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Veblen--a political economist for today

by techno Fri Feb 23rd, 2007 at 05:17:42 AM EST

"The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than it is commonly understood.  Indeed the world is ruled by little else. Practical men, who believe themselves quite exempt from any intellectual influences, are usually slaves of some defunct economist."
John Maynard Keynes

Thorstein Veblen

Anyone wishing to make sense of the world will eventually have to spend some serious time studying the often dreary subject of economics.  Economics is the only subject that people are so passionate about that they are quite willing to start wars and revolutions over the various interpretations of their economic worldview.

Of course, modern economics as taught in our finest universities has very little to do with the economic arguments that start revolutions.  The modern economist has probably best been described as someone without the charisma to become an accountant.  

From the diaries -- whataboutbob

With their elaborate computer models, economics has mutated from its origins in Moral Philosophy to its present status as a branch of applied mathematics.  The transformation is so complete that the giants of economic philosophy like Adam Smith, Karl Marx, David Ricardo, or Friedrich Hayek can no longer even be called economists.

Yet is it precisely the old-fashioned forms of political economics that sheds light on human societies.  The new economics may have given us powerful tools for quite precise measurements but unfortunately these tools are about as useful to describing the large issues as a pocket calculator is for measuring sexual attraction.  The fact that most modern economists are very right wing and conservative has much more to do with institutional arrangements and the Zeitgeist than any particular truths uncovered by the new tools.

To make this short and sweet: Modern academic Economics is about the tools and methodologies of inquiry; Political Economy is about the ideas and assumptions that economists seek to prove or disprove.  One actually need not know a whole lot about economics to argue Political Economy beyond a basic understanding of what their tools can prove.  Economics is a very narrow specialty while Political Economy is a very broad subject open to curious and informed laymen.  And since the tools of economics can be universally applied to assumptions of conservative AND progressives (that is why they are so valuable) the interesting debates are almost always about the ideas of the Political Economists.

After a lifetime of rummaging around the attics of economic philosophy I have discovered a set of principles I find especially useful and descriptive.  A solid majority of them were first articulated by a first-generation American political economist named Thorstein Veblen.  Anyone looking for an explanation of modern economic conditions could do FAR worse than read Veblen.  He has become, by FAR, my favorite dead political economist.

Who was Thorstein Veblen

Minnesota farmhouse
Thorstein Veblen was born in 1857 to Norwegian immigrants on a farm in Wisconsin.  In 1864, the family moved to a larger and much more fertile farm in Minnesota.  The high prices offered for farm commodities due to the American Civil War soon made this struggling immigrant family very prosperous.  Because the Veblen children were unusually bright, some of this newfound prosperity was spent sending them to a nearby college named Carleton.

Thorstein would graduate from Carleton in 1880.  After a short stay at Johns Hopkins in Baltimore, he would get his Ph.D. in philosophy from Yale after writing a dissertation on Immanuel Kant.  He attempted to get work as a philosophy professor but soon discovered that such jobs were usually given to the religiously devout.  After a long reassessment of his options, he went back to school to study political economy.  In 1892, he would finally land a job at the University of Chicago.

After publishing a handful of academic articles, he wrote the book that would make him an international sensation entitled "The Theory of the Leisure Class."  It first hit the bookstores in 1899 and has not been out of print since.  His output would eventually include 10 books and slightly over 100 essays, book reviews, and other scholarly works.

What makes Veblen still relevant?

That mountain of material contains an astonishing amount of insight into the human condition.  Even though Veblen is no longer considered an economist, his ideas are still taught in many sociology and cultural anthropology classes...along with the occasional class on political economy.  Veblen was obviously a genius which makes his books extremely difficult for the modern reader.  Yet the fact that folks are still mining them for nuggets of wisdom is telling.  Why?

  1. "The Theory of the Leisure Class" (PDF file) introduced the expression Conspicuous Consumption to the English language.  It also contained the lesser-known idea of Conspicuous Waste.  This book is required reading for anyone interested in the role of luxury spending in economics.  It also suggests that pollution and environmental destruction may be as much a function of faulty social arrangements as bad industrial design and inefficiency.

  2. Veblen's economics were based on his assumption that the most interesting class division in human societies was between the Industrial Classes (those who built and maintained the necessary machinery to provide for the community's material needs) and the Leisure Classes (those who fastened themselves on backs of the Industrial Classes through force and fraud in order to provide for their own survival.)  This class analysis is essential for anyone who wonders why rocket scientists, software programmers, and engineers need trade unions.

  3. Veblen was also the inventor of a little-used but extremely powerful investigative tool called Institutional Analysis.  By Veblen's thinking, the investigation into human understanding has devolved into a study of individuals (Psychology, and sometimes Theology) and groups (Sociology, Cultural Anthropology, etc.)  He proposed that a more productive line of inquiry was of the interaction between what he called Institutions (education, banking, the military, agriculture, etc.)  Institutional Analysis works for the very simple reason the people who make up Institutions are predisposed or are trained to serve the needs of the Institution.  Farmers act like farmers, bankers like bankers, teachers like teachers, etc. for a wide assortment of good reasons.  If you can understand those Institutional reasons, predicting the behavior of significant groups of people is possible.

And because the behavior of Institutions is fairly predictable, it is possible predict human history with some degree of scientific accuracy.  In 1915, Veblen wrote a book of towering genius called "Imperial Germany and the Industrial Revolution." (PDF file) In it, he postulated that Germany's main Institutional dilemma stemmed from an ugly and dangerous combination of leading edge scientific and industrial power with old-fashioned Prussian militarism.  Because of this, Germany would be a dangerous neighbor even if she lost World War I.  In that case, the industrialists would hire themselves a dictator who would allow them to reorganize.  When industry returned to churning along smoothly, militarism would reappear and war would break out again in Europe.  He wrote THAT with war fever breaking out in USA.

The ONLY reason Institutional Analysis has not become more popular is because while its theory can be understood in minutes, learning to actually do it requires a lifetime.  It is one thing to assert that bankers act like bankers--it is quite another to understand the elements of this behavior.  Veblen may have "proved" that Institutional Analysis works, but even he was 58 and had already been called the last man to know everything when he demonstrated his skill.

Veblen may have been dead since 1929, but his observations are still amazingly useful in explaining the failure to come to grips with environmental problems, the precarious nature of "western" prosperity, or even the sorry track record of political predictions.  

Why this is important

Unlike guys such as Marx, Veblen has never had "followers."  This is mostly because he considered himself to be an evolutionary economist.  People who need enduring truths are usually frustrated by people who tell them that the essential truths are found in studying change.

Even so, there is no good reason to re-invent the wheel.  Veblen was by far, the most modern of the giants in Political Economy.  He was the only one who could have been called technologically literate.  Reading him will provide anyone interested in understanding modern economic problems a running head start.

Three quiet cheers.  Theory of the Leisure Class despite its stodgy prose style (which one can get used to after an initial culture shock), somewhat disorganised presentation, and what can charitably be called a naif model of history, ethnicity etc ("dolichocephalic blonds," indeed) remains one of my favourite texts.  Veblen's insight into caste, class, privilege and display behaviours (and their relation to waste and dysfunction) remains as cogent today as it was when written.  I only wish I could hear what the canny old fellow would have had to say about SUVs.  I'll try to track down a germane bit of text this weekend...

The difference between theory and practise in practise ...
by DeAnander (de_at_daclarke_dot_org) on Fri Feb 23rd, 2007 at 02:48:15 AM EST
Veblen would more examples today than when he was alive.  My explanation is that with advertising on television (and elsewhere) status emulation has become "industrialized."

I occasionally teach video creation.  I have sworn that with my next class, I intend to get a DVCAM into everyone's hands and assign everyone to go out a shoot at least 10 examples of conspicuous consumption which we could cut together into a montage.  A clever student could complete such an assignment in 30 minutes.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Fri Feb 23rd, 2007 at 04:43:14 PM EST
[ Parent ]
Did you mean 30 minutes or 30 seconds?
by Colman (colman at eurotrib.com) on Fri Feb 23rd, 2007 at 04:48:00 PM EST
[ Parent ]

It takes a few minutes to take a video camera out of its case, hook up the battery, get it on a tripod, etc.

But you point is VERY good!!

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Fri Feb 23rd, 2007 at 05:16:43 PM EST
[ Parent ]

Thanks for writing this diary techno. I have tried to read The Theory of the Leisure Class and found it to be hard going. I think I will go back and give it another try.

Money is a sign of Poverty - Culture Saying

by RogueTrooper on Fri Feb 23rd, 2007 at 05:36:43 AM EST
"Theory" was difficult for all of us!  I believe that anyone who tries to read it before the age of 30 is basically wasting his time.  (BTW, that is what Plato said about studying philosophy.)

"Remember the I35W bridge--who needs terrorists when there are Republicans"
by techno (reply@elegant-technology.com) on Sat Feb 24th, 2007 at 01:51:30 PM EST
[ Parent ]
Ok, I downloaded all linked articles.

If this is economy for today, how it would treat this?

by das monde on Fri Feb 23rd, 2007 at 08:17:44 AM EST
Good question.  I don't know how Veblen would have treated Whitney.  I think he is pretty primitive but then I have become a cranky old coot.

My guess is that Veblen would say that the best way to deal with a housing bubble is to not create one in the first place.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Fri Feb 23rd, 2007 at 04:48:56 PM EST
[ Parent ]
My guess is that Veblen would say that the best way to deal with a housing bubble is to not create one in the first place.

Oops, too late... I never understood why the real estate market has to be escalated. I mean, no one can forbid to make capital gains for those willing to speculate on margin, but why it has to be so "easy"? If anything, real estate speculation has to be discouraged at any times. For once, that way of sitting on growing money does nothing good to the society. And most importantly, once a buble crashes, many people are hurt so badly.

All this craziness with real estate, market stocks, reality shows, gambling and World Poker Tours looks as if the modern prospering world decided to play a Russian rullete out of boredom: lets make just a few HUGE winners, over masses of meek loosers. I would prefer cricket - somewhat less exciting, but fun for everyone!

by das monde on Fri Feb 23rd, 2007 at 07:10:33 PM EST
[ Parent ]
Best relevant quote of Veblen on that subject might be:

"The laws of the land are written in the interests of the petty real estate speculator."

In other words, inflating real estate prices has been, at least in USA, a goal so widely shared that to even question it sounds like utter heresy to most people.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Sat Feb 24th, 2007 at 01:48:11 PM EST
[ Parent ]
Wow.  My dad is an artist, 82 years old, went to art school but not college, set up educational television in Memphis TN when I was a kid, worked in United Fund as an executive director and was later a stockbroker.  He was horribly self-conscious about not having a college degree, yet is the smartest and best-educated man I know.  He "retired" at about age 50 to be a full-time struggling artist because he didn't want to have "here lies a stockbroker" on his tombstone.  He's my hero.

But the point: he quoted Thorstein Veblen to me all my life.  And for some time now, I've been telling him about this web site and how much I think he'd enjoy it.  Thank you thank you, thank you for this diary; you've provided the bait and the hook, I'm certain, and have rekindled my interest in Veblen, too.  I'll be poring over those links for quite a while.  Damn I love Eurotrib!!

Karen in Austin

'tis strange I should be old and neither wise nor valiant. From "The Maid's Tragedy" by Beaumont & Fletcher

by Wife of Bath (kareninaustin at g mail dot com) on Fri Feb 23rd, 2007 at 09:04:17 AM EST
You dad sounds like a very neat guy!!!

Folks who understand Veblen can detect each other in even casual conversation.  It is like the Veblenians have a secret decoder ring or something.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Fri Feb 23rd, 2007 at 05:14:04 PM EST
[ Parent ]
Am I dreaming that I did a story about Theory of the Lesiure Class at some stage? I can't find it if I did.
by Colman (colman at eurotrib.com) on Fri Feb 23rd, 2007 at 09:13:01 AM EST
Thanks for that post, interesting;

however, without knowing the details of Veblen's analysis, I might remark that the following view:

> In that case, the industrialists would hire >
> themselves > a dictator who would allow them to
> reorganize.

Is only a very imprecise characterisation of Hitler and his relation to German industry. Certainly, I cannot reproach Veblen for writing this two decades before the Nazi seizure of power, how could he have known the precise dynamics in any detail. However, in the thirties, fourties and fifties this view (largely appropriated by the Marxists) had very wide circulation but it is essentially wrong, I would argue. Hitler was not "hired" by industrialists; his party was a revolutionary force based on popular support;

after seizing power, he ruthlessly pursued his racial goals through the power of the state which ultimately overruled any business interests; there was a lot of tension between the Nazis and industry as the Nazis began to gear the German economy towards war, imposing taxes and price controls, directing investments away from civilian production, establishing huge state controlled concerns (such as the Reichswerke Herman Goering), forcing businesses to buy government bonds etc;

of course, overall industry had little to complain as German recovery gained pace, Hitler dissolved all independent unions and the initial phase of war and conquest allowed them to reap untold profits; large parts of industry became extremely guilty; certainly, there was nothing resembling any kind of organised resistance to Hitler;

nevertheless, and in particular in the early 30s and before the seizure of power, industrialists were generally neither Nazis, nor particularly interested in giving a radical like Hitler a shot at government; they prefered a conservative authoritarian government such as that of von Papen in the early 1930s; the collaboration with Hitler was only meant to use his popular support to legitimize a conservative, traditional solution which on its own had very little popular backing at the time;

in this sense, one may say they "hired" hitler; but "they" is more the conservative political class than German industry per se; moreover, "they" never intended Hitler to become the absolutely dominant force in Germany as he swiftly did; nor was this any well-thought out plan to "hire a dictator"; rather, it was an emergency solution judged necessary by some of these deluded fools because they feared that if they did not integrate at least one of the big popular parties into government (and they sure wouldn't let the communists), popular unrest may spiral totally out of control;

by Almanax on Fri Feb 23rd, 2007 at 09:30:54 AM EST
"Imperial Germany" is a fairly large book.  My summary is a few sentences.  Obviously, I left a lot out.  Probably a LOT of important stuff.

The industrialists may not have exactly hired Hitler even if Herr Krupp claimed just that.  What is more important is that the industrialists got a lot of power in how the economy would be structured at the expense of most other actors--including banking.  And it showed--Germany was the first country to emerge from the global economic depression.

"The industrial system is handicapped by dissension, misdirection, and unemployment of material resources, equipment, and man power, at every turn where the statesmen or the captains of finance can touch its mechanisms." Thorstein Veblen (1921)

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Fri Feb 23rd, 2007 at 05:00:57 PM EST
[ Parent ]
The industrialists may not have exactly hired Hitler even if Herr Krupp claimed just that.

I'm not sure what quote you refer to, but maybe you mean rival Franz Thyssen who wrote a book titled "I paid Hitler".

I also believed a simple picture of industrialist support until reading a historian's article presenting a more complicated picture, pointing out ignored or misinterpreted evidence.

For example, there was the secret 20 February 1933 meeting when 25 industrialists donated 3 million. But this was after Hitler became chancellor, and the meeting was organised by the Nazis, with much wit. Göring issued the invitations as speaker of the Reichstag, for a 'presentation of the new economic programme'. Then Hitler gave a talk about the menance of communism, hinted that democracy will soon be over, then pro-Nazti bankier Hjalmar Schacht said the famous words ("Und nun, meine Herren, an die Kasse!" = 'And now, dear Sirs, to the cashier!'). Peer pressure was also employed. So the relationship was the opposite as commonly suggested on the left: the (majority of) industrialists bowing to pressure to go along, rather than directing events from the background.

Another much-quoted evidence is the Industrielleneingabe of 19 November 1932, a letter demanding Hitler as chancellor signed by 16 (+4 later) industry leaders & financiers, but it is forgotten that  more industrialists signed a contrary petition, one titled Mit Hindenburg für Volk und Reich!, calling for support of rival parties earlier the same month.

I'd educative to compare the route of Krupp and Thyssen, the two big companies that were merged much later.

During the Weimar Republic, it was Fritz Thyssen who was pro-Nazi, while Gustav Krupp was a post-pro-Kaiser conservative who opposed Hitler and wasn't happy about his chancellorship. But then he gave funding when requested to, got a business upturn, and Hitler chose Krupp, the main WWI provider of armory, as propagandistic leader of the military industry, while after the Night of The Long Knives (the slaying of the leadership of the party militia SA, which Hitler feared as rival power base), Fritz Thyssen turned into an opponent of the Nazis, who took revenge by nationalising his firm, and even put him in a concentration camp. Meanwhile, Alfried Krupp, a son unlike father who was even in the SS before Hitler's takeover (but not the NSDAP), inherited the rival company, and it mutated into a major slave labourer under him.

Alfried Krupp would later explain his amoral opportunism with:

"Die Wirtschaft brauchte eine ruhige oder aufwärts steigende Entwicklung. Wir hatten den Eindruck, dass Hitler nie solch eine gesunde Entwicklung bescheren würde. Tatsächlich hat er das getan.""The economy needed a steady or upwards rising development. We had the impression that Hitler could never bring such a healthy development. But he did so in actuality."

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Feb 24th, 2007 at 08:53:20 AM EST
[ Parent ]
OK, you win!

Thanks for these corrections.  The really interesting story (for me) is why the German economy so completely outperformed most of the rest of the world's during the 1930s.  I THINK Veblen's explanation would be included in the following:

"The industrial system is handicapped by dissension, misdirection, and unemployment of material resources, equipment, and man power, at every turn where the statesmen or the captains of finance can touch its mechanisms." (1921)

What I know about this subject (which apparently isn't much) I got while reading Wm. Manchester's "The Arms of Krupp."  Manchester was a WWII vet who actually saw real combat (not a LOT of them from USA, you know) and spent the next 25 years trying to make sense of it all.

If you ever write a diary about this, please let me know

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Sat Feb 24th, 2007 at 01:43:37 PM EST
[ Parent ]
The question of German industry and Hitler was the background to one of the nastiest disputes in recent American historiography, over a book by David Abraham which agreed with you, but was riddled with errors. Most of them were trivial sloppiness (ranging from minor cite errors to passing off paraphrases as direct quotes), but a few were quite serious (you do NOT cite non existent documents or insert/remove a negative to make it look like a key primary source says the opposite of what it really does to make your argument more convincing). Henry Turner, a very eminent historian at Yale who has specialized in the subject launched a campaign against Abraham and succeeded in getting him drummed out of the profession (he had gotten a TT at Princeton, lost his job, went to law school and is now a law prof). There was a strong political subtext to the mess as Abraham is very left wing while Turner fairly right wing.

In any case, if you want serious reading on the subject from opposite perspectives, you can try the revised Abraham The Collapse of the Weimar Republic: Political Economy and Crisis (don't read the first version) or Henry Turner's German Big Business and the Rise of Hitler

by MarekNYC on Sat Feb 24th, 2007 at 02:48:34 PM EST
[ Parent ]
Would you mind writing a diary about this subject (you being a qualified historian), of course if you have time to do so?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Feb 24th, 2007 at 04:11:18 PM EST
[ Parent ]
Just remember here, we are discussing whether Veblen in 1915 actually predicted something that happened in 1932 so accurately that valid historians argue--with HINDSIGHT--whether he got it right.

The historical argument is interesting.  The validation for institutional analysis is overwhelming!

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Mon Feb 26th, 2007 at 03:01:30 AM EST
[ Parent ]
Hi--Thanks for a great summary of Veblen.  It makes me want to break out some of his books as I'm pretty unfamiliar with him and am particularly interested in what you say is the importance of "waste," which I assume can also be related to both overproduction and hyper-consumption.

On that note, I thought I would leave a quote from Zygmunt Bauman, a fairly controversial and puzzling "philosopher/sociologist" of our time.  I've been reading him quite a lot lately and he sees waste as integral to modernity "order-building."  Material waste, as a product of increased efficiency, rather than actually making things cheaper, requires capital and resources in the form of new markets, advertising, trash collection and mental space.  Waste is therefore a paradox that allows for the absorption of excess capital which could otherwise lead to inflation and the breakdown of the system.  Increased efficiency also leads to "wasted humans."  I'll quote Bauman here in a passage where he refers to immigrants:

Superfluous people are in a no-win situation. If they attempt to fall in line with currently lauded ways of life, they are immediately accused of sinful arrogance, false pretences and the cheek of claiming unearned bonuses...If they [the Superfluous] openly resent and refuse to honour those ways which may be savoured by the haves but are more like poison for themselves, the have-nots, this is promptly taken as proof of what 'public opinion' (more correctly, its elected or self-appointed spokespersons) 'told you all along'--that the superfluous are not just an alien body, but a cancerous growth gnawing at the healthy tissues of society and sworn enemies of 'our way of life' and 'what we stand for'. [Bauman "Wasted Lives" p. 41]

Waste (as trash, as people) is for Bauman a core part of our economic and political identity.

Anyway, I've ended up writing a longer more pedantic post than I intended when I just wanted to point some people towards Bauman and his theories of waste...

Thanks for the great post on Veblen.

by andrethegiant on Fri Feb 23rd, 2007 at 09:37:45 AM EST
Hm. I once wrote an article around the methapor "America: Land of Waste". Seems like Bauman would be interesting for me.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Sat Feb 24th, 2007 at 07:07:20 AM EST
[ Parent ]
I like Veblen too, but his work needs to be looked at with the added insights that have developed since he wrote.

One of the things is that he brought a certain austere view of life to his work which colored his thinking. It makes for great invective, but slightly biased investigation.

The principle change in the study of consumerism since his day, I think, is the understanding of how marketing and propaganda can influence behavior. People are now frequently persuaded to act in ways that are at odds with their own self-interest. This ranges from the trivial of the annual changes in women's fashions, to adopting the themes of racial or cultural superiority which leads to wars and mass annihilation.

People seem to fall into several broad groups psychologically.
At the top are the amoral power hungry - Stalin, Hitler, etc. (Perhaps 1% of the population?)

Below them are those who "need to believe". These are the ones Robert Altemeyer calls RWA's (right wing authoritarians). They follow a strong leader unquestioningly and are immune to facts which contradict their beliefs. There is a strong correlation between them and religious and social conservatives. In the US currently many of them are Evangelical Christians. (Estimated to be about 20% of the population.)

Next down are the weak followers. This is probably the biggest sector. (My guess 50+% of the population). They either go along so as not to stand out, or keep out of the way if there are strong spits of opinion. Politically they are the big percentage that doesn't vote or seldom votes. Since choices are made by others that are more committed their options are limited for them, especially in the market place. Try to buy an 80 mpg auto in the US.

Finally there are the 20% or so of people who reject the conventions. They may drop out, or accommodate to society as little as possible. I think they tend to be artists and artisans and go into academia or other "ivory tower" fields. Their disdain for convention also means that they end up influencing the direction society takes less than their numbers would indicate.  

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Fri Feb 23rd, 2007 at 10:49:35 AM EST
People are now frequently persuaded to act in ways that are at odds with their own self-interest.  This ranges from the trivial of the annual changes in women's fashions

No, no, no. Following the changes in fashions, especially with high-end stuff is an excellent, clear piece of conspicious consumption that demonstrates you have the time and money to do so. It's all about status display, which is not against the person's self-interest: it's essentiasl to it.

This  is one of the failings of the utopians: people like status and currently it is derived from consumption. You have to provide acceptable substitutes. As energy gets more expensive, conspicious consumption of energy will become even more of a status symbol.

by Colman (colman at eurotrib.com) on Fri Feb 23rd, 2007 at 11:04:20 AM EST
[ Parent ]
I've long wondered how to get people to compete over who consumes less rather than who consumes more. I haven't the slightest idea of how to bring that about as the whole concept of status would seem to preclude it.

you are the media you consume.

by MillMan (millguy at gmail) on Fri Feb 23rd, 2007 at 03:35:49 PM EST
[ Parent ]
kcurie is in favour of a potlatch economy, in which status is linked to how much you give away rather than hoard or consume.
by afew (afew(a in a circle)eurotrib_dot_com) on Fri Feb 23rd, 2007 at 03:55:08 PM EST
[ Parent ]
the potlatch economy is where Veblen got his intellectual start--it is mentioned in "Theory of the Leisure Class."

"Remember the I35W bridge--who needs terrorists when there are Republicans"
by techno (reply@elegant-technology.com) on Fri Feb 23rd, 2007 at 05:03:56 PM EST
[ Parent ]
Well sure, but how do we make that happen?

And is it sustainable from the standpoint that your consumption based neighbor will just run you over with his greater economic and (likely) military might?

you are the media you consume.

by MillMan (millguy at gmail) on Fri Feb 23rd, 2007 at 05:15:21 PM EST
[ Parent ]
Wow! Fascinating to the end, although the links will take much longer.  Thank you.

LOL: "someone without the charisma to become an accountant."  I will use that one.  

Our knowledge has surpassed our wisdom. -Charu Saxena.

by metavision on Fri Feb 23rd, 2007 at 02:01:14 PM EST
a grayfaced shambling man lolling resentful at his desk with his cheek on his hand, in a low sarcastic mumble of intricate phrases subtly paying out the logical inescapable rope of matter-of-fact for a society to hang itself by,
dissecting out the century with a scalpel so keen, so comical, so exact the the professors and students ninetenths of the time didn't know it was there, and the magnates and the respected windbags and the appluaded loudspeakers never knew it was there.
asked too many questions, sufferend  from a constitutional inability to say yes.
Socrates asked questions, drank down the bitter drink one night when the first cock crowed,

but Veblen

drank it in little sips through a long life in the stuffiness of classrooms, the dust of libraries, the statleness of cheap flats such as a poor instructor can afford.  He fought the bogy all right, pedantry, routine, timesavers at office desks, trustees, collegepresidents, the plump flunkies of the ruling businessmen, all the good jobs kept for yesmen, never enough money, every broadening hope thwarted.  Veblen drank the bitter drink all right.

The Veblens were a family of freeholding farmers.
The freeholders of the narrow Norwegian valleys were a stubborn hardworking people, farmers, dairymen, fishermen, rooted in their fathers' stony fields, in their old timbered farmsteads with carved gables they took their names from, in the upland pastures where they grazed the stock in summer.
During the early nineteenth century the towns grew:  Norway filled up with landless men, storekeepers, sheriffs, moneylenders, bailiffs, notaries in black with stiff collars and briefcases full of foreclosures under their arms.  Industries were coming in.  The townsmen were beginning to get profit out of the country and to finagle the farmers out of the freedom of their narrow farms.
The meanspirited submitted as tenants, daylaborers;  but the strong men went out of the country
as their fathers had gone out of the country centuries before when Harald the Fairhaired and Saint Olaf hacked to pieces the liberties of the Northern men, who had been each man lord of his own creek, to make Christians and serfs of them,
only in the old days it was Iceland, Greenland, Vineland the Northmen had sailed west to;  now it was America.
Both Thorstein Veblen's father's people and his mother's people had lost their farmsteads and with them the names that denoted them free men.
Thomas Anderson for a while tried to make his living as a traveling carpenter and cabinetmaker, but in 1847 he and his wife, Kari Thorsteinsdatter, crossed in a whalingship from Bremen and went out to join friends in the Scandihoovian colonies round Milwaukee.
Next year his brother Haldor joined him.
They were hard workers;  in another year they had saved up money to pre-empt a claim on a hundred and sixty acres of uncleared land in Sheboygan County, Wisconsin;  when they'd gotten that land part cleared they sold it and moved to an all-Norway colony in Manitowoc County, near Cato, and a place named Valders after the valley they had all come from in the old country;
there in the house Thomans Anderson built with his own tools, the sixth of twelve children, Thorstein Veblen was born.
When Thorstein was eight years old, Thomas Anderson moved west again into the blacksoil prairies of Minnesota that the Sioux and the buffalo had only been driven off from a few years before.  In the deed to the new farm Thomas Anderson took back the old farmstead name of Veblen.

He was a solid farmer, builder, a clever carpenter, the first man to import merino sheep and a mechanical reaper and binder;  he was a man of standing in the group of Norway people farming the edge of the prairie, who kept their dialects, the manner of life of their narrow Norway valleys, their Lutheran pastors, their homemade clothes and cheese and bread, their suspicion and stubborn dislike of townsmen's ways.
The townspeople were Yankees mostly, smart to make two dollars grow where a dollar grew before, storekeepers, middlemen, speculators, moneylenders with long heads for politics and mortgages;  they despised the Scandihoovian dirtfamers they lived off, whose daughters did their wives' kitchenwork.
The Norway people believed as their fathers had believed that there were only two callings for an honest man, farming or preaching.

Thorstein grew up a hulking lad with a reputation for lazines and wit.  He hated the irk of overrepeated backbreaking chores around the farm.  Reading he was happy.  Carpentering he liked or running farmmachinery.  The Lutheran pastors who came to the house noticed that his supple mind slid  easily round the corners of their theology.  It was hard to get farmwork out of him;  he had a stinging tongue and was famous for the funny names he called people;  his father decided to make a preacher out of him.
When he was seventeen he was sent for out of the field where he was working.  His bag was already packed, horses hitched up.  He was being sent to Carleton Acaemy in Northfield, to prepare for Carleton College.
As there were several young Veblens to be educated, their father built them a house on a lot near the campus.  Their food and clothes were sent to them from the farm.  Cash money was something they never saw.
Thorstein spoke English with an accent.  He had a constitutional inability to say yes.  His mind was formed on the Norse sagas and on the matter-of-fact sense of his father's farming and the exact needs of carpenterwork and threshingmachines.
He could never take much interest in the theology, sociology, economics of Ccarleton College where they were busy trimming down the jagged dogmas of the old New England Bibletaught traders to make stencils to hang on the walls of commissioningmerchants' offices.
Veblen's collegeyears were the years when Darwin's assertions of growth and becoming were breaking the set molds of the Noah's Ark world;
when Ibsen's women were tearing down the portières of the Victorian parlors,
and Marx's mighty machine was rigging the countinghouse's own logic to destroy the countinghouse.
When Veblen went home to the farm, he talked about these things with his father, following him up and down at his plowing, starting an argument while they were waiting for a new load for the wheatthresher.  Thomas Anderson had seen Norway and America;  he had the squarebuilt mind aof a carpenter and builder, and an understanding of tools and the treasured elaborated builtupseasonbyseason knowledge of a careful farmer,
a tough whetstone for the sharpening steel of young Thorstein's wits.

At Carleton College young Veblen was considered a brilliant unsound eccentric;  nobody could understand why a boy of such attainments couldn't settle down to the business of the day, which was to buttress property and profits with anything usable in the débris of Christian ethics and eighteenth-century economics that cluttered the minds of college proressors, and to reinforce the sacred, already shaky edifice with the new strong girderwork of science Herbert Spencer was throwing up for the benefit of the bosses.
People complained they never knew whether Veblen was joking or serious.
In 1880 Thorstein Veblen started to try to make his living by teaching.  A year in an academy at Madison, Wisconsin wasn't much of a success.  Next year he and his brother Andrew started graduate work at Johns Hopkins.  Johns Hopkins didn't suit, but boarding in an old Baltimore house with some ruined gentlewomen gave him a disdaining glimpse of an etiquette motheaten now but handed down through the lavish leisure of the slaveowning planter's mansions straight from the merrie England of the landlord cavaliers.
(The valleyfarmers had always been scornful of outlanders' ways.)
He was more at home at Yale, where in Noah Porter he found a New England roundhead granite against which his Norway granite rang in clear dissent.  He tok his Ph.D. there.  But there was still some question as to what department of the academic world he could best make a living in.
He read Kant and wrote prize essays.  But he couldn't get a job.  Try as he would he couldn't get his mouth around the essential yes.
He went back to Minnesota with a certain intolerant knowledge of the amenities of the higher learning.  To his slight Norwegian accent he'd added the broad "a."

At home he loafed about the farm and tinkered with inventions of new machinery and read and talked theology and philosophy with his father.  In the Scandihoovian colonies the price of wheat and the belief in God and Saint Olaf were going down together.  The farmers of the Northwest were starting their long losing fight against the parasite businessmen who were sucking them dry.  There was a mortgage on the farm, interest on debts to pay, always fertilizer, new machines to buy to speed production to pump in a halfcentury the wealth out of the soil laid down in a million years of buffalograss.  His brothers kept grumbling about this sardonic loafer who wouldn't earn his keep.
Back home he met again his college sweetheart, Ellen Rolfe, the niece of the president of Carleton College, a girl who had railroadmagnates and money in the family.  People in Northfield were shocked when it came out that she was going to marry the drawling pernickety bookish badly-dressed young Norwegian ne'erdowell.
Her family hatched a plan to get him a job as economist  for the Santa Fe Railroad, but at the wrong moment Ellen Rolfe's uncle lost control of the line.  The young couple went to live at Stacyville where they did everything but earn a living.  They read Latin and Greek and botanized in the woods and along the fences and in the roadside scrub.  They boated on the river and Veblen started his translation of the Laxdaelasaga.  They read Looking Backward and articles by Henry George.  They looked at their world from the outside.

In '91 Veblen got together some money to go to Cornell to do postgraduate work.  He turned up there in the office of the head of the economics department wearing a coonskin cap and gray corduroy trousers and said in his low sarcastic drawl, "I am Thorstein Veblen,"

but it was not until several years later, after he was established at the new University of Chicago that had grown up next to the World's Fair, and had published The Theory of the Leisure Class, put on the map by Howell's famous review, that the world of the higher learning knew who Thorstein Veblen was.
Even in Chicago as the brilliant young economist he lived pioneer-fashion.  (The valleyfarmers had always been scornful of outlanders' ways.)  He kept his books in packingcases laid on their sides along the walls.  His only extravagances were the Russian cigarettes he smoked and the red sash he sometimes sported.  He was a man without smalltalk.  When he lectured he put his cheek on his hand and mumbled out his long spiral sentences, reiterative like the eddas.  His language was a mixture of mechanics' terms, scientific latinity, slang, and Roget's Thesaurus.  The other profs couldn't imagine why the girls fell for him so.
Tongues wagged so (Veblen was a man who never explained, who never could get his tongue around the essential yes;  the valleyfarmers had always been scornful of the outlanders' ways, and their opinions) that his wife left him and went off to live alone on a timberclaim in Idaho and the president asked for his resignation.
Veblen went out to Idaho to get Ellen Rolfe to go with him to California when he succeeded in getting a job at a better salary at Leland Stanford, but in Palo Alto it was the same story as in Chicago.  He suffered from woman trouble and the constitutional inability to say yes and an unnatural tendency to feel with the workingclass instead of with the profittakers.  There were the same complaints that his courses were not constructive or attractive to bigmoney bequests and didn't help his students to butter their bread, make Phi Beta Kappa, pick plums off the hierarchies of the academic grove.  His wife left him for good.  He wrote to a friend, "The president doesn't approve of my domestic arrangements;  nor do I."
Talking about it he once said, "What is one to do if the woman moves in on you?"
He went back up to the shack in the Idaho woods.
Friends tried to get him an appointment to make studies in Crete, a chair at the University of Pekin, but always the bogy, routine, businessmen's flunkies in all the university offices... for the questioner the bitter drink.

His friend Davenport got him an appointment at the University of Missouri.  At Columbia he lived like a hermit in the basement of the Davenports' house, helped with the work round the place, carpentered himself a table and chairs.  He was already a bitter elderly man with a gray face covered with a net of fine wrinkles, a Vandyke beard and yellow teeth.  Few students could follow his courses.  The college authorities were often surprised and somewhat chagrined that when visitors came from Europe, it was always Veblen they wanted to meet.
Those were the years he did most of his writing, trying out his ideas on his students, writing slowly at night in violet ink with a pen of his own designing.  Whenever he published a book, he had to put up a guarantee with the publishers.  In The Theory of Business Enterprise, The Instinct of Workmanship, The ested Interests and the Common Man,
he established a new diagram of a society dominated by monopoly capital,
etched in irony
the sabotage of production by business,
the sabotage of life by blind need for money profits,
pointed out the alternatives:  a warlike society strangled by the bureaucracies of the monopolies forced by the law of diminishing returns to grind down more and more the common man for profits,
or a new matter-of-fact commonsense society dominated by the needs of the men and women who did the work and the incredibly vast possibilities for peace and plenty offered by the progress of technology.

These were the years of Debs' speeches, growing labor-unions, the I.W.W. talk about industrial democracy;  these years Veblen still held to the hope that the workingclass would take over the machine of production before monopoly had pushed the western nations down into the dark again.

War cut across all that;  under the cover of the bunting of Woodrow Wilson's phrases the monopolies cracked down, American democracy was crushed.
The war at least offered Veblen an opportunity to break  out of the airless greenhouse of academic life.  He was offered a job with the Food Administration, he sent the Navy Department a device for catching submarines by trailing lengths of stout bindingwire. (Meanwhile the government found his books somewhat confusing.  The postoffice was forbidding the mails to Imperial Germany and the Industrial Revolution while propaganda agencies were sending it out to make people hate the Huns.  Educators were denouncing The Nature of Peace while Washington experts were clipping phrases out of it to add to the Wilsonian smokescreen.)
For the Food Administration Thorstein Veblen wrote two reports;  in one he advocated granting the demands of the I.W.W. as a wartime measure and conciliating the workingclass instead of beating up and jailing all the honest leaders;  in the other he pointed out that the Food Administration was a businessman's racket and was not aiming for the most efficient organisation of the country as a producing machine.  He suggested that, in the interests of the efficient prosecution of the war, the government step into the place of the middleman and furnish necessities to the farmers direct in return for raw materials;
but cutting out business was not at all the Administration's idea of making the world safe for democracy;
so Veblen had to resign from the Food Administration.
He signed the protests against the trial of the hundred and one wobblies in Chicago.

After the armistice he went to New York.  In spite of all the oppression of the war years, the air was freshening.  In Russia the great storm of revolt had broken, seemed to be sweeping west;  in the strong gusts from the new world in the wast the warshodden multitudes began to see again.  At Versailles allies and enemies, magnates, generals, flunky politicians were slamming the shutters against the storm, against the new, against hope.  It was suddenly clear for a second in the thundering glare what war was about, what peace was about.
In America, in Europe, the old men won.  The bankers in their offices took a deep breath, the bediamoned old ladies of the leisure class went back to clipping their coupons in the refined quiet of their safe-deposit vaults.
The last puffs of the ozone of revolt went stale
in the whisper of speakeasy arguments.

Veblen wrote for the Dial,
lectured at the New School for Social Research.
He still had a hope that the engineers, the technicians, the nonprofiteers whose hands were on the switchboard might take up the fight where the workingcass had failed.  He helped form the Technical Alliance.  His last hope was the British general strike.
Was there no group of men bold enough to take charge of the magnificent machine before the pigeyed speculators and the yesmen at office desks irrevocablly ruined it
and with it the hopes of four hundred years?

No one went to Veblen's lectures at the New School.  With every article he wrote for the Dial the circulation dropped.
Harding's normalcy, the new era was beginning;
even Veblen made a small killing on the stockmarket.
He was an old man and lonely,
his second wife had gone to a sanatarium suffering from delusions of persecution.
There seemed no place for a masterless man.

Veblen went back out to Palo Alto
to live in his shack in the tawny hills and observe from outside the last grabbing urges of the profit system taking on, as he put it, the systematized delusions of dementia praecox.
There he finished his translation of the Laxdaelsaga.

He was an old man.  He was much alone.  He let the woodrats take what they wanted from his larder.  A skunk that hung round the shack was so tame he'd rub up against Veblen's leg like a cat.
He told a friend he'd sometimes hear in the stillness about him the voices of his boyhood taking Norwegian as clear as on the farm in Minnesota where he was raised.  His friends found him harder than ever to talk to, hardre than ever to interest in anything.  He was running down.  The last sips of the bitter drink.
He died on August 3, 1929.
Among his papers a penciled note was found:
It is also my wish, in case of death, to be cremated if it can conveniently be done, as expeditiously and inexpensively as may be, without ritual or ceremony of any kind;  that my ashes be thrown loose into the sea or into some sizable stream running into the sea;  that no tombstone, slab, epitaph, effigy, tablet, inscription or monument of any name or nature be set up to my memory or name in any place or at any time;  that no obituary, memorial, portrait or biography of me, nor any letters written to or about me be printed or published, or in any way reproduced, copied or circulated;
but his memorial remains
riveted into the languages:
the sharp clear prism of his mind.

-- THE BITTER DRINK, by John dos Passos, from The Big Money, vol III of the USA Trilogy.

And as this is not in Project Gutenberg or any other ascii vault I could find, I had to type it in -- yowza!

The difference between theory and practise in practise ...

by DeAnander (de_at_daclarke_dot_org) on Sun Feb 25th, 2007 at 08:19:21 PM EST
Thanks for the work. I drank in every word.

Time to get one of his books now.

by citizen on Mon Feb 26th, 2007 at 12:45:12 AM EST
[ Parent ]
Oh DeAnader

This is wonderful.  Thank you so much.  I thought I had read all the good stuff written about Veblen.  I was wrong.

If you don't mind, I'll put this on my website.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Mon Feb 26th, 2007 at 01:36:44 AM EST
[ Parent ]
I am posting three pictures I rarely show because most people cannot understand why they are interesting.  But after DeAnder's hand-typed addition to our lives, these pictures mean something.  Dos Passos "got" Veblen!!!

Stanford house

This is the house where Veblen died.  It was recently destroyed.  The land it sat on had become amazingly "valuable" there across the street from the Stanford Golf Course.

Veblen's table

Veblen was a son of a master carpenter--who was much more in love with ornamentation than his son.  This table was built by an old man.  It is about as plain as one can be.  Yet it is well-proportioned, sturdy, and carefully built.  There is actually a glue joint that ran the length of the top that does not show up on this picture.  This table was built by the man who wrote "The Theory of the Leisure Class" AND "The Instinct of Workmanship."

table detail

Nothing fancy about this joint.  Veblen's father built his Minnesota house using mortise and tenon joints on the FRAMING to save money on nails.  He laid the first hardwood floor in the county using groove and spline joints.  Thorstein very likely know how to make fancy joints, he simply choose not to on this table.  There were two of these tables--Veblen probably built them both in a single day.

"Remember the I35W bridge--who needs terrorists when there are Republicans"

by techno (reply@elegant-technology.com) on Mon Feb 26th, 2007 at 02:25:00 AM EST
[ Parent ]

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