# Social Ideas, Social Reality, Social Practice II

## GA 337b — 13 September 1920, Dornach

### 8. Economic Cycles and Crises

*Ernst Schaller gives a lecture on “Economic Cycles and Crises.” Rudolf Steiner then addresses questions that have been raised in the discussion.*

Rudolf Steiner: Yes, my dear attendees, an extraordinarily important matter has been brought up here [by Dr. Schaller]. He has pointed out how economic life can be healed through the threefold social order, based on very specific economic issues. And I would like to say: I consider this general point of view of Dr. Schaller to be the most important thing for this evening. I have often said that if we look at the individual phenomena, whether in economic life or in any other area of social life, it will become clear what this threefold social order actually means for the recovery of human life. There are people today who, because of the education and habits of thought that have been fostered in recent years, have described The Core Problems as a utopian book. One can only say that it is merely the thoroughly amateurish, short-sighted, impractical thinking that is expressed in such a judgment. And that is why it would be of particular importance if people were to become more and more involved in this, especially with regard to economic issues - which really do require discussion for most people, because economic life is all too little known in broader sections of the population. Dr. Schaller has done today, if they allowed themselves to take things as they really are, and to show from an expert point of view how this threefold social order is conceived out of the full practice of life.

There is still a great deal that is not understood about this idea of the threefold social organism. This is shown to me, for example, by a question that has just been read out here and which I would like to mention in the introduction to what I actually want to say. For example, it has been asked:

> Why should associations only form in the threefold social organism?

No one has ever claimed that associations, including economic associations, should or could only form in the threefold social organism. There have always been associations; of course there were also associations in the unified state. In the threefold social organism, however, the social organism is first divided into three parts and then economic life will take effect through associations. So what we know otherwise from associative life, especially in economic life, and also what Walther Rathenau says about associations, testifies to nothing other than that such economic things are only taken in the abstract. Above all, Rathenau is an abstract thinker of the most terrible kind, and one does not tend to [see things realistically] when one is such an abstract salon socialist as Rathenau – such abstract thinkers take everything abstractly, including social ideas – they only talk about associations. I could name other people who also talked about associations. For example, there is a 19th-century theologian named Anton Günther. And of course you could find people everywhere who talk about associations. Associations are ultimately the universities, for example in the field of science. This belief in words, this insistence on words, and this deduction from words, is what we must finally get beyond. We must grasp things in practical life, we must be clear about the fact that something else is needed. When someone shows clearly and sharply how the threefold social organism should be structured, and then shows that the associations are conditioned precisely by economic life, while the spiritual and legal life work for themselves, without such associations, then it is something different from speaking in the style of Walther Rathenau in abstractions of associations. How little these “key points of the social question” are meant in the abstract, how little they are abstract in every line, should be studied first. Then such theorizing, as expressed in this question, for example, appears as a complete impossibility.

Now, it would go far beyond what can be said in such a short time if I were to consider the question I have been asked in connection with Dr. Schaller's lecture. Above all, it should be mentioned that Dr. Schaller has very helpfully provided the various sets of figures that show how the economic curve he himself has drawn rises and falls, how crises follow booms and how favorable economic conditions can then follow depressions, and so on. Well, you can present the matter in a certain way, as if the crisis were to some extent to break away from the favorable economic conditions, and then the depressions would arise and then the matter would recover again – as Dr. Schaller has just explained. But if you follow this thread of causality too closely, you are suddenly torn away from what is actually the deeper, real basis of the matter. You see, it appears as if it is a matter of the crises growing out of the favorable economic conditions, and then the depression comes and then the ascending development again, and so on. It appears so because since the first third of the 19th century, since 1810, we have had a special economic metamorphosis in that money, that is, monetary transactions and money-lending and the credit associated with it, has become the economic ruler, whereas in the past, that is, before 1810, economic life in terms of its production was in fact the ruler. If one studies what happened in 1810 with regard to the circulation of money and the credit system, it becomes clear that the appearance of being able to derive such an automatically occurring curve from these figures actually only applies to this economic era since 1810. It would not be possible to sustain it for earlier economic eras. But even for this economic epoch, it is necessary to look more at the specific facts during a favorable economic period and during a crisis period than at this mere rise and fall in the numbers.

And here I refer above all to the crisis of 1907 - I could just as easily pick out another example -; it is extraordinarily interesting to study. This crisis is particularly interesting to study because it shows how crises are actually caused by human will. As I said, this would also apply to other such matters; financial events of this kind cannot be judged without studying the violent speculation of a few American capital magnates and its connection with the European money market. What comes into consideration is a rise in a very specific type of stock, and thus an enormous desire to acquire these stocks. As a result, the capital magnates who have created this boom have been able to draw the money to themselves and impoverish the people who actually needed the money. This is what caused the discount to skyrocket. Dr. Schaller mentioned the private discount – I believe that the German Reichsbank went up to 7% at the time. So, an American consortium of money magnates was working towards such an increase in the discount. Of course, all these things are then counterbalanced by others. But as soon as one gets down to practical matters, as soon as one looks facts in the face, then it is precisely these individual facts that come into consideration, and even the other facts would point in the same direction. One cannot work [like these capital magnates] when one is involved in pure economic life and money with credit is, so to speak, only the external expression of economic circulation as such. The way work was done in those years, 1906, 1907, 1908, can only be done if, on the one hand, economic life proceeds as it should and, on the other, the money market, as such, the processes within the circulation of money, is emancipated. This means that money and the corresponding loans, whether in stocks or bonds or anything else, can be used to create a separate circulation on the money and credit market, which to a certain extent [detached from the real economic processes].

You see, for this reason the appearance is gradually emerging that in our economic life partial favorable booms and partial crises are impossible; the appearance is emerging that only general booms and general crises can arise. The prerequisite for this is that, to a certain extent, there is a general medium [such as the money market as such] that does not care about the crises in [real] economic life. In [real] economic life, the crisis is regulated. It is one thing to bring boots onto the market and another to bring watches onto the market or to produce oil. When dealing with commodities, one is dealing with concrete things; economic cycles arise out of production. But when you are dealing only with money and credit, that is out of the question – in money and credit, you are only speculating. To create all kinds of artificial economic trends, it is necessary that the money market is emancipated from the rest of the economic market.

These are, of course, only individual things. I could go on speaking in this style all night long. But whenever you have crisis years on hand, you can always ask yourself: Where must I look for the direct economic will that asserts itself in this way on the capital market? In a sense, it is true that this whole story is related to capitalism, because such a crisis is only possible if you can speculate in money and credit, or throw money and credit on the market. You could just as well study the year 1912 and so on, and you would find very specific facts everywhere, facts that emanate from the will of those who have a say in economic life. But such general crises, or even just widespread crises, cannot be caused in any other way than by the emancipation of the money market.

I emphasize these points in particular because it is now time to be very clear about them: it is not a matter of theorizing; it is not a matter of forming ideas based on statistics in such a general way that one thing follows from the other. Basically, only looking at the facts is fruitful. And it is of much greater importance for the understanding of the crisis that emerged around 1907, it is much more important to study the machinations of certain capitalist magnates than to remain in general economic categories. I would also like to note that it is not entirely correct to think that partial cycles do not play a role in modern times. In actual economic life they do play a role, but the role they play is obscured by the capital economy or by the money and credit economy. All these questions are treated in my article on credit in the fourth number of Soziale Zukunft, from the general point of view, because it is not always possible to go into detail.

It is essential, especially in economics, to be clear about the fact that only a real engagement with the facts leads to knowledge, to knowledge that is socially fruitful, that can lead us can lead us out of the greatest crisis we are in – that is the social crisis – while in the last few decades, in particular, in economics as a science, theorizing has actually played a very bad role. Basically, there is not much to be gained from university economics for a real understanding of economic life. Today, however, it is really time to look at what follows from the will of the people. Certainly, it is true that the masses of people behave in the same way under certain typical circumstances. And so it happens that when the results of a favorable economic situation for people's lives have been achieved, then desires arise; and out of these desires people engage in something like commodity speculation, and then a crisis arises – but it arises out of human will. And again, when after a certain time this has led to money taking certain routes, then an upswing can occur – but this too always arises from the will of men.

These things, favorable economic conditions, crises, depressions and so on, they turn out, when you study the facts, not much different than, say, the things in the suicide statistics. If you take a sufficiently large territory, you can say that a certain number of suicides will occur in that territory in a certain number of years and that they will then repeat themselves in a certain period of time. Of course that doesn't prove that there is a law of nature that so-and-so many suicides must take place in so-and-so many years, but it only proves that in some years so-and-so many events occur in a certain territory, which, in their typical form, repeatedly and repeatedly tempt people to commit suicide. The simplest statistic that can be made is this: if a piece of meat is held out to a dog five times, he will snap at it five times; he does the same thing five times under the influence of the same facts. Under the influence of the same repeating facts, people naturally do the same thing. But that does not mean that you can leave the human being out of the whole; that is, you have to take into account what human will is. And if you look at “The Crux of the Social Question,” you will see that this most difficult-to-deal-with material, human will, is taken into account in economic life, that it is taken into account and that there is much to be found in the “Crux” from this point of view.

Now I would like to mention something quite different; I only want to include it because here too we always have more or less the same problem.

Last time, I had to mention that the stupid claim of the “stolen threefolding” was found in a public newspaper. Of course, the paper that printed the dirty articles by Pastor Kully - I mean the “Katholisches Volksblatt” - also made itself responsible for printing these filthy, thick, dirty lies. And that is why I advise as many people as possible to read the brochure by Mrs. Elisabeth Mathilde Metzdorff-Teschner, which was published in 1920. Mr. Rohm's filth in Lorch comes from this brochure, all the nonsense comes from this brochure. I would like to write down the title for you: “3:5, 5:8 = 21:34. The secret of being able to pay off the debts in the foreseeable future”. You will get a somewhat mystical impression from the title “3:5, 5:8 etc.”; the brochure as a whole is written no less mystically than this title; you can open it anywhere you want, for example:

> "Haeckel concludes the fifth chapter of the solution of the world's riddles with the words: ‘I have given a detailed justification of the entire family tree and its application to the natural system of organisms in the three volumes of my ’Systematic Phylogeny'. The sharper critical distinction of the six lines and 30 main stages of our human tribal history is contained in my pamphlet on 'Our Line of Ancestors (Progonotopxis hominis)', Jena, July 30, 1908.
> The attempts of the Frey-Bund, the anthroposophical threefold social order, to work their way up to the seventh level are presented in the same way as ours. Their kingdom of culture remains attached to mammon, which their prophets or princes cannot and will not do without.

And so it goes on. You feel as if you have stepped right into a madhouse and are listening to the incoherent ravings of a bunch of lunatics. The brochure states that the human brain should be divided in a ratio of so-called divine proportions, which have something to do with the ratio of 3:5, 5:8 = 21:34 – why, one cannot figure out, because the whole brochure is nonsense; this would make it possible to free the entire German people from the enormous debt burden. Then everything will be all right, then all the debts of the German Reich will have been paid off. It is therefore truly absolute madness. The “noble” lady claims of this madness:

> "The press office of the Ministry of War in Munich knows the day and year when the morphological threefold division was born in 1917 (i.e. before Steiner's core point of the social question), through an event that had a profound impact on women's lives. Science can therefore rely on historical data. As early as January 16, 1918, the press office approved the lecture about it, which was entrusted to the anthroposophists on April 20 and was not returned until May 11."

Now, I don't know which anthroposophists were presented with the lecture about the “significant event in a woman's life” and all the cabbages back then; I don't know which anthroposophists were lucky enough to have that. Now look at this writing, this example of a “press event”; it appears in the world today. In Lorch sits a man - I called him a “pig” in a public lecture - sits a pig who can read print and uses it to fabricate the article “The Stolen Threefold Social Order”. And here in Switzerland there are actually people, under the aegis of the shepherds of souls, who reprint such things. These articles are read – that is the fact. People read them and have no idea of the madness behind them. But there are enough immoral people who do not abhor throwing dust in people's eyes to such an extent that they print such things for an audience that naturally cannot check it, that does not even know how idiotic it is. We have brought public life to this degree of idiocy; and the summit of idiocy stands under the aegis of spiritual shepherds. This is something that actually comes into consideration here. It is something that should be looked at.

And I ask you to familiarize yourself with the document. Among other things, it also mentions the fact that the lady in question has also shared her secret of divine proportions, of “threefold social order”, with other people. She says that she was convinced right up to the last phase that debt repayment would be possible in the foreseeable future through the “morphological cultural realm (state-cultural realm-church)”. She says she also sent the lecture to “other people”, but none of them took any interest in it. I can't imagine how anyone could have got involved in it, except as a psychiatrist. So only the anthroposophists responded to it, but they made something completely different out of it. And now this lady finds that these anthroposophists are somewhat better than the other people, because at least they talked about the “threefold social order” — she thinks. Now, at least in this way, publicity has been created for this lady, for Mrs. Elisabeth Metzdorff-Teschner; so the anthroposophists have at least condescended to create publicity for this lady in this way. Now only a small thing is needed, namely that the German people recognize the “morphological cultural realm” through a popular decision — the recognition through a popular decision is actually to be brought about by Mrs. Metzdorff-Teschner. And it is necessary, she says, that the principle 3:5, 5:8 = 21:34, which she has found, be proclaimed publicly everywhere; she has thus brought a kind of social golden ratio into the world. Notabene, she also accuses those people who have written about the golden ratio of plagiarism, that is, of intellectual theft.

And now, through this brochure, a strange document has come to light that I would otherwise probably never have heard of. It seems that the lady – it is very difficult to find out – wrote to a doctor in Munich. This man then writes that he gave the lady's letter to a professor in Munich, and he then writes back to the lady:

> "Professor *Steiner* handed over the material sent to him for my information and for answering your letter. However, I am one of those people who cannot accuse either the Jesuits or the Jews of being to blame for the German collapse without committing a sacrificrum intellectus. (We Germans broke our own neck in a truly German way).
> And, moreover, I must honestly confess that I myself am a member of the Anthroposophical Society. (And I only became one recently, after reading everything available in writing against Steiner.) I was not unaware of the accusations against Steiner made by M. Seiling, whom I otherwise admire. Incidentally, I am the last person who would want to completely clear Steiner's name. He has a great deal of human inadequacy. And yet he is a teacher to whom I and better people than me owe a great debt. — This will not satisfy you, but I cannot say more."

So you see, very strange things come to light through this lady.

But you also see that the revered clergy, the Catholic clergy of the local area, does not miss any of these things. This is the situation we are in today. Just appreciate the moral squalor of this place, and then consider whether any word has been said too much by this or that person, which has often been said from this place.

So: Elisabeth Mathilde Metzdorff-Teschner, “3:5, 5:8 = 21:34. The secret of being able to pay off the debt in the foreseeable future.” I would also like to state that this brochure was published in 1920 in the “famous” self-publishing house in Sooden an der Werra.