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Re: <nettime> Another insult of the 1 percent: everybody does it!
Keith Hart on Sat, 12 May 2012 23:24:22 +0200 (CEST)

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Re: <nettime> Another insult of the 1 percent: everybody does it!

On Fri, May 11, 2012 at 7:04 PM, Brian Holmes
<bhcontinentaldrift {AT} gmail.com>wrote:

> A real CEO! What Veblen would've called a "business entrepreneur." That's
> a class whose function, with regard to the engineers, is making profit out
> of them by any means necessary, most often through what Veblen called the
> *sabotage* of productivity in order to maintain market prices and
> profitability. Check out the little book he wrote in the wake of the
> Russian revolution, during the 1919-1920 recession and the great wave of
> strikes that accompanied it:
> http://socserv2.mcmaster.ca/~**econ/ugcm/3ll3/veblen/**Engineers.pdf<http://socserv2.mcmaster.ca/%7Eecon/ugcm/3ll3/veblen/Engineers.pdf>
> Veblen, like OWS, was a genius at inventing new terminology for Marxist
> concepts so they could be smuggled into the United States.

Veblen deserves more credit than as just a crypto-Marxist. The decades
leading up to the First World War saw a fundamental shift in the social
organization and technology of industrial economies. We will never make
sense of our own times unless we grasp fully what happened then, with all
the benefits of hindsight. Fortunately we have a wonderful analysis of the
making of the twentieth century in Thorstein Veblen?s *The Theory of
Business Enterprise *(1904), a work that is less well-known than his
notorious *The Theory of the Leisure Class *(1899), but is better-known
than another masterpiece, *Imperial Germany and the Industrial

Marx first drew attention to the importance of machines in modern
development. Veblen, a Scandinavian Midwesterner, a half-century later and
with the robber barons operating right under his nose, saw how machine
production could be hijacked by financial speculators. He recognized the
extraordinary implications of the recent legal fiction that would treat
huge corporations as if they were individual persons with the natural
rights of ordinary citizens. At the same time, he revealed how ?captains of
industry? were able to pile up personal fortunes at the expense of
society?s real interests while hiding behind this fiction. He was
scornfully derisive of the intellectually backward and self-serving
platitudes of the economics profession. Explaining why economics did not
deserve to be recognized as an ?evolutionary science?, he proposed instead
to remake it as the study of institutions. No doubt he would have his own
interpretation of the rise of neoclassical economics to the virtual
standing of a world religion since the Second World War.

Veblen saw a fundamental contradiction between the social discipline
imposed by machine production and the motives of businessmen who controlled
the industrial system through their ability to make money by selling.
Businessmen will promote any useless activity, as long as it brings a
profit; they do not care about production or livelihood as such. In
consequence, power in industry had passed from the factory floor to the
financial managers at head office. The cultural system of business
enterprise originated in seventeenth-century England which he described as
?an isolation hospital for technology, science and civil rights?. Its
foundation is the institution of private ownership ? the idea that free
labour should own the product of its workmanship or ?natural rights?. The
system of market competition laid out in the eighteenth century (by Adam
Smith) was based on handicrafts and its philosophy was pre-industrial.
Machine production transformed the nineteenth-century economy and
developments in the legal forms of corporate capitalism were rapidly
reorganizing the logic of business enterprise in Veblen?s day.

Yet economists still persevered with a preindustrial myth of economy (?a
conventional anthropomorphic fact?) that was as relevant to understanding
the modern world as Newtonian mechanics or the artisan?s notion of God as a
creator. The organization of machine industry had removed de facto natural
rights long ago. Its culture is sceptical, matter-of-fact and relativistic;
modern science reflects this attitude. The spirit of pecuniary gain that
motivates modern businessmen (and that the economics profession slavishly
endorses) cannot be reconciled with the material and social needs of
machine industry. Veblen predicts that the idea of the economy as free
market competition is a transitory halfway house on the road either to
socialism based on machine production or to a new barbarism, dynastic
politics conducted along medieval lines, with war and games the principal
preoccupations of the ruling clas

This was not the message that twentieth-century Americans wanted to hear
and Veblen's institutional economics, after receiving a boost from the
Great Depression, was sidelined into the margins of academia. He got his
own back on the universities in *The Higher Learning in America: a
memorandum on the conduct of universities by businessmen* (1918). There he
asked how a cpaitalist society could tolerate the organized pursuit of
truth. His answer was by telling professors that they have high social
status and paying them the wages of artisans (then low-paid, but not now).
They in turn sacrifice all intellectual principle in order to make up the

In this way you can see that the current attack on the universities is not
> just a caste issue for academics, it's a societal issue. The structure of
> society based on distinct professional fields defined and guarded by
> credentials is useless for the business entrepreneurs. The real question,
> imo, is not how to defend professional status but rather how to transform
> it into something that can have a positive social function for everyone. So
> instead of getting a degree to carve out a protected niche in the economy,
> you would get both a degree and a profession in order to contribute to a
> greater good.

As my brilliant friend Noam Yuran insists, one link between Marx and Veblen
is their focus on the *historicity* of the struggle for socialism in the
age of capitalist. For Marx industrial capitalism was essentially feudalism
in drag, another coercive way of extracting surplus labour through
production for profit rather than in the form of rent. As midwife of the
transition from agrarian civilization to a just and democratic society,
capitalism was Janus-faced, looking both to the past and to the future.
This is Veblen's perspective too, with the businessman and the engineer as
ideal types locked in a conflict that could go either way.

Like John, I feel that Brian's vision of the contemporary threat to the
universities doesn't go far enough. Twentieth century national capitalism
was, after all, based on Hegel's recipe for a state-made universal class of
university-trained bureaucrats that Marx and Engels had already trashed in
The German Ideology. The academic division of labour and caste system was
explicitly based on the principles of the medieval guild and was tied to
the fortunes of social democracy which flourished briefly after world war
2. This is when the idea of a professional job for life took root, but it
looks increasingly archaic now. Cue in Mark and his digital economy mantra
which is compelling.

So I wonder if, instead of harking back to Talcott Parsons' dream of a
middle class division of labour where doctors, professors and engineers are
valued because they are good for society, we might revive a more romantic
vision which holds that, if the world's structures are going to hell in a
basket, there is no point in acquiring stable knowledge of their
functioning. rather, each of us should concentrate on improving what is
between our ears in the hope that it will help us to respiond creatively to
the chaos around us, even perhaps to build something new there. Cue in
Brian and the politics of art. This to me is more hopeful than pining for a
lost age of public higher education that will never return in any form,
however socially useful.


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