Thorstein Veblen is recognised as one of the most provocative economists of the late 19th century. His theories on human behaviour, the relationship between economics and culture and his critique of capitalist institutions had a profound impact on economic thinking.
Thorstein Veblen, an American economist and sociologist of Norwegian descent, stood out for bringing together economic, anthropological and sociological perspectives. His interdisciplinary approach and sharp criticism of the unbridled quest for status and excessive consumption are still applicable today, guiding reflections on social inequality and economic sustainability.
Veblen is best known for his 1899 masterpiece The Theory of the Leisure Class, in which he introduced concepts such as ‘conspicuous consumption’ and ‘conspicuous idleness’. The economist challenged orthodox economic thinking by questioning the behaviour of social classes in a capitalist system, emphasising that economics is not only a mathematical science, but also a social and cultural one.
Veblen’s recognition lies in his ability to question the idea that the market operates efficiently and that economic agents are always rational. Instead, Veblen argued that economic behaviour is influenced by cultural, psychological and social factors, a view that preceded and influenced modern behavioural economics.
‘Conspicuous consumption’
At the centre of Veblen’s work is the concept of ‘conspicuous consumption’, which describes how the wealthy classes flaunt wealth and status through lavish spending and activities. For Veblen, this was not only a way of satisfying needs, but also a mechanism for establishing social distinction. According to the economist, this behaviour contributes to perpetuating inequalities and a waste of resources, the result of economies based on appearance.
At the centre of Veblen’s work is the concept of ‘conspicuous consumption’, which describes how the wealthy classes flaunt wealth and status through lavish spending and activities
Another important contribution of the author is the idea of ‘conspicuous idleness’, which reflects the practice of avoiding work considered vulgar in order to demonstrate high social ‘status’. This notion is linked to ‘conspicuous consumption’, emphasising how the search for prestige shapes economic decisions.
The ‘idle class’
Veblen also introduced the term ‘idle class’ to describe privileged groups who, by controlling resources without directly participating in production, play a disproportionate role in the economy. The economist and sociologist criticised the way in which economic institutions perpetuated such dynamics, which were often inefficient and socially damaging.
Instinct and innovation
Veblen challenged the view that individuals make exclusively rational economic decisions. He argued that basic instincts – such as those of labour and emulation – influence human choices. At the same time, he saw technology as a transformative force capable of changing institutions and social behaviour.
Applicability of Veblen’s theories
Although many of Veblen’s ideas were developed more than a century ago, their relevance persists in various areas, including:
– Consumer and marketing studies – companies and market analysts use the notion of conspicuous consumption to understand how the desire for status shapes consumer behaviour. The trade in luxury products, such as sports cars and fashion from prestigious brands, is often based on this logic.
– Sustainability and the green economy – Veblen’s critique of waste is applicable to modern discussions about sustainable consumption. Movements in favour of the circular economy and reducing overconsumption are reflected in his work.
– Behavioural economics – contemporary research, such as that by Daniel Kahneman and Richard Thaler, echoes Veblen’s critique of economic rationality. Studies analysing cognitive biases and irrational decisions are in line with his emphasis on the influence of social and cultural factors.
– Analysing inequalities – academics who study inequalities, such as Thomas Piketty, consider ‘Veblenian’ concepts when exploring how capital and wealth are used to perpetuate social hierarchies.
– Criticising capitalism – movements that question corporate practices and the concentration of economic power are often inspired by Veblen’s criticisms of economic institutions.
Ostentation of wealth or focus in Veblen studies
Criticisms of Veblen’s thought
Although recognised as relevant, some of Veblen’s ideas have been considered vague or excessively pessimistic. The vision of classes driven exclusively by selfish motivations has been accused of underestimating the complexity of human behaviour. In addition, critics point out that Veblen failed to offer practical solutions to the problems he diagnosed.
Others question his interdisciplinary approach, arguing that it diluted the theoretical rigour typical of conventional economics. His ironic writing also made it difficult to immediately popularise the ideas he defended.
Thorstein Veblen’s lasting legacy
Thorstein Veblen remains a reference figure for economists, sociologists and scholars from various disciplines. His critique of consumer society, inequality and economic institutions offers valuable considerations in a world facing problems such as climate change, concentration of wealth and financial crises.
More than an economic theorist, Veblen was a social critic who encouraged a more holistic and ethical approach to understanding the economy.
Text: Celso Chambisso – Photo: D.R
