The Right of Aesthetic Realism to Be Known

Aesthetic Realism was founded by Eli Siegel in 1941

Ethics: The One Efficiency

Dear Unknown Friends:

We continue serializing the great lecture Selves Are in Economics, which Eli Siegel gave in December 1970. This was the year in which he began to show, in his Goodbye Profit System lectures, that economics based on contempt, on seeing human beings in terms of how much profit could be gotten out of them, had permanently failed. He wrote:

The Aesthetic Realism approach to history made it clear to me in the spring of 1970 that, though an unethical and inefficient way of economics could last for century after century, in this time of ours it could no longer work even as well as it had.... Reality as ethics is saying: "I, too, am with production. My absence hurt things years ago; but somehow production and distribution went on tolerably. The world has now come to such a geographic or historic state, I, ethics, must be honored." [Goodbye Profit System: Update, pp. 157-9]

I comment here on statements in a recent New York Times article to say something of how Mr. Siegel’s explanation of three decades ago is borne out by—and makes sense of—what’s happening now. The contemptuous use of the world’s resources and people, while taking some new forms, is indeed a failure. And for economics to succeed, be efficient and kind and stop causing misery, it needs what Mr. Siegel explained: to be based on ethics—justice to every man, woman, and child.

The headline of the March 21 Times article by Joseph Kahn is "Losing Faith: Globalization Proves Disappointing." Kahn is writing from Monterrey, Mexico, and this is his first paragraph:

The world leaders who have gathered here to discuss how to fight poverty do not always see eye to eye on what works best. But many now agree that the force they once saw as a near panacea—globalization—has come up short.

There is a certain ambiguity in this paragraph, representative of the ambiguity throughout the article: does the paragraph say globalization "has come up short" as such, or that it "has come up short" in "fight[ing] poverty"? I wrote last week about poverty, and about Mr. Siegel’s explaining, with passion and clarity, that if people really wanted poverty to end, it would: it exists because people like feeling superior. The implication of Kahn’s first paragraph is that somehow the purpose of "globalization" has been to stop poverty. That is hardly the case. The purpose of the phenomenon called globalization has been for corporations to make profit unrestricted by any national borders—to use the whole globe and its people as a means of private profit. And a huge reason why US companies have "globalized" their production—are having, say, engineering work done in India, let alone garment manufacturing done in Guatemala—is that it became impossible to make big profits using American labor.

"The Triumph of Good Will"

Mr. Siegel explained this in the 1970s: because of the courage of unions, American workers came to live with less anguish and increasing dignity—and every cent added to a worker’s wages or spent to make a workplace safer was that much less profit pocketed by the boss. That is one of the reasons Mr. Siegel said on May 22, 1970, as he spoke of the profit system’s failure, "We have with us the triumph of good will." The inability to go on making big profits from US labor was an ethical triumph: it arose from the fact that (because of unions) workers were better paid, received health benefits, worked under safer conditions—were less likely to get industrial diseases and lose limbs in machinery.

So companies looked to the "globe": sought lands where people would work for a pittance and be in no position to protest horrible working conditions.

The profit system—"globalized" or otherwise—depends on poverty. This is a matter of tremendous ethics, but also of simple arithmetic. If all the people of the world receive enough of the fruits of their labor to live without distress and even with some comfort, there will not be profits for persons who don’t do the work, persons such as stockholders.

Contempt: The Opponent of Ethics

To feel that someone else has to be weak so you can be strong is contempt. Contempt, Mr. Siegel showed, is a huge desire in people. It is "the addition to self through the lessening of something else." It is everyday, goes on in us hour after hour. Contempt can be a sense of victory in feeling someone is stupid or crude and therefore we are smart or sensitive. But it is the ugliest thing in the human self. It is the interference within us to intelligence, art, kindness. Mr. Siegel identified contempt as the source of all human brutality. And economics based on contempt, on this lessening of a fellow human in order to heighten oneself, is what Mr. Siegel showed to be at the end of its historical rope.

About the beginnings of globalization, Kahn notes: "The fall of the Berlin Wall allowed capitalism to spread worldwide at a rapid rate." That is so. Yet the fall of one mode of economics doesn’t mean the remaining one is a success either, however much it may "spread worldwide." As Mr. Siegel described, and as I have in many issues of this journal, economics now needs to be something different from what people have yet experienced: it needs to be ethics. It needs to be based on this central question, stated by Mr. Siegel: "What does a person deserve by being a person?" We are at a time in which the ethics of economics has to be thought about and, as he wrote, honored at last.

Let us take a subject he speaks of in the current section of the lecture we’re serializing: monopoly. To look at economics truly would be, for example, to ask, What in the self likes monopoly? We have the phrase in ordinary life "He monopolized the conversation." There is a desire in a person to control something utterly and have everyone else’s relation to it depend solely on my wishes. Does the desire for monopoly arise from respect for reality and people, or contempt? It is interesting that while profit economics is supposed to love the free market and competition, every person going after profit would really like to be a monopolist, kill the competition completely, corner the market, be the sole determiner of the price and availability of the product even as people’s very lives might depend on their need for it.

What Is Being Aided?

The Times article has this sentence about the desire of persons governing wealthy nations to provide more "foreign aid":

The perception that markets have failed to lift all boats fast and high is behind the sudden support for more foreign aid, as is the recent rockiness in the world economy.

The unlifted boats are a metaphor for impoverished people. But the new "support for more foreign aid" is not in order to have people less poor, as Kahn implies it is. The purpose of the "foreign aid" is to enable companies in the US, Britain, Germany, France, etc. to make profit. For example, French president Jacques Chirac is quoted in the article. Chirac, we’re told, called for "aid for trade" and said, "There’s no creation of wealth without the necessary infrastructure—and that infrastructure demands outside aid." 

What this is about is the fact that for the profit system to continue, even globally, governments have to prop it up. Governments have to spend their citizens’ money so that, for instance, a US company will have the "infrastructure" (maybe electricity, water supply, roads) it needs to employ people in a foreign land at starvation wages. Just as our government has bankrolled corporations here with massive "corporate welfare," it also needs to support them abroad. That fact is a sign of what Mr. Siegel explained: the profit system is not faring well.

Then there is another matter which, Kahn says, has impelled the "support for more foreign aid": "The threat that terrorists can take advantage of the poorest places as havens also motivates the increase." This is a saying that persons in various lands are furious at being used for profit, being made poor so others can be rich. They are furious at the US, and their fury can be exploited horribly by, perhaps, vicious militant Islamic fundamentalists.

We are in the midst of what the lecture serialized here is about: the fact that economics always has to do with selves, the self of everyone. And the question is: What is the ethical way, also the efficient way, for the self of every person to be related to the resources of this earth?

What Mr. Siegel showed in 1970 is that two things seen as opposites—ethics and efficiency—are now one. Economics won’t be efficient until it is just.

In this lecture he looks at passages from an economics text, and he comments on them with a certain lightness that is also deep and exact. In the section we have come to, he finds, as he had earlier, that one of the sentences has enough profound drama, life, and accuracy to be poetry; and he gives that sentence a line structure.

I love the way Eli Siegel saw economics. He had a beautiful passion for justice at one with great ease. He had tremendous scholarship at one with respect for the everyday, for the immediate happenings in homes, in streets, and in human feelings.

Ellen Reiss, Aesthetic Realism Chairman of Education

Selves and Monopoly

By Eli Siegel

Note. The passages Mr. Siegel reads are from Principles and Problems of Economics, by Ault and Eberling (1936).

In the matter of price, a word that means running by one central force has taken on an ethical meaning, a sinister meaning. The word is monopoly. And monopoly is a way of thumbing your nose at laissez-faire.

At one time laissez-faire was the big thing: let prices and wages take their course and they’ll find their equilibrium; they’ll be stabilized. Combinations of workers went against that, and also monopoly did. Combinations of workers were for the purpose of raising wages, and monopoly was for the purpose of price remaining at a certain high point. That was its chief purpose, outside of the fact that anybody who belonged to a monopoly had a little pleasure from it. Try it some time. Think that you’re part of a trust or trade association—that’s what it calls itself, a trade association, but it’s really for the purpose of monopoly. It’s very agreeable and you don’t worry about defying the laws of laissez-faire at all, I can assure you.

In chapter XIV the writers ask this:

Considering that the only reason for the legalized existence of industries at all is that through them society hopes to reap the rewards of efficiently-organized production, does it not seem strange that society will permit the organization and operation of industrial monopolies or monopolistic control of any kind?

It does seem strange, but society itself is strange, so you can expect it. Monopolies have been objected to. A phrase in the American language is trust-buster—for Theodore Roosevelt.

For Instance, Railroads

Railroads have had monopolies. That is, as soon as there’s only one railroad going between two cities, there is a monopoly. The only questioning of it is footwork, the coach at one time, the wagon, then the car, and there has been a great rivalry between the bus systems and the railroads. Buses so far have never got into the freight business; trucks have. The writers of this book are lively on the subject:

A railroad once built in a territory has a monopoly of the transportation in that territory.

Which is quite true. You can build only one pair of tracks on so much ground. You can have another pair of tracks near, but it would seem to be a little wasteful.

The word monopoly has been used in ever so many ways. For instance, to be a father gives you the right to monopolize your child, and to be a child gives you the right to monopolize your father. If you don’t know this, you shouldn’t have been born.

Then the writers point out there was a railroad that tried to go along somewhat near where the New York Central was going. It sure had nerve. It had an interesting name, the Nickel Plate Railroad:

The Nickel Plate Railroad...over a generation ago...built alongside the New York Central. The venture was a complete failure and only recently has the Nickel Plate come into earning power.

The Nickel Plate’s more dignified name is New York, Chicago, and St. Louis Railroad. The names of railroads will keep America lovely for a while. Even if the railroads are not, the names are lovely. Burlington, Peoria, and Oswego: there is no such railroad, but there will be.

The earlier statement about the railroad monopoly is also poetic. In line structure it is:

A Railroad

A railroad

Once built in a territory

Has a monopoly

Of the transportation in that territory.

No Monopoly in Cameras

It used to be felt years ago that Eastman Kodak had a monopoly on cameras. Since then Kodak has been given to people most interested in photographing their grandchildren or their relatives, while the higher stuff is given to Leica. Today there is no monopoly in the camera field. But at one time it would seem that the whole camera business was given over to Kodak—as let’s say a person once tried to show how distinguished he was by saying, "Dear, will you give me my Arrow," meaning "my shirt." Because it was felt if a shirt was good it had to be Arrow.

The authors, meanwhile, are writing about 1936:

Monopoly power is now prevalent in the manufacture of shoe machinery, aluminum, cash registers, cameras and optical goods, many kinds of steel products, incandescent lamps, washing machines, vacuum cleaners, refrigerators, radios, sewing machines,...and among many financial institutions.

Monopoly happens to be something that people like. "I am monarch of all I survey. / I dare anyone to push me away":* that was said by Robinson Crusoe in a happy moment.

The function of these companies is something to look at. In keeping with the old word, used in this book—should firms, companies, manufacturers be stewards, or should they be monopolists or owners? If they really are stewards, the profit system will not be.

Others hold that the leaders of these monopolies will have to become the stewards of society, because, if they attempt to exploit society, they will only accomplish their own ruin.

Something like that is occurring, but what it means can be looked at and looked at.


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*See the first line of William Cowper’s "Verses Supposed to Be Written by Alexander Selkirk."