time traveler

Thorstein Bunde Veblen (born Tosten Bunde Veblen July 30, 1857 – August 3, 1929) was a Norwegian-American sociologist and economist and a founder, along with John R. Commons, of the Institutional economics movement. He was an impassioned critic of the performance of the American economy, and is most famous for his book The Theory of the Leisure Class (1899).

Veblen was born in Cato, Wisconsin, of Norwegian immigrant parents. While Norwegian was his first language, he learned English both from neighbors and from school, which he began at the age of 5. His family was highly successful and placed great emphasis on education and hard work, all of which undoubtedly contributed to his later scorn for what he termed "conspicuous consumption" and waste of the gilded age.

He obtained his B.A. in Economics at Carleton College (1880), under John Bates Clark, a leading economist in the emerging body of thought now identified as neoclassical economics. He did graduate work at Johns Hopkins University under Charles Sanders Peirce, the founder of the pragmatist school in philosophy, and subsequently received his Ph.D. in (1884) at Yale University, under the direction of William Graham Sumner, a proponent of laissez-faire economic policies. Perhaps the most important intellectual influence on Veblen was Herbert Spencer, whose work in the last half of the 19th century sparked an enormous interest in the evolutionary perspective on human societies.

From 1891 to 1892, after six years spent reading voluminously at the family farm where he went to recover from malaria, Veblen continued studying as a graduate student, now in economics, at Cornell University under James Laurence Laughlin.

In 1892, he became a professor at the newly opened University of Chicago, simultaneously serving as managing editor of the Journal of Political Economy.

In 1906, he received an appointment at Stanford University, where he left, it is often written, because of "womanizing". The rumors of Veblen’s womanizing probably followed him from the University of Chicago, where difficulties with his eccentric first wife had led some to see him, probably wrongly, as a roué. It is possible that these rumors were used to terminate the employment of a man who was widely regarded as a poor teacher and a radical critic.

In 1911, Veblen joined the faculty of the University of Missouri–Columbia, where he had support from Herbert Davenport, the head of the economics department. Veblen was not fond of Columbia, Missouri, but remained there through 1918. In that year, he moved to New York to begin work as an editor of a magazine called The Dial, and then in 1919, along with Charles Beard, James Harvey Robinson and John Dewey, helped found the New School for Social Research (known today as The New School). He was also part of the Technical Alliance, created in 1918-19 by Howard Scott, which would later became the Technocracy movement. From 1919 through 1926 Veblen continued to write and to be involved in various activities at The New School. In 1927 Veblen returned to the property that he still owned in Palo Alto and died there in 1929.

Veblen developed a 20th century evolutionary economics based upon the new ideas emerging from anthropology, sociology, and psychology. Unlike the neoclassical economics that was emerging at the same time, Veblen described economic behavior as socially rather than individually determined and saw economic organization as a process of ongoing evolution. This evolution was driven by the human instincts of emulation, predation, workmanship, parental bent, and idle curiosity.

Veblen wanted economists to grasp the effects of social and cultural change on economic changes. In The Theory of the Leisure Class, which is probably his best-known work, because of its satiric look at American society, the instincts of emulation and predation play a major role. People, rich and poor alike, attempt to impress others and seek to gain advantage through what Veblen coined "conspicuous consumption" and the ability to engage in "conspicuous leisure". In this work Veblen argued that consumption is used as a way to gain and signal status. Through "conspicuous consumption" often came "conspicuous waste," which Veblen detested. Much of modern advertising is built upon a Veblenian notion of consumption.

In The Theory of Business Enterprise, which was published in 1904, at the height of American concern with the growth of business combinations and trusts, Veblen employed his evolutionary analysis to explain these new forms. He saw them as a consequence of the growth of industrial processes in a context of small business firms that had evolved earlier to organize craft production. The new industrial processes impelled integration and provided lucrative opportunities for those who managed it.

What resulted, as Veblen saw it, a conflict between businessmen and engineers, with businessmen representing the older order and engineers as the innovators of new ways of doing things. In combination with the tendencies described in The Theory of the Leisure Class, this conflict resulted in waste and "predation" that served to enhance the social status of those who could benefit from predatory claims to goods and services.

Veblen generalized the conflict between businessmen and engineers by saying that human society would always involve conflict between vested interests and new forms developed out of an innate human tendency to manipulate and learn about the physical world in which we exist.

He also generalized his model to include his theory of instincts, processes of evolution as absorbed from Sumner, as enhanced by his own reading of evolutionary science, and Pragmatic philosophy first learned from Charles Sanders Peirce.

The instinct of idle curiosity led humans to manipulate nature in new ways and this led to changes in what he called the material means of life. Because, as per the Pragmatists, our ideas about the world are a human construct rather than mirrors of reality, changing ways of manipulating nature lead to changing constructs and to changing notions of truth and authority as well as patterns of behavior (institutions). Societies and economies evolve as a consequence, but do so via a process of conflict between vested interests and older forms and the new. Veblen never wrote with any confidence that the new ways were better ways, but he was sure in the last three decades of his life that the American economy could have, in the absence of vested interests, produced more for more people. In the years just after World War I he looked to engineers to make the American economy more efficient.

In addition to The Theory of the Leisure Class and The Theory of Business Enterprise, Veblen’s monograph "Imperial Germany and the Industrial Revolution", and his many essays, including "Why Is Economics Not an Evolutionary Science",and "The Place of Science in Modern Society", remain influential.

In spite of difficulties of sometimes archaic language caused in large part by Veblen’s struggles with the terminology of unilinear evolution and of biological determination of social variation that still dominated social thought when he began to write, Veblen’s work remains relevant, and not simply for the phrase "conspicuous consumption". His evolutionary approach to the study of economic systems is once again in vogue and his model of recurring conflict between the existing order and new ways can be of great value in understanding the new global economy.

Veblen, as noted, is regarded as one of the co-founders (with John R. Commons, Wesley C. Mitchell, and others) of the American school of Institutional economics. Present-day practitioners who adhere to this school organise themselves in The Association for Evolutionary Economics (AFEE) and the Association for Institutional Economics (AFIT). AFEE gives an annual Veblen-Commons (see John R. Commons) award for work in Institutional Economics and publishes the Journal of Economic Issues. Some unaligned practitioners include theorists of the concept of "differential accumulation". Veblen’s legacy has also been claimed by those involved with technocracy and his work is often cited in treatments of American literature.

 

Ludwig Heinrich Edler von Mises (September 29, 1881 – October 10, 1973) was a notable economist and a major influence on the modern libertarian movement. He has been called the "uncontested dean of the Austrian School of economics". The Ludwig von Mises Institute is named after him.

Ludwig von Mises was born in Lemberg, then part of the Austro-Hungarian Empire and now the city of Lviv, Ukraine, to Jewish parents. His father was stationed there as a construction engineer. Physicist Richard von Mises was Ludwig’s younger brother. Another sibling died in infancy. When Ludwig and Richard were small children, his family moved back to their ancestral home of Vienna. In 1900, he attended the University of Vienna, becoming influenced by the works of Carl Menger. Mises’ father died in 1903, and in 1906 Ludwig was awarded his doctorate.

In the years from 1904 to 1914, Mises attended lectures given by the prominent Austrian economist Eugen von Boehm-Bawerk. Mises taught at the Vienna University in the years from 1913 to 1934, while also serving as a principal economic adviser to the Austrian government.

To avoid the influence of National Socialists in his Austrian homeland, and fearing repression due to his Jewish ancestry in 1934 Mises left for Geneva, Switzerland, where he was a professor at the Graduate Institute of International Studies until 1940. In 1940, he emigrated to New York City. He was a visiting professor at New York University from 1945 until he retired in 1969, though he was not salaried by the university. Instead, he earned his living from funding by businessmen such as Lawrence Fertig. For part of this period he worked on currency issues for the Pan-Europa movement led by a fellow NYU faculty member and Austrian exile, Richard Coudenhove-Kalergi. He received an honorary doctorate from Grove City College. Despite his growing fame, Mises listed himself plainly in the New York phone directory and he welcomed students freely to his home. Mises died at the age of 92 at St Vincent’s hospital in New York.

Mises wrote and lectured extensively on behalf of classical liberalism and is seen as one of the leaders of the Austrian School of economics. In his treatise on economics, Human Action, Mises introduced praxeology as the conceptual foundation of the science of human action, establishing economic laws of apodictic certainty rejecting positivism and material causality. Many of his works, including Human Action, were on two related economic themes:

1-monetary economics and inflation;
2-the differences between government controlled economies and free trade.
Mises argued that money is demanded for its usefulness in purchasing other goods, rather than for its own sake and that any significant credit expansion causes business cycles. His other notable contribution was his argument that socialism must fail economically because of the economic calculation problem — the impossibility of a socialist government being able to make the economic calculations required to organize a complex economy. Mises projected that without a market economy there would be no functional price system, which he held essential for achieving rational allocation of capital goods to their most productive uses. Socialism would fail as demand cannot be known without prices, according to Von Mises. Mises’ criticism of socialist paths of economic development is well-known.

The only certain fact about Russian affairs under the Soviet regime with regard to which all people agree is: that the standard of living of the Russian masses is much lower than that of the masses in the country which is universally considered as the paragon of capitalism, the United States of America. If we were to regard the Soviet regime as an experiment, we would have to say that the experiment has clearly demonstrated the superiority of capitalism and the inferiority of socialism. These arguments were elaborated on by subsequent Austrian economists such as Hayek.

In Interventionism, An Economic Analysis (1940), Ludwig von Mises wrote:

"The usual terminology of political language is stupid. What is ‘left’ and what is ‘right’? Why should Hitler be ‘right’ and Stalin, his temporary friend, be ‘left’? Who is ‘reactionary’ and who is ‘progressive’? Reaction against an unwise policy is not to be condemned. And progress towards chaos is not to be commended. Nothing should find acceptance just because it is new, radical, and fashionable. ‘Orthodoxy’ is not an evil if the doctrine on which the ‘orthodox’ stand is sound. Who is anti-labor, those who want to lower labor to the Russian level, or those who want for labor the capitalistic standard of the United States? Who is ‘nationalist,’ those who want to bring their nation under the heel of the Nazis, or those who want to preserve its independence?"