Editing Thorstein Veblen (section)

==Contributions to social theory==
[[File:Veblen - Theory of the leisure class, 1924 - 5854536.tif|thumb|''The Theory of the Leisure Class'', 1924]]

===Institutional economics===
Thorstein Veblen laid the foundation for the perspective of [[institutional economics]] with his criticism of traditional static economic theory.{{sfn|Hodgson|2004|pp=125–194}} As much as Veblen was an economist, he was also a sociologist who rejected his contemporaries who looked at the economy as an autonomous, stable, and static entity. Veblen disagreed with his peers, as he strongly believed that the economy was significantly embedded in social institutions. Rather than separating economics from the social sciences, Veblen viewed the relationships between the economy and social and cultural phenomena. Generally speaking, the study of institutional economics viewed economic institutions as the broader process of cultural development. While economic institutionalism never transformed into a major school of economic thought, it allowed economists to explore economic problems from a perspective that incorporated social and cultural phenomena. It also allowed economists to view the economy as an evolving entity of [[Bounded rationality|bounded rationale]].{{sfn|Diggins|1978}}

===Pecuniary emulation===
[[The_Theory_of_the_Leisure_Class#(iii)_Pecuniary_emulation|Pecuniary emulation]] refers to the tendency of individuals to compete through the display of wealth and status symbols, rather than through productive or useful activities. Colloquially known as [[Keeping up with the Joneses|Keeping Up with the Joneses]], this can take the form of luxury goods and services or the adoption of a luxury lifestyle. In ''[[The Theory of the Leisure Class]]'', Veblen argues how emulation is at the basis of ownership.{{sfn|Veblen|1899|p=25}} He says that individuals wish to emulate others, especially if they are of a higher social or pecuniary standing, so they initially begin acquiring the luxury goods that others have acquired. Eventually, the act of conspicuous consumption becomes the symbol of status, rather than the individual. This pecuniary emulation drives consumers to spend more on displays of wealth and status symbols, as opposed to more useful commodities. This cycle of constant emulation promotes materialism, demotes other forms of fulfillment, and negatively impacts the consumer's decision-making process within the market.

===Conspicuous consumption===
{{Main|Conspicuous consumption}}
In his most famous work, ''[[The Theory of the Leisure Class]]'', Veblen writes critically of the [[leisure class]] for its role in fostering wasteful [[Consumption (economics)|consumption]], or conspicuous waste.{{sfn|Hodgson|2004|pp=125–194}} In this first work Veblen coined the term ''[[conspicuous consumption]]'',<ref>{{cite book |last1=Dyson |first1=George |title=Turing's Cathedral: The Origins of the Digital Universe |publisher=Pantheon Books |chapter=Chapter 3}}</ref> which he defined as spending more money on goods than they are worth.

The term originated during the [[Second Industrial Revolution]] when a ''[[nouveau riche]]'' social class emerged as a result of the accumulation of capital wealth. He explains that members of the leisure class, often associated with business, are those who also engage in conspicuous consumption to impress the rest of society through the manifestation of their social power and prestige, be it real or perceived. In other words, social status, Veblen explained, becomes earned and displayed by patterns of consumption rather than what the individual makes financially.{{sfn|Dowd|1966|p=32}} Subsequently, people in other social classes are influenced by this behavior and, as Veblen argued, strive to emulate the leisure class. What results from this behavior, is a society characterized by the waste of time and money. Unlike other sociological works of the time, ''The Theory of the Leisure Class'' focused on consumption, rather than production.{{sfn|Ritzer|2011|pp=196–198}}

===Conspicuous leisure===
{{Main|Conspicuous leisure}}
''Conspicuous leisure'', or the non-productive use of time for the sake of displaying [[social status]], is used by Veblen as the primary indicator of the [[leisure class]]. To engage in conspicuous leisure is to openly display one's wealth and status, as productive work signified the absence of pecuniary strength and was seen as a mark of weakness. As the leisure class increased their exemption from productive work, that very exemption became honorific and actual participation in productive work became a sign of inferiority. Conspicuous leisure worked very well to designate social status in rural areas, but urbanization made it so that conspicuous leisure was no longer a sufficient means to display [[Pecuniary emulation|pecuniary]] strength. Urban life requires more obvious displays of status, wealth, and power, which is where conspicuous consumption becomes prominent.{{sfn|Parker|Sim|1997|pp=368–369}}

===Leisure class===
In ''[[The Theory of the Leisure Class]]'', Veblen writes critically of [[conspicuous consumption]] and its function in social-class [[consumerism]] and [[social stratification]].{{sfn|Diggins|1978}} Reflecting historically, he traces said economic behaviors back to the beginnings of the [[Division of labour|division of labor]], or during tribal times. Upon the start of a division of labor, [[High status|high-status]] individuals within the community practiced hunting and war, notably less labor-intensive and less economically productive work. Low-status individuals, on the other hand, practiced activities recognized as more economically productive and more labor-intensive, such as farming and cooking.{{sfn|Dowd|1966|pp=25–27}} High-status individuals, as Veblen explains, could instead afford to live their lives [[leisure]]ly (hence their title as the [[leisure class]]), engaging in [[Symbolic interactionism|symbolic]] economic participation, rather than practical economic participation. These individuals could engage in conspicuous leisure for extended periods of time, simply following pursuits that evoked a higher social status. Rather than participating in conspicuous consumption, the leisure class lived lives of conspicuous leisure as a marker of high status.{{sfn|Diggins|1978|pp=57–60}} The leisure class protected and reproduced their social status and control within the tribe through, for example, their participation in war-time activities, which while they were rarely needed, still rendered their lower social class counterparts dependent upon them.{{sfn|Dowd|1966|p=113}} During modern industrial times, Veblen described the leisure class as those exempt from industrial labor. Instead, he explains, the leisure class participated in intellectual or artistic endeavors to display their freedom from the economic need to participate in economically productive manual labor. In essence, not having to perform labor-intensive activities did not mark higher social status, but rather, higher social status meant that one would not have to perform such duties.{{sfn|Diggins|1978|p=72-75}}

====Assessment of the rich====
Veblen expanded upon [[Adam Smith]]'s [[The Wealth of Nations|assessment of the rich]], stating that "[t]he leisure class used charitable activities as one of the ultimate benchmarks of the highest standard of living."<ref name=":1" /> Veblen insinuates that the way to convince those who have money to share is to have them receive something in return. [[Behavioral economics]] also reveals that [[Reward anticipation|rewards]] and [[incentive]]s are very important aspects of every-day [[Decision-making|decision making]]. When the rich shift their mindset from feeling as though they are forced to give their hard-earned money to feeling pride and honor from giving to charitable organizations there is benefit for every party involved. In ''[[The Theory of the Leisure Class]]'' (1899), Veblen referred to communities without a leisure class as "non-predatory communities," and stated that "[t]he accumulation of wealth at the upper end of the [[pecuniary]] scale implies privation at the lower end of the scale." Veblen believed that inequality was natural, and that it gave housewives something to focus their energy on. The members of the leisure class planning events and parties did not actually help anyone in the long run, according to Veblen.<ref name=":1">{{Cite journal|doi=10.1080/00213624.1998.11506049|jstor=4227319|title=Poverty and Charity: Early Analytical Conflicts between Institutional Economics and Neoclassicism|year=1998|last1=Ganley|first1=William T.|journal=Journal of Economic Issues|volume=32|issue=2|pages=433–440}}</ref>

===Theory of business enterprise===
The central problem for Veblen was the friction between "business" and "industry".

Veblen identified ''business'' as the owners and leaders whose primary goal was the profits of their companies but who, in an effort to keep profits high, often made efforts to limit production. By obstructing the operation of the industrial system in that way, "business" negatively affected society as a whole (through higher rates of unemployment, for example). With that said, Veblen identified business leaders as the source of many problems in society, which he felt should be led by people such as engineers, who understood the [[Industrial sector|industrial system]] and its operation, while also having an interest in the general welfare of society at large.{{sfn|Rutherford|1980}}

===Trained incapacity<!--'Trained incapacity' redirects here-->===
In sociology, '''trained incapacity'''<!--boldface per WP:R#PLA--> is "that state of affairs in which one's abilities function as inadequacies or blind spots."<ref name="Merton1968">{{cite book|author=Robert King Merton|title=Handschift und charakter: gemeinverstandlicher abriss der graphologischen technik|year=1968|publisher=Simon and Schuster|isbn=978002921130-4|page=252}}</ref> It means that people's past experiences can lead to wrong decisions when circumstances change.<ref name="Merz2011">{{cite book|author=Felix Merz|title= Max Weber's Theory of Bureaucracy and Its Negative Consequences| date= July 23, 2011|publisher=GRIN Verlag |isbn= 9783640965632|page=16}}</ref>

Veblen coined this phrase in 1914, in ''The Instinct of Workmanship and the Industrial Arts''. Essayist [[Kenneth Burke]] expanded upon the theory of trained incapacity later on, first in his book ''Permanence and Change'' (1935) and again in two later works.<ref name="Wais2005">{{cite journal |last1=Wais |first1=Erin |title=Trained Incapacity: Thorstein Veblen and Kenneth Burke |journal=The Journal of the Kenneth Burke Society |date=Fall 2005 |volume=2 |issue=1 |url=https://kbjournal.org/wais}}</ref>