Examining Rudolf Steiner's Concept of Associations
Ezrah Bakker is an economist and partner in the Orifiel Institute in the Netherlands. This article was first published in the Dutch magazine, Driegonaal, and has been rendered into English by Joke Murray and Christopher Houghton Budd.
Those familiar with Rudolf Steiner's contribution to economics,(1) regularly use the term "association", interpreting it mainly as bringing together in different ways the representatives of producers, consumers and commerce. Simple though it seems, it is difficult to make this concept clear because such an image is too static. A more vivid understanding of the topic is needed.
Economy and Association
"Only when in labor reciprocity for each other starts, one can speak of labor in an economic way"(2) This quote of Steiner expresses the essence of his economic vision. Everywhere in his economic writings one finds an emphasis on mutual dependence. And yet this is still nowhere to be found in the foundations of modern economic science.
One could draw the following conclusion from Steiner's statement: The essence of economy is expressed in the image of two people doing something for each other. This image can take different forms, depending on the point of view of those concerned. If both want something from each other, then one could speak of a normal exchange. If neither wants something of the other, then one touches the highest form of exchange. Two people helping each other is the archetype of economic life. Two people acting out of love for each other is the highest expression of the archetypical image. But beware, it is an act of freedom: force it upon people and you have Bolshevism. The development of this ideal can be helped, however, by actively basing economic life on mutual dependency. But for this it is necessary to move on from a basic exchange situation.
How do two people reach an agreement about exchange? By definition, the governing decision-making principle cannot be democracy (which implies a majority versus a minority), or freedom. Only consensus is consistent with mutual agreement. But what does this mean? If one asks oneself how mutual exchange between people can be encouraged it helps if each party has insight into his own motives, but this is never the decisive point. The primary thing is for each person to get to know the motives of the other.
ÓIn economic life one has no other starting point then one's own needsÉ [but] if one acts out of one's own needs, then, in all circumstances, one appears as an anti-social being. This can never be the basis for sound social judgment. From this follows, with self-evident certainty the necessity of " associations"É by getting to know the needs and experiences of others, a joint judgement emerges that can result in becoming economically active.Ó(3)
Firstly, the association is an organ through which one gets to know the needs and experiences of the other. Secondly, it is where one can weigh one's own needs against those of the other. This can lead to the discovery of mutual interest such that an exchange might be initiated. The emphasis is on overcoming one-sided interest. As the instrument for discovering mutual needs, the association is the primary form of economic organisation.
One-sided Interest and Mutual Interest
If one thinks that producers and consumers meet each other in something like the vegetable market, this is to a certain extent correct. However, one cannot base a full economic theory on this idea - as market economics seeks to do. One needs to reach to the economic archetype of two people each doing something for the other, for then each one is both producer and consumer. Relationships must be created in which "nobody will have a one-sided producer or consumer interest; but equal interests."(4) For Steiner, as soon as one-sidedness appears, one is no longer dealing with associations but with "companies". Important and useful as such groups of interests are, they cannot be the primary form of economic organisation. It is good to keep in mind that with the increase in division of labour there is a corresponding logical increase in the need for co-operation. But this is not a blessing on itself, since it can also serve to strengthen one-sided ways of working. Indeed, one-sided associations are a contradiction in terms. "Association is exactly the opposite of that which leads towards cartels and such things".(6)
Seen in this way, it will gradually become clear that associations provide a means of seeing mutual interests, which lie just beyond the horizon of one's own limited point of view. "Associations within one branch economic life do not existÉ because association goes from one branch to another."(7) The important thing is that associations can help promote insight into all manner of economic relationships. Concretely stated, associations should help us become clear what influence, for example, the construction of the Channel Tunnel between France and England has on the price of cattle in, say, Wales.
"The first and most basic abstract principle is that associations arise from the union of diverse branches of economic life."(8) Indeed, taken too abstractly this principle leads nowhere.
Association and Centralisation
A classic organisational dilemma concerns centralisation versus decentralisation. Neither direction is of main importance in economics, however. While the state always tends towards centralisation and cultural life towards decentralisation, the economy tends towards association - something that, rightly considered, lies in-between.
Associations exist to find insights into the most far-reaching economic relationships. This requires clarity, for which one needs to have an overview. Yet this raises the important question: Do associations entail the risk of ruling from above? "If an economic body reaches a certain size and consists of several branches of economic life, it will be impossible to rule it centrally."(9) "One cannot organise economic life from above; one can only associate it."(10)
The key point is that, by definition, any and every exchange must be based on the free insight of the participants. The paradox is that in an associative economy more people will be able to do so, because of the greater quantity, improved quality, and increased sharing of information. A more centralised channelling of information can be expected, on the one hand, but as the basis for a strongly decentralised way of working economically.
Knowledge and Efficiency
As said before, the purpose of associating is never to create abstract connections or to identify mutual needs in an abstract way - by, for example, sitting shoemakers, farmers and chemical employees together at the same table. "Such a situation does not develop because the associations which evolve in the economy will do so in a chain. From association to association there will be a need for pragmatic negotiation."(11) Associations are not impractical; they are there to increase economic understanding in an exponential way and to ensure the best allocation and matching of expertise with what needs to be done. "An association is not an organisation and not a coalition. It develops where all the individuals active in economic life gather and where the individual can be of help through the expertise and ability he has in his field."(12)
In his book, "The Threefold Social Order",(13) Steiner describes how economic life is concerned with the efficient organisation of the circulation of goods. In my view, such efficiency has two poles that can either weaken or strengthen each other. On the one hand, as efficient as possible use of the means of production and, on the other, the best possible adaptation to individual needs. Everyone meets this problem everyday, reflected in the evaluation between low costs (or budget) and personal desire. If we bear in mind the economic archetype, it is clear that both parties to any exchange have to deal with this field of tension.
Goods, not the association as such, are in this tension-field. The association is the expression of this tension. Because of this, associations span from the simplest exchange to worldwide connections. An association does not exist unto itself. Just like goods, it is subject to continuous transformation. In fact, an association disappears as soon as the field of tension implicit in any exchange is resolved with the completion of the transaction. The association then enters straight away into a new and, by definition, different one.
Characteristic of Steiner's economic views is that one should always ask whether and how long something can be treated as a good. With respect to associations one should ask whether the fields of tension - i.e. exchange circumstances - tend towards a certain balance. In other words: it is important to monitor when balance has been struck. When does a one-sided need start dominating, for example? For then one can no longer speak of exchange; the situation starts tending towards robbery. Steiner uses the (rather proza-c) term "forced donations" in this respect.
Size through Balance
Although associations scale from the smallest exchange to global economic connections, it is still possible to say something about size. The difficulty is that one has to see the principle of association from different angles. If one speaks about a global association for oil, for example, then one is speaking at the same time about millions of smaller associations.
Here a huge paradox arises. Just as in economic life nobody exists unto himself - we need others and others need us - so associative connections do not exist unto themselves either. Together they form the world economy and the whole of the world economy tends again towards the smallest transaction. It can be rather misleading, therefore, to speak of an association. The size of an association is always a relative matter in the sense that it is always connected to others - bigger, smaller, equals. The same paradox can be extended to the economic archetype. Herein lies the dynamic of economic life, to which we should become awake. Once we keep this in mind we can start speaking again in terms of an association and do this also, just like Steiner, with regard to a baker and his clients.(14)
When asked how large an association should be, Steiner answered with the following observation: with consumer groups, it is important for them firstly to buy as cheaply as possible and secondly to attract as many people into the group as possible. Producer groups have the exact opposite tendency. They like to sell as expensively as possible and, out of fear for competition, seek to limit the number of members in their group. As it occurs in each association, it is this tension between growing and limiting that eventually determines the association's size.(15)
Steiner also pointed to a further important law concerning size: "Étoo small a group and the members will wither economically, Étoo big a group and others connected with it through economic life will wither economically."(16) It often goes un-noticed, for example, that the smaller an association, the smaller the possibilities for satisfying the needs of all parties concerned. This is often easy to observe in small-scale initiatives, where for the sake of a high moral purpose, those involved avoid the relevant question of scale. Such ventures can become socially exhausted by continuously relying on personal sacrifices for the sake of the cause. For an association that is too big, consider the effect of a huge supermarket, often based on the edge of a town. People with limited transport possibilities cannot go there while their local supermarket loses clients; their "association" becomes smaller. Therefore you can also say: an association that is too big, causes other associations to become too small.
The first law shows the tendency towards balance ; the second emphasises the consequences of imbalance. Observations like these provide deep insight into the working of the modern economy. The dynamics are as true "close to home" as they are for bigger economic relationships. Take France, for example, a country that is strongly centralised. One can see the region of Paris as an association that is too big and one can ask how far other regions, seen as associations, are too small. And what about the global North-South relations, where the North prospers at the expense of the South?
How an associative economy really looks in practice, lies beyond the reach of this article. However, if one takes up this vivid economic way of thinking in practical situations, it will provide guidance of itself and lead to further laws yet to be elucidated. The most important thing here is to have the will to seek true economic knowledge. I emphasis "knowledge" because mere good will is not enough: is one really prepared to get insight into the consequences of one's own economic deeds?
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(1) Economics, New Economy Publications, Canterbury 1996.
(2) ES, 3.8.22.
(3) Rednerkurs, GA 338, 16.2.21.
(4) FS, 25.5.19. Institute for Present-day Questions, Freiburg, 1980.
(6) CS, 10.10.20.
(7) CS, 10.10.20.
(8) CS, 12.10.20.
(9) BR, GA 331, 24.6.19.
(10) CS, 25.5.20 .
(11) BR, 23.7.19.
(12) WO, GA 38.
(13) The Threefold Social Order, Rudolf Steiner Press, London, 1977.
(14) CS, 23.3.19 and 10.10.20.
(15) CS, 13.5.19.
(16) CS, 16.5.19.
Extra: (Intermezzo for below: are goods also associated with services? The problem with the German "Ware" is a matter of great difficulty. There are a lot of people who serieusly think that Steiner did not include "Diensleistungen" , services. Well, he did include them, though the answer is not easy. The point is that services should be treated as natural goods in many ways. So in essence "eine Ware" is something coming from nature through labor, which is the starting point for Steiner's economic science, but from then on services, springing from spirit on labor, are also included.)