Absentee Ownership is an inquiry into the economic situation as it has taken shape in the twentieth century, particularly as exemplified in the case of America. According to Thorstein Veblen, absentee ownership is the main and immediate controlling interest in the life of civilized men. It is the paramount issue between the civilized nations, and guides the conduct of their affairs at home and abroad. World War I, says Veblen, arose out of a conflict of absentee interests and the peace was negotiated with a view to stabilize them. Part I of the book is occupied with a summary description of that range of economic circumstances and that sequence of economic growth and change that led up through the nineteenth century and have come to a head in the twentieth century. Part II is an objective, theoretical analysis of those economic circumstances described in the first part of the book.
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Thorstein Bunde Veblen was an American economist and social scientist best known for challenging the economic theories of his time.
He rejected the neat logic and natural laws of his contemporaries, asserting instead that economic order was evolutionary and that this evolution was strongly influenced by institutions such as labor unions, business organizations, schools, and even churches.
In so doing, Veblen laid the basis for what is now known as the institutional school of economics. Veblen was often described as being an aloof and isolated, albeit gifted, misfit. His sense of isolation was established early; he was born on a farm in rural Wisconsin to immigrant Norwegian parents.
English was spoken only as a second language in the tight-knit Norwegian community and Veblen did not perfect his use of the language until he entered college. A voracious reader with a distinct aversion to farm work, he was sent to nearby Carleton College to study for the Lutheran ministry.
While at Carleton, Veblen alienated some of the faculty with inflammatory and agnostic writings, and, although he graduated in , it was without the divinity degree that would have enabled him to teach at one of the many small religious colleges of the time. After graduate work at Johns Hopkins University and Yale University, he returned to his parents' home, where he spent the next seven years relaxing, reading, and doing odd jobs. In he married Ellen Rolfe, much to the dismay of her uncle who happened to be the president of Carleton College.
During this period, Veblen had little luck finding a job, even with the benefit of his wife's and her uncle's connections. Finally, at the age of 34, Veblen went to Cornell University to seek a teaching position. Despite his frontier appearancecorduroy trousers and coonskin caphe was given a one-year teaching assignment. The next year he joined the faculty at the University of Chicago, where he taught until The Theory of the Leisure Class was an insightful, if not contemptuous, analysis of the excess consumption and wasteful behavior of the wealthy.
Veblen contended that the modern quest for the accumulation of money, and its lavish display, was derived from the predatory barbarian practice of seizing goods and wealth without work.
In The Theory of Business Enterprise, he described the heads of corporate enterprises as saboteurs of the economic systempeople interested only in the financing of production rather than the process of production. This was a radical view, but Veblen was writing during the period when the "robber barons" seemed obsessed by the profits that could be made from stock flotations, bond issues, and other complex financial deals.
Veblen's notorious womanizing cost him his position with the University of Chicago in He moved on to Stanford University, then the University of Missouri, and finally to the New School for Social Research in New York, where he taught briefly before retiring to a small rustic cabin in California.
Divorced from his wife in , he remarried in , but his second wife was institutionalized shortly after for psychological problems. Veblen was one of the most provocative economists of his time, but his ideas were such that he attracted few disciples. Even so, economists have come to recognize the importance of institutions and their impact on economic behavior.
Additional testament to the influence of his work is the fact that many of the terms he coined are in wide use today, among them conspicuous consumption conspicuous consumption, the leisure class, and cultural lag. Thorstein Veblen.
Absentee Ownership: Business Enterprise in Recent Times - The Case of America
The following essay is an inquiry into the economic situation as it has taken shape during this twentieth century, particularly as exemplified in the case of America. Its aim is an objective, theoretical analysis and formulation of the main drift, as determined by the material circumstances of the case, including the industrial arts, and by the dominant institution of absentee ownership, including the use of' credit. This analysis and formulation occupies Part II of the essay. It makes little use of the received theories of Political Economy; not as departing from the received theories or discrediting them, but because the inquiry is concerned chiefly with economic forces and phenomena which are of later date than the received doctrines. Part I of the essay is occupied with a summary description of that range of economic circumstances and that sequence of economic growth and change which have led up through the nineteenth century and have come to a head in the situation of the past two decades; regard being had chiefly to the case of England for the earlier decades of the century and chiefly to the case of America for the later years. It makes no use of recondite information and makes no attempt to penetrate beyond the workday facts which are already familiar to students of these matters. An unknown error has occurred.
Absentee Ownership and Business Enterprise in Recent Times: The Case of America
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Absentee Ownership : Business Enterprise in Recent Times - The Case of America
Thorstein Bunde Veblen was an American economist and social scientist best known for challenging the economic theories of his time. He rejected the neat logic and natural laws of his contemporaries, asserting instead that economic order was evolutionary and that this evolution was strongly influenced by institutions such as labor unions, business organizations, schools, and even churches. In so doing, Veblen laid the basis for what is now known as the institutional school of economics. Veblen was often described as being an aloof and isolated, albeit gifted, misfit.
Thorstein Veblen sketches here the passage from an economy where the artisan is in direct contact with the production and sale of goods and is still the owner of the tools for making objects, to a situation where new figures intervene to mastermind the production and sale of goods on a much larger scale, requiring more expensive means plants, machines, transport. In the words of the author "Instead of continuing to act as foreman of the shop, This new scenario can be called "capitalism," something quite different from what Adam Smith described in his Wealth of Nations , in which the small independent producer emerges free from the shackles of the state mercantilistic policies. Very much as was the case in the petty trade of the Middle Ages, so also in the handicraft industry; by degrees but unavoidably, absentee ownership came in so soon and so far as the scare of operation advanced to such a point that trade or industry became a matter of teamwork. With the advance of specialisation and division of labor the equipment required for carrying on any given line of work presently became larger than what a workman could ordinarily provide out of his own work as he went along, at the same time that the equipment took more and more of the character of a "plant" designed for the joint use of a number of workmen.