Thorstein Bunde Veblen (1857-1929)
July 30, 1857|
|Died||August 3, 1929
Sand Hill Road, Menlo Park, California
|Field||evolutionary economics; sociology|
|Opposed||Karl Marx, Neoclassical economics, German historical school|
|Influences||Herbert Spencer,William Graham Sumner, Lester F. Ward, William James, William McDougall, Georges Vacher de Lapouge, John Dewey, Gustav von Schmoller, John Bates Clark|
|Influenced||Wesley Clair Mitchell, Clarence Edwin Ayres, John Kenneth Galbraith, C. Wright Mills, Robert A. Brady, Lewis Mumford, Harold Adams Innis, Edith Penrose, John M. Clark, Geoffrey Hodgson, Jonathan Nitzan, Shimshon Bichler|
|Contributions||conspicuous consumption, penalty of taking the lead, ceremonial/instrumental dichotomy|
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 exploitation 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.
Veblen was born in Cato, Wisconsin, of Norwegian American parents who had immigrated from Norway. He spent the majority of his youth on his family farm in Nerstrand, Minnesota; the farmstead is now a National Historic Landmark. These settlements were little Norways, oriented around the religious and cultural traditions of the old country. Although Norwegian was his first language, he learned English from both neighbors and at school, which he began at the age of 5. His family was highly successful and placed great emphasis on education and hard work, all of which undoubtedly contributed to his later scorn for what he termed “conspicuous consumption” and waste of the Gilded Age. At seventeen, he was sent to attend a nearby college named Carleton College Academy (now Carleton College) in Northfield, Minnesota; he was fortunate to study with young John Bates Clark (1847–1938), who later became the nation's foremost economist and was a leader in the new field of neoclassical economics.
Veblen did graduate work at Johns Hopkins University under Charles Sanders Peirce, the founder of the pragmatist school in philosophy; he took his Ph.D. in 1884 at Yale University with a dissertation on "Ethical Grounds of a Doctrine of Retribution." He was a student of philosopher Noah Porter (1811–1892) and economist/sociologist William Graham Sumner (1840–1910). Perhaps the most important intellectual influences on Veblen were Charles Darwin and Herbert Spencer, whose work in the last half of the 19th century sparked an enormous interest in the evolutionary perspective on human societies. In 1891 he became a fellow at Cornell University.
Veblen married fellow Cornellian Ellen Rolfe in 1888; it was a very unhappy marriage that finally ended in divorce in 1911. He married Ann Bradley in 1914 and became stepfather to her two girls, Becky and Ann. After his wife's death in 1920, Veblen became very active in the care of the girls. Becky went with him when he moved to California, looked after him there, and was with him at his death in 1929.
Thorstein Veblen received his undergraduate degree from Carleton College in Northfield, Minnesota in 1880. He went to Yale to pursue a Ph.D. Upon graduation from Yale, Veblen was unable to obtain an academic job, partly due to prejudice against Norwegians, and partly because most universities considered him insufficiently educated in Christianity; most academics at the time held divinity degrees. Veblen returned to his family farm — ostensibly to recover from malaria — and spent six years there reading voraciously. In 1891 he left the farm, to study economics as a graduate student at Cornell University under James Laurence Laughlin.
He obtained his first academic appointment at the new University of Chicago, which overnight had become a world class university in many fields. He was promoted to assistant professor in 1900 and edited the prestigious Journal of Political Economy, while conversing with such intellectuals as John Dewey, Jane Addams and Franz Boas. He published two of his best known books, The Theory of the Leisure Class (1899), and The Theory of Business Enterprise (1904). The books made him famous overnight for their ridicule of businessmen. In 1906, he moved to Stanford University. He soon left, perhaps because of adultery, or because the faculty and administration distrusted a man they saw as a poor teacher, a nasty colleague and a political radical.
Veblen reflected many of his views in his personal habits. Veblen's house was often a mess, with unmade beds and dirty dishes; his clothes were often in disarray; he was an agnostic; and he tended to be blunt and rude while dealing with other people.
In 1911, Veblen joined the faculty of the University of Missouri, where he had support from Herbert Davenport, the head of the economics department. Veblen disliked the local town but remained until in 1918 he moved to New York to begin work as an editor of The Dial. In 1919, along with Charles A. Beard, James Harvey Robinson and John Dewey, he helped found the New School for Social Research (known today as The New School). From 1919 through 1926 Veblen continued to write and be involved in activities at The New School.The Engineers and the Price System was written during this period.
Veblen proposed a soviet of engineers in one chapter in The Engineers and the Price System. According to Yngve Ramstad, this work's 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, by such as Morris Cooke; Henry Laurence Gantt, who had died shortly before; and Howard Scott. Cooke and Gantt were followers of Taylor's Scientific Management. Scott, who listed Veblen as on the temporary organizing committee of the Technical Alliance, perhaps without consulting Veblen or other listed members, later helped found the Technocracy movement. Veblen had a penchant for socialism and believed that technological developments would eventually lead toward a socialistic organization of economic affairs. However, his views on socialism and the nature of the evolutionary process of economics differed sharply from that of Karl Marx; while Marx saw socialism as the final political precursor to communism, the ultimate goal for civilization, and saw the working class as the group that would establish it, Veblen saw socialism as one intermediate phase in an ongoing evolutionary process in society that would be brought about by the natural decay of the business enterprise system and by the inventiveness of engineers.Daniel Bell sees an affinity between Veblen and the Technocracy movement. Janet Knoedler and Anne Mayhew demonstrate the significance of Veblen's association with these engineers, while arguing that his book was more a continuation of his previous ideas than the advocacy others see in it.
In 1927, Veblen returned to the property that he still owned in Palo Alto and died there in 1929. His death came less than three months before the momentous crash of the U.S. stock market, which heralded the Great Depression.
Veblen and other American institutionalists were indebted to the German Historical School, especially Gustav von Schmoller, for the emphasis on historical fact, their empiricism and especially a broad, evolutionary framework of study. Veblen admired Schmoller but criticized some other leaders of the German school because of their overreliance on descriptions, long displays of numerical data and narratives of industrial development that rested on no underlying economic theory. Veblen tried to use the same approach with his own theory added.
Probably the clearest inheritors of Veblen's ideas that humans are not rationally pursuing value and utility through their conspicuous consumption are adherents of the school of Behavioral economics, who study the ways consumers and producers act against their own interests in apparently non-rational ways.
Veblen developed a 20th-century evolutionary economics based upon Darwinian principles and new ideas emerging from anthropology, sociology, and psychology. Unlike the neoclassical economics that was emerging at the same time, Veblen described economic behavior as socially determined and saw economic organization as a process of ongoing evolution. Veblen strongly rejected any theory based on individual action or any theory highlighting any factor of an inner personal motivation. Such theories were according to him "unscientific." This evolution was driven by the human instincts of emulation, predation, workmanship, parental bent, and idle curiosity. Veblen wanted economists to grasp the effects of social and cultural change on economic changes. In The Theory of the Leisure Class, the instincts of emulation and predation play a major role. People, rich and poor alike, attempt to impress others and seek to gain advantage through what Veblen coined "conspicuous consumption" and the ability to engage in “conspicuous leisure.” In this work Veblen argued that consumption is used as a way to gain and signal status. Through "conspicuous consumption" often came "conspicuous waste," which Veblen detested.
In The Theory of Business Enterprise, which was published in 1904 during the height of American concern with the growth of business combinations and trusts, Veblen employed his evolutionary analysis to explain these new forms. He saw them as a consequence of the growth of industrial processes in a context of small business firms that had evolved earlier to organize craft production. The new industrial processes impelled integration and provided lucrative opportunities for those who managed it. What resulted was, as Veblen saw it, a conflict between businessmen and engineers, with businessmen representing the older order and engineers as the innovators of new ways of doing things. In combination with the tendencies described in The Theory of the Leisure Class, this conflict resulted in waste and “predation” that served to enhance the social status of those who could benefit from predatory claims to goods and services.
Veblen generalized the conflict between businessmen and engineers by saying that human society would always involve conflict between existing norms with vested interests and new norms developed out of an innate human tendency to manipulate and learn about the physical world in which we exist. He also generalized his model to include his theory of instincts, processes of evolution as absorbed from Sumner, as enhanced by his own reading of evolutionary science, and Pragmatic philosophy first learned from Peirce. The instinct of idle curiosity led humans to manipulate nature in new ways and this led to changes in what he called the material means of life. Because, as per the Pragmatists, our ideas about the world are a human construct rather than mirrors of reality, changing ways of manipulating nature lead to changing constructs and to changing notions of truth and authority as well as patterns of behavior (institutions). Societies and economies evolve as a consequence, but do so via a process of conflict between vested interests and older forms and the new. Veblen never wrote with any confidence that the new ways were better ways, but he was sure in the last three decades of his life that the American economy could, in the absence of vested interests, have produced more for more people. In the years just after World War I he looked to engineers to make the American economy more efficient.
In addition to The Theory of the Leisure Class and The Theory of Business Enterprise, Veblen's monograph "Imperial Germany and the Industrial Revolution", and his many essays, including “Why is Economics Not an Evolutionary Science,” and “The Place of Science in Modern Civilization,” remain influential.
Veblen's intellectual legacy
In spite of difficulties of sometimes archaic language, caused in large part by Veblen's struggles with the terminology of unilinear evolution and of biological determination of social variation that still dominated social thought when he began to write, Veblen's work remains relevant, and not simply for the phrase “conspicuous consumption”. His evolutionary approach to the study of economic systems is once again in vogue and his model of recurring conflict between the existing order and new ways can be of great value in understanding the new global economy.
Veblen, as noted, is regarded as one of the co-founders (with John R. Commons, Wesley C. Mitchell, and others) of the American school of institutional economics. Present-day practitioners who adhere to this school organise themselves in the Association for Evolutionary Economics (AFEE) and the Association for Institutional Economics (AFIT). AFEE gives an annual Veblen-Commons (see John R. 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".
- Theory of the Leisure Class: An Economic Study of Institutions 1899, 1915 edition at Internet Archive
- Theory of Business Enterprise 1904, at Internet Archive
- The Instincts of Worksmanship and the State of the Industrial Arts, 1914.
- Imperial Germany and the Industrial Revolution 1915.
- The Higher Learning In America: A Memorandum On the Conduct of Universities By Business Men 1918, at Internet Archive
- An Inquiry Into The Nature Of Peace And The Terms Of Its Perpetuation pdf 1919, at Internet Archive
- The Vested Interests and the Common Man pdf 1919, on Open Library
- The Engineers and the Price System 1921, at Internet Archive
- Absentee Ownership and Business Enterprise in Recent Times: the case of America, 1923.
- Essays in Our Changing Order, 1927.
- What Veblen Taught: Selected Writings of Thorstein Veblen edited by Wesley C. Mitchell; 1936.
- "Kant's Critique of Judgement", Journal of Speculative Philosophy, 1884.
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- "Bohm-Bawerk's Definition of Capital and the Source of Wages", QJE, 1892, .
- "The Overproduction Fallacy", QJE, 1892.
- "The Food Supply and the Price of Wheat", JPE, 1893.
- "The Army of the Commonweal", JPE, 1894.
- "The Economic Theory of Women's Dress", Popular Science Monthly, 1894.
- "Review of Karl Marx's Poverty of Philosophy", JPE, 1896.
- "Review of Werner Sombart's Sozialismus", JPE, 1897.
- "Review of Gustav Schmoller's Über einige Grundfragen der Sozialpolitik", JPE, 1898.
- "Review of Turgot's Reflections", JPE, 1898.
- "Why is Economics Not an Evolutionary Science?", QJE, 1898.
- "The Beginnings of Ownership", American Journal of Sociology, 1898.
- "The Instinct of Workmanship and the Irksomeness of Labor", American Journal of Sociology, 1898.
- "The Barbarian Status of Women", American Journal of Sociology, 1898.
- "The Preconceptions of Economic Science", QJE1899,1900. Part 1, Part 2, Part 3.
- "Industrial and Pecuniary Employments", Publications of the AEA, 1901.
- "Gustav Schmoller's Economics", QJE, 1901.
- "Arts and Crafts", JPE, 1902.
- "Review of Werner Sombart's Der moderne Kapitalismus", JPE, 1903.
- "Review of J.A. Hobson's Imperialism", JPE, 1903.
- "An Early Experiment in Trusts", JPE, 1904.
- "Review of Adam Smith's Wealth of Nations", JPE, 1904.
- "Credit and Prices", JPE, 1905.
- "The Place of Science in Modern Civilization", American J of Sociology, 1906.
- "Professor Clark's Economics", QJE, 1906.
- "The Socialist Economics of Karl Marx and His Followers", (1906,1907), QJE.
- "Fisher's Capital and Income", Political Science Quarterly, 1907.
- "The Evolution of the Scientific Point of View", University of California Chronicle.
- "On the Nature of Capital", 1908, QJE, 1908.
- "Fisher's Rate of Interest", Political Science Quarterly, 1909.
- "The Limitations of Marginal Utility", JPE, 1909.
- "Christian Morals and the Competitive System", International J of Ethics, 1910.
- "The Mutation Theory and the Blond Race", Journal of Race Development, 1913.
- "The Blond Race and the Aryan Culture", Univ of Missouri Bulletin, 1913.
- "The Opportunity of Japan", Journal of Race Development, 1915.
- "On the General Principles of a Policy of Reconstruction", J of the National Institute of Social Sciences, 1918.
- "Passing of National Frontiers", Dial, 1918.
- "Menial Servants during the Period of War", Public, 1918.
- "Farm Labor for the Period of War", Public, 1918.
- "The War and Higher Learning", Dial, 1918.
- "The Modern Point of View and the New Order", Dial, 1918.
- "The Intellectual Pre-Eminence of Jews in Modern Europe", Political Science Quarterly, 1919.
- "On the Nature and Uses of Sabotage", Dial, 1919.
- "Bolshevism is a Menace to the Vested Interests", Dial, 1919.
- "Peace", Dial, 1919.
- "The Captains of Finance and the Engineers", Dial, 1919.
- "The Industrial System and the Captains of Industry", Dial, 1919.
- The Place of Science in Modern Civilization and other essays, 1919.
- "Review of J.M.Keynes's Economic Consequences of the Peace, Political Science Quarterly, 1920.
- "Economic theory in the Calculable Future", AER, 1925.
- "Introduction" in The Laxdaela Saga, 1925.
- Veblen, Thorstein. 1898. "Why is Economics Not an Evolutionary Science." The Quarterly Journal of Economics. vol. 12, 1898.
- History of Political Economy 1982 14(3):323-341; DOI:10.1215/00182702-14-3-323
- Gary Alan Fine, "The Social Construction of Style: Thorstein Veblen's the Theory of the Leisure Class as Contested Text" Sociological Quarterly 1994 35(3): 457-472.
- Bartley 1997
- Dorfman, Joseph (1934). Thorstein Veblen and His America. Harvard University Press. ISBN 0-678-00007-7.
- Eff 1989. Hodgson 1998, 2004.
- Elizabeth Watkins Jorgensen and Henry Irvin Jorgensen, Thorstein Veblen: Victorian Firebrand (1999)
- (Dorfman 1934: 55)
- (Dorfman 1934: 54-55)
- (Dorfman 1934: 56)
- Jorgensen and Jorgensen (1999) pp. 105-6, 115, 132.
- John Kenneth Galbraith, in the Introduction of Veblen, Thorstein (1973). The Theory of the Leisure Class. introd. John Kenneth Galbraith. Boston: Houghton Mifflin. ISBN 978-0-395-14008-6.
- The Engineers and the Price System, 1921.
- Rick Tilman, Thorstein Veblen and His Critics, 1891-1963 (1992)
- Yngve Ramstad, "Veblen, Thorstein" in The Elgar Companion to Institutional and Evolutionary Economics (edited by G. M. Hodgson, W. J. Samuels, and M. R. Tool), (Edward Edgar, 1994)
- David Adair, The Technocrats 1919-1967: A Case Study of Conflict and Change in a Social Movement, master's thesis, Simon Fraser University (1970)
- Daniel Bell (1963), "Veblen and the Technocrats: On the Engineers and the Price System" (in The Winding Passage: Sociological Essays and Journeys, 1980)
- Wood, John (1993). The Life of Thorstein Veblen and Perspectives on his Thought. introd. Thorstein Veblen. New York: Routledge. ISBN 0-415-07487-8. "The decisive difference between Marx and Veblen lay in their respective attitudes on socialism. For while Marx regarded socialism as the ultimate goal for civilization, Veblen saw socialism as but one stage in the economic evolution of society."
- Daniel Bell, "Veblen and the New Class", American Scholar, vol. 32 (Autumn 1963) (cited in Rick Tilman, Thorstein Veblen and His Critics, 1891-1963, Princeton University Press (1992))
- Janet Knoedler and Anne Mayhew (1999) "Thorstein Veblen and the Engineers: A Reinterpretation", History of Political Economy, vol. 31, no. 2: pp. 255-272.
- Thorstein Veblen, "Gustav Schmoller's Economics," The Quarterly Journal of Economics, vol. 16 no. 1 (Nov. 1901): 69–93.
- John C. Wood, Thorstein Veblen: Critical Assessments (1993) p. 13.
- Bernard Chavance, Institutional Economics (2008) p. 10.
- Example given here in a talk by evolutionary biologist Professor Amotz Zahavi .
- See Chapter 2, "Capital as Power" in The Global Political Economy of Israel by Jonathan Nitzan and Shimshon Bichler.
- Anne Mayhew (1999) "Institutional Economics", in The Elgar Companion to Feminist Economics (ed. by J. Peterson and M. Lewis), Edward Elgar.
- Camic, Charles and Geoffrey M Hodgson (Eds.). Essential Writings of Thorstein Veblen. (Routledge Studies in the History of Economics) London: Routledge, 2010-2011. ISBN 978-0415777902
- Mitchell, Wesley C. (Ed.). What Veblen Taught: Selected Writings of Thorstein Veblen. New York: Viking, 1936.
- Bartley, Russel H. "In Search of Thorstein Veblen: Further Inquiries into His Life and Work". International Journal of Politics, Culture, and Society. 11(January 1997):129-173.
- Diggins, John Patrick. Thorstein Veblen: Theorist of the Leisure Class. 2nd ed. Princeton, NJ: Princeton University Press, 1999.
- Dorfman, Joseph. Thorstein Veblen and His America. New York: Viking Press, 1934.
- Dowd, Douglas Fitzgerald. Thorstein Veblen. New York: Washington Square Press, 1966.
- Edgell, Stephen. Veblen in Perspective: His Life and Thought. Armonk, NY: M.E. Sharpe, 2001.
- Adorno, Theodor W. Prisms. Cambridge, MA: MIT Press, 1967.
- Banta, Martha. "Taylored Lives: Narrative Production in the Age of Taylor, Veblen, and Ford". Modernism/Modernity, vol. 1, no. 3 (1994): 264.
- Brette, Olivier. "Thorstein Veblen's Theory of Institutional Change: Beyond Technological Determinism". European Journal of the History of Economic Thought, 2003 10(3): 455-477.
- Davis, Arthur K. "Thorstein Veblen Reconsidered," Science & Society, vol. 21, no. 1 (Winter 1957), pp. 52–85, a Marxist view
- Dugger, William M. "Veblen's Radical Theory of Social Evolution." Journal of Economic Issues. 40 (September 2006): 651-672.
- Eby, Clare Virginia. "Thorstein Veblen and the Rhetoric of Authority." American Quarterly 1994 46(2): 139-173.
- Eff, E. Anthon. "History of Thought as Ceremonial Genealogy: The Neglected Influence of Herbert Spencer on Thorstein Veblen." Journal of Economic Issues, 23 (September 1989): 689-716.
- Heilbroner, Robert. The Worldly Philosophers. New York: Simon and Schuster, 1953.
- Hodgson, Geoffrey M. "On the Evolution of Thorstein Veblen's Evolutionary Economics". Cambridge Journal of Economics, 22(4) (1998): 415-431.
- Hodgson, Geoffrey M. The Evolution of Institutional Economics: Agency, Structure and Darwinism in American Institutionalism. London: Routledge, 2004.
- Jorgensen, Elizabeth Watkins and Henry Irvin Jorgensen. Thorstein Veblen: Victorian Firebrand. Armonk, NY: M.E. Sharpe, 1999.
- Knoedler, Janet T. "Veblen and Technical Efficiency". Journal of Economic Issues, 31(4) (1997):1011-1026.
- Knoedler, Janet and Anne Mayhew. "Thorstein Veblen and the Engineers: a Reinterpretation." History of Political Economy 1999 31(2): 255-272.
- McCormick, Ken. Veblen in Plain English. Youngstown, NY: Cambria, 2006.
- Plotkin, Sidney and Rick Tilman, eds. The Political Ideas of Thorstein Veblen (2011)
- Riesman, David. Thorstein Veblen: A Critical Interpretation. New York: Scribner's, 1960.
- Shannon, Christopher. Conspicuous Criticism: Tradition, the Individual and Culture in American Social Thought, from Veblen to Mills. Rev ed. Scranton, PA: University of Scranton Press, 2006.
- Tilman, Rick. Thorstein Veblen and the Enrichment of Evolutionary Naturalism. Columbia, University of Missouri Press, 2007.
- Tilman, Rick. Thorstein Veblen and His Critics, 1891-1963: Conservative, Liberal, and Radical Perspectives. Princeton, NJ: Princeton University Press, 1992. ISBN 0-691-04286-1
- Tilman, Rick. The Intellectual Legacy of Thorstein Veblen: Unresolved Issues. Westport, CT: Greenwood Press, 1996. ISBN 0-313-29946-3
- Vian, Francesca Lidia. "Ithaca Transfer: Veblen and the Historical Profession," History of European Ideas, 35,1 (2009): 38-61.
- Wood, John Cunningham (Ed.). Thorstein Veblen: Critical Assessments London; New York: Routledge, 1993.
- Yonay, Yuval P. The Struggle over the Soul of Economics: Institutionalist and Neoclassical Economists in America Between the Wars. Princeton, NJ: Princeton University Press, 1998.
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- Works by or about Thorstein Veblen in libraries (WorldCat catalog)
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