----------------- HES POSTING ----------------- 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). Copyright (c) 2002 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ([log in to unmask]; Telephone: 513-529-2850; Fax: 513-529-3308). Published by EH.Net (January 2002). All EH.Net reviews are archived at http://www.eh.net/BookReview ------------ FOOTER TO HES POSTING ------------ For information, send the message "info HES" to [log in to unmask]