Thorstein Veblen: The independent thinker whose contributions advanced a distinct tradition of heterodox economicsABSTRACT
Challenging Charles Camic’s perspective, this article argues that Thorstein Veblen’s time at the top amounted to about nineteen years; a fraction of his professional career. While drawing from and building upon challenges associable with a changing world which he faced - related to the ending of Laissez-faire and the rise of big business; the institutions initiated for prosecuting World War I; and the accompanying rise of the vested interests - Veblen’s writings effectively and propitiously provided a solid foundation for an American school of heterodox thought known as Original Institutional Economics.
KEYWORDS:
Charles Camic; Thorstein Veblen; Joseph Dorfman; Robert Heilbroner; Original Institutional Economics
RESUMO
Desafiando a perspectiva de Charles Camic, este artigo argumenta que o tempo de Thorstein Veblen no topo ascendeu a cerca de dezenove anos, mas apenas uma fração da sua carreira profissional. Considerando os desafios associados a um mundo em mudança que Veblen enfrentou - relacionados com o fim do laissez-faire e a ascensão das grandes empresas; as instituições criadas para levar a cabo a Primeira Guerra Mundial; e o consequente aumento dos interesses instalados - o pensamento de Veblen forneceu, no entanto, uma base sólida para uma escola americana de pensamento heterodoxo conhecida como Economia Institucional Original. words: 97
PALAVRAS-CHAVE:
Charles Camic; Thorstein Veblen; José Dorfman; Robert Heilbroner; economia heterodoxa
Should we consider Thorstein Veblen as an “outsider” to the American academy and the Economics profession? Rephrasing this question somewhat differently: should we think of Veblen as a “marginal-man?” In other words, should Veblen be viewed as someone who could - because of his Norwegian immigrant roots and rural upbringing - be described as deservedly left stuck way out on the periphery of the system of American colleges and universities, as well as an Economics profession that was taking form during his adult years near the turn and with the start of the twentieth century?
Or should we admit that Veblen registers as having one of the most able and keenly educated minds, placing him within the first generation of Americans earning doctoral degrees at stateside universities, and that through his education he became especially expert in Continental Philosophy as well as Political Economy? In addition, should Veblen be understood as integrating himself as a research scientist, joining what back in his day were recognized as some of the top faculties at Ph.D. granting institutions, actively publishing books at reputable houses and having his articles appear in what were (and still are) considered as top-ranked journals? Is it the case that when taken together, Veblen’s thinking not only challenged the conservative thinkers who came to dominate the Economics profession, but also that his efforts were so effective that he literally “unmade” the Discipline of Economics?
In his recent account appearing as a lengthy book titled: Veblen: The Making of an Economist Who Unmade Economics, author Charles Camic aims to effectively negate the first set of questions posed above. Then he answers this second set of questions affirmatively, providing ample supporting evidence in this personal and intellectual biography of Veblen under review that stretches for more than four-hundred and ninety-two pages - that is, if we were to account for his book’s notes, credits, acknowledgements and index.
For the many decades prior to the publication of Camic’s 2020 book, author Joseph Dorfman dominated how Veblen was characterized and - lamentably - understood and perceived by members of the scholarly community. In November of 1934 Dorfman’s biography first appeared under the title Thorstein Veblen and His America. For better (but mostly for worse, as shall be argued in detail below), Dorfman’s book has served - since its initial appearance ninety years ago - as the principal reference for readers seeking to understanding the life and times; that is, the background and settings that contributed to Veblen’s formation as a thinker, theorist, academic author and professional economist. In this sense Camic’s biography, simply titled Veblen and appearing some eighty-six years after Dorfman’s book, registers in my mind as a heroic effort which also has the scholarly robustness not only to challenge, but also to finally break the grip of what has lingered for too long. We could add by noting that Dorfman’s account appeared as a long-winded, erudite narrative which has long remained as the established view regarding Thorstein Veblen, his life and his times - at least up until the publication of Camic’s book.
CHALLENGING THE DORFMAN-HEILBRONER VIEW
With its initial appearance in 1934, and revision in 1958, what Dorfman’s biography of Veblen offered - and what has tended to endure over the decades since - is in castigating Veblen as the proverbial marginal man, the outsider to the academy and the Economics profession. With his informative article titled: “Veblen’s Radical Theory of Social Evolution,” author William Dugger (2006, p. 651) emphasized that Veblen got reduced to someone describable as a backwoods eccentric. In a biting, sarcastic manner Dugger challenged what he views as this mischaracterization to which Veblen and his legacy has been subjected. What Camic appears to have accomplished with his lengthy inquiry is to further challenge Dorfman’s dominating view, while offering a much more favorable account of Thorstein Veblen that should inspire his readers to re-kindle a new appreciation for the man, the scholar, and his novel contributions to social sciences, generally.
It should be emphasized that Dorfman’s depictions and characterizations tended to stick in the minds of those seeking to understand Veblen; the man, his life and his times. However, my critique of Dorfman’s efforts is that he failed to establish why Veblen’s contributions to the literature would prove so enduring. To qualify, Veblen’s scholary efforts would register as novel and also enduring as he effectively laid a solid foundation for a heterodox school within political economic inquiry. What is more, this school remains relevant more than one hundred years on. In short, with each new generation (and now across the world) Veblen’s legacy continues to attract inspired and energetic members intending to further enrich and extend the heterodox tradition he initiated and established.
However, to be fair, we need to admit, recognize and concede that indeed Dorfman’s biography was especially well written, reflecting the erudition of a young scholar faced with researching and writing up a doctoral dissertation that he would defend at Columbia University in New York City. With his efforts, Dorfman considered many aspects which he thought went into the making up of Veblen - the man, the scholar, the public intellectual. Integral to his efforts Dorfman had also met Veblen face-to-face.
Perhaps even more importantly than having had direct personal contact, Dorfman benefited from correspondence with Andrew Veblen; an able scientist in his own right, who appears to have known his younger brother - Thorstein - especially well, and who made himself available to Dorfman for offering insights into the Veblen family as well as Thorstein’s personal and professional paths of development. Back in the day when Thorstein was on hand, Dorfman traveled out to just beyond what used to be referred to as the “Old Northwest,” paying a visit to the family homestead located at the edge of what then was America’s rural frontier. At this frontier European immigrant families, with their roots in a host of countries - but mostly in Scandinavia and North-Central Europe - had sought low priced acreage; that with basic machinery and determination driven by human brawn, could be transformed from forests to profitable farms generating foodstuffs supplying America’s burgeoning population.
My 1975 printing of Dorfman’s Thorstein Veblen and His America contains five-hundred and seventy-two pages, that is, if we were to include - along with the lengthy text - the accompanying references, notes, and index. It is not clear whether many people have actually read Dorfman’s account from cover-to-cover? Considering this book’s thickness, we have reasons to doubt a sizeable readership. In spite of the drawbacks, however, Dorfman’s depiction of Veblen has long been held up, with his tome relied upon by Veblen’s supporters and detractors alike. Over the ninety years since its initial appearance, this book has been thumped and cited by scholars in a manner that circuit preachers might thump a Bible when emphasizing the immediacy of scripture. One outcome is that Dorfman’s characterizations of Veblen have tended to be adopted without challenge: at least until Camic stepped up to the scholarly plate, authoring this recent book under review, with the apparent aim of not merely adding to, but finally straightening out the Thorstein Veblen story.
When matched against Camic’s more recent research into Veblen’s life and career, readily we could infer that Dorfman had mis-characterized Veblen as a “marginal man” and “outsider.” Lamentably, this mischaracterization would become compounded many times over as in 1953 Robert Heilbroner had published a book titled The Worldly Philosophers: The Lives and Times of Famous Economists. Unlike Dorfman’s long-winded, detailed and nuanced biography of Veblen that would interest specialists seeking to gain an understanding of the man and the timeframe of his career, Heilbroner’s account of Veblen would be limited to just one chapter in a book, but with a noted four million copies being sold! Heilbroner’s Chapter Eight titled “The Savage Society of Thorstein Veblen,” appeared within what has been touted as the ‘second best-selling book’ in the history of books on economics published in the United States. True, Heilbroner’s book challenged but never outsold Paul Samuelson’s Principles of Economics, a textbook that first appeared in 1948 and, from early on, dominated in the teaching of classroom economics over a long span of the postwar era.
Heilbroner’s book would be sold as a trade-book, that is, as a “reader” for use in introductory courses in Economics. In the postwar era these intro-courses ended up with extra-large enrollments as attendance at colleges and universities mushroomed during the fifties and sixties when members of the not yet defined baby-boomer generation found relatively easy access to tertiary education. His book would also be sold to students taking more specialized courses focused upon the “History of Economic Thought.” In addition, we need to consider that both Dorfman and Heilbroner had been based in New York City, longue a leading urban center in the United States legendary for the editing, publishing, and distribution of books. After first appearing in 1953, Heilbroner’s Worldly Philosophers would go through revisions and several printings at various publishing houses, including the “employee-owned” academic press of W. W. Norton. The most recent edition of Heilbroner’s book in my library was printed in 1999, forty-six years after the initial appearance of the Norton edition. That so many professors and students would rely upon this eighth chapter for gaining insights into Dr. Veblen suggests to me that Heilbroner’s characterization of the man essentially became institutionalized, and his depictions would take on the weight of a “conventional wisdom.”
As a member of the generation of American Institutionalists inspired by and following in Veblen’s theoretical footsteps, one John Kenneth Galbraith (1908-2006) endeavored to carry on with emphasizing a sharply critical approach, invariably targeting the “businessmen” whom Veblen had singled out; and for their proclivities and efforts at achieving “pecuniary gain” at the neglect of the “serviceability” of their products. Veblen had written at length about the rise of ‘big business and the related changes in industrial organization that had emerged by the start of the twentieth century.
As a prolific author of books on a wide range of subjects, as well as a long-term Professor of Economics at Harvard University, Galbraith frequently relied upon Veblen’s notion of a conventional wisdom when advancing his critical ideas. In Chapter Two of The Affluent Society (1958 [1984]) Galbraith teaches us that members of society prefer to shy away from thinking independently and critically. Rather, what they tend to do - in the wording of Galbraith (1984, p. 7) - is to “associate truth with convenience.” Metaphorically - and invoking Veblen - Galbraith advanced the idea that members of society “adhere as to a raft, to those ideas which represent our understanding.” In sum, Galbraith suggested that what could be thought of as a conventional wisdom served to “associate truth with convenience,” and such registered as anathema to a critical perspective promoting accurate thinking.
Galbraith’s perspective could be applied herein by noting that Dorfman’s initial efforts - which led to the publication of his lengthy, detailed, and erudite account of Veblen, his life, and timeframe - got compounded with Heilbroner’s short but more widely read popular account. Taking these two accounts together suggests that in the minds of most everyone - save for a few earnest students and scholars focused upon Veblen’s contributions, and who could think independently - Thorstein Veblen became widely known and unquestionably accepted as the proverbial “marginal man;” forever castigated as an “outsider” to the academy and whose ideas never registered as important in the minds of most of the leaders of the Economics profession. Re-invoking William Dugger’s wording, Thorstein Veblen got framed, and not only as a backwoods eccentric, but also as someone suffering from lamentable personal deficiencies.
Robert Heilbroner (1972, p. 210-11) can be quoted:
A very strange man, Thorstein Veblen. He was a peasant in looks, a Norwegian farmer. A photograph shows his hair, lank and flat, parted in the middle of a gnomelike head and falling in an inverted V over a low and sloping forehead. Peasant eyes, shrewd and speculative, peer out from behind a blunt nose… .
A strange appearance, but it hid a yet stranger personality. Those piercing eyes might hint at an equally piercing scrutiny that rustic exterior might prepare one for a certain blunt quality of inquiry. But there was no external sign of the keynote to Veblen’s life: his alienation from society.
Alienation is often a phenomenon of the sick, and by our standards, Veblen must have been neurotic indeed. For he had a quality of hermetic insulation. He walked through life as if had descended from another world, and the goings on which appeared so natural to the eyes of his contemporaries as piquant, exotic, and curious as the rituals of a savage community to the eye of an anthropologist. Other economists - and this includes Adam Smith and Karl Marx - were not only in their society, but they were of it; sometimes full of admiration of the world about them and sometimes filled with despair and rage at what they saw. Not Thorstein Veblen. In the bustling, boosting, gregarious community in which he lived, he stood apart: uninvolved, unentangled, remote, aloof, disinterested, a stranger.
After considering this lengthy quote, one question comes to mind. If Heilbroner could write so confidently about Veblen, are his depictions based upon his having benefited from direct and close contact with this man?
To this question, we could readily infer an answer of “no.” The widely held opinion is that Heilbroner simply drew his understanding of Veblen from reading Dorfman’s book! Adding support to our inferred answer, we could also consider that their dates of birth and death precluded any reasonable speculation that Heilbroner - born in 1919 - had ever set eyes upon Veblen, much less benefitted from a face-to-face meeting during the first ten years of his life before Veblen’s passing in 1929. In short and with confidence we could infer that Dorfman started many readers down the road of thinking of Thorstein Veblen as the marginal man, as the ultimate example of an outsider - and as the laughable backwoods eccentric. Then, uncritically, Heilbroner picked up where Dorfman left off, injecting yet more venom into Dorfman’s reputational snake bite. Such effectively served to institutionalize what has long endured, and what should deservedly be referred to as the Dorfman-Heilbroner View of Thorstein Veblen. By this, I mean that through drawing from Dorfman’s account, Heilbroner’s (mis)characterization of Veblen found its way into the university curricula and thusly into the popular culture of the college educated. The several editions of his book appear to have misled a mass community of readers - that would also include future journalists who would later write about Veblen for popular presses. Such appears to have generated a contagion that left most everyone thinking of Veblen not only as the marginal man, the outsider - and as the laughable backwoods eccentric - but also as a wholly deficient human being. Veblen had been reduced to a man so lacking that his ideas (and the ideas of his followers) should be dismissed as undeserving of consideration. Laudibly, the importance of Camic’s book appears rooted in his earnest efforts to finally set the Veblen story straight.
‘ICONOCLAST’ WHO CHALLENGED THE FOUNDATIONS OF NEOCLASSICAL THEORY
Thorstein Veblen entered the world in July of 1857, a bit more than four years prior to the start of America’s Civil War. Often described as a “war between the states” this conflict commenced in April of 1861 when Confederate forces first fired upon Federal troops at Fort Sumter, South Carolina. Out on a homestead located in the State of Wisconsin, Thorstein arrived in our world as the sixth of the twelve children who would be born to Thomas Anderson Veblen and Kari Thorsteindatter Bunde (Veblen). Thomas and Kari had come to America as immigrants, after strugging with their decision to depart from their hardscrabble setting back in rural Norway. At the time of their departure from Europe, both were completely unaware that in the not too distant future they would be recognized as the caring parents of one of America’s most renowned thinkers. As a sidenote, both sides of his parents’ families were associated with a rural segment of Norwegian society labeled as bønder (see Camic, 2020, p. 52). This term could be thought of as synonymous with: the hard-working, the self-reliant, and those wholly unwilling to remain under the thumbs of elites wielding power.
What proved unusual and helps to distinguish Thomas Veblen is that - as a Norwegian immigrant partnering with his wife and their carving out more than one family homestead at the edge of the American farming frontier - he placed a high priority on educating the Veblen children. In the mid-1860s the family moved out of Wisconsin, heading a bit farther north to start up a new homestead in Rice County, Minnesota (Camic, 2020, p. 82-84). What we could cite is that Thomas and Kari propitiously relocated the Veblen family within the vicinity of a newly established and promising undergraduate institution. With its founding in 1866, Carlton College would quickly become reputed for its dedication towards carrying on a tradition of delivering quality education in Liberal Arts and Sciences leading to baccalaureate degrees. Of note is that this tradition of emphasizing a rigorous, liberal education was more typically found in the northeastern United States within the region of New England - than at the edges of the Northwest farming frontier.
So committed was Thomas Veblen towards his children’s educations that he went the extra length. He purchased a city lot in Northfield, Minnesota and constructed a wooden house for his children. He undertook this construction in order that his children could depart their family farm and live in convenient proximity for attending lectures at Carlton College. In 1875 at the time of Thorstein’s enrolment, Carlton was offering a special curriculum designed to bring newly matriculated students up to the high standards that the administrators and professors expected. Such involved three years of “preparatory study,” followed by three more years of course work towards completing the baccalaureate degree. In total, Thorstein would spend six years studying at Carlton.
At the start of the first three of his college years Veblen enrolled in the “classics” track, taking courses that included Latin and ancient Greek. Camic (2020, p. 103) suggests that this line of study would continue for seventeen of the eighteen terms in which he was enrolled. We could note that early on Thorstein displayed an interest in Philology, an area of inquiry which focuses upon the study of ancient civilizations, their histories, languages, and cultures. He also took courses in what could be considered as the “highbrow” track of Philosophy that at Carlton College had been dubbed as “Mental Philosophy.” This curriculum placed special emphasis upon grappling with the big questions with which great minds have contended over millennia. He also got introduced to Economics at the undergraduate level. During his time at Carlton, Economics - or more correctly Political Economy - was the discipline and mode of thinking that he encountered and which would later prove to be the area of inquiry that would attract his full scholarly attention while also serving as a productive outlet for his expanding intellectual energies.
My reading suggests that Veblen’s passion for this area of inquiry known as Political Economy could be traced back to one John Bates Clark (1847-1938) and his having joined Carlton’s faculty in 1874, one year prior to Veblen’s arrival. In my reading of Camic’s account of Veblen’s intellectual journey, what appears to be at issue is that with time Clark would take to busying himself with advancing a theory that a nation’s income is generated as marginal returns to factors of production - namely, land labor and capital. What proves interesting - and well worth noting - is that early on, long before differences in their respective theoretical schools would become so pronounced, Professor Clark and the young Mr. Veblen developed a supportive relationship apparently based upon their mutually high intelligence quotients, scholarly dispositions, and an uncompromising drive to get at the truth of a matter. Though friendly towards one another in a gentlemanly manner, in his formation as a political economist, later on Veblen would not only harbour, but would also express deep-seated disagreements with the marginalist, theoretical approach upon which Clark advanced his ideas - and with time - established his reputation nationally and globally. Some years later when Veblen began to focus upon Political Economy at the doctoral level, he would not only take to challenging Professor Clark’s key assumptions, but he would also dismiss Clark’s theoretical school which he identified and dubbed as “Neoclassical.” Moreover, this disagreeing would extend over a span of decades and appears to have influenced a good portion of the subject matter Veblen would develop with his journal articles, especially.
The careful research, the narrations of stories - along with what needs to be appreciated as the attendant Veblen-lore - suggests that after Thorstein completed his doctoral degree in 1884 at Yale University in New Haven, Connecticut, he ran into difficulties finding work commensurate with his level of educational attainment. True, he had completed his doctoral degree in Philosophy and had successfully defended his dissertation which is thought to bear the title: “Kant’s Critique of Judgment;” what appeared as the title to his very first academic article that got published in the Journal of Speculative Philosophy in 1884 - the same year that he completed his Ph.D. at Yale.
Penned at the nascent stage of his academic journey, Veblen’s article dealt skillfully with aspects and notions of “reason” considered by Immanuel Kant (1724-1804). However, even with a doctoral degree in Philosophy already in hand from Yale University, combined with a mastery over Kant’s project, prospects for Veblen’s gainful employment proved limited within the academy as an integral member of a prominent university faculty. In addition, the widely shared opinion is that after completing his advanced degree at Yale, Veblen was reported to be “unwell,” and Camic (2020, p. 184-185) suggests that his state of health likely reflected a longue case of malaria that would plague him over about seven years. It is speculated that Veblen contracted his case when he resided in the low lying area of urban Baltimore, that was when he was enrolled at Johns Hopkins University where he studied Philosophy at the masters-level. The story has it that Veblen dealt with his compromised health by returning to his familiar, familial life known to offer fresher air and a more robust diet typical of a homestead located at the edge of Minnesota’s farming frontier. During what Camic artfully refers to as his hiatus (or time away), Thorstein came up with a strategy, plotting how he could ultimately shift out of the rural periphery and integrate himself into the centre; that is, at the top of what was taking form as the American academy.
As a deserving side note, the term “academy” used throughout Camic’s book suggests to me that back in the 1880s and 90s, American universities had started collecting talented lecturers and researchers - some with masters and fewer others with recently earned doctorates - so that the newly formed graduate programs could commence with offering advanced seminars and doctoral degrees. During Veblen’s day this new generation of American-based students enrolled in these estudos da pós-graduação, would form the first generation that could remain home - stateside - and not have to travel out of the country for advanced study at foreign-based universities. Up until Veblen’s day, universities in Britain, France, Germany and Spain had proved especially important for educating and qualifying with credentials those seeking to build the American academy. The switch came with Veblen’s generation.
Camic’s writings suggest that Thorstein had concluded that for him to escape the rural setting and academic periphery, and to integrate himself at the top of the American academy, he would need to study towards a second doctoral degree. He chose to get away from Continental Philosophy and his efforts to slice through Kant’s philosophical knots altogether, and instead to fully embrace what had gotten labeled back in his day as “Political Economy.”
Making full use of his cunning, Thorstein seems to have calculated how he could ultimately position himself for a successful career through gaining a faculty post at the top of the American academy. In his efforts, in 1891 he enrolled for doctoral studies at Cornell University located in Ithaca, New York, placing himself under the wing of one James Laurence Laughlin (1850-1933). Widely known and also reputed as an insider to the American academy, Laughlin held a degree from Harvard University. What is more, he was appreciated as an economist with a reputation as someone critical of formalistic approaches. Not at all considered as a holder of conservative views, still Professor Laughlin seemed at ease within the company of conservative-minded leaders in what was emerging near the turn of the twentieth century as American universities gaining certification for granting doctoral degrees. What proved prodigious for Thorstein, and for this area of inquiry that Camic defines and elaborates upon as “Political Economy,” is that soon after he got enrolled at Cornell University in New York State, Laughlin accepted a new faculty position. Just one year later - in 1892 - Laughlin would resign from his post at Cornell and relocate to the recently founded and opened University of Chicago, taking Veblen with him as one of his three assistants (for details, see Camic, 2020, p. 236-275).
To accurately differentiate Economics (or Economic Science) from Political Economy we need to consider how these areas of inquiry emerged, stabilized and became institutionalized within the American academy and the Economics profession back in the 1880s and 90s. Ever so artfully Camic (2020, p. 127-132) addresses some of these differences, seeking to clarify what he understands as the origins of and ongoing distinctions between Economics and Political Economy, especially with regards to how these two areas of inquiry could be related to Thorstein Veblen, his studies, and his chances in the academy and the profession.
What could be drawn from and added to Camic’s understanding is that the version of Political Economy which would emerge in the America of the late nineteenth century came into form through a close association with the study of History. Relatedly, the field of Political Economy relied upon inductive reasoning and could also be associated with French and German (i.e., “Continental”) traditions, generally, and, in particular, with exponents of the German Historical School, especially with Gustav von Schmoller (1838-1917). Author Mark Blaug (1986, p. 213-214) teaches us that with time Herr Professor Schmoller would establish his national and international recognition as the principal exponent of what became known as die jüngere historische Schule, with “jüngere,” (or younger) meaning the more recent school of German Historismus). This was during the decades in which Professor Schmoller benefited from his prominent faculty position at the Humboldt University in Berlin. As it took form in the United States near the end of the nineteenth century, and particularly at Johns Hopkins University, it was at Hopkins that the movers and shakers who would found the American Economic Association were collecting, and where a critical mass of creative thinkers were recognizing the importance of accounting for institutions in economic analysis. Finding fertile soil for rapid growth in America, the emerging field of Political Economy actually drew from this already fully formed, Continental and especially German tradition of Historismus. This area of inquiry would end up closely associated with the academic field of “Economic History,” and would steadily evolve to contribute to the formation of what American academics would label and agree upon as “Political Economy.” In sharp contrast, Economics (or Economic Science) could be taken to refer to a competing area of inquiry that was based upon a different theoretical foundation, reflecting a distinctly English (Manchester, but also Austrian) approach with its core methodology relying - not upon inductive reasoning - but upon deductive reasoning for theorizing.
For perspective and for contrasts, what we could think of as Political Economy emphasized the importance of real economic activity (i.e., not based upon a priori theorizing), singling out production, especially, and stressing that production - and also foreign trade activities - would generate data. Said data could then be organized in time-series. The idea is that through employing inductive reasoning the data presented in tables could be closely considered for patterns, tendencies, and even cycles. Moving from the specifics observable in the data to generalizations, hypotheses could be formulated and then tested for their veracity. Such is how this branch of the science emerged in Continental Europe (with Germany and France as two major players), and later served as the inspiration and practical foundation for the American version of Political Economy which Camic’s book starts the reader to consider.1
For contrasts, Economic Science (but which often gets expressed simply as Economics) tends to be based upon a priori assumptions and deductive reasoning. Typically, this approach to inquiry suggests that one starts with an assumption formulated a priori (in theory) that could be presented as a hypothesis, but which - more often than not - gets stated as a “law.” Clearly, this sheds light upon the tradition within Neoclassical Economics established by one Alfred Marshall (1842-1924) who was based for decades at Cambridge University. Reflecting Marshall’s emphases, the a priori assumption, hypothesis, or law is thought to be true even before the start, and its validity then tends to be conveniently supported by the selection and presentation of data. As is typically found in textbooks dealing with Microeconomics carrying on the Marshallian tradition, the data is simply made up and assembled to assist in substantiating the a priori assumption - and/or law - that was presented at the start. What serves to further differentiate Economics and Economic Science from Political Economy is that while the later has tended to focus upon the real economy and the centrality of production and foreign trade for generating output data, the former tends to focus upon giving credence to a priori assumptions regarding consumption.
If we were to consider Veblen primarily as an economist - or more precisely as a political economist in accordance with the definition and details offered above - I think it correct to note that one major thrust of his scientific efforts were aimed at undermining Clark’s stressing of marginal productivity theory for explaining returns to factors of production as a nation’s sources of wealth. To this end, Veblen had published an article in Year 1908 with the title: “Professor Clark’s Economics,” appearing in the already prominent Quarterly Journal of Economics (QJE), (see Veblen, 1908a). About one decade prior, back in 1899 Veblen had penned three articles which were published in sequential issues of the QJE. These papers appeared under the titles “The Preconceptions of Economic Science,” I, II, and III (see Veblen (1899b, 1899c, 1899d). One year after his 1908a article dealt with Clark’s “Economics,” Veblen saw two articles published which challenged Clark’s understanding of capital. These documents appeared under the titles “On the Nature of Capital I: The Productivity of Capital Goods” (1908b) and “On the Nature of Capital II: Investment, Intangible Assets, and the Pecuniary Magnate” (1908c).
As emphasized by the Australian scholar Tony Aspromorgos (1987), what we refer to as “Neoclassical Economics” needs to be appreciated as a term which was actually coined and first put to usage by Veblen for when referring to a distinctive school emerging within Economic Science that could readily be traced back to precepts and ideas regarding “utility.” The understanding of utility at the heart of Neoclassical Theory could be traced further back to a section found in the book: A Fragment on Government and An Introduction to the Principles of Morals and Legislation that first appeared in 1789 and was authored by one Jeremy Bentham (1748-1832), the legendary English “reformer.” About ninety years after the appearance of Bentham’s book, one W. Stanley Jevons (1835-1882) who was based at Manchester University, authored a book titled: The Theory of Political Economy (1871 [1957]), therewith enshrining Bentham’s notion of utility into the second and third chapters of his then pioneering work.
What could be emphasized is that in this book Jevons highlighted the centrality of consumption, stressing the (assumed) role played by preferences and choice. To support his view, Jevons conjured up an imagined consumer with attributed proclivities goading him/her to consume in a manner that contributed towards the maximization of marginal utility. Alfred Marshall’s Principles of Economics, first published in 1890, and that was followed by a series of subsequent editions, assisted in institutionalizing this Bentham/Jevons nascent “neoclassical” thinking across what back in those key decades was the far-reaching British Empire. In my understanding, for us to rightly consider how Neoclassical Economics came to dominate and end up described as “orthodoxy,” we need to consider the backdrop of history that should include the importance of Queen Victoria’s long and stable reign influencing Great Britain and her vast empire; of the lofty status held by Cambridge University and its Alfred Marshall, one of Cambridge’s most famous professors; as well as his major textbook: Principles of Economics that first appeared in 1890. In my judgment, these variables register as key for effectively rendering Neoclassical Economics as the dominant school, a dominance taking on the aura of orthodoxy, which could easily be argued as worn thin by time, but which nevertheless continues to rule the academy to this very day.
ON VEBLEN’S ENDURING CONTRIBUTIONS TO THEORY
When considering this biography emphasizing the intellectual journey of Thorstein Veblen, it should be noted that Professor Camic’s main discipline is Sociology - not Economics. In my view this explains why his efforts appear to me to run long when dealing with aspects such as detailing and interpreting the significance of Thorstein’s immigrant background, including his parents’ life back in rural Norway prior to departing on their American adventure; Thorstein’s liberal arts education at Carlton College; and his fraught, first marriage to one Ellen (Nellie) Rolfe. While strong on these features with which one steeped in Sociology should run long, the author appears - in my assessment - to fall short in detailing Thorstein Veblen’s contributions to Economic thinking and Political Economy which have proven significant and also enduring. Indeed, Camic’s book considers aspects of Veblen’s contributions to Political Economy, including his efforts to advance a theory of capital. But I think that his book could have offered a broader and deeper consideration of Veblen, not only as the capable Political Economist, but also as an especially talented theorist advancing novel approaches and methods rooted in his academic background in Philosophy.
As developed in the section above, with his contributions to the literature which would span over about four decades, one of Veblen’s main efforts sought to expose and undermine what he had identified as Neoclassical Economics, also thought of as economic orthodoxy, a branch within the science that would become so pervasive as to be touted to this very day as the “mainstream.” One John Maynard Keynes (1883-1946), noted author of the General Theory of Employment, Interest and Money (published in 1936), also expressed his own dissension with accepting some of the basic assumptions upon which neoclassical theory was based. However, what helps to differentiate the thinking of J. M. Keynes from T. B. Veblen is that the former started out integrated into academy, which also seems related to what could be interpreted as a privileged “birthright,” more so than a personal achievement. In contrast, Veblen inherited the birthright of a first generation, Norwegian-American; born as the sixth of twelve children out on a homestead at the rural frontier, with his early childhood education based upon intently listening to his mother’s vast repertory of Nordic sagas of yore (irony intended), and with the family placed out in a territory where farms were hewn from the dark forests. For contrasts, while through his family J. M. Keynes started out life already integrated at the top of the academy, Veblen’s integrating himself into the American academy - and making his way to the top (and staying at the top) - would prove to be a struggle based more upon his merits as a creative and brilliant thinker, than upon inherited privilege.
John Neville Keynes (1852-1949), John Maynard’s father, was associated with the Economics Faculty at Cambridge University over a significant span of his long life (Blaug, 1986, p. 110-112). While studying at Cambridge where his father was recognized as a prominent faculty member, the young John Maynard came, like others of his generation, under Alfred Marshall’s neoclassical spell. Marshall was recognized as a towering Don at Cambridge, with influences spreading across the vast Victorian realm. However, some years after studying the Marshallian approach to Economic Science, John Maynard would flip, and his flipping could be associated with his efforts to account for the downturn in economic activity initiated by the Wall Street crash taking place in October of 1929.
In my understanding of the time frame, with some of the major European powers mobilizing for war starting in August of 1914, the world economy effectively reached the end of the era of Laissez-faire. However, additional years would be needed before the end of this epoch was realized and the implications understood. With a war mobilization underway, countries and kingdoms entering the conflict preferred not to wait around for investors seeking favourable rates of return to respond and start producing the metals, chemicals and other materials, including foodstuffs and fibers, that would be needed for the war efforts.
Indeed, Keynes was attentive in drawing observations on the ending of this era and the bumpy transition. Already in 1926 he penned an essay with the title The End of Laissez-Faire. Evoking prescience, just three years later in 1929, and initiated by a shock associable with precipitous declines in the value of equities at Wall Street trading houses, what initially turned into a contraction in business activity later precipitated markedly high levels of unemployment and under-employment. With time, what registered as a downturn in economic activity would be born out in the data - not as market frictions - but as persistent and continuing quarter after quarter and year after year, with no apparent end in sight. This tendency could be drawn from the statistical records, observed while walking down mainstreets and paying attention to the shuttered businesses, as well as in endeavoring to explain the spontaneous cropping up of “Hoovervilles.”
Reflecting the failed economic program of Herbert Hoover’s presidential administration, this was the term assigned to the transient communities of the 1930s; that had popped up near railyards spanning across the American nation. It was in these Hoovervilles that the itinerant men (especially) collected in their hobo jungles, seeking out wage work and applying their cunning to survive the hard times that got dubbed (and immortalized in the literature and as well got burned into the minds of millions) as the “Great Depression.” With J. M. Keynes (1936, Chapter 2) doubting the efficacy of the neoclassical maxim regarding self-correcting markets - especially as this theory was being applied to labour markets - it is in this sense that his thinking should be considered as heterodox. In short, Keynes challenged the orthodox, mainstream, neoclassical view. Heretic that he had become, Keynes shifted the focus for dealing with persistent unemployment to insufficient levels of effective demand (1936, Chapter 3). In sum, Keynes highlighted that an insufficient level of (effective) demand for aggregate output would give rise to “involuntary” unemployment that could also prove to be persistent.
Such gets us to a point at which a question needs to be posed and answered. Of the two thinkers challenging neoclassical orthodoxy (Keynes versus Veblen), which of the two should be considered as the more heterodox?
In contrast to Keynes’ dissenting with economic orthodoxy’s view of self-regulating markets, and his drawing connections between insufficient levels of effective demand and the employment/unemployment nexus, Veblen offered a fundamentally different approach. For Veblen, the economy needed to be seen as inextricably intertwined with the society and its rich legacy of culture, all of the while foot thumping to the backbeat of the drums that give rise to the dance of history. Within all of this, the forces and variables leading to the emergence of institutions needed to be explicated. In Veblen’s distinct, novel and heterodox view, institutions were to be placed at the centre of economic inquiry. What is more, institutions were thought to be evolving over time. For Veblen, the world was neither given, nor did he consider the world as static. In Veblen’s view, accounting for the evolution of institutions helped us explain the underlying dynamic creating the world in which we humans have had to labour, live, and seek to thrive.
With this perspective in mind, Veblen set out to relate Economic Science to evolutionary thinking. That is, Veblen sought to integrate an evolutionary dynamic into what Scotsman Thomas Carlyle had - at the start of the nineteenth century - dubbed as the “dismal” science. Challenging the cynical character of this view integral to Carlyle’s depiction, for Veblen’s there is nothing dismal about the science. In Veblen’s view the economy needed to be understood as inherently dynamic, and the evolutionary processes at play are actually what proved most interesting for political economists to consider! For Veblen the institutions composing the larger social system - including the economy - could best be understood as emerging and evolving. In his effort to provide solid footing for this new field of “Evolutionary Economics,” early on in his publishing career Veblen penned an article that appeared in the Quarterly Journal of Economics, a journal which back in his day was already established as prominent and influential.
Published in 1898 and posing the questioning title: “Why is Economics Not an Evolutionary Science?”, Veblen’s efforts appear in ways to have been reflecting the pioneering research of one Charles Robert Darwin (1809-1882). Back in 1859 the appearance of Darwin’s ideas forcefully challenged a long held conventional wisdom known as the “immutability hypothesis.” Stated not as a hypothesis, but presented as doctrine readily found, read and continously preached from the Book of Genesis,” this biblical story seeks to convince what could be created from scratch in as few as six days!
In short order Darwin established his reputation and name recognition by authoring a major inquiry - a tome, really - with the title: The Origin of Species. This book appeared just two years after Thorstein was born. I think that we could confidently note that it would fall on the shoulders of Veblen and members of his generation to integrate an evolutionary perspective - inspired by Darwin’s thinking - and then rewrite not only Economics, but also other areas of scientific inquiry, rendering them as evolutionary.
What Darwin sought to explain is the role played by what he identified as “natural selection” in engendering changes (evolution) which he had observed durante suas viagens (during his voyages). While out and about on ships criss-crossing the world’s waters, Darwin drew observations which would lead to his detailing a novel understanding of what engenders changes in species within the vegetable and animal kingdoms. Reflecting the spirit of Darwin, Veblen sought to lay the foundations for an Evolutionary Economics, accounting for the forces and variables contributing to the changes (evolution) taking place in institutions composing the societal realm.
For Veblen, his understanding embraced the notion that the society and economy should be understood as intertwined, rooted in history and culture, and best framed through the use of “dualism.” Relatedly, Veblen’s background (including his doctoral studies) in Philosophy - and in particular what he had drawn from the writings of Immanuel Kant - would assist him in establishing his heterodox approach. I hold the opinion that indeed we could judge Veblen’s thinking as much richer and vastly more heterodox than what Keynes offered; which amounts to relatively few and comparatively minor disagreements with orthodoxy. Moreover, Keynes’ heterodox view did not threaten to undermine his birthright entwined with his being being born at the top and the social inertia that would keep him at the top of the academy and Economics profession for the duration of his life. In contrast to Keynes, Veblen dove into the turbulent and especially swift waters of theory and took to swimming against the stream. To his advantage, he could rely upon his academic background in Philosophy for advancing an approach to evolutionary thinking that even challenged what Professor Georg Wilhelm Friedrich Hegel (1770-1831) had emphasized as the centrality of “contradiction,” what should be considered as a dominant view back in Veblen’s day.
Professor Hegel’s school of thought had not only stressed contradiction, but also the interpretative powers that could be associated with a dialectical view of history. In a nutshell, through the resolution of contradictions we could expect to end up at a happy place at which historical contradictions would have been resolved. In contrast to Hegel’s use of the dialectic, Veblen’s efforts reflect a creative use of “dualism.” In actuality, framing his reasoning with the use of dualism contributed towards the philosophical richness of his thinking, rendering his ideas much like a lovely tapestry woven of golden and silver threads, glistening in the light and also winding and coursing their ways through the warp and woof of his writings. Framing complex ideas with the use of dualism needs to be appreciated for contributing to Veblen’s distinct approach to heterodox economics, as well as the school of thought which he is associated with founding - namely, “Evolutionary-Institutional Economics.” In this sense and in comparison to Veblen, J. M. Keynes registers as but a cautious, theoretical lightweight; quietly tiptoeing and confining himself to challenging the status quo of orthodoxy at the edges of doctrine. In contrast to Mr. Keynes, Dr. Veblen needs to be understood as a theorist capable of advancing a wholly novel school of thought creatively built upon solid philosophical, methodological, and theoretical foundations. In short, Thorstein Veblen would advance a heterodox school which could also be interpreted as challenging the theoretical status quo with a forceful head-butt. In my opinion, Camic’s biography failed in emphasizing this. Admittedly, Camic’s book does advance the idea that Veblen’s contributions “unmade economics;” however, I think that his writings fall short in emphasizing and detailing how it was that Veblen proceeded with offering a novel field for inquiry, as well as in founding a new school of heterodox thought.
One Clarence Ayres (1891-1972) had been Veblen’s student who went on to complete his Ph.D. degree at Chicago - but not in Economics. Like Veblen, Ayres also earned his doctoral degree in Philosophy. During the many years that he was established as a professor at University of Texas, Austin, he authored a book which sought to provide a foundation for a Veblenian approach to Evolutionary-Institutional Political Economy. In his book The Theory of Economic Development (1944 [1962] and his 1953 article titled: “The Role of Technology in Economic Theory,” appearing in the American Economic Review, Ayres drew from and also helped to clarify Veblen’s thinking, referring to what he distinguished as the “instrumental - ceremonial dichotomy.”
The instrumental dimension of Ayres’ dualism suggests that we need to consider tools and their advancements (technology in a broad sense), including the accompanying skill sets which people have been wonted to master over the long span of human history. The ceremonial dimension of the unity could be viewed as culture.
Drawing from Veblen’s thinking, the notion which Ayres touts is that the instrumental (i.e., that tools and their uses) will indeed make advances. Simultaneously, the ceremonial (that is, the culture which reflects habits of mind and entrenched and practiced traditions) should be regarded as resistant to change (Waller, 1982). The key takeaway associable with this Ayresian view of social and economic evolution - framed through the use of dualism and drawing from Veblen’s thinking - is that in order to integrate technical advances (the instrumental) into the framework of society, institutions need to emerge, or existing institutions need to be reformed. The dynamic for which Veblen and Ayres seek to account has been taking place over the eons. However, Veblen’s tradition - and the caveat that we need to consider - holds that the emergence of wholly novel institutions, as well as the reforming of already established institutions as responses to technological advances, takes place slowly - at least relative to the technological advances. Such suggests that indeed we should expect time lags to occur. What is being suggested herein is that economic and social evolution should indeed appear as fraught. As technologies and skill sets continue their advances, lags in institutional adjustments reflect the recalcitrant character of culture, rendering an imperfect fit between the instrumental and ceremonial - which also renders our world full of shortcomings. In drawing from Ayres’ thinking, we have now stated the first approach regarding how Professor Veblen characterized social and economic evolution.2
A second approach which we might also draw from Veblen’s writings appears to be taken from what the ancient Greeks referred to as συνεχής and which could be transposed to appear in our more familiar Latin letters as syneches. As the Greek-rooted word suggests, syneches (or synechism) reflects connections and connectedness between and among variables. Herein, the term “concatenation” proves helpful, suggesting that variables are not to be viewed as independent, but as in connection and reflecting dynamic processes characterized by adjustments and changing (evolution). What I would introduce as Veblen’s second way of understanding social and economic evolution is expressed in his writings as cumulative causation. This term appears at several places in his 1898 QJE article (Hall and Whybrow, 2008). Related to synechism, Veblen appears to accept the use of what one Charles Sanders Peirce (1839-1914), Veblen’s professor at John Hopkins at the start of the 1890s, advanced as “firstness, secondness and thirdness.” The ideas that Peirce draws from the ancient Greek notion of synechism needs to be understood as an alternative methodology challenging Hegel’s use of the dialectic that employed categories of thesis, antithesis, and synthesis.
In Veblen’s approach to social and economic evolution - what appears to be drawn from Peirce’s notion of synechism - is that firstness could be thought to take place randomly, as an unexpected event or occurrence. As an example we could think in terms of an earthquake with attendant tsunamis, a volcanic eruption, the commencing of an enemy’s bombing campaign, a nuclear detonation over a population center, and the like. With a more hypothetical (fictional) example, we could also consider the familiar character known as Godzilla.
As an example of firstness, Godzilla is known to be on the loose and is stamping her way down the city street. Secondness is then viewed as brute reaction to firstness. [The masses of people on the street become hysterical and let out loud screams.] Thirdness is considered not to be out of relation to firstness and secondness. [The members of the crowd could choose (or not choose) to run en masse straight over a cliff and to their deaths in the sea in their desperate efforts to escape the dangers posed by Godzilla gone wild.]
What could be noted herein is that this second line of evolutionary thinking drawing from Veblen’s writings - which I trace to the influential thinking of Charles Peirce and his understanding of synechism and which Veblen integrates into his social sciences lexicon as cumulative causation - effectively moves processes away from teleological characterizations, and thusly away from the thought traditions attributable not only to G. F. Hegel, but also to one Karl Marx (1818-1883); with Veblen’s approach opening up possibilities that could come along with randomness associated with firstness and then followed by subsequent processes.
To summarize: firstness is not preordained, as chance comes into play. Then, thirdness is not at all preordained, but clearly allows for human agency. That processes are considered as open takes us to the core of Veblen’s non-teleological approach to evolutionary thinking. In this sense, Veblen advances a view which challenges and also helps to undermine both Hegel’s and Marx’s notions that the resolution of historical contradictions would naively lead to a betterment measurable as human progress.
This philosophical tradition drawing from his Professor Peirce, which he borrowed from the ancient Greeks, appears to have influenced Veblen and has been adopted by his principled followers. This approach leaves many things open, all the while endorsing that we (as members of societies) have every reason to remain hopeful. In short, Veblen’s methodological approach creates room for human agency and its plausible applications to generate favourable outcomes that could indeed be fully in line with society’s most noble aims. Such could include solving international and internal frictions for ending a war (say, in the Middle East) and laying the foundation for decades of future peace and prosperity for millions of people. Or through a political process, there could emerge a consensus with an agreement for altering income distribution in the interests of a fairer, more just, and more stable society: what the Veblenian John Kenneth Galbraith (1996) viewed as seizing an opportunity for creating a “good” society. In short, the Veblenian evolutionary-institutional view suggests that the course of history rests - not on dialectial processes allegedly resolving historical contradictions systematically and in predictable sequences over time - but in the hands of society’s members; should they like to rise to the occasion and set out by introducing policies that could take us on a more favourable course.
The third approach to social and economic evolution which Camic’s book failed to consider, but which could also be drawn from Veblen’s writings; requires our delving even deeper into the thinking of Immanuel Kant, whom I regard as Veblen’s most important philosophical (and hence, methodological) influencer - bar none. Offering a framework based upon the use of dualism, Kant viewed objects and things as having two dimensions. One dimension of the dualism relates to the actuality of the object or thing, what Kant considers as the pure and “intellectual.” The other dimension of the dualism holds that we humans tend to form (and harbour) understandings of objects and things based upon our perceptions. Kant refers to this as the sensitive aspect of an object or thing.3
This describes the dualism which Kant thinks makes reality so confounding and confounded, plaguing our world with distortions and confusion. Early on in his intellectual journey, Kant introduced his ideas on subreption towards the end of his Inaugural Dissertation, originally authored in Latin and appearing in 1770 as De Mundi Sensibilis atque Intelligibilis Forma et Principis. Kant’s dissertation was translated to German and, with time, to English - with the title translated as: On the Forms and Principles of the Sensible and Intelligible World (Eckoff, 1894; Handyside, 1929).
In his dissertation Kant devoted special consideration to what he termed as vitium subreptionis metaphysicum. In the English language we could phrase this as the “fallacy of subreption.” In a nutshell, with this term and its full meaning, Kant singles out what I view as an ontological problematic engendered through a proclivity for our conflating the sensitive (rooted in our perceptions) with the intellectual. What Kant appears to be suggesting is that integral to the fallacy of subreption and the problematic of mixing human perception (the sensitive) with the intellectual, such gives rise to falsehoods which could then get introduced into processes of reasoning and decision-making. The introduction of a falsehood into reasoning is suggested to contribute not only to confusion and distortions, giving rise to unexpected and often unwanted outcomes. Changes engendered by what Kant identified as subreption are also noted to appear as a subtile and seldom acknowledged form of institutional evolution - which Veblen considered as he endeavored to bring Kant’s thoughts on subreption directly into social science thinking.
Relying upon his academic background in Philosophy, Veblen made his first effort to apply the key concepts associable with Kant’s understanding of subreption in a lengthy chapter that he hoped would be included in what got published as The Theory of Business Enterprise, a book appearing in 1904 and which became (and remains) recognized by many as Veblen’s magnum opus. However, the story has it that the book’s publisher opted to exclude this lengthy chapter. Indeed, if such be the case, then the publisher’s decision would have slowed down the appearance of Veblen’s writings that sought to relate subreption to institutional evolution. However, some fourteen years later - in year 1918 - the contents of this chapter were published as a full-blown inquiry under the title: The Higher Learning in America: A Memorandum on the Conduct of Universities by Business Men. With this book Veblen sought to apply a methodology drawn from Kant’s pioneering work on subreption for explaining the evolutionary processes which led to changes in curricula; first in European universities and later in American colleges and universities (see Hall, Dunlap, Mitchell-Nelson, 2016).
Critic that he is and as a bold and masterful interpreter of Veblen’s heterodox tradition, William Dugger (1980, p. 901) characterized subreption as “one of the least studied social phenomena of the twentieth century.” He added that Veblen’s The Higher Learning in America (1918) needs to be recognized as the most important study of subreption ever written. After considering the strength of Dugger’s many articles and books, I sincerely doubt that his boldly stated opinion could ever be challenged. While Dugger is known for penning words lauding Veblen’s use of subreption, he also took a step with advancing his own research agenda. Relying upon Veblen’s understanding of subreption Dugger sought to explicate how the United States so ever quietly - and even surreptitiously - evolved over the twentieth century. Dugger’s research suggests that it could be drawn from the data that the U.S. economy and body politic evolved from exhibiting laudably pluralistic and democratic tendencies - aptly described in the mid-1830s by one Alexis de Toqueville (McKinster, 2019) - to later serving as a severe and tragic example describable as Corporate Hegemony. This term refers to the title of Dugger’s book published in 1989, and which followed two supporting articles, with one published in 1980 and the second appearing in 1988.
In addition to his efforts that offer insights into subtle processes associable with subreption engendering social and economic evolution, we need to offer special consideration to what Veblen advanced in his very first book that appeared in 1899 with the title The Theory of the Leisure Class. In addition, this book offers a telling subtitle worded as An Economic Study of Institutions. While many of Veblen’s books and articles have tended to remain underappreciated, this particular book was widely read and lauded by a large audience seeking a critical view based upon insights into the variables at work and the tendencies and proclivities displayed in patterns of consumption. In a recent Working Paper (2023) titled “Deconstructing the Kardashian-Based Economy,” author Alec van Rossum demonstrates the ongoing relevance of Veblen’s 1899 inquiry that also offers a theory of consumption, accounting for effects associable with some members of the influential Kardashian family. Appreciated almost as much today as it was when he was back at University of Chicago at the end of the 1890s, with the publication of this book Veblen established his profile as a public intellectual - an iconoclast within the social sciences making advances that would endure. What proves especially pertinent is the very first sentence of this book. To offer a quote, Veblen (1899a [2007], p. 1) emphasized:
The institution of a leisure class is found in its best development at the higher stages of the barbarian culture; as, for instance, in feudal Europe and feudal Japan.
With this opening sentence to his first book, the focus of economic and social analysis was effectively challenged with a heretofore novel view - a heterodox view, an evolutionary view, a distinct and uniquely Veblenian view. This view placed at its centre the importance of an institution like a “leisure class.” Effectively, Veblen shifted the analysis away from notions that consumption was driven as choices of an individual were made in an effort to maximize marginal utility. With his inquiry, Veblen supplanted the neoclassical view stemming from Bentham (1789) and Jevons (1871) through recognizing the larger social dynamics integral to consumption, especially the role played by the instinct of emulation.
As but one of many possible examples suggesting - not only the importance but also the enduring character of Veblen’s thinking regarding institutions - we need but to consider answering the following question. What do Ronald Coase (1910-2013), Douglass North (1920-2015) and Elinor Ostrom (1933-2012) share in common? What we could readily note is that these three scholars were awarded Nobel Prizes in Economics. Moreover, what really helps to unite these three scholars is that with their early contributions, each one recognized and emphasized the importance of institutions. While recognizing the centrality of institutions in their research and analyses, their writings went yet deeper into the literature and actually cited Veblen for his seminal contribution towards advancing the importance of institutions in economic analysis.
THE ACADEMY AND THE ECONOMICS PROFESSION
In my reading, the thrust of Camic’s biography seeks to establish that Veblen should rightly be considered as integral and not marginal to the American Academy, and as an insider and not as an outsider to the Economics profession. Phrased differently and again invoking the wording of William Dugger, we should altogether refrain from employing a narrowmindedness associable with ad hominem thinking. Instead of mischaracterizing Veblen as a backwoods eccentric, we should, instead, offer his contributions their due.
What Camic details is that as an aspring academic Veblen moved about with confidence; initially as a postgraduate student and later as a young lecturer/researcher, going between university towns and even big cities - near the end and with the start of the twentieth century. Once he completed his Ph.D. at Yale, Veblen would join faculties at which he would contribute to instruction, as well as to research that would tend to appear as books published by established presses, and as articles in some of the leading academic journals of his day.
However, if we were to consider that Veblen lived from 1857 to 1929, this comes to seventy-three years. Related to his many years of schooling, Camic’s research suggests that his professional life only began to take off when Professor Laughlin took him under his wing at Cornell. This was in Year 1891, essentially seven years after earning his doctorate in Philosophy at Yale in 1884. As noted above, the very next year - 1892 - Laughlin resigned from and departed Cornell for a faculty post at University of Chicago, taking Veblen with him. While he was indeed engaged at Cornell for a timespan of several months, working towards a second doctoral degree, with this one in Economics, it was at the recently founded - and John D. Rockefeller financed - University of Chicago that Veblen’s academic career appears to have taken off. That is, Veblen became deeply engaged, focused, and also highly productive as a thinker and author. At Chicago, his talents and capacities as a scholar expanded outwards and broadly until he had name recognition as a promising public intellectual. What also needs to be added is that while at Chicago Veblen not only became involved with, but he also played a leading role in the editing of the Journal of Political Economy (JPE), in addition to his teaching and research. In 1906, about fifteen years after his propitious start at Chicago, Veblen sought an even better situation and departed Chicago, after having accepted a faculty post at Stanford University in California. However, what we could draw from Camic’s biographical details is that when Veblen moved to California and commenced with lecturing and researching at Stanford, his professional life started out just fine, but this would not last. About three years after his start, Veblen’s academic contract would be terminated at the end of the 1909-10 academic year.
This suggests that if Veblen could be characterized as an insider to the American Academy - as Camic’s book purports - the span of time on the inside runs for about nineteen years, but with the best years numbering closer to fourteen or fifteen - when he was a faculty member at Chicago and turned his laudable abilities towards interfacing with the especially able members of Chicago’s recently assembled faculty, as well as championing the JPE as a respected source of novel ideas. If we were to remain generous to Camic’s efforts and go with what his book suggests could be calculated as nineteen years (and not fourteen or fifteen) as an insider also at the top of the academy and the Economics profession, this needs to be considered against a backdrop of a life stretching over some seventy-three years. Drawing from Camic’s research, with a high degree of confidence we could then suggest that Veblen should neither be considered as marginal nor as an outsider to the academy and profession for about twenty-seven percent of his lifetime. So, what about the remaining fifty-four years that make up the remaining sixty-three percent of his lifespan?
While the thrust of Camic’s argument could be viewed as seeking to dispel the perspective advanced some nine decades earlier by Joseph Dorfman and later reinforced by Robert Heilbroner, he appears - in my assessment - to fall short in his efforts to convince (at least me) by not emphasizing the length of time; that is, the numbers of years which are noted above, as well as the percentage of his lifespan in which Veblen could be argued as integrated at the top of the academy and the Economics profession. Camic does advance the idea that one reason Dorfman’s account appears so negative is that he focused heavily upon Veblen’s later years when - like a ship’s captain failing at navigating through a thick fog during the darkness of a moonless night - his academic career and first marriage had run up upon the rocks.
After David Starr Jordan, then Stanford University’s president, had terminated Veblen’s academic contract in 1910, Thorstein would manage to find employment. However, his employment took place at levels suggesting that the once lauded Professor Veblen - who had been at the top of his game and at the top of the academy and duly recognized within the Economics profession - got transformed into an outsider pushed to the periphery. In short, after losing his position at Stanford Veblen got faced with managing his career at the margins of the academy, and in practical terms had to start into a new phase of life after having fallen from the top. The reality is that Veblen (Camic, 2020, p. 345) ended up on a faculty at what could be termed as an “academic backwater.” No inuendo intended on my part, but this is a term applied to University of Missouri. Departing from highbrow Stanford and sunny Palo Alto, Veblen landed a position in the heartland and had to relocate to Missouri’s capitol city of Columbia. This step down from the top of the academy appears to have also engendered implications for his standing within the Economics profession.
True, Veblen had a job that offered a salary and he would continue to write and generate articles and books of importance. However, the position was not anywhere near the top. After Missouri Veblen held a few different posts, and one involved his working out of Washington, D.C. for the United States Government’s “Food Administration,” engaging his talents as an economist - as well as his farming background - for dealing with the procurement of food supply intended to support the prosecuting of World War One. After his stint in Washington he relocated to New York City and joined the editorial board of a periodical known as The Dial. In my mind, The Dial should be considered as a journal reflecting the intellectual abilities of highbrow New Englanders; a periodical that became legend through promoting a homegrown philosophy known as “American Transcendentalism.” Back in the day, the likes of Ralph Waldo Emerson and his highly principled protégé, Henry David Thoreau, had disseminated their ideas through penning articles published in The Dial. However, that was back in the first half of the 1840s. By the time that Veblen arrived in New York City after World War I and joined the editorial board of The Dial (about ninety years later), I think that it is correct to note that this periodical had long suffered from diminished influence. True, Veblen found employment, and he also played a role in founding and offering lectures at the New School for Social Research in lower Manhattan. However, we need to consider that the once lauded Professor Veblen ended up at positions well below the top; with job descriptions falling well shy of honouring his abilities as the brilliant lecturer; an academic who had become legendary for keeping his students spellbound by his unparalleled mastery over areas of knowledge. In spite of these and other challenges, still Veblen managed to continue with having published additional books and articles that should be considered as fully representative of his abilities. Then, with his retirement in 1925 Veblen is noted to have departed from New York City and headed back to Palo Alto, California, settling at the edge of Stanford’s campus where he took on the appearance of a gold miner. Noted as often clad in overalls of coarse cloth, Veblen recast himself as a man who could feel himself fully at home within the spartanic conditions associable with his simple cabin in the woods. This describes how Veblen spent his last four years dealing with what could be characterized as a phase of postretirement that lasted until his passing in 1929.
The question begs answering. Is Camic’s thesis really convincing? That is, should we endorse Camic’s efforts and begin to think of Veblen, generally, as propitiously integrated at the top of the American Academy, and also as a major and influential figure within the Economics profession?
For his book, Camic selected the subtitle: the “economist who unmade economics.” Should we consider Camic’s depiction and characterization of Veblen as accurate? Did Veblen really “unmake” economics? Or should we begin to think that - more realistically - the American academy and the Economic’s profession actually victimized and then unmade poor Professor Veblen?
The points that Camic works so hard to establish in this especially well-researched and lengthy book, appear to me as - at best - ambiguous. What Camic altogether fails to consider and which I shall endeavor to emphasize below is what I view as what was behind Veblen’s relatively short time at the top of the academy and profession. My research suggests that Veblen needs to be considered as a victim of various forces and circumstances, and his victimization should be associated with his slim chances for long term integration into the top ranks of the American Academy and the Economics profession. Unlike J. M. Keynes who was born at the top and easily stayed at the top through a social inertia associated with the Britain’s class system, T. B. Veblen had to struggle to get to the top, and his remaining at the top not only proved to be formidable, but also a fruitless effort.
If we were to think critically, challenging Camic’s view and considering why Veblen’s relation to the academy and profession ended up as fraught as I am implying that it did, we would also need to consider the changing circumstances of the United States (that Veblen also dealt with in his writings), and which appear to have been brought on by his country’s participation in an expanding world war that promoted a quick shifting away from an economy rooted in principles of Laissez-faire and a system built upon an almighty private sector governed by competitive market forces, to a reliance upon a comprehensive set of newly emerging institutions associable with the rise of big business and what was beginning to take form and solidify as “big government.”
In their textbook American Economic History, Eighth Edition (2011), authors Jonathan Hughes and Louis Cain offer insights into the administrative structures which were formed to support participation in the war. Part Four of their book appears titled as “The Expansion of Federal Power, 1914-1945.” Within this Part Four, Chapter Twenty-Two offers the title “The Command Economy Emerges: World War I.” This fourth part and this particular chapter emphasizes the importance of the two houses of congress having passed (in 1909 and ratified in 1913) the Sixteenth Amendment to the U.S. Constitution, an amendment which offered the potential for dramatically increasing the inflow of revenues drawn in with this newly sanctioned federal tax on income.
With income taxation created as an instrument that could readily contribute towards dramatic increases in federal revenues, the coauthors suggest that in response to the beating of war drums, nothing less than a “command economy” emerged and its emergence was furthered - in the view of Hughes and Cain (2011, p. 448) - through the formation of nearly five thousand new federal agencies. As but a few of the many examples which could be cited: in 1916 the Naval Consulting Board was formed, and the National Defense Act was implemented in that same year. A principal institution that got dubbed as the “War Industries Board (WIB)” was formed in 1917. Headed by the wealthy financier Bernard Baruch, Hughes and Cain (2011, p. 449) document that the members of this Board engaged in activities wholly anathema to principles that were typically associated with a Laissez-faire market economy. In effect, this Board started setting production priorities across manufacturing industries, engaging in price fixing, as well as in coordinating federal purchases. These actions should be considered as measures taken in order to achieve specified aims and distinct targets.
Drawing from the account offered by Hughes and Cain, the emergence of these novel institutions appear to have effectively shifted the U.S. economy away from market-oriented principles based upon notions associable with Laissez-faire and towards a fusion of private owner interests operating in lockstep with expanding governmental controls. These controls were supported and furthered by sizeable spending allocations. We could also note that in 1919 Veblen had published a book titled The Vested Interests and the Common Man. My interpretation of the thrust of this particular book is that the emergence of these new institutions appears to have goaded Veblen to address their rise and growing significance. As a talented thinker with a gift as well as a deep-seated penchant for perceiving the emergence of new institutions rising up on the American landscape, my interpretation is that Veblen had engaged his gray matter. This engagement, combined with his methodological advantages associable with his brand of political economic inquiry based upon inductive reasoning, he wrote up an account that would focus upon the rise and significance of what he coined and defined as the vested interests.
My understanding of his book’s emphasis is that Veblen had recognized that the era of Laissez-faire had ended. Relatedly, those vying to increase their personal wealth took to relying upon their connections within this newly emerging system based upon fused business-government relations, devising ways to gain income and amass personal wealth without having to engage in earnest activities - like producing quality goods and services for sale in competitive markets. Related to the emergence of this evolutionary tendency, Veblen refers to those identifiable with vested interests as belonging to the “kept classes,” with some ruthlessly pursuing what Veblen artfully coined as that “unearned increment” gained - not thorough earnest economic activity - but through social networking. Such marks the historical juncture at which the Federal Government took on a newly founded importance. In essence, a novel institution had emerged and could be characterized as a governmental-private sector complex. While members of the kept classes and those belonging to the vested interests were characterized by Veblen as determined to get something (or even much) for nothing, in contrast Veblen considered the “common man” and characterized him/her as a member of a social class faced with having to labour in order to earn money for their necessities; with small chances of ever getting ahead (Veblen, 1919, p. 161-163). For Veblen, the common man belonged to a group of Americans who essentially got “nothing,” or no more than their subsistence, for their hard labouring. For a more detailed description, please see: Sweger-Hollingsworth (2019).
I think it correct to note that the institutions introduced to direct the mobilization and allocation of resources for prosecuting World War I engendered the formation (emergence) of a wealthy and powerful class that Veblen identified as the vested interests and which became politically connected at the hip to that community of fellows in charge of taxation and federal budgetary allocations. What we could think of as governmental ministries came into cahoots with those owners advantageously producing for the war effort. Lamentably for Veblen and his followers, from then on members of this newly emerged class would find ideas that pointed out and highlighted how they had gained and maintained their wealth and dominance as threating, and therefore deserving of suppression. Such helps to explain to me why Veblen could never recover and get back to the top after the emergence, formation, and institutionalization of this new power structure run by the rich and powerful vested interests that initially arose for the prosecuting of World War I. Admittedly, after 1919 federal expenditures were reduced. However, these wartime gains made by the vested interests would reemerge in the 1930s with Franklin Roosevelt’s “New Deal,” and would further solidify with the prosecution of a second world war that was promptly followed by an extended forty years of “Cold” War. In my reading, these are the key variables and the forces of history which served to promote and consolidate a distinct American power landscape going forward to this very day!
My research suggests that the America of the mid-nineteenth century in which Veblen was born and nurtured, offered vast opportunities for him and members of his generation to flourish as creative and even critical thinkers. However, what we could infer from historical inquiry is that towards the end of the second decade of the twentieth century, creative thinking that threatened these newly emerged and institutionalized vested interests was to be dealt with ruthlessly and even mercilessly.
PERSPECTIVE
At least among some - especially those displaying penchants for critical thinking and bringing to the fore inconvenient truths - Thorstein Veblen is lauded for having made novel contributions to social science thought. Such would include advancing an American persuasion of Political Economy and its sub-areas of heterodox inquiry labeled as Evolutionary-Institutional Economics. As the author of many books and journal articles, and as a classroom lecturer extolled for an unrivaled mastery over his subject matter, Veblen did not appear to have many competitors at his level within the American academic scene of his day. He stood out as would the blinding glare shot from a morning sun rising up over a desert’s eastern horizon.
As emphasized in the sections above, Veblen’s contributions to economic thinking have proved novel and also enduring, even with his “time at the top” limited to less than twenty years at the most. What is more, we could identify those who have sought to carry on his thought traditions still today; as these thinkers continue to recognize the importance of the rich legacy of culture, while considering the centrality of institutions and the multiplicity of variables which might come together - into a dynamic interplay - engendering processes of change characterized as institutional evolution.
Clearly, there was a place for Veblen and his ideas. However and lamentably, as the twentieth century advanced - as the era of Laissez-faire degenerated and ended, and as the great powers entered into a protracted world war - new institutions were formed to artificially prop up economic activity and to aid and abet a young and ambitious America in her aspirations to come out on top of her first global war; and therewith to join the ranks of the great powers. Relatedly, the space for Veblen’s intellectual maneuvering appears to have become constrained and reduced, especially by the second and third decades of the twentieth century. But such marks just the first part of a much more involved set of changes - which Camic’s book appears to have missed - but which served to kick Veblen down from off the top, from the pinnacle which he had enjoyed for at least some years.
As I understand it, the Economics profession in the United States commenced with solidifying when the American Economic Association (AEA) was founded back in 1885. One Richard Ely (1854-1943) had returned after completing his doctoral studies in Germany; on a stay stretching several years and which included his studying under lauded exponents of both the “old” as well as the “new” German Historical School. With his joining the faculty at Johns Hopkins University, Ely took on a leadership role, and - all indicators suggest - that he championed the AEA’s founding. Dr. Ely even served as this professional association’s first “Secretary.” Inspired by Gustav Schmoller’s Verein für Sozialpolitik (Union for Social Policy), Ely brought with him from Germany what I view as noble principles which - from the get-go - oriented the AEA towards serving, as Mark Blaug (1996, p. 73) emphasized, as an “instrument of reform promoting a social role of economists.” The articulation of such virtuous values promoted by Ely and his close associates at Hopkins, especially, appear to have been drawn directly from the German Historical School, with the AEA being set up to emulate Professor Schmoller’s Verein. In sum and in short, the AEA got set up with the explicit intention of advancing and applying the Discipline of Economics towards improving the lives of American citizens. As noble as were the intentions at its founding; however, with the march of time it appears that these laudable values - that had been clearly stated and which served the AEA when it was but a nascent professional organization - got compromised. In my judgment, this reorienting of the AEA should be seen as affecting Veblen’s professional prospects.
After Ely’s time in the leadership had run its course, the AEA opened-up to include business economists. What we could note is that the Economics profession - as represented in and reflected by the AEA - also came to reflect larger societal tendencies that appeared to be influenced by and were fully congruent with the rise of big business and the start of a post-Laissez-faire era characterized by big business run by absentee owners which - with time - moved in lock-step with governmental interests.
Those like Veblen, with perspectives critical of the rise and dominance of big business, and the unwelcomed emergence in importance of the kept class of businessmen describable as the vested interests pursuing their “unearned increments,” would end up pushed to the edges of the academy and the profession. A priori assumptions congruent with and even advancing selected aims of the vested interests would emphasize reduction and formalism as two key pillars of the methodology deemed acceptable for advancing economic analysis. In my view, this tendency moved the science away from penetrating, honest, and critical inquiry; thusly offering little room - and even disincentives - for further advancing an Evolutionary Economics built upon and extending Veblen’s original efforts.
CONCLUSION
After reading and carefully considering this biography focused upon Thorstein Veblen, I laud Camic for applying his scholarly talents towards adding to the Veblen story. Clearly his tome has served to shift the narrative away from the long held, dominant view that could be drawn from Joseph Dorfman, and what I have attributed to Robert Heilbroner’s book chapter titled “The Savage Society of Thorstein Veblen.” Scholar that he is, Camic has woven into his account numerous sources, with many never before considered within this area of social science inquiry which we could dub, label, and laud as Veblen Studies. As a heralded academic and distinguished professor in his own right, and as journal coeditor of Social Knowledge in the Making, such accomplishments place him in an advantageous position for artfully dealing with a variety of subjects, especially subject matter pertinent to the Sociology of Knowledge and the Sociology of Education.
However, with these strengths acknowledged I have to note that I have run into difficulties with accepting the full strength of this book’s thesis. I interpret his book’s thesis in this way. Veblen should not be mischaracterized as marginal to the academy and as an outsider to the Economics profession. Instead and more correctly, Veblen should be recognized as a major figure within the American academy, and as one who proved himself as integral to the Economics profession. In essential ways, his book’s thesis is reflected in his subtitle: that, namely, Veblen should be recognized as the iconoclast who unmade economics. However, while advancing thinking along such lines, still one area in which Camic’s book appears to fall short is through his not emphasizing the broad range of novel contributions that Veblen made to his distinct brand of evolutionary-institutional political economy, contributions which have also proved significant, substantial and have withstood the tests associable with more than one hundred years of passing time.
Offering my respect to his scholarly efforts, still I think that Camic could have more earnestly emphasized that: with the difficulties Thorstein Veblen faced, he nevertheless managed to generate - not only a large number of novel contributions to the political economy literature - but also that a good portion of the theoretical advances associable with his writings continue to be considered, appreciated, and applied more than one hundred years after their initial appearances, even though his ideas characteristically advanced inconvenient truths that members of the vested interests would prefer had never been entered into public discourse.
Without difficulty we could readily locate between fourteen to nineteen “really good” years during which he was clearly at the top of his game. However, if we were to add in the long spells of what should be considered as unfavourable years, still it could be noted that - in spite of the challenges associable with the march of time and the evolution of institutions related to the ending of Laissez-faire, the rise of big business, and the mobilizing of resources for prosecuting a world war - Thorstein Veblen managed to generate novel and even extraordinary contributions to the literature. Such would include his introducing what were unknown methodological approaches rooted in his profound knowledge of Philosophy that would prove foundational for his branch of Evolutionary-Institutional Economics. In my mind, these accomplishments effectively render Veblen - as the subtitle to this review suggests and seeks to establish in the literature - as the independent thinker whose contributions advanced a distinct tradition of heterodox economics. With the establishment of his school of thought, also describable as “Original Institutional Economics” (OIE), it is true that Veblen’s heterodox approach is not so widely known these days. Nevertheless, Veblen’s distinct “Institutionalist” tradition remains deeply appreciated - especially by those dissenters mustering sufficient levels of courage to challenge the vested interests.
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1
For a concise yet artfully composed exposition of the Continental tradition juxtaposed to the Anglo-Saxon tradition for which Manchester University remains legend, please see Jonas Rama (2022) “On Celso Furtado and the French Influences Found in His Development Economics,” especially, Part 2, “The French Tradition and Its Approach to Economic Science,” published in the Review of Evolutionary Political Economy.
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2
Though written several decades back, this view drawn from Veblen’s writings by Clarence Ayres tends to serve as the unquestioned starting point for American Institutionalists, describing how social and economic evolution is thought to take place. Originally published in 1944, The Theory of Economic Development was republished in 1962. Core ideas found in Ayres’ book appeared in summarized form in 1953 as an American Economic Review article titled: “The Role of Technology in Economic Theory.” Being especially steeped and well-schooled in this tradition, author William Waller (1982) considered the core ideas of the “instrumental - ceremonial” dichotomy; first by Ayres and then he went further to consider three other key thinkers advancing Veblen’s evolutionary-institutional thought tradition.
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3
Finer points regarding subreption and its origins and appearances in law and philosophy, as well as how Veblen brought Kant’s notion of subreption into social research; can be found in Hall, Dunlap and Mitchell-Nelson, 2016 p. 476-484, that is, in Section 1 titled: “Etymology and Uses [of Subreption] in Law and Kantian Philosophy,” and Section 2, “From Kant’s Philosophy to Veblen’s Social Science Inquiry.”
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Based upon the book with the title Veblen: The Making of an Economist Who Unmade Economics authored by Charles Camic. Cambridge, MA: Harvard University Press, 2020.
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The author would like to express his thanks to a referee associated with the BJPE for offering comments on an earlier draft that proved to be especially insightful and helpful. Interpretations of texts and ideas advanced in this Review Article reflect the efforts of the author, only, and should not be associated with any institution or organization.
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JEL Classification:
B15; B31; B41.
