Thorstein Veblen
Economic Theory in the Calculable Future.

American Economic Review, Vol. 15, No. 1. (Mar., 1925), Supplement, pp. 48-55.
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It may seem a gratuitous commonplace to say that the calculable future of 
economic science lies in the hands of the incoming generation of economists and 
that they are due to create a scheme of economics in their own image. So also, 
like other men of earlier generations, these incoming economists are due to be 
the creatures of that heredity and environment out of which they emerge.
On the side of heredity there is not much to be said, nothing much of a 
distinctive character. There is little if anything in the way of heredity to 
distinguish this generation of economists from the generations of men that have 
gone before, say, during the past 10,000 years or so. What is fairly to be 
presumed is that they will be persons of sound average mentality, of which there 
is one born every minute, under the broad Malthusian principle of fecundity 
conditioned by subsistence.
Therefore any distinctive or peculiar traits to be looked for in the science, in 
the way of scope and method, in the range of its inquiry and the drift and bias 
of its guiding interest, its logic and its data, will be due to arise out of 
those characteristic habits of thought that are induced in the incoming 
generation of economists in the course of that habituation to which they will 
have been exposed during the period of their growth and adolescence and during 
those marginal years of waning flexibility that make up the initial phase of 
adult life.
Any critical shift in the course of events during the run of their inquiry will 
also have its effect in the way of directing their attention and shaping the 
perspective of their science. Yet these current events with which the economists 
will be occupied will perforce be apprehended and formulated 'in terms germane 
to that scheme of knowledge and belief which has been induced in these 
economists by their past habituation. As ever, current facts are again due to be 
made up under those forms and categories that have taken shape in response to 
past experience, and to be built into a theoretical structure suitable to meet 
the exigencies of this past experience. It is only that the experience which has 
given its bias to these latter-day economists is of a later date than that to 
which their predecessors were exposed; it is of the twentieth century, rather 
than the nineteenth.
In some substantial, perhaps critical and decisive, respects, therefore, these 
incoming economists will have that advantage over the passing generation that 
habitually inures to late-comers. Loosely, the events current during the next 
quarter-century are due to be made up and handled by them in the terms and with 
the preconceptions that have been carried over out of the past quarter-century; 
instead of those more archaic holdovers of knowledge and belief out of the 
nineteenth century with which the passing generation of economists have gone to 
their work.
But there is also this further presumptive difference to be anticipated, between 
this prospective era in the science and any corresponding period that has gone 
before, that the facts current in this calculable future are presumably due to 
go on changing, in detail and at large, cumulatively and at an unexampled rate, 
as time goes on; whereas the mentality of these economists who will have to deal 
with these elusive current facts of the future, the substance and logic of their 
knowledge and belief, will have only that rate of flexibility and adaptation 
that is conditioned by the inveterate tenacity of human preconceptions; and 
preconceptions are something in the nature of fixed ideas, and they yield and 
adjust themselves to current changes only tardily and concessively. So that, 
under these circumstances, it is fairly to be presumed that a sort of effectual 
discrepancy is again fairly to be looked for between the working categories and 
formulas employed by the economists, on the one side, and the current exigencies 
of economic life, on the other side; a discrepancy which should be appreciably 
more pronounced in this calculable future of the science than at any period in 
the past, and answering to the more appreciable interval of lag to be looked 
for, due to the swifter run of events.
The distinctive factors which enter into the case, then, and which are to be 
counted on to set this prospective phase of economic science off against what 
has gone before, would accordingly be (a) such special habits of thought as have 
been induced in this generation of economists by the peculiarities of their 
training and experience, in the way of outlook, intellectual interests, and 
principles of valuation; and (b) that latter-day range of economic events which 
will provoke their inquiry and on which their science is to spend itself. And 
under both heads there are novel factors to be taken account of.
The circumstances of life, material and spiritual, have been changing during 
this quarter-century and more, and they have therefore progressively been 
inducing something of a change in the effectual outlook, the bias and logic of 
scientific inquiry, its basis of valuation. The schooling to which this 
generation of students have been subjected differs also from that which entered 
into the training of their forbears. At the same time the range of events which 
will engage their inquiry and determine its direction has been and still is 
engaged in a process of cumulative change running into the future. What these 
changes may come to in the calculable future must, of course, be largely a 
matter of surmise.
By contrast with the nineteenth century, the material conditions of life during 
the past few decades have been characterised by an accentuated and ever-
increasing mechanisation, due to the exigencies of the current industrial arts, 
which have been going forward on that line unremittingly and have exacted a 
degree of mechanical standardisation in the workday arts of life, the ways and 
means of living, such as no earlier generation has been exposed to. This 
mechanical standardisation has affected urban life most immediately and most 
profoundly, but no part of the community is or has been immune. Present 
indications are that this mechanisation of the ways and means of living should 
go on in the calculable future, presumably at an accelerated rate unless 
extraneous causes should bring on a collapse or substantial setback in the 
advance of the industrial arts and the growth of population. Indications are not 
altogether wanting that something in the nature of such a setback or collapse 
may conceivably supervene, due to an excessively bellicose patriotism fomented, 
guided, and driven by business enterprise, leading to bootless adventures in 
nationalism, with an attendant recrudescence of religious superstitions, after 
the fashion of what has followed from the Great War. The contingency may seem a 
remote one, yet it is a contingency not to be wholly overlooked.
From the continued mechanisation in the ways of living it has followed by reason 
of habituation that in the workday habits of thought of this generation the 
concrete realities of tangible performance are more insistently and more 
convincingly present than has been the case in the past. Such is the case of the 
economists no less than of others; presumably more so, since the schooling of 
the economists will necessarily bring them more or less intimately in touch with 
the physical and biological sciences where mechanistic conceptions already rule 
the road of inquiry with slight abatement. With a wider application than before, 
the accepted baseline of reality in all knowledge and belief is coming to be 
tangible performance, objective and impersonal; so much so that even the 
spiritual realities are by way of being brought within the three dimensions of 
space, in such a degree as to alarm the spokesmen of the holdovers of the Faith.
Notoriously, scientific inquiry at large is increasingly meticulous in its 
attention to precise objective measurements and computations, and increasingly 
negligent of any postulates and values which do not lend themselves to that 
manner of logic and procedure. The economists are somewhat in arrears in this 
matter, as might be expected, yet they show a visible drift in this direction, 
perhaps as much in what they overlook as in what they formally profess. So that 
those certified articles of theory at large that have meant so much to the 
passing generation of economists have been falling into decay through 
obsolescence by disuse during the past quarter-century.
Self-contained systems of economic theory, balanced and compendious, are no 
longer at the focal center of attention; nor is there a felt need of such. The 
felt need runs rather along the lines of conjugation between economic science 
and those fields of knowledge and belief that are cultivated by the material and 
biological sciences. Meantime, detailed monographic and itemised inquiry, 
description, analysis, and appraisal of particular processes going forward in 
industry and business, are engaging the best attention of the economists; 
instead of that meticulous reconstruction and canvassing of schematic theories 
that once was of great moment and that then brought comfort and assurance to its 
adepts and their disciples. There is little prospect that the current generation 
of economists will work out a compendious system of economic theory at large. 
They go quite confidently into their work of detailed inquiry with little help 
from general principles, except it be principles of common-sense, mathematics, 
and general information.
These principles of common-sense and common information prevalent in this 
opening quarter of the century are of an evolutionary, or genetic complexion, in 
that they hold the attention to the changes that are going forward, rather than 
focus it on that "Natural State of Man," as Nassua Senior called it, to which 
the movement of history was believed inevitably to tend. The question now before 
the body of economists is not how things stabilise themselves in a "static 
state," but how they endlessly grow and change. But in its purview of this 
genetic proliferation of phases current knowledge and belief see growth and 
change only in that field in which the Victorians looked to see an indefeasible 
stability--the field of human institutions, use and wont, law and custom, the 
state of the industrial arts; whereas this current generation is inhibited from 
looking for substantial change where the Victorians found their comfort in 
recognising it-in the human factor. There is for them no "perfectibility of the 
human race," whether through education or through breeding; the Mendelians 
forbid it, and in practical effect they are allowed to have the right of it. 
Tempora mutantur sed nos non mutamur in illis.
Such is the background and perspective of current knowledge and belief touching 
those facts of life with which the economists will have to make up their 
account, and it is for the economists to live within the bounds of the case as 
well as to live up to their opportunities. As was said above, they are giving 
their best attention to monographic work of a detailed and itemised character, 
dealing with special segments or processes of economic life. And within the run 
of each detailed process of business or industry so dealt with it is the run of 
the process at work and the workday give and take between this given process and 
the contiguous processes in the working sequence, before and after, that chiefly 
supply the concepts and categories made use of in organising the inquiry and 
formulating its results. But if these results are to go into the common stock of 
knowledge and belief as a substantial contribution they will have to conform to 
those canons of knowledge and belief that rule the road for the time being.
through all this work of objective and itemised inquiry and analysis there runs, 
of course, now as ever, the bias given by the particular economist's personal 
equation. This personal bias will commonly run somewhat strong and intemperate; 
more so perhaps than has been the case in the work of the passing generation. It 
gives something of a partisan touch to much of this work, and it should 
presumably continue to do no less in the future. Men should fairly be expected 
to take sides more obstinately and intolerantly in the absence of any 
pervasively corrective reference to compendious theoretical formulations.
This drift in the direction of partisan spirit and special pleading is greatly 
reinforced by the shape in which the data present themselves in the immediate 
present as contrasted with Victorian times; and the outlook is for an advance on 
present lines rather than a reversion to anything like Victorian times. 
Progressively during the past quarter-century the process of economic life at 
large has suffered a measure of bifurcation, amounting to something very like a 
dichotomy of the economic community and its work and interests. More and more 
visibly the economic process has been falling apart into Business and Industry; 
so that in practical effect any given economist's analysis and canvassing of the 
data will almost perforce run to a conclusion within the confines of the one 
segment or the other; the state of the industrial arts or the state of the 
price-system. Within each field men's initiative and endeavors run their course 
and round out their purposes in virtual detachment from the aims and exigencies 
that make up the scheme of things within the other half of this dichotomous 
economic system. So alien to one another are these complementary halves of the 
working system, in their logic, their aims, and their data, that they cannot 
even be said to be consistently at variance. Mr. Taussig has spoken of this 
bifurcation as a division of the labor of creative leadership between the 
inventors and the money-makers. On the one side rules the mechanistic logic of 
technology as it has worked out since the Industrial Revolution; on the other 
side rules the business logic of the price-system as that has worked out during 
the same period in response to the exigencies of absentee ownership on a large 
and ever-increasing scale.
This growth of absentee ownership and business enterprise during their century 
is one of the things which the economists of the Victorian age overlooked, 
together with the rise of modern technology. But these things are now the main 
facts of the economic situation, the dominant institutional factors in the case, 
and it is !he working out of these dominant institutional factors, in common and 
in conflict, on which the new generation of economists will perforce be engaged. 
In the economic foreground stands, of course, the organisation of business 
enterprise, the absentee owners and their agents, in whom vest by law and custom 
all initiative and discretion in economic affairs. And it is to this work of the 
business community that the economists are chiefly turning their attention. And 
such should presumably continue to be the drift and emphasis of economic inquiry 
and speculations in the calculable future, inasmuch as the promise of things as 
they run in the immediate present is, unmistakably, that the interests and 
exigencies of business traffic are and of right must be paramount. These things 
are visible, understandable, legitimate, and urgent; and like other men the 
economists are imbued with the preconceptions of the price-system, in terms of 
which these things are understandable and urgent; but in terms of which the 
other half, the technological half, of the current economic world is obscure 
and, at the best, subsidiary.
So that economic science should, for its major incidence and with increasing 
singleness and clarity, be a science of business traffic, monographic, detailed, 
exacting, and imbued with a spirit of devotion to things as they are shaping 
themselves under the paramount exigencies of absentee ownership considered as a 
working system; and the personnel of the science, the body of economists in 
ordinary, in the degree in which they run true to form under the training of the 
schools and the market, should be partisans of this system, and of a reasonably 
intolerant temper.
Not that there will be no controversy and no dissenters to be looked for, even 
within the ranks; but the lines of cleavage between these prospective factions 
and disputants should continue to run within the theoretical domain of the 
price-system, and the controversies should in an increasing degree run in terms 
drawn from the current business traffic. Such has been the visible drift of 
things in the science during the past quarter-century and there is no visible 
cause why things should take a different turn in the immediate future. Loosely 
speaking, no argument on economic matters today will get a reasonably wide 
hearing until it is set out as a "business proposition" in terms drawn from the 
conduct of business.
This comes to saying that, following the lead given by the workday conduct of 
business traffic, the attention of the economists and their formulations of 
theory should converge on the ways and means of differential gain. For business 
traffic is a quest of differential gains, a pursuit of income over outlay for 
the particular business concern engaged, and the gains so sought emerge in the 
form of a price-differential. As in business, so in the scientific inquiry which 
busies itself with the theory of business enterprise, the emergence or 
attainment of such a price-differential is the terminus ad quem, the final and 
focal point beyond which neither the business man nor the economist of the 
business concern can interest himself unless by way of obiter dictum.
It is otherwise with the other half, the technological half of the current 
economic situation. Business traffic seeks a differential gain in terms of 
price; technological enterprise perforce seeks a gain in productive efficiency 
at large. Any given business concern may profit by the disabilities of its 
competitors; its differential gains stand to increase as theirs fall off. Any 
given technologist is hampered in his work by disabilities on the part of his 
fellow technicians in the same field. So also the technical efficiency of any 
given industrial plant and of its personnel is furthered by efficient work on 
the part of other concerns in the same or related lines of production, and is 
hampered in its work by whatever hinders them. Technically, in point of 
workmanlike efficiency, the several industrial concerns are engaged in teamwork; 
as business units they are competitors engaged in a strategy of mutual defeat. 
Monopoly is an asset in business, the most valuable of intangible assets. In the 
technical half of the economic world monopoly is Mere waste.
Yet as things have fallen out during this quarter-century of swift advance, and 
as they promise to fall in the calculable future, any technical advance can get 
a hearing and reach a practical outcome only if and so far as it can be 
presented as a "business proposition"; that is to say, so far as it shows a 
convincing promise of differential gain to some given business concern. So also 
the economist who ventures to take stock of anything in the technological way 
and to bring such facts into the framework of his theoretical structures will of 
necessity handle these matters as a "business proposition," as ways and means of 
differential gain for one business concern as against others. The realities of 
the science, those categories that afford the final and conclusive terms of the 
economist's analysis and on which therefore his analysis converges, are with 
increasing singleness the realities of business traffic and differential gain. 
So that the actualities, of the industrial arts come to have an economic 
reality, within the purview of the science, if and in so far as they lend 
themselves to the pursuit of a differential gain.
And the statesmen, in the policies which they avow and pursue, and in the use 
which they make of national powers and national frontiers, work together to the 
same end. To them too economic interests mean advantages in trade, opportunities 
of differential gain for the business concerns domiciled within the national 
frontiers as against outsiders. Things have taken such a turn that nations, 
national interests, national policies, and national armaments no longer have any 
other use, serve no other purpose, than the differential gain of business 
concerns doing business in competition with outsiders. The war and that peace of 
suspicion, bitterness, and bickering in which it has eventuated have made all 
that plain. National state-craft and patriotic inflation have no other uses. And 
such economists and commissions of economic inquiry as are drawn into the 
service of the national establishment are drawn in for no other purpose and on 
no other qualifications than such as are presumed to serve the bankers and 
traders of the nation as against outsiders. Economic science, in so far as it 
enters into the training of the nation's civil servants is perforce of this 
complexion.
So also the schools are turning their powers to the same purpose, in so far as 
they cultivate economic science. Increasingly the faculties of economic science 
are taken up with instruction in business administration, business finance, 
national trade, and salesmanship, with particular and growing emphasis on the 
last-named, the art of salesmanship and the expedients of sales-publicity. Such 
is the current state of academic economics, and such appears to be its promise 
as conditioned by the circumstances that promise to surround it in the near 
future. Of course, there still stand over certain perfunctory antiquities out of 
the Victorian age, in the way of standard articles of economic theory, and these 
are given a perfunctory hearing in the schools; but that has little else than a 
historical interest. It is a matter of survival, not of proliferation.
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