Overview on Thorstein Veblen & CMS
By Georgios Patsiaouras
“We are still not sure what to do with Thorstein Veblen. The classical economists dismiss him as a mountebank. The Marxists scorn him as a petty bourgeois dilettante. Practical business economists wish to take over his methods of concrete analysis without his rejection of the system of business enterprise. His cavalier treatment of money, credit and interest outlaw him from Keynesian circles. Institutionalists have decided to claim him as ancestor while they reject him as a prophet. And no one has ever been altogether certain what he meant." (James Burnham, 1956)
Thorstein Bunde Veblen (1857-1929) was an American economist and sociologist who is primarily known for initiating and popularizing the areas of institutional and evolutionary economics. Based upon Darwinian principles of socio-economic evolution, Veblen synthesized and applied ideas emerging from economics, anthropology and sociology to a variety of topics such as conspicuous consumption practices, critiques of neoclassical economic theory, origins of the concept of ownership, Marxian economics and the impact of technology on industrial activity amongst others. However, his name has been inextricably linked with the term ‘conspicuous consumption’ referring to the consumption practices and leisure activities that aim to indicate one’s membership of a superior social class. Veblen (1899) introduced the term in his most famous book ‘The Theory of the Leisure Class’, where he sought to propose an evolutionary framework behind the development of social, cultural and consumption practices which attribute status and social standing. Focusing on the mannerisms, caprices and superfluous activities of the upper classes, Veblen’s imaginative and innovative endeavors to explicate some socio-economic aspects of ‘status consumption’ have been overshadowed by the impact and popularity of his satiric writing and comments. His effort to combine a theory of institutional change by intermingling social class relations, mimetic behaviour and the notion of private property into an incomplete theory of status-seeking phenomena, offered a super-ambitious and generic explanation of consumer demand and its impact on the perception of individuals.
Leaving aside his most famous book, Veblen’s (1904) legacy has also been closely associated with the ‘Theory of Business Enterprise’ a book of political economy that critically examines the interrelationships, dynamics and clashing motivations between ‘business’ and ‘industrial’ interests. A biting and amusing critique of the educational practices used in American universities has been presented in his book ‘Higher Learning in America’ (Veblen, 1918/1957). Overall, we notice that Veblen’s ideas represent an intriguing and original amalgam of American pragmatism, political economy, European and American socialist thought (Marx and Bellamy), and anthropology and evolutionary theory, particularly Darwinism. Accordingly, the adoption and diffusion of his theories and ideas by (primarily) economists, sociologists, critical and cultural theorists, anthropologists, philosophers and historians of the sociology of knowledge throughout the twentieth and twenty-first centuries should not cause surprise.
Veblen’s work could be an extremely useful intellectual source for those seeking alternative and unorthodox approaches to economic and social phenomena along with well-justified criticism to neoclassical and utilitarian economic theory. At the same time, his ideas can inform the work of individuals interested in the evolution of advertising practices, status symbols and sociological approaches to consumption phenomena. As the first economist who paid attention to individuals’ tendency to consume for status, at the end of the nineteenth century, he generalized and simplified the analysis of socially-complex consumption phenomena and limited his descriptions primarily to ostentatious and visible consumption actions. Despite Veblen’s lack of patience to organize his ideas into a complete theoretical system, his work and observations on emulation and status consumption continue to mirror our social realities, desires and collective behavior in the 21st century.
Veblen, T., (1899) The Theory of the Leisure Class: an economic study of institutions. New York: Random House.
Veblen, T., (1904) The Theory of Business Enterprise. New York: Schribners.
Veblen, T., (1918/1957) The Higher Learning in America: a memorandum on the conduct of universities by business men. New York: Sagamore Press.
Veblen's other writings
Veblen, T., (1898) The Beginnings of Ownership. The American Journal of Sociology, 4(3), pp. 325-365.
Works drawing on Veblen's ideas
Adorno, T., (1941) Veblen’s attack on culture. Studies in Philosophy and Social Science, 9(3), pp. 389-413.
Campbell, C., (1995) Conspicuous Confusion? A Critique of Veblen’s Theory of Conspicuous Consumption. Sociological Theory, 13(1), pp. 37-47.
Dorfman, J., (1934) Thorstein Veblen and his America. New York: Viking Press.
Dyer, A., (1986) Veblen on Scientific Creativity: The Influence of Charles S. Pierce. Journal of Economic Issues, 20(1), pp. 21-42.
Dyer, A., (1997) Prelude to a theory of homo absurdus: variations on themes from Thorstein Veblen and Jean Baudrillard. Cambridge Journal of Economics, 21, pp. 45-53.
Lears, T.J.J. (1989), Beyond Veblen in: Bronner, S. ed., Consuming Visions: Accumulation and Display of Goods in America, 1880-1920. New York: Norton., pp. 73-97.
Mestrovic, S., (2002) Appreciating Veblen without idealizing or demonizing him. International Journal of Politics, Culture and Society, 16(1), pp. 153-157.
Heilbroner, R., (1953) The worldly philosophers: the lives, times and ideas of the great economic thinkers. Harmondsworth: Penguin. (chapter on Veblen)
Hodgson, G., (1992) Thorstein Veblen and post-Darwinian economics. Cambridge Journal of Economics, 16, pp. 285-301.
Patsiaouras, G., and Fitchett, A., J., (2009) Veblen and Darwin: tracing the evolutionary roots of consumer research. Journal of Marketing Management, 25(7/8), pp. 729-744.
Tilman, R., (1999) The Frankfurt School and the problem of social rationality in Thorstein Veblen. History of the Human Sciences, 12(1), pp. 91-109.
Tilman, R., (2004) Ferdinand Tonnies, Thorstein Veblen and Karl Marx: From community to society and back? European Journal of the History of Economic Thought, 11(4), pp. 579-606.
Titman, R., (1985) The utopian vision of Edward Bellamy and Thostein Veblen. Journal of Economic Issues, 19(4), pp. 879-899.
Trigg, A., (2001) Veblen, Bourdieu and conspicuous consumption. Journal of Economic Issues, 35(1), pp. 99-115.