What is crucial in my system is free credit, he told me. If I am wrong on this, socialism is truly a dream.
Pierre-Joseph Proudhon, cité par Frédéric Bastiat
Capital and Rent is an attempt at explaining why interest are not only beneficial to lenders but also to borrowers, thus rendering these perfectly legitimate. At the time, zero or negative interest rates did not exist but were already called for by a fringe of the political class, including the famous Proudhon who informs us that his socialist utopia cannot work without them. As a consequence, Frédéric Bastiat will demonstrate that credit cannot and should not be free, which will invalidate the socialist utopia.
Let’s not fool ourselves with today’s negative rates. These are not legitimate and do not invalidate in the least the thesis from Frédéric Bastiat. His explanations are crystal clear and still valid nowadays. The pamphlet being ordered in five parts following the introduction, there will be five more quotes to follow, picked up in this pamphlet that is absolutely key to understand how capitalism works.
Other quotes from Capital and Rent:
Introduction – Part 1 of 5 – The sack of wheat – The house – The plane – Part 5 of 5