Reordering of Society

Reordering of Society Capital and Credit On-line since: 30th May, 1999 An Essay By Rudolf Steiner Unidentified Essay Be sure to read another version of the Essay: Reordering of Society — Capital and Credit. Copyright © 1927 This e.Text edition is provided through the wonderful work of: The Anthroposophical Publishing Company London

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--| CAPITAL AND CREDIT |-------------------------------------------

From various points of view the opinion has been expressed that all
questions of money are so complicated as to be well-nigh impossible to
grasp in clear and transparent thoughts. A similar view can be
maintained regarding many questions of modern social life. But we
should consider the consequences that must follow if men allow their
social dealings to be guided by indefinite thoughts; for such thoughts
do not merely signify a confusion in theoretic knowledge, they are
potent forces in life; their vague character lives on in the
institutions that arise under their influence, which in turn result in
social conditions making life impossible ...

If we try to go the root of the social question, we are bound to see
that even the most material demands can be grappled with only by
proceeding to the thoughts that underlie the co-operation of men and
women in a community. For example, people closely connected with the
land have indicated how, under the influence of modern economic
forces, the buying and selling of land has made land into a commodity,
and they are of the opinion that this is harmful to society. Yet
opinions such as these do not lead to practical results, for men in
other spheres of life do not admit that they are justified ... We must
take into account how the purely capitalistic tendency affects the
valuation of land. Capital creates the laws of its own increase, which
in certain spheres no longer accord with an increase on sound lines.
This is specially evident in the case of land. Certain conditions may
well make it necessary for a district to be fruitful in a particular
way-they may be founded on spiritual and cultural peculiarities. But
their fulfilment might result in a smaller interest on capital than
investment elsewhere. As a consequence of the purely capitalistic
tendency the land will then be exploited, not according to these
spiritual or cultural points of view, but in such a way that the
resulting interest on capital may equal that in other undertakings.
And in this way values that may be very necessary to a real
civilization are left undeveloped.

It is easy to jump to the conclusion: The capitalistic orientation of
economic life has these results, and must therefore be abandoned ...
But one who recognizes how modern life works through division of
labour and of social function will rather have to consider how to
exclude from social life the disadvantages which arise as a by-product
of this capitalistic tendency ... The ideal is to work for a structure
of society whereby the criterion of increase in capital will no longer
be the only power to which production is subject-it should rather be
the symptom, which shows that the economic life, by taking into
account all the requirements of man's bodily and spiritual nature, is
rightly formed and ordered ...

Now it is just in so far as they can be bought and sold for sums of
capital in which their specific nature finds no expression, that
economic values become commodities. But the commodity nature is only
suited to those goods or values which are directly consumed by man.
For the valuation of these, man has an immediate standard in his
bodily and spiritual needs. There is no such standard in the case of
land, nor in the case of means of production. The valuation of these
depends on many factors, which only become apparent when one takes
into account the social structure as a whole ...

Where ‘supply and demand’ are the determining factors, there the
egoistic type of value is the only one that can come into reckon ing.
The ‘market’ relationship must be superseded by associations
regulating the exchange and production of goods by an intelligent
observation of human needs. Such associations can replace mere supply
and demand by contracts and negotiations between groups of producers
and consumers, and between different groups of producers ...

Work done in confidence of the return achievements of others
constitutes the giving of *credit* in social life. As there was once a
transition from barter to the money system, so there has recently been
a progressive transformation to a basis of credit. Life makes it
necessary today for one man to work with means entrusted to him by
another, or by a community, having confidence in his power to achieve
a result. But under the capitalistic method the credit system involves
a complete loss of the real and satisfying human relationship of a man
to the conditions of his life and work. Credit is given when there is
prospect of an increase of capital that seems to justify it; and work
is always done subject to the view that the confidence or credit
received will have to appear justified in the capitalistic sense. And
what is the result? Human beings are subjected to the power of
dealings in capital which take place in a sphere of finance remote
from life. And the moment they become fully conscious of this fact,
they feel it to be unworthy of their humanity ...

A healthy system of giving credit presupposes a social structure which
enables economic values to be estimated by their relation to the
satisfaction of men's bodily and spiritual needs. Men's economic
dealings will take their form from this. Production will be considered
from the point of view of needs, no longer by an abstract scale of
capital and wages.

Economic life in a threefold society is built up by the cooperation of
*associations* arising out of the needs of producers and the interests
of consumers. In their mutual dealings, impulses from the spiritual
sphere and sphere of rights will play a decisive part. These
associations will not be bound to a purely capitalistic standpoint,
for one association will be in direct mutual dealings with another,
and thus the one-sided interests of one branch of production will be
regulated and balanced by those of the other. The responsibility for
the giving and taking of credit will thus devolve to the associations.
This will not impair the scope and activity of individuals with
special faculties; on the contrary, only this method will give
individual faculties full scope: the individual is responsible to his
association for achieving the best possible results. The association
is responsible to other associations for using these individual
achievements to good purpose. The individual's desire for gain will no
longer be imposing production on the life of the community; production
will be regulated by the needs of the community ...

All kinds of dealings are possible between the new associations and
old forms of business — there is no question of the old having to be
destroyed and replaced by the new. The new simply takes its place and
will have to justify itself and prove its inherent power, while the
old will dwindle away ... The essential thing is that the threefold
idea will stimulate a real social intelligence in the men and women of
the community. The individual will in a very definite sense be
contributing to the achievements of the whole community ... The
individual faculties of men, working in harmony with the human
relationships founded in the sphere of rights, and with the
production, circulation and consumption that are regulated by the
economic associations, will result in the greatest possible
efficiency. Increase of capital, and a proper adjustment of work and
return for work, will appear as a final consequence ...

Whether a man rejects this idea or makes it his own will depend on his
summoning the will and energy to work his way through into the sphere
of causes. If he does so, he will cease considering external
institutions alone; his attention will be guided to the human beings
who make the institutions. Division of labour separates men; the
forces that come from the three spheres of social life, once these are
made independent, will draw them together again ... This inevitable
demand of the time is shown in a vivid light by such concrete facts as
the continued intensification of the credit system ... In the long run,
credit cannot work healthily unless the giver of credit feels himself
responsible for all that is brought about through his giving credit.
The receiver of credit, through the associations, must give him
grounds to justify his taking this responsibility. For a healthy
national economy, it is not merely important that credit should
further the spirit of enterprise as such, but that the right methods
and institutions should exist to enable the spirit of enterprise to
work in a socially useful way.

The social thoughts that start from the threefold idea do not aim to
replace free business dealings governed by supply and demand by a
system of rations and regulations. Their aim is to realize the true
relative values of commodities, with the underlying idea that the
product of one man's labour should be equivalent in value to all the
other commodities that he needs for his consumption during the time he
spends in producing it.

Under the capitalistic system, demand may determine whether someone
will undertake the production of a certain commodity. But demand alone
can never determine whether it will be possible to produce it at a
price corresponding to its value in the sense defined above. This can
only be determined through methods and institutions by which society
in all its aspects will bring about a sensible valuation of the
different commodities. Anyone who doubts that this is worth striving
for is lacking in vision. For he does not see that, under the mere
rule of supply and demand, human needs whose satisfaction would uplift
the civilized life of the community are being starved. And he has no
feeling for the necessity of trying to include the satisfaction of
such needs among the practical incentives of an organised community.
The essential aim of the threefold society is to create a just balance
between human needs and the value of the products of human work.

--- 

Taken from: “Understanding the Human Being”, selected writings
of Rudolf Steiner, Edited by Richard Seddon, Rudolf Steiner Press,
Bristol, 1993, ISBN: 1 85584 005 7.
From: Chapter 7 – Reordering of Society:

Essay Source = Anthroposophy, 1927 Vol. II, No.3, “Capital and
Credit”, 1919.



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