Man of Paradox: Pierre-​Joseph Proudhon

“My real masters,” Proudhon writes, “those who have caused fertile ideas to spring up in my mind, are three in number: first, Bible; next, Adam Smith; and last, Hegel.” Hegel’s dialectical approach is clearly in evidence in all of Proudhon’s writings. In his Philosophy of Misery, Proudhon frames an antagonism between political economy and socialism, the former “optimists with regard to accomplished facts,” the latter “reproach[ing] economic theories…with leaving the future hopeless.” But engaging Hegel’s dialectical approach, Proudhon contends that “in a conflict of this nature the truth is found, not in the exclusion of one of the opposites, but wholly and solely in the reconciliation of the two.” It is a scientific fact, Proudhon argues, “that every antagonism, whether in Nature or in ideas, is resolvable in a more general fact or in a complex formula, which harmonizes the opposing factors by absorbing them, so to speak, in each other.”

Proudhon thus establishes a dichotomy by reference to the status quo, with socialism encompassing a range of alternatives focused on the “oppression, misery, and crime” of the existing social and economic order. Political economy, Proudhon says, represents tradition, socialism utopia. It may surprise the contemporary reader, particularly the libertarian, to observe the flexibility and breadth with which socialists of Proudhon’s day defined their school of thought. Indeed we can hardly regard it as a single school it all. Socialism was rather a broad current of thought that, while possessing a certain political and economic character or flavor, embraced a host of frequently conflicting visions. We might therefore contrast the decentralist, libertarian socialism of an anarchist like Proudhon with the authoritarian socialism actualized by certain twentieth century government actors—that latter category regrettably having come to embody all of socialism in so many minds. Notwithstanding contemporary usages and ideological classifications, “libertarian socialism” is no oxymoron. Proudhon believed that a libertarian order would accomplish the goals of socialists, that in fact only such an order could accomplish socialists’ goals. Within this framework, Proudhon sets out to scrutinize political economy and its institutions, to break them down and lay bare the truths within them.

Proudhon’s goal in What is Property? is to explore the contradictions inherent in our constructions of property, and from that to educe a theory of property consistent with justice. Of this, his first major work, Proudhon opined with “accustomed frankness,” “it is perhaps the salvation of the nation.” And while Woodcock calls him Proudhon’s “most bitter ideological rival,” even Karl Marx conceded the ambition and the force of Proudhon’s “scientific investigation” of private property, writing that it “for the first time makes a real science of political economy possible.” Proudhon is interested in the apparent paradox presented by property and in the interplay of opposites generally. Running through Proudhon’s entire body of work is a consistent fascination with balance and harmony, a desire to reconcile, for example, individual and community, liberty and authority, competition and cooperation. Justice is always Proudhon’s starting point, and his first book undertakes to develop the golden rule (“Do unto others that which you would that others should do unto you”) through the application of scientific principles, of observation and study.

The golden rule, for Proudhon, represents the “principle of reciprocity” that so interests him, the idea that justice is fundamentally about interrelations between free and equal individuals. And if individuals are free and equal, if their interactions must be shaped around that assumption, then government, “the authority of man over man,” becomes problematic. So too does private property present itself as a potential source of injustice, depending both on its contours as a concrete, historical phenomenon and as an abstract concept in political theory. Proudhon’s book treats both, analyzing their relationships with the kinds of economic subordination and inequality he opposes. Since Proudhon’s justice is delineated in terms of equilibrium—“from which,” he says, “must spring a unity of interests and social harmony”—he is concerned with whether property serves to protect the laborer in the possession of his product, or shelters class interests and thereby poverty. In the course of sorting out an answer to this question, or building a foundation upon which we may begin to answer it, Proudhon offers one of history’s most trenchant critiques of private property: “Property is theft!” Proudhon’s exclamatory indictment of property as an institution will likely prove jarring to most American libertarians, for whom private property rates as among the most important features of a free and fair society. True to his preferred method, though, Proudhon readily confronts property’s immanent dualities. For even while he asserts that “property is theft,” Proudhon also says that “property is freedom.” How, then, does Proudhon set about syncretizing the two claims?

By the nature of the case, a property right is a monopoly right, an exclusionary power that restricts use and enjoyment to the property owner herself. Such a right, if not narrowly tailored, has the potential to serve injustice, concentrating power in a way that allows some privileged few to take advantage of others. Indeed, among Proudhon’s foremost objections to the institution of private property is that it includes what he calls “the right of increase,” the “power to produce without labor.” For Proudhon, a student of the labor theory of economic value as set forth by Adam Smith, this characteristic of property intimated that something was wrong, that an injustice was at hand. Considered in light of “the sum of [its] abuses,” this assessment of property as a tool of enslavement and exploitation carries an important libertarian insight. Insofar as a legal right grants an individual ownership of land or goods that do not properly belong to him, property acts as a coercive violation of liberty and justice instead of their safeguard. On the other hand, as the means of protecting the worker by giving him possession of the implements of his work and the fruits of his labor, property means freedom. As the anarchist author Iain McKay writes in his introduction to Property is Theft: A Pierre-​Joseph Proudhon Anthology, “Proudhon showed that the defenders of property had to choose between self-​interest and principle, between hypocrisy and logic.” After all, were we to grant property titles only in accordance with the principles endorsed by its philosophical and ideological proponents, workingmen would become owners. Proudhon turns property back on itself, advancing classical political economy by attacking it.

For all his caustic analyses of private property and the political economists, Proudhon is among history’s most outspoken and determined critics of communism. Proudhon and Marx debated spiritedly in both their private correspondence and their published works. As their ongoing exchange progressed, it became increasingly acrimonious, the two apparently competing to provide the dominant socialist model. It is remarkable that, despite Marx’s hostility toward Proudhon and his work, many (if not most) of Marx’s most notable contributions to political and economic theory are evident first in Proudhon’s writings. Proudhon’s anticommunism became a leading influence on American individualist anarchism, the centerpiece of which was Benjamin Tucker, publisher of the periodical Liberty. But it was William Batchelder Greene who introduced Proudhon’s work to Tucker, encouraging the younger man to translate Proudhon’s What is Property? into English. The individualist anarchism Tucker would go on to pronounce in Liberty is an eclectic amalgam of mutualism from Proudhon and Greene, egoism from Max Stirner, and Josiah Warren’s Cost Principle, among other influences.

Greene was Proudhon’s student and compeer, the chief proponent of Proudhon’s mutual banking idea in the United States. In keeping with Proudhon’s critiques of communism, Greene said that “[t]he march of social progress is out of communism into mutualism,” the latter of which he defined as “the reciprocal correlation of each to every other.” Before he had even become personally acquainted with Proudhon in Paris in 1853, Greene, a former military officer and Unitarian minister, had already embarked on a presentation of mutualism’s plan for money and banking, 1850’s Mutual Banking. The book, which Tucker called “the most important work on finance ever published in the English language,” reflected Proudhon’s thought and influence with perspicuity.

Greene’s book set out a “triple formula of practical mutualism,” a tripartite blueprint whereby Position and Contradiction, Production and Consumption respectively, were reconciled in Exchange, to take place through the arrangement of a Mutual Bank. For mutualists like Proudhon and Greene, there is nothing inherently exploitative about the fact of market exchange. Conversely, however, the fact of exchange itself is also no proof of the absence of exploitation. The question, then, is whether the parties to a given exchange have traded equal values, the trade taking place in an environment free of the kinds of privilege that close off opportunities for the worker. As a permutation of socialism, Proudhon’s mutualist economic thought is concerned simply with ending the exploitation of producers by capitalists, which two classes he says are “theoretically identical,” though “now hostile.” The mutual banking schemes of Proudhon and Greene may seem to present a rather rigid template. But in an 1846 letter to Marx, Proudhon admits, “I make profession in public of an almost absolute economic anti-​dogmatism.” Rather than a set of precepts to be adhered to with religious constancy, Proudhon’s mutualist anarchism furnishes us with a set of criticisms and insights, new ways to evaluate social relationships.

Within the broader anarchist tradition, Proudhon’s work is often characterized as reformist rather than revolutionary, envisioning a slow and gradual development of the principles of justice until the existing order is replaced in its entirety. Proudhon thus did not believe that violent, political cataclysms, the replacement of one regime of authority with another, could effectuate genuine socialism. Instead, Proudhon sees the social revolution as the means to the political revolution, the ultimate conclusion of which is “the abolition of authority among men.” The social revolution is the appearance and maturation of new forms of organization, cooperative and based on the balancing of social forces. As political theory scholar Paul Thomas observes in his book Karl Marx and the Anarchists, “Proudhon believed that if contract, of a simple and direct kind, between two parties, were made the paradigm of human relationships in general, this move would be both cause and effect of the removal of illegitimate political, as well as property, relationships.” “What [the idea of anarchy] means,” Proudhon says, “is that political functions have been reduced to industrial functions, and that social order arises from nothing but transactions and exchanges.” Proudhon thought that governmental authority was not only unjust but unnecessary, that its legitimate functions could be accomplished by “the reign of contract,” absorbed by the forces of economics as opposed to “military rule.”

As an advocate of free banking and a market-​friendly variety of libertarian socialism, Proudhon shares certain commonalities, at least superficially, with prominent twentieth century radical libertarians like Murray Rothbard. Both thinkers argued compellingly that politics could be dissolved within economics. Further, both emphasized the disconnect between exploited and exploiters, makers and takers, productive and parasitic, industrious and indolent. But where Rothbard sees capitalists as belonging to the former groups, as indispensable entrepreneurs, Proudhon sees just the opposite. In Proudhon’s thought, private property allows capitalists an arbitrary right of increase, the power to live in idle luxury, profiting on the labor of others. Proudhon and Rothbard made very different predictions about what kinds of economic relationships and organizations a stateless, libertarian society would yield. Still, we ought not reduce the differences between the societies they envisage to questions of prediction alone. The two thinkers disagree substantively on what liberty and justice, for example, entail politically and economically, and therefore the differences are prescriptive as well as predictive. One area in which the substantive differences present themselves starkly is theories of land ownership. For Proudhon, in order for property to be freedom, not theft, it must be carefully delimited by the requirements of justice, balanced by the imperatives of community and equality. And while Proudhon’s ideas on property changed and evolved over his lifetime, his works recommend a system of land tenure that, in Woodcock’s words, “guarantees the independence of the peasant and artisan”—“uphold[ing] the basic right of the producer to control his land and his workshop.” Proudhon sets up this model of property in opposition to the kind of large-​scale, absentee landlord ownership that characterizes capitalism and, Proudhon argues, gives rise to the usurious oppression of a wealthy rentier class. Mutualist anarchists in the tradition of Proudhon are thus often said to favor a system of real property ownership tied to a more exacting and rigorous standard of occupancy and use, a standard which arguably makes acquisition more difficult and abandonment more immediate. For his part, Rothbard allowed that although he “strongly disagree[d] with this doctrine,” it nevertheless supplied a “useful corrective” to free market libertarians who ignore the problem of land monopoly. Like Proudhon, Rothbard maintains that there must be an adequate theory of justice underpinning property rights, not a mere insistence on defending existing property titles wherever we find them. Rothbard, however, argues that once real property has been properly and rightfully acquired, full ownership includes the right to use, hold out of use, rent, or sell freely.

Rothbardian anarcho-​capitalists and Proudhonian mutualists also part ways on questions of money, credit and banking. Anarchist and mutualist credit theorists such as Proudhon, Greene, and Lysander Spooner held that worker-​organized, cooperative mutual banks could lend without interest, rejecting banking systems in which the medium of exchange is based upon specie. Though it predates several important developments in economic theory, the debate between Proudhon and Frederic Bastiat in 1849 and 1850 nevertheless offers us a serviceable proxy for many of the differences in economic thought—particularly on the question of interest—that divide anarcho-​capitalists and mutualists. Proudhon considered capital, borrowing Marx’s phrase, “dead labor,” already paid and essentially unproductive, opposing categories of income like rent and interest that were not payments for labor. Bastiat argued, as capitalist libertarians would today, that money-​lending is an important and legitimate economic service, entitled to compensation and facilitating the important and beneficial process of capital accumulation. The mutualists argued that the removal of privileges and the emergence of genuine competition would drive down the price of credit; they further argued that, as Greene writes, “any thing that may be sold under the hammer” is a sound “basis of mutual money.” As philosopher Roderick Long explains, Proudhon maintained that interest both resulted from and fueled “entrenched asymmetries of power.” Rothbard gives us a very different picture of libertarian money and banking. “[T]he anarchist society,” he thought, “would, contrary to anarchist notions, lead to much ‘harder’ money than we have now.” In Rothbard’s anarcho-​capitalist vision, free banking would inevitably mean bank notes representing deposits of specie. Rothbard even regarded fractional reserve banking—under which a given bank’s reserves are insufficient to all satisfy depositors’ demands simultaneously—as a form of embezzlement, defrauding the bank’s customers.

Proudhon is an important figure in the history of libertarianism, socialism, and anarchism, worthy of continued attention from today’s liberty movement. Revisiting Proudhon and the debates of his life can demonstrate the diversity of the libertarian tradition and the commonalities that link seemingly very different strains of political thought. Themes of contract, mutually beneficial exchange, free association, spontaneous order, decentralism, and economics as a means of social change all feature prominently in Proudhon. Contemporary libertarians ought to welcome his influence in a time of authoritarian social relations and a highly centralized corporate economy with deep ties to the bureaucratic total state.