Industry Versus Business: Thorstein Veblen’s Deconstruction of the Engineering-Business Nexus

Abstract

One of the most controversial claims ever made on the engineering-business nexus was put forward by Thorstein Veblen (1857–1929) in his 1921 book The Engineers and the Price System, in which he argued that the engineers would have the potential to become a revolutionary class in America. His claim fundamentally questioned, if not entirely rejected, the rationale of a nexus between engineering and business. Veblen explored the cultural contradictions of capitalism (The formulation is borrowed from the title of Daniel Bell’s 1976 book The Cultural Contradictions of Capitalism published with BasicBooks and reprinted in 1996 with the same publisher) (the price system) in terms of a contradiction between industry and business. From an anthropological perspective he traced this contradiction to the residual habits of primitive societies. By juxtaposing engineers to the ‘pecuniary class’ Veblen aimed to explore a possible candidate movement such as the one led by progressive engineers with the potential to delegitimize the prevailing business ideology for a final socialist overturn. However interpretations of The Engineers and the Price System have varied. The purpose of this chapter is to argue in favor of a reinterpretation of The Engineers and the Price System by addressing a number of issues and claims in the literature on Veblen that we find problematic. In so doing, after an introductory framing of our argument, we will first zoom in on Veblen’s industry-business dichotomy and his theory of capitalism, the theoretical backdrop for his early as well as his later treatment of engineers. Second we shall analyze The Engineers and the Price System in the light of four interpretive key recognitions. Third we present Veblen’s Darwin-informed theory of evolutionary change, the underpinning of his theory of capitalism as well as his treatment of engineers. In conclusion we shall argue that a number of interpretations of The Engineers and the Price System have been too narrowly focused on actual occurrences in engineering in order to subject Veblen’s claim to a reality test but thereby neglecting the theoretical system behind the claim, with the result that a more balanced assessment of the critical potential of Veblen’s theoretical system, and his key insights regarding the inherent contradictions of capitalism have been lacking.