Thorstein Veblen and human emotions: an unfulfilled prescience.

Author:Wolozin, Harold

By centering on instinct as a prime mover in economic behavior, Thorstein Veblen tapped into the function of the mind itself-in particular, the commanding role of the unconscious in human motivation and behavior. In this paper, I expose his seminal focus on instinct to the powerful beam of light of psychoanalytic theory. The results of this analysis point to (1) a new perspective on Veblen's insights into the relationship between economic institutions and human emotions and (2) the contribution psychoanalytic theory can make to the analysis of economic behavior--in particular, the roles of restlessness, phantasy, and the irrational.

Veblen on Instinct, Institutions, and Human Emotion

In his wide-ranging works Veblen singled out instinct, in particular the instinct of workmanship, as the prime mover of economic behavior. He described man as "a coherent structure of propensities and habits, which seeks realization and expression in an unfolding activity" (1898). These included a number of basic instincts including workmanship, parental bent, idle curiosity, and so on. He described these instincts as "products of his (man's) heredity traits and his past experience" (my italics). To Veblen, instinct was the pilot and motor of human action. He held "he is not simply a bundle of desires that are to be saturated.... It is the characteristic of man to do something, not simply to suffer pleasures and pain" (390).

Yet Veblen, in his depiction of the roots of instinctual behavior, had created a dilemma. On one hand, in describing instincts as timeless propensities he was in essence saying that they were deep emotions, self-directed roads to "satisfaction." On the other hand, tying instincts to "past experience" suggested that the resulting instinctive behavior was the product of institutions, handmaidens of past experience (1898, 386, 390). This point-counterpoint of internal propensities and emotions and external influences (institutions) dominated his economic analysis. It also presented him with an unresolved dilemma, namely, the relationship in human behavior between the raw, timeless emotion of instinct and institutions. As I shall explain, the path he took in coping with this dilemma established a template for subsequent developments in institutional theory, leading many institutionalists to conclude that "it's all culture," a position which Veblen himself did not unequivocally hold.

The evolution of Veblen's thinking on this issue is not, however, clear cut. Although Veblen singled out the prime, teleological role of "hereditary" instincts (the instinct of workmanship, the parental bent, idle curiosity, sentiments) (1931), he was less than consistent in his work in depicting their influence. In his pioneering 1899 work, The Theory of the Leisure Class, he forcefully depicted man as "a centre of unfolding impulsive activity--teleological activity" (15-16). He drew a sharp line between "the human endowment of instincts" and the "habitual elements of human life." Instincts are "transmitted intact from the beginning of humanity," while the "habitual elements ... change unremittingly and cumulatively, resulting in a continued proliferous growth of institutions." As to instincts, "no heritable modification ... is to be looked for" (306). However, in a later work, The Instinct of Workmanship and the State of the Industrial Arts (1914), he described the instinct of workmanship as "concerned with the ways and means of life rather than with one given ulterior end" (318). In The Place of Science in Modern Civilization (1961), he had modified his position that instincts are prime movers to conclude that institutions were on a par with if not superceding instincts in determining human conduct. It "takes place under institutional norms and only under stimuli that have an institutional bearing" (242). Thus, Veblen had backed down from his initial, strong depiction of instincts as prime movers. Institutions were now either on a par or even replacing instincts as prime movers of human and economic behavior.

Veblen's Psychological Model

The psychological model which influenced Veblen was that current in his era. According to Robert Cherry, it was the new instinct theory of William James as popularized by William McDougall (1975, 3). Cherry also pointed out that Veblen as early as 1898 questioned the psychological foundations of marginalism in light of the then-new instinct theory (5).

Following this model, Veblen described human behavior as "impulsive" and instincts as "psychological phenomena" (1914, 90). These instincts, wrote Veblen, "incontinently touch, blend, overlap and interfere, and cannot be conceived as acting each and several in shear isolation and independence of one another" (13). He also made many references to sentiments in his writing such as "those kindly 'humane' sentiments that are bound up with the parental bent" (90). Veblen [1919] 1961 focuses on the instinct of workmanship as not only the most important of an extensive catalogue of proclivities manifested in human behavior but also as "crossing and colouring" all the others--emulation, the parental bent, idle curiosity, and so on. It was a prime mover "effective in such consistent, ubiquitous and resilient fashion that students of human culture will have to count with it as one of the integral heredity traits of mankind" (38).

Institutions and Instincts

As I pointed out earlier, Veblen in his later works departed from his initial position on the autonomy of instincts ([1919] 1961). He came to the conclusion that they could be shaped by institutions: "All instinctive behavior is subject to development, hence to modification by habit." He wrote that institutions as "widespread habits of thought" were programmed into the mind (38). Thus, he had departed from his initial focus on instincts as solely hereditary, deeply centered, and fixed drives open to modification by culture--but he did not conclude that "it was all culture." Interestingly enough, he had arrived at a position compatible with a number of contemporary scholars, covering a wide range of disciplines--including psychoanalyst Elio Frattaroli, neuroscientist Antonio Damasio, cultural anthropologist Richard Shweder, and social theorist Anthony Giddens, to name but a few.

In focusing on instincts and institutions as influencing human and economic behavior (largely involving interpersonal relations), Veblen had reached a conclusion in concert with contemporary psychoanalytic theory. This, as we shall see, could be the missing link in explaining the dynamics of the relationship between instincts and institutions in Veblen's analysis. It seems that he was intuitively, if not consciously, in sympathy with the central role assigned to the unconscious by psychoanalytic theory and its path to insight into the roots of economic behavior. Thus, Veblen was intuitively, if not consciously, heading in the direction called for by J. Ronald Stanfield, namely, the domain of psychoanalytic theory: "It is ... necessary to integrate psychoanalysis into the discussion of institutional alternatives. The urge to dominate and exploit one's fellows may have deep and obdurate roots in the nature of the human species, perhaps as a result of the psychological effects of extended childhood dependency (Heilbroner 1981). Some sort of inveterate propensity of this kind seems to have been suggested by Veblen's notion of a predatory bent or acquisitive instinct" (1999, 251).

An earlier call to turn to psychology was voiced by J. M. Clark, who in the 1930s asserted, "The economist may attempt to ignore psychology, but it is a sheer impossibility for him to ignore human nature, for his science is a science of human behavior.... If the economist borrows his conception of man from psychologists his constructive work may have some chance of remaining purely economic in character. But if he does not, he will not thereby avoid psychology. Rather he will force himself to make his own and it will be bad psychology" (1967, 96).

In addition to Clark, at least two seminal theorists in the history of economic thought, going past the behavioral assumptions of mainstream economics...

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