In No. 10 and the following issues of the Volksstaat may be 
found a series of six articles on the housing question.* These 
articles are worthy of attention only because, apart from some 
long-forgotten would-be literary writings of the forties, they are 
the first attempt to transplant the Proudhonist school to Germany. 
This represents such an enormous step backward in comparison 
with the whole course of development of German socialism, which 
delivered a decisive blow precisely to the Proudhonist ideas as far 
back as twenty-five years ago,* that it is worth while answering this 
attempt immediately. 

The so-called housing shortage, which plays such a great role in 
the press nowadays, does not consist in the fact that the working 
class generally lives in bad, overcrowded and unhealthy dwellings. 
This shortage is not something peculiar to the present; it is not 
even one of the sufferings peculiar to the modern proletariat in 
contradistinction to all earlier oppressed classes. On the contrary, 
all oppressed classes in all periods suffered rather uniformly from 
it. In order to put an end to this housing shortage there is only 
one means: to abolish altogether the exploitation and oppression 
of the working class by the ruling class— What is meant today by 
housing shortage is the peculiar intensification of the bad housing 
conditions of the workers as a result of the sudden rush of 
population to the big cities; a colossal increase in rents, still greater 

* In Marx: Misére de la philosophie etc., Brussels and Paris, 1847. 

a [A. Mülberger,] “Die Wohnungsfrage”, Der Volksstaat, Nos. 10-13, 15, 19, 
February 3, 7, 10, 14, 21, March 6, 1872.— Ed. 

congestion in the separate houses, and, for some, the impossibility 
of finding a place to live in at all. And this housing shortage gets 
talked of so much only because it is not confined to the working 
class but has affected the petty bourgeoisie as well. 

The housing shortage from which the workers and part of the 
petty bourgeoisie suffer in our modern big cities is one of the 
innumerable smaller; secondary evils which result from the 
present-day capitalist mode of production. It is not at all a direct 
result of the exploitation of the worker as worker by the capitalist. 
This exploitation is the basic evil which the social revolution wants 
to abolish by abolishing the capitalist mode of production. The 
cornerstone of the capitalist mode of production is, however, the 
fact that our present social order enables the capitalist to buy the 
labour power of the worker at its value, but to extract from it 
much more than its value by making the worker work longer than 
is necessary to reproduce the price paid for the labour power. The 
surplus value produced in this fashion is divided among the whole 
class of capitalists and landowners, together with their paid 
servants, from the Pope and the Emperor down to the night 
watchman and below. We are not concerned here with how this 
distribution comes about, but this much is certain: that all those 
who do not work can live only on the pickings from this surplus 
value, which reach them in one way or another. (Compare Marx’s 
“Capital’,; where this was propounded for the first time.) 

The distribution of this surplus value, produced by the working 
class and taken from it without payment, among the non-working 
classes proceeds amid extremely edifying squabblings and mutual 
swindling. In so far as this distribution takes place by means of 
buying and selling, one of its chief methods is the cheating of the 
buyer by the seller; and in retail trade, particularly in the big 
cities, this has become an absolute condition of existence for the 
seller. When, however, the worker is cheated by his grocer or his 
baker, either in regard to the price or the quality of the 
merchandise, this does not happen to him in his specific capacity 
as a worker. On the contrary, as soon as a certain average measure 
of cheating has become the social rule in any place, it must in the 
long run be adjusted by a corresponding increase in wages. The 
worker appears before the shopkeeper as a buyer, that is, as the 
owner of money or credit, and hence not at all in his capacity as a 
worker, that is, as a seller of labour power. The cheating may hit 
him, and the poorer class as a whole, harder than it hits the richer 
social classes, but it is not an evil which hits him exclusively, which 
is peculiar to his class. 

The Housing Question.—I 319 

And it is just the same with the housing shortage. The 
expansion of the big modern cities gives the land in certain 
sections of them, particularly in those which are centrally situated, 
an artificial and often enormously increasing value; the buildings 
erected in these areas depress this value, instead of increasing it, 
because they no longer correspond to the changed circumstances; 
they are pulled down and replaced by others. This takes place 
above all with centrally located workers’ houses, whose rents, even 
with the greatest overcrowding, can never, or only very slowly, 
increase above a certain maximum. They are pulled down and in 
their stead shops, warehouses and public buildings are erected. 
Through its Haussmann in Paris,* Bonapartism exploited this 
tendency tremendously for swindling and private enrichment. But 
the spirit of Haussmann has also been abroad in London, 
Manchester and Liverpool, and seems to feel itself just as much at 
home in Berlin and Vienna. The result is that the workers are 
forced out of the centre of the towns towards the outskirts; that 
workers’ dwellings, and small dwellings in general, become rare 
and expensive and often altogether unobtainable, for under these 
circumstances the building industry, which is offered a much 
better field for speculation by more expensive dwelling houses, 
builds workers’ dwellings only by way of exception. 

This housing shortage, therefore, certainly hits the worker 
harder than it hits any more prosperous class, but it is just as little 
an evil which burdens the working class exclusively as is the 
cheating of the shopkeeper, and, as far as the working class is 
concerned, when this evil reaches a certain level and attains a 
certain permanency, it must similarly find a certain economic 
adjustment. 

It is largely with just such sufferings as these, which the working 
class endures in common with other classes, and particularly the 
petty bourgeoisie, that petty-bourgeois socialism, to which 
Proudhon belongs, prefers to occupy itself. And thus it is not at all 
accidental that our German Proudhonist seizes chiefly upon the 
housing question, which, as we have seen, is by no means 
exclusively a working-class question; and that he declares it to be, 
on the contrary, a true, exclusively working-class question. 

“The tenant is in the same position in relation to the house-owner as the 
wage-worker in relation to the capitalist.”> 

a The words “in Paris” were added by Engels in the 1887 edition.— Ed. 
b [A. Mülberger,] op. cit., Der Volksstaat, No. 12, February 10, 1872.— Ed. 

This is totally untrue. 

In the housing question we have two parties confronting each 
other: the tenant and the landlord, or house-owner. The former 
wishes to purchase from the latter the temporary use of a 
dwelling; he has money or credit, even if he has to buy this credit 
from the house-owner himself at a usurious price in the shape of 
an addition to the rent. It is a simple commodity sale; it is not a 
transaction between proletarian and bourgeois, between worker 
and capitalist. The tenant—even if he is a worker—appears as a 
man with money; he must already have sold his commodity, a 
commodity peculiarly his own, his labour power, to be able to 
appear with the proceeds as the buyer of the use of a dwelling or 
he must be in a position to give a guarantee of the impending sale 
of this labour power. The peculiar results which attend the sale of 
labour power to the capitalist are completely absent here. The 
capitalist causes the purchased labour power first to produce its 
own value but secondly to produce a surplus value, which remains 
in his hands for the time being, subject to distribution among the 
capitalist class. In this case, therefore, an excess value is produced, 
the sum total of the existing value is increased. In a renting 
transaction the situation is quite different. No matter how much 
the landlord may overreach the tenant it is still only a transfer of 
already existing, previously produced value, and the total sum of 
values possessed by the landlord and the tenant together remains 
the same after as it was before. The worker is always cheated of a 
part of the product of his labour, whether that labour is paid for 
by the capitalist below, above or at its value; the tenant,only when 
he is compelled to pay for the dwelling above its value. It is 
therefore a complete misrepresentation of the relation between 
landlord and tenant to attempt to make it equivalent to the 
relation between worker and capitalist. On the contrary, we are 
dealing here with a quite ordinary commodity transaction between 
two citizens, and this transaction proceeds according to the 
economic laws which govern the sale of commodities in general, 
and in particular the sale of the commodity “landed property”. 
The building and maintenance costs of the house or of the part of 
the house in question enter first into the calculation; the value of 
the land, determined by the more or less favourable situation of 
the house, comes next; the relation between supply and demand 
existing at the moment decides in the end. This simple economic 
relation expresses itself in the mind of our Proudhonist as follows: 

“The house, once it has been built, serves as a perpetual legal title to a definite 
fraction of social labour although the real value of the house has been paid to the 

The Housing Question.—I 32] 

owner long ago more than adequately in the form of rent. Thus it comes about 
that a house which, for instance, was built fifty years ago, during this period covers 
the original cost price two, three, five, ten and more times over in its rent yield.” 4 

Here we have at once Proudhon in his entirety. First, it is 
forgotten that the rent must not only pay the interest on the 
building costs, but must also cover repairs and the average amount 
of bad debts and unpaid rents as well as the occasional periods 
when the house is untenanted,° and finally must pay off in annual 
instalments the building capital which has been invested in a 
house, which is perishable and which in time becomes uninhabit- 
able and worthless. Secondly, it is forgotten that the house rent 
must also pay interest on the increased value of the land upon 
which the building is erected and that, therefore, a part of it 
consists of ground rent. Our Proudhonist immediately declares, it 
is true, that since this increment is brought about without the 
landowner having contributed anything, it does not equitably 
belong to him but to society as a whole. However, he overlooks the 
fact that he is thereby in reality demanding the abolition of landed 
property, a point which would lead us too far if we went into it 
here. And finally he overlooks the fact that the whole transaction 
is not at all one of buying the house from its owner, but of buying 
only its use for a certain time. Proudhon, who never bothered 
himself about the real, the actual conditions under which any 
economic phenomenon occurs, is naturally also unable to explain 
how the original cost price of a house is under certain 
circumstances paid back ten times over in the course of fifty years 
in the form of rent. Instead of examining this not at all difficult 
question economically and establishing whether it is really in 
contradiction to economic laws, and if so how, Proudhon resorts to 
a bold leap from economics into jurisprudence: “The house, once 
it has been built, serves as a perpetual legal title’ to a certain annual 
payment. How this comes about, how the house becomes a legal 
title, on this Proudhon is silent. And yet that is just what he 
should have explained. Had he examined this question he would 
have found that all the legal titles in the world, no matter how per- 
petual, could not give a house the power of obtaining its cost price 
back ten times, over the course of fifty years, in the form of rent, 
but that only economic conditions (which may have obtained social 
recognition in the form of legal titles) can accomplish this. And 
with this he would again be where he started from. 

a [A. Mülberger,] op. cit., Der Volksstaat, No. 10, February 3, 1872.— Ed. 
b The rest of the sentence was added by Engels in the 1887 edition.— Ed. 

The whole Proudhonist teaching rests on this saving leap from 
economic reality into legal phraseology. Every time our good 
Proudhon loses the economic hang of things—and this happens to 
him with every serious problem—he takes refuge in the sphere of 
law and appeals to eternal justice. 

“Proudhon begins by taking his ideal of justice, of ‘justice 
éternelle, from the juridical relations that correspond to the 
production of commodities; thereby, it may be noted, he proves, 
to the consolation of all good citizens, that the production of 
commodities is a form of production as everlasting as justice. 
Then he turns round and seeks to reform the actual production of 
commodities, and the actual legal system corresponding thereto, in 
accordance with this ideal. What opinion should we have of a 
chemist, who, instead of studying the actual laws of the molecular 
changes in the composition and decomposition of matter, and on | 
that foundation solving definite problems, claimed to regulate the 
composition and decomposition of matter by means of the ‘eternal 
ideas’, of ‘naturalité and affinité’? Do we really know any more 
about ‘usury’, when we say it contradicts ‘justice éternelle’, ‘équité 
éternelle’, ‘mutualité éternelle’, and other ‘vérités éternelles’, than the 
fathers of the church did when they said it was incompatible with 
‘grace éternelle’, ‘foi éternelle’, and ‘la volonté éternelle de Dieu’?” 
(Marx, Capital, p. 45°). 

Our Proudhonist does not fare any better than his lord and 
master: 

“The rent agreement is one of the thousand exchanges which are as necessary 
in the life of modern society as the circulation of the blood in the bodies of 
animals. Naturally, it would be in the interest of this society if all these exchanges 
were pervaded by a conception of right,that is to say, if they were carried out 
everywhere according to the strict demands of justice. In a word, the economic life 
of society must, as Proudhon says, raise itself to the heights of economic right. In 
reality, as we know, exactly the opposite takes place.”> 

Is it credible that five years after Marx had characterised 
Proudhonism so summarily and convincingly precisely from this 
decisive angle, one can still print such confused stuff in the 
German language? What does this rigmarole mean? Nothing more 
than that the practical effects of the economic laws which govern 
present-day society run contrary to the author’s sense of justice 
and that he cherishes the pious wish that the matter might be so 

a Engels quotes from the first (1867) German edition of Volume One of Capital; 
see also the English edition which was edited by Engels (Capital, Vol. I, London, 
1887, p. 56).— Ed. 

b [A. Mülberger,] op. cit., Der Volksstaat, No. 11, February 7, 1872.— Ed. 

The Housing Question.—I 325 

arranged as to remedy this situation.—Yes, if toads had tails they 
would no longer be toads! And is then the capitalist mode of 
production not “pervaded by a conception of right”, namely, that 
of its own right to exploit the workers? And if the author tells us 
this is not his conception of right, are we one step further? 

But let us go back to the housing question. Our Proudhonist 
now gives his “conception of right” free rein and treats us to the 
following moving declamation: 

“We do not hesitate to assert that there is no more terrible mockery of the 
whole culture of our lauded century than the fact that in the big cities 90 per cent 
and more of the population have no place that they can call their own. The real 
nodal point of moral and family existence, hearth and home, is being swept away 
by the social whirlpool... In this respect we are far below the savages. The 
troglodyte has his cave, the Australian his clay hut, the Indian his own hearth, but 
the modern proletarian is practically suspended in mid-air,” etc. 

In this jeremiad we have Proudhonism in its whole reactionary 
form. In order to create the modern revolutionary class of the 
proletariat it was absolutely necessary to cut the umbilical cord 
which still bound the worker of the past to the land. The hand 
weaver who had his little house, garden and field along with his 
loom was a quiet, contented man, “godly and honourable” despite 
all misery and despite all political pressure; he doffed his cap to 
the rich, to the priest and to the officials of the state and inwardly 
was altogether a slave. It is precisely modern large-scale industry 
which has turned the worker, formerly chained to the land, into a 
completely propertyless proletarian, liberated from all traditional 
fetters,” a free outlaw; it is precisely this economic revolution which 
has created the sole conditions under which the exploitation of the 
working class in its final form, in capitalist production, can be 
overthrown. And now comes this tearful Proudhonist and bewails 
the driving of the workers from hearth and home as though it 
were a great retrogression instead of being the very first condition 
of their intellectual emancipation. 

Twenty-seven years ago I described, in The Condition of the 
Working-Class in England, the main features of just this process of 
driving the workers from hearth and home, as it took place in the 
eighteenth century in England.‘ The infamies of which the land 
and factory owners were guilty in so doing, and the deleterious 
effects, material and moral, which this expulsion inevitably had on 
the workers concerned in the first place, are there also described 

a [bid.— Ed. 
b Der Volksstaat has “culture” instead of ‘‘fetters”.— Ed. 
¢ See present edition, Vol. 4, pp. 307-27.— Ed. 

as they deserve. But could it enter my head to regard this, which 
was in the circumstances an absolutely necessary historical process 
of development, as a retrogression “below the savages”? Impossi- 
ble! The English proletarian of 1872 is on an infinitely higher level 
than the rural weaver of 1772 with his “hearth and home”. And 
will the troglodyte with his cave, the Australian with his clay hut or 
the Indian with his own hearth ever accomplish a June insurrec- 
tion?*? or a Paris Commune? 

That the situation of the workers has on the whole become 
materially worse since the introduction of capitalist production on 
a large scale is doubted only by the bourgeois. But should we 
therefore look backward longingly to the (likewise very meagre) 
fleshpots of Egypt,”*° to rural small-scale industry, which produced 
only servile souls, or to “the savages”? On the contrary. Only the 
proletariat created by modern large-scale industry, liberated from 
all inherited fetters including those which chained it to the land, 
and herded together in the big cities, is in a position to accomplish 
the great social transformation which will put an end to all class 
exploitation and all class rule. The old rural hand weavers with 
hearth and home would never have been able to do it; they would 
never have been able to conceive such an idea, not to speak of 
desiring to carry it out. 

For Proudhon, on the other hand, the whole _ industrial 
revolution of the last hundred years, the introduction of steam 
power and large-scale factory production which substitutes 
machinery for hand labour and increases the productivity of 
labour a thousandfold, is a highly repugnant occurrence, some- 
thing which really ought never to have taken place. The 
petty bourgeois Proudhon aspires to a world in which each person 
turns out a separate and independent product that is immediately 
consumable and exchangeable in the market. Then, as long as 
each person receives back the full value of his labour in the form 
of another product, “eternal justice” is satisfied and the best 
possible world created. But this best possible world of Proudhon 
has already been nipped in the bud and trodden underfoot by the 
advance of industrial development, which long ago destroyed 
individual labour in all the big branches of industry and which is 
destroying it daily more and more in the smaller and even smallest 
branches, which is setting social labour supported by machinery 
and the harnessed forces of nature in its place, and whose finished 
product, immediately exchangeable or consumable, is the joint 
work of the many individuals through whose hands it has had to 
pass. And it is precisely this industrial revolution which has raised 

The Housing Question.—I 325 

the productive power of human labour to such a high level 
that—for the first time in the history of mankind—the possibility 
exists, given a rational division of labour among all, of producing 
not only enough for the plentiful consumption of all members of 
society and for an abundant reserve fund, but also of leaving each 
individual sufficient leisure so that what is really worth preserving 
in historically inherited culture—science, art, forms of intercourse, 
etc.—may not only be preserved but converted from a monopoly 
of the ruling class into the common property of the whole of 
society, and may be further developed. And here is the decisive 
point: as soon as the productive power of human labour has risen 
to this height, every excuse disappears for the existence of a ruling 
class. After all, the ultimate basis on which class differences were 
defended was always: there must be a class which need not plague 
itself with the production of its daily subsistence, in order that it 
may have time to look after the intellectual work of society. This 
talk, which up to now had its great historical justification, has been 
cut off at the root once and for all by the industrial revolution of 
the last hundred years. The existence of a ruling class is becoming 
daily more and more a hindrance to the development of industrial 
productive power, and equally so to that of science, art and 
especially of forms of cultural intercourse. There never were 
greater boors than our modern bourgeois. 

All this is nothing to friend Proudhon. He wants “eternal 
justice” and nothing else. Each shall receive in exchange for his 
product the full proceeds of his labour, the full value of his 
labour. But to calculate this in a product of modern industry is a 
complicated matter. For modern industry obscures the particular 
share of the individual in the total product, which in the old 
individual handicraft was obviously represented by the finished 
product. Further, modern industry eliminates more and more 
individual exchange, on which Proudhon’s whole system is built 
up,* namely, direct exchange between two producers each of 
whom takes the product of the other in order to consume it. 
Consequently a reactionary streak runs through the whole of 
Proudhonism; an aversion to the industrial revolution and the 
desire, sometimes overtly, sometimes covertly expressed, to drive 
the whole of modern industry out of the temple—steam engines, 
mechanical looms and the rest of the business—and to return to 
old, respectable hand labour. That we would then lose nine 
hundred and ninety-nine thousandths of our productive power, 

4 The rest of the sentence was added by Engels in the 1887 edition.— Ed. 

that the whole of humanity would be condemned to the worst 
possible labour slavery, that starvation would become the general 
rule—what does all that matter if only we succeed in organising 
exchange in such a fashion that each receives “the full proceeds of 
his labour”, and that “eternal justice” is realised? Fiat justitia, 
pereat mundus!* 

Let justice be done though the whole world perish! 

And the world would perish in this Proudhonist counter- 
revolution if it were at all possible to carry it out. 

It is, however, self-evident that, even with social production 
conditioned by modern large-scale industry, it is possible to assure 
each person “the full proceeds of his labour’, so far as this phrase 
has any meaning at all.” And it has a meaning only if it is 
extended to purport not that each individual worker becomes the 
possessor of “the full proceeds of his labour’, but that the whole 
of society, consisting entirely of workers, becomes the possessor of 
the total product of their labour, which product it partly 
distributes among its members for consumption, partly uses for 
replacing and increasing its means of production, and partly stores 
up as a reserve fund for production and consumption. 

After what has been said above, we already know in advance 
how our Proudhonist will solve the great housing question. On the 
one hand, we have the demand that each worker have and own 
his own home in order that we may no longer be below the savages 
On the other hand, we have the assurance that the two, three, five 
or tenfold repayment of the original cost price of a house in the 
form of rent, as it actually takes place, is based on a legal title and 
that this legal title is in contradiction to “eternal justice”. The 
solution is simple: we abolish the legal title and by virtue of eternal 
justice declare the rent paid to be a payment on account of the 
cost of the dwelling itself. If one has so arranged one’s premisses 
that they already contain the conclusion, then of course it requires 
no greater skill than any charlatan possesses to produce the result, 
prepared beforehand, from the bag and proudly point to 
unshakeable logic whose result it is. 

And so it happens here. The abolition of rented dwellings is 
proclaimed a necessity, and couched in the form of a demand that 
every tenant be turned into the owner of his dwelling. How are we 
to do that? Very simply: 

a4 The motto of Ferdinand I, emperor of the Holy Roman Empire.— Ed. 

b The next sentence was added by Engels in the 1887 edition.— Ed. 

The Housing Question.—I 327 

“Rented dwellings will be redeemed... The previous house-owner will be paid 
the value of his house to the last farthing. Hitherto the tenant has paid rent as his 
tribute to the perpetual title of capital, now, from the day when the redemption of 
rented dwellings is proclaimed, the exactly fixed sum paid by the tenant will become 
the annual instalment paid for the dwelling which has passed into his possession... 
Society ... transforms itself in this way into a totality of free and independent owners of 
dwellings.” @ 

The Proudhonist finds it a crime against eternal justice that the 
house-owner can without working obtain ground rent and 
interest” out of the capital he has invested in the house. He 
decrees that this must cease, that capital invested in houses shall 
no longer yield interest; nor ground rent either, so far as it 
represents purchased landed property. Now we have seen that the 
capitalist mode of production, the basis of present-day society, is in 
no way affected hereby. The pivot on which the exploitation of 
the worker turns is the sale of his labour power to the capitalist 
and the use which the capitalist makes of this transaction, the fact 
that he compels the worker to produce far more than the paid 
value of his labour power amounts to. It is this transaction 
between capitalist and worker which produces all the surplus value 
afterwards divided in the form of ground rent, commercial profit, 
interest on capital,° taxes, etc., among the diverse varieties of 
capitalists and their servitors. And now our Proudhonist comes 
along and believes that if we were to prohibit one single variety of 
capitalists, and at that of capitalists who purchase no labour power 
directly and therefore also cause no surplus value to be produced, 
from making profit or receiving interest,’ it would be a step 
forward! The mass of unpaid labour taken from the working class 
would remain exactly the same even if house-owners were to be 
deprived tomorrow of the possibility of receiving ground rent and 
interest.° However, this does not prevent our Proudhonist from 
declaring: 

“The abolition of rented dwellings is thus one of the most fruitful and magnificent 
aspirations which have ever sprung from the womb of the revolutionary idea and it 
must become one of the primary demands of the Social-Democracy.” 

a {A. Milberger,] op. cit., Der Volksstaat, No. 12, February 10, 1872.— Ed. 

b Der Volksstaat has “profit” instead of ‘“interest”.— Ed. 

© The words “interest on capital” were added by Engels in the 1887 
edition.— Ed. 

d The words “or receiving interest” were added by Engels in the 1887 
edition.— Ed. 

€ Der Volksstaat has “profit” instead of “interest”.— Ed. 

f [A. Milberger,] op. cit., Der Volksstaat, No. 12, February 10, 1872.— Ed. 

This is exactly the type of market cry of the master Proudhon 
himself, whose cackling was always in inverse ratio to the size of 
the eggs laid. 

And now imagine the fine state of things if each worker, petty 
bourgeois and bourgeois were compelled by paying annual 
instalments to become first part owner and then full owner of his 
dwelling! In the industrial districts in England, where there is 
large-scale industry but small workers’ houses and each married 
worker occupies a little house of his own, there might possibly be 
some sense in it. But the small-scale industry in Paris and in most 
of the big cities on the Continent is supplemented by large houses 
in each of which ten, twenty or thirty families live together. 
Supposing that on the day of the world-delivering decree, when 
the redemption of rent dwellings is proclaimed, Peter is working 
in an engineering works in Berlin. A year later he is owner of, if 
you like, the fifteenth part of his flat consisting of a little room on 
the fifth floor of a house somewhere in the neighbourhood of the 
Hamburger Tor. He then loses his job and soon afterwards finds 
himself in a similar flat on the third floor of a house in the Pothof 
in Hanover with a wonderful view of the courtyard. After five 
months’ stay there he has just acquired '/3, part of this property 
when a strike sends him to Munich and compels him by a stay of 
eleven months to assume ownership of exactly ''/ig) of a rather 
gloomy abode on the street level behind the Ober-Angergasse. 
Subsequent removals, such as nowadays are so frequent with 
workers, saddle him further with 7/36 of a no less desirable 
residence in Saint Gall, 7°/:39 of another one in Leeds, and **”/s¢99s, 
figured out exactly in order that “eternal justice” may have 
nothing to complain about, of a third flat in Seraing. And now, of 
what use are all these shares in flats to our Peter? Who is to give 
him the real value of these shares? Where is he to find the owner 
or owners of the remaining shares in his various one-time flats? 
And what exactly are the property relations regarding any big 
house whose floors hold, let us say, twenty flats and which, when 
the redemption period has elapsed and rented flats are abolished, 
belongs to perhaps three hundred part owners who are scattered 
all over the world? Our Proudhonist will answer that by that time 
the Proudhonist exchange bank**! will exist, which will pay to 
anyone at any time the full labour proceeds for any labour 
product, and will therefore pay out also the full value of a share in 
a flat. But in the first place we are not at all concerned here with 
the Proudhonist exchange bank since it is nowhere mentioned 
in the articles on the housing question; secondly it rests on the 

The Housing Question.—I 329 

peculiar error that if someone wants to sell a commodity he will 
necessarily always find a buyer for its full value, and thirdly it 
went bankrupt in England more than once under the name of 
Lazour Excuance Bazaar,”** before Proudhon invented it. 

The whole conception that the worker should buy his dwelling 
rests again on the reactionary basic outlook, already emphasised, 
of Proudhonism, according to which the conditions created by 
modern large-scale industry are morbid excrescences, and society 
must be brought forcibly, that is, against the trend which it has 
been following for a hundred years, to a condition in which the 
old stable handicraft of the individual is the rule, and which, 
generally speaking, is nothing but an idealised restoration of 
small-scale enterprise, which has gone and is still going to rack and 
ruin. Once the workers are flung back into these stable conditions 
and the “social whirlpool” has been happily removed, the worker 
can naturally again make use of property in “hearth and home”, 
and the above redemption theory appears less absurd. Proudhon 
only forgets that in order to accomplish all this he must first of all 
put back the clock of world history a hundred years, and that if he 
did he would turn the present-day workers into just such 
narrow-minded, crawling, sneaking servile souls as their great- 
great-grandfathers were. 

As far, however, as this Proudhonist solution of the housing 
question contains any rational and practically applicable content it is 
already being carried out today, but this realisation does not 
spring from “the womb of the revolutionary idea”, but from—the 
big bourgeois themselves. Let us listen to an excellent Spanish 
newspaper, La Emancipacion, of Madrid, of March 16, 1872": 

“There is still another means of solving the housing question, the way proposed 
by Proudhon, which dazzles at first glance, but on closer examination reveals its 
utter impotence. Proudhon proposed that tenants should be converted into buyers 
on the instalment plan, that the rent paid annually be booked as an instalment on 
the redemption payment of the value of the particular dwelling, so that after a 
certain time the tenant would become its owner.?43 This method, which Proudhon 
considered very revolutionary, is being put into operation in all countries by 
companies of speculators who thus secure double and treble the value of the 
houses by raising the rents. M. Dollfus and other big manufacturers in 
North-Eastern France have carried out this system not only in order to make 
money but, in addition, with a political idea at the back of their minds. 

“The cleverest leaders of the ruling class have always directed their efforts 
towards increasing the number of small owners in order to build an army for 
themselves against the proletariat. The bourgeois revolutions of the last century 

a [P. Lafargue,] “Articulos de primera necesidad. II. La Habitacion”, La 
Emancipacion, No. 40, March 16, 1872.— Ed. 

divided up the big estates of the nobility and the church into small allotments, just 
as the Spanish republicans propose to do today with the still existing large estates, 
and created thereby a class of small landowners which has since become the most 
reactionary element in society and a permanent hindrance to the revolutionary 
movement of the urban proletariat. Napoleon III aimed at creating a similar class 
in the towns by reducing the denominations of the individual bonds of. the public 
debt, and M. Dollfus and his colleagues sought to stifle all revolutionary spirit in 
their workers by selling them small dwellings to be paid for in annual instalments, 
and at the same time to chain the workers by this property to the factory once they 
worked in it.244 Thus the Proudhon plan, far from bringing the working class any 
relief, even turned directly against it.” * 

How is the housing question to be settled, then? In present-day 
society, just as any other social question is settled: by the gradual 
economic levelling of demand and supply, a settkement which 
reproduces the question itself again and again and therefore is no 
settlement. How a social revolution would settle this question not 
only depends on the circumstances in each particular case, but is 
also connected with much more far-reaching questions, one of the 
most fundamental of which is the abolition of the antithesis 
between town and country. As it is not our task to create utopian 
systems for the organisation of the future society, it would be 
more than idle to go into the question here. But one thing is 
certain: there is already a sufficient quantity of houses in the big 
cities to remedy immediately all real “housing shortage’, provided 
they are used judiciously. This can naturally only occur through 
the expropriation of the present owners by quartering in their 
houses homeless workers or workers overcrowded in their present 
homes. As soon as the proletariat has won political power, such a 
measure prompted by concern for the common good will be just 
as easy to carry out as are other expropriations and billetings by 
the present-day state. 

However, our Proudhonist is not satisfied with his previous 
achievements in the housing question. He must raise the question 

* How this solution of the housing question by means of chaining the worker to 
his own “home” is arising spontaneously in the neighbourhood of big or rapidly 
rising American towns can be seen from the following passage of a letter by 
Eleanor Marx-Aveling, Indianapolis, November 28, 1886: “In, or rather near, 
Kansas City we saw some miserable little wooden shacks, containing about three 
rooms each, still in the wilds; the land cost 600 dollars and was just big enough to 
put, the little house on it; the latter cost a further 600 dollars, that is, together, 
4,800 marks, for a miserable little thing, an hour away from the town, in a muddy 
desert.” In this way the workers must shoulder heavy mortgage debts in order to 
obtain even these dwellings, and now indeed become the slaves of their employers. 
They are tied to their houses, they cannot go away, and must put up with whatever 
working conditions are offered them. [Note by Engels to the 1887 edition.] 

The Housing Question.—I 331 

from the level ground into the sphere of higher socialism in order 
that it may prove there also an essential “fractional part of the 
social question”: 

“Let us now assume that the productivity of capital is really taken by the horns, 
as it must be sooner or later, for instance, by a transitional law which fixes the 
interest on all capitals at one per cent, but mark you, with the tendency to make even 
this rate of interest approximate more and more to the zero point, so that finally 
nothing more will be paid than the labour necessary to turn over the capital. Like all 
other products, houses and dwellings are naturally also included within the purview 
of this law... The owner himself will be the first one to agree to a sale because 
otherwise his house would be unused and the capital invested in it simply useless.” @ 

This passage contains one of the chief articles of faith of the 
Proudhonist catechism and offers a striking example of the 
confusion prevailing in it. 

The “productivity of capital” is an absurdity that Proudhon 
takes over uncritically from the bourgeois economists. The 
bourgeois economists, it is true, also begin with the proposition 
that labour is the source of all wealth and the measure of value of 
all commodities; but they likewise have to explain how it comes 
about that the capitalist who advances capital for an industrial or 
handicraft business receives back at the end of it not only the 
capital which he advanced but also a profit over and above it. In 
consequence they are compelled to entangle themselves in all sorts 
of contradictions and to ascribe also to capital a certain productivi- 
ty. Nothing proves more clearly how completely Proudhon 
remains enmeshed in bourgeois thinking than the fact that he has 
taken over this phrase about the productivity of capital. We have 
seen at the very beginning that the so-called “productivity of capital” 
is nothing but the quality inherent in it (under present-day so- 
cial relations, without which it would not be capital at all) of being 
able to appropriate the unpaid labour of wage-workers. 

However, Proudhon differs from the bourgeois economists in 
that he does not approve of this “productivity of capital,” but on 
the contrary, discovers in it a violation of “eternal justice’. It is 
this productivity which prevents the worker from receiving the full 
proceeds of his labour. It must therefore be abolished. But how? 
By lowering the rate of interest by compulsory legislation and 
finally reducing it to zero. Then, according to our Proudhonist, 
capital will cease to be productive. 

The interest on loaned money capital is only a part of profit; 
profit, whether on industrial or commercial capital, is only a part 

a [A. Milberger,] op. cit., Der Volksstaat, No. 13, February 14, 1872.— Ed. 

of the surplus value taken by the capitalist class from the working 
class in the form of unpaid labour. The economic laws which 
govern the rate of interest are as independent of those which 
govern the rate of surplus value as could possibly be the case with 
laws of one and the same form of society. But as far as the 
distribution of this surplus value among the individual capitalists is 
concerned, it is clear that for industrialists and merchants who 
have in their businesses large amounts of capital advanced by 
other capitalists the rate of profit must rise—all other things being 
equal—to the same extent as the rate of interest falls. The 
reduction and final abolition of interest would, therefore, by no 
means really take the so-called “productivity of capital” “by the 
horns”. It would do no more than re-arrange the distribution 
among the individual capitalists of the unpaid surplus value taken 
from the working class. It would not give an advantage to the 
worker as against the industrial capitalist, but to the industrial 
capitalist as against the rentier. 

Proudhon, from his legal standpoint, explains the rate of 
interest, as he does all economic facts, not by the conditions of 
social production, but by the state laws in which these conditions 
receive their general expression. From this point of view, which 
lacks any inkling of the interconnection between the state laws and 
the conditions of production in society, these state laws necessarily 
appear as purely arbitrary orders which at any moment could be 
replaced just as well by their exact opposites. Nothing is, 
therefore, easier for Proudhon than to issue a decree—as soon as 
he has the power to do so—reducing the rate of interest to one 
per cent. And if all the other social conditions remain as they 
were, this Proudhonist decree will simply exist on paper only. The 
rate of interest will continue to be governed by the economic laws 
to which it is subject today, all decrees notwithstanding. Persons 
possessing credit will continue to borrow money at two, three, four 
and more per cent, according to circumstances, just as before, and 
the only difference will be that rentiers will be very careful to 
advance money only to persons with whom no litigation is to be 
expected. Moreover, this great plan to deprive capital of its 
“productivity” is as old as the hills; it is as old as—the usury laws 
which aim at nothing else but limiting the rate of interest, and 
which have since been abolished everywhere because in practice 
they were continually broken or circumvented, and the state was 
compelled to admit its impotence against the laws of social 
production. And the re-introduction of these medieval and 
unworkable laws is “to take the productivity of capital by the 

The Housing Question.—] 333 

horns”? One sees that the closer Proudhonism is examined the 
more reactionary it appears. 

And when thereupon the rate of interest has been reduced to 
zero in this fashion, and interest on capital therefore abolished, 
then “nothing more will be paid than the labour necessary to 
turn over the capital’. This is supposed to mean that the 
abolition of the rate of interest is equivalent to the abolition of profit 
and even of surplus value. But if it were possible really to abolish 
interest by decree, what would be the consequence? The class of 
rentiers would no longer have any inducement to loan out their 
capital in the form of advances, but would invest it industrially, 
either on their own or through joint-stock companies. The mass of 
surplus value extracted from the working class by the capitalist class 
would remain the same; only its distribution would be altered, and 
even that not much. 

In fact, our Proudhonist fails to see that already now, in 
commodity purchase in bourgeois society, no more is paid on the 
average than “the labour necessary to turn over the capital” (it 
should read, necessary for the production of the commodity in 
question). Labour is the measure of value of all commodities, and 
in present-day society—apart from fluctuations of the market—it 
is absolutely impossible that in the aggregate more should be paid 
on the average for commodities than the labour necessary for 
their production. No, no, my dear Proudhonist, the difficulty lies 
elsewhere. It is contained in the fact that “the labour necessary 
to turn over the capital” (to use your confused terminology) is 
simply not fully paid for! How this comes about you can look up in 
Marx (Capital, pp. 128-60%). 

But that is not enough. If interest on capital is abolished, house 
rent is abolished with it; for, “like all other products, houses and 
dwellings are naturally also included within the purview of this 
law”. This is quite in the spirit of the old Major who summoned 
his one-year volunteer recruit and declared: 

“T say, I hear you are a doctor; you might report from time to 
time at my quarters; when one has a wife and seven children there 
is always something to patch up.” 

Recruit: “Excuse me, Major, but I am a doctor of philosophy.” 

Major: “That’s all the same to me; one sawbones is the same as 
another.” 

Our Proudhonist behaves the same way: house rent or interest 

4 Cf. the English edition of Capital, Vol. I, London, 1887, pp. 143-78.— Ed. 

13— 1006 

on capital, it is all the same to him. Interest is interest*; sawbones 
is sawbones. 

We have seen above that the rent price, commonly called house 
rent, is composed as follows: 1) a part which is ground rent; 2) a 
part which is interest on the building capital, including the profit 
of the builder; 3) a part which goes for repairs and insurance; 4) a 
part which has to amortise the building capital inclusive of profit 
in annual deductions according to the rate at which the house 
gradually depreciates. 

And now it must have become clear even to the blindest that 

“the owner himself will be the first one to agree to a sale because otherwise his 
house would be unused and the capital invested in it simply useless”. 

Of course. If the interest on loaned capital is abolished, no 
house-owner can thereafter obtain a penny piece in rent for his 
house, simply because house rent may also be spoken of as rent 
interest and because such rent interest contains a part which is really 
interest on capital. Sawbones is sawbones. Whereas the usury 
laws relating to ordinary interest on capital could be made ineffective 
only by circumventing them, yet they never touched the rate of 
house rent even remotely. It was reserved for Proudhon to imagine 
that his new usury law would without more ado regulate and 
gradually abolish not only simple interest on capital but also the 
complicated house rent for dwellings.° Why then the “simply 
useless” house should be purchased for good money from the 
house-owner, and how it is that under such circumstances the 

a The original has “Zins ist Zins”; a pun on ‘“Mietzins” (house rent) and 
“Kapitalzins” (interest on capital).— Ed. 

b The passage “We have seen above ... house rent for dwellings” was edited by 
Engels for the 1887 edition; in Der Volksstaat No. 53 of July 3, 1872 it runs as 
follows: 

“We have seen above that the rent price, commonly called house rent, is 
composed as follows: 1) a part which is ground rent, 2) a part which is profit, not 
interest, on the building capital, 3) a part which is the cost of repairs, maintenance, 
and insurance. It contains no part which is interest on capital, unless the house is 
encumbered with a mortgage debt. 

“And now it must have become clear even to the blindest that ‘the owner 
himself will be the first one to agree to a sale because otherwise his house would be 
unused and the capital invested in it simply useless’. Of course. If the interest on 
loaned capital is abolished, no house-owner can thereafter obtain a penny piece in rent 
for his house, simply because house rent may also be spoken of as rent interest. 
Sawbones is sawbones.” 

After the sentence “It contains no part which is interest on capital, unless the 
house is encumbered with a mortgage debt” in the 1872 separate reprint of Part I 
of The Housing Question Engels made the following note, omitted in the 1887 
edition: 

The Housing Question.—I 335 

house-owner would not pay money himself to get rid of this “simply 
useless” house in order to save himself the cost of repairs—about 
this we are left in the dark. 

After this triumphant achievement in the sphere of higher 
socialism (Master Proudhon called it suprasocialism’) our 
Proudhonist considers himself justified in flying still higher: 

“All that still has to be done now is to draw some conclusions in order to cast 

And what are these conclusions? Things which follow as little 
from what has been said before as the worthlessness of dwelling 
houses from the abolition of interest. Stripped of the pompous 
and solemn phraseology of our author, they mean nothing more 
than that, in order to facilitate the business of redemption of 
rented dwellings, the following is desirable: 1) exact statistics on 
the subject; 2) a good sanitary inspection force; 3) co-operatives of 
building workers to undertake the building of new houses. All 
these things are certainly very fine and good, but, despite all the 
vociferous phrases in which they are enveloped, they by no means 
cast “complete light” into the obscurity of Proudhonist mental 
confusion. 

One who has achieved such great things has the right to address 
a serious exhortation to the German workers: 

“Such and similar questions, it would seem to us, are well worth the attention of 
the Social-Democracy.... Let it seek to clarify its mind, as here on the housing 
question, so also on other and equally important questions, such as credit, state debts, 
private debts, taxes,” etc. 

Thus, our Proudhonist here confronts us with the prospect of a 
whole series of articles on “similar questions”, and if he deals with 
them all as thoroughly as with the present “so important subject”, 
the Volksstaat will have copy enough for a year. But we are ina 
position to anticipate—it all amounts to what has already been 
said: interest on capital is to be abolished and with that the interest 

‘For the capitalist who buys a ready-built house, part of the rent price, which is 
not composed of ground rents and overhead expenses, may appear in the form of 
interest on capital. But this alters nothing because it does not matter whether the 
builder of the house lets it himself or sells it for that purpose to another 
capitalist.” — Ed. 

a P, J. Proudhon, Systéme des contradictions économiques, ou Philosophie de la misere, 
Vol. 1, Paris, 1846, p. III (Proudhon has “suprasocial”).— Ed. 

b [A. Mülberger,] op. cit., Der Volksstaat, No. 13, February 14, 1872.— Ed. 

© Ibid.— Ed. 

13* 

on public and private debts disappears, credit will be gratis, etc. 
The same magic formula is applied to any and every subject and 
in each particular case the same astonishing result is obtained with 
inexorable logic, namely, that when interest on capital has been 
abolished no more interest will have to be paid on borrowed 
money. 

They are fine questions, by the way, with which our Proudhonist 
threatens us: Credit! What credit does the worker need besides that 
from week to week, or the credit he obtains at the pawnshop? 
Whether he gets this credit free or at interest, even at the usurious 
interest charged by the pawnshop, how much difference does that 
make to him? And if he did, generally speaking, obtain some 
advantage from it, that is to say, if the cost of production of 
labour power were reduced, would not the price of labour power 
be bound to fall—But to the bourgeois, and in particular to the 
petty bourgeois, credit is an important matter, and it would be a 
very fine thing for the petty bourgeois in particular if credit could 
be obtained at any time, and besides without payment of interest. 
“State debts!”” The working class knows that it did not make them, 
and when it comes to power it will leave the payment of them to 
those who contracted them. “Private debts!” —see credit. “Taxes!” 
A matter that interests the bourgeoisie very much but the worker 
only very little. What the worker pays in taxes goes in the long run 
into the cost of production of labour power and must therefore be 
compensated for by the capitalist. All these things which are held 
up to us here as highly important questions for the working class 
are in reality of essential interest only to the bourgeois, and still 
more so to the petty bourgeois; and, despite Proudhon, we 
maintain that the working class is not called upon to safeguard the 
interests of these classes. 

Our Proudhonist has not a word to say about the great question 
which really concerns the workers, that of the relation between 
capitalist and wage-worker, the question of how it comes about 
that the capitalist can enrich himself by the labour of his workers. 
True enough, his lord and master did occupy himself with it, but 
introduced absolutely no clearness into the matter. Even in his 
latest writings he has got essentially no farther than he was in his 
Philosophie de la misére, which Marx so strikingly reduced to 
nothingness in 1847." 

aK. Marx, The Poverty of Philosophy. Answer to the “Philosophy of Poverty” by 
M. Proudhon.— Ed. 

The Housing Question.—II 337 

It was bad enough that for twenty-five years the workers 
speaking Romance languages had almost no other socialist mental 
pabulum than the writings of this “socialist of the Second 
Empire”, and it would be a double misfortune if the Proudhonist 
theory were now to inundate Germany too. However, there need 
be no fear of this. The theoretical standpoint of the German 
workers is fifty years ahead of that of Proudhonism, and it will be 
sufficient to make an example of this one question, the housing 
question, to save further trouble in this respect. 

Part II