ABSTRACT

Thorstein Veblen has always been treated as little more than a backstage actor in the repertoire of contemporary orthodox economics. For the best part of a century, from John Cummings to Thomas Sowell, the critics pooh-poohed his theories of the firm and capital as a simple variation on the anticapitalist themes composed by Marx or the socialist and radical currents of thought (Cummings, 1899; Knight 1921, 1969; Dobriansky 1956; Harris 1958; Sowell 1987), while his interpretation of the processes of social evolution was dismissed as a confused and approximate system, the fruit of ‘excessive theorising upon scanty biological and psychological evidence’ (Douglas 1924: 155). One can readily admit that the system which emerges from Veblen’s evolutionary theories is indeed a complicated medley of anthropological, psychological and biological explanations. Yet it was by means of this welding together of dissimilar components drawn from several disciplines that Veblen shaped theories whose essentially innovative nature cannot be denied. In the first place, he forged a new notion of the mind as an alternative to its current interpretations by the associationists, on the one hand, and by the pragmatists headed by Peirce on the other. Of greater importance, however, were his unconventional explanation of the processes of institutional transformation and his demonstration that application of Darwin’s and Spencer’s categories to the study of social evolution was much more complicated than was commonly supposed.