Associative Economics

An emerging school of economic thought

With its many and wide-ranging implications for modern economic life, associative economics places human beings at the centre of all economic processes. Our capacity to be both free and responsible means we can make conscious what is otherwise left to the unseen working of market forces. Likewise, we can regulate our own behaviour without recourse to the state. Owing much to the observations of Rudolf Steiner, the Austrian 'renaissance man' whose seminal work was concerned with the advent of global economics, associative economics takes full account of wide-ranging views from Aristotle to Adam SmithKarl Marx to Maynard Keynes and Milton Friedman, as well as the 'sustainability critique' and the sophistications of modern finance.

Rudolf Steiner's contribution to economics is based on his 1922 seminal course Economics – the World as One Economy, in which he describes how since the beginning of the 20th century humanity has entered a new stage of societal development characterised by three autonomously governed spheres (spiritual life, rights life and economic life), the last of which, economic life, transcends the prior but still existing stages of private and national economies and their corresponding economics.

This development in human affairs requires a rethinking of economic science. Closed and single, the appearance of a global economy marks the culmination of the validity of today's conventional approach originating in 18th century mercantilism and predicated on separate national economies. Economically seen, the earth as a whole has no extra-terrestrial balance of payments. Instead, the dynamic of a closed economy requires inherent regulation, achieved in particular, per Steiner, by differentiating money into three kinds (purchase, loan and gift money), not just three functions (means of exchange, store of value and unit of account).

In large part, it was the failure to recognise and accommodate this change that resulted in World War I. According to Steiner, the remedy for this historical problem lies in autonomous economic governance on a consciously co-ordinated – i.e. 'associative' – basis. This does not require a political programme of any kind, but a more nuanced and precise understanding of actual economic phenomena themselves. For Steiner, insofar as economics has its roots in 19th century emulation of the 'hard' sciences, it cannot be called a true science. For that, an entirely new approach is needed, embracing inter alia methodology, history, sociology, accounting and the insight that money is an articulated and not a monolithic phenomenon. Above all, Steiner emphasises the need for human beings to be placed at the centre of economic processes and to draw their understanding of economic life from the experience of their own conduct, rather than the theoretical world of the abstract observer.

The term 'associative economics' describes just such a way of understanding modern economic life. Pointing to the next step after market economics, it describes the landscape that comes into being as and when humanity, individually and collectively, thinks and acts associatively. This it can only do, however, when economic life is grasped as a whole, not from the point of view of one person only, and when the way we do business and manage the economic aspect of our lives and institutions matches the exigencies and inherent dynamics of a single global economy.

An Associative Economics Guarantee Mark  has been in existence since 1998 as a means to self-audit the associative nature of one's activity.