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Rudolf Steiner e.Lib
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World Economy
Rudolf Steiner e.Lib Document
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World Economy
Schmidt Number: S-4909
On-line since: 13th November, 2000
Dornach, 26th July, 1922.
In Economic Science, as I explained yesterday, it is essential to take
hold of something that is for ever fluctuating namely: the
circulation of values and the mutual interplay of fluctuating values
in the forming of Price. Bearing this in mind, you say to yourselves:
Our first need is to discover what is really the proper form of
the science of Economics. For a thing that fluctuates cannot be taken
hold of directly. There is no real sense in trying to take hold by
direct observation of something that is for ever fluctuating. The only
sensible procedure is to consider it in connection with what really
lies beneath it.
Let us take an example. For certain purposes in life we use a
thermometer. We use it to read the degrees of temperature, which we
have grown accustomed in a certain sense to compare with one another.
For instance, we estimate 20° of warmth in relation to 5° and so on.
We may also construct temperature curves. We plot the temperatures for
instance during the winter, followed by the rising temperatures in
summer. Our curve will then represent the fluctuating level of the
thermometer. But we do not come to the underlying reality till we
consider the various conditions which determine the lower temperature
in the winter, the higher temperature in the summer months, the
temperature in one district, the different temperature in another, and
so forth. We only have something real in hand, so to speak, when we
refer the varying levels of the mercury to that which underlies them.
To record the readings of the thermometer is in itself a mere
statistical procedure. And in Economics it is not much more than this
when we merely study prices and values and so forth. It only begins to
have a real meaning when we regard prices and values much as we regard
the positions of the mercury as indications, pointing to
something else. Only then do we arrive at the realities of economic
life. Now this consideration will lead us to the true and proper
form of Economic Science.
By ancient usage, as you are probably aware, the sciences are
classified as theoretical and practical. Ethics, for instance, is
called a practical science, Natural Science a theoretical one. Natural
Science deals with that which is; Ethics with that which
ought to be. This distinction has been made since ancient time:
the Sciences of that which is, the Sciences of that which
should be. We mention this here only to help define the concept of
Economic Science. For we may well ask ourselves this question: Is
Economics a science of what is, as Lujo Brentano, for instance,
would assert? Or is it a practical science a science of what
ought to be? That is the question.
Now, if we wish to arrive at any knowledge in Economics it is
undoubtedly necessary to make observations. We have to make
observations, just as we must observe the readings of the barometer
and thermometer to ascertain the state of air and warmth. So far,
Economics is a theoretical science. But at this point, nothing has yet
been done. We only achieve something when we are really able
to act under the influence of this theoretical knowledge.
Take a special case. Let us assume that by certain observations
(which, like all observations, until they lead to action, will be of a
theoretical nature) we ascertain that in a given place, in a given
sphere, the price of a certain commodity falls considerably, so much
so as to give rise to acute distress. In the first place, then, we
observe theoretically, as I have said this
actual fall in price. Here, so to speak, we are still only at the
stage of reading the thermometer. But now the question will arise:
What are we to do if the price of a commodity or product falls
to an undesirable extent? We shall have to go into these matters more
closely later on: for the moment I will but indicate what should be
done and by whom, if the price of some commodity shows a considerable
decrease. There may be many such measures, but one of them will be to
do something to accelerate the circulation, the commerce or trade in
the commodity in question. This will be one possible measure, though
naturally it will not be enough by itself. For the moment, however, we
shall not discuss whether it is a sufficient, or even the right
measure to take. The point is: If prices fall in such a way, we must
do something of a kind that can increase the turnover [Umsatz].
It is in fact similar to what happens when we observe the thermometer.
If we feel cold in a room, we do not go to the thermometer and try by
some mysterious device to lengthen out the column of mercury. We leave
the thermometer alone and stoke the fire. We get at the thing from
quite a different angle; and so it must be in Economics too. When it
comes to action, we must start from quite a different angle. Then only
does it become practical. We must answer, therefore: The science of
Economics is both theoretical and practical. The point will be how to
bring the practical and the theoretical together.
Here we have one aspect of the form of Economic Science. The
other aspect is one to which I drew attention many years ago, though
it was not understood. It was in an essay I wrote at the beginning of
the century, which at that time was entitled: Theosophy and the
Social Question.* It would only have had real significance if
it had been taken up by men of affairs and if they had acted
accordingly. But it was left altogether unnoticed; consequently I did
not complete it or publish any more of it. We can only hope that these
things will be more and more understood, and I trust these lectures
will contribute to a deeper understanding. To understand the present
point, we must now insert a brief historical reflection.
* now published as Anthroposophy and the Social Question.
Go back a little way in the history of mankind. As I pointed out in
the first lecture, in former epochs nay, even as late as the
15th or 16th century economic questions
such as we have today did not exist at all. In oriental antiquity
economic life took its course instinctively, to a very large extent.
Certain social conditions obtained among men caste-forming and
class-forming conditions and the relations between man and man
which arose out of these conditions had the power to shape instincts
for the way in which the individual must play his particular part in
economic life. These things were very largely founded on the impulses
of the religious life, which in those ancient times were still of such
a kind as to aim simultaneously at the ordering of economic affairs.
Study oriental history: you will see there is nowhere a hard and fast
dividing line between what is ordained for the religious life and what
is ordained for the economic. The religious commandments very largely
extend into the economic life. In those early times, the question of
labour, or of the social circulation of labour-values did not arise.
Labour was performed in a certain sense instinctively. Whether one man
was to do more or less never became a pressing question, not at any
rate a pressing public question, in pre-Roman times. Such exceptions
as there may be are of no importance, compared to the general course
of human evolution. Even in Plato we find a conception of the social
life wherein the performance of labour is accepted as a complete
matter of course. Only those aspects are considered which Plato
beholds as Wisdom-filled ethical and social impulses, excluding the
performance of labour, which is taken for granted.
But in the course of time this became more and more different. As the
immediately religious and ethical impulses became less effective in
creating economic instincts, as they became more restricted to the
moral life, mere precepts as to how men should feel for one another or
relate themselves to extra-human powers, there arose more and more the
feeling in mankind which, pictorially stated, might be thus expressed:
Ex cathedra, or from the pulpit, nothing whatever can be
said about the way a man should work! Only now did Labour
the incorporation of Labour in the social life become a
question.
Now this incorporation of Labour in the social life is historically
impossible without the rise of all that is comprised in the term
law or right. We see emerge at the same
historical moment the assignment of value to Labour in relation to the
individual human being and what we now call law. Go back into very
ancient times of human history and you cannot properly speak of law or
rights as we conceive them today. You can only do so from the moment
when the Law becomes distinct from the Commandment. In
very ancient times there is only one kind of command or commandment,
which includes at the same time all that concerns the life of Rights.
Subsequently, the Commandment is restricted more to the
life of the soul, while Law makes itself felt with respect to the
outer life. This again takes place within a certain historic epoch,
during which time definite social relationships evolve. It would take
us too far afield to describe all this in detail, but it is an
interesting study especially for the first centuries of the
Middle Ages to see how the relationships of Law and Rights on
the one hand, and on the other those of Labour, became distinct from
the religious organisations in which they had hitherto been more or
less closely merged. I mean, of course, religious organisations in the
wider sense of the term.
Now this change involves an important consequence. You see, so long as
religious impulses dominate the entire social life of man-kind, human
Egoism does no harm. This is a most important point, notably for an
understanding of the social and economic life. Man may be never so
selfish; if there is a religious organisation (and these, be it noted,
were very strict in certain districts in oriental antiquity) such that
in spite of his egoism the individual is fruitfully placed in the
social whole, it will do no harm. But Egoism begins to play a part in
the life of nations the moment human Rights and Labour emancipate
themselves from other social impulses or social currents. Hence,
during the historical period when Labour and the life of legally
determined Rights are becoming emancipated, the spirit of humanity
strives as it were unconsciously to come to grips with Egoism, which
now begins to make itself felt and must in some way be allowed for in
the social life. And in the last resort, this striving culminates in
nothing else than modern Democracy the sense for the equality
of man the feeling that each must have his influence in
determining legal Rights and in determining the Labour which he
contributes.
Moreover, simultaneously with this culmination of the emancipated life
of Rights and human labour, another element arises which though
it undoubtedly existed in former epochs of human evolution had
quite a different significance in those times owing to the operation
of religious impulses. In European civilisation, during the Middle
Ages, it existed only to a very limited degree, but it reached its
zenith at the very time when the life of Rights and Labour was
emancipated most of all. I refer to the Division of Labour.
You see, in former epochs the division of labour had no peculiar
significance. It too was embraced in the religious impulses. Everyone,
so to speak, had his proper place assigned to him. But it was very
different when the democratic tendency united with the tendency to
division of labour a process which only began in the last few
centuries and reached its climax in the nineteenth century. Then the
division of labour gained very great significance.
For the division of labour entails a certain economic consequence. We
shall yet, of course, have to consider its causes and the course of
its development. To begin with, however, if we think it abstractly to
its conclusion, we must say that in the last resort it leads to this:
No one uses for himself what he produces. Economically speaking, what
will this signify? Let us consider an example.
Suppose there is a tailor, making clothes. Given the division of
labour, he must, of course, be making them for other people. But he
may say to himself: I will make clothes for others and I will also
make my own clothes for myself. He will then devote a certain portion
of his labour to making his own clothes, and the remainder by
far the greater portion to making clothes for other people.
Well, superficially considered, one may say: It is the most natural
thing in the world, even under the system of division of labour, for a
tailor to make his own clothes and then go on working as a tailor for
his fellows. But, economically, how does the matter stand?
Through the very fact that there is division of labour, and every man
does not make all his own things for himself through the very
fact that there is division of labour and one man always works for
another, the various products will have certain values and
consequently prices. Now the division of labour extends, of course,
into the actual circulation of the products. Assuming, therefore, that
by virtue of the division of labour, extending as it does into the
circulation of the products, the tailor's products have a certain
value; will those he makes for himself have the same economic value?
Or will they possibly be cheaper or more expensive? That is the most
important question. If he makes his own clothes for himself one thing
will certainly be eliminated. They will not enter into the general
circulation of products. Thus what he makes for himself will not share
in the cheapening, due to the division of labour. It will, therefore,
be dearer. Though he pays nothing for it, it will be more expensive.
For on those products of his labour which he uses for himself, it is
impossible for him to expend as little labour compared to their
value as he expends on those that pass into general
circulation.
Well, I admit, this may require a little closer consideration,
nevertheless it is so. What one produces for oneself does not enter
into the general circulation which is founded on the division of
labour. Consequently it is more expensive. Thinking the division of
labour to its logical conclusion, we must say: A tailor, who is
obliged to work for other people only, will tend to obtain for his
products the prices which ought to be obtained. For himself, he will
have to buy his clothes from another tailor, or rather, he will get
them through the ordinary channels: he will buy them at the places
where clothes are sold.
These things considered, you will realise that the division of labour
tends towards this conclusion: No one any longer works for himself at
all. All that he produces by his labour is passed on to other men, and
what he himself requires must come to him in turn from the community.
Of course, you may object: If the tailor buys his suit from another
tailor, it will cost him just as much as if he made it for himself:
the other tailor will not produce it any more cheaply nor more
expensively. But if this objection were true, we should not have
division of labour or at least the division of labour would not
be complete. For it would mean that the maximum concentration of work,
due to the division of labour, could not be applied to this particular
product of tailoring. In effect, once we have the division of labour,
it must inevitably extend into the process of circulation. It is in
fact impossible for the tailor to buy from another tailor; in reality
he must buy from a tradesman and this will result in quite a different
value. If he makes his own coat for himself, he will buy
it from himself. If he actually buys it, he buys it from a tradesman.
That is the difference. If division of labour in conjunction with the
process of circulation has a cheapening effect, his coat will, for
that reason, cost him less at the tradesman's. He cannot make it as
cheaply for himself.
To begin with, let us regard this as a line of thought that will lead
us to the true form of Economic Science. The facts themselves will, of
course, all of them, have to be considered again later.
Meanwhile it is absolutely true and indeed self-evident
that the more the division of labour advances, the more it will come
about that one man always works for the rest for the community
in general and never for himself. In other words, with the rise
of the modern division of labour, the economic life as such depends on
Egoism being extirpated, root and branch. I beg you to take this
remark not in an ethical but in a purely economic sense. Economically
speaking, egoism is impossible. I can no longer do anything for
myself; the more the division of labour advances, the more must I do
everything for others.
The summons to altruism has, in fact, come far more quickly through
purely outward circumstances in the economic sphere than it has been
answered on the ethical and religious side. This is illustrated by an
easily accessible historical fact.
The word Egoism, you will find, is a pretty old one,
though not perhaps in the severe meaning we attach to it today. But
its opposite the word Altruism, to think
for another is scarcely a hundred years old. As a word,
it was coined very late. We need not dwell overmuch on this external
feature, though a closer historical study would confirm the
indication. But we may truly say: Human thought on Ethics was far from
having arrived at a full appreciation of altruism at a time when the
division of labour had already brought about its appreciation in the
economic life. Taking it, therefore, in its purely economic aspect, we
see at once the further consequences of this demand for altruism. We
must find our way into the true process of modern economic life,
wherein no man has to provide for himself, but only for his
fellow-men. We must realise how by this means each individual will, in
fact, be provided for in the best possible way.
Ladies and gentlemen, this might easily be taken for a piece of
idealism, but I beg you to observe once more: In this lecture I am
speaking neither idealistically nor ethically, but from an
economic point of view. What I have just said is intended in a
purely economic sense. It is neither a God, nor a moral law, nor an
instinct that calls for altruism in modern economic life
altruism in work, altruism in the production of goods. It is the
modern division of labour a purely economic category
that requires it.
This is approximately what I desired to set forth in the essay I
published long ago.* In recent times our economic life has begun to
require more of us than we are ethically, religiously, capable of
achieving. This is the underlying fact of many a conflict. Study the
sociology of the present day and you will find: The social conflicts
are largely due to the fact that, as economic systems expanded into a
World-Economy, it became more and more needful to be altruistic, to
organise the various social institutions altruistically; while, in
their way of thinking, men had not yet been able to get beyond Egoism
and therefore kept on interfering with the course of things in a
clumsy, selfish way.
* see Anthroposophy and the Social Question.
But we shall only arrive at the full significance of this if we
observe not merely the plain and obvious fact, but the same fact in
its more masked and hidden forms. Owing to this discrepancy in the
mentality of present-day mankind owing to the discrepancy
between the demands of the economic life and the inadequate ethical
and religious response the following state of affairs is
largely predominant in practice. To a large extent, in present-day
economic life, men are providing for themselves. That is to
say, our economic life is actually in contradiction to what by
virtue of the division of labour is its own fundamental demand.
The few who provide for themselves on the model of our tailor do not
so much matter. A tailor who manufactures his own clothes is obviously
one who mixes up with the division of labour something that
does not properly belong to it. But this is open and unmasked. The
same thing is present in a hidden form in modern economic life where
though he by no means makes his products for himself a
man has little or nothing to do with the value or price of the
products of his labour. Quite apart from the whole economic process in
which these products are contained, he simply has to contribute, as a
value to the economic life, the labour of his hands. It amounts to
this: To this day, every wage-earner in the ordinary sense is a man
who provides for himself. He gives only so much as he wants to earn.
In fact, he simply cannot be giving as much to the social organism as
he might give, for he will only give so much as he wants to earn. In
effect, to provide for oneself is to work for one's earnings, to work
for a living. To work for others is to work out of a
sense of social needs.
To the extent that the demand which the division of labour involves
has been fulfilled in our time, altruism is actually present
namely: work for others. But to the extent that the demand is
unfulfilled, the old egoism persists. It has its roots in this
that men are still obliged to provide for themselves. That is economic
Egoism. In the case of the ordinary wage-earner we generally fail to
notice the fact. For we do not ask ourselves: What is it that values
are really being exchanged for in this case? The thing which the
ordinary wage-earner manufactures has after all no-thing to do with
the payment for his work absolutely nothing to do with it. The
payment the value that is assigned to his work proceeds
from altogether different factors. He, therefore, works for his
earnings, works for a living. He works to provide for
himself. It is hidden, it is masked, but it is so.
Thus one of the first and most essential economic questions comes
before us. How are we to eliminate from the economic process this
principle of work for a living? Those who to this day are still mere
wage-earners earners of a living for themselves how are
they to be placed in the whole economic process, no longer as such
earners but as men who work because of social needs? Must this really
be done? Assuredly it must. For if this is not done, we shall never
obtain true prices but always false ones. We must seek to obtain
prices and values that depend not on the human beings but on the
economic process itself prices that arise in the process of
fluctuation of values. The cardinal question is the question of Price.
We must observe prices as we observe the degrees of the thermometer,
and then look for the underlying conditions.
Now to observe a thermometer we need some kind of zero point, from
which we go upward and downward. And for prices a kind of zero-level
does in fact arise in a perfectly natural way.
It arises in this way. Here we have Nature on the one side.
(Diagram 2)
It is transformed by human Labour. Thus we get the transformed products of
Nature, and this is one point at which values are created. On the
other side we have Labour itself. It, in its turn, is modified by the
Spirit, and there arises the other kind of value. Value 1, Value 2.
And, as I said on a previous occasion, price originates by the
interaction of Value 1 and Value 2.
Now these Values on either hand Value 1 and Value 2 are
in fact related to one another as pole to pole. And we may put it as
follows: If a man is working in this sphere, for example
(Diagram 2 right-hand side),
or mainly so in an absolute sense
it is of course impossible, but I mean mainly in this sphere if
in the main his work is of the type that is organised by the Spirit,
then it will be to his interest that the products of Nature should
decrease in value. If on the other hand a man is working directly upon
Nature, it will be to his interest that the other kind of products
should decrease in value. Now when this interest becomes
an effective process (and so, in fact, it is, for if it were not so,
the farmers would have very different prices, and vice versa;
the actual prices on both sides are, of course, very
occult) we may be able to observe a kind of
Mean Price midway between the two poles where we have two persons
(there must always be two, for any economic dealings) with little
interest either in Nature or Spirituality or Capital. When is it so in
practice? We have the case in practice if we observe a pure trader, a
pure middleman, buying from and selling to a pure middleman. Here,
prices will tend towards a mean. If under normal conditions (we shall
yet have to explain this word normal ) a middleman
trading in boots and shoes buys from a middleman trading in clothes
and vice versa, the prices that emerge will tend to assume the
mean position. To find, the mean price-level, we must not go to the
interests of those producers who are on the side of Nature, nor of
those who are on the Spiritual side. We must go to where middleman
trades with middleman, buying and selling. Here it is that the mean
price will tend to arise. Whether there be one middleman more or less
is immaterial.
This does not contradict what we have said before. After all, look at
the typical modern capitalist. Are they not all of them traders? The
industrialist is after all a trader. Incidentally he is a producer of
his particular goods; but economically he is a trader. Commerce has
developed very largely on the side of production. In all essentials,
the industrial capitalist is a trader. This is important. In actual
fact, modern conditions amount to this: All that arises here in the
middle
(Diagram 2)
rays out to the one side and to the other. On the one side you
will soon recognise it if you study the typical business undertaking;
and we shall see how it appears on the other side in the course of the
next few days.
Last Modified: 23-Nov-2024
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