Thorstein Veblen

Thorstein Bunde Veblen (born Torsten Bunde Veblen; July 30, 1857 – August 3, 1929) was an American economist and sociologist, and leader of the institutional economics movement. Besides his technical work he was a popular and witty critic of capitalism, as shown by his best known book The Theory of the Leisure Class (1899). Veblen is famous in the history of economic thought for combining a Darwinian evolutionary perspective with his new institutionalist approach to economic analysis. He combined sociology with economics in his masterpiece The Theory of the Leisure Class (1899) where he argued that there was a fundamental split in society between those who make their way via exploit and those who make their way via industry. In early barbarian society this is the difference between the hunter and the gatherer in the tribe, but as society matures it is the difference between the landed gentry and the indentured servant. The titular manifestation of those with the power of exploit is the "leisure class" which is defined by its lack of productive economic activity and its commitment to demonstrations of idleness. As Veblen describes it, as societies mature, conspicuous leisure gives way to "conspicuous consumption", but both are performed for the sole purpose of making an invidious distinction based on pecuniary strength, the demonstration of wealth being the basis for social status. Veblen was sympathetic to state ownership of industry, but he had a low opinion of workers and the labor movement and there is disagreement about the extent to which his views are compatible with Marxism, socialism or anarchism. As a leading intellectual of the Progressive Era, he made sweeping attacks on production for profit, and his stress on the wasteful role of consumption for status greatly influenced socialist thinkers and engineers who sought a non-Marxist critique of capitalism. Fine (1994) writes that economists at the time complained that his ideas, while brilliantly presented, were crude, gross, fuzzy, and imprecise; others complained that he was a wacky eccentric. Scholars continue to debate what exactly he meant in his convoluted, ironic and satiric essays; he made heavy use of examples of primitive societies, but many examples were pure invention. Continue Reading »

The Theory of the Leisure Class

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