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Stephen Edgell, _Veblen in Perspective: His Life and Thought_. Armonk, NY:
M.E. Sharpe, 2001. xiii + 209 pp. $22.95 (paper), ISBN: 1-56324-117-x.
Reviewed for EH.NET by Donald Stabile, Department of Economics, St. Mary's
College of Maryland. <[log in to unmask]>
Does Thorstein Veblen still deserve consideration from economists? After
all, his most famous book, _The Theory of the Leisure Class_, appeared over
a century ago. Edgell's book on Veblen makes the case that he does. A
professor of sociology at Salford University in England, Edgell stresses
Veblen's linkages with his own discipline. Much of his book's content will
be of interest only to Veblen scholars. Still, economists can profit from
reading it.
To support his contention that Veblen's ideas have enduring value, Edgell
first removes some of the mystery that surrounds Veblen's personality and
ideas. That mystery has existed ever since. Joseph Dorfman published an
extensive biography of Veblen, _Thorstein Veblen and His America_, in 1934.
In it, he portrayed Veblen as a detached, lonesome loser, who viewed the
U.S. as if he were from another planet. Edgell argues that by slanting his
data, Dorfman misinterpreted Veblen's personality by focusing on his
immigrant parents from Norway whose poverty and "Norskie" ways gave him a
feeling of inferiority. That feeling, in turn, contributed to Veblen's
failed life. He had a spectacularly unsuccessful academic career and few
friends, according to Dorfman, and found revenge with his attacks on the
world around them.
Drawing on new sources and on sources Dorfman had but did not use, Edgell
offers a different story. For example, he turns around the issue of
Veblen's family background, to argue, persuasively, that Veblen benefited
from it. His parents were affluent farmers who sent all their children to
college. Even the family's Norwegian background was a positive influence on
Veblen. Even though he became fluent in English and appreciated Anglo-Saxon
culture at an early age, Veblen, Edgell tells us, drew upon Scandinavian
cultural values as a source of strength and an anchor for his ideas. Edgell
maintains that he especially learned the value of workmanship and
cooperation from his ethnic background. He also credits the works of Henrik
Ibsen as having a great deal of influence on Veblen's ideas and his writing
style.
His multicultural life made Veblen more cosmopolitan than his
contemporaries. He became fluent in all the major European languages and
finely attuned to the latest thinking in Europe. Earning a doctorate in
philosophy at Yale with a dissertation on Kant added to Veblen's broad
interests.
Edgell draws three important lessons from Veblen's experiences. First, he
had no difficulties being a successful student due to his cultural
background; his professors took an interest in him and he got on well with
them. This pattern continued throughout his academic career. He had many
friends from among his colleagues and students, and they all stood by him
with loyalty and devotion. Second, when he began to study economics, Veblen
became a global thinker whose research knew no disciplinary boundaries.
Third, neither his ethnic background nor his personality quirks can explain
his lack of success as an academic. His failure to attain tenure at a major
university was the result of his unconventional ideas.
Edgell provides a very readable summary of those ideas. Veblen was never
satisfied with the rationalist approach to economics set forth by the
neoclassical school that was beginning to dominate economics at the end of
the nineteenth century. In place of their version of the rational utility
maximizing human as the prime mover in economics, Veblen applied the
results then emerging from anthropology and psychology to develop a more
complex theory of human behavior in economic affairs. More important, to
Veblen, any science had to be based on a Darwinian approach. Edgell
establishes that Veblen was a thorough reader of Darwin's books and finds
parallels in their ideas about society.
As a Darwinian, Veblen was interested in explaining how the economic system
evolved over time. To him, the capitalist system of his day was neither
final nor the finest point of economic development. Rather, the economic
system would continue to develop and there was no reason to believe that
its development would lead to a better world. Darwin had no idea where
biological evolution would lead, and Veblen took the same stance with
economic evolution. This perspective, Edgell points out, placed Veblen at
odds with the ideas of American economic progress. It was also contrary to
the neoclassical paradigm with its methodology of equilibrium.
Underlying Veblen's economics was an approach based on the interplay of
human nature and social institutions. Human nature gave human beings
clusters of behavior that he labeled instincts. Veblen identified two major
instincts, workmanship and predation. These instincts, however, were highly
adaptable. The social institutions under which humans functioned influenced
which instinct took precedence in human behavior. In a capitalist society,
these two instincts translated into two types of work, pecuniary and
industrial. Pecuniary work stressed making money through financial dealing,
while industrial work required efficient economic production. Pecuniary
work was predominantly predatory, while industrial work emphasized
workmanship. The problem was that the predatory group was in charge and
made decisions based on what was good for their pecuniary gain, not on what
was good for society.
As long as predatory values dominated capitalism, the chances for a better
society were slim. Veblen's study of the leisure class, moreover, showed
how the pecuniary values of the leisure class created a "capitalist
hegemony," to use Edgell's term, by influencing the values of all other
members of society. Contrary to Marxist theory, Veblen found that the
pecuniary values of capitalism were so influential that they led to
institutional stability. Although he was a socialist, as Edgell describes,
Veblen could not accept the inevitability of socialism, due to his
Darwinian perspective. Only changes in technology, the driving force of
economic evolution, could erode the power and influence of the pecuniary
elite who were in charge of economic decisions.
Veblen always argued that the persons with industrial values who understood
the technology of production should be in charge of the economy. Late in
his life, he wrote a book, _The Engineers and the Price System_, that set
forth the proposal that engineers had the right industrial values to run
the economy. Interpreters of Veblen have struggled with whether or not he
meant what he aid. Edgell reviews their interpretations (including my own)
very capably. He offers his own view that in this book Veblen became a
utopian in a very special sense. However fanciful, utopias have a very
practical purpose of setting a standard of what ought to be for comparison
with what is. In this case, Veblen used a utopian vision of engineers
planning the smooth functioning of an industrial machine to point out the
chaotic nature of an economic system that mixed markets with an unstable
financial system.
Edgell has helped put Veblen in his rightful place as an enduring thinker
whose perception that a market system has costs as well as benefits has
salience for today. Economists who read this book will learn how Veblen
argued that "conspicuous consumption" created waste in the form of negative
externalities. They will also find that his ideas contain elements of
behavioral economics, feminist economics, the new institutional school, and
the theory of "social capital." Even in the twenty-first century, Veblen
has things to teach us, and Edgell deserves credit for teaching us more
about Veblen.
References:
Joseph Dorfman, 1934. _Thorstein Veblen and His America_ (New York: Viking
Press).
Thorstein Veblen, 1953 (1899). _The Theory of the Leisure Class_ (New York:
Mentor Books).
Thorstein Veblen, 1944 (1921). _The Engineers and the Price System_ (New
York: Viking Press).
Donald Stabile's most recent books are _Community Associations: The
Emergence and Acceptance of a Quiet Innovation in Housing_ (Greenwood
Press, 2000) and _The Origins of American Public Finance: Debates over
Money, Debt, and Taxes in the Constitutional Era, 1776-1836_ (Greenwood
Press, 1998).
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Published by EH.Net (January 2002). All EH.Net reviews are archived at
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