Thorstein Veblen - Business Quotes

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Intangible assets are the capitalized value of income not otherwise accounted for. Such income arises out of business relations rather than out of industry; it is derived from advantages of salesmanship, rather than from productive work; it represents no contribution to the output of goods and services, but only an effectual claim to a share in the "annual dividend," — on grounds which appear to be legally honest, but which cannot be stated in terms of mechanical cause and effect, or of productive efficiency, or indeed in any terms that involve notions of physical dimensions or of mechanical action.

Thorstein Veblen
It is always sound business to take any obtainable net gain, at any cost and at any risk to the rest of the community.

Thorstein Veblen
Now, these businesslike maneuvers of deviation and delay are by no means to be denounced as being iniquitous or unfair, although they may have an unfortunate effect on the conditions of life for the common man. That is his misfortune, which law and custom count on his bearing with becoming fortitude. These are the ordinary and approved means of carrying on business according to the liberal principles of free bargain and self-help as established in the eighteenth century; and they are in the main still looked on as a meritorious exercise of thrift and sagacity.

Thorstein Veblen
So inordinately productive is this familiar new order of industry that in ordinary times it is forever in danger of running into excesses and turning out an output in excess of what the market — that is to say the business situation — will tolerate. There is constant danger of "overproduction," So that here is commonly a large volume of man power unemployed and an appreciable proportion of the industrial plant lying idle or half idle.

Thorstein Veblen
The very large aggregate value of such assets indicates how imperative it is for the conduct of industrial business under the new order to restrict output within reasonable limits, and at the same time how profitable it is to be able to prevent the excessively high productive capacity of modern industry from outrunning the needs of profitable business. For the prosperity of business it is necessary to keep the output within reasonable limits; that is to say, within such limits as will serve to maintain reasonably profitable prices; that is to say, such prices as will yield the largest obtainable net return to the concerns engaged in the business.

Thorstein Veblen
To the spokesmen of "business as usual" this rating of current production under the pressure of war needs may seem extravagantly low; whereas, to the experts in industrial engineering, who are in the habit of arguing in terms of material cost and mechanical output, it will seem extravagantly high. Publicly, and concessively, this latter class will speak of a 25 percent efficiency; in private and confidentially they appear disposed to say that the rating should be nearer to 10 percent than 25.

Thorstein Veblen
There is another curious question that will also have to be left as a moot question, in the absence of more specific information than that which is yet available; more a question of idle curiosity, perhaps, than of substantial consequence. How nearly is it likely that the total gains which accrue to these prosperous business concerns and their investors from their conscientious withdrawal of efficiency will equal the total loss suffered by the community as a whole from the incidental reduction of the output?

Thorstein Veblen
The workman has become subsidiary to the mechanical equipment, and productive industry has become subservient to business, in all those countries which have come in for the latter-day state of the industrial arts, and which so have fallen under the domination of the price system.

Thorstein Veblen
Business is a pursuit of profits, and profits are to be had from profitable sales, and profitable sales can be made only if prices are maintained at a profitable level, and prices can be maintained only if the volume of marketable output is kept within reasonable limits; so that the paramount consideration in such business as has to do with the staple industries is a reasonable limitation of the output. "Reasonable" means "what the traffic will bear"; that is to say, "what will yield the largest net return."

Thorstein Veblen
Any person with a taste for curiosities of human behavior might well pursue this question of capitalized free income into its further convolutions, and might find reasonable entertainment in so doing. The topic also has merits as a subject for economic theory. But for the present argument it may suffice to note that this free income and the business-like contrivances by which it is made secure and legitimate are of the essence of this new order of business enterprise; that the abiding incentive to such enterprise lies in this unearned income; and that the intangible assets which are framed to cover this line of "earnings," therefore, constitute the substantial core of corporate capital under the new order.

Thorstein Veblen
It is a matter of course and of absolute necessity to the conduct of business, that any discretionary businessman must be free to deal or not to deal in any given case; to limit or withhold the equipment under his control, without reservation. Business discretion and business strategy, in fact, has no other means by to work out its aims. So that, in effect, all business sagacity reduces itself in the last analysis to judicious use of sabotage.

Thorstein Veblen
At home in America for the transient time being, the war administration has under pressure of necessity somewhat loosened the strangle-hold of the vested interests on the country's industry; and in so doing it has shocked the safe and sane business men into a state of indignant trepidation and has at the same time doubled the country's industrial output.

Thorstein Veblen
And all the while the owner of the equipment is some person who has contributed no more than his per-capita quota to this state of the industrial arts out of which his earnings arise. Indeed the chances are that the owner has contributed less than his per-capita quota, if anything, to that common fund of knowledge on the product of which he draws by virtue of his ownership, because he is likely to be fully occupied with other things, — such things as lucrative business transactions, e. g., or the decent consumption of superfluities.

Thorstein Veblen
There is circumstantial evidence that very material gains in economy and expedition commonly resulted from these successive moves of consolidation in the steel business.

Thorstein Veblen
In this connection, and under the existing conditions of investment and credit, "reasonable returns" means the same thing as "the largest practicable net returns." It all foots up to an application of the familiar principle of "charging what the traffic will bear"; for in the matter of profitable business there is no reasonable limit short of the maximum. In business, the best price is always good enough; but, so also, nothing short of the best price is good enough. Buy cheap and sell dear.

Thorstein Veblen