Typically (and stereotypically), the Gilded Age is known for:
1) Money and industry, and
2) People who made a lot of money in industry.
Although the arts, libraries, and universities flourished thanks to the philanthropic efforts of the aforementioned “people that made a lot of money,” the era nonetheless does not call to mind, for most of us, a list of its great academics.
And yet there’s this little turn of phrase that we use all the time, which finds its source in one particular Gilded Age economist. That phrase is “conspicuous consumption,” and that economist was Thorstein Veblen.
Veblen’s seminal work, The Theory of the Leisure Class (1899), carved out a reputation for him as the first academic to ever sit down and think seriously about wealth and consumerism and how they interrelate in American society. Veblen, an assistant professor at the University of Chicago, started looking at the world around him and identifying something that continues to—choose your adjective, depending on your personal feelings on the matter—define, trouble, or invigorate American society today. That something, of course, is how goods—the expensive ones—confer status. We saw this writ large during the Gilded Age, when the nouveaux-riches splurged on mansions that mimicked those of Versailles or hosted beyond-fancy dinners served by footmen in livery. In his treatise, Veblen also explores pecuniary emulation (an academic term for keeping up with the Joneses), conspicuous waste, and a host of other interesting issues about human behavior and money.
The University of Chicago calls The Theory of the Leisure Class a “savage and frequently ironic if extremely erudite assault on current values,” pointing out that his sardonic tone didn’t always make him easy to read. One contemporary analyst said he wrote “with one eye fixed on the squirming reader.”
Sounds fun—let’s take a look. Conspicuous consumption, Veblen writes in the book’s fourth chapter, predates the Gilded Age and hearkens back to what he calls “the predatory culture,” during which time there were two major classes: “able-bodied men on the one side, and a base inferior class of labouring women on the other.” The men consume what the women produce and, not having produced it themselves and gotten their hands dirty, so to speak, both communicate and earn honor from the rest of society by that act of consumption. Call it human nature (Veblen was greatly influenced by evolutionary theories of the day). Okay. So fast forward many thousands of years, and a luxury is still something which those who produce it cannot enjoy (it is “tabu” to do so), while those who consume it get a status boost from that mere consumption. So “an expensive vice” like drinking fine wine or Scotch, distilled by the laboring class for their betters’ enjoyment, is “conventionally accepted as marks of a superior status, and so tend to become virtues and command the deference of the community…”
Similarly, Veblen identifies “conspicuous leisure” as devoting yourself to the pleasures of life such as entertaining, dining, the fine arts, and philosophy. Just as consuming what someone else labored to make confers social status, to spend your free time not-laboring has the same effect. This is probably what created the demand for servants in America.
Two chapters later, Veblen holds up two spoons. One is base metal, machine-made, cheap, utilitarian; the other is of silver, exquisitely handmade, expensive. They are identical but for this, and clearly will perform the function of dipping soup from the bowl equally well. Yet “the hand-wrought spoon gratifies our taste, our sense of the beautiful, while that made by machinery out of the base metal has no useful office beyond a brute efficiency.” It is a hundred times less valuable; it’s a knock-off. Today, what we’d call a Veblen good is one that is desirable because it is expensive—the price, and the “superior status” it relays to its purchaser, is part of its value.
Veblen would have other axes to grind, going on, for example, to write The Higher Learning in America in 1919 to tell all of the problems he saw in our universities. But in terms of his legacy, it’s the Leisure Class work that is still read today.