And certainly, if you want credit to be free of charge, you have to prove that capital is not generated by the work of the person lending it and that it does not make the work of the person borrowing it more fruitful.
Letter No. 10
F. Bastiat to Pierre-Joseph Proudhon
After explaining that he does not really appreciate the insults proffered by his opponent, Frédéric Bastiat insists to focus on the topic, namely, free credit. Today’s quote should end the debate because if the first term may not always be true (wealth might have been ill-acquired), the second term is necessarily true (to borrow without expecting a benefit is a behaviour for psychiatry, not economics). Besides, it could be interesting to compare this to what is happening nowadays – if the lender is the printing press of the central bank and the borrower is the government trying to spend credit without any fruitful work, is it any wonder that politicians think they have proven free credit is possible?
What is admirable in this letter is that Frédéric Bastiat is able to keep a straight face in front of an opponent whose intellectual honesty is dubious to say the least and that he manages to use erroneous or fallacious arguments to bounce back and always try to find a common ground for agreement. Thus, the critics of Proudhon on the Banque de France are clearly exposing that “it has a privileged status” and therefore, is “not able to shed any light on this debate”.
However, this privilege is giving the opportunity to find common ground – freedom cannot put up with privileges and exposing them (which was the source of the French Revolution) could well be a way to find agreement between Frédéric Bastiat and Pierre-Joseph Proudhon. The conclusion of all this being that “capital should be lent not free of charge but freely”.
Other quotes from Free Credit:
First letter – Second letter – Third letter – Fourth letter – Fifth letter – Sixth letter – Seventh letter – Eighth letter – Ninth letter – Tenth letter – Eleventh letter – Twelfth letter – Thirteenth letter – Fourteenth letter