Dear Unknown Friends:
It is an honor to begin to serialize a lecture by Eli Siegel of both historic and urgent meaning. Ownership, Strikes, Unions, of July 17, 1970, is one of the “Goodbye Profit System” lectures—in which Mr. Siegel described, documented, and explained something enormous taking place in world economics and within people. We are even more intensely in the midst of that huge something now. And we need Mr. Siegel’s explanation to understand what is occurring—in America’s offices and factories, and in people’s feelings and conversations.
Mr. Siegel showed that by the spring of 1970 a way of economics which had gone on for centuries had become so decisively weaker that it could never prosper again. The profit system, a mode of using human beings that had always been ugly, was now irrevocably crippled. He explained:
Deeply, what has made the profit system weaker is at the very beginning of history…: man was not made to be used by man for money….It is a corruption, it is artifice. [Goodbye Profit System: Update,Definition Press, p. 70]
Mr. Siegel showed that economics based on the world’s wealth being owned by a few people, and on a person’s using the work of others to get money for himself, was essentially finished—though it might stay around for a while in a state of illness. And that is what has happened. Persons whose sense of power has been tied up with profit economics have been trying, with increasing ferocity and brutality, to reinvigorate it, and to make sure they make profit at any cost to others’ lives. One result is the phenomenon of global capital “flows”: corporations’ and speculators’ investment in and swift, massive extracting of profits from “third world” nations, leaving those nations economically devastated, therdir people even more impoverished than before. Another result of the effort to keep profits coming to a few persons is the diminishing of America’s middle class: the fact that a hard-working father in Lansing, perhaps, or Houston, cannot pay his bills, and there are tears shed by strong men at America’s kitchen tables.
Economics and Ethics
I love the way Aesthetic Realism sees economics. Mr. Siegel showed that economics as such is not, as it has often been called, “the cold science,” or even, as Carlyle called it, “the Dismal Science”—though economics has certainly been used in behalf of hideous coldness, and therefore has made millions of people’s lives dismal, miserable, and tormented. This central principle of Aesthetic Realism is about economics, as it is about everything human beings do: “All beauty is a making one of opposites, and the making one of opposites is what we are going after in ourselves.”
The biggest opposites in our lives are Self and World—ourselves and what is not ourselves. Ethics, Mr. Siegel showed, makes self and world one: we are ethical if we feel we take care of ourselves by being fair to what is not ourselves. But economics for centuries has been based on a severing of those fundamental opposites. Profit economics has been based on: the way to feather my nest is to lessen you—get all I can out of you and give you as little as possible. Profit economics is based on the desire which Mr. Siegel identified as the source of all the cruelty and mental weakness in history: the desire for contempt, “the addition to self through the lessening of something else.”
Contempt can take the form of one child spitting at another and feeling he’s a big shot because he could humiliate someone. Contempt is in a wife’s feeling she owns her husband: what matters most about him is whether he makes much of her. And, Mr. Siegel wrote, “Only contempt could permit a man to make money from the work of another—as man has done these hundreds of years” (GPS:U, p. 155). Plainly, every boss feels, “The less I can pay this person, the better for me.” Also, “The less I spend making working conditions safe, the more money for me.” What a basis for economics! Yet it is the basis of profit economics everywhere in the world.
Once you feel the way to take care of yourself is for another to have little, you are ready to justify about anything as a necessity for your own well-being. So bosses “justified” child labor, sweatshops, disease-causing conditions: after all, “To hire a more costly adult instead of a child would be too big a sacrifice for me.” The conditions that made a miner get black lung disease and die in agony, meant better dividends for the mine’s stockholders, and so the conditions were desired.
More Dignity, Less Profit
By 1970, Mr. Siegel showed, the conditions through which big profits could be made had been combated and significantly changed. This is the chief reason that the profit system was essentially over. Because of unions and the tremendous courage of people in them, working people in this nation were making wages that gave them more dignity. Because of unions, people were increasingly able to live healthily and well. At the time Mr. Siegel gave the lecture we are serializing, unions were at the height of their power—which means the American people were. Each drop of dignity for a person who worked and that person’s family, meant less profit for boss and stockholders. And so there was a feeling in various persons that for business to be profitable, unions had to be broken: the American people had to give up their hard-gained dignity and be made to suffer so the profit system could go on.
I have commented in this journal on the voluminous pronouncements by the media that the American economy is “robust.” They are complete fakery. Big profits are being made by some persons; but the economy that belongs to the people of America, the economy of a family in Tennessee or New Hampshire, uncertain about meeting the mortgage payments; of children sitting in American classrooms, scared because they heard their parents fight over the lack of money; of a single mother in Nebraska, working with weary body and mind at her second job late into the night; of a senior citizen in California, choosing between medicine and food because he can’t afford both—that economy, the real economy, is a definite failure.
The means by which economics based on using people for profit is able now to go on at all are: the reintroduction of child labor and sweatshop conditions; the making people work longer hours for less; the forcing people to be perpetual temporary workers, without benefits; the making “job security” virtually nonexistent; the sending of jobs to “third world” nations so as to avoid paying even the meager US minimum wage; the making it necessary increasingly for middle class parents to go to charity food pantries to feed their families.
And even more than in the 1970s, there is an anger across America at how economics is taking place in this land. There is a fury in people about the way they are seen on the job: contemptuously, in terms of how much profit can be gotten out of them. The illusion of the beneficent corporate employer is pretty much over—an American worker knows that her boss would like to pay her Honduran wages, or get rid of her altogether. People in America are told reassuringly by the media that jobs are abundant; but somehow they do not feel that an abundance of wretchedly paying jobs—and their having to hold two at a time—is reassuring. Even persons now making large salaries are worried that they may be unemployed next week and forced to take a job for a fraction of their present wages.
Though Americans are enraged at a way of economics that sees them in terms of how much money their bodies and minds can bring in, they do not know an alternative that looks acceptable to them. The true alternative is not some way associated with Eastern Europe. The alternative is ethics: it is an economy in which production, jobs, buying, selling are based on the honest answering of this most central question, stated by Mr. Siegel: “What does a person deserve by being alive?”
The way Mr. Siegel spoke about economics was utterly beautiful. His passionate feeling for what people deserve was inseparable from his scholarship—scholarship as thorough and loving as ever existed in the world. He showed that justice is real, is imperative—is not something to water down and lie about—and that justice is also the most graceful thing in the world, the height of style. He said, “The whole purpose of history is to show that the greatest kindness is the greatest power.” He documented that statement, and also, in all his words and moments, exemplified it.
In Ownership, Strikes, Unions, Mr. Siegel speaks about something people need to be clear about, which in a lecture the month before he had put this way—in one of the greatest statements about economics and humanity ever made:
The most important thing in industry is the person who does the industry, which is the worker. That…never can change. Labor is the only source of wealth. There is no other source, except land, the raw material….Every bit of capital that exists was made by labor, just as everything that is consumed is. [GPS:U, pp. 39-40]
In the opening paragraphs of the present lecture, Mr. Siegel mentions Adam Smith, and he will quote him in the portion to be published next week. He cared for Smith very much, and showed, in other classes, that this economist, so often put forth as the spokesperson for laissez-faire capitalism, really stood for a deep kindness to people and reality itself.
—Ellen Reiss, Aesthetic Realism
Chairman of Education
Ownership, Strikes, Unions
By Eli Siegel
The dislike which is had by many people for the going of the profit system and its being superseded by the incentive of good will and creation and expression—that is to be noted. Many people think the profit system will never come to an end, it’s been around so long. And there are signs saying, Well, once more it’s as good as ever. We’ll see about that. In the meantime, I ask everyone to be exceedingly critical and to present whatever doubts there may be in the most useful fashion, because what I have been saying isn’t being said anywhere else.
The most important thing is the presenting of ethics, or good will, as steel, as force—and that is a hard thing to believe; also the presenting of good will as being illustrated by economics, politics, anthropology, and so on, with ethics one way of saying aesthetics. In other words, it can be shown that the world, the people in the world, are tired of insufficient good will and the absence of good will; and, while not knowing clearly what they are objecting to, they are objecting to it. Also, they objected to it successfully, because something is over. What we now have is like something which has shown its weakness, or even its death, acting as if it still could dance. The stock market could rise two hundred points—it doesn’t mean a damned thing. The rise of the stock market now is essentially an inside job.
It is well to begin at the beginning. The history of production has been essentially farcical and cruel; mostly so in the last few hundred years, those years when what is called capitalism has been more noticeable. It was really so too with feudalism, with what came before feudalism, ancient times—because the main thing in production was not seen as the main thing. This is economics and it’s ethics. The person who made this main thing noticeable was Adam Smith in 1776. One can see that in the first pages of David Ricardo’s Principles of Political Economy, where Ricardo, in 1817, quotes Smith. Chapter one, “On Value,” has not been superseded.
The definition of value, in any form, is: anything that, taken to oneself or affecting oneself, can make oneself more. That has value for us which makes us more the way we want to be. The value can be got from something we do ourselves—as, if we take a walk or do exercises it has value because we become more refreshed and supposedly healthier. Music has value; anything that makes ourselves more, or makes anything more, has value. That is the simplest definition.
So there are things in the world which have value. Some are unusual. Cognac, for example, has value, and water less value. Though if it were a fight between cognac and water, many people for a while would take water. That is, water is more necessary. You can’t quench a sensible thirst by cognac.
Value, then, is the one thing that has remained in economics since the work of Petty, let’s say, who is a 17th-century economist, through the 18th century, 19th century, with McCulloch, Cairnes, and the like. Ricardo says:
The value of a commodity, or the quantity of any other commodity for which it will exchange, depends on the relative quantity of labour which is necessary for its production, and not on the greater or less compensation which is paid for that labour.
Ricardo is saying that the value of a commodity depends on the quantity of labor; it doesn’t depend on the fact that anybody invested in the company or that somebody was able to buy machines. It doesn’t depend, in other words, on that inanimate factor in production made by man himself which is called capital. Capital is either tools or money—instruments or machines, or money.
Ricardo is careful in the wording, but if this is true, then my statement that the history of production in the western world is a farce and cruel is true; because if the value of a commodity depends on the relative quantity of labor, what is called management should be seen as a phase of labor.
Management of labor is labor—as a lieutenant, who manages privates, still works. And a conductor who manages an orchestra still works. The other thing, making money through capital, which can be done by one’s nephew in Dutch Guiana—that is, he puts in capital and never sees the place—that is not labor, and that is profit in its purest hurtful form.
Management is labor. Insofar as an executive works, he is a laboring man. Insofar, however, as he profits from his portfolio, that’s something else. If he profits from his brain or hands, he’s a laboring man. Hands and brain, yes; portfolio, no.
So there is an attempt to show that this farce, cruel farce, can continue.