Veblen vs. Marx

Thorstein Veblen was odd man out in late-nineteenth and early-twentieth-century American economics. Veblen is best known for his book The Theory of the Leisure Class. In it he introduced the term "conspicuous consumption." Conspicuous consumption was consumption undertaken to make a statement to others about one's class or accomplishments. This term, more than any other, is what Veblen is known for. Veblen wanted economists to try to understand the social and cultural causes and effects of economic changes. What social and cultural causes were responsible for the shift from hunting and fishing to farming, for example, and what were the social and cultural effects of this shift? Veblen's skepticism about religion and his rough manners and unkempt appearance made him unattractive to universities. Home Books Encyclopedia

Thorstein Veblen(1857-1929): Veblen's theory of the leisure class is to be compared to that of Marx's theory. Marx was of the view that the upper class were at "swords points" with one another and the inevitable historical outcome would be the violent overthrow of the upper classes. Veblen, however, was of the view that the lower classes were not out to overthrow the upper class; but, rather, strived to climb up to it. Its presence, indeed, served the larger community by setting the example and giving the working class purpose. Peter Landry www.blupete.com

A commodity is a Veblen good if people's preference for buying it increases as a direct function of its price. The definition does not require that any Veblen goods actually exist. However, it is claimed that some types of high-status goods, such as expensive wines or perfumes are Veblen goods, in that decreasing their prices decreases people's preference for buying them because they are no longer perceived as exclusive or high status products. The Veblen effect is named after the economist Thorstein Veblen, who invented the concepts of conspicuous consumption and status-seeking. Wikipedia