# Associative Economics and Spiritual Freedom in Social Life

## GA 338 — 16 February 1921, Stuttgart

### Ninth Lecture

On the one hand, it is necessary to show people the necessity of the separation and free organization of spiritual life by looking at the threads of spiritual life in the present. On the other hand, it is necessary to show everything that ultimately shows how economic life must be based on the associative principle.

Above all, a sure judgment must be called for in order to prevent the individual from doing anything in economic life that cannot be fruitfully integrated into that economic life. In the spiritual life, it is the case that the judgment must always ultimately come from the individual person; therefore, through a free spiritual life, the individual person must be able to fully come into his or her own; the state must be brought about in which each person can individually come into his or her own according to his or her abilities. In economic life, this would be of no use at all. On the contrary, it would be harmful because the economic judgment of an individual person has no value at all. It can never be rooted in reality.

Anyone familiar with anthroposophy will readily understand this. For what constitutes spiritual life ultimately flows from within the human being. A person must shape what he brings with him through birth out of himself. Admittedly, he shapes it through interaction with his environment. He also acquires experience, be it external, be it internal, be it physical, be it spiritual experience. But the process that unfolds must come from his very individual abilities. Now, if we want to intervene in economic life, we have nothing in our humanity that could be as decisive for social life as the individual abilities of the individual.

These individual abilities enrich the general life of humanity when they are applied by the human being. If he simply applies them, community life is enriched. In economic life as such, that is, insofar as one is dealing with the exchange and valuation of goods, nothing is present from the human being other than his needs. Man, as it were, knows nothing about economic life and its necessities as an individual through anything other than his needs; he knows that he has to eat and drink to a certain extent, he has individual needs. But these individual needs are only important to himself, only to himself,

What a person produces intellectually has significance for everyone else; what he produces intellectually is, in fact, a priori socially significant. The needs that a person has, and for the sake of which he must desire that there be an economic life, have significance only for himself. Economically, he can only know how to provide for himself. But this in no way provides a social yardstick, nowhere the basis for a social judgment. For it simply excludes what is to be effective in the social life if one has only one yardstick for what one needs oneself. Therefore, a social judgment can never be built on that knowledge, which is taken from one's own needs. The individual has no basis for social judgment. If he acts from what he is as an individual, that is, simply takes his needs into account, then applies his intellect and abilities, not to produce something for the general public, as in intellectual life, but to satisfy his needs, then he acts under all circumstances as an anti-social being.

That is why all cleverness is of no help when it comes to economic judgments. I must again and again cite the example of the defense of the gold standard in the course of the 19th century. If you read the parliamentary reports and other things that, for example, also originated from practitioners in defense of the gold standard in individual countries, you can actually find a great deal of individual acumen everywhere. What was said was actually completely clever, one might say. One gains respect for human capacity when one still reads the speeches that were held about the gold standard today. But just what the cleverest people said always culminated in the fact that the gold standard would contribute significantly to promoting free trade in the world. And the reasons that were put forward to support this judgment, that free trade would result from the gold standard, are actually indisputable. But the opposite has happened everywhere! Everywhere in the wake of the gold standard, the need for protective tariffs and the like has arisen. Everywhere, free trade has been restricted. And this example shows to an eminent degree that individual human cleverness is of no help when it comes to economic questions, even if it is as prominent as it was in the 19th century. It is a mistake for individuals to want to act economically on the basis of individual judgments.

The necessity of associations follows with apodictic certainty. Only when people who are active in the most diverse branches and elements associate with each other, and what one person knows in one field is supplemented and expanded by what another knows, only then does a common judgment arise that can then be transformed into economic action and lead to social recovery. There is no way to escape the necessity of association, if one simply points out this basic fact. Furthermore, what happens to economic life as such under the influence of threefolding? What do we actually have in economic life? We have three factors.

The first is that which arises from expertise in the production of this or that. Whether you want to mine coal, grow grain, raise livestock or supply some industry, you have to be an expert in the field.

The second thing is that, in our present economic life, the movement of goods, of the necessities of life, must be properly directed. Trade must be conducted in the right way. Goods must be transported to the places where they are needed. For only there do they have their real value. Otherwise they are not commodities, but only objects. One must distinguish between them. Something, even food, can, when it is in any place, be merely an object and not a commodity. For if there is an enormous amount of food of a certain quality in any place, without people needing it, there are only as many goods as people can use up. The others are merely objects, and they only become commodities when they come to the places where they can be used. Without trade, no object is a commodity. This is the second point. But this second point is intimately connected with human labor. For the transformation of natural and other objects from objects into commodities occurs precisely through human labor. If you think about it, you will find that this transformation of objects into commodities is actually quite equivalent to the expenditure of human labor. The labor begins with what we take from nature. It is always possible to trace it back to the object's character, and if you can trace it back to that, then you cannot speak of any economic character of the object. It only becomes economic when it comes into circulation. Only then does it become something that has significance for the economy as a whole. But this is connected with the overall structure and development of human labor, with the type and time and so on of human labor.

The third thing in the economy is that you know what is needed. Because only by knowing what is needed over a certain territory can you produce in a reasonable way. An item that is produced too much will inevitably become cheap; and an item that is produced too little will inevitably become expensive. The price depends on how many people are involved in the production of an item. That is the fundamental and vital question of economics, that it starts from the satisfaction of needs, and from the free satisfaction of needs. What is at issue here cannot be determined by statistics because it is part of a living process. It can only be determined by people associated with a particular territory simply becoming humanly acquainted with those who have this or that need, know the sum of the needs humanly and can negotiate from a purely human, living point of view, not from a statistical point of view, how many people are needed to produce an item. So that in the life of the association, one has first of all those people who set out to educate themselves about the existing needs in a given area, which of course arises from economic foundations, and develop the will to initiate negotiations about how many people in any economic sector must produce so that the needs can be satisfied. All this must be linked to having a sense of the freedom of needs. In no way should any opinion prevail among those who have the task just described, whether any need is justified or not, but it must be merely a matter of objectively establishing a need.

Combating senseless needs, luxurious, harmful needs, is not the responsibility of the economic life of the association, but only of the influence of the spiritual life. Meaningless and harmful needs must be eliminated by educating people in spiritual life to refine their desires and perceptions. A free spiritual life will certainly be able to do this. To put it bluntly: cinemas must not be banned by the police, but people must be educated in such a way that they do not acquire a taste for them. That is the only healthy way to combat harmful influences in social life. The moment needs as such are assessed by the economy or the state, we no longer have a threefold social order, but a chaotic mixture of spiritual, economic and other interests. The threefold social order must be taken seriously down to its innermost fibers. Spiritual life must be truly placed on its own footing. It is not free when some kind of censorship authority exists, when this or that can be forbidden in the sphere of human needs. No matter how fanatical you are, you can rail against cinemas; that does not affect the free spiritual life. The moment you call for the police, the moment you shout: That should be forbidden, you impair the free spiritual life. This must be remembered, and one must not shrink from a certain radicalism.

So initially, the associations will have to deal with people who inform themselves about the needs within a certain territory and then initiate negotiations, not make laws, about the necessary production.

So you see, you can characterize the matter somewhat differently, then perhaps it will even, I would say, seem somewhat more mundane. But finally, by way of illustration, it can also be said that initially the associations will need objectified agencies and agents who are not only interested in ensuring that the person for whom they work sells as much as possible, but who also ask themselves: What needs are there? – and who are then experts in how to produce in order to satisfy these needs.

Thus we have, I might say, the first link of the associations. The second link is taken from the series of those who have to supply the market, who, therefore, when a product is manufactured somewhere, have to arrange for its transportation, or initiate negotiations for it to be transported to the place where it is needed. So we find, so to speak, experts in consumption, experts in trade and, thirdly, experts in production. However, these are taken from the free spiritual life, because this includes everything that flows from the spiritual into productive life through abilities.

You see, representatives of all three limbs of the social organism will be present in the economic associations; only the associations themselves will belong only to the economic link and will only deal with economic matters: with the consumption, circulation and production of goods and the pricing that results from this. Therefore, in the threefold social organism, there are corporations that have sole competence within the respective link. In the economic associations, nothing but economic issues are discussed; but in the associations, of course, the people who have their abilities and competencies for the negotiations come from the free spiritual life and the legal-state. It is therefore not a matter of placing the three elements of the social organism schematically next to each other, but of having administrations and corporations with expertise in the individual matters. That is what it is about.

The details will be clear to you from the “key points”. First of all, it is a matter of always appealing to the intellectual life with regard to capital, by saying: the person who has brought together the means of production through his abilities remains in the business as long as these abilities are present. Determining this is a matter for the intellectual life. Then it still attributes so much judgment to him that he can determine his successor. That also belongs to the free spiritual life. And if he cannot or will not do it himself, the free corporation of the free spiritual life decides. You see, everything that is a function of abstract capitalism passes over into the work of the free spiritual life within economic life. It is exactly the same as in the human organism. The blood is connected with the circulatory system, but it passes into the head and pulses through it. It is exactly the same with the real social organism. Therefore it is, in a sense, fatal that, especially abroad, particularly in Nordic countries, there has been such a strong tendency to speak of a “tripartite division” of the social organism instead of “tripartition”. This “tripartite” social organism naturally gives rise to terrible misunderstandings. It is a division that is not a division. The individual members must interact with each other. We must create a clear understanding of this.

And we can hope that the reasonable bourgeois, like the proletarians, will gradually come to understand the matter. We already had the beginnings of this in Stuttgart in 1919; elsewhere, a start may have been made here or there. But the opposition from all sides has become so active that we, with our few people, have not been able to hold out for the time being. Therefore, we have now called upon your strong forces so that a kind of strengthening of our advocacy for the threefold social organism can occur. It is now absolutely necessary, I would even say urgent, that a strong push be made for everything that emerges from anthroposophical spiritual science and what threefolding of the social organism is. Because in a certain respect, it is still a matter of our temporary existence or non-existence. We should not deceive ourselves about this.

But we must work towards great clarity in everything. That is why I have tried again to give as clear an idea as possible of associative life. If anyone wants to know more about associations, we can do that this evening by answering all kinds of questions. It must be a constant feature of our lectures that we strive for clarity and that we try to evoke an understanding of how lack of clarity in our public and social affairs has brought about our present situation. I will give you an example of this.

When you are asked about this or that today, people come to you with schematic questions. They ask you: what about capital, what about small businesses, what about land and so on? Well, with regard to healthy social conditions, the land question is settled in my “Key Points”, although it seems to have only been touched on in a subordinate clause. But everything that is otherwise discussed today stems from the fact that land is involved in our social life in an incredibly convoluted way.

When the newer economic life arose and imposed the character of a commodity on everything, for example, labor, so that everything can be bought, then land also became a commodity. You could buy and sell it. But what is actually involved in this buying and selling of land? If we want to understand this, we have to go back to very primitive conditions, in which the feudal lord had acquired a certain piece of land either by conquest or in some other way, and gave it to those who were to work it, who then, in kind or in other forms of payment, gave him a certain quota in return, which initially meant the origin of land rent. But why did the people give this rent to him, to the feudal lord or to the church, to the monastery? Why did they give it to him? What made it plausible for them to make such payments? Nothing else made it more plausible for them than if they, as small owners, worked on their land and soil to till and harvest it, since anyone could come along and chase them away. Being able to work the land requires protection of the land and soil. Now, in most cases, the feudal lords themselves had an army, which they maintained from the tributes, and that was for the protection of the land. And the land rent was paid not for the right to work the land, but for the protection of the land. The right to work the land had arisen entirely out of necessity, since the landowner himself could not work all the land. This had nothing to do with any other circumstances. But the land had to be protected. And that is what the dues were paid for. In the same way, the dues were paid to the monasteries. The monasteries themselves maintained armies with which they protected the land, or they were bound by some kind of treaty here or there in such a way that the land was secured by some other power relationship. If you trace the origin of the land rent, you have to see it as a tax for the protection of the land and soil. If we consider this original meaning of the land rent, we see that it refers to times when very primitive conditions prevailed, when, in economic terms, sovereign feudal lords or monasteries ruled who obeyed no one.

These conditions ceased, first in the West and only later in Central Europe, in that certain rights that the individual had - in certain areas of Germany they ceased to be individual rights at the very latest - were gradually transferred to individual princes, which was by no means an economic but a political process. The rights were transferred. With the transfer of the rights, the protection of the land was also transferred. It then became necessary for the prince to maintain the armies. For this he naturally had to demand a levy. Gradually, the systematization of the tax system came about, which weighs so heavily on us today. This was added to the other, but curiously the other remained! It lost its meaning, because the one who was now the landowner no longer needed to spend anything on the protection of land and property; the territorial prince or the state was now there for that. But the land rent remained. And with the new economic life, it gradually passed into the ordinary circulation of goods. The fact that the connection between land rent and land lost its meaning meant that land rent could be turned into a profit-making object. It is pure nonsense that has become reality. There is something in the process of circulation of values that has basically completely lost its meaning, but which is still treated today as a commodity.

Such things can be found everywhere in our economic life. They have arisen from some justified things. Something else has taken the place of these justified things. But the old has remained. And some new process has taken it up and introduced the senseless into social life.

If you now simply take economic life as it is – if you are a professor of economics and thus have the task of thinking as little as possible in the sense I have characterized it before – then you define the land rent as it is written in the books today. And as something so senseless, it also figures in life today. So you can see how much work there is to be done to make people understand that we not only have nonsense in our system of thought, but also everywhere in economic life. And when the individual sighs under economic life, it is actually from such undergrounds. What is needed today is to arrive at a more thorough, unprejudiced, comprehensive thinking than that which can be developed by sitting in today's educational institutions.

For ultimately, what kind of thinking is being developed there today? The thinking that is perhaps characterized by mathematics is being developed. But it is being developed in such a way that it stands apart from all reality. Then they develop the kind of thinking that can be learned through experimentation, that can be learned through systematics. They develop the kind of thinking that has finally become a mere formality in the hands of people like Poincare, Mach and so on, something that they merely call “summarizing external reality.” In short, they do not develop any kind of thinking at all! And because they do not develop any thinking, they cannot do anything in economics at all.

Indeed, a method of economics has gradually emerged – Lujo Brentano handled it particularly cleverly – that develops out of understandable needs the theory that one should not think at all about what economic life should be, but only observe it correctly. Well, one should imagine how one is somehow to arrive at a science of economic life by mere observation! It would be like advising the pedagogue to just observe the children. It would never be possible to develop an activity from it. That is why our economic theorists are so terribly sterile, because they have the method of passively confronting external reality.

And the other side of the coin becomes apparent when people really do start to intervene in economic life. On the one hand, they developed a science that only observes. But when war came to Central Europe, they were suddenly supposed to intervene in economic life, even to the point of influencing price formation. What was the result? The economist Terhalle summarized the results: First, he said, and he cites countless scientific proofs in his book on “Free or Fixed Pricing?” First: things have been done in such a way that you can see that the people who did it didn't know what was important at all. Secondly, they are based on theoretical schematisms that have so little to do with reality that, by applying them, they ruin reality. Thirdly, in influencing the formation of prices, it has come about that individual trades have not been helped but harmed; and fourthly, honest craftsmanship and trade have been harmed in favor of profiteering! Just imagine what it means for an official economist to have to judge the political and governmental economic activity of recent years on the basis of economic research: that it has favored profiteering at the expense of honest trade and craftsmanship! One has only to sense what this actually means. These things must be said to people, as clearly as possible, so that one can see how powerless our civilization has become in the face of reality.

If we do not clarify such things as I have just told you with regard to land rent, we will not be able to show people the necessity of the associations; because just imagine the associations installed in the most makeshift way: immediately, experience reveals how damagingly all the unnatural things in economic life affect the formation of prices. This cannot come to light, of course, if economic life is organized in such a way that the agents go out into the countryside and do business for the individual enterprises. There they cannot be confronted with the connection between production and consumption. They do not have the interest to focus on how much should be produced. For them, only the one self-evident “truth” applies, that their master can produce as much as possible. This interest in the master's production being as strong as possible must be replaced by the positive knowledge: how many producers must there be, because we have seen that there is such and such a demand for an article, so that it must be ensured that not too many and not too few work on the territory in question for this purpose? The objective interest must take the place of the interest in the individual entrepreneur. That is what matters in the association.

Now we have to show people how economic life, because it has so many absurd elements in it – because in addition to the land rent, there are many others – is already pushing for integration. The cartel system, with the quota allocation of profit, demand, sales and so on, the merging, the amalgamation – what does it arise from? In Europe it takes more the form of a cartel, in America more that of a trust. It arises from the fact that the individual can no longer produce due to the many absurd elements that are in economic life. Just think how different it is today, when everything is pushing towards large-scale enterprise, than it was when the sole trader or small business owner was part of economic life. What can a person ask today if they want to start their own business? They can only ask how the market for a particular product is doing, whether there is demand for a particular product. A product that is in demand seems promising, a product that is not in demand does not seem promising.

In the past, when the number of entrepreneurs was small, it did not matter much; only when there were too many did the individual ones perish. But suppose that everything tends towards large-scale enterprise, when it is noticed that a particular article is needed and that something can be earned from it. By setting up the large-scale enterprise, you abolish the very thing from which you concluded that it was necessary to set up the large-scale enterprise! Because everything tends towards large-scale enterprise, what used to be decisive for the individual small entrepreneur is no longer decisive. This is why the necessity for mergers arises. And so we have cartels, trusts and so on, because the leading circles were quite careless with regard to consumption. Because they did not care about it, these mergers arise only out of the interests of the producers. Consumption is not taken into account.

The essential thing is that it is shown: You can no longer get by in economic life without association. Therefore, the one-sided associations of cartels and trusts, which, however, arise from mere production interests, must be supplemented by being based on an understanding of consumption, on an insight into the needs of a particular territory. Thus the trusts and cartels, by being caricatures of what should arise, show how necessary it is to move in a certain direction, in the direction of association. One has only to look at what kind of associations should now be created.

Characterization must be based on real life in all cases. Then perhaps we shall be able to make people understand how necessary associations are for economic life. And so it will actually be a matter of giving the lectures you now want to give in terms that are as clear as possible. The prerequisite must be that what is given in the “key points” is basically a kind of axiom of modern social life. It is never necessary to prove the Pythagorean theorem in all its individual objects. But it must prove itself in all its individual objects. Just as little is it necessary to prove the insight into social conditions, as it is gained, in detail; it is proved as such by its content, like the Pythagorean theorem. And one has only to show how things must be integrated into life. This must be taken into account.

And I would like to say this: Let us really consider our activity in such a way that it connects with what has already been done. That is why I said yesterday: It is necessary to look at our movement as a whole and not to be embarrassed to present what has been done to the people and to tell them that it is there. We have an experience again and again, in fact in a truly alarming way: When I go somewhere to give a lecture, there is a table of books at the entrance of the hall. It is only looked at if I do not mention any of the books. If I do mention one, it is bought. Usually there are not enough of them available. The others are passed over. Well, I always regret that there are so many books. You can't mention them all in a single lecture. Therefore, we must also face the present with a sense of reality. I recommend that you do not disdain any opportunity to recommend the Dreigliederungszeitung where you can, because we must reach the stage where the Dreigliederungszeitung becomes a daily newspaper. But we will not reach that stage unless we make it more popular than it is. So, we must face reality to that extent. But don't forget to recommend something else as well! Otherwise the other things will be returned unpurchased in huge numbers. It may look strange to say such things in serious lectures, but if we don't say them, they are very often not done either. And we have come together to agree on the things that should be done. Because we want to do something in the near future.