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.
It will be in place, by way of illustration, to show in some detail how the economic principles so far set forth apply to everyday facts in some one direction of the life process. For this purpose no line of consumption affords a more apt illustration than expenditure on dress. It is especially the rule of the conspicuous waste of goods that finds expression in dress, although the other, related principles of pecuniary repute are also exemplified in the same contrivances. Other methods of putting one's pecuniary standing in evidence serve their end effectually, and other methods are in vogue always and everywhere; but expenditure on dress has this advantage over most other methods, that our apparel is always in evidence and affords an indication of our pecuniary standing to all observers at the first glance. It is also true that admitted expenditure for display is more obviously present, and is, perhaps, more universally practiced in the matter of dress than in any other line of consumption. No one finds difficulty in assenting to the commonplace that the greater part of the expenditure incurred by all classes for apparel is incurred for the sake of a respectable appearance rather than for the protection of the person. And probably at no other point is the sense of shabbiness so keenly felt as it is if we fall short of the standard set by social usage in this matter of dress. It is true of dress in even a higher degree than of most other items of consumption, that people will undergo a very considerable degree of privation in the comforts or the necessaries of life in order to afford what is considered a decent amount of wasteful consumption; so that it is by no means an uncommon occurrence, in an inclement climate, for people to go ill clad in order to appear well dressed. And the commercial value of the goods used for clothing in any modern community is made up to a much larger extent of the fashionableness, the reputability of the goods than of the mechanical service which they render in clothing the person of the wearer. The need of dress is eminently a "higher" or spiritual need.
"Classic" always carries this connotation of wasteful and archaic, whether it is used to denote the dead languages or the obsolete or obsolescent forms of thought and diction in the living language, or to denote other items of scholarly activity or apparatus to which it is applied with less aptness. So the archaic idiom of the English language is spoken of as "classic" English. Its use is imperative in all speaking and writing upon serious topics, and a facile use of it lends dignity to even the most commonplace and trivial string of talk. The newest form of English diction is of course never written; the sense of that leisure-class propriety which requires archaism in speech is present even in the most illiterate or sensational writers in sufficient force to prevent such a lapse. On the other hand, the highest and most conventionalized style of archaic diction is - quite characteristically - properly employed only in communication between an anthropomorphic divinity and his subjects. Midway between these extremes lies the everyday speech of leisure-class conversation and literature.
Elegant diction, whether in writing or speaking, is an effective means of reputability. It is of moment to know with some precision what is the degree of archaism conventionally required in speaking on any given topic. Usage differs appreciably from the pulpit to the market-place; the latter, as might be expected, admits the use of relatively new and effective words and turns of expression, even by fastidious persons. A discriminate avoidance of neologisms is honorific, not only because it argues that time has been wasted in acquiring the obsolescent habit of speech, but also as showing that the speaker has from infancy habitually associated with persons who have been familiar with the obsolescent idiom. It thereby goes to show his leisure-class antecedents. Great purity of speech is presumptive evidence of several successive lives spent in other than vulgarly useful occupations; although its evidence is by no means entirely conclusive to the point. As felicitous an instance of futile classicism as can well be found, outside of the Far East, is the conventional spelling of the English language. A breach of the proprieties in spelling is extremely annoying and will discredit any writer in the eyes of all persons who are possessed of a developed sense of the true and the beautiful. English orthography satisfies all the requirements of the canons of reputability under the law of conspicuous waste. It is archaic, cumbrous, and ineffective; its acquisition consumes much time and effort; failure to acquire it is easy of detection. Therefore it is the first and readiest test of reputability in learning, and conformity to its ritual is indispensable to a blameless scholastic life.
Intimately bound up with this bureaucratic officialism and accountancy, and working consistently to a similar outcome, is the predilection for "practical efficiency" - that is to say, for pecuniary success - prevalent in the American community. This predilection is a matter of settled habit, due, no doubt, to the fact that preoccupation with business interests characterizes this community in an exceptional degree, and that pecuniary habits of thought consequently rule popular thinking in a peculiarly uncritical and prescriptive fashion.
The intrusion of business principles in the universities goes to weaken and retard the pursuit of learning and therefore to defeat the ends for which a university is maintained. The result follows, primarily, from the substitution of impersonal, mechanical relations, standards and tests, in the place of personal conference, guidance, and association between teachers and students; as also from the imposition of a mechanically standardized routine upon the members of the staff, whereby any disinterested preoccupation with scholarly or scientific inquiry is thrown into the background and falls into abeyance. Few if any who are competent to speak in these premises will question that such has been the outcome.
The new order of things which now faces the Americans is an outgrowth of a period of unexampled changes. So there has arisen a situation which foots up to a new order of things; although the new order carries over much of the old order out of which it has arisen. The changes that have been going forward have not affected all parts of the scheme of life in anything like the same measure. The drive of change has not been the same, and the rate of change has not been the same, and the rate of change has therefore not been the same throughout. The driving forces of change have taken direct effect in the industrial arts, and have touched matters of law and custom only at the second remove. Habits of thought have therefore not been displaced and shifted forward to a new footing in law and morals in anything like the same measure in which men have learned to use new ways and means in industry. The principles (habits of thought) which govern knowledge and belief, law and morals, have accordingly lagged behind, as contrasted with the forward drive in industry and in the resulting workday conditions of living.