The Theory of the Leisure Class

The Theory of the Leisure Class is a book, first published in 1899, by the American economist Thorstein Veblen while he was a professor at the University of Chicago.

Economic drive

Whereas classical economics defines humans as rational, utility-seeking people who try to maximize their pleasure, Veblen recast them as completely irrational creatures who chase after social status without much regard to their own happiness.

Related Topics:
Classical economics - Utility - Social status

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He used the word emulation to describe these actions. For example, people tend to try to mimic the more respected among each other in order to gain more status for themselves.

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As an example from modern-day life, certain brands and stores are considered more "high-class" than others, and people may shop at them, even though they cannot afford them, and cheaper alternatives would make their whole lives easier.

Related Topics:
Brands - Stores

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Following this line of reasoning, Veblen also concluded that businessmen were simply the latest manifestation of the leisure class. He noted that businessmen do not produce goods and services, but simply shift them around whilst taking a profit. He thus argued that the modern businessman is no different from a barbarian, in that he uses prowess and competitive skills to make money from others, and then lives off the spoils of conquests rather than producing things himself.

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