The theory of the leisure class, which was proposed by Thorstein Veblen in 1899, rationalizes the evolutionary development of human institutions (social and economic) that forms society, such as how citizens earn their livelihoods, wherein technology and the industrial arts are the creative forces of economic production. The production of goods and services was not intended to merely reach the material needs of society, but to earn profits for the owners of this production. The industrial production system required diligence and efficiency of workers, whereas the owners were concerned about their earnings in order to display their accumulated wealth in public. This behavioral model refers to the conspicuous consumption and conspicuous leisure survived from past of the tribal stage till modern times.
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Veblen (1899) critiqued contemporary economic theories as being intellectually static and hedonistic by suggesting to economists to take into account people’s social and cultural behavior, rather than rely on the abstractions of theoretic deduction to explain the economic behaviors of society (p.73). Moreover, Veblen contradicted neoclassical economics which define people as rational agents who seek utility and maximum pleasure from their economic activities. He perceived people as irrational, economic agents who pursue social status and the prestige inherent to a place in society with little regard to their own happiness (Veblen, 1899, p.84). The conspicuous consumption did not constitute social progress due to influence of the British aristocracy on American economic development, in which it might be concluded that the conspicuous consumption was not American activity contrary to the country’s dynamic culture of
Veblen (1899) critiqued contemporary economic theories as being intellectually static and hedonistic by suggesting to economists to take into account people’s social and cultural behavior, rather than rely on the abstractions of theoretic deduction to explain the economic behaviors of society (p.73). Moreover, Veblen contradicted neoclassical economics which define people as rational agents who seek utility and maximum pleasure from their economic activities. He perceived people as irrational, economic agents who pursue social status and the prestige inherent to a place in society with little regard to their own happiness (Veblen, 1899, p.84). The conspicuous consumption did not constitute social progress due to influence of the British aristocracy on American economic development, in which it might be concluded that the conspicuous consumption was not American activity contrary to the country’s dynamic culture of