{"id":176521,"date":"2021-01-11T12:00:20","date_gmt":"2021-01-11T12:00:20","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=176521"},"modified":"2021-01-05T04:50:16","modified_gmt":"2021-01-05T04:50:16","slug":"the-prophet-of-maximum-productivity","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2021\/01\/the-prophet-of-maximum-productivity\/","title":{"rendered":"The Prophet of Maximum Productivity"},"content":{"rendered":"
\n
\n
\n

Reviewed: <\/em>Veblen: The Making of an Economist Who Unmade Economics\u00a0<\/a>by Charles Camic, Harvard University Press, 492 pp.<\/em><\/strong><\/p>\n<\/div>\n

Thorstein Veblen\u2019s maverick economic ideas made him the foremost iconoclast of the Age of Iconoclasts. <\/em>Armed with two Ph.D.s from Yale and Cornell, sacked by Chicago and Stanford, he was an intellectual giant whose ideas hold after 100 years of his death.<\/em><\/p>\n<\/div>\n<\/div>\n

\n

14 Jan 2021 issue – <\/em>We are all Veblenians now. Our understanding of the way people\u2019s acquisitions and activities advertise their superiority\u2014not least in an era of Facebook show-offs and Instagrammable lives\u2014has roots in work that the economist and social theorist Thorstein Veblen published over a century ago. Behavioral economics finds a precursor in Veblen. So does evolutionary psychology. Our worries about the \u201cfinancialization\u201d of capital, with its overgrowth of exotic instruments of debt and the institutions that create and trade them? Veblen got there first. Patriarchy as a system centered on warfare, private property, and the control of women\u2019s bodies: this feminist vision, too, was elaborated in his work.<\/p>\n

Veblen even presaged the ascent of Trump. \u201cA degree of arrested spiritual and mental development is, in practical effect, no bar against entrance into public office,\u201d he once wrote. \u201cIndeed, a degree of puerile exuberance coupled with a certain truculent temper and boyish cunning is likely to command something of popular admiration and affection.\u201d<\/p>\n

Given that Veblen so shaped our view of the world, it\u2019s striking that our view of him has long been so distorted. For generations, he was seen as a \u201cmarginal man\u201d\u2014someone raised in penury within an insular immigrant community, who spoke no English until well into his teens, whose eccentric manner branded him as a social outcast and an academic outsider (save when it came to the bedrooms of faculty wives), and who saw through the complacencies of his scholarly age precisely because he never fit into it.<\/p>\n

\"\"<\/a>

Thorstein Veblen in 1880, the year he graduated from Carleton College.
Minnesota Historical Society<\/p><\/div>\n

This depiction was put forth in a much-lauded biography that the Columbia economist Joseph Dorfman published in 1934, five years after his subject\u2019s death. It set the tone for later writing on Veblen by such eminences as David Riesman, C. Wright Mills, and Daniel Bell. Only in the 1990s did revisionist scholarship reveal this portrait to be tendentious almost to the point of fraudulence. Charles Camic, a sociologist at Northwestern, pushes the argument further in Veblen: The Making of an Economist Who Unmade Economics, his book about the intellectual background of Veblen\u2019s thought. Evidently he was not only far from a marginal man in his personal life; he was, in his professional life, the \u201cconsummate academic insider.\u201d<\/p>\n

Some of the biographical confusions are understandable. Veblen\u2019s parents, Thomas and Kari, were immigrants from Norway who arrived in the US in 1847 with little money and less English, and joined other Scandinavians who were turning the northern prairies into croplands. But the industrious Veblens\u2014with the help of the odd bank loan\u2014soon established themselves. Thorstein was born in 1857; when he was eight, the family moved from Wisconsin to Minnesota, having acquired 290 acres there. By 1870 they were the richest farming household in the township. Thomas, a freethinker with literary interests, was an accomplished carpenter as well, and the house he built, now a National Historic Landmark, featured precise wainscoting and faux-graining, a double-deck porch, and walk-in closets.<\/p>\n

Veblen had English-speaking playmates and classmates, and grew up in a household that could afford to hire tutors\u2014and to pay in full when he enrolled in nearby Carleton College. It was Veblen\u2019s great good fortune that its faculty included the thirtyish John Bates Clark, who later became the country\u2019s preeminent economic theorist. Clark, in those days, inveighed against the \u201clove of display\u201d of the vulgar rich who ordered their libraries by the linear foot and \u201cshrewd trading men\u201d whose dealings benefited \u201cno one but themselves.\u201d Veblen took half a dozen courses with him; he recognized a first-rate mind when he saw one. So did Clark, who became a lifelong supporter of Veblen\u2019s, even when the two found themselves on opposite sides of a fierce and consequential battle.<\/p>\n

An equally fateful encounter was with a younger Carleton student named Ellen Rolfe. She was a niece of both the president of the college and the president of a major midwestern railroad company, and she was described by another student as \u201ceasily the most intellectual member\u201d of her class. Having grown up close to great wealth but not quite in possession of it, she was a Ruskinian socialist, with literary ambitions. (\u201cI want most of all to be a poet of the new time,\u201d she wrote.)<\/p>\n

A decade elapsed before they were married, in part because she was hesitant to marry anyone at all, and in part because Veblen was away in graduate school\u2014at Johns Hopkins, where he studied philosophy and political economy, and at Yale, where he received a doctorate in philosophy in 1884. He then fell ill with what seems to have been malaria and went home for a years-long convalescence. He may have been recovering, too, from having been dosed with calomel, a mercury compound widely used for such conditions, as Elizabeth and Henry Jorgensen conjecture in Thorstein Veblen: Victorian Firebrand (1998), a ragged but spirited biography that eschews the \u201cmarginal man\u201d trope. When Thorstein and Ellen married in 1888, neither was in the pink of health; Ellen had long suffered from thyroid dysfunction (she hid a goiter behind high collars) and was recovering from a breakdown. Still, the newlyweds also shared cultural and political enthusiasms, and were jointly captivated by Edward Bellamy\u2019s just-published Looking Backward, a million-selling, socialist-utopian novel with powers of political conversion unequaled until The Fountainhead arrived to pull impressionable youth in the opposite direction.<\/p>\n

The professional course of Veblen\u2019s life was finally set when, in 1891, he went to Cornell and swiftly secured a second doctorate, in economics. (The typical Ph.D. thesis wasn\u2019t the baggy monster it later became.) His work was so impressive that when his adviser was hired away by the University of Chicago the following year, he brought his brilliant prot\u00e9g\u00e9 with him as a junior colleague. Veblen spent the next decade and a half at Chicago, crafting the arguments for which he became known.<\/p>\n

In Veblen, Camic has produced a sort of intellectual biography that largely dispenses with the personal life, while directing intense and illuminating attention to the scholarly milieu in which Veblen emerged. In chapter after chapter, he establishes the continuities between Veblen\u2019s views and those of his professors and peers. Veblen is considered, for example, the progenitor of institutionalism in economics, which sees economic activity as shaped by evolving institutions and customs, rather than simply arising from the aggregation of rational, self-interested individuals. Yet Camic shows that many of Veblen\u2019s instructors, at Hopkins, Yale, and Cornell, were saying much the same thing. Veblen\u2019s evolutionary convictions\u2014\u201cWhy Is Economics Not an Evolutionary Science?\u201d was the title of a 1898 paper\u2014were similarly shared by his mentors and colleagues. Even the combination of these interests wasn\u2019t distinctive; some of his most illustrious Chicago colleagues, Camic says, viewed social institutions and evolution as \u201cinterlocked concepts.\u201d<\/p>\n

And while we may be impressed by Veblen\u2019s regular recourse to the ethnography of distant tribes, Camic notes that Clark, when Veblen was his student, was calling for political economy to be \u201cbuilt on a permanent foundation of anthropological fact.\u201d As for Veblen\u2019s iconoclastic pose and prose? \u201cIn the Age of Iconoclasm, mainstream academics were iconoclasts,\u201d Camic writes, pointing out that his main instructors in graduate school all described themselves as rebels. Veblen wasn\u2019t out of the swim of things; he was simply swimming faster and more forcefully than his peers.<\/p>\n


\nTo a remarkable degree, the core tenets of Veblen\u2019s thought can be found in his first and most famous book, A Theory of the Leisure Class: An Economic Study of Institutions (1899). The work, for most readers, was the great indictment of the Gilded Age; that\u2019s how William Dean Howells approached it when he published the review that lofted it to fame. \u201cConspicuous consumption\u201d\u2014which could be \u201cvicarious conspicuous consumption,\u201d as when men required their wives to become women of leisure\u2014put a crisply alliterative label on the habit of competitive display, grouping together fashion, finery, sports, and much more. Skirts appealed precisely because they were \u201ccumbrous\u201d and advertised that the wearer could afford a garment that \u201cincapacitates her for all useful exertion.\u201d Almost everything people did semaphored what Veblen called \u201cinvidious comparison.\u201d<\/p>\n

Our very aesthetic sense, he argued, was deeply and unconsciously shaped by status concerns: we admired the high gloss on a gentleman\u2019s fancy hat but deplored the shine on a threadbare sleeve. We persuaded ourselves that the handwrought silver spoon was prettier than the machine-made and perfectly shaped aluminum one, though they were equivalent in their \u201cserviceability\u201d\u2014a crucial Veblenian term of value. The canons of taste arose from perceptions of price.<\/p>\n

As was then common, Veblen divided the history of mankind into the stages of savagery, barbarism, and civilization, although he was inclined to depict this not so much as progression as decadence. In \u201cpeaceable savagery,\u201d we engaged in honest toil to create serviceable goods\u2014responsive to real needs, not wasteful consumer preferences. Only in the barbarian stage did the \u201cpredatory habits and aptitudes\u201d of forcible acquisition evolve. The essential thing to acquire was the labor of others, and Veblen thought women were the most productive of laborers. Hence his argument that the \u201cinstitution of ownership has begun with the ownership of persons, primarily women.\u201d<\/p>\n

In our civilized era, these predatory ways became only more pervasive and proficiently exercised under \u201cthe pecuniary employments\u201d\u2014anything directed at moneymaking rather than manufacture. Ownership had all the prestige, while the work of making useful things, \u201cindustrial employment,\u201d was denigrated. For economists, the chief provocation was in the thesis (still in fledgling form here) that pecuniary pursuits were nonproductive, that the profit motive tended to be at odds with, rather than aligned with, what Veblen thought mattered most: the efficient use of industrial capacity. The problem with industry was that it was in the hands of businessmen.<\/p>\n

Both readers who approached A Theory of the Leisure Class as cultural critique and those who approached it as economic theory were struck by its caustic, coruscating prose. Camic says the style was \u201ca standard piece of equipment in the intellectual toolbox handed down to him.\u201d In fact, that style was doing a great deal of work. Veblen, as a social scientist, maintained a pretense that he was making no judgments even as his adjectives constantly rendered their verdicts. \u201cOpinion seems to be divided as to whether I am a knave or a fool, though there are some who make out that the book is a work of genius,\u201d Veblen humble-bragged to his older brother Andrew. Inevitably, the book participated in the economy of prestige it limned. Those who considered themselves sophisticates did well to have a copy in the drawing room, readily visible to their guests.<\/p>\n

\"\"<\/a>The professional triumphs were accompanied by personal turmoil. In A Theory of the Leisure Class, Veblen approvingly invoked the \u201cNew-Woman movement\u201d and its \u201cdouble watchword, \u2018Emancipation\u2019 and \u2018Work.\u2019\u201d He seemed the perfect feminist, his wife the perfect New Woman.<\/p>\n

But the two made each other miserable. It didn\u2019t help that Veblen had fallen in love with Sarah Hardy, a brilliant graduate student. This was clearly what we\u2019d now call an \u201cemotional affair,\u201d not a sexual one. (Modern scholars see no evidence that he was ever physically intimate with more than two women, his first and second wives.) The marital froideur was a torment, though, and Ellen responded by throwing herself into real estate, buying and selling properties, erecting shacks, and settling for a while on a remote farm in Idaho.<\/p>\n

After Hardy was lost to another man in another city, Veblen decided to confess to his wife his futile love for the young woman (\u201cI can see now that I have been deceiving both myself and you about it\u201d) and ask for a divorce. He declared that \u201cthe relation of husband has become untenable,\u201d and ventured that it might have \u201calways been a false one.\u201d Why false? Camic and others, taking note of a pathologist\u2019s report, tell us that Ellen had anatomical anomalies that may have made coitus impossible. In the event, she refused to initiate a divorce, and Veblen wouldn\u2019t pursue one against her wishes.<\/p>\n

Curiously, Ellen established warmly cordial relations with the University of Chicago\u2019s president, William Harper\u2014he read the manuscript of a charming children\u2019s book she\u2019d written, The Goosenbury Pilgrims, and it was published with his encouragement\u2014even as Veblen\u2019s relations with him were cooling. The Theory of Business Enterprise, which appeared in 1904, did not please Harper, who sought the patronage of exactly the sort of people it indicted.<\/p>\n

The so-called captains of industry, Veblen\u2019s book argued, were really predators whose money-minded manipulations came at the expense of \u201ceconomies of production and heightened serviceability.\u201d When businesses competed with one another\u2014Veblen always viewed competition with disfavor\u2014they gave up the efficiencies to be gained by coordination and scale. And when rational consolidation had taken place, businesses were inclined to underproduce in order to buoy prices. He was scathing, too, about the pecuniary prevarication represented by salesmanship, advertising, corporate communications, branding\u2014all the intangible elements of what accountants called \u201cgoodwill.\u201d The activities of both bankers and businessmen, he maintained, \u201cbegin and end with what may broadly be called \u2018the higgling of the market.\u2019\u201d<\/p>\n

The book\u2019s account of finance capitalism certainly seems prescient. As Veblen saw it, debentures and other instruments of debt were placing traditional capital (a factory, say) on a credit basis, and were reorganizing industrial concerns in a way that blurred the line between capital and credit. \u201cCapital\u201d now meant \u201ccapitalized presumptive earning capacity.\u201d If the captains of industry were ultimately parasites, the captains of finance, who simply issued and traded paper, were parasites on parasites. Yet Harper may have been more offended by a section that had been removed from the book. Veblen sent it around for publication as a standalone essay, and a copy evidently reached Harper\u2019s desk. The subject was higher learning in America\u2014and the involvement of businessmen as a bane to it.<\/p>\n

Veblen was too prominent to be fired without a high-minded reason. One soon materialized. When Ellen heard rumors that he had an inappropriate relationship with a colleague\u2019s estranged wife, she sent off a letter to Harper, depicting her husband as sexually dissolute. (Scholars now tend to accept Veblen\u2019s insistence that the rumors were unfounded.) Before long, Veblen was informed that his time at Chicago was coming to an end. This is more or less when Camic\u2019s book ends, too, and not unreasonably. The book\u2019s subtitle refers to \u201cthe making of an economist,\u201d and by this point Veblen the economist was thoroughly made.<\/p>\n

What about the subtitle\u2019s claim that Veblen \u201cunmade economics\u201d? Camic, who says we must recognize what wasn\u2019t original in Veblen in order to see what was, situates him amid the great methodological struggle represented by the \u201cmarginal revolution\u201d in economics. Not a few of his colleagues were awoken from their dogmatic slumber\u2014or, as Veblen thought, narcotized into one\u2014by the work of the Austrian scholars Carl Menger and, starting in the late 1880s, his disciples Friedrich von Wieser and Eugen von B\u00f6hm-Bawerk.<\/p>\n

(In America, Camic finds, the influence of other marginalist schools came later.) Today this work is seen as a forerunner of the neoclassical economics that dominated the century to come.<\/p>\n

The so-called Austrian school solved an old problem right away. Why, Adam Smith had wondered, were diamonds more valuable than water, given that we all need water and nobody needs diamonds? For such marginalists, the crucial distinction was between total utility and marginal utility\u2014the value to you of another bucket of water, in a world where water is abundant, versus the value to you of another carat of diamond, in a world where diamonds aren\u2019t. And while the classical economics associated with Smith and David Ricardo supposed that the value of a good reflected, objectively, the paid labor that went into making it, the marginalists thought its worth was, subjectively, whatever people would fork out for another one.<\/p>\n

John Bates Clark, for all his youthful leanings toward Christian Socialism, became a stalwart of the new approach. In the \u201cmarginal productivity theory of distribution\u201d he advocated, an employee will be paid according to what his labor brings in, its \u201cmarginal product.\u201d Clark conceded that the rule was subject to various idealizing counterfactuals. (It assumed, for example, perfect competition and substitutability: a firm was choosing among equivalent workers, the worker among equivalent jobs.) Still, he considered it a \u201cnatural law\u201d that, \u201cif it worked without friction, would give to every agent of production the amount of wealth which that agent creates.\u201d Workers, he was inclined to say, got what they deserved.<\/p>\n

Veblen blasted away. How could we ever know that your remuneration coincided with the utility of your labor? In Veblen\u2019s terms, \u201cvendibility\u201d (what the market rewarded) seldom squared with serviceability (what the community at large required). Otherwise why did we have poverty and unemployment amid plentiful resources and unmet wants? Business folk, those inveterate \u201chigglers,\u201d could enrich themselves by buying cheap and selling dear, by manipulating prices through letting their factories idle, by puffing up the prices of their goods through deceitful advertising, or through a host of other stratagems, most of which negatively affected social benefit. The best-rewarded people were generally the least productive people. \u201cFriction\u201d wasn\u2019t a sideline issue in the workings of capitalism; it was the whole game.<\/p>\n

Veblen\u2019s chief professional contribution, in Camic\u2019s view, was precisely this \u201cnovel nonproductivity theory of the distribution of economic rewards.\u201d Classical theorists like Smith and J.S. Mill had discussed unproductive labor\u2014labor that didn\u2019t produce material, serviceable goods\u2014but Veblen\u2019s account of the modern economy put it front and center. In so doing, Camic claims, he was able to undermine the foundations of the Austrian school\u2014along with, by implication, its neoclassical successors\u2014and point toward a sounder alternative.<\/p>\n

That it was Veblen who coined the term \u201cneoclassical economics\u201d provides yet another instance of movements baptized by their enemies. Yet it\u2019s hard to turn his critique into a program. For marginalists, concerned not with the servicing of needs but with the satisfying of wants, a distinction between productive and nonproductive labor was hardly tenable. Any activity that produced something people were willing to pay for (a shovel, a tidy house, a night at the theater, a silk cravat) created wealth. Was Veblen\u2019s nonproductivity theory a useful replacement? Certainly the task of trying to say what is and isn\u2019t \u201cserviceable\u201d is not an enviable one. That heirloom tomato on your plate is nutritious, delicious, and status-signaling: you would have to have a very sharp knife to separate out those parts.<\/p>\n

Then there\u2019s the question of whether the model of marginal utility, whatever its uses and abuses, was necessarily blind to distributive malignities:<\/p>\n

The greater the differences in wealth, the more striking will be the anomalies of production. It will furnish luxuries for the wanton and the glutton, while it is deaf to the wants of the miserable and the poor. It is therefore the distribution of wealth which decides how production is set to work, and induces consumption of the most uneconomic kind: a consumption which wastes upon unnecessary and culpable enjoyment what might have served to heal the wounds of poverty.<\/p>\n

The sentiment could be Veblen\u2019s; the words, published a decade before A Theory of the Leisure Class appeared, are from Wieser, the very person who introduced the term \u201cmarginal utility\u201d (as his coinage Grenznutzen was translated), along with the concept of opportunity costs.<\/p>\n

In taking on the marginalists, Veblen had skewered the model of Homo economicus\u2014an atomistic, ahistorical concept of man as a \u201clightning calculator of pleasures and pains.\u201d Yet Wieser was perfectly aware that, as he wrote, \u201cthe appraisal of even the purely individual need\u201d is in fact \u201cinfluenced by society,\u201d such that someone \u201cmay plunge into excessive disbursements to maintain outer show\u2026for fear of losing caste and of being relegated to a lower social level.\u201d<\/p>\n

Mr. Marginal Utility, then, had no problem reconciling his models with talk of processes, social forces, institutions, wasteful display. And government interventions: Wieser was especially proud of having supplied theoretical support for progressive taxation. (Friedrich Hayek later complained that he was \u201cslightly tainted with Fabian socialist sympathies.\u201d) You didn\u2019t need to think that industrial work is the only productive kind in order to see fault in the distribution of rewards. All theories idealize: all stipulate counterfactual conditions or invoke ideal types (as with Veblen\u2019s sharp contrast between the productive and the nonproductive). Precisely because we live in a world of highly imperfect information, we need an array of models; we also need to know when to remodel them.<\/p>\n

Veblen, shown the door at Chicago, soon found himself engaged in no little higgling himself. In 1906 he secured a job offer from Stanford\u2019s ambitious founding president, David Starr Jordan. Although the terms were mingy, Veblen improved them through hard bargaining. \u201cI cannot afford to accept any academic rank lower than the highest assigned to any member of the Department, or any salary less than the highest paid to any member of the Department,\u201d he wrote Jordan. \u201cMy acceptance of an inferior grade would be looked on by my friends in science as something in the nature of a reduction to the ranks\u201d and \u201ccontribute to my discomfort.\u201d It would, in short, be a blow to his status.<\/p>\n

Thorstein and Ellen arrived together in Palo Alto\u2014he picked her up from a remote timber claim in Oregon\u2014and she had hopes that she would finally share in the ineffable delights of academic social life in a college town. Once again, however, it became plain that Veblen\u2019s heart belonged to another: this time to Mrs. Ann Bradley Bevans, known as \u201cBabe,\u201d a Eugene Debs\u2013adoring socialist and suffragist. Once again, Ellen threw herself into construction, putting up a two-story house on Sand Hill Road, parts of which she built with her own hands.<\/p>\n

Meanwhile, Babe, recently divorced, wrote repeatedly to Ellen, asking her to set her husband free. The attempt misfired. In the spring of 1909 Ellen wrote to Jordan of her concerns, and he asked for more information. Ellen evidently forwarded letters from her husband, and probably some from Bevans. In October Jordan wrote his counterpart at the University of Chicago:<\/p>\n

I have been able, with the help of Mrs. Veblen, to find out the truth in detail as to Professor Veblen\u2019s relations. He seems unable to resist the femme m\u00e9comprise\u2026. The university cannot condone these matters.<\/p>\n

A few days later, Jordan assured Ellen that \u201cwe have accepted Dr. Veblen\u2019s resignation.\u201d<\/p>\n

Camic writes of \u201ca stigma of shame that Ellen Veblen kept fresh by her relentless efforts to incriminate Veblen in academic circles,\u201d efforts that permanently scotched his prospects for a career at a major research university. The Jorgensens, more colorfully, ascribe to her \u201ca vengeance worthy of Moriarty\u2019s pursuit of Holmes.\u201d But we can regret the damage done to Mr. Veblen without losing sympathy for Mrs. Veblen. She might have had a very different life had medicine been more advanced, since she suffered from something like Graves\u2019 disease (and probably from misguided attempts to treat it). Her life certainly would have been different had gender equality been more advanced, since she suffered, finally, from being in a world less than eager to develop a woman\u2019s intellect and talent.<\/p>\n

Veblen, who had so recently insisted on the perquisites of his rank, now knew he\u2019d be lucky to find any academic post at all. He took one\u2014poorly paid, and on an annual contract\u2014at the business school at the University of Missouri, which was then a far cry from the research institutions he had been accustomed to, and put down stakes in what he called \u201ca woodpecker hole of a town in a rotten stump called Missouri.\u201d He would make do. Ellen, perhaps mollified by his reversal of fortunes, finally granted him a divorce; Babe, as his legal wife, eventually joined him in Columbia with her two daughters. By then, however, her health was in decline. Veblen was a bit creaky himself, probably the lingering effects of the calomel he had been given for a case of pneumonia.<\/p>\n

Still, he resumed an interrupted career; The Instinct of Workmanship and the State of the Industrial Arts, planned long before, appeared in 1914. In our evolutionary past, he conjectured, a tropism toward workmanship\u2014what he variously called \u201ca proclivity for taking pains\u201d and as \u201ca disposition to do the next thing and do it as well as may be\u201d\u2014enabled our ancestors to survive. Alas, this salubrious instinct was readily overridden or distorted, especially by \u201cthe proprieties of the pecuniary culture.\u201d<\/p>\n

It\u2019s telling that Veblen, always best known for his theory of the \u201cleisure class,\u201d seldom used that term in his later writing. In part, it\u2019s because he had shifted his focus from consumption to production. He had come to notice, too, that \u201cleisure\u201d was something of a red herring. \u201cNo class of men have ever bent more unremittingly to their work than the modern business community,\u201d he wrote in The Instinct of Workmanship. \u201cWithin the business community there is properly speaking no leisure class, or at least no idle class\u201d\u2014its besuited members took pride in their strenuous labors, displaying the instinct for workmanship in a perverted form. Being a successful parasite, it appeared, was no job for loafers.<\/p>\n

Camic notes that Veblen, ousted from \u201cthe research hothouses of Chicago and Stanford,\u201d largely ceased aiming his work at his professional peers. By 1918 he had moved to New York and joined the staff of The Dial, then a biweekly in a political phase. If the irony of his earlier work arose from an artful tension between implicit polemic and professed dispassion, he was now more apt to call a spade a spade, and to revile the schemers who didn\u2019t know how to use one. The wit grew sparser, small gemstones that were set in large cinderblocks but could still catch the light. Writing, at one point, about the \u201cvery reputable fortunes\u201d made in the slave trade, Veblen suggests that it was<\/p>\n

in this moral penumbra that American business enterprise learned how not to let its right hand know what its left hand is doing; and there is always something to be done that is best done with the left hand.<\/p>\n

Among members of the educated public, Veblen remained a name to conjure with. H.L. Mencken, writing in 1919, claimed that he had lately \u201cdominated the American scene\u201d\u2014that \u201cthere were Veblenists, Veblen clubs, Veblen remedies for all the sorrows of the world.\u201d Hostile hyperbole was Mencken\u2019s specialty, of course, but when the New School was established that year\u2014as a scantily funded assemblage of illustrious leftists, including Charles Beard and John Dewey\u2014it happily welcomed Veblen to its ranks. The offer was well timed because he was being discarded by The Dial, now under new, more literary-minded management.<\/p>\n

While all this was going on, it was weighing on his mind that his wife was losing hers. Babe had spiraled into paranoid fantasies\u2014for example, that Kaiser Wilhelm\u2019s son was planning to assassinate her husband\u2014and ended up in McLean, the renowned psychiatric hospital in Massachusetts. It all went terribly wrong. A hunger strike, a feeding tube, a lung infection: by October 1920 she was dead. In his remaining decade, Veblen took on the responsibility of looking after his stepdaughters, the elder of whom increasingly took on the responsibility of looking after him.<\/p>\n

As the 1920s got underway and the financial sector that he warned of in his younger years spread like an algal bloom, he had only the chilly satisfaction of seeing his pessimism vindicated. In truth, that pessimism made him an odd fit for the \u201cProgressive\u201d label sometimes affixed to him. Veblen considered labor unions, for instance, to be just another impediment to his principal concern: maximizing productivity. (\u201cThe A.F. of L. is itself one of the Vested Interests, as ready as any other to do battle for its own margin of privilege and profit.\u201d) His research, as the radical economist Douglas Dowd observed, had shown him \u201ca working class that, far from wishing to abolish the economic system under which it worked, sought largely to occupy a more rewarding and honorific role within it.\u201d<\/p>\n

Veblen prided himself on being a diagnostician; he was chary about offering remedies, aptly enough for someone debilitated less by the diseases he contracted than by the medications he was given for them. Yet he was drawn to a technocratic vision in which entrepreneurs were replaced by engineers. In his next-to-last book, The Engineers and the Price System (1921), he sketched out a long-odds solution to what ailed us, and proposed having industry run by \u201ca soviet of technicians,\u201d set up as a \u201cself-directing General Staff.\u201d (Those who grew up in the planned economies of the mid-twentieth century may see some misplaced confidence here.) If our productive industries were organized into a whole and then managed by competent technicians with an eye single to maximum production of goods and services; instead of, as now, being manhandled by ignorant business men with an eye single to maximum profits; the resulting output of goods and services would doubtless exceed the current output by several hundred per cent.<\/p>\n

This was his way of dispensing with friction. And yet we are left with a quandary. Veblen scorned Homo economicus as a uselessly unreal model, but if we\u2019re taking human beings as they are, how far will we get by wishing away the profit motive, the pecuniary urges, the appetite for acquisition, even the inclination to compete? His selfless technicians\u2014like his peaceable-savage workmen\u2014are little more plausible than those lightning calculators of utility. One can wonder, too, why Veblen, for all his evolutionary enthusiasms, not to mention his preoccupation with industrial efficiency, took so little interest in innovation. \u201cJust now communism offers the best course that I can see,\u201d he wrote a friend some months before his death.<\/p>\n

Perhaps we\u2019d do better to attend less to what he saw than to his ways of seeing. Veblen can be credited with establishing a habit of rational analysis that\u2014in a way now commonplace\u2014tightly enmeshed evolutionary and economic thinking. Over the past half-century, the deliverances of a technical apparatus (most notably, game theory) created an intellectual Schengen Zone between these realms, eased by a shared formal language. Veblen\u2019s notion of \u201cconspicuous consumption\u201d found a powerful heritor in the handicap principle, which emerged in evolutionary theory in the 1970s and applied his explanation for the appeal of \u201ccumbrous\u201d apparel to the biological world. According to this hypothesis, the deer\u2019s uselessly massive antlers or the peacock\u2019s extravagant tail, precisely because they are wasteful and costly, signal that the creature has fitness to burn. \u201cSignaling\u201d theory\u2014concerned with the ways economic actors seek to convey information about themselves\u2014arrived in economics around the same time, and the ultimate result was an interdisciplinary wedding at which Veblen was brought back to officiate.<\/p>\n

These days, \u201ccostly\u201d and therefore credible signaling is as likely to be discussed in journals of biology as of economics. It is the stotting gazelle, leaping into the air to display its robust health and agility (discouraging predators and encouraging mates); it is the Super Bowl commercial that suggests, simply by its expense, a firm\u2019s confidence in the product being marketed. The Prius in your driveway, the fair-trade stamp on your bag of coffee, the college degree on your resume: signaling theory, in deeply Veblenian ways, has something to say about all these things and more. His gimlet-eyed perspective has, perhaps to a fault, become an intellectual reflex.<\/p>\n

If this perspective could seem philistine, not to say inhumane\u2014Theodor Adorno insisted, half in praise, that culture \u201cwas never anything for Veblen but advertising, a display of power, loot, and profit\u201d\u2014the philistinism was theoretical, not personal. In his fading years, he busied himself with a translation of an Old Norse saga. His antipathy for pecuniary pursuits was, on the other hand, matched by a certain incompetence at them. He bought oil stocks and invested his nest egg in a Fresno raisin farm\u2014never a good idea\u2014only to see the raisin industry go bust. Despite various baleful remarks about real estate, he acquired the house on Sand Hill Road from his first wife, at a considerable markup. The place lacked the fine craftsmanship of the house where he grew up but had its ramshackle charms. It was amid Ellen\u2019s handiwork that he died, of a heart attack, on August 3, 1929, weeks before a crash that made his holdings worthless and his writings invaluable.<\/p>\n

In 2004 a grandson of the second Mrs. Veblen put the house on the market as a teardown. The property, across the street from the Stanford golf course, brought in a seven-figure offer. \u201cBuild Your Own Dream Home!\u201d was the realtor\u2019s pitch, and someone did. A former communications exec at Visa lives there now. Veblen would have taken a mordant satisfaction in this. He took a dim view of both credit and corporate communications, but he always relished irony.<\/p>\n

____________________________________________<\/p>\n

Kwame Anthony Appiah teaches philosophy at NYU. His latest books are <\/em>As If: Idealization and Ideals and<\/em> The Lies That Bind: Rethinking Identity. (January 2021)<\/em><\/p>\n

Go to Original – nybooks.com<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

14 Jan 2021 issue – We are all Veblenians now. Thorstein Veblen\u2019s maverick economic ideas made him the foremost iconoclast of the Age of Iconoclasts. Armed with two Ph.D.s from Yale and Cornell, sacked by Chicago and Stanford, he was an intellectual giant whose ideas hold after 100 years of his death.<\/p>\n","protected":false},"author":4,"featured_media":176524,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[67],"tags":[870],"class_list":["post-176521","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-reviews","tag-reviews"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/176521","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=176521"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/176521\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/176524"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=176521"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=176521"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=176521"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}