Veblen's radical theory of social evolution.

Author:Dugger, William M.

The Red Threads in Veblen: Anarchism and Socialism

Thorstein Veblen wove two red threads into his tapestry of social theory--anarchism and socialism. They held his theoretical system--his tapestry--together. But they did not fit into the era of reformed capitalism that began a few years after his death in 1929. Veblen did not support reforming capitalism. He supported changing it into something else. The reformers that came after him, however, were not anarchists and socialists. They wanted to make capitalism good, and they wanted to use the existing state to do it. They did not want to change state-supported capitalism into anarchistic socialism. They wanted to stabilize the business cycle, humanize the workplace, and regulate the excesses of capitalism. When reforming capitalism moved to the top of the intellectual agenda, the red threads were cut out of Veblen's thought and it started unraveling. He started resembling a backwoods eccentric. (For a full analysis of Veblen's interpreters, reinterpreters, and critics see Tilman 1985, 1992, 1996, and 2003.) However, today (2006) the reforms of capitalism are being removed. Pure capitalism is being restored. Veblen should be, too.

This article will restore the whole Veblen. It will put the red threads back into him and turn Veblen the Eccentric back into Veblen the Red. The first step in this task involves a review of a select number of relevant Veblenians.

A Review of Selected Veblenians

In 1985 Floyd B. McFarland objected to what he termed the "bowdlerization" of Veblen by many institutionalists. Referring primarily to Clarence E. Ayres and Wendell C. Gordon, McFarland said this of the reforming institutionalists who followed Veblen:

[T]heir theory is a totally wrong-headed interpretation of Veblen that trivializes his work and simultaneously makes it virtually impossible for them to do work of genuine merit. By rejecting Veblen's lead, they appear to have trivialized themselves. (95) A more moderate statement from Ron Phillips emphasizes the need for the restoration of Veblen. Phillips explained how Veblen once wrote a memo that proposed using the Industrial Workers of the World (IWW) in the 1918 grain harvest. The grain was badly needed in the war effort, and the U.S. government had been repressing the anarchistic/socialistic IWW. Veblen urged a reversal of the policy. Veblen's support for the anarchistic-socialistic IWW was embarrassing to many institutionalist reformers, who claimed Veblen as an intellectual forefather. They downplayed its importance as an argument supporting anarchism/socialism and interpreted it as merely an eccentric way to propose a more effective war effort. Phillips stated,

Institutionalists have interpreted the memorandum as merely Veblen's contribution to "winning the war." However, I believe that this interpretation is in direct conflict with Veblen's published writings where he stated that "winning the war" meant making the world safe for the Vested Interests. I argue in this note that, contrary to what Institutionalists may contend, Veblen's support of the IWW is completely consistent with his analysis of business enterprise and the demise of the Vested Interests. (1987, 98) A few other institutionalists have shared Phillips' views of Veblen as a radical. Some have even suggested that Veblen was a Marxist. Forest G. Hill, the very first editor of this journal, once remarked,

The way Veblen evaluated Marxian doctrines would suggest that he "revised" Marxism for his own purpose. In his own words he made it "Darwinian," substituting cumulative causation for Hegelian dialectics in explaining economic change. He freed it from its classical, hedonistic bias and abandoned the labor theory of value and related doctrines. In a real sense, Marxism became Veblenism; Marx's problems were given Veblen's solutions through use of Veblen's approach, postulates, and conclusions. (1958, 141-42) Phillip O'Hara (2000) basically agrees with Hill, quoting and citing Hill at length in O'Hara's masterly book-length synthesis of Veblen and Karl Marx. O'Hara shows the differences between the two, but his synthesis is virtually seamless. He uses Marx's strengths to buttress Veblen's weaknesses and Veblen's strengths to do the same for Marx. In O'Hara's synthesis, it is sometimes hard to tell where Veblen begins and Marx ends, and that is a compliment.

Lacking the benefit of the O'Hara synthesis, twelve years earlier William M. Dugger had leaned heavily on Veblen to propose the basic concepts of a "radical institutionalism." (1988). In 1989 he edited Radical Institutionalism, adding two essays of his own to round out a collection of eight works of contemporary institutionalists. They explored the past and potential future of Veblen's brand of institutionalism. Dugger claimed that "Radical institutionalism is the institutionalism of Thorstein Veblen" (1989a, 1). Dugger and Howard Sherman produced a dialogue between Marxism and institutionalism, demonstrating the great extent to which the two schools of thought fit together into a theory of social evolution (1994 and 2000; see also Dugger 1984 and Dugger and Waller 1996).

J. Ron Stanfield, Veblenian institutionalist, has suggested a synthesis in which

[c]ontemporary Marxists and institutionalists should be bent on identifying the psychocultural pathology of late capitalism by exposing the cultural hegemony by which corporate and other large vested interests dominate the mentality of social life, and the misery that this domination either causes or perpetuates. (1989, 100) Douglas Dowd has done a great deal of work in the areas identified by Stanfield. Dowd produced a masterpiece of radical analysis entitled The Twisted Dream (1977). In it he explained how the democratic and egalitarian dreams and promises of American life have become twisted into militarism, imperialism, inequality, and a deteriorating quality of life. Power, not just class, is the key to understanding how such a state of affairs has come to dominate and to appear legitimate, explained Dowd. Power, he stated, "is the ability to act effectively, to make things go one's way, or to keep them so" (271). Dowd synthesized Marx's treatment of class with Veblen's treatment of vested interest into a profound analysis of the coursing of power through the American experiment. (See, in particular, 271-351).

Joseph E. Pluta and Charles G. Leathers (1978) have also expounded on this theme of power. They began by pointing out how similar Marxian and Veblenian theories are when they are put into abstracted and simplified "short-run conflict models." Such simplified treatments of Marx and Veblen's thought both emphasize the basic conflicts of interests between the few and the many that is found in our economy and its immediate predecessors. Pluta and Leathers continued by fleshing out the social context and political-historical elements of the conflict as analyzed by Marxian and Veblenian theories. But when fleshed out the two theories begin to diverge. The major difference between them becomes the nature of the conflict between the few and the many. Marxian theory emphasizes the conflict between the capitalist and proletarian classes. Veblenian theory emphasizes conflict between the vested interests and the common people. In the Marxian conflict the clash is between the few who own enough property to make the many work for them. In Veblenian conflict the clash is between the few who own enough property or have enough control over markets to give them power over the few who do not. The power is used to institutionalize (vest) the claim of the few on a flow of free income, at the expense of the many. Veblen saw this conflict as one between "the controllers and the controlled" (128).

Veblen did not contradict class analysis. However, to Veblen class was just one dimension of the controllers versus the controlled. He put it very carefully like this:

The new order has brought the machine industry, corporation finance, big business, and the world market. Under this new order in business and industry, business controls industry. Invested wealth in large holdings controls the country's industrial system, directly by ownership of the plant, as in the mechanical industries, or indirectly through the market, as in farming. So that the population of these civilized countries now falls into two main classes: those who own wealth invested in large holdings and who thereby control the conditions of life for the rest; and those who do not own wealth in sufficiently large holdings, and whose conditions of life are therefore controlled by these others. (The Vested Interests and the Common Man, 160) J. L. Simich and Rick Tilman (1980) expounded further on differences between Marxian and Veblenian theory by looking at the critiques of Veblen made by T. W. Adorno and Herbert Marcuse, leading members of the Frankfurt School. The Simich-Tilman article exposes the wide gulf between Veblen and the Marxian Frankfurt Schoolers on the significance of conspicuous consumption. Veblen emphasized the wastefulness of it and the conservative effect it has on the common man while the Frankfurt Schoolers downplay the significance of waste in capitalism, replacing waste with exploitation, and then entirely missing the socially conservative effect of conspicuous consumption and the accompanying emulation. The Frankfurt School is left with a Puritanical Veblen who objects to the excessive sophistication and waste of the capitalist milieu--Veblen the rustic and eccentric Protestant instead of Veblen the Red.

However, in their famous Monopoly Capital Marxian theorists Paul A. Baran and Paul M. Sweezy missed none of the implications of Veblen's conspicuous consumption and emulation. Instead, Baran and Sweezy wove conspicuous consumption, emulation, and Veblenian waste into a sophisticated treatment of twentieth century capitalism and how absorption of the growing economic surplus...

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