Thorstein Veblen | |
|---|---|
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| Born | Thorstein Bunde Veblen (1857-07-30)July 30, 1857 Cato, Wisconsin, U.S. |
| Died | August 3, 1929(1929-08-03) (aged 72) Menlo Park, California, U.S. |
| Academic background | |
| Alma mater | |
| Influences | Herbert Spencer,Thomas Paine,William Graham Sumner,Lester F. Ward,William James,Georges Vacher de Lapouge,Edward Bellamy,John Dewey,Gustav von Schmoller,John Bates Clark,Henri de Saint-Simon,Charles Fourier |
| Academic work | |
| Discipline | Economics,socioeconomics |
| School or tradition | Institutional economics American Psychological School |
| Institutions | |
| Notable ideas | Conspicuous consumption,conspicuous leisure,trained incapacity,Veblenian dichotomy |
Thorstein Bunde Veblen (/ˈθɔːrstaɪnˈvɛblən/THOR-stynVEH-blən;[1] July 30, 1857 – August 3, 1929) was an Americaneconomist andsociologist who, during his lifetime, emerged as a well-knowncritic of capitalism.
In his best-known book,The Theory of the Leisure Class (1899), Veblen coined the concepts ofconspicuous consumption andconspicuous leisure. Veblen laid the foundation for the perspective ofinstitutional economics. Contemporary economists still theorize Veblen's distinction between "institutions" and "technology", known as the Veblenian dichotomy.
As a leading intellectual of theProgressive Era in the US, Veblen attackedproduction for profit. His emphasis on conspicuous consumption greatly influenced economists who engaged in non-Marxist critiques offascism,capitalism, andtechnological determinism.
Veblen was born on July 30, 1857, inCato,Wisconsin, toNorwegian-American immigrant parents, Thomas Veblen and Kari Bunde.[2] He was the sixth of twelve children.[3]
His parents had emigrated fromValdres, Norway, toMilwaukee, Wisconsin, on September 16, 1847, with few funds and no knowledge of English. They migrated to Milwaukee viaDrammen,Hamburg andQuebec.[2] The trip took four and a half months.[2] Despite their limited circumstances as immigrants, Thomas Veblen's knowledge in carpentry and construction, paired with his wife's supportive perseverance, allowed them to establish a family farm inRice County, Minnesota, where they moved in 1864.[3][2] (TheVeblen farmstead, located near the town ofNerstrand, became aNational Historic Landmark in 1981.)[4] Kari Bunde was not formally trained as a physician, but she frequently provided medical treatment to surrounding areas.[2]
Veblen began his schooling at age five. AlthoughNorwegian was his first language, he learned English from neighbors and at school. His parents also learned to speak English fluently, though they continued to read predominantly Norwegian literature with and around their family on the farmstead. The family farm eventually grew more prosperous, allowing Veblen's parents to provide their children with formal education. Unlike most immigrant children of the time, Veblen and all of his siblings received training in lower schools and went on to receive higher education at nearbyCarleton College. Veblen's sister, Emily, was reputedly the first daughter of Norwegian immigrants to graduate from an American college.[5] The eldest Veblen child, Andrew Veblen, ultimately became a professor of physics atThe State University of Iowa and the father of one of America's leading mathematicians,Oswald Veblen ofPrinceton University.[6][2]
Several commentators saw Veblen's ethnic-Norwegian background and his relative "isolation from American society" inMinnesota as essential to the understanding of his writings.Harvard University sociologistDavid Riesman maintained that Veblen's background as a child of immigrants meant that Veblen was alienated from his parents' original culture, but that his "living in a Norwegian society within America" made him unable to "assimilate and accept the available forms ofAmericanism" completely.[7] According toStanford University historianGeorge M. Fredrickson (1959), the "Norwegian society" that Veblen lived in (Minnesota) was so "isolated" that when he left it "he was, in a sense, emigrating to America."[8]
At age 17, in 1874, Veblen was sent to attend nearby Carleton College inNorthfield, Minnesota. Early in his schooling he demonstrated both the bitterness and the sense of humor that would characterize his later works.[9] Veblen studied economics and philosophy under the guidance of the youngJohn Bates Clark (1847–1938), who went on to become a leader in the new field ofneoclassical economics. Clark influenced Veblen greatly, and as Clark initiated him into the formal study of economics, Veblen came to recognize the nature and limitations of hypothetical economics that would begin to shape his theories. Veblen later developed an interest in the social sciences, taking courses within the fields of philosophy,natural history, andclassical philology. Within the realm of philosophy, the works ofHerbert Spencer (1820–1903) were of greatest interest to him, inspiring several preconceptions of socio-economics. In contrast, his studies in natural history and classical philology shaped his formal use of the disciplines of science and language respectively.[10]
After Veblen graduated from Carleton in 1880, he traveled east to study philosophy atJohns Hopkins University. While at Johns Hopkins he studied underCharles Sanders Peirce[11] (1839–1914). When he failed to obtain a scholarship there he moved on toYale University, where he found economic support for his studies, obtaining a Doctor of Philosophy in 1884, with a major in philosophy and a minor in social studies. Hisdissertation was titled "Ethical Grounds of a Doctrine of Retribution." At Yale, he studied under renowned academics such as philosopherNoah Porter (1811–1892) and sociologistWilliam Graham Sumner[12] (1840–1910).
The two primary relationships that Veblen had were with his two wives. Despite a reputation to the contrary, there is little evidence that he had sexual liaisons with other women.[13]
During his time at Carleton College, Veblen met his first wife, Ellen Rolfe, the niece of the college president. They married in 1888. While some scholars have blamed alleged womanizing tendencies for the couple's numerous separations and eventual divorce in 1911, others have speculated that the relationship's demise was rooted in Ellen's inability to bear children. Following her death in 1926, it was revealed that she had asked for her autopsy to be sent to Veblen, her ex-husband. The autopsy showed that Ellen's reproductive organs had not developed normally, and she had been unable to bear children.[14] A book written by Veblen's stepdaughter asserted that "this explained her disinterest in a normal wifely relationship with Thorstein" and that he "treated her more like a sister, a loving sister, than a wife".[15]
Veblen married Ann Bradley Bevans, a former student, in 1914 and became stepfather to her two daughters, Becky and Ann. For the most part, it appears that they had a happy marriage. Ann was described by her daughter as asuffragette, asocialist, and a staunch advocate ofunions andworkers' rights. A year after he married Ann, they were expecting a child together, but the pregnancy ended in a miscarriage. Veblen never had any children of his own.[16]
After his wife Ann's premature death in 1920, Veblen became active in the care of his stepdaughters. Becky went with him when he moved to California, looked after him there, and was with him at his death in August 1929.[16] Prior to his death, Veblen had earned a comparatively high salary from theNew School. Since he livedfrugally, Veblen invested his money in California raisin vineyards and the stock market. However, after returning to northern California, Veblen lost the money he had invested and lived in a house onSand Hill Road inMenlo Park (that once belonged to his first wife). Earning $500 to $600 a year from royalties and a yearly sum of $500 sent by a former Chicago student,[10] he lived there until his death in 1929.
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 hisdissertation research on "Ethical Grounds of a Doctrine of Retribution" (1884) was considered undesirable. However, this possibility can no longer be meaningfully evaluated because Veblen's dissertation has been missing from Yale since 1935.[17] Apparently the only scholar who ever studied the dissertation wasJoseph Dorfman, for his 1934 bookThorstein Veblen and His America. Dorfman says only that the dissertation, advised by evolutionary sociologistWilliam Graham Sumner, studies such evolutionary thought as that ofHerbert Spencer, as well as themoral philosophy ofImmanuel Kant.[18] Also in 1884, Veblen wrote the first English-language study of Kant's third Critique, his 'Kant'sCritique of Judgment' published in the July 1884 issue of theJournal of Speculative Philosophy.[19] 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.[20] 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.[21] It is suspected that these difficulties in beginning his academic career later inspired portions of his bookThe 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.[22]
In 1891, Veblen left the farm to return to graduate school to study economics atCornell University under the guidance of economics professorJames Laurence Laughlin. With the help of Professor Laughlin, who was moving to theUniversity of Chicago, Veblen became a fellow at that university in 1892. Throughout his stay, he did much of the editorial work associated with theJournal 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 theAmerican 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.[12]
In 1899, Veblen published his first and best-known book, titledThe 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.[20]
Veblen's students at Chicago considered his teaching "dreadful".[9] 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.[9] 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.[23] One story claims that he was fired from Stanford afterJane Stanford sent him a telegram fromParis, having disapproved of Veblen's support of Chinese workers in California.[24] (The fact that Jane Stanford was already dead by 1905, while Veblen appointed in 1906,[25] casts doubt on this story.)
With the help ofHerbert J. Davenport, a friend who was the head of the economics department at theUniversity 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 dislikedColumbia, Missouri, the town where the university was located.[26] 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). AfterWorld War I began, Veblen publishedImperial Germany and the Industrial Revolution (1915). He considered warfare a threat to economic productivity and contrasted the authoritarian politics ofGermany with the democratic tradition ofBritain, noting that industrialization in Germany had not produced a progressive political culture.[27]
By 1917, Veblen moved toWashington, D.C. to work with a group that had been commissioned byPresidentWoodrow Wilson to analyze possible peace settlements for World War I, culminating in his bookAn Inquiry into the Nature of Peace and the Terms of Its Perpetuation (1917).[27][28] This marked a series of distinct changes in his career path.[29] Following that, Veblen worked for theUnited States Food Administration for a period of time. Shortly thereafter, Veblen moved toNew 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.[10]
In the meantime, Veblen had made contacts with several other academics, such asCharles A. Beard,James Harvey Robinson, andJohn Dewey. The group of university professors and intellectuals eventually foundedThe New School for Social Research. Known today asThe New School, in 1919 it emerged fromAmerican modernism,progressivism, and thedemocratic 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".[30] From 1919 to 1926, Veblen continued to write and maintain a role in The New School's development. During this time, he wroteThe Engineers and the Price System.[31] In it, Veblen proposed a soviet of engineers.[32] According to Yngve Ramstad,[33] the view that engineers, not workers, would overthrow capitalism was a "novel view". Veblen invitedGuido 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; andHoward Scott. Cooke and Gantt were followers ofFrederick Winslow Taylor'sscientific management theory. Scott, who listed Veblen as being on the temporary organizing committee of theTechnical Alliance, perhaps without consulting Veblen or other listed members, later helped found thetechnocracy movement.[34]
Americanpragmatism distrusted the notion of the absolute, and instead recognized the notion offree will. Rather than God's divine intervention taking control of the happenings of the universe, pragmatism believed that people, using their free will, shape the institutions of society. Veblen also recognized this as an element of causes and effects, upon which he based many of his theories. This pragmatist belief was pertinent to the shaping of Veblen's critique of natural law and the establishment of hisevolutionary economics, which recognized the purpose of man throughout.[35] The skepticism of theGerman Historical School regardinglaissez-faire economics was also adopted by Veblen.[36]
From 1896 to 1926, he spent summers at his study cabin onWashington Island in Wisconsin.[37] On the island he learnedIcelandic, which allowed him to write articles accepted by an Icelandic newspaper[38] and translate theLaxdæla saga into English.[39]
Thorstein Veblen laid the foundation for the perspective ofinstitutional economics with his criticism of traditional static economic theory.[40] As much as Veblen was an economist, he was also a sociologist who rejected his contemporaries who looked at the economy as an autonomous, stable, and static entity. Veblen disagreed with his peers, as he strongly believed that the economy was significantly embedded in social institutions. Rather than separating economics from the social sciences, Veblen viewed the relationships between the economy and social and cultural phenomena. Generally speaking, the study of institutional economics viewed economic institutions as the broader process of cultural development. While economic institutionalism never transformed into a major school of economic thought, it allowed economists to explore economic problems from a perspective that incorporated social and cultural phenomena. It also allowed economists to view the economy as an evolving entity ofbounded rationale.[41]
Pecuniary emulation refers to the tendency of individuals to compete through the display of wealth and status symbols, rather than through productive or useful activities. Colloquially known asKeeping Up with the Joneses, this can take the form of luxury goods and services or the adoption of a luxury lifestyle. InThe Theory of the Leisure Class, Veblen argues how emulation is at the basis of ownership.[42] He says that individuals wish to emulate others, especially if they are of a higher social or pecuniary standing, so they initially begin acquiring the luxury goods that others have acquired. Eventually, the act of conspicuous consumption becomes the symbol of status, rather than the individual. This pecuniary emulation drives consumers to spend more on displays of wealth and status symbols, as opposed to more useful commodities. This cycle of constant emulation promotes materialism, demotes other forms of fulfillment, and negatively impacts the consumer's decision-making process within the market.
In his most famous work,The Theory of the Leisure Class, Veblen writes critically of theleisure class for its role in fostering wastefulconsumption, or conspicuous waste.[40] In this first work Veblen coined the termconspicuous consumption,[43] which he defined as spending more money on goods than they are worth.
The term originated during theSecond Industrial Revolution when anouveau riche social class emerged as a result of the accumulation of capital wealth. He explains that members of the leisure class, often associated with business, are those who also engage in conspicuous consumption to impress the rest of society through the manifestation of their social power and prestige, be it real or perceived. In other words, social status, Veblen explained, becomes earned and displayed by patterns of consumption rather than what the individual makes financially.[44] Subsequently, people in other social classes are influenced by this behavior and, as Veblen argued, strive to emulate the leisure class. What results from this behavior, is a society characterized by the waste of time and money. Unlike other sociological works of the time,The Theory of the Leisure Class focused on consumption, rather than production.[45]
Conspicuous leisure, or the non-productive use of time for the sake of displayingsocial status, is used by Veblen as the primary indicator of theleisure class. To engage in conspicuous leisure is to openly display one's wealth and status, as productive work signified the absence of pecuniary strength and was seen as a mark of weakness. As the leisure class increased their exemption from productive work, that very exemption became honorific and actual participation in productive work became a sign of inferiority. Conspicuous leisure worked very well to designate social status in rural areas, but urbanization made it so that conspicuous leisure was no longer a sufficient means to displaypecuniary strength. Urban life requires more obvious displays of status, wealth, and power, which is where conspicuous consumption becomes prominent.[46]
InThe Theory of the Leisure Class, Veblen writes critically ofconspicuous consumption and its function in social-classconsumerism andsocial stratification.[41] Reflecting historically, he traces said economic behaviors back to the beginnings of thedivision of labor, or during tribal times. Upon the start of a division of labor,high-status individuals within the community practiced hunting and war, notably less labor-intensive and less economically productive work. Low-status individuals, on the other hand, practiced activities recognized as more economically productive and more labor-intensive, such as farming and cooking.[47] High-status individuals, as Veblen explains, could instead afford to live their livesleisurely (hence their title as theleisure class), engaging insymbolic economic participation, rather than practical economic participation. These individuals could engage in conspicuous leisure for extended periods of time, simply following pursuits that evoked a higher social status. Rather than participating in conspicuous consumption, the leisure class lived lives of conspicuous leisure as a marker of high status.[48] The leisure class protected and reproduced their social status and control within the tribe through, for example, their participation in war-time activities, which while they were rarely needed, still rendered their lower social class counterparts dependent upon them.[49] During modern industrial times, Veblen described the leisure class as those exempt from industrial labor. Instead, he explains, the leisure class participated in intellectual or artistic endeavors to display their freedom from the economic need to participate in economically productive manual labor. In essence, not having to perform labor-intensive activities did not mark higher social status, but rather, higher social status meant that one would not have to perform such duties.[50]
Veblen expanded uponAdam Smith'sassessment of the rich, stating that "[t]he leisure class used charitable activities as one of the ultimate benchmarks of the highest standard of living."[51] Veblen insinuates that the way to convince those who have money to share is to have them receive something in return.Behavioral economics also reveals thatrewards andincentives are very important aspects of every-daydecision making. When the rich shift their mindset from feeling as though they are forced to give their hard-earned money to feeling pride and honor from giving to charitable organizations there is benefit for every party involved. InThe Theory of the Leisure Class (1899), Veblen referred to communities without a leisure class as "non-predatory communities," and stated that "[t]he accumulation of wealth at the upper end of thepecuniary scale implies privation at the lower end of the scale." Veblen believed that inequality was natural, and that it gave housewives something to focus their energy on. The members of the leisure class planning events and parties did not actually help anyone in the long run, according to Veblen.[51]
The central problem for Veblen was the friction between "business" and "industry".
Veblen identifiedbusiness as the owners and leaders whose primary goal was the profits of their companies but who, in an effort to keep profits high, often made efforts to limit production. By obstructing the operation of the industrial system in that way, "business" negatively affected society as a whole (through higher rates of unemployment, for example). With that said, Veblen identified business leaders as the source of many problems in society, which he felt should be led by people such as engineers, who understood theindustrial system and its operation, while also having an interest in the general welfare of society at large.[52]
In sociology,trained incapacity is "that state of affairs in which one's abilities function as inadequacies or blind spots."[53] It means that people's past experiences can lead to wrong decisions when circumstances change.[54]
Veblen coined this phrase in 1914, inThe Instinct of Workmanship and the Industrial Arts. EssayistKenneth Burke expanded upon the theory of trained incapacity later on, first in his bookPermanence and Change (1935) and again in two later works.[55]
Veblen and other American institutionalists were indebted to theGerman Historical School, especiallyGustav von Schmoller, for the emphasis on historical fact, theirempiricism and especially a broad, evolutionary framework of study.[56] Veblen admired Schmoller, but criticized some other leaders of the German school because of their over-reliance 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.[57]
Veblen developed a 20th-centuryevolutionary economics based uponDarwinian principles and new ideas emerging fromanthropology, sociology, andpsychology. Unlike theneoclassical economics that emerged at the same time, Veblen described economic behavior as socially determined[vague][dubious –discuss] and saw economic organization as a process of ongoing evolution. Veblen rejected any theory based on individual action or any theory highlighting any factor of an inner personal motivation. He considered such theories to be "unscientific". This evolution was driven by the human instincts ofemulation,predation,workmanship, parental bent, and idle curiosity. Veblen wanted economists to grasp the effects of social and cultural change on economic changes. InThe 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 termed "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. He further spoke of a "predatory phase" of culture in the sense of the predatory attitude having become the habitual spiritual attitude of the individual.[58]
Politically, Veblen was sympathetic tostate ownership. Scholars disagree about the extent to which Veblen's views are compatible withMarxism,[59]socialism, oranarchism.[60]
TheVeblenian dichotomy is a concept that Veblen first suggested inThe Theory of the Leisure Class (1899), and made fully into an analytical principle inThe Theory of Business Enterprise (1904).[61] To Veblen, institutions determine howtechnologies are used. Some institutions are more "ceremonial" than others. A project for Veblen's idealized economist is to identify institutions that are too wasteful and pursue institutional "adjustment" to make instituted uses of technology more "instrumental".[62]
Veblen defines "ceremonial" as related to the past, supportive of "tribal legends" or traditional conserving attitudes and conduct; while the "instrumental" orients itself toward the technological imperative, judging value by the ability to control future consequences.[62]
The theory suggests that, although every society depends on tools and skills to support the life process, every society also appears to have a "ceremonial" stratified structure of status that runs contrary to the needs of the "instrumental" (technological) aspects of group life.[63] The Veblen Dichotomy is still very relevant today and can be applied to thinking around digital transformation.[64]
Later in life, Veblen became suspicious of technology. In his bookThe Instinct of Workmanship, he viewed the instinctive drive to produce better technology as a blind force that was making the world less human.
Historiographical debates continue over Veblen's commissioned 1913 writings on "the blond race" and "the Aryan culture" in the context ofcultural andsocial anthropology.[65]Mendelian concepts shaped both his praise ofcultural anthropology and critique ofsocial anthropology, as well as his contrasts betweenMendelian andDarwinian ideas inantediluvian racial typologies such as "dolicho-blond" and "brachycephalic brunet."[66] Historians argue that Veblen preferredmelting pot ideas as well as his own approach tomonoculturalism andcultural evolution in cultural anthropology. Many, if not most, of these historical studies, as well as scholarly appraisals of his 1915–19 articles onJapanese industrial expansion and the distinct politics of theJews, maintain strict distinctions between Veblen's renunciation of "invidious"scientific racism and Veblen'seurocentric assumptions, if any.[67]
Veblen is regarded as one of the co-founders of the American school ofinstitutional economics, alongsideJohn R. Commons andWesley Clair Mitchell. Economists who adhere to this school organize themselves in the Association for Institutional Economics (AFIT). TheAssociation for Evolutionary Economics (AFEE) gives an annual Veblen-Commons award for work in Institutional Economics and publishes theJournal of Economic Issues. Some unaligned practitioners include theorists of the concept of "differential accumulation."[68]
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 newglobal economy.[69] In this sense some authors have recently compared theGilded Age, studied by Veblen, with the New Gilded Age and the contemporary processes ofrefeudalization, arguing for a new global leisure class and distinctive luxury consumption.[70]
Veblen has been cited in the writings offeminist economists. Veblen believed that women have no endowments[clarification needed] and that the behavior of women instead reflects thesocial norms of their time and place. Veblen theorized that women in the industrial age remained victims of their "barbarian status". That has, in hindsight, made Veblen a forerunner of modernfeminism.[71]
Veblen's work has also often been cited in American literary works. He is featured inThe Big Money byJohn Dos Passos, and mentioned inCarson McCullers'The Heart Is a Lonely Hunter andSinclair Lewis'Main Street. One of Veblen's PhD students wasGeorge W. Stocking Sr., a pioneer in the emerging field ofindustrial organization economics. Another wasCanadian academic and authorStephen Leacock, who went on to become the head of Department of Economics and Political Science atMcGill University inMontreal. The influence ofTheory of the Leisure Class can be seen in Leacock's 1914 satire,Arcadian Adventures with the Idle Rich.[72]
Veblen goods are named for him, based on his work inThe Theory of the Leisure Class.
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