Veblen's "Instinct of Workmanship," its cognitive foundations, and some implications for economic theory.

Author:Cordes, Christian

Chief among those instinctive dispositions that conduce directly to the material well-being of the race, and therefore to its biological success, is perhaps the instinctive bias here spoken of as the sense of workmanship.

--Veblen

In the early twentieth century, economic and social theory were enriched by a Darwin-inspired approach. A major contributor to this line of reasoning about socio-economic evolution was Thorstein Veblen (see Hodgson 2004, part III). This article will show how lost arguments from Veblenian thought can be combined with insights delivered by cognitive science to tackle some of the theoretical problems of today's economics.

The paper is intended to reappraise Veblen's theory of human nature and especially the psychological, biological, and cultural aspects of his instinct theory. (1) According to Veblen, "[instincts] are the prime movers in human behaviour" (1914, 1) and the starting point of his theory of institutional change. (2) Veblen ascribed the origins of institutions to learned habits and ultimately to innate instincts, which provide a set of basic drives of human action, in the context of particular material conditions (Edgell 1975). Compared with instincts, which are directed toward a concrete objective end, habits are the means by which these ends can be reached and a flexible way of adapting to complexity (Brette 2003).

Veblen himself considered "The Instinct of Workmanship" (1914) to be his most important work because it delivered the psychological foundations of his approach in the most comprehensive way (see Hodgson 2004, 143). The central idea of his book is that during human phylogeny natural selection forces would have led to the selection of a natural propensity or instinct to engage in working activities that are useful for survival. Such an instinct would entail an appreciation of effective work, distaste for futile effort, and a drive for technological improvement (Veblen 1914, 33-5; Rutherford 1984). According to Veblen, the "instinct of workmanship" is a generic feature of human nature that guides the life of man in his utilization of material things and gives rise to a proclivity for purposeful action (see also Edgell 1975).

In general, Veblen identified instincts as specific innate tendencies of the mind that have evolved in the process of adaptation of species to their environment (see Jensen 1987). In particular, Veblen defined the instinct of workmanship as the main determinant of technological progress in that it "occupies the interest with practical expedients, ways and means, devices and contrivances of efficiency and economy, proficiency, creative work and technological mastery of facts" (1914, 33). In Veblen's concept, workmanship refers to tool-using activities, from the "industrial employments" of primeval man to the "machine process," in other words, it centers on sophisticated human skill in manipulating physical objects (Ayres 1958). The central capacity of craftsmen is to imagine particular forms of artifacts and to bring manual skills and perceptual acuity into the service of their implementation. Workmanship is oriented toward serviceability for the ends of life. Veblen considered technological advancement to be a result of the "instinct of workmanship" that is expressed in an institutional context more or less favorable to its emergence (see Brette 2003).

An understanding of human behavior is the starting point for all economic reasoning. In Veblen's view, human nature comprises irreducible innate instincts and learned habits. He conceived the individual in both biological and socio-economic terms. Human behavior is described as one in which agents and social environment interact. The limited reception of Veblenian economic psychology is partly due to the unsubstantiated nature of his specific hypothesized instincts (see Twomey 1998). But, as will be shown in this paper, recent results from cognitive disciplines provide evidence to reaffirm major ideas about human nature found in Veblen's thought.

The paper is organized as follows: the next section presents Veblen's Darwin-inspired approach to social theory and institutional change. In this context, instincts play a crucial role. Then, findings from cognitive sciences show that there are certain psychological dispositions of man that may be regarded as the cognitive foundations of an "instinct of workmanship." The implications of the "instinct of workmanship" for human creativity and the diffusion of novelty are the subject matter of the subsequent section. The last section offers some conclusions.

Veblen's Darwin-Inspired Approach to Social Theory and Institutional Change

All theories of socio-economic evolution contain, explicitly or implicitly, a theory of human nature (Jensen 1987). In 1898(b), Veblen put the question "Why Is Economics Not an Evolutionary Science?" to the audience and delivered an early evolutionary approach to economics, inspired by contemporary Darwinian thought. Veblen aimed to develop a theoretical concept for an evolutionary economics comprising a theory of institutional evolution that takes into account the cumulative nature of the cause and effect sequence of the process of institutional development. Instincts are a key component of Veblen's theory of institutional and cultural evolution (see also Ayres 1958; Brette 2003). He considered the determinants of human behavior to be the main explanatory variables and driving forces of his theory of institutional and cultural dynamics. Behavior responds to two kinds of determinants: the basic drive of instinctive factors and the drive to conform to habits. Thus, with respect to the capacity to motivate behavior, instincts and habits are functionally equivalent. Habits, as elements of the socially approved scheme of conduct and pursuit, become proximate ends of endeavor. They may even occupy the interests of agents to such an extent that the instinctively given ulterior purpose temporarily loses influence (Veblen 1914, 7). While the formation of habits relies on evolved sophisticated forms of social learning, instincts are directly based on innate cognitive dispositions.

In a nutshell, Veblen's theory of cumulative evolutionary change takes the following shape (see Rutherford 1998, 1984): the starting point of institutional change always consists of the given instinctive endowment of man--comprising the "instinct of workmanship"--and some established way of life, related habits of thought, and institutions. If the existing institutional circumstances are not too obstructive, the instinctive nature of humans will express itself in ways that give rise to new technological insights. (3) Objectives that people adopt to pursue are, in Veblen's view, a matter of instinct (1914, 3). Both instincts and habits operate alongside conscious reasoning and also penetrate conscious reasoning processes themselves though ends and purposes of life, Veblen said, are assigned by man's instinctive proclivities (see also Twomey 1998). It is by the prompting of instinct that reflection, deliberation, and technological creativity come to be employed. Indeed, recent findings in cognitive science highlight the significance of mental processing outside conscious channels (see, e.g., Merikle and Daneman 2000).

The development and introduction of new technology may eventually, cumulatively, and unintendedly entail a change in the basic pattern of life and economic environment, ultimately leading to the development of new habits of thought that possibly come to replace the established habits and institutions. (4) Thus, in the long run, technological changes introduced under one institutional logic may entail the development of a competing institutional logic or adjustments within the existing institutional setting. In this context, habituation occurs through the conditioning influence of the material circumstances reflecting technological knowledge. The environment, Veblen argued, tends to direct the way people think and act, a process that results in commonly held habits of thought that, over time, become institutions. (5) The latter are then supported by social sanction and are passed on through socialization. Institutions are largely "a matter of tradition out of the past, a legacy of habits of thought accumulated through the experience of past generations" (1914, 7). On the other hand, institutions produce change in the habits of life and work by determining the pace and direction of technological change, establishing a sequence of change that involves institutions affecting technology and technology affecting institutions. Technology is an endogenous factor in Veblen's scheme with the causal links between institutions and technology running in both directions.

Consequently, in Veblen's theory, the evolution of institutions is conditioned by the material circumstances and by the innate propensities of human nature. His theory of instincts, which are hereditary traits, applies to the biological evolution of humankind and is closely connected with cultural evolution. According to Veblen, man's particular endowment of instincts is to be understood as originally arrived at through processes of natural selection in the early pre-history of the human species. But Veblen did not adhere to biological reductionism. Instincts only give the starting point for the cumulative evolution of habits and institutions. Habits and institutions can both reflect and modify instinctive dispositions, but the underlying basic cognitive endowment of man, on the basis of which the habituation takes place, remains substantially unchanged. As Veblen put it.

The typical human endowment of instincts, as well as the typical make-up of the race in the physical respect, has according to this current view been transmitted intact from the beginning of humanity. ... On the other hand the habitual elements of human life change unremittingly and cumulatively, resulting in a...

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