Institutional Law and Economics: The Legal-Economic Nexus

  This section begins with a simultaneous causality of predation creating ownership and ownership creating predation in Veblen's mind. He says regardless of which comes first there grows with ownership a sense of differentiation between people based ons status, occupations, habits and many other characteristics.  In fact, people begin to grow in self-interest and the common interest that is exemplified by the parental bent is greatly diminished.  To the extent that any interest beyond the self exists, it is based on a false patriotism towards the flag only and not in the common good for all who reside in a community. Again, Veblen notes that as private ownership, wealth and predation grow so too does the power of the priesthood grow as well.  Generally, in fact the warlike Goods become predominant as this helps build the myth around those who are the warrior and predatory class.  The monarch is then supported by the priesthood (and can also be brought down by th...

In this section, Veblen starts by casting doubt on the presumed origins of private property. The standard story according to Veblen is that farmers and ranchers began to develop better techniques and a surplus of product they had to need to store such surpluses.  Veblen doubts that the institutional innovation of private property would have developed in this manner.  Instead, he starts his story with the idea that a portion of the now growing agricultural surplus is being captured by a priestly or magical class. He uses the term “inchoate priestly class” which could mean in preparation for a criminal act. In this case, I believe he means that some of the surplus will be removed by less than legitimate means at least in Veblen's view. He also points tot he fact that the very fact that technological growth and efficiency is occurring gives rise to a warrior class who can act in a predatory manner and take what others have produced.  This gives to the institution of a predat...