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The Theory of the Leisure Class: An Economic Study of Institutions (1899), by Thorstein Veblen, is an economic treatise and detailed social critique of conspicuous consumption, as a function of social-class consumerism. It proposes that the social strata and the division of labor of the feudal period continued into the modern era. The lords of the manor employed themselves in the economically useless practices of conspicuous consumption and conspicuous leisure, while the middle and lower classes were employed in the industrial occupations that support the whole of society. Economically wasteful activities are those activities that do not contribute to the economy or to the material productivity required for the fruitful functioning of society. Veblen's analyses of business cycles and prices, and of the emergent technocratic division of labor by speciality (scientists, engineers, technologists) at the end of the 19th century proved to be accurate predictions of the nature of an industrial society.
The Theory of the Leisure Class was based on a trio of articles published in the American Journal of Sociology in 1898, and contained most of the major themes Veblen would develop in his later works. Veblen’s theories were based on and relevant to contemporary issues in the U.S., but were conceived at the starting point of American social sciences. He was influenced by writers such as Charles Darwin, Adam Smith and Herbert Spencer. His most important inspiration, however, seems to have been Karl Marx, in that Veblen argues for a materialist perspective on the formation of society, saying that the latter is shaped by its citizens' ways of procuring a livelihood. Unlike Marx, on the other hand, Veblen did not see labor, but technology and industrial arts, as the creative forces in society. His interest in production as not just a means of serving society's needs, but also a way of making a profit for the owner class, was shared by classical theorists of his day.
Veblen thought that economists of his era were too static and hedonistic in their theories, despite being an economist himself. He argued that instead of focusing solely on theoretical deductions, economists should take larger social and cultural issues into account. Whereas neoclassical economics define human beings as rational, utility-seeking agents who try to maximize their pleasure, Veblen recast people as irrational, economic creatures who pursue social status with little regard to their own happiness. He saw the rise of conspicuous consumption in the 19th century not as progress, but as influenced by the British aristocracy, and therefore un-American. The Theory of the Leisure Class was not so much a timeless theory as a result of Veblen's perception of a rapidly developing society. His opinion of the U.S. was also colored by his background as a child of Norwegian immigrants who had lived in a Norwegian community within America. Veblen’s perception of the U.S. was therefore underlined by its sharp contrasts to the immigrant community where he grew up.
Later editions of The Theory of the Leisure Class are distinguished by the author of the introduction, consolidating the Norwegian American as a pivotal place in the history of thought. Introductions were written by prominent sociologists, economists, and journalists, such as acknowledged American sociologist C. Wright Mills, best-selling author on economics John Kenneth Galbraith, economist from Harvard and MIT Stuart Chase, and Guggenheim Fellowship recipient Martha Banta. The newest edition was published as a Paperback Classic in 2001 by the Modern Library with a foreword by political scientist Alan Wolfe.
Veblen’s seminal work have been discussed frequently by several very different writers since its publication over a century ago. The contemporary reception of The Theory of the Leisure Class was mostly positive, albeit almost a bit apprehensive. He was more thoroughly criticised around two decades later, but, some argue, vindicated after the Great Depression. Since then his reviewers have mostly remained, to varying degrees, positive, arguing that Veblen’s theories must be recognized, whether we like them or not.
The publishing success of The Theory of the Leisure Class derives from Veblen's pointed sociological reportage, not as an economic treatise. This immediate success came unexpectedly, including to Veblen. Although they had no choice but to acknowledge his abilities, several of his contemporaries found him “more than a little mad,” and he became, and remained, an iconoclast. Upon its publication, one reviewer opined that the book "requires no other commendation for its scholarly performance than that which a casual reading of the work readily inspires", while the writer and critic William Dean Howells devoted two long reviews to it, and overnight the book became the vade mecum of the intelligentsia of the day. Howells favourably reviewed the book as an economic treatise and as a social satire about the American way of life, and the pursuit of prestige through the ownership of consumer goods. Howells argued that although social classes were the same anywhere, those of America had a novelty to them, since the leisure class had appeared in that country fairly recently. Yet Veblen was on the fringe of economists at the time, not necessarily rejecting their theories, but wanting to expand their viewpoint. His efforts at this endeavour failed. As an eminent sociologist told Veblen, "It fluttered the dovecotes of the East."
Throughout the twentieth century, however, reviews of the book have been mixed. About author, book, and thesis of The Theory of the Leisure Class, the American intellectual H. L. Mencken said:
Do I enjoy a decent bath because I know that John Smith cannot afford one—or because I delight in being clean? Do I admire Beethoven's Fifth Symphony because it is incomprehensible to Congressmen and Methodists—or because I genuinely love music? Do I prefer terrapin à la Maryland to fried liver, because plowhands must put up with the liver—or because the terrapin is intrinsically a more charming dose?
— Henry Louis Mencken, Professor Veblen, Prejudices, First Series, 1919.
The Doctor has made one big mistake, however. He has presupposed, in writing this book, the existence of a class with much more leisure than any class in the world ever possessed - for, has he not counted on a certain number of readers?
— Robert Charles Benchley, The Dullest Book of The Month: Dr. Thorstein Veblen Gets the Crown of Deadly Nightshade, 1919.
Whereas the field of economy took some time to accept Veblen, he quickly became influential within the field of sociology. The classic Middletown studies of 1929 made much use of Veblen's theories. These and many other sociological studies supplied empirical evidence that confirmed Veblen's theories. In the Middletown studies, for example, researchers learned that lower-class families were willing to go without necessities such as food or new clothes to maintain a certain level of conspicuous consumption.
The opinion of the book among economists turned positive again later, starting in the 1930s with a new edition being introduced in 1934, and have remained fairly positive since. In the preface of the new edition Stuart Chase wrote that the results of the Great depression had vindicated Veblen, and that The Theory of the Leisure Class had unified “the outstanding economists of the world.”
An edition was published in 1953 with a foreword by C. Wright Mills, who called Veblen “the best critic of America that America has ever produced.”
Twenty years later, J. K. Galbraith identified Thorstein Veblen as a man of his time in the introduction to the 1973 edition. According to Galbraith, Veblen reflected his own Weltanschauung in his person and in his personality: his house often was unkempt; his grooming neglected, and his clothes disheveled; he was an agnostic in an anti-intellectual and superstitious society; and he tended to curtness in dealing with people less intelligent than himself.
Many modern classical economists take issue with some of his ideas. Some recent scholars have argued for the marginalization of Veblen's theories. The primary reason for this appears to be his attack on the rational expectations theories that continue to dominate the discipline. Another reason is that the American upper classes today are overworked, and, among them, being at leisure or idle makes you irrelevant. In the year 2000 Robert Heilbroner said that, although valid for their late 19th-century time (the Gilded Age of the 1890s), the economic and sociological theories of Thorstein Veblen have limited, contemporary application, because the studies are specific to the societies of the U.S. and the city of Chicago. In recent years, with the rise of such theories as Butterfly Economics, Veblen has been given serious consideration by some economists. He has lately been recognised as a foresighted economist in that his arguments have been restated by his present-day colleagues, such as Robert Frank, who applied Veblen’s approach to economy to an analysis of the 21st century. New York Times’ Daniel Gross argued in 2009 that Veblen’s ideas could still be used to explain the idiosyncrasies of today’s upper classes, but that he was "about 90 percent wrong" in developing a theory fitting to the modern leisure class.
The concept of conspicuous consumption has lately been applied to advertising, and to explain why poorer classes have been unable to advance economically. Veblen's views on the uselessness of "businessmen", while usually discarded, have been adopted by Warren Buffett, who has criticized the growth of practices such as day trading and arbitrage which make money solely through abstract means, with no value being added.
Although it is a socio-economic treatise about economic consumption, Thorstein Veblen's language in The Theory of the Leisure Class is idiosyncratic and satirical in its presentation of the consumerist mores of modern American society, as illustrated in this quote:
A better illustration [of conspicuous leisure], or at least a more unmistakable one, is afforded by a certain King of France who was said to have lost his life in the observance of good form. In the absence of the functionary whose office it was to shift his master's seat, the King sat uncomplaining before the fire, and suffered his royal person to be toasted beyond recovery. But, in so doing, he saved his Most Christian Majesty from menial contamination.
— Thorstein Veblen, The Theory of the Leisure Class, p. 33
Veblen naturally wanted the reader to perceive him as objective. He does, however, use very few statistical or concrete facts. Veblen's reports of the business-cycle behaviour of businessmen in his later book The Theory of Business Enterprise (1904), is straightforwardly objective. Nevertheless, in the opinion of Robert Lekachman, an interpretive problem arises from the personality of Veblen, whom he considered a misanthrope; thus, in his Introduction to the 1967 Penguin edition of The Theory of the Leisure Class, he said:
As a child, Veblen was a notorious tease, and an inveterate inventor of malicious nicknames. As an adult, Veblen developed this aptitude into the abusive category and the cutting analogy. In this volume [The Theory of the Leisure Class] the most striking categories are four in number: Conspicuous Consumption, Vicarious Consumption, Conspicuous Leisure, and Conspicuous Waste. It is amazing what a very large proportion of social activity, higher education, devout observance, and upper-class consumer goods seemed to fit snugly into one, or another, of these classifications.
— Lekachman, Introduction to The Theory of the Leisure Class (1967)
That opinion was seconded by the economist John Kenneth Galbraith, in his introduction to the 1973 Houghton Mifflin edition of The Theory of the Leisure Class, wherein he proposes that the book is Veblen's intellectual put-down of American society; and that Veblen might have spoken satirically in order to soften the negative social implications of his social and economic analyses—because they are more threatening to the socio-economic status quo of American society than are the implications of the like analyses by Karl Marx. That, unlike Marx, who recognised that capitalism was superior to feudalism in providing goods and services, Veblen did not recognise that distinction, because capitalism was just a form of barbarism, and that goods and services, for conspicuous consumption, are fundamentally worthless.
The Theory of the Leisure Class proposes that economic life is driven by the vestiges of the social stratification of tribal society, rather than by social and economic utility. The supporting examples, contemporary and anthropological, propose that many economic behaviors of contemporary society (c. late 19th century) are variants of the corresponding tribal-society behaviors, when men and women practiced the division of labor according to the person's status group. Thus, the high-status people practiced hunting and war, whilst the low-status people practiced farming, cooking, et cetera; occupations that were deemed economically productive.
Such a division of labor was due to the barbarian culture of conquest, domination, and exploitation, wherein, once in control, the conquerors assigned the labor-intensive jobs to the vanquished people, and, for themselves, assumed the military profession, and other less labor-intensive work. Thus they became the elementary leisure class. In practice, it was sociologically unimportant that the low-status occupations provided greater economic support to society than did the high-status jobs of soldier, hunter, etc. Moreover, within an unconquered tribe, certain men and women of the lower classes disregarded the collective division-of-labor system, and emulated the behavior of the leisure class.
Although the leisure class did perform some useful work, and so contributed to the collective well-being of the tribe, such work tended to be minor and peripheral, functioning more as symbolic economic participation than as practical economic production. For example, although hunting could provide food for the tribe, it was less productive and less reliable than were farming and animal domestication, and easier, less labor-intensive, than the latter work. Likewise, whilst tribes required warriors for war, the members of the military stratum of the leisure class retained their high social-status and economic positions—exemption from menial, physical work—even during peace, despite being physically capable of performing labor-intensive, "menial" work that was more productive, and economically beneficial, to the collective well-being of the tribe.
Simultaneously, the leisure class retained its superior social status in the tribe by means of direct and indirect coercion; for example, the leisure class reserved for themselves the (honorable) profession of soldiering in defense of the tribe; and so withheld weapons and military skills from the lower-order social classes. Such a division of labor rendered the lower social classes dependent upon the leisure class, and so perpetuated and justified their existence for defense against enemies, natural (other tribes) and against supernatural (ghosts and gods), because the first clergy were members of the leisure class.
Hence, contemporary society did not psychologically supersede the tribal stage of the division of labor, but merely evolved different forms and expressions of said assignments of productive labor; for example, during the Middle Ages (5th to 15th centuries), only the nobility were allowed to hunt and soldier; likewise, in contemporary society, manual laborers usually are paid less than managers and professionals, whose importance to society's economic well-being (by organizing work systems, inventing machinery and methods for working, obtaining and coordinating work, etc.) is less directly productive.
Veblen argued that people emulate the more respected members of their socio-economic class in order to attain a greater status within that social group. Certain brands and retail shops are considered of a higher class than other such shops; people might buy from such businesses even when they cannot economically afford to do so, despite the utility of consumer goods of lesser brands and lower prices. Hence, businessmen were just the latest manifestation of the leisure class, because businessmen do not produce consumer goods and services, but simply shift them about the market in order to increase the profit yielded by the goods and services. The contemporary businessman, then, is no different from a barbarian, in that he uses prowess (business acumen) and competitive skills (marketing) to make increased sums of money from the conspicuous consumption of the buyers of the goods and services for sale. Then he lives off the spoils of economic conquest rather than from producing consumer goods and services, himself.
As a sociologist Thorstein Veblen outlined some consequences of a tribalistic social order that underpins contemporary consumer society:
"In order to gain and to hold the esteem of men it is not sufficient merely to possess wealth or power. The wealth or power must be put in evidence, for esteem is awarded only on evidence."
In The Theory of the Leisure Class Veblen presented the concepts of conspicuous consumption and conspicuous leisure. Conspicuous consumption is the application of money, and other resources, to display a higher social-status, e.g. the use of silver flatware at meals, although flatware made of other materials might equally serve the function of eating. Moreover, Veblen goods are consumer goods made greatly desirable by high manufacturing cost, sale price, and scarcity in the market, especially "socially visible" consumer goods, rather than goods that are consumed in private.
Conspicuous leisure is the extended length of time that a person devotes to pleasurable pursuits that grant him or her a higher social-status. For example, a gentleman of Veblen's day must study philosophy and the fine arts, which do not directly earn a living. Therefore, such intellectual activities displayed the rich person's freedom from the economic need to perform directly economically productive manual labor. In Veblen's view, higher social status derives from not having to perform manual labor, and not the other way around.
Explaining the foundation of modern society as based in barbarian ones, Veblen started out his book by introducing the leisure class and their role in community. He defined leisure and why certain men are exempt from industrial labor through belonging to the leisure class.
In the chapter on pecuniary emulation Veblen started by stating that “The emergence of a leisure class coincides with the beginning of ownership.” He based this statement on the occurrence of marriage as a form of ownership of women and evidence of prowess. Veblen also explained how the consumption of the leisure class has very little to do with comfort or subsistence, but with esteem and, through the latter, self-respect.
Through arguing that within the lower classes a reputation of efficiency is the highest form of emulation open to them, Veblen showed how labor among the leisure class is seen as a sign of weakness. He defined the characteristic feature of the Leisure Class as “exemption from useful employment” and leisure as “non-productive consumption of time.”
In chapter four Veblen presented the hypothesis that luxuries, theoretically, should be limited to the leisure class, whereas the lower classes have other, more important, things to spend their money on. Yet that is not the case, as he illustrated through the lower classes’ consumption of costly luxury goods such as intoxicating beverages and narcotics. The lower classes want to emulate the standards of life of the leisure class because those are “at the head of the social structure in point of reputability.” Veblen also presented the idea that manners are a result of non-productive consumption of time, and that lower classes emulate those manners to appear as of a higher class. The utility of conspicuous consumption and leisure lies in the element of waste.
Veblen argued that our consumption and our standard of living are habitual, which is why it is much easier to add products to our lives than to get used to not having them. After self-preservation have been achieved, Veblen wrote, “the needs of conspicuous waste” will control the output from economic or industrial improvement in society.
Chapter six addresses what makes an object a product of conspicuous consumption. “The canon of honorific waste” will have an influence on what is regarded as beautiful or worthy of the upper classes (and of emulation by the lower classes). Veblen argued that costly items, such as precious metals and stones, are more popular than cheaper ones because price can masquerade as beauty to our aesthetic sense, especially since they have very little utility except as objects of conspicuous consumption.
Through pointing out that people’s dress suggest their social class to the spectator, Veblen argued that clothing exists mostly to define the wearer, not to protect them. Clothing can also be used to indicate that the owner is not dependent on productive labor, such as a corset does by rendering it impossible for the wearer to perform physical labor. Clothing is also symbolic that a fashionable member of the leisure class can afford to buy new clothing as fashions change.
In chapter eight Veblen argued that society develops through the establishment and further developing of institutions, and that the latter are always shaped on ideas from the past. He stated that the point of the leisure class is to maintain that which to the rest of society is out of date, which is why they are opposed to changes to such a degree that conservatism has become an honorific feature.
Veblen started out chapter nine by pointing out that the existence of the leisure class influences individuals. The lower classes emulate the class directly above them, a fact which changes their habits and attitudes. He also argued that those who rids themselves of scruple and honesty will find it easier to succeed and enter into the leisure class.
By pointing out that the leisure class is not a part of the industrial community, but only benefits from it, Veblen argued that the characteristics of the leisure class are not actually contributing to society. He was of the opinion that astuteness and ferocity make up the characteristics necessary for those who want individual success, and those features are nurtured by the pecuniary culture. At the same time neither lends any use to society.
Veblen stated that the reason people gamble is that they believe in luck bringing success to the individual, but, according to the author, this is a problem for society as a whole. He argued that sport goes even further that the belief in luck, since it is related to pride, and that gambling becomes part of the display of conspicuous consumption and leisure. Thus it is performed by most strata of society.
In Chapter twelve Veblen seemed to devalue the presence of religion in society, but he stated that he merely wants to demonstrate how religious practices fit into communities, and how they are related to the pecuniary culture he has been discussing. To him, religious symbols and traditions such as the church and the mass were items of conspicuous consumption and leisure because they do not serve any physical needs, but the needs of the mind.
Veblen argued that the clergy, as well as the female members of the leisure class, become items of vicarious leisure, and for them to contribute to industry becomes morally impossible. Thus status is more important to upper class women and clergy than to the men of the same class. Women are therefore the most indicative of the economic standing of any community. How a woman spends her time becomes telling of the standing of her husband, her family, and her class in society.
In the last chapter Veblen argued that learning is to be considered as conspicuous leisure in that it does not directly contribute to society. He points out that ceremonial symbols, such as the cap and gown, were mostly used in institutions of higher education that teaches leisure-related studies, such as theology and philosophy, whereas lower, technical, educations were not celebrated to the same degree. Thus modern colleges were what Veblen called leisure-class establishments.
Filmmaker Gabriel Bologna wrote and directed a horror film called The Theory of The Leisure Class in 2001 about the disintegration of American culture. The movie starred Christopher McDonald, Tuesday Knight, and Brad Renfro. The film received awards from The New York International Independent Film and Video Festival.
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