Analysis of Veblen’s The Theory of Business Enterprise

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1. Introduction In the field of economics much has been said on the nature of commerce organizations and their role in the economy, but most mainstream approaches fall short in their attempts to form a realistic model of the economy. The standard view of business is that of the firm, a homogeneous entity that produces homogeneous widgets with the use of perfectly substitutable homogeneous capital and labor; occasionally discussions will mention “The Entrepreneur”, an all-knowing master coordinator. (Kasper et al., 2012) In The Theory of Business Enterprise, Thorstein Veblen provides an alternative approach using his intuitionalist-based analysis, most famously developed in The Theory of the Leisure Class, to the structure of business and industry of the late 1800’s and early 1900’s. Veblen’s analysis reveals that the interests of businessmen and industry do not always align with and can be detrimental to the community or society as a whole. (Veblen, 1899, 1904) This paper will review Veblen’s history, theory, and analysis and attempt to offer appraisals and critiques of Veblen’s view of the relationship between businessmen, industry, and society as a whole. In an attempt to accomplish this, this paper will be organized into 3 parts: 1. Veblen's general view of businesses in the Industrial Age 2. The machine process & Veblen's view of the end 3. A final conclusion 2. Veblen v. mainstream economic theory (1) Veblen’s general view of businesses in the Industrial Age In contrast to the standard view of the firm, Veblen recognized that the industrial age brought with it a new type economic organization much different from the single owner businesses and small partnerships that are closer to the standard idea of the firm. Hi... ... middle of paper ... ...cs – Property, Competition, Policies. Cheltenham, UK and Northampton, MA, USA: Edward Elgar Veblen, Thorstein. 1899. The Theory of the Leisure Class. New York: Dover Publications, Inc. Veblen, Thorstein. 1904 The Theory of Business Enterprise. 4th ed. Clifton, New Jersey: Augustus M. Kelley Publishers (also available from: https://pilot.wright.edu/d2l/le/content/237767/viewContent/776495/View; accessed on March 28, 2014) Brøndal, Jørn. 2004. Ethnic Leadership and Midwestern Politics: Scandinavian-Americans and the Progressive Movement in Wisconsin, 1890-1914. Champaign, IL: University of Illionois Press (also available from: http://books.google.com/books?id=oVTPWILqYCkC&lpg=PP1&pg=PP1#v=onepage&q&f=false; accessed on April 3, 2014) Library of Economics and Liberty. 2014. Thorstein Veblen. http://www.econlib.org/library/Enc/bios/Veblen.html; accessed April 3, 2014.

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