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Thorstein Bunde Veblen (1857 -1929) was a Norwegian-American economist and sociologist.The Theory of the Leisure Class (1899), a satiric look at American society written while he taught at the University of Chicago, is his most famous work. He coined the widely used phrases "conspicuous consumption" and "pecuniary emulation".Thorstein Veblen's career began amidst the growth of the disciplines of anthropology, sociology, and psychology. He argued that economics was inevitably shaped by culture and that no universal "human nature" could possibly be invoked to explain the variety of norms and behaviors discovered by the new science of anthropology.

One of his most important analytical contributions was what came to be known as the "ceremonial / instrumental dichotomy". Veblen saw that although every society is dependent on tools and skills to support the "life process", every society also appeared to have a stratified structure of status ("invidious distinctions") that ran contrary to the imperatives of the "instrumental" ("technological") aspects of group life. This led rise to the dichotomy: the "ceremonial" was related to the past, supporting the tribal legends; "instrumental" was oriented toward the technological imperative to judge value by the ability to control future consequences. The "Veblenian dichotomy" was a specialized variant of the "instrumental theory of value" due to John Dewey, with whom Veblen was to make contact briefly at The University of Chicago.

The Theory of the Leisure Class and The Theory of Business Enterprise together constitute an alternative construction on the neoclassical marginalist theories of consumption and production, respectively. Both are clearly founded on the application of the "Veblenian dichotomy" to cultural patterns of behavior and are therefore implicitly but unavoidably bound to a critical stance; it is not possible to read Veblen with any understanding while failing to grasp that the dichotomy is a valuational principle at its core. The ceremonial patterns of activity are not bound to just any past, but rather to the one that generated a specific set of advantages and prejudices that underly the current structure of rewards and power. Instrumental judgments create benefits according to an entirely separate criterion, and therefore are inherently subversive. This line of analysis was more fully and explicitly developed by Clarence E. Ayres of the University of Texas at Austin from the 1920s. In addition to these two books, his monograph Imperial Germany and the Industrial Revolution and the essay entitled "Why Economics is not an Evolutionary Science" have been influential in shaping the research agenda for following generations of social scientists. His ideas were also inspirational to the technocratic movement.