You will have seen that the main object of our present studies was to find concepts, or rather pictures, of the economic life, such as would help us actually to get inside it. In no one of the activities which are now being pursued in the Anthroposophical Movement — and in which I have myself been taking part — is it my opinion that all the existing scientific results should be simply flouted. On the contrary, I am convinced that there is a wide range of very useful results in the existing sciences. Only, the method of treatment, both in Natural Science and in the other branches of knowledge, needs to be developed in some essential respects. Thus, in the main, I have tried to give you pictorial concepts, ideal pictures, to aid you in making proper use of the wide range of valuable material which is already there in Economic Science. For this reason I have given you such pictures as could really live. A living thing, you may be sure, is always many-sided and contains many meanings. Many of you may therefore go away from these lectures with the feeling that various objections can be made to what has been said. In a sense I shall be rather glad if you do have this feeling, provided it is combined with real earnestness and with a genuine scientific spirit. Faced by a living thing, this feeling is indeed inevitable. Life will not endure dogmatic theories; and it is in this sense that you must conceive the ideal pictures I have given to you.

The thought-picture of money growing old or getting used up is a particularly pregnant one. You must relate yourself to such an ideal picture as you would do, let us say, to a growing human being. You have a general feeling that he will prove a very able man in one direction or another. You may have fairly definite ideas of what he will accomplish. But these ideas will very likely turn out to have been mistaken. He may accomplish what he has to do in quite other ways. So too for the concept of money getting used up in course of time, you may find various ways in which this can be brought about. The way I have tried to present is one conceived as little as possible along bureaucratic lines; it results naturally from the economic life itself.

Many objections may no doubt be made. Here is a very easy one: How will it be settled that a given enterpriser puts young money and no other into his business? After a short time it may no longer be recognisable whether the money was young or not, for his business will be going on. In answer to this, you must bear in mind that he does not simply get the money from the sky; he borrows it from someone. Moreover, since you can see from my Threefold Commonwealth that I do not think that interest on money should be abolished, provided the money has real value (on the contrary I believe that up to a point interest is actually necessary in the economic life), you may say: How shall I as an enterpriser get money from those who might lend it to me, if I am only going to pay them interest for an atrociously short time? They will only wish to give me money on the assumption that they will get interest out of my business for as long a time as possible. Thus, you may find that it is not enough simply to let money grow old in the way described. This may lead you on to think out the method in greater detail. For instance, money issued today might be date-stamped, not with the present year but with a future year, in such a way that the value increased up to that year, and after that decreased.

Take for example what is said of Price. You will be told that the conditions determining price-levels are the following, so far as the seller is concerned: his relative need for money, the value of the money, the costs of production which he has to meet and the competition among buyers. But if you analyse these concepts you will always find that, though you can think about them rightly enough, you cannot enter with them into the realities of life. For you would first have to ask yourself: Is it an economically healthy state of affairs if it so happens that a particular enterpriser is in need of money at a particular time and thereby, in accordance with his private need for money, prices rise or fall in a particular direction? Can the utility-value [Gebrauchswert] of money, if we may call it so, work in a healthy way at all? Both things can work in a healthy and in an unhealthy way. Or again, speaking of costs of production, it may be desirable for the attainment of a healthy price not to think how the price will come out if costs of production are looked upon as something absolute, but on the contrary to think how the costs of production for a given article might have to be reduced so that it has a healthy price when it comes on to the market. In other words, you need to have concepts which really begin at the beginning. You cannot let a living man begin his life at the age of 25, nor should you let your concepts, which are to enter into real life, begin at any arbitrary point. You should not let your economic concepts begin, for example, with the competitive relation between buyers or between sellers. For the question is: May it not be, under certain conditions, the fundamental error of our economic life that an excessive competition should exist at all, as between sellers or between buyers? These are matters of principle, which must be taken very much in earnest.

Quite apart from whether one or other of you may agree with particular parts of our exposition, the endeavour has been throughout to make our concepts living. If they are living, then, in the event, they will show of their own accord how they need to be modified. What matters is that we should be brought on to the path of these living concepts. Thus, we can say: If we have money that is used up, i.e., grows old, then, inasmuch as money comes into circulation and figures as purchase-money, loaned money and gift-money, the peculiar qualities of money will bring it about in the natural course — if they are allowed to function in a purely economic and unhampered way — that the demand for young money will arise at one place and the demand for old money at another.

What is it that really emerges when we think, in this way, that in money in circulation we have a kind of reflection of that element of use and wear which in fact is present throughout the whole range of consumable goods — and even spiritual services are consumable goods for the economic life? In a money which wears out we have a parallel process to goods, commodities, real values, which also wear out. What have we, in effect, if we perceive this parallelism — we can extend it over the entire world-economy — between the real value and the token value? Truly we may describe it essentially as a kind of book-keeping system for the whole world-economy. It is the world's book-keeping. When some item is transferred or delivered, this simply signifies the entry of an item in another place. In actual practice the thing is done by passing money and commodities from hand to hand. The principle is fundamentally the same whether we contrive to record the items in their proper places in an immense book-keeping system embracing the whole world-economy, and so direct things simply by transferring credits, or whether we write out a chit and give it to the person concerned, so that the thing is done in external action. In the circulation of money we have in effect the world's book-keeping. And this is, as everyone can really see for himself, what should be aimed at. For in this way we give back to money the only quality which it can properly have — that of being the external medium of exchange. Look into the depths of economic life, and you will see: Money can be nothing else than this. It is the medium of exchange of services or things done. For in reality men live by the things actually done, not by the tokens thereof.

It is important for us to see, as I emphasised in the last lecture, that different kinds of services must be judged in different ways with respect to the values circulating through the economic life. As we showed yesterday, that which is gained from Nature to begin with, and on which Labour is expended, corresponds to the picture: “Labour united with an object of Nature.” In a certain sense, we can begin the economic process at this point. Here, we may say, the value is created by the Labour which I unite with a particular product of Nature. But in the economic process there is also the contrary stream, which comes into play the moment there are spiritual services. As soon as spiritual services come into play, another formula of valuation, if I may call it so, has to be introduced, namely: “A spiritual service is worth the amount of Labour which it saves to the person who contributes it.” Take for example the artist who paints a picture and thereby provides a value, a value for which real interest is felt (otherwise it would not be a value). If the production of the picture and the existence of the artist are to be economically healthy, the artist must value it in this way: It must save him the amount of Labour required to satisfy his own needs during the time which it will take him to produce a new picture in like manner. Thus, in the economic process spiritual services ox products come to meet those which are mainly based on the elaboration of Nature, i.e., on manual Labour, upon, say, means of production. On the one side we must have Labour uniting itself with the means of production, while on the other side Labour must be saved or spared. Thus there arises the economic circuit with its two opposing streams, which must compensate each other in a healthy way.

The great question is: How shall they compensate each other? In the first place we need only bear in mind the universal bookkeeping of our world-economy. It is here that we should find the items on either side which must somehow be mutually balanced. And this would be the source of Price. But the point is that the items in this universal book-keeping must mean something. An item — A — which I insert, will correspond to what we may describe as “Labour united with Nature,” or another item — B — will correspond to “so much Labour is saved by this service.” Every such item must have concrete meaning. But it can only have a meaning if it represents something which is comparable, or which is at least made comparable by the economic system. We cannot simply ask: How many nuts is a potato worth? We cannot ask a question like that without more ado. First we must say: “Nut” signifies a Nature-product united with human Labour: “Potato” signifies a Nature-product united with human Labour. And then we can ask how the two values are to be equated. The problem is to find something which will enable us to assess economic values one against the other. It becomes still more difficult if you take, say, a literary essay. The essay, too, must be, economically, worth the amount of physical Labour upon some means of production which is saved by it, minus the very small amount of physical work spent on the actual writing. At any rate you can see that it is not altogether easy to work out how these things are to be equated or assessed as against each other. Nevertheless, by taking hold of the economic process from another angle, we shall find means of reaching such an assessment. For on the one hand we have the physical Labour spent on the means of production, including Nature herself. At a given time it is quite a definite amount of Labour. I mean that at a given time a definite amount of Labour is needed, shall we say, to produce wheat over a given area, say x square metres of land, taking “production” as ending in the moment when the wheat is in the merchant's hands, or at some other given point. Once more then, a definite amount of Labour is needed to produce wheat. It is a given magnitude, which under certain conditions can actually be ascertained. Properly regarded, all human economic service or achievement — of whatsoever kind — eventually takes us back to Nature. There is no other possibility. The farmer works upon Nature directly. One who provides, shall we say, clothing, works not directly upon Nature, but ultimately his work goes back to Nature. His Labour will contain an element of “Labour saved” to the extent that he applies Spirit or intelligence to it. Nevertheless even his work has its connection with Nature. Everything, right up to the most complicated of spiritual services, eventually goes back to Nature — to Labour that is expended upon the means of production. Think it through clearly and you will see that everything in economic life can be traced back in the long run to bodily work upon Nature. The process begins from Nature; values are created there by the application of Labour; and it is these values — taken to some definite point still as close to Nature as possible — which have to be distributed over the whole of a “closed” economic domain.

Go back to the hypothetical case I took yesterday — the closed village economy, In such a self-contained village economy you have the manual workers, but I assumed that the only spiritual workers were the parson and the schoolmaster and possibly the parish clerk. It is a very simple economy! Most of the people are doing bodily work, bodily work upon the soil; only, they have to do in addition enough bodily work to provide for the needs — food, clothing, etc. — of school-master, parson and clerk. It will be additional, for the schoolmaster, the parson and the parish clerk do not do their work upon Nature for themselves. Say that the village economy consists of 30 peasants plus the three — what shall we call them? — “worthies.” These three supply their spiritual services. They need the spared Labour of the rest. Suppose that every one of the 30 peasants gives to these three, or to each one of them, a token, a ticket, on which is written so much, say x, of wheat — that is, wheat elaborated to a certain point. Another member of the community might give a ticket on which something else was entered, something comparable to wheat for purposes of consumption. These things can be ascertained. The schoolmaster, the parson and the clerk will collect these tickets. Instead of going out into the fields to fetch their wheat and rye and beef for themselves, they will hand over their tickets to those concerned, who in their turn will do the necessary Labour in addition to their own and will give them the product in exchange. That is a process which cannot help developing of its own accord. It cannot possibly be otherwise, nor does it make any difference if it occurs to some bright individual to introduce metallic coin instead of tickets. It amounts to this: Some kind of tokens must be devised, based on the stored-up material Labour — Labour expended on means of production, Labour invested in economic values. And these tickets must be handed over to those who need them, so that they can save themselves the Labour.

Hence you will see that no kind of money can in reality be any other than an expressions of the sum-total of means of production available in a given region — means of production including in the very first place the land itself — reduced to the form in which it can be most suitably expressed. This will relate the economic process to something which we can at least take hold of. It is not possible to bring about an economic paradise anywhere on earth. Let those believe it is, who invent Utopias without reference to reality. It is so easy to say that an economy should be thus and thus. But, ladies and gentlemen, an economy — including that economy of the entire Earth which we can call “world-economy” — cannot be absolutely determined, but only relatively so. Suppose that in a closed economic region we have an area, say Ar, of land. Now supposing all the people in this area are doing everything which it is possible for human beings to do, then a different amount will be available for consumption if B million people live in this area of land, than will be the case if the population is B¹ million.

Thus in effect it depends on the ratio of population to the area of land, and on how much a given population can get out of the given area, for it is from the land that everything ultimately comes. Take now the hypothetical case: An economic area has a population of, say, 35 millions — the number does not matter. What holds true, here, of a self-contained economic territory, is true also of the world-economy. Assume 35 million inhabitants at a given time; and that the problem is to bring these 35 million people economically into an economically just relation. (I may not be putting it quite clearly and precisely, but you will soon see what I mean). What would you have to do if you wished such a condition to prevail among these 35 million as would bring about feasible prices? The moment you begin to lead over the economic life of the region into a healthy condition, you would have to give each one of them an amount of land corresponding to one 35-millionth of the entire area available for production, adjusted according to fertility and ease of cultivation. Suppose that every child were to receive such an area of land at birth, to be worked by him in perpetuity. The prices which would thus arise would be feasible prices for such an area, for things would then have their natural exchange values.

Now the curious hypothesis which I have here put forward is nothing else than the reality. The economic process actually does this of its own accord, Of course you will not believe that I mean what I am now saying in any other than a figurative sense. Yet these are the actual conditions. You can imagine the entire area distributed among the people concerned, remembering that they will also have to elaborate, in the proper way, such products as become detached from the soil. You can imagine the entire area divided up among the population, and it is in fact this which gives to each individual thing its exchange value. Indeed it might well be that if in some place you were to note down the actual exchange values, you would find a very close approximation. But if you now compare this with ordinary present-day conditions, you will find the price of one thing far above and the price of another far below that level. Still, if you like to suppose a Utopia somewhere, populated solely by newborn children (looked after by angels to begin with), to each of whom you have given his piece of land, then, when they are able to begin work, you will have produced conditions under which the natural exchange values will arise. And if after a time prices are different, it can only mean that one has taken something away from another, It is this kind of thing which produces the various social discontents; men dimly feel that here something works into the process which does not correspond to the real prices at all.

Yet if the economic life becomes permeated with a way of thinking such as we have here adopted, the actual measures we shall take will bring about the result I have stated. It all depends on that. We shall find that our currency, representing, as it were, the day-to-day book-keeping of world-economy, will have to be inscribed, let us say: “Wheat producible over a given number of acres,” and this will then be equated to other things. The different products of the soil are the easiest things to equate. So you see where it is we must start from — our figures must mean something. It simply leads away from reality if money has inscribed on it: “So much gold.” It leads towards reality if it has inscribed on it: “This represents so much Labour upon such and such a product of Nature.” For we shall then have this result: Say there is written on the money “x wheat,” all money will be stamped “x of wheat, y of wheat, z of wheat.” The real origin of the whole economic life will then be made evident. Our currency will be referred to the usable means of production upon which bodily work is done — the means of production of the given economic region. This is the only sound basis of currency — the sum-total of the usable means of production.

One who can look into the realities with open mind will see, as he looks, that this is so. It may be objected that no one value can be precisely equated to another. But to a great extent this can be done. For since in this method of valuation everything is ultimately valued through consumption, the values of different kinds of services do not differ so very much from one another. However spiritual a worker I may be, I need so much saved Labour every year — namely, as much as I require to maintain myself as a human being. Moreover, by this means it will be evident how and to what extent a spiritual worker needs something in addition, beyond what a manual labourer needs. And when the thing has become as transparent as this, it will be acknowledged because it is transparent. Even today — though they become increasingly rare — conditions do exist in selfcontained economies under which the spiritual workers receive all that they need; where the others give it them gladly, without even writing it down on slips of paper beforehand. In saying this, I do not wish to reduce an economic to a sentimental argument. I say it simply because this, too, is part of the realities of economics and because in an economic system you are after all always dealing with human beings.

Above all, you will attain in this way to a relationship between the members of an economic whole which will be really visible to all. Each one in every moment will then have his connection with Nature, even in the money. It is just this which makes our present-day relations so unsound; they have become so far remote from Nature — the connection with Nature is no longer there. If we can bring it about (and it is only a question of evolving the necessary technique in the associative life) that we really have the Nature-value recorded on our paper-money in place of the indefinable gold value, then we shall see directly — in every-day business and intercourse — how much a given spiritual service is worth. For I shall know, when I paint a picture, that for me to have painted this picture so many workers on the land, for example, have to work for so many months or years on wheat or oats, etc. Think how transparent the economic process would become. The ordinary way of putting it today would be to call it the substitution of a Nature-currency for a gold-currency. Yes, and that is just what we need. For by this means true economic conditions will be brought about.

Once again I have placed a picture before you. I have to speak in these pictures, for they give the reality. What people generally have in their heads in economic intercourse today is not reality. He alone has the reality who in receiving a piece of money of a certain magnitude in exchange for something, knows that it signifies so much work upon the land. We must, of course, include in our calculations the work that is done on other means of production. These will, however, be equivalent to Nature. For the moment they are finished, and thus leave the realm of commodities altogether, they are devalued inasmuch as it is no longer possible to buy or sell them. They thus becomes equivalent to the means of production which we have in Nature directly. It is therefore only a continuation of the part which Nature already plays in the economic process, when we say that means of production should be dealt with in this way. Moreover, it is only in this way that we can have a clear idea of Nature herself, considered as means of production. The concepts of land which you will generally find in Economics are always open to objection, unless you conceive of “means of production” in the way I attempted in my Threefold Commonwealth. You need only consider this: Even a given region of Nature may have to be worked upon to some extent before it is available as “land” — before it is fit for cultivation. Up to the moment when Nature — or a given part of Nature — has been cleared and can be handed over for use, during this period also, some Labour must be expended on it. In other words, by the time this Labour has been done, even a piece of land may justly be reckoned a commodity, an economic value, in the sense that it is a piece of Nature combined with human Labour.

Only by formulating the ideas in the way we have done will you get the concept “means of production” clear and transparent, and you will then be able to work it out in the most varied spheres. You will perceive, when for example an author writes an article, that the main value of it, economically speaking, consists in the Labour saved; from which you would only have to deduct the minute amount of bodily work which the actual writing entails. Your concepts will be capable of differentiation in manifold directions so that you stand with them in very life, inasmuch as you are forming them out of life itself. And then, if for example you are concerned with some question of prices, you will no longer be content merely to trace it back to the immediate costs of production; you will have to trace it back to the primal phase of all production. You will have to see what are the conditions of price-formation right from the primal phases of all production. It is only then that you will be able to trace them rightly up to any given point in the economic process.

In this way, ladies and gentlemen, perhaps I may have been able to give you an idea which will at least guide you on your way towards the cardinal question of Economics — namely, that of prices. For to engage in economic activity at all is to bring about the exchange of products among human beings, and this exchange lives itself out in the forming of prices. It is the forming of prices that matters, and in this respect you do not have to go back to anything vague or indefinite, For you can always follow things back to the fundamental relationship of value which is brought about by the very fact of work upon the land, namely the proportion of the population to the available area of cultivation. In this relation you will find that which originally underlies the formation of values. In effect, all the Labour that can be done must come from the given population and, on the other hand, all that this Labour can unite with must come from the given land. Everyone needs what this Labour brings about and, as to those who can save themselves the Labour on account of their spiritual services, the others must perform it for them in addition to their own. Thus we arrive at the actual basis of economic life.

Looking at things in this way, we shall admit that even in our present highly complicated economic life, that which was universal in the most primitive conditions — where the simple exchange of goods, shall we say, was the essential thing — still plays its part. The difference is that we are no longer able to see the connection clearly everywhere. But we shall have it before us always, when the connection with Nature is expressed in our currency notes. Whatever we may do, the connection with Nature is always there. Do not let us forget it! It is reality. Once more, speaking pictorially, let me say: While I am giving my shilling quite thoughtlessly for this or that, there is always a little demon who writes on it how much Labour, actually done upon Nature, it corresponds to; for this alone is the reality. Here, too, if we would get at the reality, we cannot stop short at the outer surface.

If you have absorbed that which is living in these ideal pictures, you will not have spent these fourteen days here in vain. For it is this that weighs on one so heavily. Great issues are impending. Human beings are in need of free and clear insight into the essentials, for the healing of so many ills of our civilisation. There is much talk of what should be done, but there is little will, alas, to dive down into realities and to draw forth from there the word which tells what should be done. We have gradually departed from the sphere of Truth, and from the real life of Rights — Rights that spring forth from the very nature of man — and from that which must unfold in man if he is to be of value to his fellows — namely the genuine Practice of life. Out of the word of Truth we have slid into the empty phrase out of the sense of Right into mere convention; out of a practical hold on life into dead routine. We shall not escape from the threefold untruth of phrase, convention and routine till we develop the will to go down into the facts and to see how things are shaped in their own real nature. But if we do so, then, precisely as persons who approach the matter as students, we shall be met with understanding. There are so many agitatory phrases in the world today, doing appalling harm just because there are so few men with an earnest will to go into realities.