The Center for Spatially Integrated Social Science This page was retrieved from the Internet Archive and has been archived locally for permanent and immediate access by The Center for Spatially Integrated Social Science at the University of California Santa Barbara.

Note: This page is based on a speech given to the 1996 ITVA (International Thorstein Veblen Association) convention.

Fuzzy Logic Applied to Thorstein Veblen's Evolutionary Thought

It is appropriate that Veblen's ideas are called Evolutionary. For that is what they are. The Minnesota Populists taught that society was divided into producers and parasites. Producers, naturally, produced the goods necessary for human survival such as food. The parasites, as Veblen would put it, fastened themselves upon the backs of working people for the sole purpose of getting something for nothing through force and fraud.

Veblen simply enlarged the notions of the producer/ parasite split into a conflict between the industrial classes and the leisure classes. Populist comparisons between banking or railroad interests to "rats in the corncrib" were colorful and apt descriptions of the loss of farm income but for Veblen, such comparisons were biologically insufficient. The vested interests were more dangerous than parasites, they were predatory.

Establishing the existence of producers and predators is simple enough, but as we shall see, many people are not clear examples of either one. Modern social scientists classify most occupations of advanced industrialization as service occupations.

The existence of service occupations does not destroy the producer-predator duality. Service, after all, implies an allegiance to another person or agenda. For most of recorded history, "service" was merely another name for producers. Societies were pretty simple--there were those who ruled and those who served.

There were layers of stratification within each group, but one thing was absolutely clear: the lowest member of the ruling classes was above the highest member of the serving classes.

The industrial revolution ended this neat arrangement. For the first time, producers achieved real power, but because industrialization, especially in England, was grafted onto feudal stock, the social arrangements were only slightly modified. Rich and powerful producers acted much like the worst of the old predators. This was the world as Marx described it. Please note that Marx's petit bourgeoisie were the servants who did the dirty business of predation--not to be confused with the servants who cleaned the stalls. These latter were still lumped together with the producing peasants, builders, and mechanics to form the proletariat.

The late nineteenth-century American Populist writers were not as critical of business enterprise as Marx. Going into business, after all, was the main element of the American dream. Though there was not much evidence, the Populists believed that producers could become successful and still maintain their producer attitudes. It was possible to reach the top without cheating anyone.

This graph is meant to show that, though a few producers had become rich, most were to be found at the bottom of the social order in any meaningful sense. The gap is meant to represent the emerging awareness of a separate agenda. Populists and progressives agreed to and organized around the notions of difference.

The world got its first populist-producer billionaire in Henry Ford. Social progressives were enchanted. Ford seemed to have found the magic formula. He made his fortune producing something, paid his workers well, hired racial minorities, and embraced the 8-hour day. Better yet, when he made his fortune, he spent it on improving his product, opening a museum glorifying the history of the producing classes, and promoting causes like the end of World War I.

As might be imagined, Ford's "capitalist" peers were horrified. In spite of his incredible wealth and power, Ford was shunned by the wealthy and powerful for his ideas. As shown in the chart, the predators still held power and chose to make the 1920s miserable for both Ford and the class he championed. The idealism at Ford Motor lost its luster when the firm began to lose money.

In the end, Ford was to become a tightfisted, union-busting tyrant. Even so, important producer legacies remain:

1) producers have their own business-management-leadership style that is successful--there is no need to emulate the predators; and

2) clean fortunes are possible--class conflict need not be between the rich and poor but between the producers who believe everyone can be rich in every meaningful sense and the predators who believe only a few can be really rich.

The producers now had an economic agenda with a proven track record. This led to political success. It can be argued that, in the period between 1945 and 1970, the producer agenda dominated the political economy of the industrial states and the thinking of most of the rest.

Power, in all its forms, in the later stages of industrialization is far too fragmented to enable one to state clearly that the producers are absolutely ascendant. (It seems as if most modern social science is dedicated to proving that no one has any power anymore. In a sense they are correct. No one seems to have real power because many persons and groups seem to have some. If a social scientist chooses to ignore the possibility of producer power, the fragmentation of power looks even more bewildering.)

In fact, a chart of power--both economic and political--might look something like this. This graph is probably misleading even if accurate. The newly significant service sector is, in reality, a convenient, but confusing, classification device because garbage collectors, bankers, and kings can be so classified.

There may be three basic occupational types but there remain only two agendas. Those who would serve are forced to choose between those who would produce and those who will not. It is possible for royalty and bankers, persons once considered the essence of predation, to serve the interests of producers. Kings and princes can be regularly seen pushing the products of their native countries worldwide. Bankers who live modest lives while promoting the economies of their communities are a regular fixture of the American Midwest.

Such are exceptions. Most bankers are predators, think as predators, and if not, serve the interests of predators. It is rare for any royalty (or anyone else living off inherited wealth for that matter) to justify income with real service.

An interesting picture emerges. It turns out that industrial societies do not need many real producers because they are so efficient. A single farmer can produce enough food to feed several hundred people. A punch press operator can make more parts in one year than he can consume in a century.

Producers find few natural allies in the service sector. The exception concerns those associated with industrial maintenance. The difference between building an automobile and repairing one is very small. If the goal is not merely an automobile but an automobile that runs, they are economically identical since an automobile that is inoperative has no (or negative) value.

Socially, maintenance and production people share an important similarity--both must understand and use tools. If the fundamental difference is between producers who use tools, and the predators who use weapons, then maintenance people are, in fact, Real Producers though they are usually classified as service workers.

If maintenance allies itself naturally with production, the rest of the service industries pose more problems for producer recruitment to their agenda. It seems the only certain way to create producers is to put tools in their hands and teach them to use them well.

Producers have appealed to the lower classes of the service sector through notions of class solidarity. This has not worked well. Trade unions look down on industrial unions and have joined forces only out of dire necessity. Producers can be awful snobs.

The upper classes of the service sector produce a whole different set of problems for producer recruitment. Because upper class members of the service sector are unlikely to use tools to produce anything, the predisposition of history is toward the predator agenda.

Class Conflict

The rise to prominence and power of the producing classes would tend to mitigate, one would suppose, the conflicts of class. In fact, something of the sort has happened. Serious scholars have portrayed the United States as a classless society. People do not talk of America as a classless society any longer, but class conflict has grown exceedingly complex since the issue was last raised. Any simplistic description of class conflict in terms of rich versus poor is probably doomed to fail because it is irrelevant.

The fact that both major interest groups contain upper, middle, and lower economic classes does not end battles between these groups but, in fact, provides a wider assortment of possibilities for conflict. The conflicts are of four major types: predator against producer, predator against predator, producer against producer, and producer against predator.

One: Predator against Producer

This is the oldest conflict. One who does not produce food and shelter for oneself must get someone else to do it. The predators have been extremely inventive over the years. Their methods have included slavery, imperialism, usury, ground rents, tithes, and taxation.

Of course, since the very upper predator crust does not do anything productive at all, servants who share the predator mentality have always surrounded them to do the actual work of profit taking, tax gathering, and rent collection. The real work of predation has been done by sheriffs, IRS agents, lawyers, judges, and an army of bureaucrats. Overseeing all this activity is the clergy (or other moral leaders) whose job it is to see that everyone agrees this is the best possible arrangement

Two: Predator against Predator

This conflict is usually called war. History books are filled with the lurid accounts of these conflicts to which nothing can be added here. Within a given society, predator-predator conflicts are rare because loyalty is a big predator virtue while treason is a big predator sin. As a result, while tales of revolution and coups d'état are common, historically they are quite rare. There are also recorded instances of bankers ruining kings, but these are even more rare.

Three: Producer against Producer

Though widely misunderstood, producer-producer conflicts are common. They usually center around the issues of automation. The sophisticated tools associated with industrialization enable anyone with access to this tooling to copy exactly any product. The producer with the best original design and the best tooling will eliminate those producers with inferior products.

In the beginning of the industrial revolution, these producer-producer conflicts boiled over in social revolt as artisans were displaced by factories. The Luddite movement saw these displaced artisans smash sophisticated factory tools. What finished the Luddite impulse was the realization that industrialization would also produce cheap, but sophisticated, tools. These tools would allow the small producer to fill the gaps in production left, deliberately or otherwise, by the large producer.

There are modern examples of new producers displacing old ones--such as when the $5 quartz crystal-microchip watch proved to be more accurate than the $5000 mechanical watch produced by the Swiss.

Four: Producer against Predator

When one thinks of attacks of producers on predators, strikes, boycotts, and sabotage are what come to mind. And in fact, these are about the only options available to lower class producers.

Upper class producers have an option that they have frequently exercised: simply make things so very complicated that only those who made them know how they work. This has been the strategy of choice as producers have sought to increase their power. It has been highly effective. The world that producers have created by the end of the twentieth century is so complex that it is a rare predator who has even the vaguest notion how the world works.

Even the specialist servants of predation have a hard time understanding the smallest slice of the world they pretend to govern, regulate, or defraud. Even so, the predators and their servants exhibit an odd trait that makes this process of obfuscation easy. This trait is best termed "fashionable ignorance" and it is on display every time you hear someone proudly proclaim they cannot program their VCR.

The Problem of Categorization

Determining whether a person or an occupation is productive or predatory is not always a simple matter. In Elegant Technology, I made a valiant attempt to summarize the personal traits of each, and while I am quite fond of the lists I produced, by themselves they solved nothing.

 Predators  Producers

 Anthropological Roots
 Hunting  Agriculture
 Definition of Success  
 Will have to do no work at all  Work will have its effects on millions
 Means to Power  
 Weapons  Tools
 Violence  Mastery of physical processes
 Religion  Increases in scientific knowledge

 Favorite ways to Get Rich  
 Slavery  Inventions
 Ground rents  Mega-projects
 Tithes  Military procurement fraud
 Taxation  New businesses
 Stock manipulation  Producer monopolies

 Means to Personal Success  
 Who you know  What you know
 Appearance  Ability

 Alexander the Great  Thomas Jefferson
 Erwin Rommel  Benjamin Franklin
 Marshall Zhukov  Thomas Edison
 J. P. Morgan  Henry Ford
 Donald Trump  Alfred Nobel

 Favorite Governments  
 Royalty  Democracy
 Dictatorships  Anarchy

 Favorite Publications  
 Forbes  Business Week
 Wall Street Journal  Inc. Magazine
 Washington Post  Car and Driver

 Monetary Theories  
 Free markets  Managed currency exchanges
 Monetarism  Low interest rates
 Free trade  Growth in money supply

 What Validates Money  
 Shortage of currency  Excellent work

 Basic Economic Theory  
 Market determines value  Design determines value
 Wealth is gathered  Wealth is manufactured

 Goal of Economics  
 Wealth is to be concentrated  Wealth should be widely spread
 Truth Tellers  
 Constitutional scholars  Scientists
 Theologians  Mathematicians
 Gurus  Engineers
 Mystics  Builders
 Ideologues  Inventors

 Means to Truth  
 Dedication  Experimentation
 Discipline  Curiosity
 Obedience  Research
 Scholarly examination of previously defined"truths"  

 Harvard University  
 Oxford University  Massachusetts Institute of Technology
 Their imitators  M.I.T.'s imitators
 Get rich in real estate courses  Vocational Schools

 Definition of Intelligence  
 Cunning  Creativity

 Validation of Knowledge  
 Footnotes  Experiments
 Appeals to authority  Patents

 Information Exchanges  
 Propaganda  Instruction manuals
 Public relations  Video cassettes, CD-ROM
 Mass media  Photocopy networks
 Scares  Computer bulletin boards

 Idealism  Materialism
 Dogmatism  Pragmatism
 Determinism  Free will
 Favorite Greeks  
 Socrates Euclid
Plato  Pythagoras
 Aristotle  Archimedes

 Read "Revelations"  Invent
 Indulge in games of chance  Plan
 Play the stock market  Build

 Frame of Reference  
 Extremely short  Very Long

 Thugs and thieves  Everything else

 War  Environmental destruction

The problem is obvious--while a list might make perfect sense from a rational viewpoint, virtually everyone who looks at one finds they have preferences from both categories. Some of Veblen's critics have seized on the fact that occupations cannot always be classified as either business OR industry. With many occupations somewhere between these polar extremes, such critics would invoke Aristotle's logical law of the undistributed middle to mount an assault on a very good idea.

It was time for some more evolution of this great idea.

Fuzzy Logic to the Rescue

The problem, it turns out, was NOT Veblen's but Aristotle's. The law of the undistributed middle may seem perfectly "logical," but is in fact, a hopelessly primitive idea. As Bart Kosko, the man who formulated the mathematical proof for fuzzy logic, points out, we wasted in excess of $120 billion in the attempt to perfect an Artificial Intelligence for computers because we were trying to teach them Aristotle.

Now that fuzzy logic has been used by the Japanese to allow camcorders to compensate for unsteady hands or automatic transmissions that learn the driving habits of the car's owner, the question is no longer whether or not fuzzy logic has become the ultimate "systems upgrade," but how fast the rest of us can incorporate the lessons learned.

Fuzzy logic is so far superior to Aristotle's, that those who do not perform the necessary "systems upgrades" to their logical thinking are at risk of joining the ranks of such intellectual cranks as can be found in a Flat Earth Society or promoting scientific creationism.

In all of this, there is very, very good news for anyone who claims Veblen as an intellectual "godfather." The problem of the business/ industry dichotomy demonstrates beyond any doubt that Veblen was, as in so many other areas, far ahead of his time. Veblen thought in fuzzy-logic terms long before the fuzzy-logic tool had been perfected. It is my contention that The Instinct of Workmanship can be viewed as a pre-fuzzy logic document.

The beauty of all this is NOT limited to creating colorful, yet accurate visualizations of the great Veblenian ideas. No! This is just a peek through the window of opportunity provided by the perfection of fuzzy logic. With it, Institutionalists can leapfrog their intellectual competitors. Neoclassical, neoliberal economists can be demonstrated as in error precisely because their notions are utterly Aristotelian.

But let us not worry about the fate of those poor misguided souls and concentrate on how our great new toolbox can be put to use.

Bart Kosko postulates that most ideas can best be represented as a cube where Aristotelian logic works only for statements that can be found at the extreme points.

If we were to place our class analysis into a three dimensional "cube," it would begin to look like this:

The mind literally boggles with the possibilities of this new logic. Instead of rigid categories that eliminate as much, or more, information as they describe, we can now describe reality accurately in all its infinite variety in at least three dimensions. Take, for example, the problem of describing industrial output.

There exists the possibility that most industrial output such as tools are nothing more than weapons used against nature. This position obviously has merit--otherwise one must ignore the examples of the chainsaw and bulldozer. But since I also believe that tools can be used to restore and conserve the biosphere, I believe this continuum is the "z" axis of the fuzzy tool/ human creation cube--with tools vs. weapons the "x" axis, and, simple and flexible, vs. specialized the "y" axis.

Of course, these are just three of my favorite considerations--there are others probably much better than mine. But it would be fun to see the industrial output of any given society plotted in this manner.

Keep in mind something important. Three dimensions simply marks the outer limits of visualization. Theoretically, there are no limits to the number of dimensions that could be plotted--a significant advantage when trying to evaluate something a complex has human behavior. There are practical limits, of course--each dimension evaluated add an order of magnitude to the difficulty.

However, even this may not be a problem, because of:

The ultimate in evolutionary thought

So far, I have only employed fuzzy logic in terms of categorization--or as Veblen might have put it, mere taxonomy. Who cares!?

Every Institutionalist should care because suddenly great, but sometimes subtle ideas, can now be represented by mathematical coordinates that can be easily tested and manipulated by quite simple instructions with cheap computers. But there is more.

Testing complex variables against each other would ordinarily seem like a multi-billion-year project for a supercomputer. If this were true, we would be in no better position than the neoclassicists who must intuitively simplify their models. Fortunately, it is no longer true because of another breakthrough in Artificial Intelligence--Genetic Algorithms.

For anyone who would aspire to Evolutionary thought, the name alone is absolutely perfect.

Genetic Algorithms shorten billion-year projects to weeks because they teach computers to assume that Darwin was right. For example, I think it would be very interesting to distill Veblen's business-industry split into a set of fuzzy-logic assumptions, run them through a set of genetic algorithms based on his forecasting in Imperial Germany and see, for example, if the Germans do not emerge on top of the industrial heap in Europe as has happened in real life. Of course, if with a little tinkering with the assumptions, one can form an evolutionary model that reflects the real-world outcome of the present--assuming we can make an accurate comparison--we can just keep the model running to see what happens if we keep operating on those assumptions in the future. And if we do not like the outcome, we will be able to test which modification of which operating social assumption we most need to change.

It has only taken 70+ years for the tools to be perfected, but I am absolutely convinced that every idea Veblen ever had can be scientifically tested by the combination of fuzzy logic and the computerized Darwinism that is genetic algorithms. Best of all, such an exercise would just overwhelm the primitive econometric models of the neoclassicists. We could "out-science" the quant jocks who have come to dominate the economics profession.

Elegant Technology online / revised 6/AUG/97