Thorstein Veblen introduced a fresh perspective to economic theory by considering the changing social and institutional environments and their impact on individuals. He explores the non-economic aspects of the leisure class’s social life in his examination. In his economic analysis, Veblen digs deep into the past, tracing the origins of the leisure class throughout history. He delves into unusual topics, not commonly explored in economics, such as the demand and consumption patterns of the upper classes.
Veblen analyzes the classes of society by using terms such as conspicuous consumption, pecuniary emulation, and conspicuous leisure. He focuses on the consumption patterns of the upper class because it affects the rest of society through emulation. According to Veblen, the pecuniary struggle is the force that drives cultural and societal development. Pecuniary emulation, or “keeping up with the Joneses,” occurs when we consume products not only to survive but also to imitate those who earn more than us. By employing an evolutionary analysis, Veblen demonstrates a recurring pattern that remains relevant today. For instance, he illustrates how the leisure class’s practice of conspicuous consumption, emulation, and waste has resulted in negative values in society, prioritizing “predatory” exploitation over “productive” workmanship (Bookrags.com).
Pecuniary Standard of Living: The standard of consumption honored by a community determines the pecuniary standard of living. Changing this standard is a slow process, especially when there is a wide gap between social classes and limited class mobility. The standards are influenced by conspicuous waste and workmanship, as well as predatory animus (Veblen: 105). The wider the gap between classes, the slower the process of change. Conspicuous Consumption: According to Veblen, both conspicuous leisure and conspicuous consumption involve waste. Conspicuous leisure wastes time and effort, while conspicuous consumption wastes goods. Both serve as means of displaying wealth and are often considered synonymous.
In “The Theory of the Leisure Class,” Thorsten Veblen presents two conceptions of conspicuous consumption. The first one can be seen as characterized by specific outcomes or as a function, while the second one is identified as an intention, motive, or instinct. Veblen’s notion of conspicuous consumption originated from the division of wealth, which was more easily discernible a century ago. However, this division is even more pronounced in today’s society, despite being less apparent.
Thorsten Veblen’s theory of conspicuous consumption emerged from the concept of pecuniary emulation. To be respected and admired by others, it is not enough to simply possess wealth or power. The wealth must be visible, as esteem is only given when evidence is presented. While the upper class does play a role in stimulating the obsession with consumption among the middle class, it is clear that status emulation and consumer satisfaction have become the very foundation of this social class. Conspicuous Waste Dress serves as an illustration of such extravagant expenditure.
The way people dress is always on display and reflects their financial status. Dress is primarily a means of presentation rather than protection. Often, individuals prioritize their appearance over protecting themselves from the weather, wanting to appear fashionable. Veblen discusses dress as a spiritual necessity, as individuals feel the need to conform to societal taste standards. Cheap clothing is perceived as unworthy and inferior, lacking the aesthetic quality found in expensive hand-made items.
Veblen (168) suggests that individuals should adorn themselves with costly attire to demonstrate their lack of involvement in any form of productive work. The conclusion drawn is that societal transformation stems from economic influences, with numerous changes being prompted by pecuniary pressures. The upper classes, being less susceptible to such pressures compared to other segments of society, exhibit the highest resistance to change as it disrupts their established habits and lifestyle. Nevertheless, change does transpire, and Veblen examines this phenomenon.
Veblen studied the lifestyles of the leisure class to analyze their consumption and leisure habits. He examined their characteristics, activities, and manner of dress, among other things. Through this analysis, he found that their activities and spending habits were driven by conspicuous consumption and waste, rather than functionality or usefulness. The display of status was the primary motive behind their choices. They deliberately avoided productive employment, as such activities were not deemed honorable.
This is the foundation on which society is built and economic activity operates. The concept of conspicuous consumption, coined by Veblen, is derived from Karl Marx’s theory of commodity fetishism. Both ideologies originate from the unfulfilled desires of consumers. Commodity fetishism was Marx’s equivalent of conspicuous consumption according to Veblen. In a capitalist system, those who own the means of production possess the commodities. As a result, the commodity itself does not lead to genuine awareness or reflect human qualities. When individuals are attracted to commodities, they are left feeling unsatisfied.
Additionally, Marx argues that most of our needs are created by the existence of commodities. The capitalists seek profit through the idea of the commodity, and our awareness and desire for it are shaped by advertising (Allen 2007:26). According to Marx, this creates a false consciousness, which is a misrepresentation of the dominant social relations in the consciousness of the subordinate classes. This ideology contrasts with Veblen’s concept of pecuniary emulation. In Marx’s perspective, ideology refers to the ideas through which people understand their world.
According to Marx, ideology and thought rely on one’s material circumstances, meaning that consciousness is determined by those circumstances. As Marx puts it, “The hand-mill gives you society with the feudal lord; the steam-mill with the industrial capitalist” (Marx: 1971). Veblen’s theory can be compared to Michael Foucault’s theory of “from subject to object,” which suggests that the most deceptive form of power is the power we exert over our own thoughts and emotions in the guise of acting for others (Allen 2007:530).
