The Theory of the Leisure Class: An Economic Study of Institutions

Conspicuous consumption is the practice of purchasing items or services for prices higher than their productive value. This is usually done for the sake of projecting social status and respectability, regardless of whether the consumer actually possesses wealth or honor. Conspicuous consumption is common in the leisure class and emulated by the middle and working classes, who strive to emulate the leisure class’s respectability and status.

The industrial class is generally comprised of people in the lower stratum of society, such as laborers and artisans, who rely on productive work to survive. They perform menial and labor-intensive tasks and transform raw materials into consumable objects in a process that is efficient and productive. Veblen contrasts them with the leisure class, which is characterized by its wastefulness.

The leisure class is term Veblen coins to characterize the wealthy upper class who define their culture around wasting time and resources. With no economic obligations, the leisure class employs itself in tasks that are ultimately unproductive, such as higher learning, religious observances, lavish lifestyles, and charity designed to increase their social status. They distinguish themselves from the lower industrial classes by developing a set of rules, customs, and cultural practices, such as etiquette, which project their wealth and serve a gatekeeping function to bar members of other classes from entering their ranks. In a patriarchal system, such as the 19th-century American society in which Veblen was writing, only men could truly belong to the leisure class because only they held pecuniary power. Women, children, and servants were extensions of a man’s social and economic status, and their actions comprised vicarious leisure that elevated their “master’s” status.

Non-invidious interests are selfless acts that redistribute wealth in a way that minimizes waste. In The Theory of the Leisure Class, Veblen argues that leisure class women and the clergy, despite donating to the poor, are not truly displaying selflessness because their actions are motivated by their desire to display their masters’ wealth. As such, their goodwill is more representative of vicarious waste than non-invidious interest. Veblen’s theory is that only members of the industrial class engage in non-invidious actions because they do not have reputations to protect.

Pecuniary emulation is the desire to mimic the dominant culture—that of conspicuous consumption established by the leisure class. In the context of Veblen’s work, pecuniary emulation encourages people to spend their wages on symbolic items or services for the sake of projecting an image of respectability rather than on goods that contribute to their material comfort.

The predatory period is a stage in human development characterized by the establishment of private ownership and the division of labor and social class. It marks the decline of collectivity and solidarity and the rise of competitive behavior. Whereas in earlier periods men fought against their environment through cooperation, in the predatory period, people develop turn against each other for personal gain and community recognition. This period marks the beginning of conspicuous consumption and leisure.

Veblen defines production and industry as the act of transforming raw materials into consumable goods, which actively contributes to the improvement of people’s material comfort. It is the opposite of waste, which is characteristic of the leisure class that engages in conspicuous consumption. Productivity and industry are not seen as respectable or deserving of honor, and members of the leisure class avoid engaging in any activity that has productive value, choosing instead to spend their energy and resources on wasteful activities.

In Veblen’s terms, the quasi-peaceful period predates the modern industrial era. It created chattel slavery and a strict social stratification between the industrial and leisure classes.

Veblen dubs the very early stages of human history as “savage.” Their communities were relatively peaceful and were mainly concerned with subsistence rather than the production of wealth. This period is characterized by cooperation and minimum social stratification because societies required everyone to participate in productive tasks.

The vicarious class is principally made of women, servants, and the clergy who serve men belonging to the leisure class. It is defined as a group of people participating in conspicuous culture not through their own means but to project their master’s wealth. Leisure class women, for example, do not typically possess the wealth or social rights to own private property, as they are subordinate to their fathers and husbands. However, they participate in conspicuous consumption vicariously to publicly reflect their husband’s respectability.

Waste and wastefulness are both used as economic terms throughout Veblen’s work. They are not moral judgements but define consumption or production patterns that do not generate goods or services with material worth. Engaging in wasteful actions is the function of the leisure class, which does not have to engage in industrious activities. In a culture that is socially stratified, wasteful, conspicuous consumption is a mark of prestige.