Impact of Thorstein Veblen in the Field of Economics - Essay Example

? Thorstein Veblen Tasks Introduction Thorstein Veblen is an American economist who existed many years ago about the 19th century as well as 20th century. This happened to be the time when the people of America saw the effects of Industrial revolution as well as the results of a deregulated industry. The loose regulations that arisen contributed to the emergence of super rich class known as the “robber barons” who owned extremely large companies. The “robber robins” were known for their ways of lavish lifestyles and exuberant spending. Thorstein criticized the type of the behaviour and called it as being a waste, and he believes that the behaviour did not help the economy at all. In his first, famous book, the theory of Leisure Class, he coined the system of spending as being “conspicuous consumption”. He was intensely critical of businessperson concerning their greedy and the tendency of spending money for things, which are not even productive. Thorstein Veblen described the wealthy class using hyperbole and some humours in order to show hierocracies of people who are wealthy. This paper will try to analyze the impacts of economics that Thorstein Veblen has contributed to, in the field of the economics (Peil, 2009, p.121). Impact of Thorstein Veblen in the field of economics Veblen in the field of economics makes his readers aware of American small-scale, which was intensely competitive was giving its ways for the large-scale monopoly trusts. He further explained by emphasizing that the monopolistic practices administered prices, which meant that, there was a charge in what the traffic will bear; as well as, the limitations of producing high quality for the sake of raising the prices and maximizing the profits. However, the case of the emergence of the leisure class which led to wasteful as well as, conspicuous consumption for status. Veblen, on the other hand, used instinct theories as well, individual-social welfare interface, his analysis of economic surplus was unique since Veblen Considered it as being the product of the collectively which generated wealth through positive influence of instincts. Veblen was the first economist man who recognized the importance of wealth as well as technological wealth from the generation of collective surplus. While technological knowledge to be the common stock that is held as well as, carried forward by the community collectively, but it is not a creative achievement of the individuals who are working in isolation of self-sufficiently (Veblen, 2004, p. 103). Veblen continued to argue that every new invention in addition to innovation comes in, to a given degree, which is made by individuals. However, he is a social individual because every change made must always be made by individuals who are immersed in a community plus exposing to disciplines of the group life because it runs in the community and all life are group life. Subsequently, welfares that are generated by the social wealth are substitutes to the material output; however, it is a necessary condition, which is suggested to be for the long-term developments of the material output (Krugman, 2009, p.124) The bonds of interaction may be fragile, while the human society may be at a lower level of development if there fails to be structures of the community as well as, trust. Technology knowledge has become a common theme that is used in economics today. However, the study shows that, in some states for example Kerala, which is in India, the social wealth provided a foundation for high standards of living but less Gross Domestic Product (GDP) per capita. A similar notion that seemed to have the same meaning to that of Veblen was developed. The notion was all about the social structures of schools accumulations. The institution is that to be suitable for providing a reproductive foundation for the growth and accumulation, since social wealth is able to promote growth at the same time to be essential to dimensions of the quality life. He explains further by analyzing that when one ignores the social wealth, and goes for a durable business, which has a fixed capital, then, that can lead to a decrease number in the standard of living as well as, development hence it becomes critical (World Bank 1997). His emphasises based on a collective generation of the social, human and the technological wealth, which gave potential of revolutionising economics. Veblen believes that, such well are collectively generated because of negative instincts, which might have been perpetually exploited by stakes for their sake in terms of benefits in a form of surplus products. According to Veblen, he insists that corporations can exploit the wealth by means of monopoly. He explains further by saying that, Financers are able to gain some shares of surplus by interests or lending of money, and through creations of the credits. Unions on the other side gain their share through industrial action as well as, wages, which are above labours that collect their contribution to workmanship. The vested interests do not only use a portion of economic surplus, but it also stimulates interests which reduces the production of surplus. This made Veblen believe that, the economists actually need of critically analyse power of elites as well as, classes with the aim of sharing surplus product in an egalitarian manner because of it being economists and the social critics. The social changes which occurred at the period which technological innovations were originally introduced in the case of ending consistent in one value system leading to the formation of systems with an alternative values. He incorporated into those theories aspects of William Graham Sumner's evolutionary, social theory and John Dewey's instrumentalism, and strands of the anthropological research. In many compliments, Veblen's ideas look like those of Karl Marx, though he discarded the labour premise of value and the teleological elements of collectivism. Veblen’s impact/influence on technology and nature In the beginning, Veblen views regarding the natural resources and technology appears to be containing some of the striking inconsistencies in the preceding analysis on exploitation and waste of resources. Notably, Veblen, on the other hand, felt that, the natural resources are extremely valuable in social construct. This is because, the society wills to be paying for their use. This is clearly seen when Veblen speaks about the natural resources, which includes the timber, and coal in his chapter “The Technology of Physics and Chemistry” as being constantly increasing because of the improved knowledge, which is very technical(Wessels,2000,p. 123). Veblen observed that the rapid growth of technologies has brought new designs, for making natural resources. He argued that the natural resources are those resources has no indications of characteristics of a landscape, this is because the technicians understand them by turning them into account, hence; they have become the standard factors to the production area. His faith regarding technology did not end from criticizing to the people who applied the irrationally. Veblen on the other hand, blamed the mismanagement of the industry where business owners are supposed to shed all the responsibility. Veblen has played a significant role to the understanding of people by use of technology where it has become extremely critical approach in industries as well as, bureaucratic management. He believed that the engineers, as well as the technicians, have greater knowledge concerning the industrial processes, which is intrinsically more than business. He also bemoaned by saying that, all the businesspersons, the accountants as well as, the managers holding money have displaced all the engineers at producing the goods (Champlin, 2004, p.194). Consequently, Veblen was the first economist, who also sought in integrating in the questions of species, gender, the classes as well as, the question of ethnicity into the evolutionary analysis. He does this by abstracting from the rational economic man because of social individuals who had the preferences and choices, which were then affected by a multiple tasks of knowing that a person is born, and afterwards his lifestyle will have to change throughout his/her life. Conclusion This paper has tried to analyze the Impact of Thorstein Veblen in the field of economics as well as, investigating the contemporary relevance concerning Thorstein Veblen’s theory. A specific attention is paid to the theory of change of economic in the society where all the theories were integrated, and developed. It became so relative when other scholars started imitating Veblen when he attempted to develop the analysis of evolutionary transformation concerning the institution. It became particularly prominent that the cultural analysis regarding the institutional change, which continued to be well formulated as it, was started by Veblen (Ricketts, 2003, pg.173). This paper also found that Veblen involved in some project works where he tried explaining on how people should economize the little resources that they have in order to avoid the recession in the coming years. He also showed how people are under an influence of the instincts that provide the directions as well as, plans by sorting out each individual. The research also showed that there are enough promises to the theory of psychology as well as, the institutional (Camic, 2011, p.151). Lists of references Camic, C., & Hodgson, G. M. (2011). The essential writings of Thorstein Veblen. New York: Routledge. Champlin, D. P., & Knoedler, J. T. (2004). The institutionalist tradition in labour economics. New York: M.E. Sharpe. Krugman, P. R. (2009). The return of depression economics and the crisis of 2008. New York: W.W. Norton. Peil, J. (2009). Handbook of economics and ethics. London: Edward Elgar. Ricketts, M. (2003). The economics of business enterprise an introduction to economic organisation and the theory of the firm (International student ed.). London: E. Elgar. Wessels, W. J. (2000). Economics (3rd ed.). London: Barron's. Read More