World Economy
GA 340
Appendix
The following answers to questions (on the Tailor Example) given by Dr. Steiner at the “Seminar” which accompanied this course of lectures may be helpful to the reader:—
Q. X brings up for discussion the problem of the tailor. (Lecture IV.)
A. The illusion arises because the effect in relation to the single suit is extraordinarily small and therefore it needs a long time for this small effect to become visible in the tailor's accounts and for the loss to be really felt. Products become cheaper through division of labour. When you work, under division of labour, for a community your own products will also become cheaper than they would be if you were to work for yourself. This is due simply to the cheapening effect of the division of labour. If you interrupt it at a certain point, then you will make the article concerned, which you have made for yourself, more expensive. Now the single effect in relation to a single suit would naturally be small, but it would be marked if all tailors were to make their own suits. When a tailor, who makes his own suits, comes to make up proper accounts, he ought to price his own suits higher than the market price. He must reckon his expenses higher. Naturally, the supposition is that the suits should be bought, not from other tailors, but from the dealers in clothes, the clothiers. The price of a suit at the clothiers is cheaper than it would be if tailors worked without clothiers—otherwise the division of labour and merchanting would have no sense. Therefore the tailor ought to price a suit a little higher if he does without the merchant, because the merchant brings the single suit on to the market more cheaply than the tailor could bring it into use...
Q. Does the tailor depress the price of other suits of clothes by that one suit?
A. He depresses the price of suits by withdrawing one suit from the total number of suits with which the clothiers are dealing. He deprives the clothiers of the opportunity of making a profit on this suit. Therefore the clothiers must demand a higher profit on the other suits. This demand of the clothiers for a higher profit brings about a rise in clothiers' prices, but it means a drop in tailors' prices.
Q. Suppose there are considerably more clothiers than are economically justified?
A. In what I have said there is the presumption that exactly as many clothiers exist as are economically justified. We have to do not with progression in a straight line, but in a direction towards a maximum and a minimum. There is an optimum number of clothiers which will give the best commercial results. Anything over or below it would work uneconomically.
Q. Can the number be ascertained?
A. When you have rational management, then you will have a determinate number of clothiers, as of producers ...
List of relevant literature, published or distributed by Rudolf Steiner Press unless otherwise stated:
BY RUDOLF STEINER
The Threefold Social Order
The Social Future
The Inner Aspect of the Social Question
Anthroposophy and the Social question
Education as a Social Problem
BY FOLKERT WILKEN
The Liberation of Work (Routledge R Kegan Paul)