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History of economic doctrines, Veblen. The economic views of T. Veblen Veblen accent

Institutionalism.

1. Introduction.

2) Economic views of T. Veblen.

3) Views of J. Gelbraith.

4) John Commons theory.

5) The economic views of Wesley Mitchell.

6) Conclusion.

Introduction

At the end of the last - the beginning of this century, a trend arose in the United States, akin to the new historical school and which soon received the name - institutionalism (this term is associated with two concepts: 1) institution - order, custom, establishment; 2) institution - the consolidation of customs and orders in the form of laws and institutions). One of the theorists of institutionalism, Charles Hamilton, proposed the following definition: “Institutions are a verbal symbol for better designating a group of verbal customs. They denote the predominant and permanent way of thinking that has become habitual for the group and has become a custom for the people ... Institutions set the boundaries and forms of human activity. The world of customs and habits, to which we adapt our life, is the intertwining and indissoluble life of institutions ”... In fact, the terms “institution”, “institute” were understood as phenomena as an economicand non-economic order - the state, legislation, customs of the nation, its mental makeup, various social organizations, family, private property, etc. Including all these institutions in the range of phenomena analyzed by economic theory, the adherents of this trend strove for an expansive interpretation of its subject.

There was a lot in common between institutionalism and the new historical school. The methodology of both directions contains sharp criticism of the atomic approach of the Austrians, an emphasis on the "social point of view", the study of the economic behavior of people under the influence of customs, formed moral and legal norms, etc. The predominance of the social approach is explained by the fact that in the United States in the late 19th - early 20th century. as nowhere was the dominance of big capital clearly manifested, its specific features in sharp contrast to the model of individual economy, which constituted the starting point of the analysis of the Austrian school.

Institutionalists, like representatives of the new economic school, proceeded from the presence of acute social contradictions of capitalism and the need to reform them. They were also skeptical about the abstract method, preferring the described approach to reality. Finally, another important feature that brought US institutionalism closer to the new historical school in Germany was the evolutionary point of view, i.e. recognition of the variability of the phenomena of social life while denying qualitative leaps in their development. The idea of evolutionism served as a rationale for socio-economic programs sustained in the spirit of more or less moderate reformism.

The most prominent ideologues of early institutionalism were Thorstein Veblen (1857-1929), whose first works were published at the end of the last century, as well as John Commons (1862-1945) and Wesley Mitchell (1874-1948), the peak of their creative activity falls on the period between the two world wars.

Economic views of T. Veblen

T. Veblen is rightfully considered the founder of the institutionalistic trend. He penned a number of studies: "The theory of the leisure class" (1899), "The theory of business entrepreneurship" (1904), "The instinct of skill and the level of development of production technology" (1914), "Large entrepreneurs and the common man" (1919), "Engineers and the system of values "(1921)," Absentee property and entrepreneurship in modern times (1923).

Veblen was born to a Norwegian peasant emigrant family in rural Wisconsin. Having received, thanks to his outstanding abilities, a higher education and even a doctorate, he never became one of his in the academic world. Veblen spent most of his life fighting for his daily bread, often changing colleges and universities where he taught. He died in poverty a few weeks before the stock market crash on October 24, 1929. - "Black Thursday", from which the "Great Depression" reports, which in many respects confirmed the social criticism of his theories.

As the founder of institutionalism, Veblen deduces a number of economic phenomena from social psychology; his views are based on a peculiar understanding of man as a biosocial being, guided by innate instincts. Among the latter are Veblen's instinct for self-preservation and preservation of the genus, the instinct of mastery (a tendency or predisposition to effective actions), as well as a tendency to rivalry, imitation, and idle curiosity. Thus, private property appears in his works as a consequence of the original human tendency to compete: it is portrayed as the most visible proof of success in competition and "the traditional basis of respect."

Veblen's books contain covert and sometimes overt polemics with neoclassical economists. With all his work, he made it clear that economics should not be just a science of prices and markets. Veblen wrote that the subject of political economy is human activity in all its manifestations, social sciences should deal with the relationship of people to each other. He was one of the first economists who put the focus of research not on the "rational", but on the "living person" and tried to determine what dictated his behavior in the market.

Neoclassicists often presented a person as an ideal calculating device, instantly assessing the usefulness of a particular good, in order to maximize the overall effect of using the available stock of resources. However, according to Veblen, the economic behavior of people is of a more complex, often irrational nature, because a person is not a “machine for calculating the sensations of pleasure and suffering”, for example, motives of demonstrative prestigious consumption, envious comparison, the instinct of imitation, the law of social status affect people's behavior and other congenital and acquired tendencies. Human behavior cannot be reduced to economic models based on the principles of utilitarianism and hedonism.

According to Veblen, institutions, or the currently accepted system of social life, directly determine the goals that subordinate the behavior of people. But favorable conditions for economic development exist only when the system of institutions is in harmony with the ultimate goals arising from instincts.

T. Veblen considered technique and technology to be another major factor underlying the change in institutions. According to his teachings, technology does not always play this dominant role, but only at the stage of machine production. Thus, his methodology contains elements of historicism, although in many respects of a technocratic nature: institutions change because they are influenced by human psychology, on the one hand, and the flow of technical factors, on the other. This dual psycho-technocratic concept laid the foundations for modern theories of staging economic growth and industrial civilization.

Veblen challenged two fundamental tenets of the neoclassical school:

- consumer sovereignty clause (the provision according to which the consumer is the central figure of the economic system, demanding the recipient of goods and services at the lowest prices),

- provision on the rationality of his behavior.

Veblen proved that in a market economy, consumers are exposed to all kinds of social and psychological pressure, forcing them to make unreasonable decisions. It is she who brings honor and respect. The characteristics of the class of large owners are demonstrative idleness (“not work” - as the highest moral value) and demonstrative consumption, closely related to the money culture, where the object receives an aesthetic assessment not for its qualities, but for its price. In other words, goods begin to be valued not for their useful properties, but because how much the possession of them distinguishes a person from others (the effect of envious comparison). The more wasteful a person becomes, the higher his prestige rises. It is no coincidence that in our time there is such a concept as "costs of representation." The highest honors are erected to those who, through control over property, extract more wealth from production without engaging in useful work. And if conspicuous consumption is a confirmation of social significance and success, then it forces consumers of the middle class and the poor to imitate the behavior of the rich. From this Veblen concludes that the market economy is characterized not by efficiency and expediency, but by conspicuous waste, an envious comparison, a deliberate decline in productivity.

The category of "envious comparison" plays a very important role in Veblen's system. With the help of this category, Veblen not only explains the inclination of people to prestigious consumption, but also the desire to accumulate capital: the owner of a smaller fortune is envious of the larger capitalist, and strives to catch up with him; upon reaching the desired level, there is a desire to overtake others and thereby get ahead of competitors.

Central to Veblen's teachings is his doctrine of the "leisure class", to whose education he also approached historically. Like many admirers of L. Morgan's classic work "Ancient Society", Veblen distinguished several stages in the history of mankind: early and late savagery, predatory and semi-peaceful barbarism, and then craft and industrial stages. At different stages, people lived in a cooperative environment. Then, as it seemed to Veblen, there was no property, exchange, price mechanism. Later, when a surplus of benefits was accumulated, the generals and priests found it advantageous to rule over other people. So the process of formation of the "leisure class" began, and in its place the transition from savagery to barbarism. As peaceful pursuits gave way to military campaigns and plunder, the inherent instinct of skill was suppressed. If earlier a person struggled, mainly with nature, now - with another person. At the center of the new way of life was private property, which was rooted in violence and deception.

In later historical eras, Veblen wrote, entrenched peaceful habits were only hidden under the guise of peaceful forms of behavior. The social hierarchy was finally established with the "leisure class" at the top of the social pyramid. Outward signs of difference were the displayed idleness and consumption, calculated to demonstrate wealth ("conspicuous waste"). The rapid progress of technology came into sharp conflict with the desire of people for ostentatious luxury.

The doctrine of the leisure class, coupled with the methodology of technocratism (literally: technocracy - the power of technology) underlies Veblen's concept of the "industrial system". According to this theory, capitalism (in Veblen's terminology - "money economy") goes through two stages of development: the stage of the domination of the entrepreneur, during which power and property belong to the entrepreneur, and the stage of domination of the financier, when finances push back entrepreneurs. The domination of the latter is based on absentee property provided by stocks, bonds and other securities (fictitious capital), which generate huge speculative profits. The last stage is especially characterized by a dichotomy (confrontation) between industry and business, whose interests are completely different. By industry Veblen understood the sphere of material production based on machine technology, and business was the sphere of circulation (stock speculation, trade, credit, etc.)

The industry, according to Veblen's concept, is represented not only by functioning entrepreneurs, but also by engineering and technical personnel, managers, and workers. All these strata are interested in improving production and therefore are the bearers of progress. In contrast, business representatives are purely profit-oriented and don't care about production as such.

The dichotomy between industry and business, according to Veblen, is that in the industrial sphere there are layers that are necessary for society, while business is personified in the "leisure class" that does not carry a payload. Veblen enrolled the largest financial magnates into the "leisure class"; He did not consider small and large entrepreneurs to be social dependents and even (with some reservations) enrolled in the productive class.

The American scientist repeatedly expressed deep respect for K. Marx, although he did not agree with him on everything (he criticized the Marxist theory of value, the teaching of the reserve army of labor as a result of capital accumulation). The main spearhead of Veblen's criticism was directed against the interests of the largest bourgeoisie. This is due to the fact that Veblen stood on the left flank of Western economic thought and was the ideologue of the radical intelligentsia. The most important result of Veblen's theoretical activity was his doctrine of "absentee property". This is the property of businessmen who are not directly involved in production. If earlier, at the stage of "domination of entrepreneurs", profit was a natural result of useful entrepreneurial activity, then in the conditions of the "monetary economy" of the twentieth century. credit became the main means of making a profit. It is with the help of credit that businessmen (representatives of the "leisure class") appropriate stocks, bonds, and other fictitious values that bring large speculative profits. As a result, the securities market expands immensely, and the growth in the size of "absentee" property is many times greater than the increase in the value of corporations' tangible assets. "Absentee property" is the basis for the existence of the "leisure class", the reason for the escalating conflict between industry and business.

Thus Veblen very subtly analyzes many real aspects of the US economy at the beginning of this century: the transfer of economic power into the hands of tycoons, the manipulation of fictitious capital as one of the main means of increasing financial capital, a significant separation of capital-property from capital-function, etc. at the same time, this economist was a staunch supporter of the exchange concept: he looked for the root of social conflicts in the sphere of circulation, not production, the contradictions of the latter were interpreted by him as secondary.

According to Veblen, engineers - technocrats (persons who come to power on the basis of a deep knowledge of modern technology) were called upon to play the main role in the upcoming transformations. According to him, participation in the creation of advanced production forces, the formation of highly efficient technology gives rise to the desire of technocrats for political domination.

Observing the contradiction between business and industrial development, engineers are imbued with a hatred of finance. True, the "leisure class" seeks to bribe engineers, provide them with material benefits, and increase income. Some of the engineering and technical personnel, especially among the older generation, are imbued with the spirit of money-grubbing, but the majority of young engineers do not enter into a deal with businessmen, since the interests of scientific and technological progress are more important for them than personal enrichment.

Specifically, the picture of the establishment of a "new order" looked like this in Veblen's works: the scientific and technical intelligentsia begins a general strike that paralyzes industry. The paralysis of the economy is forcing the "leisure class" to retreat. Power passes into the hands of technocrats who begin to transform the industrial system on a new basis. Veblen argues that it is enough to unite a small number of engineers (up to one percent of their total number) for the "leisure class" to voluntarily relinquish power.

T. Veblen's work evoked very contradictory responses in economic science. Thus, representatives of conservative and moderate circles criticize him for an unjustifiably harsh, in their opinion, position in relation to big business. They also point to the unrealism of many of his prophecies (for example, that credit, as well as the banker personifying it, will soon "outlive its age"). On the contrary, representatives of the left intelligentsia idolize Veblen for his deep, original criticism of the "leisure class", "monetary civilization" in general.

Veblen's concept of the evolution of the "industrial system" did not pass unnoticed for the reformist left wing of American economic thought. It was further developed in the studies of the prominent economist and sociologist J.K. Gelbraith, and in a number of futurological models by O. Toffler, R. Heilbroner, and others.

J. Gelbraith's views.

Veblen's ideas about the "leisure class" were taken up and developed by the American economist and sociologist J. Galbraith. His most famous book is The New Industrial Society. At the heart of Gelbraith's concept is the concept of "technostructure". This refers to the social stratum, including scientists, designers, specialists in technology, management, finance, that is, in all specialties that are required for the normal operation of a large corporation that produces tens or hundreds of types of products. Gelbraith argues that the goal of the technostructure is not profit, but constant economic growth, which alone ensures the growth of salaries and stability. However, the interests of economic growth, a necessary condition of which is the growth of consumption, leads to further pressure on consumers from producers (through advertising and other forms of pressure, which Veblen wrote about, questioning the postulate of consumer sovereignty in a market economy). Gelbraith notes that the apparatus of suggestion and persuasion associated with the sale of goods has grown enormously. In terms of the means that are spent on this activity and the abilities that are used in it, it increasingly competes with the process of production of goods. As a result, there is a hypertrophied growth of individual needs, and social needs, to which Gelbraith attributed investment in human capital by expanding the education system, are declining. The goals of the technostructure come into conflict with the interests of society. (Here we see the difference between the views of Veblen and Gelbraith). This contradiction lies not only in the whipping up of consumer psychosis, but also in the fact that the domination of the technostructure results in the squandering of natural resources, inflation and unemployment. These negative processes are, according to Galbraith, the result of the conciliatory policy of the technostructure, which wants to live in peace with all strata of society. One of the consequences of such a policy is the growth of wages, which outstrips the growth of labor productivity, thereby opening the way for inflation. Based on the analysis of the "harmful" aspects of the domination of technocracy, Gelbraith comes to the conclusion about the need for social control over the economy by the state, which would include state regulation of social needs, state planning of the main economic proportions and a number of other areas. By the way, the idea of the need for social control over the economy by the state is characteristic of all representatives of institutionalism.

John Commons theory.

If Veblen can rightfully be ranked among the technocratic direction of American institutionalism, then his follower John Commons headed the socio-legal variety of this trend.

Along with teaching and research activities, Commons actively collaborated with trade unions, worked as an economic and legal adviser to the American Federation of Labor. In the 30s, when he became a member of the Commission on Industrial Relations, he actively collaborated with the Rooseveld administration. Largely thanks to his efforts, the Social Security Act was developed and passed in 1935, laying the foundations of the modern US pension system.

Commons's scientific works are closely related to the interests of the US labor movement and reflect its interests. On the initiative of this scientist, with his primary participation, the four-volume History of Labor in the United States was written. Among his other works, the most famous are the monographs "Legal Foundations of Capitalism" and "Institutional Economics".

In the realm of methodology, Commons argued the superiority of law over economics. All of his works are imbued with the idea of peaceful settlement of conflicts and achieving social harmony through a legal procedure. Commons wrote that the US Supreme Court was the first chair of political economy.

At the center of Commons' views is the famous theory of transactions, that is, "the theory of joint activities of people and their assessments in all transactions, through which the participants encourage each other to achieve unity of opinion and action." The concept of a bargain, which Commons considered to be central to political economy, includes three elements:

1. conflict, i.e. conflict of interests of the parties to the transaction;

2. interdependence, or interdependence, of the interests of the parties to the conflict;

3. order - the end of the conflict and the completion of the transaction.

Commons believed that by means of a deal, i.e. legal agreement, any contradiction can be resolved.

Although Commons had a reputation for being radical, he did not at all seek to change capitalist attitudes; he has always sought a consensual approach to industrial labor relations.

The idea of the social world, which filled all of Commons's theoretical work, also dominates in his scheme of periodization of the stages of capitalist society. According to him, the initial stage of commercial capitalism is replaced by its entrepreneurial stage, followed by banking (financial) capitalism and, finally, administrative capitalism. Already at the stage of financial capitalism, large associations of entrepreneurs and trade unions emerge, seeking significant privileges for their members.

This is how the foundations of "harmony of interests" are born, which are even more strengthened at the stage of administrative capitalism. Special government commissions here act as the supreme arbiter in the conclusion of transactions between "collective institutions."

Commons, therefore, advocated the important idea of "collective control" over the social sphere, he was a supporter of the expansion of state intervention in economic life, which then corresponded to the real trends in the development of the Western economy. It didn’t occur to him, however, that government commissions might not be as impartial as they should be. On the whole, the mood of moderation is expressed in Commons's writings much more clearly than in Veblen's.

The Economic Views of Wesley Mitchell.

Another prominent representative of institutionalism in the United States was Wesley Mitchell. Like other supporters of this trend, he considered the subject of political economy - the economic behavior of people, subject to certain psychological motivations. But along with this, he considered the monetary factor (circulation of banknotes, the activities of financial and credit institutions) as a factor that has a strong influence on the activities of economic agents. There is a well-known expression of Mitchell that money may not be the root of all evil, but it is, in any case, the “root of economics”.

W. Mitchell assumed that the money economy, despite the shortcomings, is the best form of economic organization of society. On this basis, he generally had a positive attitude towards such a type of money economy as financial capitalism. Unlike Veblen, who was his teacher, Mitchell did not consider it necessary to criticize the desire of businessmen and financiers to appropriate increased profits. At this point, he adjoined, rather, the views of Commons. Mitchell's first works - "The History of the Green Berets" (ie dollars), "Gold, Prices and Wages at the Dollar Standard" - are still considered authoritative studies on the history of US monetary circulation.

The next problem that entered the circle of his interests was the problem of the economic cycle. Mitchell's work "Business Cycles" should be noted in this area. (The expanded edition of this book, published in 1927, provides detailed data on the movement of economic cycles in the period 1850-1925. It summarizes the material for seventeen countries with a breakdown of the main indicators by quarters and even months). The final work on this topic "Changing Business Cycles" was created by Mitchell in collaboration with A. Burns.

Mitchell was a staunch supporter of the exchange concept. In his writings on the history of the cycle, he tried to explain this phenomenon, proceeding mainly from the phenomena of the sphere of circulation (prices, stock prices), and not production.

General assessments of W. Mitchell's work are very contradictory. So the leader of American monetarism M. Friedman believes that in his works, along with a detailed description of economic phenomena, there are a number of theoretical conclusions that have retained significance, in particular, for modern theories of the monetary economy. Along with this, numerous critics of Mitchell (for example, the famous economist Schumpeter) reproached him for his disregard for economic theory, for his adherence to empiricism.

Indeed, Mitchell can, to a certain extent, be assessed as the leader of the empirical direction in institutionalism. Over the course of a number of years, he and his staff compiled about a thousand time series of various national economic indicators. On the basis of extrapolation, it was supposed to predict the economic situation. So in 1917 the famous Harvard Barometer appeared, which at first gave very reliable results, but during the years of the "Great Depression" of 1929-1933. failed in predicting prosperity on the eve of economic disaster.

However, Mitchell's work in the study of cash flows, cycles and economic conditions should not be underestimated. Heading, for a quarter of a century, the work of the National Bureau of Economic Research, he stimulated subsequent developments in the field of the theory of the national product and income of such economists as S. Kuznets, etc.

Mitchell shared the central idea of institutionalism about the need to strengthen social control over the economy. In 1923, he proposed the creation of a state unemployment insurance system, which was then considered an unacceptable encroachment on free enterprise. He was one of the first to put forward the requirement for indicative planning of the American economy. Later, during the years of F.D. Roosevelt's "New Deal", Mitchell took part in the creation of the US National Resources Committee, proposed to use this body for the purposes of macroeconomic regulation.

Not only Mitchell, but also other prominent institutionalists, with their theoretical and practical activities, actively supported the Roosevelt administration in the field of anti-crisis regulation of the economy, the implementation of a liberal reformist social policy. In essence, American institutionalism paved the way for Roosevelt's New Deal. Institutionalist ideas about the need to strengthen the role of the state in the economic and social field were a very timely response to the onset of the era of state capitalism.

Conclusion.

Concluding my lecture, I want to note that in economic theory, institutionalism is not a constructive direction, but a critical one. The main contribution to the theory of economic thought lies in the fact that the representatives of institutionalism questioned the central tenets of classical political economy: the rationality of the individual's behavior, the automatic achievement of the optimal state of the economic system, the identity of private-proprietary interest in the public good. Noting the shortcomings of the functioning of the capitalist system (ostentatious consumption, elimination of competition, restriction of the release of goods), they insisted on the need for regulatory measures on the part of the state. They also insisted that the object of study in economic theory should not be a rational, but a real person, often acting irrationally under the influence of fear, poorly realized aspirations and pressure from society. As already noted, the behavior of people is affected by the motives of conspicuous consumption, envious comparison, the instinct of imitation, the law of social status and other innate and acquired inclinations. Therefore, representatives of institutionalism are supporters of an interdisciplinary approach, and insist on the inclusion of such disciplines as psychology, biology, anthropology, law and a number of others in economic analysis.

Institutionalism as a course of economic thought is rather vague, there is no economic model, clear premises that are so characteristic of classical political economy; in a constructive sense, he gave little, but his critical charge influenced the further development of economic theory, influencing the views of economists of the twentieth century, in particular, such an outstanding economist as J. Schumpeter.

Although institutionalism remained an independent trend in economic thought in the future, its concepts largely anticipated the emergence of the macroeconomic theory of Keynesianism.

References:

1 I.I.Agapov "History of Economic Thought" M., 1998

2 "History of economic doctrines" Under. Ed. A.G. Khudokormova Moscow State University 1994

MSU

on the subject: "History of economic doctrines"

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COURSE WORK

on the topic: "Institutional theory of Thorstein Veblen"

Introduction

1. Brief biography of Thorstein Veblen

2. T. Veblen as a representative of institutionalism

3. Scientific work of T. Veblen "The theory of the leisure class"

4. Assessment and role of T. Veblen's teaching

Conclusion

Bibliography

Introduction

The term "institutionalism" comes from the word "institution" or "institution", which means a certain custom, an order accepted in society, as well as the consolidation of customs in the form of a law or institution.

The ideologists of institutionalism attributed to institutions both superstructural and economic phenomena: the state, family, private property, corporations, the system of monetary circulation, etc. science, inclusion in the analysis of non-economic phenomena and institutions.

Institutionalism originated in the United States at the turn of the 19th and 20th centuries. Three prominent economists are at its origins: Thorstein Veblen, John Commons, and Wesley Claire Mitchell. An examination of this trend as a whole shows how, against the background of the unfolding crisis, "institutionalism" as a specific trend in bourgeois political economy still has many supporters today. The question of the specifics of institutionalism is all the more interesting because after the Second World War this trend became one of the leading trends in modern bourgeois political economy. It is represented by such bourgeois theorists as J. Galbraith, L. Grachi, V. Gordon, G. Myrdal, R. Heilbroner and others.

1. Brief biography of Thorstein Veblen

Veblen, Thorstein Bunde (1857-1929), American economist. Born in Kato (Wisconsin) on July 30, 1857 in a family of Norwegian settlers. He graduated from Carlton College in Northfield (Minnesota), was engaged in teaching, went to Johns Hopkins University. Unable to get a scholarship, he transferred to Yale University, where he received his doctorate in 1884 for his dissertation "The Ethical Foundations of the Doctrine of Retribution." Due to agnostic views, he could not get a place at the university for a long time, but in 1891 he was admitted to graduate school at Cornell University, and the next year, thanks to the patronage of J.L. Laughlin, he moved to the newly opened University of Chicago, where he taught until 1906. Was editor of the Journal of Political Economy, was a member of the circle of friends of John Dewey and Jacques Loeb. During this period Veblen wrote Leisure Class Theory: An Economic Study of Institutions (1899) and Theory of Entrepreneurship (1904).

In 1906 Veblen, accused of adultery, had to transfer to Stanford University, and in 1910 he was forced to leave Stanford for the same reason, but received a teaching position at the University of Missouri. In subsequent years he published the work "The Instinct of Mastery" (1914); "Imperial Germany and the Industrial Revolution" (1915) and "Investigation of the nature of the world and the conditions for its maintenance" (1917). In 1918 Veblen published the book Higher Education in America, in which he criticized the system of relations between business and universities.

By that time Veblen had become a renowned social critic and scholar. Between 1918 and 1919, the New York weekly Diel published a series of essays and editorials by Veblen, which were later combined into two collections: Big Entrepreneurs and the Common Man (1919) and Engineers and the Pricing System (1921). From 1920-1922 Veblen lectured at the New School for Social Research in New York, and in 1923 published his last major work, Absent Property and Entrepreneurship in the Modern Age: The Case of America.

leisure class veblen institutionalism

2. T. Veblen as a representative of institutionalism

At the turn of the XIX and XX centuries. specific historical conditions have developed, under the influence of which the United States has become the richest and most developed socio-economic country in the world. It was in it that for the first time in the most acute form the problems associated with the all-encompassing process of transition from an economy of free competition to a predominantly monopolistic one were manifested. This was one of the reasons that the United States became the pioneers of antitrust measures, which the administration of this country tested back at the end of the 19th century. The permanent nature of such measures later became apparent to all governments of the developed countries of the world.

At the beginning of the XX century. American economists, activating the analysis of the intensified monopolistic tendencies in the economy and promoting the "antitrust" policy of their own country, acquired the status of leaders in the concepts of social control over the economy, carried out by various methods. Their theories laid the foundation for a new direction of economic thought, which is now commonly called socio-institutional or simply institutionalism.

The term “institutionalism” is based on one of the interpretations of the concept “institution”. The latter is considered by institutionalists as the primary element of the driving force of society in the economy and outside it. The most diverse categories and phenomena (for example, the state, family, entrepreneurship, monopolies, private property, trade unions, religion, morals, etc.) that predetermine customs, habits, ethics, legal decisions, social psychology and, most importantly, the evolution of the economy.

Institutionalism is, in a sense, an alternative to the neoclassical direction of economic theory. If neoclassicists proceed from the Smithian thesis about the perfection of the market economic mechanism and self-regulation of the economy and adhere to "pure economic science", then institutionalists consider spiritual, moral, legal and other factors considered in a historical context to be the driving force of the economy along with material factors. In other words, institutionalism as the subject of its analysis puts forward both economic and non-economic problems of socio-economic development. At the same time, the objects of research - institutions - are not subdivided into primary or secondary ones and are not opposed to each other.

In the field of methodology, institutionalism, according to many researchers, has much in common with the historical school of Germany.

It should be noted, however, that historicism and taking into account the factors of the social environment to substantiate the paths of economic growth, although they indicate the similarity of the methodological principles of institutionalism and the historical school of Germany, do not at all mean the complete and unconditional continuity of the traditions of the latter. And there are several reasons for this. First, being under the theoretical influence of A. Smith, the German authors of the second half of the 19th century. fully supported the Junker circles of Prussia in their struggle to establish freedom of trade and other principles of economic liberalism in the country, including the need for unlimited free competition among entrepreneurs. Secondly, historicism in the studies of the German school manifested itself mainly in the assertion of a natural character, market economic relations and support for the position of the automatic establishment of equilibrium in the economy throughout the development of human society. And, thirdly, in the writings of the authors of the historical school of Germany, even any hints of the possibility of reforming the economic life of society on the principles limiting "free enterprise" were not allowed.

Institutionalism, thus, is a qualitatively new direction of economic thought. It absorbed the best theoretical and methodological achievements of the previous schools of economic theory and, first of all, based on mathematics and mathematical apparatus, the marginal principles of economic analysis of neoclassicists (in terms of identifying trends in the development of the economy and changes in market conditions), as well as the methodological tools of the historical school of Germany ( to study the problem of "social psychology" of society).

In many ways, a similar judgment is expressed by M. Blaug, in whose opinion, trying to determine the essence of "institutionalism", one can find three features related to the field of methodology:

1) dissatisfaction with the high level of abstraction inherent in neoclassicism, and especially with the static nature of the orthodox price theory;

2) the desire to integrate economic theory with other social sciences, or "belief in the advantages of an interdisciplinary approach";

3) dissatisfaction with the lack of empiricism of classical and neoclassical theories, a call for detailed quantitative research. "

The concept of "institution", which underlies the name of the theory, is considered by institutionalists as the primary element of the driving force of society in the economy and outside it. They refer to "institutions" as a variety of categories and phenomena - the state, family, entrepreneurship, monopolies, entrepreneurship, private property, trade unions, religion, morals, etc., predetermining customs, habits, ethics, legal decisions, social psychology, and most importantly - the evolution of the economy.

The birth of American institutionalism as a special current of economic thought can be dated very accurately. In 1898 Thorstein Veblen published his keynote article "Why hasn't economics become an evolutionary science yet?" and in 1899-1900. continued to explain the meaning of the scientific program in a series of articles under the general heading "The prejudices of economic science" and at the same time made an attempt to implement this program in his most famous book "The theory of the leisure class."

As the founder of institutionalism, Veblen deduces a number of economic phenomena from social psychology, his views are based on a kind of understanding of man as a biosocial being, guided by innate instincts. Among the latter, T. Veblen refers to the instinct of self-preservation and preservation of the family ("parental feeling"), the instinct of mastery ("the inclination or predisposition to effective actions"), as well as the tendency to rivalry, imitation, and idle curiosity. Thus, private property appears in his works as a consequence of the original human tendency to compete: it is portrayed as the most visible proof of success in competition and "the traditional basis of respect." A more complex psychological background is characteristic of the category of "envious comparison", which plays an extremely important role in Veblen's system. Using this category, Veblen interprets such economic phenomena as people's adherence to prestigious consumption, as well as to the accumulation of capital: the owner of a smaller fortune is envious of the larger capitalist and seeks to catch up with him; upon reaching the desired level, a desire is manifested to surpass others and thereby surpass competitors.

One of the most important provisions of Veblen was the requirement for a historical approach in economics. In his opinion, it was necessary to carry out the study of various economic and social institutions in their development, from the moment of their emergence to the present. He studied the history of human society a lot, analyzed the emergence of private property, classes, the state, sought to discover in the past the origins of those contradictions that, in his opinion, were demonstrated by contemporary capitalism.

Veblen saw the driving force of development in the contradictions between institutions and the external environment. In his words: “Institutions are the result of processes that took place in the past, they are adapted to the circumstances of the past and, therefore, were not in full“ agreement with the requirements of the present ”. According to Veblen, the discrepancy between the already established institutions and the changed conditions, the external environment, makes it necessary to change existing institutions, replace outdated institutions with new ones. At the same time, the change in institutions occurs in accordance with the law of natural selection. Veblen wrote: “The life of a person in society, just like the life of other species, is a struggle for existence, and, therefore, this is a process of selection and adaptation, the evolution of a social structure was a process of natural selection of social institutions. The continuing development of the institutions of human society and human nature, progress, can in general terms be reduced to the natural selection of the most adapted way of thinking and the process of forced adaptation, which changes with the development of society and social institutions in which human life takes place ”. Thus, in Veblen's interpretation, socio-economic development (“evolution of the social structure”) appears as the implementation of the process of “natural selection” of various institutions.

Veblen mechanically transferred the Darwinian doctrine of natural selection to the realm of social phenomena. At the same time, he did not take into account that the "evolution of the social structure" is a social process, the laws of which cannot be reduced to biological laws.

Neoclassicists often presented a person as an ideal calculating device, instantly assessing the usefulness of a particular good, in order to maximize the overall effect of using the available stock of resources. However, according to Veblen, the economic behavior of people is of a more complex and often irrational nature, because man is not a "machine for calculating the sensations of pleasure and pain." The behavior of people is affected, for example, by the motives of demonstrative prestigious consumption, envious comparison, the instinct of imitation, the law of social status, and other innate and acquired inclinations. Human behavior cannot be reduced to economic models based on the principles of utilitarianism and hedonism. T. Veblen used these arguments, in particular, in a polemic against one of the pillars of neoclassicism - J. Clark.

According to Veblen, institutions, or "the currently accepted system of social life," determine the immediate goals that subordinate the behavior of people. But favorable conditions for economic development exist only when the system of institutions is in harmony with the ultimate goals arising from instincts.

As a result of the reforms, Veblen foresaw the establishment of a “new order” in which the leadership of the country's industrial production would be transferred to a special “council of technicians”, and “the industrial system would cease to serve the interests of monopolists, since the motive of technocracy and industrialists would not be monetary gain”, but serving the interests of the whole society ...

T. Veblen considered technique and technology to be another major factor underlying the change in institutions. According to his teaching, technology does not always play this dominant role, but only at the stage of machine production. Thus, in Veblen's methodology, there are elements of historicism, although in many respects of a technocratic nature: institutions change because they are influenced by human psychology, on the one hand, and a continuous stream of technical factors, on the other. This dual psycho-technocratic concept laid the foundations for modern theories of staging economic growth and industrial civilization.

3. Scientific work of T. Veblen "The theory of the leisure class"

Leisure class theory was born of the social theorist Thorstein Veblen. He is rightfully considered the founder of this institutionalistic trend. The Leisure Class Theory was written by Thorstein Veblen, a native of Norway, back in 1899.

He said that the institution of the Idle Class was born gradually. This beginning took place during the transition from a peaceful way of life to a warlike way of life.

For the emergence of the institution of the leisure class, the following conditions must be met:

1. The community must have a predatory lifestyle

2. Livelihoods must be attainable in relatively free conditions. This condition is necessary in order for it to become possible to free a significant number of individuals from continuous participation in labor activity.

The institution of the Idle Class reaches its highest point of development at a later stage in the existence of barbarian culture (for example, in feudal Europe). In such societies, the distinctions between classes are observed extremely strictly and with a specific feature of class properties, there are differences between the types of activities appropriate for individual classes. The upper strata of society are freed from production activities. From that moment on, those occupations that are considered to be more prestigious (for example, military affairs or government) are recorded for them. There is a rule: the upper strata of society cannot be engaged in production activities. At the same time, this also contains an economic expression of their higher position than the rest. The non-productive activities that are allowed to engage in the higher strata can be divided into the following areas: administration, military affairs, religious service, sports and a variety of entertainment.

The Institution of the Idle Class was born out of an earlier demarcation of activities. According to this division, some activities are considered honorable (this is a varied valiant activity), while others are less (this mainly includes necessary daily activities).

In the process of cultural evolution, the emergence of the Idle Class occurred simultaneously with the emergence of private property. This happened because both institutions are the results of the impact of the same economic phenomena. The motive that underlies private property is rivalry between individuals. Thus, the initial phase of the formation of the institution of property is the stage of acquisition through seizure, and the next stage is the organization of production activity. Acquisitions are now beginning to be appreciated not only as evidence of a successful conquest or raid, but rather as evidence of the superiority of the owner of these material assets over other members of society. As a consequence, in order to master an honorable position in society, the possession of a certain property becomes mandatory. When the possession of property is made a basis for respecting people, it also becomes necessary for self-respect. Also, the power given by wealth becomes the motive for the accumulation of property.

This is how conspicuous consumption arises, as well as conspicuous indolence.

The backbone on which a positive reputation is based is now monetary power. It is logical that now it is necessary to demonstrate the availability of funds. This is possible thanks to idleness and conspicuous consumption.

Industrial labor activity gradually became an indicator of a lower status in society. It was perceived as degrading the personal dignity of the individual. In order to gain and preserve authority among other people, only the possession of power and consistency is not enough. For this, wealth and power must be made self-evident, because reverence will be given only after the presentation of appropriate evidence. An idle existence is the most vivid, weighty and convincing confirmation of the availability of funds, and, consequently, the superiority of power in general. The quasi-peace-loving stage of production can be characterized by the establishment of an established system of slave labor. From this moment on, a distinctive feature in the life of the Idle Class becomes a demonstrative getting rid of all useful activities. Abstinence from work is evidence of security, solvency, and also represents a proof of social status. Everywhere, where the criterion of demonstrative idleness begins to work, a secondary idle layer appears. He is extremely poor, but still unable to condescend to profitable pursuits. Most often, these are either those people who have gone bankrupt quite recently and still cannot get used to their new position. Or a group of individuals who seek to wishful thinking and, not having sufficient reserves and passive income, lead an idle lifestyle. Subsequently, they, of course, can be ruined.

The point is that the term idleness has nothing to do with laziness. It only implies non-productive use of time. The institution of the Idle Class comes into being with the institution of property, which comes about with the emergence of property over other people. Among them were prisoners after the conquests, victims of debt slavery, and mainly women. As a result, they became not only servants, but sometimes the master's wives. However, their idleness is fundamentally different from the full-fledged idleness of the master. The main difference lies in the fact that the peculiarities of rather difficult work are still assigned to the wife or servant (women were engaged in servicing their master and the atmosphere in the house). That is why it can be called idleness only in the sense that representatives of the present stratum perform relatively little production work. Thus, another secondary, or, in other words, derivative idle layer appears. Its function is to present idleness in a false manner, with the aim of increasing the esteem of the primary idle class. It is understood that the richer the person himself, the richer his environment: wife, children, servants, and the more numerous they are.

In order to visually show and confirm one's own idleness in the eyes of others, the phenomenon of idle consumption arises. For society, this serves as additional proof of the noble origin and high position of the individual. For example, black caviar is used by people of the upper classes not so much as a means of satisfying hunger, but as an indicator of indolence, because it is quite expensive. Moreover, idle consumption is not only about a person's lifestyle, food, and entertainment. It often affects the upbringing, education and spiritual development of the individual.

However, in addition to the desire for idleness, there is an instinct for mastery in every person. This instinct limits a person, not allowing him (especially at the peace-loving stage) to show ordinary extravagance. In order to part with money, an individual needs at least an ostentatious goal. Here it is quite possible to use the same example with black caviar, when a person seeks to use it, allegedly not because it is so expensive, but because of hunger.

In addition, as long as production work continues to be performed by hired workers or even slaves, people continue to perceive it as humiliating, which prevents the instinct of skill from exerting a serious influence. However, the moment the quasi-peace-loving stage is transformed into a peace-loving production stage, the features of which are wage labor and money payment, the instinct of mastery develops the beliefs of individuals about what is worthy of encouragement.

It turns out that Veblen proved with his theory that in a market economy, consumers are exposed to all kinds of social and psychological pressure, forcing them to make unreasonable decisions. Often, subsequent actions lead to waste, which, in turn, can lead to bankruptcy. This happens because the highest honors are erected to those groups who, thanks to control over private property, extract more wealth from production without engaging in useful labor. Hence the conclusion suggests itself: the market economy will be characterized not so much by performance, efficiency and compliance with the set goals, but by conspicuous waste, deliberate decline in productivity and envious comparison.

So what is conspicuous consumption? First of all, this is the consumption of goods and services in excess of the need. For example, we are all accustomed to the phrase "a car is not a luxury, but a means of transportation." However, the purchase of an overly expensive car with properties that are not needed (as a rule, it is some kind of special design) or several cars is conspicuous consumption. In other words, goods begin to be valued not by their useful properties, but by how much the possession of them begins to distinguish a person from others (the effect of envious comparison arises).

Demonstrative idleness, if we follow the analogy, is a non-productive consumption of time, which is carried out accordingly. The most striking examples are learning foreign languages or learning to play the piano. It is unlikely that a person will need these skills in life (especially if these are already unused or just rarely used dialects), so such education is an example of idle consumption of time.

In addition to demonstrative, there is also a false idleness. It represents a kind of dummy use of both time and some material values in such an amount that is necessary to fulfill the norm of monetary well-being.

Accordingly, in this theory, the criterion dividing society into classes is the incentive to compete. The same incentive, as well as the very competition, leads society to the emergence of private property. After all, competition is a desire to show that an individual has succeeded in something to a greater extent than others. And, having taken possession of a large amount of property, he can demonstrate his wealth (or good luck).

Here are some explanations for what was said above. A little more about the main historical stages of human development that Thorstein Veblen identified:

1. peaceful;

2. predatory;

3. Quasi-peaceful.

The fact is that at various stages, humanity lived in conditions of mutual cooperation. Previously, as it seemed to the author of the concept, there was no property, no exchange, or a price mechanism. Thorstein Veblen called this stage in the life of mankind the peace-loving stage. Later, when a surplus of material wealth was accumulated, the military leaders and priests found it beneficial to rule the rest of the people, because by that moment part of the population had been freed from the need to participate in the production process. Thus, the emergence of the institution of the leisure class began. As peaceful occupations disappeared, giving way to robberies and military campaigns, a predatory stage of development began to emerge. It was at this stage of development that the instinct of mastery, genetically characteristic of the individual, began to be suppressed. If before a person fought with nature, now he had to fight mainly with other people. At the center of the new way of life was private property, which was rooted in violence and deception.

And the last stage of human development comes into its own when people begin to mask their own predatory nature. That is, in later historical eras, Veblen wrote, the ingrained peace-loving habits were only buried under the guise of peaceful forms of behavior. By this time, the social hierarchy was finally established with the "leisure class" at the top of the social pyramid. Outward signs of difference were contained in the flaunting idleness and consumption, which was calculated to demonstrate wealth.

However, despite the objectively different material position of representatives of different classes, Veblen draws the readers' attention to the fact that the differences between classes are exclusively differences in consciousness.

Of course, in addition to differences in consciousness, there are also material symbols of social status. Usually these are such commodities that testify in an indirect way to a person's belonging to one or another class through the characteristics of a person's consumption.

4. Assessment and role of T. Veblen's teaching

Thus, Veblen very subtly analyzes many real aspects of the US economy at the beginning of the 20th century: the transfer of economic power into the hands of financial tycoons, the manipulation of fictitious capital as one of the main means of increasing financial capital, a significant separation of capital-property from capital-function, etc. ... At the same time, this economist was a staunch supporter of the exchange concept: he looked for the root of social conflicts in the sphere of circulation, not production, the contradictions of the latter were interpreted by him as secondary.

According to Veblen, engineers - technocrats (persons who come to power on the basis of a deep knowledge of modern technology) are called upon to play the main role in the upcoming transformations. According to him, participation in the creation of advanced production forces, the formation of highly efficient technology gives rise to the desire of technocrats for political domination.

Observing the contradiction between business interests and industrial development, engineers are imbued with hatred of financiers. True, the "leisure class" seeks to bribe engineers, provide them with material benefits, and increase their income. Part of the engineering and technical personnel, especially among the older generation, is penetrated by the spirit of money-grubbing, but the majority of young engineers do not make a deal with businessmen, since the interests of scientific and technological progress are more important for them than personal enrichment.

Specifically, the picture of the establishment of a "new order" looks as follows in Veblen's works: the scientific and technical intelligentsia begins a general strike that paralyzes industry. The paralysis of the economy is forcing the "leisure class" to retreat. Power passes into the hands of technocrats who begin to transform the industrial system on a new basis. Veblen argues that it is enough to unite a small number of engineers (up to one percent of their total number) for the "leisure class" to voluntarily relinquish power.

T. Veblen's work evoked very contradictory responses in economic science. Thus, representatives of conservative and moderate circles criticize him for an unjustifiably harsh, in their opinion, position in relation to big business. They also point to the unrealism of many of his prophecies (for example, that credit, as well as the banker personifying it, will soon become outdated in distress). On the contrary, representatives of the left intelligentsia idolize Veblen for his deep, original criticism of the "leisure class", "money civilization" in general.

Veblen's concept of the evolution of the "industrial system" did not pass unnoticed for the left-reformist wing of American economic thought. It was further developed in the studies of the prominent economist and sociologist J.K. Gelbraith, in a number of futurological models by O. Toffler, R. Heilbroner, and others.

Institutionalism has absorbed the best theoretical and methodological achievements of the previous schools of economic theory and, above all, the principles of economic analysis of neoclassicists based on mathematics and mathematical statistics.

Institutionalists are strong in describing real economic structures and identifying the specifics of their institutional forms in a particular country, in examining the evolution of the institutional system, in recording new phenomena and processes. Their work is an indispensable source of material necessary for understanding the nature of modern capitalism, especially for analyzing its various forms and types, for studying individual institutions and links of institutional structures, the role of institutions (including state policy) in stimulating or retaining economic development. On the basis of empirical institutional research, many broad theoretical conclusions have been made that have enriched political economy. This refers to various areas and problems, such as the theory of consumer demand (Veblen's ideas about the effect of “demonstration”, non-saturable “status” needs, the role of demand management), the theory of monopoly (the monopolistic nature of large companies, the role of oligopolistic structures, “controlled prices ”), The area of“ industrial relations ”(relations of labor and capital), the labor market, the socio-economic theory of welfare, the theory of the economic cycle, inflation, etc.

Conclusion

Veblen, the founder of institutionalism, in his book "The Leisure Class Theory" suggests using the categorical apparatus of biological dynamics in the analysis of economic phenomena and considers the evolution of society to be a process of natural selection of institutions. According to T. Veblen, economic processes are based on psychology, biology and anthropology. The scientist believes that the main role in economic development should be played by technocracy: technical intelligentsia and managers. The American economist investigated the problems associated with state intervention in the economy. In his opinion, under the government there should be a kind of "brain center" of intellectuals, technical specialists, promoting a more rational activity of the state. The subject of economic science, according to T. Veblen, lies in the study of the motives of consumer behavior. In The Leisure Class Theory, he argued that consumer behavior, contrary to the ideas of neoclassical theory, is not determined by individual evaluations of goods in terms of their degree of usefulness. Thus, the behavior of the "leisure class" is often conditioned by the desire to emphasize their privilege by means of "conspicuous consumption" and "conspicuous waste", and the lower classes sometimes seek to copy the behavior of the "leisure class".

The main instinctive tendencies of people, according to the American economist, are:

Mastery instinct;

Instinct of idle curiosity;

Parental instinct;

Propensity for acquisitions;

A set of selfish inclinations;

Habits.

Veblen argued that the presence of monopolies significantly reduces production and leads to an artificial increase in stock and other prices, fraught with a serious crisis (the crisis he predicted, the Great Depression, came three months after his death in 1929). According to Veblen, a reasonably organized society could create a class of engineers and technologists; in this society there should have been a general staff and unified control over production processes. Veblen's technocratism was also expressed in his concept of the lag of the consciousness of people and public institutions from scientific and technological development. As a result of this lag, according to Veblen, social progress in the 20th century. was reduced mainly to purely individual adaptation to the objectively flowing technological progress.

Bibliography

1. Veblen T. Theory of the leisure class. - M .: Progress, 1984.

2. History of economic doctrines: Textbook. - M .: Economist, 2004

3. Yadgarov Ya.S. History of Economic Thought. M .: Economics, 1996.

4. Negishi T. History of economic doctrines. M .: Aspect Press, 1995.

5. Blaug M. Economic thought in retrospect. M .: "Delo LTD", 1994

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At the beginning of the twentieth century, institutionalism arose in the United States, the most prominent representatives of which were Thorstein Veblen, who headed the socio-psychological (technocratic) version of institutional research, John Commons - the socio-legal (legal), Wesley Mitchell - the opportunistic-statistical (empirical-predictive).

This direction received its name after the American economist W. Hamilton in 1916. first used the term "institutionalism". Its spread was associated with the evolution of economic theory in the United States, where in the 20s of this century it took a leading position.

According to W. Hamilton, an institution is a verbal symbol for a better description of a group of social customs, a "way of thinking" that has become a habit for a group of people or a custom for a people. W. Hamilton argued that "institutions" establish the boundaries and forms of human activity. The world of customs and habits to which we adapt our lives is an intertwining and continuous fabric of "institutions."

Institutionalism is, in a sense, an alternative to the neoclassical direction of economic theory. If neoclassicists proceed from the Smithian thesis about the perfection of the economic market mechanism and self-regulation of the economy and adhere to "pure economic science", then institutionalists consider spiritual, moral, legal and other factors considered in the historical context to be the driving force of the economy along with material factors. In other words, institutionalism as the subject of its analysis puts forward both economic and non-economic problems of socio-economic development. At the same time, the objects of research, institutions, are not subdivided into primary or secondary ones and are not opposed to each other.

T. Veblen is a representative of early institutionalism. He penned a number of studies: "The theory of the leisure class" (1899), "The theory of business entrepreneurship" (1904), "The instinct of skill and the level of development of production technology" (1914), "Large entrepreneurs and the common man" (1919), "Engineers and the system of values "(1921)," Absolute property and entrepreneurship in modern times "(1923).

Veblen mechanically transferred the Darwinian doctrine of natural selection to the realm of social phenomena. At the same time, he did not take into account that the “evolution of the social structure” is a social process, the laws of which cannot be reduced to biological laws.

Neoclassicists often presented a person as an ideal calculating device, instantly assessing the usefulness of a particular good, in order to maximize the overall effect of using the available stock of resources. However, according to Veblen, the economic behavior of people is of a more complex and often irrational nature, because man is not a "machine for calculating the sensations of pleasure and pain." The behavior of people is affected, for example, by the motives of demonstrative prestigious consumption, envious comparison, the instinct of imitation, the law of social status, and other innate and acquired inclinations. Human behavior cannot be reduced to economic models based on the principles of utilitarianism and hedonism. T. Veblen used these arguments, in particular, in a polemic against one of the pillars of neoclassicism - J. Clark.

2. Teaching T. Veblen about "leisure class". Industrial system concept. The doctrine of "absentee property"

Central to Veblen's writings is his doctrine of the "leisure class", to whose education he also approached historically. Like many admirers of L. Morgan's classic work "Ancient Society", Veblen distinguished several stages in the history of mankind: early and late savagery, predatory and semi-peaceful barbarism, and then craft and industrial stages. In the early stages, people lived in a collaborative environment. Then, as it seemed to Veblen, there was no property, exchange, price mechanism. Later, when a surplus of material wealth was accumulated, military leaders and priests found it advantageous to rule over other people. Thus began the process of the formation of the "leisure class", and with it the transition from savagery to barbarism. As peaceful pursuits gave way to military campaigns and plunder, the inherent instinct of skill was suppressed. If earlier a person struggled mainly with nature, now - with another person. At the center of the new way of life was private property, which was rooted in violence and deception.

The doctrine of the leisure class, coupled with the methodology of technocracy (literally: technocracy - the power of technology) underlies Veblen's concept of the "industrial system". According to this theory, capitalism (in Veblen's terminology - "money economy") goes through two stages of development: the stage of the entrepreneur, during which power and property belong to the entrepreneur, and the stage of domination of the financier, when the financiers push back entrepreneurs. The last stage is especially characterized by a dichotomy (confrontation) between industry and business, whose interests are completely different. By industry Veblen understood the sphere of material production based on machine technology, and business - the sphere of circulation (stock speculation, trade, credit, etc.).

The industry, according to Veblen's concept, is represented not only by functioning entrepreneurs, but also by engineering and technical personnel, managers, and workers. All these strata are interested in improving production and therefore are the bearers of progress. On the contrary, business representatives are purely profit-oriented and do not care about production as such.

The dichotomy between industry and business, according to Veblen, is that in the industrial sphere there are layers that are necessary for society, while business is personified in an "idle class" that does not carry a payload. Veblen included only the largest financial magnates in the "leisure class"; He did not consider small and medium-sized entrepreneurs to be social dependents and even (with certain reservations) enrolled in the productive class.

The American scientist repeatedly expressed deep respect for Marx, although he did not agree with him on everything (he criticized the Marxist theory of the development of value, the doctrine of the reserve army of labor as a result of capital accumulation). The main spearhead of Veblen's criticism was directed against the interests of the largest bourgeoisie. This is due to the fact that Veblen stood on the left flank of Western economic thought and was the ideologue of the radical intelligentsia.

The most important result of Veblen's theoretical activity was his doctrine of "absentee property" (absentee - absent, intangible). This property is owned by businessmen who are not directly involved in production. If earlier, at the stage of "domination of entrepreneurs", profit was a natural result of useful entrepreneurial activity, then in the conditions of the "monetary economy" of the twentieth century. credit became the main means of making a profit. It is with the help of credit that businessmen (representatives of the "leisure class") appropriate stocks, bonds, and other fictitious values that bring huge speculative profits. As a result, the securities market expands immensely, and the growth in the size of "absentee" property is many times greater than the value of the tangible assets of corporations. "Absentee property" is the basis for the existence of the "leisure class", the reason for the escalating conflict between industry and business.

3. Assessment and role of T. Veblen's teaching

T. Veblen's work evoked very contradictory responses in economic science. Thus, representatives of conservative and moderate circles criticize him for an unjustifiably harsh, in their opinion, position in relation to big business. They also point to the unrealism of many of his prophecies (for example, that credit, as well as the banker personifying it, will soon become outdated in distress). On the contrary, representatives of the left intelligentsia idolize Veblen for his deep, original criticism of the "leisure class", "money civilization" in general.

Ministry of Education and Science of the Russian Federation

FSBEI HPE "Moscow State Open University named after V.S. Chernomyrdin "

Cheboksary Polytechnic Institute (branch)

TEST

by discipline Institutional Economics

on T. Veblen's theme "The theory of an idle day."

Completed by: Ermolina Marina Vladislavna

Checked by: Associate Professor Aleksandrov A.Kh.

Cheboksary 2012

Introduction

Conclusion

Bibliography

Introduction

In this epoch-making book, Veblen, the revolutionary iconoclast, smashes all the conventions of bourgeois society ...

Meanwhile, the desire to win a position in society, to surpass others through the accumulation of various benefits, undoubtedly, existed, but it was not a cause, but a consequence of the emergence of a new form of property, contributing to the development of productive forces. Veblen traces how, with the development of society, the owners of property turn out to be a privileged group, which becomes the head of the social hierarchy. He states that the representatives of this group do not participate in useful work, in the creation of material values; they receive the products of social production only as owners of the means of production, thanks to the fact of ownership.

1. T. Veblen his short biography and description of his work "Theory of the idle day"

T. Veblen his biography and description of his work "Theory of the idle day." The author of The Leisure Class Theory, Thorstein Veblen, a prominent American economist and sociologist, is the founder of one of the main directions of modern bourgeois political economy - institutionalism. This trend emerged at the turn of the 19th and 20th centuries. in the leading capitalist country, the United States, during the period when American capitalism entered the stage of imperialism. Institutionalism has become quite widespread already in the 1920s. In bourgeois literature, T. Veblen is assigned a prominent role in the development of American bourgeois political economy. Its role in the creation of its institutional direction is especially highly regarded. Indeed, in his works, the most important provisions of institutionalism were formulated for the first time. It was the ideas of T. Veblen that largely determined the further evolution of this direction. An analysis of his works is necessary to identify the ideological roots of modern institutionalism and for a comprehensive criticism of this trend of bourgeois political economy.

The main ideologist of American institutionalism, Thorstein Veblen, is the author of a number of fundamental economic and sociological works. The following works are of the greatest interest: “The theory of the leisure class. Institutional economics ”,“ Theory of business entrepreneurship ”,“ The instinct of skill and the level of development of production technology ”,“ Large entrepreneurs and the common man ”,“ Engineers and the system of values ”,“ Absentee property and entrepreneurship in modern times. American version ". Two collections, "In the world of ongoing changes" and "The place of science in modern civilization and other essays" (published posthumously), included the main articles of Veblen, written in different years of his work. W. Mitchell, a student and follower of T. Veblen, prepared in the last years of the teacher's life a selection of extracts from his books and articles.

Veblen's main works were reprinted several times in the United States. His biography is most detailed in the book by J. Dorfman "Thorstein Veblen and his America." Note that until now none of the works of T. Veblen has yet been translated into Russian.

Veblen's parents, Thomas Veblen and his wife Carey, emigrated from Norway to the United States in the late 1940s. For some time Thomas Veblen was a factory worker, then a carpenter, and having saved a certain amount of money, he bought a farm and settled in the Norwegian settlement of Kato. The sixth child of the Thorstein family, Bund Veblen, was born on this farm on July 30, 1857. In 1874, at the age of seventeen, Thorstein entered Carleton College in Northfield. The college was religious and trained missionaries. Veblen graduated from college a year ahead of schedule, passing exams as an external student. In 1880, after graduating from college, T. Veblen received a teaching position in the state of Madison, but a year later the educational institution was closed, he was unemployed and settled on his father's farm. A year later, he enters, together with his older brother Andrew, at Hopkins University, where he studies philosophy and political economy. Soon after entering the university, he wrote the work “Theory of land taxation by J. St. Mill ". Veblen studied at Hopkins University for only an incomplete semester, as he did not receive the expected scholarship. His father takes a bank loan for him, and he goes to Yale University. Veblen's existence during this period was the most modest, there was no money for clothes, debts ...

During Veblen's two and a half years at Yale University, he studied the doctrine of evolution, participated in debates around this doctrine, and wrote his dissertation "The Ethical Foundations of the Doctrine of Retribution." The dissertation was based on the work of Spencer and Kant. In 1884, a competition was announced for the best work on "the history and theory of the distribution of the national budget among the American states." In dire need of money, Veblen writes such a work and receives an award. In the same year, 1884 Veblen received a Ph.D. degree for his dissertation and began looking for work. Although he had strong support (written recommendations from Prof. Clark and Prof. Porter from Yale), his Ph.D., and articles in philosophy journals, he did not find a job. Philosophy teachers were recruited from among theologians. For the Norwegian, and, moreover, suspected of adherence to the theory of evolution, nowhere was there a place. Veblen was forced to return to his father's farm again. There he worked as a literary day laborer in newspapers and magazines, wrote, in his words, "experimental articles" that were not published anywhere, even engaged in invention in the field of agricultural technology.

In 1895, when Veblen was 39 years old, his financial affairs were recovering a little. He begins work on the book Leisure Class Theory. Veblen wrote to his friend Miss Hardy in November 1895 that the first book on his list of planned works was The Leisure Class Theory, and he was beginning to “tackle it little by little.” occupations ... As I advance, or rather, when I try to advance, I find myself more and more surrounded by unheard-of economic doctrines that I have invented, which have more or less distant relation to the main topic; therefore, having written what will be in the edited form of pages, probably 50 or 60, I have not yet come to consider the doctrine of ostentatious waste, which, of course, should form, in essence, the core of this work. "

In the summer of 1896 Veblen traveled to Europe, where he also collected material for a forthcoming book. He devotes his main attention to The Theory of the Leisure Class, repeatedly rewriting entire chapters. The book is published in February 1899. On the tenth anniversary of the University of Chicago, Veblen and Laughlin set out in their anniversary publication their theories of modern credit and its role in entrepreneurship. The central thesis of Veblen's work was the following: "Only modern competing businesses need credit, but not modern production." This work, almost unchanged, was subsequently included in Veblen's book The Theory of Business Entrepreneurship, which was published in the summer of 1904.

On Saturday, August 3, 1929, Veblen died. As J. Dorfman writes, six months before his death Veblen told his neighbor Mrs. R. Fisher: “Naturally, something new will develop all the time, but so far I do not see a better course than the one proposed by the communists”.

2. Analysis of the work "Theory of the idle day"

Veblen economic bourgeois money-grubbing

The time of the corporate machine industry is characterized, according to Veblen, by the institutions of monetary competition and ostentatious consumption. In The Leisure Class Theory (1899) Veblen analyzes the mechanisms of the formation of the acquisitive type of economic behavior that characterizes the representatives of this class. Veblen contrasts this type with the productive type of behavior characteristic of the lower classes. For the leisure class, according to Veblen, the principle of demonstrative waste in the name of maintaining a high standard of living becomes characteristic.

Veblen emphasizes, and this is very important, that the bourgeoisie is trying to impose its canons of the way of life on the whole of society, on all its strata. Such a stereotype of existence appears in the coverage of Veblen as wretched and meaningless. The theory of the leisure class contains not only an objective condemnation of the modern Web-Lenu business civilization and the scale of values created by this civilization that orientates people only to consumption, but also an idea of the true essence of man, naturally gifted with the instinct of skill and an irresistible craving for other values - knowledge and LABOR - This is the indisputable merit of Veblen's book. Suffice it to recall the key position of Keynes's economic theory, the assertion that high rates of economic development are predetermined by high rates of consumption, or aggregate demand. Stimulating aggregate demand is, in his opinion, one of the main priorities of the state's economic policy. But this is also the task of manufacturers, because the rate of development of the enterprise and, accordingly, the profit obtained directly depends on the demand for its products. And therefore, the task of producers becomes not so much the satisfaction of the existing demand as its creation by means of various forms of pressure on consumers. He draws attention to the fact that it is industrial propaganda that develops a person's attitude to have (or acquire), and not to be. It is no coincidence that Veblen's work The Leisure Class Theory was written in the last decade of the 19th century. The so-called mass consumption society is beginning to form in the United States.

In the summer of 1914, just before the outbreak of the First World War, Veblen went to Norway, after which he continued work on the already begun new book, Imperialist Germany and the Industrial Revolution. He expounded a number of provisions of the book that was being prepared to students at the beginning of the next course in Economic Factors, and the students said that it smelled like a new book. He wrote it unusually quickly, in 1915 the book was published. Immediately after that, Veblen begins work on the next one. This was a particularly productive period for Veblen. He successively completed one development after another of the themes raised in the Leisure Class Theory. All these themes are united by one thought: the domination of private capital is detrimental to the economy and - in constant connection with modern production - to all spheres of social life.

The relevance of the topic, the sharp condemnation of idle classes aroused great interest in Veblen's book. In this landmark book, Veblen, the revolutionary iconoclast, smashes the conventions of bourgeois society ... Priston University economics professor Winthrop Daniels wrote in Atlantic Munsley in his review of Leisure Class Theory: Veblen has an uncanny ability to penetrate the pathological aspects of bourgeois society and entrepreneurship , stepping ruthlessly over the ulcers that the scalpel of his criticism reveals. Ward called The Leisure Class Theory one of the finest books ever published in the country.

From this he draws a very unexpected conclusion that the lower classes are just as conservative as the upper ones: People who are miserable and those whose forces are absorbed by the daily struggle for food are conservative because they cannot afford to take care of the day after tomorrow (S. Veblen neglects that the fact that it is precisely the miserable poverty of people that creates the situation in which, according to Karl Marx, people have nothing to lose except their chains, and they go to active resistance with the aim of restructuring the unbearable life. Practice, this is the best criterion of truth, showed that all social revolutions - slave revolutions, peasant wars, bourgeois revolutions and proletarian revolutions - occur when the life of the oppressed masses becomes unbearably difficult, and are carried out by precisely those people who are below, closer to the lower limit of the social scale. as historical experience shows, they go to great lengths, up to death, to make a revolution. Helen about the conservatism of the lower strata is important for his forecast of the future, because, precisely based on the idea of the conservatism of the lower strata, he tries to find other social groups that are supposedly called upon to become revolutionary carriers of the new. In The Leisure Class Theory, the forecast for the future of human society has not yet sounded, but Veblen is already leading the reader to it. Already in this book, there are notes of clear approval of machine production and those who, in his opinion, have the most progressive human plstppk-tom - the instinct for mastery. It was in the Theory of the Leisure Class that the basis of the technocratic concept was laid, which was picked up by many institu- tionalists and developed by J. Analyzing the process of the emergence of the leisure class, Veblen distinguished two stages in the history of human society: the peace-loving stage and the predatory stage. The first is characterized by small primitive groups of people. As a rule, they are peaceful and lead a predominantly sedentary lifestyle. They are poor, individual property is not the dominant feature of the system of economic relations in them. According to Veblen, there is no aggression at this stage and people are engaged in some form of peaceful production activity. At an early stage of social development, when society usually still leads a peaceful and possibly sedentary lifestyle, and the system of individual property is not yet developed, the fullest manifestation of the individual's abilities can occur mainly in activities aimed at maintaining the life of the group. In addition, Veblen believes that rivalry between people, to which he attaches decisive importance in the emergence of private property and the leisure class, is relatively weak at this stage and does not go beyond the sphere of peaceful pursuits.

3. Aspect "Idle Day Theory"

In The Leisure Class Theory and other works, Veblen develops his historical and economic concept. He singled out a number of periods in history: early and late savagery, warlike and semi-peaceful barbarism and, finally, the stage of civilization. In general terms, such a fragmentation of the history of society - savagery, barbarism and civilization - coincides with the periodization proposed in the work of L. Morgan "Ancient Society". As you know, this periodization was summarized in more detailed material by F. Engels, who wrote about it. Veblen shows that barbarism is based on exploitation and hostile division between the military and priestly castes, which consumed the surplus created, and the lower strata of the population who create it. In the period of barbarism, according to Veblen, those social habits that formed the basis of the acquisitive type of economic behavior characteristic of the representatives of the leisure class were born. Veblen contrasts this type with the productive type characteristic of the lower classes, which is based on social habits typical of the period of early savagery. It is important to note that Veblen endows with similar social habits during the period of capitalism the representatives of the "leisure class", on the one hand, and representatives of the engineering and technical intelligentsia, on the other.

Thus, Veblen draws two opposite types of social structure and, accordingly, two historically opposite types of economic behavior. It is clearly seen that the role of psychological factors is exaggerated in the historical and economic concept of Veblen. The development of society, socio-economic changes appear in Veblen's interpretation ultimately as a result of a conflict of types of social habits. For Veblen, conflicts between opposing motives and habits are central. Contradictions in the system of production relations - the real source of the development of society - he does not consider. This clearly manifested the often characteristic Veblen approach based on idealism and biology. Elements of social psychology (way of thinking) exerted, according to Veblen, a decisive and direct influence on the development of society. The idea of the decisive role of customs and habits runs through the entire theory of Veblen. In turn, this historical and economic concept is important for understanding and evaluating the criticism that Veblen subjected to his contemporary capitalist society. His criticism of bourgeois economic institutions is closely related to the concept of opposite types of economic activity and customs of thinking - peaceful and predatory. In terms of time, the emergence of the "leisure class" Veblen refers to the period of transition to the predatory way of life. Veblen further outlines those conditions which, in his opinion, are necessary for the formation of the "leisure class." The conditions, obviously, necessary for its appearance are:

1) The presence of a predatory way of life in the community;

2) The availability of the means to maintain life should be obtained on fairly easy conditions so that a significant part of society can be freed from constant participation in work according to the established schedule. The second condition put forward by Veblen should be understood as the possibility of creating a surplus product as the economic basis for dividing society into classes.

Veblen associates the emergence of the “leisure class” with the emergence of private property, since in the process of cultural evolution the emergence of the leisure class coincides with the emergence of property. This is certainly true, for these two institutions are the result of the action of the same economic forces. He examines the various stages in the formation of the institution of private property: the initial stage of property, associated with acquisition by seizure and circulation in their favor, and the next stage - the organization of production, arising on the basis of private property, when the trophies of predatory raids as a generally accepted indicator of success and superiority in power are increasingly being replaced by accumulated property. Veblen pays great attention to the problem of private property in his theory. He rightly associated with the emergence of private property the division of society into idle and working strata, the inevitable antagonism between them. But his concept of the emergence of private property, like his entire historical and economic concept, is abstract from reality. In addition, this theory does not contain a single consistent methodological approach. Economic institutions are seen by Veblen as the embodiment of certain behavioral habits and customs. He constantly strove to study the economic phenomenon as a specific custom, which, once established, then possesses inertia and authority. The behavior of people, their motives, fixing themselves in the form of institutions, determine in the future economic relations and the entire socio-economic development of society. This position of Veblen manifested itself in the analysis of the emergence of the most important economic institution - private property. The motive underlying ownership is rivalry; the same motive of rivalry, on the basis of which the institution of property arises, remains effective in the further development of this institution and in the evolution of all those features of the social structure to which property is related.

In Veblen's concept, property originally arose as a trophy and as the result of a raid on another tribe or clan. Property was a sign of victory over the enemy, distinguishing the owner of the trophy from his less fortunate neighbor. With the development of culture, property is acquired mainly not by military, but by peaceful means. But it still serves as a proof of success, a high position in society. Ownership turns out to be the most readily discernible proof of success and the traditional basis of respect, Veblen says. As wealth becomes the criterion of "honor", as long as the acquisition of additional property, the increase in property becomes necessary to obtain approval from the community and a strong position in it. In Veblen's interpretation, at a certain stage in the development of society, the achievement of a certain “prestigious monetary level,” that is, a certain conditional standard of wealth, is as necessary as valor, as previously a feat. Exceeding the monetary level turns out to be especially honorable, and, on the contrary, those members of society who do not possess the necessary property receive a negative assessment of their fellows and suffer from it. Veblen points out that the monetary standard of living does not remain unchanged: it increases with the development of society. In the process of assessing the property of its various owners, as in other situations, people, according to Veblen, resort to envious comparisons. The envious comparison is the source of the desire for an almost unlimited increase in property.

Veblen believes that the desire to increase wealth, to surpass the rest, can hardly be achieved in each case. This circumstance, according to Veblen, proves the fallacy of the assertion that the main purpose of accumulation is consumption. He makes an attempt to criticize this statement, which is widespread in the literature. Veblen believes that the monetary standard of living is also determined by the habit of monetary rivalry and that among the motives that guide people in the accumulation of wealth, primacy both in scale and in strength remains behind this motive of monetary rivalry. Veblen's inherent tendency to psychologize in the interpretation of economic phenomena in the analysis of the emergence and development of private property is especially evident. He prioritizes rivalry as a supposedly fundamental property of human nature and ignores the question of why the emergence of private property was economically inevitable. Consequently, Veblen limits his consideration of the causes of the emergence of private property mainly to psychological motives. He says bluntly that private property is based on an envious comparison. For him, the transition from communal to private property was not due to the objective need to change outdated production relations, which became a brake on the development of productive forces, by new production relations, forms that contribute to their growth. Meanwhile, the desire to win a position in society, to surpass others through the accumulation of various benefits, undoubtedly, existed, but it was not a cause, but a consequence of the emergence of a new form of property, contributing to the development of productive forces.

Veblen traces how, with the development of society, the owners of property turn out to be a privileged group, which becomes the head of the social hierarchy. He states that the representatives of this group do not participate in useful work, in the creation of material values; they receive the products of social production only as owners of the means of production, thanks to the fact of ownership.

Therefore Veblen also calls this social group the expressive term "leisure class".

In addition to idleness, Veblen notes another important feature characteristic of the representatives of the ruling class: excessive, not conditioned by human needs, the amount of consumption. Such consumption was possible then, that the representatives of the "leisure class", thanks to property, appropriated for themselves most of the product created by society. Veblen points out that the consumption of this class conflicts with the interests of society as a whole; to characterize such consumption, he introduces the term “wasteful consumption”. Veblen analyzes in detail and criticizes the ideology and psychology of the representatives of the "leisure class". He believes that since ownership of property, idleness and “wasteful consumption” became the attributes of the ruling class (other members of society were forced to work and limit their consumption), they took the main place in the value system of the “leisure class” and became honorable. Possession of more property meant higher prestige, a higher position in society, so representatives of the property class sought to demonstrate their wealth; an idle way of life and “conspicuous consumption”, according to Veblen, are the most important properties of the “leisure class”. Veblen analyzes the history of the development of idleness. It shows how rules, idle skills, a code of propriety, and rules of conduct are gradually developed. According to Veblen, the entire way of life of the upper strata is subordinated to a constant demonstration of indolence, and this demonstration becomes burdensome even for many. The founder of institutionalism also gives an apt description of the value system of bourgeois society. The foundation on which a good reputation ultimately rests is money power. And the means of demonstrating monetary power, and thus the means of acquiring or maintaining a good name, are idleness and demonstrative material consumption. He argues that the cost of conspicuous consumption is becoming more important than the cost of essential. Veblen constantly emphasizes his negative assessment of demonstrative idleness and conspicuous consumption as a waste of material wealth and people's strength. He believes that conspicuous consumption absorbs the growing efficiency of production, eliminates its results.

Veblen repeatedly returns to one of the main ideas of the Leisure Class Theory - the emergence and strengthening of the institution of property. He notes that the growing power of money led to the formation of a "money civilization", and the development of human society went on the wrong path. He emphasizes that, in contrast to class society, where belonging to the highest circles is hereditary, in bourgeois society the power of money blurs the line between different strata of society, does not exclude the transition from one stratum to another, since the difference is only property. Because of this, in bourgeois society, “decent consumption” becomes a general requirement for all its members. The author comes out with a clear condemnation of waste in consumption, which, in his opinion, does not contribute to rational behavior. Analyzing the psychological mechanism of fashion, Veblen comes to the conclusion that the current situation is absurd; his outspoken criticism is directed directly to contemporary capitalism.

Veblen says that the big financial bourgeoisie is especially prone to consumption habits that run counter to the interests of material production, such as wasteful consumption that serves the purposes of rivalry and prestige, but harms production.

List of used literature

1. Bernard I., Collie J.-K. Explanatory Dictionary of Economics and Finance: In 2 volumes. Moscow: International Relations, 1994.

2. Brunner K. The concept of man and the concept of society: two approaches to understanding society // THESIS. 1993. Autumn. T. 1. Issue. 3.P. 51 - 72

3. Weber M. Selected Works. Moscow: Progress, 1990.

4. Veblen T. Theory of the leisure class. Moscow: Progress, 1994.

5. Tutov LA, Shastitko AE Subject and method of economic theory: Materials for the lecture. M .: TEIS, 1997.

Veblen's ideas

Veblen is the founder of institutionalism, a theory that prioritizes historically defined forms of social behavior, or institutions. V Leisure class theories he argued that consumer behavior, contrary to the ideas of neoclassical theory, is not determined by individual evaluations of goods in terms of their degree of usefulness. Thus, the behavior of the "leisure class" is often conditioned by the desire to emphasize their privilege by means of "conspicuous consumption" and "conspicuous waste", and the lower classes sometimes seek to copy the behavior of the "leisure class".

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