Theory of the Leisure Class: An Economic Study of Institutions

THORSTEIN B. VEBLEN, the son of Norwegian immigrants, was born in Valders, Wisconsin, on July 30, 1857, and was raised in rural Minnesota. He graduated from Carleton Col-lege in Northfield, Minnesota, in 1880 and earned his doc-torate from Yale in 1884.

An economist and social critic, Veblen dissected Ameri-can social and economic institutions and analyzed their psy-chological bases, laying the foundations for the study of institutional economics. In The Theory of Business Enter-prise (1904), he described the inherent conflict between the processes of technology and industry and those of business: Technology, the making of goods, naturally tended toward maximum efficiency in production, while business, the mak-ing of money, profited from monetary manipulation and restrictions on output to create artificially high prices.

Despite the effects these theories have had on the study of modern economics, it was The Theory of the Leisure Class, published in 1899, that became Veblen's best-known work. In it, he introduced the now classic concept of "con-spicuous consumption." Other books include The Instinct of Workmanship and the State of the Industrial Arts (1915) and The Engineers and the Price System (1921).

After retiring from a teaching career that included tenures at the University of Chicago, Stanford University, the Uni-versity of Wisconsin, and The New School for Social Research in New York City, Veblen died near Menlo Park, California, on August 3, 1929.