I’ve just finished reading Thorstein Veblen’s The Theory of the Leisure Class. Obviously, I can’t claim that this puts me in the vanguard of anything, but I found his organization of economic analysis around the categories of, on one side, “invidious distinction,” and, on the other side, the “instinct of workmanship,” very provocative. Economic life is organized around “invidious” distinctions when human life is predatory: based on hunting, war and conquest. Under such conditions, some men gain possessions and reputations that place them in a superior position to other men, and the way they manifest this superiority is through conspicuous leisure: doing lots of things that serve no utilitarian purpose and, indeed, flaunt their contempt for utilitarian purpose. For me, the analysis gets interesting when Veblen associates players on the market, or those driven by “pecuniary” interests, with the class of “predators,” and hence “archaic” by the standards of a “modern industrial” society. He thereby places the entrepreneur, banker, broker, etc., at odds with those driven by the instinct of workmanship, who are interested in working out and applying causal relations: scientists, engineers, etc. The economic figures driven by pecuniary interests are, then, simply hunters and warriors in a new, quasi-peaceful guise. As, of course, are “administrators,” i.e., bureaucrats and the government.
I suspect that a quick look at a transcript of some casual conversation among Wall Street brokers would confirm the plausibility of this classification, as is our use of terms like “robber barons” to describe the great corporate founders of the nineteenth century, idioms like “make a killing,” etc. For Veblen, exchanges on the market are indistinguishable from fraud, an essentially predatory relation to others—all lines separating fraudulent form legitimate exchange are essentially contingent and pragmatic. Are we so sure we could we say he is wrong about that? He also associates gambling with the predatory disposition, and it is easy to wonder how much of our current economic crisis, especially that part attributable to the mysterious “derivatives,” is a result of nothing more than very high stakes gambling (with other people’s money, of course). What is further interesting in Veblen’s account is his classification of Christianity as a religion grounded in the leisure class: in this case, God is king/conqueror, and worship of Him, with its incessant emphasis on His infinite power, is the vicarious leisure of the servant class. Veblen has quite a bit of fun with the clothing worn by priests, the architecture and decoration of Churches, and so on, in the process of establishing this claim. Charity and philanthropy, further, fit into this characterization: they are more conspicuous leisure, dedicated to promoting the honor and value of the benefactor warrior/king.
Of course, those familiar with GA will notice several things here, which might be invisible to others. First of all, we know that all human existence is based on “invidious distinction,” which enables us to reverse Veblen’s hierarchy of the two economic types. Veblen argues that the “instinct for workmanship” is the more originary trait, characterizing human existence at a more primitive and peaceful stage, while the predatory element in human existence comes must later, and is ultimately a mere variant of the former. For us, social relations based on invidious distinction are also based on the shaping of such distinctions into such forms as mitigate the inter-communal violence they would otherwise incite—if there were nothing but invidiousness, there would be no community at all. The instinct of workmanship, meanwhile, we can easily locate in the esthetic element of the originary gesture, which is there from the beginning, as the gesture needs to “propose” some symmetry or harmonization of the group in order to take hold, but is nevertheless secondary to the felt need to interrupt the imminent violence itself. This also means that the instinct for workmanship involves, first of all, a social relation between the maker and his/her fellows, rather than the direct relation to his/her materials and the manipulation of the causal relations articulating them, as Veblen would have it.
We could, further, identify Veblen’s account of the predatory/pecuniary interest with what we can call the “Big Man” stage of history—a stage of history which we have by now means exited (indeed, modern constitutionalist politics and the free market aim at harnessing Big Men more than at eliminating them), as Veblen, along with so many others, fervently hoped. His discussion of Christianity and monotheism more generally is illuminating in this connection, since both Judaism and Christianity are invented as responses to the unimpeded rule of Big Men and the imperial moralities such rule generated. If, as Eric Gans has argued, the centrality of scapegoating to social order only holds true for communities thusly organized, then faiths predicated upon a repudiation of the scapegoating morality of the Big Man presuppose his continued existence (and periodic chastisement). If the total replacement of the Big Man as a social phenomenon by esthetic, conciliatory gestures and the reality revealed by norms of scientific inquiry (the instinct for workmanship) were to occur, then it makes perfect sense to assume that the monotheistic faiths would fade into oblivion.
I’m not going to argue for the impossibility of such a development here—I’ll just say that the invention of the Big Man as an occasionally necessary medium of social deferral (albeit elected and subject to recall and liable to criticism and disobedience, or subject to the discipline of the market and the threat of and bankruptcy) can no more be revoked than the invention of nuclear weapons. I’m more interested in the implications of Veblen’s classification of entrepreneurial and financial activity for the mode of economic theory I’m most interested in now, the Austrian theory of Mises and Hayek. I assume that these thinkers, and those of their “school,” would vigorously repudiate Veblen’s claim: for these free market thinkers and advocates, there is nothing more peaceful then the activity of exchange: indeed, exchange is the antithesis of violence, it is what we do once we have successfully suppressed violence as a factor in human relations.
I want to explore the possibility that Veblen is right, and they are wrong—and the plausibility of this hypothesis lies not only in the very structure of competition, in which you can win just as easily by disabling your opponent as by improving yourself, and not only in the enormous destruction which can be deliberately wrought in the financial arena, but also in the very evident attitude of those who operate there, which seems to be one of obligatory triumphalism, machismo, threat, bluff, swagger, etc. (Here, we would have to distinguish between those entrepreneurs who are closer to the workmanlike aspects of the job and those closer to the financial dimension—but no entrepreneur could indefinitely avoid the latter aspect.) (In a similar vein, the Austrians like to believe that private property rights derive from occupancy and/or use of territory or object—but doesn’t it make more sense to say the property was first of all what one could take, defend, and persuade others to accept as a fait accompli—and that rights then emerged to mediate between property owners?) I also reject Veblen’s assumption that this position is obsolete. So, if the pecuniary/predatory is here to stay, and is inseparable from a proper understanding of freedom, how do we incorporate that into our economic, ethical and cultural analyses?
Every commercial community must come to terms with the distinction between fraud and fair exchange—it is inevitable that such a distinction be made simply because even dealing among merchants would become impossible otherwise. Even for purposes of fraud, reputation as a fair dealer is essential (Veblen associates “honor” with predatory/pecuniary fields; indeed, of what relevance is “honor” to an engineer, architect, dentist or plumber, except insofar as we confront them as merchants—we can see their work for ourselves); and you can only gain such a reputation if “fair dealer” has some shared meaning. Such a distinction is inevitably rough and relative—there are a lot of things that could interfere with the fulfillment of a contract that couldn’t have been anticipated, whereas the parameters of expectations for the “workman” I just mentioned parenthetically can be much more tightly drawn. The levels of required trust and acceptable risk will be drawn differently under different conditions—again, most unlike the standards of good workmanship: the good dentist or carpenter is good in Boston or in Moscow, and their clients will be able to distinguish their work from more shoddy varieties.
This line will be drawn, like all lines, by events: in the midst of a commercial culture given over, or in danger of falling into, general fraudulence and corruption, someone and/or some group will come to exemplify fair practices. The establishment of fair practices would first of all be negative—we don’t do all the things our competitors do. But it would eventually become subject to verifiable norms, and embedded in relatively transparent practices, and advertised as an intrinsic part of your experience, as a customer, with that business. The fair dealers would seek each other out and, I think, would be genuinely “authenticated” by the business community and circle of customers once they had weathered some storm—once they had, for example, refused the compromise involved in obtaining some government sponsored monopoly, or abstained from participating in some boom or panic that wiped out other businesses, and ended up intact, perhaps even stronger, precisely due to the values implicit in their “fairness.” Again unlike workmanship, though, where skills may deteriorate, but in fairly predictable ways, the “capital” of “fairness” can erode rapidly, and often as a result of what seemed at the time to be inconsequential decisions (cutting a corner here, lobbying the government there, when things got a little rough…).
It further seems to me that the creation of such a capital fund of fairness will be in inverse proportion to government involvement in establishing and enforcing norms. The government’s secondary function, indeed (second only to preventing violent assaults on citizens’ rights), is the prevention of fraud, which violates the sanctity of contracts. But such a task would prove impossible to perform, or at least perform adequately, if standards of fairness had not already evolved within the commercial community itself, so that the government is essentially policing the margins of the community in accord with the norms of the community itself—it’s very hard to see on what basis the government (government lawyers, to be more precise—yet another set of predators who would need to establish a set of internal norms) could generate such norms in a non-arbitrary way. But, of course, the government’s role will also be established through events—for example, through its protection of some “fair dealer” in danger of being scapegoated within the commercial community. The relationship between business norms and the legal system, then, is an index of the moral health of the economy; and the moral health of the economy is itself an economic “factor”: certainly, much wealth is lost to corruption and fraud, and gained by fair dealing.
In this way, the Christian morality that has emerged and sustained itself as a check on predatory Big Men (think of how focused both Judaism and Christianity are on the “haughty”), could become an economic value in its own right—perhaps one we could even learn to calculate. Surely some economist could (or, for all I know, already has) invent a formula for determining the value of the moral economy (of course, we would need to be anthropologists to devise measures for the moral economy). What is x number of people willing to leave cutthroat firms when they cross the line and become, not “community organizers,” but more honest versions of the business they have “exodused” from, “worth”? Or x number of individuals willing to form companies in which their own money is at stake, instead of playing only with others’? These are challenging questions, because below a particular threshold above which there would be enough of such firms to survive and impact the economy, their worth would be zero. Even more challenging is determining which other, only indirectly economic elements of the culture would comprise a moral economy making such thresholds attainable. We’re not just talking about honesty or altruism here—rather, “fair dealing” involves the ability to create, revise, and continually re-interpret, on the ground, in conjunction with others, sets of rules that are largely tacit. Distinguishing between those who preserve and adhere to the rules so as to skew them in their direction and those whose actions always preserve a residue aimed at enhancing and refining the rules is a skill acquired, like any skill, through practice.
The grammar of rules might be sought in a seemingly strange location. Rules are difficult to describe—even the ones we follow flawlessly and thoughtlessly. Indeed, the thoughtlessness is the problem—analytically, not necessarily morally. Rules always have a tacit dimension—if you ask someone (or yourself) how you follow the myriad rules you do follow to mediate all your daily interactions, you must either simply “point” to what you do and rely upon your interrogator’s own intuitions as a rule follower to understand; or, find a way to point to another set of (meta) rules which tell you how to follow the rules in question—but, then, how do you follow those rules?
A few posts back, I defined imitation as the derivation of imperatives from a model. Iteration, meanwhile, derives from the response you get when you issue an imperative to your model in return, demanding that he/she show or tell you how to obey the previous imperative, subsequent to an inevitably failed attempt. That initial attempt must fail because you will still be insufficiently like the model, hence indicating some portion of the imperative left unfulfilled. To demand of the model another imperative, now part of a series (his implicit one to you, yours in return, and now his again), is to now treat the model as him/herself subject to imperatives, which he/she could convey intelligibly. In that case, the two of you share the same source of imperatives; but this further means that part of the imperatives this newly revealed shared center issues involves articulating the imperatives each of you receives with those the other receives. Hence, the birth of rules, which call upon one to act in such a way as to coordinate unknown acts along with everyone else.
One is always within rules, but one becomes aware of the rules when they become problematic, and they become problematic when one must narrow them down, in a single case, to an unambiguous imperative—what must I do right here and now? It is then that the origin of rules in a center issuing imperatives that must be shared becomes evident because one must then ask the center for guidance. This, it seems to me, is the structure of prayer, which would mean that learning how to follow the “spirit” of rules means learning how to pray. (“God, give me the wisdom to understand your will…”) (For Veblen, this is the kind of situation the “instinct for workmanship” could never lead us into.) And in the monotheistic or, perhaps (I’m not sure where Islam is on this), anti-“haughty” faiths, such prayers would take on the greatest urgency in situations where one’s desire is to abuse the position of the “Big Man,” usurp that position, elevate oneself by discrediting the existing one, fantasize oneself as Big Man, or create a negative Big Man who will serve as the “cause” of some present crisis; but, also, where one’s desire is intertwined with the emptiness of the Big Man space, or the inadequacy of its current occupant—where one may need to help prop it up, in other words, but where such a need edges imperceptibly into these more sinful desires.
Humbly demanding that the center, the iterable source of rules, or the “central intelligence,” come through with a clear imperative at such moments is the heart of the proper creed of our commercial civilization. If we recognize that our entrepreneurial class is comprised, not of pacific servants of others unreasonably harassed by the predatory state but, with all the good they do, of actual and budding Big Men (who, of course, seek commerce with Big Men in other realms), thereby adding a political component to the economy, then we can find the economic value in the prayerful state that seeks a middle between haughtiness and debasement. This middle would also turn out to exist between other poles inevitable in an increasingly sophisticated rule-based culture: between the “letter” and “spirit” of the law; between the rules’ tacit and explicit dimensions; between preservation and innovation, and so on. Such prayer is itself a kind of thinking, and I’m even thinking of considering prayer as the origin of the declarative sentence. In another post.