Norwegian-American Sociologist and Economist, Leader of the Institutional Economics Movement
Thorstein Veblen, fully Thorstein Bunde Veblen, born Torsten Bunde Veblen
Norwegian-American Sociologist and Economist, Leader of the Institutional Economics Movement
They are apparently moved by a feeling that so long as the established arrangements are maintained they will come in for a little something over and above what would come to them if they were to make common cause with the undistinguished common lot. In other words, they have a vested interest in a narrow margin of preference over and above what goes to the common man. But this narrow margin of net gain over the common lot, this vested right to get a narrow margin of something for nothing, has hitherto been sufficient to shape their sentiments and outlook in such a way as, in effect, to keep them loyal to the large business interests with whom they negotiate for this narrow margin of preference.
Under the circumstances prevailing at any given time this [leisure] class is in a privileged position, and any departure from the existing order may be expected to work to the detriment of the class rather than the reverse. The attitude of the class... should therefore be to let well-enough alone. This interested motive comes in to supplement the strong instinctive bias of the class, and so to render it even more consistently conservative than it otherwise would be.
When the community passes from peaceable savagery to a predatory phase of life... opportunity and the incentive to emulate increase greatly... The activity of the men more and more takes on the character of exploit; and an invidious comparison... grows continually easier and more habitual. Tangible evidences of prowess?trophies?find a place in men's habits of thought as an essential feature... and booty serves as prima facie evidence of successful aggression...as a conventional evidence of successful contest. Therefore... the obtaining of goods by other methods than seizure comes to be accounted unworthy...Labor acquires a character of irksomeness by virtue of the indignity imputed to it.
Things have changed in such a way since that time, that the ownership of property in large holdings now controls the nation's industry, and therefore it controls the conditions of life for those who are or wish to be engaged in industry; at the same time that the same ownership of large wealth controls the markets and thereby controls the conditions of life for those who have to resort to the markets to sell or to buy. In other words, it has come to pass with the change of circumstances that the rule of Live and Let Live now waits on the discretion of the owners of large wealth. In fact, those thoughtful men in the eighteenth century who made so much of these constituent principles of the modern point of view did not contemplate anything like the system of large wealth, large-scale industry, and large-scale commerce and credit which prevails today. They did not foresee the new order in industry and business, and the system of rights and obligations which they installed, therefore, made no provision for the new order of things that has come on since their time.
Under the new order of things the mechanical equipment ? the "industrial plant" -- takes the initiative, sets the pace, and turns the workman to account in the carrying-on of those standardized processes of production that embody this mechanistic state of the industrial arts; very much as the individual craftsman in his time held the initiative in industry, set the pace, and made use of his tools according to his own discretion in the exercise of his personal skill, dexterity and judgment, under that now obsolescent industrial order which underlies the eighteenth-century modern point of view, and which still colors the aspirations of Liberal statesmen and economists, as well as the standard economic theories. The workman -- and indeed it is still the skilled workman -- is always indispensable to the due working of this mechanistic industrial process, of course; very much as the craftsman's tools, in his time, were indispensable to the work which he had in hand. But the unit of industrial organization and procedure, what may be called the "going concern" in production, is now the outfit of industrial equipment, a works, engaged in a given standardized mechanical process designed to turn out a given output of standardized product; it is the plant, or the shop.
When the predatory habit of life has been settled upon the group by long habituation, it becomes the able-bodied man's accredited office in the social economy to kill, to destroy such competitors in the struggle for existence as attempt to resist or elude him, to overcome and reduce to subservience those alien forces that assert themselves refractorily in the environment.
This conservatism of the wealthy class is so obvious a feature that it has even come to be recognized as a mark of respectability...it has acquired a certain honorific or decorative value. It has become prescriptive to such an extent that an adherence to conservative views is comprised as a matter of course in our notions of respectability; and it is imperatively incumbent on all who would lead a blameless life in point of social repute.
Under the new order the going concern in production is the plant or shop, the works, not the individual workman.
When the quasi-peaceable stage of industry is reached, with its fundamental institution of chattel slavery, the general principle, more or less rigorously applied, is that the base, industrious class should consume only what may be necessary to their subsistence. In the nature of things, luxuries and the comforts of life belong to the leisure class. Under the tabu, certain victuals, and more particularly certain beverages, are strictly reserved for the use of the superior class.
This conspicuous leisure of which decorum is a ramification grows gradually into a laborious drill in deportment and an education in taste and discrimination as to what articles of consumption are decorous and what are the decorous methods of consuming them.
Under the regime of emulation the members of a modern industrial community are rivals, each of whom will best attain his individual and immediate advantage if, through an exceptional exemption from scruple, he is able serenely to overreach and injure his fellows when the chance offers.
Wherever the canon of conspicuous leisure has a chance undisturbed to work out its tendency, there will therefore emerge a secondary, and in a sense spurious, leisure class?abjectly poor and living in a precarious life of want and discomfort, but morally unable to stoop to gainful pursuits.
There is a great and pressing need of such a construction of these principles, which would greatly facilitate the work of corporation finance; but it is to be admitted that some slight cloud still rests on this manner of disposing of ownership. It involves abdication or delegation of that discretionary exercise of property rights which has been held to be of the essence of ownership.
This eighteenth-century order of nature, in the magic name of which Adam Smith was in the habit of speaking, was conceived on lines of personal initiative and activity. It is an order of things in which men were conceived to be effectually equal in all those respects that are of any decided consequence, -- in intelligence, working capacity, initiative, opportunity, and personal worth; in which the creative factor engaged in industry was the workman, with his personal skill, dexterity and judgment; in which, it was believed, the employer ("master") served his own ends and sought his own gain by consistently serving the needs of creative labor, and thereby serving the common good; in which the traders ("middle-men") made an honest living by supplying goods to consumers at a price determined by labor cost, and so serving the common good.
Under this common-sense barbarian appreciation of worth or honor, the taking of life?the killing of formidable competitors, whether brute or human?is honorable in the highest degree. And this high office of slaughter... casts a glamor of worth over every act of slaughter and over all the tools and accessories of the act. Arms are honorable, and the use of them... becomes a honorific employment. At the same time, employment in industry becomes correspondingly odious, and, in the common-sense apprehension, the handling of the tools and implements of industry falls beneath the dignity of able-bodied men. Labor becomes irksome.
Wherever the circumstances or traditions of life lead to an habitual comparison of one person with another in point of efficiency, the instinct of workmanship works out in an emulative or invidious comparison of persons...In any community where such an invidious comparison of persons is habitually made, visible success becomes an end sought for its own utility as a basis of esteem. Esteem is gained and dispraise is avoided by putting one's efficiency in evidence. The result is that the instinct of workmanship works out in an emulative demonstration of force.
There is another curious question that will also have to be left as a moot question, in the absence of more specific information than that which is yet available; more a question of idle curiosity, perhaps, than of substantial consequence. How nearly is it likely that the total gains which accrue to these prosperous business concerns and their investors from their conscientious withdrawal of efficiency will equal the total loss suffered by the community as a whole from the incidental reduction of the output? The resulting question is, therefore, not whether the rest of the community loses as much as the business men gain, -- that goes without saying, since the gains of the business men in the case are paid over to them by the rest of the community in the enhanced (or maintained) price of the products, but rather it is a question whether the rest of the community, the common man, loses twice as much as the business concerns and their investors gain.
this free income which the community allows its kept classes in the way of returns on these vested rights and intangible assets is the price which the community is paying to the owners of this imponderable wealth for material damage greatly exceeding that amount. But it should be kept in mind and should be duly credited to the good intentions of these businesslike managers, that the ulterior object sought by all this management is not the 100 per cent of mischief to the community but only the 10 per cent of private gain for themselves and their clients.
Unrestricted ownership of property, with inheritance, free contract, and self-help, is believed to have been highly expedient as well as eminently equitable under the circumstances which conditioned civilized life at the period when the civilized world made up its mind to that effect. And the discrepancy which has come in evidence in this later time is traceable to the fact that other things have not remained the same. The odious outcome has been made by disturbing causes, not by these enlightened principles of honest living. Security and unlimited discretion in the rights of ownership were once rightly made much of as a simple and obvious safeguard of self-direction and self-help for the common man; whereas, in the event, under a new order of circumstances, it all promises to be nothing better than a means of assured defeat and vexation for the common man.
While the proximate ground of discrimination may be of another kind, still the pervading principle and abiding test of good breeding is the requirement of a substantial and patent waste of time. There may be some considerable range of variation in detail within the scope of this principle, but they are variations of form and expression, not of substance.
There is circumstantial evidence that very material gains in economy and expedition commonly resulted from these successive moves of consolidation in the steel business.
This... outline of the development and nature of domestic service comes nearest being true for that cultural stage which has here been named the "quasi-peaceable" stage of industry...the quasi-peaceable stage follows the predatory stage proper, the two being successive phases of barbarian life...life at this stage still has too much of coercion and class antagonism to be called peaceable in the full sense of the word...it might as well be named the stage of status...But as a descriptive term to characterize the prevailing methods of industry, as well as... the trend of industrial development... the term "quasi-peaceable" seems preferable.
Vicarious consumption practiced by the household of the middle and lower classes cannot be counted as a direct expression of the leisure-class scheme of life... The leisure class stands at the head of the social structure in point of reputability; and its manner of life and its standards of worth therefore afford the norm of reputability for the community.
With many qualifications?with more qualifications as the patriarchal tradition has gradually weakened?the general rule is felt to be right and binding that women should consume only for the benefit of their masters.
There is in all barbarian communities a profound sense of the disparity between man's and woman's work. His work may conduce to the maintenance of the group, but it is felt that it does so through an excellence and an efficacy of a kind that cannot without derogation be compared with the uneventful diligence of the women.