Academic journal article Journal of Economic Issues

Veblen's Radical Theory of Social Evolution

Academic journal article Journal of Economic Issues

Veblen's Radical Theory of Social Evolution

Article excerpt

The Red Threads in Veblen: Anarchism and Socialism

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

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

A Review of Selected Veblenians

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

   [T]heir theory is a totally wrong-headed interpretation of Veblen
   that trivializes his work and simultaneously makes it virtually
   impossible for them to do work of genuine merit. By rejecting
   Veblen's lead, they appear to have trivialized themselves. (95)

A more moderate statement from Ron Phillips emphasizes the need for the restoration of Veblen. Phillips explained how Veblen once wrote a memo that proposed using the Industrial Workers of the World (IWW) in the 1918 grain harvest. The grain was badly needed in the war effort, and the U.S. government had been repressing the anarchistic/socialistic IWW. Veblen urged a reversal of the policy. Veblen's support for the anarchistic-socialistic IWW was embarrassing to many institutionalist reformers, who claimed Veblen as an intellectual forefather. They downplayed its importance as an argument supporting anarchism/socialism and interpreted it as merely an eccentric way to propose a more effective war effort. Phillips stated,

      Institutionalists have interpreted the memorandum as merely
   Veblen's contribution to "winning the war." However, I believe that
   this interpretation is in direct conflict with Veblen's published
   writings where he stated that "winning the war" meant making the
   world safe for the Vested Interests. I argue in this note that,
   contrary to what Institutionalists may contend, Veblen's support
   of the IWW is completely consistent with his analysis of business
   enterprise and the demise of the Vested Interests. (1987, 98)

A few other institutionalists have shared Phillips' views of Veblen as a radical. Some have even suggested that Veblen was a Marxist. Forest G. Hill, the very first editor of this journal, once remarked,

      The way Veblen evaluated Marxian doctrines would suggest that he
   "revised" Marxism for his own purpose. In his own words he made it
   "Darwinian," substituting cumulative causation for Hegelian
   dialectics in explaining economic change. He freed it from its
   classical, hedonistic bias and abandoned the labor theory of value
   and related doctrines. In a real sense, Marxism became Veblenism;
   Marx's problems were given Veblen's solutions through use of
   Veblen's approach, postulates, and conclusions. … 
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