REVIEW --- Books: Scourge of the Elites --- Thorstein Veblen's critique
of wealth struck a chord during the Progressive Era, and to some still does.
Carter, Zachary D.Wall Street Journal, Eastern edition; New York, N.Y.
[New York, N.Y]28 Nov 2020: C.7.
Veblen
By Charles Camic
Harvard, 492 pages, $39.95
Thorstein Veblen may be the most important American thinker most
Americans have never heard of. A prolific economist at the turn of the
20th century, Veblen's groundbreaking work on the mysteries of
inequality earned him the admiration of his academic peers, while his
searing observations about the "conspicuous consumption" and "predatory"
habits of the wealthy won him an audience far beyond the ivory tower.
Veblen's epic life ended in despair -- a final note urged that no
biographical account or intellectual tribute ever be paid to him -- and
yet long after his passing, writers including John Dos Passos, Carson
McCullers and John Kenneth Galbraith persistently refused to honor his
dying wish.
About 40 years ago, however, Veblen fell precipitously out of fashion.
To the small clique of enthusiasts who remain, he is understood as a
social critic or philosopher -- fine things, to be sure, but a dead-end
legacy for an economist in an age in which economics still calls the
tune for public policy.
And so it is that an insightful new Veblen biography comes to us from
Charles Camic, a sociologist at Northwestern University who proves
himself a capable guide down the tumultuous currents of
late-19th-century ideas. Mr. Camic's Veblen is an intellectual
flamethrower, torching every school of thought in sight, from the
classicism of Adam Smith to the communism of Karl Marx, attempting to
clear the ground for a new kind of science.
Economists, Veblen argued, were doing economics all wrong. They should
have been studying the development and decline of economic institutions.
Instead, they were devoting themselves to empty abstractions about
consumption, production and productivity that could not be verified by
data or experience.
Veblen cut a new course for the discipline by composing ambitious
treatises on the origin of inequality. In "The Theory of the Leisure
Class" (1899) and "The Theory of Business Enterprise" (1904), he argued
that the rich and the modern corporation -- examples of what he vaguely
defined as "institutions" -- were parasitic elements that leeched wealth
from more productive segments of society. The ostentatious rich, Veblen
maintained, were not evidence of productive abundance but proof that
modern industry was making society poorer.
Veblen made his case with the acid wit of an outsider granted
ill-considered admittance to an inner sanctum. Raised by Norwegian
immigrants in the hinterlands of the Midwest, Veblen wedged himself into
university life in the mid-1870s, just as the academy was beginning to
assume an aura of high prestige. Studying first at Carleton College, he
moved on to Johns Hopkins, Yale, Cornell and the University of Chicago,
impressing professors who had earned their stripes studying in the grand
universities of Europe.
The children of privilege Veblen encountered in higher learning were
very different from the immigrant farmers of his youth. He grew up in
townships where English was a second language and, in some cases, rarely
spoken at all. Though his own family and many of his neighbors did quite
well, even the most prosperous farmers of Minnesota were considered
backwater curiosities by the industrial elite of Baltimore and New Haven.
The true significance of "pecuniary success," Veblen came to believe,
was not its purchasing power but the social rank it conferred. For
wealth to serve this ultimate hierarchical purpose, it had to be
diligently displayed. And the most prestigious of all social signals was
idleness. The surest mark of "good breeding," he wrote in "The Theory of
the Leisure Class," was the performance of "a substantial and patent
waste of time." Working people, after all, had to work.
In Veblen's telling, whole industries developed enabling the rich to
flaunt their social superiority by purchasing fripperies and studiously
doing nothing much at all -- a compulsion that devoured the structure of
everyday life.
"Under the requirement of conspicuous consumption of goods, the
apparatus of living has grown so elaborate and cumbrous, in the way of
dwellings, furniture, bric-a-brac, wardrobe and meals, that the
consumers of these things cannot make way with them in the required
manner without help," Veblen wrote. The rich hired servants to help them
waste their time.
Lower classes, emulating their betters, devoted themselves to similar
habits with what funds they could muster. The productive energy of
society that could have gone into new medicines or improved farming
techniques was instead directed toward the manufacture of useless status.
Veblen distinguished between "production" -- the actual development and
manufacture of new goods -- and "business," what we would today call
financial engineering. True production, he argued, raised society's
standard of living, while the aim of business was "getting something for
nothing." Businessmen made their fortunes through accounting schemes and
political manipulation, seizing the wealth created by inventors,
engineers and laborers. Because the corporation was a creature of
business rather than production, the industrial system was a monument to
organized waste.
In the urbane field of economics of the day, this idea that corporate
management could be "unproductive" was shocking. Surely all work that
went into production must be of value -- why else would the associated
wages and costs be tolerated? But Veblen was drawing on his rural
experiences. The 1870s and '80s were years of agrarian depression, when
foreclosure and even starvation had been commonplace among farmers.
Veblen's family had weathered the hard times relatively well, but across
rural America, the idea of the virtuous farmer exploited by predatory
lenders and city merchants was taken for granted.
Veblen compiled these theories before the era of reliable economic
statistics. His claims to scientific rigor rested on his historical
account of the development of his "institutions" across a sweeping
ethnographic survey from "savagery" to "barbarism" and "civilization."
Today this is easily recognized as junk science. Veblen's best ideas
ultimately rest on the same blunt rhetorical force for which he
criticized his peers. You either find his portrait of society compelling
or you do not.
Still, surrounded as we are by inequality and the flagrant excesses of
the super-rich, the power of Veblen's vision in our own era is obvious.
Though his attacks on big business and the "conservative" elite resonate
with contemporary liberals, there is much in Veblen to give those same
readers pause. Veblen argued that intellectual life was easily perverted
into a style of performative leisure -- a phenomenon familiar to
observers of the competitive wonkery often displayed on Twitter.
Mr. Camic is at his best when discussing the early American economics
discipline -- a world of philosophical debate and inquiry much broader
than the field students now encounter. Contemporary complaints about
inequality are loudest on the political left, but as Mr. Camic details,
uneasiness with inequality once pervaded the refined redoubts of
academic economics. Capitalism was supposed to generate broadly shared
prosperity. The reality of inequality was recognized as a deep problem.
Conservatives welcomed debate on causes and remedies, and their
critiques often forced progressives to change their thinking. In this
milieu, Veblen's ideas made him an iconoclast, but not an outcast.
Despite its scholarly rigor, Mr. Camic's book fails as a biography.
Veblen's extraordinary life was the stuff of MGM melodrama, but Mr.
Camic often shoves its romantic entanglements and family tragedies into
footnotes or parentheticals, instead devoting page after page to
analyses of textbooks that Veblen may or may not have encountered.
Specialists must be granted some eccentricities, but given the material
available, Mr. Camic's narrative choices approach the threshold of
criminality.
Veblen's professional prowess was undone by personal tragedy. As a
teenager at Carleton, he was enchanted by the "sparkling and, at times,
slightly caustic wit" of Ellen Rolfe, the niece of the college's
president, but their marriage would be star-crossed. Due to a rare
anatomical disorder, Ellen was unable to engage in intercourse. When
Thorstein eventually fell under the sway of a former student at the
University of Chicago, a furious Ellen refused to grant him a divorce.
Instead, she embarked on a long project to destroy her husband's career.
Barred from divorce and still shy of his 40th birthday, Veblen could not
be romantically involved without inviting scandal in the high-strung
culture of the day. Whenever Ellen heard rumors of his affections for
others, she contacted university presidents and boards of trustees to
rail against his moral failings. In 1906, her efforts drove him out of
Chicago, where he had lived and worked for more than a decade.
For all her meticulous fury, Ellen had not uncovered the one affair her
husband had actually consummated -- an entanglement with his former
student Ann Bevans, who was 20 years younger than Thorstein and married
with two children. The affair ended when Veblen took a job at Stanford
University hoping to salvage the Chicago wreck, but Ann eventually
traveled west to reunite with him. This time, the lovers were
discovered, and an enraged Ellen persuaded Stanford to fire her husband
over the matter -- only a few weeks after he turned down a lucrative job
offer from the University of Missouri.
Veblen continued to publish, but his career never recovered. He at last
won a divorce in 1913, when Ellen had been away from home long enough
for him to claim desertion. He married Ann Bevans and adopted her
children, but calamity soon struck again. Ann went mad in 1918 and died
two years later at the age of 43.
New books appeared, some of them significant, particularly "The
Engineers and the Price System" (1921) and "Absentee Ownership" (1923).
All were out of step with the discipline, however, and none received the
fanfare that had greeted Veblen's early writing. He died, age 72, in
1929, embittered to both academia and his own work.
But his ideas took on a second life during the Great Depression as
inequality once again came to dominate public attention. The theoretical
advent of rational markets in the 1970s swept him back out to sea, but
12 years on from the financial crisis of 2008, we are overdue for an
ambitious synthesis of the man and his ideas. The wait continues.
---
Mr. Carter is a senior reporter at HuffPost, where he covers Congress,
the White House and economic policy. He is the author of "The Price of
Peace: Money, Democracy, and the Life of John Maynard Keynes."
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