Economic views of T. Veblen. The institutional theory of T. Veblen T. Veblen as a representative of institutionalism

Thorstein Veblen and the socio-psychological direction of institutionalism.

1. T. Veblen's doctrine of the “leisure class”. Industrial system concept. The doctrine of “absenteeism property.”
2. Evaluation and role of T. Veblen's teachings.

1. Features of T. Veblen's methodology. Scientific works of Veblen. Criticism of non-classical ideas about the harmony of economic interests and market equilibrium.

At the beginning of the twentieth century, institutionalism arose in the United States, the most prominent representatives of which were Thorstein Veblen, who led the socio-psychological (technocratic) version of institutional research, John Commons - the socio-legal (legal) one, Wesley Mitchell - the opportunistic-statistical (empirical-prognostic) one.

This direction received its name after the American economist W. Hamilton in 1916. first used the term "institutionalism". Its spread was associated with the evolution of economic theory in the USA, where in the 20s of this century it took a leading position.

According to W. Hamilton's definition, an institution is a verbal symbol to better describe a group of social customs, a “way of thinking” that has become a habit for a group of people or a custom for a people. W. Hamilton argued that “institutions” establish the boundaries and forms of human activity. The world of customs and habits to which we adapt our lives is a plexus and continuous fabric of "institutions."

Institutionalism is, in a certain sense, an alternative to the neoclassical direction of economic theory. If neoclassicists proceed from the Smithian thesis about the perfection of the economic market mechanism and the self-regulation of the economy and adhere to “pure economic science,” then institutionalists, along with material factors, also consider spiritual, moral, legal and other factors considered in a historical context to be the driving force of the economy. In other words, institutionalism puts forward both economic and non-economic problems of socio-economic development as the subject of its analysis. At the same time, the objects of research, institutions, are not divided into primary or secondary and are not opposed to each other.

The representative of early institutionalism is T. Veblen. He is responsible for a number of studies: “The Theory of the Leisure Class” (1899), “The Theory of Business Entrepreneurship” (1904), “The Instinct of Mastery and the Level of Development of Production Technology” (1914), “Large Entrepreneurs and the Common Man” (1919), “Engineers and the system of values" (1921), "Absent ownership and entrepreneurship in modern times" (1923).

As the founder of institutionalism, Veblen derives a number of economic phenomena from social psychology; his views are based on a unique understanding of man as a biosocial being, guided by innate instincts. Among the latter, T. Veblen includes the instinct of self-preservation and the preservation of the race (“parental feeling”), the instinct of mastery (“the inclination or predisposition to effective action”), as well as the tendency to competition, imitation, and idle curiosity. Thus, private property appears in his works as a consequence of the original human inclination to competition: it is portrayed as the most noticeable proof of success in competition and the “traditional basis of respect.” A more complex psychological background is characteristic of the category “envious comparison,” which plays an extremely important role in Veblen’s system. With the help of this category, Veblen interprets such economic phenomena as people's commitment to prestigious consumption, as well as to the accumulation of capital: the owner of a smaller fortune is envious of a larger capitalist and strives to catch up with him; When the desired level is achieved, the desire to surpass others and thereby surpass competitors is manifested.

One of Veblen's most important provisions was the requirement of a historical approach in economics. In his opinion, it was necessary to study various economic and social institutions in their development, from the moment of their emergence to the present day. He worked a lot on the history of human society, analyzed the emergence of private property, classes, and the state, and sought to discover in the past the origins of the contradictions that, in his opinion, were demonstrated by contemporary capitalism.

Veblen saw the driving force of development in the contradictions between institutions and the external environment. In his words: “Institutions are the result of processes that took place in the past, they are adapted to the circumstances of the past and, therefore, not in complete “accord with the requirements of the present time.” According to Veblen, the discrepancy between already established institutions and changed conditions, the external environment, makes it necessary to change existing institutions and replace outdated institutions with new ones. At the same time, changes in institutions occur in accordance with the law of natural selection. Veblen wrote: “The life of man in society, just like the life of other species, is a struggle for existence, and, therefore, it is a process of selection and adaptation; the evolution of the social order was a process of natural selection of social institutions. The continuing development of the institutions of human society and human nature, progress, can be broadly reduced to the natural selection of the most adapted way of thinking and the process of forced adaptation that changes with the development of society and social institutions in which human life takes place.” Thus, in Veblen’s interpretation, socio-economic development (“the evolution of the social structure”) appears as the implementation of the process of “natural selection” of various institutions.

Veblen mechanically transferred the Darwinian doctrine of natural selection to the field of social phenomena. He did not take into account that the “evolution of social structure” is a social process, the laws of which cannot be reduced to biological laws.

Veblen's books contain hidden and sometimes overt polemics with neoclassical economists. With all his creativity, he made it clear that economic science should not only be the science of prices and markets. Veblen wrote that the subject of political economy is human activity in all its manifestations; social sciences are called upon to deal with the relationships of people to each other.

Neoclassicists often imagined a person in the form of an ideal calculating device, instantly assessing the utility of a particular good in order to maximize the overall effect of using the available supply of resources. However, according to Veblen, the economic behavior of people is more complex, often irrational, because man is not “a machine for calculating sensations of pleasure and pain.” People's behavior is influenced, for example, by motives of conspicuous prestigious consumption, envious comparison, the instinct of imitation, the law of social status, and other innate and acquired inclinations. Human behavior cannot be reduced to economic models based on the principles of utilitarianism and hedonism. T. Veblen used these arguments, in particular, in polemics against one of the pillars of neoclassicism - J. Clark.

According to Veblen, institutions, or “the currently accepted system of social life,” determine the immediate goals that govern the behavior of people. But favorable conditions for economic development exist only when the system of institutions is in harmony with the ultimate goals arising from instincts.

As a result of the reforms, Veblen foresaw the establishment of a “new order”, in which the leadership of the country’s industrial production would be transferred to a special “council of technicians”, and “the industrial system would cease to serve the interests of monopolists, since the motive of technocracy and industrialists would not be monetary gain”, but serving the interests of the entire society .

Another important factor underlying changes in institutions, T. Veblen considered technology, technology. According to his teaching, technology does not always perform this dominant role, but only at the stage of machine production. Thus, in Veblen’s methodology, there are elements of historicism, although largely of a technocratic nature: institutions change because they are influenced by human psychology, on the one hand, and a continuous flow of technical factors, on the other. This dual psychological-technocratic concept laid the foundations for modern theories of the stages of economic growth and industrial civilization.

2. T. Veblen’s doctrine of the “leisure class”. Industrial system concept. The doctrine of "absenteeism"

The central place in Veblen’s works is occupied by his doctrine of the “leisure class,” the formation of which he also approached historically. Like many admirers of L. Morgan's classic work "Ancient Society", Veblen distinguished several stages in the history of mankind: early and late savagery, predatory and semi-worldly barbarism, and then the craft and industrial stages. In the early stages, people lived in cooperative conditions. Then, as Veblen imagined, there was no property, exchange, or price mechanism. Later, when a surplus of material wealth had been accumulated, military leaders and priests found it profitable to rule over other people. Thus began the process of formation of the “leisure class,” and with it the transition from savagery to barbarism. As peaceful pursuits gave way to military campaigns and robberies, the human instinct of mastery was suppressed. If earlier a person fought mainly with nature, now he fights with another person. At the center of the new way of life was private property, which had its origins in violence and deceit.

The doctrine of the leisure class, coupled with the methodology of technocratism (literally: technocracy - the power of technology) underlies Veblen's concept of the "industrial system". According to this theory, capitalism (in Veblen's terminology - "money economy") goes through two stages of development: the stage of the entrepreneur, during which power and property belong to the entrepreneur, and the stage of financier dominance, when financiers push aside entrepreneurs. The last stage is especially characterized by a dichotomy (confrontation) between industry and business, the interests of which are completely different. By industry, Veblen understood the sphere of material production based on machine technology, and by business - the sphere of circulation (stock market speculation, trade, credit, etc.).

Industry, according to Veblen's concept, is represented not only by functioning entrepreneurs, but also by engineering and technical personnel, managers, and workers. All these layers are interested in improving production and therefore are carriers of progress. On the contrary, business representatives are focused exclusively on profit, and production as such does not concern them.

The dichotomy between industry and business lies, according to Veblen, in the fact that in the industrial sphere the layers necessary for society function, while business is personified in the “leisure class” that does not carry a useful load. Veblen included only the largest financial magnates in the “leisure class”; He did not consider small and medium-sized entrepreneurs to be social dependents and even (with certain reservations) included them in the productive class.

The American scientist repeatedly expressed deep respect for Marx, although he did not agree with him in everything (he criticized the Marxist theory of the development of value, the doctrine of the reserve army of labor as a result of the accumulation of capital). The main thrust of Veblen's criticism was directed against the interests of the largest bourgeoisie. This is explained by the fact that Veblen stood on the left flank of Western economic thought and was an ideologist of the radical intelligentsia.

The most important result of Veblen's theoretical activity was his doctrine of “absentee property” (absentee property - absent, intangible). This is the property of businessmen who are not directly involved in production. If earlier, at the stage of “dominance of entrepreneurs,” profit was a natural result of useful entrepreneurial activity, then in the conditions of the “money economy” of the twentieth century. Credit became the main means of generating profit. It is with the help of credit that businessmen (representatives of the “leisure class”) appropriate stocks, bonds, and other fictitious values ​​that bring huge speculative profits. As a result, the securities market is expanding enormously, and the growth in the size of “absenteeism” property is many times greater than the value of the material assets of corporations. “Absenteeism property” is the basis of the existence of the “leisure class”, the reason for the escalating conflict between industry and business.

3. Evaluation and role of T. Veblen’s teachings

Thus, Veblen very subtly analyzes many real aspects of the US economy of the early 20th century: the transfer of economic power into the hands of financial magnates, the manipulation of fictitious capital as one of the main means of increasing financial capital, a significant separation of capital-property from capital-function, etc. . At the same time, this economist was a convinced supporter of the exchange concept: he looked for the root of social conflicts in the sphere of circulation, not production, the contradictions of the latter were interpreted by him as secondary.

According to Veblen, engineers - technocrats (persons who rise to power on the basis of a deep knowledge of modern technology) are called upon to play the main role in the coming transformations. According to his ideas, participation in the creation of advanced production forces and the formation of highly efficient technology gives rise to technocrats' desire for political dominance.

Observing the contradiction between the interests of business and the development of industry, engineers are imbued with hatred of financiers. True, the “leisure class” seeks to bribe engineers, provide them with material benefits, and increase their income. Some engineering and technical personnel, especially among the older generation, are imbued with the spirit of money-grubbing, but most young engineers do not make deals with businessmen, since the interests of scientific and technological progress are more important to them than personal enrichment.

Specifically, the picture of the establishment of a “new order” looks like this in Veblen’s works: the scientific and technical intelligentsia begins a general strike that paralyzes industry. The paralysis of the economy forces the "leisure class" to retreat. Power passes into the hands of technocrats who begin to transform the industrial system on a new basis. Veblen argues that it is enough for a small number of engineers to unite (up to one percent of their total number) for the “leisure class” to voluntarily give up power.

The work of T. Veblen evoked very contradictory responses in economic science. Thus, representatives of conservative and moderate circles criticize him for what they believe is an unjustifiably harsh position towards big business. They also point out the unreality of many of his prophecies (for example, that credit, as well as the banker who personifies it, will soon “become obsolete”). On the contrary, representatives of the left intelligentsia idolize Veblen for his deep, original criticism of the “leisure class” and “monetary civilization” as a whole.

Veblen's concept of the evolution of the "industrial system" did not pass without leaving a mark on the leftist wing of American economic thought. It was further developed in the studies of the prominent economist and sociologist J.C. Galbraith, in a number of futurological models by O. Toffler, R. Heilbroner and others.

Institutionalism has absorbed the best theoretical and methodological achievements of previous schools of economic theory and, above all, the principles of economic analysis of neoclassics based on mathematics and mathematical statistics.

Institutionalists are strong in describing real economic structures and identifying the specifics of their institutional forms in a particular country, in considering the evolution of the institutional system, in recording new phenomena and processes. Their works are an irreplaceable source of material necessary for understanding the nature of modern capitalism, especially for analyzing its various forms and types, for studying individual institutions and links of institutional structures, the role of institutions (including state policy) in stimulating or maintaining economic development. On the basis of empirical institutional studies, many conclusions of a broad theoretical nature have been made that have enriched political economy. This applies to various areas and problems, such as the theory of consumer demand (Veblen's ideas about the “demonstration” effect, unsatisfied “status” needs, the role of demand management), the theory of monopoly (the monopolistic nature of large companies, the role of oligopolistic structures, “controlled prices” "), the field of "industrial relations" (relations between labor and capital), the labor market, socio-economic theory of welfare, theory of the business cycle, inflation, etc.

List of used literature

1. Yadgarov Y.S. History of Economic Thought. M: Economics, 1996.
2. Negishi T. History of economic doctrines. M.: Aspect Press, 1995.



The founder of institutionalism was the American scientist T. Veblen. His main
work - “The Theory of the Leisure Class” (1899).

Veblen's institutionalism is socio-psychological in nature, since it derives a number of economic phenomena from social psychology. His views are based on a unique understanding of man as a biosocial being, guided by innate instincts: self-preservation and preservation of the species, a tendency to compete, imitate, idle curiosity, a predisposition to effective actions (instinct of mastery), etc. Polemicizing with the neoclassics, Veblen wrote that the subject of political economy is human activity in all its manifestations; social sciences are called upon to study relationships between people.

The economy is considered by Veblen as an evolutionary open system that experiences constant influences from the external environment, culture, politics, nature and reacts to them. Therefore, institutionalism denies the most important postulate of neoclassical
theory – the economy’s desire for equilibrium, considering it as an atypical and very short-term state. There are factors inside and outside the system that generate a state of “tension,” an endless process of change and development. It is called “cumulative” (increasing). Veblen believed that “modern science is increasingly becoming a theory of successive changes, understood as changes that are self-sustaining and have no final goal.”

However, the process may end if there is a blocking effect that can be created by political and other structures.

Veblen introduces scientific concepts into science: “institution” (custom, established order) and “institution” (order enshrined in the form of a law or institution). However, both are often called “institutions”.

Veblen emphasizes cultural norms and traditions, emphasizing that institutions guide, facilitate, and encourage human activity rather than limiting them. Institutions form connections between people, erase differences in individual behavior and make individual behavior understandable and predictable.

Being generally accepted, institutions are stable, but this stability is disrupted from time to time, giving way to a period of collapse of some institutions and the emergence of others. The sources of change are “idle curiosity” (creativity) and conflicts. The first source generates scientific, technical and social changes,
the second is friction between institutions, especially those that developed in different historical eras.

Another important concept of institutionalist theory is the evolution of institutions. Veblen came up with the idea that institutions can be likened to genes and that evolution in the economic system and in living nature proceeds, if not according to general laws, then according to similar laws. Evolutionary economics is, to one degree or another, based on Darwinian principles of selection: heredity, variability and natural selection. Veblen describes the mechanisms for implementing these principles.

According to Veblen, an institution by its nature has the properties of “continuity” (heredity), since it is a self-reproducing social phenomenon. Like the biological gene, the institution also transmits information, but in an economic environment and through imitation and learning. This explains the enormous importance that Veblen attached to the sociocultural environment.

Like biological genes, institutions are subject to variability under the influence of the social, cultural, political and natural environment. However, institutions can also mutate randomly, and stable random development trajectories can arise. This recognition of random processes distinguishes the institutional-evolutionary theory from other teachings that are based on the principle of determinism of economic processes and phenomena.

In addition, institutionalists introduce into their theory the criterion of “survival” of the fittest, i.e. preservation and dissemination of certain institutions that have the largest set of “socially expedient” features. Such institutions help the survival of groups of people or an entire society. Those that “survive” ultimately lead to the growth of wealth, freedom and well-being of the entire society. Socially inappropriate institutions eventually reach a dead end and cease to exist.

Analyzing capitalist society, Veblen creates the concept of an “industrial” system. According to this theory, capitalism (“money economy”) goes through two stages of development: the dominance of the entrepreneur and the dominance of the financier. The second stage is characterized by a confrontation between industry (the sphere of material production) and business (the sphere of circulation). Industry figures (entrepreneurs, engineers, workers) are the bearers of progress, while businessmen are focused only on profit, they are not interested in production. Business is personified in the “leisure class”: these are financial tycoons, speculators. Businessmen do not directly participate in production; property has become “absenteeism” (intangible), the main means of making a profit in the twentieth century. a loan was made. With its help, businessmen plant securities that bring them speculative income. The growth of fictitious capital (securities) is many times greater than the increase in the value of tangible assets of companies.

Thorstein Bunde Veblen is a famous American economist and sociologist, the founder of institutionalism as a movement. He was also a popular and witty critic, as can be seen in his book The Theory of the Leisure Class, which was published in 1899. In it, he first describes the Veblen effect - demonstrative behavior that is characteristic of certain individuals. His main contribution to science is that he applied Darwin's theory to economics and considered the dichotomy of institutions and technology.

Brief biography of the scientist

Veblen was born into a family of Norwegian immigrants. He was the fourth of twenty children. Despite these conditions, he and his wife managed to establish a farm, which is now considered a national monument. Veblen went to school at the age of five. Then he went to college. All of his brothers and sisters also studied in higher educational institutions. Many scholars of Veblen's work say that his childhood and environment greatly influenced his views. The features of something are always better visible from the outside. At Carleton College, professors noted Veblen's sense of humor and wit. He studied under John Bates Clark, who later became the founder of neoclassical economics. His influence on Veblen was very significant. Even during his studies, he was very interested in the works of Kant and Spencer.

After graduating from college, Veblen studied at Johns Hopkins University. When he failed to get a scholarship here, he went to Yale. It was there that he received the title of Candidate of Sciences. After this he went to his farm and concentrated on social sciences. For seven years after graduating from Yale, he could not find a teaching job until he graduated from Cornwall.

Institutional economy

Thorstein Veblen laid the foundations of a new direction with his criticism of traditional theory. This became possible due to the fact that he was not only an economist, but also a talented sociologist. The Veblen effect as a concept appeared only because the scientist managed to see in the economy something more than a stable and autonomous system. He argued his position by saying that crises constantly arise in countries that cannot be prevented by any government action. The scientist believed that social institutions are the basis of any society. Already in “The Theory of the Leisure Class” he wrote that the development of the economy depends on them. Instead of separating one science from another, Veblen tried to understand the place of rules and behavior in the market. The new direction allowed economists to look at the national economy and the not-so-rational individual from a new angle, and also to understand the role of a cultural phenomenon.

Veblen goods

At school we are taught that a fall in price causes an increase in demand. Experience also speaks to this. But there are products for which this effect does not work. For example, such products include Rolls-Royces. The more expensive these cars are, the more people buy them. This situation can be understood by the Veblen effect. It means an increase in demand for a product with an increase in its market value. Its second name is the snob effect. This usually happens with luxury goods that are purchased to emphasize the status of their owner. “Weblen” goods include luxury goods: expensive wines, jewelry, branded items, cars. The high price makes them desirable as a status symbol of their owner. Buying them is a form of demonstrative behavior that causes the Veblen effect. A reduction in their prices leads to a sharp drop in demand.

Giffen effect

A similar situation is observed with the most necessary goods. But this is the Giffen effect. Its existence is confirmed by many microeconomic mathematical models. It was first noticed by a Scottish economist, which Alfred Marshall noted in his book “Principles of Economics.” Giffen's paradox was discovered by observing the habits of the poor during the Victorian era. The increase in the price of potatoes caused a sharp jump in demand for it. The Giffen Paradox can still be seen in action today. If the population sees an increase in the price of buckwheat, then they suddenly begin to sweep it off supermarket shelves. Although in fact this behavior is fundamentally illogical. Aren't there other cereals? As a result, the price rises even more due to rush demand. The situation is even more complicated with goods that you cannot do without.

Rationality of demonstrative behavior

An increase in price makes the status of the owner of such a product higher. The purchase becomes even more preferable, since it is assumed that these items have become exclusive. Therefore, the concept of the “Veblen effect” characterizes the situation of the influence of status on the spending of money by consumers. If a product goes out of fashion, people will stop buying it. Therefore, we cannot say that the Veblen effect characterizes the same products throughout their entire life cycle. In addition, you need to understand that not all people are susceptible to it. Much, moreover, depends not so much on character as on national mentality.

Although the Veblen effect in economics is the most famous case of the influence of culture on the behavior of market actors, there are many similar situations. You need to understand that a fall in price does not always lead to an increase in demand. Economics is a rather difficult subject to study, in which nothing is clear-cut. Each of the theories differs in that it violates the well-known theory of a decrease in demand when prices increase. Their basis is the limited rationality of economic subjects. Among these concepts, four are considered the most important.

Snob effect

It is characterized by the fact that a certain group of people like to buy products that are different from others. This helps them in self-identification. For them, price is a characteristic of a product. They are attracted not by quality or design, but by the exclusivity of such products. Price in this case does not have much influence on demand at all. This effect makes people reject cheap and high-quality consumer goods. It is important for such a person, if not to receive a high social status, then at least to appear rich.

The effect of joining the majority (imitation)

Man is a social being. It is always important for us to feel that we belong to a certain group. It is not surprising that the popularity of certain beliefs only increases when more people begin to accept them. This is where the so-called Overton window comes into play. In economics, this means an increase in demand for consumer goods. That’s why they love to use people in advertising who talk about successful experiences using this or that technical innovation. Sometimes people don't even notice how susceptible they are to groupthink. Advertised products immediately catch our eye in the supermarket. The tendency to agree with the opinions of others is explained by the fact that people are accustomed to using other people's experiences throughout their lives. Conformity is confirmed by the experiments of Asch and Sherif.

Network externality

It is common in business for the user of a product to influence its value to others. The more people use telephone services, the more important it becomes to others. The more network subscribers, the more valuable the connection is for each new user. The above situation is an example of a positive externality. This effect can be measured by applying Metclaff's law. He argues that the value of a network is directly proportional to the square of the number of its users. An example of a negative externality is traffic jams and congestion of local networks.

General law of balance in business

In order to get a good result, you need to put in a lot of effort. This is what this concept is about. A product that is too cheap usually immediately arouses suspicion among the consumer. Low cost and high quality seem incompatible to most of us. Therefore, a sharp rise in the price of a product can often be attributed to the use of new technologies that allow, for example, healthier products. Likewise, lower prices and constant sales can signal a decrease in demand due to consumer concerns about quality.

Veblen's Intellectual Legacy

Despite the somewhat archaic language, the book by the founder of institutionalism in economics, “The Theory of the Leisure Class,” written back in 1899, enjoys significant success. The approach described in it is often compared with North's, which breathed a second life into this direction. Veblen's work remains entirely relevant as demonstrative behavior shapes our lives even more than it did in the days of our ancestors. His approach to the study of economics becomes especially relevant in the era of globalization. Veblen's understanding of institutions as the traditional way of behavior of people allows us to understand why even the best laws may not lead to the prosperity of a nation.

Canons, which was created by the leisure classes and received its full expression in the era of imperialism. And above all, this relates to the ideology of consumerism and philistinism. Admiration for things, the desire to stand out from the crowd by demonstrating things, the pursuit of ridiculous fads of fashion appear in Veblen’s light as atavism, tinsel that only hinders a person, since it destroys his best inclinations.

As is known, capitalism is characterized by commodity and money fetishism. Essentially, Veblen provides an illustration of how the fetishism of things arises and is formed in people’s minds, which subsequently takes the form of commodity fetishism, a phenomenon discovered and scientifically substantiated by K. Marx.

At the same time, as in Veblen’s study of the problem of property, his analysis of the power of things and money in bourgeois society is characterized by a psychologization of economic phenomena and, although accurate, impressive, but superficial description of them. Veblen failed to identify the roots of many of the processes he studied in capitalist society, and in a number of cases he reduced them only to the manifestation of human instincts. Such an instinct as “people’s predisposition to rivalry” is used by him as the basis for demonstrative wastefulness; Moreover, all the institutions of “monetary civilization” are actually built on the tendency to compete.

Declaring the “law of demonstrative waste” discovered by him as the “fundamental”, “great” law of monetary civilization, Veblen exaggerates the role of consumption. For him, it is not production, but consumption that is the decisive factor in the development of society. Let us recall that the principle he formulated of increasing needs is organically connected with the development of production and is conditioned by it. It generates, firstly, an increase in the need for means of production, and, secondly, as a result of the development of production on the basis of technical progress, numerous new types of products are created that did not exist before, and a need for them arises. Veblen ignores this organic connection between production and consumption, with the determining role of production. "

The hypertrophy of the role of “demonstrative waste” is also reflected in Veblen’s analysis of a number of economic phenomena and categories. Thus, he reduces the methods of competition between wealthy people primarily to “conspicuous consumption,” leaving aside the struggle of the bourgeoisie in the process of production and appropriation of surplus value.

Veblen's characteristic disregard for production relations and the exaggeration of the role of consumption and psychological factors when considering a product and its properties are clearly evident. In Veblen’s concept, the use value of a product is characterized by two types of “utilitarianism”: firstly, “functional utilitarianism”, i.e. satisfaction of necessary needs (for food, clothing, housing, etc.), and, secondly, the ability to bring the buyer product corresponding honor, recognition - “additional utility”. However, Veblen attaches decisive importance to this additional utilitarianism. He writes about the criteria for assessing the usefulness of goods: “The habit of looking for signs of excessive high cost in goods and demanding that in all goods some additional utilitarianism, beneficial for envious comparison, is visible, leads to a change in the criteria by which the general assessment of the usefulness of goods is derived. In the evaluation of goods by the consumer, what is honorable and what is crudely functional do not exist separately from each other; both of these components constitute the inseparable utility of goods in their totality” (p. 175). According to Veblen, the purpose of production of goods is the same for all methods of production and is associated only with the potential value of the product for the consumer, with its use value. Here he ignores the second property of a commodity - value, which in a capitalist society acquires a dominant meaning, since the purpose of producing goods is to obtain surplus value, appropriated by capitalists as a result of the sale of the commodity as value.

From the position of the universal “law of conspicuous waste,” Veblen considers goods created as a result of the process of machine production or manual labor. All Veblen's sympathies are on the side of machine production. He argues that machine-made products contain fewer defects and are generally better able to satisfy the rational needs of consumers. But due to the “law of conspicuous waste,” consumers often choose handmade products. “Manual labor is a more wasteful method of production; consequently, the goods obtained in this way more reliably serve the purpose of acquiring a monetary reputation; Consequently, traces of manual labor turn out to be prestigious, and goods in which such traces are evident become of a higher grade than the corresponding product of machine production” (p. 177). This often results in the leisure class’s rejection of goods created by machines, due to their “ordinariness” and affordability in monetary terms for many people. Consumption of such a product “is not honorable because it does not serve the purpose of making favorable, envious comparisons of oneself with other consumers” (p. 178).

Veblen rightly emphasizes that the idea of ​​the false prestige of idleness, its demonstration even where there are not sufficient means for a truly idle lifestyle, remains valid for families with average incomes, in which the head of the family works, but strives to provide an idle life for his wife, with so that she is engaged in the design of the home, its aesthetics, herself - all for the sake of maintaining the decency of the family, “monetary reputation”: “... the substitute idleness and consumption reproduced by the wife, as well as the auxiliary representation of idleness through servants, remain in fashion as a convention that can be neglected the demands of reputation will not allow it” (p. 118). At the same time, Veblen notes that representatives of the “bogus leisure class,” women in particular, begin to feel disgust at the status of their uselessness for society and protest, demanding their inclusion in socially useful activities and the production process.

According to Veblen, the ideology of the cult of idleness, which is sowed by the ruling classes, is needed by them to justify their own idleness. A striking example of how “substitute idleness” does not serve the benefit of the person himself, but turns into work to restore the face of the propertied person, is the sphere of religion. “Observance of the rites of piety” is Veblen’s term for this area. “... Priests close to the deity should not participate in productive work... no occupation that brings tangible benefit to people should not be performed in the presence of the deity... on holidays set aside for the glorification of the deity or for communion, no work, useful to society should not be performed by anyone” (p. 151). The gods are the ideal leisure class. However, the lifestyle of this “supernatural leisure class” is an exact copy of the lifestyle of the powerful. Observance of the rituals of piety leads, according to Veblen, to a divergence between the selfish interests of the leisure class and the interests of the life of the entire human society.

The evil influence of the leisure class extends to sports. In bourgeois society, "football has the same relation to genuine physical culture as bullfighting has to agriculture." Veblen devotes a special chapter entitled “Belief in Luck” to such an integral attribute of idleness as gambling. But here, too, the author of “The Theory of the Leisure Class” gives preference to psychological factors. He considers addiction to gambling as a manifestation of “belief in luck”, characteristic of people at all stages of the evolution of society.

Finally, Veblen analyzes “demonstrative idleness” using the example of contemporary higher education in bourgeois society. The author devotes a lengthy final chapter of the book to this important topic - “Higher Education as an Expression of Money Culture.” Higher education is also one of the vast areas of activity, subject to the laws of an idle lifestyle. In the system of bourgeois higher education, for example, classical philology and ancient languages ​​enjoy great respect. Classical education is a guarantee and evidence of liberation from production, since in order to obtain it, one must spend an amount of time and wasteful, and therefore honorable, effort inaccessible to poor people. Veblen writes bitterly that people who tried to expand the horizons of human knowledge in modern bourgeois universities “found no cordial welcome, they were reluctantly tolerated.”

Veblen’s important progressive thesis is that in relation to material production, the leisure class turns out to be not only superfluous, but also harmful: “The relation of the leisure... class to the economic process is a monetary relation - the relation of acquisitiveness, and not production, exploitation, and not usefulness” (p. 216). "

But what will replace existing institutions? Veblen's position on this issue is revealed in his later works, most notably in The Theory of Business Entrepreneurship and the book Engineers and the Value System.

Veblen's works paid special attention to the "contemporary economic organization", or the "new industrial system". Its characteristic features are “machine process and investment for profit.” Veblen used the terms “industry” and “industrial system” almost as synonyms, meaning by them material production based on machine technology, to which he attached great importance. Veblen correctly noted such consequences of the introduction of machines into the production process as the expansion of scale

1 T. Veblen. The Theory of Business Enterprise, p. 39.

production, deepening the social division of labor, etc.

The material form of modern civilization, according to Veblen, is the industrial system, and the guiding force that animates this system is entrepreneurship. Veblen notes the features of the capitalist socialization of production, which creates the need for a high organization of labor, and points out that capitalists do not provide such a high organization, seeing the reason for this as the fact that the interests of business do not coincide with the interests of the development of production. He states that the immediate goal and incentive for an entrepreneur’s activity is to make a profit, and not to develop production: “The motive of business is monetary gain. His method is buying and selling. The goal is to accumulate wealth."

Since the goal of entrepreneurs in whose hands production is located is exclusively profit, a contradiction arises - in Veblen's terminology, a “dichotomy” - between the interests of production development and the interests of capitalists. Veblen shows that in many cases a businessman is not interested in expanding and improving the production he manages. Various production issues are considered by businessmen only in terms of the possibility of profitable sale of manufactured products on the market. Meanwhile, this possibility can be achieved not only by improving the production process and increasing labor productivity, but also as a result of limiting the production of goods and accordingly setting favorable prices for them. “Business captains” who manage production with the help of monetary transactions do not take into account what effect these transactions can cause, how this will affect other enterprises: “... the businessman is indifferent to how his operations affect production” 2. Veblen comes to the conclusion that separating the interests of those people who govern from the interests of society.

Veblen is characterized by the opposition between “industry” and “business”, material production as such and the system of production of goods for extraction

1 T. Veblen. Op. cit., p. 40.

arrived. Veblen considered the subordination of “the material interests of society to the purposes of making profit” an important feature of capitalism. The study of “dichotomy” was accompanied by Veblen’s criticism of the motives and methods of capitalist management, determined by the “shameless thirst for profit of the ruling classes.” He showed with specific examples that the system of capitalist entrepreneurship hinders the development of social production. But Veblen's analysis of the "dichotomy" turned out to be superficial; he proposed a psychological interpretation of the contradiction he noted. It was the “psychology of business,” that is, the immediate motives and goals of capitalists, their “rules of conduct,” that Veblen considered decisive in the system of capitalist entrepreneurship. He did not give a correct analysis of the contradiction he discovered. Identifying his interpretation of “dichotomy” with the essence of capitalism, he ignored the system of exploitation of labor by capital based on capitalist ownership of the means of production. He completely misses the fact of the capitalists appropriating the unpaid labor of workers in the form of surplus value as the main and determining content of the capitalist mode of production. Veblen does not explore the relationship between the antagonistic classes - the bourgeoisie and the proletariat, replacing it with a consideration of the “psychology of business”. Meanwhile, “business psychology” is a secondary, derivative element; it arose and was formed on the basis of capitalist property relations. It is capitalist ownership of the means of production, the ability to appropriate the results of other people's labor that is the basis of the thirst for profit as the main motive for the activities of capitalists. The desire to make profit, which Veblen considers the source of all the vices of capitalism, is only a reflection of the objectively determined goal of capitalist production - the receipt and appropriation of surplus value by capitalists.

According to Veblen, with the development of capitalism, the “dichotomy” of production and business becomes more acute. The sphere of market relations, various speculative operations become more profitable for the capitalist than direct entrepreneurial activity. As a result, many capitalists are distracted from organizing the production process and begin to invest part of their capital in various speculative transactions: “Instead of the old capitalism, when the capitalist regulated a certain production process, there has come a revival of the redistribution of capital investments into more profitable transactions.” Veblen notes a number of features of monopoly capitalism: education and the growth of corporations, the enormous scale of corporate ownership, the elimination of free competition, etc. But Veblen considers the main thing not the concentration of production, on the basis of which monopolies grow, but the widespread use of credit and the formation of “absenteeism property.” Veblen used the term “absenteeism” (“absent”, “intangible”) property to denote the separation of ownership from the management and direction of industrial production. This property is represented by a capitalist who does not participate in the management of his enterprise, and therefore, in the creation of the finished product, and is engaged in a variety of speculative operations not related to production.

As corporations become more widespread, the contradiction between industry and business becomes even more acute. This is manifested primarily in the fact that the financial oligarchy often receives a large share of its income through the purchase and sale of “property titles” on the market, and not through the growth of production and increasing its efficiency; “a corporation is always a business enterprise; it is a means of making money, not of producing goods" 2.

Veblen notes the facts of the personal union of the big financial bourgeoisie with the state apparatus. According to his definition, the bourgeois state has turned into a “department of business”, and the big bourgeoisie gains political dominance, which gives it access to the country’s national wealth. The pursuit of profit carried out by corporations leads to predatory use and waste of natural resources, which has extremely negative consequences for production and public interests.

Veblen repeatedly returned to the question of “the separation of property from control over it,” most clearly manifested in the widespread dissemination of the dream

1 T. Veblen. The Theory of Business Enterprise, p. 24-25 -

2 T. V e ы e n. The Absentee Ownership..., p. 85.yn

we participate (“holding systems”). He analyzes how large financial companies, acting as owners of a controlling stake, subjugate many enterprises and weaker corporations to their influence. The interests of these “invisible” business owners are especially far from the interests of society: “material production is under the control of people whose interest is concentrated in increasing the value of intangible assets”

Thus, Veblen takes the position of condemning big capital, its dominance in economics and politics. But the flaw in Veblen’s analysis is the hypertrophy of the role of the sphere of circulation in a capitalist economy. He tries to find the source of contradictions within the specified sphere and concentrates his attention on monetary and credit relations.

Veblen viewed the period of monopoly capitalism as the culmination of the contradiction between “business” and “industry.” Veblen's forecast for the future of capitalist society was largely based on the concept of "dichotomy". He constantly emphasized that the development of “industry” leads to the need for transformation. Essentially, Veblen gave a detailed description of the fact that the production relations of capitalism inhibit the development of productive forces, but failed to reveal the essence of capitalism, ignored capitalist exploitation and, as a result, proposed an erroneous scenario for the further development of society. According to this scenario, the power of the technical intelligentsia - “technocracy” - will be established in the future. Veblen's technocratic concept is the most important part of his theory.

According to Veblen, the interaction of technical, economic, biological, psychological and other elements always takes place, but as capitalism develops, technology turns out to be the main factor in socio-economic development. After the invention and implementation of various machines, large-scale machine production becomes the central link in the economic structure of society; it imposes on its participants a special way of thinking. Veblen believed that workers in large machine production are automatically interested in its better functioning, technical

1 T. Veblen. The Theory of Business Enterprise, p. 176.

ical efficiency, which forces them to strive to increase it, and this turns into a principle of behavior for them. From here Veblen draws the incorrect conclusion that the interests of workers in large-scale machine production coincide with public interests; better functioning of industry leads to an increase in the production of goods and the material well-being of society.

Veblen considered the engineering and technical intelligentsia to be the most progressive social group. He contrasted engineers with businessmen: as capitalism develops, “productive functions” are transferred to engineers, and capitalists are engaged only in financial activities and do not perform useful work. One of the reasons that caused this transition was the complication of production processes and technical progress: “the development of technology required an increased amount of specialized knowledge.” The scientific and technical knowledge that engineers possess not only separates them from businessmen, but also gives rise to contradictions between them: “Captains of finance, busy with business affairs, went far from real production; they trusted technical specialists less and less, whom they did not understand, but without which they could not manage.” Veblen considered the main source of contradictions between engineers and businessmen to be the discrepancy between the goals and methods used by both in their activities. The main goal of engineers is the best operation of industry, and not profit, as for a businessman, who becomes an unnecessary link in the economic organization. “To produce the goods and services needed by society, engineers do not need the intervention of businessmen...” The incompatibility of the principles and methods of the financial oligarchy with the interests of the development of production means, according to Veblen, the inevitability of the creation of a new form of economic organization of society; “business stands in the way of the production of goods and services” 2. Veblen postulates the need to put material production under the full control of specialist engineers; he assumes that the engineering and technical intelligentsia are able to transform society and become leaders

1 What Veblen Taught..., p. 427.

2 Ibid., p. 430, 434.

his. This is Veblen's prediction about the future of capitalism in the United States.

Veblen contrasts the engineering and technical intelligentsia with the working class. Although the proletariat is also engaged in industrial production, nevertheless, Veblen mistakenly considered the “expert specialists,” the engineering and technical intelligentsia, to be the only carrier of progress. The interests of various sections of the proletariat are allegedly contradictory, and this prevents the unification of workers on the basis of a common program: “Differences of interests have made all the aspirations of the workers essentially futile...” On the contrary, in Veblen’s interpretation, the engineering intelligentsia reveals a significant degree of solidarity; it is ready to create an independent organization based on common interests. “Engineers are ready to take the next step,” Veblen concludes.

As is known, within the working class there really are various detachments and groups. The development of technology is accompanied by a complication of the composition of the working class in terms of qualifications, which is expressed in significant differences in the wages of workers, and, consequently, in the differentiation of their economic interests. But this does not mean that it is fundamentally impossible to unite the proletariat, for the main thing is not what divides the workers, but what unites them - the exploitation of all sections of the working class by the bourgeoisie. Veblen ignored the very fact of the oppression of the proletariat, its exploitation by the bourgeoisie and, accordingly, the common interests and tasks of the entire working class.

Veblen's assertion that workers supposedly do not represent an independent social force and can only support the scientific and technical intelligentsia follows from his false interpretation of the main contradiction of capitalism. For Veblen, the main sphere of functioning of the contradiction of capitalism is the area of ​​market relations and production management, and not the relationship of exploitation in the production process.

Veblen's works lack a socio-economic approach to the bourgeois technical intelligentsia. The top of the technical intelligentsia, in their social status and economic interests, is closely linked

1 Ibid., p. 440, 442.

is engaged with the bourgeoisie, receives large incomes, and it is these specific economic interests, and not the abstract “public good,” that are the main incentive for its production activities. Veblen's fundamental mistake is the assertion that there are common interests for the entire scientific and technical intelligentsia. This revealed Veblen's characteristic reluctance to analyze phenomena from a social and class perspective. The engineering and technical intelligentsia under capitalism is extremely heterogeneous in its social and class composition, which refutes the thesis about the “common interests” of the intelligentsia.

In Veblen's future scenario, a strike of engineers is envisaged, which should end with the establishment of a “new order”. The transfer of power to the engineering and technical intelligentsia seems to Veblen easily achievable: the entire industrial system is so dependent on the activities of its leaders that an “engineers’ strike” will bring “paralysis of the old order” and force entrepreneurs to abandon their leadership positions in production and power. Veblen so overestimates the importance of the engineering intelligentsia that he claims that the unification of only 1% of all engineers and technicians is sufficient for “the general revolution of technical specialists in industry to end in success.” Veblen proposes to subordinate the economic life of the country to a specially created “council of technical specialists.” He paints a utopian picture of a society led by a technocracy: production, freed from the power of business, functions to meet the needs of all members of society; The “council of technical specialists” carries out the efficient use of natural resources and increases production volumes. The shortcomings caused by the “financial sabotage of absintheist owners” will be eliminated."

Veblen's prediction that in the event of a hypothetical revolution the entire technical intelligentsia would support it is clearly utopian in nature. The leading technical personnel of capitalist enterprises are interested in maintaining the rule of the bourgeoisie, while ordinary engineers and technicians are subject to extermination.

1 Ibid., p. 441, 442.

exploitation by the capitalist. Putting forward the thesis about the possibility of a “revolution of technological specialists” and the need to put production under the complete control of these specialists, Veblen misses the most important fact that the intelligentsia is not an independent class. The bourgeois intelligentsia does not act as the bearer of any mode of production and therefore can neither carry out a radical transformation nor become the head of a new society.

The naivety of Veblen's ideas about the methods of reorganizing society is completely obvious. The hypothesis that the bourgeoisie will voluntarily cede its privileges and give up power with little or no struggle does not stand up to criticism. Veblen's technocratic scenario should be regarded as a social utopia. Probably aware to some extent of the inconsistency and utopianism of his program, Veblen did not name the time frame for its implementation and postponed its implementation to the indefinite future.

Regardless of Veblen’s own intentions, the program he proposed objectively acts not only as a criticism, but also as a form of defense of capitalism. Changing production management methods is not enough to radically transform capitalist society. Ignoring the issue of the exploitation of wage labor under capitalism, Veblen did not propose to eradicate its source - capitalist ownership of the means of production in all its forms. This is where the bourgeois-liberal essence of Veblen’s theory found its manifestation. The uniqueness of his proposed version of the defense of capitalism lies in the fact that he used a technological approach to obscure the most important antagonisms of the capitalist mode of production, to deny the historical mission of the proletariat.

The theoretical basis of Veblen's technocratic scenario was technological determinism: the development of technology seemed to be decisive, determining all socio-economic development. In Veblen's interpretation, technology and its progress directly influence the superstructure, in particular social psychology. He believed that a person’s simple involvement in technology, his employment in machine production, automatically determines his psychology and interest in the better functioning of the industrial system. This view of Veblen - quite in the spirit of primitive technicalism - is deeply erroneous. Marxist theory has proven that technology influences the social and spiritual aspects of social life not directly, but indirectly, through the economic basis: “The method of production of material life determines the social, political and spiritual processes of life in general.”

Due to the duality of Veblen's position, his social identity cannot be defined unambiguously. On the one hand, the anti-monopoly orientation of his theory is obvious: he came out with petty-bourgeois criticism of the financial oligarchy. On the other hand, the technological approach, ignoring capitalist exploitation, and denying the leading role of the working class in the transformation of society mean obscuring the antagonistic contradictions of capitalism, and in this regard, Veblen objectively appears as a spokesman for the class interests of the entire bourgeoisie. The further evolution of the technological approach in bourgeois political economy confirms this position. Essentially, Veblen proposed a kind of apologetics, which is widely used by many bourgeois economists in our time.

The Theory of the Leisure Class remains Veblen's most famous work. Why is it of interest to the ■reader?

1 K. Marx and F. Engels. Soch., vol. 13, p. 7. " , ;

ry - law, religion, family, higher education system.

But the bourgeoisie is dangerous not only for its idleness that is burdensome to society, Veblen warns. It creates a false system of values, subordinating the entire structure of life to the moloch of demonstrative waste. It is in conspicuous consumption, life for show, that Veblen sees the core of the “monetary civilization” created by the bourgeoisie. Within the framework of this civilization, people do not strive to live more fully, more intelligently, kinder, brighter, no, they only strive to prove to everyone else that they have a surplus of money and things! - strive to demonstrate this surplus in the most visual way. And under the banner of an all-consuming desire for money and, essentially, completely unnecessary things, human life passes, reduced by the civilization of the dollar to the level of an endless and meaningless pursuit of a money fetish. In this regard, Veblen's book is extremely modern: it attacks directly modern bourgeois culture, the ideology of consumer society.