Thorstein Veblen, 1857-1929

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Biographical note

Thorstein Bunde Veblen, born Tosten Bunde Veblen (July 30, 1857 – August 3, 1929) was an American sociologist and economist and a primary mentor, along with John R. Commons, 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], arguing there was a basic distinction between the productiveness of "industry," run by engineers, which manufactures goods, and the parasitism of "business," which exists only to make profits for a leisure class. The chief activity of the leisure class was "conspicuous consumption", and their economic contribution is "waste," activity that contributes nothing to productivity. The American economy was therefore made inefficient and corrupt by the businessmen, though he never made that claim explicit. Veblen believed that technological advances were the driving force behind cultural change, but, unlike many contemporaries, he refused to connect change with progress.

Although Veblen was sympathetic to government ownership, he had a low opinion of workers and the labor movement and was hostile to Marxism. As a leading intellectual of the Progressive Era, his sweeping attack on production for profit and his stress on the wasteful role of consumption for status greatly influenced liberal thinkers seeking a non-Marxist critique of capitalism. Experts complained his ideas, while brilliantly presented, were crude, gross, fuzzy, and imprecise; others complained he was a wacky eccentric. Scholars continue to debate exactly what he meant in his convoluted, ironic and satiric essays; he made heavy use of examples of primitive societies, but many examples were pure invention.

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