Finley vs. Veblen
Advanced industrial society has long since held as a matter of common sense that, to put it bluntly, all that is not business is trash. This view underlies Bill Finley’s July 10 TDN op ed, in which, on business-survival grounds, he persuasively argues that the quantity of racing “product” should be cut in half; and I mention it, not to derrogate his point of view, but, on the contrary, to establish that it conforms perfectly with what passes in our age for common sense.
The business premise of Finley’s piece caught my attention because, ever since the demise of the Deep Water Horizon and the incineration of its crew, I’ve been collecting, insofar as possible, and reading the works of Thorstein Veblen. It’s the least I could do. He’s the renegade American economist who’s most notable for writing The Theory of the Leisure Class, published in 1899, and for coining the term “conspicuous consumption.”
Eschewing more straightforward and morally laden terms like envy, pride, venality, and profligacy to characterize Gilded Age excesses, Veblen preferred the more academically distant “invidious comparison,” “emulation,” and “honorific waste.” None of them quite captures the mood at Keeneland on those summer evenings during the early 1980s than his term “pecuniary complacency.” But that was all for satire.
His sense of humor all but exhausted after the Great War, Veblen thought it too late to don his satiric mask when he wrote The Engineers and the Price System, published in 1921. In that book he excoriates the investment bankers, which by then had superceded entrepreneurs as the “Guardians” of the price system. His argument goes something like this.
As industry by “machine process” becomes increasingly complex and increasingly dependent on management by the engineers, financial control by the captains of industry, which Veblen lumps into the category “absentee owners,” becomes increasingly untenable. The reason is that the absentee owners, ignorant of the machine process, have a strictly business interest in the production of consumable goods; and, insofar as their interest is vested entirely in profit, it runs at cross-purposes with competent production and distribution. Eventually, Veblen thought, the absentee owners, in their pursuit of profit, would so thoroughly sabotage the system of production that they would be forced to abdicate their role in the price system and leave it all, by default, to the engineers.
Veblen didn’t live to be proven wrong about that, but only because he died in 1929. Yes, the absentee owners did indeed thoroughly wreck the system of production, even sooner than he thought, but clawed their way back from the Great Depression; and here we are in the Great Recession of 2008 with crude spewing up through a hole in the bottom of the Gulf, leased by a corporation that’s essentially an investment bank, all the engineers saying, “I told you so.”
Now, pedigree and horsemanship constitute the machine process in the production of racehorses, and breeders and horsemen are the engineers. As a practical matter, to talk about the system of racing as “the product” misses the point that the product is actually the horse, along with its inherent capacities. That’s the end-in-view of the machine process. The system of racing has nothing whatever to do with the product other than to package it and sell it, which, in Veblen’s analysis, are business functions alien to and contingent upon the productive elements. Put another way, raceplayers bet horses, not races.
It’s a matter of course that any perturbation in the system of racing, especially of the scale suggested by Finley, is bound to derange the machine process. One can only hope that, when it’s decided which 50% will be cut in the interest of economizing the system of racing, it doesn’t sabotage the breeding industry.
Posted by Roger Lyons on Tuesday, July 13, 2010 at 6:44 am.