How Proudhon Solves the Housing Question
Frederick Engels
[1872]
In No. 10 and the following numbers of the Volksstaat appears a
series of six articles on the housing question. These articles are
only worthy of attention because, apart from some long-forgotten
would-be literary writings of the 'forties, they are the first
attempt to transplant the Proudhonist school to Germany. This
represents such an enormous step backward in comparison with the
whole course of development of German socialism, which delivered a
decisive blow particularly to the Proudhonist ideas as far back as
twenty-five years ago, [In Marx: Misere de la Philosophie, etc.,
Bruxelles et Paris, 1847 (The Poverty of Philosophy, etc.). -- [Note
by F. Engels.] that it is worth while answering it immediately.
The so-called housing shortage, which plays such a great role in
the press nowadays, does not consist in the fact that the working
class generally lives in bad, overcrowded and unhealthy dwellings.
This shortage is not something peculiar to the present; it is not
even one of the sufferings peculiar to the modern proletariat in
contradistinction to all earlier oppressed classes. On the contrary,
all oppressed classes in all periods suffered more or less uniformly
from it. In order to make an end of this housing shortage there is
only one means: to abolish altogether the exploitation and
oppression of the working class by the ruling class. What is meant
today by housing shortage is the peculiar intensification of the bad
housing conditions of the workers as the result of the sudden rush
of population to, the big towns; a colossal increase in rents, a
still further aggravation of overcrowding in the individual houses,
and, for some, the impossibility of finding a place to live in at
all. And this housing shortage gets talked of so much only because
it does not limit itself to the working class but has affected the
petty bourgeoisie also.
The housing shortage from which the workers and part of the petty
bourgeoisie suffer in our modem big cities is one of the numerous
smaller, secondary evils which result from the present-day
capitalist mode of production. It is not at all a direct result of
the exploitation of the worker as a worker by the capitalists. This
exploitation is the basic evil which the social revolution strives
to abolish by abolishing the capitalist mode of production. The
cornerstone of the capitalist mode of production is, however, the
fact that our present social order enables the capitalists to buy
the labour power of the worker at its value, but to extract from it
much more than its value by making the worker work longer than is
necessary in order to reproduce the price paid for the labour power.
The surplus value produced in this fashion is divided among the
whole class of capitalists and landowners together with their paid
servants, from the Pope and the Kaiser, down to the night watchman
and below. We are not concerned here as to how this distribution
comes about, but this much is certain: that all those who do not
work can live only from fragments of this surplus value which reach
them in one way or another. (See Marx's Capital where this was
worked out for the first time.)
The distribution of this surplus value, produced by the working
.class and taken from it without payment, among the non-working
classes proceeds amid extremely edifying squabblings and mutual
swindling. In so far as this distribution takes place by means of
buying and selling, one of its chief methods is the cheating of the
buyer by the seller, and in retail trade, particularly in the big
towns, this has become an absolute condition of existence for the
sellers. When, however, the worker is cheated by his grocer or his
baker, either in regard to the price or the quality of the
commodity, this does not happen to him in his specific capacity as a
worker. On the contrary, as soon as a certain average level of
cheating has become the social rule in any place, it must in the
long run be leveled out by a corresponding increase in wages. The
worker appears before the small shopkeeper as a buyer, that is, as
the owner of money or credit, and hence not at all in his capacity
as a worker, that is, as a seller of labour power. The cheating may
hit him, and the poorer class as a whole, harder than it hits the
richer social classes, but it is not an evil which hits him
exclusively or is peculiar to his class.
And it is just the same with the housing shortage. The growth of
the big modern cities gives the land in certain areas, particularly
in those which are centrally situated, an artificial and often
colossally increasing value; the buildings erected on these areas
depress this value, instead of increasing it, because they no longer
correspond to the changed circumstances. They are pulled down and
replaced by others. This takes place above all with workers' houses
which are situated centrally and whose rents, even with the greatest
overcrowding, can never, or only very slowly, increase above a
certain maximum. They are pulled down and in their stead shops,
warehouses and public buildings are erected. Through its Haussmann
in Paris, Bonapartism exploited this tendency tremendously for
swindling and private enrichment. [Haussmann was Prefect of the
Seine Department in the years 1853-70 and carried on big building
alterations in Paris in the interests of the bourgeoisie. He did not
fail to profit himself also. -Ed.] But the spirit of Haussmann
has also been abroad in London, Manchester and Liverpool, and seems
to feel itself just as much at home in Berlin and Vienna. The result
is that the workers are forced out of the centre of the towns
towards the outskirts; that workers' dwellings, and small dwellings
in general, become rare and expensive and often altogether
unobtainable, for under these circumstances the building industry,
which is offered a much better field for speculation by more
expensive houses, builds workers' dwellings only by way of
exception.
This housing shortage therefore certainly hits the worker harder
than it hits any more prosperous class, but it is just as little an
evil which burdens the working class exclusively as the cheating of
the shopkeeper, and it must, as far as the working class is
concerned, when it reaches a certain level and attains a certain
permanency similarly find a certain economic adjustment.
It is with just such sufferings as these, which the working class
endures in common with other classes, and particularly the petty
bourgeoisie, that petty-bourgeois socialism, to which Proudhon
belongs, prefers to occupy itself. And thus it is not at all
accidental that our German Proudhonist occupies himself chiefly with
the housing question, which, as we have seen, is by no means
exclusively a working class question; and that, on the contrary, he
declares it to be a true, exclusively working class question.
"As the wage worker in relation to the capitalist,
so is the tenant in relation to the house owner."
This is totally untrue.
In the housing question we have two parties confronting each
other: the tenant and the landlord or house owner. The former wishes
to purchase from the latter the temporary use of a dwelling; he has
money or credit, even if he has to buy this credit from the house
owner himself at a usurious price as an addition to the rent. It is
simple commodity sale; it is not an operation between proletarian
and bourgeois, between worker and capitalist. The tenant -- even if
he is a worker -- appears as a man with money; he must already have
sold his own particular commodity, his labour power, in order to
appear with the proceeds as the buyer of the use of a dwelling, or
he must be in a position to give a guarantee of the impending sale
of this labour power. The peculiar results which attend the sale of
labour power to the capitalist are completely absent here. The
capitalist causes the purchased labour power firstly to produce its
own value and secondly to produce a surplus value which remains in
his hands for the time being, subject to its distribution among the
capitalist class. In this case therefore an extra value is produced,
the total sum of the existing value is increased. In the rent
transaction the situation is quite different. No matter how much the
landlord may overreach the tenant it is still only a transfer of
already existing, previously produced value, and the total sum of
values possessed by the landlord and the tenant together remains the
same after as it was before. The worker is always cheated of a part
of the product of his labour, whether that labour is paid for by the
capitalist below, above, or at its value.
The tenant, on the other hand, is cheated only when he is
compelled to pay for the dwelling above its value. It is, therefore,
a complete misrepresentation of the relation between landlord and
tenant to attempt to make it equivalent to the relation between
worker and capitalist. On the contrary, we are dealing here with a
quite ordinary commodity transaction between two citizens, and this
transaction proceeds according to the economic laws which govern the
sale of commodities in general and in particular the sale of the
commodity, land property. The building and maintenance costs of the
house, or of the part of the house in question, enters first of all
into the calculation; the land value, determined by the more or less
favourable situation of the house, comes next; the state of the
relation between supply and demand existing at the moment is finally
decisive. This simple economic relation expresses itself in the mind
of our Proudhonist as follows:
"The house, once it has been built. serves as a
perpetual legal title to a definite fraction of social labour
although the real value of the house has already long ago been more
than paid out in the form of rent to the owner. Thus it comes about
that a house that, for instance, was built fifty years ago, during
this period covers the original cost two, three, five, ten and more
times over in its rent yield."
Here we have at once the whole Proudhon. Firstly, it is forgotten
that the rent must not only pay the interests on the building costs,
but must also cover repairs and the average sum of bad' debts,
unpaid rents, as well as the occasional periods when the house is
untenanted, and finally pay off in annual sums the building capital
which has been invested in a house which is perishable and which in
time becomes uninhabitable and worthless. Secondly, it is forgotten
that the rent must also pay interest on the increased value of the
land upon which the building is erected and that therefore a part of
it consists of ground rent. Our Proudhonist immediately declares, it
is true, that this increase of value does not equitably belong to
the landowner, since it comes about without his co-operation, but to
society as a whole. However, he overlooks the fact that with this he
is in reality demanding the abolition of landed property, a point
which would lead us too far if we went into it here. And finally he
overlooks them fact that the whole transaction is not one of buying
the house from its owner, but of buying its use for a certain time.
Proudhon, who never bothered himself about the real and actual
conditions under which any economic phenomenon occurs, is naturally
also unable to explain how the original cost price of a house is
paid back ten times over in the course of fifty years in the form of
rent. Instead of examining and establishing this not at all
difficult question economically, and discovering whether it is
really in contradiction to economic laws, and if so how, Proudhon
rescues himself by a bold leap from economics into legal talk: "The
house, once it has been built, serves as a perpetual legal title"
to a certain annual payment. How this comes about, how the house
becomes a legal title, on this Proudhon is silent. And yet -- that
is just what he should have explained. Had he examined it, he would
have found that not all the legal titles in the world, no matter how
perpetual, could give a house the power of obtaining its cost price
back ten times over in the course of fifty years in the form of
rent, but that only economic conditions (which may have social
recognition in the form of legal titles) can accomplish this. And
with this he would again be as far as at the start.
The whole Proudhonist teaching rests on this saving leap from
economic reality into legal phraseology. Every time our good
Proudhon loses the economic hang of things -- and this happens to
him with every serious problem -- he takes refuge in the sphere of
law and appeals to eternal justice.
"Proudhon begins by taking his ideal of justice, of
'justice eternelle,' from the juridical relations that correspond to
the production of commodities: thereby, it may be noted, he proves,
to the consolation of all good citizens, that the production of
commodities is a form of production as everlasting as justice. Then
he turns round and seeks to reform the actual production of
commodities, and the actual legal system corresponding thereto, in
accordance with this ideal. What opinion should we have of a
chemist, who. instead of studying the actual laws of the molecular
changes in the composition and decomposition of matter, and on that
foundation solving definite problems, claimed to regulate the
composition and decomposition of matter by means of the 'eternal
ideas,' of 'naturalite and affinite'? Do we really know any more
about 'usury,' when we say it contradicts 'justice kernel,' 'equite
eternelle,' 'mutualite eternelle,' and other 'verites eternelles'
than the fathers of the church did when they sad it was incompatible
with 'grace eternelle,' 'foi eternelle,' and 'la volonte eternelle
de Dieu'?" [Marx, Capital, Vol. 1, Kerr edition, footnote,
pp. 96-97. -Ed.]
Our Proudhonist does not fare any better than his lord and master:
"The rent agreement is one of the thousand
exchanges which are as necessary in the life of modem society as the
circulation of the blood in the bodies o( animals. Naturally, it
would be in the interests of this society if all these exchanges
were pervaded by a conception of justice, that is to say, if they
took place always according to the strict demands of justice. In a
word, the economic life of society must, as Proudhon says, raise
itself to the heights of economic justice. In reality, as we know,
exactly the opposite takes place."
Is it credible that, five years after Marx had characterised
Proudhonism so summarily and convincingly precisely from this
decisive angle, it should be possible to print such confused stuff
in the German language. What does this rigmarole mean? Nothing more
than that the practical effects of the economic laws which govern
present-day society run contrary to the author's sense of justice
and that he cherishes the pious wish that the affair might be so
arranged that this would then no longer be the case. Yes, but if
toads had tails they would no longer be toads! And is then the
capitalist mode of production not "pervaded by a conception of
justice," namely, that of its own right to exploit the workers?
And if the author tells us that that is not his idea of justice, are
we one step further?
But lot us go back to the housing question. Our Proudhonist now
gives his "conception of justice" free rein and treats us
to the following moving declamation:
"We do not hesitate to assert that there is no more
terrible mockery of the whole culture of our lauded century than the
fact that in the big cities 90 per cent and more of the population
have no place that they can call their own. The real key point of
moral and family existence, hearth and home, is being swept away by
the social whirlpool.... In this respect we are far below the
savages. The troglodyte has his cave, the Australian aborigine has
his clay hut, the Indian has his own hearth -- the modern
proletarian is practically suspended in mid air," etc.
In this jeremiad we have Proudhonism in its whole reactionary
form. In order to create the modem revolutionary class of the
proletariat it was absolutely necessary to cut the umbilical cord
which still bound the worker of the past to the land. The hand
weaver who had his little house, garden and field along with his
loom, was a quiet, contented man "in all godliness and
respectability" despite all misery and despite all political
pressure; he doffed his cap to the rich, to the priests and to the
officials of the state; and inwardly was altogether a slave. It is
precisely modem large-scale industry, which has turned the worker,
formerly chained to the land, into a completely propertyless
proletarian, liberated from all traditional fetters and free as a
bird; it is precisely this economic revolution which has created the
sole conditions under which the exploitation of the working class in
its final form, in the capitalist mode of production, can be
overthrown. And now comes this tearful Proudhonist and bewails the
driving of the workers from hearth and home as though it were a
great retrogression instead of being the very first condition for
their intellectual emancipation.
Twenty-seven years ago I described in The Condition of the
Working Class in England the main features of just this process
of driving the workers from hearth and home as it took place in the
eighteenth century in England. The infamies of which the landowners
and factory owners were guilty in so doing, and the deleterious
effects, material and moral, which this expulsion inevitably had on
the workers concerned in the first place, are there also described
as they deserve. But could it enter my head to regard this, which
was in the circumstances an absolutely necessary historical process
of development, as a retrogression "below the savages"?
Impossible! The English proletarian of 1872 is on an infinitely
higher level than the rural weaver of 1772 with his "hearth and
home." Will the troglodyte with his cave, the Australian
aborigine with his clay hut, and the Indian with his hearth ever
accomplish a June insurrection and a Paris Commune?
That the situation of the workers has in general become
materially worse since the introduction of capitalist production on
a large scale is doubted only by the bourgeoisie. But should
therefore look backward longingly to the (likewise very meager
flesh-pots of Egypt, to rural small-scale industry, which produced
only servile souls, or to "the savages"? On the contrary.
Only the proletariat created by modern large-scale industry,
liberated from all inherited fetters, including those which chained
it to the land, and driven in herds into the big towns, is in a
position to accomplish the great social transformation which will
put an end to all class exploitation and all class rule. The old
rural hand weavers with hearth and home would never have been able
to do it; they would never have been able to conceive such an idea,
much less able to desire to carry it out.
For Proudhon, on the other hand, the whole industrial revolution
of the last hundred years, the introduction of steam power and
large-scale factory production which substituted machinery for hand
labour and increased the productivity of labour a thousandfold, is a
highly repugnant occurrence, something which really ought never to
have taken place. The petty-bourgeois Proudhon demands a world in
which each person turns out a separate and independent product that
is immediately consumable and exchangeable in the market. Then, as
long as each person only receives back the full value of his labour
in the form of another product, "eternal justice" is
satisfied and the best possible world created. But this best
possible world of Proudhon has already been nipped in the bud and
trodden underfoot by the advance of industrial development which has
long ago destroyed individual labour in all the big branches of
industries and which is destroying it daily more and more in the
smaller and smallest branches which has set social labour supported
by machinery and the harnessed forces of nature in its place, and
whose finished product immediately exchangeable or consumable, is
the joint work of many individuals through whose hands it has to
pass. And it is precisely this industrial revolution which has
raised the productive power of human labour to such a high level
that -- for the first time in the history of humanity -- the
possibility exists, given a rational division of labour among all,
to produce not only enough for the plentiful consumption of all
members of society and for an abundant reserve fund, but also to
leave each individual sufficient leisure so that what is really
worth preserving in historically inherited culture -- science, art,
human relations is not only preserved, but converted from a monopoly
of the ruling class into the common property of the whole of
society, and further developed. And here is the decisive point: as
soon as the productive power of human labour has developed to this
height, every excuse disappears for the existence of a ruling class.
Was not the final reason with which class differences were defended
always: there must be a class which need not plague itself with ,he
production of its daily subsistence, in order that it may have time
to look after the intellectual work of society? This talk, which up
to now had its great historical justification, has been cut off at
the root once and for all by the industrial revolution of the last
hundred years. The existence of a ruling class is becoming daily
more and more a hindrance to the development of industrial
productive power, and equally so to science, art and especially
cultural human relations. There never were greater boors than our
modern bourgeois.
But all this is nothing to friend Proudhon. He wants "eternal
justice" and nothing else. Each shall receive in exchange for
his product the full proceeds of his labour, the full value of his
labour. But to reckon that out in a product of modern industry is a
complicated matter. For modern industry obscures the particular
share of the individual in the total product, which in the old
individual handicraft was obviously represented by the finished
product. Further, modern industry abolishes more and more the
individual exchange on which Proudhon's whole system is built up,
namely direct exchange between two producers, each of whom takes the
product of the other in order to consume it. Consequently a
reactionary character runs throughout the whole of Proudhonism; an
aversion to the industrial revolution, and the desire, sometimes
overtly, sometimes covertly expressed, to drive the whole of modern
industry out of the temple, steam engines, mechanical looms and the
rest of the swindle, and to return to the old, respectable hand
labour. That we would -then lose nine hundred and ninety-nine
thousandths of our productive power, that the whole of humanity
would be condemned to the worst possible labour slavery, that
starvation would become the general rule -- what does all that
matter if only we succeed in organising exchange in such a fashion
that each receives "the full proceeds of his labour," and
that "eternal justice" is realized? Fiat justitia, pereat
mundus!
Justice must prevail though the whole world perish!
And the world would perish in this Proudhonist counter-revolution
if it were at all possible to carry it out.
It is, moreover, self-evident that, with social production
conditioned by modern large-scale industry, it is possible to assure
each person "the full proceeds of his labour," so far as
this phrase has any meaning at all. And it has a meaning only if it
is extended to mean not that each individual worker becomes the
possessor of 66 the full proceeds of his labour," but that the
whole of society, consisting entirely of workers, becomes the
possessor of the total proceeds of its labour, which it partly
distributes among its members for consumption, partly uses for
replacing and increasing the means of production, and partly stores
up as a reserve fund for production and consumption.
*********
After what has been said above, we already know in advance how our
Proudhonist will solve the great housing question. On the one hand,
we have the demand that each worker own his own home in order that
we may not remain "below the savages." On the other hand,
we have the assurance that the two, three, five or tenfold repayment
of the original cost price of a house in the form of rent, as it
actually takes place, is based on a "legal title" and that
this legal title is in contradiction to "eternal justice".
The solution is simple: we abolish the legal title and declare, in
virtue of eternal justice, the rent paid to be a payment on account
of the cost of the dwelling itself. If one has so arranged on
premises that they already contain the conclusion in them, then of
course it demands no greater skill than any charlatan possesses to
produce the already prepared result from the bag and to point to
unshakable logic whose result it is.
And so it happens here. The abolition of rented dwellings
proclaimed as an necessity, and indeed in the form that the demand
is put forward for the conversion of every tenant into the owner of
his own dwelling. How are we to do that? Very simply:
"Rented dwellings will be redeemed.... The previous
house owner will be paid the value of Ws house to the last farthing.
Rent, instead of being as previously the tribute which the tenant
must pay to the perpetual title of capital, will be, from the day
when the redemption of rented dwellings is proclaimed, the exactly
fixed sum paid by the tenant to provide the annual installment for
the payment of the dwelling which has passed into the possession of
the tenant.... Society... transforms itself in this way into a
totality of independent and free owners of dwellings."
The Proudhonist finds it a crime against eternal justice that
,the house owner can without working obtain ground rent and interest
out of the capital he has invested in the house. He decrees that
,this must cease, that capital invested in houses shall produce no
interest, and so far as it represents purchased landed property, no
ground rent either. Now we have seen that hereby the capitalist mode
of production, the basis of present-day society, is in no way
affected. The pivot on which the exploitation of the worker turns is
the sale of labour power to the capitalist and the use which the
capitalist makes of this transaction in that he compels the worker
to produce far more than the paid value of the labour power ,amounts
to. It is this transaction between capitalist and worker which
produces all the surplus value which is afterwards divided in the
form of ground rent, commercial profit, interest on capital, taxes,
etc., among the various sub-species of capitalists and their
servants. And now our Proudhonist comes along and believes that if
we were to forbid one single sub-species of capitalists, and at that
of such capitalists who purchase no labour power directly and
therefore also cause no surplus value to be produced, to receive
profit or interest, it would be a step forward! The mass of unpaid
labour taken from the working class would remain exactly the same
even if house owners were to be deprived tomorrow .,of the
possibility of receiving ground rent and interest. However, this
does not prevent our Proudhonist from declaring: "The
abolition of rent dwellings is thus one of the most fruitful and
magnificent efforts which has ever sprung from the womb of the
revolutionary idea and it must become one of the primary demands of
Social-Democracy." This is exactly the type of market cry
of the master Proudhon himself, whose cackling was always in inverse
ratio to the size of the eggs laid.
And now imagine the fine state of things if each worker, petty
bourgeois and bourgeois were compelled by paying annual installments
to become first part owner and then full owner of his dwelling! In
the industrial districts in England, where there is large-scale
industry but small workers' houses and each married worker occupies
a little house of his own, there might possibly be some sense in it.
But the small-scale industry in Paris and in most of the big towns
on the continent is accompanied by large houses in each of which
ten, twenty or thirty families live together. On the day of the
world-delivering decree, when the redemption of rent dwellings is
proclaimed, Peter is working in an engineering works in Berlin. A
year later he is owner of, if you like, the fifteenth part of his
dwelling consisting of a little room on the fifth floor of a house
somewhere in the neighborhood of Hamburger Tor. He then loses his
work and soon finds himself in a similar dwelling on the third floor
of a house in the Pothof in Hanover with a wonderful view on to the
courtyard. After five months' stay there he has just acquired one
thirty-sixth part of this property when a strike sends him to Munich
and compels him by a stay of eleven months to take on himself
ownership in exactly eleven one-hundred-and-eightieths of a rather
gloomy property on the street level behind the Ober-Angergasse.
Further removals such as nowadays so often occur to workers saddle
him further with seven three-hundred-and-sixtieths of a no less
desirable residence in St. Gallen, twenty-three
one-hundred-and-eightieths of another one in Leeds, and three
hundred and forty-seven
fifty-six-thousand-two-hundred-and-twenty-thirds, to reckon it out
exactly in order that "eternal justice" may have nothing
to complain about, of a third dwelling in Seraing. And now what is
the use for our Peter of all these shares in dwellings? Who is to
give him the real value of these shares? Where is he to find the
owner or owners of the remaining shares in his various one-time
dwellings? And what exactly are the property relations of any big
house whose floors hold, let us say, twenty dwellings and which,
when the redemption period has elapsed and rented dwellings are
abolished, belongs perhaps to three hundred part owners who are
scattered in all quarters of the globe. Our Proudhonist will answer
that by that time the Proudhonist exchange bank will exist and will
pay to anyone at any time the full labour proceeds for any labour
product, and will therefore pay out also the full value of a share
in a dwelling. But in the first place we are not at all concerned
here with the Proudhonist exchange bank since it is nowhere even
mentioned in the articles on the housing question, and secondly it
rests on the peculiar error that if someone wants to sell a
commodity he will necessarily also find a buyer for its full value
and thirdly it has already gone bankrupt in England more than once
under the name of Labour Exchange Bazaar, before Proudhon
inventedit.
The whole conception that the worker should buy his dwelling rests
in its turn on the reactionary basic outlook of Proudhonism, already
emphasized, according to which the conditions created by modern
large-scale industry are diseased excrescences, and that society
must be led violently, i.e., against the trend which it has been
following for a hundred years, to a condition in which the old
stable handicraft of the individual is the rule, which as a whole is
nothing but the idealized restoration of small-scale enterprise,
which has been ruined and is still being ruined. If the workers are
only flung back into these stable conditions, if the "social
whirlpool" has been happily abolished, then the worker
naturally could also again make use of property in "hearth and
home," and the above redemption theory appears less ridiculous.
Proudhon only forgets that in order to accomplish all this he must
first of all put back the clock of world history by a hundred years,
and that thereby he would make the present-day workers into just
such narrow-minded, crawling, sneaking slaves as their
great-grandfathers were.
As far, however, as this Proudhonist solution of the housing
question contains any rational and practically applicable content it
is already being carried out today, but this realization does not
spring from "the womb of the revolutionary idea," but from
the big bourgeois himself. Let us listen to an excellent Spanish
newspaper, La Emayzcipacion, of Madrid of March 16, 1872:
"There is still another means of solving the
housing question, the way proposed by Proudhon, which dazzles at
first glance, but on closer examination reveals its utter impotence.
Proudhon proposed that the tenants should be converted into
purchasers by installments, so that the rent paid annually would be
reckoned as an installment on the payment of the value of the
dwelling, and, after a certain time, the tenant would become the
owner of the dwelling. This means, which Proudhon considered very
revolutionary, is being put into operation in all countries by
companies of speculators who thus secure double and treble payment
of the value of the houses by raising the rents. M. Dollfus and
other big manufacturers in Northeastern France have carried out this
system not only in order to make money, but in addition, with a
political idea at the back of their minds.
"The cleverest leaders of the ruling class have always
directed their efforts towards increasing the number of small
property owners in order to build an army for themselves against the
proletariat. The bourgeois revolutions of the last century divided
up the big estates of the nobility and the church into small
properties, just as the Spanish republicans propose to do today with
the still existing large estates, and created thereby a class of
small landowners which has since become the most reactionary element
in society and a permanent hindrance to the revolutionary movement
of the urban proletariat. Napoleon III aimed at creating a similar
class in the towns by reducing the size of the individual bonds of
the public debt, and M. Dollfus and his colleagues sought to stifle
all revolutionary spirit in their workers by selling them small
dwellings to be paid for in annual installments, and at the same
time to chain the workers by this property to the factory in which
they work. Thus we see that the Proudhon plan has not merely failed
to bring the working class any relief, it has even turned directly
against it." *
[How this solution of the housing question
by means of chaining worker to his own "home" is arising
spontaneously in the neighborhood of big or growing American towns
can be seen from the following passage of a letter by Eleanor
Marx-Aveling, Indianapolis, November 28, 1886: "In, or rather
near Kansas City we saw some miserable little wooden huts,
containing about three rooms each, still in the wilds; the land cost
600 dollars and was just enough to put the little house on it; the
latter cost a further 600 dollars, that is together about 4,800
marks [L240] for a miserable little thing, an hour away from the
town, in a muddy desert." In this way the workers must shoulder
heavy mortgage debts in order to obtain even these houses and thus
they become completely the slaves of their employers; they are bound
to their houses, they cannot go away, and they are compelled to put
up with whatever working conditions are offered them. [Note by F.
Engels to the second German edition.]
How is the housing question to be solved then? In present-day
society just as any other social question is solved: by the gradual
economic adjustment of supply and demand, a solution which ever
reproduces the question itself anew and therefore is no solution.
How a social revolution would solve this question depends not only
on the circumstances which would exist in each case, but is also
connected with still more far-reaching questions, among which one of
the most fundamental is the abolition of the antithesis between town
and country. As it is not our task to create utopian systems for the
arrangement of the future society, it would be more than idle to go
into the question here. But one thing is certain: there are already
in existence sufficient buildings for dwellings in the big towns to
remedy immediately any real "housing shortage," given
rational utilization of them. This can naturally only take place by
the expropriation of the present owners and by quartering in their
houses the homeless or those workers excessively overcrowded in
their former houses. Immediately the proletariat has conquered
political power such a measure dictated in the public interests will
be just as easy to carry out as other expropriations and billetings
are by the existing state.
However, our Proudhonist is not satisfied with his previous
achievements in the housing question. He must raise the question
from the level ground into the sphere of the higher socialism in
order that it may prove there also an essential "fractional
part of the social question":
"Let us now assume that the productivity of
capiital is really taken by the horns, as it must be sooner or
later, for instance by a transitional law which fixes the interest
on all capitals at one per cent, but mark you, with the tendency to
make even this rate of interest approximate more and more to the
zero point so that finally nothing more would be paid than the
labour necessary to turn over the capital. Like all other products,
houses and dwellings are naturally also included within the
framework of this law.... The owner himself would be the first one
to agree to a sale because otherwise his house would remain unused
and the capital invested in it would be simply useless."
This passage contains one of the chief articles of faith of the
Proudhonist catechism and offers a striking example of the confusion
prevailing in it.
The "productivity of capital" is an absurdity that
Proudhonism takes over uncritically from the bourgeois economists.
The bourgeois economists, it is true, also begin with the statement
that labour is the source of all wealth and the measure of value of
all commodities; but they also have to explain how it comes about
that the capitalist who advances capital for an industrial or
handicraft business receives back at the end of it not only the
capital which he advanced, but also a profit over and above it. In
consequence they are compelled to entangle themselves in all sorts
of contradictions and also to ascribe to capital a certain
productivity. Nothing proves more clearly how deeply Proudhon
remains entangled in the bourgeois ideology than the fact that he
has taken over this phrase about the productivity of capital. We
have already seen at the beginning that the so-called "productivity
of capital" is nothing but the quality attached to it (under
present-day social relations, without which it would not be capital
at all) of being able to appropriate the unpaid labour of wage
workers.
However, Proudhon differs from the bourgeois economists in that
he does not approve of this "productivity of capital,"
but, on the contrary, finds it a violation of "eternal justice."
It is this which prevents the worker from receiving the full
proceeds of his labour. It must therefore be abolished. But how? By
lowering the rate of interest by compulsory legislation and finally
by reducing it to zero. And then, according to our Proudhonist,
capital would cease to be productive.
The interest on loaned money capital is only a part of profit;
profit, whether on industrial or commercial capital, is only a part
of the surplus value taken by the capitalist class from the working
class in the form of unpaid labour. The economic laws which govern
the rate of interest are as independent of those which govern the
rate of surplus value as could possibly be the case between laws of
one and the same social form. But as far as the distribution of this
surplus value among the individual capitalists is concerned, it is
clear that for those industrialists and business men who have large
quantities of capital in their businesses advanced by other
capitalists, the rate of their profit must rise -- all other things
being equal -- to the same extent as the rate of interest falls. The
reduction and final abolition of interest would therefore by no
means really take the so-called "productivity of capital" "by
the horns"; it would do no more than re-arrange the
distribution among the individual capitalists of the unpaid surplus
value taken from the working class; it would not, therefore, give an
advantage to the worker as against the industrial capitalist, but to
the industrial capitalist as against the rentier.
Proudhon, from his legal standpoint, explains interest, as he
does all economic facts, not by the conditions of social production,
but by the state laws in which these conditions receive their
general expression. From this point of view, which lacks any inkling
of the inter-relation between the state laws and the conditions of
production in society, these state laws necessarily appear as purely
arbitrary orders which at any moment could be replaced just as well
by their exact opposite. Nothing is therefore easier for Proudhon
than to issue a decree -- as soon as he has the power to do so --
reducing the rate of interest to one per cent. And if all the other
social conditions remained as they were, then indeed this
Proudhonist decree would exist on paper only. The rate of interest
will continue to be governed by the economic laws to which it is
subject today, despite all decrees. Persons possessing credit will
continue to borrow money at two, three, four and more per cent,
according to circumstances, just as much as before, and the only
difference will be that the financiers will be very careful to
advance money only to persons from whom no subsequent court
proceedings might be expected. Moreover this great plan to deprive
capital of its "productivity" is as old as the hills; it
is as old as-the usury laws which aimed at nothing else but limiting
the rate of interest, and which have since been abolished everywhere
because in practice they were continually broken or circumvented,
and the state was compelled to admit its impotence against the laws
of social production. And the reintroduction of these mediaeval and
unworkable laws is now "to take the productivity of capital by
the horns"? One sees that the closer Proudlionism is examined
the more reactionary it appears.
When, now, in this fashion the rate of interest has been reduced
to zero, and interest on capital therefore abolished, then "nothing
more would be paid than the labour necessary to turn over the
capital." This means that the abolition of interest is
equivalent to the abolition of profit and even of surplus value. But
if it were possible really to abolish interest by decree what would
be the consequence? The class of rentiers would no longer have any
inducement to loan out their capital in the form of advances, but
would invest it industrially themselves or in joint-stock companies
on their own account. The mass of surplus value extracted from the
working class by the capitalist class would remain the same; only
its distribution would be altered, and even that not much.
In fact, our Proudhonist fails to see that, even now, no more is
paid on the average in commodity purchase in bourgeois society than
"the labour necessary to turn over the capital" (it should
read, necessary for the production of the commodity in question).
Labour is the measure of value of all commodities, and in
present-day society -- apart from fluctuations of the market -- it
is absolutely impossible that on a total average more should be paid
for commodities than the labour necessary for their production. No,
no, my dear Proudhonist, the difficulty lies elsewhere: it is
contained in the fact that "the labour necessary to turn over
the capital" (to use your confused terminology) is not fully
paid! How this comes about you can look up in Marx (Capital).
But that is not enough. If interest on capital is abolished,
house rent is also abolished with it; for, "like all other
products, houses and dwellings are naturally also included within
the framework of this law." This is quite in the spirit of the
old Major who summoned one of the new recruits and declared:
"I say, I hear you are a doctor; you might report
from time to time at my quarters; when one has a wife and seven
children there is always something to patch up."
Recruit: "Excuse me, Major, but I am a doctor of philosophy."
Major: "That's all the same to me; one sawbones is the same as
another."
Our Proudhonist behaves just like this: house rent or interest on
capital, it is all the same to him. Interest is interest; sawbones
is sawbones.
We have seen above that the rent price commonly called house rent
is composed as follows:
1. a part which is ground rent;
2. a part which is interest on the building capital, including
the profit of the builder;
3. a part which is for costs of repairs and insurance;
4. a part which has to amortize the building capital inclusive of
profit in annual deductions according to the rate at which the house
gradually depreciates.
And now it must have become clear even to the blindest that "the
owner himself would be the first one to agree to a sale because
otherwise his house would remain unused and the capital invested in
it would be simply useless." Of course. If the interest on
loaned capital is abolished then no house owner can obtain a penny
piece in rent for his house, simply because house rent is spoken of
as interest and because the rent contains a part which is really
interest on capital. Sawbones is sawbones. Though it was only
possible to make the usury laws relating to ordinary interest on
capital ineffective by circumventing them, yet they never touched
even remotely the rate of house rent. It was reserved for Proudhon
to imagine that his new usury law would without more ado regulate
and gradually abolish not only simple interest on capital, but also
the complicated house rents of dwellings. Why then the "simply
useless" house should be purchased for good money from the
house owner, and how it is that under such circumstances the house
owner would not also pay money himself to get rid of this "simply
useless" house in order to save himself the cost of repairs, we
are not told.
After this triumphant achievement in the sphere of higher
socialism (Master Proudhon called it super-socialism) our
Proudhonist considers himself justified in flying still higher: "All
that has now to be done is to draw some conclusions in order to cast
complete light from all sides on our so important subject." And
what are these conclusions? They are things which follow as little
from what has been said before, as that dwelling houses would become
valueless on the abolition of interest. Deprived of the pompous and
solemn phraseology of their author, they mean nothing more than
that, in order to facilitate the business of redemption of rented
dwellings, what is desirable is: [1] exact statistics on the
subject; [2] a good sanitary inspection force; and [3] co-operatives
of building workers to undertake the building of new houses. All
these things are certainly very fine and good, but, despite all the
clothing of quack phrases, they by no means cast "complete
light" into the obscurity of Proudhonist mental confusion.
One who has achieved so much feels he has the right to deliver
the following serious exhortation to the German workers:
"In our opinion, such and similar questions are
well worth the attention of Social-Democracy.... Let them therefore,
as here in connection with the housing question, seek to become
clear on other and equally important questions such as credit, state
debts, private debts, taxation," etc.
Thus, our Proudhonist here faces us with the prospect of a whole
series of articles on "similar questions," and if he deals
with them all as thoroughly as the present "so important
subject," then the Volksstaat will have copy enough for a year.
But we are in a position to anticipate: -- it all amounts to what
has already been said: interest on capital is to be abolished and
with that the interest on public and private debts disappears,
credit will be gratis, etc. The same magic formula is applied to
every subject and in each separate case the same astonishing result
is obtained with inexorable logic, namely, that when interest on
capital has been abolished no more interest will have to be paid on
borrowed money.
They are fine questions, by the way with which our Proudhonist
threatens us: credit! What credit does the worker need apart from
that from week to wee'.-, or the credit he obtains from the
pawnshop? Whether he gets this credit free or at interest, even at
the usurious interests of the pawnshop, how much difference does
that make to him? And if he did, generally speaking, obtain some
advantage from it, that is to say, if the costs of production of
labour power were reduced, would not the price of labour power
necessarily fall also? But for the bourgeois, and in particular for
the petty bourgeois, credit is an important matter and it would
therefore be a very fine thing for them, and in particular for the
petty bourgeois, if credit could be obtained at any time and, in
addition, without payment of interest. "State debts!" 'The
working class knows very well that it did not make the state debt,
and when it comes to power it will leave the payment of it to those
who did make it. "Private debts!" -- see credit. "Taxes"!
Matters that interest the bourgeoisie very much, but the worker only
very little. What the worker pays in taxes goes in the long run into
the costs of production of labour power and must therefore be
compensated for by the capitalist. All these things which are held
up to us here as highly important questions for the working class
are in reality of essential interest only to the bourgeoisie, and in
particular to the petty bourgeoisie, and, despite Proudhon, we
assert that the working class is not called upon to look after the
interests of these classes.
Our Proudhonist has not a word to say about the great question
which really concerns the workers, that of the relation between
capitalist and wage worker, the question of how it comes about that
the capitalist can enrich himself from the labour of his workers.
His lord and master it is true, did occupy himself with it, but
introduced absolutely no clearness into it, and even in his latest
writings he has got essentially no farther than he was in his
Philosophic de la Misere [Philosophy of Poverty] which Marx disposed
of so conclusively in all its emptiness in 1847.
It was bad enough that for twenty-five years the workers of the
Latin countries had almost no other socialist mental nourishment
than the writings of this "Socialist of the Second Empire,"
and it would be a double misfortune if Germany were now to be
inundated with the Proudhonist theory. However, there need be no
fear of this. The theoretical standpoint of the German workers is
fifty years ahead of that of Proudhonism, and it will be sufficient
to make an example of it in this one question of housing in order to
save any further trouble in this respect.