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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-4919
On-line since: 13th November, 2000
Dornach, 30th July, 1922.
We have now seen how the economic system as a whole takes its course;
we have seen how purchase or sale, loan and gift act as impelling
factors, motive factors, within this system. Let us realise at once
that there can be no economic system without this interplay of loan,
gift and purchase. The influences, which create the economic values
(of which we have already spoken from one aspect) and lead to the
forming of price, will therefore proceed from these three factors:
purchase, loan and gift. The important thing is to understand
how the three factors work in the forming of price. Only by
perceiving this, shall we succeed in any degree in formulating the
price problem.
It is very necessary that we should have a distinct view of the real
nature of separate economic problems. In this respect our present
Economic Science is full of unclear ideas ideas which, as I
have often explained, become confused mainly because they try to
grasp at rest what is in constant movement.
Granting then that gift, purchase and loan are inherent in economic
movement, let us consider what in our present-day economy are
if I may so call them the principal factors of rest. Let
us turn for a moment to what is perhaps one of the commonest topics
nowadays and a principal source of the errors that find their way into
Political Economy. People talk of Wages, and they talk
of them in such a way as to make them look like the price of Labour.
If the so-called wage-earner has to be paid more, they say: The
price of Labour has gone up. If he has to be paid less,
they say: Labour is cheaper. Thus they actually speak as
though a kind of sale and purchase took place between the wage-earner
who sells his Labour and the man who buys it from him. But this sale
and purchase is fictitious. It does not in reality take place. That is
the trouble in our present economic conditions. On all hands we have
hidden or masked relationships relationships which develop in a
way not in accordance with what in a deeper sense they really are. I
have spoken of this before.
Value in the economic system, as we have already seen, can only arise
in the exchange of products in the exchange of commodities or
more generally of economic products. It cannot arise in
any other way. But what follows? If value can only arise in this way,
and if moreover the price of the value is to be arrived at along the
lines laid down yesterday (that is, by seeing that the producer of a
given product receives, as its counter-value, what he will require to
satisfy his needs during the production of another like product)
if this is to be possible, the various products must, as it
were, reciprocally determine one another's value. And, after all, it
is not difficult to see that this is what actually happens in the
economic process. Only it is masked by the fact that money steps in
between the objects exchanged. But the money is not the important
thing. We should not take the slightest interest in money if it did
not foster the exchange of products, making the process not only more
convenient but less expensive. We should have no need of money if it
were not for the fact that when a man brings a product to the market
under the influence of the division of Labour he cannot
be bothered to fetch what he needs from wherever it may happen to be;
instead, he takes money for it, so that he may supply his needs later
on at his own convenience. In fine we may say: It is the mutual
tension, arising between the various products in the economic process,
which must be concerned in the forming of prices.
Let us consider from this point of view the so-called wage-nexus, that
is, the Labour-nexus. We cannot really exchange Labour for anything;
since, as between Labour and anything else, there is no possibility of
reciprocal determination of value. We may fancy that we are paying for
Labour, we may even actualise this fancy by letting in the wage-nexus.
But we do not really do anything of the sort. In reality, even in the
Labour or wage-nexus, it is values which are exchanged. The
worker produces something directly; he delivers a product, and it is
this product which the enterpriser [Unternehmer] really
buys from him. In actual fact, down to the last farthing, the
enterpriser pays for the products which the workers deliver to
him. It is time we began to see these things in their right light. The
enterpriser buys products from the worker; and after he has bought
them it is his business to impart to them a higher value, by making
use of the conditions present in the social organism and by his own
enterprising or undertaking spirit. It is really this
which gives him his profit. He gains on the transaction because,
having bought the commodities from his workers, he is able by his
knowledge of the market (we must not shirk unpleasant
expressions) to enhance their value.
Thus, in the Labour-nexus we are dealing with a true purchase. And,
ladies and gentlemen, we cannot speak of a surplus value arising
through the Labour-nexus as such. All we can say is that in such and
such circumstances the price which the enterpriser pays is not
according to the true price, of which we spoke yesterday; and this is
a thing we shall often find in the economic process that,
although the products reciprocally determine one another's values,
although they have their real values, these values are not
actually paid for in the course of commercial dealing. It is easy
enough to see that all values are not really paid for. Take the case
of a manufacturer on a small scale, who suddenly inherits a large
legacy. Tired of the whole factory business, he decides to sell his
stock-in-trade, and does so at an absurdly low price. That does not
mean that the commodities decrease in value; it only means that the
true price is not paid. Thus in actual economic intercourse prices are
constantly being falsified. We must not forget this. In the course of
commercial dealing prices may often be falsified. But there is,
nevertheless, a true price. The commodities sold by the man in the
above example are worth just as much as the same commodities produced
by someone else.
Now that we have tried to make it clear that the wage-nexus does
really involve a purchase, let us consider what is involved by rent
by the price of land. You see, the conditions under which the
price of land originates are not those of a mature economy. To take an
extreme instance, we may consider how a piece of land may have come
under the control of particular persons by conquest, that is, by the
exercise of force. Even here, no doubt, the element of exchange will
enter in to some extent; the invader will have granted certain
portions of the conquered territory to those who helped him to
victory. Here, then, at the starting-point of an economic process we
have something that is not properly economic. The process is not
really economic; it is a process to which we can only apply the word
power or right. By means of power, rights
are gained rights, in this case, over land. Thus we have the
economic domain bordering on the one hand on these relationships of
right and power.
But what is it that takes place under the influence of such
relationships of right and power? This is what happens continually:
The man who has the free right of disposal over land looks after
himself better than those others whom he attaches to himself as
labourers who deliver the products to him by their Labour. I am
speaking now not of the Labour, but of the products of the Labour; it
is the products of Labour with which we are concerned. The others have
to deliver more to him than he delivers to them. This, indeed, is only
the prolongation of his relationship to them of conquest or right.
Now, what is this excess of what they give him over what he
gives them? What is it, in other words, that falsifies the price
relationship in this case? It is none other than compulsory gift!
Here, then, the relation of giving comes in, with the sole difference
that the man who is to make the gift does so not of his own free will,
but by compulsion; it is in fact a compulsory gift. That is what
happens in relation to the land. Through the compulsory gift, the
price which farm-products really ought to have in terms of other
products is actually raised.
Thus the price of all things capable of subjection to such
relationships of right has an inherent tendency to rise
above its true level. So, for instance, if foresters or huntsmen are
living with farmers, the foresters and huntsmen will come off better
than the farmers. Farmers, among forest people, have to pay higher
prices to the foresters for what they give them higher prices,
that is to say, than the true exchange prices as between their
respective products, for the simple reason that in forestry, more than
anywhere else, it is as a pure matter of right that the owner has the
thing at his disposal and determines prices. Farming requires some
real Labour; but in forestry, hunting and the like, we come very near
to the pure Labour-less valuation a valuation
proceeding solely from relationships of right and power. Again, if
handicraftsmen are living among farmers, the prices once again will
tend to rise above their true level on the farmer's side; while on the
other hand they will sink beneath the true level as against
handicraft. Life is dearer for handicraftsmen among farmers; life is
comparatively cheaper for farmers among handicraftsmen (assuming there
are enough of them to make any appreciable difference). Handicraftsmen
among farmers will find life comparatively dearer. Thus, the sequence
governing this tendency for prices to rise above or to sink below
their true level is as follows: First, forestry, then farming, then
handicraft and, lastly, the entirely free spiritual work. These are
the lines along which we should approach the problem of
price-formation in the economic process.
There is a tendency, an inherent tendency, in the economic process to
create rent. The economic process tends, as it were, of its own
accord, to submit itself to this necessity of paying more dearly for
farm products than for other things. This tendency obtains where there
is division of Labour and all our remarks have reference to a
social organism in which there is division of Labour. This tendency is
called forth through the fact that what I had to repeat twice over a
few days ago, to the bewilderment of a large number of the audience
(namely that the man who provides for himself lives more expensively
and for that reason must take more for his products, must estimate
them at a higher value than one who gets his products in free
commercial dealing from others), that this simply does not come in in
the case of farming.
In relation to the various branches of industry, ladies and gentlemen,
this has a very real meaning, albeit you may have to think a very long
time to find your way to that meaning. But in respect to agriculture
and forestry it has no meaning. We must never forget that, when we are
dealing with realities, the various concepts only hold good for
certain regions; they change for other regions. This is equally true
in other walks of life. What is a means of healing for the head, is
pernicious is a means to disease for the stomach; and
vice versa. And so it is in the economic organism. For example, if it
were at all possible for the farmer not to provide for himself,
the rules we apply for the general circulation of commodities would be
right in his case, too. But the fact is, he can do no other than
provide for himself; for within the economic process the entire
agriculture of a social organism forms of its own nature a single
entity, however many individual landowners there may be. Accordingly,
the farmer must in every case keep back, from the totality of
his products, what he has to provide for himself. Even if he gets it
from another farmer, in reality he is still keeping it back. The
farmer is essentially a man who provides for himself. Hence he is
obliged to value his goods more expensively. The consequence is that
prices must rise on his side.
It follows that there is an inherent tendency to create rents in the
economic process. The only question will now be: How to make these
rents harmless in the economic life? But in the first, place we must
know that this tendency to create rent exists. If you abolish rents,
in one form or another they will be created again, for the simple
reason which I have just explained.
You see, for the same reason which underlies the tendency in the
economic process to create rent, there arises, on the other hand, the
tendency of the industrialists to devalue Capital, to make Capital
cheaper and cheaper. We shall best understand this tendency if we get
it clear to begin with that Capital cannot really be bought, True,
there are dealings in Capital; people buy Capital. But
every such purchase of Capital is once again merely a masked
relationship; in reality we do not buy Capital, we only borrow it.
Yet, in the end, even if the relationship is apparently other, you
will always be able to unmask it and expose the loan character
of industrial Capital. I say expressly, of industrial Capital,
for if you extend the principle to rents it is no longer the case. But
it is certainly the case with industrial Capital, for the simple
reason that there is a constant tendency to undervalue, as compared
with other things, that which depends on the human Will that is
to say, handicraft or manufacture and entirely free activity
(at this point in the diagram)).
Industrial Capital is altogether implicated in
the free activity of the Spirit; hence it is constantly being
devalued; and we may say, on this side
(Diagram 4), there is
inherent in the economic process a tendency, while we create rents, to
lower industrial Capital, to make it lower and lower in value. Just as
things become more and more expensive on the one side, on the side of
ground-rent, so do they become cheaper and cheaper on the other side,
on the side of Capital. Capital has a permanent tendency to go
down in its economic value, or rather in its economic price. Rents
have a permanent tendency to rise in price.
There is also another reason from which you will see that industrial
Capital must inevitably go down. We said just now that in farming one
cannot help providing for oneself. It is just by this self-provision
that the rise in the value of farm-products is brought about. At the
same time you will see that in the case of industrial Capital, where
the loan principle predominates, one cannot provide for oneself; one
cannot provide for oneself with Capital. What one does provide for
oneself must be included in the balance sheet nowadays in precisely
the same way as what one borrows if the balance sheet is to be
correct. Since, therefore, at this point
(Diagram 4) one cannot
provide for oneself, it follows that the opposite tendency obtains
the tendency towards lower prices.
Everything depends on our seeing clearly through these relationships
in the economic process. For then we shall see that it is by no means
easy to establish true prices. The true price is constantly being
upset by the fact that, on the one hand, there are things appearing on
the market which tend to be too high in price, while, on the other
hand, there are things appearing which tend to be too low in price.
And since the price is settled by exchange, being in the middle,
between the two, it is continually exposed to these influences. You
can observe this very clearly in the economic process. In the same
measure in which the products of forestry and agriculture grow more
expensive, those produced by free human activity grow cheaper. Thus
there arise those relationships of tension which give rise to social
unrest and discontents. This, therefore, is the most important
question in relation to the formation of price: How can we deal with
the natural tension which exists in the creation of prices, as between
the values accruing to goods arising out of the free will of man, and
the values accruing to those goods in the production of which Nature
participates? How can we get at this tension? How can we equate the
one, the downward, tendency with the other, upward tendency?
Through division of Labour, more and more highly differentiated
products arise. You need only remember how simple are the products
arising, let us say, among a hunting or forest community. Here the
price difficulty scarcely comes into question; but as soon as
agriculture is added to forestry, the difficulty begins. In effect,
the difficulty lies in the differentiation; the further the division
of Labour extends, and new needs arise in the process, the more does
the differentiation of products increase, and the difficulties
connected with price-formation accumulate. The more varied are the
products, the more difficult does it become to bring about their
reciprocal valuation and the valuation can only be
reciprocal. This may be seen from the following comparison: There
is a reciprocal valuation even in the case of products only
slightly differentiated one from another say, for instance,
wheat and rye and other agricultural products. But follow the thing
out over a long period of time and you will find the relationship of
reciprocal valuation as between wheat, rye and other cereals remains
fairly stable. If wheat goes up, the other cereals go up; if wheat
goes down, the other cereals go down with it. This is due to the fact
that there is comparatively little differentiation between
these products; as soon as the differentiation becomes greater, this
constancy no longer obtains. For it may well happen, through various
events in the social organism, that some product which someone has
been accustomed to exchange for another suddenly shoots up in price,
while the other may go down at the same time. Think what revolutions
are thus brought about in economic relationships. Altogether the
things that happen in the economic world depend far more on the
relative risings and fallings in price than on any other circumstance.
It is by the relative rise and fall in prices that the difficulties of
life itself are introduced into the economic sphere. As to whether the
products as a whole rise or fall if they all rose or fell
uniformly, it would concern us very little. What interests people is
that the different products rise or fall to a different extent. This
fact is emerging in a very tragic way just now, under the present
economic conditions. Products rise and fall in varying measure.
Money-values especially are rising and falling, but in the
money-values we simply have stored up what were once upon a time real
values. By this rising and falling, an entire mingling and confusion
is now being brought about in society.
From this we can see that there is another way, too, in which we must
look at the factors operative in the economic organism. We took our
start from the several factors which are enumerated by orthodox
Economics, but we saw that the mere enumeration of Nature, Capital and
Labour leads us no farther. Precisely when you add what we have said
today to what has been said before, you will see that the pricing or
valuing of Nature-products does not come about through purely economic
relationships, but also through relationships of right or title;
while, on the other hand, the valuing of industrial Capital is
influenced by the free human Will with all that it unfolds when it is
active in public life. Consider all that is necessary in order to
collect a sum of Capital for a given purpose. Here the free human will
comes in. Where lending is concerned, free human will has a very great
part to play indirectly perhaps, for the man who wants to keep
savings is naturally going to invest those savings; but whether he
ever saves at all, or not, is an expression of his Will. Here, then,
the free human Will plays a real part. Now, if we take this into
account, we shall find yet another classification of the economic
factors beside the one which we have been considering hitherto.
Up to now I have given you a diagrammatic classification. I showed:
There is Nature, but value only arises through Nature elaborated, that
is to say, it only arises when Nature moves in the direction of human
Labour; and again, value will only arise through human Labour when it
moves on towards Capital, i.e., towards the Spirit. In this way the
tendency arises to return again to Nature. This, as we saw, can be
prevented by leading over the excess Capital, not into the land, where
it would become fixed, but into free spiritual undertakings where it
vanishes, save for the remnant which must continue as a kind of seed,
by which the economic process may be fertilised and maintained.
Now, in addition to this movement which begins from left to right (see
(Diagram 5)
there is another movement. The former movement, as we have
seen, gives rise to elaborated Nature, organised or articulated
Labour, and emancipated Capital Capital, that is to say, which
figures only within undertakings dependent on mind or Spirit
active Capital. The other movement does not lead to the
creation of values in this way, the preceding element always being
taken on by the next, but goes in the opposite direction; the first
movement runs counter-clockwise, the second clockwise. Here, in the
first movement, something arises through the former member always
working on into the next; in the other movement something arises
through the fact that that which flows in one direction receives, as
it were, what is flowing in the other direction and embraces it. You
will see what I mean directly. Remember that Capital is, properly
speaking, Spirit realised in the economic process; so that I can write
at this point Spirit which gives us Nature,
Labour and Spirit. Now when the Spirit absorbs and receives the
elaborated Nature (Nature transformed by Labour) when it does
not merely lead it on into the economic process in the continued
counter-clockwise movement, but absorbs it Means of
Production arise. What we call means of production is something
different it is in quite an opposite process of movement
from a Nature-product which has been elaborated for consumption. It is
a Nature-product taken in charge by the Spirit a Nature-product
which the Spirit needs. From the pen which I possess as my means of
production to the most complicated machinery in a factory, means of
production
are, as it were, Nature grasped by the Spirit. Nature can be
elaborated and sent on in this direction, in which case it becomes
Capital; or it can be sent in the other direction, in which case it
becomes means of production.
And now, what arises at this point with the help of means of
production can move on and be taken in charge in turn by human Labour.
Just as Nature is here received by the Spirit, so can the means of
production (in the widest sense of the term) be received in turn by
Labour. What have we then, when Labour receives the means of
production when means of production and Labour are united? It
is Industrial Capital, for in effect industrial Capital
consists in this very union. Thus if you follow the process out, you
get a movement whereby means of production and industrial Capital coalesce.
And if this movement be now continued, so that Nature (albeit another
portion of Nature) from time to time receives what has been produced
with the help of means of production a and industrial Capital, then
and then only does there arise in the economic process what we may
call Commodity in the proper sense. For the commodity is at
once taken over by the process of Nature. Either it is eaten, in which
case it is taken up very decidedly by Nature; or it is used or
otherwise destroyed. In short, a thing becomes a commodity by the very
fact that it returns to Nature.
So that you may say: We have now traced out the movement, which is
inherent in the whole economic process and which contains the three
factors: Means of Production, Industrial Capital and Commodity. Here,
at this third point in the diagram, the distinction becomes unusually
difficult; for when the thing we are seeking is shifting to and fro in
the process of exchange proper that is, in purchase and sale
it is extraordinarily difficult to distinguish whether it is
moving in this direction or in that whether it is a commodity
or something that cannot be called a commodity in the
true sense of the word. How does a piece of goods become a
commodity? In describing this counter-clockwise
movement, to make the nomenclature quite exact, I ought really to
write goods instead of commodities and in
the opposite movement I ought to write commodity; for a
commodity may be defined as a piece of goods in the
hands of the tradesman, the merchant who offers it for sale and does
not use it himself.
Today my main purpose was that we should acquire such concepts as
point to the true relationships in the economic process. These true
relationships are again and again being diverted, by falsified
processes, into a mode of operation which introduces constant
disturbances into the economic process. Continually to smooth out and
compensate for the disturbances is one of the essential tasks of
Economics. People keep on saying that we ought to get rid of the evils
of economic life; and they are inclined to have at the back of their
minds the notion: Then everything will be all right and the
earthly paradise will begin. But that is just as though you
were to say: I should like, once and for all, to eat so much
that I need never eat any more. I cannot do that; for I am a
living organism wherein ascending and descending processes must
constantly be taking place. Such ascending and descending processes
must equally be present in the economic life; there must be the
tendency on the one hand to falsify prices by the forming of rent, and
on the other hand the tendency to lower prices on the side of
industrial Capital. These tendencies are present all the time, and we
must understand them in order to obtain, as far as possible, those
prices which represent a minimum of falsification.
To this end it is necessary, by direct human experience, to take hold
of the economic process as it were in the nascent state to
be within it all the time. The individual can never do this;
nor can a society above a certain size. (A society, for example, such
as the State). It can only be done by Associations growing out of the
economic life itself, and able therefore to work out of the immediate
reality of the economic life. The greater the technical accuracy with
which we study the economic process, the more are we led to recognise
that the required institutions must grow out of the economic life
itself. Then, they will be able to observe the kind of tendencies that
are at work and how these can be counteracted.
Last Modified: 23-Nov-2024
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