Veblen: writing

Thorstein Veblen 1915 Imperial Germany and The Industrial Revolution

The Limitations of Marginal Utility Thorstein Veblen 1909 Journal of Political Economy, volume 17.

Thorstein Veblen, The Theory of the Leisure Class (1899) Chapter 14: The Higher Learning as an Expression of the Pecuniary Culture

To the end that suitable habits of thought on certain heads may be conserved in the incoming generation, a scholastic discipline is sanctioned by the common sense of the community and incorporated into the accredited scheme of life. The habits of thought which are so formed under the guidance of teachers and scholastic traditions have an economic value — a value as affecting the serviceability of the individual — no less real than the similar economic value of the habits of thought formed without such guidance under the discipline of everyday life. Whatever characteristics of the accredited scholastic scheme and discipline are traceable to the predilections of the leisure class or to the guidance of the canons of pecuniary merit are to be set down to the account of that institution, and whatever economic value these features of the educational scheme possess are the expression in detail of the value of that institution. It will be in place, therefore, to point out any peculiar features of the educational system which are traceable to the leisure-class scheme of life, whether as regards the aim and method of the discipline, or as regards the compass and character of the body of knowledge inculcated. It is in learning proper, and more particularly in the higher learning, that the influence of leisure-class ideals is most patent; and since the purpose here is not to make an exhaustive collation of data showing the effect of the pecuniary culture upon education, but rather to illustrate the method and trend of the leisure-class influence in education, a survey of certain salient features of the higher learning, such as may serve this purpose, is all that will be attempted.

In point of derivation and early development, learning is somewhat closely related to the devotional function of the community, particularly to the body of observances in which the service rendered the supernatural leisure class expresses itself. The service by which it is sought to conciliate supernatural agencies in the primitive cults is not an industrially profitable employment of the community’s time and effort. It is, therefore, in great part, to be classed as a vicarious leisure performed for the supernatural powers with whom negotiations are carried on and whose good-will the service and the professions of subservience are conceived to procure. In great part, the early learning consisted in an acquisition of knowledge and facility in the service of a supernatural agent. It was therefore closely analogous in character to the training required for the domestic service of a temporal master. To a great extent, the knowledge acquired under the priestly teachers of the primitive community was knowledge of ritual and ceremonial; that is to say, a knowledge of the most proper, most effective, or most acceptable manner of approaching and of serving the preternatural agents. What was learned was how to make oneself indispensable to these powers, and so to put oneself in a position to ask, or even to require, their intercession in the course of events or their abstention from interference in any given enterprise. Propitiation was the end, and this end was sought, in great part, by acquiring facility in subservience. It appears to have been only gradually that other elements than those of efficient service of the master found their way into the stock of priestly or shamanistic instruction.

Why is Economics Not an Evolutionary Science, The Quarterly Journal of Economics Volume 12, 1898

M.G. de Lapouge recently said, “Anthropology is destined to revolutionise the political and the social sciences as radically as bacteriology has revolutionised the science of medicine.” In so far as he speaks of economics, the eminent anthropologist is not alone in his conviction that the science stands in need of rehabilitation. His words convey a rebuke and an admonition, and in both respects he speaks the sense of many scientists in his own and related lines of inquiry. It may be taken as the consensus of those men who are doing the serious work of modern anthropology, ethnology, and psychology, as well as of those in the biological sciences proper, that economics is helplessly behind the times, and unable to handle its subject matter in a way to entitle it to standing as a mod- ern science. The other political and social sciences come in for their share of this obloquy, and per- haps on equally cogent grounds. Nor are the economists themselves buoyantly indifferent to the rebuke. Probably no economist today has either the hardihood or the inclination to say that the science has now reached a definitive formulation, either in the detail of results or as regards the fundamental features of theory. The nearest recent approach to such a position on the part of an economist of accredited standing is perhaps to be found in Professor Marshall’s Cambridge address of a year and a half ago. But these utterances are so far from the jaunty confidence shown by the classical economists of half a century ago that what most forcibly strikes the reader of Professor Marshall’s address is the exceeding modesty and the uncalled for humility of the spokesman for the “old generation.” With the economists who are most attentively looked to for guidance, uncer- tainty as to the definitive value of what has been and is being done, and as to what we may, with effect, take to next, is so common as to suggest that indecision is a meritorious work. Even the Historical School, who made their innovation with so much home grown applause some time back, have been unable to settle down contentedly to the pace which they set themselves.

The Engineers and the Price System (1921)

“Sabotage” is a derivative of “sabot,” which is French for a wooden shoe. It means going slow, with a dragging, clumsy movement, such as that manner of footgear may be expected to bring on. So it has come to describe any manoeuvre of slowing-down, inefficiency, bungling, obstruction. In American usage the word is very often taken to mean forcible obstruction, destructive tactics, industrial frightfulness, incendiarism and high explosives, although that is plainly not its first meaning nor its common meaning. Nor is that its ordinary meaning as the word is used among those who have advocated a recourse to sabotage as a means of enforcing an argument about wages or the conditions of work. The ordinary meaning of the word is better defined by an expression which has latterly come into use among the I. W. W., “conscientious withdrawal of efficiency” — although that phrase does not cover all that is rightly to be included under this technical term. The sinister meaning which is often attached to the word in American usage, as denoting violence and disorder, appears to be due to the fact that the American usage has been shaped chiefly by persons and newspapers who have aimed to discredit the use of sabotage by organized workmen, and who have therefore laid stress on its less amiable manifestations. This is unfortunate. It lessens the usefulness of the word by making it a means of denunciation rather than of understanding. No doubt violent obstruction has had its share in the strategy of sabotage as carried on by disaffected workmen, as well as in the similar tactics of rival business concerns. It comes into the case as one method of sabotage, though by no means the most usual or the most effective; but it is so spectacular and shocking a method that it has drawn undue attention to itself. Yet such deliberate violence is, no doubt, a relatively minor fact in the case, as compared with that deliberate malingering, confusion, and misdirection of work that makes up the bulk of what the expert practitioners would recognize as legitimate sabotage. The word first came into use among the organized French workmen, the members of certain syndicats, to describe their tactics of passive resistance, and it has continued to be associated with the strategy of these French workmen, who are known as syndicalists, and with their like-minded running-mates in other countries. But the tactics of these syndicalists, and their use of sabotage, do not differ, except in detail, from the tactics of other workmen elsewhere, or from the similar tactics of friction, obstruction, and delay habitually employed, from time to time, by both employees and employers to enforce an argument about wages and prices. Therefore, in the course of a quarter-century past, the word has quite unavoidably taken on a general meaning in common speech, and has been extended to cover all such peaceable or surreptitious manoeuvres of delay, obstruction, friction, and defeat, whether employed by the workmen to enforce their claims, or by the employers to defeat their employees, or by competitive business concerns to get the better of their business rivals or to secure their own advantage. Such manoeuvres of restriction, delay, and hindrance have a large share in the ordinary conduct of business; but it is only lately that this ordinary line of business strategy has come to be recognized as being substantially of the same nature as the ordinary tactics of the syndicalists. So that it has not been usual until the last few years to speak of manoeuvres of this kind as sabotage when they are employed by employers and their business concerns. But all this strategy of delay, restriction, hindrance, and defeat is manifestly of the same character, and should conveniently be called by the same name, whether it is carried on by business men or by workmen; so that it is no longer unusual now to find workmen speaking of “capitalistic sabotage” as freely as the employers and the newspapers speak of syndicalist sabotage. As the word is now used, and as it is properly used, it describes a certain system of industrial strategy or management, whether it is employed by one or another. What it describes is a resort to peaceable or surreptitious restriction, delay, withdrawal, or obstruction.

The Theory of Business Enterprise (1904)

In respect to its point of departure, the following inquiry into the nature, causes, utility, and further drift of business enterprise differs from other discussions of the same general range of facts. Any unfamiliar conclusions are due to this choice of a point of view, rather than to any peculiarity in the facts, articles of theory, or method of argument employed. The point of view is that given by the business man’s work, — the aims,motives, and means that condition current business traffic. This choice of a point of view is itself given by the current economic situation, in that the situation plainly is primarily a business situation.

L. Randall Wray has an interesting essay on Veblen’s Theory of Business Enterprise and Keynes’s Monetary Theory of Production

It has long been recognized that Thorstein Veblen and John Maynard Keynes share a common approach to the nature of “business enterprise” or “monetary production” in the modern capitalist economy (Dillard 1948; Dowd 1964). Keynes’s most explicit treatment was in the early drafts of the General Theory, unfortunately the final version dropped some of the clearest statements. Veblen’s best known exposition was in the Theory of Business Enterprise. This paper will provide a concise summary of Veblen’s views on the “credit economy,” comparing that with Keynes’s “monetary economy.” While there are many similarities, Veblen’s version is in some important respects more complete, and still relevant for developing an understanding of modern business practice. On one hand, this is not surprising as Keynes had let many of the monetary details “fall into the background.” However, as Matthew Wilson (2006) argues, it is surprising that most followers of Keynes have not mined the Theory of Business Enterprise for arguments that nicely complement and extend Keynes’s better known approach.

Thorstein Veblen’s views on American “exceptionalism”: an interpretation, Journal of Economic Issues, March, 2005 by Rick Tilman

A facet of Thorstein Veblen’s thought and the intellectual milieu in which he lived remains inadequately explored and explained. (1) It is his “exceptionalism,” that is, his analysis of why Europe and the United States are different. Although Veblen is occasionally mentioned by scholars as having an “exceptionalist” view of America, no systematic or detailed analysis of his “exceptionalism” as such exists. For example, even Dorothy Ross has been casual in her claims about his exceptionalism, her illustrations of them, and her citations. Other writers tend to assume away what needs proving or simply fail to focus on the issue of whether or not Veblen held an exceptionalist view of America. The thesis of American exceptionalism takes various forms when articulated by historians and social scientists, several of which are related to each other and thus form a more or less coherent interpretation of our history. (2) In fact, as Ross has argued, there are three generic varieties of American exceptionalism. They are (1) supernaturalist explanations which emphasize the causal potency of God in selecting America as a “city on a hill” for the rest of the world to admire and emulate, (2) genetic interpretations which emphasize racial traits, ethnicity, or gender, and (3) environmental explanations such as geography, climate, availability of natural resources, social structure, and type of political economy. (3) For obvious reasons only environmental factors, which are most susceptible to proof or disproof of the claim that America is different not only from Europe but the rest of the world as well, will be used here.

Exceptionalists, who roughly speaking were Veblen’s contemporaries, argued that American capitalism, an economic system based on private property, sanctity of contract, and free exchange, was less conducive to class consciousness, class struggle, and ideological politics than Europe. The disharmony and social and civil conflict characteristic of European states was less intense and late in coming to our shores for the following reasons: (1) The existence of a large frontier in the West and the availability of large tracts of rich agricultural land, ready to be taken up by the dispossessed and the discontented, acted as a safety valve in reducing class conflict, social disorder, and ideological politics in cities on the Eastern seaboard. (2) The wealth and the acquisitiveness of American society, that is, rapid economic growth and individual prosperity, caused socialism to founder “on reefs of roast beef and apple pie.” A conflict-ridden, class-dominated society thus did not develop because most Americans were satisfied with their share of the economic pie or else aspired to the status of those near the top of the economic ladder and thought a promised “equal opportunity” would ensure those aspirations. (3) The superstructural apparatus of capitalism, that is, its prevailing values and culture and the acquiescent, if not supportive, role of its organic intellectuals gave its upper class and its upper middle class satellites “ideological hegemony” and thus political control. An older and more conventional Marxist variant of exceptionalism stresses the existence of “false consciousness” among the masses, that is, lack of awareness of objective self-interest fostered by the social and cultural apparatus of hegemonic capitalism. In short, people are not necessarily interested in what is to their interest. (4) Status emulation, that is, conspicuous consumption, conspicuous waste, and conspicuous avoidance of useful labor were powerful social bonding agents and processes which greatly mitigated class-conflict and ideological politics. Thus spoke Frederick Jackson Turner, (4) Werner Sombart, (5) Antonio Gramsci, (6) and Veblen. (7) Of course, there are several other variants of these thematic expressions of the exceptionalist thesis and, in fact, other versions of the thesis itself. But because the above variations partly converge with Veblen, or serve to illustrate his thesis, they are emphasized more than other interpretations.

The ‘Evolutionary’ Economics of Thorstein Veblen —Thomas Sowell

Much more is understood about Veblen the social satirist, the personal eccentric, and the literary stylist than is understood about Veblen the economist. One reason for this is the mythology which has grown up around his economic thinking and its relationship to later ‘institutionalism’. Like Marx, Veblen suffers from the fact that many of his most knowledgeable interpreters are also disciples or sympathizers who do not always sharply distinguish the words of the master from the traditions of the followers. A reassessment of Veblen must include (1)Veblen’s methodological criticisms of traditional economics, (2) his intellectual relationship to Karl Marx, (3) his own economic theories, and (4) the meaning of ‘institutionalism’ in Veblen’s writings as distinguished from the meaning it has acquired in later years.

Some quotes from works cited:

Representative government means, chiefly, representation of business interests. The government commonly works in the interest of the business men with a fairly consistent singleness of purpose. And in its solicitude for the business men’s interests it is borne out by current public sentiment, for there is a naive, unquestioning persuasion abroad among the body of the people to the effect that, in some occult way, the material interests of the populace coincide with the pecuniary interests of those business men who live within the scope of the same set of governmental contrivances. This persuasion is an article of popular metaphysics, in that it rests on an uncritically assumed solidarity of interests, rather than on an insight into the relation of business enterprise to the material welfare of those classes who are not primarily business men.

Veblen, T. (1904), The Theory of Business Enterprise, p. 286, Charles Scribners Sons.

Gradually, as industrial activity further displaces predatory activity in the community’s everyday life and in men’s habits of thought, accumulated property more and more replaces trophies of predatory exploit as the conventional exponent of prepotence and success. With the growth of settled industry, therefore, the possession of wealth gains in relative importance and effectiveness as a customary basis of repute and esteem. Not that esteem ceases to be awarded on the basis of other, more direct evidence of prowess; not that successful predatory aggression or warlike exploit ceases to call out the approval and admiration of the crowd, or to stir the envy of the less successful competitors; but the opportunities for gaining distinction by means of this direct manifestation of superior force grow less available both in scope and frequency. At the same time opportunities for industrial aggression, and for the accumulation of property by the quasi-peaceable methods of nomadic industry, increase in scope and availability. And it is even more to the point that the property now becomes the most easily recognized evidence of a reputable degree of success as distinguished from heroic or signal achievement. It therefore becomes the conventional basis of esteem.

Veblen, T. (1899), The Theory of the Leisure Class, Macmillan.

The outcome of this management of industrial affairs through pecuniary transactions, therefore, has been to dissociate the interests of those men who exercise the discretion from the interests of the community … It is, as a business proposition, a matter of indifference to the man of large affairs whether the disturbances which his transactions set up in the industrial system help or hinder the system at large.

Veblen, T. (1904), The Theory of Business Enterprise, p. 26, Charles Scribners Sons.

In the last analysis the nation remains a predatory organism, in practical effect an association of persons moved by a community interest in getting something for nothing by force and fraud.

Veblen, T. (1923), Absentee Ownership and Business Ownership in Recent Times, p. 442, B.W. Huebsch.

The two barbarian traits, ferocity and astuteness, go to make up the predaceous temper or spiritual attitude. They are expressions of a narrowly self-regarding habit of mind. Both are highly serviceable for individual expediency in a life looking to invidious success. Both also have a high aesthetic value. Both are fostered by the pecuniary culture. But both alike are of no use for the purposes of the collective life.

Veblen, T. (1899), The Theory of the Leisure Class, p. 275, Macmillan.

The management of the affairs of the community at large falls by common consent into the hands of business men and is guided by business considerations. Hence modern politics is business politics, even apart from the sinister application of the phrase to what is invidiously called corrupt politics. This is true both of foreign and domestic policy. Legislation, police surveillance, the administration of justice, the military and diplomatic service, all are chiefly concerned with business relations, pecuniary interests, and they have little more than an incidental bearing on other human interests.

Veblen, T. (1904), The Theory of Business Enterprise, p. 268, Charles Scribners Sons.

Technological knowledge and proficiency is in the main held and transmitted pervasively by the community at large, but it is also held in part – more obviously because exceptionally – by specially trained classes and individual workmen. Relatively little, in effect a negligible proportion, of this technological knowledge and skill is in any special sense held by the owners of the industrial equipment, more particularly not by the owners of the typical large-scale industries … In effect, therefore, the owners of the necessary material equipment own also the working capacity of the community and the usufruct of the state of the industrial arts. Except for their effective ownership of these elements of productive efficiency, their ownership of the material equipment of industry would be of no effect … In what has just been said above, the view is implied that the owners of the material means, who are in great part also the employers of workmen and are sentimentally spoken of as “captains of industry,” have, in effect and commonly, but a relatively loose grasp of the technological facts, possibilities, and requirements of modern industry, and that by virtue of their business training they are able to make but a scant and uncertain use of such loose ideas as they have on these heads.

Veblen, T. (1914), The Instinct of Workmanship and the State of the Industrial Arts, p. 219, Macmillan.

Such business control of industry, as has just been remarked above, is exercised with a view to pecuniary gain; but pecuniary gain in these premises comes from changes, and apprehended changes, in the efficiency of the various industrial processes that are touched by such control, rather than the work-day functioning of the several items of equipment involved. The changes which so bring gain to these larger businessmen may be favourable to the effective working of industry, but they may also be unfavourable; and the opportunities for gain which they afford the larger businessmen may be equally profitable whether the disturbance in question is favourable or unfavourable to industrial efficiency. The gains to be derived from such disturbance are proportioned to the magnitude of the disturbance rather than to its industrial productiveness.

Veblen, T. (1914), The Instinct of Workmanship and the State of the Industrial Arts, p. 353, Macmillan.

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