The Cardinal Question of Economic Life – continued.
By “objective meaning” I don’t mean that you can assign a value to a commodity by using statistics or the like. The interactions from which a commodity acquires its value are much too complex for that. Nevertheless, every commodity has a certain definite value. When a commodity is on the market with a certain price, this price can be either too high or too low in respect to its true objective value, or it can accord with it. But just as this price can be falsified by various means, it is also true that if one were in a position to define all the thousands of conditions involved in production and consumption, he would be able to define the objective value of a commodity. What I call the objective economic value can only be applied to commodities and not to something else which is treated as a commodity. It cannot be applied to land and it cannot be applied to capital.
I do not wish to be misunderstood. You will never hear me characterize capitalism as it is so often described with all kinds of slogans. It is so obvious that it is hardly worth mentioning that without capital nothing can be accomplished in the economy. And all the thundering against capitalism is economic dilettantism. What I’m saying is something quite different: if you can say that a commodity’s price lies over or under a certain midpoint which, although it cannot be directly discerned nevertheless exists, and which alone is beneficial, you can’t say the same for something which today is treated as though it were a commodity: land. The price of land, the value of land, is directly subject to speculation, what you can call different social motives. And there is no necessity in an economic sense to attach a price or a value on land. A commodity, whether it is good or bad – if it’s good it’s good to use, if it’s bad, it’s bad to use – it’s objective value can be set according to the extent it is needed.
The same cannot be said about land or capital. What they bring is completely dependent upon human abilities, which are never completed. If I have land to manage, I can only manage it according to my ability and its value is therefore variable. It is the same with capital that I manage. Whoever studies this fact in its full meaning will have to say: this radical difference between commodities on one hand and land and capital on the other really exists. And the result is that certain symptoms occur that point to an illness in our social organism, which is directly related to the fact that the same money, that is, the same value standard, is used for both items, although their essential nature is completely different – and thus should be treated differently.
If we ask ourselves how this came about and we follow human history, we will see that three domains of life interact inorganically in our social organism, three areas which come from completely different roots and relate to each other in social life only through the individual human being. These are, firstly, the spiritual domain in which human abilities are active, which in reality man brings to the earth from other worlds, in which his talents lie and in which he can learn through these talents, which is completely individual and which can be developed intensively accordingly to the measure in which his individuality is brought to bear in social life. Materialist or not, one must admit that the human being brings what is active in this area to the world from birth, from the physical skill of the handworker to the highest manifestations of inventive ability. And it depends entirely on the human individuality if it is to prosper.
It is a different story in economic life. To use an example: you all know that at a certain time in the 19th century the ideal of a unified gold standard was discussed. The things said by economists, theoreticians, parliamentarians who were pushing for the gold standard at the time – I say it without irony – were all very clever. One can be impressed by the cleverness of what has been said in those circles about the blessings of the gold standard. One thing the most important people said and wrote was that the gold standard would bring about a most beneficial free market, and that the economically damaging political barriers would lose their importance. The reasons for such an affirmation are extraordinarily clever. But what happened? Exactly in those areas where they expected the economic (“political” is probably meant – trans.) barriers to fall as a result of the gold standard, they were found to be necessary, or at least many insisted that they were necessary. Real economic life proved the opposite of what the cleverest people prophesized would happen.
This is an important historical fact from which we should perceive the necessary consequences. And what are these necessary consequences? In economic life, which consists of the production, circulation and consumption of commodities – allow me to utter the paradox; it’s a true one derived from unprejudiced consideration – individual cleverness is of no use. You can be very clever, can think about economics is the most clever way, the proofs can agree, but real economic life will show you to be in error. Why is that? Economic life cannot be reduced to the ideas of an individual, because economic experience and knowledge can only arise and be put into practice through the agreement among those who have interests in the various aspects of economic life. An individual can never come to a valid judgment, even by the use of statistics, as to how the economy should be run. This can only be accomplished by agreement between consumers and producers who unite in associations in which one can tell the other what his needs are and the other can say what the productive possibilities are. Valid economic decisions can only be made when a collective judgment takes place within economic associations.
Here we are touching on a contradiction between common economic knowledge and economic psychology. But life is a unity and the human soul cannot be avoided if we really want to speak of practical life. And it is true that a real economic judgment can only take place through agreement between those who are active in economic life, that is, that one individual’s partial knowledge is augmented by the other’s partial knowledge. In economic life only discussion and agreement can lead to valid judgments.
Therewith however, we have two very different aspects of human life. And the more we look at life in a practical way, the more we see how different they are. Production, for example, which demands knowledge of how to produce and how to use human abilities to work, calls for individuality; and everything that happens to the commodity once it is produced is subject to collective judgment. Between these two areas a third is evident, in which it is not the individual who brings his abilities through birth into life in order to develop them and take collective economic decisions, but in which he relates to others in a purely human, person to person way.
And this relation includes all that the individual does within the social organism, that which he may do or what he is obliged to do in respect to another individual, in that he has rights, apart from his abilities and his social position. This is the third component of the social organism.
It may seem as though these three components are no more than clever constructs. They are not. It may seem that they have no relation to practical experience. That is exactly what they do have. And when these three areas interact in an erroneous way, injury is done to the social organism. In my “Basic Issues of the Social Question” I used the analogy of the human organism – not in order to prove anything, I know full well that you can’t prove anything by analogies – but only to illustrate what I had to say. This human organism is certainly a unity, but when one analyzes it physiologically, it becomes evident that it is also tripartite. We should clearly differentiate between the nervous-sensorial system which, although it courses through the entire body, is mostly centered in the head. Then there is the second, relatively autonomous breathing and circulation system, the rhythmic system. The third system is the metabolic-limbs organism – everything that affects either the internal functioning of metabolism or external human activity, which of course begins with the motion of the limbs, through which metabolism is activated.
As I said, the human being is a unity, but only because these three relatively autonomous members interact harmoniously. If we wanted the human being to be an abstract unity instead of an organically interacting unity, we would be wishing foolishly. Each of these members has its own opening to the world – the senses, breathing, nourishment – all are relatively autonomous. It is just through this relative autonomy that the three components interact harmoniously, in that each one develops its own specific strength, and thus a unity arises. Not as proof, only as an analogy, when one observes the social organism it becomes evident that society also requires a relatively autonomous economic organism, a political or rights organism and a spiritual-cultural organism, in the manner I have described.
This tripartite society has often been criticized because of a misunderstanding. It is said that this separation is not possible because, for example, rights are always present in economic life as are spiritual-cultural aspects, and it is therefore nonsense to want to introduce a tripartite organization.
In the human organism the three members interact in unison just because each one acts through its specific attributes. For example, the nervous-sensory system receives nutrition and in turn is necessary for the metabolic system. A healthy physiology reveals, however, that all three members are relatively autonomous. Furthermore, such a physiology reveals that through relative autonomy each member is able to develop its original qualities in order to cooperate as a unity.
The spiritual-cultural component should be administered according to its own foundations. Those who are, for example, teachers, should at the same time administer the schools, so that we don’t have on one side pedagogical science and on the other side rules that are set by the political state. This administration must derive directly from pedagogical science, from the spiritual component. The administration of the political and constitutional bodies is based on person-to-person agreement within these bodies. In the economic sector associations must be formed. What would the tasks of these associations be?
The specific tasks could be decided upon during the formation of the associations, as I tried to show in “Basic Issues of the Social Question”. I never wrote there that this or that is the best way. That would have been utopian. I am convinced that if, for example, we were to get twelve people together, wonderful programs about how schools should be run would be the result. Point 1, point 2, point 3, etc. If these points could be realized we’d have an ideal school. They cannot become reality however, because people can think out the most ideal things, but what can be realized is subject to other conditions.
In the Waldorf School in Stuttgart we are trying to do something – as far as it is possible in these times – which is not based on programs, but which flows from educational practice. The Free Waldorf School has a certain number of teachers. They could also think up ideal school programs if they tried – although I wouldn’t exactly want to praise them for it. But we are spared that. Living human beings are teachers there. And what they can do, their innate capacities, should be developed. All ideal programs are rejected, all regulations are rejected. Everything is directed towards individual ability.
In “Basic Issues of the Social Question” I have not presented some kind of social structure, but have indicated how people can be brought into a relationship in which they can steer the social question in the right direction, not “solve” it, as is sometimes dreamed of. These associations will preferably be concerned with economic life in which commodities circulate. Therefore the associations will tend to indicate the correct prices, which will also enable each producer to buy what will satisfy his needs. I once tried to indicate a formula that would result in a just price. I said the just price for a commodity is that which gives the producer the possibility to provide for his and his family’s needs until he is able to produce the same product again.
This should not be understood as a dogma. I’m not saying that it must be so, because then it could never be put into practice. I am only saying that correct price, arrived at through associative cooperation, would tend in this direction. Again I would like to emphasize my conviction that economic thinking should be based on the human being and that the extent to which the human being must be the motor for economic development should be recognized; that economic theories are no help. Instead we should determine how human cooperation should be organized in order to find out what is correct.
I would like to clarify this by means of the following analogy. There has been much discussion lately concerning how human embryonic development can be influenced in order to arbitrarily decide whether a boy or a girl should be born into the world. I’m not going to talk theoretically about this subject today, but I consider it a stroke of good fortune that this question hasn’t been solved in practice, for although people can’t abstractly determine what the best distribution of female and male sex in the world is, it happens at least approximately without human interference. There are certain objective natural laws that take effect when the human being simply does what corresponds to his elementary impulses. This would also be the case if the associations are organized in the proper way and according to knowledge of life, without someone dogmatically determining prices, but that prices are determined by the associative activity. I call it associative activity because human individuality should be perceived in the associations, that is, in the unification of the strength of one with the strength of the other, individuality remains, while in coalitions and cooperatives individuality is lost.
There are other tasks for the associations that we can think of. If we consider again the analogy with the human organism, we can say: By certain symptoms we see that the human organism is ill. By means of these symptoms we can gain a perception of the illness. It is very similar in respect to the social organism. We can see clear symptoms of illness in the social organism today. Associations are a curative factor. Associations act as harmonizing agents for the differing interests, so that production and consumption interests are harmonized through cooperation in the associations. Especially important is the harmonizing of management and worker interests. We see today how the opposite of associative life exists in a sick economic body. We see passive resistance, lockouts and strikes, sabotage and even revolt. No one who thinks sanely can think otherwise than that all this goes in the opposite direction of associative life, and that they are all symptoms of sickness in the social organism which must be overcome by harmonizing effects. For this we need a really appropriate organization of the social organism, just as the human threefold organism is appropriately organized.
Now I come back to what I said about land and capital not being commensurable with commodities, because the value of the latter is the result of human abilities. If we have an abstract unitary society, which is more and more the case today, but which also reveals the symptoms of sickness already mentioned and more, then the result is that land, capital and even work are assigned values in the same way as commodities are.
If the social organism were tripartite, the strengths of the individual would be manifest in the spiritual-cultural area. Therefore, everything that must be concerned with the development of the individual in economic life, such as land and capital, must logically be included in the spiritual-cultural part of the social organism. Therefore I outlined how the administration of capital and of land is to be a function of the spiritual-cultural sector of the social organism
The criticism that this would only tear apart the three areas doesn’t take into account that the spiritual-cultural organism would, of itself, take over the administration of capital and land once the human being is taken into consideration. Work, however, is something that one person carries out for the other person, something that can never prosper if it is merely a part of economic life. Therefore the regulation of working conditions belongs to the rights state, to the political state.
It would be very strange if we were to form a small committee and were to decide how many rainy days there must be in 1922 in order for the economy to prosper. Nature must be considered, and economic life can only be built based on this. On the other side of economic life are the relatively autonomous associations, which could even control currency emission and circulation. And human labor conditions would not be determined by economic requirements, just as economic requirements cannot regulate the amount of rainfall.
I believe that little by little understanding will come for this cardinal question of economic life. Today, however, we have those terrible conflicts that wear down economic life because we do not study economic affairs with the same good will we use for the physical organism. It is only when we learn to treat economic life in the same way as biology, physiology and therapy that we will recognize what the possibilities are and then the social questions can be posed in the correct manner. They will have to be brought back to the human element. I think the most important thing is that as many people as possible be convinced of the need for this kind of natural understanding of the social organism, according to which the social organism is examined for health and illness as science tries to do for the physical organism. And I think that it can be seen that the tri-formation of the social organism can throw light into the areas of economics, rights or the political state, and spiritual-cultural activities. These three areas should not be separated, but by virtue of being able to develop their strengths because of enjoying relative autonomy, each could cooperate harmoniously with the others.
The cardinal question of economics is this: How must independent spiritual-cultural life and the political state interact with purely economic activities in respect to capital and land ownership, as well as the measurement and evaluation of human labor, so that through the creation of economic associations a healthy social organism can come into being? If we think about the situation in such a natural way, then the cardinal economic question can be asked in a correct, practical way in accordance with life. In life it is mostly the case that the most serious mistakes are made not because incorrect solutions are accepted, but because the incorrect questions are asked. This seems to me to be the most important economic problem of today - that the right questions be formulated and that life and historical reality provide the answers instead of theories. No theory can give the answers, only the practical reality of life.