The Rudolf Steiner Archive

2. The Economy on an Associative Basis: The Transformation of the Market – Pricing – Monetary and Tax Systems – Credit

[ 1 ] From the perspectives that have emerged in response to the facts of modern social development—as I attempted to explain yesterday—has arisen what you will find outlined in my book The Key Points of the Social Question: the idea of the threefold social order. This idea of the threefold social order is intended to be a thoroughly practical concept for life and contains nothing utopian. Therefore, the prerequisite for writing my book was that it be received with a certain instinct for the real facts, and that it not be judged on the basis of preconceived theories or preconceived party opinions. However, if it is true—and what I stated yesterday is undoubtedly true—that social realities in people’s living conditions have gradually become so complicated that it is extremely difficult to grasp them as a whole, then a special method will be necessary when discussing what should guide our will today.

[ 2 ] Given the complexity of the facts, it is only natural that people initially have a certain understanding—particularly of economic phenomena—only of those things that fall within their own sphere of life. Yet everything within those spheres depends on the rest of the economy—and today, not only on the economy of a single country, but on the global economy as a whole. Consequently, the individual will very often find himself in the natural and understandable position of wanting to judge the necessities of the global economy based on his experiences within his immediate sphere of life. Naturally, he will err in doing so. Anyone familiar with the requirements of realistic thinking also knows how important it is to approach the phenomena of the world with a certain instinct for reality, in order thereby to arrive at certain fundamental insights that can then play a role in life similar to that of fundamental truths in certain academic disciplines.

[ 3 ] You see, if one were to set out to understand the entire economic system in all its details and only then draw conclusions from it for social policy, one would never finish. But one would be just as far from finishing if one first had to go through all the details in which, say, the Pythagorean theorem finds application in technical life in order to recognize the truth of the Pythagorean theorem. One grasps the truth of the Pythagorean theorem through certain inner connections and then knows: wherever its application is at issue, it must hold true. In social understanding, too, one comes to realize that certain fundamental insights, by their very nature, can reveal themselves to consciousness as true. And if one then possesses a sense of reality, one will find that wherever they are relevant, they are also applicable. Thus, the book The Core Points of the Social Question should be understood from its inner nature, from the inner nature of the social conditions described therein, and in the same way, the overall idea of the threefold structure of the social organism should initially be grasped. But in these lectures I will certainly attempt to show how individual phenomena of social life provide confirmation for what follows from this idea of the threefold social order, which arises from the vital necessities of the present and the near future of humanity.

[ 4 ] For now, however, before I move on to my actual topic for today, I will be compelled to begin by simply outlining for you the basic idea behind this threefold structure of the social organism. Yesterday we were able to conclude that our social life must derive its demands from three fundamental roots; in other words, that the social question is a spiritual question, a question of the state or law, a political question, and an economic question. Anyone who examines the course of humanity’s recent development will find that these three elements of life—spiritual life, legal and political life, and economic life—have gradually and chaotically merged into a whole, into a unity, right up to the present day, and that our current social ills have arisen from this merging.

[ 5 ] If one recognizes this thoroughly—and these lectures are intended to lay the foundation for such a thorough understanding— one will find that the future must unfold in such a way that life—public life, the social organism—is structured into an independent administration of intellectual affairs, specifically of public intellectual life in education and the school system; into an independent administration of political, governmental, and legal affairs; and into a completely independent administration of economic life.

[ 6 ] At present, a single administrative body in our countries encompasses these three elements of life, and when one speaks of a threefold social order, one is immediately misunderstood today. People interpret it to mean: Well, someone wants an independent administration for spiritual life, an independent administration for legal, state, or political life, and an independent administration for economic life; so they are calling for three parliaments—a cultural parliament, a democratic-political parliament, and an economic parliament. - If one were to demand this, one would understand absolutely nothing of the idea of the threefold social order, for this idea of the threefold social order simply seeks to take completely seriously the demands that have arisen historically in the course of humanity’s recent development. And these three demands can be expressed with the three words that have, admittedly, already become catchphrases; but if one moves beyond the catchphrases to grasp reality, one finds that legitimate historical impulses are contained within these three words. These three words are the impulse toward freedom in human life, the impulse toward democracy, and the impulse toward a social organization of community life. But if one takes these three demands seriously, one cannot lump them together into a single system of governance, for one will inevitably interfere with the other. For example, anyone who takes the call for democracy seriously must acknowledge: This democracy can only be realized through a representative assembly or a referendum if every single person who has attained legal capacity—being equal to every other person who has attained legal capacity—can decide, through their own judgment, what can indeed be decided on democratic grounds by the judgment of every person who has attained legal capacity.

[ 7 ] Now, according to the idea of the threefold social order, there is an entire sphere of life—namely, the sphere of legal life, the sphere of state life, and the sphere of political relations—in which every person who has come of age is called upon to have a say based on their democratic consciousness. But if democracy is to be taken seriously and public life is to be fully democratized, the spiritual sphere, on the one hand, can never be incorporated into this democracy, nor can the cycle of economic life be incorporated into this democratic administration.

[ 8 ] In this democratic form of government, a parliament certainly has its place. But such a democratic parliament can never decide on matters pertaining to spiritual life, including those related to education and schooling. I would like to briefly touch upon today, by way of introduction, what I will discuss in much greater detail in the fourth lecture: the threefold social order strives for an independent spiritual life, particularly in public affairs and in the fields of education and schooling. This means that in the future, it should not be determined by any government regulations what and how to teach; rather, those who are truly immersed in the practical work of teaching and education should themselves be the administrators of the educational system. This means that from the lowest level of elementary school all the way up to the highest level of education, the teacher should be independent of any other power—whether governmental or economic—with regard to what and how they are to teach. This should follow from what is deemed appropriate for the spiritual life within the independent spiritual community itself. And the individual should need to devote only as much time to teaching as is necessary to leave him or her with enough time to serve as a co-administrator of the entire educational system, as well as of the entire intellectual life.

[ 9 ] In the fourth lecture, I will attempt to demonstrate how this independence of spiritual life will place people’s spiritual disposition on an entirely different foundation, and how precisely that which, according to today’s prejudices, one would least expect to happen will come to pass: Through this independence, spiritual life will gain the power to intervene fruitfully—truly of its own accord—in political life and, in particular, in economic life. And inwardly, an independent spiritual life will not provide mere abstract theory or unworldly scientific views, but will at the same time penetrate human life, so that, drawing from such an independent spiritual life, people will be imbued not with merely abstract spiritual views, but with insights through which they can hold their own in economic life. It is precisely through this independence that spiritual life will simultaneously become practical. So that one can say: In spiritual life, expertise and the application of that expertise must prevail. What may arise from the judgment of every discerning, mature individual must not prevail. The administration of spiritual life must therefore be removed from the parliamentary system. Anyone who believes that a democratic parliament should rule here thoroughly misunderstands the very impulse behind the threefold social order.

[ 10 ] The situation is similar in economic life. But economic life has its own independent roots. It must be managed based on its own conditions. Nor can the manner in which the economy should be managed be judged democratically by every person who has come of age, but only by those who are actively involved in a particular branch of the economy, who have become competent in that branch, and who understand the interconnections between that branch and others. Expertise and professional competence—these are the conditions through which something fruitful can come about in economic life alone. This economic life will therefore have to be separated, on the one hand, from the constitutional state and, on the other hand, from intellectual life. It will have to be placed on its own foundation.

[ 11 ] This is also what socialist thinkers today fail to recognize most of all. These socialist thinkers imagine some form that economic life should take so that certain social ills will disappear in the future of humanity. It has been observed—and indeed it is easy to see—that the private-capitalist economic system of the past centuries has caused certain ills. These ills are evident. How should one judge this? One might say: The private-capitalist economic system has arisen; it has brought about these ills. These ills will disappear if we abolish the private capitalist economic system and replace it with the communal economy. What has arisen as ills has come about because individual owners personally own the means of production. If, then, individual owners no longer own the means of production, but the community manages them, these ills will disappear.

[ 12 ] Now one might say: Even those who think along socialist lines have already arrived at certain individual insights today, and it is interesting to see how these individual insights are already having a definite impact in socialist circles. People are already saying today: Yes, the means of production—or capital, which is, after all, the representative of the means of production—should be collectively managed. But we have seen where, for example, the nationalization of certain means of production—the nationalization of the postal service and the railroads, and so on—has led, and one certainly cannot say that the problems have been eliminated simply because the state has now become a capitalist. So one cannot nationalize. Nor can one municipalize. Nor can one achieve anything fruitful by founding consumer cooperatives in which people who need certain goods for consumption join together. Those people who regulate this consumption and also seek to regulate the production of the goods to be consumed accordingly become—even in the view of socialist thinkers—tyrants of production in their capacity as consumers. And so the realization has already taken hold that both nationalization and communalization, as well as administration by consumer cooperatives, become a tyranny of the consumers. Producers would become entirely tyrannically dependent on consumers. Some therefore believe that workers’ productive associations or workers’ productive cooperatives could be established as a form of communal administration; in such arrangements, workers would organize themselves and produce for themselves according to their own opinions and principles.

[ 13 ] Once again, socialist thinkers have recognized that this would achieve nothing more than replacing a single capitalist with a number of workers engaged in capitalist production. And these workers engaged in capitalist production would be no more capable of doing anything different than the individual private capitalist. Thus, workers’ production cooperatives are also rejected.

[ 14 ] But people are not yet satisfied with the realization that these individual similarities cannot lead to anything fruitful in the future. They now imagine that the entire society of any given state, any closed economic region could, in a sense, become a large cooperative—a large cooperative in which all participants are simultaneously producers and consumers—so that it is not the individual who directly takes the initiative to produce this or that for the community, but rather the community itself that issues the directives on how production should take place, how the products should be distributed, and so on. Yes, it is precisely such a large-scale cooperative—encompassing both consumption and production—that we wish to establish in place of the private-sector management of our modern economic life.

[ 15 ] Anyone who takes a closer look at reality knows that, fundamentally, this shift toward the idea of a large-scale cooperative stems solely from the fact that the errors involved are not as easy to grasp as they are in the individual cases of nationalization, municipalization, workers’ production cooperatives, and consumer cooperatives. In the latter cases, the scope of what one must take into account is, so to speak, smaller. It is easier to see the mistakes one makes when striving to establish such institutions than in the case of a large cooperative, which encompasses an entire sector of society. Here, people talk their way into what they want to do without yet realizing that the same errors are bound to arise—errors that are readily recognized on a small scale but are not recognized on a large scale simply because one is unable to grasp the whole picture. That is what matters. And one must understand what the fundamental flaw of this entire line of thinking actually is—a thinking that sails headlong into a large cooperative, which is supposed to set about managing all consumption and all production on its own.

[ 16 ] How does one actually think when one wants to bring something like this about? Well, the way people think about this is evident in numerous party platforms that are emerging right now. How do these party platforms present themselves? People say to themselves: Well, there are certain branches of production that must now be managed collectively. Then, in turn, they must be grouped into larger sectors, into larger administrative regions. This, in turn, requires some kind of administrative headquarters to manage the whole, and so on up to the central economic office that manages the entirety of consumption and production. What thoughts, what mental images does one apply when seeking to structure economic life in this way? One applies, in fact, what one has had to learn in political life, as it has developed in recent human history. The people who speak of economic programs today have, for the most part, been schooled in purely political life. They have participated in everything that takes place during election campaigns, in what happens when one is elected and then has to represent, in some form of representative body, those who elected them. They have experienced the relationships one then enters into with government offices—which are political offices—and so on. In a sense, they have become familiar with the entire framework of political administration, and they want to impose this framework of political administration on the entire cycle of economic life. This means that, according to such programs, economic life is to be thoroughly politicized, for they have only come to know the political aspect of administration.

[ 17 ] What we desperately need today is to realize that this entire template, when imposed on economic life, is something entirely foreign to economic life. But the vast majority of people who today speak of reforms of economic life—or even of a revolution in economic life—are, at heart, mere politicians who operate on the superstition that what they have learned in the political arena can be applied to the management of economic life. However, a recovery of our economic cycle will only occur if economic life is viewed and shaped on the basis of its own conditions.

[ 18 ] What, then, do such politicized economic reformers demand? They demand nothing less than that, in the future, this hierarchy of the central authority determine: First, what should be produced and how it should be produced. Second, they demand that the entire nature of the production process be determined by the administrative authorities. Third, they demand that the people who are to participate in the production process be selected and appointed by these central agencies and assigned to their posts. Fourth, they demand that these central agencies oversee the distribution of raw materials to the individual enterprises. In other words, the entire production process is to be subordinated to a hierarchy of political administration. This is, after all, what most of today’s economic reform ideas ultimately amount to. Yet people fail to realize that such a reform would leave us stuck exactly where we are today and would not eliminate its ills but, on the contrary, would magnify them to an extreme degree. People realize that nationalization, municipalization, consumer cooperatives, and workers’ production cooperatives do not work; yet they fail to see that such a system would merely transfer the very flaws they so strongly criticize in the private capitalist system to the communal administration of the means of production.

[ 19 ] This is what must be truly understood above all else today: that such a measure, such institutions, would inevitably lead—wherever they are implemented—to what is already very clearly evident today in Eastern Europe. In Eastern Europe, individual people were able to carry out such ideas for economic reform and put them into practice. People who are willing to learn from facts could see, from the fate that awaits Eastern Europe, how these measures lead to their own absurd conclusion. And if people did not cling to their dogmas but truly wanted to learn from the facts, then today one would not say that, for this or that secondary reason, economic socialization in Hungary had failed; rather, one would study why it was bound to fail, and one would realize that any such socialization can only destroy and create nothing fruitful for the future.

[ 20 ] But even today, many people still find it difficult to learn from the facts in this way. This is best illustrated by points that socialist thinkers often mention only in passing. They say: Yes, it is true that modern technology has transformed the entire modern economic system. But if they were to follow this line of thought further, they would have to recognize the connection between modern technology and expertise and professional competence. They would have to see how this modern technology permeates economic activity itself in every area. But they do not want to see that. And so they say, as an aside: they do not want to concern themselves with the technical nature of production processes. Let that take care of itself. They want to concern themselves only with the way in which the people involved in the production processes are situated in social life, and with how social life is shaped for those involved in the production processes.

[ 21 ] But it is, after all, plain to see—if one is only willing to see it, if one is only willing to grasp it—how technology itself intervenes in immediate economic life. Let me cite just one example—one that is nothing short of a classic example. Modern technology has made it possible—to put it simply—to use numerous machines to produce goods that are then consumed. And these machines depend solely on the fact that four hundred to five hundred million metric tons of coal were mined in the period before this war catastrophe struck, for the sake of economic activity. If we calculate the economic energy and economic power generated by machines—which are based on human thought and can only be operated through human thought—we arrive at the following interesting result: If we assume eight-hour workdays, it follows that the machines—that is, the human ideas embodied in the machines, the inventiveness of the human mind—generate as much labor energy and labor power as could be generated by seven hundred to eight hundred million people.

[ 22 ] If you therefore have in your mental image that the Earth has a population of approximately one thousand five hundred million people who contribute their labor, then—thanks to human ingenuity in recent cultural development and technological progress—it has gained an additional seven hundred to eight hundred million. So two thousand million people are “working”; that is to say, these seven hundred to eight hundred million people are not actually working themselves, but the machines are working for them. What, then, is at work within the machines? It is the human spirit.

[ 23 ] It is extremely important to truly understand such facts, which can easily be multiplied. For it is from such facts that one will recognize that technology cannot simply be set aside as an afterthought, but that technology, as such, is constantly and actively involved in economic processes—that it is an integral part of them. Modern economic life is simply inconceivable without the foundation of modern technology and without technical and specialized knowledge.

[ 24 ] When one considers such matters, one does not take reality into account, but rather preconceived ideas arising from human passions. The idea of the threefold social order is certainly sincere in its approach to the social question. For this very reason, however, it cannot stand on the same ground as those who speak solely in terms of slogans and party platforms. It must speak from a factual basis. Therefore, by standing on the ground of reality, it must acknowledge that economic activity—especially in our complex lives—rests entirely on the initiative of the individual. If one replaces the initiative of the individual with abstract collectivity, this means the extinction, the death of economic life. Eastern Europe will be able to prove this if it remains for much longer under the same rule it is currently under. It means the extinction, the death of economic life, when one takes away from the individual the initiative that must spring from his spirit and flow into the movement of the means of production, precisely for the benefit of the human community.

[ 25 ] But what, then, has given rise to what we see today as harm? The fact that the modern production process, through its technical sophistication, demands the initiative of the individual—and thus also demands that the individual have access to capital and be able to carry out the production process on his own initiative—is what recent human development has brought about. And the ills that have accompanied this—their origin can be traced to entirely different underlying causes. If one wishes to recognize this origin, one must, above all, base one’s understanding not on the principle of cooperation—even when referring to large cooperatives—but on the principle of association.

[ 26 ] What does it mean to base one’s approach on the principle of association rather than on the principle of cooperation? It means the following: Anyone who stands on the ground of the cooperative principle claims that people need only join together, make decisions based on their common ground, and then they can manage the production processes. So first one decides on the association of people, the uniting of people, and then one wants to produce from that common union, from the community of people. The idea of the threefold social order is grounded in reality and states: First, there must be people who are capable of producing, who are knowledgeable and skilled. The production process must depend on them. And these knowledgeable and skilled people must then come together and manage economic life on the basis of that production which flows from the initiative of the individual. - That is the true principle of association. First, production takes place, and then what has been produced is made available for consumption on the basis of the association of the producers.

[ 27 ] The fact that people today fail to recognize the difference—the radical difference—between these two principles is, in a sense, the scourge of our time. For, fundamentally, everything hinges on this insight. People lack the instinct to realize that any abstract community, if it seeks to manage the production process, must inevitably undermine it. A community that is meant to be an association can only incorporate what is produced through the initiative of the individual and can then distribute it socially to consumers.

[ 28 ] Today, people fail to grasp the significance underlying these events, for a reason I already mentioned yesterday: that around the time the Renaissance and the Reformation took place in recent human history, precious metals were brought over from Central and South America, which led from the natural economy—which had been almost the sole dominant system until then—to a monetary economy. This brought about a significant economic revolution in Europe. Conditions emerged that continue to influence us to this very day. But at the same time, I would say, these conditions have formed veils through which one cannot see the true realities.

[ 29 ] Let’s take a closer look at these conditions. Let’s take as our starting point—even though it no longer exists on that scale today—the old subsistence economy. In the economic processes of that system, one deals only with what the individual produces. He can exchange this for what another person produces. And one might say: Within this subsistence economy, where only product can be exchanged for product, a certain solidity must prevail. For if one wishes to exchange a product one needs, one must have something to offer in exchange, and one must have a product that the other person accepts as of equal value. This means that people are compelled, if they want something, to produce something as well. They are compelled to exchange what has a real, an obvious real value.

[ 30 ] The monetary economy has replaced this exchange of goods that have real value for human life. And money has become something with which one conducts economic activity—just as one does with real objects in a natural economy. But because money has become a real economic object, it presents people with something imaginary, and in doing so, it simultaneously tyrannizes them.

[ 31 ] Let’s consider an extreme case: that the credit economy—which I alluded to at the end of yesterday’s talk—flows into the monetary economy. This has, in fact, happened frequently in recent times. This then leads, for example, to the following situation: One wants to make some kind of investment—whether as a government or as an individual—such as a telegraph system or something similar. One can take out a loan—a loan of a very substantial amount. One will be able to bring this telegraph system to fruition. Certain circumstances will require certain amounts of money. But interest must be paid on these amounts. One must cover the cost of this interest. And in numerous cases—what becomes apparent within our social structure, most notably in nationalization, when the state itself manages the economy—what becomes apparent? That what was produced at the time—and for which the money in question was used—has long since been consumed, that it is no longer there, and that people still have to pay off what was borrowed as credit back then! In other words: What is owed under the terms of the loan is already gone, but people are still managing the money.

[ 32 ] Such things also have global economic significance. Napoleon III, who was thoroughly imbued with modern ideas, came up with the idea of beautifying Paris, and he had a great many things built. The ministers, who were his compliant tools, carried out the construction. The state’s revenues—which were allocated to this purpose—can be used simply to pay the interest. Now Paris has become much more beautiful, but people are still paying off the debts incurred back then! In other words: even though these things have long since ceased to be based on anything real, people are still juggling the money, which has itself become an economic object.

[ 33 ] There is also a bright side to this. In the old subsistence economy, it was necessary, when managing one’s affairs, to produce goods. These were, of course, subject to decay; they could be lost, and one was dependent on working ever more, constantly producing new goods if such were to be available. With money, that is not necessary. You give it away, lend it to someone, secure it. That is to say, you manage your money entirely independently of those who produce the goods. Money, in a sense, emancipates people from the immediate economic process, precisely by becoming an economic process in its own right. This is extraordinarily significant. For in the old subsistence economy, the individual was, after all, dependent on other individuals—one person was dependent on another. People had to cooperate; they had to get along. They had to agree on certain institutions; otherwise, economic life could not continue. Under the monetary economy, of course, the one who becomes a capitalist is also dependent on those who work, but he stands completely alien to those who work. How close the consumer was to the producer in the old natural economy, where one dealt with real goods! How distant is the one who manages money from those who work so that this money can yield interest! Gaps are being torn open between people. People are no longer close to one another under the monetary economy. This must be taken into consideration above all else if one is to understand how the working masses—whether they are intellectual or physical laborers—that is, those who actually produce, must once again be brought closer to those who, through capital investments, make economic activity possible. But this can only happen through the principle of association—by people coming together again as human beings. The principle of association is a requirement of social life, but one such as I have characterized it, not one as it often appears in socialist programs.

[ 34 ] And what else has come to pass, particularly under the increasingly dominant monetary economy of recent times? As a result, even what is called human labor has become dependent on money. Socialists and others are, after all, debating the place of human labor within the social structure. And one can cite quite good reasons both for and against the arguments put forward by both sides. One understands this perfectly, especially when one has learned not to think and feel about the proletariat, but to think and feel with the proletariat, one understands it completely when the proletarian says that in the future his labor power must no longer be a commodity, that the relationship must not continue in which, on the one hand, goods are paid for on the commodity market, and on the other hand, human labor is paid for on the labor market in the form of wages. This is easy to grasp. And it is important to understand that Karl Marx had gained many followers when he calculated that the worker produces surplus value, that he does not receive the full product of his labor power but instead produces surplus value, that this surplus value is handed over to the entrepreneur, and that, under the influence of such a theory, the worker then fights for this surplus value. But on the other hand, it is just as easy to prove that wages are paid out of capital, that modern economic life is entirely governed by the capitalist economy, that certain products yield a capitalist return, and that wages are paid—labor is purchased—based on what they yield; that is to say, wages are generated from capital. - One can prove one view just as well as the other. One can prove that capital is the parasite of labor; one can prove that capital is the very creator of wages; in short, one can advocate partisan views with equal validity from one side or the other.

[ 35 ] One should really come to fully understand this. Then one would realize why, in the present day, people tend to seek to achieve things primarily through struggle rather than through objective progress and the clarification of circumstances. Labor is something so fundamentally different from commodities that it is entirely impossible, without causing economic harm, to pay for both commodities and labor in the same way. But people do not understand how these things are connected. Even today, they do not grasp the economic structure in this particular area.

[ 36 ] Today, there are numerous economists who say to themselves: If the money supply—that is, circulating currency, whether metal or paper money—is increased in any way, money becomes cheap, and the most essential goods of daily life, in particular, become expensive. - One notices this and sees the absurdity of simply increasing the money supply. For this simple increase in the money supply—as is plain to see—does nothing but cause food prices to rise as well. The well-known endless screw keeps turning, keeps moving. But people fail to realize something else: that the moment labor is paid in the same way that goods and products are paid for, labor will naturally strive, through struggle, to obtain ever better and better pay, ever better and better wages. But whatever money labor receives as remuneration has the same effect on price formation as the mere increase in the money supply. That is what one must realize.

[ 37 ] Instead of increasing production or ensuring that production becomes more productive—as some finance ministers have done—they can simply print money and increase the money supply. Then people will have more money, but all products, especially the necessities of life, will also become more expensive. People already realize this. That is why they see how nonsensical it is to simply increase the money supply in an abstract way. But they do not realize that all the money spent solely for the purpose of paying for labor has exactly the same effect of driving up the prices of goods. For healthy prices can only develop within an independent economic life itself. Sound prices can only develop if they are based on the valuation of human labor. That is why the idea of the threefold social order—and elaborating on this in more detail will be a particular task for tomorrow—seeks to completely separate labor from the economic process.

[ 38 ] Work as such is not something that belongs in the economic process at all. Just consider the following. It sounds strange, even paradoxical, when you say it, but many things seem paradoxical today that must nevertheless be fully understood. People have strayed very far from clear thinking; which is why they find some things completely absurd—things that must be stated precisely on the basis of reality. Suppose someone today engages in sports from morning till night. He engages in a certain kind of sport. He expends just as much labor as someone who chops wood; he expends exactly the same amount of labor. The only difference is that one expends labor for the benefit of the human community. The person who plays sports does not thereby contribute to the human community—at most, by building up his strength—but as a rule, he does not apply it in that way. Yet for the community, it generally has no significance at all when someone engages in his work for the sake of sports, which tires him just as much as chopping wood. Chopping wood—that is what matters.

[ 39 ] In other words, expending labor power is something that is not at all relevant in social terms; but what is produced through the expenditure of labor power—that is what is relevant in social life. One must focus on what is produced by labor. That is what has value for the community. Therefore, even within economic life, only the product produced by labor can be of any significance. And economic administration can only concern itself with regulating the relative value of products. Labor must lie entirely outside the economic cycle.

[ 40 ] It must be based on the legal foundation—the foundation we will discuss tomorrow—where every person who has attained legal capacity must judge every other person who has attained legal capacity as an equal. The nature, timing, and character of work are determined by the legal relationships among people. Work must be separated from the economic process. Then all that will remain for the economic process is what might be called the regulation of the mutual valuation of goods—the regulation of how much one is to receive from another’s output in exchange for one’s own output. This will be the responsibility of those who separate themselves from the associations formed between producers and other producers, producers and consumers, and so on. This will involve dealing with price formation.

[ 41 ] Labor will not be an area that needs to be regulated within economic life at all; it will be excluded from economic life. If labor is part of economic life, then it must be paid for out of capital. This brings about precisely what, in modern economic life, can be called the pursuit of pure profit, of mere gain. For as a result, anyone who wishes to supply economic products finds themselves fully immersed in a process that ultimately culminates in the market.

[ 42 ] And here, anyone who truly wishes to gain insight must correct a notion—a concept—that is currently shaped in a very, very erroneous way. It is said: The capitalist producer brings his products to market; he seeks to make a profit. And whereas for a long time socialist thinkers have said, with some justification, that the entire moral code has nothing to do with this production—only economic thinking—today there is a strong tendency to mix profit with the moral code from an ethical and moral standpoint. Here we should not speak from a one-sided moral standpoint, nor from a one-sided economic one, but from the standpoint of society as a whole. And here one must ask: What is it that profit actually represents? It is something that, in the real context of the national economy, can only be described in the same way one might describe a rising mercury column on a thermometer in a room—namely, that it has become warmer. If someone says, “This mercury column shows me that it has gotten warmer,” then they will know that it is not this mercury column that has made the room warmer, but that this mercury column merely indicates that the room has become warmer due to other factors. The profit on the market, which arises under our current conditions of production, is also, at first glance, nothing other than an indicator that one is permitted to produce the products that yield a profit. For I would like to know where on earth one could possibly find any basis today for concluding that a product should be produced if it does not turn out that, when produced and brought to market, it yields a profit! This is the only indicator that the economic structure may be organized in such a way that this product comes into being. The only way to know that a product should not be produced is when, upon bringing it to market, one realizes: There is no market for it. People do not demand it. No profit is made. — That is the real state of affairs, not all the nonsense and drivel that has been spouted about supply and demand in many schools of economics. The fundamental phenomenon, the fundamental reality in this area, is that today, and only today, the generation of profit enables people to say to themselves: You can produce a certain product because it will have a certain value within human society.

[ 43 ] The transformation of the market, which holds such significance today, will come about when a genuine principle of association is embedded in our social life. Then it will no longer be impersonal supply and demand—separated from human beings—that determines whether a product should be produced or not; rather, from these associations, through the social will of the people employed within them, other personalities will emerge who will be concerned with examining the relationship between the value of a produced good and its price.

[ 44 ] The value of a produced good is, in a certain sense, not even an issue today. It does, however, serve as the driving force behind demand. But this demand is, in fact, quite problematic in our current social life precisely because it is always countered by the question of whether the corresponding means and the corresponding ownership structures are available to meet that demand. One may well have needs: if one does not possess the necessary means to satisfy them, one will not be able to demand them at all. But the point is that a link must be created between human needs—which give goods and products their value—and prices. For what one needs has its human value depending on that need. Institutions will have to emerge from the social order that build a bridge between this value—which is imposed on products by human needs—and the prices they must have.

[ 45 ] Today, price is determined by the market, based on whether there are people who can buy these goods—people who have the necessary money. A true social order must be oriented toward ensuring that people who, based on their legitimate needs, must have certain goods, are also able to obtain them—that is, that the price truly reflects the value of the goods and corresponds to it. The chaotic market of today must be replaced by an institution through which people’s needs and consumption are not tyrannized—as they are by workers’ production cooperatives or by the large socialist cooperative—but through which people’s consumption is studied and the means of meeting that consumption are determined accordingly.

[ 46 ] For this to happen, it is necessary that, under the influence of the principle of association, the possibility be genuinely created to produce goods in such a way that they correspond to observed needs; that is to say, there must be institutions staffed by people who study those needs. Statistics can only capture a moment in time; they are never decisive for the future. The needs that exist at any given time must be studied, and production arrangements must be made accordingly. If an item shows any tendency to become too expensive, this is a sign that too few people are working on that item. Negotiations must be conducted to transfer workers from other branches of production to this one, so that more of this item is produced. If an item tends to become too cheap—meaning its producer earns too little—then negotiations must be initiated to reduce the number of people working specifically on that item. This means that, in the future, the way people are assigned to their jobs must determine how needs are met. The price of a product is determined by the number of people working on it. But through such mechanisms, it will be similar to, and essentially equal to, the value that human need assigns to the good in question.

[ 47 ] There we see how human reason will take the place of the random market, how the price will reflect what people have negotiated, and what contracts people have entered into through the existing institutions. Thus, we see the transformation of the market brought about by reason taking the place of the randomness of the market that prevails today.

[ 48 ] We can see, in general: As soon as we separate economic life from the other two spheres—which we will discuss in the coming days—we will also discuss the relationship to economic life, and many things that must remain unclear today will then become clear—as soon as we separate economic life from the other two spheres, the legal or political sphere and spiritual life, economic life is placed on a healthy, rational foundation. For then it will be viewed solely in terms of how economic activity is conducted. Consequently, there is no longer any need to allow commodity prices to be influenced by the fact that they are also supposed to determine how long one should work, or how much one should work, or how much wages should be paid, and the like; rather, in economic life one deals solely with the comparative value of commodities. Thus, one stands on sound ground in economic life as well.

[ 49 ] This healthy foundation must be preserved for the entire economic life. Therefore, in such an economic life, that which today—in a purely monetary economy, where money itself is the object of economic activity—can only be an illusion will be restored to its natural, solid foundation. In the future, it will no longer be possible to conduct economic activity through money and for the sake of money, for the institutions will have to deal with the mutual value of goods. This means that we will return to the intrinsic value of goods, and thus also return to the productive capacity and competence of human beings. And credit relationships will no longer be dependent on whether money is available or not, or on whether money is risked in one way or another; rather, credit relationships will depend on whether there are people capable of actually bringing one thing or another to fruition, of producing one thing or another. Credit will be based on human capability.

[ 50 ] And since human competence sets the limit on how much credit can be granted, this credit cannot be granted beyond the bounds of that human competence. If you simply hand over money and let it be managed, then what is created by it may have long since been consumed—you still have to keep managing that money. If you hand over money solely for human competence, then, of course, what can be achieved with that money also ceases with that human competence. We will discuss this in the coming days.

[ 51 ] Only when economic life is supported by the other two spheres—the independent legal sphere and the independent intellectual sphere—can it stand on its own two feet in a healthy way. But then everything within economic life must also follow naturally from economic premises.

[ 52 ] Material goods are produced from economic conditions. One need only think of something that, in social life, appears—I would say—as a byproduct of economic life, and one will see how genuine economic thinking must do away with much of what is still taken for granted in the social order today—indeed, what people are fighting for as progress.

[ 53 ] Even today, none of those who believe they understand anything about real life consider that it does not represent a great step forward to shift from all kinds of indirect taxes or other sources of government revenue to the so-called income tax—in particular, the progressive income tax. Today, everyone takes it for granted that taxing income is the just thing to do. And yet, as paradoxical as it may sound to people today, this idea—that fair taxation can be achieved by taxing income—stems solely from the delusion brought about by the monetary economy.

[ 54 ] Money is received. Money is used to manage economic affairs. Through money, one frees oneself from the substance of the productive process itself. In a sense, one abstracts money from the economic process, just as one abstracts thoughts from the thought process. But just as one cannot conjure up any real mental images or sensations from abstract thoughts, so one cannot conjure up anything real from money if one overlooks the fact that money is merely a sign for goods that are produced, that money is, in a sense, merely a kind of accounting—a fluid accounting—and that every monetary sign must stand for some good.

[ 55 ] This, too, will be discussed in greater detail in the coming days. Today, however, it must be said that an era that sees only how money becomes an independent economic entity—such an era must view monetary income as the primary target for taxation. But in doing so, the taxing authority makes itself complicit in the abstract monetary economy! One taxes what is not actually a real good, but merely a symbol of a good. One is dealing with something economically abstract. Money only becomes real when it is spent. That is when it enters the economic process, regardless of whether I spend it for my pleasure or for my physical and mental needs, or whether I deposit it in a bank so that it is used there for the economic process. When I deposit it in a bank, it is a kind of expenditure on my part—that, of course, must be noted. But money becomes a real entity in the economic process at the very moment it is separated from my possession and enters the economic process. People really only need to consider one thing: It does a person no good at all to earn a lot. If he puts his large earnings in a straw sack, he may have them, but they are of no use to him in the economic process. What benefits people is only the ability to spend a lot.

[ 56 ] And in public life—in real, productive life—the sign of having a lot of income is precisely that one can spend a lot. Therefore, if one does not wish to create something within the tax system that is parasitic on the economic process, but rather something that represents a genuine dedication of the economic process to the public good, one must tax capital at the very moment it is transferred into the economic process. And the curious thing is that the income tax must be transformed into an expenditure tax—which I ask you not to confuse with an indirect tax. Indirect taxes often emerge today as the preference of certain rulers simply because direct taxes—income taxes—are usually insufficient. When we speak of an expenditure tax here, the issue is neither indirect taxes nor direct taxes, but rather that what I have acquired is taxed at the very moment it enters the economic process, when it becomes productive.

[ 57 ] This example of taxation in particular illustrates how necessary it is to relearn and rethink. The belief that an income tax is the preferred option is a byproduct of the monetary system that has emerged in modern civilization since the Renaissance and the Reformation. If economic life is placed on its own foundation, then the only issue will be that what truly drives the economy—what is inherent in the production process—provides the means for the work that produces what the community needs. Then the focus will be on an expenditure tax, never on an income tax.

[ 58 ] You see, as I said yesterday, we must relearn and rethink. So far, in these two lectures, I have only been able to sketch out a few points. In the next four, much of this will be elaborated upon. Anyone who speaks out on such matters today knows full well that they are bound to cause offense on both the left and the right, that at first hardly anyone will agree with them, for all these issues have been submerged in the realm of partisan opinion. But there is no hope of a remedy until these matters rise again from the realm where partisan passions rage into the realm of objective thinking, of thought truly drawn from life.

[ 59 ] And this is what we so dearly wish for: that people, in opposing the threefold social order, do not judge according to party stereotypes or party principles, but rather that they draw upon their instinct for reality in forming their judgments. Party opinions and party principles have often led people away from this instinct for reality. That is why we see time and again that it is precisely those who today are more or less dependent on mere consumption who, deep down, understand quite easily—based on their instincts—what an idea of reality such as the threefold social order actually aims to achieve. But then come the leaders, especially those of the socialist masses. And it must not be concealed today that these leaders of the socialist masses are by no means inclined to engage with the realm of reality.

[ 60 ] And unfortunately, one thing must be noted today, and this is also—especially in the economic sphere—one of the most pressing aspects of the social question: We have experienced, through our work toward the threefold social order, how the masses have been addressed, and how the masses, drawing on their instinct for reality, have clearly understood what has been said. Then the leaders came along and declared: “That’s utopian!”—In truth, it simply didn’t fit with what they’ve been accustomed to carrying around in their heads and spinning for decades, and so they tell their loyal followers that it’s utopian, that it’s not reality. And unfortunately, a blind faith has developed too strongly in the present day—a blind following, a terrible sense of authority in this area. And one must say: Whatever sense of authority has been aroused—let’s say, toward the bishops and archbishops of the Catholic Church—is small compared to the strong sense of authority that the modern working masses feel toward their leaders. That is why these leaders find it relatively easy to get their way.

[ 61 ] What is required, however, is to point out, above all else, what is honest in this area—not what serves the party line. If I succeed, particularly in these lectures, in showing that what the threefold social order strives for is truly intended for the common good of all humanity, without distinction of class, social status, and so on, then the essential goal that such lectures can only strive to achieve will have been attained.

Q&A following the second presentation

[ 62 ] A mechanical engineer points out a problem commonly found in today’s system: that several factories invest capital in similar machinery, which is only partially utilized everywhere. He asks whether this waste of capital could be eliminated in an associatively managed economy.

[ 63 ] Dr. Steiner: Perhaps I may say right away: What the gentleman just said certainly confirms the principle of association. If work is carried out in a completely individual manner, without the producers associating—that is, working together—then what you assumed will naturally occur: that a machine is only partially utilized. Full utilization, however, can only be achieved if the people involved actually form an association. So what you are saying is entirely in line with what is meant by the principle of association.

[ 64 ] The question is raised as to how things could have been handled differently in Eastern Europe under the circumstances at the time, and whether conditions might not have become more promising in contrast to tsarism.

[ 65 ] Dr. Steiner: Isn’t it true that today, even in circles that are really not all that narrow—and this must be said without approaching the opinions of these circles with either fear or hope—there is a view that what is happening in the East is something terrible. On the other hand, there are also circles that see something promising for the future in it. Usually, those who—with more or less justification—condemn the conditions in the East will then point to one or another terrible thing that is happening; they describe the circumstances, and some of what is described can indeed send a chill down one’s spine; that much is clear. Those who then seek to put such things into perspective—those who are more supportive of what is being done there—well, they then seek to gloss over or deny the terrible conditions and the like.

[ 66 ] Yes, but you see, that really doesn’t get us anywhere. It’s simply not possible to assess these matters based on individual symptoms. No matter how many journalists travel to the East and describe the things they observe there, , no one should be allowed to form a judgment based on such descriptions, for the simple reason that even today no one can assess what, for example, of the horrors of Eastern Europe—which are truly no small matter—should be attributed to the current rulers and what should be attributed to the aftermath of the terrible war. These things are getting mixed up: the aftermath of the war and what is developing out of the current circumstances. What one sees so directly and what is happening so immediately may be the subject of quite pleasant feature-page musings, but there is no basis for assessing the situation. One must be capable of delving into the intentions behind what is currently being done in the East to usher in a social future for humanity.

[ 67 ] Now the Lord asks whether I believe that something else could have been done, or whether the current circumstances are not, after all, more promising than the previous ones.

[ 68 ] Now I know very well how unpromising the previous tsarist conditions were. The fact that so many people liked them stems solely from the fact that these people never really established a basis for a true judgment and had no desire whatsoever to do so. Anyone who truly takes stock of all that tsarism has committed—namely, what it has committed in the very recent past—may, under certain circumstances, come to ask: Which is better, the past or the present? — But that, too, is not the issue; the only question that matters is: Has what has come to pass today, in principle and in essence, truly improved upon the old conditions? — One must be able to consider the intentions, and one must maintain an unbiased judgment in such matters.

[ 69 ] You can arrive at such an unbiased judgment, for example, by examining ideas such as those of Lenin. Read something like Lenin’s State and Revolution. There you will find—from the pre-war period, since the book was written earlier—Lenin’s ideas. One might say: In a certain sense, Lenin is even right when he rebukes all the half-, quarter-, or three-quarter-Marxists and ultimately considers himself the only true, truly consistent Marxist: In the future, people must be placed within the social order in such a way that everyone can live “according to their abilities and needs.” That would have to be a subsequent state of affairs that could emerge from the unjust, impossible conditions of the present. Now, there is a highly interesting discussion in Lenin’s work that boils down to his saying: But you cannot do that with today’s people—have them live in the social order “according to their abilities and needs”—but this can only be achieved when other people exist, an entirely different human race. This entirely different human race must first be created.

[ 70 ] Yes, you see, there you have it: sailing into the very depths of unreality and counting on something that is simply beyond hope. For the conditions brought about by Lenin certainly do not foster the emergence of this new kind of person who will then bring about just social conditions. The intentions behind what is happening rest on such shaky ground. And whether one is horrified by the details or finds them necessary, whether one praises or criticizes them—that is not the point. What matters is that one recognizes: calculations are being made based on unrealistic ideas. And that is why what is being brought about in this way is nothing other than the exploitation of the past.

[ 71 ] A few months ago in Basel, I experienced a particularly striking example of how the most important things sometimes present themselves through symptoms, when I spoke to an audience about the very subject I am discussing with you now. A gentleman stood up and said: “Yes, that’s all well and good, and it would even be wonderful if it were realized; but it cannot be realized until Lenin becomes the ruler of the world.”—I had to reply at the time: “If anything is to be socialized, then what is at stake is, above all, the socialization of the relations of power.” But this socialist, who was a follower of Lenin, wants to make Lenin the ruler of the world—a world emperor or a world pope of the economic sort. In that scenario, the relations of power are neither socialized nor democratized; rather, they are monarchized and tyrannized, and an autocracy is created. Anyone who claims such a thing does not even understand how to begin the process of socializing, above all, the relations of power.

[ 72 ] Thus, for those who look more closely, something very strange emerges regarding the structure of reality in today’s East: those who profess to support the intentions of today’s East believe that something will be achieved through them. No, what is being sought there is not, in its essence, opposed to tsarism; it is merely the very essence of tsarism expanded to encompass another class—a continuation of tsarism in a worse form than it was before. Indeed, those on the far-left wing of the radical parties no longer even bother to hide the fact that they are not progressives, but are far worse reactionaries than those who previously championed reactionary causes. By demanding the dictatorship of a single class, nothing else would emerge from that class but the tyranny of individuals—I won’t even say “the chosen ones”—; it would certainly not be the “chosen ones,” but rather those who pull the wool over the eyes of others. It would be the tyranny of those within the individual classes who pull the wool over the eyes of others. It would merely be a reversal of the human order. But conditions would certainly not improve; rather, they would essentially worsen.

[ 73 ] So the point here is to truly focus on the principle of thinking based on reality, not on preconceived, dreary theories. You see, sometimes those who think soundly based on reality already have a very sound judgment based on individual phenomena. I have explained to you today that the rule of money actually has a confusing effect on real social conditions. One simply has to see through this. It actually works in such a way that money creates power structures and tyrannical conditions, so that the power of money simply takes the place of old conquering powers and the like. In Europe, people still have little insight into such things. There is an American proverb that goes something like this: “To become rich through the mere economy of capital means that after three generations, you’ll be walking around in your shirt sleeves again!”—This very clearly highlights the imaginary nature of the capitalist economy, this dissolution, this imaginary aspect. One can become a billionaire, and after three generations, the descendants will naturally be walking around in their shirt sleeves, because money becomes the ruler over human beings.

[ 74 ] And now, for those who work according to Lenin’s intentions, it is by no means a matter of finding new principles—of truly exploring, based on the living conditions of humanity, what the social structure should be—but rather a matter of applying what they have learned about capitalism to a major capitalist whom they recruit from the sphere available to them. Whatever has been effective under capitalist rule will then continue to be effective through a system of espionage, a system of patronage, and all sorts of other means. In the past, people spoke of “throne and altar.” In the East, they speak of “office and machine.” But the superstition is just as great. Today, the issue is not about trying to bring about new conditions using the old concepts—merely through a different class of people—but rather about rallying around truly new principles, around a truly new understanding.

[ 75 ] After all, this is also evident from the reality of historical development. Take America, for example. Today, you have a Republican Party and a Democratic Party. If one were to study these parties today without knowing anything about their history, one would not understand why they are called by those names; for the Republican Party is not republican, and the Democratic Party is not democratic—rather, they are representatives of cliques, each of which represents its own particular clique interests. The party names have remained as remnants from earlier times. What these party names were originally meant to signify has long since lost its meaning. The reality is quite different. Today, it is by no means a matter of allowing oneself to be blinded by any party stereotypes, but rather of taking a practical look at reality. That is it.

[ 76 ] And anyone who takes a practical look at the reality of the East will then come to the following conclusion. Perhaps I may tell a little story in this regard. It is, after all, important that such matters—which are symptomatic of the times—not be entirely concealed. When I returned to Berlin from Switzerland in January 1918, I spoke with a man who was deeply involved in the events of the time, very much entangled in them, and who had long been familiar with my ideas: namely, that the concept of the threefold social order must now be embraced in Central and Eastern Europe. I had worked it out at that time and, given the circumstances of the day, presented it to the people who could have worked on it. The man knew that, too. It seemed very plausible to him that this could have been a way to find a spiritual path out of the misery. This had already been discussed for quite some time. As I said—do you remember what happened back in January 1918?—I came to Berlin. The man, who was a military officer—a high-ranking one—said, when I spoke to him about the unfortunate, the impossible idea of launching that terrible spring offensive of 1918 once again, instead of undertaking a spiritual initiative—he said: “What do you want? Didn’t Kühlmann have the threefold social order in his pocket?” He had it in his pocket; and yet he signed the Treaty of Brest-Litovsk!

[ 77 ] It may seem to you today like the ramblings of some fantasist; but I know that this “fantasy” is deeply rooted in reality. I know that the Russian people possess precisely the elements necessary to grasp, first and foremost—if communicated in the right way—the idea of the threefold social order. This should have taken the place of the impossible action at Brest-Litovsk as a spiritual act. There could have been a communion between Central Europe and Eastern Europe that would have been a spiritual act, a coming together. That would have been something entirely different.

[ 78 ] But what was it that brought Leninism to Russia? I would simply point out that Lenin was transported through Germany to Russia in a sealed train car. Leninism is an import. If one wishes to speak of “German militarism,” one must also acknowledge that Leninism was an import.

[ 79 ] One may well hold the view, however, that an intellectual initiative could have brought about something entirely different from the fact that such an initiative failed to materialize and that, in its place—and in place of what is unfolding among the Russian people—an abstract, general Marxist phrase about the realization of social conditions—which, if it could be realized at all, could just as easily be imposed on Brazil, Argentina, or anywhere else, just as it is being imposed on Russia, without any knowledge of the specific circumstances of the people—or, for all I care, even on the moon. This superstition—that anything can be imposed on anything else—is the great misfortune of the East; it is what gives rise there to the tyranny of an idea whose consequences will be terrible, because it exploits the past. No matter how much it may replace something bad: where it is productive, it is only in the remnants, the leftovers of the old. But if it is to be productive in and of itself, it will be reduced to nothingness.

[ 80 ] Failing to judge these matters impartially today is a social dereliction of duty. For the truth is that the situation today is extraordinarily serious. Therefore, one cannot judge such important matters based on any party line, but must judge them in light of the full scope of reality itself. One must ask: What should have been developed from the very foundations of Russian society itself? Certainly not Leninism, which is an abstraction—and one that goes so far as to say: The human race must first be created. That is why Lenin’s work is not for the Russians, but for people whom he intends to cultivate through impossible conditions that he first brings about. That is the real fact.

[ 81 ] Truly, what I say is not based on any sympathy or antipathy, but on the pursuit of insight. It is of no use not to consider these things today in all their full, comprehensive gravity.

[ 82 ] Another question is this:

[ 83 ] How does the scene in Goethe’s Faust in which Mephistopheles commits financial fraud relate to what has been said today?

[ 84 ] It is interesting that this question is being asked, because it allows us to see just how deeply Goetheanism, through Goethe himself, had already penetrated the realities of the situation. Just picture the entire scene in the second part of Faust where Mephistopheles, the devil, invents paper money and lays out the whole monetary fraud before the emperor. Essentially, you have a beautiful imagination here—a vivid depiction of what we must today articulate as social truths. The entire detachment of the monetary economy from solid reality is portrayed—in a magnificent poetic form—as a creation of the “spirit that always negates,” which creates nothing positive. This only shows how Goethe poetically shaped what he truly could not have shaped in reality during his time. For even the very open-minded Duke Karl August of Weimar would have been able to grasp very little of what Goethe actually meant by this creation of money as such through the “spirit that always negates.” But Goethe wanted to speak his mind nonetheless. And just take a look at how much of such ideas are contained in Wilhelm Meister’s Journeyman Years. Goethe wanted to speak his mind. In his time, he could not have expressed himself any other way than he did. But there is an immense amount of socially impulsive and socially inspiring insight precisely in this scene.

[ 85 ] Only gradually will we come to understand what it means, in Goethe’s case, that he was in a state of constant development throughout his entire life. This is something that is very little understood today; for today—people talk about evolution in the natural sciences, but what about the development of the human being throughout life? When one is twenty years old, one is considered mature enough to be elected to the state legislature, to write feature articles, and to pass judgment on all sorts of things! The idea that one should still continue to develop after that—well, people don’t really think about that much these days, do they?

[ 86 ] Goethe thought about this. He knew full well that in the later years of his development he had achieved things he had not in his earlier years. Indeed, there is a rather nice eight-line poem from Goethe’s posthumous works. In it, he speaks out against those people who said: “Oh yes, Goethe has grown old.” His early works—at that time, only the first part of Faust had been published—bear witness to true artistic power. But the old Goethe—he’s simply grown old! —That’s what people said in hindsight. You see, the Swabian Vischer, “V-Vischer,” called the second part of Faust a cobbled-together, glued-together piece of old-age drivel. I have nothing else against V-Vischer and hold him in high regard; but V-Vischer was certainly a philistine who could not understand what Goethe had achieved through his artistic development—he was full of philistine spirit. Goethe himself left behind an eight-line poem that applies to his contemporaries and to others as well. It reads:

[ 87 ] There they praise Faust,

[ 88 ] — he is referring to the first part of Faust; the second part had not yet been printed; it was a work of his mature period —

[ 89 ] And what else
In my writings rages
In their favor;
The old Mick and Mack
That pleases them greatly;
It means, says the rabble,
That we’re no longer what we used to be!

[ 90 ] You see, Goethe was already aware that he had achieved something he owed solely to the development of his later years. And so what he has woven into the second part of Faust is truly quite artistic. And its artistic power in terms of form only becomes apparent when it is presented through eurythmy, as we intend to do shortly with the scene from the second part of Faust dealing with worry.

[ 91 ] But people aren’t exactly paying attention to this development. They think they’re presenting a developed worldview by pointing to abstract feelings and saying that everything is already there in the young Goethe: “A name is but sound and smoke… Feeling is everything… Who may name it, and who may profess it?... the Sustainer of All, the All-Encompassing One...” and so on. That’s supposed to be greater than any developed worldview! Even philosophers quote this, completely forgetting that Goethe put these words into Faust’s mouth, when Faust is catechizing a sixteen-year-old schoolgirl. So the teachings of a sixteen-year-old schoolgirl are to be cited against a developed worldview!

[ 92 ] In many respects, we really do need to unlearn certain things today. And Goetheanism is certainly something from which we can unlearn. And just as with this scene involving the financial fraud, many other examples could be cited—particularly from the second part of Faust, from Wilhelm Meister’s Journeyman Years, and from various other works—that could illustrate what human development is and how one can draw inspiration from Goethe. Now, I have also been asked:

[ 93 ] How are wages to be paid, if not from the proceeds of the goods?

[ 94 ] Thinking about wages—since we’ve come so far that I can only touch on this briefly—is actually quite interesting. It is remarkable how, little by little, economic life alone has exerted such a powerful hypnotic influence that, at the very time when humanity began to succumb to the great delusion, the socialist program underwent a complete transformation precisely with regard to such matters. One of the most fascinating aspects of studying the modern labor movement is becoming familiar with the three programs: the Eisenach Program, the Gotha Program, and the Erfurt Program. If one examines the programs—up to the Erfurt Program, which was adopted in 1891—one finds throughout that there is still an awareness that work should be based on certain legal, state, and political views. Hence, the two main demands of the earlier programs are the abolition of wages and the establishment of equal political rights. The Erfurt Program, however, is purely an economic program—albeit a politicized one, as I have explained today. The main demands set forth there are: the transfer of the means of production to communal administration and communal ownership, and production by the community. The program is formulated from a purely economic perspective, but with political implications.

[ 95 ] People think so much in terms of today’s social order that, in the broadest circles, they are completely unaware of how wages as such are, in reality, a social falsehood. In reality, the relationship is such that the so-called wage laborer collaborates with the head of the enterprise, and what actually takes place is a dispute—one that is merely concealed by all sorts of deceptive circumstances, mostly power relations and so on—over the distribution of profits. To put it paradoxically, one could say: Wages do not actually exist; rather, there is a distribution of profits—this is already the case today, except that, as a rule, the economically weaker party finds themselves shortchanged in the division. That is the whole of it. The point here is not to project onto reality something that is based solely on a social fallacy. The moment the social structure becomes as I have described it in my book, The Key Points of the Social Question, it will become clear how a collaborative relationship exists between the so-called employee and employer, how these terms—employee and employer—cease to exist, and how a system of distribution operates. Then the concept of wages will have completely lost its meaning.

[ 96 ] But then we must no longer think of paying for labor as such. That, of course, is the other extreme. Labor is subject to a legal relationship—I will speak more about this tomorrow—and is defined in terms of its scope and nature within a democratic society and under the rule of law. Labor, like the forces of nature, thus becomes the foundation of the economic order, and what is produced will not serve as the basis for any form of remuneration.

[ 97 ] What will exist in the economic sphere will be nothing more than the valuation of performance. The point here is to understand the foundation—the “primordial cell,” so to speak—of economic life. This “primordial cell”—I have often described it this way: Essentially, the institutions I have outlined today must ensure that, through the dynamic activity of associations, every person receives, in exchange for what they produce, an equivalent value that enables them to satisfy their needs until they have produced an equivalent product again. Simply put: If I produce a pair of boots, then through the institutions I have described today, these boots must be worth enough—I must receive enough in exchange for them—to cover my needs until I have made another pair of boots.

[ 98 ] So this cannot be a matter of determining wages for work at all, but rather of determining relative prices. Of course, this must include everything related to disability benefits, health care, and so on—as well as child-rearing and so forth. This is a matter for further discussion. The point is to create a social structure that truly prioritizes performance, while work itself can be based solely on a legal relationship—for it cannot be regulated in any other way than by one person working for another. But this must be regulated on a legal basis: how one person works for another; it must not be subject to the market dynamics of economic conditions. You will see tomorrow that these things are indeed based on a real, tangible foundation. Then I am also asked:

[ 99 ] How should the expenses be recorded?

[ 100 ] Yes, it’s very easy to track expenses. You can’t hide them. Every time I transfer something into the social process, it can of course be recorded, just as a letter delivered to me by the post office is recorded—and the post office will not fail to collect the postage from me, and so on. These individual, specific mechanisms—anyone who just thinks about them will not find them all that difficult.

[ 101 ] Now, one more thing:

[ 102 ] What is the state of agricultural credit conditions?

[ 103 ] It would be too late to go into these matters today. I will be discussing agricultural conditions in other contexts during my upcoming lectures.