Beyond Gold—Money as Bookkeeping

Surprisingly few anthroposophists know of Rudolf Steiner as an economist, let alone as a credible contributor to current monetary affairs.

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Yet, Steiner’s reputation as an economist is being quietly established through master’s and doctoral theses and academic activities of members of the Economics Conference of the Goetheanum.¹ Whether this be in Campinas, Brazil,² Delft University in the Netherlands,³ Buckingham University in England,⁴ Fribourg in Switzerland⁵ or in proximity to the Bank of England,⁶ these works have not only received high marks but been supervised by experts in their fields. In each case, the relevance and validity of Rudolf Steiner as a modern-day voice had to be established; not an easy task in modern academia.

Much of this work turns on two topics which Steiner concerned himself with intimately following the debacle of the 1920 Treaty of Versailles, known as “The Peace” by the victors and as Der Diktat [The Decree] by Germany. The first topic concerns the end of the road for gold as a monetary medium; the second is Steiner’s idea that the world needs a single currency but that it should take the form of “money as bookkeeping”, meaning that instead of coins and notes, money has the form of accounting, shared ledgers, and a common language or chart of accounts.⁷ Both of these topics occupied the second half of Steiner’s economics course,⁸ where he had to introduce seminar sessions because of the complexity of his subject matter, as attested to by Guenther Wachsmuth, Emil Leinhas, and other associates of Steiner’s linked to finance and business.

Steiner belonged to Central Europe, whereas the locus of monetary evolution was —and remains —London. There, in those days, Steiner had no voice, and monetary evolution proceeded without his ideas, let alone his advice. For one hundred years, this absence has been evident, but now, perhaps, a new possibility exists. I take this up in my book Beyond Gold: Hayek, Keynes and Steiner in Concert.⁹

Hayek and Keynes

Hayek who? Friedrich von Hayek grew up in Austro-Hungary and knew well the Central European world centred on Vienna of which Steiner spoke, but which collapsed in 1914.¹⁰ Hayek spent much of his life in London as an economist, advocating the denationalisation of money,¹¹ so that the issuing of money no longer relied on political interference and responsible behaviour on the part of banks, especially when it came to printing money in the abstract or allowing themselves to be rescued by government bail-outs. In 1944, Hayek co-founded the Mont Pelerin Society, the group of people who, for good or ill, in the early 1980s found their champions in Margaret Thatcher and Ronald Reagan and through them were able to usher in the marketisation that exposed service industries to market forces in most of the non-communist world.

Keynes who? Keynes is Britain’s most famous economist. A Germanophile, he resigned from the British government in 1919 to publish his book protesting the injustices and ultimate economic futility of the Treaty of Versailles.¹² Steiner referred to him several times in 1920.¹³ Like Steiner’s Threefold Commonwealth,¹⁴ Keynes’s book was a best seller at the time. He accompanied the entire 20th century as one of its foremost commentators and designers of economic policy, especially with his idea of an international clearing union, whereby the countries of the world could maintain balanced trade and credit together through the use of a non-national currency, the bancor.

Hayek and Keynes clashed a great deal when Hayek first appeared in London, muscling in on Keynes’s patch, as it were. So much so that the popular image is of them at loggerheads and holding diametrically opposed views. This is not the historical truth, however, as they came to have a fruitful and harmonious working relationship later in their careers.¹⁵

Beyond the Gold Standard

From the point of view of the one-world economy that had come about during World War 1, both economists were clear that gold and the gold standard, and with it western hegemony, had passed its “sell by” date. And both sought to overcome this, each in their own way. Hayek suggested free issue of money by whomever, with acceptance, not issuance, being the deciding factor in its use. Then, as now, this was a severe challenge to central banks. Keynes published his seminal A Tract on Monetary Reform in 1923,¹⁶ the thesis of which sits back-to-back with Steiner’s economics lectures. Indeed, then, as now, the way for English economists to reach Steiner passes via Keynes, as does the way for Steiner’s ideas to get mainstream traction in the so-called Anglo-Saxon world.

With Keynes, this is due in part to his Aristotelian background—although stemming from the philosophy of George Moore, it was somewhat hedonistic. But it is more challenging to align Hayek with Steiner because of the key question of how modern humanity can get to grips with today’s world economic realities. While both Hayek and Steiner agreed that the lone individual cannot do so, they disagreed on how to solve the problem. Hayek claimed that the limits to knowledge require us to listen to and obey the dictates of the market. Steiner regarded there to be no limits to knowledge and articulated what is becoming known formally as “associative economics,” that the parties involved talk and work with one another, and don’t leave everything to “market forces”.

There, for the most part, the story ends with humanity stuck in a seemingly endless debate between the state and markets, and with associative economics in the margins, at best, an outlier far from the centre of policy influence or business school tenets. However, all three—Hayek, Keynes and Steiner—can be brought together around the subject of “money as bookkeeping,” which is also the way beyond gold and all that the adherence to gold implies: the uncertainty of many central bank reserves, the disturbance of the gold market, and above all the inability to pass from blind, instinctive economics to what Keynes called “deliberate and scientific” management of economic life—in other words, consciousness displacing the unseen working of gold to, eventually, conscience-led consciousness.

Both Hayek and Keynes were familiar with bookkeeping, but both had reached a dead end. Hayek, because he was never an entrepreneur, and so did not have bookkeeping as lived experience. Keynes because he could not get beyond the “bookkeeping money” created by fractional reserve lending, whereby banks lend money in considerable excess of their deposits, seeming to create money “out of nothing,” but in fact reflecting the creativity of human beings by providing credit not to buy things but to finance that creativity. Had either met Steiner and his idea of “money as bookkeeping,” things might have been different. And they might still be.

Instruments of Perception

It is possible that through encountering Steiner, the seemingly different objectives of both Hayek and Keynes would have been met, because bookkeeping is a neutral science and an objective process on which the global financial system itself actually rests. When not captured by narrow national interests, it can be seen to be the very condition needed if economic life is to be conducted on its own principles. This is the central argument of Steiner’s perspective. Bookkeeping is the same all over the world, allowing different currencies (today, there are 180+) to coexist while all use the same shared framework. No central banks and no overarching regulation are needed: accounting does the work. In this way, the world’s currencies are no longer weapons of economic rivalry and warfare, but become instruments of perception of the working and dynamics of the many sectors and regions in today’s one-world economy.

Is it naïve or ambitious to position Rudolf Steiner in this way? I think not. Indeed, I see no other way to trim-tab the direction of modern economics and with it the direction of economic life as such, let alone slow its pace or turn the ship around. Any candid survey of the world of economists will not find Steiner’s ideas having an influence or gaining traction, nor will they, unless he is given a seat at the “top table,” as an economist among others—“the other Austrian”, as I call him.

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This year we bring you a series of articles titled “Rudolf Steiner as…” to honor the 100th anniversary of Rudolf Steiner’s death—sometimes an essay, sometimes simply a thought or reflection—always, an aspect of his being.

1. The Economics Conference.
2. Xavier Andrillon: “True Price as Condition of Sustainability: The Global Coffee Crisis (1999– 2003) and the Brazilian Amazon as Case Studies,” available as Beyond Brundtland from aeBookstore.
3. For example, “Capital and capacities: Using capital to create economic space for capacities,” C.W.M. Naastepad in Creating Economic Space for Social Innovation, eds. Alex Nicholls and Rafael Ziegler, Oxford University Press, 2019.
4. Three Kinds of Money, Rudolf Steiner and the Development of Monetary Economics. Arthur Edwards, Associative Economics Worldwide 2019, from aeBookstore.
5. “Money as Accounting” – From Ancient Mesopotamia to 2008 and Beyond. Historical and Theoretical Issues, Fionn Meier, Associative Economics Worldwide 2019, from aeBookstore.
6. Finance at the Threshold – Rethinking the real and financial economies. Houghton Budd, C. London: Gower 2011.
7. Such as the treasurers of the Anthroposophical Society worldwide are working on.
8. Economics – The world as one economy. 2014 [1922]. (CW 340) from aeBookstore.
9. Beyond Gold: Hayek, Keynes and Steiner in concert. Ethics International Press.
10. Triple Governance: Hayek’s Lost Thesis. Houghton Budd, C. in: Leeson R. (eds.) Hayek: A Collaborative Biography. Archival Insights into the Evolution of Economics. Palgrave Macmillan, Cham 2018.
11. The Denationalisation of Money. Friedrich von Hayek, Hobart Paper 70, Institute of Economic Affairs, October 1976.
12. The Economic Consequences of the Peace, J M Keynes, Macmillan, London 1919.
13. See “Keynes and the Treaty of Versailles” in Rudolf Steiner, Economist. Articles and Essays by Rudolf Steiner, Emil Leinhas and Christopher Houghton Budd. New Economy Publications, Canterbury 2018 [1996], from aeBookstore.
14. Towards Social Renewal. Rudolf Steiner. Rudolf Steiner Press, London 1977 [1919].
15. See Keynes: The Object of Hayek’s Passion?, Filomena de Sousa, F. (2021) Cambridge Journal of Economics 2021, 45, 1–18.
16. A Tract on Monetary Reform, J M Keynes, Macmillan, London 1923.