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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-4933
On-line since: 13th November, 2000
Dornach, 3rd August, 1922.
In the opinion of a number of economists, as you are probably aware,
it was quite impossible for the World War to last as long as it
actually did last. From their knowledge of economic relationships,
these economists declared that the economic life, as existing at the
time, would not permit such an extensive war to last more than a few
months. Yet, as you know, the facts of life refuted this idea. If
people thought objectively, this in itself would convince them of the
need to revise their science of Economics. For if you took the trouble
at this moment to follow up the reasons which some economists,
at any rate, adduced for their assertion, you would by no means be
able to conclude that they were mere fools. Quite the contrary. You
would see that their arguments were not at all bad and carried some
conviction. Nevertheless, the reality of life refuted them. The War
went on far longer than was theoretically possible. Obviously,
therefore, Economic Science did not embrace the reality; the reality
turned out quite differently from what Economic Science had supposed.
We can only understand such a thing as this if we see clearly the
nature of the evolution of economic life upon the Earth. It
consists of a series of successive stages, but one in which the
earlier stages continue to exist side by side with the later.
Similarly we may say that the lowest organic forms now living are
somewhat like the earliest living creatures of Earth-evolution. Thus
in a sense the most primitive creatures are still here, existing side
by side with the highest creatures which have yet evolved. There is a
difference, but there is also a marked resemblance in the forms. So it
is in the economic life. The phenomena of primitive phases of economic
life are still here today, side by side with those which have attained
a higher stage. But in the economic life there is another peculiarity.
While in the animal kingdom, for example, the more primitive forms can
live literally side by side in space with the more highly evolved, in
the economic life the more primitive processes are constantly
penetrating into the more highly evolved ones. We might very well
compare it with those cases where bacteria penetrate inside higher
organisms. Only, in the economic life it is infinitely more
complicated. Nevertheless, we can detect certain underlying
structures, and from these we can take useful examples which will help
us to bring our line of thought to its conclusion.
The more primitive forms of political economy must be
conceived as private agricultural economies on a large scale. Their
magnitude is relative, of course; but we must understand that if the
private agricultural economy is self-contained, it includes within it
the other members of the social organism. It has its own
administration, possibly even its own defence force, its own police,
and moreover its own spiritual life. Such a private economy
grown to gigantic proportions, it is true, but still preserving in all
essentials the character of a primitive agricultural concern, a
gigantic farm was the so-called kingdom of the Merovingians. It
was a kingdom in a quite external sense, but it was
certainly no State. It was in fact no more that an immense farming
estate, comprehending a huge area. The entire social structure of the
Merovingian kingdom was really no different from this: the
economic life underlay everything. On it was built an administrative
system which accorded with the prevailing ideas of right and justice;
and into this was placed a spiritual life an extraordinarily
free one for that time. For, ladies and gentlemen, it is only in more
modern times and notably under the influence of
Liberalism that we have seen the rise of the maximum of
unfreedom in the spiritual life. Not until Liberalism
came did the spiritual life begin to grow more and more unfree; and it
reaches the zenith of unfreedom in that embodiment of all political
bliss, the Soviet Republic of Russia. Only books approved by the
Soviet Government can be sold at all. The Pope does at least content
himself with proscribing books; but under the Soviet Government
proscription is automatic, inasmuch as no books are printed and
published save those which the Government permits.
Now if we trace the further course of evolution, we see how private
economies gradually passed over into national economies,*
which again
at a certain time at the beginning of the modern period
tended to become State-economies.
The way it happens is
characteristic. Private economy initiative in private business
gradually passes over into the hands of government departments,
and thus the fiscal administration grows increasingly into industrial
organisation. We see the economic passing over into the life of the
State; and we see the spiritual life absorbed by the life of the State
at the same time. So then we witness the rise of the modern economic
and spiritual organism of the State. The State, as such, has grown
increasingly powerful. We, as you know, are aware that it will have to
be, so to speak, articulated once more in distinct members [wiederum
eine gewisse Gliederung erfahren musz] if economic life is to
progress.
At the moment, however, we are not concerned with
three-folding. We observe, as I said, how private
economies were gradually joined together. It generally happened on a
pretty large scale. Private economies grew into something which could
be called economy on a larger scale national economy; and in
this way a new social structure was created. Yet, within the new, the
element of private economy was still preserved. The more primitive
phase of evolution was still there as an insertion in the new. What is
it that arises at this stage in the true sense of national economy? It
is a mutual exchange between the several private economies. The
exchange is regulated in many different ways. The regulation hovers
like a kind of cloud over it all. The exchange, the trade or commerce
between so many private economies, is the essential thing that arises
with this welding of private economies into a national economy. What
is the outcome? We saw yesterday that in the process of economic
exchange each of the parties has an advantage, or can have an
advantage. The result is, therefore, that the single economies which
join together for the sake of mutual exchange (the essential thing in
all economic life) profit by so doing. Once more, then, the single
economies, the single businesses, gain an advantage by joining
together. They profit by it simply because they can now exchange one
with another. We can draw up a statement. We can calculate how much
the one private economy or business will gain by means of the other
private economies with which it is now connected. Each party gains an
advantage, and the gain of each and all becomes significant for the
entire national economy.
Now at the time when the modern science of Political Economy was
founded that particular stage had been reached. National economies had
taken shape out of the private economies. This must be borne in mind
if we wish to understand the economic ideas of Ricardo or Adam Smith.
Only on this foundation can we understand the thoughts which they
evolved about Political Economy, as they called it. It
was this working together of private economies which they actually saw
and upon which they based their views. In Adam Smith you can see it
again and again how he thinks from the point of view of private
economy or private business and thence draws his conclusions. At the
same time he has before him the picture of their joining together into
a national economy. Yet even in their ideas about this latter process
the older economists retained to a large extent a way of thinking
based on private business. Such were the views at which they commonly
arrived: they treated national economy on the analogy of private
economy. Thus the fertility, the prosperity of a national economy, as
they conceived it, lay in this one national economy would
exchange with another, would come into mutual intercourse with
another, and would thus derive profit and advantage. The
Mercantilist school, for example, was based on the
advantages arising from such exchange between national economies.
Now already at this early stage, where the single private economies or
businesses come together into a large national economy, there is sure
to arise a kind of leadership. In effect, the most powerful of the
private economies which have merged into a larger complex will
naturally assume the leadership; and this would undoubtedly have
happened at the transition from the stage of private economy into that
of national economy. But it was masked and hidden; it did not come
fully to expression, inasmuch as the State undertook the leadership.
If this had not happened, one private economy namely, the most
powerful of them all would naturally have been the leader. So
in effect it happened that the single private economies passed
imperceptibly into the form, not of national, but of
State-economy.
But it was different at the next stage, when in the further course of
modern history the mutual exchange between national economies
world-trade, in other words became more and more comprehensive.
Then, indeed, such a leadership emerged quite evidently. It happened,
as an absolute matter of course, in the further progress of economic
life, that England's national economy became the dominating one. From
another point of view I have already drawn your attention to the fact
that England evolved directly from trade into industrialism. Let us
think what happened while England was acquiring her colonies. She set
the standard for currencies. Her colonies, in the manner of private
economies, joined together into a larger complex. In the first place
this gave rise to those internal advantages which are always the
result of mutual exchange. But, not only so: it also gave rise to that
powerful economic hegemony which, with the further evolution of
world-trade, subsequently exerted a dominant influence on the economic
life of the world. While she was gaining her colonies, England set the
standard for currencies, because it was precisely through England that
gold was forced on those countries which adopted it throughout the
world. For, as you may easily compute, in economic intercourse with a
rich country having a gold currency, any country which did not possess
it would be at a disadvantage. In a word, we may say that under the
influence of world-trade England became the leading economic power.
Moreover, while this was going on, it was still possible to develop
concepts of national economy in a straight line with whatever
modifications and improvements from Hume, Adam Smith and
Ricardo, and, we may add, Karl Marx for fundamentally, though
he turned their ideas pretty well upside down, Karl Marx only
continued along the same lines. The ideas of these economists are only
to be understood if we have before us the picture of that economic
life, which arose under the dominating influence of England's economic
power.
Now with the last third of the nineteenth century, there was a
transition from world-trade to world-economy. It is a very
remarkable process this passage from world-trade into
world-economy. Definitions are of course inexact, for these
transitions tend to take place in successive stages; but if we want a
definition we must say: At the stage of world-trade the economic life
of the world is characterised by single national economies exchanging
with one another. This traffic quickens the whole process of exchange
and thus essentially alters prices alters the whole structure
of economic life. But for the rest in all other respects
the economic life is carried on within the several territories.
As against this it may be called world-economy when the
single economic units not only exchange their products one with
another, but when they actually work together industrially: when, for
example, half-manufactured products are sent from one country to
another, for their manufacture to be continued there. That is a
radical example of what I mean by their working together industrially.
So long as it is merely a question of raw products, the account will
continue to show a condition of pure trade. This cannot yet be
described as an actual working-together in the industrial life. But
when all factors in human life (in so far as they are affected
by economics), that is to say, when all production, all distribution,
all consumption not merely production alone or consumption
alone are fed from the entire world; when all things are
intricately interwoven and fed from the entire world then we
have world-economy. And through the rise of this world-economy,
certain advantages which existed formerly for the national economies
are lost.
Let us look back once more. When private economies join into a
national economy, ladies and gentlemen, they gain on the whole; they
derive advantages. Every single one derives advantages. But, apart
from this, what is it that impels them? It is of course not always
conscious insight which impels them thus to join together. Their
joining together is, as a rule, not brought about by conscious
economic insight, for in most cases the feeling for liberty is too
great; the private business man is not as concerned as all that with
the piling up of the profits which arise in this way. Economically,
these profits certainly arise; but the process is more complicated
than that. The fact is that the single private economies or businesses
have the same characteristic as every living organism. Namely, their
life tends in the course of time to become weaker and weaker. It is a
universal law and it applies equally to economic life. An
economic life which is not being constantly improved always
deteriorates. Thus, as a rule, the merging into larger
wholes did not take place with the object of making
private businesses profitable beyond their original level, but with
the object of protecting them from imminent decline.
When once they join together, they gain the corresponding advantage,
though of course it varies from one case to another. And we may say
that whatever the single economies have lost in course of time is
amply made up for by their joining into national economies. Indeed, as
a rule, it is more than compensated. Moreover, whatever the national
economies have lost in course of time is amply made up for by
world-trade and the transition into world-economy. But when
world-economy is once achieved, what then? With whom can it exchange?
This, in effect, is what has happened. We have seen the economic life
of the entire Earth gradually merging into world-economy. And at this
point the possibility of reaping further advantages by merger is at an
end.
The economists who declared that the World-War could not last as long
as in fact it did last were thinking in terms of national economies,
and not of world-economy. If world-economy had been national economy,
their declarations would have been quite true. But from the very
beginning the World-War had the tendency to spread and spread, and by
this very fact it had a longer life.
If in the state of world-economy we continue to think in the spirit of
national economies, world-economy itself will at a certain point break
up. Even if the break-up had not already been precipitated by various
dark forces, this would have been the inevitable outcome of men's
continuing to think in terms of national economy.
You see how there play into the economic domain circumstances which
are quite clearly perceptible, but which cannot in the nature of
things be easily taken hold of with figures and statistics. And this
will show you, ladies and gentlemen, that it is quite impossible to
prolong in a straight line the old economic ideas. We are obliged to
admit that a science of Economics is now needed which will express the
realities of the immediate present. The economic categories formed
about a century ago no longer hold good to-day. What we need is an
Economic Science capable of thinking in the spirit of world-economy.
Herein you see one of our greatest historical problems.
Observe the leading statesmen of to-day coming together at Versailles,
Genoa or the Hague. Science has only provided them with a way of
thinking in terms of national economy. Whatever results they arrive
at, unless and until they are permeated with world-economic thinking,
must lead down-hill. Can they deny that they are tearing the economic
life still more to pieces, erecting fresh artificial barriers and thus
hindering the transition into a pure world-economy? We see this
tendency in the immediate past the tendency to break the world
asunder as far as possible even in the economic life, and at the same
time to conceal the tendency under the cloak of political and national
pleas. Yet we shall have to pass into a real world-economy and a
corresponding Economic Science, or we shall create an economically
impossible state of affairs over the Earth. Such a condition of
affairs can only continue in being for a time through one part of the
Earth stealing advantages at the expense of another by means of
differences in currency or the rates of exchange. This is precisely
what is happening in economic life at the present moment.
To conceive what world-economics really means, we must see clearly, to
begin with, that at the frontiers of the domain of world-economy (if
we may use the expression) the conditions will be quite different from
those of economic domains bordering on one another. Relatively
speaking, world-economy exists today; and therefore, relatively
speaking, a Science of World-Economy will have to follow. The domain
of world-economy borders on nothing else, and this makes it
necessary for us to observe still more precisely those economic
processes which emerge within a closed economic domain, independently
of its external frontiers. The cardinal problem for modern Economics
to solve is the problem of the closed economic domain a
self-contained domain of one giant economy. For today the very
smallest question even the price of breakfast coffee is
influenced by the economic life of the entire Earth. If it is not so,
it only means that progress is partial. This state of affairs is
actually on the way and our thinking will have to follow suit.
To understand the economic conditions in a closed economic
domain, we must see clearly that within the economic domain
in the mutual interplay of production, consumption and commerce (that
is, in effect, circulation) we have on the one hand consumable
commodities, some of them relatively lasting, no doubt; while on the
other hand we have the thing we call money. Now as
regards the form of economy to which these things are subject, it
makes an essential difference whether we envisage the class of
foodstuffs for example (short-lived products) or of clothing (more
long-lived) or, let us say, of furniture or houses (more long-lived
still). With respect to their use and consumption we have these
important differences of duration as between different kinds of
economic products. As an instance of a really lasting economic
product, we might point once more to the diamond in the Crown of
England, or any other crown. Or, again, we might think of the Sistine
Madonna. Such things may be to some extent regarded as a kind of
product that will keep; we find them especially among works of art.
Now in a social organism subject to division of Labour, having
therefore an extensive process of circulation, there must be some
equivalent of every product. There must be the money-value,
representing the price. But a very little observation of the economic
realm will convince you that this equivalent between the
commodity-value and the money-value is fluctuating. A product is worth
so much at one place and so much at another. A product can be worth
more if it is worked up in one way, or less if it is worked up in
another. Be that as it may, however, in the total economic life you
will perceive that, apart from a few exceptional goods of very long
duration, we always have to do with goods which pass away in time.
They lose their value, and after a certain lapse of time are no longer
there.
The one exception, strange to say, in our whole economic life is
money. Although it occupies a position of perfect equivalence to the
other elements of economic life, money does not wear out. You can get
to the root of the matter in this way: If I have £20 worth of
potatoes, I must see to it that I get rid of them. I must do
something to get rid of them. After a time they are no longer there;
they are used up, they are gone. Now if it were in a true relation of
equivalence to the goods that are produced, money, too, would have to
wear out, like other goods. That is to say, if the body economic
contains money which is incapable of being used up money which
does not wear out we may well be giving money the advantage
over goods, which do wear out. This is a most important point and it
becomes all the more so when we take the following into account. Think
of all that I must do, if let us say through my activity
and Labour I want to thrive so well that as a result of having a
certain amount of potatoes today I shall have double the amount in 15
years' time. And think, on the other hand, how little an individual
person has to do if he possesses £20 in money today and wishes to
possess double the amount in 15 years' time. He need do nothing at
all; he can withdraw his entire labour-power from the social organism
and let other people work. All he need do is to lend his money and let
other people do the work. Unless he himself in the meantime sees to it
that the money is spent, the money need not be used up.
This is the very thing which brings into the body social so much of
what is afterwards felt shall we say as a social
anomaly, as an injustice. Indeed, gigantic changes are brought about
in the body social, even economically speaking, by this reshuffling
I will not say of the relationships of property (I will not
speak of these) but of the relationships of work and activity. And we
may ask: How are these changes related to another factor, by which it
is perhaps more easy to apprehend them? For there is still something
rather vague about it if I merely describe empirically, as I did just
now, this existing discrepancy as between money and the real objects
in the economic organism. How can we get a picture-thought of some
particular instance?
We can get a picture of it if we consider, to begin with, how
absolutely fundamental for the whole economy of a closed domain is the
consumption by all the human beings contained in it. This is the very
first premiss: the total consumption by all the human beings
who live in the economic domain. That is something which is simply
there; it is presupposed: the consumption by all the human beings
contained in any economic domain.
But there is also another thing which is of fundamental significance;
and that is the land as such. Though this was badly misunderstood by
the Physiocrats, for example, nevertheless the land is of fundamental
significance, in spite of the fact, which has emerged from these
lectures, that it must be constantly devalued. Indeed, it is just
because of its fundamental significance that it must again and again
be devalued. The Physiocrats made the following mistake. They lived in
a time when land (as is of course still the case) had capital value.
They conceived their ideas under the influence of this fact. They
traced the economic relationships, indeed, in a very clear and graphic
way. Of all the economists, they were the most rational. And from
their standpoint they came to the conclusion that the intrinsic worth
of an economic realm lies in the cultivation of the land, i.e., in the
production of those goods which actually serve for the nourishment of
man. So long as we remain within this field, we must in fact regard
the land as the more or less fixed and given foundation of that which
constitutes the intrinsic worth of an economic realm. You need only
reflect how the workers who work upon the land, who unite with their
Labour the Nature-products which subsequently serve for human
nourishment, do in effect so far as food is concerned
feed all the others along with themselves. All others are dependent on
them; all others must be nourished by them. The others, it is true,
can somehow get the means to pay for it, and pay more or less dearly.
But we may think it out in simple terms in order to grasp the
essential point. Let us suppose that there is a certain number, A, of
eaters. This number A will include all the farm-workers, all the
industrial workers, all the investors, all the traders, all the
spiritual workers, right up to the freest spiritual life. All these
require feeding. There will be another number, B, of those who have
nourishment to offer. That is to say, B is the number of those who by
their work really provide whatever passes over directly into human
nourishment into that part of the sum-total of economic
consumption which represents the food consumed. Now if A is
increased to A1, while B remains constant, B's product will
have to be further divided; and unless B can also be increased in its
value somehow, people will have to be brought into the country and the
yield of the land increased.
In other words, you cannot arbitrarily increase the number of
spiritual workers, for example, within a given economic domain,
without increasing on the other side the number of those who are
responsible for the production of foodstuffs. Alternatively you can
increase the fertility of the soil. The latter may, of course, be the
achievement of spiritual workers, but in that case it follows that the
spiritual workers of a period when the fertility is higher must be
wiser; they must have higher faculties than those who went before
them. Thus the increased yield of farm-Labour is in a certain sense
equivalent to the enhancement of the insight with which we elaborate
the products we receive from Nature. This may be done in many
different ways. A man may enhance the forestry of a whole country by
improving the bird-life of the country. It may be done in countless
ways; we are only concerned with the principle.
So long as we are only thinking in terms of national economy, it is
clear enough that such things can happen. Into a country endowed with
a lesser degree of insight cleverer people may immigrate from another
country, and they may then improve the cultivation of the land. Or, on
the other hand, if more people move up into the classes which are not
actually producing food, fresh workers may be called into the country.
All these things actually happen within and across the frontiers of
national economies which border upon other national economies.
All that we can think upon this matter may now be expressed in the
question: What is to be done if on the side of A consumption is in
excess of what B can produce? Whatever we may think at this point in
terms of purely national economy, it ceases to be thinkable when
world-economy arises, and when the conditions of the world are already
in a certain sense disposed as for world-economy. What we have to do,
ladies and gentlemen, is to form an idea of the changes entailed by
the existence of a self-contained economic domain.
We can study it empirically by observing some small economy wherein
exports and imports can be more or less disregarded. After all, there
have been such economies. Empirically, we can study the
condition within a self-contained economic realm. And we find it true:
The foundation is the land. What the land yields is subjected to
Labour elaborated and thus receives an economic value.
Thereafter Labour itself is organised. We come to the class of men who
are no longer actual producers of food, who are consumers but not
producers so far as food is concerned. Above all, when we come to the
spiritual workers, we have consumers and not producers, so far as
foodstuffs are concerned. In a self-contained economic realm we must
therefore distinguish, with respect to food, a certain number of
producers who indeed if I may say so are very much aware
of the fact that they are the producers; and over against them the
consumers.
These things, of course, are relative; the transition is gradual. But
if we consider the whole of human life within a self-contained
economic realm of this kind, we must bring about what I explained a
few days ago: The Capital must not be allowed to become congested.
Hence at the place where the spiritual life is most highly evolved in
the forming of Capital (this place is of course spread
out throughout the entire economic realm) the excess of Capital which
has been acquired must not be allowed to flow into the land, where it
would become dammed up. Provision must be made for the elimination of
the excess Capital. The Capital must not be allowed to become
congested in the land. That is to say, at an earlier stage in the
process, the congestion must be prevented by the free gift, to
spiritual institutions, of the excess which has been acquired. Only
what I described as a kind of seed must be allowed to
pass on. It is here that the concept of free gift
confronts us inevitably; there must be free gifts.
Study any of the self-contained economic realms which have arisen in
the course of history, and you will see that the free gift is always
there. In all essentials, the spiritual life is dependent on what, in
the economic sense of the word, are free gifts, pure and simple.
From the simple case where Charles the Bald, out of what he had to
give away, maintained his Court Philosopher (which some may regard as
a rather superfluous article of furniture!) Scotus Erigena
to Peter's Pence whereby the Roman Catholics of all the world
give their free gifts to the Church in tiny doses, such gifts are
always there. Wheresoever an economic life, no matter how gigantic it
may become, represents an economic domain more or less self-contained,
you have the transformation of accumulated Capital into gift-Capital
for the maintenance of spiritual institutions.
In other words, now that we have inevitably come to a closed economic
realm, namely that of the entire world, we should reflect that one
thing is inevitable in a truly economic sense: What would otherwise
become dammed up in the land must vanish into spiritual institutions.
I say once more, it must somehow vanish into the spiritual
institutions. It must take effect as a free gift.
For a truly modern Economic Science, we must seek an answer to this
question: How (in the sense of economics) must we buy and sell, so
that the values, primarily created as food-values within the purely
material realm, may vanish within the spiritual domain? That is the
great question. I will formulate it once more: What form of payment
must we strive for in our economic intercourse, so that that which is
created by the elaboration of Nature, where the productive process
primarily works for the nutrition of mankind, eventually vanishes in
spiritual institutions? This is the great economic question, to the
answering of which we shall proceed in the next lecture.
Last Modified: 23-Nov-2024
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