Institutional Law and Economics: The Legal-Economic Nexus

  Veblen begins the next section by stating three prepositions: 1) it is difficult to say when and how institutions will change in these earlier phases of industrial organization and 2) this early phase of workmanship can be contrasted with a later phase primarily dominated by private property and 3) the two phases may overlap to a large extent. The next couple of paragraphs lay the groundwork for what Veblen views as the material limitations imposed on these earlier cultures in the development of technology via their instinct of workmanship. Each culture has the inherent ability to further develop their technology and mastery of material conditions but become constrained by the natural environment that they face and in some cases by the older institutions they inherit from elders. Veblen believes we can make several general statements about transitions between what he calls “the savage state of affairs” to a “barbarian culture” which entails pecuniary control of industry and work ...

  Chapter 4 is entitled “The Technology of the Predatory Culture”.  It starts with a strong statement that the way of life is very much based on the group's holding of a stock of knowledge and no individual can truly do their work or create without access to a pool of knowledge.  This is a reversal from some of our traditional notions that individuals create knowledge and that knowledge is then shared with the group through usage and implementation.  This idea is present through much of Veblen's writing. Veblen does recognize that some individuals are more creative or hard working or more inherently skilled but that they are still a product of the group. The next few paragraphs Veblen focuses on the differences they exist across individuals due to chance of heredity and other random factors. He also makes the point that people will often deny the role of the group in their achievements and success. He writes that, “to evade or deny something of the breadth of their i...

  Veblen ends this chapter 3 with a discussion of the borrowing of technology across cultures. He also notes that a degree of religious or magical thinking is often associated with many prehistoric cultures. Here again he notes the problem that this causes with the mechanical arts although less so with the agricultural and animal arts. He then speculated that certain cultures borrowing from others may not carry over the religious or spiritual or magical elements.  Thus unencumbered borrowing in Veblen's mind would lead to more improvements in mechanical arts as they are tied into the problems of spiritual elements and more focused on matter of fact application.  It is hard not to see in this book so far that Veblen was very much arguing that 1) technological improvement was a key to human development and growth, 2) technological development was inhibited by imbecile institutions such as religious or spiritual practices versus matter of fact viewpoints, 3) spiritual or mag...

 In this post, we are looking at about 20 pages to catch up from the week missed. Veblen starts with the claim the the rate and nature of the technology of any community is a function of the material environment and the nature of the people in that community. He at first seems to claim that different communities will have different capacities for technological change but then wavers and seems to say that the character of people to seek and make technological change is a function of the material environment as well.  He then makes a further claim that communities which are made up of “hybrid” racial groups will be better able to achieve technological change and growth.  These are clearly empirical claims that could in theory be tested. Starting on page 117, Veblen starts with a claim that all of the European communities started at a low level of savagery in terms of their institutional and technological environment and character. These communities in this state of “savager...

  In chapter 3 entitled "The Savage State of the Industrial Arts", Veblen starts with his well known notion of the community stock of technological knowledge or as he often refers to it immaterial equipment. Well before Paul Romer and his Nobel prize, Veblen understood that economic growth and change was driven by changes in tools and know-how of humanity. Veblen's approach acknowledges that individuals come up with changes in tools use and ideas but that these individuals are immersed in a social and community setting.  This is the key connection that Veblen makes.  Individuals do have agency and do act but at the same time are immersed in a deep social network or setting that drives to some extent what we think about and our decision making processes.   There are a few underlying points or details that Veblen is at pains to make in this overall discussion.He points to the fact that at times certain specialists will be brought to bear.  And yet, he still argues...

  Veblen on page 89 reintroduces the idea of parental bent. Again, this is the instinct that drives people to consider the welfare of others not just their own children and the welfare of the community into the future.  He also remarks that this instinct was stronger before the advent of a pecuniary society and private property ownership. Veblen also references that this instinct drives a desire to minimize wasted effort. However, in a reference back to his book the Theory of the Leisure Class , notes that “conspicuous waste” is a countervailing instinct that may intervene as societies develop over time. Finally, Veblen again refers to the fact that parental bent and compassion may be useful in advancing the usefulness of biological and agricultural human ventures but not in the mechanical arts. From here, Veblen spends a considerable amount of time extolling the virtues of women in  terms of the parental bent and their for animals and crops.  He seems to refer in fa...

  Veblen starts this next section with a logical question: How is that some contamination can occur in workmanship that actually perverts its own ends? He suggests that workmanship itself is part of the problem as its method of cause and effect may at times in error connect certain causes which are not in effect real causes.  The second issue that occurs whereby Veblen introduces a new instinct which he calls idle curiosity.  He defines this as, “which men, more or less insistently, want to know things, when graver interests do not engross their attention”. (Veblen, pg. 85, 1904).  It is really the essence of a creative instinct in many ways. How does play into the problems of the contamination of instincts? Veblen first starts with the point that this is a very influential instinct but may be in the background in many cases where more urgent issues arise. He also points to the fact that it is likely that only certain individuals in a community have an overabundance ...