From The Wall Street Journal:
Thorstein Veblen may be the most important American thinker most Americans have never heard of. A prolific economist at the turn of the 20th century, Veblen’s groundbreaking work on the mysteries of inequality earned him the admiration of his academic peers, while his searing observations about the “conspicuous consumption” and “predatory” habits of the wealthy won him an audience far beyond the ivory tower. Veblen’s epic life ended in despair—a final note urged that no biographical account or intellectual tribute ever be paid to him—and yet long after his passing, writers including John Dos Passos, Carson McCullers and John Kenneth Galbraith persistently refused to honor his dying wish.
About 40 years ago, however, Veblen fell precipitously out of fashion. To the small clique of enthusiasts who remain, he is understood as a social critic or philosopher—fine things, to be sure, but a dead-end legacy for an economist in an age in which economics still calls the tune for public policy.
And so it is that an insightful new Veblen biography comes to us from Charles Camic, a sociologist at Northwestern University who proves himself a capable guide down the tumultuous currents of late-19th-century ideas. Mr. Camic’s Veblen is an intellectual flamethrower, torching every school of thought in sight, from the classicism of Adam Smith to the communism of Karl Marx, attempting to clear the ground for a new kind of science.
Economists, Veblen argued, were doing economics all wrong. They should have been studying the development and decline of economic institutions. Instead, they were devoting themselves to empty abstractions about consumption, production and productivity that could not be verified by data or experience.
Veblen cut a new course for the discipline by composing ambitious treatises on the origin of inequality. In “The Theory of the Leisure Class” (1899) and “The Theory of Business Enterprise” (1904), he argued that the rich and the modern corporation—examples of what he vaguely defined as “institutions”—were parasitic elements that leeched wealth from more productive segments of society. The ostentatious rich, Veblen maintained, were not evidence of productive abundance but proof that modern industry was making society poorer.
Veblen made his case with the acid wit of an outsider granted ill-considered admittance to an inner sanctum. Raised by Norwegian immigrants in the hinterlands of the Midwest, Veblen wedged himself into university life in the mid-1870s, just as the academy was beginning to assume an aura of high prestige. Studying first at Carleton College, he moved on to Johns Hopkins, Yale, Cornell and the University of Chicago, impressing professors who had earned their stripes studying in the grand universities of Europe.
The children of privilege Veblen encountered in higher learning were very different from the immigrant farmers of his youth. He grew up in townships where English was a second language and, in some cases, rarely spoken at all. Though his own family and many of his neighbors did quite well, even the most prosperous farmers of Minnesota were considered backwater curiosities by the industrial elite of Baltimore and New Haven.
The true significance of “pecuniary success,” Veblen came to believe, was not its purchasing power but the social rank it conferred. For wealth to serve this ultimate hierarchical purpose, it had to be diligently displayed. And the most prestigious of all social signals was idleness. The surest mark of “good breeding,” he wrote in “The Theory of the Leisure Class,” was the performance of “a substantial and patent waste of time.” Working people, after all, had to work.
Link to the rest at The Wall Street Journal (PG apologizes for the paywall, but hasn’t figured out a way around it.)
PG believes that Veblen was the first to introduce the term, “conspicuous consumption,” in The Theory of the Leisure Class.