What is social renewal? In the social ferment of postwar Europe in 1919, Steiner presented his insights concerning the three autonomous domains of social life that are fundamental to the nature of human relationships in our time: the economic, political/rights and cultural domains. As he explained, all three of these essential dynamics must be recognized and consciously cooperated with if any real social renewal is to be achieved. In this essay I will be comparing the dynamics of social renewal that Steiner revealed with some of the ideas of Klaus Schwab, Chairman of the World Economic Forum. Quotes from what Schwab has written are from his web article, The Davos Manifesto 2020: The Universal Purpose of a Company in the Fourth Industrial Revolution,[1] posted on Dec 2, 2019. See footnotes for references to the quotes from Steiner that I have used.
Schwab’s article introduces several topics which after closer examination can be contrasted with what Steiner wrote and said.
Value
Schwab defines the purpose of a company as matter of “value creation”:
The purpose of a company is to engage all its stakeholders in shared and sustained value creation. In creating such value, a company serves not only its shareholders, but all its stakeholders – employees, customers, suppliers, local communities and society at large.
His further description:
A company serves its customers by providing a value proposition that best meets their needs. It accepts and supports fair competition and a level playing field.
The term, ‘value proposition’ (introduced by Lanning and Michaels in 1988), is “a clear, simple statement of the benefits, both tangible and intangible, that the company will provide, along with the approximate price it will charge each customer segment for those benefits.”[2] Schwab has a ‘value proposition’ where the price fluctuates based on need and competition and is therefore subjective, whereas for Steiner, a commodity has an objective value determined by people with expertise in the characteristics of the commodity[1] .
Steiner:
[A commodity] has an objective value, to the degree that it is durable or the reverse, lasting or perishable; to the degree that by its nature it is more or less serviceable, plentiful, or scarce. All these things condition an objective, actual economic value, the determination of which demands an objective expert knowledge.[3]
Dignity and Respect
Schwab:
A company treats its people with dignity and respect. It honours diversity and strives for continuous improvements in working conditions and employee well-being. In a world of rapid change, a company fosters continued employability through ongoing upskilling and reskilling…It integrates respect for human rights into the entire supply chain.
Schwab frames dignity and respect in the context of how an employee is treated and trained. Conversely, Steiner frames dignity in the context of the value of work for humanity as a whole.
Steiner:
[A large part of humanity] no longer wants to be led to work by economic compulsion. They want to work from motives more befitting human dignity…It [the three-membered organization] aims at establishing within an independent, self-sustaining cultural life a realm where one learns in a living way to understand this human society for which one is called upon to work; a realm where one learns to see what each single piece of work means for the combined fabric of the social order, to see it in such a light that one will learn to love it because of its value for the whole.[4]
Regulation and Transparency
Schwab:
[A company] has zero tolerance for corruption. It keeps the digital ecosystem in which it operates reliable and trustworthy. It makes customers fully aware of the functionality of its products and services, including adverse implications or negative externalities…It ensures the safe, ethical and efficient use of data.
The company is to be the guard against corruption and the assurance of transparency. This is not something that should be left within the purview of companies as a matter of self-regulation. Zero corruption and transparency can only be achieved through an autonomous rights domain holding sway over the economic domain to ensure human dignity and quality of life.
Steiner:
The political state must be based upon, and occupy itself with, those requirements which are common and equal to all.[5]
It is essential for knowledge about the members of the social organism to be able to differentiate between the legal rights system, which can only concern itself with relations between human beings that derive from human sources, and the economic system, which can only be concerned with the production, circulation and consumption of commodities. It is necessary to sense this difference in life in order that, as a consequence of this sensibility, the economy be separate from the rights member.[6]
The Environment and Technology
Schwab:
[A company] acts as a steward of the environmental and material universe for future generations. It consciously protects our biosphere and champions a circular, shared and regenerative economy. It continuously expands the frontiers of knowledge, innovation and technology to improve people’s well-being.
Here, companies act as guardians of the environment and oversees technical advances on behalf of everyone. Though the environment and technology were not of the same level of concern in the early 20th century as they are today, it is not the purview of companies to be the stewards of these. As Andrew Brogan concisely summarized from Steiner’s insights on the rights domain: “… the role of politics is to ensure equality in interpersonal relationships through the establishment and promotion of human rights which contribute to a dignified life.”[7] Environment issues and the application of technology are directly impacting our ability to lead a “dignified life.” It is the responsibility of the rights domain to ensure quality of life – people’s well-being – which would of course include living conditions, the environment and the biosphere as a whole. It is out of the spiritual/cultural domain that innovations will emerge, which then are taken up by the economic cycle.
The Social System
Schwab:
A company is more than an economic unit generating wealth. It fulfills human and societal aspirations as part of the broader social system.
Schwab believes that “generating wealth” (profit) at least partly fulfills the aspirations of human beings. Even in Steiner’s time, the reason for why we work was shifting away from a purely profit motive. In our times, this is even more relevant – people are more and more concerned about the environment and other people rather than their personal profit. When Schwab wrote “more than an economic unit” we see how he frames “upskilling and reskilling” (modern corporate words for education) as also being fulfilling to people and their “societal aspirations,” a nod to the expression attributed to Malcom Forbes: “He who dies with the most toys wins.” Conversely, in the healthy social organism, education is in the purview of an autonomous cultural domain, not the economic domain.
Steiner:
An economic management that does not include this profit motive among the forces at work within the economy cannot of itself exert any effect whatever upon the human will to work. And precisely because it cannot do so, it meets a social demand that a large part of humanity has begun to raise in the present stage of development. This part of humanity no longer wants to be led to work by economic compulsion.[8]
In conclusion, hopefully this short essay provides some counterpoint to Schwab’s model, which he calls ‘stakeholder capitalism,’ and its fundamental impulse that it “positions private corporations as trustees of society, and is clearly the best response to today’s social and environmental challenges”[9] (my italics). It is important to be aware of Schwab’s thinking and to counter his views with the concrete reasoning that Steiner brings to our consciousness regarding social renewal.
[1] https://www.weforum.org/agenda/2019/12/davos-manifesto-2020-the-universal-purpose-of-a-company-in-the-fourth-industrial-revolution/
[2] Lanning, Michael J., and Edward G. Michaels. “A business is a value delivery system.” McKinsey staff paper No. 41. July, 1988.
[3] Steiner, R. (2013) The Social Future. Revised by Henry B. Monges. SteinerBooks. Lecture 5, 29 October 1919, Zurich
[4] Steiner R. (1985) Renewal of the Social Organism. Translated by E. Bowen-Wedgewood and Ruth Mariott, revised by Frederick Amrine, Anthroposophic Press, GA 24, article 6
[5] Steiner, R. (1977, 2019) Toward a Threefold Society: Basic Issues of the Social Question. Translated by F.T. Smith. Rudolf Steiner Publications. GA 23, Ch. 3
[6] Steiner, R. (1977, 2019) Toward a Threefold Society: Basic Issues of the Social Question. Translated by F.T. Smith. Rudolf Steiner Publications. GA 23, Ch. 2
[7] Brogan, A. Steiner Shorts 3, The Social Problem https://www.academia.edu/67073076/Steiner_Shorts_3_The_Social_Problem
[8] Steiner R. (1985) Renewal of the Social Organism. Translated by E. Bowen-Wedgewood and Ruth Mariott, revised by Frederick Amrine, Anthroposophic Press, GA 24
[9] https://www.project-syndicate.org/commentary/stakeholder-capitalism-new-metrics-by-klaus-schwab-2019-11
Marc Clifton 