Published by EH.NET (January 2002)
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.
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
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
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
said. 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).
|Subject(s):||History of Economic Thought; Methodology|
|Geographic Area(s):||North America|
|Time Period(s):||20th Century: Pre WWII|