The Place of Science in Modern Civilization

Thorstein Veblen

• Publisher: Routledge
• Year: 2017
• ISBN:
  9781351477338
• Edition: 1
• Topic: Biological Sciences
• Subtopic: Science General
• Index: Biological Sciences

On its original publication in 1919, The Place of Science in Modern Civilization was recognized as a major contribution, and today Veblen continues to command attention and respect. This volume includes some of his most seminal work, essays that have critical, almost devastating implications for capitalist society and mainstream economic theory as well as Marxism and socialism in general.

The continuing power of Veblen's work derives both from the penetration and range of his analysis and the arguable failure of modern society and social science theory to change in any material respect since he worked. The continuing relevance of his topics and ideas is manifest. In this volume in particular, Veblen addresses controversies over the relations of deduction and induction and efforts to produce truth, belief systems, and language, disputes about the significance of business mergers and acquisitions, and questions about the historical meaning and status of socialism. All of these are subjects of continuing interest and concern.

The first six essays are fundamental contributions to the study of the preconceptions that drive thought and modern science and their origins. The next nine essays apply Veblen's thinking to critiques of other economists and capitalism. Three of these nine essays represent fundamental components of Veblen's view of capitalism and its problems are of lasting interpretive and analytic value. The final three essays in the book, and in particular the last two, are examples of a genre of thinking which, while not uncommon among social scientists of the period in which Veblen worked haven been discredited and certainly have no lasting value, being conjectural history using such concepts as natural selection.

As Warren Samuels notes in his stimulating introduction to this new edition, "Veblen was heterodox, iconoclastic, sardonic, caustic, and satiric. He also was brilliant, penetrating, original, courageous, literarily dram

PROFESSOR CLARK’S ECONOMICS¹

FOR some time past economists have been looking with lively anticipation for such a comprehensive statement of Mr. Clark's doctrines as is now offered. The leading purpose of the present volume² is “to offer a brief and provisional statement of the more general laws of progress”; although it also comprises a more abridged restatement of the laws of “Economic Statics” already set forth in fuller form in his Distribution of Wealth. Though brief, this treatise is to be taken as systematically complete, as including in due correlation all the “essentials” of Mr. Clark's theoretical system. As such, its publication is an event of unusual interest and consequence.

Mr. Clark's position among this generation of economists is a notable and commanding one. No serious student of economic theory will, or can afford to, forego a pretty full acquaintance with his development of doctrines. Nor will any such student avoid being greatly influenced by the position which Mr. Clark takes on any point of theory on which he may speak, and many look confidently to him for guidance where it is most needed. Very few of those interested in modern theory are under no obligations to him. He has, at the same time, in a singular degree the gift of engaging the affections as well as the attention of students in his field. Yet the critic is required to speak impersonally of Mr. Clark's work as a phase of current economic theory.

In more than one respect Mr. Clark's position among economists recalls the great figures in the science a hundred years ago. There is the same rigid grasp of the principles, the “essentials,” out of which the broad theorems of the system follow in due sequence and correlation; and like the leaders of the classical era, while Mr. Clark is always a theoretician, never to be diverted into an inconsistent makeshift, he is moved by an alert and sympathetic interest in current practical problems. While his aim is a theoretical one, it is always with a view to the theory of current affairs; and his speculations are animated with a large sympathy and an aggressive interest in the amelioration of the lot of man.

His relation to the ancient adepts of the science, however, is something more substantial than a resemblance only. He is, by spiritual consanguinity, a representative of that classical school of thought that dominated the science through the better part of the nineteenth century. This is peculiarly true of Mr. Clark, as contrasted with many of those contemporaries who have fought for the marginal-utility doctrines. Unlike these spokesmen of the Austrian wing, he has had the insight and courage to see the continuity between the classical position and his own, even where he advocates drastic changes in the classical body of doctrines. And although his system of theory embodies substantially all that the consensus of theorists approves in the Austrian contributions to the science, yet he has arrived at his position on these heads not under the guidance of the Austrian school, but, avowedly, by an unbroken development out of the position given by the older generation of economists.³ Again, m the matter of the psychological postulates of the science, he accepts a hedonism as simple, unaffected, and uncritical as that of J evons or of James Mill. In this respect his work is as true to the canons of the classical school as the best work of the theoreticians of the Austrian observance. There is the like unhesitating appeal to the calculus of pleasure and pain as the indefeasible ground of action and solvent of perplexities, and there is the like readiness to reduce all phenomena to terms of a “normal,” or “natural,” scheme of life constructed on the basis of this hedonistic calculus. Even in the ready recourse to “conjectural history,” to use Steuart's phrase, Mr. Clark's work is at one with both the early classical and the late (]evans-Austrian) marginal-utility school. It has the virtues of both, coupled with the graver shortcomings of both. But, as his view exceeds theirs in breadth and generosity, so his system of theory is a more competent expression of current economic science than what is offered by the spokesmen of the J evans-Austrian wing. It is as such, as a competent and consistent system of current economic theory, that it is here intended to discuss Mr. Clark's work, not as a body of doctrines peculiar to Mr. Clark or divergent from the main current.

Since hedonism came to rule economic science, the science has been in the main a theory of distribution,— distribution of ownership and of income. This is true both of the classical school and of those theorists who have taken an attitude of ostensible antagonism to the classical school. The exceptions to the rule are late and comparatively few, and they are not found among the economists who accept the hedonistic postulate as their point of departure. And, consistently with the spirit of hedonism, this theory of distribution has centered about a doctrine of exchange value (or price) and has worked out its scheme of (normal) distribution in terms of (normal) price. The normal economic community, upon which theoretical interest has converged, is a business community, which centers about the market, and whose scheme of life is a scheme of profit and loss. Even when some considerable attention is ostensibly devoted to theories of consumption and production, in these systems of doctrine the theories are constructed in terms of ownership, price, and acquisition, and so reduce themselves in substance to doctrines of distributive acquisition.⁴ In this respect Mr. Clark's work is true to the received canons. The “Essentials of Economic Theory” are the essentials of the hedonistic theory of distribution, with sundry reflections on related topics. The scope of Mr. Clark's economics, indeed, is even more closely limited by conc-epts of distribution than many others, since he persistently analyses production in terms of value, and value is a concept of distribution.

As Mr. Clark justly observes (p. 4), “The primitive and general facts concerning industry… need to be known before the social facts can profitably be studied.” In these early pages of the treatise, as in other works of its class, there is repeated reference to that more primitive and simple scheme of economic life out of which the modern complex scheme has developed, and it is repeatedly indicated that in order to an understanding of the play of forces in the more advanced stages of economic development and complication, it is necessary to apprehend these forces in their unsophisticated form as they work out in the simple scheme prevalent on the plane of primitive life. Indeed, to a reader not well acquainted with Mr. Clark's scope and method of economic theorising, these early pages would suggest that he is preparing for something in the way of a genetic study,— a study of economic institutions approached from the side of their ongms. It looks as if the intended line of approach to the modern situation might be such as an evolutionist would choose, who would set out with showing what forces are at work in the primitive economic community, and then trace the cumulative growth and complication of these factors as they presently take form in the institutions of a later phase of the development. Such, however, is not Mr. Clark's intention. The effect of his recourse to “primitive life” is simply to throw into the foreground, in a highly unreal perspective, those features which lend themselves to interpretation in terms of the normalised competitive system. The best excuse that can be offered for these excursions into “primitive life” is that they have substantially nothing to do with the main argument of the book, being of the nature of harmless and graceful misinformation.

In the primitive economic situation — that is to say, in savagery and the lower barbarism — there is, of course, no “solitary hunter,” living either in a cave or otherwise, and there is no man who” makes by his own labor all the goods that he uses,” etc. It is, in effect, a highly meretricious misrepresentation to speak in this connection of “the economy of a man who works only for himself,” and say that “the inherent productive power of labor and capital is of vital concern to him,” because such a presentation of the matter overlooks the main facts in the case in order to put the emphasis on a feature which is of negligible consequence. There is no reasonable doubt but that, at least since mankind reached the human plane, the economic unit has been not a “solitary hunter,” but a community of some kind; in which, by the way, women seem in the early stages to have been the most consequential factor instead of the man who works for himself. The “capital” possessed by such a community — as, e.g., a band of California “Digger” Indians — was a negligible quantity, more valuable to a collector of curios than to any one else, and the loss of which to the “Digger” squaws would mean very little. What was of “vital concern” to them, indeed, what the life of the group depended on absolutely, was the accumulated wisdom of the squaws, the technology of their economic situation.⁵ The loss of the basket, digging-stick, and mortar, simply as physical objects, would have signified little, but the conceivable loss of the squaw's knowledge of the soil and seasons, of food and fiber plants, and of mechanical expedients, would have meant the present dispersal and starvation of the community.

This may seem like taking Mr. Clark to task for an inconsequential gap in his general information on Digger Indians, Eskimos, and palceolithic society at large. But the point raised is not of negligible consequence for economic theory, particularly not for any theory of “economic dynamics” that turns in great part about questions of capital and its uses at different stages of economic development. In the primitive culture the quantity and the value of mechanical appliances is relatively slight; and whether the group is actually possessed of more or less of such appliances at a given time is not a question of first-rate importance. The loss of these objects — tangible assets — would entail a transient inconvenience. But the accumulated, habitual knowledge of the ways and means involved in the production and use of these appliances is the outcome of long experience and experimentation; and, given this body of commonplace technological information, the acquisition and employment of the suitable apparatus is easily arranged. The great body of commonplace knowledge made use of in industry is the product and heritage of the group. In its essentials it is known by common notoriety, and the “capital goods” needed for putting this commonplace technological knowledge to use are a slight matter,— practically within the reach of every one. Under these circumstances the ownership of “capital-goods” has no great significance, and, as a practical fact, interest and wages are unknown, and the “earning power of capital” is not seen to be “governed by a specific power of productivity which resides in capital-goods.” But the situation changes, presently, by what is called an advance “in the industrial arts.” The “capital” required to put the commonplace knowledge to effect grows larger, and so its acquisition becomes an increasingly difficult matter. Through “difficulty of attainment” in adequate quantities, the apparatus and its ownership become a matter of consequence; increasingly so, until presently the equipment required for an effective pursuit of industry comes to be greater than the common man can hope to acquire in a lifetime. The commonplace knowledge of ways and means, the accumulated experience of mankind, is still transmitted in and by the body of the community at large; but, for practical purposes, the advanced “state of the industrial arts” has enabled the owners of goods to corner the wisdom of the ancients and the accumulated experience of the race. Hence “capital,” as it stands at that phase of the institution's growth contemplated by Mr. Clark.

The “natural” system of free competition, or, as it was once called, “the obvious and simple system of natural liberty,” is accordingly a phase of the development of the institution of capital; and its claim to immutable dominion is evidently as good as the like claim of any other phase of cultural growth. The equity, or “natural justice,” claimed for it is evidently just and equitable only in so far as the conventions of ownership on which it rests continue to be a secure integral part of the institutional furniture of the community; that is to say, so long as these conventions are part and parcel of the habits of thought of the community; that is to say, so long as these things are currently held to be just and equitable. This normalised present, or “natural,” state of Mr. Clark, is, as near as may be, Senior's “Natural State of Man,” — the hypothetically perfect competitive system; and economic theory consists in the definition and classification of the phenomena of economic life in terms of this hypothetical competitive system.

Taken by itself, Mr. Clark's dealing with the past development might be passed over with slight comment, except for its negative significance, since it has no theoretical connection with the present, or even with the “natural” state in which the phenomena of economic life are assumed to arrange themselves in a stable, normal scheme. But his dealings with the future, and with the present in so far as the present situation is conceived to comprise “dynamic” factors, is of substantially the same kind. With Senior's “natural state of man” as the baseline of normality in things economic, questions of present and future development are treated as questions of departure from the normal, aberrations and excesses which the theory does not aim even to account for. What is offered in place of theoretical inquiry when these “positive perversions of the natural forces themselves” are taken up (e.g., in chapters xxii.-xxix.) is an exposition of the corrections that must be made to bring the situation back to the normal static state, and solicitous advice as to what measures are to be taken with a view to this beneficent end. The problem presented to Mr. Clark by the current phenomena of economic development is: how can it be stopped? or, failing that, how can it be guided and minimised? Now here is there a sustained inquiry into the dynamic character of the changes that have brought the present (deplorable) situation to pass, nor into the nature and trend of the forces at work in the development that is going forward in this situation. None of this is covered by Mr. Clark's use of the word “dynamic.” All that it covers in the way of theory (chapters xii.-xxi.) is a speculative inquiry as to how the equilibrium reestablished itself when one or more of the quantities involved increases or decreases. Other than quantitive changes are not noticed, except as provocations to homiletic discourse. Not even the causes and the scope of the quantitive changes that may take place in the variables are allowed to fall within the scope of the theory of economic dynamics.

So much of the volume, then, and of the system of doctrines of which the volume is an exposition, as is comprised in the later eight chapters (pp. 372-554), is an exposition of grievances and remedies, with only sporadic intrusions of theoretical matter, and does not properly constitute a part of the theory, whether static or dynamic. There is no intention here to take exception to Mr. Clark's outspoken attitude of disapproval toward certain features of the current business situation or to quarrel with the remedial measures which he thinks proper and necessary. This phase of his work is spoken of here rather to call attention to the temperate but uncompromising tone of Mr. Clark's writings as a spokesman for the competitive system, considered as an element in the Order of Nature, and to note the fact that this is not economic theory.⁶

The theoretical section specifically scheduled as Economic Dynamics (chapters xii.-xxi.), on the other hand, is properly to be included under the caption of Statics. As already remarked above, it presents a theory of equilibrium between variables. Mr. Clark is, indeed, barred out by his premises from any but a statical development of theory. To realise the substantially statical character of his Dynamics, it is only necessary to turn to his chapter xii. (Economic Dynamics). “A highly dynamic condition, then, is one in which the economic organism changes rapidly and yet, at any time in the course of its changes, is relatively near to a certain static model” (p. 196). “The actual shape of society at any one time is not the static model of that time; but it tends to conform to it; and in a very dynamic society is more nearly like it than it would be in one in which the forces of change are less active” (p. 197). The more” dynamic” the society, the nearer it is to the static model; until in an ideally dynamic society, with a frictionless competitive system, to use Mr. Clark's figure, the static state would be attained, except for an increase in size,— that is to say, the ideally perfect “dynamic” state would coincide with the “static” state. Mr. Clark's conception of a dynamic state reduces itself to a conception of an imperfectly static state, but in such a sense that the more highly and truly “dynamic” condition is thereby the nearer to a static condition. Neither the static nor the dynamic state, in Mr. Clark's view, it should be remarked, is a state of quiescence. Both are states of more or less intense activity, the essential difference being that in the static state the activity goes on in perfection, without lag, leak, or friction; the movement of parts being so perfect as not to disturb the equilibrium. The static state is the more “dynamic” of the two. The “dynamic” condition is essentially a deranged static condition: whereas the static state is the absolute perfect, “natural” taxonomic norm of competitive life. Thi£ dynamic-static state may vary in respect of the magnitude of the several factors which hold one another in equilibrium, but these are none other than quantitive variations. The changes which Mr. Clark discusses under the head of dynamics are all of this character,— changes in absolute or relative magnitude of the several factors comprised in the equation.

But, not to quarrel with Mr. Clark's use of the terms “static” and “dynamic,” it is in place to inquire into the merits of this class of economic science apart from any adventitious shortcomings. For such an inquiry Mr. Clark's work offers peculiar advantages. It is lucid, concise, and unequivocal, with no temporising euphemisms and no politic affectations of sentiment. Mr. Clark's premises, and therewith the aim of his inquiry, are the standard ones of the classical English school (including the J evans-Austrian wing). This school of economics stands on the pre-e...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Contents
• INTRODUCTION TO THE TRANSACTION EDITION
• THE PLACE OF SCIENCE IN MODERN CIVILISATION
• THE EVOLUTION OF THE SCIENTIFIC POINT OF VIEW
• WHY IS ECONOMICS NOT AN EVOLUTIONARY SCIENCE?
• THE PRECONCEPTIONS OF ECONOMIC SCIENCE. I.
• THE PRECONCEPTIONS OF ECONOMIC SCIENCE. II.
• THE PRECONCEPTIONS OF ECONOMIC SCIENCE. III.
• PROFESSOR CLARK'S ECONOMICS
• THE LIMITATIONS OF MARGINAL UTILITY
• GUSTAV SCHMOLLER'S ECONOMICS
• INDUSTRIAL AND PECUNIARY EMPLOYMENTS
• ON THE NATURE OF CAPITAL. I.
• ON THE NATURE OF CAPITAL. II.
• SOME NEGLECTED POINTS IN THE THEORY OF SOCIALISM
• THE SOCIALIST ECONOMICS OF KARL MARX. I.
• THE SOCIALIST ECONOMICS OF KARL MARX. II.
• THE MUTATION THEORY AND THE BLOND RACE
• THE BLOND RACE AND THE ARYAN CULTURE
• AN EARLY EXPERIMENT IN TRUSTS