The influence of Thorstein Veblen on the economics of Harold Innis

Journal of Economic Issues, Sept, 1996 by Fletcher Baragar

On the other hand, Canadian scholars interested in the work of Innis have frequently invoked the name of Veblen in their efforts to grasp and elucidate the nature of Innis's thought. However, just as this literature offers different interpretations and assessments of Innis's work, it similarly offers a distinct lack of consensus on the nature and significance of Veblen for Innis.

This paper constitutes a contribution to this debate. The basic argument is that the intellectual influence of Veblen on Innis is of such significance that an appreciation of it is essential for a full understanding of Innis's work. The paper begins with a short literature review that identifies those disparate interpretations of this Veblen-Innis relationship that have been previously advanced. The next section provides some background and biographical information on Innis, which helps establish the context in which his exposure to and assimilation of Veblen's ideas occurred. Following this is a section of the paper that draws attention to the similarity of Veblen's and Innis's critiques of neoclassical economics. This sets the stage for the core of the paper, which examines the influence of Veblen in the development of Innis's own analytical framework. Attention is drawn to the significance of certain analytical concepts found within Veblen's work that are appropriated and subsequently transformed by Innis and that become integral to his own research. This is followed by a discussion of the issues of human nature, human behavior, and agency. The argument there is that while Innis does not attempt to deal with Veblen's notions of instincts, a Veblenian element can still be discerned in Innis's concern with the issues of identity, consciousness, and agency. The final portion of the paper pulls together the arguments of the preceding sections in order to make some general methodological points and thereby help situate Innis in relation to both Veblen and the Veblenian legacy as manifested in American institutionalism.

Extant Interpretations of the Veblen-Innis Link

As was noted above, references to Veblen are by no means uncommon in the secondary literature on Innis. However, other than a wide recognition that Innis essentially accepted Veblen's critique of neoclassical economics, there is no consensus on the character and extent of Veblen's influence on Innis. Aspects of this neoclassical critique are examined in a later section of this paper. The objective of this section is to map the terrain that the existing debate has covered.

In one of the earliest surveys of Innis's research and publications, W. T. Easterbrook [1953] unequivocally stated that "Veblen's influence left its mark."

In [Innis's] method of approach, in the selection of questions he regarded as most significant, and in his emphasis on the total environment of economic thought, Veblen's influence was beyond question [Easterbrook 1953, 293].

However, Easterbrook held that this Veblenian influence was most pronounced in the early years of Innis's career.(3) In this "Veblen phase," which to Easterbrook covers the period from 1920 to 1933, Innis is said to be engaged in a systematic investigation of the effects of industrialism in Canada. For Easterbrook, the specific Veblenian influence manifests itself through Innis's acceptance and utilization of the putative price-technology dichotomy associated with Veblen. Easterbrook views Innis's work in this period as revealing a mastery of the technological side of this dichotomy, whereas aspects of the pricing element were developed somewhat belatedly and thus really only emerged in Innis's second phase (1934-40).(4)

This concern with the technological aspects of the effect of industrialism on modern societies and values is also adduced by Carl Berger [1976, chap. 4] as evidence of Veblen's influence on Innis. For Berger, however, this influence is not entirely salutary. Berger suggests that this technologically oriented Veblenian influence contributed to the presence of a deterministic element in Innis's analytical framework.(5) David McNally [1981] attempted to exploit this deterministic vein in a much more explicit fashion. Regarding the attention Innis gave to staple production in Canadian economic development, McNally writes that "this focus on the geographic and technical character of staple products was part of Innis's intellectual inheritance from Veblen" [1981, 41-42]. McNally insists that the significance of this inheritance is of the utmost importance. According to McNally,

Veblen's technological determinism rendered explicit in Innis what is often merely implicit in classical political economy - its tendency to view production in entirely material or technical terms [1981, 44-45].

McNally thus views Innis's work as a continuation of a long tradition that either ignores or abstracts from the social relations of production. As part of this tradition, Innis's work is vulnerable to the charge of "commodity fetishism." An important implication of this interpretation is that the Veblen-Innis connection is thereby held to occlude any affinity to the work of Marx.(6)