Michael Lewis Echoes Veblen

Describing those who made money in the subprime mortgage market, Michael Lewis said this:

They were outsiders to the market that they were betting on. And in addition, they were, in many cases, personally curious people, not clubbable members of the group. And I think that was a key to the success. I think that the fact that they didn’t feel compelled in any way, on any level, to think like other people gave them an advantage.

This is what Thorstein Veblen said about Jews in a 1917 essay titled “The intellectual pre-eminence of Jews in modern Europe.” Being outsiders gave them freedom of thought. Lewis may have read that essay. A few years ago, he compiled an anthology of economic classics, one of which was Veblen’s Theory of the Leisure Class. I mentioned this essay earlier.

2 Responses to “Michael Lewis Echoes Veblen”

  1. Nile Says:

    The man who did more than anyone else in the 20th century to prevent nuclear war [Herman Kahn] has a few illuminating paragraphs on educated incapacity.

    I have observed it is very difficult for the average American, raised in a protective cocooning environment to engage in “reality testing”

    http://www.hudson.org/index.cfm?fuseaction=publication_details&id=2219

  2. seth Says:

    Thanks, Nile. Kahn attributes the term “trained incapacity” to Veblen. An example: “If a new cure happens to be developed that is at variance with accepted concepts, the medical profession is often the last to accept it. This problem has always existed in all professions, but it tends to be accentuated under modern conditions.”