The General Approach

Veblen's point of departure was a critical dissection of the doctrines of theclassic economists in the light of evolutionary and sociological reasoning. Heobjected to the notion that the "laws" they had constructed were timelessgeneralizations and contended instead that the economic behavior of men, likeany other human activity, had to be analyzed in terms of the social contextin which it was imbedded. He further objected to the deriving of economicbehavior from alleged utilitarian and hedonistic propensities generic to man-kind. The categories of the classical economists, he argued, could be appliedonly to special historical circumstances and in very restricted contexts. Thus,primitive economic behavior could not be understood in terms of Ricardiannotions. "A gang of Aleutian Islanders,' Veblen wrote derisively, "slashingabout in the wrack and surf with rakes and magical incantations for the cap-ture of shell-fish are held, in point of taxonomic reality, to be engaged in afeat of hedonistic equilibration in rent, wages, and interest."

"The hedonistic conception of man," Veblen argued bitingly, "is that ofa lightning calculator of pleasures and pains, who oscillates like a homogenousglobule of desire of happiness under the impulse of stimuli that shift himabout the area, but leave him intact. He has neither antecedent nor conse-quence. He is an isolated, definitive human datum.... Self-imposed inelemental space, he spins symrnetrically about his own spiritual axis....The hedonistic man is not a prime mover. He is not the seat of a process ofliving."

In contrast to an obsolete economics that centers attention upon allegedtranshistorical laws and utilitarian or hedonistic calculations, Veblen urged anew economics that is historical, or, to use his own terminology, evolutionary,and that is based on an activistic conception of man. "It is the characteristicof man to do something.... He is not simply a bundle of desires that are tobe saturated . . . but rather a coherent structure of propensities and habitswhich seek realization and expression in an unfolding activity." The economiclife history of the individual "is a cumulative process of adaptations of meansto ends." What is true of the individual is true of the community. It too iscontinually engaged in an active process of adaptation of economic means toeconomic ends. "Evolutionary economics must be the theory of a process ofcultural growth as determined by the economic interest, a theory, of a cumula-tive sequence of economic institutions stated in terms of the process itself."

Veblen conceived of the evolution of mankind in Spencerian or Darwinianfashion as a process of selective adaptation to the environment. According, tohim, there was no goal to historical evolution as the Hegelians and Marxistshad claimed, but rather "a scheme of blindly cumulative causation, in whichthere is no trend, no final term, no consummation.''

Human evolution, Veblen argued, involved above all the invention anduse of ever more effective technologies. "The process of cumulative changethat is to be accounted for is the sequence of change in the methods of doingthings--the methods of dealing with the material means of life." Hence, "thestate of the industrial arts" ultimately determined the state of adaptation ofman to his natural environment. Technology, moreover, likewise determinedman's adjustment to his social environment.

A man's position in the technological and economic sphere, Veblen argued,determines his outlook and his habits of thought. Similarly, habits and customs,ways of acting and ways of thinking grow within communities as they areengaged in their struggle to wrest a livelihood from nature. Such habits andcustoms in their turn crystallize over time into institutional molds into whichcommunities attempt to press their component members. Institutions areclusters of habits and customs that are sanctioned by the community. An in-stitution "is of the nature of a usage which has become axiomatic and indis-pensable by habituation and general acceptance." The evolution of humansocieties, contended Veblen, must be seen as "a process of natural selection ofinstitutions." "Institutions are not only themselves the result of a selectiveand adaptive process which shapes the prevailing or dominant types of spiritualattitude and aptitudes; they are at the same time special methods of life andhuman relations.''

Hence, the scheme of man's social evolution is to Veblen essentially a pat-tern of institutional change rooted in the development of the industrial arts.Four main stages of evolution are distinguished: the peaceful savage economyof neolithic times; the predatory barbarian economy in which the institutionsof warfare, property, masculine prowess and the leisure class originated; thepremodern period of handicraft economy; and finally the modern era domi-nated by the machine. Much of this, especially the distinction between savageryand barbarism, was based on conjectural history. But Veblen accepted it,despite his often caustic remarks about such history. When a student onceasked him what he considered the difference between real and conjecturalhistory, he answered that the relation was about the same as that between areal horse and a sawhorse.

Veblen's theory of evolutionary stages may well be relegated to the museumof antiquities, but his more general theory of technological determination,though often blended with one or another form of Marxism, has continued toexert influence among contemporary social scientists. Much current work inanthropology is still informed by his view--for example, that "A study of . . .primitive cultures . . . shows a close correlation between the material (in-dustrial and pecuniary) life of any given people and their civic, domestic, andreligious scheme of life; the myths and the religious cult reflect the characterof these other--especially the economic and domestic--institutions in a pecu-liarly naive and truthful manner." The main thrust of Veblen's work, how-ever, does not come in his anthropological studies but rather in his discussionof contemporary or near-contemporary society. Here his distinction betweenindustrial and pecuniary types of employment is crucial.

Veblen's central idea in regard to the modern capitalist world is that it isbased on an irremediable opposition between business and industry, ownershipand technology, pecuniary and industrial employment--between those whomake goods and those who make money, between workmanship and salesman-ship. This distinction served Veblen as a major weapon in his attack againstthe prevailing scheme of things in America, and against prevailing evolutionarydoctrine. His fellow evolutionists, men like his former teacher Sumner, arguedthat the leading industrialists and men of finance, having shown in the com-petitive struggle that they were "the fittest," had to be regarded as the flowersof modern civilization. Veblen argued that, far from being the fittest agents ofevolutionary advancement, men engaged in pecuniary activities were parasitesgrowing fat on the technological leadership and innovation of other men."The leisure class lives by the industrial community rather than in it.'' The"captains of industry" made no industrial contribution and therefore had noprogressive function in the evolutionary process; rather, they retarded and dis-torted it.

Veblen adapted the Spencerian distinction between militant and industrialsocieties to his own uses. Whereas Spencer had argued that businessmen wereengaged in a peaceful way of life, which stood in opposition to that of themilitant warrior, Veblen insisted that the "captains of industry" were onlypursuing the predatory ways of their militant forebears under new circum-stances. American robber barons were as eager to exploit the underlying popula-tion as had been their medieval ancestors. The price system in which business-men and speculators were involved only hampered and impeded the system ofindustrial arts and so delayed the forward course of mankind's evolutionaryadvancement. The differential income businessmen derive from their positionin the price system is far from a reward for creative entrepreneurship butrather a ransom exacted from the underlying productive population. The in-stitution of absentee ownership, the foundation of the modern price system,creates perpetual crises and competitive anarchy leading to the "sabotage" ratherthan the advancement of production.

In tune with his overall theory of technological determinants of thought,Veblen argued that positions in the spheres of industrial or of pecuniary em-ployment respectively fostered radically different casts of mind or habits ofthought. Those in pecuniary employment were inclined toward an "animisticbent," that is, they thought in magical categories. Those involved in industrialemployment, on the other hand, were impelled to think in rational, matter-of-fact terms. Magical and animistic types of reasoning are at variance with therequirements of modern industrial societies; such reasoning is partly a survivalfrom earlier barbaric conditions of life and partly a response to the existentialconditions of those who continue to depend on luck in their speculative ma-nipulations. Modern industry depends on rationality and, in turn, fosters it."In the modern industrial communities, industry is, to a constantly increasingextent, being organized in a comprehensive system of organs and functionsmutually conditioning one another; and therefore freedom from all bias in thecausal apprehension of phenomena grows constantly more requisite to efficiencyon the part of men concerned in industry.''

Veblen believed that the major disciplining agent in the modern worldwas the machine process of production. "The machine technology," he rea-soned, "rests on a knowledge of impersonal, material cause and effect....Within the range of this machine-guided work, and within the range of modernlife so far as it is guided by the machine process, the cause of things is givenmechanically, impersonally, and the resultant discipline is a discipline in thehandling of impersonal facts for mechanical effect. It inculcates thinking interms of opaque, impersonal cause and effect, to the neglect of those norms ofvalidity that rest on usage and on the conventional standards handed down byusage.'' This being the case, Veblen argued further, the future evolution ofmankind depended on those whose minds had been disciplined by involvementin the industrial arts and in the machine process. Further evolutionary ad-vances could be expected only if the habits inculcated by the disciplinaryeffects of the machine prevailed over the predatory life-styles and the magicaland animistic casts of thought of those involved in pecuniary employment.

From Coser, 1977:264-268.

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