Thorstein Bunde Veblen (born Torsten Bunde Veblen; July 30, 1857 – August 3, 1929) was an American economist and sociologist, and leader of the institutional economics movement. Veblen is credited for the main technical principle employed by institutional economists, known as the Veblenian dichotomy. It is a distinction between what Veblen called “institutions” and “technology.” Besides his technical work, Veblen was a popular and witty critic of capitalism, as illustrated by his best-known book The Theory of the Leisure Class (1899).
Veblen is famous in the history of economic thought for combining a Darwinian evolutionary perspective with his new institutionalist approach to economic analysis. He combined sociology with economics in his masterpiece, The Theory of the Leisure Class (1899), where he argued that there was a fundamental split in society between those who make their way via exploitation and those who make their way via industry. In early barbarian society, this was the difference between the hunter and the gatherer in the tribe, but as society matured it became the difference between the landed gentry and the indentured servant. In society’s progressively modernized forms, those with the power to exploit are known as the “leisure class”, defined by a commitment to demonstrations of idleness and a lack of productive economic activity. Veblen maintains that as societies mature, conspicuous leisure gives way to “conspicuous consumption”. Both are performed to demonstrate wealth or mark social status.
While Veblen was sympathetic to state ownership of industry, he did not support labor movements of the time. Among scholars, there is little agreement regarding the extent to which Veblen’s views are compatible with Marxism, socialism, or anarchism. Veblen believed that technological developments would eventually lead to a socialist organization of economic affairs, but his views on socialism and the nature of the evolutionary process of economics differed sharply from that of Karl Marx. While Marx saw socialism as the final political precursor to communism, or the ultimate goal for civilization, and believed that the working class would be the group to establish it, Veblen saw socialism as one intermediate phase in an ongoing evolutionary process in society that would be brought about by the natural decay of the business enterprise system.
As a leading intellectual of the Progressive Era, Veblen made sweeping attacks on production for profit, and the emphasis on the wasteful role of consumption for status found within many of his works greatly influenced socialist thinkers and engineers who sought a non-Marxist critique of capitalism.(…)
By 1917, Veblen moved to Washington, D.C. to work with a group that had been commissioned by President Woodrow Wilson to analyze possible peace settlements for World War I, culminating in his book An Inquiry into the Nature of Peace and the Terms of Its Perpetuation (1917). This marked a series of distinct changes in his career path. Following that, Veblen worked for the US Food Administration for a period of time. Shortly thereafter, Veblen moved to New York City to work as an editor for a magazine, The Dial. Within the next year, the magazine shifted its orientation and he lost his editorial position.
In the meantime, Veblen had made contacts with several other academics, such as Charles A. Beard, James Harvey Robinson, and John Dewey. The group of university professors and intellectuals eventually founded the New School for Social Research (known today as The New School) in 1919 as a modern, progressive, free school where students could “seek an unbiased understanding of the existing order, its genesis, growth, and present working.” From 1919 to 1926, Veblen continued to write and maintain a role in The New School’s development. It was during this time that he wrote The Engineers and the Price System. In it, Veblen proposed a soviet of engineers. According to Yngve Ramstad, the view that engineers, not workers, would overthrow capitalism was a “novel view”. Veblen invited Guido Marx to the New School to teach and to help organize a movement of engineers, by such as Morris Cooke; Henry Laurence Gantt, who had died shortly before; and Howard Scott. Cooke and Gantt were followers of Taylor’s Scientific Management. Scott, who listed Veblen as on the temporary organizing committee of the Technical Alliance, perhaps without consulting Veblen or other listed members, later helped found the Technocracy movement. Veblen had a penchant for socialism and believed that technological developments would eventually lead toward a socialistic organization of economic affairs. However, his views on socialism and the nature of the evolutionary process of economics differed sharply from that of Karl Marx; while Marx saw socialism as the final political precursor to communism, the ultimate goal for civilization, and saw the working class as the group that would establish it, Veblen saw socialism as one intermediate phase in an ongoing evolutionary process in society that would be brought about by the natural decay of the business enterprise system and by the inventiveness of engineers. (…)
Source: Thorstein Veblen. Wikipedia. Web. 09 Nov 2014.
Photo: Thorstein Veblen. Wikipedia. Web. 09 Nov 2014.