Veblen's Q―Tobin's Q

摘要

I have argued that Veblen's historiography of capital might well provide a model for current research in understanding the importance of monopoly power in capital valuations. In particular, Veblen's association of high values of Q with low levels of new investment suggests that marginal Qs―in industries with monopoly power―can be low when average Qs are high. This early insight by Veblen anticipated Hayashi's mathematical derivation of the same idea by about eighty years. I have also argued that the absolute and relative increase in mergers and acquisitions during booms provide strong inferential evidence that many marginal Qs do, in fact, fall when Qs rise. This evidence on mergers and acquisitions runs directly contrary to what modern Q theory predicts. The failure of modern Q theory to correctly predict the course of mergers and acquisitions―indeed, its insistence on competitive outcomes in a system dominated by oligopolies―can be traced to its failure to appreciate the role of monopoly power in restricting new investment. Any corrective action would have to probe into the industrial structure―a pathway first cleared by Veblen's historiography. I have argued, too, that Veblen's use of Q as a normative construct meshes well with his contribution to positive economics. Ultimately, the differing valuations attributable to capital assets reflect the business (and monopoly) context within which those capital assets are housed. Veblen's famous distinction between business and industry and his use of "industry" to benchmark the failure of the business system to provide for human welfare is symbolized by Q and the volatile behavior of its "intangible" core. Veblen once mentioned that the corporation "is organized for prosperity, not for adversity" ([1923] 1964, 93). As shown by the recent financial melt-down of "make-believe" asset valuations, the extraction of "free income" by top managers, and the insecurities inflicted on the underlying population, Veblen's understanding of the corporate form of capitalization retains contemporary relevance.