The Consequences of Peace: Veblen on Proper Policy to Support Capitalist Economic Relations

Thorstein Veblen generally shied from directly professing policy recommendations. His concerns lay mainly in the development of theory that would assist in the understanding of the workings of a capitalist economy. But, Veblen clearly understood that while it was possible for the government to reinforce capitalist relations through “proper ” policy, that “improper ” policies might threaten the durability of those relations. In Veblenian terms, “proper ” policies are dictated by the underlying property relations of capitalism that require: (1) a segmented (or class) society in which productive equipment is controlled by a minority; (2) a propertyless laboring majority that must sell labor power to those who control property; and (3) an economic process that has monetary gain as its objective. As such, capitalism is a “predatory ” economy. To support it, “the community must be of a predatory habit of life... that is to say, the men, who constitute the inchoate leisure class in these cases, must be habituated to the infliction of injury by force and stratagem ” (Veblen [1899] 1922, 7-8). Capitalism differs from the predatory economies on which it is founded in that it is a pecuniary economy. In addition t