The relationship between Karl Marx and Thorstein Veblen has created some controversy between various scholars and schools of economic thought. While some point out the Marxist influences in Veblen’s writings, the general consensus is that “Veblen is not an American Marxist”. One of Veblen’s first criticism of Marxism can be found in a book review of Max Lorenz’s Die Marxistische Socialdemokratie, where he claimed that the Marxist doctrine lacked an adequate theory of human agency:
While the materialistic interpretation of history points out how social development goes on—by a class struggle that proceeds from maladjustment between economic structure and economic function—it is nowhere pointed out what is the operative force at work in the process. It denies that human discretion and effort seeking a better adjustment can furnish such a force, since it makes man the creature of circumstances. This defect reduces itself…to a misconception of human nature and of man’s place in the social development. The materialistic theory conceives of man as exclusively a social being, who counts in the process solely as a medium for the transmission and expression of social laws and changes; whereas he is, in fact, also an individual, acting out his own life as such. Hereby is indicated not only the weakness of the materialistic theory, but also the means of remedying the defect pointed out. With the amendment so indicated, it becomes not only a theory of the method of social and economic change, but a theory of social process considered as a substantial unfolding of life as well.
Veblen rejected the idea that an individual’s actions can be explained entirely in terms of socioeconomic circumstance. While material conditions certainly had a role to play in shaping human behavior, Veblen looked at the human behavior though a Darwinian framework:
When the materialistic conception passes under the Darwinian norm, of cumulative causation, it happens, first, that this initial principle itself is reduced to the rank of a habit of thought induced in the speculator who depends on its light by the circumstances of his life, in the way of hereditary bent, occupation, tradition, education, climate, food supply, and the like. But under the Darwinian norm the question of whether and how far material exigencies control human conduct and cultural growth becomes a question of the share which these material exigencies have in shaping men’s habits of thought; i.e., their ideals and aspirations, their sense of the true, the beautiful, and the good. Whether and how far these traits of human culture and the institutional structure built out of them are the outgrowth of material (economic) exigencies becomes a question of what kind and degree of efficiency belongs to the economic exigencies among the complex of circumstances that conduce to the formation of habits. It is no longer a question of whether material exigencies rationally should guide men’s conduct, but whether, as a matter of brute causation, they do induce such habits of thought in men as the economic interpretation presumes, and whether in the last analysis economic exigencies alone are, directly or indirectly, effective in shaping human habits of thought. (Veblen 1907: 305-306)
This is in contrast to Marx, who assumed that workers, through rational thought, would comprehend the contradictory nature of capitalism and inevitably want to overthrow it.
A more fundamental issue Veblen had with the Marx and Marxism was the teleological nature of historical materialism. With Marx’s theory of history, we are left with a teleological account of capitalism, where it will ultimately meet its own end at the hands of the proletariat:
The continuity sought in the facts of observation and imputed to them by the earlier school of theory was a continuity of a personal kind,-a continuity of reason and consequently of logic. The facts were construed to take such a course as could be established by an appeal to reason between intelligent and fair-minded men. They were supposed to fall into a sequence of logical consistency. The romantic (Marxian) sequence of theory is essentially an intellectual sequence, and it is therefore of a teleological character. The logical trend of it can be argued out. That is to say, it tends to a goal. (Veblen 1907: 304).
For Veblen, there was no direct casual connection between the “material forces” and the choices of the working class. The materialist interpretation of history lacked an explanation of the forces at work and didn’t adequately explain how social forces impel individual agents to think. There was very little said about the efficient causes, channels, or methods by which economic conditions affected and changed institutions, i.e the habits and propensities, of the working class. Instead, Veblen turned to Darwinism and the process of cumulative social change. This sequence of causation, according to Veblen, was “opaque and unteleological” in character and could not involve a process of convergence or equilibrium; “in Darwinism there is no such final or perfect term, and no definitive equilibrium (Veblen 1906: 582) (2).
1. It should be noted that Marx didn’t hold a strong position of historical materialism. In fact, he specifically said that materialism must be interpreted weakly.
2. When you consider such a prolific and controversial writer like Marx, there is bound to be some confusion over what he actually meant. I myself have read very little of Marx and to conclude that Veblen was correct in his critique of Marx would be premature. However, even if we consider the more nuanced thought of Marx (and other Marxists), I still think Veblen would reject the romantic and deterministic nature of Marx’s system .
1. Hodgson, Geoffrey M. “On the Evolution of Thorstein Veblen’s Evolutionary Economics.” Cambridge Journal of Economics 22 (1998): 415-31. Print.
2. Edgell, Stephen, and Jules Townshend. “Marx and Veblen on Human Nature, History, and Capitalism: Vive La Difference!” Journal of Economic Issues 27.3 (1993): 721-39. Print.
3. Veblen, Thorstein. “Industrial and Pecuniary Employments.” Publications of the American Economic Association 3rd ser. 2.1 (1901): 190-235. Print.
4. Veblen, Thorstein, “The Socialist Economics of Karl Marx and His Followers.” The Quarterly Journal of Economics, Vol. 20, No. 4 (Aug., 1906), pp. 575-595
5. Veblen, Thorstein, “The Socialist Economics of Karl Marx and His Followers.”
The Quarterly Journal of Economics, Vol. 21, No. 2 (Feb., 1907), pp. 299-322