I had put off reading the last section in Thorstein Veblen’s “The Engineers and the Price System,” in which he suggested that, if they got their act together, production engineers could lead a major revision of the industrial economy from an emphasis on generating wealth for absentee owners to one that focuses on production of goods and services.
There is much to quote and much is relevant today. Perhaps Veblen’s failure in 1921 to predict an economic collapse in 1929 is simply a consquence of him hedging his bets and always taking the long view. He seemed to think that the war had exposed some significant deficits. That the second world war provided an opportunity to correct them perhaps went unnoticed, because their presence had not been properly noted by those who survived. Perhaps the situation is somewhat similar to the disappearance of economic events from public consciousness in the wake of Nixon’s Watergate.
So, it has now been more than forty years and we are back to the same problems identified by Veblen. He blamed the Vested Interests and absentee ownership, which he referred to as “make-believe.” I do not remember reading this section before, but perhaps it accounts for some of the verbiage I like to employ.
…the economists have, by tradition and by force of commercial pressure, habitually gone in for a theoretical inquiry into the ways and means of salesmanship, financial traffic, and the distribution of income and property, rather than a study of the industrial system considered as a ways and means of producing goods and services….”business” is not “industry” and … investment is not production.
What is wanted is training in the ways and means of productive industry, not in the ways and means of salesmanship and profitable investment.
Their units and standards of valuation and accountancy are units and standards of price and of private gain in terms of price; whereas for any scheme of productive industry which runs, not on salesmanship and earnings, but on tangible performances and tangible benefits to the community at large, the valuations and accountancy of salesmanship and earnings are misleading.
I would note that the rubric of the free market, which has been propounded by the chambers of commerce, salesmanship has, for all intents and purposes, disappeared. It isn’t that it has been replaced by advertising and promotion, but that their agency has been erased from public consciousness.
…commercial accountancy; which is the same as saying, the accountancy of absentee ownership and free income.
…the difference between the avowed purpose and the tangible performance…
What I would call substituting the intent for the act. Where does it come from? Veblen ascribed it to habit, and I think I would agree. One can become habituated to exploitation and abuse.