Welcome Back and Upcoming Schedule

• Try to avoid the tension and unnecessary fear that characterizes second semester law school
• Comments on the first essay have all been made. We now have the feedback to write a better second paper
• We can also keep improving second essay
• Second Paper due by the close of business Friday of the first week of April.

Bear Stearns

Contrast the design of old bank buildings to the ones built today . Previously, bank buildings were built to indicate strength; they represented themselves as a fortress for money. Today they are made of glass to indicate transparency and openness. This is in part a response to an increasing level of sophistication in the consumer. The customer now understands the money isn’t actually kept there. There is waste in both instances.

Veblen’s Goal

• Veblen’s aim was to create a framework for analyzing institutions and their processes and practices. It is a big observational set of the behavior of people in the material world. The theory gives a structure for the containing of everyone’s economic practices. The result includes insight on waste and inefficiency.
• In order to understand people’s economic behavior, we must understand human minds. This theory of human behavior links Veblen to the other modes of explanation that he is trying to employ.
• See also Charles Darwin’s 1859 book On the Origin of Species and Sigmund Freud’s The Interpretation of Dreams.
• Veblen was inspired by Darwin to find a way to establish an order for economic behavior. He read Darwin as a form of intellectual machinery for biological and social events. For Darwin, underlying fact of biological change is motiveless and directionless, unvariable. Natural selection is the selection mechanism; then look at what is the plan how is it expressed. This is the structure by which many things are created and some survive. Over time this creates great change
• Social selection has much faster acceleration. Cultural variation can be reproduced through teaching. Propagation of acquired characteristics is much faster given innate imitativeness of human beings. What determines which ones last and which ones perish?
• Veblen’s goal is to explain the mechanism for differential survival. Pecuniary emulation is the game of display of power through possessions. The source of which might be the zoological mating tournament. In time, it rapidly becomes less about mating opportunities and merely about possessions. The display of looting and war booty becomes not enough. Possessions are useful for allowing people to demonstrate pecuniary might; to permit a making of comparisons
• Diamonds and Gypsy Gold as a sign of pecuniary strength. In gypsy culture the wife wears gold as a part of her career to vicariously demonstrating the husband’s wealth. This idea expands with more wealth. In the beginning you adorn yourself to demonstrate yourself. As you get more wealthy, you need more people to demonstrate your wealth
• Veblen also wants to address the question why waste survives. Throwing away what others would need to keep demonstrates power of waster. Waste is heavily selective. The most valuable resources are chosen to be wasted. For example, the highest use of water in the United States is found in Las Vegas, a desert. Veblen would respond, “Of course!”

-- WendyHuang - 10 Apr 2008