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Thorstein Veblen Notes

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This is an extract of our Thorstein Veblen document, which we sell as part of our International Political Economy Notes collection written by the top tier of University Of Warwick students.

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*Cross-reference - PO230 Adam Smith; Karl Marx

THORSTEIN VEBLEN: CONSUMPTION AND THE LEISURE CLASS
QUESTIONS

1. What does Veblen mean when he refers to 'predatory instincts' and 'predatory culture'?

2. What was Veblen's critique of the 'business logic'? [2017]
What is the basis of Veblen's critique of 'business logic', and how does this relate to his account of social change?

3. What is the relevance of Veblen's account of status-oriented consumption to our understanding of behaviour in the contemporary international political economy?

4. To what extent does Veblen provide a convincing alternative to neoclassical political economy? [2016]

BACKGROUND

Norwegian-American 'economist' Thorstein Veblen was a heterodox observer of modern capitalism. While educated in the late nineteenth-century iteration of neoclassical economics, Veblen was more drawn to the irrationality of what he observed than the optimizing rationality postulated by his predecessors.

In place of the prettified Marginalist depiction of homo economicus ('a homogenous globule of desire of happiness'),
Veblen sought to establish an evolutionary economics concerned with non-teleological processes of cumulative change and causation; that drew from anthropology, sociology, psychology and Darwinian principles. Economic organization is a dynamic process whereby changing material circumstances of life (as a result of technology) lead to changes in 'habits of thought', e.g. predation, emulation, curiosity. Each generation experiences the economy anew and constructs their identity accordingly.
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'The economic life history of the individual is a cumulative process of adaptation of means to ends that cumulatively change as the process goes on, both the agent and his environment being at any point the outcome of the last process.'

THE LEISURE CLASS & 'CONSPICUOUS CONSUMPTION'

Written during a massive industrial boom in America, The Theory of the Leisure Class (1899) presents a critique of
'conspicuous waste' borne from excessive and unnecessary indulgence in luxury goods, which frustrated the prime function of an economy: serviceability. That is, 'the ongoing ability of an economy to produce goods and services required for the health of the evolving community' [Dowd]
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His argument echoes the Calvinist ethics of parsimony, frugality and conservation.

'With the growth of settled industry, opportunities for industrial aggression and the accumulation of property increase in scope and availability. The possession of wealth, which was at the outset valued simply bas evidence of efficiency,
becomes, in popular apprehension, itself intrinsically honorable and confers honor to its possessor... Relative success,
tested by an invidious pecuniary comparison with other men, becomes the conventional end of action'.

Members of the leisure class were 'self-anointed arbiters of taste' [Watson], whose intentional displays of flamboyance and idleness (i.e. non-engagement in any kind of productive or socially beneficial work) served as signals/emblems of social status founded on their unique ability to break the link between consumption and work. In short, they consumed
'conspicuously' for the sole purpose of flaunting discretionary economic power rooted in the economic disempowerment of others.
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'Leisure class activities were a manifestation of the social dysfunctionality of private ownership within what he called 'the predatory phase of culture'' [Watson]
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Subjectivity is not construed based on some abstract economy, but always in relation to the self-consciousness consumption of specific brands or 'Veblen goods' like vintage wines, designer clothes, etc.

Pecuniary emulation - the tendency of lower class individuals to conspicuously consume or imitate leisure class spending habits in order to appear 'upper class'.

BUSINESS VS. INDUSTRY
Veblen imagined history as a great dialectic between two instincts:

1. The predatory instinct (or 'sportsmanship') characterized by animism, class distinctions and ceremonial observances;

2. The creative instinct (or 'workmanship') characterized by thrift, integrity and an innate desire to pursue species continuity efficiently.

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