Review of Veblen's "The Theory of Business Enterprise"
By the Gunton's Magazine, (New York), Vol. 27 (Jul., – Dec., 1904)

Gunton's Magazine, (New York), Vol. 27, (Nov., 1904), pp. 517-519.
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THE THEORY OF BUSINESS ENTERPRISE. By Thorstein Veblin. Cloth; gilt top; 400 
pages. Charles Scribner's Sons, New York, 1904. Price $1.50 net.

This book is true to its title. The author proceeds upon the very sound 
principle that the life and culture of society is chiefly moulded by the 
character of the industrial system. He shows with great clearness and abundant 
illustrations that the machine-process of modern industries tends to systematize 
and discipline the whole people, that the approximate uniformity of process 
affects not only the industrial actions and social habits of the people, but 
also their social ideals and ethical standards; and he might have added the 
personal efficiency of individuals and the scientific accuracy of observation 
and thinking. This precision of method and habit, the author thinks, has a 
materalizing effect; but that is only another way of saying it is more 
scientific. It creates a tendency to rely only on what can be reduced to some 
measure of scientific accuracy. This, of course, undermines the belief in divine 
revelation and superstition generally, and increases the influence of exact 
knowledge and respect for science and the scientific spirit.

This growth of the scientific spirit tends to eliminate accident, which is 
another name for ignorance, from the industrial experience of society, and 
thereby gives a greater uniformity and prominence to industrial welfare. It has 
already eliminated famine from those countries where modern business methods 
prevail. With the further development of exact knowledge and the application of 
scientific method to political as well as industrial society, panics and 
business [518] depressions will also be eliminated, and material prosperity be 
as continuous as industrial effort.

Mr. Veblin, like Matthew Arnold and Ruskin, is fearful of the material effect of 
the machine-process upon culture. He says:

The intellectual and spiritual training of the machine in modern life, 
therefore, is very far-reaching. It leaves but a small proportion of the 
community untouched; but while its constraint is ramified throughout the body of 
the population, and constrains virtually all classes at some points in their 
daily life, it falls with the most direct, intimate, and unmitigated impact upon 
the skilled mechanical classes, for these have no respite from its mastery, 
whether they are at work or at play. ... It is a matter of common notoriety that 
the modern industrial populations are improvident in a high degree and are 
apparently incapable of taking care of the pecuniary details of their own life. 
This applies, not only to factory hands, but also to the general class of highly 
skilled mechanics, inventors, and technological experts.

Here our author fails to perceive certain compensations that come with this 
machine-method of civilization. It becomes less necessary for the average 
individual to provide against the accident of unemployment, because this is 
being gradually eliminated. Moreover, the very civilization he has described has 
introduced the elements of insurance, which sooner or later must be applied to 
wage-earners for sickness and enforced idleness as much as to machinery and 
other forms of property. It is a feature of modern civilization that the anxiety 
about the means of sustaining life is being more and more eliminated by the 
increased perminence (sic!) and regularity of employment and the security of 
income, and the individual has greater freedom to avail himself of the cultural 
influence of social and ethical life.

This pessimistic strain in the author leads him to predict the decay of business 
enterprise; but he really gives little [519] foundation for this prophecy, and 
ends up with uncertainty. This is the weakest part of the book, and naturally so 
because it rests on wide induction as a foundation; but regardless of this 
defect, the book is a careful discussion of the theory of business enterprise, 
and abounds in wholesome suggestions, and is well worth the attention of 
students of economics and sociology.

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