Inviduous Consumption In Thorstein Veblen's Argument

Thorstein Veblen was one of the first eighteenth-century economist to disagree with mercantilist fallacies. Veblen focused on human behavior and its value unlike classical economists, who claimed that humans behave in accordance to their nature as rational utility maximizers only, basically degrading the human being to pleasure and pain calculators. He realized that if humans really did act on a purely utility maximizing basis, the existence of culture and institutions, which shape human behavior and differentiate them from animals, would not be possible. Additionally, Veblen criticized neoclassical economists, who claimed that human consumption is driven entirely by one’s desire to maximize utility and regardless of one’s wealth. He emphasized that the main reason behind consumption of commodities for capitalists is not utility maximization but rather as evidence of their social status. Veblen defines the existence of such human behavior in capitalist societies as “conspicuous consumption” and described the process “leisure class” to display their wealth and power. He implies that there are two reasons behind conspicuous consumption, “invidious consumption” and “pecuniary emulation”. On one hand “Invidious consumption” is when a person of higher social status consumes specific and unique goods to differentiate himself from the lower classes. On …show more content…
(Hunt, 539). Veblen describes such instincts as natural inclinations of the mind that develop as human adjust to their environment. He explained there are two features of human character that determine and shape of their behavior “aversion to work” or predation and its counterpart, “the instinct of workmanship”. The social institutions under which humans functioned influenced which instinct took precedence in human behavior. In fact, the antithesis between these two traits, manifested in varying institutions, was the core of Veblen’s social