Suppose that in a certain country all the people wore hats.  If, by machinery, the price could be reduced half, it would not necessarily follow that the consumption would be doubled.

Would you say that in this case a portion of the national labour had been paralyzed?  Yes, according to the vulgar demonstration; but, according to mine, No; for even if not a single hat more should be bought in the country, the entire fund of wages would not be the less secure.  That which failed to go to the hat-making trade would be found to have gone to the economy realised by all the consumers, and would thence serve to pay for all the labour which the machine had rendered useless, and to excite a new development of all the trades.  And thus it is that things go on.  I have known newspapers to cost eighty francs, now we pay forty-eight:  here is a saving of thirty-two francs to the subscribers.  It is not certain, or at least necessary, that the thirty-two francs should take the direction of the journalist trade; but it is certain, and necessary too, that if they do not take this direction they will take another.  One makes use of them for taking in more newspapers; another, to get better living; another, better clothes; another, better furniture.  It is thus that the trades are bound together.  They form a vast whole, whose different parts communicate by secret canals:  what is saved by one, profits all.  It is very important for us to understand that savings never take place at the expense of labour and wages.

IX.—­Credit.

In all times, but more especially of late years, attempts have been made to extend wealth by the extension of credit.

I believe it is no exaggeration to say, that since the revolution of February, the Parisian presses have issued more than 10,000 pamphlets, crying up this solution of the social problem.

The only basis, alas! of this solution, is an optical delusion—­if, indeed, an optical delusion can be called a basis at all.

The first thing done is to confuse cash with produce, then paper money with cash; and from these two confusions it is pretended that a reality can be drawn.

It is absolutely necessary in this question to forget money, coin, bills, and the other instruments by means of which productions pass from hand to hand.  Our business is with the productions themselves, which are the real objects of the loan; for when a farmer borrows fifty francs to buy a plough, it is not, in reality, the fifty francs which are lent to him, but the plough; and when a merchant borrows 20,000 francs to purchase a house, it is not the 20,000 francs which he owes, but the house.  Money only appears for the sake of facilitating the arrangements between the parties.

Peter may not be disposed to lend his plough, but James may be willing to lend his money.  What does William do in this case?  He borrows money of James, and with this money he buys the plough of Peter.