Yves here. Karl Marx and Friedrich Englels, who documented the abuses of the early Industrial Revolution, are well remembered today, not just as activists but also as journalists. Oddly, Thorstein Veblen, who identified many of the pathologies of the rich of the Gilded Age, is vastly less well known. Was it because the robber barons of his age had amassed so much wealth and power that they were better able to create a veneer of legitimacy than Victorian era factory owners?
This post picks up some Veblen themes that are particularly germane today, such as the notion that businessmen often operate as rentiers and predators.
By Ann Jones, who is at work on a book about social democracy in Scandinavia (and its absence in the United States) and is the author of several books, including most recently They Were Soldiers: How the Wounded Return from America’s Wars — the Untold Story, a Dispatch Books original. Originally published at TomDispatch
Distracted daily by the bloviating POTUS? Here, then, is a small suggestion. Focus your mind for a moment on one simple (yet deeply complex) truth: we are living in a Veblen Moment.
That’s Thorstein Veblen, the greatest American thinker you probably never heard of (or forgot). His working life — from 1890 to 1923 — coincided with America’s first Gilded Age, so named by Mark Twain, whose novel of that title lampooned the greedy corruption of the country’s most illustrious gentlemen. Veblen had a similarly dark, sardonic sense of humor.
Now, in America’s second (bigger and better) Gilded Age, in a world of staggering inequality, believe me, it helps to read him again.
In his student days at Johns Hopkins, Yale, and finally Cornell, already a master of many languages, he studied anthropology, sociology, philosophy, and political economy (the old fashioned term for what’s now called economics). That was back when economists were concerned with the real-life conditions of human beings, and wouldn’t have settled for data from an illusory “free market.”
Veblen got his initial job, teaching political economy at a salary of $520 a year, in 1890 when the University of Chicago first opened its doors. Back in the days before SATs and admissions scandals, that school was founded and funded by John D. Rockefeller, the classic robber baron of Standard Oil. (Think of him as the Mark Zuckerberg of his day.) Even half a century before the free-market economist Milton Friedman captured Chicago’s economics department with dogma that serves the ruling class, Rockefeller called the university “the best investment” he ever made. Still, from the beginning, Thorstein Veblen was there, prepared to focus his mind on Rockefeller and his cronies, the cream of the upper class and the most ruthless profiteers behind that Gilded Age.
He was already asking questions that deserve to be raised again in the 1% world of 2019. How had such a conspicuous lordly class developed in America? What purpose did it serve? What did the members of the leisure class actually do with their time and money? And why did so many of the ruthlessly over-worked, under-paid lower classes tolerate such a peculiar, lopsided social arrangement in which they were so clearly the losers?
Veblen addressed those questions in his first and still best-known book, The Theory of the Leisure Class, published in 1899. The influential literary critic and novelist William Dean Howells, the “dean of American letters,” perfectly captured the effect of Veblen’s gleeful, poker-faced scientific style in an awestruck review. “In the passionless calm with which the author pursues his investigation,” Howells wrote, “there is apparently no animus for or against a leisure class. It is his affair simply to find out how and why and what it is. If the result is to leave the reader with a feeling which the author never shows, that seems to be solely the effect of the facts.”
The book made a big splash. It left smug, witless readers of the leisure class amused. But readers already in revolt, in what came to be known as the Progressive Era, came away with contempt for the filthy rich (a feeling that today, with a smug, witless plutocrat in the White House, should be a lot more common than it is).
What Veblen Saw
The now commonplace phrase “leisure class” was Veblen’s invention and he was careful to define it: “The term ‘leisure,’ as here used, does not connote indolence or quiescence. What it connotes is non-productive consumption of time. Time is consumed non-productively (1) from a sense of the unworthiness of productive work, and (2) as an evidence of pecuniary ability to afford a life of idleness.”
Veblen observed a world in which that leisure class, looking down its collective nose at the laboring masses, was all around him, but he saw evidence of something else as well. His anthropological studies revealed earlier cooperative, peaceable cultures that had supported no such idle class at all. In them, men and women had labored together, motivated by an instinctive pride in workmanship, a natural desire to emulate the best workers, and a deep parental concern — a parental bent he called it — for the welfare of future generations. As the child of Norwegian immigrants, Veblen himself had grown up on a Minnesota farm in the midst of a close-knit Norwegian-speaking community. He knew what just such a cooperative culture was like and what was possible, even in a gilded (and deeply impoverished) world.
But anthropology also recorded all too many class-ridden societies that saved upper-class men for the “honourable employments”: governance, warfare, priestly office, or sports. Veblen noted that such arrangements elicited aggressive, dominant behavior that, over time, caused societies to change for the worse. Indeed, those aggressive upper-class men soon discovered the special pleasure that lay in taking whatever they wanted by “seizure,” as Veblen termed it. Such an aggressive way of living and acting, in turn, became the definition of manly “prowess,” admired even by the working class subjected by it. By contrast, actual work — the laborious production of the goods needed by society — was devalued. As Veblen put it, “The obtaining [of goods] by other methods than seizure comes to be accounted unworthy of man in his best estate.” It seems that more than a century ago, the dominant men of the previous Gilded Age were, like our president, already spinning their own publicity.
A scientific Darwinian, Veblen saw that such changes developed gradually from alterations in the material circumstances of life. New technology, he understood, sped up industrialization, which in turn attracted those men of the leisure class, always on the lookout for the next thing of value to seize and make their own. When “industrial methods have been developed to such a degree of efficiency as to leave a margin worth fighting for,” Veblen wrote, the watchful men struck like birds of prey.
Such constant “predation,” he suggested, soon became the “habitual, conventional resource” of the parasitical class. In this way, a more peaceable, communal existence had evolved into the grim, combative industrial age in which he found himself: an age shadowed by predators seeking only profits and power, and putting down any workers who tried to stand up for themselves. To Veblen this change was not merely “mechanical.” It was a spiritual transformation.
The Conspicuous Class
Classical economists from Adam Smith on typically depicted economic man as a rational creature, acting circumspectly in his own self-interest. In Veblen’s work, however, the only men — and they were all men then — acting that way were those robber barons, admired for their “prowess” by the very working-class guys they preyed upon. (Think of President Trump and his besotted MAGA-hatted followers.) Veblen’s lowly workers still seemed to be impelled by the “instinct for emulation.” They didn’t want to overthrow the leisure class. They wanted to climb up into it.
For their part, the leisured gents asserted their superiority by making a public show of their leisure or, as Veblen put it, their “conspicuous abstention from labour.” To play golf, for example, as The Donald has spent much of his presidency doing, became at once “the conventional mark of superior pecuniary achievement” and “the conventional index of reputability.” After all, he wrote, “the pervading principle and abiding test of good breeding is the requirement of a substantial and patent waste of time.” In Donald Trump’s version of the same, he displayed his penchant for “conspicuous consumption” by making himself the owner of a global chain of golf courses where he performs his “conspicuous leisure” by cheating up a storm and carrying what Veblen called a “conspicuous abstention from labour” to particularly enviable heights.
Veblen devoted 14 chapters of The Theory of the Leisure Class to analyzing every aspect of the life of the plutocrat living in a gilded world and the woman who accompanied him on his conspicuous outings, elaborately packaged in constricting clothing, crippling high heels, and “excessively long hair,” to indicate just how unfit she was for work and how much she was “still the man’s chattel.” Such women, he wrote, were “servants to whom, in the differentiation of economic functions, has been delegated the office of putting in evidence their master’s ability to pay.” (Think POTUS again and whomever he once displayed with a certain possessive pride only to pay hush money to thereafter.)
And all of that’s only from chapter seven, “Dress as an Expression of the Pecuniary Culture.” Today, each of those now-century-old chapters remains a still-applicable little masterpiece of observation, insight, and audacity, though it was probably the 14th and last chapter that got him fired from Rockefeller’s university: “The Higher Learning as an Expression of the Pecuniary Culture.” How timely is that?
The (Re)tardiness of Conservatives
As both an evolutionary and an institutional economist (two fields he originated), Veblen contended that our habits of thought and our institutions must necessarily “change with changing circumstances.” Unfortunately, they often seem anchored in place instead, bound by the social and psychological inertia of conservatism. But why should that be so?
Veblen had a simple answer. The leisure class is so sheltered from inevitable changes going on in the rest of society that it will adapt its views, if at all, “tardily.” Comfortably clueless (or calculating), the wealthy leisure class drags its heels (or digs them in) to retard economic and social forces that make for change. Hence the name “conservatives.” That (re)tardiness — that time lag imposed by conservative complacency — stalls and stifles the lives of everyone else and the timely economic development of the nation. (Think of our neglected infrastructure, education, housing, health care, public transport — you know the lengthening list today.)
Accepting and adjusting to social or economic change, unfortunately, requires prolonged “mental effort,” from which the leisured conservative mind quite automatically recoils. But so, too, Veblen said, do the minds of the “abjectly poor, and all those persons whose energies are entirely absorbed by the struggle for daily sustenance.” The lower classes were — and this seems a familiar reality in the age of Trump — as conservative as the upper class simply because the poor “cannot afford the effort of taking thought for the day after tomorrow,” while “the highly prosperous are conservative because they have small occasion to be discontented with the situation as it stands.” It was, of course, a situation from which they, unlike the poor, made a bundle in an age (both Veblen’s and ours) in which money flows only uphill to the 1%.
Veblen gave this analytic screw one more turn. Called a “savage” economist, in his meticulous and deceptively neutral prose, he described in the passage that follows a truly savage and deliberate process:
“It follows that the institution of a leisure class acts to make the lower classes conservative by withdrawing from them as much as it may of the means of sustenance and so reducing their consumption, and consequently their available energy, to such a point as to make them incapable of the effort required for the learning and adoption of new habits of thought. The accumulation of wealth at the upper end of the pecuniary scale implies privation at the lower end of the scale.”
And privation always stands as an obstacle to innovation and change. In this way, the industrial, technological, and social progress of the whole society is retarded or perhaps even thrown into reverse. Such are the self-perpetuating effects of the unequal distribution of wealth. And reader take note: the leisure class brings about these results on purpose.
The Demolition of Democracy
But how, at the turn of the nineteenth century, had America’s great experiment in democracy come to this? In his 1904 book The Theory of Business Enterprise, Veblen zoomed in for a close up of America’s most influential man: “the Business Man.” To classical economists, this enterprising fellow was a generator of economic progress. To Veblen, he was “the Predator” personified: the man who invests in industry, any industry, simply to extract profits from it. Veblen saw that such predators created nothing, produced nothing, and did nothing of economic significance but seize profits.
Of course, Veblen, who could build a house with his own hands, imagined a working world free of such predators. He envisioned an innovative industrial world in which the labor of producing goods would be performed by machines tended by technicians and engineers. In the advanced factories of his mind’s eye, there was no role, no place at all, for the predatory Business Man. Yet Veblen also knew that the natural-born predator of Gilded Age America was already creating a kind of scaffolding of financial transactions above and beyond the factory floor — a lattice of loans, credits, capitalizations, and the like — so that he could then take advantage of the “disruptions” of production caused by such encumbrances to seize yet more profits. In a pinch, the predator was, as Veblen saw it, always ready to go further, to throw a wrench into the works, to move into the role of outright “Saboteur.”
Here Veblen’s image of the predatory characters who dominated his Gilded Age runs up against the far glossier, more gilded image of the entrepreneurial executive hailed by most economists and business boosters of his time and ours. Yet in book after book, he continued to strip the gilded cloaks from America’s tycoons, leaving them naked on the factory floor, with one hand jamming the machinery of American life and the other in the till.
Today, in our Second Even-Glitzier Gilded Age, with a Veblen Moment come round again, his conclusions seem self-evident. In fact, his predators pale beside a single image that he himself might have found incredible, the image of three hallowed multi-billionaires of our own Veblen Moment who hold more wealth than the bottom 160 million Americans.
The Rise of the Predatory State
Why, then, when Veblen saw America’s plutocratic bent so clearly, is he now neglected? Better to ask, who among America’s moguls wouldn’t want to suppress such a clear-eyed genius? Economist James K. Galbraith suggests that Veblen was eclipsed by the Cold War, which offered only two alternatives, communism or capitalism — with America’s largely unfettered capitalist system presenting itself as a “conservative” norm and not what it actually was and remains: the extreme and cruel antithesis of communism.
When the Soviet Union imploded in 1991, it left only one alternative: the triumphant fantasy of the “free market.” What survived, in other words, was only the post-Veblen economics of John D. Rockefeller’s university: the “free market” doctrines of Milton Friedman, founder of the brand of economics popular among conservatives and businessmen and known as the Chicago School.
Ever since, America has once again been gripped by the heavy hands of the predators and of the legislators they buy. Veblen’s leisure class is now eclipsed by those even richer than rich, the top 1% of the 1%, a celestial crew even more remote from the productive labor of working men and women than were those nineteenth-century robber barons. For decades now, from the ascendancy of President Ronald Reagan in the 1980s to Bill Clinton’s New Democrats in the 1990s to the militarized world of George W. Bush and Dick Cheney to the self-proclaimed billionaire con man now in the Oval Office, the plutocrats have continued to shower their dark money on the legislative process. Their only frustration: that the left-over reforms of Veblen’s own “Progressive Era” and those of President Franklin Delano Roosevelt’s New Deal still somehow stand (though for how long no one knows).
As Galbraith pointed out in his 2008 book The Predator State, the frustrated predators of the twenty-first century sneakily changed tactics: they aimed to capture the government themselves, to become the state. And so they have. In the Trump era, they have created a government in which current regulators are former lobbyists for the very predators they are supposed to restrain. Similarly, the members of Trump’s cabinet are now the saboteurs: shrinking the State Department, starving public schools, feeding big Pharma with Medicare funds, handing over national parks and public lands to “developers,” and denying science and climate change altogether, just to start down a long list. Meanwhile, our Predator President, when not golfing, leaps about the deconstruction site, waving his hands and hurling abuse, a baron of distraction, commanding attention while the backroom boys (and girls) demolish the institutions of law and democracy.
Later in life, Veblen, the evolutionary who believed that no one could foresee the future, nonetheless felt sure that the American capitalist system, as it was, could not last. He thought it would eventually fall apart. He went on teaching at Stanford, the University of Missouri, and then the New School for Social Research, and writing a raft of brilliant articles and eight more books. Among them, The Vested Interests and the Common Man (1920) may be the best summation of his once astonishing and now essential views. He died at the age of 72 in August 1929. Two months later, the financial scaffolding collapsed and the whole predatory system came crashing down.
To the end, Veblen had hoped that one day the Predators would be driven from the marketplace and the workers would find their way to socialism. Yet a century ago, it seemed to him more likely that the Predators and Saboteurs, collaborating as they did even then with politicians and government lackeys, would increasingly amass more profits, more power, more adulation from the men of the working class, until one day, when those very plutocrats actually captured the government and owned the state, a Gilded Business Man would arise to become a kind of primitive Warlord and Dictator. He would then preside over a new and more powerful regime and the triumph in America of a system we would eventually recognize and call by its modern name: fascism.
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Thankyou for bringing up one of my all time favourite authors. Why is he neglected? Because he saw and wrote too clearly and he mocked the use of mathematical models, and the silly assumptions underlying them – oh so unscientifically unsound.
I think Veblen may be neglected because his observations do not comport well with what many others observe. For instance, in the quoted or paraphrased material in the article, he asserts that the upper classes are idly conservative. But if we have observed the development of cooperative agrarian societies into, first, instances of industrial capitalism, and later imperial-liberal or finance-capitalist warfare-welfare states, it is the capitalists who were the radical progressives, who shook things up, who ‘moved fast and broke things’, and the agrarian cooperators who were the conservatives or reactionaries. And Uncle Karl agrees with me, at least as of the Communist Manifesto: ‘The bourgeoisie cannot exist without constantly revolutionizing the instruments of production, and thereby the relations of production, and with them the whole relations of society….. All that is solid melts into air….’ and so on.
Would that the rich were idle! But they are not. They labor ceaselessly to destroy the Earth, to turn it into nothing more than numbers written on a tablet. It is a mistake to underestimate and deride such people, even if their personalities are socially deficient.
I think you need to look at the crucial distinction Veblen made between industry and business, which I find has much more analytical and prescriptive power than Marx.
I was thinking of the combination of business and industry, industry being the work of changing the material world to produce desired things, experiences, and circumstances, and business being the political organization of that work, which has evolved in various ways into contemporary capitalism. The large-scale practice of modern industry apparently requires a lot of political organization. In my observation and personal experience, business, so defined, is also hard work, since one is not dealing with inanimate things, but with human beings, who are often as unpredictable, crafty, greedy and treacherous as oneself. Hence not many actually want to or are able to do it. This poses an obvious problem for those who want to establish a more cooperative and egalitarian social order above the local or familial level, much less a sustainable economy. The rich are anything but idle, and they always want more.
as a friend of mine likes to say, “America never had a ruling class disinterested in ruling or an intelligentsia that was truly intelligent.”
I think similar to Joan Robinson’s The Economics of Imperfect Competition. Basically neglected because suppressed by the Chicago School because the Brits in general showed them up as charlatans. I’m thinking of Piero Sraffa, especially. The Chicago School managed to relegate them to the status of “heterodox economics.” I managed to find a copy of Robinson’s book and it seems to be accessible to non-economists — she announces some chapters use mathematics which might be daunting, but the 1930s didn’t use math as an obfuscation.
The book is also available for free at project Gutenberg:
http://www.gutenberg.org/ebooks/833
The leisure class hasn’t been able to expand copyright to infinity yet.
They are trying. Project Gutenberg is presently blocking all German IP addresses after a publisher asserted copyright on 18 works from 1903–1920. I must content myself with reading H.L. Mencken’s iconoclastic essay, “Professor Veblen”.
The Opera browser has a build-in VPN…just sayin’ ;-)
Ah, yes! H.L. Mencken, social darwinist and proto-nazi, as was Veblen’s first professor at Yale, William Graham Sumner, Phi Beta Kappa and Bonesman, who brought the teachings of Herbert Spencer to Yale and America as the new Science of “Sociology”. Of course we no longer call such sociology “social darwinism” or “nazism”. “Meritocracy” is a more polite term. Veblen would still call it “predatory”.
Amazing post! As clear and succinct political manifesto and call to arms as any I’ve read. Looks like I’ve got some more essential reading to do now.
Try Jamie Galbraith’s The Predator State.
Wow! I am reading this while sitting in the cafeteria of UPMC Presbyterian Hospital (where my husband’s cousin, the farmer of whom I have written here before, hovers between life and death.) Pittsburgh, home of the planet’s largest gothic phallus, the gargoyled tower at Carnegie Mellon U. Even the First Baptist Church is a mini-Notre Dame.
Walking the mile up to the hospital this morning, along the row of gracious mansions, now a designated Historic District, built from the blood and sweat of the Polish and Czech and Italian coal miners and steel workers, I wondered if their tenements had been declared an Historic District.
Eclair: All the best to you. Your posts here have evoked him so well–a life of hard work and care for the land.
DJG, I wrote a think you post to you, with additional comments but it either got lost or delayed or my fat fingers consigned it to Oblivion. Typing on my phone is dangerous.
Upmc, the future of predatory healthcare. My great grandfather raised his family of eight Italians in one of those row houses in Oakland. Now it’s probably rented out by a slumlord to college kids racking up debt.
Also the cathedral of learning is university of Pittsburgh
Yes. Pittsburgh was once the real ‘metropolis of tomorrow’, and the Cathedral of Learning was the ultimate proof both of the city’s arrival in the future and of just how conservative that future was going to look. One of the key American buildings of its time, it’s a tenth ‘malic mould’ embodying not only the so-called ‘skyward trend of thought’ by which the predatory businessmen of the 1920s imagined themselves transported to ‘impossible heights’ but also — inside — a showcase of international culture that foreshadowed today’s globalization. https://en.wikipedia.org/wiki/Cathedral_of_Learning
My dad, and I assume most of the other Pitt graduates of at least that era, called it “The Tower Of Ignorance”.
We aren’t all suckers, even if we sit at desks and wear ties.
Oops, you are correct, Trent! I don’t know why I associated it with C-M. And it really is almost more beaux arts than gothic. But it is still an example of ‘mine is much much bigger than yours.’
No worries, I’m a throwback that takes a bit of pride in the area my family has resided the past few hundred years. If you get bored you should read about the Mellon’s. Very big players in the gilded age.
So, not a designated ‘Historic District,’ I will bet. My grandparents raised their kids in brick mill housing, still standing. But not ‘Historic.’. Just haunted by the ghosts of the still-born babies and tubercular adolescents.
It’s only historic until someone can make a profit from it!
My condolences upon your presence in the Pittsburgh of capitalism and scalping. If you wish to see the contradictory nature of “historicism”, Pittsburgh is THE place to follow.
Case in point: In the close-by tiny mill town of Millvale (aptly named, no?) sits the St. Nicholas Croatian Catholic Church, where once a Croatian artist named Maxo Vanka was allowed to paint beautiful murals upon its walls and ceilings, all of which commemorated and encapsulated the horrific struggles of mine and mill workers of the region. They are akin to, and in some ways exceed, the murals of Diego Rivera – passionately and class-reverently done.
The contradiction? Besides the religious basis for this socialist art, the current foundation trying to preserve and defend these paintings is begging for corporate donations and having $1000+ benefits (wine, cheese, hubris) so some retouching and repainting can occur under an umbrella of the threat to the art and the church posed by… those selfsame corporations who would love to topple the structure and put up office space. Oh, to be able to say “Sic semper tyrannus…”
So, Mike, I should make a pilgrimage to visit this church soon, before it is scraped, yeah?
Fear not – the church still stands, and the professional class are scurrying about, waxing poetic and oozing dollars, so it will be there for you for at least as long as the fund-raisers do their work.
I would go soon, though, just to see how years of neglect can harm mural art, because the difference between the undone and finished restoration is something to note.
P.S.- easier to drive there if you have wheels. Public transport suffers by scarcity and slowness.
P.P.S. – my best wishes to your cousin, as well.
Sotte voce: When I lived in Pittsburgh, the planet’s largest gothic phallus was called the Catheter of Learning. (It’s real name is the Cathedral of Learning.)
Ok, but geez. Shouldn’t there be a meet-up in here somewhere?
If the human condition is viewed as an endless spiritual crisis seeking out resolution, then everyones collective efforts begin to make more sense. Spiritual connections must be made in order to survive and this choice sets into motion a chain of events that approximate the future. Everyone must choose what life they want to live. They must choose what spirit they will follow. A passive choice supports the status quo/conservatives, while an active choice drives change in society.
How the current spiritual crisis is handled will determine our collective future. It is no coincidence that true, honest spirituality has also been corrupted by the predator class. Spiritual subversion is the essence of TINA. Education and spiritual growth are the foundations upon which a free and productive society rest- without that, as the author notes, society evolves into fascism. Fascism becomes the spirituality of the predator class. Fascism is freedom disguised.
If this is true, then it becomes imperative for all freedom loving people to do everything in their power to subvert such exploitation and purposeful suffering. The spirit must be without freedom for all there is, in reality, freedom for none. Society must be based on reducing suffering, not creating or perpetuating it.
At root, that is what civil disobedience is all about. Civil disobedience takes on many forms, including actively building parallel social structures to negate the damaging social conditions brought about by a predator class. The saboteurs are themselves subject to sabotage. This inevitable dynamic explains why foreigners and domestic dissenters are treated as enemies and terrorists by the ruling elite. Foreign and domestic enemies must be eliminated. When this dynamic becomes an issue, it proves all by itself that the ruling elite no longer hold their citizens to any regard, regardless of the propaganda they employ to prove otherwise. The society becomes more polarized and violent.
The follow up to this essay is to explore the people and communities that took Veblen insights to heart and acted accordingly. That would provide examples upon which to build and restore.
…and yet, in the present arrangement of things, most of us can’t even get around in the place where we live without someone, somewhere, drilling oil, and transporting it, and refining it, and transporting it some more…using this computer required someone, somewhere to mine metal ore, and refine and process and transport it…
The great tragedy of our situation is that we often choose to do things we know to be harmful in order to protect and provide for those we love. “I’d give up my car, but I need it for my job. I’d quit the job, but I’ve got kids to think about…and plus, what happens if my kid gets hurt and needs to get to the hospital fast? So I can’t give up the car, even though I know it’s contributing to larger scale problems that will effect everyone negatively, and already effect some people extremely negatively.”
You feel you are doing well when you are doing better than your peers.
I’ve only got a Boeing 747, and he’s got an Airbus A380.
His one is bigger than mine.
Mummy!
The biggest threat to progress in the forwards direction is those that like progress in the reverse direction.
The Magna Carta was the first step in moving forwards from when wealth and power were concentrated with one person, the Absolute Monarch.
Progress is always a battle between those below and those at the top, who want to keep wealth and power as concentrated as it is now, or to move backwards to when it was more concentrated.
Royalty spent centuries trying to regain the power they lost with the Magna Carta and get back to where they were before.
It is a constant battle and many nations slide back to the beginning with dictators, where wealth and power are concentrated with one person, and where that wealth and power is inherited.
To progress from the Magna Carta to universal suffrage took 700 years. Within another 50 years those at the top looked to move backwards to when they had more wealth and power.
They sought to regain the economic freedom they used to have and roll back the welfare state.
They set the wheels in motion.
In 1947, Albert Hunold, a senior Credit Suisse official looked for a group of right wing thinkers to form the Mont Pelerin Society and neoliberalism started to take shape.
“Why Nations Fail” is a good book on this subject.
“In the passionless calm with which the author pursues his investigation,” Howells wrote, “there is apparently no animus for or against a leisure class. It is his affair simply to find out how and why and what it is. If the result is to leave the reader with a feeling which the author never shows, that seems to be solely the effect of the facts.”
If only this author had such a deft hand as Veblen. Aspiration.
The University of Chicago forgot what they used to know.
Henry Simons was at the University of Chicago as he was a firm believer in free markets, but he had learned the lessons of the 1920s and 1930s.
“Stocks have reached what looks like a permanently high plateau.” Irving Fisher 1929.
Irving Fisher was a neoclassical economist that believed in free markets and he knew this was a stable equilibrium.
He became a laughing stock and worked out where he had gone wrong.
What goes wrong with free markets?
Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money, so that free market valuations could have some meaning.
The real world and free market, neoclassical economics would then tie up.
https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.52.41.png
1929 – Inflating the US stock market with debt (margin lending)
2008 – Inflating the US real estate market with debt (mortgage lending)
Bankers inflating asset prices with the money they create from loans.
https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf
Real science is evolutionary and new knowledge builds on past knowledge in a way that is self-correcting and improves over time. The old knowledge remains and anything that is wrong gets changed.
Thorstein Veblen recognised economics wasn’t like that and this is why they keep forgetting stuff.
We had a new, scientific economics for globalisation.
Oh dear.
This explains why Milton Friedman is better known than Thorstein Veblen
I would not necessarily call something scientific even if it builds on previous knowledge. The key is the real effort at studying and understanding a subject.
“Economics,” especially its propagandistic version Neoliberalism, is not at all scientific or even an attempt to study something. It is an effort to make opaque, not an attempt to clarify.
Political economy, like philosophy, metaphysics, psychology and sociology are themselves not “hard”science, but they were created, built upon, and maintain as usually honest attempts at understanding; Neoliberal Economics is as to Adam Smith’s Wealth of Nations in Political Economy as Social Darwinism is to Charles Darwin’s On the Origin of Species is in evolutionary biology.
Take 1920s neoclassical economics and stick some more complex maths on top.
Voila.
A new, scientific economics.
There is an underappreciated consumer-credit-boom-and-bust aspect to the Great Crash / Great Depression era – people often point out the contradictions in blaming margin lending for eveything, IMO it is the consumer-credit aspect that helps fill in the rest. Briefly, the 1920s saw the first great boom in consumer credit, as wage-suppressed workers saw the fabulous boom in wealth of the rentier and stock-speculator class and were misled to go into hock by the overall optimism thus engendered. The boom in installment-plan buying was the 1920s analog of the the late great mortgage-finance bubble. Here is a link, much more out there for those willig to look for it:
http://econc10.bu.edu/Ec341_money/Papers/Carroll_paper.htm
An interesting question:
I have a feeling that the rejection was going on earlier. I am reminded that Sinclair Lewis’s career started with his first important novel in 1914–fifteen years after Theory of the Leisure Class, yet still before the shattering effects of World War I. Yet Sinclair Lewis has also been in decline, and his stories are the novelist’s way of dealing with Veblen’s ideas–especially the novel Dodsworth.
I have a feeling that something deeper in the culture pushes aside the observations that Americans are avaricious, conformist, and not particularly happy. It is so much chirpier to repeat Life, Liberty, and the Pursuit of Happiness. And it may be that the fear of falling in U.S. culture–dropping economically with the possible implication of turning black racially–means that the unproductivity of the upper classes is what Americans are fixated on and aspire to.
Very good to mention Sinclair Lewis here.
Highly recommended literary counterpart to Veblen, though Veblen was no slouch
as a stylist, among his many strengths.
Not only Dodsworth, but I would say all of Lewis’ oeuvre exposes the predation, corruption
and injustice of various good ole ‘murkan institutions: Elmer Gantry (venal ministers), Arrowsmith (careerism in medicine), Main Street (oppressive ‘normality’), Gideon Parrish (the ‘uplift’ racket), Ann Vickers (womens prisons), The Job (women in the workplace) etc etc.
Lewis is hilarious and a truly prescient progressive.
Highly recommended!
Sinclair Lewis probably faded because the self satisfied American world he described took a nose dive in the great depression and satire became both superfluous and universal (any 1930s Hollywood depiction of the rich–i.e. A Night at the Opera).
In any case thanks for the good article above. It does lay on the Trump hate a little thick given that our Veblen moment has been going on at least since Reagan.
Yes the trump hate was a bit thick.
Not really. Trump is the current and shameless torchbearer, even though he hypocritically purports to be the saviour of the “deplorables” callously abandoned by Hilary & Co.
Lewis was a gleeful unmasker of hypocrisy.
Makes some people uncomfortable!
RE: Should we break up big tech?
Absolutely, start with ooindoze; years ago a Finn Linus Torwald
wrote a FREE replacement for Unix, cutting ATT off at the Internet; all he got for his trouble was the runaway monopoly of ooindoze. Now ooindoze is worth billions (ten plus at last count) .
The difference is BS and propaganda and the sleaziest possible merchandizing, YAHOO
MOUNTAIN DEW!!
The irony of linking to a Veblen book on Amazon is…well, it’s a thing…ironic…anyway it’s still early, you get what I’m saying. Here’s a free version, as Thorstein would have wanted it:
http://elegant-technology.com/resource/Vested_Interests.pdf
Or a discount version from a small, out-of-copyright, publisher: https://doverpublications.ecomm-search.com/m?formSubmitted=true&keywords=Veblen&x=22&y=24
Thanks, Diptherio, but, and I don’t know why so many people forget about this, you could just go to your nearest public library. They’d be delighted to find it for you…
I think NC should adopt a quote from Theory of Business Enterprise as it’s official (or unofficial) motto:
That’s from memory, so maybe not exactly verbatim, but close. Sounds like a pretty good description of every day on NC!
Thanks for the tip. In 1919, Mencken worked through all of Veblen’s published works. Following his recommendation, I found copies of the two Mencken thought most essential: “What I found myself aware of, coming to the end, was that practically the whole system of Prof. Veblen was in his first book and his last [as of 1919] – that is, in “The Theory of the Leisure Class” and “The Higher Learning in America”. I pass on the news to literary archeologists. Read these two, and you won’t have to read the others. And if even two daunt you, then read the first. Once through it, though you will have have missed many a pearl and many a pain, you will have an excellent grasp of the gifted metaphysician’s ideas.” [Prejudices, First Series (1919), pp. 59-83]
Umm, as I noted above, Mencken was hardly a fan of Veblen. See e.g. this link, vectored through a fan of Mencken, Tyler Cowen . . .
My very modest knowledge of Veblen is through secondary sources, one of which is Mencken, who I never thought was a Veblen adulator. It is probably now a duty to read some of the primary sources.
What a wonderful article with which to start my day!
Today’s #MustRead IMO
Thank you!
Back in the day I bought one of those little Penguin Classics of Theory out of the university bookstore for a buck. The fact that it was still in print was sufficient testimony that curiosity continued to exist about the long dead discipline of Political Economics. I read a portion of it, but never came close to finishing it. That always bothered me. What happened to the little Penguin over the years I cannot say.
Anyway, a couple of years ago I had the public library exhume a copy for me out of their warehouse. Immediately upon reading it I recalled with great disappointment why I never finish the Penguin…the prose style was both turgid and tortured. So, I guess you could say that I have always been pleased to read about Veblen and depressed with the actual reading.
My recommendation would be that a good translator translate Theory of the Leisure Class into say French or Italian and then another translator translate it back into English. Doubtless much of the drole and tongue planted firmly in cheek would be lost in the translation, but perhaps a much more readable book would ensue.
Once one understands how censored publications were in that day (plus ça change. . .) and one discovers the sarcasm veiled behind all that “turgid prose”, The Theory of the Leisure Class becomes a joy to read.
We read it in high school and I remember it being very witty, and hence enjoyable.
Am I a member of the leisure class if I like to read articles & comments on this site?
I have downloaded and started reading “The Theory of the Leisure Class”. Perhaps I can answer my own question after reading several chapters…
My thanks as well for this post, which (ahem, everyone) deserves a wider audience. Sadly, my own college edjumacation glided over Veblen. This was in the early 70’s, when Friedman and Co. Economists, Inc. were taking over economics. Suddenly, he’s relevant again!
Now, we just need a Teddy Roosevelt progressive to initiate some reforms and a Franklin Roosevelt to make the right kind of enemies.
The Theory of the Leisure Class was my introduction to economics, reading it right after the Kennedy assassination, thus turning me from a right-wing parrot into a critical and still learning skeptic of all cheerleading about “our” government, “our” city on the hill. My father, a union founder and organizer as well as a solid drinker, would often go off on me about my “nazi” ideas before this turn, then wondered at the abrupt wheel. Ahhhh, once an outlier, always…
The sad part is I (we?) are more “outliers” than ever before, thanks to the freedom exercised by many of our co-citizens to conform and obey to any media/government/corporate message with knee-jerk speed. Expected of the professional caste and their sponsors within the banking and corporate elite, it is sad to see its reach into levels of the working class, where it displays its total dysfunction.
Small quibble with this outstanding post.
In her quick gloss of our Predator-Enablers in Chief, from Reagan to Trump,
Teflon Obama gets a pass he does not deserve:
“For decades now, from the ascendancy of President Ronald Reagan in the 1980s to Bill Clinton’s New Democrats in the 1990s to the militarized world of George W. Bush and Dick Cheney to the self-proclaimed billionaire con man now in the Oval Office, the plutocrats have continued to shower their dark money on the legislative process. Their only frustration: that the left-over reforms of Veblen’s own “Progressive Era” and those of President Franklin Delano Roosevelt’s New Deal still somehow stand (though for how long no one knows)…..
Similarly, the members of Trump’s cabinet are now the saboteurs: shrinking the State Department, starving public schools, feeding big Pharma with Medicare funds, handing over national parks and public lands to “developers,” and denying science and climate change altogether, just to start down a long list. Meanwhile, our Predator President, when not golfing, leaps about the deconstruction site, waving his hands and hurling abuse, a baron of distraction, commanding attention while the backroom boys (and girls) demolish the institutions of law and democracy.”
I think Obama’s legacy is dismantling more lefty organizing venues and directing energy towards wasteful infighting as people who conned themselves into liking him hold onto bizarre beliefs to justify Obama’s third and fourth Shrub terms such as how Obama “inherited” problems despite choosing to run for President. Ben Bernanke, Bob Gates, Larry Summers and Tim Geithner (or insert whatever monster you wish) were just the associates of the previous administrations at various levels. Though Obama may not have been from the “leisure class” but the higher level staff, he approached the Presidency as a luxury pursuit. Yes, Michelle opted for lesser known designers, but the people who mattered cut their teeth in the previous four administrations. Outsiders were not brought in. Liz Warren jumps out as an exception, and even now her Presidential run, she is almost completely separate from Obama despite her time in the administration creating her star.
Coolidge restored public confidence in the White House after the scandals of his predecessor’s administration, and left office with considerable popularity.[3] As a Coolidge biographer wrote: “He embodied the spirit and hopes of the middle class, could interpret their longings and express their opinions. That he did represent the genius of the average is the most convincing proof of his strength”.[4]
Scholars have ranked Coolidge in the lower half of those presidents that they have assessed. He is praised by advocates of smaller government and laissez-faire economics, while supporters of an active central government generally view him less favorably, though most praise his stalwart support of racial equality.[5] This is from the wiki on Calvin Coolidge. Does it sound like someone?
Except for Silent Cal stories and being an advocate of “white collies” (puppies that were often drowned because it was believed they were blind), he was a continuation of more of the same and has largely disappeared from the discourse outside of memorizing the Presidents. He was President until March 1929, and Hoover gets a lot of flak. The economic crisis came from somewhere.
Trump is particularly predatory and being current merits mention as the old leisure class not merely taking control of the government but turning it into their leisure pursuit. Obama much like his “soaring rhetoric” is almost entirely forgettable.
Thank you for mentioning this. The omission of Obama from that list jumped out at me as well. When I think of a “Banker’s President” Obama is the first to come to mind.
Thank you for an introduction to Ann Jones. She is a beautiful writer and her subject is wonderful. No argument there. I enjoyed her jabs at Trump too. But in his behalf I’d just like to say it was refreshing to see him crash the gates for the sole reason that he shook up our very complacent Congress and they almost seem awake now. Trump is not an ideologue. He’s a self promoter. So we can’t expect him to have a vision. That’s the big problem with him. He’s got no compass. It isn’t that he impulsively and inanely talks about things like “beautiful wonderful new health care” and other crap – it’s that he doesn’t have a clue about how to achieve anything. Except cooking books and money shuffling. And Jones’ example of his cheating at golf – urban legend already – is his character in a nutshell. But that said, I blame malicious obstructionists like Pelosi and the very dreadful Mitch for preventing the progress we are dying for. Congress is MIA. Why do we even bother to elect it?
Great post. Thanks so much.
So, was Einstein a member of the “leisure class”?
At Princeton, he would take his little sailboat out on the lake when there was so little wind
that no other boats were out there with him.
He would get his boat just barely moving slowly steadily calmly.
And that is where he thought his deepest thoughts.
Personally, my deepest thoughts come in a leisurely hot bath.
A most enjoyable essay and it brings me full circle with what I have been researching this past week. The Counsel on Foreign Relations and what their many spinoff non profit organizations claim to do, and their membership list. Membership is by invitation only and there is enough history now to see who has been running the country since its inception in 1919. I could write a book on all of the corruption of each member on a global scale. Just pull up any 3 or 4 of the current members (no need to research all of the U.S. presidents, and yes they are all members, because we already know what they have done) and you will see how corrupt they all are. The members at the top are all white, male, .01%’s with international power. It seems really obvious to me that we lost the last of our rights on 9/11 and that we are now living in a communist country actually being run fairly quietly for now by the Chinese government. We have been taught to hate and kill anyone considered to be communist (Russia is in MSM all of the time) but where is the hatred for China in the media? Why has China been permitted to but up so much real estate here? I could to on and on but the bottom line is that I think that the international leaders of the world are all communists and that is why we have no democracy left. Before you disagree and call me crazy please do your research! That is all I ask.
Thank you Excellent, comments included!! My copy of Thorstein Veblens Theory of the Leisure Class was lost somewhere along the way. I dutifully, as a fellow Norwegian, read it 50 years ago, working in New York, trying to like and acclimatize to an American way of life. This I saw first hand at the top, as part of staff of one of the richest, most famous banking families, then from the opposite level, clerk at Bell Telephone System in lower Manhattan. I’ve downloaded a free copy of Veblen, thanks, and shall reread it, as Norway seems to be on a trajectory not unlike the US, seemingly seeking the seat left open after UK’s Tony Blair as US poodle one. NATO secretary general Jens Stoltenberg the successor, I think – most regretfully.
No comment needed:
“It is also a matter of common notoriety and byword that in offenses which result in a large accession of property to the offender he does not ordinarily incur the extreme penalty or the extreme obloquy with which his offenses would be visited on the ground of the naive moral code alone. The thief or swindler who has gained great wealth by his delinquency has a better chance than the small thief of escaping the rigorous penalty of the law and some good repute accrues to him from his increased wealth and from his spending the irregularly acquired possessions in a seemly manner. A well-bred expenditure of his booty especially appeals with great effect to persons of a cultivated sense of the proprieties, and goes far to mitigate the sense of moral turpitude with which his dereliction is viewed by them. It may be noted also—and it is more immediately to the point—that we are all inclined to condone an offense against property in the case of a man whose motive is the worthy one of providing the means of a “decent” manner of life for his wife and children. If it is added that the wife has been “nurtured in the lap of luxury,” that is accepted as an additional extenuating circumstance. “