The Rudolf Steiner Archive

35. Tripartition and Social Trust (Capital and Credit)

[ 1 ] It has been said from various quarters, for example by the English financial theorist Hartley Withers (in his remarks on "Money and Credit"), that all questions relating to money are so intricate that their sharp formulation into definite ideas encounters extraordinary difficulties.

[ 2 ] It will be possible to apply this view to many questions of social life. But one should also consider what consequences it must have in this social life if people organize their cooperation according to impulses that are rooted in indeterminable, or at least difficult to determine, thoughts. Such thoughts are not merely defects of insight that confuse cognition; they are effective forces in life. Their indeterminacy lives on in the institutions that arise under their influence. And from such institutions spring social conditions that are impossible to live in.

[ 3 ] A healthy insight into the "social question" must be based on the recognition that the civilized humanity of the present lives in conditions that arise from such confusing thought impulses. This question flows first of all from the perception of the hardships in which people find themselves. And one is little inclined to follow the path that leads from the perception of these needs to the human thoughts in which they have their source in a truly appropriate manner. It is all too easy to see an impractical idealism in following this path - from bread to thoughts. One does not recognize the impracticality of a practice of life to which one is accustomed, but which nevertheless rests on thoughts that are impossible for life.

[ 4 ] Such impossible thoughts are contained in contemporary social existence. If one endeavors to really get to the bottom of the "social question", one will have to see how today the demands of the most material life can only be practically tackled if one progresses to the thoughts from which the cooperation of the people of a social community emerges.

[ 5 ] There is, however, no lack of references to such thoughts from individual circles of life. People whose activities are linked to the nature of land speak of the fact that, under the influence of recent economic drives, land is treated like "commodities" in terms of buying and selling. And they believe that this is detrimental to social life. Such views do not lead to practical consequences, because people in other walks of life do not admit their justification out of their own interests.

[ 6 ] The realistic observation of such a fact should lead to a guiding force for attempts to solve the "social question". For such an observation can show how he who resists the legitimate demands of social life, because from within his circle of life he assents to ideas which are not in harmony with them, ultimately undermines the foundations on which his interests are built.

[ 7 ] Such an observation can be made about the social significance of land. One will make it if one considers how the purely capitalist orientation of the national economy affects the measurement of the value of land. The consequence of this orientation is that capital creates laws for its multiplication which, in certain areas of life, no longer correspond to the conditions which may in a healthy way bring about an increase of capital.

[ 8 ] This becomes particularly clear in the case of land. The fact that a certain area of land is made fertile in a certain way can be absolutely necessary due to living conditions. Such conditions can be of a moral nature. They may lie in spiritual cultural conditions. But it may well be that the fulfillment of these conditions yields a lower return on capital than the investment of capital in another enterprise. The purely capitalist orientation then leads to abandoning the exploitation of the land according to the not purely capitalist aspects described above and to utilizing it in such a way that its capitalist yield is equal to that of other enterprises. The production of values, which can be very necessary for true civilization, is thereby suppressed. And under the influence of this orientation, a valuation of the goods of life arises that can no longer be rooted in the natural connection that people must have with nature and spiritual life if these are to satisfy them physically and mentally.

[ 9 ] It is now obvious to come to the conclusion that the capitalist orientation of the national economy has the characterized effects; therefore it must be eliminated. The only question is whether this elimination would not also eliminate the foundations without which modern civilization cannot exist.

[ 10 ] Those who regard the capitalist orientation as a mere intruder into modern economic life will demand its elimination. But he who recognizes how the life of modern times works in the social organism through the division of labour and subdivision can only think of excluding the dark side of this orientation, which appears as a side effect, from community life. For it is clear to him that the capitalist method of labor is a consequence of this life, and that the dark sides can only appear so long as the capital point of view is exclusively asserted in the valuation of the goods of life.

[ 11 ] It is important to work towards such a structure of the social organism by which the assessment according to the increase of capital is not the sole power under which the branches of production of economic life are forced, but in which the increase of capital is the expression of a shaping of this life which takes into account all the requirements of human corporeality and spirituality.

[ 12 ] Those who organize their way of thinking according to the one-sided standpoint of the increase of capital or, which is a necessary consequence of it, according to that of the increase of wages, are deprived of the immediate view of the effects of individual areas of production on the economic cycle. If it is a question of increasing capital or raising wages, it is irrelevant in which branch of production this takes place. The natural relationship of people to what they produce is undermined. The amount of a sum of capital or wages remains the same if instead of one kind of commodity another is acquired for it, or if another is exchanged for one kind of labor. But it is by this that the goods of life become " commodities ", that they can be acquired or sold by the quantity of capital, in which their particular character finds no expression.

[ 13 ] However, only those goods of life that are directly consumed by man can bear this commodity character. For man has a direct measure of their value in his bodily or spiritual needs. There is no such yardstick either for land or for the artificially produced means of production. The measurement of their value depends on many factors which only become clear when one considers the whole social structure of human life.

[ 14 ] If it is necessary for cultural interests that an area of land should be treated in such a way that from the point of view of capital its yield appears lower than that of another enterprise, this lower yield will not in the long run be detrimental to the community. For the lower yield of one branch of production must after a time affect others in such a way that the prices of their products will also be lowered. This connection only eludes the momentary point of view, which cannot but take into account the egoistic value. In the mere market relation, in which supply and demand alone prevail, it is only possible to reckon with this egoistic value. This relationship can only be overcome if associations regulate the exchange and production of consumer goods on the basis of rational observation of human needs. Such associations can replace mere supply and demand with the results of contractual negotiations between consumer and producer circles on the one hand and between the individual producer circles on the other. If in these observations it is excluded that one man can set himself up as the judge of what another may have in the way of wants, then in the foundations of such negotiations only what can come about from the natural conditions of the economy and from the human possibility of labor will have a say.

[ 15 ] The domination of the economic cycle by the mere capitalist and wage orientation makes life on such foundations impossible. Through this orientation, there is an exchange in life for which there is in fact no common standard of comparison: Land, means of production and goods for immediate consumption. Indeed, even human labor and the utilization of people's intellectual abilities are made dependent on an abstract standard, the capital and wage standard, which in human judgment and human activity makes the natural relationship of man to his field of activity disappear.

[ 16 ] Now, in the more recent life of mankind, the relation of man to the goods of life cannot be established which was possible under the rule of the natural economy or even under the rule of an even simpler monetary economy. The division of labor and social structure which have become necessary in modern times separate man from the purchaser of his labor product. This fact and its consequence, the waning of direct interest in performance, cannot be counteracted without undermining the life of modern civilization. The waning of a certain kind of interest in work must be accepted as a result of this life. But these interests must not disappear without others taking their place. For man must work with a share within the social community and live in it.

[ 17 ] The necessary new interests will spring from the intellectual and legal life, which will become independent. From these two independent spheres will come the impulses which correspond to other points of view than those of mere capital increase and wage level.

[ 18 ] A free spiritual life creates interests from the depths of human nature, which place work and all activity in the community in a purposeful and substantive way. Such a spiritual life creates in people the awareness that they have a meaningful existence with their abilities, because it cultivates these abilities for their own sake. Under the influence of abilities cultivated in this way, the community will always take on the character in which they can have an effect. Legal and economic life will take on a character corresponding to the developed abilities. In a spiritual life which receives its regulation from the political-legal sphere, or which cultivates and utilizes human abilities according to their economic effect, self-interests will not be able to emerge in full development.

[ 19 ] Such an intellectual life will provide "idealistic" additions to life in artistic and cognitive endeavors or satisfaction for concerns in worldview content that lead beyond social life into an area more or less alien to life. Only a free spiritual life can be life-permeating because it is given the opportunity to shape life of its own accord. In my Kernpunkte der sozialen Frage I have tried to show how in such a spiritual life the impulses can be found which place the administration of capital on a healthy social basis. Only those persons or groups of persons can fruitfully administer a mass of capital who possess the human capacity to perform those services in the service of the human community for which the capital is utilized. It is therefore necessary that such a person or group of persons only manage a mass of capital for as long as they are able to do so on the basis of their own abilities. If this is no longer the case, then the capital should be transferred to other persons who possess these abilities. Since in a free spiritual life the development of human abilities arises entirely from the impulses of this spiritual life itself, the management of capital in the economic cycle becomes a result of the development of spiritual power. And this carries into economic life all those interests that sprout from its soil.

[ 20 ] An independent legal life creates relations between the people living in a social community, which make them work for each other, even if the individual cannot have a direct interest in the production of his work product. This interest is transformed into that which he can have in working for the human community in whose legal structure he participates. The share in the independent legal life can become the basis for a special drive for life and achievement alongside economic and intellectual interests. Man can turn his gaze from his achievements to the human community, in which he is a living part with all that flows from his humanity merely by virtue of the fact that he has become a mature human being, without regard to his intellectual abilities, and without the economic position in which he finds himself having any effect on this relationship. The product of labor will radiate its value to labor if one sees the way in which it serves the human community in which one is so directly humanly interwoven. But nothing else can bring about this interwovenness like an independent legal life, because only this is an area in which every man can meet every man with the same undivided interest. Every other field must, by its very nature, bring about separations according to individual abilities or according to the content of work; this one bridges all separations.

[ 21 ] For the administration of capital, the independence of spiritual life means that the increase of capital is not a direct drive, but can only occur as a natural consequence of other drives that result from the proper connection of human abilities with the fields of achievement.

[ 22 ] Only from such points of view, which do not lie within the capitalist orientation, can the social organism receive a structure in which human performance and counter-performance find a satisfactory balance. And as in the area of capitalist orientation, the same can happen in other areas in which modern life has distanced man from the natural connection with the conditions of life.

[ 23 ] Through the independence of intellectual and legal life, artificial means of production and land as well as human labor power are stripped of their commodity character. (The ways in which this happens are described in more detail than can be given here in my book "Die Kernpunkte der sozialen Frage"). In the independent legal and intellectual sphere will be rooted the impulses out of which means of production, out of which land will be transferred without purchase and out of which human labor will be performed.

[ 24 ] This, however, will create the forms of social interaction of human forces appropriate to the present life of civilization. And only from such forms can the best possible satisfaction of human needs arise. In a merely capitalistically and wage-organized community, the individual can only assert his abilities and powers to the extent that they find their equivalent in the acquisition of capital. Trust, by which one places his powers at the disposal of another for the latter's services, can only be based on the prospect that the other lives in conditions that can instill confidence in a capitalist way of thinking. In social life, working in reliance on the services of others is the granting of credit. The complexity of modern life has increasingly led to a transition from a natural to a monetary economy for older cultures, and to a work based on the granting of credit for more recent ones. We stand in an age in which life makes it necessary for one person to work with the means that another or a community hands over to him in reliance on his ability to perform. For capitalist activity, however, the humanly satisfying connection with the conditions of life is completely lost through the credit economy. The granting of credit with the prospect of a corresponding increase in capital and work from the point of view that the trust placed in it appears to be justified in capital terms become the driving forces of credit transactions. This, however, produces results in the social organism by means of which men are brought under the power of capital transfers alien to life, which they feel to be inhuman the moment they become fully conscious of them.

[ 25 ] If credit is granted on land, then in healthy social life this can only be done from the point of view that a person or a group of people equipped with the necessary abilities is given the opportunity to develop a production enterprise that appears justified from all the cultural conditions under consideration. If credit is granted on land out of a purely capitalist orientation, it may happen that the land must be deprived of its otherwise desirable purpose so that it receives a commodity value that corresponds to the granting of credit.

[ 26 ] A healthy granting of credit presupposes a social structure through which the goods of life find a valuation that is rooted in their relationship to the physical and spiritual satisfaction of human needs. An independent spiritual and legal life leads people to a vital recognition and assertion of this relationship. In this way, the economic cycle is shaped in such a way that it makes the assessment of production dependent on what people need and does not allow it to be dominated by powers in which concrete human needs appear to be extinguished in the abstract scale of capital and wages.

[ 27 ] Economic life in the tripartite social organism comes about through the interaction of the associations formed from the needs of production and the interests of consumption. These will have the decisions on granting and receiving credit. In the negotiations of such associations, the impulses will play a decisive role, which have an effect on economic life from the intellectual and legal spheres. There is no need for a purely capitalist orientation for these associations. For one association will interact with the other. Thus the one-sided interests of one branch of production are regulated by those of the other.

[ 28 ] The responsibility for granting and receiving credit will fall to the associations. This does not detract from the importance of the individual abilities of the individual personalities, but rather brings them to full fruition. The individual is responsible to his association for the best possible performance; and the association is responsible to other associations for the targeted use of the benefits. In such a division of responsibility lies the guarantee that the production activity will proceed from points of view which correct each other in their one-sidedness. Production is not driven by the acquisitive impulses of individuals into community life, but by the needs of the community acting in an appropriate manner. The need identified by one association can be the reason for granting credit to another.

[ 29 ] He who is attached only to habitual trains of thought will say: these are "beautiful" thoughts; but how is one to get out of the present life into one that rests on such ideas? It is a matter of recognizing that what is proposed here can actually be translated directly into reality. It is only necessary to make a start with the marked associations. No one who has a healthy sense of the realities of life should doubt that this is possible without further ado. Such associations, which rest on the basis of the threefold idea, are just as easy to form as consortia, societies and so on in the sense of the old institutions. But any kind of economic intercourse between the new associations and the old institutions is also possible. There is no need to think that the old must be destroyed and artificially replaced by the new. The new places itself alongside the old. The old must then prove itself through its inner strength and justification; the new crumbles out of the social organization. The idea of threefolding is not a program for the whole of the social organism, which demands that the whole of the old cease and that all things be "reorganized". This idea can take its starting point from the formation of individual social institutions. The transformation of a whole will then take place through the spreading life of the individual social formations. Because this idea can work in such a direction, it is not a utopia, but a force appropriate to reality.

[ 30 ] The essential thing is that the idea of threefolding brings appropriate social understanding to the people united in the social organism. The economic viewpoints are appropriately fertilized by the impulses that come from the independent spiritual and legal life. The individual becomes, in a certain sense, a collaborator in the achievements of the whole. This cooperation is mediated through his share in the free intellectual life, through the interests generated on the legal ground, through the interrelationships of economic associations.

[ 31 ] The effectiveness of the social organism is to a certain extent transformed under the influence of the threefold idea. At present man must see in the increase of capital and in the level of wages the characteristics by which he finds himself appropriately placed in the social organism. In the tripartite social organism, the individual abilities of individuals, in harmony with the human relations arising from the legal basis and the economic production, circulation and consumption based on associative activity, will result in the best possible fruitfulness of communal work. And the increase of capital or the equalization of performance with corresponding compensation will emerge as the consequence of social activities and institutions.

[ 32 ] The idea of threefolding aims to direct the transforming and constructive activity away from reforming in the area in which only the social effects play a role and towards the area of causes. In accepting or rejecting this idea, the question is whether one has the will to work through to this area of causes. And this will must lead away from the observation of external institutions to the people who bring about these institutions. Modern life has brought about the division of labor in many areas. This is a requirement of the external institutions. What is brought about by the division of labor must find its balance in the vital human interrelationships. The division of labor separates men; the forces that will come to them from the three members of the social organism, which have become independent, will unite them again. Our social life is characterized by the fact that the separation of people has reached the climax of its development. This must be recognized through life experience. For those who recognize it, it becomes a necessary challenge of the times to think of treading the paths that lead to unity.

[ 33 ] Such concrete phenomena of economic life as the increasingly intensive credit traffic illuminate this necessary challenge of time. The stronger the tendency towards a capitalist orientation, the more developed the monetary economy, the more active the spirit of enterprise, the more credit transactions develop. But for a healthy mind, this should create the need to penetrate it with a real understanding of the actual production of goods and the human need for certain goods. Ultimately, it can only have a healthy effect if the lender feels responsible for what happens through the granting of credit; and if the borrower, through the economic connections - through the associations - in which he is involved, provides the lender with documentation for this responsibility. For a healthy national economy, it cannot be merely a question of the credit promoting the spirit of enterprise as such, but of the existence of institutions through which the spirit of enterprise has a socially favorable effect.

[ 34 ] Theoretically, hardly anyone will want to doubt that an increase in the sense of responsibility is necessary in the present economic traffic. However, this increase depends on the emergence of associations, through whose activity the individual is really made aware of what happens in the social community through his actions.

[ 35 ] It is rightly asserted by persons whose life's work is connected with the cultivation of the soil, and who therefore have experience in this field, that those who have to administer land must not regard it as any other commodity, and that land credit must be granted in a different way from commodity credit. But it is impossible that in the present economic cycle such knowledge can gain any practical significance, if there are not behind the individual the associations which, from the relations of the individual branches of the economy, give the land economy a different character from that of another branch of production.

[ 36 ] It is quite understandable that some people say to such statements: why all this, since, after all, human need is the master of all production and, for example, no one can come to the granting or receiving of credit unless a need justifies the matter from some corner. One could even say: after all, everything that is thought up about social institutions is nothing more than a conscious shaping of what is certainly also automatically regulated by "supply and demand". But whoever observes more closely will realize that in the discussions on the social question, which proceed from the idea of the threefold organization of the social organism, it is not a question of substituting a compulsory economy for free circulation under the sign of supply and demand, but of shaping the mutual values of the goods of life in such a way that the value of a human product essentially corresponds to the value of the other goods for which the producer has a need in the time he spends on its production. Whether one wants to produce a good in a capitalist orientation may be decided by demand; whether a good can be produced at a price corresponding to its value in the sense indicated cannot be decided by demand alone. This decision can only be brought about by institutions through which the valuation of the individual goods of life comes about out of the whole social organism. He who would doubt that such institutions are desirable has no eye for the fact that the mere operation of supply and demand atrophies human needs, the satisfaction of which increases the civilization of a social organism; and he lacks the sense for a striving which seeks to incorporate the satisfaction of such needs into the impulses of the social organism. In the creation of a balance between human needs and the value of human achievements, the striving for the tripartite organization of the social organism sees its content.