Printer Friendly

Thorstein Veblen, C. Wright Mills and the possibilities of a public administration.


Thorstein Veblen (1857-1929) is best known for his satirization of consumption in his justly famous The Theory of the Leisure Class (1899). Yet this book and other of his writings also contain a theory of public or collective goods and, interestingly, a theory of public administration. It is these two theories and their linkages which is the focal point of the first part of this analysis. The second part focuses on C. Wright Mills' theory of craftsmanship and the Veblen-Leibenstein analysis of emulation behaviour to explain tensions and conflicts in human behaviour in complex organizations. The third and concluding part links together parts one and two with some suggestions for identifying and overcoming these problems within an authentic public administration.

First, however, some brief comments are in order regarding Veblen's political philosophy and perspective on history as these relate to deliberate collective action and social reconstruction. Although Veblen died shortly before the onset of the Great Depression and the New Deal response to it, Norman Markowitz has written that Veblen's work on cultural lag became "such a powerful rationale for social liberal reform programs as to make Veblen appear to many to be the patron saint of the New Deal" (Markowitz, 1973, p. 12). However, the work of New Deal historians like Markowitz should be compared with the analyses of other American social scientists. For example, economist Allan Gruchy argued that Veblen believed it impossible to remodel capitalism so as to eliminate the conflict of diverse economic interests. Isador Lubin, another economist and a personal friend of Veblen, stated that Veblen "always gave the impression ... that certain forces in our society would not permit radical changes in our economic system". Sociologist Max Lerner took an extreme position when he wrote that Veblen would have found "most of the features of the administration program obnoxious to his deepest intellectual drives. His scepticism would have eaten through the very rhetoric of the New Deal that to such an extent derives from him". Marxist Lewis Corey attacked the "institutional economists who rallied to the New Deal to make more workable the system of business enterprise that Veblen condemned" (see Corey, 1937, p. 164; Gruchy, 1939, pp. 124-215; Lerner, 1935, p. 10; Lubin, 1968, p. 144).

Does this mean that no relationship existed between Veblen's ideas and New Deal policy? If a distinction can be made between Veblen's doctrine and his influence, it is still possible to maintain that his influence worked in two quite different directions. As Max Lerner put it:

As with Hegelianism, there is a Veblenism of the Right and Left. The

Veblenism of the Right leads logically to a system of governmental

controls which would match the coercions of business, and thus make the

price system work without sabotage and without depressions. The

Veblenism of the Left despairs of anything short of a complete displacement

of the price system itself, and of the system of absentee owners whose

vested right, as Veblen used to put it, was "the right to get something

for nothing" (Lerner, 1948, pp. 32-3).

The Veblenism of the Right, as New Deal liberalism, legitimized a mixed economy which preserved private property within the matrix of welfare and regulatory state capitalism. The Veblenism of the Left was more radical and demanded a change in the entire system of social relations through fundamental shifts in power and property to achieve a co-operative common-wealth. The Veblenism of the Right was, strictly speaking, contrived and largely bogus while the Veblenism of the Left was authentic, although New Deal historians holding to the conventional view of Veblen as a reformist liberal fail to recognize this.

Does an endorsement of this view of Veblen's influence on the New Deal mean that his work has no relevance for the interventionist state and social engineering schemes of the New Deal-Fair Deal-Great Society-Clinton-Gore variety? Not at all, for deeply rooted in his analysis of American society and political economy is both a rationale for public goods and a theory of public administration. The rationale for public or collective goods implicit in The Theory of the Leisure Class is simply that far too many goods and services are produced for emulatory consumption and waste in an effort to enhance the consumer's self-image; in short, conspicuous consumption and conspicuous waste dissipate economic resources as individuals strive to achieve more self-esteem by impressing their neighbours with their ability to spend and consume. "Implicit" is the term used here because nowhere does Veblen state explicitly that government should take excess purchasing power from consumers, that is likely to be used for emulatory display and waste, and divert it to the support of public goods. The provision of collective goods using revenue raised by taxing emulatory consumption is a public policy which, nonetheless, can be logically derived from his analysis. In short, public goods might be substituted for emulatory waste and their creation justified on grounds of both social equity and economic efficiency.

Probably the main consideration in justifying such policy for those who accept Veblen's theory of status emulation is whether social engineers know enough regarding the possible consequences of their action to make the right choices regarding both ends and means, that is, can they know enough about the latent and manifest effects of their actions, given the immature state of development of the social sciences, to make rational choices as to which public goods to provide, how to provide them and who to provide them for? Veblen's view of the American governmental apparatus was not a very positive one; indeed, two of its main functions in his writing are waste and predation. Its capacity as a successful interventionist and reconstructive agent are not very great in his opinion. Nevertheless, it is possible that both the evolution of the polity and the machinery of government might bring it to a stage of development where it could provide collective goods of an adequate quality in sufficient quantity without producing undesirable side-effects. Phillip O'Hara has, indeed, pointed to the inadequacy of Veblen's theory of the state and to the need for those working in the Veblenian tradition to develop a more adequate understanding of its potential:

Veblen's analysis of the role of the state is extremely problematical, even

for the pre-welfare-state era in which he wrote. To reduce the state to

the pure functions of capitalist business led Veblen to accept

the traditional Marxist view of the state as a mere tool of the

capitalist class, which has no interest in the long-term stability of

the system, or the general welfare of the population (to

the extent that it differs from the short-term interest of capital). Modern

research has shown this view to be anomalous, especially (but not just)

in the case of the post-war (1945-1990s) period of capitalist

development. The state necessarily approximates neither the pure

functions of business, nor those of industry, but represents a

qualitatively different institutional sphere examinable in its own

right. Veblen overlooked the extent to which business

and the state may differ in their objectives; or that the state may be

a qualitatively different institution, unique in itself (O'Hara, 1993,

p. 110).

The possibilities that the State might serve as a sphere of countervailence and redistribution for the underlying population, especially the lower classes, was never explored by Veblen in his writing. In view of this it is not surprising either that he paid little heed to state provision of collective goods except at the most rudimentary level such as national defence, administration of justice and a few public works. Nevertheless, not only is there an underlying rationale for collectivism in his theory of status emulation as it pertains to consumer behaviour, his theory of collective social wealth itself provides another powerful legitimation for large-scale provision of public goods.

Veblen's emphasis on the social nature of the stock of industrial knowledge and tools, his stress on the organic character of all economies, and his focus on the collective process by which goods and services are produced led him to egalitarian conclusions regarding the distribution of wealth and income. He did not believe it was possible to trace the origin of the value of a commodity to a particular input of land, labour, or capital. This principle of collective wealth is thus fundamental to Veblen's social view of the economy. As he put it:

Technological knowledge is of the nature of a common stock, held and

carried forward collectively by the community, which in this relation is

to be conceived as a going concern. The state of the industrial arts is

a fact of group life, not of individual or private initiative or

innovation. It is an affair of the collectivity not a creative achievement

of individuals working self-sufficiently in severalty or in isolation. In

the main, the state of the industrial arts is always

a heritage out of the past; it is always in process of change, perhaps, but

the substantial body of it is knowledge that has come down from

earlier generations. New elements of insight and proficiency are

continually being added and worked into this common stock

by the experience and initiative of the current generation, but such

novel elements are always and everywhere slight and inconsequential

in comparison with the body of technology that has been carried over

from the past (Veblen, 1918, p. 103).

In some of Veblen's writings on workmanship the contributing elements to social wealth are defined very broadly. In the production of this communal wealth, for instance, he said that it seems to be required that if several local groups are effectively to be comprised in a single industrial system conditions of peace must prevail among them. Community of language seems also to be nearly necessary to the maintenance of such a system (Veblen, 1918, p. 108). Questions of language, communication and co-operation are thus important to his theory of the social production of community wealth. Nor does he neglect "real people" by leaving them out of the process.

Each successive move in advance, every new wrinkle of novelty, improvement,

invention, adaptation, every further detail of workmanlike innovation, is

of course made by individuals and comes out of the individual experience

and initiative, since the generations of mankind live only

as individuals. But each move so made is necessarily made by individuals

immersed in the community and exposed to the discipline of group life as

it runs in the community, since all life is necessarily group life ... A

new departure is always and necessarily an improvement on or

alternation in that state of the industrial arts that is already in the

keeping of the group at large ... (Veblen, 1918, pp. 103-4).

Veblen went on to say that:

Yet it might be argued that each concrete article of "capital goods" was

the product of some one man's labor, and, as such, its productivity, when

put to use, was the indirect, ulterior, deferred productiveness of

the maker's labor. But the maker's productivity in the case was but

a function of the immaterial technological equipment at his command, and

that in its turn was the slow distillate of the community's

time-long experience and initiative (Veblen, 1908, p. 339).

This principle of collective social wealth is thus the focal point of his critique of the marginal productivity theory of factors of production, and plays a key role in the development of his idea regarding "unearned income". Production is basically a social process, especially where the material product is produced as an integral part of the labour process, but more fundamentally it is due to the collective genesis of knowledge and the industrial arts, and the social origins of knowledge, language and communication. Unfortunately, the vested interests, Veblen claimed, gain the advantage of the community's social wealth through predation, sexism, war, status emulation and inheritance.

As several economists have suggested, Veblen's theory of collective social wealth implies both the feasibility and the desirability of the provision of public goods from the social surplus that exists; he seems to be asking his reader to assume that, if some reasonable standard of living was assured for all, what could be done with the surplus that would become available if invidious, that is, status enhancing consumption and unused industrial capacity were largely eliminated and the vested interests stripped of their exploitative rights? Could this surplus not be used to provide collective goods on an unprecedented scale and would not this change fundamentally the role of the public administrator? Such are the conclusions that can logically be extracted from Veblen's analysis even though he never explicitly stated them (on these points see O'Hara, 1995; and Stanfield, 1989, pp 717-34).

Craftsmanship, status emulation and the public administrator

The view that work is an integral part of the search for identity is expressed in the theory of craftsmanship of C. Wright Mills (1916-1969), the American sociologist. However, for many government workers the actuality of work life is far removed from any vision of craftsmanship. Where does the normative vision of a more fulfilling worklife fail? An examination of the theory of status emulation in Veblen and those who have extended his work, notably Harvey Leibenstein, provides insights into the barriers erected by the current institutional structures against the vision of a more humane workplace. These more humane structures might also serve to ameliorate the others that exist in large public organizations. Examining the theories of craftsmanship and status emulation will illustrate both the promise of their normative precepts and the barriers to fulfilling that promise in the realm of American public administration.

The theory of craftsmanship

Each of the empirical, normative and prudential facets of Mills's theory of craftsmanship are important, yet it is essentially its normative aspects which are most striking. These can be reduced to five basic propositions.

First is the desirability of unifying work and leisure instead of maintaining their bifurcation. At present, many individuals work primarily to obtain enough income to enjoy their leisure time. Since work itself is not perceived as gratifying, leisure time provides an opportunity for escapism.

The second proposition is the requirement that the worker be able to relate end product to work process and thus overcome the present separation of the two. This implicitly assumes the validity of the complaint that the division of labour and specialized work tasks divorce end product from work process and produce alienation in workers. A change is thus recommended in the nature of work so as psychologically to unite productive technique and finished product.

The third proposition in the theory of craftsmanship is that work ought to become a continuous process of learning. Thus the claim that jobs in which all the essentials can be mastered in a short period of time produce boredom or escape into reverie is accepted. A change in the nature of work is suggested so that continuing mastery of new skills and knowledge will provide greater job satisfaction.

Since work is viewed as a continuous process of learning, it is further asserted that employees must be able to participate in organizing the work process in their place of employment. This implies recognition of the antiquated and alienating nature of authoritarian management styles.

Finally, it is desirable that workers have an integrated view of their work, by which is meant understanding the social and moral significance of it. That is, they should understand the broader consequences of what they do for others in society. In short, work gratification is enhanced when the worker has an awareness of contributing to the larger social good or purpose (see Mills, 1948, pp. 195-226; 1954; 1959, pp. 25-53; 1963, pp. 347-52; 1968, pp. 112-41,215-38; Veblen, 1953, introduction).

In summation of the prescriptions for craftsmanship, it is evident that parallels exist between them and the theories of several other important figures in the social sciences. The first is Karl Marx, whose ideas about alienated and unalienated labour find structural parallels in the theory of craftsmanship. A second is Thorstein Veblen, to be treated in more detail later, whose interrelated norms of proficient workmanship, idle curiosity and parenthood also converge with Mills. A third is Max Weber, whose writings on religious belief and economic behaviour were familiar to Mills, especially the idea of a vocation or calling which, stripped of its religious significance, influenced Mills since it gives work an ethicization it would otherwise lack. Mills's theory of craftsmanship is undoubtedly an amalgam of these and other sources, all flavoured with his own unique insights. They reflect his interest in the professions and his prescription for craftsmanship in his craft the professoriate (see Tilman, 1984, ch. 4; 1989, pp. 283-7).

The relevance of this notion of craftsmanship is obvious. The ideal of autonomy and socially relevant and intellectually involved work has a considerable appeal to academics, in particular, since it approximates the ideal academic environment. The critic may, of course, object that the practice of craftsmanship is structurally impossible in many of the jobs that remain in industrial and post-industrial societies. The division of labour due to technological imperatives, the nature of the work process itself, its hierarchical organization, the resulting lack of worker countervailence, shift work and the necessity of long commuting to work; all make problematic the flowering of "craftsmanship" in many lines of work. Mills's litany of industrial virtue may appear to have a decidedly utopian and taxonomic cast to it when it is divorced from the structure and processes of existing institutions in particular cultural settings and specific historical situations. But what frustrates the realization of this vision in more appropriate occupational circumstances say, for example, in the contemporary professions and among skilled workers? And what relevance, if any, does it have in government bureaucracies where work is highly routinized and task specific? On the whole, craftsmanship is highly relevant for understanding and changing the meaning of work for occupations in the first categories, but, less so for those in the second. In any case, we now turn to the theory of status emulation to see what it has to contribute to our understanding of the blockage of craftsmanship.

The theory of status emulation

Some aspects of Veblen's thought, such as his distinction between industrial and pecuniary pursuits, have already attracted the interest of industrial sociologists such as J.A. Banks (1959, pp. 231-43). However, the Veblenian and post-Veblenian theories of emulatory behaviour and their relevance for the prospect of a humane workplace remain to be more fully analysed [1].

To describe emulatory behaviour Veblen coined the phrases conspicuous consumption", "conspicuous waste" and "conspicuous exemption from useful labour". It was Veblen's hypothesis that a powerful competitive strain exists in modern bureaucracies causing individuals to seek more status through these behaviours. An individual's sense of self-worth is based on what they think others think of them. This is largely a function of ability to consume, waste, or be conspicuously exempt from useful work. Thus ostentatious display is a means of enhancing the self-image through status enhancement.

In The Theory oft he Leisure Class the primary measure of status and thus selfworth, is ability to pay (Veblen, 1975, chs 2-4). In modern terms this might be called the "Rolex watch effect". Since a Rolex is no more functional than a quartz watch, its most important function is as a status signal. In Harvey Leibenstein's post-Veblenian analysis the original emulatory process is labelled "Veblen effects", that is, the higher the price of a good or service the more status it yields.

Leibenstein also identifies and labels two related types of emulatory consumption "bandwagon effects" and "snob effects" (Leibenstein, 1950, pp. 183-207). "Bandwagon effects" are characterized by consumers emulating their peers. These occur in industrial societies with a relatively large middle class where the economies are characterized by mass production and consumption. The object of this type of consumption is not, as in Veblen effects, to get ahead of the Jones family, but rather to keep up with them by joining them on the bandwagon.

"Snob effects" seem inevitable once mass consumption makes it impossible to gain adequate status by ostentatious display of commodities that many others can obtain. In Leibenstein's analysis, snobbery requires the consumer to possess esoteric knowledge as a consequence of sophisticated cultural indoctrination. Thus only initiates can take part in an emulatory process of this sort. The secrets of "good taste" and "breeding" are limited to the very few with the cultural expertise to enjoy such unique (and expensive) artefacts as Impressionist paintings or boxes at the opera. The point of snobbery, however, is not to get ahead of the Jones as in Veblen effects, or to join the Jones on the bandwagon, but to be different from them through possession and display of cultural expertise and artifacts which are beyond their aesthetic grasp.

Robert Steiner and Joseph Weiss, in turn, have added a still further refinement to the theory of emulatory consumption which they call "counter-snobbery"(see Steiner and Weiss, 1951, pp. 263-8; and, most recently, McCormick, 1987, pp. 57-9). Because snobbery will no longer satisfy the snob's status needs they turn against it by reverting to a simpler, more austere life style in which the acquisition of cultural artefacts and their display plays no significant role. Emulatory consumption can thus be summarized under four categories: Veblen, bandwagon, snob and counter-snobbery effects. These have social consequences and visible manifestations which are similar in one respect, but nevertheless quite different from one another in several other respects. Leibenstein, it should be noted, first used these effects in the theory of consumption, not in the theory of organization. Thus the reader must recognize explicitly the transition from consumption theory to organization theory in our use of these ideas.

Organization theory, craftsmanship and status emulation

But what does all this have to do with organization theory and how is it related to the prospect of a humane workplace? Specifically, what light do craftsmanship and status emulation shed on human interaction in large bureaucratic settings?

That there exists a characteristic and powerful emulatory strain in American culture is not in doubt, although it is stronger in some organizations than in others. The logic of the theory of status emulation suggests emulation will be most pervasive in business enterprise itself since emulatory behaviour will be strongest where pecuniary values are most dominant. Organization theorists have occasionally alluded to status emulation as a significant motivating factor in a variety of organizational settings[2].

The specific effects of emulatory constraint of craftsmanship have not yet been detailed. The literature on status emulation suggests that organizational behaviour is determined in part by the desire of employees to exceed existing consumption patterns (Veblen effects), share them with peers (bandwagon effects), or have different patterns altogether (snobbery). In a market economy, the ability to adopt a preferred consumption pattern is the most effective source of motivation.

Status can also be enhanced by demonstrated ability to waste, so it can be assumed that the organization's emulatory processes will also induce the development of a hierarchy of waste with the most prestige awarded to those who waste the most. Once more, Leibenstein's taxonomy may be employed to divide wasters into categories such as those who acquire status by wasting most as measured in terms of price, those who climb on the bandwagon in order to waste as much as their peers, and the snobs who simply waste differently although in novel or idiosyncratic ways. Finally, there are the counter-snobs who try through a reversion to a puritanically austere and simple life-style to create an image of themselves as not wasteful.

It was also suggested earlier that conspicuous exemption from useful labour was yet another example of the emulatory strain that exists within major social institutions. Employing Leibenstein's typology, it can be hypothesized that those who do the least useful work within an organization will have the most status, those who exhibit a modicum of inertia will join their peers on the bandwagon, and those who malinger in a esoteric fashion can be classified as snobs[3]. Counter-snobs might pursue their ends of status enhancement by loafing in ways that feign indifference or even revulsion against the existing status system since it is rooted in a hierarchy of laziness.

Emulatory behaviour, craftsmanship and organization theory

Status emulation may be an important obstacle to the realization of the practice of craftsmanship. What ultimately thwarts and frustrates the realization of craftsmanship are contemporary structural and institutional conditions, although one weakness of the literature is its failure to suggest how to remove them. Nevertheless, many studies prescribe change in the structure of the workplace, change in the nature of work, and changed attitudes on the part of workers towards their occupation or profession. Thus a dialectic exists in which thesis is pitted against antithesis, that is, status emulation is portrayed as obstructing and contaminating the actualization of craftsmanship with no higher synthesis yet emergent.

Can a taxonomy that attributes high status to, first, ostentatious display of the perquisites of office, second, conspicuous waste of organizational resources, and, third, conspicuous exemption from useful labour be taken seriously? To judge the utility of these concepts, we offer several hypotheses based on this analysis along with theoretical and conceptual refinements which shed light on the inner workings of organizations. These hypotheses have to do with the effects of status emulation on the functioning of organizations. First, an organization in which status emulation is pervasive will contaminate or block the development of craftsmanship, the converse is also likely to be true, i.e. the less pervasive the emulatory strain, the greater the likelihood of actualizing craftsmanship. This is true since craftsmanship and emulatory behaviour are alternative sources of identity and self-worth for individuals, What is more, we assert that they are for the most part mutually exclusive. Craftsmanship implies that satisfaction derives from the intrinsic qualities of a job and the performance of the job in a skilful manner. In contrast, emulation implies that a job is viewed as having no intrinsic worth. Instead, what is important is having a position, i.e. a place in the organization chart. Occupying such a place in a hierarchy validates a certain level of status within the organization with its attendant perquisites such as accepted levels of consumption, waste or leisure. Since human energies are limited, it is unlikely that a single individual can simultaneously pursue both of the goals. Which set of goals is dominant within an organization depends on the "culture" of the organization, among other things.

The second hypothesis we propose is that the existence of an emulatory system will ensure status enhancing forms of waste within the organization; the more dominant the emulatory strain, the greater the waste. The converse should also be true since this hypothesis follows directly from the previous one. Where emulation is important, the nominal goals of the organization, e.g. maximizing organizational productivity and service to the community will be subverted as organizational resources are channelled into patterns of consumption, waste and leisure intended to validate the status of members of the organizational hierarchy.

The presence of craftsmanship will not necessarily guarantee the elimination of organizational waste. An orientation towards performance of a specific task might conceivably lead to too many resources being used on that task. However, if the managers of the organization are possessed of a sense of craftsmanship, their sense of craftsmanship as managers leads them to seek the goals of the organization rather than specific tasks within the organization. This will result in substantially less wasteful behaviour.

The final hypothesis we propose deals with an important limitation on emulatory behaviour and the waste that such behaviour entails. We assert that, when organizational survival or autonomy are threatened, status enhancing behaviour will be reduced as organizational resources are marshalled for survival needs. The ability to engage in emulatory display is clearly limited by the resources available and the resources devoted to status seeking must not be so great as to destroy the organization through a failure to perform its mandated goals. To do so destroys the very basis on which status is granted, i.e. position within the organization. When an organization is under stress, due to a hostile environment, diversion of resources from its purpose threatens its survival. Status enhancing behaviour will be suppressed in the interests of survival. For instance, there will very likely be an inverse relationship between the amount of emulatory behaviour within a government agency, the extent of criticism the agency gets from the public, and the likelihood its budget will be reduced or the agency abolished. Where the agency is shielded from criticism and the review of its budget, politically invisible, emulatory behaviour is likely to be excessive. In intensely scrutinized environments, emulation will be unimportant.

We have argued that two largely normative theories about the nature of human behaviour, nonetheless have empirically testable implications regarding the behaviour of organizations. The theory of craftsmanship promotes a normative vision of the workplace wherein work is an exercise in self-fulfillment not frustration. The theory of emulatory behaviour likewise condemns as wasteful the practice of seeking status through conspicuous displays of various kinds. Previously the realm of each of these theories has been considered distinct. We argue that the distinction between humans as producers and as consumers is artificial and, indeed, constitutes what John Dewey called a "false dualism". Thus the ideas of emulatory status seeking applied to the workplace can explain much of the divergence between the ideal of a humane workplace and the actual experience of the workplace for most people. However, it may be legitimately inferred from the body of our text that we believe that the barriers to the achievement of organizational humanism are not so deeply embedded in government bureaucracy as to make its realization implausible. Indeed, it is evident that such ideals are relevant in many occupations and that strategies might be developed to promote their implementation for the non-emulatory pursuit of craftsmanship. For example, the practice of craftsmanship, as Mills defined it, is still prevalent, despite deskilling in some trades, in many types of employment ranging from the traditional crafts, to the service industry, to information processing, not to mention other types of work. It is, of course, true that certain types of work because of the division of labour, the demeaning structure of authority, or sheer technological obtuseness lend themselves less to the practice of craftsmanship than other types. Nevertheless, we assert the continuing relevance of craftsmanship in many lines of work throughout the public sector meaning that the extent to which Mills's ideals can be implemented is a significant test of the degree to which the organization may be said to be "humanistic".

On the other hand, the extent to which emulatory processes contaminate the workplace may be seen as the main barrier to the spread of organizational humanism. Of course, it can be argued that this arrangement of "emulation" and "craftsmanship" is a questionable dualistic antithesis which rests on some a historical standard of the meaning and role of craftsmanship. Indeed, Veblen develops both aspects of human behaviour in complex ways in The Instinct of Workmanship (Veblen, 1918) because he rejected dualistic modes of thought and a historical cultural and social analytical configurations. On the other hand, his most detailed analysis of the dichotomy between emulation and craftsmanship is to be found in Industrial and Pecuniary Employment where he argues that his distinction is at times between mutually exclusive categories, although his dichotomization is epistemologically vague (see Veblen, 1901, pp. 190-235; 1904, chs I-IV; "Mr. Cummings's strictures on The Theory of the Leisure, 1989, pp. 106-17; Tilman, 1992). Dennis Smith has recently written in this regard that:

Veblen sought to separate and to polarize elements of American culture which

are in fact, closely related. His writings may be interpreted, in large

part, as an attempt to establish the existence of a dialectical

contradiction whose tension and dynamic would provide the promise of

radical social transformation. For example, Veblen proposed a misleading

opposition between a predatory inclination and a readiness to engage in

regular, purposeful and productive labour. In fact, both traits are

typically found in the same individual or group (Smith, 1988, p. 55).

Smith overlooked Veblen's point that the polarized traits are not present in the same classes in stable quantities, the mixture is unstable even between individuals, and that it will simply not do to assume the existence of immutable or constant moral traits. Nevertheless, he may be correct in suggesting that the pursuit of self-interest is more congruent with the production of socially serviceable goods and services than Veblen imagined[4]. "Emulation" and "craftsmanship" may thus be less in conflict than the dichotomy suggests, yet this must remain a matter for empirical investigation rather than a priori assumption. In this sense, emulatory status-seeking and craftsmanship may not be as consistently incongruent as we have suggested. Nevertheless, it appears to us that, on the whole, emulation is an obstacle to craftsmanship and the latter is the organizational key to "humanism".

A semiotic approach is also possible: indeed, can be argued that, in

emulatory structures which Veblen characterized as invidious, as opposed to

efficacious, the external sign of a "calling" has replaced that which is

thought to be signalled, i.e. the actual efficacious activities. This is

"looking good" rather than "doing good", and could be taken as a form of

unreflective manipulation of signs as well as the actual phenomena

themselves. How does this come about? Is there something about government

bureaucracies that induces this such as, anonymity or information

asymmetries that promote individual recognition over individual competence.

If so, is there an alternative? Space precludes answering such questions,

but they are certainly worth asking.

"Organizational humanism" may seem a vague or at least ill-defined term to the reader, yet it has roots deep in the history of organizational theory and institutional analysis. The "classics" in the former would, of course, include the ideas and writings of Marx-Engels and many of those working in the Marxian traditions, the theorists and practitioners of the Christian Social Gospel both Protestant and Catholic, Abraham Maslow and the neo-Freudian tradition, Herbert Marcuse, Jurgen Habermas and the critical theorists of the Frankfurt School, C.B. Macpherson and those following him in the radical tradition he established in Canada; and those practitioners of an indigenous critical theory, namely, Veblen and the institutional economists and Mills and radical sociology. As Mills put it in summarizing what has come to be seen as the core of the tradition of organizational humanism "Human society ... ought to be built around craftsmanship as the central experience of the unalienated human and the very root of free human development" (Mills, 1963b, p. 386). As a vision the craftsman ideal has retained an emancipatory potential for both individual and society even though its contamination or dilution by emulatory values and behaviour remains an omnipresent danger. For Mills and Veblen an authentic public administration which fulfils that ideal remains a possibility.


[1.] William Dugger specifically relates emulatory behaviour to the corporate workplace in Corporate Hegemony (Dugger, 1989a) and he deals with the same subject in An Alternative to Economic Retrenchment (Dugger, 1984). He continues the social economic analysis of emulatory values in "The continued evolution of corporate power" (Dugger, 1985) and in "Emulation: an institutional theory of value formation (Dugger, 1989b, pp. 134-54). See also Veblen (1975, chs 2-4).

[2.] Emulatory processes rooted in pecuniary motives which aim at status enhancement and, ultimately, at strengthening the self-image will contaminate what Veblen called "the instinct of workmanship". This is true because craftsmanship and status emulation represent alternative, and to a large degree mutually exclusive, sources of individual self-esteem: see Veblen (1918, ch. 2).

[3.] The application of Leibenstein's ideas regarding emulatory consumption patterns provides an interesting insight about another of Leibenstein's theoretical concepts, the notion of `X-efficiency. Leibenstein identifies X-inefficiency as the failure to adopt the best practices available in organizing production. Emulatory consumption practices may be threatened by reorganization of production on the lines indicated by a desire to achieve productive efficiency' Thus, our analysis suggests that, in addition to being a barrier to organizational humanism, emulatory consumption may also function as a barrier to economic efficiency Leibenstein's notion of X-efficiency was first proposed in "Allocative efficiency vs. `X-efficiency"'(Leibenstein, 1966, pp. 392-415). He expanded the notion at length in his book, Beyond Economic Man (Leibenstein, 1976). Curiously, although his classic paper on the bandwagon effect, etc. is reproduced as chapter 4 of this book, he does not draw the implications we do regarding the role of emulatory behaviour as an impediment to organizational efficiency.

[4.] As Veblen suggests in The Theory of the Leisure Class, in the primitive phases of social development "the efficiency of the individual can be shown chiefly and most consistently in some employment that goes to further the life of the group. What emulation of an economic kind there is between the member of such a group will be chiefly emulation in industrial serviceability. At the same time the incentive to emulation is not strong, nor is the scope for emulation large" (Veblen, 1975, p. 31).


Banks, J.A. (1959), "Veblen and industrial sociology", British Journal of Sociology, Vol. 10, September.

Coney, L. (1937), "Veblen and Marxism", Marxist Quarterly. Vol. 1, January-March.

Dugger, W. (1984), An Alternative to Economic Retrenchment Petrocelli Books, Princeton, NJ.

Dugger, W. (1985), "The continued evolution of corporate power", Review of Social Economy, Vol. 43, April.

Dugger, W. (1989a), Corporate Hegemony, Greenwood Press, New York, NY.

Dugger, W. (1989b), "Emulation: an institutional theory of value formation", Review of Social Economy, Vol. 47, Summer.

Gruchy, A. (1939), "The concept of national planning in institutional economics", Southern Economic Journal, Vol. 6, October.

Leibenstein, H. (1950), "Bandwagon, snob and Veblen effects in the theory of consumer's demand", Quarterly Journal of Economics Vol. 64, May.

Leibenstein, H. (1966), "Allocative efficiency vs "X-efficiency", American Economic Review, June.

Leibenstein, H. (1976), Beyond Economic Man, Harvard University Press, Cambridge, MA.

Lerner, M. (1935), "What is usable in Veblen?", New Republic, Vol. 83, 15 May.

Lerner, M. (1948) (Ed.), The Portable Veblen, Viking Press, New York, NY.

Lubin, I. (1968), "Recollections of Veblen", in Qualey, C. (Ed.), Thorstein Veblen, Columbia University Press, New York, NY.

Markowitz, N. (1973), The Rise and Fall of the People's Century.' Henry A. Wallace and American Liberalism, 1941-1948, Free Press, New York, NY.

McCormick, K. (1987), "A note on Leibenstein's Veblen effect", HES Bulletin, Vol. 8, Winter.

Mills, C.W. (1948), The Sociological Imagination, Oxford University Press, New York, NY.

Mills, C.W. (1954), "Work milieu and social structure", address to the Mental Health Society of Northern California, Asilomar, CA, 13 March.

Mills, C.W. (1963a), "The unity of work and leisure", in Louis, I. (Ed.), Power, Politics and People (edition with introduction by Horowitz), Oxford University Press, New York, NY.

Mills, C.W (1963b), "The man in the middle: the designer", Power, Politics and People, Oxford University Press, New York, N.Y.

Mills, C.W. (1968), White Collar, Oxford University Press, New York, NY, pp. 112-41.

Mills, C.W. (1959), "On intellectual craftsmanship", in Gross, L. (Ed.), Symposium on Sociological Theory, Harper & Row, New York, NY.

O'Hara, P. (1993), "Veblen's analysis of business, industry and the limits of capital", History of Economics Review, No. 20, Summer.

O'Hara, P. (1995), "Thorstein Veblen's theory of collective social wealth", in Tilman, R. (Ed.), Thorstein Veblen: Essays in Retrieval and Relevance Myron E. Sharpe Publishing, Armonk, NY.

Smith, D. (1988), The Chicago School: A Liberal Critique, Macmillan Education, London.

Stanfield, R. (1989), "Veblenian and non-Marxian perspectives on the cultural crisis of late capitalism", Journal of Economic Issues, Vol. 23, September.

Steiner and Weiss (1951), "Veblen revised in the light of countersnobbery", Journal of Aesthetics and Art Criticism, Vol. 9, March.

Tilman, R. (1984), C. Wright Mills: A Native Radical and His American Intellectual Roots, Pennsylvania State University Press, University Park.

Tilman, R. (1989), "C. Wright Mills, The Sociological Imagination: A Reappraisal", The American Sociologist, Vol. 20, Fall.

Tilman, R. (1992), Thorstein Veblen and His Critics, 1891-1963, Princeton University Press, Princeton.

Veblen, T. (1901), Industrial and Pecuniary Employments publication of the American Association, Series 3.

Veblen, T. (1904), The Theory of Business Enterprise Charles Scribners Sons, New York, NY.

Veblen, T. (1908), "On the nature of capital, I: the productivity of capital goods", Quarterly Journal of Economics, Vol. 22, August.

Veblen, T. (1918), The Instinct of Workmanship, B.W. Huebsch, New York, NY.

Veblen, T. (1953), The Theory of the Leisure Class (the Mentor edition), New American Library, New York, NY.

Veblen, T. (1975), The Theory of the Leisure Class Angustus M. Kelley, New York, NY.

Veblen, T. (1989), "Mr Cummings's strictures on The Theory of the Leisure", Journal of Political Economy, Vol. 8, December.

The authors thank the anonymous critics who read earlier drafts of the manuscript.

Rick Tilman University of Nevada, Las Vegas, Nevada, USA, and

John H. Brown Georgia Southern University, Statesboro, Georgia, USA
COPYRIGHT 1995 Emerald Group Publishing, Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1995 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Author:Tilman, Rick; Brown, John H.
Publication:International Journal of Social Economics
Date:Jan 1, 1995
Previous Article:Remodelling the moral order in the Netherlands.
Next Article:Regulatory capture and the price of electricity: evidence from time series estimates.

Terms of use | Privacy policy | Copyright © 2022 Farlex, Inc. | Feedback | For webmasters |