Saturday, January 12, 2013

Human Instincts, Workmanship and Economic Development

The innate nature of man is to contribute to the development of the organization and society. Through the purposeful enhancement of individual workers, society can reap the rewards of higher levels of performance. Such performance is a natural instinct of man when given appropriate guidance and opportunities for development. Managers can contribute to the economic development of their society by fostering the instinctual self-interest of individuals to contribute to survival of the entire organization. 

"Chief among those instinctive dispositions that conduce directly to the material well-being of the race, and therefore to its biological success, is perhaps the instinctive bias here spoken of as the sense of workmanship." -Thorstein Veblen

Instincts have a large impact on why man engages in meaningful work. As a biological creature he seeks to develop the well-being of his race and in essence his own overall success. Within the context of the organization, instincts are tied to behavior and eventually to the methods by which people find needs attainment. Instincts seek concrete objects while habits are the methodology of achieving these concrete objects (Brette 2003).

In the work Instinct of Workmanship, Thorstein Veblen discusses man and his instincts as the elemental parts of an economic system. To him man, through his natural development, is instinctively pushing himself to learn, innovate and create more efficient methods of ensuring survival (Veblen, 1914). The development of tools and machines is a natural part of this process (Ayres 1958).

Understanding human behavior is important for understanding both organizational development and economics. All socio-economic development theories rely on human behavior as their foundational understanding (Jensen 1987). Therefore, psychology and economic development within an organization, or a nation, are inherently tied to behavior that can be adjusted through development of new habits based in instinctual expression.  These concepts are spawned by Darwinian explanations of biological development and adaptation.

As innovations improve they naturally create structural changes in the environment. The structural changes further adjust people's thoughts and habits that eventually lead to alignment with organizational and societal adjustments. The process of adjustment and adaptation continues because it is within man's best interest to survive, develop, and overcome. The creation of institutions and their development fits within this instinctual pattern of survival.

"The typical human endowment of instincts, as well as the typical make-up of the race in the physical respect, has according to this current view been transmitted intact from the beginning of humanity. . . . On the other hand the habitual elements of human life change unremittingly and cumulatively, resulting in a continued proliferous growth of institutions. Changes in the institutional structure are continually taking place in response to the altered discipline of life under changing cultural conditions, but human nature remains specifically the same. (1914, 18)"

 Society develops by creating ever higher levels of efficiency with its use of tools and effort. Therefore, as society develops and becomes more complex man creates the need for division of labor and institutional development in order to create higher levels of utility (Edgell 1975). With such an understanding it is possible to see how successful organizations are more able to capitalize off of the instincts inherent in every persons self-interest.

Let us put this within an example. People are naturally driven by their survival instincts to develop and innovate. Employees use the the tools available to them, through the job specialization they have learned, in order to create the most efficient use of their time. The more skill they have, the less time they spend to fulfill their financial needs. Managers not only control this function within an organization but also have a responsibility to encourage workplace adaptations that benefit the organizations. Empowering employees to use the drive of their instincts to create habits that find solutions to organizational problems contribute to their, the organizations, and society's survival. 

Key Points:
-Man is driven by instincts that create habits.
-Man's habits help him obtain resources from the environment.
-Tools, machines, and organizations help man use his time efficiently.
-Organizational management should encourage the natural instincts of employees to develop.
-Individual development contributes to organizational and societal development.
- The economic system is fostered through individual instinctual development.

Ayres, C. (1958). Veblen's Theory of Instincts Reconsidered. In Thorstein Veblen: A Critical Reappraisal, edited by D. F. Dowd, 25-37. Ithaca, N.Y.: Cornell University Press, 1958. 


Brette, O. (2003) Thorstein Veblen's Theory of Institutional Change: Beyond Technological Determinism. European Journal of the History of Economic Thought 10, (3), 455-477. 

Edgell, S. (1975). Thorstein Veblen's Theory of Evolutionary Change. American Journal of Economics and Sociology 34, (3), 267-280. 


Jensen, H.(1987). The Theory of Human Nature. Journal of Economic Issues 21, (3), 1039-1073. 


Veblen, T (1898). The Instinct of Workmanship and the Irksomeness of Labor. American Journal of Sociology 4, (2), 187-201.  






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