Thorstein Veblen, the son of a farmer, was born in Manitowoc County, Wisconsin, on 30th July, 1857. His parents were Norwegian immigrants and he did not learn to speak English until he went to school. A brilliant student, Veblen attended Johns Hopkins University before obtaining his PhD from Yale University in 1884.
Unable to find work as a teacher, Veblen returned to the family farm. His short-term financial worries came to an end when he married the wealthy heiress, Ellen Rolfe, in 1888. He entered Cornell University in 1891 and the following year became a lecturer in the economics department at the University of Chicago. Veblen also began editing the Journal of Political Economy (1892-1905) where he pioneered the idea of economic sociology.
Veblen's first book, The Theory of the Leisure Class, was published in 1899. The book attempted to apply Darwin's theory of evolution to the modern economy. Veblen argued that the dominant class in capitalism, which he labelled as the "leisure class", pursued a life-style of "conspicuous consumption, ostentatious waste and idleness". He also upset the academic world when he claimed that higher learning was marked by "conspicuous consumption".
Veblen's next book, The Theory of Business Enterprise (1904), looked at what he believed was the incompatibility between the behaviour of the capitalist with the modern industrial process. Veblen argued that the new industrial processes impelled integration and provided lucrative opportunities for those who managed it. Veblen believed this resulted in a conflict between businessmen and engineers.
Henry Agard Wallace argued that Veblen's "books were among "the most powerful produced in the United States in this century". He arranged a meeting with Veblen and later recalled that he found him "a mousy kind of man... not a particularly attractive person." However, he was "dazzled by his brilliant mind" and was deeply influenced by his views on capitalism, nationalism and militarism. Wallace observed that the economist was one of the few men who really "knew what was going on". Wallace admitted that Veblen "had a marked effect on my economic thinking."
After being accused of marital infidelity Veblen was forced to leave the University of Chicago. He became associate professor at Stanford University until another scandal in 1909 resulted in him moving to the University of Missouri. Veblen obtained a divorce in 1914 and married his long-time friend, Anne Bradley.
Veblen's criticism of modern capitalism continued in The Instinct for Workmanship (1914). He followed this with Imperial Germany and the Industrial Revolution (1915). This book explored the economic differences between the democratic states of England and France with the autocratic Germany.
An opponent of America's entry into the First World War, in his book, An Inquiry into the Nature of Peace and the Terms of its Perpetuation (1917), he argued that war was caused mainly by the competitive demands of international capitalism. Long-term peace, he believed, would need government controls over the way the capitalist economy functioned.
As well as contributing to several literary and political journals, Veblen published several more books including Higher Learning in America (1918), The Vested Interests and the Comman Man (1919), The Place of Science in Modern Civilization (1920), The Engineers of the Price System (1921) and Absentee Ownership and Business Enterprise (1923). In his last book Veblen pointed out that business tended naturally to develop into the giant corporation and then, the separation of ownership and management.
Thorstein Veblen remained a pessimist and although a strong critic of capitalism he never embraced alternative socialist economic theories. His work was largely ignored at the time of his death on 3rd August, 1929. However, there was renewed interest Veblen's theories during the Economic Depression of the 1930s and his supporters claimed that his criticisms of capitalism had been vindicated.