Thorstein Bunde Veblen

• Thorstein Veblen
• Born: July 30, 1857
• Died: August 3, 1929

Economist and social critic, was born in Cato, Wisconsin, the sixth of twelve children and the fourth son of Thomas Anderson Veblen, a carpenter and builder turned farmer, and Kari (Bunde) Veblen, a lay physician. His parents emigrated from rural Norway to the United States in 1847. In 1865 the family moved to a larger farm in Wheeling, Minnesota. Veblen grew up in tightly knit Norwegian communities in the Yankee-dominated band of settlement that stretched across the upper Midwest.

Norwegian was Veblen’s first language, and as a child he divided his school days between the Norwegian Lutheran parochial school and the English-language common school. His father was generally successful as a farmer, and he was ambitious enough and anticlerical enough to send his children to Carleton College in Northfield, Minnesota, a classical school in the New England tradition, rather than to the Lutheran college. Veblen was seventeen when he entered the preparatory division; he was graduated with a B.A. in 1880. John Bates Clark, later famous as a marginal-utility theorist, was on the faculty at the time and apparently appreciated Veblen’s talents, though few others did; he was already marked as an iconoclast and an outsider.

With the help of his older brother Andrew, he got a teaching job at Monona Academy, a Lutheran school in Madison, Wisconsin. When it closed in 1881, the brothers went to Baltimore and enrolled in the new Johns Hopkins University, Andrew to study mathematics, Thorstein to study philosophy. Within a few months Veblen transferred to Yale, where he studied philosophy with President Noah Porter and sociology with William Graham Sumner. He received his Ph.D. in philosophy in 1884 but was unable to get an academic post, so he returned to his home, where he was reluctantly supported by his family for the next four years while he read books and did occasional free-lance writing.

In 1888 Veblen married another bright loner, Ellen May Rolfe, a wealthy and well-connected young woman he had met at Carleton. They moved to her father’s farm in Stacyville, Iowa, where they worked casually in agriculture, while Veblen did some tutoring and kept up with scholarly developments in philosophy and economics.

In an attempt to begin his career anew, Veblen enrolled at Cornell University in 1891 to study economics. Two years later he followed Cornell economics professor J. Laurence Laughlin to the new University of Chicago. As a graduate fellow in the economics department, Veblen was managing editor of the Journal of Political Economy, wrote articles and reviews, and taught a course on socialism. Diffident, irreverent, and slow of speech and movement, Veblen was considered a poor teacher. It took him four years to move up to the rank of instructor.

In the heady intellectual atmosphere of the new university and of the city of Chicago, Veblen was exposed to a vibrant exchange of ideas, made extensive contacts, and indulged his penchant for exploring other disciplines, especially sociology and anthropology. Although he was a junior man at Chicago, Veblen was, because of his late start, a contemporary of more senior colleagues, such as John Dewey and Albion Small, who were engaged in a vigorous attempt to develop a philosophical outlook and a methodology that would break the dead weight of established doctrine in the social sciences and enable them to address the problems of modern society. By the late 1890s the modernist position, influenced by the evolutionary biology of Darwin and the Newtonian model of physical science, had emerged fairly clearly. The modernists saw their distinctive contribution as the legitimization, in all disciplines, of purposeful activity, and the reorientation of the disciplines toward social reform.

Veblen played a pioneering role in this redirection. In a series of articles published in the Quarterly Journal of Economics (1898-99), he effected the transformation of economics from a fatalistic, pseudo-objective science into an instrument of social control. In attempting to be scientific, Veblen wrote, classical economists had first sought to analyze economic life as a series of simple mechanical sequences of cause and effect, then had posited a force or “invisible hand” animating the sequences—either a set of natural laws, or a tendency toward equilibrium or normality, or, in the Darwinian epoch, a progressive trend that directed events toward a distant but beneficent outcome.

All these approaches, Veblen argued, are motivated by residues of the primitive fear of the unknown and the desire for certainty and simplicity, and are unsuited to the complexity of modern industrialism. Economic life is, instead, a process of “cumulative causation”—the continuous addition of bits of reality onto what already exists—and its basic material is human activity. Attempts to control economic life do not constitute interference with its “normal” course, as conservative opponents of reform maintained; they are, in fact, the very substance of economic life.

Veblen thus revealed the themes that would dominate his writing and that of his contemporaries for two generations: that there is a radical discontinuity between the past and the present; that residues from the past hinder attempts to deal realistically with modern problems; that scholars can root out these relics by exposing them to view; and that, therefore, accurate and effective scholarship is itself a form of reform. Consistent with this view was Veblen’s belief that social change is provoked by changes in technology—the means by which people accomplish tasks.

Veblen was likewise convinced that people in general are far more complex and changeable than had been assumed by the classical economists, who thought in terms of “economic man,” a rational being who is a lightning calculator of gains and losses, who pursues only gains, who seeks the most productive use of capital, and who takes account only of economic considerations in making economic decisions. In The Theory of the Leisure Class—his first and greatest book, which he began in 1895 and published, partly at his own expense, in 1899—Veblen argued that the desire for acquisition is the result of social evolution, which, like biological evolution, is imperfect, leaving residues of earlier stages to plague succeeding ones.

Society began, Veblen reasoned, in a peaceable savage state in which culture was communal and labor was shared or undifferentiated. It then passed through a series of barbarian states of which modern industrial society is the latest (and possibly the last); here useful labor is considered drudgery, culture is individualistic and predatory, and success is measured not by productivity but by displays of wastefulness (“conspicuous consumption” and “conspicuous leisure”). The gaudy materialism of the millionaires is therefore neither evidence of their natural superiority in the evolutionary struggle nor useful in economic progress, since progress requires the reinvestment of capital; it is the residue of an earlier predatory society in which the productive instinct of workmanship was forcibly subordinated.

The Theory of the Leisure Class had an immediate impact on American scholars. Orthodox economists held it up to ridicule, but radicals and reformers delighted in the brilliant satire with which Veblen demolished the moral pretensions of the captains of industry and the social institutions they created. The book’s influence was subtle and subversive over a long period of time. It has been especially popular among liberals during periods of conservative dominance, such as the 1920s, the 1950s, and the 1980s, when reformers turned to cultural criticism as an antidote to their political impotence.

A year after the book was published, Veblen was finally promoted to the rank of assistant professor. He continued to elaborate the distinction between the “industrial” and the “pecuniary” in articles, reviews, and lectures. In 1904 he published The Theory of Business Enterprise, which in the long run proved to be his most influential book in promoting specific reforms. In this work Veblen maintained that there is a fundamental incompatibility between “business” and “industry.” Whereas industry (the process of creating goods, or the “machine process”) is oriented toward productivity, business (ownership and control) is oriented toward profit; productivity must often be restricted in order to keep prices, and profits, artificially high. Those closest to the process of production—the workers and technicians—are most subject to its discipline, which promotes the salutary traits of peaceful cooperation, workmanship, achievement, and realism. Those farthest away—the owners and directors—remain in thrall to the predatory instincts of the barbarian culture and to the myths of the prescientific era. This “cultural incidence of the machine process” helps explain the polarization of politics between conservatives and the potential reform constituency. Veblen’s technological determinism also implies that the productive capacity of modern industry can be used for the benefit of society as a whole if business control of industry can be replaced by rational technical management.

Veblen’s heretical argument had a significant long-range impact through its influence on such economists as Frank W. Taussig, Wesley C. Mitchell, and a younger generation of institutional economists that included Rexford G. Tugwell, A. A. Berle, Stuart Chase, and George Soule, who moved into positions of power and influence during the New Deal years of the 1930s. The argument was particularly useful to those who favored not just regulation but publicly controlled economic and social planning without resorting to Marxian analysis or turning to the working class for salvation.

Veblen’s own career during this period of growing influence was erratic. He was irascible, aloof, and contemptuous of the hypocrisies of academic life. His extramarital affairs and frequent separations from his wife earned him the hostility of conservative officials at the University of Chicago, which pushed him out in 1906, and Stanford University (then Leland Stanford Junior University), which fired him in 1909 after three years as an associate professor. In 1911 he moved to the University of Missouri as a lecturer on annual appointments. He divorced his wife that year and in 1914 married Anne Fessenden Bradley, a divorcee with two children. She died in 1920. Veblen had no children of his own.

As his fame and notoriety increased, Veblen continued to develop his idea that economic history is a cyclic battle between obsolete institutions and the instinct for creativity and resilience. His third book, The Instinct of Workmanship and the State of the Industrial Arts (1914), argued that the fundamental human drive is to create and achieve, and that technology, the concrete expression of this drive, has been the source of human welfare in all stages of history. In Imperial Germany and the Industrial Revolution (1915), Veblen analyzed the economic, social, political, and cultural patterns obtaining in the belligerent nations of World War I, suggesting that peace is part of the instinct of workmanship, war a necessity only for the predatory leisure class. He predicted that the apparent industrial superiority of Germany would eventually disintegrate.

Three years later, Veblen said an angry farewell to academic life in The Higher Learning in America (1918). The “idle curiosity” of the scholars, he wrote, is the expression of the instinct of workmanship in intellectuals, but it is in conflict with the pecuniary interests of the businessmen who control the universities and the “captains of erudition” who run them.

After leaving Missouri in 1918, Veblen worked briefly in a minor position in the Food Administration, a war agency, and then went to New York to edit The Dial (1918-19). He served for several years (1919-26) on the faculty of the New School for Social Research, a liberal bastion created by prominent former academics. Thereafter he lived on royalties, investments, and private donations from a former student. An attempt to have him appointed president of the American Economics Association in 1924 was thwarted by conservative members.

It was during his New York period that Veblen made his only venture into the activist side of reform. A series of articles in The Dial, later published as The Engineers and the Price System (1921), had reiterated in stronger language the invidious impact of the business system in sabotaging production to maintain high prices. Veblen urged that engineers, with their professional interest in productivity, should organize a revolution, take over the economy, and run it through a “soviet of technicians.” His ideas appealed to the many mechanical engineers and efficiency experts who believed themselves capable of building a new and better society. Veblen, through several former students and disciples, had brief contacts with the leaders of this movement (known as Technocracy), but any hopes for a revolution were quickly revealed to be fantasy. He was generally as skeptical of reform movements as of everything else, calling them exercises in “pragmatic romance.”

In 1926 Veblen returned to Palo Alto, California, where he owned some property. He died there of heart disease at the age of seventy-two. Although his career has often been characterized as that of a bitter and alienated outsider, it illustrated the power of an independent mind to illuminate social problems and provoke other people to fresh thinking and new action.

In addition to the books mentioned above, Veblen wrote An Inquiry into the Nature of Peace and the Terms of Its Perpetuation (1917); The Vested Interests and the State of the Industrial Arts (1919); Absentee Ownership and Business Enterprise in Recent Times (1923); and numerous articles and essays, some of which are collected in The Place of Science in Modern Civilization (1919). There is a complete bibliography in J. Dorfman, Thorstein Veblen and His America (1934), which is also the standard biography. Two scholarly studies are J. P. Diggins, The Bard of Savagery: Thorstein Veblen and Modern Social Theory (1978), and D. Riesman, Thorstein Veblen: A Critical Interpretation (1953). Good briefer studies may be found in H. S. Commager, The American Mind (1950), Morton White, The Revolt Against Formalism (1949), and D. Aaron, Men of Good Hope (1951). A recent attempt to apply Veblen’s theories to contemporary society is J. Brooks, Showing Off in America (1981). See also The Dictionary of American Biography (1936).