Thus once the industrial arts begun developing, it was easy to understand the plight of industry. Capitalism in its earlier form was concerned with serviceability value, that is, the conditions under which a product was considered useful. With the whole entourage of businessmen, advertisers and underwriters comes the concept of vendibility value.
The value created by the advertisers especially has only in unintentional cases any actual utility for the buyer; it only serves to increase the cost of production. “Its ubiquitous presence” in the realm of business enterprise is a “cost incurred with a view to vendibility, not with a view to serviceability of the goods for human use.” (BE p. 59)
All this marks a decisive change from the small-scale production and the individual owner-entrepreneur of early capitalism, which Veblen considered to be the beginning of “the decay at the top.” The center of attention of businessmen shifts progressively from the production of useful goods and services to the sale and manipulation of corporate securities which in turn represent essentially the capitalized earning power of the underlying firms. It is in this context that the effects of continuous technological advancements must be assessed.
As Veblen saw it, the primary effect of this was a continuous lowering of production costs. With new more efficient technologies, the result would be a steady undermining of existing capital, which would cause an incessant depressing effect on business enterprise in general. Here we may discern a basic similarity in the theories of Veblen and Marx: in the final analysis, both believed that the fate of capitalism would depend on the course and outcomes of the struggle between capital and labor.
But the tension Marx saw was found in the realm of class interest and labor-exploitation having been created by the capitalist class, whereas Veblen saw the tension as having been conditioned by the machine process itself. Industry and its instrumental values leads technicians and engineers to join institutions like trade unions; finance and pecuniary gain leads businessmen to oppose them. The opposition grows. However, Veblen did not purport that the machine process would inevitably lead to a socialist revolution, unlike Marx, since not only the workers but the business class would defend their interests too.
However, Marx offered a positive theory of action, whereas Veblen worked incessantly to curb any action taken under the guise of his theories. Various solutions were proffered to amend the Veblenian problem, all of which, in Veblen’s eyes, failed to do any justice. Educational institutions could not solve the plight of industry since it only existed to further the ideology of the business class. Neither could a free press solve the problem since it reinforces the consumer and cultural ideas under the guise of distributing information .
Using national politics as a way of replacing old leadership with new leadership was seen as futile since it could not address fundamental issues. Lastly, militaristic-imperialist adventures which were the solutions the Japanese and German governments used would keep the existing technology but simply devolve the institutions to earlier, more primitive, eras.
It is important to note that Veblen was not interested in policymaking, but rather mere observing and predicting. He did not want his observations to be taken by policymakers as gospel truths; he thought of himself not as a Marxist per se; not as a technocrat or technological-determinist, nor even a postmodernist. He was, as various writers saw it, something of a man from mars.