Associative economics

Associative Economics is a term used variously by different people around the world. For some of these the work of Austrian philosopher and social thinker Rudolf Steiner is a reference. Steiner gave a course of lectures in 1922 in which he set out his view that with the advent of global economy, the science of economics would need to take a further step, which included an elaboration of the economic process, a more precise monetary analysis, and a clearer understanding of how, through the division of labour, the associative basis of economic life becomes apparent. Associative Economics emphasizes the development of conscious coordination of producers, distributors, and consumers. It understands the global economy as a single, closed domain, through which human beings meet one another's needs.

Some Themes within Associative Economics

Some of the themes central to associative economics include the following:

• how the three functions of money become three qualities
• why the factors of production are better described as factors of price formation
• true pricing (in lieu of the efficient market hypothesis)
• the concepts of gift money (not synonymous with donations) and loan money (not synonymous with loans)
• moving from real to personal credit; property rights in terms of the 'fundamental sociological law'
• understanding that land is not in the market ever - what is in the market is the right to own or use land
• understanding in detail and technically how one overcomes the gold standard, or what happens to balance of payments
• or whether there can be banking in an associative economy

The idea of associative economics is often also the inspiration behind such things as community supported agriculture, ethical banking, social finance, community land trusts, and local currencies.

Local and Global

Associative economics recognizes the central role of the individual entrepreneur and the inherent regulatory effect of face-to-face transactions between producers and consumers. At the same time, it sees that the economic organism has become truly global - has moved beyond national boundaries - so that when the economy is seen from a national perspective this is only partial and potentially harmful. Within the context of a legislative framework, the economy is best conducted by those who are responsible for economic activities, potentially everyone. It has also been described as an "Altruistic Stakeholder-Managed Economy"). This picture of an autonomously conducted economy belongs to Steiner's overall conception of the threefold nature of social life.

The Threefold Nature of Social Life

Advocates of what is often referred to as the "threefold social organism" or "social threefolding," promote the autonomy (the separation and conscious interaction) of the three realms of social life: economy, rights, and culture. They see in the cry of the French Revolution - "Liberté, Égalité, Fraternité" - three fundamental ideals of the modern human being that can only find their rightful (and compatible) place in these three spheres. Freedom and self-determination in the cultural realm - to believe, express, and develop as one sees fit; fraternity (brotherhood/sisterhood) in the economic realm - where, through shared work and division of labor, individuals come together to meet the needs of the whole; and equality in the rights realm - where all citizens can come together to make agreements, decide what is equally right for all.

Land, Labor, and Capital

Many things which today are considered commodities within the "free-market" paradigm are differently understood within an associative paradigm for example: land, labor, and capital. The so-called "factors of production" are seen as 'factors of price formation', essentially matters of right which simply border the economic realm on all sides. Land is part of the commons. It is our common heritage, a resource that, in a wider sense, belongs to all (including future generations) which needs to be stewarded by those most capable to meet current needs Steiner views labor as a form of "wagery," a descendant of serfdom and slavery (where once we sold our whole body, now we sell our time), as well as an economic untruth, an impossibility which we allow to persist:

"They actually speak as though a kind of sale and purchase took place between the wage-earner who sells his Labour and the man who buys it from him. But this sale and purchase is fictitious. It does not in reality take place... In reality... it is values which are exchanged. The worker produces something directly; he delivers a product, and it is this product which the enterpriser [Unternehmer] really buys from him. In actual fact, down to the last farthing, the enterpriser pays for the products which the workers deliver to him. It is time we began to see these things in their right light."

Capital creates value by the application of intelligence to labor. It is the human spirit manifest in the economic process. An interesting analysis of this viewpoint is provided by Folkert Wilken in his book The Liberation of Capital Often taking the form of money, it further frees and empowers the entrepreneur to apply their intelligence. The artist Joseph Beuys famously expressed this as "Art=Capital" (Kunst=Kapital), or alternatively, for his art piece in the 'Luna Luna' art fair in 1987, "Money is not CAPITAL at all. CAPACITY is CAPITAL." Capital is therefore also a product of our common heritage (this time cultural), and derives especially from our access to education.

In an associative economy, therefore, land, labor, and capital are understood as rights phenomena. Some interpret this to mean they are held in trust on behalf of the community and consequently managed by those with both the desire and capacity.

External links

Organizations

• Centre for Associative Economics
• RSF Social Finance

Books

• Rudolf Steiner, World Economy
• Rudolf Steiner, Towards Social Renewal
• Rudolf Steiner and Christopher Houghton Budd, Rudolf Steiner: Economist
• Mark Desaules, A Human Response to Globalization
• Christoper Houghton Budd, The Metamorphosis of Capitalism
• Joseph Beuys, What is Money?
• Gary Lamb, Associative Economics: Spiritul Activity for the Common Good
• John Bloom, The Genius of Money

Journals and Articles

• Rudolf Steiner, "The International Economy and the Threefold Social Order" from the newspaper The Social Future
• Owen Barfield, "The Relation Between the Economics of C. H. Douglas and Those of Rudolf Steiner"
• Robert Karp, "Toward an Associative Economy in the Sustainable Food and Farming Movement"
• Sarah Hearn, "Money: Reclaiming the Power to Create"
• Gary Lamb, "The Transformation of the Competitive Market and Capitalism: A Necessity of the Twenty-First Century"
• Guido Giacomo Preparata, "Perishable Money in a Threefold Commenwealth: Rudolf Steiner and the Social Economics of an Anarchist Utopia." Review of Radical Economics 38/4 (Fall 2006)
• Associate! a monthly digest by the Centre for Associative Economics