Governments and entire national economies have been sacrificed to save the financial sector and its major clients. Bailing out banks, bondholders and Wall Street brokerage houses — the institutions whose mismanagement, over-lending and outright fraud led to the crash — has widened economic polarization and caused fiscal strains. Their post-crisis management has enabled these interests to gain control of a large swath of the pubic domain of debtor countries, along with industries and real estate in the creditor nations themselves. The effect is to post-industrialize society, subordinating the forces of industrial capitalism to an extractive and increasingly concentrated financial superstructure consolidating its power by bank loans, bond and stock ownership — turning the rest of society into debtors, renters and buyers of monopolized goods and services. Veblen made numerous contributions to a diverse set of fields. Not surprisingly, he has been considered by some to be an economist, and by others a sociologist.

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This is the blog of Nader Elhefnawy. Thank you for visiting. In brief: the developing industrial system was increasingly sophisticated and productive, yet fragile as well, with the latter point all the more problematic because of the way in which power over that system was distributed. And on top of all this, the conflicts between management and labor where trade unions, too, get in on the game of sabotage for the sake of what the "traffic will bear" as they strike for higher wages worked in a like manner.

As all this generated more frequent disruptions that spread more quickly and widely, law and politics actually worked ever more in favor of business control; while at the same time the development and proliferation of the "machine process" makes the very foundations of that control that sacredness of property and contract seem less legitimate as the unions, for all their limitations and flaws from this perspective, demonstrate.

First, there is a good deal of synthesis of earlier work here--as in his integration of his thinking in earlier works like The Vested Interests and the Common Man on the subject of the nation-state. An institution similarly devoted to a "pursuit of unearned income" by way of sabotage, it is increasingly on behalf of the same businesses engaging in such sabotage in private economic life, for it is they who control it and benefit from it in a "democratic" age.

Third and finally, in addition to presenting a fuller and better worked out outline of the new "order of things," he affords the reader a number of close looks at key parts of the system, ranging from the rise and decline of the inventor-entrepreneur "captain of industry" since supplanted by the "captain of business"--the financial magnate, the "corporate financier" , to the ascent of technology based on basic chemistry and physics to the forefront, to the evolution of ever larger and more elaborate financial structures as holding companies and "interlocking directorates" have become routinized, and the "investment banker" has waxed in prominence, while the sector as a whole has increasingly consolidated.

As might be expected, Veblen was especially interested in these as they operated in the United States, and devoted most of the second half of the book to close examination of elements within the American version of the situation. Notable among these are the American ideals of the self-made man, the independent farmer, the country town; and by way of these, the outlooks of American business and American politics more generally, from the obsession with rising real estate values, to the lack of public-spiritedness in regard to "public service" the population in America accepting that "public office is a private job" to a degree other nationalities would not credit.

These, in turn, are all explicable in relation to the cultural assumptions of the new country. What others call the American Dream, Veblen declares in one of his most memorable turns of phrase, is "something for nothing," an expectation rooted in the experience of the frontier.

In theory it was a "democratically equal opportunity of seizure" of all natural resources for the sake of a private gain identified with the public weal, leading to a rush to grab for oneself as much as one could as quickly as one could while leaving as little as possible to others--a process he deemed not just predatory but economically inefficient and ecologically disastrous in its "rapid exhaustion, with waste, of the natural supply.

That war had two other consequences--inflation, behind which it seemed to him that the rich who did well apart the country was actually poorer rather than richer, and an intensification of conflict between labor and management. However, at the moment it seemed to him that, even if the triumph of the machine process and its associated ethos remained the long-term trend, the short-term outlook for progress was not very good, those on the side of things as they were still very much in power and still relentless--and successful--in propping up a system badly in need of change, with the likelihood in his view worsening disruption, with a "progressive, widening margin of deficiency in the aggregate material output and a progressive shrinkage of the available means of life" as the last sentence of the book states.

Reading all this nearly a century later it is undeniable that some of what Veblen wrote seems less than completely persuasive. The statistics we now have show that, in spite of indisputable inflation and inequality, the period during and after World War I was of extraordinary increases in American wealth. It may seem, too, that he did not show sufficient regard for the ways in which American finance had become bound up with global finance, which were to soon prove fateful; and that he took too much for granted the consistency of "easy-money policies" on the part of central banks in that decade, moving toward austerity.

However, Veblen was more often right than wrong in his characterization of the American economy in the s, and what he had to say about its fundamental mechanisms. The post-war reparations payments system, and the international credit sustaining it, tied to a Wall Street bubble as bankers and brokers built up a colossal and colossally rickety structure of ownership and obligations, turned a stock market correction into an unprecedented, global crash.

The democratization of the Western nation-state, Veblen observes, merely transfers the absurdity of royal sovereignty by divine right--what he memorably calls "an inferiority complex with benefit of clergy"--to the populace at large in nominal terms, so that "each of these sovereign citizens. Admittedly, amid wartime inflation and post-war slump, and interest in living standards rather than growth and profits, he had plenty of reason to doubt.


Absentee landlord

Muzahn Indeed, it has taken something like a hundred years for the formulas of the economists to adapt themselves to the new run of facts in business and industry which set in in the days of Adam Smith. This rearrangement of economic factors, and division of economic activities, was brought on by the increasing scale of the industrial plant and operations, wherever and so far as the new technology of the machine process took effect. This advance took such a turn, in the way specialisation and complexity, that no industrial enterprise of standard size and grade could continue to be competently managed under the divided attention of any man; divided between the mechanical requirements of the industry and the financial requirements of the business. Andrew marked it as to-read Dec 13, Popular passages Page 11 — First of all there must be law; that is, a fixed rule of teaching what is to be done and what is to be left undone. Want to Read Currently Reading Read. World War I, says Veblen, arose out of a conflict of absentee interests and the peace was negotiated with a view to stabilize them.


Thorstein Veblen

The term absentee owner is intended to distinguish between property owners that are hands-on with their investment versus those who are hands off. Absentee owners generally look at real estate from an investment standpoint only and may contract out all management duties to a third party , as in a property management company. Absentee owner can describe a real estate investor with one condo in a different state from where they live, or it can describe a corporation that owns shopping malls and apartment buildings all over the country. Absentee Owner Explained Absentee owners are in real estate for the capital appreciation and the rental income, particularly when it comes to corporate absentee owners. Corporate absentee owners tend to own commercial property and use property management firms to keep the tenants happy. This hands-off approach keeps the company from being bogged down in day-to-day property management and allows the company to focus on finding or building new investment properties.

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