Thorstein Veblen Research Paper

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Thorstein Bunde Veblen, an economist and sociologist (social critic and social and cultural theorist), was born to a Norwegian immigrant couple and grew up in rural Minnesota. He attended Yale University for graduate work in philosophy, where he met the sociologist William Graham Sumner (1840-1910). Upon graduation Veblen was not able to find academic employment. He eventually went to Cornell University to study economics, then taught at the University of Chicago (1891), later moving to Stanford University (1906), the University of Missouri (1911), and the New School for Social Research (1919). Veblen’s troubles with university administrations stemmed from his disregard for the norms of dress for “proper professors,” his uncommon living conditions (he lived in a shack of his own construction at one point), his classroom presentations (he often spoke softly in monotone or displayed unorthodox behavior), and his unconcealed extramarital affairs. At one point in his career he taught a class entirely in the Icelandic language to make the point that modern education was useless. Veblen saw himself as outside both Norwegian and American cultures and specifically asked those who knew him not to write his biography after his death.

Veblen posited certain human instinctual drives (mediated by cultural norms) that allow for technological and social advance, social organization, and social evolution: the instinct of workmanship, which is the most productive instinct for well-being, being an underlying creative impulse to manipulate the world with productive labor; the instinct of parenting, which leads to a concern for the well-being of others and an identification with community; and the instinct of idle curiosity, which leads to the development of knowledge. His use of the word instinct does not correspond to standard understandings from biology. Rather, he used instincts as socially refracted modifications of desire (Veblen 1914).


Influenced by Darwin’s theory of evolution, Veblen was interested in the historical and evolutionary development of society and argued that humans interpret the world using categories based in biographic and historically shaped “habits of the mind,” which in turn are the basis for cultural norms passed on through socialization. Activities formed around these norms Veblen called “institutions,” with changes in productive activity leading to changes in society (Veblen 1914).

Veblen formulated a scale of three evolutionary stages of society based on changes in material forms of production: “savagery” (a peaceable, isolated, and stable society); “barbarianism” (a warlike and conquest-oriented society, hierarchical and dominated by religion, with distinct predatory and industrious classes and a surplus of wealth); and “civilization” (a modern, economically developed society that is rational and instrumental, with machine technology, mass production, and a high division of labor). For Veblen, the business class in modern society is “predatory” in that its livelihood is based on the acquisition of personal wealth and competitive capitalist profit making (Veblen 1914). In other words, Veblen labeled modernity as a form of latter-day barbarism.

Veblen is most famous for his book The Theory of the Leisure Class (1899), which some view as a satire of American elite society but others interpret as a “coded” social criticism that was a product of his marginal social status (Riesman 1995). In either case, it establishes Veblen’s commitment to the idea that culture shapes economics, and as opposite from Marxist-derived, where Marx thought economics shaped society, it is an alternate analysis of society based on an understanding of production and consumption, material life, and economic stratification. In it Veblen shows the social and cultural causes and effects of economic changes (or economic evolution) and includes class, gender, and ethnicity in his economic analysis. He uses a materialistic approach in that he analyzes the changes in habit of productive activity.

Veblen’s social analysis draws a distinction between two classes of people. The first, the privileged, elite class of businesspeople and captains of industry, survive through the parasitic exploitation of the productive class and engage in pecuniary activities that detract from the further evolution of society. This is his critique of capitalism, which includes an attack on industrialists he labeled as “robber barons.” Veblen viewed this class as militant and predatory because its members do not engage in productive work; instead, they live off of the innovations of other people. The second class, made up of industrious workers, engineers, and inventors, produces both the wealth and useful goods for society. This class is focused on the well-being of society as a whole and includes women. Veblen tended to associate predatory culture with patriarchy and peaceful, productive culture with women—in this sense, David Riesman regards Veblen as an early feminist. In a capitalistic society within an economic price system, individuals are rewarded not for creative entrepreneurship but for ideals of competition, which for Veblen leads to “sabotage” rather than the advancement of the ideals of production (Veblen 1921). Hence Veblen critiques modernity as latter-day barbarism because of the wastefulness of capitalistic production (Veblen 1904).

For Veblen, competition exists within society due to individuals’ fear of loss of self-esteem. Patterns of consumption and conduct are seen as having symbolic significance and the latent function of enhancing status—Robert K. Merton (1910-2003) drew upon Veblen when writing about manifest and latent functions (Merton 1957). Veblen provides a theory about how individuals symbolize their own social status in the struggle for competitive advantage. Heightened self-evaluation comes with conspicuous consumption, conspicuous leisure, conspicuous waste, and conspicuous display of symbols that indicate high status, all of which are used to communicate social position and improve social standing. Conspicuous leisure indicates elite status and must be expensive because it is a symbolic message that one is above laboring. Conspicuous consumption and waste, demonstrated by the socially visible consumption and display of expensive items, fashion, exotic pets, and so on, also sends the message that one does not participate in productive labor; thus the more wasteful a person is, the more prestige he or she has. Lower-status groups emulate higher-status practices in an attempt to increase their own status, and Veblen calls these habits of competitive display and consumerism wasteful.

Veblen argued that women are exploited by men through vicarious conspicuous consumption, waste, and leisure; that is, the conspicuous activity is performed by the female to benefit the status of the male. Ideals of feminine beauty (e.g., frailty, weakness, and paleness, indicating inability to labor), certain restrictive fashions that prevent laboring, and the removal of women from socially visible, productive labor enhance the status of the male and the good name of the household and its master.


In The Theory of Business Enterprise (1904) Veblen gives an account of the business enterprises of the 1900s, with a theoretical analysis of the large-scale corporation and the institutions of U.S. capitalism. This analysis highlights the associations of business and industry, the making of money and the making of goods, ownership and technology, pecuniary and industrial employment, and the roles of those who perform social functions versus those whose behavior leads to waste. Veblen highlights the individual businessperson, the powers he or she holds and what he or she can accomplish with those powers, and his or her effect on the economic and social community as a whole. Veblen looks at the world community as it enters into the industrial age, which is dominated by what he calls the “machine process,” and shows the importance of machines and their relation to business enterprise. This discussion is important for modernization theory. Interestingly, The Theory of Business Enterprise links stock market valuation to aggregate investment in the economy, prefiguring James Tobin’s Q model.

In Absentee Ownership (1923) Veblen attempted to explain U.S. business after World War I (1914-1918) and before the Great Depression, providing a theoretical analysis of absentee ownership and credit and the economic circumstances associated with economic growth and change through the late nineteenth century. He discussed the rise and fall of the captains of industry and the notion of sabotage associated with entrepreneurs.

Finally, in his essays on education Veblen argues that universities, colleges, and even elementary schools increasingly fall under the spell of predatory habits drawn from the business world. Even in the era in which he lived, he found trends such as the increase of administrative expense over funds devoted to teaching, competition and rating among teachers based upon business models of productivity, the rivalry among universities as if they were corporations based upon the profit motive, and so on. He regarded all these trends as the opposite of what education should represent, namely, “idle curiosity”—interest in knowledge for its own sake, not for profit.

War, Peace, and Nationalism

In The Nature of Peace (1917) Veblen looked at the material conditions necessary to induce modern warfare as well as the varied meanings of patriotism within modern society. He saw militarism, nationalism, and patriotism as “predatory” in that they do not benefit the well-being of society as a whole, and he was concerned about military conflict and the patriotic exploitation of the industrious class.

In both Imperial Germany and the Industrial Revolution (1915) and The Nature of Peace (1917) Veblen developed the ideal-type of the “dynastic state” to describe Germany’s and Japan’s hierarchical organization and identification combined with the subservience of their underlying populations. This situation, he argued, results in militant aggressive nationalism and finally war; indeed, he criticized nationalism itself because it involves honor and prestige and is therefore barbaric. Veblen used a historical comparison of Germany and Great Britain before, during, and after the Industrial Revolution to show the difference in their developments due to history and context that focused on material causes as well as social-psychological states, and he claimed that when a culture industrializes more rapidly, the country will use this industrialization to produce weapons because of the honor and prestige in being warlike. Militarism is barbaric because it enforces the values of obedience and is obsessed with honor and prestige. Hence if a nation becomes militaristic, this is a sign that it is crossing the border to barbarianism, where war is a natural outcome.

Veblen As Cultural Theorist

Veblen has been interpreted as a cultural theorist, most recently by Stjepan G. Mestrovic (2003) in his analysis of narcissism as central to understanding the unifying strand in Veblen’s approach to culture. Others have used “Veblen’s ideas in cultural theory as well. For example, Riesman integrated Veblen’s thought with his own concept of marginal differentiation by the other-directed type and the striving for status by the inner-directed type (Riesman 1953). Riesman and Jean Baudrillard are influenced by Veblen’s idea that all forms of waste must be “conspicuous,” which is to say reflected in the opinions of the mass media and the peer group. These insights led to Riesman’s concept of “fake sincerity,” performed to gain approval from others, and eventually to Baudrillard’s notion of simulacra. The doctrine of separate spheres widely used in feminist theory, the notion of public versus private, was challenged by Veblen’s connection of social spheres through consumerism and status, reflecting a cultural whole with causally linked underlying economic and social class realities (e.g., domination, production, and consumption). Thus Veblen provided an opportunity to understand culture in terms of economics and vice versa. Perceived status and hierarchical social distinctions make status comparisons and symbolic representations central to Veblen’s theorizing.

Veblen had a particular influence in the social sciences with his symbolic representation of social class and social position, use of modernization theory, and analyses of economics (production, consumption, technology, business and industry, and economic growth and change). Veblen’s influence is wide-ranging. C. Wright Mills used Veblen’s work to develop his own ideas about leisure and social status in White Collar (1956) and updated Veblen’s theory of the dominant sociopolitical elite (the predatory business class) in The Power Elite (1956). Chris Rojek incorporated Veblen’s work into leisure studies with his analysis of leisure as taking on the characteristics of work (Rojek 1994), and Theodor Adorno used Veblen when discussing the aesthetics of ostentatious display. The French postmodern Baudrillard developed his own consumption theory concerning the significance of objects and images of consumption in designating prestige, where consumption and leisure should not be understood only as pleasure but also as a ranking and classification system of status itself.


  1. Baudrillard, Jean. 1981. For a Critique of the Political Economy of the Sign. St. Louis, MO: Telos.
  2. Coser, Lewis A. [1971] 1977. Masters of Sociological Thought: Ideas in Historical and Social Context. New York: Harcourt, Brace, Jovanovich.
  3. Heilbroner, Robert L. 1955. The Worldly Philosophers. New York: Simon and Schuster.
  4. Merton, Robert K. 1957. Social Theory and Social Structure. Glencoe, IL: Free Press.
  5. Mestrovic, Stjepan G. 2003. Thorstein Veblen on Culture and Society. London: Sage.
  6. Mills, C. Wright. 1956. The Power Elite. New York: Oxford University Press.
  7. Mills, C. Wright. 1956. White Collar: The American Middle Class. New York: Oxford University Press.
  8. Mills, C. Wright. 1959. The Sociological Imagination. New York: Oxford University Press.
  9. Riesman, David. [1953] 1995. Thorstein Veblen. Introduction by Stjepan G. Mestrovic. New Brunswick, NJ: Transaction Publishers.
  10. Rojek, Chris. 1994. Decentering Leisure: Rethinking Leisure Theory. London: Sage.
  11. Veblen, Thorstein. [1899] 1994. Theory of the Leisure Class. New York: Penguin.
  12. Veblen, Thorstein. 1904. The Theory of Business Enterprise. New York: Scribner.
  13. Veblen, Thorstein. 1914. Instinct of Workmanship and the State of Industrial Arts. New York: Macmillan.
  14. Veblen, Thorstein. 1915. Imperial Germany and the Industrial Revolution. New York: Macmillan.
  15. Veblen, Thorstein. 1917. An Inquiry into the Nature of Peace and the Terms of Its Perpetuation. New York: Macmillan.
  16. Veblen, Thorstein. 1921. The Engineers and the Price System. New York: B. W. Huebsch.
  17. Veblen, Thorstein. 1923. Absentee Ownership and Business Enterprise in Recent Times. New York: B. W. Huebsch.

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