A conference, “Finance at the threshold: prospects for associative economics in our time”, was held in Toronto from 12-14 August looking at the contribution which associative economics could make to economic developments. The topic is, of course, particularly relevant at a time when the international financial situation continues to be fraught with uncertainty. Kim Chotzen reports.

TORONTO (NNA) - Where are we when we talk about finance today? If the markets are on 24-7 with no pause moments, then in what world are we? Webster’s Dictionary defines threshold as a place of entry or beginning; a point above which something is true or will take place and below which it is not or will not.

The thinker and founder of anthroposophy, Rudolf Steiner, little known as an economist, had much to say in terms of economics about the reality of a threshold beyond which material concepts are non-operable. Is there a purpose in acknowledging this threshold in economic life? Do we ignore at our peril some of his observations: for example, that bringing land, labour and capital into circulation, as if they were commodities, defies the natural boundaries of economics? And if so, what would be the corresponding remedy, if humanity were inclined to it?

Are we experiencing such uncertain financial times at this moment in history because a metamorphosis of modern economic conditions requires major balance sheet write-offs on behalf of education and culture, something that may be counter-intuitive to neoliberal thinking? Is the world poised to take notice of Steiner and indeed recognise his economic analysis as the next step in modern economics? Can his keystone concepts give humanity the urgent ground it needs to unfold its wings and emerge into a new economic landscape?

Background thoughts such as these brought a group of 27 individuals to Toronto, Canada, for the recent event “Finance at the threshold – prospects for associative economics in our time”. This was a conference convened by members of the Economics Conference, a group of worldwide members whose purpose is to examine modern economic issues taking Rudolf Steiner’s economic ideas as the reference.

Sandwiched between another stock market plunge and a rare earthquake on the east coast of the US, one could almost imagine these inner and outer events being connected. Present at the meeting was Mary Adams, a star lore educator, who confirmed that even the planetary alignment indicated that something indeed was “in the air”.

We were introduced to Steiner by Christopher Houghton Budd, an economic historian and banking and finance expert, as “the other Austrian”, simultaneously linking him to the Austrian School of economists, differentiating him from socialism and setting him apart from the rationalism of the Austrian School.

Even though common assertions were shared between Steiner and the Austrians, (e.g. the individual human being is incapable of understanding economics alone), their conclusions differed because of their approaches to observing economic phenomena. Whereas the Austrians defaulted to “the wisdom of the market”, Steiner’s research refuted the dualistic thinking of the time, asserting, for example, that human beings can indeed think with three independent variables and therefore, via association with their fellows, collectively develop the wisdom to understand economics.

Modern threefold concepts - such as the elements of global economic architecture (world trade, financial markets and central banks), or of domestic economics (means of exchange, store of value and unit of account) – are readily understood when considered in the light of what Steiner said about three kinds of money.

Early on in the conference, the assumption of a metamorphosed economic life led to certain givens which allowed the participants to undertake an imaginative process to describe economic life beyond the current dualities of today. Such givens included the following: the obsolescence and eventual absence of non-profits, accounting as the world’s currency, and the consequent anomaly of the disappearance of central banks or any other controlling authority.

Banks do not issue credit: creativity that seeks financing does. Money is issued by virtue of one person needing another’s goods. In an exchange, both parties make a surplus that makes visible the fact that human beings have been served. The structure of accounting expects a surplus. Double-entry bookkeeping is a tool that protects the human being from the temptation to be untruthful in the presence of money in that it makes both sides of all transactions visible.

The room began to shake as we considered how it would be thinkable in the conventional world of economics to consider the absence of any controlling authority with accounting as the only currency. What about floating or fixed exchange rates? It is clear that nations can never have domestic control as long as, at any time, shifts in exchange rates can wreck internal stability. So how do we arrive at Keynes’s “moving point” whereby all economies prosper? Is this just an altruistic, utopian concept, or does it simply make good economic sense?

Keynes’ International Clearing Union, put forward at the 1944 Bretton Woods conference, proposed a plan that corroborated Steiner’s concepts whereby world trade would be effected using a shared currency – the bancor – which belonged to no one country. Trade above or below a certain threshold was thought to be destabilising and therefore would be penalised. His ideas were not accepted by the US, with such consequences as the new world liquidity organisation (which became the IMF) becoming based in Washington with voting power largely controlled by the US.

It is important to recognise that it is not the corporation per se that is corrupt. After all, the corporation, the “body”, does not act except that it has a force within it that causes the acting. The essential question is who or what acts or speaks in the “body”? Corporate structure in its ideal form is meant to house an idea, to support the unfolding of a mission. The way funding is introduced can either uplift or wreck the mission.

Young people today stand ready to unfold tasks for which capitalisation is needed. Whether for their education until they are old enough to generate value or for their ideas for solutions to the world’s problems, if the capital that charges rampant around the world in the form of volatile market activity were but channelled in the direction of the young people, the world would become stabilised. Whether for school financing, humanitarian services or industry, the for-profit structure is the only one needed since there would be no more externalising of costs for non-profits to mop up.

In the end, the world Steiner described at the beginning of the twentieth century is not so far from our grasp. Individuals, not “experts”, hold the key and the only question is whether there are enough human beings with the will to act.

Item: 110909-01EN Date: 9 September 2011

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