Thorstein Veblen was influenced by Herbert Spencer's ideas on social evolution. But for him human evolution took place along with the invention and use of new and increasingly more effective technologies. He said that social change in any society could be explained through the changes in the methods of doing things such as methods of dealing with the material means of life. The industrial arts or the technologies of a society determined the nature of adaptation of human beings to their natural environment. It also determined their adjustment to the social environment.
According to Thorstein Veblen man is what he does or human beings and their social organizations are dependent on their technological and economic spheres. Human thought in his view is a reflection of the way in which their community is organized. Social institutions embody the habits and customs of the people, their ways of acting and thinking in their struggle to survive in a nature. The process of social evolution reflects essentially the pattern of institutional changes. These institutional changes are themselves due to the changes in the technology of the society. In his writings Thorstein Veblen has described four main stages of evolution. Veblen has drawn a distinction between two opposed categories such as between those who make goods and those who make money, between workmanship and salesmanship. In the capitalist world there is an unresolvable opposition between business and industry, ownership and technology those who are employed in monetary employment such as business, finance etc. and those who work in the industries, the industrial workers. This distinction helped Thorstein Veblen to explain the prevailing development in American society.
It also helped him to attack the earlier conception of evolution. He did not believe that the leading industrialists and financiers in America contributed much to the production system. They were not the flowers of modern civilization. These industrialists and men of finance were parasites growing fat on the technological leadership and innovation of other men. He writes that people of the leisure class to which the industrialists, men of finance who are involved in pecuniary activities belong live by the labor of the industrial poor. They themselves make no industrial contribution and in this sense they have no progressive role to play in the process of evolution. His analysis of competitive behavior in modern capitalist society is very significant. He has analyzed the habits of thought and the ways in which social actors behave in modern industrial societies. According to him the self-esteem of people depends on the esteem accorded to them by others in the society.
In America the worth of a person is judged by the worth of others in the system. Thus there develops a vicious circle of one upmanship doing better than others. In his book The Theory of Leisure Class Veblen wrote as fast as a person makes new acquisitions and becomes accustomed to the new standard of wealth, the new standard forthwith ceases to afford appreciably greater satisfaction than the earlier standard did… the end sought by accumulation is to rank high in comparison with the rest of the community in point of pecuniary strength. It is in this context of this vicious circle of accumulation and competition with others that Veblen talks about the concept of conspicuous consumption. Related to the conspicuous consumption is the notion of conspicuous leisure and conspicuous display of high standing or position in society. These are all a means to excel one's neighbors and gain their esteem.