De la propriété des rentes sur des particuliers ou sur l'État.

CHAP. 37: On the Property of Annuities from Private Individuals or from the State.

The principal object of all property is to assure the existence or to satisfy the needs of him to whom it belongs or of the members of his family; whenever, therefore, a person has formed or regularly acquired a means of existence that infringes neither upon the goods nor the liberty of others, nor upon good morals, this means is his property; the enjoyment and disposition of it must be guaranteed to him, as if it were a matter of the material product of his industry.

There is almost always, within a civilized people, a more or less large number of families who possess no landed property, who exercise no industry, who infringe upon neither the goods nor the person of others, and who nevertheless have assured means of existence. As in great nations the number of families who are in this case is very considerable, it is important to form, by some examples, very clear ideas of the resources by means of which they exist.

The proprietor of a parcel of landed property, wishing neither to cultivate it nor to lease it out, transmits it to another person, under the condition of paying, to him and his successors, in perpetuity, a determined annuity. From the moment the agreement is perfected, he is no longer, properly speaking, proprietor of the land he has given in exchange for an annuity. The acquirer can enjoy and dispose of it as he sees fit, provided that he fulfills the condition to which he has submitted. He could even, according to French laws, free himself from this condition, by reimbursing the capital of the annuity.

It must be remarked, however, that the faculty of enjoying a thing exists completely only in him who has the power to apply all the advantages that this thing can produce to the satisfaction of his needs. If I have the enjoyment of a farm that gives an income of ten thousand francs only under the condition of paying eight thousand of it every year, it is evident that I enjoy in reality only one-fifth of the total value. The person to whom the eight thousand francs will be paid annually will have the enjoyment of four-fifths of the income of the land, and these four-fifths will be incontestably his property.

The possessor of the land could, it is true, appropriate its entire income, by perpetually paying the annuity with the products of another parcel of land, or with the interest of a capital he had invested; but then the land or the capital that he would use to effect this payment would diminish in utility, relatively to him, in the proportion of all that he had acquired. On the other hand, the former proprietor, having become an annuitant, to obtain in perpetuity and in kind the four-fifths of the products of his land, would only have to give to the farmer the sum he would receive annually from him who had become its acquirer.

What it is above all important never to lose sight of is that the contract for the creation of an annuity cannot have for its effect to increase the sum of the revenues that exist in a nation. Before such a contract was formed, the land that is its object gave, for example, an income of ten thousand francs. If he to whom the land is transmitted engages to pay in perpetuity a sum of eight thousand francs to him from whom he receives it, there will not be two revenues in society: one of ten thousand francs for the new proprietor, and one of eight thousand for the annuitant. The first may well receive, doubtless, ten thousand francs from the farmer to whom the land will be given to cultivate; but, of this sum, he will have to pay eight thousand to the second. There will therefore be no creation of values.

A capitalist can, like the possessor of a parcel of land, transmit his property to another person who takes on the charge of paying him an income from it. If the proprietor of a capital of one hundred thousand francs, for example, lends it to an industrious man, for an annual interest of six thousand francs, the latter will have the disposition of it for the service of his industry; but, in reality, the former will retain the enjoyment of it. In this case, as in the preceding one, there will not be two distinct revenues: that which the establishment created with the capital will give, and that of the capitalist. If one considers things from an elevated point of view, one will see that after as before the loan, the capitalist possesses in the social wealth a value of one hundred thousand francs, and that this value is incontestably his property. He can, doubtless, lose it, if the borrower does bad business or if he is a dishonest man; but he could also lose it if he kept it in his house, or if he placed it on deposit.

It often happens that a capitalist, instead of investing his capital in the hands of an industrious man who makes it productive and who pays him an interest on it, lends it to a government that consumes it, and that establishes a tax to pay the interest on it every year. If one supposes that the loan is made and employed for the profit of the taxpayers, the latter really become debtors for all the sums borrowed in their name: their goods have diminished by a value exactly equal to that which the government has consumed; and this value has been transferred to the capitalists, in exchange for that which they have lent. Lands or other immovable properties and industrial establishments have, in effect, value only by the revenues they produce, and the revenues diminish for the proprietors and for the industrious men, as the taxes increase. A farmer who pays ten thousand francs every year to the proprietor whose land he works will no longer want to pay more than nine thousand, if his farm is subjected to a new tax of one thousand francs. The same cause that diminishes the farm-rent by a tenth diminishes the value of the land in the same proportion.

Such a farm, for example, which could be sold for two hundred thousand francs, will no longer sell for more than one hundred and eighty thousand francs, if a perpetual tax takes from the proprietor a tenth of his income; it would sell for only half of the first sum, if the treasury seized half of the rent that the proprietor could demand from the farmer; finally, it would no longer have any value if the tax became considerable enough to absorb the entire farm-rent.

It results from this that whenever a nation makes a loan, and consumes unproductively, as is the practice, the borrowed capitals, an immense displacement of riches takes place in society. The proprietors of lands, of houses, of industrial enterprises, in short all the men upon whom the public charges fall, are despoiled of values equal to those that the government has borrowed. These values pass to the capitalists who perceive the revenues from them through the hands of the agents of the treasury, and who are thus substituted for the proprietors and the industrious men, whose revenues diminish by all that one is obliged to pay to the former. A single example will make it understood how this substitution operates.

A proprietor who would create, on a farm with an income of twelve thousand francs, a perpetual annuity of six thousand francs, for a capital he had borrowed and dissipated, would be rich by only six thousand francs of income. If he created, on his land, an annuity equal to the farm-rent, for a capital he had likewise consumed unproductively, nothing would remain for him. He could retain the title of proprietor and some of the honors attached to it; but, in reality, it would be to the capitalists or to the annuitants that the products of the property would be devolved. To simplify the operations and to make the position of the landed proprietor clearer, it would only be necessary to have the price of the farm-rent paid directly into the hands of the proprietor of the annuity. Now, a nation can alienate its revenues in the same manner as a private individual, and thus despoil itself of its properties for the profit of those from whom it borrows and consumes the capitals. There is, however, one difference: when it is a private individual who creates an annuity for a capital he dissipates, he alienates only his goods and the products of his industry; when it is a nation, it alienates, besides its goods and its industry, the properties and the industry of the generations to come.

A capitalist who, for a capital of one hundred thousand francs, buys a perpetual annuity of five thousand from the person who can legitimately dispose of it, becomes proprietor of this annuity on the same grounds that he would be of a parcel of land or a manufactory. The enjoyment of this property has for him most of the effects that the enjoyment of another kind of property that would give him a similar income would have: it assures his existence and that of his family, as an immovable or an establishment of industry or commerce would assure it. If it were ravished from him, it would have for him all the effects that are the ordinary consequence of all confiscations, and of all violent displacements of property.

When a nation establishes several millions in annuities, it does not increase the sum of riches; it only transfers to the capitalists whose capitals it consumes unproductively, as has just been seen, a part of the revenues of the other classes of society; likewise, when it abolishes annuities, without reimbursing their value, that is to say when it defaults, it displaces riches, but it does not increase them: it attributes to some the properties of which it despoils others.

In speaking of properties that consist in annuities, I have supposed that the loans were made by the proprietors or by their delegates, and that the borrowed capitals were employed in their interest. Loans made by an illegitimate authority, and charged to a people who derive no profit from them, are the most powerful means of spoliation that has ever been imagined by a government. With the aid of this means, the revenues of a nation and consequently its lands, its capitals, its commerce, can be alienated for the profit, not only of national capitalists, but also of foreign capitalists. If, for example, when the government of the Restoration borrowed a billion to deliver it to the foreigners who had established it, this billion was advanced by lenders from other nations, these lenders really acquired a billion worth of French properties. If, when a little later, it created a debt of a second billion to deliver it to the émigrés, this billion had been advanced by foreign capitalists, these capitalists would have again acquired the right to perceive in perpetuity from the products of our industry the interest on the capital lent.

One can conceive that by pushing such a system to excess, the most intelligent, the most active, the most industrious nation could be transformed into a people of helots, working for a few thousand of the idle who would buy the products of its lands, of its industry, and of all its labors, from a government that would have itself paid the value for them, and that would share it among its favorites or its satellites: only a good national representation can shelter a people from such a spoliation.

All governments have felt that to alienate in perpetuity, with advantage for themselves, a more or less considerable part of the revenues on which is founded the existence of the mass of the population, it was necessary to offer strong guarantees and great benefits to the national or foreign capitalists who would present themselves to buy them. Thus, the laws of all countries offer to the people who present themselves to buy from the government a part of the means of existence of the population that is subject to it, very great benefits and privileges. These benefits and these privileges are so exorbitant, that it has been thought necessary to prohibit them by formal laws for other kinds of properties.According to French laws, for example, revenues that consist in government annuities are exempt from all contribution [^287]; while a proprietor of lands, subject to all the taxes that weigh upon the annuitant, is, moreover, obliged to pay to the government a quarter or a fifth of his revenues, and no one can engage in any kind of industry or commerce without having paid a special tax designated by the name of license tax. No capitalist could, under penalty of being criminally prosecuted as a usurer, stipulate an interest above five percent for the capital he would lend to a simple private individual [^288]; whereas if he delivers the same capital to a government that will sell him, under the name of a government annuity, a more or less considerable portion of the citizens' revenues, he may receive an infinitely higher interest. Finally, a person's goods may be seized and sold for the profit of his creditors when they consist in landed property, in houses, in industrial or commercial establishments, whereas they are unseizable when they consist in government annuities [^289]. The individual who, having stolen a million francs, were to use it to buy an annuity of fifty thousand francs from the State, could not be stripped of it by justice, even if the theft were manifest.

One can conceive that it would not be difficult for a government that possesses such means to alienate in perpetuity, for the profit of foreign or national capitalists, a part of the population's means of existence, if it wished to abuse its power; but it is not a question here of exposing the assaults of which properties can be the object, whether on the part of a government or on the part of private individuals; I have only to make known the diverse species of properties that exist among most civilized nations.

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Notes

[^287]: Laws of December 4 and 10, 1790. [^288]: Law of September 3, 1807. [^289]: Law of 22 Floréal, an VII (May 11, 1799), art. 7.