A discussion of stock market speculation by Pierre-Joseph Proudhon

TL;DR

This paper explores Pierre-Joseph Proudhon's ideas on stock market speculation, contrasting his condemnations of gambling with entrepreneurial risk, and examines historical and modern perspectives on regulation and practices.

Contribution

It provides a detailed analysis of Proudhon's views on speculation and compares 19th-century stock market activities with contemporary practices and regulations.

Findings

Proudhon condemned gambling with shares as unproductive and harmful.

He distinguished between speculative gambling and entrepreneurial risk-taking.

Modern stock markets still reflect some of Proudhon's concerns about regulation and transparency.

Abstract

The object of this contribution is to present the ideas behind the thinking of the French economist Pierre-Joseph Proudhon (1809-1865) in relation to the causes and effects of Stock market speculation. It is based upon the works of this author but particularly on his "Manuel du sp\'eculateur \`a la Bourse" (Stock Market Speculator Manual) edited in 1857 in Paris. Compared to the markets of today, however, the stock market described by Proudhon appears embryonic. Nevertheless it represents the location for transactions in financial assets, commodities, precious metals and even some transactions involving options. This contribution is organised in the following manner - the first section is devoted to the development of Proudhon's thought in relation to speculation. It is divided into two parts. The first part is dedicated to Pierre-Joseph Proudhon's definitions of stock market speculation or gambling with shares that for him served no purpose either from a human or economic perspective and was therefore condemnable and to be contrasted with entrepreneurial speculation that, even though it is a highly-risky activity, involves the spirit of enterprise and provides the lifeblood of economic growth. The second part allows us to present Pierre-Joseph Proudhon's propositions in relation to restricting the speculation that he considers obnoxious. The second section has two objectives: one part places in perspective the views of Proudhon and the characteristics of stock market activity under the Second Empire whilst the other part examines current-day aspects of the characteristics evoked by Proudhon. We are interested especially in the question of the regulation and that of the relevance today of certain accounting practices.