The Theory of the Leisure Class: An Economic Study of Institutions

Thorstein Veblen (1857-1929) is a Norwegian-American economist and sociologist best known for authoring The Theory of the Leisure Class. Veblen is one of the first to critique classical economic theory (referring to the theory established by Adam Smith), which views market forces and economic behavior as motivated by rational self-interest. In The Theory of the Leisure Class, Veblen offers concrete evidence of cultural and social institutions influencing consumer behavior, steering them away from productivity and toward conspicuous consumption. He is best remembered for coining the terms “leisure class,” “conspicuous consumption” and “conspicuous leisure.” His framework gave rise to institutional economics, which incorporate sociology in economic analysis.

Veblen was born in 1857 in Wisconsin to a middle-class farming family, the sixth of twelve children. His parents had immigrated from Norway ten years prior to his birth. Veblen studied economics under John Bates Clark at Carleton College in Minnesota, but he soon developed an interest in philosophy and natural history. He pursued further education at John Hopkins University, then Yale University, eventually graduating with a doctoral degree in philosophy. Due to his unconventional views, especially his open agnosticism, Veblen remained unemployed for seven years after completing his doctoral program and returned to his family farm.