The Theory of the Leisure Class

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The Theory of the Leisure Class is a book, first published in 1899, by the American economist Thorstein Veblen while he was a professor at the University of Chicago.

Veblen claimed he wrote the book as a perceptive personal essay criticizing contemporary culture, rather than as an economics textbook. Critics claim this was an excuse for his failure to cite sources. Nonetheless, Theory of the Leisure Class is considered one of the great works of economics as well as the first detailed critique of consumerism.

Thesis

In the book, Veblen argues that economic life is driven not by notions of utility, but by social vestiges from pre-historic times. Drawing examples from his time (turn-of-the-century America) and anthropology, he held that much of today's society is a variation on early tribal life.

According to Veblen, beginning with primitive tribes, people began to adopt a division of labor along certain lines. The "higher-status" group monopolized war and hunting while farming and cooking were considered inferior work.

He argued this was due to barbarism and conquest of some tribes over others. Once conquerors took control, they relegated the more menial and labor-intensive jobs to the subjugated people, while retaining the more warlike and violent work for themselves. It did not matter that these "menial" jobs did more to support society (in Veblen's view) than the "higher" ones. Even within tribes that were initially free of conquerors or violence, Veblen argued that certain individuals, upon watching this labor division take place in other groups, began to mimic (or, in Veblen's term, "emulate") the higher-status groups.

Veblen referred to the emerging ruling class as the "leisure class." He argued that while this class did perform some work and contributed to the tribe's well-being, it did so in only a minor, peripheral, and largely symbolic manner. For example, although hunting could provide the tribe with food, it was not as productive or reliable as farming or animal domestication, and compared with the latter types of work, was relatively easier to perform. Likewise, while tribes occasionally required warriors if a conflict broke out, Veblen argued that militaristic members of the leisure class retained their position - and, with it, exemption from menial work - even during the extremely long stretches of time when there was no war, even though they were perfectly capable of contributing to the tribe's "menial" work during times of peace.

At the same time, Veblen claimed that the leisure class managed to retain its position through both direct and indirect coercion. For example, the leisure class reserved for itself the "honor" of warfare, and often prevented members of the lower classes from owning weapons or learning how to fight. At the same time, it made the rest of the tribe feel dependent on the leisure class's continued existence due to the fear of hostilities from other tribes or, as religions began to form, the hostility of imagined deities (Veblen argued that the first priests and religious leaders were members of the leisure class).

To Veblen, society never grew out of this stage; it simply adapted into different forms and expressions. For example, he noted that during the Middle Ages, only the nobility was allowed to hunt and fight wars. Likewise, in modern times, he noted that manual laborers usually make less money than white-collar workers.

Conspicuous consumption and leisure

Veblen, in this book, coined the now-common concepts of conspicuous consumption and conspicuous leisure.

He defined conspicuous consumption as the waste of money and/or resources by people to display a higher status than others. One famous example he used was the use of silver utensils at meals, even though utensils made of cheaper material worked just as well or, in some cases, better.

He defined conspicuous leisure as the waste of time by people to give themselves higher status. As examples, he noted that to be a "gentleman," a man must study such things as philosophy and the fine arts, which have no economic value in themselves.

Economic drive

Whereas neoclassical economics defines humans as rational, utility-seeking people who try to maximize their pleasure, Veblen recast them as completely irrational creatures who chase after social status without much regard to their own happiness.

He used the term "emulation" to describe these actions. For example, people attempt to mimic the more respected members of their group in order to gain more status for themselves.

As an example from modern-day life, certain brands and stores are considered more "high-class" than others, and people may shop at them, despite the fact that they cannot afford to do so, and even though cheaper alternatives would ease their financial situation and the goods available may be of equal utility.

Following this line of reasoning, Veblen also concluded that businessmen were simply the latest manifestation of the leisure class. He noted that businessmen do not produce goods and services, but simply shift them around whilst taking a profit. He thus argued that the modern businessman is no different from a barbarian, in that he uses prowess and competitive skills to make money from others, and then lives off the spoils of conquests rather than producing things himself.

Implications to society

Veblen outlined a number of consequences of this social order. To name a few:

• The subjugation of women. As women were once used as "trophies of war" by barbarians, in modern times, the housewife also served as a trophy to show off a man's success. By not allowing their wives to take outside professions, a man could show off her conspicuous leisure as proof of his status and spend money on his wife through conspicuous consumption.
• The growth of sports such as football. Veblen argued that, while sports could be advantageous to the community (The physical vigor acquired in the training for athletic games - so far as the training may be said to have this effect - is of advantage both to the individual and to the collectivity), it was merely a side effect (relation of football to physical culture is much the same as that of the bull-fight to agriculture), and that the true reason for the popularity of sports were their usefulness as means of displaying conspicuous leisure. Moreover, when Veblen spoke of the social "advantage" of sports, he claimed that it was only advantageous from a leisure-class (or barbaric) viewpoint.
• Religion was a group expression of both conspicuous leisure and consumption. A church, to Veblen, was simply a waste of building space, and the clergy a group paid to do nothing useful. Veblen himself, rather enjoyed his Sunday afternoons spending time with his non-"anthropomorphic" friends in the woods.
• Such things as manners and etiquette were nothing but practices of conspicuous leisure with no practical value.

Many of these views reflected (and excused) Veblen's own 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. (John Kenneth Galbraith, "Introduction" to the Houghton-Mifflin edition, 1973).

Use of satire, sarcasm and humor

Theory is often considered a satire on modern society. For example, this following passage is possibly the most often-quoted from his book:

A better illustration [of conspicuous leisure], or at least a more unmistakable one, is afforded by a certain king of France who was said to have lost his life in the observance of good form. In the absence of the functionary whose office it was to shift his master's seat, the king sat uncomplaining before the fire and suffered his royal person to be toasted beyond recovery. But in so doing he saved his Most Christian Majesty from menial contamination.

The book's popularity and commercial success is based largely on this satire. After William Dean Howells gave the book a rave review as a social satire, it became a bestseller.

Ironically, Veblen did not intend for Leisure to be a satire, but a serious economic analysis of contemporary America. For example, his theories on businessmen would find a more serious forum for discussion in his 1904 book, The Theory of Business Enterprise.

Nonetheless, Veblen consciously adopted a satirical style. This, combined with past works that were meant to be satire (e.g., a paper where he defended the virtues of cannibalism), often made it difficult for his contemporaries to distinguish between his serious work and his humorous work. Likewise, even in Leisure Class, Veblen uses words and definitions in an extremely sarcastic method. For example, he uses the word "evolve" to describe the leisure class's constant adaptations into different societal niches, even though he made clear in other works that he did not believe that evolution could be applied to the study of society. In the case of Leisure Class, he uses the word "evolve" in a highly sarcastic method, as he argued that the leisure class was incapable of fundamental change, and contained, in essence, the same values and outlook as tribal barbarians.

Another problem related to interpretations of Veblen - and Theory of the Leisure Class - stem from Veblen's peculiar personality and highly misanthropic view of society. As Robert Lekachman observed:

As a child Veblen was a notorious tease and an inveterate inventor of malicious nicknames. As an adult, Veblen developed this aptitude into the abusive category and the cutting analogy. In this volume [Theory of the Leisure Class] the most striking categories are four in number: Conspicuous Consumption, Vicarious Consumption, Conspicuous Leisure, and Conspicuous Waste. It is amazing what a very large proportion of social activity, higher education, devout observance, and upper-class consumer goods seemed to fit smugly into one or another of these classification. (Lekachman, "Introduction" to the Penguin edition of Theory of the Leisure Class, 1967).

This viewpoint was echoed by John Kenneth Galbraith in his own introduction to Leisure - Galbraith argued that the book was an intellectual "put-down" of society on Veblen's part. Veblen's style of writing is well adapted by the famous sociologist C. Wright Mills, on whom he had a lifelong impact.

However, in the same essay, Lekachman also suggested that Veblen may have used satire to mask the scathing implications of his theories. He argued that Veblen's theories posed a much greater threat to the status quo than those of Karl Marx ever did. Specifically, Lekachman noted that, although Marx conceded that capitalism was, dialectically-speaking, superior to earlier social arrangements (i.e., feudalism), and that it was able to produce good things, Veblen denied even this, claiming that capitalism was simply a form of primitive barbarism, and that its creations (as forms of conspicuous consumption) were fundamentally worthless.

Intellectual significance

While Veblen was an economist and published this book as a treatise on economics, most modern economists ignore him. The primary reason for this appears to be his attack on the rational expectations theories that continue to dominate the discipline. Only in recent years, with the rise of such theories as butterfly economics, is Veblen being given serious consideration by economists.

Within the field of sociology, in contrast, Veblen was quickly picked up and integrated into their work. The classic Middletown studies made much use of Veblen's theories. More to the point, these and many other sociological studies supplied empirical evidence that confirmed Veblen's theories. In the Middletown studies, for example, researchers learned that lower-class families were willing to go without basic necessities such as food or new clothes to maintain a certain level of conspicuous consumption.

The concept of conspicuous consumption has been carried forward to this day, and is often used to criticize advertising and to explain why poorer classes have been unable to advance economically. His views on the uselessness of "businessmen," while usually discarded, have been adopted in modified form by none other than Warren Buffett, who has harshly criticized the growth of practices such as day trading or arbitrage, which makes money solely through abstract means. However, the technocratic society predicted by Veblen in later books has not come to pass.

Criticism

While few observers deny the practice of emulation and conspicuous consumption, there is considerable debate over which luxuries and practices can be labeled as such. Part of the problem is that Theory does not comprehensively define it. As H.L. Mencken sarcastically remarked:

Do I enjoy a decent bath because I know that John Smith cannot afford one - or because I delight in being clean? Do I admire Beethoven's Fifth Symphony because it is incomprehensible to Congressmen and Methodists - or because I genuinely love music? Do I prefer terrapin à la Maryland to fried liver because plowhands must put up with the liver - or because the terrapin is intrinsically a more charming dose? Do I prefer kissing a pretty girl to kissing a charwoman because even a janitor may kiss a charwoman - or because the pretty girl looks better, smells better and kisses better? (Mencken, "Professor Veblen," from Prejudices, First Series, 1919).

In other words, what some people define as "wastes of money", others define as "enjoyable luxuries", and these tastes often differ depending on the individual, as seen by the activities Veblen named above. For example, Mencken considered golf to be conspicuous leisure; a dedicated golf player would no doubt disagree (Mencken, Baltimore Evening Sun, Nov. 9, 1948).

Attempts to universally define conspicuous consumption are often attacked as being elitist, most notably Herbert Marcuse's suggestions (which involve a supposedly-higher-educated group being given the power to define which items are luxuries, and which aren't).

Nonetheless, there have been attempts to objectively define universal expressions of conspicuous consumption. One way is to look for so-called Veblen goods, which are defined as goods whose desirability decreases with their price and scarcity, and that this effect will be stronger in more "socially visible" goods than in goods consumed privately. Some studies (Chao & Schor, 1998, Empirical tests of status consumption: Evidence from women's cosmetics. Journal of Economic Psychology, 19, 107-131) support this conclusion. However, such studies rely on statistical analysis and as such, like the above examples, reveal only what a majority of people consider conspicuous consumption, a view that may not be shared by a minority of people.

A final criticism of the book holds that, while Veblen's theories were correct, they held true only when he wrote Theory. Robert Heilbroner, in his book The Worldly Philosophers, held this view. Although Heilbroner devotes an entire chapter to Veblen (an honor he bestowed on only a few other economists, including Adam Smith and John Maynard Keynes), he argued that while Veblen's theories and views were valid for his time (the 1890s and the Gilded Age) and his location (the United States in general, and the city of Chicago in particular), but these theories are now outdated.

Editions

A paperback edition was issued in Mineola, N.Y. by Dover Publications in 1994 with ISBN 0-486-28062-4. Although it was published in 1899, Penguin Books published it as part of its "Penguin Twentieth Century Classics" paperback series.

Editions of Theory are often distinguished by the author of the publication's introduction, the most noteworthy authors being C. Wright Mills and John Kenneth Galbraith (Houghton-Mifflin, 1973 edition).

External links

• The Theory of the Leisure Class at Project Gutenberg
• Veblenite edition of The Theory of the Leisure Class
• Thorstein Veblen's Web by Harrison Mujica-Jenkins at latephilosophers.com