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Veblen and Instrumental Value: A Systems Theory Perspective

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  • Vladislav Valentinov

Abstract

This paper explores the meaning of Veblenian instrumental value from the perspective of two strands of twentieth-century systems literature: the theories of Niklas Luhmann and C. West Churchman. The distinct Veblenian approach to defining instrumental value is in terms of the "generic ends of life" implicated in the development of technological knowledge. Based on Luhmann's work, the paper argues that the complexity of technological knowledge would overburden the individual human mind. Consequently, it needs to be reduced through the institution of the business firm, the meaning of which is shown to be in substituting private ownership and profit-seeking motivation for those segments of technological complexity that cannot be grasped by the individual mind. Churchman's work is utilized to discuss the possibility of attaining instrumental value by "sweeping-in" the complexity that has been reduced by the business firm. This sweeping-in is the task of the Deweyian "public" manifesting itself in law and comparable forms of public regulation. Thus, the proposed systems theory perspective explains pecuniary value as a complexity-reducing device, and instrumental value as the human capacity to preserve sensitivity to those aspects of complexity that are suppressed by pecuniary value.

Suggested Citation

  • Vladislav Valentinov, 2013. "Veblen and Instrumental Value: A Systems Theory Perspective," Journal of Economic Issues, Taylor & Francis Journals, vol. 47(3), pages 673-688.
  • Handle: RePEc:mes:jeciss:v:47:y:2013:i:3:p:673-688 DOI: 10.2753/JEI0021-3624470304
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    References listed on IDEAS

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    1. Yan Liang, 2012. "Global Imbalances and Financial Crisis: Financial Globalization as a Common Cause," Journal of Economic Issues, Taylor & Francis Journals, vol. 46(2), pages 353-362.
    2. Palley, Thomas I., 2009. "America's exhausted paradigm: Macroeconomic causes of the financial crisis and great recession," IPE Working Papers 02/2009, Berlin School of Economics and Law, Institute for International Political Economy (IPE).
    3. Robert Guttmann & Dominique Plihon, 2010. "Consumer debt and financial fragility," International Review of Applied Economics, Taylor & Francis Journals, vol. 24(3), pages 269-283.
    4. Jon D. Wisman, 2008. "Household Saving, Class Identitiy, and Conspicuous Consumption," Working Papers 2008-19, American University, Department of Economics.
    5. Timothy Wunder, 2012. "Income Distribution and Consumption Driven Growth: How Consumption Behaviors of the Top Two Income Quintiles Help to Explain the Economy," Journal of Economic Issues, Taylor & Francis Journals, vol. 46(1), pages 173-192.
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    Cited by:

    1. Valentinov, Vladislav, 2014. "K. William Kapp's theory of social costs: A Luhmannian interpretation," Ecological Economics, Elsevier, vol. 97(C), pages 28-33.
    2. repec:zbw:espost:170540 is not listed on IDEAS
    3. Valentinov, Vladislav & Hielscher, Stefan & Pies, Ingo, 2015. "Nonprofit organizations, institutional economics, and systems thinking," Economic Systems, Elsevier, vol. 39(3), pages 491-501.
    4. Valentinov, Vladislav, 2015. "From equilibrium to autopoiesis: A Luhmannian reading of Veblenian evolutionary economics," Economic Systems, Elsevier, vol. 39(1), pages 143-155.

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