The Theory of the Leisure Class
by Thorstein Veblen
1899, reprinted 1994, Dover Publications
Written by Darrell Anderson.
Thorstein Veblen was born in 1857 of Norwegian heritage, and died in 1929, just weeks before the infamous Black Tuesday stock market crash. By profession he was an economist, but in practice also was a sociologist. Historians paint Veblen as an eccentric, and certainly he was unconventional if nothing else. His intelligence and observational abilities, however, hardly can be debated.
In studying human social systems Veblen was one of the first people to consistently use Darwin’s theory of adaptation. That is, all of life is a struggle for existence, and humans are no exception to learning how to selectively adapt to their environment. Veblen applied that theory in his best known book The Theory of the Leisure Class.
Many people consider the book a satire, much in the same vein as Gulliver’s Travels. Although Veblen was capable of sharp wit and satire, this book was a socio-economic study of humanity, particularly, the phenomenon known as the leisure class.
Veblen’s writing style is objective, and throughout this book he avoids social commentary and offers only observations. In some areas where his observations might cause offense, he is careful to side step those accusations. Those efforts seem to negate the accusations of writing satire. However, the claims of satire become clear because his observations are on the mark. People do not like being told or reminded how they act. Filing claims of satire allow people to “laugh at themselves” rather than deal with the dark side of reality.
Reading Veblen’s book is a challenge and there are portions of the book that might leave a reader glassy-eyed. However, in his study Veblen introduces several concepts.
- Unlike the traditional economics profession, Veblen is one of the few people who refused to ignore the biological half of humanity. He acknowledged that humans are animals. Social systems merely provide humans a more sophisticated manner to sustain life and pursue happiness. Veblen starts his book discussing early human social systems and how certain attributes might have risen. That economists even today still ignore the biological half of humanity tends to explain why their theories fall short.
- Human social systems evolved from peaceable hunter-gatherers, to primitive savagery, to predatory barbarism, to quasi-peaceable barbarism and status. The latter stages are noted for warlike habits.
- The leisure class appears only in communities of people that are (1) predatory in nature and (2) possess an ability to overproduce in order to sustain the lives of everybody such that some members of the community can be exempt from those daily toils.
- In ancient communities, several occupations, typically tribal chiefs, warriors, and priests, were considered “honorable” professions and such people often were exempted from the daily toils of sustaining life. This is the beginning of the leisure class and discrimination by class and status. Exploitation of the working class begins because such people do not participate in the daily toils of sustaining life. Two classes appear: those who exploit and those who are exploited. The working class of people typically does not fight this transition because those people who are chiefs, warriors, and priests are much more capable of exercising their predatory instincts.
- Subsequent changes in the social structure do not eliminate this exploiting class as long as the two primary criteria are maintained. For example, the Industrial Age did not eliminate the leisure class, but only changed the habits and ways in which that class of people sustain themselves. In fact, the Industrial Age firmly entrenched the leisure class because of the dramatic rise of a monetary exchange system, and the increase in technology and tools. A monetary exchange system, technology, and tools all enhance warlike abilities.
- The lower working class of people realizes they never will be members of the leisure class. However, regardless of class, human nature remains much the same and humans prefer to produce with as little direct effort as possible. Thus, the lower class tries to emulate the leisure class. Veblen calls this characteristic pecuniary emulation. A more common phrase that describes this attribute is keeping up with the Jones.
- Once firmly established, the leisure class is well known for not sustaining their lives through direct toil. They then possess more time to pursue other activities. Veblen calls this pursuit of leisure time conspicuous leisure. The leisure class of people is recognized by how much time they spend in pursuing non-productive activities. Such activities do not contribute to sustaining life.
- To maintain this class distinction, the leisure class embraces a social system based upon ownership. Title to resources need not be established through direct toil, but merely through fiat declaration and controlling the various legal aspects of the social system. Thus, another way to recognize the leisure class is the possession of title to more resources than they need or can use.
- Because people in the working class never can be members of the leisure class, they amplify their pecuniary emulation to a point such that they allow themselves the illusion that they live similarly to the leisure class. Although never being able to accumulate wealth at the magnitude of the leisure class, some industrious people of the working class are able to establish a surplus from their toils. Such people typically are the “captains” of industry. To provide themselves the illusion of living leisurely, they consume resources beyond any level of sustainability or utility. Veblen called such acts conspicuous consumption. For example, such people do not buy inexpensive cars simply to provide transportation, they buy expensive cars in order to provide themselves status symbols. Utility is of secondary importance.
- Conspicuous consumption uses resources at a rate beyond utility, and Veblen called this resource usage conspicuous waste. Veblen did not use the word “waste” in a judgmental manner, but in a strictly observational manner. However, one of Veblen’s complaints about traditional economic theory (and that problem continues today), is economists ignore the problem of conspicuous waste.
- The Industrial Age gave rise to tremendous dependence upon a monetary exchange system, and that system all but eliminated direct wealth-for-wealth exchanges (barter and trade). The leisure class made use of that emphasis on monetary exchange by stockpiling future exchange power. This new emphasis gave rise to what Veblen called the pecuniary standard of living. Accumulating a large quantity of future exchange power is necessary to affirm status, class, and reputation. Only by stockpiling future exchange power can one participate in conspicuous consumption.
- The predatory nature of the leisure class and the desire to consume conspicuously will give rise to conflict over resources. Within social systems that conflict is a clash over various forms of property. Thus, those who attain an ability to consume and waste conspicuously will forever practice their predatory tendencies by trying to accumulate more property. Class struggles result because the leisure class controls various aspects of the social and legal system.
The latter half of Veblen’s book analyzes various aspects of the then-modern life with respect to his foundational observations.
Although written more than 100 years ago, Veblen’s treatise eerily describes humanity today. Veblen often is ignored in academic circles because of his unorthodox approach in studying various human social problems. Ignoring what this man had to say is nothing but arrogance. More importantly, Veblen’s observations were on the mark, and thus provide his survivors a valuable tool in trying to understand humanity.
According to Veblen there are two criteria that establishes a leisure class of exploitation: (1) overproduction and (2) a predatory nature. However, technology today allows for so much overproduction that that particular criteria cannot be eliminated. Thus, if humans are to provide themselves a world that is equitable for all, they must ask themselves if this overproduction is sustainable and they also must eliminate the predatory nature of their social structure. However, to eliminate the predatory nature from their social systems means there no longer would be a leisure class who lives by exploitation rather than directly by their own toil. Therein lies a clue why social systems are so difficult to change and why Veblen was and is ignored.