The Organization of Credit and the Solution to the Social Question
When in April 1848 the Revolution seemed to take a wrong path, Proudhon restated his fundamental thesis on the occasion of presenting his project of a Bank of the People: the solution to the social question is to be sought in a radical transformation of the economic organization, not in a political reform (Haubtmann 1982: 843).
He proposed to abandon any reference to a gold or silver standard: the notes issued by the Bank must be based on products, not on metallic reserves or on properties. The bank must issue its notes by discounting bills presented by its clients. Such notes would be perfectly safe because they would have as collaterals the effective values of a service done, of a commodity the delivery of which is either already made or warranted and certain (Proudhon 1848: 28). The issuing of such notes could not be excessive because it would only be made against real bills and follow the demands for discount. Granting credit would be easier as the lending activity of the bank would no more be limited by its metallic reserve. Moreover - and this is the main aspect of the project - the bank would be able to charge a very low interest rate, just to cover its costs. In such conditions, the interest rate would be nil or almost nil, and credit would be free. The reorganization of credit is the solution to the social question.Proudhon had an important influence on the labour movement through anarcho- syndicalism and revolutionary unionism. His followers opposed those of Marx in the International Workingmen’s Association. Proudhon’s work is heterodox: it was defended by Georges Sorel (1892) and criticized by authors as different as Marx (1847), Bastiat (Bastiat and Proudhon 1849-50) and Walras (1860): but the works they devoted to him shows its importance in their eyes.
Alain Beraud
See also:
Frederic Bastiat (I); Karl Heinrich Marx (I); Non-Marxian socialist ideas in France (II); Adam Smith (I).