P.J. Proudhon on Monopoly (1846)

Proudhon, who was born in 1809, was a French philosopher, metaphysician, anarchist, free thinker, economist, and the father of an alternative economic Weltanschaung. Proudhon, who is highly underrated, is one of a few thinker who really influenced my Weltanschaung. Proudhon was highly intelligent, that’s one reason, next to many others more sinister, why his ideas did not succeed, many simply could not conceive his theories. Fallowing Proudhon, social and economical chaos is the only reason for the existence of government, in the dissolution of economical contradictions, the cause for the economical chaos and it’s social consequences, Proudhon saw the mean to arrive at social justice and in extension stability.

Proudhon believed in a direct relationship between reason; available intelligence in relation to the capacity to make use of it, and liberty, fallowing Proudhon, liberty may only be attained and increased in a sustainable way in harmony with reason, the amount of liberty attainable, in individual and social context, is determined by the absolute level of reason, an increase in reason connected with an increasing capacity for liberty; “summa lex summa libertas” (the fullness of liberty lies in the fullness of reason)

Proudhon was a very outspoken critic of communism, Marx wrote “The Misery of Philosophy” as answer to Proudhon’s “The Philosophy of Misery”.



Part from Proudhon’s “The Philosophy of Misery”.
by Pierre-Joseph Proudhon 1809-1865, French Philosopher, Economist

MONOPOLY, the exclusive commerce, exploitation, or enjoyment of a thing.

Monopoly is the natural opposite of competition. This simple observation suffices, as we have remarked, to overthrow the utopias based upon the idea of abolishing competition, as if its contrary were association and fraternity. Competition is the vital force which animates the collective being: to destroy it, if such a supposition were possible, would be to kill society.

But, the moment we admit competition as a necessity, it implies the idea of monopoly, since monopoly is, as it were, the seat of each competing individuality. Accordingly the economists have demonstrated — and M. Rossi has formally admitted it — that monopoly is the form of social possession, outside of which there is no labor, no product, no exchange, no wealth. Every landed possession is a monopoly; every industrial utopia tends to establish itself as a monopoly; and the same must be said of other functions not included in these two categories.

Monopoly in itself, then, does not carry the idea of in-justice; in fact, there is something in it which, pertaining to society as well as to man, legitimates it: that is the posi-tive side of the principle which we are about to examine.

But monopoly, like competition, becomes anti-social and disastrous: how does this happen? By abuse, reply the economists. And it is to defining and repressing the abuses of monopoly that the magistrates apply themselves; it is in denouncing them that the new school of economists glories.

We shall show that the so-called abuses of monopoly are only the effects of the development, in a negative sense, of legal monopoly; that they cannot be separated from their principle without ruining this principle; consequently, that they are inaccessible to the law, and that all repression in this direction is arbitrary and unjust. So that monopoly, the constitutive principle of society and the condition of wealth, is at the same time and in the same degree a principle of spoliation and pauperism; that, the more good it is made to produce, the more evil is received from it; that withoutit progress comes to a standstill, and that with it labor becomes stationary and civilization

1. — Necessity of monopoly.

Thus monopoly is the inevitable end of competition, which engenders it by a continual denial of itself: this generation of monopoly is already its justification. For, since competition is inherent in society as motion is in living beings, monopoly which comes in its train, which is its object and its end, and without which competition would not have been accepted, — monopoly is and will remain legitimate as long as competition, as long as mechanical processes and industrial combinations, as long, in fact, as the division of labor and the constitution of values shall be necessities and laws.

Therefore by the single fact of its logical generation mono-poly is justified. Nevertheless this justification would seem of little force and would end only in a more energetic rejection of competition than ever, if monopoly could not in turn posit itself by itself and as a principle.

In the preceding chapters we have seen that division of labor is the specification of the workman considered especially as intelligence; that the creation of machinery and the organization of the workshop express his liberty; and that, by competition, man, or intelligent liberty, enters into action. Now, monopoly is the expression of victorious liberty, the prize of the struggle, the glorification of genius; it is the strongest stimulant of all the steps in progress taken since the beginning of the world: so true is this that, as we said just now, society, which cannot exist with it, would not have been formed without it.

Where, then, does monopoly get this singular virtue, which the etymology of the word and the vulgar aspect of the thing would never lead us to suspect?

Monopoly is at bottom simply the autocracy of man over himself: it is the dictatorial right accorded by nature to every producer of using his faculties as he pleases, of giving free play to his thought in whatever direction it prefers, of speculating, in such specialty as he may please to choose, with all the power of his resources, of disposing sovereignly of the instruments which he has created and of the capital accumulated by his economy for any enterprise the risks of which he may see fit to accept on the express condition of enjoying alone the fruits of his discovery and the profits of his venture.

This right belongs so thoroughly to the essence of liberty that to deny it is to mutilate man in his body, in his soul, and in the exercise of his faculties, and society, which progresses only by the free initiative of individuals, soon lacking explorers, finds itself arrested in its onward march. ..

To avoid .. dilemma what is proposed? Compensation? In the first place, compensation is impossible: all values being monopolized, where would society get the means to indemnify the monopolists? What would be its mortgage? On the other hand, compensation would be utterly useless: after all the monopolies had been compensated, it would remain to organize industry. Where is the system? Upon what is opinion settled? What problems have been solved? If the organization is to be of the hierarchical type, we reenter the system of monopoly; if of the democratic, we return to the point of departure, for the compensated industries will fall into the public domain, — that is, into competition, — and gradually will become monopolies again; if, finally, of the communistic, we shall simply have passed from one impossibility to another, for, as we shall demonstrate at the proper time, communism, like competition and monopoly, is antinomical, impossible. ..

Some socialists, very unhappily inspired — I say it with all the force of my conscience — by evangelical abstractions, believe that they have solved the difficulty by these fine maxims: “Inequality of capacities proves the inequality of duties”; “You have received more from nature, give more to your brothers,” and other high-sounding and touching phrases, which never fail of their effect on empty heads, but which nevertheless are as simple as anything that it is possible to imagine. The practical formula deduced from these marvellous adages is that each laborer owes all his time to society, and that society should give back to him in exchange all that is necessary to the satisfaction of his wants in proportion to the resources at its disposal.

May my communistic friends forgive me! I should be less severe upon their ideas if I were not irreversibly convinced, in my reason and in my heart, that communism, republicanism, and all the social, political, and religious utopias which disdain facts and criticism, are the greatest obstacle which progress has now to conquer. Why will they never understand that fraternity can be established only by justice; that justice alone, the condition, means, and law of liberty and fraternity, must be the object of our study; and that its determination and formula must be pursued without relaxation, even to the minutest details? Why do writers familiar with economic language forget that superiority of talents is synonymous with superiority of wants, and that, instead of expecting more from vigorous than from ordinary personalities, society should constantly look out that they do not receive more than they render, when it is already so hard for the mass of mankind to render all that it receives? ..

Double the normal wages of the workman, and you invite him to idleness, humiliate his dignity, and demoralize his conscience; take away from him the legitimate price of his efforts, and you either excite his anger or exalt his pride. In either case you damage his fraternal feelings. On the contrary, make enjoyment conditional upon labor, the only way provided by nature to associate men and make them good and happy, and you go back under the law of economic dis-tribution, products are bought with products. Communism, as I have often complained, is the very denial of society in its foundation, which is the progressive equivalence of functions and capacities. The communists, toward whom all socialism tends, do not believe in equality by nature and education; they supply it by sovereign decrees which they cannot carry out, whatever they may do. Instead of seeking justice in the harmony of facts, they take it from their feelings, calling justice everything that seems to them to be love of one’s neighbor, and incessantly confounding matters of reason with those of sentiment. ..

Monopoly owes its existence both to nature and to man: it has its source at once in the profoundest depths of our conscience and in the external fact of our individualization. Just as in our body and our mind everything has its specialty and property, so our labor presents itself with a proper and specific character, which constitutes its quality and value. And as labor cannot manifest itself without material or an object for its exercise, the person necessarily attracting the thing, monopoly is established from subject to object as infallibly as duration is constituted from past to future. Bees, ants, and other animals living in society seem endowed individually only with automatism; with them soul and instinct are almost exclusively collective. That is why, among such animals, there can be no room for privilege and monopoly; why, even in their most volitional operations, they neither consult nor deliberate. But, humanity being individualized in its plurality, man becomes inevitably a monopolist, since, if not a monopolist, he is nothing; and the social problem is to find out, not how to abolish, but how to reconcile, all monopolies. ..

2. — The disasters in labor and the perversion of ideas caused by monopoly.

Like competition, monopoly implies a contradiction in its name and its definition. In fact, since consumption and production are identical things in society, and since selling is synonymous with buying, whoever says privilege of sale or exploitation necessarily says privilege of consumption and purchase: which ends in the denial of both. Hence a prohibition of consumption as well as of production laid by monopoly upon the wage-receivers. Competition was civil war, monopoly is the massacre of the prisoners.

These various propositions are supported by all sorts of evidence, — physical, algebraic, and metaphysical. What I shall add will be only the amplified exposition: their simple announcement demonstrates them.

Every society considered in its economic relations naturally divides itself into capitalists and laborers, employers and wage-receivers, distributed upon a scale whose degrees mark the income of each, whether this income be composed of wages, profit, interest, rent, or dividends.

From this hierarchical distribution of persons and incomes it follows that Say’s principle just referred to: In a nation the net product is equal to the gross product, is no longer true, since, in consequence of monopoly, the selling price is much higher than the cost price. Now, as it is the cost price nevertheless which must pay the selling price, since a nation really has no market but itself, it follows that exchange, and consequently circulation and life, are impossible.

In France, twenty millions of laborers, engaged in all the branches of science, art, and industry, produce everything which is useful to man. Their aggregate annual wages amount, it is estimated, to twenty thousand millions; but, in consequence of the profit (net product and interest) accruing to monopolists, twenty-five thousand millions must be paid for their products. Now, as the nation has no other buyers than its wage-receivers and wage-payers, and as the latter do not pay for the former, and as the selling-price of merchandise is the same for all, it is clear that, to make circulation possible, the laborer would have to pay five for that for which he has received but four. — What is Property: Chapter IV.[1]

This, then, is the reason why wealth and poverty are cor-relative, inseparable, not only in idea, but in fact; this is the reason why they exist concurrently; this is what justifies the pretension of the wage-receiver that the rich man possesses no more than the poor man, except that of which the latter has been defrauded. After the monopolist has drawn up his account of cost, profit, and interest, the wage-paid consumer draws up his; and he finds that, though promised wages stated in the contract as one hundred, he has really been given but seventy-five. Monopoly, therefore, puts the wage-receivers into bankruptcy, and it is strictly true that it lives upon the spoils.

Six years ago (1840 in his first book “what is property?”) I brought out this frightful contradiction: why has it not been thundered through the press? Why have no teachers of renown warned public opinion? Why have not those who demand political rights for the workingman proclaimed that he is robbed? Why have the economists kept silent? Why?

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~ by metadave on February 6, 2008.

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