One of several Unidentified Essays written by Rudolf Steiner, and published in various periodicals or journals. This essay first appeared in The Threefold Commonwealth, London, Volume 1, 1921, and then in Anthroposophical Quarterly, 1927, Volume 2, Number 3, Michaelmas. The translator is unknown.
From various points of view the opinion has been expressed that all questions concerning money are so complicated as to be well-nigh impossible to grasp in clear and transparent thought. One might mention, in this connection, the book on Money and Credit, by Hartley Withers, the great English authority on Finance. A similar view can be maintained with regard to many questions of modern social life. At the same time, we should consider the consequences that must follow if men allow their social dealings to be guided by impulses that have their root in indefinite thoughts — or at any rate in thoughts that are very hard to define. For such thoughts do not merely signify a lack of insight, a confusion in theoretic knowledge, they are potent forces in life. Their vague character lives on in the institutions that arise under their influence, and these in turn result in social conditions making life impossible.
The conditions under which men are living in modern civilisation arise from such chaotic impulses of thought. This fact will have to be acknowledged if a healthy insight into “the social question” is to be attained. We first become aware of the social question when our eyes are opened to the straits in which men are finding themselves. But there is far too little inclination to follow out objectively the path that leads, from a mere perception of these troubles, to the human thoughts that lie at the root of them. It is only too easy to think it a piece of practical idealism to set out on this path — from the economic bread-and-butter question to the human thoughts. And men do not see how unpractical is a practice of life to which they have grown accustomed, which nevertheless is based on thoughts that are impossible to life. Such thoughts are contained in present-day social life. If we try to go to the root of the social question we are bound to see that at the present day even the most material demands of life can be grappled with only by proceeding to the thoughts that underlie the co-operation of men and women in a community.
Many of these thoughts have indeed been pointed out by people who speak from the point of view of one circle in life or another. For example, people whose activity is 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 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.
It is from an unflinching perception of facts like these, that power should come to guide and direct any attempt to solve “the social question.” For it can reveal the truth that one who opposes right demands in social life, because through his own particular interests he lives in thoughts that do not accord with them, is in the long run undermining the very foundations on which his own interests are built.
Such a truth can be perceived in considering the social significance of land. We must first take into account how the purely capitalistic tendency in economic life affects the valuation of land. As a result of this purely capitalistic tendency, capital creates the laws of its own increase, and in certain spheres of life these laws no longer accord with the principles that determine the increase of capital on sound lines.
This is especially evident in the case of land. Certain conditions in life may very well make it necessary for a district to be made fruitful in a particular way. Such conditions may be of a moral nature — they may be founded on spiritual and cultural peculiarities. But it is very possible that the fulfilment of these conditions would result in a smaller interest on capital than the investment of the capital in some other undertaking. As a consequence of the purely capitalistic tendency, the land will then be exploited, not in accordance with these spiritual or cultural points of view (which are not purely capitalistic in character) but in such a way that the resulting interest on capital may equal the interest in other undertakings. And in this way values that may be very necessary to a real civilisation are left undeveloped. Under the influence of this purely capitalistic orientation, the estimation of economic values becomes one-sided; it is no longer rooted in the living connection which men must have with nature and with spiritual life, if nature and spiritual life are to give them satisfaction in body and in soul.
It is easy to jump to the conclusion: The capitalistic orientation of economic life has these results, and it must therefore be abandoned. But the question is, whether in so doing we should not also be abandoning the very foundations, without which modern civilisation cannot exist. One who thinks the capitalistic orientation a mere intruder into modern economic life, will demand its removal. But one who recognises 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. For he will clearly perceive that the capitalistic method of production is a consequence of modern life, and that its disadvantages can only make themselves felt so long as the capital aspect is made the sole criterion in estimating economic values.
The ideal is to work for a structure of society whereby the criterion of increase of capital will no longer be the only power to which the production is made subject. In a right structure of society, increase of capital 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. Anyone who determines his thought by the one-sided point of view of capital increase, or, which is the necessary consequence, of rise in wages, will fail to gain clear and direct insight into the effects of the various specific branches of production on the cycle of economic life. If the object is to gain an increase in capital or a rise in wages, it is immaterial through what branch of production the result is achieved. The natural and sensible relation of men and women to what they are producing is thereby undermined. For the mere quantity of a sum of capital, it is of no account whether it be used to acquire one kind of commodity or another. Nor does it matter for the mere height of wages, whether they are earned in one form of work or in another.
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 artificial means of production. The valuation of these latter things is dependent on many factors — factors which only become apparent when one takes into account the social structure as a whole.
If cultural interests demand that a certain district be put to economic uses, which, from the capital point of view, seem to yield a lower return than other industries, the lower return will yet not harm the community in the long run. For in time the lower return of the one branch of production will affect other branches in such a way that the prices of their products will also be lowered. This connection of things can only escape the momentary point of view, which reckons on nothing beyond the narrow egoistic kind of value.
Now where there is simply a “market” type of relationship — where “supply and demand” are the determining factors — there the egoistic type of value is the only one that can come into the reckoning. 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. One man's making himself a judge as to the legitimate needs of another being excluded on principle, these negotiations will simply be based on the possibilities afforded by natural resources and by human power.
Life on this basis is impossible while the economic cycle is governed simply by the point of view of capital and wages. Land, means of production, and commodities for human use — things for which there is in reality no common standard of comparison — are exchanged for one another. Nay more, human labour-power, and the use of man's spiritual and intellectual faculties; are also made dependent on the abstract standard of capital and wages — a standard which eliminates, both in man's judgment and in his practical activity, his natural and sensible relations to his work.
Now in modern life there is no possibility of bringing about that relation of man to economic values which was possible under the old system of barter, nor even that relation which was still possible under a simpler money system. The division of labour and of social function, which has become necessary in modern times, separates a man from the recipient of the product of his work. Without undermining the conditions of modern civilisation, there is no altering this fact; nor is there any way of escaping its consequence — the weakening of a man's immediate interest in his work. The loss of a certain kind of interest in work must be accepted as a result of modern life. But we must not allow this interest to disappear without others taking its place. For men cannot live and work in the community indifferently.
It is from the spiritual life and the life of rights, as they are made independent, that the necessary new interests will arise. From these two independent spheres, impulses will come, involving other points of view than those of a mere increase of capital or standard of wages. A free spiritual life creates interests which have their source in the depths of the human being, and which imbue a man's work and all his action with a living aim and meaning in the social life. Developing and caring for man's faculties for their own inherent value, such a spiritual life will create in man the consciousness that his talents, and the place he fills in life, have real meaning. And moulded by men whose faculties have been developed in this spirit, society will ever adapt itself to the free expression of human faculties. The life of rights and of economics will take their stamp from the developed faculties of man.
The deep inner interests of individuals cannot unfold fully and freely through a spiritual life that is regulated by the political sphere, or that develops and uses human faculties merely as dictated by their economic usefulness. This kind of spiritual life may supply men with artistic and scientific movements as idealistic adjuncts to life, or it may offer them comfort and consolation in religion or philosophy. But all these things are only leading men outside the sphere of social realities into regions more or less remote from every-day affairs. It is only a free spiritual life that can penetrate the everyday affairs of the community, for it is only a free spiritual life that can set its own stamp on them as they take shape.
In my book The Threefold Commonwealth, I tried to show how a free spiritual life will, among other things, provide the motives and impulses for a healthy social administration of capital. The fruitful administration of a certain piece of capital is only possible by a person or group of persons who have the human faculties to perform that particular work of social service for which the capital is used. It is therefore necessary for such a person or group of persons to have the 'administration of the capital only so long as they are able to carry on the work of management themselves by virtue of their own faculties. As soon as this ceases to be the case, the capital must be transferred to other persons who have the faculties. Now, since under a free spiritual life the human faculties are developed purely out of the impulses of the spiritual life itself, the administration of capital in the economic sphere will become a result of the unfolding of spiritual power, and the latter will carry into the economic life all those interests that are born within its own spiritual sphere.
An independent political life will create mutual relationships between the human beings living in a community. Through these political or civic relationships they will have an incentive to work for one another, even when the individual is unable to have that direct creative interest in the product of his work. This interest becomes transformed into the interest that he can have in working for the human community, whose political life he helps to build. Thus the part that a man plays in the independent life of rights can become the basis for a special impulse to life and work alongside the economic and spiritual interests. A man can look away from his work and the product of his work to the human community, where he stands in relation to his fellows purely and simply as an adult human being, without regard to his particular spiritual or mental talents, and without this relation being affected by his particular station in economic life. When he considers how it is serving the community to which he has this direct and intimate human relationship, the product of his work will appear valuable, and this value will extend to the work itself.
Nothing but an independent life of rights can bring about this intimate human relationship. For it is only in the sphere of rights that every human being can meet every other human being with equal and undivided interest. All the other spheres of social life must by their very nature create distinctions and divisions according to individual talents or kinds of work. This sphere of rights bridges over all differences.
As regards the administration of capital, the independence of the spiritual life will have the effect that increase of capital will not act as the direct and driving motive. Increase of capital will only result as a natural consequence of other motives, and these other motives will proceed from the proper connection of human faculties with the several spheres of economic activity.
It is only from such points of view as these — points of view that lie outside the purely capitalistic orientation — that society can be so constructed as to bring about a satisfactory balance between human work and its return. And as with regard to the capitalistic orientation, so it is with regard to other matters where modern life has removed man from the natural connection with the conditions of his life.
Through the independence of the spiritual life and the life of rights, artificial means of production, land, and also human labour-power, will be divested of their present character of commodities. (The reader will find a more exact description of the way in which this will come about in my book, The Threefold Commonwealth). The motives and impulses which will determine the transference of land and of means of production, when these are no longer treated as marketable commodities, will have their root in the independent spheres of equity or politics, and of spiritual life. The same may be said of those motives that will inspire human labour.
By this means forms of social co-operation that are suited to the conditions of modern life will be created. And it is only from these forms that the greatest possible satisfaction of human needs can result. In a community that is organised purely on a basis of capital and wages, the individual can apply his powers and talents only in so far as they find an equivalent in capitalistic gain. Consider, moreover, that confidence by virtue of which one man will place his forces at the disposal of another in order to enable the latter to accomplish certain work. In a capitalistic community, this confidence must be based on the belief that the other person's circumstances are such as to inspire confidence from the purely capitalistic point of view.
Work done in confidence of the return achievements of others constitutes the giving of credit in social life. Now just as in older states of civilisation there was a transition from barter to the money system, so, as a result of the complications of modern life, there has latterly taken place a progressive transformation, from the simpler money system, to a working on a basis of credit. In our age, life makes it necessary for one man to work with the means that are entrusted to him by another, or by a community, in confidence of 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 a prospect of an increase of capital that seems to justify it; and work is done always subject to the point of view that the confidence or credit received will have to appear justified in the capitalistic sense. These are the motives underlying the giving and taking of credit. And what is the result of this state of affairs? 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.
Take the case of credit on land. In a healthy social life, a man or group of men possessed of the necessary faculties may be provided with credit on land, enabling them to develop the land by establishing some branch of production. But it must be a branch of production whose development on that land seems justified in the light of all the cultural conditions that are involved. If credit is given on land from the purely capitalistic point of view, it may happen that in the effort to give it a commodity value corresponding to the credit provided, that use of the land which would otherwise be the most desirable is prevented.
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. An independent spiritual life and life of rights will lead men to recognise this relation in a living way and make it a directing force. And from it the economic dealings of men will take their form. Production will be considered from the point of view of human needs; it will no longer be ruled by processes which blot out the concrete needs of men by an abstract scale of capital and wages.
The economic life in a Threefold Commonwealth is built up by the co-operation of associations arising out of the needs of producers and the interests of consumers. These associations will have to decide on the giving and taking of credit. In their mutual dealings the impulses and points of view that enter the economic life from the spiritual sphere and the 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 dealing 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 on the associations. This will not impair the scope and activity of individuals with special faculties. On the contrary, it is only this method which 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. Such a division of responsibility will ensure that the whole activity of production is guided by complementary and mutually corrective points of view. 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, which will make themselves felt in a real and objective way. The need which one association establishes will be the occasion for the giving of credit by another association.
People who depend on their accustomed lines of thought will say: These are very fine ideas, but how are we to make the transition from present-day conditions to the threefold system?
It is important to see that what has here been proposed can be put into practice without delay. It is only necessary to begin by forming such associations. Surely no one who has a healthy sense of the realities of life, can deny that this is possible without further ado. Associations on the basis of the Threefold Commonwealth idea can be formed, just as well as companies and syndicates on the old lines. Moreover, all kinds of dealings and transactions are possible between the new associations and the old forms of business. There is no question of the old having to be destroyed and artificially replaced by the new. The new simply takes its place beside the old; the new will then have to justify itself and prove its inherent power, while the old will gradually crumble away.
The Threefold Commonwealth idea is not a programme or system for society as a whole, requiring the old system suddenly to cease and everything to be set up anew. No the threefold idea can make a start with individual institutions and undertakings in society. The transformation of the whole will then follow by the ever widening life of these individual institutions. Just because it is able to work in this way, the threefold idea is no Utopia; it is a power adequate to the realities of modern life.
The essential thing is that the threefold idea will stimulate a real social intelligence in the men and women of the community. The economic points of view will be properly fructified by the impulses that come from the independent spiritual life and life of rights. The individual will in a very definite sense be contributing to the achievements of the whole community. Through his part in the free spiritual life, through the interests that arise in the political sphere of rights, and through the mutual relations of the economic associations, his contribution will be realised.
Under the influence of the Threefold Commonwealth idea, the operation of social life will in a certain sense be reversed. At the present day a man has to look upon the increase of his capital, or the standard of his wages, as a sign that he is playing a satisfactory part in the life of the community. In the Threefold Commonwealth the individual faculties of men, working in harmony with the human relationships that are founded in the sphere of rights, and with the production, circulation and consumption that are regulated by the economic associations, will have as their result the greatest possible efficiency of the common work. Increase of capital, and a proper adjustment of work, and the return for work, will appear as a final consequence of these social institutions and their activities.
From the mere attempt at reform in the sphere of social effects, the Threefold Commonwealth idea would guide our transforming and constructive power into the sphere of social causes. 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. Modern life has brought division of labour in many spheres. The external methods and institutions require it. The effects of division of labour must be balanced by living mutual relations between men and women in the community. Division of labour separates men from one another; the forces that come to them from the three spheres of social life, once these are made independent, will draw them together again. The progressive separation of men has reached its height. This is a fact of experience, and it gives our modern social life its stamp. Once we recognise it, we realise the imperative demand of the age, to find and set out upon the paths to a reunion.
This inevitable demand of the time is shown in a vivid light by such concrete facts of economic life as the continued intensification of the credit system. The stronger the tendency to a capitalistic point of view, the more highly organised the financial system, and the more intense the spirit of enterprise became — the more did the credit system develop.
But to a healthy way of thinking the growth of the credit system must bring home the urgent need of permeating it with a living sense of the economic realities the production of commodities and the needs of men for particular commodities. 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 his connection with the whole economic sphere, i.e., through the associations, must give him grounds to justify his taking this responsibility. For a healthy national economy, it is not merely of importance 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. Theoretically, we may take it, no one will be prepared to deny that a larger sense of responsibility is very necessary in the present-day world of business and of economic affairs. But to this end associations must be created which will work in such a way as to confront the individual with the wider social effects of all his actions.
Persons whose task in life lies in the sphere of farming and who have experience in this direction, very rightly declare that a man who is administering land must not regard land as an ordinary commodity, and that land-credit must be considered in a different way from commodity-credit. But it is impossible for insight of this kind to come into practical effect in the modern economic cycle until the individual is backed up by the associations. Guided by the real connections between the several spheres of economic life, the associations will set a different stamp on agricultural economy and on the other branches of production.
We can well understand some people saying to these arguments: “What is the point of it all? When all is said and done, it is human need that rules over production, and no one — to take an instance — can give or receive credit unless there is a demand somewhere or other to justify it.” Someone might even say: “After all, all these social institutions and methods that you are thinking of, come to nothing more than a conscious arrangement of the very things that supply and demand will surely regulate automatically.” But to one who looks more accurately, it will be clear that this is not the point. The social thoughts that take their start from the threefold idea do not aim at replacing the free business dealings governed by supply and demand, by a system of rations and regulations. Their aim is to realise 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 in the time which 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 above defined. This can only be determined through methods and institutions whereby society in all its aspects will bring about a sensible valuation of the different commodities. Anyone who doubts that such methods and institutions are 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 raise the civilised 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 Commonwealth is to create a just balance between human needs and the value of the products of human work.