Key Arguments

• He formulates Corollary 3: 'The right of increase oppresses the proprietor as well as the stranger.'
• He argues that the proprietor, as possessor, 'levies a tax for the use of his property upon himself as its possessor, equal to that which he would receive from a third party'; thus 'capital bears interest in the hands of the capitalist, as well as in those of the borrower.'
• Using an example, he states that if instead of renting out an apartment for 500 francs, he occupies it himself, he 'shall become my own debtor for a rent equal to that which I deny myself.'
• He notes that this principle is 'universally practised in business, and is regarded as an axiom by the economists'—manufacturers who own their capital still deduct interest on that capital when calculating profits, even though they 'owe no interest to anyone.'
• From this he infers that moneylenders 'retain in their own possession as little money as possible; for, since all capital necessarily bears interest, if this interest is supplied by no one, it comes out of the capital, which is to that extent diminished.'
• He concludes succinctly: 'Thus, by the right of increase, capital eats itself up,' and likens this to Papinius’s phrase 'Foenus mordet solidam' ('interest bites the principal'), indicating that the logic of interest is self‑consuming.
• By showing that the capitalist must conceptually tax himself and that idle capital is devoured by its own fictive interest, he suggests that the right of increase is an absurd and self‑contradictory burden even for proprietors, reinforcing his thesis of its impossibility.

Source Quotes

In a word, increase perishes so far as the borrower is concerned; or to use the more energetic Latin phrase⁠—res perit solventi. 3. The right of increase oppresses the proprietor as well as the stranger. The master of a thing, as its proprietor, levies a tax for the use of his property upon himself as its possessor, equal to that which he would receive from a third party; so that capital bears interest in the hands of the capitalist, as well as in those of the borrower and the commandité.

The right of increase oppresses the proprietor as well as the stranger. The master of a thing, as its proprietor, levies a tax for the use of his property upon himself as its possessor, equal to that which he would receive from a third party; so that capital bears interest in the hands of the capitalist, as well as in those of the borrower and the commandité. If, indeed, rather than accept a rent of five hundred francs for my apartment, I prefer to occupy and enjoy it, it is clear that I shall become my own debtor for a rent equal to that which I deny myself.

The master of a thing, as its proprietor, levies a tax for the use of his property upon himself as its possessor, equal to that which he would receive from a third party; so that capital bears interest in the hands of the capitalist, as well as in those of the borrower and the commandité. If, indeed, rather than accept a rent of five hundred francs for my apartment, I prefer to occupy and enjoy it, it is clear that I shall become my own debtor for a rent equal to that which I deny myself. This principle is universally practised in business, and is regarded as an axiom by the economists.

This principle is universally practised in business, and is regarded as an axiom by the economists. Manufacturers, also, who have the advantage of being proprietors of their floating capital, although they owe no interest to anyone, in calculating their profits subtract from them, not only their running expenses and the wages of their employees, but also the interest on their capital. For the same reason, moneylenders retain in their own possession as little money as possible; for, since all capital necessarily bears interest, if this interest is supplied by no one, it comes out of the capital, which is to that extent diminished.

Manufacturers, also, who have the advantage of being proprietors of their floating capital, although they owe no interest to anyone, in calculating their profits subtract from them, not only their running expenses and the wages of their employees, but also the interest on their capital. For the same reason, moneylenders retain in their own possession as little money as possible; for, since all capital necessarily bears interest, if this interest is supplied by no one, it comes out of the capital, which is to that extent diminished. Thus, by the right of increase, capital eats itself up.

For the same reason, moneylenders retain in their own possession as little money as possible; for, since all capital necessarily bears interest, if this interest is supplied by no one, it comes out of the capital, which is to that extent diminished. Thus, by the right of increase, capital eats itself up. This is, doubtless, the idea that Papinius intended to convey in the phrase, as elegant as it is forcible⁠—Foenus mordet solidam.

Thus, by the right of increase, capital eats itself up. This is, doubtless, the idea that Papinius intended to convey in the phrase, as elegant as it is forcible⁠—Foenus mordet solidam. I beg pardon for using Latin so frequently in discussing this subject; it is an homage which

Key Concepts

• 3. The right of increase oppresses the proprietor as well as the stranger.
• The master of a thing, as its proprietor, levies a tax for the use of his property upon himself as its possessor, equal to that which he would receive from a third party;
• so that capital bears interest in the hands of the capitalist, as well as in those of the borrower and the commandité.
• If, indeed, rather than accept a rent of five hundred francs for my apartment, I prefer to occupy and enjoy it, it is clear that I shall become my own debtor for a rent equal to that which I deny myself.
• Manufacturers, also, who have the advantage of being proprietors of their floating capital, although they owe no interest to anyone, in calculating their profits subtract from them, not only their running expenses and the wages of their employees, but also the interest on their capital.
• for, since all capital necessarily bears interest, if this interest is supplied by no one, it comes out of the capital, which is to that extent diminished.
• Thus, by the right of increase, capital eats itself up.
• This is, doubtless, the idea that Papinius intended to convey in the phrase, as elegant as it is forcible⁠—Foenus mordet solidam.

Context

Third corollary to the axiom on the right of increase, where Proudhon extends his critique of interest to show its self‑destructive implications for proprietors and capital itself, thereby deepening his argument that property’s logic is economically impossible and contradictory.