As others have correctly located Veblen's use of the phrase "trained
incapacity," I will add simply that Veblen, in using it, was, in his
sardonic fashion, observing that failure to use industrial capacity
fully was only in part a consequence of "trained" or "learned
incapacity."  He also attributed such failure to "an habitual, and
conventionally righteous disregard of other than pecuniary
considerations" (p. 347 in THE INSTINCT OF WORKMANSHIP as republished by
Transaction Publishers, 1990).  Veblen attributed both the "trained
incapacity" and disregard of other considerations to both workmen and
businessmen who, as part of their inherited cultural context, gave pride
of place to pecuniary considerations rather than to use of industrial
capacity to produce as much as could be produced.  

One way to understand these passages in Veblen is as repetition of a
theme that runs through all of his work: human understanding and
behavior is patterned by cultural heritage (as well as by reasoned
reaction to situations) and such patterning may not lead to outcomes
that otherwise seem reasonable.  It is also of interest to note that
Veblen contrasted the focus of businessmen and workmen on pecuniary
considerations with that of the engineers who designed and, as Veblen
saw it, could manage if allowed to, the industrial capacity of the
nation to serve other considerations. The engineers, he thought, did not
see industrial capacity through the same pecuniary lens that gave rise
to the "trained incapacity" of businessmen and workmen. It was this
understanding that led to the rather curious convergence of Veblen's
vision and that of Herbert Hoover in the years immediately following
WWI.  (On this see William Barber, FROM NEW ERA TO NEW DEAL, Chap. 1
especially, and the article that Janet Knoedler and I wrote on Veblen
and the Engineers, published in HISTORY OF POLITICAL ECONOMY 31:2.)

Finally, it is worth noting that Veblen could have used (and perhaps did
use) the phrase "learned incapacity" in any number of places in his
work.  Over and over he made the point that people had to be taught
(through the subtle process of enculturation) that it was undesirable to
do things for ones' own self when status could be gained by having
others do them for you. Veblen's understanding of "the leisure class"
and of much else rested on a notion of "learned incapacity."


Anne Mayhew