Wednesday, 19 December 2012

Associative Economics

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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[1] 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. It is called "associative economics" because its goal is an economic sector which is managed by associations of business corporations (industry associations) and consumer associations instead of by the Invisible Hand of the blind market (capitalist economics) and instead of by the government (socialist economics).



[edit] Themes

Some of the themes central to/addressed by 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' [ref needed]; 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.[2]

[edit] 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!, working in association with one another rather than unto themselves. It has also been described as an "altruistic stakeholder-managed economy").[3] This picture of an autonomously conducted economy belongs to Steiner's overall conception of the threefold nature of social life.

[edit] The threefold nature of social life

In the early 20th century, Rudolf Steiner spoke in detail about the threefold nature of social life; not as an invention or theory, but as observable fact (also known as the "threefold social organism" or "social threefolding"). Central to this perception is the need for autonomy (separate yet conscious interaction) on the part of the three realms of social life: the economy, the rights life (including politics and law), and spiritual life meaning the many worldviews that human beings cherish. Though historically premature, 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.[4] Freedom and self-determination in the spiritual or cultural realm – to believe, express, and develop as one sees fit; working together as part of the whole human family in the economic realm – where through the division of labor individuals come together to meet one another’s needs; and equality in the rights realm – where everyone comes together to sense and make agreements that are right for all.

[edit] 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 entrusted to those most capable to use it to meet current needs [5]
Steiner views labor as a form of "wagery," the remnant of serfdom and slavery (where once we sold our whole body, now we sell our ’labor power’). But it is also an economic untruth, an impossibility which we allow to persist: "[People] 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."[1]
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[6] 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."[7] Capital is therefore intimately linked to the individual, although it also owes much to our common heritage, especially the way we are educated.
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, but how precisely this idea is given practical expression is one of the key, and liveliest, areas of research in associative economics.

[edit] Notes

  1. ^ a b Steiner, Rudolf Economics – The World As One Economy
  2. ^ Lamb, Gary. Associative Economics: spiritual activity for the common good (Ghent, NY: AWSNA. 2010) 20, 145
  3. ^ Karp, Robert. Toward an Associative Economy in the Sustainable Food and Farming Movement (New Spirit Ventures. 2007)
  4. ^ Steiner, Rudolf. Towards Social Renewal (Great Barrington: SteinerBooks. 1999)
  5. ^ in this, Steiner corroborates many notable thinkers including Chief SeattleChief Seattle Letter to President Pierce, 1855 and Thomas Jefferson). Jefferson, Thomas "The Earth Belongs to the Living" – a letter to James Madison, Paris, 9/6/1789
  6. ^ Wilken, Folkert. The Liberation of Capital (London, England; George Allen & Unwin. 1982)
  7. ^ Beuys, Joseph. What is Money? (Forest Row, England; Clearview. 2010) 26

[edit] External links

[edit] Organizations

[edit] Books

[edit] Journals and Articles

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