True Pricing instead of Basic Income


Initiators of the basic income movement often argue that today’s circumstances make it necessary to separate labour and income. Claiming to derive this insight from Rudolf Steiner, they sometimes also call this movement an „anthroposophical cultural impulse“.
[i] However, according to Marc Desaules, this insight should lead to the idea of true price rather than basic income.

Marc DesauMarc Desaulesles, entrepreneur and member of the executive board of the Anthroposophical Society Switzerland.

 

 

In an essay published in 1906[ii] Steiner writes that the exploitation of man by man does not arise because some are rich and others poor, but only when one fails to pay enough for what one buys and therefore fails to remunerate the producer sufficiently. This early formulation puts price at the centre of the income question because the income stream will always be insufficient if the price is too low. Expressed positively, income can only be sufficient when the price paid is sufficient. By extension, this is also true when income arises other than by way of a direct sale, for example as interest on a loan, rent on a piece of land or even as a donation. Why? Because any price is the emergence and convergence point of all values created in economic life. In other words, income is only possible because sometime, somewhere, prices come about.

But Steiner’s formulation tells us more than that: it treats the social question at an economic level, using economic terms. Not one’s class, not one’s standing is the cause of the problem. Only price. Even poor people, when they pay too low a price, engender evil and poverty in the world through their way of paying. What matters is not how much one has, but how much one pays.

As a further step in his essay, in describing this as the effect of egoism Steiner comes to what he calls the fundamental social law:

“The well-being of a community of people working together will be the greater, the less the individual claims for himself the proceeds of his work, i.e. the more of these proceeds he makes over to his fellow-workers, the more his own needs are satisfied, not out of his own work but out of the work done by others.”

And he continues: “Every arrangement in a community that is contrary to this law will inevitably engender somewhere after a while distress and want. It is a fundamental law, which holds good for all social life with the same absoluteness and necessity as any law of nature within a particular field of natural causation. It must not be supposed, however, that it is sufficient to acknowledge this law as one for general moral conduct, or to try to interpret it into the sentiment that everyone should work in the service of his fellow men. No, this law only lives in reality as it should when a community of people succeeds in creating arrangements such that no one can ever claim the fruits of his own labour for himself, but that these go wholly to the benefit of the community. And he must himself be supported in return by the labours of his fellow men. The important point is, therefore, that working for one’s fellow men and obtaining so much income must be kept apart, as two separate things.”[iii]

 The effect of egoism

Articulated in 1906 for the first time, the idea of considering labour and income separately is one that Steiner returns to again and again in later lectures as one of the most important changes needed. This is also a starting point for the movement for an ‘unconditional basic income’, a widely discussed model in Germany and elsewhere. But what did Steiner really have in mind when speaking of the separation of labour and income and is a basic income part of this?

We find an answer to this question in the third of his economics lectures held in summer 1922.[iv] He describes how in modern times on one side egoism frees the human being from religious moral contexts and begins to play a part in society, while on the other side division of labour arises out of older forms of dealing in economic life. He then gives his famous example of a modern tailor making the suit for himself instead of buying it next-door and explains how this will not have the cheaper outcome he anticipates; on the contrary. Then he continues with a more hidden example of the same egoistic practice, pointing out that to a large extent people are providing for themselves when they are working for an income, for ‘a living’. Using strong words[v], he concludes that what he regards as a catastrophic custom has to be eliminated completely from the economic process, if we want to arrive at true rather than false prices.[vi]

In this example, two fundamental things can be appreciated. In the first place the problem is not an institutional arrangement of today’s labour world, but the inner egoistic trend of working for remuneration (rather than for its own sake). In other words: it is working for an income that links labour to income. It is this therefore that needs to be overcome. Second, the reason for this is quite explicit: working for an income contradicts the division of labour and therefore necessarily falsifies economic life, engendering false prices – that is to say, prices often too low to provide the necessary income. The downward spiral that follows produces the opposite of well-being, because it makes it difficult, if not impossible, to meet human needs in an efficient way, with the disastrous result that people have to work much more than is needed.

The problem of egoism lies outside economic life but has dramatic consequences for and in it. Therefore ways need to be found to give egoism a larger scale and scope of interest, a wider horizon or deeper sense of self so that working for an income disappears, along with its destructive effect in economic life, and true prices can come about.[vii]

 Understanding labour

Another way to overcome egoism is to understand labour as something that belongs to the field of rights, that which arises and lives between people enabling human dignity. Steiner describes rights as “something that cannot be defined, just as one cannot define red or blue … [They have] to be experienced autonomously by every adult human being.”[viii]

In this sense, one does not have rights; one only has duties towards others. That labour is one such duty comes for example in the second lecture of a series given just after the end of the war in 1918[ix], in which Steiner points out that nobody can live from money. Money masks the fact that the things it buys are the result of other people’s labour. Therefore, one can only live because, however tacitly, others commit themselves to labour for one. The counterpart of this, of course, is that one has to commit himself to labour for others. In this sense, labour is not at all a matter that can be left to everyone to decide for himself. In social reality, labour is a tacit mutual compact. In the same way as we recognise education and caring for one another as the hallmarks of civilisation, so should we regard labour as the evident counterpart of living together in society. If this were understood, we would see that labour is an expression of human dignity and that this is a matter of rights, something we can entirely comprehend and give effect to without any consideration of income.

Experienced inwardly, rights life can give egoism an orientation, revealing labour as something that one does not undertake for oneself, but as the field in which one finds one’s place and sense in life, economically speaking through meeting the needs of the world and other human beings. From this point of view, to free people from labour through the provision of a systematic, state- based basic income, even if unconditional, is an attack against the will forces, a dangerous path to go. Indeed, it is to be wondered at that such a movement is furthered within anthroposophical circles, where, perhaps uniquely, the importance of harnessing and disciplining the will forces is a well-known phenomenon of our time.[x]

Contractual sharing of proceeds

A formal aspect of the problem is that labour is regarded and treated as a commodity, something that can be bought and sold, making the worker himself nothing other than an object of a market, a disguised form of slavery.

This problem can be overcome if we see that labour as such has no value. No matter how much labour is used to dig coal out of the ground, neither coal nor labour has value thereby. The value comes from the coal being needed. Only labour applied to nature in a way that meets a need can have a value. Never labour itself. To sell one’s labour is an economic nonsense that has to be seen through. It is an illusion that persists only as long as one works for a living. What happens in fact?

The worker is active in producing something that is intended to be sold. This gives rise to a price. Steiner’s proposition is to let the workers involved have part of the value arising through the price of the product or service. This can be done by way of a contract that regards those active in the production process as partners: “Through the kind of social arrangements described here, the ground can be prepared for a truly free contractual relation between manager and worker. This does not mean an exchange of commodities, i.e. money, for labour-power, but an agreement as to the share each of the persons who jointly produced the product is to receive.”[xi] And later: “It would be superficial to think that the realization of the ideas presented here would result in time-wages being converted into piece-wages. Only a one-sided view could lead to this opinion. What is advocated here is not piece-wages, but the abolition of the wage system in favour of a contractual sharing system in respect of the common achievements of management and labour – in conjunction, of course, with the overall structure of the social organism. To hold that the workers’ share of the proceeds should consist of piece-wages is to fail to see that a contractual sharing system – in no sense a wage system – expresses the value of what has been produced in a way which changes the workers‘ social position in relation to the other members of society.”[xii]

This can be for example a percentage of the price or a fixed amount set in advance for the good that is produced. If the worker has to work together with others, this also is a partnership that can be governed by a contract about prices of products. This is so for every worker at every stage of the production process, every worker can be understood and treated as a partner. Everywhere it is always a question of price, never a question of labour. That means for everyone income can derive contractually from price. It need never (and in economic reality never does) derive from labour.

Social security

This said, there is an important case to consider: all those human beings – such as teachers, researchers, artists – who fulfil their destinies in meeting human needs without being directly physically productive as such. Such people are pure consumers. As are children and disabled or elderly people – anyone who is not yet, not, or not anymore able to be physically productive. Their income too is linked to price, but indirectly. It derives from sharing a portion of the proceeds from physical production. Steiner’s illustration is of the parson in a village where everyone else works in the fields. His ultimate economic justification is that while physical production requires labour, spiritual production obviates labour.[xiii]

It is this nowadays that ought to inform the concept of social security. But a social security system based on contract, so that there is no diminution or gainsaying of human dignity on the part of those receiving their income in this way. This rather than unconditional basic income! It only needs us to follow out practically Rudolf Steiner’s insight concerning true pricing to ensure that everyone has sufficient income, whether or not he is involved in physical production.


Dieser Text ist eine gekürzte Wiedergabe des ursprünglichen Textes, welcher in einer Sammlung von Beiträgen zu Rudolf Steiner’s Konzept des richtigen Preises unter dem Titel: „Towards True Pricing and True Income“ publiziert wurde. Weitere Informationen sind auf der Website Economics/Goetheanum erhältlich.


[i] for example, see: http://grundeinkommen.tv/grundeinkommen-weil-es-schon-so-ist. Retrieved 18 April 2016.

[ii] Anthroposophy and the Social Question, op. cit.

[iii] ibid.

[iv] Economics, op. cit.

[v] “…the more the division of labour advances, the more it will come about that the individual always works for the rest of the community in general and never for himself. In other words, with the rise of the modern division of labour, the economic life as such depends on egoism being extirpated, root and branch.” Economics, op.cit., Lecture 3.

[vi] “A ‘true price’ is forthcoming when a person receives, as counter-value for the product he has made, sufficient to enable him to satisfy his needs, the whole of his needs, including of course the needs of his dependants, until he will again have completed a like product.” Economics, op.cit., Lecture 6.

[vii] In his essay, Steiner describes further the practical role of spiritual science has in modern civilisation to act as an antidote or therapy against egoism, placing human life in a broad evolutionary context such that we understand our responsibility to one another and find a way beyond narrow self interest.

[viii] The Art of Lecturing, Mercury Press, New York, 1984. Lecture 4. (German edition, GA 339.)

[ix] The Challenge of the Times, Anthroposophic Press, New York 1941. Lecture 2. (German edition, GA 186.)

[x] Given the controversy concerning the basic income movement, the following remark merits attention: “To try to regulate these things bureaucratically, through the State, would be the worst form of tyranny; but to regulate it by free ‘associations,’ which arise within the social sphere, where everyone can see what is going on – either as a member, or because his representative sits on the association, or he is told what is going on, or he sees for himself and realises what is required – that is what we must aim at.” Economics, op. cit., Lecture 5.

[xi] Towards Social Renewal, op. cit. Chapter 3.

[xii] ibid.

[xiii] See Economics, op. cit., Lecture 13.

 

2 Gedanken zu „True Pricing instead of Basic Income

  1. This presentation of Steiner’s approach re. just price certainly is correct. A Guaranteed Basic Income however does not contradict this. The correct price can still be striven for and also the incentive to work remains, either out of insight of peoples needs or more egotistically to have higher earnings above the Basic Income.
    It is a pragmatic approach in changed times to deal with the extreme automatisation and increasing unemployment. It should also not be touted as the separation of Steiner’s ideal of separation of work and income. Ideally it should be financed by taxing land and commons, whose rent income only benefits a minority of „capitalists“.

    1. Dear Christoph

      Many thanks for your comment. This view you put forward is also put forward among many anthroposophists here in Switzerland. However, is there not a better answer to the increasing automatization than putting these people who lost there job – „pragmatically“ – on the payment list of the state?

      Concerning the problem of automatization: I’m convinced that there is more than enough work for everyone on this planet as soon as we begin to understand that the true purpose of capital is to enable human beings to unfold their destiny.

      Best wishes,
      Fionn

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