The Rudolf Steiner Archive

III. Capitalism and Creative Social Ideas (Capital and Human Labor)

The only way to get a sound judgment as to what action is needed in the social field is through insight into the basic forces at work in the social organism. The basic idea behind the preceding chapters was an attempt to arrive at such an insight. The facts of social life show that the social disturbances are not merely on the surface but are fundamental. Vision that penetrates to the foundations is needed to cope with them.

It is in capital and capitalism that the worker looks for the cause of his grievances. But to arrive at any fruitful conclusion as to capital's part, for good or ill, in the social structure, one has first to be perfectly clear as to how capital is produced and consumed. One has to learn how this process takes place as a result of the individual abilities of people and the effects of the rights system and the forces of economic life.

One points to human labor as the factor that, together with capital and the nature-basis of the economy, creates the economic values. Through these three factors, the worker becomes conscious of his social situation. To reach any conclusion as to the way in which human labor must be placed into the social organism without injuring the worker's self-respect, requires keeping in mind the relation of human labor to the development of individual abilities, and to the rights-consciousness.

Today, quite rightly, people are asking what the first step must be (the most immediate action) if the claims presented by the social movement are to be met. Even a first step will not succeed unless we first know how it is to be related to the basic principles of a healthy social order. Once this is known, then, in whatever part of the social structure one is working, one will discover the particular thing that requires doing. What keeps people from this insight is the fact that they take their opinions from the social institutions themselves. Their thoughts follow the lead of the facts instead of mastering them. Today, however, we need to see that no adequate judgment can be formed without going back to those primal creative thoughts that underlie all social institutions.

The body social requires a constant, fresh supply of the forces residing in these primal thoughts. If the suitable channels for these thoughts are not there, then social institutions take on forms that impede life instead of furthering it. Yet the primal thoughts live on in men's instinctive impulses, even if their conscious thoughts are mistaken and build up stumbling blocks. It is these primal thoughts that come to expression, openly or in a hidden way, in the revolutionary convulsions of the social order.

Such convulsions will only cease when the body social takes a form in which two things are possible: First, an inclination to notice when an institution is beginning to deviate from its original intention, and second, the counteracting of every such deviation before it becomes strong enough to be a danger.

In our times the actual conditions have come to deviate widely from the demand of the primal thoughts. We need to turn vigorously back to these primal thoughts and not dismiss them as “impractical” generalities. From them we need to learn the direction in which the actual realities must now be consciously guided, for the time has gone by in which the old, instinctive guidance sufficed for mankind.

One of the basic questions raised by the practical criticism of the times is how to put a stop to the oppression the worker suffers under private capitalism. The owner, or manager, of capital is in a position to put other men's bodily labor into the service of what he undertakes to produce.

It is necessary to distinguish three elements in the social relation that arises in the cooperation of capital and human labor-power. First, there is the enterprising activity, which must rest on the individual ability of some person or group of persons. Second, the relation of the entrepreneur to the worker, which must be a relation in right. Third is the production of an object, which acquires a commodity value in the circuit of economic life.

For the enterprising activity to come to expression in a healthy way, there must be forces at work in social life that let individual abilities function in the best possible way. This can only happen if the body social includes a sphere that gives an able person the freedom to use his capacities, and leaves the judgment of their value to the free and voluntary understanding of others.

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It is clear that what a man can do socially by means of capital comes into the sphere of society where the laws and the administration are taken care of by the spiritual life. If the political state interferes to influence these personal activities, the decisions will unavoidably show a lack of understanding of individual abilities. This is because the political state is necessarily based on what is similar and equal in all men's claims on life. It is its business to translate this equality into practice. Within its own domain it must make sure that every man has a fair chance to make his personal opinion count. Its proper work has nothing to do with understanding individual abilities, so it ought never to have any influence on the exercise of these.

Just as little, where capital is needed for something, should the prospect of economic advantage determine the exercise of individual abilities. Many, weighing the pros and cons of capitalism, put great stress on this prospect. In their opinion it is only this incentive that can induce individual ability to exert itself. As “practical men,” they refer to the “imperfections of human nature.” There is no doubt that in the social order under which the present state of things developed, the prospect of economic advantage has come to play a very important part. The fact is that to no small extent, this is the cause of the state of things today. Thus there is need for the development of some other, different incentive. This can only be found in the social sense that will develop out of a healthy spiritual life. Out of the strength of the free spiritual life, a man's education and schooling will send him into activity equipped with impulses that will lead him, thanks to this social sense, to making real the things toward which his individual capacities drive him.

Visionary illusions have certainly caused tremendous harm in social endeavor, as in other fields, but such a point of view as that expressed above need not come into the “visionary” category. What is stated here does not rest on any notion that “the spirit” will work wonders if only the people who think they are filled with it, continually speak about it. It comes, on the contrary, out of observation of how people actually do work when they work together freely in the spiritual field. This work in common takes on a social character of its own accord, provided only that it can develop in real freedom.

It is only the lack of freedom in spiritual life that has kept its social character from coming to expression. The spiritual forces of social life have come to expression among the leading classes in a way that has, anti-socially, restricted their use and value to limited circles. What was produced in these circles could only be brought to the workers in an artificial way. They could get from it no support for their souls, because they did not really have any part in it. Schemes for popular education, for “uplifting the masses” to appreciation of art, etc., are no way of spreading spiritual property among “the people,” for “the people” are not within its life. All that can be given them is a view of these treasures from a point outside.

This also applies to those offshoots of spiritual activity that find their way into economic life on the basis of capital. In a healthy social order the worker should not merely stand at his machine while the capitalist alone knows what is going to become of the products in the circuit of economic life. The worker should be able to form a conception of the part he is playing in society through his work on the production line. Conferences, regarded as much a part of the operation as the work itself, should be held regularly by the management. Their aim will be the developing of a common set of ideas for the employed and the employer. Such activity will bring the workers to a sense of the fact that control of capital, properly carried out, benefits the whole community, including the worker. Also, an approach aimed at promoting a full understanding, will make the employer careful to keep his business methods above suspicion.

Only those unable to appreciate the effects of the community of feeling that arises from sharing a common task will consider the foregoing to be meaningless. Others will see clearly the benefits to economic productivity that will come from having the direction of economic affairs rooted in the free spiritual life. If this preliminary condition is fulfilled the present interest in capital and its increase merely for the sake of profits, would be replaced by a practical interest in producing something and getting work done.

The socialistic-minded thinkers of today are struggling to get the means of production under the control of society. What is legitimate in their aims can only be achieved if this control is exercised by the free spiritual sphere of society. In that way economic compulsion, which goes out from the capitalist and which is felt as something unworthy of human beings, will be made impossible. Such compulsion arises when the capitalist acts out of the forces of economic life. At the same time the crippling of men's individual abilities, which results when these abilities are governed by the political state, will not arise.

Earnings on everything done through capital and individual ability must result, like the results of all other spiritual work, from the free initiative of the doer and the free appreciation of those who wish the work done. A man himself must estimate what these earnings must be, taking into consideration preliminary training, incidental expenses, etc. Whether he finds his claims gratified or not depends on the appreciation his services meet with.

Social arrangements on such lines will lay the basis for a really free contractual relationship between the employer (work-director) and the work-doer. It will rest, not on barter of commodities, or money, for labor, but on an agreement as to the share due to each of the two joint producers of the commodity.

The sort of service rendered to the body social on the basis of capital depends, from its very nature, on the way in which individual human capacities reach into the social organism. Nothing but the free spiritual life can give men's abilities the impulse they need for their development. Even in a society where this development is tied up with the political state administration or with the forces of economic life, real productivity in things requiring the expenditure of capital depends on the extent to which free individual capacities can force their way through the hindrances imposed on them. Under such conditions, however, the development is not a healthy one. This free development of individual ability, using capital as a basis, is not what has brought about the commodity status of human labor power, but, rather is it the shackling of labor-power by the political state or by the circuit of economic processes.

Recognition of this fact is a necessary preliminary to everything that has to be done by way of social organization. For the superstition has grown up that the measures needed (for the health of society) must come from either the state or the economy. If we go any farther along the road on which this superstition has led us, we shall be setting up all sorts of institutions that will make oppressive conditions increasingly worse instead of leading man towards the goal he is striving for.

People learned to think about capitalism at a time when it had induced a disease in the body social. They experience the disease, and see that something must be done about it, but they must see more, namely, that the disease originates in the absorption into the economic circuit of the forces at work in capital. If one wants to work in the direction called for by the forces of human evolution, one must not be deluded into considering as “impractical idealism” the idea that the management of capital should be in the sphere of the free spiritual life.

At present people are little inclined to connect the idea that is to lead capitalism in a healthy direction, with the free spiritual life. Rather they connect it with something in the circuit of the economic life. They see how production has led to large scale industry and this, in turn, to the present form of capitalism. Now they propose to replace this by a system of syndicates that will work to meet the wants of the producers themselves. Since, of course, industry must retain all the modern means of production, the various industrial concerns are to be united into one big syndicate. Here, they think, everyone will be producing to meet the orders of the community, and the community cannot be an exploiter because it would simply be exploiting itself. Since they must link onto something that already exists, they turn their attention to the modern state, with the idea of converting it into a comprehensive syndicate.

What they leave out of account is that the bigger the syndicate, the less likelihood of its being able to do what they expect of it. Unless individual ability finds its place in the organism of the syndicate, in the manner and the form already described, the community control of labor cannot lead to healing of the social organism.

People are unwilling to look without bias at the idea of the spiritual life taking an active part in the social organism because they are used to thinking of it as at the opposite pole from everything material and practical. Many will find something grotesque in the view presented here, namely, that a part of the spiritual life should manifest itself in the activity of capital in the economic life. It is conceivable that on this point members of what have been up to now the ruling classes, may find themselves in agreement with socialistic thinkers. To see what this supposed absurdity means for the health of the body social requires that we examine certain present-day currents of thought. These, springing from impulses in the soul, are quite honest in their fashion, but they check the development of any really social way of thinking wherever they find entrance.

These thought currents tend, more or less unconsciously, away from everything that gives energy and driving power to inner experience. They aim at a world conception, an inner life, that strives for scientific knowledge as an island in the general sea of existence. One finds people who think it “distinguished” to sit in cloud castles meditating abstractly on all sorts of ethical and religious problems, such things as virtue and how best to acquire it, how to find an “inner significance” for one's life, etc. One sees how impossible it is to build a bridge between what these people call good, and everything that is going on in the outer world. There, in men's everyday surroundings, we see what is happening with the manipulation of capital, the payment of labor, the consumption, production and circulation of commodities, the system of credit, of banking, and the stock exchange.

One can see two main streams running side by side even in people's very habits of thought. One of them remains aloft, as it were, in divine-spiritual heights, and has no desire to build a bridge from spiritual impulses to life's ordinary activities. The other stream runs on, void of thought, in the everyday world.

But life is a single whole. It cannot thrive unless the forces that dwell in all ethical and religious life bring driving power to the commonplace, everyday things of life—that life that some people may think a bit beneath them. For if people neglect building a bridge between the two regions of life, then not only their religious and moral life, but also their social thinking degenerates into mere wordy sentiment, far removed from everyday reality. This reality then has its revenge. Out of a sort of “spiritual” impulse man goes on striving after every imaginable ideal, and everything he calls “good,” but to those instincts that underlie the ordinary daily needs of life (the ones that need an economic system for their satisfaction), he devotes himself minus his “spirit.” He knows no pathway between the two realms, and so everyday life gets a form that is not even supposed to have any connection with those ethical impulses. Then the ordinary things of every day are avenged, for the ethical, religious life turns to a living lie in men's hearts because (without this being noticed) it is being separated from all direct contact with life.

How many people there are today who, out of a certain ethical or religious quality of mind, have the will to live on a right footing with their fellow men. They really want to deal with others only in the best way imaginable, but they cannot lay hold of any social conception that expresses itself in practical habits of life.

It is people like these who, at this epoch-making moment when social questions have become so urgent, are actually blocking the road to a true practice of life. They see themselves as practical while they are, in fact, visionary obstructionists. One can hear them making speeches like this:

“What is really needed is for people to rise above all this materialism, this external material life that drove us into the disaster of the great war and into all this misery. People must turn to a spiritual conception of life.”

To illustrate man's path to spirituality, they harp on great men of the past who were venerated for their spiritual way of thinking. When one tries to bring the talk around to the thing the spirit has to do for practical life, the creation of daily bread, one is reminded that the first thing, after all, is to bring people again to acknowledge the spirit.

At this moment, however, the urgent thing is to employ the powers of the spiritual life to discover the right principles of social health. For this it is not enough that men make a hobby of the spirit. Everyday existence needs to be brought into line with the spirit. It was this taste for turning spiritual life into bypaths that led the classes that have been ruling up to now, to favor the social conditions that ended in the present state of affairs.

In contemporary society, the management of capital for the production of commodities, and the ownership of the means of production (thus also of capital) are tightly bound together. Yet the effects in the social system of these two relationships between man and capital—management and ownership—are quite different. The control, the management, of capital by individual ability is, when suitably applied, a means—to everybody's interest—of enriching the body social with goods. Whatever a person's position in life, it is to his interest that there should be no waste of those individual abilities that flow from the springs of human nature. Through them are created goods that are of use to the life of man. Yet these abilities are never developed unless the people endowed with them have free initiative in their exercise. Any check to the free flow from these sources means a certain measure of loss to human welfare, but capital is the means for making these abilities available for wide spheres of social life.

To administer the total amount of capital in such a way that specially gifted individuals or qualified groups can get the use of it to apply it as their particular initiative prompts them, must be to the true interests of everybody in a community. Everybody, brain-worker or laborer, must say (if he steers clear of prejudice and consults his own interests):

“I not only wish an adequate number of persons, or groups of people, to have absolutely independent use of capital, but I should also like them to have access to it on their own initiative. For they themselves are the best judges of how their particular abilities can make capital a means of producing what is useful to the body social.”

It does not fall within the scope of this work to describe how, as individual human abilities came to play a part in the social order, private property grew up out of other forms of ownership. Up to the present day this form of ownership has, under the influence of the division of labor, gone on developing within the body social. It is with present conditions, and the necessary next stage of their evolution, that we are concerned here.

In whatever way private property arose—by the exercise of power, conquest, etc.—it is an outcome of the social creativeness that is associated with individual human ability. Yet Socialists today, with their thoughts bent on social reconstruction, hold the theory that the only way to get rid of what is oppressive in private ownership is to turn to communal ownership. They put the question this way: How can private possession of the means of production be prevented, so that its oppressive effect on the un-propertied masses may cease? In putting the question this way, they overlook the fact that the social organism is something that is constantly developing, growing. About a growing organism one cannot ask: What is the best arrangement for preserving it in the state one regards as suitable for it? One can think in that way about something that goes on essentially unchanged from the point at which it was when it started. That will not do for the body social. Its life is a continual changing of each thing that arises in it. To fix on some form as the best, and expect it to remain in that form, is to undermine the very conditions of its life.

One of the requisites for the life of the social organism is that, as already stated, those who can serve the community through their individual abilities should not lose the possibility of doing so on their own initiative. This includes independent use of the means of production. I shall not use the common argument that the prospect of the gains associated with the means of production is needed as a stimulus. The concept presented here, of a progressive evolution in social conditions, must lead to the expectation that this kind of stimulus to social activity can drop away. This result can come through the setting free of the spiritual life from the political and the economic social entities.

The liberated spiritual life will of itself inevitably evolve a social sense, and out of this will arise stimuli of quite a different sort from those that lie in the hope of economic advantage. The question here is not so much concerned with the kind of impulse that makes men like private ownership of the means of production. We must ask whether the independent use of them, or use directed by the community, meets the requirements for the life of the social organism. We cannot here draw conclusions from conditions supposed to be found in primitive communities, but only from what corresponds to man's present stage of development.

At this present stage, the fruitful exercise of individual ability through the use of capital cannot make itself felt in the economic life unless the access to it is free and independent. Where there is to be fruitful production, this access must be possible, not because it will bring advantage to an individual or group but because, directed by a social sense, such use of the means of production is the best way of serving the community.

Man is connected with what he (alone or with others) is producing, as he is connected with the skill of his own arms and legs. Interfering with this free access to the means of production is like crippling the free exercise of bodily skill.

Private ownership is simply the means of providing this free and independent use of the means of production. As far as the body social is concerned, the only significance of ownership is that the owner has the right to use his property on his own free initiative. One sees, joined together in the life of society, two things of quite different significance for the social organism. There is the free access to the capital basis of social production, and on the other hand there is the rights relationship that arises between the user and other people. This comes up through the fact that his right of use keeps these other people from any free activity on the basis of this same capital.

It is not the original free use that leads to social harm but the continuance of the right of use after the conditions that tied it to his individual abilities have come to an end. One who sees the social organism as something growing, developing, cannot fail to understand what is meant. For what is living, there exists no fruitful arrangement by which a finished process does not later, in its turn, become detrimental. The question is entirely one of intervening at the right moment, when what had been opportune and helpful is beginning to become detrimental.

There must be the possibility of the free access of individual capacities to the capital-basis. It must also be possible to change the right of ownership connected with it in the moment that this right starts to change into a means for the unjust acquisition of power. There is an institution, introduced in our times, that meets this social requirement, but only partially since it applies simply to “spiritual property.” I refer to copyrights. Such property, after the author is dead, passes after a certain length of time into the ownership of the community, for free use. Here we have an underlying conception that accords with the actual nature of life in a human society. Closely as the production of a purely spiritual (cultural) possession is bound up with the gifts and capacities of the individual, it is at the same time a result of the common social life and must pass, at the right moment, back into this. It is just the same with other property. By the aid of his property the individual produces for the service of the community, but this is only possible in cooperation with the community. Accordingly, the right to the use of a piece of property cannot be exercised separately from the interests of the community. The problem is not how to abolish ownership of the capital-basis, but how this ownership can be so administered that it serves the community in the best way possible.

The way to do this can be found in the Threefold Order of Society. The people united in the social organism act as a totality through the rights state. The exercise of individual abilities comes under the spiritual organization.

Everything in the body social, viewed from a sense of actualities (and not from subjective opinions and theories), indicates the necessity for the three-folding of this organism. This is especially clear as regards the relation of individual abilities to the capital-basis and its ownership. The rights state will not interfere with the formation and control of private property in capital so long as the connection of this with personal ability remains such that the private control represents a service to the whole social organism. Moreover, it will remain a rights state in its dealings with private property. It will never, itself, take over the ownership of private property. It will only bring it about that the right of use is transferred at the proper moment to a person, or group of persons, who are, again, capable of establishing a relation to this ownership that is based on individual abilities. This will benefit the body social in two quite different ways. The democratic foundation of the rights state being concerned with what touches all men equally, there will be a watch kept to see that property rights do not in the course of time become property wrongs. The other benefit is that the individual human abilities into whose control the property is given (since the state itself does not administer property), are thus furnished the means of fructifying the whole social organism.

Under an organization of this sort, property rights, or their exercise, can be left attached to a personality for as long as seems opportune. One can conceive the representatives of the rights state as laying down quite different laws at different times concerning the transfer of property from one person or group to another. Today, when all private property has come to be regarded with great distrust, the proposal is to convert it wholesale into community property. If people go far on this road they will see that they are strangling the life of the social organism and, taught by experience, they will then pursue a different path. It would surely be better now, at this time, to take measures that would secure social health on the lines here indicated.

So long as an individual (alone or with a group) continues to carry on that productive activity that first procured him a capital-basis to work on, he shall retain the right to use accumulations arising as gains on the primary capital, if these are used for the productive extension of the business. As soon as this particular personality ceases to control the work of production, this accumulation of capital shall pass on to another person or group, to carry on the same kind of business or some other branch of productive industry useful to the whole community. Capital accumulating from a productive industry, that is not used for its extension, must from the beginning go the same way. Nothing shall count as the personal property of the individual directing the business except what he gets in accordance with the claims for compensation that he made when he first took over the business. These were claims he felt able to make on the ground of his personal abilities, and that appear justified by the fact that he was able to impress people sufficiently with his abilities for them to trust him with capital. If the capital has been increased through his personal exertions, then a portion of this increment will also pass into his private ownership—this addition to his original earnings representing a percentage of the increase of the capital. Where the original person controlling an industry is unable or unwilling to continue in charge, the capital used to start it will either pass over to the new person in charge (along with all its incumbent obligations), or will revert to the original owners, according to their decision.

In such an arrangement one is dealing with transfers of a right. The legal regulation of the terms of such transfers is a matter for the rights state. It will also be up to the rights state to see that these transfers are carried out and to administer them. It is conceivable that details of such regulations for transfers of a right will vary greatly in accordance with how the common sense of right (the rights-consciousness) varies in its view of what is right. No mode of conception, which, like this one, aims at being true to life, will ever attempt to do more than indicate the general direction that such regulation should take. Keeping to this direction and using one's understanding, one will always discover the appropriate thing to do in any concrete instance. One must always judge the right course according to the circumstances and from the spirit of the thing. For instance, it is obvious that the rights state must never use its control of rights-transfers to get any capital into its own hands. Its only business will be to see that the transfer is made to a person or group whose individual abilities seem to warrant it.

This way of thinking also presupposes, as a general rule, that anyone who has to undertake such a transfer of capital from his own hands will be free to select his successor in the use of it. He will be free to select a person or group, or else transfer the right of use to a corporate body of the spiritual organization. For anyone who has given practical services to society through his management of capital is likely, from native ability and social sense, to be able to judge what should be done with the capital afterwards. It will be more to the advantage of the community to abide by what he decides than to leave the decisions to people who have no direct connection with the matter.

Some settlement of this kind will be required in the case of capital accumulations over a certain amount, acquired through use of the means of production—and land also comes under this category. The exception is where the gains become private property by terms of the original agreement for the exercise of the individual's capacities.

In the latter case, what is so earned, as well as all savings coming from the results of a person's own work, will remain in the earner's private possession until his death, or in the possession of his descendants until some later date. Until this time, these savings will draw interest from any person who gets them to create means of production. The amount of interest will be the outcome of the general rights-consciousness and will be fixed by the rights state.

In a social order based on the principles described here it will be possible to draw a complete distinction between yields resulting from the employment of the means of production and sums accumulated through the earnings of personal labor, spiritual or physical. It accords with the common sense of right, as well as being to the general social interest, that these two things should be kept distinct. What a person saves and places at the disposal of a productive industry is a service in the interests of all, since this makes it possible for personal ability to direct production. Where, after the rightful interest has been deducted, there is an increase that arises out of the means of production, that increase is due to the collective working of the whole social organism. This must accordingly flow back into it again in the way described above. All that the rights state will have to do is to pass a resolution that these capital accumulations are to be transferred in the way prescribed.

The state will not decide which material or spiritual branch of production is to have the disposal of capital so transferred, or of capital savings. For it to do so would lead to the tyranny of the state over spiritual and material production. But anyone who does not want to select his successor to exercise the right of disposal over capital he has created, may appoint a corporate body of the spiritual sphere to do this.

Property acquired through saving, together with the interest on it, will also pass at the earner's death, or a little while later, to some person or group actively engaged in spiritual or material production, but it must only go to a producer; if it went to an unproductive person, it would simply become private income. The choice will be made by the earner in his last will. Here again, no person or group can be chosen direct; it will be a question of transferring the right of disposal to a corporation of the spiritual organism. Only when a person himself makes no disposition of his savings will the rights state act on his behalf and require the spiritual organization to dispose of them.

In a society ordered on these lines, due regard is paid both to the free initiative of the individual and to the social interests of the general community. In fact these are fully met through the setting free of private initiative to serve them. Whoever has to give his labor over to the direction of another person can know that under such an order of things their joint work will bear fruit to the best advantage of the community, and therefore to that of the worker himself.

The social order here conceived will establish a proportionate relation, satisfactory to healthy human feeling, between the prices of manufactured goods and the two joint factors of their production. These two factors are, as has been shown, human labor and the right of use over capital (embodied in the means of production), which are subject to the common sense of right.

No doubt all sorts of imperfections may be found in what is presented here. Imperfections, however, do not matter. The important thing, if we want to be true to life, is not to lay down a perfect and complete program for all time but to point out the direction for practical work. The special instances discussed here are simply intended as illustrations, to map out the direction more clearly. Any particular illustration may be improved upon, and this will be all to the good, provided the right direction is not lost.

The claims of general humanity and justified personal and family interests can be brought into harmony through social institutions of this kind. For instance, it may be pointed out that there will be a great temptation for people to transfer their property during their lifetime to their descendants or some one of them. It is quite easy to give such a person the appearance of a producer while in fact he may be quite incompetent as compared with others who would be much better in the place he holds. The temptation to do this can be reduced to a minimum: the rights state has only to require that property transferred from one member of a family to another must under all circumstances be made over to a corporation of the spiritual system after a certain period of time following the first owner's death. Or an evasion of the rule may be prevented in some other way by rights-law. The rights state will merely see to it that the property is made over in this fashion. The spiritual organization must make provision for the choice of the person to inherit it.

Through the fulfilling of these principles there will arise a general sense that the next generation must be trained and educated to fit them for the body social, and that one must not do social damage by passing capital on to non-productive persons. No one in whom a real social sense is awakened cares to have his own connection with the capital-basis of his work carried on by any individual or group whose personal abilities do not warrant it.

Nobody who has a sense for what is practicable will regard these proposals as Utopian. For the kind of institutions here proposed are such as can grow directly out of existing circumstances anywhere in life. The only thing is that people will have to make up their minds to give up administering the spiritual life and industrial economy within the rights state. This includes not raising opposition when what should happen really happens—when, for instance, private schools and colleges are started, and the economy is put on its own footing. There is no need to abolish state schools and the state economic undertakings at once. Beginning perhaps in a small way, it will be found increasingly possible to do away with the whole structure of state education and state economy.

The first necessity is for people who are convinced of the correctness of these social ideas, or similar ones, to make it their business to spread them. If such ideas find understanding, they will arouse in people confidence in the possibility of a healthy transformation of present conditions into conditions that do not show the evils we see about us. Only out of this sort of confidence can a really healthy evolution come. To achieve such confidence one must be able to see clearly how new institutions can be connected with what exists at present. The essential feature of the ideas being developed here is that they do not propose to bring about a better future by destroying the present social order further than has already been done. Their realization builds on what already exists, and in the process brings about the falling away of what is unhealthy. A solution that does not establish confidence in this respect will fail to attain something that is absolutely necessary: a further evolution in which the values of the goods already transformed through human labor, and the human faculties men have developed, will not be cast away but be preserved.

Even a radical person can acquire confidence in a form of social reconstruction that includes the preservation of already accumulated values if he is introduced to ideas capable of initiating really sane and healthy developments. Even he will have to recognize that whatever social class gets into power, it will not be able to get rid of existing evils unless its impulses are supported by ideas that can put life and health into the body social. To despair because one cannot believe there will be enough people with understanding for these ideas—provided the ideas are spread with the necessary energy—would be to despair of human nature's capacity for taking up healthy and purposeful impulses. All one should ask is, what must be done to give full force to the teaching and spread of ideas that can awaken men's confidence?

The first obstacle will be in current habits of thought. It will be objected that any dismemberment of social life is inconceivable, that the three branches cannot be torn apart because, in actual practice, they are everywhere intertwined. Or else there will be the opinion that it is quite possible to give each of the branches its necessary independent character under the One-fold State, and thus these ideas are mere empty cobweb-spinning. The first objection comes from unreal thinking. Some people believe that unity of social life is only possible when it is brought about by law. The facts of life itself require just the opposite: that unity must be the result, the final outcome, of all the streams of activity flowing together from various directions. Recent developments have run counter to this principle and so men resisted the “order” brought about from outside. It is this that has led to present social conditions. The second prejudice (the idea that these things could be accomplished under the One-fold State) arises from the inability to distinguish the radical differences in the operation of the three organs of the body social. People do not see that man stands in a separate and peculiar relation to each of the three. They do not see that each of these relationships needs the chance to evolve its own form, apart from the other two, so that it may work together with them.

People think that if one sphere of life follows its own laws, then everything needed for life must come out of this one sphere. If, for example, economic life were regulated in such a way as to meet men's wants, then a proper rights life and spiritual life would spring out of this economic soil as well. Only unrealistic thinking could believe this to be possible. There is nothing whatever in economic life that provides any motive for guiding what runs through the relations of man to man and comes from the sense of right. If people insist on regulating this relationship by economic motives, the result will be that the human being, his labor and his control of the means of labor, will all be harnessed to the economic life. The economy will run like clockwork but man will be a wheel in this mechanism. Economic life has a tendency always to go in one direction, a direction that we must balance from another side. It is not a question of rights regulations following the course set by economic life, but rather, economic life should be constantly subject to the rules of right that concern man simply as man. In this way a human existence within the economy then becomes possible. Economic life itself can develop in a way beneficial to man only when individual ability grows on its own separate soil (detached from the economic system) and continuously conveys to it the forces that economics and industry themselves are powerless to produce.

It is a curious thing that in purely external matters people can readily see the advantage of a division of labor. They do not expect a tailor to keep a cow in order to get milk. When it comes to a recognition of the individual functions of the different spheres of human life, however, they think no good can come of anything but a one-fold system.

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It is clear that social ideas that are related to life as it really is, will stimulate objections from every side. Real life breeds contradictions, and anyone accepting this fact will work for social arrangements whose own contradictions will be balanced out by means of other arrangements. He dare not believe that an institution that is “ideally perfect” according to his thinking will involve no contradictions when it is realized in practice.

It is an entirely justified present-day demand that institutions in which production is carried on for the benefit of the individual be replaced by institutions in which production is carried on for the general consumption. Anyone who fully recognizes this demand will not be able to come to the conclusion of modern Socialism, that therefore the means of production must go over from private to common ownership. Indeed, he will be forced to a quite different conclusion, namely, that proper methods must be used to convey to the community what is privately produced by individual energy and capacity.

The tendency of the more recent economic impulses has been to obtain income by mass production. The aim of the future must be to find out, by means of economic Associations, the best production methods and distribution channels for the actual needs of consumption. The rights institutions will see that a productive industry does not remain tied up with any individual or group longer than personal ability warrants. Instead of common ownership, there will be a circulation of the means of production through the body social. This will constantly bring them into the hands of those whose individual ability can employ them best in the service of the community.

That same connection between personality and the means of production, which previously existed through private ownership, will thus be established for periods of time. For the head of a business and his assistants will have the means of production to thank for being able to earn, by their personal abilities, the income they asked. They will not fail to improve production as far as is possible, since every improvement brings them, not indeed the whole profit, but nevertheless a portion of the added returns. For profits, as shown above, go to the community only to the extent of what is left over after deducting the percentage due to the producer for improvements in production. It is in the spirit of the whole thing that if production falls off, the producer's income must diminish in the same proportion in which it rises with increased production, but at all times the manager's income will come out of the spiritual work he has done. It will not come out of the profits that are based on the interplay of forces at work in the life of the community.

One can see that with the realization of social ideas such as these, institutions that already exist will acquire an altogether new significance. Property ceases to be what it has been up until now, and it will not be forced back to an obsolete form, such as that of communal ownership. It is, rather, taken forward, to become something quite new. The objects of ownership will be brought into the stream of social life. The individual cannot, motivated by his private interests, control them to the injury of the general public. Neither can the general public control them bureaucratically to the injury of the individual. It is rather that the qualified individual will have access to them as a means of serving the public.

A sense for the general public interest will have a chance to develop when social impulses of this sort are realized, with approaches that place production on a sound basis and safeguard the social organism from the danger of sudden (economic) crises. Also, an Administrative Body occupied solely with the processes of economic life, will be able to bring these back into balance when this appears to be necessary. Suppose, for instance, that a concern were not in a position to pay its creditors the interest due them on their invested personal savings. Then, if the firm is nevertheless recognized as meeting a need, it will be possible to get other business concerns, by free agreement, to make up the shortage in what is due to these investors.

A self-contained economic life that gets its rights basis from outside, and is supplied from without by a constant flow of fresh human ability as it comes on the scene, will, itself, have to do only with economic matters. Through this fact it will be able to facilitate a distribution of goods that procures for everyone what he can rightfully have in relation to the general state of prosperity of the community. If one person seemingly has more income than another, this will only be because this “more” resulting from the individual's talents benefits the general public.

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In a social organism that shapes itself in the light of these conceptions, the taxes needed for the rights life can be regulated through agreement between the leaders of the rights life and those of the economic life. Everything needed for the maintenance of the cultural-spiritual life will come as remuneration resulting from voluntary appreciation on the part of individuals active in the body social. This spiritual life rests on a healthy basis of individual initiative, exercised in free competition among the private individuals suited to spiritual-cultural work.

Only in the kind of social organism meant here will the rights administration develop the necessary understanding for administering a just distribution of goods. In an economic life that does not have the claim on men's labor prescribed by the single branches of production, but rather has to carry on business with the amount of labor power the rights-law allows it, the value of goods will be determined by what men actually put into it in the way of work. It will not allow the work men do to be determined by the goods-values, into the formation of which human welfare and human dignity do not enter. Such a social organism will keep in view rights that arise from purely human conditions.

Children will have the right to education. The father of a family will be able to have a higher income as a worker than the single man. The “more” that he gets will come to him through agreement among all three branches of the body social. Such arrangements could meet the right to education in the following way. The administration of the economic organization estimates the amount of revenue that can be given to education, in line with general economic conditions, and the rights state determines the rights of the individual in this regard, in accord with the opinion of the spiritual organization. Here again, since we are thinking in line with reality, this instance is merely intended to indicate the direction in which such arrangements can go. It is quite possible that for a specific instance quite other arrangements may be found to be the right thing. In any case, this “right thing” will only be found through the working together of all three independent members of the social organism. For the purposes of this presentation, our concern is merely to discover the really practical thing—unlike so much that passes for practical today. We refer to such a membering of the social organism as shall give people the basis on which to bring about what is socially useful.

On a par with the right of children to education is the right of the aged, of invalids and widows to a maintenance. The capital basis for this will flow to it through the circulatory system of the social organism in much the same way as the capital contributed for the education of those who are not yet capable of working. The essential point in all this is that the income received by anyone who is not personally an earner should not be determined by the economic life. Rather should it be the other way round: the economic life must be dependent on what develops in this respect out of the rights consciousness. The people working in an economic organism will have so much the less from what is produced through their labor, the more that has to go to the non-earners. Only, this “less” will be borne fairly by all the members of the body social when the social impulses meant here are really put into practice. The education and the support of those who cannot work, concerns all mankind in common. Under a rights state, detached from economic life, it will become the common concern in actual practice. For in the rights state there works what in every grown human being must have a voice.

A social organism so arranged will bring the surplus that a person produces as a result of his individual capacities into the general community. It will do it in just the same way as it takes from the general community the just amount needed for the support of those less capable. “Surplus value” will not be created for the unjustified enjoyment of the individual, but for the enhancement of what can give wealth of soul and body to the whole social organism, and to foster whatever is born of this organism even though it is not of immediate service to it.

Someone might incline to the thought that the careful separation of the three members of the body social only has a value in the realm of ideas (ideal value), and that it would come about “by itself” under a one-fold state or under a cooperative economic society that includes the state and rests on communal ownership of the means of production. He should, however, consider the special sorts of social institutions that must come into being if the three-folding is made a reality. For instance, the political government will no longer have to recognize the money as a legal medium of exchange. Money will, rather, owe its recognition to the measures taken by the various administrative bodies within the economic organization. For money, in a healthy social organism, can be nothing but an order for commodities that other people have produced and that one can draw out of the total economic life because of the commodities that one has oneself produced and given over to this sphere. It is the circulation of money that makes a sphere of economic activity into an economic unit. Everyone produces, on the roundabout path of the whole economic life, for everyone else.

Within the economic sphere one is concerned only with economic values. Within this sphere, the deeds that arise out of the spiritual and the state spheres also take on the character of a commodity. What a teacher does for his pupil is, for the economic circuit, a commodity. The teacher's individual ability is no more paid for than is the worker's labor-power. All that can possibly be paid for in either case is what, proceeding from them, can pass as a commodity or commodities into the economic circuit. How free initiative, and how rights, must act so that the commodity can come into being, lies as much outside the economic circuit itself as does the action of the forces of nature on the grain crop in a bountiful or a barren year. For the economic circuit, both the spiritual sphere—as regards its claim on economic returns—and the state, are simply producers of commodities. Only, what they produce is not a commodity within their own spheres. It first becomes one when it is taken up into the economic circuit.

The purely economic value of a commodity (or an accomplishment), as far as it is expressed in money terms, will depend on the efficiency, in the economic organism, that is developed by the management of the economy. On the measures taken by management, will depend the progress of economic life—always on the basis of the spiritual and the rights foundation developed by those other members of the social organism. The money-value of a commodity will then indicate that the economic organization is producing the commodity in a quantity corresponding to the demand for it. If the premises laid down in this book are realized, then the body economic will not be dominated by the impulse to amass wealth through sheer quantity of production. Rather will the production of goods adapt itself to the wants, through the agency of the Associations that will spring up in all manner of connections. In this way the proportion, corresponding in each case to the actual demand, will become established between the money-value of an article and the arrangements made in the body social for producing it.^{1Authors Note. A sound proportion between the prices of the various goods produced can only be achieved in economic life as an outcome of a social administration that springs up in this way from the free cooperation of the three branches of the body social. The proportion between prices of various goods must be such that anyone working receives as counter-value for what he has produced as much as is necessary to satisfy his total wants and the wants of his dependents until he has again turned out a product requiring the equivalent labor. It is impossible to fix such a price relation officially in advance. It must come as the result of the living cooperation between the Associations actively at work in the body social. Prices will however certainly settle down into such a normal relationship, provided the joint work of the Associations rests on a healthy cooperation between the three members of the social organization. It must develop with the same sureness that a safe bridge must come into being when it is built according to the proper laws of mathematics and mechanics. It may be said that social life does not invariably obey its own laws, like a bridge. No one, however, will make this objection who is able to recognize that it is primarily the laws of life and not those of mathematics that, throughout this book, are conceived as underlying social life.}

In the healthy society, money will really be nothing but a measure of value, since behind every coin or bill there stands the tangible piece of production, on the strength of which alone the owner of the money could acquire it. The nature of these conditions will necessarily bring about arrangements that will deprive money of its value for its possessor when once it has lost the significance just pointed out. Arrangements of this sort have already been alluded to. Money property passes back, after a fixed period, into the common pool, in whatever the proper form may be. To prevent money that is not working in industry from being held back by its possessors through evasion of the provisions made by the economic organization, there can be a new coinage, or new printing of bills, from time to time. One result of this will no doubt be that the interest derived from any capital sum will gradually diminish. Money will wear out, just as commodities wear out. Nevertheless, such a measure will be a right and just one for the state to enact.

There can be no compound interest. If a person puts aside savings, he has certainly rendered past services that gave him a claim on future counter-service in terms of commodities. This is in the same way as present services claim present services in exchange. Nevertheless, his claims cannot go beyond a certain limit. For claims that date from the past require the productions of labor in the present to satisfy them. Such claims must not be turned into a means of economic coercion. The practical realization of these principles will put the problem of the currency standard on a sound basis. For no matter what form money may take owing to other conditions, its standard will lie in the intelligent arrangement of the whole economic body through its administration. The problems of safeguarding the currency standard will never be satisfactorily solved by any state by means of laws. Present governments will only solve it when they give up attempting the solution on their own account and leave the economic organism—which will have been detached from the state—to do what is needful.

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There is a lot of talk about the modern division of labor in connection with its results in time-saving, in perfecting the manufacture and facilitating the exchange of commodities. Little attention is paid to its effect on the relation of the human individual to his work. Nobody working in a social organism based on the division of labor really earns his income himself. He earns it through the work of all those who have a part in the social organism. A tailor who makes a coat for his own use does not have the same relationship to it as does a person who, under primitive conditions, still has all the other necessities of life to provide for himself. The tailor makes the coat in order to enable him to make clothing for other people, and its value for him depends entirely on what other people produce. The coat is really a means of production. Many people will say this is hair-splitting. They won't say this when they come to consider the formation of values in the economic process. Then they will see that in an economic organism based on the division of labor one simply cannot work for oneself. All a person can do is work for others and let others work for him. One can as little work for oneself as one can eat oneself up. One can, however, establish arrangements that are in direct opposition to the very essence of the division of labor. That happens when the production of goods only takes place in order to transfer to the individual as private property what he can only produce because of his place in the social organism.

The division of labor makes for a social organism in which the individual lives in accordance with the conditions of the whole body of the organism. Economically it precludes egoism. If, then, egoism nevertheless persists in the form of class privileges and the like, a condition of social instability sets in, leading to disturbances in the social organism. We are living under such conditions today. There may be people who think it futile to insist that rights conditions and other things must bring themselves into line with the non-egoistic production resulting from the division of labor. Such a person may as well conclude, from his own premises, that one cannot do anything at all, that the social movement can lead nowhere. As regards the social movement, one can certainly do no good unless one is willing to give reality its due. It is inherent in the mode of thought underlying what is written here, that man's activities within the body social must be in line with the conditions of its organic life.

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Anyone who is only capable of forming his ideas by the system he is accustomed to, will be uneasy when he is told that the relation between the employer (work director) and the worker is to be separated from the economic organism. For he will believe that such a separation is bound to lead to the depreciation of money and a return to primitive conditions of industrial economy. (Dr. Rathenau takes this view in his book, After the Flood, and from his standpoint it is a defensible one.) This danger is, however, counteracted by the three-folding of the social organism.

The autonomous economic organism, working jointly with the rights organism, completely detaches the money relationships from the labor conditions, which rest on the rights laws. The rights conditions cannot have any direct influence on money conditions, for these latter are the result of the administration of the economic organism. The rights relationship between employer and worker will not one-sidedly show itself in money values at all. For with the elimination of wages, which represent a relation of exchange between commodities and labor, money value remains simply a measure of the value of one commodity, or piece of work, as against another. If one studies the effects of the three-folding upon the social organism, one will become convinced that it will lead to institutions that do not as yet exist in the forms of the state as we have experienced them up to now.

These arrangements can be swept clear of all that today is felt as class straggle, for this straggle is based on the wages of labor being tied up in the economic processes. Here, we are describing a form of the social organism in which the concept of the wages of labor undergoes a transformation, no less than does the old concept of property. Through this transformation there is created a social relationship between human beings that is vital, is related to life.

Only a superficial judgment would find that these proposals amount in practice merely to converting hourly wages into piece wages. One might be led to this conclusion by a one-sided view of the matter, but this one-sided view is not what we are considering here. Rather, the point is the elimination of the wage-relation altogether and its replacement by a share-relation (based on contract) between employer and workers. We approach this in terms of its connection with the whole organization of the body social. It may seem to a person that the portion of the product of labor that falls to the worker is a piece wage. This is because one fails to see that this “piece wage,” which is not a “wage” at all, finds expression in the value of the product. Furthermore, it does so in a way that puts the worker in a position with relation to other members of the social organism that is quite different from the one that arose out of class supremacy based one-sidedly on economic factors. Therewith, the demand for elimination of the class straggle is satisfied.

To those who hold the theory (heard also in Socialist circles) that evolution must bring the solution of the social question and that it is impossible to present views and say they ought to be realized, we must reply: Certainly evolution will bring about what must be, but in the social organism men's idea-impulses are realities. When time has moved on a little and what today can only be thought, can be realized, then this will be present in the evolution. If one waits until then, it will be too late to accomplish certain things that are required now by today's facts. It is not possible to observe evolution in the social organism objectively, from outside, as one does in nature. One must bring about the evolution. That is why views bent on “proving” social requirements as one “proves” something in natural science are so disastrous for healthy social thinking. A “proof” in social matters can only exist if it takes into account not only what is existing but also what is present in human impulses like a seed (often unknown to the people themselves) that will realize itself.

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One of the ways in which the three-folding of the social organism will prove that it is founded on what is essential in human social life will be the removal of the judicial function from the sphere of the state. It will be up to the state institutions to determine the rights that are to be observed between individuals or groups of men. The passing of judgment, however, is the function of institutions developed out of the spiritual organization. In passing judgment, a great deal depends on the opportunity the judge has for perceiving and understanding the particular circumstances of the person he is trying. Nothing can assure this except those ties of trust and confidence that draw men together in the institutions of the spiritual sphere. These must be the main consideration in setting up the courts of law.

Possibly the administration of the spiritual organization might nominate a panel of judges who could be drawn from the widest range of spiritual professions and would return to their own calling at the expiration of a certain period. Within definite limits, everybody would then have the opportunity of selecting a particular person on the panel for five or ten years. This would be someone in whom he feels sufficient confidence to be willing to accept his verdict in a civil or criminal suit, if it should come to that. There would always be enough judges in the neighborhood where anyone was living, to give significance to this power of choice. A complainant would always have to apply to the defendant's judge.

Only consider the importance such an institution would have had for the territories of Austria-Hungary. In districts of mixed language, the member of any nationality would have been able to choose a judge of his own people. Apart from nationality, there are many fields of life where such an arrangement can be of benefit to healthy development.

For more detailed acquaintance with points of law, the judges and courts will have the help of officials (also selected by the spiritual administration) who will, however, not themselves decide cases. The same administration will also have to set up courts of appeal. The kind of life that will go on in society through a realization in practice of the conditions we are presuming here will bring it about that a judge is in touch with the life and feelings of the ones brought before him. His own life—outside the brief period of his judgeship—will make him familiar with their lives and the circles they move in. The social sense developed in such a society will also show in the judicial activity.

The carrying out of a sentence is the affair of the rights state.

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It is not necessary at this time to go into arrangements that will be necessitated in other fields of life by the realization of what has been presented here. This would obviously take up unlimited space.

The instances of social arrangements given here make clear that this is not an attempt to revive the three old “estates” of the Plough, the Sword and the Book. The intention is the very opposite of such a division into classes. It is the social organism itself that will be functionally membered, and just through this fact man will be able to be truly man. He himself will have his own life's roots in each of the three members. He will have a practical footing in that member in which he stands by way of occupation. His relation to the other two will be actual and living, developing out of his connection with their institutions. Threefold will be the social organism as apart from man, forming the groundwork of his life, and each man as a man will unite the three members.