This is the lecture delivered by Dr Igor Calzada in collaboration with Dr Anton Popov. Dr Calzada emphasizes the timely relevant contribution of Veblen to better understand issues around wealth, crisis, work and leisure. A special mention was given to social innovation and how innovation take place in abundant societies that contrarily is immersed in austerity neoliberal policy dominant paradigm.

1.
Lecture
5:
Thorstein
Veblen
Dr
Igor
Calzada
&
Dr
Anton
Popov

2. Thorstein
Veblen,
Theory
of
the
Leisure
Class
(1899)
Ø Veblen
was
the
son
of
Norwegian
immigrants,
and
he
grew
up
in
rural
Minnesota.
Ø He
did
not
learn
to
speak
English
unBl
he
was
a
teenager.
Ø He
received
a
B.A.
from
Carleton
College
in
1880
and
a
Ph.D.
in
philosophy
from
Yale
in
1884.
At
Yale,
he
developed
a
friendship
with
his
sociology
professor,
William
Graham
Sumner,
and
wrote
his
doctoral
thesis
on
Immanuel
Kant
in
the
area
of
Moral
Philosophy.
Ø In
1882,
he
started
to
teach
poliBcal
economy
at
the
University
of
Chicago.
He
became
known
as
a
brilliant
and
eccentric
thinker
and
an
unconvenBonal
teacher.
At
the
University
of
Chicago
he
gained
a
reputaBon
as
an
insighUul
social
criBc,
and
it
was
during
his
years
in
Chicago
that
he
wrote
The
Theory
of
the
Leisure
Class.
Ø He
taught
poliBcal
economy
and
later
became
editor
of
the
Journal
of
Poli4cal
Thought.
Ø He
taught
at
Stanford
from
1906-­‐1909
and
at
the
University
of
Missouri
from
1911-­‐1918.
Ø In
1919
he
became
a
founding
member
of
the
New
School
for
Social
Research
in
New
York.
Ø He
died
in
1929
of
heart
disease.

6. Lecture
5:
Thorstein
Veblen
1.
IntroducBon
The
Theory
of
the
Leisure
Class

8. 4
Main
Points:
1.-­‐
The
Leisure
Class
is
ConservaBve
2.-­‐
ConservaBsm
is
decorous
and
respectable
3.-­‐
Leisure
class
fosters
conspicuous
consumpBon
4.-­‐
Leisure
hinders
change
and
evoluBonary
social
progress

9. Main
Point
1:
The
leisure
class
is
conservaBve,
finding
no
reason
to
support
changes,
because
they
enjoy
the
status
quo
and
are
li_le
affected
by
economic
pressures.
The
exigencies
of
the
struggle
for
means
of
life
are
less
exac4ng
for
[the
leisure]
class
than
for
any
other;
and
as
a
consequence
of
this
privilege
posi4on
we
should
expect
to
find
it
one
of
the
least
responsive
of
the
classes
of
society
to
the
demands
which
the
situa4on
makes
for
a
further
growth
of
ins4tu4ons
and
a
readjustment
to
an
altered
industrial
situa4on.
The
leisure
class
is
the
conserva4ve
class.
…exigencies
do
not
readily
produce
in
the
members
of
this
class,
that
degree
of
uneasiness
with
the
exis4ng
order
which
alone
can
lead
any
body
of
men
to
give
up
views
and
methods
of
life
that
have
become
habitual
to
them.
The
office
of
the
leisure
class
in
social
evolu4on
is
to
retard
the
movement
and
to
conserve
what
is
obsolescent….

10. Main
Point
2:
ConservaBsm
is
decorous
and
respectable.
InnovaBon
is
vulgar.
• This
conserva4sm
of
the
wealthy
class
is
so
obvious
a
feature
that
it
has
even
come
to
be
recognized
as
a
mark
of
respectability.
Since
conserva4sm
is
a
characteris4c
of
the
wealthier
and
therefore
more
reputable
por4on
of
the
community,
it
has
acquired
a
certain
honorific
or
decora4ve
value.
It
has
become
prescrip4ve
to
such
an
extent
that
an
adherence
to
conserva4ve
views
is
comprised
as
a
maLer
of
course
in
our
no4ons
of
respectability;
and
it
is
impera4vely
incumbent
on
all
who
would
lead
a
blameless
life
in
point
of
social
repute.
Conserva4sm,
being
an
upper-­‐class
characteris4c,
is
decorous;
and
conversely,
innova4on,
being
a
lower-­‐class
phenomenon,
is
vulgar.
• …progress
is
hindered
by
underfeeding
and
excessive
physical
hardship,
no
less
effectually
than
by
such
a
luxurious
life
as
will
shut
out
discontent
by
cuOng
off
the
occasion
for
it.
The
abjectly
poor,
and
all
those
persons
whose
energies
are
en4rely
absorbed
by
the
struggle
for
daily
sustenance,
are
conserva4ve
because
they
cannot
afford
the
effort
of
taking
thought
for
the
day
aPer
tomorrow;
just
as
the
highly
prosperous
are
conserva4ve
because
they
have
small
occasion
to
be
discontented
with
the
situa4on
as
it
stands
today.
• From
this
proposi4on
it
follows
that
the
ins4tu4on
of
a
leisure
class
acts
to
make
the
lower
classes
conserva4ve
by
withdrawing
from
them
as
much
as
it
may
of
the
means
of
sustenance,
and
so
reducing
their
consump4on,
and
consequently
their
available
energy,
to
such
a
point
as
to
make
them
incapable
of
the
effort
required
for
the
learning
and
adop4on
of
new
habits
of
thought.

11. Main
Points
3:
The
example
of
the
leisure
class
fosters
conspicuous
consumpBon,
which
diverts
resources
away
from
sustenance
of
the
lower
classes.
• The
prevalence
of
conspicuous
consump4on
as
one
of
the
main
elements
in
the
standard
of
decency
among
all
classes
is
of
course
not
traceable
wholly
to
the
example
of
the
wealthy
leisure
class,
but
the
prac4ce
and
the
insistence
on
it
are
no
doubt
strengthened
by
the
example
of
the
leisure
class.
The
requirements
of
decency
in
this
maLer
are
very
considerable
and
very
impera4ve;
so
that
even
among
classes
whose
pecuniary
posi4on
is
sufficiently
strong
to
admit
a
consump4on
of
goods
considerably
in
excess
of
the
subsistence
minimum,
the
disposable
surplus
leP
over
aPer
the
more
impera4ve
physical
needs
are
sa4sfied
is
not
infrequently
diverted
to
the
purpose
of
a
conspicuous
decency,
rather
than
to
added
physical
comfort
and
fullness
of
life.
Moreover,
such
surplus
energy
as
is
available
is
also
likely
to
be
expended
in
the
acquisi4on
of
goods
for
conspicuous
consump4on
or
conspicuous
boarding.
The
result
is
that
the
requirements
of
pecuniary
reputability
tend
(1)
to
leave
but
a
scanty
subsistence
minimum
available
for
other
than
conspicuous
consump4on,
and
(2)
to
absorb
any
surplus
energy
which
may
be
available
aPer
the
bare
physical
necessi4es
of
life
have
been
provided
for.

12. Main
Point
4:
Since
the
leisure
class
discourages
change,
it
hinders
evoluBonary
progress.
…the
leisure
class,
in
the
nature
of
things,
consistently
acts
to
retard
that
adjustment
to
the
environment
which
is
called
social
advance
or
development.
The
characteris4c
aOtude
of
the
class
may
be
summed
up
in
the
maxim:
"Whatever
is,
is
right"
whereas
the
law
of
natural
selec4on,
as
applied
to
human
ins4tu4ons,
gives
the
axiom:
"Whatever
is,
is
wrong."
Not
that
the
ins4tu4ons
of
today
are
wholly
wrong
for
the
purposes
of
the
life
of
today,
but
they
are,
always
and
in
the
nature
of
things,
wrong
to
some
extent.
They
are
the
result
of
a
more
or
less
inadequate
adjustment
of
the
methods
of
living
to
a
situa4on
which
prevailed
at
some
point
in
the
past
development
The
ins4tu4on
of
a
leisure
class,
by
force
or
class
interest
and
ins4nct,
and
by
precept
and
prescrip4ve
example,
makes
for
the
perpetua4on
of
the
exis4ng
maladjustment
of
ins4tu4ons,
and
even
favors
a
reversion
to
a
somewhat
more
archaic
scheme
of
life;
a
scheme
which
would
be
s4ll
farther
out
of
adjustment
with
the
exigencies
of
life
under
the
exis4ng
situa4on
even
than
the
accredited,
obsolescent
scheme
that
has
come
down
from
the
immediate
past.

13.
2.
Intellectual
influences
2.1
Marxian
Theory

14.
2.
Intellectual
influences
2.1
Marxian
Theory

15. h_p://www.dilbert.com/

16. h_p://www.dilbert.com/
• Dilbert
illustrates
the
story
Veblen
tells
• The
engineers
understand
what
should
be
happening
• The
manager,
though,
does
not
and
constantly
frustrates
his
engineers
with
poorly
constructed
plans
and
silly
sayings.

17. 1. Orthodox
theory:
AllocaBng
scarce
resources
among
alternaBve
uses.
Individual’s
are
independent
of
their
environment.
2. Veblen:
Study
of
evolving
insBtuBonal
structure
and
how
that
impacts
individual
behavior.
3. Ins4tu4ons:
Habits
of
thought
that
are
accepted
at
any
par4cular
4me.
4. Veblen’s
approach
is
similar
to
Marx:
Society
dictates
individual
acBon.
Orthodox
theory
emphasized
the
power
of
the
individual.

18. Two-­‐class
model
of
social
straBficaBon
(the
business
and
industrial
classes)
Those
who
live
on
free
income
and
those
who
live
by
work,
between
those
who
control
the
condiBons
of
work,
the
rate
and
output
and
those
who
have
to
do
the
work.
2.2
EvoluBonary
Theory
EvoluBonary
framework:
Darwin
and
Social
Darwinists
(especially
Herbert
Spencer
and
William
Graham
Sumner)

19. Future
of
Capitalism
• Marx
believed
in
the
“increasing
misery
of
the
proletariat”.
• Veblen
disagreed
with
this
perspecBve,
but
did
note
the
possibility
for
increasing
relaBve
differences.
(i.e.
individuals
want
more
than
others,
not
just
more)
•
The
Ba_le
is
between
“imbecile
insBtuBons”
and
“ma_er-­‐of-­‐fact
technology”.
Which
will
win
is
unknown,
the
only
certainty
is
change.

20. Veblen’s
ContribuBon
1) Economists
have
moved
away
from
hedonisBc
philosophy,
to
some
extent.
2) Economists
sBll
assume
perfect
compeBBon
in
standard
microeconomics,
although
there
is
a
field
of
industrial
organizaBon.
3) Keynesian
economics
has
led
to
the
de-­‐labeling
of
equilibrium
as
“good”.
4) The
work
of
Galbraith
and
the
field
of
industrial
organizaBon
has
carried
forth
his
criBque
of
imperfect
compeBBon,
especially
adverBsing.
5) Veblen’s
work
has
inspired
many
who
believe
government
acBon
can
have
a
posiBve
impact
on
economic
outcomes.
6) Although
he
did
not
pracBce
empirical
analysis,
his
student
Wesley
Mitchell,
is
one
of
the
pioneers
of
empirical
work.
7) And
Behavioral
Economics
is
a
movement
designed
to
integrate
psychology
and
economics

23. The
evoluBon
of
the
community
and
the
evoluBon
of
the
individual
3.
Veblen
operates
a
two-­‐stage
model
of
evoluBon.
3.1
‘savage
society’(+)
3.2
‘predatory
barbarism’
(-­‐)

24. 3.3
Industry
(drudgery):
‘the
effort
that
goes
to
create
a
new
thing,
with
a
new
purpose
given
it
by
the
fashioning
hand
of
its
maker
out
of
the
passive
material’
3.4
Exploit:
‘results
in
an
outcome
useful
to
the
agent…the
conversion
to
his
own
ends
of
energies
previously
directed
to
some
other
end
by
another
agent’
– ‘invidious
disBncBon’
(unpleasant)
– ‘worthy,
honorable
and
noble’
while
that
involving
industry
is
viewed
as
‘unworthy,
debasing,
ignoble’
– ‘psychological
ground’

25. ApBtude
(or
propensity):
• ‘Man
is
an
agent…
seeking
in
every
act
the
accomplishment
of
some
concrete,
objecBve,
impersonal
end.
• By
force
of
his
being
such
an
agent
he
is
possessed
of
a
taste
for
effecBve
work,
and
a
distaste
for
fuBle
effort.
• He
has
a
sense
of
the
merit
of
serviceability
or
efficiency
and
of
the
demerit
of
fuBlity,
waste
or
incapacity.’

26. 3.5.
The
Drivers
of
the
Leisure
Class:
1. beginning
of
ownership
2. women
as
trophies
3. ownership
of
private
property
4. basis
of
esteem

27. 4.
Conspicuous
Leisure
• leading
a
life
of
leisure
you
were
ostensibly
not
working
5.
Conspicuous
ConsumpBon
• ability
to
waste
money

28. 6.
Veblen
idenBfies
other
characterisBcs
of
the
leisure
class
6.1
A
propensity
to
fight
6.2
Sport
6.3
Gambling
6.4
Religiosity
7.
Conclusion

29. A
propensity
to
fight

30. Sport

31. Gambling

32. Religiosity

33. Q
&
A
for
the
Seminar:
How
can
we
apply
Veblen’s
thinking
to
the
following
topics:
1.-­‐
The
funcBon
of
leissure
in
our
society:
What
about
community-­‐based
leissure?
ContradicBon?

35. Q
&
A
for
the
Seminar:
How
can
we
apply
Veblen’s
thinking
to
the
following
topics:
2.-­‐
Labour:
In
an
individualisBc
society
how
can
efficiency
and
producBvity
be
measured
in
order
to
achieve
individual
but
also
collecBve
sustainability?

37. Q
&
A
for
the
Seminar:
How
can
we
apply
Veblen’s
thinking
to
the
following
topics:
3.-­‐
How
can
we
capture
the
human
behaviour
that
is
moBvated
by
self-­‐esteem?

39. Q
&
A
for
the
Seminar:
How
can
we
apply
Veblen’s
thinking
to
the
following
topics:
4.-­‐
Is
work
providing
dignity
and
collecBve
wealth
to
our
communiBes,
ciBes
and
countries?

41. Q
&
A
for
the
Seminar:
How
can
we
apply
Veblen’s
thinking
to
the
following
topics:
5.-­‐
Could
we
summarised
the
financial
crises
in
2008
was
sparked
by
two
causes:
First,
neoliberal
policies
driven
by
austerity
then?
Second,
conspicuous
leisure
by
‘unconcious
ciBzens’?

43. Thanks
for
your
a_enBon