Thorstein Veblen

Thorstein Veblen, in full Thorstein Bunde Veblen, (born July 30, 1857, Manitowoc county, Wisconsin, U.S.—died Aug. 3, 1929, near Menlo Park, California), American economist and social scientist who sought to apply an evolutionary, dynamic approach to the study of economic institutions. With The Theory of the Leisure Class (1899) he won fame in literary circles, and, in describing the life of the wealthy, he coined phrases—conspicuous consumption and pecuniary emulation—that are still widely used.

Early life

Veblen was of Norwegian descent. He did not learn English until he went to school, and all of his life he spoke it with an accent. He graduated from Carleton College in Northfield, Minnesota, in three years, proving himself a brilliant scholar and a mocking individualist given to railing at established ideas. He went on to study philosophy at Johns Hopkins and Yale universities, receiving his Ph.D. from Yale in 1884. Unable to find a teaching position, he returned to his father’s farm in Minnesota, where he spent most of the next seven years reading. “For days,” wrote one biographer, “all that one could see of him was the top of his head at the garret window.” In 1888 he married Ellen Rolfe, a member of a wealthy and influential family. Still unable to find a job, he entered Cornell University in 1891 as a graduate student. There he impressed J. Laurence Laughlin so highly that, when Laughlin was asked to head the economics department at the new University of Chicago in 1892, he took Veblen with him as a fellow in economics. Not until 1896, when Veblen was 39, did he attain the rank of instructor.

His first book, The Theory of the Leisure Class, subtitled An Economic Study of Institutions, was published in 1899. Still read today, it represents the essence of most of his thinking. Veblen sought to apply Darwin’s evolutionism to the study of modern economic life. The industrial system, he wrote, required men to be diligent, efficient, and cooperative, while those who ruled the business world were concerned with making money and displaying their wealth; their outlook was survivalist, a remnant of a predatory, barbarian past. Veblen examined with obvious relish the “modern survivals of prowess” in the amusements, fashions, sports, religion, and aesthetic tastes of the ruling class. The book caught the interest of the literary world, where it was read as satire rather than as science and thereby earned Veblen a reputation as a social critic that extended far beyond his academic horizon.

His reputation, however, did not bring him academic success. He was an indifferent teacher with only contempt for the university ritual of lecture and examination. His most famous course, “Economic Factors in Civilization,” ranged over vast fields of history, law, anthropology, and philosophy but paid little attention to orthodox economic theory. In 1904 he published The Theory of Business Enterprise, in which he expanded on his evolutionary theme of the incompatibility between the modern industrial process and the irrational means of business and finance (i.e., on the difference between making goods and making money). At Chicago Veblen attained only the rank of assistant professor, and he was forced to leave after being charged with marital infidelity. He was appointed to an associate professorship at Stanford University in 1906. After three years his personal affairs once more became an issue, and he was forced to resign again.