Chapter VI: Fourth Period – Monopoly

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.

Chapter VI: Fourth Period – Monopoly

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

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 labour, 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 injustice; in fact, there is something in it which, pertaining to society as well as to man, legitimates it: that is the positive 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 without it progress comes to a standstill, and that with it labour becomes stationary and civilisation disappears.

§I 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 labour and the constitution of values shall be necessities and laws.

Therefore by the single fact of its logical generation monopoly 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 labour is the specification of the worker considered especially as intelligence; that the creation of machinery and the organisation 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 speciality 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.

[…]

What, then, is this reality, known to all peoples, and nevertheless still so badly defined, which is called interest or the price of a loan, and which gives rise to the fiction of the productivity of capital?

Everybody knows that an entrepreneur, when he calculates his costs of production, generally divides them into three classes: 1, the values consumed and services paid for; 2, his personal salary; 3, recovery of his capital with interest. From this last class of costs is born the distinction between entrepreneur and capitalist, although these two titles always express but one faculty, monopoly.

Thus an industrial enterprise which yields only interest on capital and nothing for net product, is an insignificant enterprise, which results only in a transformation of values without adding anything to wealth, — an enterprise, in short, which has no further reason for existence and is immediately abandoned. Why is it, then, that this interest on capital is not regarded as a sufficient supplement of net product? Why is it not itself the net product?

Here again the philosophy of the economists is wanting. To defend usury they have pretended that capital was productive, and they have changed a metaphor into a reality. The anti-proprietary socialists have had no difficulty in overturning their sophistry; and through this controversy the theory of capital has fallen into such disfavour that today, in the minds of the people, capitalist and idler are synonymous terms. Certainly it is not my intention to retract what I myself have maintained after so many others, or to rehabilitate a class of citizens which so strangely misconceives its duties: but the interests of science and of the proletariat itself oblige me to complete my first assertions and maintain true principles.

[…]

If an entrepreneur is his own capitalist, it may happen that he will content himself with a profit equal to the interest on his investment: but in that case it is certain that his industry is no longer making progress and consequently is suffering. This we see when the capitalist is distinct from the entrepreneur: for then, after the interest is paid, the manufacturer’s profit is absolutely nothing; his industry becomes a perpetual peril to him, from which it is important that he should free himself as soon as possible. For as society’s comfort must develop in an indefinite progression, so the law of the producer is that he should continually realise a surplus: otherwise his existence is precarious, monotonous, fatiguing. The interest due to the capitalist by the producer therefore is like the lash of the planter cracking over the head of the sleeping slave; it is the voice of progress crying: “On, on! Toil, toil!” Man’s destiny pushes him to happiness: that is why it denies him rest.

[…]

I have proved, and better, I imagine, than it has ever been proved before:

That monopoly is necessary, since it is the antagonism of competition;

That it is essential to society, since without it society would never have emerged from the primeval forests and without it would rapidly go backwards;

Finally, that it is the crown of the producer, when, whether by net product or by interest on the capital which he devotes to production, it brings to the monopolist that increase of comfort which his foresight and his efforts deserve.

Shall we, then, with the economists, glorify monopoly, and consecrate it to the benefit of well-secured conservatives? I am willing, provided they in turn will admit my claims in what is to follow, as I have admitted theirs in what has preceded.

§II The disasters in labour 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-workers. Competition was civil war, monopoly is the massacre of the prisoners.

[…]

But the distressing feature in the spectacle of monopoly’s effects is the sight of the unfortunate workers blaming each other for their misery and imagining that by uniting and supporting each other they will prevent the reduction of wages. “The Irish,” says an observer, “have given a disastrous lesson to the working classes of Great Britain… They have taught our workers the fatal secret of confining their needs to the maintenance of animal life alone, and of contenting themselves, like savages, with the minimum of the means of subsistence sufficient to prolong life… Instructed by this fatal example, yielding partly to necessity, the working classes have lost that laudable pride which led them to furnish their houses properly and to multiply about them the decent conveniences which contribute to happiness.”

I have never read anything more afflicting and more stupid. And what would you have these workers do? The Irish came: should they have been massacred? Wages were reduced: should death have been accepted in their stead? Necessity commanded, as you say yourselves. Then followed the interminable hours, disease, deformity, degradation, debasement, and all the signs of industrial slavery: all these calamities are born of monopoly and its sad predecessors, — competition, machinery, and the division of labour: and you blame the Irish!

At other times the workers blame their luck, and exhort themselves to patience: this is the counterpart of the thanks which they address to Providence, when labour is abundant and wages are sufficient.

I find in an article published by M. Leon Faucher, in the Journal des Economistes (September, 1845), that the English workers lost some time ago the habit of combining, which is surely a progressive step on which they are only to be congratulated, but that this improvement in the morale of the workers is due especially to their economic instruction. “It is not upon the manufacturers, cried a spinner at the meeting in Bolton, that wages depend. In periods of depression the employers, so to speak, are only the lash with which necessity is armed; and whether they will or no, they have to strike. The regulative principle is the relation of supply to demand; and the employers have not this power…. Let us act prudently, then; let us learn to be resigned to bad luck and to make the most of good luck: by seconding the progress of our industry, we shall be useful not only to ourselves, but to the entire country.” (Applause.)

Very good: well-trained, model workers, these! What men these spinners must be that they should submit without complaint to the lash of necessity, because the regulative principle of wages is supply and demand! M. Leon Faucher adds with a charming simplicity: “English workers are fearless reasoners. Give them a false principle, and they will push it mathematically to absurdity, without stopping or getting frightened, as if they were marching to the triumph of the truth.” For my part, I hope that, in spite of all the efforts of economic propagandism, French workers will never become reasoners of such power. [The notions of] Supply and demand, as well as [of] the lash of necessity, no longer have any hold on their minds. England lacked this poverty [of reasoning power]: it will not cross the channel.[24]

[…]

Monopoly, which just now seemed to us so well founded in justice, is the more unjust because it not only makes wages illusory, but deceives the worker in the very valuation of his wages by assuming in relation to him a false title, a false capacity.

M. de Sismondi, in his Studies of Social Economy, observes somewhere that, when a banker delivers to a merchant bank-notes in exchange for his values, far from giving credit to the merchant, he receives it, on the contrary, from him.

“This credit,” adds M. de Sismondi, “is in truth so short that the merchant scarcely takes the trouble to inquire whether the banker is worthy, especially as the former asks credit instead of granting it.”

So, according to M. de Sismondi, in the issue of bank paper, the functions of the merchant and the banker are inverted: the first is the creditor, and the second is the credited.

Something similar takes place between the monopolist and wage-worker.

In fact, the workers, like the merchant at the bank, ask to have their labour discounted; in right, the entrepreneur ought to furnish them bonds and security. I will explain myself.

In any exploitation, no matter of what sort, the entrepreneur cannot legitimately claim, in addition to his own personal labour, anything but the IDEA: as for the EXECUTION, the result of the co-operation of numerous workers, that is an effect of collective power, with which the authors, as free in their action as the chief, can produce nothing which should go to him gratuitously. Now, the question is to ascertain whether the amount of individual wages paid by the entrepreneur is equivalent to the collective effect of which I speak: for, were it otherwise, Say’s axiom, Every product is worth what it costs, would be violated.

“‘The capitalist,’ they say, ‘has paid the workers their daily wages at a rate agreed upon; consequently he owes them nothing.’ To be accurate, it must be said that he has paid as many times one day’s wage as he has employed workers, — which is not at all the same thing. For he has paid nothing for that immense power which results from the union of workers and the convergence and harmony of their efforts; that saving of expense, secured by their formation into a workshop; that multiplication of product, foreseen, it is true, by the capitalist, but realised by free forces. Two hundred grenadiers, working under the direction of an engineer, stood the obelisk upon its base in a few hours; do you think that one man could have accomplished the same task in two hundred days? Nevertheless, on the books of the capitalist, the amount of wages is the same in both cases, because he allots to himself the benefit of the collective power. Now, of two things one: either this is usurpation on his part, or it is error.” (What is Property?: Chapter III.)

To properly exploit the mule-jenny, engineers, builders, clerks, brigades of workingmen and workingwomen of all sorts, have been needed. In the name of their liberty, of their security, of their future, and of the future of their children, these workers, on engaging to work in the mill, had to make reserves; where are the letters of credit which they have delivered to the employers? Where are the guarantees which they have received? What! millions of men have sold their arms and parted with their liberty without knowing the import of the contract; they have engaged themselves upon the promise of continuous work and adequate reward; they have executed with their hands what the thought of the employers had conceived; they have become, by this collaboration, associates in the enterprise: and when monopoly, unable or unwilling to make further exchanges, suspends its manufacture and leaves these millions of workers without bread, they are told to be resigned! By the new processes they have lost nine days of their labour out of ten; and for reward they are pointed to the lash of necessity flourished over them! Then, if they refuse to work for lower wages, they are shown that they punish themselves. If they accept the rate offered them, they lose that noble pride, that taste for decent conveniences which constitute the happiness and dignity of the worker and entitle him to the sympathies of the rich. If they combine to secure an increase of wages, they are thrown into prison! Whereas they ought to prosecute their exploiters in the courts, on them the courts will avenge the violations of liberty of commerce! Victims of monopoly, they will suffer the penalty due to the monopolists! O justice of men, stupid courtesan, how long, under your goddess’s tinsel, will you drink the blood of the slaughtered proletarian?

Monopoly has invaded everything, — land, labour, and the instruments of labour, products and the distribution of products. Political economy itself has not been able to avoid admitting it.

[…]

Finally, monopoly, by a sort of instinct of self-preservation, has perverted even the idea of association, as something that might infringe upon it, or, to speak more accurately, has not permitted its birth.

Who could hope today to define what association among men should be? The law distinguishes two species and four varieties of civil societies, and as many commercial societies, from the simple partnership to the joint-stock company. I have read the most respectable commentaries that have been written upon all these forms of association, and I declare that I have found in them but one application of the routine practices of monopoly between two or more partners who unite their capital and their efforts against everything that produces and consumes, that invents and exchanges, that lives and dies. The sine qua non of all these companies is capital, whose presence alone constitutes them and gives them a basis; their object is monopoly, — that is, the exclusion of all other workers and capitalists, and consequently the negation of social universality so far as persons are concerned.

Thus, according to the definition of the statute, a commercial society which should lay down as a principle the right of any stranger to become a member upon his simple request, and to straightway enjoy the rights and prerogatives of associates and even managers, would no longer be a company; the courts would officially pronounce its dissolution, its non-existence. So, again, articles of association[25] in which the contracting parties should stipulate no contribution of capital, but, while reserving to each the express right to compete with all, should confine themselves to a reciprocal guarantee of labour and wages, saying nothing of the branch of exploitation, or of capital, or of interest, or of profit and loss, — such articles would seem contradictory in their tenor, as destitute of purpose as of reason, and would be annulled by the judge on the complaint of the first rebellious associate. Agreements thus drawn up could give rise to no judicial action; people calling themselves the associates of everybody would be considered associates of nobody; treatises contemplating guarantee and competition between associates at the same time, without any mention of social capital and without any designation of purpose, would pass for a work of transcendental charlatanism, whose author could readily be sent to a madhouse, provided the magistrates would consent to regard him as only a lunatic.

And yet it is proved, by the most authentic testimony which history and social economy furnish, that humanity has been thrown naked and without capital upon the earth which it cultivates; consequently that it has created and is daily creating all the wealth that exists; that monopoly is only a relative view serving to designate the grade of the worker, with certain conditions of enjoyment; and that all progress consists, while indefinitely multiplying products, in determining their proportionality, — that is, in organising labour and comfort by division, machinery, the workshop, education, and competition. On the other hand, it is evident that all the tendencies of humanity, both in its politics and in its civil laws, are towards universalisation, — that is, towards a complete transformation of the idea of the company as determined by our statutes.

Whence I conclude that articles of association which should regulate, no longer the contribution of the associates, — since each associate, according to economic theory, is supposed to possess absolutely nothing upon his entrance into the company, — but the conditions of labour and exchange, and which should allow access to all who might present themselves, — I conclude, I say, that such articles of association would contain nothing that was not rational and scientific, since they would be the very expression of progress, the organic formula of labour, and since they would reveal, so to speak, humanity to itself by giving it the rudiment of its constitution.[26]

[…]

As for the personal composition of the [joint-stock] company, it naturally divides itself into two categories, — the managers and the stockholders. The managers, very few in number, are chosen from the promoters, organisers, and patrons of the enterprise: in truth, they are the only associates. The stockholders, compared with this little government, which administers the society with full power, are a people of taxpayers who, strangers to each other, without influence and without responsibility, have nothing to do with the affair beyond their investments. They are lenders at a premium, not associates.

One can see from this how all the industries of the kingdom could be carried on by such companies, and each citizen, thanks to the facility for multiplying his shares, be interested in all or most of these companies without thereby improving his condition: it might happen even that it would be more and more compromised. For, once more, the stockholder is the beast of burden, the exploitable material of the company: not for him is this company formed. In order that association may be real, he who participates in it must do so, not as a gambler, but as an active factor; he must have a deliberative voice in the council; his name must be expressed or implied in the title of the society; everything regarding him, in short, should be regulated in accordance with equality. But these conditions are precisely those of the organisation of labour, which is not taken into consideration by the code; they form the ULTERIOR object of political economy, and consequently are not to be taken for granted, but to be created, and, as such, are radically incompatible with monopoly.[27]

Socialism, in spite of its high-sounding name, has so far been no more fortunate than monopoly in the definition of society: we may even assert that, in all its plans of organisation, it has steadily shown itself in this respect a plagiarist of political economy. M. Blanc, whom I have already quoted in discussing competition, and whom we have seen by turns as a partisan of the hierarchical principle, an officious defender of inequality, preaching communism, denying with a stroke of the pen the law of contradiction because he cannot conceive it, aiming above all at power as the final sanction of his system, — M. Blanc offers us again the curious example of a socialist copying political economy without suspecting it, and turning continually in the vicious circle of proprietary routine. M. Blanc really denies the sway of capital; he even denies that capital is equal to labour in production, in which he is in accord with healthy economic theories. But he can not or does not know how to dispense with capital; he takes capital for his point of departure; he appeals to the State for its silent partnership: that is, he gets down on his knees before the capitalists and recognises the sovereignty of monopoly. Hence the singular contortions of his dialectics. I beg the reader’s pardon for these eternal personalities: but since socialism, as well as political economy, is personified in a certain number of writers, I cannot do otherwise than quote its authors.

“Has or has not capital,” said La Phalange, “in so far as it is a faculty in production, the legitimacy of the other productive faculties? If it is illegitimate, its pretensions to a share of the product are illegitimate; it must be excluded; it has no interest to receive: if, on the contrary, it is legitimate, it cannot be legitimately excluded from participation in the profits, in the increase which it has helped to create.”

The question could not be stated more clearly. M. Blanc holds, on the contrary, that it is stated in a very confused manner, which means that it embarrasses him greatly, and that he is much worried to find its meaning.

In the first place, he supposes that he is asked “whether it is equitable to allow the capitalist a share of the profits of production equal to the worker’s?” To which M. Blanc answers unhesitatingly that that would be unjust. Then follows an outburst of eloquence to establish this injustice.

Now, the phalansterian does not ask whether the share of the capitalist should or should not be equal to the worker’s; he wishes to know simply whether he is to have a share. And to this M. Blanc makes no reply.

Is it meant, continues M. Blanc, that capital is indispensable to production, like labour itself? Here M. Blanc distinguishes: he grants that capital is indispensable, as labour is, but not to the extent that labour is.

Once again, the phalansterian does not dispute as to quantity, but as to right.

Is it meant — it is still M. Blanc who interrogates — that all capitalists are not idlers? M. Blanc, generous to capitalists who work, asks why so large a share should be given to those who do not work? A flow of eloquence as to the impersonal services of the capitalist and the personal services of the worker, terminated by an appeal to Providence.

For the third time, you are asked whether the participation of capital in profits is legitimate, since you admit that it is indispensable in production.

At last M. Blanc, who has understood all the time, decides to reply that, if he allows interest to capital, he does so only as a transitional measure and to ease the descent of the capitalists. For the rest, his project leading inevitably to the absorption of private capital in association, it would be folly and an abandonment of principle to do more. M. Blanc, if he had studied his subject, would have needed to say but a single phrase: I deny capital.

Thus M. Blanc, — and under his name I include the whole of socialism, — after having, by a first contradiction of the title of his book, ORGANISATION OF LABOUR, declared that capital was indispensable in production, and consequently that it should be organised and participate in profits like labour, by a second contradiction rejects capital from organisation and refuses to recognise it: by a third contradiction he who laughs at decorations and titles of nobility distributes civic crowns, rewards, and distinctions to such litterateurs inventors, and artists as shall have deserved well of the country; he allows them salaries according to their grades and dignities; all of which is the restoration of capital as really, though not with the same mathematical precision, as interest and net product: by a fourth contradiction M. Blanc establishes this new aristocracy on the principle of equality, — that is, he pretends to vote masterships to equal and free associates, privileges of idleness to workers, spoliation in short to the despoiled: by a fifth contradiction he rests this equalitarian aristocracy on the basis of a power endowed with great force, — that is, on despotism, another form of monopoly: by a sixth contradiction, after having, by his encouragements to labour and the arts, tried to proportion reward to service, like monopoly, and wages to capacity, like monopoly, he sets himself to eulogise life in common, labour and consumption in common, which does not prevent him from wishing to withdraw from the effects of common indifference, by means of national encouragements taken out of the common product, the grave and serious writers whom common readers do not care for: by a seventh contradiction…. but let us stop at seven, for we should not have finished at seventy-seven.

[…]

Thus M. Blanc asks for State aid and the establishment of national workshops; thus Fourier asked for six million francs, and his followers are still engaged today in collecting that sum; thus the communists place their hope in a revolution which shall give them authority and the treasury, and exhaust themselves in waiting for useless subscriptions. Capital and power, secondary organs in society, are always the gods whom socialism adores: if capital and power did not exist, it would invent them. Through its anxieties about power and capital, socialism has completely overlooked the meaning of its own protests: much more, it has not seen that, in involving itself, as it has done, in the economic routine, it has deprived itself of the very right to protest. It accuses society of antagonism, and through the same antagonism it goes in pursuit of reform. It asks capital for the poor workers, as if the misery of workers did not come from the competition of capitalists as well as from the factitious opposition of labour and capital; as if the question were not today precisely what it was before the creation of capital, — that is, still and always a question of equilibrium; as if, in short, — let us repeat it incessantly, let us repeat it to satiety, — the question were henceforth of something other than a synthesis of all the principles brought to light by civilisation, and as if, provided this synthesis, the idea which leads the world, were known, there would be any need of the intervention of capital and the State to make them evident.

[…]

End Notes

[24] Marx turns Proudhon’s very obvious sarcasm into: “‘Well and good,’ cries M. Proudhon, ‘these are well developed model workmen, &c., &c. The poverty we have here does not exist in England; it cannot cross the Channel.’” His claim that “M. Proudhon is so unfortunate as to take the foremen and overseers for ordinary workmen, and to urge upon them the advice not to cross the Channel” is equally misleading as is the notion that Proudhon “cordially agrees with the foremen of Bolton because they determine value by supply and demand.” (183, 184, 185) (Editor)

[25] The term “acte de société” literally means “deed of partnership.” Proudhon is referring to the process of creating and joining workplaces, contrasting the forms created within capitalism (with wage-labour as management rights reflect the capital provided) to the socialised, egalitarian, and self-managed ones of mutualism (with management rights granted automatically on joining). It should also be noted that “société” can be translated as “society” as well as “company.” (Editor)

[26] Cf. Marx: “[Proudhon’s] whole system rests on the labour commodity, on labour which is trafficked, bought and sold…” (63) Proudhon repeatedly contrasts the associated (self-managed) workplaces of mutualism with capitalist firms with their “hierarchical organisation” ( Chapter IV: section II) in which wage-workers toil “under a master” (Chapter XI: section III) after they “parted with their liberty” and “have sold their arms” to a boss who appropriates both the “collective power” (Chapter VI: section II) and the “surplus of labour” they create ( Chapter XI: section IV).

[27] Possibly these paragraphs will not be clear to all without the explanation that the form of association discussed in them, called in French the commandite, is a joint-stock company to which the shareholders simply lend their capital, without acquiring a share in the management or incurring responsibility for the results thereof. (Translator)