Thorstein Bunde Veblen, born Torsten Bunde Veblen (July 30, 1857 – August 3, 1929) was an American economist and sociologist, and a leader of the so-called institutional economics movement. Besides his technical work he was a popular and witty critic of capitalism, as shown by his best known book The Theory of the Leisure Class (1899).
Veblen is famous in the history of economic thought for combining a Darwinian evolutionary perspective with his new institutionalist approach to economic analysis. He combined sociology with economics in his masterpiece, The Theory of the Leisure Class (1899), arguing there was a basic distinction between the productiveness of "industry," run by engineers, which manufactures goods, and the parasitism of "business," which exists only to make profits for a leisure class. The chief activity of the leisure class was "conspicuous consumption", and their economic contribution is "waste," activity that contributes nothing to productivity. The American economy was therefore made inefficient and corrupt by the businessmen, though he never made that claim explicit. Veblen believed that technological advances were the driving force behind cultural change, but, unlike many contemporaries, he refused to connect change with progress.
Veblen, in his writings smashed the big lie of the theory of capitalism of Adam Smith, the idea of the “invisible hand” of free market. Classical economists inspired by the Smith’s school of thought, had always portrayed capitalism as a reflection of timeless truth and eternal laws. But Veblen had a refreshing perspective. He treated economics as a Darwinian cultural science. He found conflict, force and fraud persisting in a society supposedly harmonized by contracts, laws, and peaceful rules of natural exchanges.
Now certainly holding such audaciously different way of thinking speaks for the place from where this person was coming from. Certainly he was one of those rebels, who did not have an orthodox conditioning of the traditional education. He was born on the Wisconsin frontier in 1857 to Norwegian Immigrants. He embarked on graduate studies at the John Hopkins and then at Yale, where he received his doctorate in Philosophy in 1884. But as he disbelieved in supernaturalism, he disqualified himself from teaching philosophy in a God fearing college or university. (John Hopkins, Yale, Harvard – all these universities were born out of Protestant Christian movements, and had a deep belief in God and His ways). The next seven years he passed reading, unneeded and un-employed, on farms owned by his father. Eventually he found work teaching economics as a low level instructor at the university of Chicago, where in 1899, where he wrote his first and most famous book “The Theory of Leisure Class”. Nobody has attacked the strategic imperative of consumer capitalism – confusing personal worth with accumulation and display of commodities – with a more vicious erudition than Veblen in this great book.
The Roaring Twenties (around 1920s principally in London and USA, which was marked my extreme economic prosperity, materialism and consumerism), left him a defeated man. During his last years he lived alone, unemployed and impoverished, in a small cabin in the hills surrounding Palo Alto. He survived on the strength of donations from admirers.
The conspicuous in-attention given today to Veblen’s criticism of business cant conceal his broad relevance. The corporation, he said burst into the 19th century as nothing more creative than a collective credit transactions; it was an institution mobilized by business class for the purpose of seizing control of the industrial process from workers, farmers and engineers. Business enterprise was “a competitive endeavor to realize the largest gains in terms of price”. The point was to manipulate markets, to maximize profits, using methods of chicanery and prevarication against consumers. “Its aim and end is not productive work,” he wrote, “but profitable business; and its corporate activities are not in the nature of workmanship but of salesmanship”. He indicated that Industry made useful things for human needs, but business made money.
Veblen’s distinction between the Industry and Business reads like an advanced memorandum on the follies of growth as the tonic for our malaise. Against the barrage of pecuniary language directed our way by consultants, management theorists, self help gurus, venture capitalists, financial journalists and other vested interests, he said America’s enormous productive capacities suffered from a corporate form designed to make money, whatever the cost, while denying the workers a chance of meaningful participation. Business destruction of farming, handicrafts, and small scale production, combined with its plunder of natural resources, has left us – just as Veblen warned - with ancestral memories of craftsmanship.
The best we can hope for; while our politicians wrangle of business’s debts and securities, is to return to the same stupefying jobs once held and to pay for the privilege of turning ourselves into brads. Liberals meanwhile make new idols of rapacious businessmen such as Steve Jobs, and Warren Buffet, and evangelical Christians make common cause with their natural enemies - libertarians.
America, left and right, remains in thrall to what Veblen called the “business metaphysics” – a superstition deeply engrained in the classical school of Adam Smith’s economics, inspired by Protestant Christianity – “The market is not an impersonal, fallible mechanism for distributing resources. It is a source of spiritual values, and it is never wrong. The “invisible hand” distributes virtues and honor along with wealth. God wants you to be rich. But rich or poor you have what you deserve.”
______________________________________________Veblen is famous in the history of economic thought for combining a Darwinian evolutionary perspective with his new institutionalist approach to economic analysis. He combined sociology with economics in his masterpiece, The Theory of the Leisure Class (1899), arguing there was a basic distinction between the productiveness of "industry," run by engineers, which manufactures goods, and the parasitism of "business," which exists only to make profits for a leisure class. The chief activity of the leisure class was "conspicuous consumption", and their economic contribution is "waste," activity that contributes nothing to productivity. The American economy was therefore made inefficient and corrupt by the businessmen, though he never made that claim explicit. Veblen believed that technological advances were the driving force behind cultural change, but, unlike many contemporaries, he refused to connect change with progress.
Veblen, in his writings smashed the big lie of the theory of capitalism of Adam Smith, the idea of the “invisible hand” of free market. Classical economists inspired by the Smith’s school of thought, had always portrayed capitalism as a reflection of timeless truth and eternal laws. But Veblen had a refreshing perspective. He treated economics as a Darwinian cultural science. He found conflict, force and fraud persisting in a society supposedly harmonized by contracts, laws, and peaceful rules of natural exchanges.
Now certainly holding such audaciously different way of thinking speaks for the place from where this person was coming from. Certainly he was one of those rebels, who did not have an orthodox conditioning of the traditional education. He was born on the Wisconsin frontier in 1857 to Norwegian Immigrants. He embarked on graduate studies at the John Hopkins and then at Yale, where he received his doctorate in Philosophy in 1884. But as he disbelieved in supernaturalism, he disqualified himself from teaching philosophy in a God fearing college or university. (John Hopkins, Yale, Harvard – all these universities were born out of Protestant Christian movements, and had a deep belief in God and His ways). The next seven years he passed reading, unneeded and un-employed, on farms owned by his father. Eventually he found work teaching economics as a low level instructor at the university of Chicago, where in 1899, where he wrote his first and most famous book “The Theory of Leisure Class”. Nobody has attacked the strategic imperative of consumer capitalism – confusing personal worth with accumulation and display of commodities – with a more vicious erudition than Veblen in this great book.
The Roaring Twenties (around 1920s principally in London and USA, which was marked my extreme economic prosperity, materialism and consumerism), left him a defeated man. During his last years he lived alone, unemployed and impoverished, in a small cabin in the hills surrounding Palo Alto. He survived on the strength of donations from admirers.
The conspicuous in-attention given today to Veblen’s criticism of business cant conceal his broad relevance. The corporation, he said burst into the 19th century as nothing more creative than a collective credit transactions; it was an institution mobilized by business class for the purpose of seizing control of the industrial process from workers, farmers and engineers. Business enterprise was “a competitive endeavor to realize the largest gains in terms of price”. The point was to manipulate markets, to maximize profits, using methods of chicanery and prevarication against consumers. “Its aim and end is not productive work,” he wrote, “but profitable business; and its corporate activities are not in the nature of workmanship but of salesmanship”. He indicated that Industry made useful things for human needs, but business made money.
Veblen’s distinction between the Industry and Business reads like an advanced memorandum on the follies of growth as the tonic for our malaise. Against the barrage of pecuniary language directed our way by consultants, management theorists, self help gurus, venture capitalists, financial journalists and other vested interests, he said America’s enormous productive capacities suffered from a corporate form designed to make money, whatever the cost, while denying the workers a chance of meaningful participation. Business destruction of farming, handicrafts, and small scale production, combined with its plunder of natural resources, has left us – just as Veblen warned - with ancestral memories of craftsmanship.
The best we can hope for; while our politicians wrangle of business’s debts and securities, is to return to the same stupefying jobs once held and to pay for the privilege of turning ourselves into brads. Liberals meanwhile make new idols of rapacious businessmen such as Steve Jobs, and Warren Buffet, and evangelical Christians make common cause with their natural enemies - libertarians.
America, left and right, remains in thrall to what Veblen called the “business metaphysics” – a superstition deeply engrained in the classical school of Adam Smith’s economics, inspired by Protestant Christianity – “The market is not an impersonal, fallible mechanism for distributing resources. It is a source of spiritual values, and it is never wrong. The “invisible hand” distributes virtues and honor along with wealth. God wants you to be rich. But rich or poor you have what you deserve.”
Copy Right © All rights reserved - Samrat Kar
No comments:
Post a Comment