Thorstein Veblen - The Institutionalist, Veblen Economics

Thorstein Veblen Biography and Theory

Thorstein Bunde Veblen was the son of Norwegian immigrants, was raised in rural Minnesota, and engaged in graduate work at Johns Hopkins and Yale where he received a doctorate in philosophy. Interestingly, because he had radical ideas and was largely an opponent to mainstream economics for his time period, Veblen was unable to acquire an academic position and worked as an instructor in economics" at many colleges across the United States including the University of Chicago, Cornell, Stanford, and the University of Missouri. For the most part, Veblen was viewed as a fairly pessimistic, bitter, and skeptical man.

In this chapter, we review some of the writings of Veblen, especially his first and most popular book The Theory of the Leisure Class, published in 1899. Throughout his life, Veblen wrote ten books and many articles and was considered a very profound social theorist that became a champion of the common man against (what has now become one of his renowned and patented phrases) "predatory exploits of the pecuniary class." We have included his contributions to economics in this textbook because they offer a significant alternative viewpoint of economics during a time of when microeconomics was at the forefront of the field. Veblen's work (the Institutionalist School) was also significant because it dealt with the social-economic problems of the day and was considered to form the beginnings of what is known today as macroeconomics or the study of the economy as a whole as opposed to the small parts that make up the whole (marginal analysis) (Dorfman, 1934).