Veblen’s Theory of Finance Capitalism and Contemporary Corporate America

Abstract

One of the myths of U.S. capitalism is that major economic organizations (corporations) exist principally to develop and produce products and services for the benefit and use of consumers and other businesses. This is how they are alleged to earn their keep. When they do a good job they are supposed to be rewarded by sales and repeat sales to loyal customers, who value both the quality of the goods and the services received. If the businesses fail to do this faithfully, they are expected to lose sales and money. Eventually, if they do not improve, they are supposed to go out of business. Thorstein Veblen's theories of business enterprise are especially pertinent in the present day economic context for they illuminate what lies behind the current economic debacle in the United States. Allegations of financial mismanagement, corporate book cooking, and insider trading currently rage in the United States. 'What was originally proclaimed to be one or two rogue corporations, and their executives, enriching themselves and their friends and minions now has become a flood of reported ill-gotten gains and financial irregularities. The fingers of greed and fraud even point to the nation's CEO and his deputy CEO and possibly to other members of his cabinet, many of whom are former corporate executives (Rich 2002; Bush Defends 2002; Mike Allen, Bush Urges 'New Ethic' for Execs, Arlington Star-Telegram, July 10, 2002, and