Veblen and Instrumental Value: A Systems Theory Perspective

Vladislav Valentinov

Journal of Economic Issues, 2013, vol. 47, issue 3, 673-688

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.

Date: 2013
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DOI: 10.2753/JEI0021-3624470304

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