Thorstein Veblen

In his best-known book, The Theory of the Leisure Class (1899), Veblen coined the concepts of conspicuous consumption and conspicuous leisure. Veblen laid the foundation for the perspective of the institutional economics. Contemporary economists still theorize Veblen's distinction between "institutions" and "technology", known as the Veblenian dichotomy.


As a leading intellectual of the Progressive Era in the US, Veblen attacked production for profit. His emphasis on conspicuous consumption greatly influenced economists who engaged in non-Marxist critiques of fascism, capitalism, and technological determinism.

Academic career[edit]

After graduation from Yale in 1884, Veblen was essentially unemployed for seven years. Despite having strong letters of recommendation, he was unable to obtain a university position. It is possible that his dissertation research on "Ethical Grounds of a Doctrine of Retribution" (1884) was considered undesirable. However, this possibility can no longer be researched because Veblen's dissertation has been missing from Yale since 1935.^[15] Apparently the only scholar who ever studied the dissertation was Joseph Dorfman, for his 1934 book Thorstein Veblen and His America. Dorfman says only that the dissertation, advised by evolutionary sociologist William Graham Sumner, studies such evolutionary thought as that of Herbert Spencer, as well as the moral philosophy of Immanuel Kant.^[16] Also in 1884, Veblen wrote the first English-language study of Kant's third Critique, his ‘Kant's Critique of Judgment’ published in the July 1884 issue of the Journal of Speculative Philosophy.^[17] Some historians have also speculated that this failure to obtain employment was partially due to prejudice against Norwegians, while others attribute this to the fact that most universities and administrators considered him insufficiently educated in Christianity.^[18] Most academics at the time held divinity degrees, which Veblen did not have. Also, it did not help that Veblen openly identified as an agnostic, which was highly uncommon for the time. As a result, Veblen returned to his family farm, a stay during which he had claimed to be recovering from malaria. He spent those years recovering and reading voraciously.^[19] It is suspected that these difficulties in beginning his academic career later inspired portions of his book The Higher Learning in America (1918), in which he claimed that true academic values were sacrificed by universities in favor of their own self-interest and profitability.^[20]


In 1891, Veblen left the farm to return to graduate school to study economics at Cornell University under the guidance of economics professor James Laurence Laughlin. With the help of Professor Laughlin, who was moving to the University of Chicago, Veblen became a fellow at that university in 1892. Throughout his stay, he did much of the editorial work associated with the Journal of Political Economy, one of the many academic journals created during this time at the University of Chicago. Veblen used the journal as an outlet for his writings. His writings also began to appear in other journals, such as the American Journal of Sociology, another journal at the university. While he was mostly a marginal figure at the University of Chicago, Veblen taught several classes there.^[10]


In 1899, Veblen published his first and best-known book, titled The Theory of the Leisure Class. This did not immediately improve Veblen's position at the University of Chicago. He requested a raise after the completion of his first book, but this was denied.^[18]


Veblen's students at Chicago considered his teaching "dreadful".^[7] Stanford students considered his teaching style "boring", but this was more excused than some of Veblen's personal affairs. He offended Victorian sentiments with extramarital affairs while at the University of Chicago.^[7] At Stanford in 1909, Veblen was ridiculed again for being a womanizer and an unfaithful husband. As a result, he was forced to resign from his position, which made it very difficult for him to find another academic position.^[21] One story claims that he was fired from Stanford after Jane Stanford sent him a telegram from Paris, having disapproved of Veblen's support of Chinese workers in California.^[22] (The fact that Jane Stanford was already dead by 1905, while Veblen appointed in 1906,^[23] casts doubt on this story.)


With the help of Herbert J. Davenport, a friend who was the head of the economics department at the University of Missouri, Veblen accepted a position there in 1911. Veblen, however, did not enjoy his stay at Missouri. This was in part due to his position as a lecturer being of lower rank than his previous positions and for lower pay. Veblen also strongly disliked Columbia, Missouri, the town where the university was located.^[24] Although he may not have enjoyed his stay at Missouri, in 1914 he did publish another of his best-known books, The Instincts of Worksmanship and the State of the Industrial Arts (1914). After World War I began, Veblen published Imperial Germany and the Industrial Revolution (1915). He considered warfare a threat to economic productivity and contrasted the authoritarian politics of Germany with the democratic tradition of Britain, noting that industrialization in Germany had not produced a progressive political culture.^[25]


By 1917, Veblen moved to Washington, D.C. to work with a group that had been commissioned by President Woodrow Wilson to analyze possible peace settlements for World War I, culminating in his book An Inquiry into the Nature of Peace and the Terms of Its Perpetuation (1917).^[25] This marked a series of distinct changes in his career path.^[26] Following that, Veblen worked for the United States Food Administration for a period of time. Shortly thereafter, Veblen moved to New York City to work as an editor for a magazine, The Dial. Within the next year, the magazine shifted its orientation and he lost his editorial position.^[8]


In the meantime, Veblen had made contacts with several other academics, such as Charles A. Beard, James Harvey Robinson, and John Dewey. The group of university professors and intellectuals eventually founded The New School for Social Research. Known today as The New School, in 1919 it emerged from American modernism, progressivism, and the democratic education movement. The group was open to students and aimed for a "an unbiased understanding of the existing order, its genesis, growth, and present working".^[27] From 1919 to 1926, Veblen continued to write and maintain a role in The New School's development. During this time, he wrote The Engineers and the Price System.^[28] In it, Veblen proposed a soviet of engineers.^[29] According to Yngve Ramstad,^[30] the view that engineers, not workers, would overthrow capitalism was a "novel view". Veblen invited Guido Marx to the New School to teach and to help organize a movement of engineers with others such as Morris Cooke; Henry Gantt, who had died shortly before; and Howard Scott. Cooke and Gantt were followers of Frederick Winslow Taylor's scientific management theory. Scott, who listed Veblen as being on the temporary organizing committee of the Technical Alliance, perhaps without consulting Veblen or other listed members, later helped found the technocracy movement.^[31]

Legacy[edit]

Veblen is regarded as one of the co-founders of the American school of institutional economics, alongside John R. Commons and Wesley Clair Mitchell. Economists who adhere to this school organize themselves in the Association for Institutional Economics (AFIT). The Association for Evolutionary Economics (AFEE) gives an annual Veblen-Commons award for work in Institutional Economics and publishes the Journal of Economic Issues. Some unaligned practitioners include theorists of the concept of "differential accumulation".^[66]


Veblen's work has remained relevant for more reasons than the phrase "conspicuous consumption". His evolutionary approach to the study of economic systems is again gaining traction and his model of recurring conflict between the existing order and new ways can be of value in understanding the new global economy.^[67] In this sense some authors have recently compared the Gilded Age, studied by Veblen, with the New Gilded Age and the contemporary processes of refeudalization, arguing for a new global leisure class and distinctive luxury consumption.^[68]


Veblen has been cited in the writings of feminist economists. Veblen believed that women had no endowments, believing instead that the behavior of women reflects the social norms of their time and place. Veblen theorized that women in the industrial age remained victims of their "barbarian status". This has, in hindsight, made Veblen a forerunner of modern feminism.^[69]


Veblen's work has also often been cited in American literary works. He is featured in The Big Money by John Dos Passos, and mentioned in Carson McCullers' The Heart Is a Lonely Hunter and Sinclair Lewis' Main Street. One of Veblen's PhD students was George W. Stocking Sr., a pioneer in the emerging field of industrial organization economics. Another was Canadian academic and author Stephen Leacock, who went on to become the head of Department of Economics and Political Science at McGill University in Montreal. The influence of Theory of the Leisure Class can be seen in Leacock's 1914 satire, Arcadian Adventures with the Idle Rich.^[70]


To this day, Veblen is little known in Norway. President Bill Clinton honored Veblen as a great American thinker when addressing King Harald V of Norway. ^[71]


Veblen goods are named for him, based on his work in The Theory of the Leisure Class.