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.
I have always enjoyed working a lot more than getting paid or leisure.
Even when I was a kid cleaning barns and scraping up chicken droppings, I looked forward to chores, though the bad smells I could do without. And I could pass up the arthritis that my physician thinks is likely due to too much heavy work too young, my punishment for having had more fun than my share as a kid.
I regret that the likes of Gates and Bezos probably got more benefit from my work than I did. I don’t envy them, but if I had paid more attention, I might have done things that would have benefited more interesting people.
Since I retired, my wife says I work more than I did when I was being paid, but now I pay more attention to who benefits from my work. There’s some satisfaction in that, I guess, but work itself, making things, making things happen, is still the best part.
Each to his own taste.
The trouble with the ‘theory of the leisure class’ is that leisure was not a permanent mark of social superiority, but a temporary fashion. Since Veblen’s time, it has become much easier for businesses to grow rapidly from nothing, and for entrepreneurs to grow rich by their own efforts. The people on top of the heap now are not idlers with inherited wealth; those have been left far behind by self-made men like Jeff Bezos, Elon Musk, and Warren Buffett. Such men don’t have time for conspicuous consumption; they are too busy running their businesses. If they fly on private jets, it is not because private jets cost a lot of money, but because waiting on the timetables of commercial airlines wastes time that could be devoted to business. Being rich has become a Red Queen’s race.
The new ‘leisure class’ consists of the unemployed, the old, and the disabled. There is no social cachet to be gained by imitating them. Even if you do happen to inherit enough money to save you from having to work for a living, you don’t advertise the fact by not working. You work all the harder, at the highest-status occupation you can find, so that you can gain status by appearing to be indispensable.
Bill Gates has been quoted as saying he would not be leaving behind great wealth for his kids to exist in idleness but rather enough that they be able to do anything (productive) but not nothing. It remains to be seen if he can engineer that.
So far none of the great entrepreneurs have established successful entrepreneurial lineages. The closest has been Ford yet that line seems ended. Those people’s legacies are their companies (and the seedlings sprouted by their diaspora of executives), not their genes.
You work all the harder, at the highest-status occupation you can find, so that you can gain status by appearing to be indispensable.
Speak for yourself: I always wanted to be part of the idol rich – it always seemed better than working, though I had to work and did make myself indispensable enough that I was well rewarded – and never worried about status (why should I care what people think of me?). Unfortunately, I didn’t have any money when I was young and hadn’t accumulated enough until I retired, when I became one of the idle fairly well off (which I define as not rich enough for private jets but willing to pay for business class flights just for the comfort).
There is certainly no social cachet in imitating me but there are plenty of people who would happily dispense with the cachet and just have the income.
You wanted to be part of the idle rich because you wanted to spend money. It’s a common ambition, and common, when we are talking about social status in the upper crust of society, is a pejorative term. The very rich are not like you and me: they have each other to compete with. And the poor, slaving peon with only 50 billion dollars is working 25 hours a day, eight days a week to catch up with his insufferably superior neighbour who has 100 billion. Conspicuous accumulation replaces conspicuous consumption.
The cry of the modern super-rich was heard in Monty Python’s The Meaning of Life, when the executives of the Very Big Corporation fo America faced ‘the urgent realization of just how much there is still left to own.’
That’s what the Moon and Mars (and Philantropic Foundations) are for. Let the hoi polloi keep the mudball, they’ll have the stars to look down from.
(Or a reasonable facsimile, by today’s standards.)
Thorstein Veblen is one of my intellectual heroes from the days when Theory of the Leisure Class required reading for first year college students. Note that three of his important books are available on gutenberg.org. Lawns as unconsumed pasture is a concept that I think about as I observe my lawnmower obsessed neighbors and see landscaper’s trucks full of lawn-mowing equipment on suburban streets. As a farm boy wandering among intellectuals, Veblen is a welcome voice. I’ve put the Camic biography on my reading list.