Saturday, August 16, 2008

Thorstein Veblen and blog values

Thorstein Veblen is easily seen to be the source of much of the thinking of Tom Peters, Peter Drucker, and W. Edwards Deming. Veblen was a handsome ladies man, so they say, as well as a radical feminist and politician-hater who refused to vote.

From his thought we see a stronghold of user-centric ideology, a bedrock that all web usability analysis and customer acquisition, loyalty, and word of mouth buzz.

Consider how, compared to the modern business owner, the guild craftsmen of centuries past were more "bloggy", i.e., closer to customers, actively conversing with them, and dependent upon perfection of satisfying user needs.

I could see the neighborhood cobbler as having hundreds of stories to tell his friends and customers. Tales that end up with his hand-made shoes being involved in a positive way, that's what he'd put into his blog. Close communications with friends, colleagues, peers is what social media is all about.

In the older days, when handicraft was the rule

(52) of the industrial system, the personal contact between the producer and his customer was somewhat close and lasting.

Under these circumstances the factor of personal esteem and disesteem had a considerable play in controlling the purveyors of goods and services. This factor of personal contact counted in two divergent ways:

(1) producers were careful of their reputation for workmanship, even apart from the gains which such a reputation might bring; and

(2) a degree of irritation and ill-will would arise in many cases, leading to petty trade quarrels and discriminations on other grounds than the gains to be got, at the same time that the detail character of dealings between producer and consumer admitted a degree of petty knavery and huckstering that is no longer practicable in the current large-scale business dealings.

Of these two divergent effects resulting from close personal relations between producer and consumer; the former seems on the whole to have been of preponderant consequence.

Under the system of handicraft and neighborhood industry, the adage that "Honesty is the best policy" seems on the whole to have been accepted and to have been true. This adage has come down from the days before the machine's regime and before modern business enterprise.

Under modern circumstances, where industry is carried on on a large scale, the discretionary head of an industrial enterprise is commonly removed

(53) from all personal contact with the body of customers for whom the industrial process under his control purveys goods or services. The mitigating effect which personal contact may have in dealings between man and man is therefore in great measure eliminated.

The whole takes on something of an impersonal character. One can with an easier conscience and with less of a sense of meanness take advantage of the necessities of people whom one knows of only as an indiscriminate aggregate of consumers.

Particularly is this true when, as frequently happens in the modern situation, this body of consumers belongs in the main to another, inferior class, so that personal contact and cognizance of them is not only not contemplated, but is in a sense impossible.

Equity, in excess of the formal modicum specified by law, does not so readily assert its claims where the relations between the parties are remote and impersonal as where one is dealing with one's necessitous neighbors who live on the same social plane.

Under these circumstances the adage cited above loses much of its axiomatic force. Business management has a chance to proceed on a temperate and sagacious calculation of profit and loss, untroubled by sentimental considerations of human kindness or irritation or of honesty.

-- Thorstein Veblen

The Theory of Business Enterprise (Charles Scribner's Sons, 1904, chapter III)

1 comment:

Ben Kunz said...

Social media is returning is to complete transparency, and tightening up the relationship between suppliers and consumers. Zappos is a good example of a company that gets this. Producers can no longer sit on a hill and try to "take advantage" of consumers; instead, profit is derived by being fair, honest, and focusing on the service aspects that increase the mutual value exchange between you and your customer.

In other words, the old days of intimacy between buyer and shopkeeper are back.