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Posts Tagged ‘veblen

“The Intellectual Pre-eminence of Jews in Modern Europe”

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Thorstein Bunde Veblen was a Norwegian-American sociologist and economist and a founder, along with John R. Commons, of the Institutional economics movement.

He was born in Valders, Wisconsin on July 30, 1857 and died of heart disease on August 3, 1929 at the age of 72 in poverty in Menlo Park. He tried and failded to recoup his investments in the collasing raisin industry. Absentee ownership didn’t profit him. His death was less than three months before the monentous crash of the U.S. stock market, which heralded the Great Depression. 

He is one of the good economist and sociologist in the world. And he only speaks Norwegian at home and did not learn English until he was a teenager.Veblen believed that economics must not ve studied as a closed system but rather as an aspect of a culture whose customs and habits constitute that are rapidly changing.

His well known book is “The Theory of the Leisure Class” that tells about his view on American society. His major contributions are Conspicuous Consumption, Conspicuous Leisure, and Veblen Effect or good, which are all present in his book.

I agreed what he says about conspicuous consumption that:
“Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure. As wealth accumulates on his hands, his own unaided effort will not avail to sufficiently put his opulence in evidence by this method. The aid of friends and competitors is therefore brought in by resorting to the giving of valuable presents and expensive feasts and entertainments. Presents and feasts had probably another origin than that of naive ostentation, but they required their utility for this purpose very early, and they have retained that character to the present; so that their utility in this respect has now long been the substantial ground on which these usages rest.”

He says that Leisure class can live and enjoy the life with wealth. During China’ The People’s Republic, the power was from the gun but in Modern Industrial Society, the power of money reigns. I was surprised how Veblen foresees the present life and society 100 years ago. He is a brilliant man and a stubborn analyst.

Last is Veblen’s effect that is abnormal market behavior where consumers purchase the higher-priced goods whereas similar low-priced substitutes are available. It is caused either by the belief that higher price means higher quality, or by the desire for conspicuous consumption. Many companies are using the effect to their marketing strategy to earn higher profit.

If Veblen is alive in the present he will earn big money but he died with poverty on August 3, 1929.

I like this quote among his quotes because it reflects the present days.
“Conspicuous consumption of valuable goods is a means of reputability to the gentleman of leisure.”


Veblen, T (1899). The Theory of the Leisure Class: an economic study of institutions


Written by bora1105

March 16, 2009 at 10:47 PM