# Political Economy Seminar

## GA 341 — 1 August 1922, Dornach

### Second Seminar Discussion

> Walter Birkigt: Work in the economic sense would be human activity in terms of its economic efficiency. In the field of physics, we know exactly that physical work is determined by its mechanical effect. Is every economically useful service already work? No – value can only come into being through the consumer in the final analysis. If work is done that acquires real value in an economic context, then it can be spoken of as economic work.

Rudolf Steiner: I would just like to make a small suggestion by asking Mr. Birkigt how he would react if, let us say, these arguments were discussed and the question arose: If I in some way combine the work within the economic organism or process with the physical recording of the work, what would happen if one now looks more closely at the concept of physical work? – Certainly, everything you have said is correct, but when the physicist draws up a formula for his work, he will introduce the concept of mass. This is because physical work, an energy, is a function of mass and velocity. You will easily find an analogy for the latter in the economic process. But the strange thing about the physical formula for physical work is precisely that the concept of mass is introduced, which can be determined physically by weight. So in the physical concept of work we have “weight”, which we can only replace by “mass” and “speed”. Now the question would arise as to whether it is necessary, if we stick to your analogy, to introduce something like the concept of mass or the concept of weight into the economic approach. If we were to do that, we would have to seek out precisely that in the economic process which would correspond to mass. So I think this question could be raised in the discussion.

> Objection: The problem of the essence of work involves recognition on the part of the buyer. The entrepreneur presupposes this idea of recognition. The fact that the purchase of any goods comes about is recognition.

Rudolf Steiner: Since your concept of recognition is not entirely in the economic field, but more in the philosophical field, it is necessary - so that you can somehow justify that this concept has an economic value - that you give it an economic significance. Because in the recognition as such - when the housewife, for example, first sees that she can use something well - there is hardly more than a judgment. The economic aspect only begins when she can now buy it. It could very well be that the thing is excellent, but for economic reasons, because it is too expensive, it cannot be bought. So mere recognition may be a philosophical category. But it would only become an economic category if it were able to place itself in economic life. And that is why the concept of economic action would clarify.

> Question: What is the relationship between the verification of an economic act and recognition?

Rudolf Steiner: “Recognition” as such can hardly be an economic category. This may be because recognition must be subjective. Of course, something subjective already plays a role in economic categories. But then one must show the way in which it becomes objective. Suppose, for example, that two housewives have completely different recognitions of a thing, and for the sake of argument this can lead to a yes to an economic success and a no to an economic failure. The economic aspect would be found where the reasons lead to success in one case and to failure in the other, because recognition can only be a philosophical concept. Of course, recognition can slip down into the [private] economic sphere, but then it must also slip over into the national economy.

> Remark from a participant: By economic action, I understand an anticipation of the physical expression of a verification, presenting itself as an initiative.

Rudolf Steiner: We are perhaps dealing here with something quite different from what might have emerged from the discussion. We want to move here in economic thinking. This formula does not prove to me that you have entered into economic thinking with this matter. The formula is, of course, worthy of all recognition, but it is actually more the formula of an economic philosophy that strives, even in a somewhat scholastic way, to find the concept of economic action in order to metaphysically justify economic action before the entire world order. If that is what you are aiming at, then you may take this path; then it will be very interesting to talk about it. But if you ask yourself whether it is not important today, for example, that a number of people, who are now the people of today, bring something out of thinking into the economic sphere that could help economic life, then it is not easy to see what could actually be gained by such a formulation.

Of course, it could be gained that people learn to think better, but we are faced with the necessity to make the national economy as such really fruitful. In science and medicine, after all, it does not depend very much on whether one has a methodology. There this is actually more of a technique in the treatment of methods, research instruments and so on, but the methodology itself has no extraordinary value. In economics, it certainly has an extremely high value, because what we think about things has to be put into practice in economics. Otherwise it is just what Brentano pursues in his way: purely empirical. It does not become practical. Today we need an economic way of thinking that can be put into practice. And that is why it would be extremely interesting to go through the definition word for word. But it is more in the realm of economic-philosophical thinking than of economic thinking.

Mr. Birkigt's discussions were aimed at extracting the concepts of work in such a way that someone who wanted to clarify in an association how one or the other work is to be evaluated can benefit from it. That was your tendency, and that should be our tendency today, if we were stuck inside an association, be it as any kind of worker, so that we would somehow have a basis for evaluating things in their economic process.

> Note: economic work is any human activity that directly or indirectly produces value.

Rudolf Steiner: I think that if we want to develop a practical economic way of thinking, we will have to take something else into account. Let us take a scientific analogy to clarify this: the overall process in the human organism is not at all understandable if we only look at ascending processes, processes that run in one direction. You only get a real understanding of the total process when you also look at the catabolic processes. For example, we have catabolic processes in the bones and nervous system; we have catabolic processes in the blood as well as distinct anabolic processes. We can even say that we have anabolic processes in the human organism, starting with lymph formation, through lymph formation to the generation of venous blood. Then we have the processes associated with breathing. These are processes that represent a kind of unstable equilibrium between anabolic and catabolic processes. And the processes that take place in the nerves and bones are distinctly catabolic. Devolutions as opposed to evolutions! We only gain a real understanding when we organize our concepts in such a way that we understand the liver process, for example, as a combination of anabolic and catabolic processes. Someone may come along and may have a mere theoretical interest, who then also subsumes the catabolic processes under the anabolic processes. He says: Physically, the human being develops to a certain degree through anabolic processes. Then he begins to build up spiritually, that is, differently. Now, then we come from one sphere into the other and retain only the abstract web of concepts and thereby learn to understand nothing. We learn to understand the effectiveness of the spirit in the human organism only when we know that the spirit begins to work when there are no anabolic processes; when we know that there is no anabolism in the brain, but catabolism, and that it is only in the catabolism that the spirit asserts itself. Then I have a kind of comprehension through which I enter into reality. If I hold on to a conceptual direction in the abstract, step by step, purely dialectically and logically, then I do not arrive at any practical understanding.

Thus it is necessary in economics to take into account not only the formation of value, but also its devaluation; that one also speaks, to a certain extent, of real destruction. I have done that. Consumption is where it begins, but there is still a mental process in which devaluation also takes place.

They said that when I tear down a house, it also has value. Because at this point, the demolition of the house means that something productive is being created for someone. Certainly, you can see it that way if you stick to the abstract development of concepts. But in practice, it has a meaning where I compose the economic process out of the creation and devaluation of value. And then it must be clear, of course, that work is important not only for the production of values, but also for the destruction of values. Without going into this, I cannot get an adequate concept of work. If work were not also there for destruction, it would not be possible to do any economic activity at all. You have to bring this into your concept.

I believe that it will be of great importance, even in the near future, to recognize what is to happen economically in the direction of value creation and value destruction. Because if values arise that are not destroyed in the appropriate way, even though they are there to be destroyed, this also disturbs the economic process. The process is disturbed by overproduction. The process is disturbed simply by the fact that, figuratively speaking, there is too much in the stomach of the economic system.

> Question: Must we not understand the concept of work in such a way that work is an activity that comes into consideration for a closed economic organism?

Rudolf Steiner: What comes into consideration here is that things are taken up as realities. Undoubtedly, the process of creating too much shielding can be a destructive one; but in terms of work performance, it is a constructive process under all circumstances, as long as we remain at work. On the other hand, the destructive process of destroying screens is not opposed to this. Under certain circumstances, destruction is not achieved by what you would define as work. But in any case, one cannot call the process of creating too many screens a destructive process if one wants to think about the matter in terms of work.

We must be aware that in the economic view we are to characterize, that is, we should try to get a concept by defining it from different sides in order to gain a truly descriptive judgment. We have no use for an abstract definition. A concept of work has been established: work is human activity in terms of its economic efficiency, in short, economic activity of man. But how does such a definition of work in the economic sense differ from the definition of work in the physical sense? In such an economic definition, we have nothing real in it. When the physicist defines physical work by means of a formula, by means of a function, and in it has the mass and the speed, then you have something real in it; because the mass can be weighed. If the physicist wants to define the speed, he draws up a definition. The definition serves only as a means of communication. The physicist is fully aware that he is only pointing to what is to be considered. For only he has a concept of speed who knows it from observation. What he defines is the measure of speed. And so the physicist will never believe that he is giving any real explanation when he gives this explanation. But he is of the opinion - whether rightly or wrongly, I will not investigate - that he is giving a real explanation when he explains labor as a function of mass and speed. In doing so, he is getting at a real explanation.

When I do this in economic life, it is because I am approaching the story at the right point. So, for example, if I give my explanation of value at a certain point in such a way that value is produced, value arises, value is a function of labor and a natural object, a natural being, or of mind and nature, then you have labor in the change that is taking place there. This is, of course, a qualitative change, whereas the moving body undergoes a change of location. What the physicist has as a measure is the real substance of nature. However, I am basing a definition that does indeed meet the requirements of such a real definition in physics. I am not doing anything special for economics when I try to define labor in itself. Above all, I must realize that labor as such only becomes an economic category when I bring it into function with the natural product. When you make such definitions, you get into a way of looking at things that is actually quite striking later on. For example, you know that during the reign of classical physics, the physicist always defined labor as a function of mass and speed. In contrast to modern conceptions of ions and electron processes, this working definition completely loses its meaning, because the concept of mass is dropped. We are only dealing with acceleration. In this way, the physical process emancipates itself from what is ponderably present as mass in it, just as capital emancipates itself from the nature it works on in my book and enters into a function of its own.

So you enter a realm that actually justifies itself from all sides. That is the peculiarity of realistic thinking: you think more than you have in definitions. I would like to point out that nowhere, when I speak of economics, do I try to grasp a concept where it cannot be grasped. I cannot grasp “mass” in physics either, but only its function. “Mass is the quantity of matter”, that is also only a word definition! Nor do I want to see the terms nature, labor and capital defined one after the other as economically significant, but rather to be grasped where the realities are: not nature, but nature that has been worked; not labor, but organized labor; not capital, but capital directed by the human spirit, set in motion, set in motion in the economy. I believe that touching things where they are is necessary in economics today!

> Question not noted.

Rudolf Steiner: I would just like to point out that the distinction between mental and manual work is not really justified. If one wanted to try to define the thing mental work and the thing manual work, one could not really find anything other than a slow transition from one pole to the other, but no real contrast. Physiologically, there is no real contradiction either. That things have been viewed incorrectly can be seen from the fact that people have always been mistaken about the recuperative effect of gymnastics. Today we know that gymnastics does not represent the recuperation that was attributed to it in the past. The student does not work more through so-called mental work than through gymnastics, which lasts the same amount of time. Of course, it is always a matter of thinking about things in a fruitful economic way.

> Question about the relationship between economic and biological thinking.

Rudolf Steiner: The economic entities are, in their reality, as they once were, already very much analogous to the biological entities. You can verify this very well if you try to determine the economic value of a job, for example, a printer's job. Let us assume that a poet fancies himself to be an extraordinarily great poet and manages to get his poetry printed, whether through patronage or financial support or something similar. And now the paper workers, the typesetters, a whole range of people are working on the realization of this volume of poetry, who, according to the Marxist concept, are doing decidedly productive work. But let's assume that not a single copy is sold, but that they are all pulped. Then you would have the same real effect as if they had not been made at all. Basically, you have expended labor completely uselessly in this case. Now, however, you would first have to examine whether this is seven-eighths stupid, as the Marxists say, or whether it does not have a meaning after all. And then you will notice that the biological point of view offers a certain analogy. You can say: In biology I can observe the whole being from beginning to end and have it before me, whereas in economics I only have to do with tendencies and the like. But now I ask you whether you have more than tendencies in the whole of nature, when you consider that not all herring eggs become herrings, but that countless herring eggs, compared to those that become herrings, are simply destroyed? However, the question arises as to whether these destroyed eggs mean nothing at all for the whole process of nature, or whether they only take a different direction in the whole biological process. That is the case. There could be no herrings and many other sea creatures if so many herring eggs did not simply perish. Now, you are still not on the basis of a real observation when you say: Well, eggs are perishing there - and so on. You are still obliged to say: I have an evolution in front of me. The egg has come into being and perishes through something. The whole herring also came into being and perishes through something. The processes only take on different directions, and the herring merely continues the tendency of the egg. Nowhere can you somehow say that the herring has a greater right to cease to exist than the egg. And now you have an analogy with perishing labor, with perishing economic entities.

You can come up with countless analogies between economic and biological thinking. This is only not noticed because we have neither a proper biological nor a proper economic thinking. If biology were to begin to develop a real thinking, it would become very similar to economic thinking. You need the same abilities to do real biology as you need to do real economics.

> Question: What is the justification for printed poetry that is then trampled on again, compared to herring eggs?

Rudolf Steiner: The matter may be as follows. If the people who are employed were not kept busy, these people would naturally have to find something to do elsewhere. And if they had to find something to do elsewhere, then under certain circumstances not enough would be derived from human activity. Human activity, like herring eggs, must also be diverted under certain circumstances, and this diversion also has an economic effect. It is easy to say that sleeping is rest, and living is activity. From a certain point of view, however, sleep is much more necessary for life than waking. It is the same with this activity. Of course, you can say: I want to use it in a more useful way; but it is questionable whether it is more useful when it comes to umbrellas that are produced too much. First of all, these are stopgaps, albeit in an inappropriate economic process, to eliminate work that would have a disruptive effect. The matter would turn out differently if one were to think in a healthy economic way. If one were to think in a healthy economic way, one would have to expend a colossal amount of cleverness - but here we go beyond the usual economic consideration - in order to utilize the surplus working hours that arise for those people who cannot work for themselves. So, it is actually the case that if one were to think in a healthy economic way, something would immediately arise that you would probably welcome with joy. But people cannot imagine that it would be necessary to teach those who are unable to work for themselves, who are unable to occupy their time, what it means to save time. For it would hardly be necessary for a person who works eight or nine hours today to work more than three or four hours longer. If people thought in terms of economics in a sensible way, they would need to work much less than they do now. And then the time saved would simply correspond to the time it takes for the herring eggs to hatch. Now people waste so much on work that has to be done again anyway.

> Note: When one speaks of biological thinking, one has a certain limited object of perception about which one thinks. When thinking economically, one has to designate through thinking what one is thinking about economically.

Rudolf Steiner: You only have a limited object of perception in biology to a certain extent. You do not have this with world structures that are observed under a microscope, for example, or where you observe individual phenomena as emerging from a larger context. You can say that you have a manageable object in a drop of blood. But the moment you look at it under the microscope, you see more – five to six hundred red blood cells in one cubic millimeter, and they are all active. This is certainly visible to the eye through the microscope, but it looks damn similar to what you see when you look at a limited economic process somewhere. Imagine you are standing in front of a stall at the fair and see how the stall-keeper is standing there, how his wares are lying; there are the customers, he hands over the goods, they put down the money, ... if you now imagine, you manage to be such a giant - how you can think of all this as something very dense and cohesive, then there is no real difference. I can understand the economics of a limited area just as relatively. If I look at the booth owner with everything that goes with it, it is only relatively different from, say, when the British sell opium in China and I look at everything that goes with it. I can't find why you don't have an object.

> Question: I just don't know where political economy begins and ends.

Rudolf Steiner: We also don't know where biology begins. It is another thing to ride the comparison to death. I just mean: What makes it possible to understand the nature of living things, the same in the conception makes it possible to understand economics. Only one thing is necessary. What you say may apply: when you look at a natural object, the object comes to you, whereas in economics the subject must come to the object to some extent. In economics, you have to have what I called spiritus yesterday. So biologists can really have very little spiritus and only work with the methods. But to think economically, you will need some spiritus.

> Question: It seems to me that the economic process has come about without thinking in economic terms; that thinking must first become economic. Whether the economy is healthy or unhealthy is irrelevant. In this respect, I will be able to speak of an object in economics in the same way as in natural science.

Rudolf Steiner: Mr. G. is right: the difference is that in economics it is necessary to start from a certain subjective grasp of what is happening in the world. But in economics this subjectivity is in turn easier than in biology. In biology, you are always on the outside, of course, as a human being – since you are not a cockchafer when you study it – and you have to stand on the outside, whereas you are only on the outside to a much lesser degree when you look at something economically. You can still muster enough humanity to understand the worker well, to understand the entrepreneur as well. That is the general human element, and it replaces what is external observation in biology. In this respect, Mr. G. is right. But on the other hand, I believe that Goethe, for example, gave such a good definition of the dark side of the concept of trade because he did indeed go very far in his biological approach. Thus, Goethe sometimes expresses remarkably apt economic views. This has something to do with his morphological-biological approach. In biology, nature plays the role of someone who pushes you when you don't have the spirit yourself. In economics, you have to apply the spirit yourself.

> Objection: There are theorists who say that there is no such thing as a national economy because there is no economy. Spann expresses this.

Rudolf Steiner: He is much admired and is considered a special luminary in Vienna by very clever people. I have not studied him enough to have too much of an opinion about him, but what very clever people say about him has not particularly convinced me. But it would only be a clever dialectic to say that there is no economy. There are also people who say that there is no life, only mechanism.

We should now look at specific aspects. Someone should try to show more specifically where economic processes of exploitation and devaluation are necessary.