have no major debt, but also no real savings to speak of either. They only cultivate their small piece of land. If the year brings a good harvest they enjoy a few extra pleasantries like some slightly nicer food or new clothes, but they live squarely within their means.

This poor family is doomed, according to the third corollary our axiom: “The right of increase oppresses the proprietor as well as the stranger.” They owe themselves interest on their own capital, which they are not paying. Suppose this capital is $80,000. At an interest rate of 2.5%, they would owe themselves $2,000 each year. If this is consumed, then this is a deficit left unpaid each year. In 40 years these good people will, without realizing it, have eaten up all their property and be bankrupt!

This seems ridiculous, but it is true.

The government enacts conscription, which is itself an act of property by the government. The sons of the family are taken away to join the army, something all young men despise unless they are depraved. “You can generally judge of a soldier’s morality by his hatred of his uniform.”

To save their sons from this fate, the family needs to borrow money to redeem them out of service. The father borrows $40,000 at 5% interest, which would be $2,000.

Before now, the production of the peasant family has been constantly balanced by their consumption. Let’s say that they lived on $12,000 each year ($2,000 per person). In order to pay off this loan, the six people must produce as if they were seven, or consume as if they were five. But both are impossible. They cannot consume less, already living as a subsistence level, nor can they produce more, already working as hard as possible.

The interest cannot be paid. The interest will accumulate. The farm will be seized. The family will be evicted.

The family had abstained from using their right of property, and therefore fell into misery as the exercise of this right became a necessity. Property requires both the power of enlarging the land and fertilizing it on command. A simple possessor finds in land their means of subsistence. By a pretend proprietor, this is insufficient. They must not only produce what they consume, but even more to grow their instrument.

The 1000 Families Again

Let’s go back to our original example of the 1000 families, with the 900 families of laborers who, because of farm-rent, only receive 0.9p instead of 1p. But they need 1p to survive. What happens?

To survive, they must now borrow money too, upon which they must pay interest. And the only people they can borrow from are the proprietors themselves from the surplus they received! Thus their first robbery becomes the occasion for a second.

Then debts increase indefinitely; the proprietor makes advances to the producer who never returns them; and the latter, constantly robbed and constantly borrowing from the robbers, ends in bankruptcy, defrauded of all that he had.

Suppose the proprietor decides to be benevolent though and releases the tenant from their debts. What charity! How magnanimous! The grateful tenant, wanting to remain out of debt they had found themselves in before, decides to raise their prices. But when the farmer raises the price of their wheat, the manufacturer who buys this for their bread must also raise their prices in turn, and so on. This rise in price spreads throughout all society, inflating all prices and therefore affecting even the proprietors themselves. The laborer is not able to escape their burden by raising their prices like this, although they do lessen it a bit by throwing some of it back onto the proprietor this way, but only marginally.

But even with this, the problem has not been solved. As much as they tried avoiding debt, they find themselves in the same situation as before. They must take out a loan and are forced to make a choice of fasting to cut their consumption, or increasing production. Unable to do the former, they try to do the latter.

But production combines labor, capital, and land. They are willing to try to work more, but they have no more capital or else they’d be paying off their debts. Even if they did have it, it would not do them any good unless they had more land to use it on. (This is the issue we will examine in the next proposition.)

Can they work harder though? We had already assumed that we were at the maximum average of production. Were it not the highest, the proprietor would just increase the farm-rent to force them to work even harder.

Is not this the way in which the large landed proprietors have gradually raised their rents, as fast as they have ascertained by the increase in population and the development of industry how much society can produce from their property? The proprietor is a foreigner to society; but, like the vulture, his eyes fixed upon his prey, he holds himself ready to pounce upon and devour it.

The proprietor, after robbing the laborer by usury, murders them by starvation.

Property cannot exist without robbery and murder. By murdering the tenant, it also destroys its very basis of support.

Therefore property is impossible.

Proposition 5: Property is Impossible, Because, if it Exists, Society Devours Itself

The proprietor wants to squeeze out as much labor from the worker as possible. They know the power of the human spirit to persevere, and rely on it to always take just a bit more.

When the ass is too heavily loaded, he lies down; man always moves on. Upon this indomitable courage, the proprietor — well knowing that it exists — bases his hopes of speculation. The free laborer produces ten; for me, thinks the proprietor, he will produce twelve.

Before our poor peasant family gives up, they try something else: leasing more land. They will sow 1/3rd more land, keeping half of this additional product for themselves and half for farm-rent. Thus to add 1/6th to his production, the farmer must add 2/6ths to his labor!

By taking on more land, they reduce what was available for others. They increase their own labor by taking it away from their neighbors. The proprietor reduced production when they gave up working to live on farm-rent. Now they have reduced it further by encouraging a monopoly of labor.

The worker needs to make up the 0.1p they paid in farm-rent. Their only option is to increase their labor. Thanks to this, the discontent of the proprietors, and worker’s own ability to persuade the proprietors to extend loans to them redistributes the division of labor, forcing some out of work.

For the 900 workers to increase their labor by 10%, they must throw 90 workers into unemployment. This makes the problem even worse. We now have 810 people trying to produce as if they were 900, when what was really needed was the labor of 1000. Production is not increased, but is instead drastically decreased. People keep needing to take on debt, the problem being unsolved.

Overworking themselves fails to solve the issue. As the debt begins to pile up, the farmers and manufacturers start to think “I could pay my debts, if only I had not hired so many people.” They start turning to machines to replace workers. Thus the inventions meant to lighten the burden of mankind’s labor instead becomes a way of throwing them to die of starvation, unemployed.

Society devours itself in this two-step process:

1. The regular and violent sacrificing of workers.

2. The prevention of consumption caused by property.

These may begin simultaneously, but soon feed into a vicious cycle with each other. The drop in consumption gives cause for the sacrifice of more workers as a remedy, and the drop of production and increasing debt make labor more necessary.

For a business to succeed, its product must be sufficient to pay:

1. The interest on capital employed

2. Maintenance to preserve this capital

3. The wages of all workers employed or contracted

On top of this, it must also realize as large a profit as possible.

This also helps to show the shrewdness of the proprietors. They take from production first under the name “interest,” and then they take a second time under the name “profit.”

But no matter the form, property is impossible.

The Shoemaking Society

Workers are, in relation to each other, part of one big process of social production based on a division of labor.

Suppose that, for simplicity, there were a society of only three people: a cattle-raiser, a tanner, and a shoemaker. The social industry then is shoemaking. Likewise, each doing their task, each should receive a third of the social product. Whether they explicitly intend to divide things this way does not matter, as we will demonstrate.

Each job covers part of the three-step process of shoemaking:

1. Rearing cattle

2. Preparing hides

3. Cutting and sewing

Suppose we assign a value to the product as it goes through each stage. The raw hide leaving the farmer’s stable is worth “1,” the prepared hides are worth “2,” and the final shoes are worth “3.”

As the product goes down the line then, each producer must not only be able to pay for their own labor, but for the labor of others. To obtain however many shoes are produced from 10 tanned hides, the cattle-raiser would need to pay 30 raw hides, and the tanner would have to pay 15 tanned hides.

If we brought this system out of line, it messes the whole thing up. If the shoemaker demanded 33 raw hides from the farmer and 16.5 tanned hides from the tanner for 10-tanned hides worth of shoes, then exchange would become impossible. They would be charging for 11 when only providing 10. When the farmer and tanner would find their own books out of balance.

(Note: The translator Benjamin Tucker notes that Proudhon seems to have made an error in his math here. This appears to be his claim that “twenty tanned hides are worth thirty raw hides.” But if tanned hides are worth “2” and raw hides are “1” then that is clearly false. I have adjusted the numbers accordingly above.)

This is precisely how increase works at a larger scale, whether it comes in the form of rent, interest, or profit. If the shoemaker needs to borrow money to purchase their tools, then they will need to profit off the tanner and farmer to pay the interest. They must choose between fraud and ruin.

No matter how complex the economy becomes, this law remains the same:

That the producer may live, his wages must repurchase his product.

The economists must realize this basic law of their pretend science, yet they defend property and the inequality of wages. If people cannot, with their combined wages, buy back what they have produced, how can they live? Why are they paying more than they are receiving?

This is an evil system. If wages were equal, the proprietor’s evil would be felt by all and would be easily recognized. But the inequality of wages masks the true nature of this system, as the extra burden is passed from the strong to the weak. The lowest class of people are stripped naked and eaten alive.

The right of increase does not allow things to be sold at their cost-price, which is the only thing laborers can afford to pay. “On the signs of those magnificent warehouses which he in his poverty admires, the laborer reads in large letters: ‘This is thy work, and thou shalt not have it.’”

The proprietor pushes them more and more into a state of misery. “Every man who makes a profit has entered into a conspiracy with famine.”

If the worker is unable to afford the product, then who is it made for? It must be for the wealthier consumers. It is for the rich.

When the whole of society produces together, it must be for the consumption of the entire society. If only a part of that society is consuming, then sooner or later the non-consuming side must become idle, and then wither away and die. Society devours itself.

Competition and Crisis

We can see this evil of competition working its way throughout society.

Suppose that 100,000 printers can make enough books for 34,000,000 people, but the price is so high that only a third of the people could afford them. They will have created three times too many books. To match this demand, they will need to reduce production. For simplicity, we can assume they work only a third of what they did before, remaining idle two days out of three. As they need their work to survive, they are essentially told not to live two out of three days.

The proprietor makes this problem worse. To increase their profits, they look to reduce their costs, introducing machinery that can make more products or make the same in less time. The workers see the factories opening up and rush for employment, but the more they work today, the more they will be idle tomorrow.

The manufacturer needs to pay the interest on their capital, so they try to keep production going by lowering expenses. They start reducing wages, replacing workers with more machinery, filling jobs with more easily exploitable workers (women, children, the less skilled, etc.). But thanks to the system of property, production outpaces consumption. Unable to buy back the product of their own labor, people are inevitably thrown out of work and sent to starve.

In these conditions, the manufacturer cannot pay the interest on their capital anymore. The creditors take back the funds they lent. Production halts entirely.

All of this is a result of competition. By this we do not only mean the rivalry of two parties engaged in the same business, but the general efforts of all businesses to get ahead of all other businesses.

Economic recessions are caused by interest on capital. In ancient times people rightly condemned this as usury, but did not have the courage to extend this to its other forms like farm-rent, house-rent, or profit. Whether we are lending land or money though, the nature of the crime is the same: robbery.

The more the capitalist receives in increase, the greater the commercial crisis will be. How bad things will get depends on the course of property.

If property is evenly distributed and little business is done, with the right of increase of each canceling out this same right in others, then there will be no harm. It would be almost the same as if there were no property at all. They do not have the full advantages of free association, but at least property would not be working this evil except perhaps in a few isolated victims. More typically, property is concentrated, and its damages tend to especially focus on commercial industries.

In short, property sells products to the laborer for more than it pays him for them, and is therefore impossible.

APPENDIX

Reorganizing Labor

Firstly, let’s address those reformers who think the solution to this problem is reorganizing labor, trying to increase efficiency.

Fourier claimed the solution to poverty was to organize labor better, yet still demand people be paid “according to his capital, his labor, and his skill.”

But reorganizing labor is pointless so long as property is maintained. No matter how much production is increased, this doesn’t fix the underlying problem that labor cannot meet its expenses. Any increased product will be lost.

Fourier’s system is so ridiculous some people expect him to even be a secret enemy of property, despite defending capital here. Proudhon does not share this opinion. “Charlatanism was too important a part for such a man to play, and sincerity too insignificant a one. I would rather think Fourier ignorant (which is generally admitted) than disingenuous.”

Inequality of Wages

Secondly, there are the reformists who think we can fix things by getting rid of these various forms of usury, but should keep the inequality of wages, such as paying doctors and ministers more than peasants, making sure people are paid “according to his capacities” as Saint-Simon and Fourier proposed.

But the disparity of wages is just another form of the right of increase.

Inequality of talent is a real thing, but is irrelevant on questions of rights. Rarity gives no special privilege for several reasons:

1. God’s intended purpose for this rarity was not to have the man of genius dominate others, but to perform the rarely needed function for the benefit of all.

2. Talent is a creation of society, not a gift of nature. Without society to provide education, this talent could not exist.

3. Capacities have no common unit of measurement. With the equality of conditions, inequality of talent is simply a matter of specialties.

4. The inequality of wages, like the right of increase, is impossible. All have labored, so all are equally entitled to the product of that social labor. All having received their equal share, where should the higher wages come from? We come back to the problem of their wages

While inequality of talents exists then, it does not grant a privilege. On the contrary, these greater talents are only developed through the assistance of society providing the education and opportunity.

However, we might say that equality does distribute according to capacity in a sense.

Economically, wages are the “reproductive consumption of the laborer.” The act of producing and consuming are united here, making them equal each other. Tasks that require more are given more, provided with the right material and instruments that particular function happens to need. What more could anyone demand?

“We must conclude, then, that in equality, and only in equality, St. Simon’s adage — To each according to his capacity to each capacity according to its results — finds its full and complete application.”

Overpopulation

Thirdly and finally, there are those who point to the problem of “overpopulation.” But as we’ve seen from our analysis, this so-called surplus population is generated by property itself. Hence in all ages, even when the population was much smaller, there was “overpopulation.”

From a brief look at history, we can determine two things then: (1) that poverty is independent from population, and (2) all the proposed solutions of charity and prisons have failed.

Seeing this, the economists have suggested a new path: limiting the growth of the population. If they were serious about this, you’d think they’d want to prevent everyone from having kids, but, strangely enough, they only ever seem to be focused on preventing the poor from having children and never the rich.

All the proposed options for how to do this are silly, ineffective, or cruel. The only real option they have is to ban and restrict sex itself. But by reducing the number of workers, we are reducing the amount we produce.

The real problem is not the lack of food, but that the proprietor is eating for two.

A full analysis for Proudhon’s solution to this problem is pushed off for another work though.

Proposition 6: Property is Impossible, Because it is the Mother of Tyranny

Let us view the government as public economy, being the supreme administration over public works and national possessions. In this point of view, we can look at citizens as stockholders in a massive joint-stock association, where they can cast their vote on what it should do.

But property introduces an inequality into this vote. By accumulating more of the nation’s capital to themselves, they have gained more shares in this joint-stock association, and can dictate what it will do. The small stockholders are at the mercy of the large stockholders, and turned into their slaves.

Property is incompatible with political and civil equality. Therefore it is impossible.

Realizing this, we can make three historical comments:

1. When the vote of the Third Estate was doubled in 1789, this grossly violated the property of the nobility and the clergy.

2. Every radical who proposes some reform is really attacking property (e.g. changing taxes, regulations, reforming education, reorganizing labor, etc.), despite claiming to defend it, proving they do not know what they do or wish.

3. The republican oath should be changed. Instead of, “I swear hatred to royalty,” the new member of a secret society should say, “I swear hatred to property.”

Proposition 7: Property is Impossible, Because, in Consuming Its Receipts, It Loses Them; In Hoarding Them, It Nullifies Them; And in Using Them as Capital, It Turns Them Against Production

Consuming

If workers are living machines, as the economists suppose them to be, then wages are the support for keeping these machines in good working order. The manufacturers that pay wages therefore do not view this as a loss since what they pay will come back to them in the product. Labor is therefore a kind of “productive consumption.”

By contrast, a proprietor is a machine which does not work, or works only at its own leisure and produces nothing. What they consume is not produced again, but is permanently lost to him.

Proprietor therefore impoverishes themselves through consumption.

To enjoy property, then, it is necessary to destroy it; to be a real proprietor, one must cease to be a proprietor.

Proprietors are therefore incapable of sustaining themselves. Instead, they have others labor in their place. The proprietor therefore claims to “produce” by attributing the actions of the laborer they hire to themselves. A robber might as well claim to “produce” by the same logic.

The proprietor cannot fix this by laboring either, as they are now just demanding to be paid twice.

The proprietor’s consumption destroys their own property. It would disappear entirely, if not regularly replenished by the labor of others.

Hoarding

The proprietor who consumes destroys their property, but they do even worse if they hoard it. It is not used by the proprietor or anyone, disappearing as if it went to another world.

But if they choose instead to hoard their property, no good is done. It is simply withdrawn from anyone’s use.

Using

If the proprietor decides to use their property as capital, it is inevitably turned against production. The more the right of increase is exercised, the more wages must be reduced. This ultimately destroys the proprietor’s source of income: the labor of others.

Suppose there were an estate of farmable land owned by a proprietor. Suppose the proprietor used their income to decorate the estate instead of increasing production. Can the proprietor demand more farm-rent on account of this beauty? Of course not, since the tenant cannot produce anymore compared to before. To increase their revenue, the proprietor must expand production. But this cannot go on forever.

This is why governments constantly need to raise taxes to pay the interest on their loans.

A nation is the tenant of a rich proprietor called the government, to whom it pays, for the use of the soil, a farm-rent called a tax.

The government borrows money in an unproductive way, and the taxpayer must continually pay interest on it. Because it is unproductive, it has no way of paying this debt off except to borrow more and more.

Historically, this is also why around Proudhon’s time people were discussing changing the rate of interest, reducing it from 5% to 4%. Ultimately, following the same logic, the interest could be abolished entirely. This would be a direct attack on property and move us towards equality. Seeing that this revolution against property is inevitable, a wise government should do the job itself voluntarily.

Proposition 8: Property is Impossible, Because Its Power of Accumulation is Infinite, and is Exercise Over Finite Quantities

There is no limit placed on interest.

Suppose a loan were made that extended over several generations. Let’s say $100 is lent at 5% interest over 600 years. This would turn $100 into $107,854,010,777,600. This would be 20 times the value of the whole Earth, and of course would be impossible to pay.

Anyone familiar with basic math can figure this out, but the Napoleonic Code puts no limit on interest on loans. How did no one catch this?

Proposition 9: Property is Impossible, Because it is Powerless Against Property

Property and Inequality of Rights

By the third corollary, we know that the right of increase oppresses the proprietor as well as the stranger.

It is said that the manufacturer must pay themself interest on their own home and capital. More accurately, they are paid by the public who buy their products. They cannot profit from the sale of something to themself, just like we do not gain by switching something from our right hand to our left.

If A profits off B though, then B must make this up by profiting off C, who must profit off D, and so on. Where does this end? With Z? According to JB Say, it is by the consumer, but that is just everyone A to Z. Is Z paid by A? Then no one makes a profit. If Z is simply left with the burden though, they are driven out from society, having lost a right to its benefits that it gave everyone else.

For the right of increase to be respected for A, it must be denied to Z. For property, one can only gain at the expense of someone else. The right of property can only be respected in some when it is destroyed for others.

Property, then, is inequality of rights; for, if it were not inequality of rights, it would be equality of goods, — in other words, it would not exist. Now, the charter guarantees to all equality of rights. Then, by the charter, property is impossible.

Property and Force

Can proprietor A take possession of the property of their neighbor, proprietor B? Of course not, says the proprietor. Let’s consider this more closely.

Capitalist businesses in competition with one another look to undercut their rivals. They reduce their own profits, and by doing so harm their neighbor. This undercutting therefore favors the wealthier business which can afford to undercut more, and the weaker party has no redress.

Likewise, two landowners will try to undercut each other, the larger and wealthier party undercutting their neighbor until they are forced to sell.

The right of property claims that the property of others may not be taken by force. But this is exactly what the proprietor does, conquering through their superior strength.

Therefore, without force, property is powerless against property, since without force it has no power to increase; therefore, without force, property is null and void.

Historically, this is especially clear in the colonial context. The colonial proprietor overpowers the native farmer and manufacturer. One way or another, the right of property is violated.

Property is the justice of barbarians: trial by combat.

Proposition 10: Property is Impossible, Because It is the Negation of Equality

The previous propositions collectively give a strong case of the impossibility of property, not only individually, but collectively.

Property violates economic justice, demanding something for nothing. (P1)

Property violates economic law, making production cost more than it's worth. (P2)

It also requires production to be proportional to capital, when really it's proportional to labor. (P3)

Property robs and kills the laborer, individually as homicide and collectively by making society eat itself. (P4 and P5)

It produces tyranny, concentrating power into the hands of proprietors. (P6)

It causes sterility and death, since its consumption is destructive. (P7)

It tries to expand infinitely, when the Earth is finite. (P8)

It only survives through force and fraud. (P9)

The common element is clear: Property violates equality, and is therefore impossible.

Link to the next chapter.