Thorstein Veblen (edit name/settings)

Thorstein Bunde Veblen was an American sociologist and economist and a primary mentor, along with John R. Commons, of the institutional economics movement. Besides his technical work he was a popular and witty critic of capitalism, as shown 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, arguing there was a basic distinction between the productiveness of "industry," run by engineers, which manufactures goods, and the parasitism of "business," which exists only to make profits for a leisure class. The chief activity of the leisure class was "Conspicuous Consumption", and their economic contribution is "waste," activity that contributes nothing to productivity. The American economy was therefore made inefficient and corrupt by the businessmen, though he never made that claim explicit. Veblen believed that technological advances were the driving force behind cultural change, but, unlike many contemporaries, he refused to connect change with progress.

Although Veblen was sympathetic to state ownership of industry, he had a low opinion of workers and the labor movement and was hostile toward Marxism. As a leading intellectual of the Progressive Era, his sweeping attack on production for profit and his stress on the wasteful role of consumption for status greatly influenced socialist thinkers and engineers seeking a non-Marxist critique of capitalism. Experts complained his ideas, while brilliantly presented, were crude, gross, fuzzy, and imprecise; others complained he was a wacky eccentric. Scholars continue to debate exactly what he meant in his convoluted, ironic and satiric essays; he made heavy use of examples of primitive societies, but many examples were pure invention.

He obtained his B.A. in economics at Carleton College (1880), under John Bates Clark, a leading economist in the emerging body of thought now identified as neoclassical economics. He then undertook graduate work at Johns Hopkins University under Charles Sanders Peirce, the founder of the pragmatist school in philosophy, and subsequently received his Ph.D. in 1884 at Yale University, under the direction of William Graham Sumner, a proponent of laissez-faire economic policies. His dissertation won the John Addison Porter Prize for that year. Perhaps the most important intellectual influences on Veblen were Charles Darwin and Herbert Spencer, whose work in the last half of the 19th century sparked an enormous interest in the evolutionary perspective on human societies.

Veblen married fellow Cornellian Ellen Rolfe in 1888; it was a hateful marriage that finally ended in divorce in 1911.

Upon graduation from Yale, Veblen was unable to obtain an academic job, partly due to prejudice against Norwegians, and partly because most universities considered him insufficiently educated in Christianity — most academics at the time held divinity degrees. Veblen returned to his family farm — ostensibly to recover from malaria — and spent six years there reading voluminously. In 1891 he left the farm, to study economics as a graduate student at Cornell University under James Laurence Laughlin, where he joined the Phi Kappa Psi Fraternity and the Irving Literary Society.

In 1892, he became a professor at the newly opened University of Chicago, simultaneously serving as managing editor of the Journal of Political Economy. In 1906, he received an appointment at Stanford University, which he left, it is often written<citation needed>, because of “womanizing.” It is possible that these rumors were used as a reason to terminate the employment of a man who was widely regarded as a poor teacher and a radical critic.

Veblen reflected many of his views in his personal habits. To wit: Veblen's house was often a mess, with unmade beds and dirty dishes; his clothes were often in disarray; he was an agnostic; and he tended to be extremely blunt and rude while dealing with other people.

In 1911, Veblen joined the faculty of the University of Missouri, where he had support from Herbert Davenport, the head of the economics department. Veblen was not fond of Columbia, Missouri, but remained there through 1918. In that year, he moved to New York to begin work as an editor of The Dial, and then in 1919, along with Charles Beard, James Harvey Robinson and John Dewey, helped found the New School for Social Research (known today as The New School). From 1919 through 1926 Veblen continued to write and be involved in activities at The New School. The Engineers and the Price System was written during this period.

Veblen proposes a soviet of engineers in one chapter in The Engineers and the Price System. According to Yngve Ramstad, this work's 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 regarding socialism and the nature of the evolutionary process of economics differed sharply from that of Karl Marx; while Marx saw socialism as 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. Daniel Bell sees an affinity between Veblen and the Technocracy movement. Janet Knoedler and Anne Mayhew demonstrate the significance of Veblen's association with these engineers, while arguing that his book was more a continuation of his previous ideas than the advocacy others see in it.

In 1927 Veblen returned to the property that he still owned in Palo Alto and died there in 1929. His death came less than three months before the momentous crash of the U.S. stock market, which heralded the Great Depression.