History and analysis, theory and empiricism, have led us, through the agitations of Liberty and Power, to the idea of political contract.
Implementing this idea straightaway and trying to give an account of it, we recognised that the social contract par excellence was a contract of federation, that we have defined in these terms: A synallagmatic and commutative contract, for one or several determined objects, but whose essential condition is that the contracting parties always keep for themselves a greater amount of sovereignty and action than they give up.
This is just the opposite of what happened in the old systems, monarchist, democratic and constitutional, where, by force of circumstances and the driving of principles, individuals and groups are supposed to abdicate their whole sovereignty into the hands of an imposed or elected authority, and yet keep less rights, keep less guarantees and initiative, than the burdens and duties that fall on them.
This definition of the contract of federation is a huge step [forward], one which is going to give us the solution we have longed for.
The political problem, as we said in the first Chapter, reduced to its simplest expression consists in finding the balance between two opposite elements, Authority and Liberty. Any false balance is immediately translated into disorder and ruin for the State, into oppression and misery for the citizens. In other words, anomalies or disruptions of the social order result from the antagonism of its principles; they will disappear when the principles are co-ordinated in such a way that they will no longer be able to do harm.
To balance the two forces is to submit them to a law which, by keeping them at bay from one another, gets them to come to an agreement. What shall provide us with this new element, superior to Authority and Liberty, and render it by their mutual consent the dominant characteristic of the system? — The contract, whose terms make RIGHT and [which] imposes itself equally on the two rival powers.
But in a concrete and lively nature, such as society, Right cannot be reduced to a purely abstract notion, an indefinite aspiration of conscience, which would be to drag us back into fictions and myths. It is necessary, to establish society, to pose not simply an idea but a juridical act, to form a true contract. The men of ’89 sensed it, when they gave France a Constitution, and all the Powers that followed them felt the same. Unfortunately, if the will was good, the enlightenment was insufficient; until now the notary has failed to draw up the contract. We know what the spirit of it must be: let us try now to draft its terms.
All the articles of a constitution can be reduced to a single article, the one that concerns the role and the competence of this great civil servant which has State as its name. Our national assemblies have dealt over and over again with the division and separation of powers, i.e., of the State’s faculties of action; as for the jurisdiction of the State itself, its size, its object, one can see that nobody was very worried about it. One thought about sharing, as was naively said by a minister in 1848; as for the thing to be shared, it generally appeared that the more there would be of it, the more beautiful the feast would be. And yet the definition of the role of the State is a matter of life or death for liberty, collective and individual.
The contract of federation, whose essence is to always reserve more to the citizens than to the State, more to the municipal and provincial authorities than to the central authority, is the only thing that can put us on the path to truth.
In a free society, the role of the State or Government is par excellence a role of legislation, of institution, of creation, of inauguration, of installation; its role as executive should be the minimum possible. In this respect, the name of executive power, by which we designate one of the aspects of the sovereign power, has oddly contributed to distorting ideas. The State is not an entrepreneur of public services, which would be to compare it to the companies that undertake the works of a city for a fixed price. The State, whether it enacts, acts or supervises, is the generator and the supreme director of the activity; if it sometimes gets [directly] involved, it is by way of first demonstration, to give impetus and set an example. The creation carried out, the installation or inauguration having been made, the State withdraws, relinquishing the operation of the new service to local authorities and citizens.
It is the State that sets the weights and measures, that gives the units, the value and the divisions of monies. The examples provided, the first issue finished, the manufacturing of gold, silver and copper coin ceases to be a public function, a job for the State, a ministerial attribute; it is an industry left to towns, and there is nothing that would prevent it, just like the manufacturing of scales, weighting-machines, barrels and bottles, from being entirely free. The best market is the only law here. What is needed, in France, for gold and silver currency to be reputable of honest worth? A tenth of alloy and nine tenth of base metal. I want an inspector to watch and supervise the manufacturing: the role of the State goes no further.
What I say about money, I repeat for a host of services, improperly left in the hands of the government: roads, canals, tobacco, posts, telegraphs, railways, etc. I understand, I admit, I call for the intervention of the State, when necessary, in all these great creations of public utility; I do not see the need to leave them in its hands once they have been delivered to the public. Such a concentration, according to me, constitutes a real excess of prerogatives. I asked in 1848 for State intervention in the founding of national banks, institutions of credit, of savings, of insurance, as with the railways: never has it crossed my mind that the State, having accomplished its work of creation, should forever remain a banker, an insurer, a transporter, etc. Indeed, I do not believe in the possibility of organising the education of the people without a great effort from the central authority, but I remain no less a partisan of the freedom of teaching, as I am of all liberties. I want the school to be as completely separated from the State as from the Church. If there is a Cour des comptes, formed as a statistics office to gather, check and generalise all data, all transactions, all financial deals across the Republic, that is fine. But why should all the expenditures and takings go through the hands of a treasurer, unique collector or paymaster, ministry of State, when the State, by the nature of its function, must have only little or no service to render, and so little or no expenditures?… Is it also really necessary that tribunals be dependent on the central authority? To dispense justice has been the highest attribute of the prince, I know it: but this attribute is a leftover of divine right; it would not be claimed by a constitutional king, with less reason by the head of an empire established on universal suffrage. Since the idea of Right, becoming human again, gets, as such, preponderance in the political system, the independence of the magistracy would be the necessary consequence of it. It is distasteful that Justice be considered as an attribute of central or federal authority; it can only be a delegation carried out by citizens to municipal authority, at the most provincial. Justice is the attribute of man that no raison d’État must deprive him of. — I do not even except the service of war from this rule: militias, armouries, fortresses, [should] go into the hands of federal authorities only in cases of war and for the special purpose of war; apart from that, soldiers and armaments remain in the hands of local authorities.
In a regularly organised society, all must be in continuous growth, science, industry, work, wealth, public health; liberty and morality must go at the same pace. There, movement, life does not stop for a minute. The main organ of this movement, the State, is always in action, because it continually has new needs to satisfy, new issues to solve. If its function of prime driving force and of high director is ceaseless, its works, on the other hand, do not repeat themselves. It is the highest expression of progress. But, what happens when, as we see it almost everywhere, as we almost always have seen it, it dwells on the services that it created itself and gives in to the temptation of monopolising? From founder, it makes itself worker; it no longer is the spirit of the collectivity, who creates it, directs it and enriches it, without imposing on it any trouble: it becomes a vast anonymous company, with six hundred thousand employees and with six hundred thousand soldiers, organised to do everything, and who, instead of helping the nation, instead of serving the citizens and the communes, dispossesses and pressurises them. Soon, corruption, embezzlement, slackening enter this system; busy supporting itself, increasing its prerogatives, multiplying its services and enlarging its budget, Power loses sight of its true role, falls into autocracy and failure to act, the social body suffers, and the nation, against historical law, starts to decline.
Did we not point out, in Chapter VI, that in the evolution of States, Authority and Liberty are in a chronological and logical succession; that, moreover, the first is in continuous decline, the second is in accession, that the Government, expression of authority, is imperceptibly made subordinate by its representatives or organs of liberty, namely: the central Power by the deputies of the departments or provinces; the provincial authority by the delegates of the communes, and the municipal authority by the inhabitants; thus liberty aspires to make itself preponderant, authority to become servant to liberty, and the contractual principle to substitute itself everywhere, in public affairs, for the authoritarian principle?
If these facts are true, the consequence cannot be doubted: it is that, according to the nature of things and the play of principles, Authority retreats and Liberty replaces it, but in a way that both follow each other without ever hurting one another, the constitution of society is essentially progressive, which means more and more liberal, and that this fate can only be fulfilled in a system where governmental hierarchy, instead of being put at its summit, is established right at its base, I mean in the federative system.
The whole constitutional science is there: I summarise it in three proposals:
1. Form groups of average size, each sovereign, and unite them by a pact of federation;
2. Organise in each federated State government according to law of separation of organs; I mean: separate everything in the power that can be separated, define everything that can be defined, distribute between different organs or civil servants everything that can be separated and defined; leave nothing undivided; surround the public administration by all conditions of publicity and control;
3. Instead of absorbing the federated States or provincial and municipal authorities into a central authority, reduce its attributes to a simple rule of general initiative, mutual guarantee and supervision, whose decrees receive their execution only on the approval [visa] of the confederated governments and by agents under their orders, like, in a constitutional monarchy, every order emanating from the king must, to be implemented, be countersigned by a minister.
Most certainly, the separation of powers, such as it was practised under the 1830 Charter, is a beautiful institution and of a high level, but which is puerile to restrict to the members of a cabinet. It is not between seven or eight elected people, emerging from a parliamentary majority and criticised by an opposing minority, that the government of a country must be shared, it is between the provinces and the communes: otherwise political life is abandoned in the peripheries for the centre, and stagnation overcomes the nation which has become hydrocephalic.
The federative system is applicable to all nations and eras, since humanity is progressive in all generations and all races, and the politics of federation, which is par excellence the politics of progress, consists in calling each population, at any given time, to follow a regime of decreasing authority and centralisation, corresponding to their state of consciousness and morals.
 There are three ways to conceive of law, according to the viewpoint of the moral being and the position he puts himself, as a believer, as a philosopher and as a citizen.
The law is the command given to man in the name of God by a competent authority: this is the definition of theology and divine right.
The law is the expression of the relations of things: this is the definition of the philosopher, given by Montesquieu.
The law is the statute of arbitration of the human will (Justice in the Revolution and in the Church, 8th study): this is the theory of contract and of federation.
Truth being one, although many-sided, these three definitions merge into each other and must be regarded as basically identical. But the social systems they generate are not the same: in the first, man declares himself subject of the law and of its author or representative; in the second, he recognises himself as an integral part of a vast organism; in the third, he makes the law his and frees himself from all authority, fate and domination. The first formula is the one of a religious man, the second of a pantheist; the third of a republican. The last alone is compatible with liberty.
 The sale of tobacco was a state monopoly. (Editor)
 While the phrase “freedom of teaching” (liberté de l’enseignement), in the context of French political debates, was associated with opposition to government-run, lay education, Proudhon distinguishes elsewhere between “freedom of teaching” and “freedom of worship” (liberté des cultes). In an 1850 article for La Voix du Peuple, for instance, he insists that “freedom of worship is [...] merely a negative freedom; it is the contrary of freedom of teaching” (Mélanges 3.145). (Editor)
 According to the 1848 Swiss federal constitution, the confederation has the right to create a Swiss University. This idea was vigorously fought against as detrimental to the sovereignty of the cantons, and it seemed to me it was good policy. I ignore whether the project has been pursued.
 The Cour des comptes (Court of Auditors) is a quasi-judicial body of the French government charged with conducting financial and legislative audits of most public institutions and some private institutions. Its three duties are to conduct financial audits of accounts, conduct good governance audits and provide information and advice to the French Parliament and Administration. It verifies the good form of accounting and the proper handling of public money and is essentially a cross between a court of exchequer, comptroller general’s office, and auditor general’s office. (Editor)
 In Switzerland, there exists a federal budget, administered by the federal Council, but which only concerns the matters of the Confederation, and has nothing in common with the budget of the cantons and towns.
 Swiss federal Constitution, Art. 13: “The Confederation has not got the right to maintain permanent armies.” I give this article to our unitarist republican to meditate upon.
 Hydrocephalus, also known as Water on the Brain, is a medical condition in which sufferers have an abnormal accumulation of cerebrospinal fluid in the cavities of the brain. This may cause increased pressure inside the skull and progressive enlargement of the head, convulsion, and mental disability. It can also cause death. (Editor)