In fact, revenue can increase only as productive soil increases: it is useless to build walls of marble, and work with plows of gold. But, since it is impossible to go on acquiring forever, to add estate to estate, to continue one’s possessions, as the Latins said; and since, moreover, the proprietor always has means wherewith to capitalize—it follows that the exercise of his right finally becomes impossible.
Well, in spite of this impossibility, property capitalizes, and in capitalizing increases its revenue; and, without stopping to look at the particular cases which occur in commerce, manufacturing operations, and banking, I will cite a graver fact—one which directly affects all citizens. I mean the indefinite increase of the budget.
The taxes increase every year. It would be difficult to tell in which department of the government the expenses increase; for who can boast of any knowledge as to the budget? On this point, the ablest financiers continually disagree. What is to be thought, I ask, of the science of government, when its professors cannot understand one another’s figures? Whatever be the immediate causes of this growth of the budget, it is certain that taxation increases at a rate which causes everybody to despair. Everybody sees it, everybody acknowledges it; but nobody seems to understand the primary cause.24 Now, I say that it cannot be otherwise—that it is necessary and inevitable.
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. Whenever the government makes war, loses or gains a battle, changes the outfit of its army, erects a monument, digs a canal, opens a road, or builds a railway, it borrows money, on which the taxpayers pay interest; that is, the government, without adding to its productive capacity, increases its active capital—in a word, capitalizes after the manner of the proprietor of whom I have just spoken.
Now, when a governmental loan is once contracted, and the interest is once stipulated, the budget cannot be reduced. For, to accomplish that, either the capitalists must relinquish their interest, which would involve an abandonment of property; or the government must go into bankruptcy, which would be a fraudulent denial of the political principle; or it must pay the debt, which would require another loan; or it must reduce expenses, which is impossible, since the loan was contracted for the sole reason that the ordinary receipts were insufficient; or the money expended by the government must be reproductive, which requires an increase of productive capacity—a condition excluded by our hypothesis; or, finally, the taxpayers must submit to a new tax in order to pay the debt—an impossible thing. For, if this new tax were levied upon all citizens alike, half, or even more, of the citizens would be unable to pay it; if the rich had to bear the whole, it would be a forced contribution—an invasion of property. Long financial experience has shown that the method of loans, though exceedingly dangerous, is much surer, more convenient, and less costly than any other method; consequently the government borrows—that is, goes on capitalizing—and increases the budget.
Then, a budget, instead of ever diminishing, must necessarily and continually increase. It is astonishing that the economists, with all their learning, have failed to perceive a fact so simple and so evident. If they have perceived it, why have they neglected to condemn it?
Historical Comment.—Much interest is felt at present in a financial operation which is expected to result in a reduction of the budget. It is proposed to change the present rate of increase, five percent. Laying aside the politico-legal question to deal only with the financial question—is it not true that, when five percent is changed to four percent, it will then be necessary, for the same reasons, to change four to three; then three to two, then two to one, and finally to sweep away increase altogether? But that would be the advent of equality of conditions and the abolition of property. Now it seems to me, that an intelligent nation should voluntarily meet an inevitable revolution halfway, instead of suffering itself to be dragged after the car of inflexible necessity.
Eighth Proposition
Property is impossible, because its power of Accumulation is infinite, and is exercised only over finite quantities.
If men, living in equality, should grant to one of their number the exclusive right of property; and this sole proprietor should lend one hundred francs to the human race at compound interest, payable to his descendants twenty-four generations hence—at the end of six hundred years this sum of one hundred francs, at five percent, would amount to 107,854,010,777,600 francs; two thousand six hundred and ninety-six and one-third times the capital of France (supposing her capital to be 40,000,000,000), or more than twenty times the value of the terrestrial globe!
Suppose that a man, in the reign of St. Louis, had borrowed one hundred francs, and had refused—he and his heirs after him—to return it. Even though it were known that the said heirs were not the rightful possessors, and that prescription had been interrupted always at the right moment—nevertheless, by our laws, the last heir would be obliged to return the one hundred francs with interest, and interest on the interest; which in all would amount, as we have seen, to nearly one hundred and eight thousand billions.
Every day, fortunes are growing in our midst much more rapidly than this. The preceding example supposed the interest equal to one-twentieth of the capital—it often equals one-tenth, one-fifth, one-half of the capital; and sometimes the capital itself.
The Fourierists—irreconcilable enemies of equality, whose partisans they regard as sharks—intend, by quadrupling production, to satisfy all the demands of capital, labor, and skill. But, should production be multiplied by four, ten, or even one hundred, property would soon absorb, by its power of accumulation and the effects
