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The Engineers and the Price System
In his The Engineers and the Price System, originally published in 1921, Veblen observes that World War One demanded industrial innovations, and he was among the first to predict the need for changes in managerial struc-ture. Veblen saw that industrial output was more dependent upon techno-crats―managers and capital innova-tors―than financiers. In The Engineers and the Price System, Veblen applies economic theory to modern industrial society. He demon-strates that revolutionary change can be advanced by managers and engi-neers upon whose "brains and skills" the state of industrial arts depends. In his uniquely comprehensive in-troduction, Daniel Bell discusses the associations and attitudes which mark Veblen as the prophetic outsider he remained most of his life.
158 pages, Paperback
First published January 1, 1921
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About the author
Thorstein Veblen
315 books183 followersThorstein (born 'Torsten') Bunde Veblen was a Norwegian-American economist and sociologist. He was famous as a witty critic of capitalism.
Veblen is famous for the idea of "conspicuous consumption". Conspicuous consumption, along with "conspicuous leisure", is performed to demonstrate wealth or mark social status. Veblen explains the concept in his best-known book, The Theory of the Leisure Class (1899). Within the history of economic thought, Veblen is considered the leader of the institutional economics movement. Veblen's distinction between "institutions" and "technology" is still called the Veblenian dichotomy by contemporary economists.
As a leading intellectual of the Progressive Era, Veblen attacked production for profit. His emphasis on conspicuous consumption greatly influenced the socialist thinkers who sought a non-Marxist critique of capitalism.
Veblen is famous for the idea of "conspicuous consumption". Conspicuous consumption, along with "conspicuous leisure", is performed to demonstrate wealth or mark social status. Veblen explains the concept in his best-known book, The Theory of the Leisure Class (1899). Within the history of economic thought, Veblen is considered the leader of the institutional economics movement. Veblen's distinction between "institutions" and "technology" is still called the Veblenian dichotomy by contemporary economists.
As a leading intellectual of the Progressive Era, Veblen attacked production for profit. His emphasis on conspicuous consumption greatly influenced the socialist thinkers who sought a non-Marxist critique of capitalism.
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Displaying 1 - 9 of 9 reviews
December 29, 2020
This was an excellent book in many ways, and an indispensible part of the Institutionalist canon. It's certainly useful for analyzing the largely tacit institutional assumptions behind marginalist economics and the power relations it conceals.
Its main drawbacks result from Veblen's shared technological assumptions with the vulgar Marxists (and with Galbraith and Chandler, for that matter). He takes at face value the received doctrine tying capital-intensiveness, size, and centralization to productivity, and assumes that the capital-intensiveness and scale of American industry is the neutral result of objective technological imperatives toward increased efficiency. From this it follows that chronic problems of idle capacity, and the capitalists' consequent resort either to restrictions on ouput or to waste production as a remedy, are simply an issue of the irrational and backwards of the capitalist price system interacting with technologies of abundance that no longer fit within their "capitalist integument" or the existing "relations of production."
In fact the mass production model was by no means the objectively most efficient model for the second industrial revolution (i.e. the integration of electrically powered machinery into manufacturing), in terms of the ratio of material inputs to outputs. It was one competing model that was chosen because it was the most efficient at promoting what James Scott calls "legibility," and ease of labor discipline and surplus extraction.
In terms of purely material efficiency, arguably, a preferable model would have been the industrial district model of Kropotkin, Mumford, and Borsodi: integrating electrically powered, general-purpose craft tools into job-shop production near the point of consumption, frequently switching between product lines on a lean basis.
Mass production, on the other hand -- an industrial model based on extremely expensive, product-specific machinery -- required long production runs to fully utilize capacity, amortize capital outlays and minimize unit costs. This meant production undertaken without regard to preexisting orders, and an entire society organized around supply-push distribution to guarantee consumption of the output.
So the chronic idleness of mass-production industry was not, as Veblen assumed, the result of its generic technological superiority exceeding the ability of capitalist productive relations to cope with. It was the result of a technological system which was itself irrational, undertaken to serve capitalism's perverse institutional requirements.
Its main drawbacks result from Veblen's shared technological assumptions with the vulgar Marxists (and with Galbraith and Chandler, for that matter). He takes at face value the received doctrine tying capital-intensiveness, size, and centralization to productivity, and assumes that the capital-intensiveness and scale of American industry is the neutral result of objective technological imperatives toward increased efficiency. From this it follows that chronic problems of idle capacity, and the capitalists' consequent resort either to restrictions on ouput or to waste production as a remedy, are simply an issue of the irrational and backwards of the capitalist price system interacting with technologies of abundance that no longer fit within their "capitalist integument" or the existing "relations of production."
In fact the mass production model was by no means the objectively most efficient model for the second industrial revolution (i.e. the integration of electrically powered machinery into manufacturing), in terms of the ratio of material inputs to outputs. It was one competing model that was chosen because it was the most efficient at promoting what James Scott calls "legibility," and ease of labor discipline and surplus extraction.
In terms of purely material efficiency, arguably, a preferable model would have been the industrial district model of Kropotkin, Mumford, and Borsodi: integrating electrically powered, general-purpose craft tools into job-shop production near the point of consumption, frequently switching between product lines on a lean basis.
Mass production, on the other hand -- an industrial model based on extremely expensive, product-specific machinery -- required long production runs to fully utilize capacity, amortize capital outlays and minimize unit costs. This meant production undertaken without regard to preexisting orders, and an entire society organized around supply-push distribution to guarantee consumption of the output.
So the chronic idleness of mass-production industry was not, as Veblen assumed, the result of its generic technological superiority exceeding the ability of capitalist productive relations to cope with. It was the result of a technological system which was itself irrational, undertaken to serve capitalism's perverse institutional requirements.
June 13, 2015
Written in 1919, yet as relevant today. Veblen one of best economic thinkers of 19 century in his clear and easy to understand language (even for an economic layman) explains the system which keeps the whole world in calcified inefficiency and waste.
To sum it up in his own words: "Politics and investment are still allowed to decide matters of industrial policy which should plainly be left to the discretion of the general staff of production engineers driven by no commercial bias." Amen to that!
To sum it up in his own words: "Politics and investment are still allowed to decide matters of industrial policy which should plainly be left to the discretion of the general staff of production engineers driven by no commercial bias." Amen to that!
October 1, 2012
Strangely prescient early 20th century heterodox economics treatise on the engineers (aka skilled craftsmen) and the disruptions they could cause in perfect economic models since they are "workers' but are actually more akin to the entrepreneurs, and how they really will own the world and control the company. Witness: internet companies and developers. Me likey. Has a quick section on advertising economics if you happen to be writing a book on advertising and economics. BECAUSE WE ALL ARE>
August 16, 2014
Thorstein Veblen is one of the most brilliant thinkers in the dissenting institutionalist tradition. Brilliant insight into the functioning of industrial society and the foundation of the modern business and labour worlds. A hypothesis with far reaching implications re: the history of progress (or lack thereof).
May 20, 2025
This is a fresh perspectives on society, living, technology, politics and economics all rolled into one, although it’s written more than 100 years ago. There’re many relevance today in the advances on the 4th industrial economy, (digitalisation and automatons learning).
My background is firstly a mechanical and production engineer while I quickly took up an MBA to round my “technical” knowledge. This was the standard educational and learning path 30 years ago. Suppose this is Veblen’s conclusion on the dissemination of knowledge of the Soviet of Engineers. And not purely taken from the perspective of the guardian solely. Unfortunately, this is not so in vogue lately with the Engineering-MBA combination. However there are many bachelor business engineering degrees at top institutions. This reading would an excellent grounding at these programs.
Finally, the advantage on technology has never been so prevalent in our global society. This past 300 plus years of the Western scientific enlightenment has brought about tremendous human advancements. There are many turns and set backs, and huge push forward. Veblen has provided a valuable insight at his period for us to continue build upon.
My background is firstly a mechanical and production engineer while I quickly took up an MBA to round my “technical” knowledge. This was the standard educational and learning path 30 years ago. Suppose this is Veblen’s conclusion on the dissemination of knowledge of the Soviet of Engineers. And not purely taken from the perspective of the guardian solely. Unfortunately, this is not so in vogue lately with the Engineering-MBA combination. However there are many bachelor business engineering degrees at top institutions. This reading would an excellent grounding at these programs.
Finally, the advantage on technology has never been so prevalent in our global society. This past 300 plus years of the Western scientific enlightenment has brought about tremendous human advancements. There are many turns and set backs, and huge push forward. Veblen has provided a valuable insight at his period for us to continue build upon.
May 28, 2018
Interesting discussion on the uses of sabotage, but other than that... I have no idea how this book has any relevance, or is part of any serious discussion on economics.
The book focuses solely on price, while ignoring any discussion of the more relevant topics of cost, supply, demand, and especially profit. After an interesting review of management divisions, the author then supposes that the technical team can develop a more efficient system, without any method of determining demand.
The book focuses solely on price, while ignoring any discussion of the more relevant topics of cost, supply, demand, and especially profit. After an interesting review of management divisions, the author then supposes that the technical team can develop a more efficient system, without any method of determining demand.
April 3, 2024
Delightfully verbose. Makes one point only, which I really wish it could have made faster.
September 17, 2020
tl;dr: original critiques, unsubstantiated, repetitive
I wanted to like veblen. i really did. i think his thesis regarding the different forms of manufacturing sabotage on both sides is profound and original. however, this is essentially the extent of his argument.
the writing is inaccessible and unnecessarily so. veblen’s style of composing sentences is challenging for no apparent reason. perhaps he is trying to cloak the fact that this entire piece is the same few points repeated over and over again.
similar to other critiques on capitalism and the society it engenders, this work is largely void of evidence, statistics, or even the remotest of examples. Veblen makes sweeping generalizations (ie: sales account for 50% of the price of business operation) with almost no evidence. and this is one of the few times he even pins a number on it. usually, he speaks in the type of broad sweeping generalizations that a 10th grade history or english teacher would reduce points for on an essay.
it’s also almost comical how wrong he was about the soviet union. he writes as if he admires the soviets, 12 years into the introduction of the gulag system. either he literally didnt know or he’s a moron. likely both.
moreover, he’s very clearly disingenuous. he writes several paragraphs with an acute disdain for business owners or private ownership in general and then remarks along the lines of, “this is in no way a criticism of perfectly reasonable business decisions and behaviors...” bullshit. at least marx had the honesty to carry through with his execution of argument.
I wanted to like veblen. i really did. i think his thesis regarding the different forms of manufacturing sabotage on both sides is profound and original. however, this is essentially the extent of his argument.
the writing is inaccessible and unnecessarily so. veblen’s style of composing sentences is challenging for no apparent reason. perhaps he is trying to cloak the fact that this entire piece is the same few points repeated over and over again.
similar to other critiques on capitalism and the society it engenders, this work is largely void of evidence, statistics, or even the remotest of examples. Veblen makes sweeping generalizations (ie: sales account for 50% of the price of business operation) with almost no evidence. and this is one of the few times he even pins a number on it. usually, he speaks in the type of broad sweeping generalizations that a 10th grade history or english teacher would reduce points for on an essay.
it’s also almost comical how wrong he was about the soviet union. he writes as if he admires the soviets, 12 years into the introduction of the gulag system. either he literally didnt know or he’s a moron. likely both.
moreover, he’s very clearly disingenuous. he writes several paragraphs with an acute disdain for business owners or private ownership in general and then remarks along the lines of, “this is in no way a criticism of perfectly reasonable business decisions and behaviors...” bullshit. at least marx had the honesty to carry through with his execution of argument.
June 3, 2016
Amazing book on technocracy
Displaying 1 - 9 of 9 reviews