Proudhon - A Biography

THE VOICE OF THE PEOPLE
ment, with its policy of herding the unemployed into national
workshops, was erring by seeking to palliate the social situation
without touching the basic contradictions underlying the
prevalent economic distress, and, secondly, that the deification
o f universal suffrage betrayed a failure to realise the important
truth that ‘social reform will never come out o f political reform;
political reform must, on the contrary, emerge from social
reform.’ Within a few months the June rising was to prove
Proudhon right on the first point, and the election o f Louis
Bonaparte through the institution o f universal suffrage was to
justify him on the second.
These two pamphlets attacked the immediate topical issues of
the day; the third gave the first sketch of his long-promised
constructive suggestions for the reform of society. With perhaps
an excess o f descriptive volubility, it was entitled: The Organisation
of Credit and Circulation and the Solution of the Social Problem without
Taxation, Loans, Specie, Paper Money, - Price Control, Levies,
Bankruptcy, Agrarian Law, Poor Law, National Workshops,
Association, Sharing or State Intervention, without Impediment to
Commerce and Industry, and without Attacking Property. It was a
vast programme, but Proudhon summarised it in the following
sentence: ‘What we need, what I call for in the name o f all
workers, is reciprocity, equity in exchange, the organisation of
credit.’
To achieve this organisation of credit, Proudhon proposed
that there should be an immediate reduction of interest rates,
dividends, rents and wages, accompanied by a simultaneous
reduction of prices which, he held, would solve the difficulties
the country was undergoing owing to the scarcity of circulating
media. But the main basis o f his proposals lay in the Bank of
Exchange or, as he was later to call it, the People’s Bank. The
scheme o f the People’s Bank remained a favourite social
panacea to which Proudhon continually returned, but it was not
one o f his most influential ideas, and for the moment we can
confine ourselves to its basic outline.
In substance, it was Mutualism put into more concrete form.
Proudhon envisaged an organisation in which the workers, as
members, mutually guaranteed each other. Credit would no
longer be a matter arranged by financiers or the State; it would
rest on the mutual support which the workers were willing to