The Rudolf Steiner Archive

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The Renewal of the Social Organism
GA 24

Four Articles from the Newspaper The Social Future

2. The International Economy and the Threefold Social Order

The contradiction that has gradually developed between the self-imposed tasks of nation-states and the tendencies of economic life is one of the most significant facts of recent history. The nation-states have sought to draw the regulation of economic life within their boundaries into the sphere of their responsibilities. Persons, or groups of persons, who administer economic life seek support for their activities in the power of the state. One state confronts the other not only as a separate cultural and political realm, but also as a bearer of the economic interests at work within the region.

Marxist ideology would like not only to continue these national efforts, but to devlop them to the extreme. Using the present national framework, it would like to change private capitalism into a cooperative through socialization of the means of production. Industries within the national framework would be combined into economic organisms wherein methodical production would be organized according to existing needs and wherein the distribution of the products among the people living in the nation would be managed.

Recent developments in economics conflict with this endeavor, however. Economic life tends to evolve into a uniform world economy without considering the given national boundaries. Humanity as a whole is striving to become one single economic community. The nations' positions are such that those living within them are bound together through interests that conflict to a large degree with the economic relationships ready to unfold. Economic life is striving to grow beyond the national structures that evolved under historical conditions that definitely did not conform to the economic interests in all cases.

The catastrophe of World War I has revealed the disparity between national structures and the interests of world economy. A large part of the war's causes must be sought in the fact that the nations exploited the economy to augment their power, or in the fact that people involved in economic pursuits sought to promote their own economic interests by means of politics. Individual economies served to disrupt a world economy striving for unity. The various nations sought to turn the economic gains that should have remained within the economy to political advantage.

Within the national states, cultural and political interests become entangled with those of the economy. Within the national boundaries that have arisen historically, cultural, political and economic interests will not necessarily coincide. If humanity is to take serious steps toward realizing its justified demands for spiritual freedom, political democracy and a social economy, one must not think for a minute that the administrations of the cultural and political spheres would be able to regulate economic life as well. For all cultural and political relationships on an international level would have to adapt themselves slavishly to the conditions of an economy whose coercive nature would influence their development.

In theory, Marxist socialism easily avoids such criticisms. Its exponents argue that cultural attainments and political provisions are ideological constructs founded upon economic realities. Marxists believe, therefore, that they need not worry for now about the organization of the cultural and political domains. They want to create closed economic systems on a grand scale, and believe that within these systems cultural and political conditions will arise that will permit international relations to start up on their own once the economic systems begin doing business with each other. This socialist approach recognizes a truth, yet it is a one-sided truth. In the existing states—so the Marxist discovered — branches of production are administered, products are managed, and both administration and management are combined with a form of government that denies cultural freedom and is politically far from ideal. He concludes from this that henceforth the social organism need only produce more and administer more production lines. Because he believes that out of all this the cultural and legal-political spheres originate “by themselves,” the Marxist overlooks one thing: to the extent that one takes the government of people out of economic administration, precisely to that extent must another form of government be found.

The idea of a threefold articulation of the social organism makes provision for that which Marxist socialism ignores. It takes seriously the ideal of an administration of economic life that is based solely upon economic perspectives. Yet it also allows one to recognize that the spiritual needs and political demands of humanity have to be articulated into separate administrations. This permits cultural and legal relationships on an international level to become independent of economic life, which must pursue its own path.

Conflicts that stem from one sphere of life will thus be balanced through another sphere. Nations or alliances that are in economic conflict drag the cultural and legal interests into the conflict if they are unitary states whose governments combine the administrations of cultural, legal and economic concerns. However, in a social organism where each of these three spheres has a separate administration, economic interests will, for example, have a balancing effect on opposing cultural interests.

In the southeastern corner of Europe, where the catastrophe of the World War started, one could observe the effect of the merger imposed by the unitary nation-states on the three areas of life. In general, the cultural contrast between Germanicism and Slavism was at the root of the conflict. This was aggravated by a political element in the sphere of rights. In Turkey, the democratically-minded Young Turks replaced the old reactionary government. As a result of this political realignment, Bosnia and Herzegovnia were annexed by Austria, which did not want merely to stand by while the Turkish democracy drew the inhabitants of these lands to its parliamentary system (even though legally both areas belonged to Turkey — despite Austria's occupation going back to the Congress of Berlin). The third element in the conflict related to Austria's economic ambitions. Austria intended to build a railroad from Sarajevo to Mitrovitza in order to establish a profitable trade connection with the Aegean Sea. These three elements, then, were important factors leading to war. If railroads were constructed only on economic grounds, they could not contribute to the conflicts that exist between nations.

One can see in the negotiations over the Baghdad problem also how cultural and political interests prevailed against economic factors. The economic advantages of such a railroad could have been viewed entirely from the perspective of world economy if the negotiations would have involved only economic administrations whose decisions could not be influenced by other, national interests.

The objection can be made, of course, that in earlier times conflicts also arose between nations through such conflation of economic interests with cultural and political ones. However, this objection should not be raised against the idea of the threefold social order. For this idea is an expression of modern consciousness, for which such catastrophes are unbearable, whereas in earlier ages humanity reacted to them differently. The people of those times who, unlike today's men and women, did not aspire to cultural freedom, democracy, political and social economy, could not even consider such a social organism that alone takes these aspirations seriously. Just as they instinctively regarded their own social organism as adequate, so they also accepted the international conflicts arising from them as a natural necessity.

The expansion of national economies into a unified world economy cannot become a reality unless the economy is separated from cultural life on the one hand and from political and legal life on the other. There are some who are generally sympathetic to the idea of a threefold social order because they understand its justification in the light of present and future needs. Nevertheless, these same people are keeping their distance because they feel that one single state could not even begin to set the wheels in motion toward its realization. They believe the other nations, which have kept their unitary character, would take drastic economic measures to make life impossible for the threefold organism. Such an objection is justified against the development of a state in the Marxist sense, but it is not valid where it concerns the idea of a threefold social order. An economic super-cooperative forced into the framework of a present-day national government could not develop economically profitable relations with the private capitalist economies of foreign countries. When centrally administered, economic operations are hampered in their free unfolding, which is required in relationships with foreign countries. Free initiative and speed, so important for decision-making within such relationships, can only be attained when commerce between industry and foreign markets (as well as commerce between foreign industry and domestic markets) is direct and handled solely by those immediately involved. Emphasizing these points, the opponents of centrally controlled economic super-cooperatives are always in the right, even if advocates of the super-systems are willing to grant far-reaching independence to their manager. In practice, for instance, the procurement of raw materials (a process that should involve many managing authorities) would result in business procedures that might not fit with the way in which the demands of foreign countries must be satisfied. Similar difficulties would arise when ordering raw materials from abroad.

The threefold social organism would place economic life on its own foundation. Marxist socialism designates the state as the economic organization. The threefold social order frees economic life from the bonds of the state. Therefore, it can consider only those measures that evolve naturally from within the economy itself. However, the economy withers if it is built upon a centrally-oriented administration because regulations and tasks necessary for production must be based on free initiative. This free initiative does not preclude production within the social organism corresponding to consumer needs through socially justified prices, as I have indicated in my previous article. The preservation of free initiative in management is possible only if the leadership is not yolked to a central administration, but rather is permitted to combine into associations. The result of this is that a central administration does not control management operations; management retains full freedom, and the social orientation of the economic body is based upon agreements between independent management operations. A management responsible for export will be able to act completely out of its own free initiative in its commercial dealings with foreign countries; and domestically it will maintain relations with those associations that will help the most with the supply of raw materials and the like, to satisfy foreign demands. The same will be possible for import management.

It will be necessary, however, that in trade with foreign countries no products will be imported whose production costs or purchase price will impair the population's life style. Nor should relationships with foreign countries cause domestic production branches to be destroyed because the lower cost of foreign products makes continuation of domestic production unprofitable. Yet all this can be effectively prevented through a system of associations. Should a firm or a trading corporation conduct its business to the detriment of domestic production, they could be prevented from doing so by those respective associations from which they cannot exclude themselves without making their working situation impossible.

The necessity can arise, however, that the cost is too high for certain products that must be purchased from abroad for various reasons. Faced with such a necessity, one will need to consider what I wrote in my book, Toward Social Renewal: “An administration that occupies itself solely with economic processes will be able to bring about adjustments that show themselves within these economic processes to be necessary. Suppose, for instance, a business concern were not in a position to pay its investors the interest on the savings of their labor, then — if it is a business that is nevertheless recognized as meeting a need — it will be possible to arrange for other industrial concerns to make up the deficiency by the voluntary agreement of everyone concerned.” In the same way, the excessive cost of a foreign good can be offset through subsidies from concerns whose earnings surpass the need of its workers.

In addition to all such preventative steps that a threefold social organism can take to counteract the damage it sustains through commerce with states averse to the threefold idea, it may become necessary to resort to additional measures that are similar to the principle of tariff. It is easy to see that autonomy of economic life dictates different premises for such measures than those needed when treatment of import and export depends upon majority rule within groups of people united by common political and cultural interests. Economic organizations that combine their efforts for practical reasons have as their goal a price structuring that has a social effect; such endeavors could never arise out of individual groups' desire for profit. That is why the economic life of threefold social organisms strives toward the ideal of free trade. Within a unified world economy, free trade offers the best way of guaranteeing that production in separate parts of the world is neither too expensive nor too cheap. A social body with independent economic management that is not surrounded by threefold organisms will, of course, be forced to protect certain branches of production from economically unfeasible price reduction by raising tariffs. The management of these tariffs will then be entrusted to associations for the public's benefit.

If disadvantages can be overcome in the manner indicated, an isolated threefold social organism will present itself to foreign countries as a comprehensive economic structure whose internal organization will be of no consequence for commerce with non-articulated states, since this commerce is not based on the internal structure, but rather on the free initiative of those engaged. On the other hand, the individual nation's progress toward establishing a threefold order will be highly exemplary for other states. The effect will make itself felt not only morally, through the social character of the way of life the inhabitants of the threefold organism enjoy, but also through the awakening of purely economic interests. These will arise because the threefold social order will prove to be markedly less profitable for the non-articulated states when they retain their unitary character than it would were they to adopt the threefold order themselves. In this way, then, a threefold social order could be instrumental in clearing away obstacles to a unified world economy. Through its structure, based on free associations, the threefold organism can prevent damage to itself as a single economic body. Through organizing its labor force rationally to make certain products attractive to foreign countries, the threefold organism can assure that the disturbances it causes among unitary states will not lead to boycott of its economy. An oasis within the area it shares with the national economies, the threefold nation will prove that the changeover to threefolding indeed represents economic progress and, in general, a step forward for humanity.

Today it is stressed on many sides, and rightly so, that the salvation of the world economy has to come from a heightened will to work, a will that has been diminished by the war. Anyone who understands human nature knows that this commitment to work can only come when people are convinced that in the future their work will be done under social conditions that guarantee them a dignified human existence.

The belief that the old social system can lead to an even better way of life is crumbling on all sides. And, within certain areas, the disaster of the World War has shattered this belief completely. The idea of the threefold social order will exert a compelling influence in the direction indicated here. It will create an impetus toward work through the vistas it opens up into humanity's social future. To disseminate this idea in a way that can be received with understanding, and that will put to rest the misgivings of its opponents, seems to be an essential part of the task confronting contemporary social thinking.