his time in the production of such things, he must have been led to it by the consideration of the power which these instruments add to his power; of the time which they save him; of the perfection and rapidity which they give to his labour; in a word, of the advantages which they procure for him. Now, these advantages, which have been prepared by labour, by the sacrifice of time which might have been used in a more immediate manner, are we bound, as soon as they are ready to be enjoyed, to confer them gratuitously upon another? Would it be an advance in social order, if the law decided thus, and citizens should pay officials for causing such a law to be executed by force? I venture to say, that there is not one amongst you who would support it. It would be to legalize, to organize, to systematize injustice itself, for it would be proclaiming that there are men born to render, and others born to receive, gratuitous services. Granted, then, that interest is just, natural, and lawful.
2nd. A second consequence, not less remarkable than the former, and, if possible, still more conclusive, to which I call your attention, is this:--Interest is not injurious to the borrower. I mean to say, the obligation in which the borrower finds himself, to pay a remuneration for the use of capital, cannot do any harm to his condition. Observe, in fact, that James and William are perfectly free, as regards the transaction to which the plane gave occasion. The transaction cannot be accomplished without the consent of the one as well as of the other. The worst which can happen is, that James may be too exacting; and in this case, William, refusing the loan, remains as he was before. By the fact of his agreeing to borrow, he proves that he considers it an advantage to himself; he proves, that after every calculation, including the remuneration, whatever it may be, required of him, he still finds it more profitable to borrow than not to borrow. He only determines to do so because he has compared the inconveniences with the advantages. He has calculated that the day on which he returns the plane, accompanied by the remuneration agreed upon, he will have effected more work, with the same labour, thanks to this tool. A profit will remain to him, otherwise he would not have borrowed. The two services of which we are speaking are exchanged according to the law which governs all exchanges, the law of supply and demand. The claims of James have a natural and impassable limit. This is the point in which the remuneration demanded by him would absorb all the advantage which William might find in making use of a plane. In this case, the borrowing would not take place. William would be bound either to make a plane for himself, or to do without one, which would leave him in his original condition. He borrows, because he gains by borrowing. I know very well what will be told me. You will say, William may be deceived, or, perhaps, he may be governed by necessity, and be obliged to submit to a harsh law.
It may be so. As to errors in calculation, they belong to the infirmity of our nature, and to argue from this against the transaction in question, is objecting the possibility of loss in all imaginable transactions, in every human act. Error is an accidental fact, which is incessantly remedied by experience. In short, everybody must guard against it. As far as those hard necessities are concerned, which force persons to burdensome borrowings, it is clear that these necessities exist previously to the borrowing. If William is in a situation in which he cannot possibly do without a plane, and must borrow one at any price, does this situation result from James having taken the trouble to make the tool? Does it not exist independently of this circumstance? However harsh, however severe James may be, he will never render the supposed condition of William worse than it is. Morally, it is true, the lender will be to blame; but, in an economical point of view, the loan itself can never be considered responsible for previous necessities, which it has not created, and which it relieves to a certain extent.
But this proves something to which I shall return. The evident interests of William, representing here the borrowers, there are many Jameses and planes, in other words, lenders and capitals. It is very evident, that if William can say to James,--"Your demands are exorbitant; there is no lack of planes in the world;" he will be in a better situation than if James's plane was the only one to be borrowed. Assuredly, there is no maxim more true than this--service for service. But left us not forget that no service has a fixed and absolute value, compared with others. The contracting parties are free. Each carries his requisitions to the farthest possible point, and the most favourable circumstance for these requisitions is the absence of rivalship. Hence it follows, that if there is a class of men more interested than any other in the formation, multiplication, and abundance of capitals, it is mainly that of the borrowers. Now, since capitals can only be formed and increased by the stimulus and the prospect of remuneration, let this class understand the injury they are inflicting on themselves when they deny the lawfulness of interest, when they proclaim that credit should be gratuitous, when they declaim against the pretended tyranny of capital, when they discourage saving, thus forcing capitals to become scarce, and consequently interests to rise.
3rd. The anecdote I have just related enables you to explain this apparently singular phenomenon, which is termed the duration or perpetuity of interest. Since, in lending his plane, James has been able, very lawfully, to make it a condition that it should be returned to him, at the end of a year, in the same state in which it was when he lent it, is it not evident that he may, at the expiration of the term, lend it again on the same conditions? If he resolves upon the latter plan, the plane will return to him at the end of every year, and that without end. James will then be in a condition to lend it without end; that is, he may derive from it a perpetual interest. It will be said, that the plane will be worn out. That is true; but it will be worn out by the hand and for the profit of the borrower. The latter has taken into account this gradual wear, and taken upon himself, as he ought, the consequences. He has reckoned that he shall derive from this tool an advantage, which will allow him to restore it in its original condition, after having realised a profit from it. As long as James does not use this capital himself, or for his own advantage--as long as he renounces the advantages which allow it to be restored to its original condition--he will have an incontestable right to have it restored, and that independently of interest.
Observe, besides, that if, as I believe I have shown, James, far from doing any harm to William, has done him a service in lending him his plane for a year; for the same reason, he will do no harm to a second, a third, a fourth borrower, in the subsequent periods. Hence you may understand that the interest of a capital is as natural, as lawful, as useful, in the thousandth year, as in the first. We may go still further. It may happen that James lends more than a single plane. It is possible, that by means of working, of saving, of privations, of order, of activity, he may come to lend a multitude of planes and saws; that is to say, to do a multitude of services. I insist upon this point,--that if the first loan has been a social good, it will be the same with all the others; for they are all similar, and based upon the same principle. It may happen, then, that the amount of all the remunerations received by our honest operative, in exchange for services rendered by him, may suffice to maintain him. In this case, there will be a man in the world who has a right to live without working. I do not say that he would be doing right to give himself up to idleness--but I say, that he has a right to do so; and if he does so, it will be at nobody's expense, but quite the contrary. If society at all understands the nature of things, it will acknowledge that this man subsists on services which he receives certainly (as we all do), but which he lawfully receives in exchange for other services, which he himself has rendered, that he continues to render, and which are quite real, inasmuch as they are freely and voluntarily accepted.
And here we have a glimpse of one of the finest harmonies in the social world. I allude to leisure: not that leisure that the warlike and tyrannical classes arrange for themselves by the plunder of the workers, but that leisure which is the lawful and innocent fruit of past activity and economy. In expressing myself thus, I know that I shall shock many received ideas. But see! Is not leisure an essential spring in the social machine? Without it, the world would never have had a Newton, a Pascal, a Fenelon; mankind would have been ignorant of all arts, sciences, and of those wonderful inventions prepared originally by investigations of mere curiosity; thought would have been inert--man would have made no progress. On the other hand, if leisure could only be explained by plunder and oppression--if it were a benefit which could only be enjoyed unjustly, and at the expense of others, there would be no middle path between these two evils; either mankind would be reduced to the necessity of stagnating in a vegetable and stationary life, in eternal ignorance, from the absence of wheels to its machine--or else it would have to acquire these wheels at the price of inevitable