Veblen argues that modern industry is driven by the business enterprise's pursuit of profit rather than by the needs of production. This system generates absentee ownership and a separation between those who manage industry and those who own it, creating a dynamic where business policy dictates industrial output for financial gain. This can lead to a "go-directly-to-hell policy" where business interests, prioritizing short-term profit, disregard the long-term health and efficiency of the industrial system.
The book examines how the business of business, focused on pecuniary gain, inherently conflicts with the efficient functioning of the machine industries. This dynamic results in what Veblen terms "sabotage," a conscious or unconscious limitation of production to maintain prices and profits, thereby hindering technological advancement and societal welfare. Readers learn about the inherent tensions within capitalism that arise from the dominance of business interests over industrial capability.
Key concepts
- Absentee ownership — Ownership of property by individuals who do not reside on the premises or manage the property directly.
- Business of business — The activities and motivations of the enterprise focused primarily on pecuniary gain.
- Pecuniary gain — Profit or financial advantage sought through business operations.
- Sabotage — The deliberate or unintentional limitation of production to maintain prices and profits.
- Machine industries — The sector of the economy based on modern technological production methods.