Dear Unknown Friends:

Here is the third section of the 1974 lecture Always with PDC, by Eli Siegel. In an informal way, with vividness and grace, he is showing that what is always with those three aspects of economics—production, distribution, consumption—is Ethics.

Ethics is the state of justice or injustice with which we see what’s not ourselves. And Aesthetic Realism explains that it is the largest matter in the life of everyone. How fair do we want to be to a person—a person we’re close to or one in another neighborhood or continent? How fair do we want to be to an object, a situation, a book, a song, an idea? Whether we know it or not, we judge ourselves on our ethics. How much we like ourselves, how much we feel deeply at ease and alive, depend ineluctably on how just we are to what’s different from ourselves.

In his Goodbye Profit System lectures of the 1970s, Mr. Siegel explained that the economics of the world is no longer able to proceed with ease and efficiency, and the reason is: the ethics that has been at its basis these many centuries is ugly. Today the failure of America ‘s profit-driven economics is all around us. While a few individuals are making huge amounts of money, it’s well known that most Americans are less comfortable financially than their parents were, and expect their children to be worse off than themselves. According to the New York Times of October 12: “95 percent of Americans reported smaller incomes” than they had five years earlier. Further, “more people,” the Times tells us, have been “working longer hours”; and those “figures on incomes…help explain why so many Americans report feeling economic distress.”

How much pain and fury in households across this land, how much humiliation, how much tormented worry, also how many hungry children, those phrases “smaller incomes” and “economic distress” include!

Ethics—Behind Every Decision

In issue 73 of this journal, published two days before the lecture we’re serializing, Mr. Siegel wrote:

Ethics is not that which accompanies economic or political decisions and processes; it is the central impulsion right from the beginning and never stops being that….

Will the decisions that take place between man as entrepreneur and man as employee, between man as seller and man as purchaser, between man as landlord and man as tenant, between man as corporation director and man as union organizer—will these decisions, as industry is now organized and impelled, be ethically good enough?

Another story in the Times is a means of asking what kind of ethics has impelled the economic decisions of our profit system these many years. It appeared on the first page of the October 8 issue, with the headline “Dangerous Sealer Stayed on Shelves after Recall.” Reporter Eric Lipton recounts a history of injuries caused by a do-it-yourself spray product for sealing grout around tiles. Though according to its label the spray would “evaporate harmlessly,” this product sent scores of people to the hospital, caused two deaths, and made for lasting injury to the lung tissue of children and adults. Yet the manufacturer kept selling the product even after its harmfulness was abundantly clear, and therefore more people were injured. Was this decision impelled centrally by a certain kind of ethics? And what was that ethics?

The Profit Motive

“The product’s maker,” writes Lipton, “…appeared… more concerned with protecting its bottom line than with taking steps to ensure that the hazard was removed.” Most people would agree that what the reporter is describing in this sentence is bad ethics. Yet he is describing the very basis of the profit system: the profit motive. That motive, toward human beings and objects and happenings, is: I want to make as much money as possible through you. It’s not: I want to see you as you deserve; I want to understand you; I want to be fair to you.

The profit motive is a phase of that motive, huge in everyone, which Aesthetic Realism identifies as the source of all injustice, cruelty, and narrowness: contempt, “the addition to self through the lessening of something else.”

Never before in history has there been so much awareness that the profit motive and the desire to be just to people are at odds. Americans have seen, for example, that tobacco companies, because their motive toward humanity is profit, have tried to get people to buy cigarettes even though these companies have known for years that cancer and deaths would result.

What kind of ethics does the profit system encourage in a person, perhaps a go-getter for a firm? It encourages you to make other people unreal, take away their humanity, make their feelings nonexistent—because once you see another person as being as real as you are, with hopes and fears and flesh like yours, you’ll find yourself not so able to use him or her for profit. The profit system also encourages you to hope people are stupid, so you can manage them for your own aggrandizement.

Take a person quoted in the Lipton article. After a researcher for the sealant manufacturer reported to her boss that in testing the product personally she grew dizzy and developed a headache and sinus irritation, her boss wrote a joking response: “Please instruct us where to send the body when the test is complete.” And, according to the Times, he “made it clear that he wanted to ensure the product remained on the market.” “We are doing everything,” he wrote, “to convince the Home Depot that there is no reason to take these batches off the shelf.”

So is the ethics of the profit motive essentially good, with occasional unfortunate lapses? Or is its ethics centrally bad, wrong, ugly? It is the latter. The profit purpose, to make money from people’s lives and needs, has led to child labor, sweatshops, industrial diseases, slavery—as well as to the everyday, taken-for-granted horror that some people are poor, that people have to worry about having enough in a world of plenty.

A Certain Teamwork

Some of the most publicized instances of hurtful production, distribution, and consumption involve objects manufactured in China for American companies: tainted toothpaste and pet foods, toys containing lead, play ovens that cause burns. In a report on the subject, on the website of the BBC, we find something that for centuries has been with economics based on profit: one person’s ill will using another’s; a certain teamwork of ill will.

Numerous American companies, many with big brand names, have hired foreign companies, called contract manufacturers, to make their product. The BBC quotes a person representing one such for-profit contract manufacturer in China, who says, We shouldn’t be blamed for the tainted products—the culprits are the big brand firms that hire us. He says about the lead paint on toys:

There are many contract manufacturers in China, just like my company….I have personally experienced pressure to reduce costs by hook or by crook or lose big contracts that are vital for the survival of our company.

…If the big brand comes back to us and asks us to cut costs, our only option is to compromise on materials….We know that quality gets compromised. Our customers [the big brand companies] know it too.

This manufacturer acts innocent and victimized; yet he’s saying that his interest in profit has him do things that will cause children to ingest lead. Meanwhile, he’s likely right in pointing out that the US company, impelled by profit, didn’t care how hurtfully the product was made. So one company’s ill will used, encouraged, and was fortified by the ill will of a manufacturer thousands of miles away.

Then of course there’s what’s behind this contract manufacturer situation to begin with: the fact that US companies, to make profit, now need to contract abroad so as to avoid paying American wages. This is part of the failure of the US profit system, and part of its inherent ill will for American workers.

Ethics, Aesthetic Realism explains, needs to be aesthetics, the oneness of opposites: “To be ethical,” Mr. Siegel writes, “is to give oneself what is coming to one by giving what is coming to other things.” That ethics-as-aesthetics is what economics needs to be based on. It is now the only economic practicality, and is what the American people want.

—Ellen Reiss, Aesthetic Realism
Chairman of Education

Injustice Has Become Inefficient

By Eli Siegel

Note. Mr. Siegel has been quoting from the textbook Economics, by John Ise (Harper & Brothers, 1946).

The other aspects of life meet economics. We see that in the next passage. Thirty years ago a girl would say, “Well, I think I would like to study typewriting and maybe stenography. And I have a notion that if I get a good office job I might meet the person I wouldn’t mind being my husband.” There are a good many novels about how the office is the first step to the altar. And that still may happen. Ise writes:

The chance of meeting men who may turn out to be sweethearts and husbands is in some cases an extra attraction for women workers, tending to reduce wages. [P. 377]

Something that entrepreneurs have to go after is reducing costs. Since the main cost anyplace production goes on is wages, you have to want to reduce that too—and of course be very nice about it.

A phrase that is part of American life is “I asked the boss for a raise.” And the boss says, “If you knew what I was thinking of, you wouldn’t be here.” Well, asking for a raise is a big thing in American life. Sometimes it gets into cartoons, like “Blondie,” with Dagwood. But it happens that executives ask for a raise too. A raise, quite clearly, is related to right and wrong, and right and wrong is of the very midst of ethics.

Ethics & “the Supply of Labor”

In history, labor has been either plentiful or not. A time associated with revolution is the time of the Black Death and Wat Tyler and John Ball, 1381. Because of the plague, labor was scarce, and labor became more bold. Then also there was the desire to reduce costs. So we have the most noted sign of displeasure by labor in English history: Wat Tyler’s Revolt.

But labor is either plentiful or not. There is a story about the old colony days and a person, a carpenter, who had committed a crime. The magistrate, in order to punish the crime, would have had to execute the carpenter. But he didn’t want to do that because there weren’t so many carpenters. So what he did was execute a cloth worker, because there were cloth workers already. That’s a little exaggerated, but it shows that the need for labor is a very large matter sometimes, the right kind of labor. And when one sees oneself as the only shoemaker in a town, I think it goes to one’s head. Ise deals with that too.

There has been a feeling that ethics may have to do with love, with family maybe, with religion. But the idea that from the very beginning it had to do with production, distribution, consumption—PDC—that is not a real thing yet. So let’s look at a sentence about the supply of labor.

Malthus said something like this: that in order to abolish poverty we simply have to curtail the birthrate. Margaret Sanger said something like that too. Population is a sociological matter, but it’s also economics, and it has a great deal to do with ethics. For example, sometimes two people separate because they don’t know whether they want to have a child or not. We have this sentence:

For the long run, an increase in the supply of labor must come largely from an increase in the population; and the population, as we have seen, is determined by the birth rate, the death rate, and immigration and emigration. [P. 379]

An intense matter in American history is the anger with the Chinese in California in the 1870s, because they would work for lower wages than others. There has been the attempt to stop immigration because immigrants, at least in the beginning, would work for less than the American worker. But without the Chinese laborer, the Irish laborer, and the Italian laborer, the West wouldn’t look the way it does now, with the railroads.

“The supply of labor” sounds quite economic, but it means also so many human beings ready to do things that another human being wants.

Standard of Living

In the next passage we have the phrase “the standard of living”—which people think is now in jeopardy. They have to buy all kinds of things they once wouldn’t have bought. For instance, they’re sure getting familiar right now with cows: they know that cows have other edible parts and they have to be satisfied with secondary, even tertiary, beef. I hate to talk about this but I have to keep up. There are quite a few tables at which people see clearly that what’s on the table is not as sumptuous as it was two years ago. How did that occur?

The standard of living as thus defined is analogous to the cost of production of goods. Ill-trained, poorly educated children can be reared in large numbers at low costs, like the gimcracks sold in the Woolworth stores; but the cost of rearing healthy, well-educated children is high, like the cost of producing quality goods of any sort. [P. 379]

That has something to do with the commotion about Jews leaving the USSR. The USSR sees itself as having educated those Jews who want to go, and it feels there should be some kind of return, while they want to leave and work for Israel. And the USSR, being somewhat capitalistic, doesn’t like it. In other words, suppose you’ve worked very hard to give somebody a voice, and then instead of working for your show he wants to go somewhere else. You might get annoyed.

…but the cost of rearing healthy, well-educated children is high, like the cost of producing quality goods of any sort. The man who insists upon rearing only such children must content himself with a modest number of them unless he has a fairly large income. [P. 379]

A notable work in the history of economics and also the history of literature, and something which is read more than ever, is Jonathan Swift’s A Modest Proposal. It shows that a newborn child or a young infant is wealth.

And we have the following:

On the other hand, if the birth rate is persistently low or if emigration serves to keep the supply of labor down, wages may be high, even in rather barren and unproductive regions such as Wyoming, Nevada, and parts of California. [P. 379]

A phrase for getting a job of any kind is selling oneself. And if that phrase selling oneself does not reek with drama and morality or immorality, I don’t know what phrase does.

Ethics Is Collective & Individual

We can look at the census, which is a very large work and has all the occupations, and who works at them, and the changes in occupations, and how many persons who were born in Eastern Europe work in a certain field, and how many who were born in Ireland, and so on. The census is a tremendous work. As is well known, every one of its items has a person there, and there have been feelings. Ethics is collective and individual. What I say in the last issue of The Right Of is that in the history of economics the collective ethics, most of it unfelt, has been of a certain kind, and the situation of the world is such that it cannot be of that kind any longer. In 1970, the ethics that had been suitable for thousands of years in a way, or hundreds of years, was worn out. That occurred in the spring of 1970 fairly clearly. And that it is worn out is being shown right now. It is not the ethics to go with the economics of the world as it now is.

I shall get back to Ise and present ethics as a tableau, as a series of situations that have solidity—each one is piquant and each brings up things that one doesn’t know fully—and then ask, Is there something going on all the time? There is something going on all the time, because ethics can have the right value or the wrong value.

There are three aspects to value: there are justice, beauty, efficiency. There are other aspects. They all have to do with ethics. And the relation of efficiency to what is just, is something to be seen. Keats said that the true and the beautiful are the same, but it has to be seen that somewhere the efficient and the just are also the same.

We know that for many years they haven’t seemed to be. The world has gone on on unjust ethics, and things have been produced, and the stores have been filled. Still, can there be an aspect of the world, a change of the world, where this unjust ethics will also be inefficient ethics? We have reached that point. Injustice has become inefficient. So I’ll use books on economics, including more of Ise and others too, and, to be sure, current things, to show that there is a discrepancy between unjust ethics and the efficiency that the world wants.