The Frankfurt School attacked Veblen's claims regarding machine-induced rat
ionality in industrial society. Their criticisms stemmed in part from the f
act that Veblen failed to present his ideas systematically in a formal trea
tise on either economics or sociology, and because he did not use concepts
or jargon familiar to the critical theorists. This article thus aims at: (1
) demonstrating through textual exegesis the meaning of social rationality
in the corpus of Veblen's writing, especially The Theory of Business Enterp
rise (1904); (2) elucidating the problems that arose in the Frankfurt Schoo
l's critique of Veblen because he used nomenclature and conceptualizations
unfamiliar to Herbert Marcuse, Theodor Adorno and Max Horkheimer; (3) reite
rating Veblen's thesis on the impact of 'transfer effects' on workers inter
acting with the machine process; and (4) outlining the failure of the Frank
furt School adequately to examine his claims in the American political envi
ronment in which they were made.