Dear Unknown Friends:

With this issue we begin to serialize the great lecture Always with PDC, which Eli Siegel gave in 1974. PDC stands for the three aspects of economics: production, distribution, consumption. And Mr. Siegel is showing that what is always with them is Ethics. He wrote, defining that term, “To be ethical is to give oneself what is coming to one by giving what is coming to other things” (Self and World, p. 243).

He is the philosopher, historian, critic, economist to explain that economics is centrally a matter of ethics. And in 1970, in his Goodbye Profit System lectures, he showed that by the last third of the 20th century, economics based on seeing human beings in terms of how much profit one can get out of them had failed. The underlying reason for the profit system’s failure is the contempt, the shoddy ethics, at its basis.

To want people to be desperate for work so that you can pay them very little for their labor, is bad ethics, and it’s fundamental to the profit system. To hope this man’s business goes under so yours can prevail, is an ethically ugly way of mind, and it’s central to the profit motive. To hope a coworker flops so you can get her job, is shabby ethics—and people are ashamed of thinking this way and angry at the economic system which forces them to do so.

Not What the World Was Meant For

Contempt, Aesthetic Realism explains, is the ugly, cheap, cruel thing in the human self: it’s the feeling we’ll be more if we can lessen someone or something else. Profit economics encourages contempt, and in fact arose from it. Mr. Siegel wrote six decades ago, in a sentence important for its beautiful prose as well as for its logic and kindness:

The world was meant to be known, to be felt, not to be parcelled out into huge segments or lesser segments for the complacent but deleterious delectation of some and the domination and manipulation of others. [Self and World, pp. 279-280]

For the past three decades, economics based on the profit motive has continued, certainly, but continued with more and more difficulty. Whether or not the stock market soars, whether or not a few people are very rich—most Americans are working longer hours for less; millions are tormented about not being able to afford healthcare for their families; bankruptcies, both business and personal, abound. The following statements are from articles on the first business page of a single day’s New York Times (September 14, 2007): 1) “That there is a financial crisis is clear”; 2) “The percentage of the population that is employed has been dropping since December”; 3) “A new poll of corporate chief financial officers, taken by Duke University and CFO Magazine, shows a surge in pessimism”; 4) “Main Street Cuts Back Spending and Braces for Worse to Come.”

Eli Siegel explained three decades ago:

There will be no economic recovery in the world until economics itself, the making of money, the having of jobs, becomes ethical; is based on good will rather than on the ill will which has been predominant for centuries.

Ethics: A Force

He explained that there is such a thing as the force of ethics in the world. As history has proceeded, this force of ethics has become more salient, making economics based on bad ethics no longer tenable. That statement may sound abstract. It’s not. Ethics as force is exceedingly tangible. It’s as tangible as an automobile—because the fact that automobiles are now being manufactured not mainly in Detroit, but ever so abundantly and well in other nations, is part of that force of ethics. In 1970, presenting reasons for the ill health of America’s profit economy, Mr. Siegel said: “America is not the only country now with industrial know-how….There is more competition with the American product.”

American profit-making throve when the rest of the world could not produce what America could and therefore people in other countries were compelled to buy American goods. In fact, US profit-making would fare well now only if the rest of the world were suddenly rendered ignorant, made to lack know-how, were robbed of their technological and productive ability. It’s clear that to want other nations to be ignorant and inept is bad ethics. The fact that people throughout the world know more and can do more, is part of the force of ethics—of an increasing justice. But it is making the profit system weaker.

Human Dignity vs. Profit

Mr. Siegel presented too, and documented richly, the other large cause of the profit system’s mortal sickness. By 1970, because of unions, men and women in America were earning much more than they had been; millions were no longer poor. They were having lives much more in keeping with the true dignity of a human being. Each instance of greater justice to people in their working lives—from a higher minimum wage to the mandating of safety equipment so limbs would not be lost—was a weakening of the profit system.

Every nickel that labor creates will go either toward the good life of the persons who did the work, or into the pockets of some employer or stockholder who didn’t work for that nickel. As unions enabled workers to stop dying of industrial diseases, and to be able to live with more ease, and even send their children to college, more of those nickels were going to the people who earned them and fewer to the employers and stockholders who didn’t.

The combination of increased foreign competition and increased justice to workers is simply fatal to the profit system in this land. Therefore, in order for profit-motivated economics to go on, the victory for working Americans had to be reversed. One cannot have certain persons, owners and stockholders, making large profits and also have the persons who created those profits—the workers—living well: corporate owners and their political friends know this. So in the last decades there has been a terrific effort to destroy unions in order to have Americans earn much less.

The big choice now, which all Americans need to be clear about, is: which are we for—sacrificing Americans’ ability to live well so that certain individuals can make big profits; or having Americans live comfortably and well because the wealth they earned is going to them.

What’s Looked For

The ethical economics America is looking for, Mr. Siegel made clear, is certainly not some ism associated with dullness and regimentation. It’s the American non-profit system—with style, creativity, true to the US Constitution, Declaration of Independence, Rocky Mountains, Great Lakes, Mississippi River, and American literature and earth. It’s an economy based on answering what he described as the most important question for humanity: “What does a person deserve by being a person?”

As a short prelude to Always with PDC, I’m going to quote from a poem for children, by Robert Louis Stevenson. It’s an authentic poem. And in a basic way, it’s about those three aspects of economics. Here is the first stanza of “The Cow,” spoken by a child:

The friendly cow all red and white,

I love with all my heart:

She gives me cream with all her might,

To eat with apple-tart.

Every child deserves to feel that the world is friendly to him or her—can provide what the child needs, as this cow provides cream “with all her might.” The relation between the cow and the speaker stands for the reciprocity which is ethics: that the world, including through what it can produce, should make a person stronger; and in turn, the person should care for and want to know the outside world (“I love with all my heart”).

Here is the last stanza. It is musical, beautiful, and represents the opponent to contempt in economics or anywhere. That is, Stevenson wants to be fair to something—this cow. He wants to see what affects it. He wants to show its dignity and mystery, not use it contemptuously, for personal acquisition:

And blown by all the winds that pass

And wet with all the showers,

She walks among the meadow grass

And eats the meadow flowers.

—Ellen Reiss, Aesthetic Realism
Chairman of Education

Always with PDC

By Eli Siegel

The basis of what is worrying America now can be described as ethical. But to see that, there needs to be a presentation of what ethics is. Today, in a way that will be supplemented by others, I will try to present what I’m getting at, and I call today’s talk “Always with PDC.” That is, economics is supposed to be the study of the production, distribution, and consumption of wealth. And we have our old friend, the world—because where there is production, the world is like a great mama that allows itself to be the source. Whether it’s of oil or flowers or wheat or copper, the earth is the great father and mother.

So there is production, and that is a big thing in itself, though the word has come to have an evil meaning sometimes: “putting on a production.” Then there is distribution. That has been a big matter of contention: whether the distribution is just or not. And then there is consumption. The three, of course, are inseparable. At the moment, there is a feeling that there’s a curtailment of production so as to make for more p-r-o-f-i-t. But the three are there. And ethics is present, because where human beings are concerned, ethics, like an abstract doggy, attends. There is no such thing as human activity without ethics.

A way to begin looking at production is to ask about all the things that are used in New York City, and then show where they were got. Let’s take a sweater: how is that got? Then, the buttons that are on a sweater or on a coat; or a cap; or socks; or suntan lotion. Suntan lotion is also produced.

One of the matters agreed on is that economics is a co-presence of those three activities: production, distribution, consumption. But all of them can be managed ethically wrong. You can produce wrong. Particularly, you can distribute wrong. Then, also, you can consume wrongly. One good use of the present inflation is that people can’t be gluttons as easily—they can’t gobble so much.

There is a sense of tension now which wasn’t present in 1970: what is happening to the economy is getting to persons. So this evening I am using a very copious book on economics (in past years I used others), and I’m going to use it somewhat casually. You can begin economics in various ways. You can begin in the depth of some rough mine of coal or copper, or you can begin with a finished product in Saks Fifth Avenue, and both will be right. This is Economics, by John Ise, who is esteemed; Harper & Brothers, 1946. The way things meet in economics is what should be seen—the way they intersect.

In an Early Chapter

In the early chapter “The Laws of Production” we see one of the things that have to do with ethics: a problem a manufacturer has—how good should be his raw material? There is a phrase, the very best leather, and Ise writes about “the shoe manufacturer who uses leather of high quality” (p. 20).

Leather has fallen on evil days because there is synthetic leather, a good deal of it. But leather has always had a history. Tanning is an old industry. There are many stories in economics and one of the most noted is John Galsworthy’s “Quality,” which is about shoemaking. It should be read, because the instinct of workmanship is a big thing in humanity. Veblen wrote about it, among others. William Morris wrote about it. If you want to do the very best work, you may have to curtail your desire for profit. Maybe you won’t—depending on where you are. In the Iliad we find Vulcan trying to do the best work making Achilles’ shield.

Then there is this sentence, which has ethics in it:

Some businessmen have hobbies, extravagances, in their businesses, in which they indulge even at a loss, as for instance, the magnificent horses that many brewers used to drive. [P. 20]

They don’t need just those great horses, but they put on a show. —I think these two items, about the very best leather and the strapping horses of the brewery, have to do with ethics, and aesthetics too.

Inventions, Patents, & Ethics

The next matter is somewhat more serious. Inventions are not the largest thing in production, but they change production. The cotton gin changed production. The story of Eli Whitney and how he got his invention across, is a big thing. So is the story of the sewing machine, and here there are two persons, quite different: Elias Howe and Isaac Merritt Singer. Then, there was the invention of the spinning jenny, and the loom. Inventions are still going on. The patent office is still busy. But wherever something occurs in economics there is a field for crummy ethics. There is not a thing in economics that doesn’t have that as almost a next-door neighbor, sometimes a stronger neighbor.

Let’s assume that somebody works at an invention, some “crazy inventor,” and gets to something. The first flashlight was invented; the electric bulb; then various versions of the electric bulb. Ise writes this:

In the hands of a man of modest financial resources, a patent is likely to be of little value, even if it covers a greatly improved device. [P. 128]

He says that this patent may be a new thing but a company would like to take it for granted, mingle it with what the company already has. There have been ever so many patent disputes, because unless you begin in a very fine position you cannot get the fulness of the value of your patent across. Sometimes stories about that have been in the cinema: a big company tries to steal Grandpa’s patent. It has happened. Humanity is there, and ideas are property. An idea is with every invention, and the invention is tangible.

Monopoly: A Possibility of Ego

It’s interesting that this matter of patents is in the chapter called “Monopoly.” The desire to be monopolistic is a tremendous possibility of ego: to manage everything and own everything. There is more monopoly than people know. There is a feeling there was monopoly, in some way or other, about meat some months ago. Sometimes monopoly is called oligopoly: that is, there are a few companies involved. Sometimes there are two, as let’s say Mobil Oil and Exxon seem to be somewhere the same person. That goes on a great deal. The important thing is the desire, which is in economics, to do as little work and get paid as much as possible: that is the purpose of the monopoly. It can also take the form of reduced production with even more profit. Ise talks again and again of reduced production. A lot of it has gone on.

It is exemplified in a very taking thing in the book business: what’s called the Limited Edition. That is, if you have a certain number of copies in vellum with maybe an autograph, and sell each for twelve and a half dollars, you can make as much money as if you sold twenty thousand at two and a half. What we are now going through in history is the Limited Edition. That’s not exactly literal, but there’s a feeling that if you can get more money for fewer items, why do you have to produce more, even though persons would like to have more and not pay so much? So the phenomenon of reduced production has been in economics from the beginning, because where there is scarcity, somebody can gain a lot.

In the matter of a patent—a patented invention—a company is interested but will try to give as little for the patent as it can. That’s good business. A patent is, in a sense, a commodity. It is an unusual commodity. It is a new commodity that arises from the mind of someone. But there’s a desire to have it on the terms that are best for you . And as soon as the ego is left to itself, whether it takes the form of a company or not, we can have some sad things happening. If a company has all the means of processing that patent while the poor inventor—all he does is work in his cellar and bother the neighbors—the company will likely be in a better position. It is a little bit like the selling of a song. The copyright is sometimes sold for much less than a composer should have, because the composer needs money but fast.

So this has to do with ethics. There are quite a few things that are bought in Whelan’s, and many of them were invented. The toothpaste tube did not come from Juno or Jove: somebody got to it. Then there were various improvements of the toothpaste. At one time there was a whole business about its lying flat on the brush. We don’t hear that anymore. Also, the 16th century didn’t have those neat brushes you brush typewriter keys with, or teeth. Somebody invented those: how to get in all the little bristles and have them stay put and work together and be a happy family. All toothbrushes bristle with pride.

What I am trying to say is that every moment in the history of economics has had ethics with it. To feel that, you have to feel the particular things that are part of PDC.