That idea in Veblen's theory is a description of monopoly conditions in a market
Monopoly conditions in a market is one fstrategic position that frequently enables a firm to engage in business sabotage, but its certainly not the only such position. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
Competition between firms is a tenent of price "discovery" and price "clearing," according to free market ideology. "Business damage" and "business sabotage" are competitive tactics deliberately employed by "businessmen" to eliminate rivals thereby establishing one of several conditions that constitute exclusive market power within an industry. As you know, one crucial test of Westworld antitrust prosecution are stationarity and more generally a pattern of predatory pricing (beggaring the question of prospective dominance and "pecuniary gain"), for example.
GC.ca: Predatory prices are an investment in a future monopoly, a sacrifice of today's profits for tomorrow's. The investment must be recouped. If a monopoly price later is impossible, then the sequence is unprofitable and we may infer that the low price now is not predatory. More importantly, if there can be no "later" in which recoupment could occur, then the consumer is an unambiguous beneficiary even if the current price is less than the cost of production.... Because determination of likelihood of recoupment is easier than undertaking the price/cost characterization and comparison,(37) the court held that trial courts ought to undertake the recoupment analysis first. If recoupment is implausible, then one need not undertake the laborious price/cost exercise.
Because determination of likelihood of recoupment is easier than undertaking the price/cost characterization and comparison,(37) the court held that trial courts ought to undertake the recoupment analysis first. If recoupment is implausible, then one need not undertake the laborious price/cost exercise.
Veblen also discusses, with his idiosyncratic ambivalence to scale of comparative terms, beneficial cooperation between firms in order to regulate prevailing price. First, "animus" of business damage:
It is notorious, beyond the need of specific citation [BWAH!], that the great business coalitions and industrial combinations which have characterized the situation of the last few years have commonly been the outcome of a long-drawn struggle, in which the industrial ends, as contrasted with business ends, have not been seriously considered, and in which great shrewdness and tenacity have commonly been shown in the staving off of a settlement for years in the hope of more advantageous terms. The like is true as regards further coalitions, further consolidations of industrial processes which have not been effectcd, but which are known to be feasible and desirable so far as regards the mechanical circumstances of the case. The difficulties in the way are difficulties of ownership, of business interest, not of mechanical feasibility. These negotiations and much of the strategy that leads up to a business consolidation are of the nature of derangements of industry, after the manner spoken of above. So that business interests and manoeuvres commonly delay consolidations, combinations, correlations of the several plants and processes, for some appreciable time after such measures have become patently advisable on industrial grounds. In the meantime the negotiators are working at cross-purposes and endeavoring to put their rivals in as disadvantageous a light as may be, with the result that there is chronic derangement, duplication, and misdirected growth of the industrial equipment while the strategy is going forward, and expensive maladjustment to he overcome when the negotiations are brought to a close.(11*)
What he does not theorize is valuation of either profit or price. That pseudo-scientific activity is known as axiology. Diversity is the key to economic and political evolution.
"Business damage" and "business sabotage" are competitive tactics deliberately employed by "businessmen" to eliminate rivals thereby establishing one of several conditions that constitute exclusive market power within an industry.
That is true, but that does not imply that business damage and business sabotage are only employed to eliminate rivals. And of course broader institutional constraints are an important element in that.
As you know, one crucial test of Westworld antitrust prosecution are stationarity and more generally a pattern of predatory pricing (beggaring the question of prospective dominance and "pecuniary gain")
This is an institutional constraint, which was not entrenched at the time that Veblen was writing. Yes, of course the legal tests that are used to apply anti-trust legislation are then part of the landscape which helps determine where the strategy opportunities for business damage and business sabotage lie, and is indeed one of the reasons that business damage and sabotage tended to involve more industrial collaboration in the US following World War II.
Then you quote a long block which seems to be quite valid for the time to which Veblen is referring. You seem to object to:
It is notorious, beyond the need of specific citation [BWAH!], that the great business coalitions and industrial combinations which have characterized the situation of the last few years have commonly been the outcome of a long-drawn struggle, in which the industrial ends, as contrasted with business ends, have not been seriously considered, and in which great shrewdness and tenacity have commonly been shown in the staving off of a settlement for years in the hope of more advantageous terms.
Is the complaint that the argument is not based in a neoclassical or quantitative Marxian fashion on quantities that are indeterminate until the type of strategic decisions being discussed have been made? That would seem to be a point in favor of the argument rather than a point against it, that it does not rely on fictions like the neoclassical "natural level of output" or a notion of an intrinsic level of surplus value. I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.
but that does not imply that business damage and business sabotage are only employed to eliminate rivals.
Veblen sez otherwise. Refer to text, exerpted above or other, if you would to illustrate how "businessmen" or trade unions damage or sabotage their own going concerns.
This is an institutional constraint [sic], which was not entrenched at the time that Veblen was writing.
"Institutional constraint" is another euphemism for statute(s), prohibitive or affirmative state sanction of business conduct. Veblen's text would seem to contradict a retrospective claim, such as yours, that neither prohibitive nor affirmative antitrust statutes were "entrenched" [read: enforced?] as of 1904. Or that he was unaware of prohibitive or affirmative antitrust enforcement up to and including 1904.
The landmark Sherman Act of course established federal standards to test anti-competitive business conduct in 1890 (you may want to review Veblen notes to the text). Prior to that act, one, sufficient schooled in Anglo or Black's jurisprudence, may argue that private actions ("litigation") among firms enforced "institutional constraints" on conduct alledged to restrain trade at least in the US from the 1850s.
English courts generally let restrictive contracts stand because they did not consider themselves suited to judging adequacy or fairness. Over time, courts looked more closely into both the purpose and the effect of any restraint of trade. The turning point came in 1711 with the establishment of the basic standard for judging close cases, "the rule of reason." Courts asked whether the goal of a contract was a general restraint of competition (naked restraint) or particularly limited in time and geography (ancillary restraint). Naked restraints were unreasonable, but ancillary restraints were often acceptable. Exceptions to the rule grew as the economic philosophy of laissez-faire (meaning "let the people do what they please") spread its doctrine of noninterference in business. As rival businesses formed cartels to fix prices and control output, the late-eighteenth-century English courts often nodded in approval.
May I remind you that I am quoting Veblen, and anyone may take a turn to excerpt the text that illustrates his or her intepretation(s) of his keen, novel analytical insight on scale efficiences of "business" motives, accounting, and credit strategies.
Incessantly questioning or ascribing value judgements to my motives is beside the issue. Diversity is the key to economic and political evolution.
book review, polemic Kuznets invented national income statistics, et seq intellectual history of national income accounting, e.g. 1, 2 axiology Diversity is the key to economic and political evolution.
