GA 341: Political Economy Seminar

Themes and Structure

The first discussion is almost entirely about method, and it sets the terms for everything after. Steiner argues that economics has been crippled by two habits: pure deduction, which produces laws that are internally perfect and untrue to life, and pure induction, which collects facts and never arrives at a productive thought. His example of the first is Lassalle's wage theory, which he treats with a kind of respect: the reasoning is airtight given its premises, and would have come true had liberal economics continued undisturbed. It failed as prediction because social legislation intervened, not because the logic broke. A law can be correct and still not correspond to reality. What Steiner proposes instead is a way of building concepts by approaching a phenomenon from several sides, letting a provisional concept form, then walking it back through the facts to modify it.

The second discussion turns to labour. A participant offers a tidy definition, and Steiner uses a comparison with physics to show what such a definition is missing. The physicist's formula for work contains mass, something weighable, something real. An economic definition of labour that contains nothing comparable is only words in a row. Labour, he argues, becomes an economic category only when it is set in function with a natural product, and only when we admit that it works in both directions. Here he introduces the theme that organises the middle of the seminar: an economy is not understandable through value creation alone, any more than an organism is understandable through its building-up processes alone. Bone and nerve tissue break down. So does an economy, and it must, or it chokes on its own overproduction.

The same discussion produces the volume's most memorable analogy. Asked about wasted labour, printers setting a bad poet's verses that are then pulped, Steiner points to herring spawn. Most eggs never become herring, and their perishing is not a defect in nature but a condition of it. Economic entities behave similarly. His broader claim is that biology and economics would converge as disciplines if either were thought properly, and that both demand a capacity that mere observation does not supply.

The third session works through the division of labour by way of a deliberately small example: a tailor who makes his own suit. Steiner's answer is that the tailor has quietly made himself poorer, that an honest balance sheet would have to enter his own suit above market price, and that the effect is invisible only because the quota per garment is tiny. Scale it up and it shows. The same conversation raises the question of how many merchants an economy should have, and Steiner treats it as a genuine optimum: below a certain number and above it, trade works against the economy rather than for it. He recalls a village shoemaker from his boyhood who insisted on delivering every pair of boots himself, and uses him to locate exactly where the division of labour begins.

The fourth discussion pursues devaluation as economic work. Thread wound onto a spool must be unwound. Coal shovelled into a locomotive must be shovelled out. Packaging is made in order to be destroyed. These are not accidents at the margins but continuous, necessary operations that ordinary accounting does not see. The session extends uncomfortably into war material and standing armies, which Steiner analyses as consumption without production, structurally similar to the consumption of rentiers.

The fifth session is the currency session: exchange rates, gold cover, speculation, and the reasons Steiner gives for rejecting the balance-of-payments explanation as the primary cause of the German and Austrian collapse. It opens outward into his claim that a world economy had already arrived decades earlier while economic thinking, and political intention, kept trying to force events back into national categories. Spengler is criticised at length here as a writer of excellent aphorisms whose concepts do not touch reality.

The sixth and final discussion is the strangest and the most cited. Money, Steiner argues, must age. Value that never expires distorts everything downstream of it, and he compares the idea to the Old Testament jubilee year with its general remission of debts. Money issued young can be invested long; money grown old passes toward gift capital and is then reissued. Paired with this is his claim that a means of production ceases to be a commodity the moment it starts producing, rejoining nature and losing its price. Behind both sits a definition of money so austere it still unsettles readers: "In a fluctuating sense, money is accounting." The metal, in this account, is decoration. The final exchange, on why a rare jewel commands its price, ends with rarity dissolving into something else entirely.