Financialization, Industrial Sabotage and Income Distribution: A Veblenian Perspective

This paper reconstructs Thorstein Veblen’s theory of the firm, analyzing its structural implications for income distribution dynamics. The study argues that the Veblenian firm is a primary locus of institutional conflict between the ‘industrial’ drive of technicians, oriented towards productive efficiency, and the ‘pecuniary’ strategy of businessmen, focused on monetary profit and the growth in size through strategic output restriction. By incorporating the role of bank credit and finance into this framework, this paper shows that: (i) at the microeconomic level, competition in Veblen’s view — contrary to the mainstream approach of his time (e.g., John Bates Clark) and of the present day — is a dynamic, time-based process based on the manipulation of the turnover of monetary and technical capital; (ii) at the macroeconomic level, the outcome of the internal conflict within firms determines the distribution of income among real wages, profits, and financial rents (and, consequently, luxury consumption). Finally, some insights into contemporary financialization are provided.