Associative Economics

Associative Economics

Since the beginning of the 20th century humanity has entered a new stage of societal development characterised by the appearance of global economy, as distinct from the preceding, but still co-existing stages of private and national economics.

In his economics course, given in 1922, Rudolf Steiner drew attention to the fact that this then unnoticed development in human affairs would require a new approach to economic science. The appearance of a global economy, that was closed and single, showed the approach described by Adam Smith, in terms of world trade and competing national economies, to be anachronistic. The earth cannot, after all, balance payments with Mars! The dynamic of a closed economy requires inherent regulation.

The failure to accommodate this change resulted in the First World War; the remedy, according to Steiner, would be to undertake economic life on a consciously co-ordinated associative basis. To do so would not require a political programme of any kind, but rather a more precise understanding of the actual phenomena themselves. For Steiner saw that the discipline of economics, as it had developed during the 19th century, could not yet be called a science. For that, an entirely new approach was needed, an approach that embraced methodology, history, sociology, accounting and the insight that money is an articulated phenomenon. Above all Steiner placed an emphasis on the need for the human being to place himself at the centre of economic processes and draw from the experience of his own conduct, rather than the theoretical world of the abstract observer.

Hence the term associative economics describes a way of understanding modern economic life that points to a next step after market economics. It describes a landscape that comes into being as humanity, individually and with one another, takes a step towards association, which it can only do when economic life is grasped as a whole, not from the point of view of one person only, and also not until the way we do business and manage the economic aspect of our institutions matches the exigencies of a single global economy.